Agenda packet — Palo Alto City Council, March 18, 2024 (part 2 of 3)

Regular Meeting
March 4, 2024
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M.

Present In Person: Burt, Kou, Lauing, Lythcott-Haims, Stone, Tanaka, Veenker Present Remotely:

Absent:

Study Session

1. Study Session to provide early feedback about the proposed redevelopment of Buena Vista Mobile Home Park at 3980 El Camino Real.

NO ACTION

Consent Calendar
Council Member Tanaka requested to pull Agenda Item Number 2.

Council Member Tanaka registered a no vote on Agenda Item Number 2.

MOTION: Vice Mayor Lauing moved, seconded by Mayor Stone to approve Agenda Item Numbers 2-5.

MOTION PASSED ITEM 2: 6-1, Tanaka no
MOTION PASSED ITEMS 3-5: 7-0

2. Approval of a Purchase Order with Mobile Modular Management Corporation in the Amount of $244,850, including $222,591 for Basic Services and $22,259 for Contingency, to Provide and Install a Modular Building at 4000 Middlefield Road to Serve as a Temporary Fire Station During Construction of the Fire Station 4 Replacement Capital Project (PE-18004); CEQA Status - Exempt under CEQA Guidelines Section 15303

3. Approval of Office of the City Auditor FY2024 Task 4 Task Orders (CEQA Status - Not a Project)
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DRAFT ACTION MINUTES

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City Council Meeting
Draft Action Minutes: 03/04/2024

4. Acceptance of the Office of the City Auditor's Quarterly Status Report for the Period of October - December 2023

5. Approval of Professional Services Contract Number C24189371 with Kimley Horn and Associates in an Amount Not to Exceed $178,559 for the Quiet Zone Study Services for railroad crossings at Churchill Avenue, Meadow Drive, and Charleston Road for a term ending December 31, 2025; CEQA – not a project.

Action Items

6. Adopt a Park Dedication Ordinance for the Tower Well site, 0.19 acres of land (8,437 square feet) at 201 Alma Street and approve the proposed name “Tower Well Park” as Recommended by the Parks and Recreation Commission. CEQA status - not a project.

MOTION: Council Member Veenker moved, seconded by Council Member Burt to:

1. Adopt a Park Dedication Ordinance (Attachment A) for the Tower Well site, 0.19 acres of land (8,437 square feet) at 201 Alma Street, and;

2. Approve the proposed name “Tower Well Park”, and;

3. Referral to the Historic Resources Board and Parks and Recreation Commission to consider the naming of it to be Fredrick Eyerly Tower Well and to refer to the Historic Resources Board adding the site to the California and National Historic Registry.

MOTION PASSED: 7-0

7. Public Hearing: Second Reading Planned Community Ordinances for 2901 Middlefield Road and 702 Ellsworth Place. CEQA Status – Categorically Exempt AMENDMENT: Mayor Stone moved, seconded by Council Member Kou to restore the sight triangle specified in the December 11, 2023 ordinance, to “extend to the southernmost corner of the property along Middlefield Road and shall”.

AMENDMENT PASSED: 5-2, Lythcott-Haims, Tanaka no

AMENDMENT INCORPORATED INTO THE MAIN MOTION
MOTION: Council Member Lythcott -Haims moved, seconded by Council Member Tanaka to adopt the draft ordinances amending the Planned Community Ordinance 2343 to rezone 2901 - 2905 Middlefield Road and 702 Ellsworth Place as prepared for the February 5, 2024 City Council meeting with the following amendments:

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1. Require maximum 3-foot-tall cable rail fence within the sight visibility triangle area that maintains visibility through the sides of the sight triangle adjacent to Ellsworth Place and Middlefield Road, and;

2. Remove signage that limits the size of delivery trucks on Ellsworth Place, and;

3. Restore the sight triangle specified in the December 11, 2023 ordinance, to “extend to the southernmost corner of the property along Middlefield Road and shall”.

MOTION PASSED: 6-1, Kou no

8. Approval of the 2024 City Council Priority Objectives and Finance Committee and Policy & Services Committee Workplans
NO ACTION - ITEM CONTINUED TO MARCH 11, 2024 CITY COUNCIL MEETING

Adjournment: The meeting was adjourned at 10:27 P.M.

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City Council Meeting
Draft Action Minutes: 03/04/2024
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes a re prepared in accordance with Palo Alto Municipal Code (PAMC)

2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section

2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: March 18, 2024
Staff Report: 2401-2549
TITLE
Adoption of a Resolution Approving an Edison Electric Institute Master Power Purchase and Sale Agreement With Silicon Valley Clean Energy Authority and Delegating Authority to the City Manager to Transact Under the Master Agreement for Electricity-Related Commodities and Services CEQA Status: Not a project under CEQA Guidelines 15378(b)(5)

RECOMMENDATION
Staff recommends that Council adopt a Resolution (Attachment A):
(a) Approving the Edison Electric Institute Master Power Purchase and Sale Agreement with Silicon Valley Clean Energy Authority (SVCE) (Exhibit A to Attachment A); and (b) Delegating authority to the City Manager or their designee, the Director of Utilities, to transact under the Master Agreement for electricity-related commodities and services subject to the following limitations:
a. The date for delivery of the electricity products for each transaction shall not exceed 36 months from the date the transaction is executed; b. The delivery date for any transaction shall not extend beyond December 2027; c. The maximum aggregate transaction limit under each Master Agreement shall be $25 million;
d. All transactions shall be subject to the Palo Alto Municipal Code; and e. All transactions shall be subject to the City’s Energy Risk Management Policies, Guidelines, and Procedures.

EXECUTIVE SUMMARY
An active set of creditworthy counterparties is essential to ensure that the City can continue to meet its electric supply portfolio planning objectives, internal risk management controls, and external operational and regulatory requirements. Approval of the recommended electric master agreement with SVCE provides the City with an additional electric supplier with which to transact in a timely and competitive manner ensuring that the City’s objectives are met efficiently.

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Executing the master agreement does not commit the City to any transactions with SVCE, but it allows for transactions to be executed efficiently in the future. The recommended master agreement was negotiated under terms and conditions acceptable to the City and has been reviewed and approved by the City Attorney’s Office and the City’s Energy Risk Manager.

BACKGROUND
Palo Alto Municipal Code (PAMC) Section 2.30.340 (Contracts for Wholesale Utility Commodities) allows for the use of Master Agreements to buy and/or sell electricity, gas, and related services through various preapproved (“enabled”) suppliers. Contracts or transactions executed under the Council-approved Master Agreements must be done in accordance with the City’s Energy Risk Management Policy, Guidelines, and Procedures.

Historically, the process for entering into Master Agreements with wholesale utility suppliers has been to: issue a request for proposals (RFP); select multiple suppliers; negotiate terms and conditions with the potential suppliers; and seek Council approval of and authority to transact under the Master Agreements. This process took upwards of one year, and was how the City established its current set of Electric Master Agreements ( Resolution 9324 1). This set of agreements, which were all approved by Council in March 2013, includes:

1. BP Energy Company

2. Cargill Power Markets, LLC

3. Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC)

4. Avangrid Renewables, LLC (formerly Iberdrola Renewables, LLC)

5. NextEra Energy Marketing, LLC

6. PacifiCorp

7. Powerex Corp.

8. Shell Energy North America (US), L.P.

9. Turlock Irrigation District
However, in August 2016 Council streamlined this process, approving Ordinance No 53872, which modified the Municipal Code to explicitly allow for Council-approved standard form master agreements. The ordinance modified PAMC Section 2.30.140, clarifying the process to enable new suppliers by specifically allowing the use of a standard form agreement that contains the City’s minimum contract terms and conditions. Negotiations could then be carried out with qualified suppliers on an ongoing basis without the need to issue successive formal requests for proposals. Under this process, execution of, and delegation of authority to transact under, standard form master agreements with specific suppliers remains subject to Council approval before any transactions may be completed.
1 Resolution 9324: https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/reso-9324.pdf 2 Ordinance 5387: https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/ordinances/ord-5387.pdf.

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In December 2016 Council approved a standard form electric master agreement ( Resolution 96523), based on the year 2000 version of the Edison Electric Institute (EEI) Master Power Purchase and Sale Agreement. This standard form agreement has been made available to any wholesale utility supplier on the City’s website since that time, although to date this has not yielded any new enabled suppliers.

ANALYSIS
In 2023 Palo Alto Utilities reached out to SVCE about the possibility of entering into an electric master agreement with the City. SVCE is a non-profit, community-owned agency (commonly known as a Community Choice Aggregator, or CCA) that provides clean electricity to more than 270,000 residential and business customers in 13 Santa Clara County communities. SVCE was formed in 2016 by 12 South Bay communities to source clean electricity at lower rates than PG&E, and recently had its investment-grade issuer credit ratings affirmed by both Standard & Poor’s (A) and Moody’s Investors Services (Baa1).

Over the course of 2023 Utilities staff worked with the City Attorney’s Office to negotiate master agreement language with SVCE staff and attorneys. The resulting agreement (Attachment A) meets the City’s “must-have” contract provisions 4, has been approved as to form by the City Attorney’s Office, and has also been approved by the City’s Energy Risk Manager.

Consistent with the City’s other electric master agreements, the Energy Risk Manager recommends that transactions executed under the master agreement with SVCE be subject to the following limitations:
a. The date for delivery of the electricity products for each transaction shall not exceed 36 months from the date the transaction is executed; b. The delivery date for any transaction shall not extend beyond December 2027; c. The maximum aggregate transaction limit under each Master Agreement shall be $25 million;
d. All transactions shall be subject to the Palo Alto Municipal Code; and In addition, all transactions shall be subject to the City’s Energy Risk Management Policies, Guidelines, and Procedures. Staff will seek Council approval prior to execution of any transaction outside of the above limitations.

3 Resolution 9652: https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/reso-9652.pdf. 4 PAMC Section 2.30.340(c) requires that utilities contracts incorporate the following contract terms and conditions: (1) governing law shall be the laws of the State of California; (2) choice of venue shall be the County of Santa Clara; and (3) a counterparty shall obtain and maintain during the term of the contract the minimum credit rating established as of the date of award of contract of not less than a BBB- credit rating established by Standard & Poor’s and a Baa3 credit rating established by Moody’s Investors Services.

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FISCAL/RESOURCE IMPACT
Approval of the electric master agreement with SVCE will help ensure that the City continues to have an active set of suppliers in the future so that it can continue to competitively and efficiently meet its electric supply portfolio objectives. Further, approval of this electric master agreement does not commit the City to any transactions with SVCE; therefore, this action will not result in any direct fiscal impact to the City. Costs and revenues associated with future transactions under the recommended master agreement will be accounted for in the Electric Utility Fund budget.

STAKEHOLDER ENGAGEMENT
Utilities staff has coordinated with key staff from departments involved in the negotiation and/or implementation of electric master agreements, including the Administrative Services Department and the City Attorney’s Office.

ENVIRONMENTAL REVIEW
The City Council’s approval of this electric master agreement does not meet the definition of a project under the California Environmental Quality Act (CEQA), pursuant to Public Resources Code Section 21065 and CEQA Guidelines 15378(b)(5) because this activity would not result in a reasonably foreseeable direct or indirect change in the environment.

ATTACHMENTS
Attachment A: Resolution Approving the EEI Master Purchase and Sale Agreement with Silicon Valley Clean Energy Authority
APPROVED BY:

Dean Batchelor, Director Utilities
Staff: James Stack, PhD., Sr. Resource Planner
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Attachment A

* NOT YET APPROVED *
1 6056763R
Resolution No. _________
Resolution of the Council of the City of Palo Alto Approving an Edison Electric Institute Master Power Purchase and Sale Agreement with Silicon Valley Clean Energy Authority and Delegating Authority to the City Manager to Transact Under the Master Agreement for Electricity-Related Commodities and Services

R E C I T A L S

A. The City of Palo Alto seeks to ensure an active set of creditworthy counterparties to meet its electric supply portfolio planning objectives, internal risk management controls, and external operational and regulatory requirements.

B. Silicon Valley Clean Energy Authority (SVCE) is a non-profit, community-owned agency with investment-grade credit ratings.

C. Approval of the Edison Electric Institute Master Power Purchase and Sale Agreement (Master Agreement) with SVCE will provide the City with an additional electric supplier to transact with efficiently and competitively.

D. The recommended Master Agreement with SVCE has been negotiated under terms and conditions acceptable to the City, reviewed and approved by the City Attorney’s Office, and deemed suitable by the City’s Energy Risk Manager.

E. Palo Alto Municipal Code (PAMC) Section 2.30.340 permits the use of Master Agreements to buy and/or sell electricity, gas, and related services through preapproved suppliers, subject to the City’s Energy Risk Management Policy, Guidelines, and Procedures.

F. Executing this Master Agreement does not commit the City to any transactions with SVCE but allows for future transactions to be executed efficiently.

The Council of the City of Palo Alto does hereby RESOLVE as follows:

SECTION 1. The Council hereby approves the execution of the Edison Electric Institute Master Power Purchase and Sale Agreement with Silicon Valley Clean Energy Authority (SVCE) (Exhibit A).

SECTION 2. The Council hereby delegates authority to the City Manager or their designee, the Director of Utilities, to transact under the Master Agreement for electricity- related commodities and services and to take any actions necessary to implement this Resolution, subject to the following limitations:
(a) The date for delivery of the electricity products for each transaction shall not exceed 36 months from the date the transaction is executed;
(b) The delivery date for any transaction shall not extend beyond December 2027; Item 6
Attachment A -
Resolution Approving
Master Agreement with
Silicon Valley Clean
Energy Authority

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Attachment A

* NOT YET APPROVED *
2 6056763R
(c) The maximum aggregate transaction limit under the Master Agreement shall be $25 million;
(d) All transactions shall be subject to the Palo Alto Municipal Code; and (e) All transactions shall be subject to the City’s Energy Risk Management Policies, Guidelines, and Procedures.

SECTION 3. The City Council’s approval of this electric master agreement does not meet the definition of a project under the California Environmental Quality Act (CEQA), pursuant to Public Resources Code Section 21065 and CEQA Guidelines 15378(b)(5) because this activity would not result in a reasonably foreseeable direct or indirect change in the environment.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

___________________________ ___________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

___________________________ ___________________________ Assistant City Attorney City Manager

___________________________
Director of Utilities

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Resolution Approving
Master Agreement with
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: March 18, 2024
Staff Report: 2311-2223
TITLE
Approval of Amendment No. 2 of C19171513 With CLEAResult Consulting, Inc. (CLEAResult) Extending the Contract Expiration Date by Three Years From April 16, 2024 to April 15, 2027.

CEQA Status - Not a Project.

RECOMMENDATION
Staff recommends the Council approve and authorize the City Manager, or designee, to execute the attached Amendment No. 2 to extend the third-party Electric Vehicle (EV) Program Contract (C19171513) with CLEAResult by three years from April 16, 2024 to April 15, 2027 to finish EV charger installations that have been moving through the Electric Vehicle Technical Assistance Program (EVTAP). The not-to-exceed amount of $736,995 in the original contract will remain the same.

EXECUTIVE SUMMARY
EVTAP is the key EV charger customer program developed to assist multi-family property, non- profit, school, and small and medium business customers navigate the process of designing, permitting, and installing EV chargers. CLEAResult was selected as the program administrator in April 2019 to provide technical assistance to eligible customers. However, due to the COVID pandemic and longer than anticipated project timelines, CLEAResult is unable to reach the program goal of installing 250 ports at 30 sites by the current contract end date of April 2024.

Thus far, CLEAResult has facilitated the installation of EV chargers at 4 non-profits, 1 school, and 2 multi-family customer sites (totaling 81 ports). There are another 4 projects in the process of being installed by April 2024 (estimated 94 ports). Based on additional projects in the pipeline, CPAU staff and CLEAResult are confident that with a contract extension, EVTAP could facilitate EV charger installations at 19 additional sites (estimated 250+ ports), bringing the total number of sites with completed installations to 30 by April 2027. This could be achieved within the $736,995 original contract limit approved by Council in May 2019.

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BACKGROUND
Transportation currently accounts for roughly two-thirds of Palo Alto’s greenhouse gas emissions. To achieve an 80% emissions reduction from 1990s levels by 2030 (80x30 goal) and prevent catastrophic climate change, drastic changes must be made in the transportation sector along all possible avenues. This requires reductions in the number of vehicle miles traveled, particularly in single occupancy vehicles, and electrification of the remaining vehicles traveled to the greatest extent possible. The April 2021 Sustainability and Climate Action Plan (S/CAP) impact analysis showed a pathway to achieving the 80x30 goal that involved Palo Alto reducing its vehicle emissions from 300,000 metric tons (MT) to 120,000 MT. Reaching this ambitious target will require 85% of new vehicle sales to be EVs and 44% of all vehicles to be EVs by 2030.

It is critical that the City provide programs to help transition drivers from fossil fuel vehicles. Palo Alto single-family households are embracing EVs. Based on the vehicle registration data obtained from the Department of Motor Vehicles (“DMV”), an estimated 28.8%of Palo Alto single-family households were driving an EV in 2022. However, it has been a challenge for residents living in multi-family properties – over 40% of the City’s population – to switch to an EV due to the lack of available charging infrastructure at the majority of the over 800 multi-family (MF) properties in the City. Surveys repeatedly show that 70-80% of EV drivers charge at home, and that the number one reason MF residents do not switch to an EV is the lack of charging infrastructure at their place of residence. As of 2022, approximately 6.6% of MF households drive an EV, as shown by DMV registration data. To support adoption with this customer segment, we have set the goal to facilitate the installation of Electric Vehicle Supply Equipment (EVSE) at 10% of the City’s 800 MF properties by 2025.

To support multi-family residents, on April 15, 2019, the City entered into a contract with CLEAResult to provide EVSE-related technical assistance to qualifying non-profit, schools, small to medium businesses and multi-family property customers. The contract was approved by Council on May 6, 20191 with an effective date of April 15, 2019. The goal of the agreement was to assist customers in successfully navigating the various stages of the EVSE installation, including site evaluation, engineering support, layout design, contractor bidding and selection process, permitting support, installation project management and the securing of rebates.

In December 2021 the contract was amended to allow an additional 2 years to meet the original 3-year program goals. While there was no change to the maximum compensation payable under the contract, the term was amended to make funds available over a 5-year period ending on April 15, 2024. However, this extension was not enough to jump-start the program due to the chilling effect that COVID had on the progress of the program. COVID impacted the entire EV industry which has taken longer to bounce back. Some of the reasons for the slower uptake include:
1 Council staff report # 10287: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2019/final-approved-report-id-10287.pdf?t=58991.87 Item 7
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1. The manufacturing sector had slowed down, resulting in the ability to get EV charger equipment and transformers on a timely basis;

2.Properties were in “survival mode” during COVID focusing more on maintaining essential services rather than expanding their resources on outward facing projects; and

3.The “work from home” trend reduced commuting and led to less demand for EVs, resulting in properties feeling less pressured to install EV chargers.

While these trends have reversed post-COVID, the resurgence has not been as fast as was originally anticipated when the first amendment was passed. Therefore, staff is requesting that the CLEAResult contract be extended for an additional three years to be able to reach their original goals.

ANALYSIS
Since the inception of the contract in April 2019, CLEAResult has accomplished the following:
•Enrolled 154 sites which signed a Program Participation Agreement. •Conducted 93 Technical Site Visits by CLEAResult engineers to inventory electrical infrastructure and analyze parking layouts.
•Prepared and presented 88 Charging Evaluation Reports (“CER”) which include electrical load calculations, transformer loads, EVSE installation scenarios and pricing estimates. •Of these customers:
o7 have completed EVSE installations with CLEAResult assistance (2 MF, 4 nonprofits, and 1 school)
o4 EV charger projects are expected to be completed by April 2024 (2 MFs and 2 non-profits)
o49 customers remain active, of which an estimated 19 customer sites are expected to be able to install chargers by April 2027.

Each project takes an average of 2 years or more to complete.

Continuing to use CLEAResult’s expertise and relationships makes it more likely that the City will achieve the EVTAP program goals. They are subject matter experts in EVSE installations and have deep knowledge of every aspect of EVSE project implementation. Nurtured over many months, CLEAResult account managers have established strong working relationships with the multi- family, school and non-profit customers currently enrolled in EVTAP. They also have intimate knowledge and understanding of each property’s needs, as well as the technical and funding limitations of each site. CLEAResult is positioned to be the best possible partner to bring these projects to completion.

The goal of this extension is to ensure that 30 projects are completed by the end of the 8-year term. Of those, 11 sites are expected to be completed before the extension goes into effect.

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with the goal for all 30 sites to have EVSEs operational by the end of the recommended contract extension period through April 2027. The extension would provide CLEAResult the necessary time to assist these customers complete installations to meet the Program goal of 30 sites.

FISCAL IMPACT
No additional funds are being sought. With this proposed contract extension, it is projected that the City will pay CLEAResult up to $299,472, which is the remaining portion of the contract. The total not-to-exceed amount of the contract will remain at $736,995.

It is anticipated that 0.5 FTE of staffing resources would continue to be required to manage the EV Charger Technical Assistance Program and this contract, as well as oversee the approval and payout of the EV charger incentives. Staffing will be from existing resources.

STAKEHOLDER ENGAGEMENT
Staff provided an update to the S/CAP Working Group on October 17, 2023 on the progress of the EVTAP and EV Charging Rebate Program. Program updates are also provided regularly in the Utility Advisory Commission (UAC) Quarterly Reports.

ENVIRONMENTAL REVIEW
CLEAResult provides only technical assistance for EV charger installation projects under this contract and is not responsible for the installation of chargers; that is the responsibility of the customer and installer hired by the customer. Typically installing EV chargers at an existing customer site does not trigger California Environmental Quality Act (CEQA) review. Providing technical assistance is exempt from the California Environmental Quality Act (CEQA) because it can be seen with certainty that providing technical assistance on a consulting basis will not result in any environmental impacts.

ATTACHMENTS
Attachment A - CLEAResult Consulting, Inc. Contract Amendment No 2. C19171513 APPROVED BY:

Dean Batchelor, Director Utilities
Staff: Marina Kipnis, Sustainability Programs Administrator Item 7
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/94/92/70/54/85/87/63/i255/65/64/i255/i255/94/19/72/62/56/22/60/i255/65/82/i255/67/54/92/93/80/68/i255/22/23/i255/62/55/19/i255/70/22/60/62/71/17/72/62/i255/56/57/i255/55/19/71/19/77/84/i255/17/59/19/60/61/19/61/i255/62/22/i255/71/19/17/61/i255/17/57/i255/23/22/78/78/22/79/57/108/i255 /i255
/67/54/55/19/i255/62/19/71/59/i255/22/23/i255/62/55/56/57/i255/58/18/71/19/19/59/19/60/62/i255/57/55/17/78/78/i255/77/19/i255/23/71/22/59/i255/62/55/19/i255/61/17/62/19/i255/22/23/i255/56/62/57/i255/23/90/78/78/i255/19/97/19/72/90/62/56/22/60/i255/62/55/71/22/90/18/55/i255/58/91/71/56/78/i255/21/75/82/i255 /65/24/65/74/i255/90/60/78/19/57/57/i255/62/19/71/59/56/60/17/62/19/61/i255/19/17/71/78/56/19/71/i255/91/90/71/57/90/17/60/62/i255/62/22/i255/94/19/72/62/56/22/60/i255/21/73/i255/66/54/19/71/59/56/60/17/62/56/22/60/69/i255/22/23/i255/62/55/56/57/i255/58/18/71/19/19/59/19/60/62/64/68/i255 /i255
/i255
/i255
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Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
5 Packet Pg. 226 of 389

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/i255
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/i255
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Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
6 Packet Pg. 227 of 389

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Item 7
Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
7 Packet Pg. 228 of 389

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Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
8 Packet Pg. 229 of 389

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/114/24/75/86/121/21/118/61
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/114/86/21/75/25/25/25/i255/114/123/25/75/25/25/25/i255/114/21/123/75/86/121/21/i255/114/24/124/75/121/117/25/i255/114/24/124/75/121/117/25/i255/114/24/124/75/121/117/25/i255/114/24/124/75/121/117/25/i255/114/24/124/75/124/124/117/i255/114/117/21/25/75/21/115/124/i255 /125/22/57/80/58/53/22/62/i255
/16/86/16/113/i255/62/17/70/73/i255
/62/19/57/i255/19/72/19/63/59/78/i255
/114/24/75/21/25/25/i255
/62/19/57/i255/19/72/19/63/59/78/i255
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/57/19/62/71/17/60/19/73/i255
/76/84/i255/57/19/18/77/71/17/57/i255
/62/57/22/18/57/17/61/i255
/22/77/59/57/19/17/60/53/i255
/117/78/117/i255/114 /115/75/25/25/25/i255/114/124/21/25/i255/65 /118/69/i255/65 /118/69/i255/65 /118/69/i255/65 /118/69/i255/65 /118/69/i255/65/118/69/i255 /114/115/75/124/21/25/i255 /127/128/129/130/131/132/133/134/i255/136/134/137/138/139/128/140/138/i255/141/127/142/i255/143/144/145/146/147/147/148/149/150/145/127/151/152/150/148/153/149/127/150/154/154/153/153/150/145/136/152/146/148/144/149/153/149/151/145/145 Item 7
Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
9 Packet Pg. 230 of 389

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/i255 /77/78/79/80/81/82/83/83/i255/77/84/82/81/88/87/79/i255/77/78/83/87/81/80/80/79/i255/77/79/79/81/80/84/83/i255/77/80/82/81/88/78/80/i255/77/78/78/85/81/87/86/83/i255/77/82/86/81/83/86/83/i255/77/87/82/81/80/80/88/i255/77/84/85/86/81/82/82/80/i255 /i255
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Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
10 Packet Pg. 231 of 389

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Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
11 Packet Pg. 232 of 389

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/i255
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/108/109/108/111/73/108/114/i255/112/103/113/i255
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/108/109/108/114/73/108/115/i255/112/103/113/i255
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/61/62/61/58/64/i255 /i255 /122/123/123/124/125/108/114/109/i255/122/126/111/125/110/114/109/i255/122/127/127/125/127/114/109/i255/122/108/126/115/125/111/127/109/i255 /24/i255/86/40/19/i255/42/17/30/27/i255/121/22/29/27/40/42/49/i255/55/19/19/i255/26/17/49/i255/41/19/i255/17/36/57/39/30/27/19/36/i255/27/22/i255/30/27/17/49/i255/47/28/27/40/28/29/i255/27/40/19/i255/85/22/27/80/27/22/80/44/89/38/19/19/36/i255/83/39/36/18/19/27/33/i255 /i255
/128/129/130/131/132/133/134/135/i255/137/135/138/139/140/129/141/139/i255/142/128/143/i255/144/145/146/147/148/148/149/150/151/146/128/152/153/151/149/154/150/128/151/155/155/154/154/151/146/137/153/147/149/145/150/154/150/152/146/146 Item 7
Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
12 Packet Pg. 233 of 389

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/33/62/62/28/63/28/64/38/33/34/i255/32/27/26/65/28/66/27/32/i255 /i255
/39/40/19/i255/67/68/69/70/71/72/39/61/69/39/i255/45/40/17/51/51/i255/53/47/22/48/43/41/19/i255/17/41/41/43/46/43/22/44/17/51/i255/45/19/47/48/43/50/19/45/i255/22/44/51/54/i255/57/54/i255/17/41/48/17/44/50/19/41/49/i255/52/47/43/46/46/19/44/i255/17/56/46/40/22/47/43/60/17/46/43/22/44/i255 /23/47/22/42/i255/46/40/19/i255/67/73/39/74/59/i255/39/40/19/i255/67/68/69/70/71/72/39/61/69/39/49/i255/17/46/i255/46/40/19/i255/67/73/39/74/75/45/i255/53/47/22/76/19/50/46/i255/42/17/44/17/18/19/47/75/45/i255/47/19/77/56/19/45/46/49/i255/45/40/17/51/51/i255/45/56/57/42/43/46/i255/17/i255 /41/19/46/17/43/51/19/41/i255/52/47/43/46/46/19/44/i255/53/47/22/53/22/45/17/51/i255/43/44/50/51/56/41/43/44/18/i255/17/i255/41/19/45/50/47/43/53/46/43/22/44/i255/22/23/i255/46/40/19/i255/45/50/22/53/19/i255/22/23/i255/45/19/47/48/43/50/19/45/49/i255/45/50/40/19/41/56/51/19/49/i255/51/19/48/19/51/i255/22/23/i255 /19/23/23/22/47/46/49/i255/17/44/41/i255/67/68/69/70/71/72/39/61/69/39/75/45/i255/53/47/22/53/22/45/19/41/i255/42/17/58/43/42/56/42/i255/50/22/42/53/19/44/45/17/46/43/22/44/49/i255/43/44/50/51/56/41/43/44/18/i255/47/19/43/42/57/56/47/45/17/57/51/19/i255/19/58/53/19/44/45/19/49/i255 /23/22/47/i255/45/56/50/40/i255/45/19/47/48/43/50/19/45/i255/57/17/45/19/41/i255/22/44/i255/46/40/19/i255/47/17/46/19/45/i255/45/19/46/i255/23/22/47/46/40/i255/43/44/i255/39/17/57/51/19/i255/67/59/78/59/i255/39/40/19/i255/17/41/41/43/46/43/22/44/17/51/i255/45/19/47/48/43/50/19/45/i255/45/50/22/53/19/49/i255 /45/50/40/19/41/56/51/19/i255/17/44/41/i255/42/17/58/43/42/56/42/i255/50/22/42/53/19/44/45/17/46/43/22/44/i255/45/40/17/51/51/i255/57/19/i255/44/19/18/22/46/43/17/46/19/41/i255/17/44/41/i255/17/18/47/19/19/41/i255/46/22/i255/43/44/i255/52/47/43/46/43/44/18/i255/57/54/i255/46/40/19/i255 /67/73/39/74/75/45/i255/16/47/22/76/19/50/46/i255/79/17/44/17/18/19/47/i255/17/44/41/i255/67/68/69/70/71/72/39/61/69/39/i255/53/47/43/22/47/i255/46/22/i255/50/22/42/42/19/44/50/19/42/19/44/46/i255/22/23/i255/46/40/19/i255/45/19/47/48/43/50/19/45/59/i255/16/17/54/42/19/44/46/i255/23/22/47/i255 /17/41/41/43/46/43/22/44/17/51/i255/45/19/47/48/43/50/19/45/i255/43/45/i255/45/56/57/76/19/50/46/i255/46/22/i255/17/51/51/i255/47/19/77/56/43/47/19/42/19/44/46/45/i255/17/44/41/i255/47/19/45/46/47/43/50/46/43/22/44/45/i255/43/44/i255/46/40/43/45/i255/61/18/47/19/19/42/19/44/46/i255 /i255
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/i255/i255/i255
/83/i255/67/43/46/54/i255/85/86/70/85/i255/43/42/53/51/19/42/19/44/46/17/46/43/22/44/i255/53/47/22/50/19/45/45/i255/43/42/53/47/22/48/19/42/19/44/46/45/i255 /83/i255/67/43/46/54/i255/85/86/i255/23/51/19/19/46/i255/50/22/44/45/56/51/46/43/44/18/i255 /83/i255/85/86/70/85/i255/89/43/45/46/47/43/57/56/46/19/41/i255/85/44/19/47/18/54/i255/95/19/45/22/56/47/50/19/45/i255/90/89/85/95/92/i255/17/44/41/i255/85/42/19/47/18/43/44/18/i255/39/19/50/40/44/22/51/22/18/54/i255 /50/22/44/45/56/51/46/43/44/18/i255
/i255
/96/97/98/99/100/101/102/103/i255/105/103/106/107/108/97/109/107/i255/110/96/111/i255/112/113/114/115/116/116/117/118/119/114/96/120/121/119/117/122/118/96/119/123/123/122/122/119/114/105/121/115/117/113/118/122/118/120/114/114 Item 7
Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

Item 7: Staff Report
Pg.
13 Packet Pg. 234 of 389

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/25/26/27/28/29/i255/31/32/33/34/i255/35/36/37/38/28/39/i255/40/26/41/29/42/i255 /i255
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Attachment A -
CLEAResult Consulting,
Inc. Contract Amendment
No. 2 C19171513

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Community Services
Meeting Date: March 18, 2024
Report #:2402-2596
TITLE
Approval of a Professional Services Agreement (Contract No. C24190819) Between the City of Palo Alto and Pets in Need for a Total Not-to-Exceed Amount of $7,373,516 for a Five-year Term; and Amend the FY2024 Budget in the General Fund; CEQA status – categorically exempt.

RECOMMENDATION
Staff recommends the City Council:

1. Approve and authorize the City Manager to execute Professional Services Agreement (Contract No. C24190819) Between the City of Palo Alto and Pets in Need for a Total Not-to-Exceed Amount of $7,373,516 for a Five-year Term (Attachment A),

2. Amend the Fiscal Year 2024 Budget Appropriation for the General Fund (requires a 2/3 vote) by:
a. Increasing the contract expense appropriation in the Community Services Department by $194,433; and
b. Decreasing the Budget Stabilization Reserve by $194,433.

EXECUTIVE SUMMARY
The Agreement recommended for approval reflects the actualization of previously stated commitments by both the City and PIN to work together as partners to provide high quality and timely animal care services to residents of Palo Alto, Los Altos, and Los Altos Hills.

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 developed a Term Sheet that was approved by Council on August 14, 2023 1, and was the basis for a new five-year Agreement (Attachment A). The Agreement terms include an annual compensation amount to PIN in the amount of $1.4 million with an annual escalator equal to the higher of: three percent or the yearly percentage change in 1 City Council, August 14, 2023; Agenda Item #6; SR#2306-1712, https://cityofpaloalto.primegov.com/Portal/viewer?id=2632&type=0 Item 8
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Consumer Price Index (CPI) using the Bureau of Labor Statistics’ Consumer Price Index for the Bay Area plus a $100,000 contingency fund ($20,000 annually) for unforeseen costs, for a total compensation over five years equal to $7.37 million. All terms in the Council-approved Term Sheet (Attachment B) have been included in the new Agreement and no other significant terms have been added. Additional program costs for after-hours veterinary medical care will initially be absorbed by the Animal Control Division of the Police Department. A budget request will be brought forward in FY 2025, to include adding 0.5 FTE Administrative Associate for licensing and up to $20,000 annually for after-hours veterinarian costs and $5,000 annually for other general services costs associated with re-directed animal services.

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. Palo Alto maintained its own shelter and provided animal services to other neighboring cities until 2019, when animal sheltering services for Palo Alto and two partner cities, Los Altos and Los Altos Hills, were provided 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, 20182 to operate the Animal Shelter after a public solicitation process for potential operators. The term and compensation of the Agreement 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
•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
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•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, 2022 3, the City Council unanimously passed a motion to extend the notice of termination for six months and to proceed with negotiations with Pets in Need for a long-term contract agreement for animal services in Palo Alto.

The PIN Board supported extending the termination date for six additional months to end on March 15, 2023. On March 27, 2023 4, 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 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. 3 City Council, February 14, 2022; Agenda Item #9; SR #13952, https://portal.laserfiche.com/Portal/DocView.aspx?id=59364&repo=r-704298fc 4 City Council, March 27, 2023; Agenda Item #3; SR #2302-0940, https://portal.laserfiche.com/Portal/DocView.aspx?id=65785&repo=r-704298fc Item 8
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•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, 20235. The responses are included as Attachment C to the June 12th staff report. 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

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
The direction received from Council and additional input by the PIN Board of Directors resulted in a revised Term Sheet (Attachment B) that the Council reviewed and approved on August 14, 20236. On January 16, 2024 7, the City Council approved Amendment No. 2 to the current Agreement in the amount of $342,501 to continue operations of the animal shelter for an additional three-month term while the new Agreement was finalized. 5 City Council, June 12, 2023, Agenda Item #13,
https://cityofpaloalto.primegov.com/Portal/viewer?id=2049&type=0 6 City Council, August 14, 2023, Agenda Item #6; SR#2306-1712, https://cityofpaloalto.primegov.com/Portal/viewer?id=2632&type=0 7 City Council, January 16, 2024; Agenda Item #6; SR#2312-2462, https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=0964a45a-8f20-48b9-b6e6-478b900942fd Item 8
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ANALYSIS
The attached Agreement reflects the collaborative efforts of the City and PIN to provide quality and timely animal services to the residents of Palo Alto, Los Altos, and Los Altos Hills.

Within the past year, PIN has fulfilled their commitment to establish a stable leadership team by hiring a seasoned Chief Executive Officer, Laura Toller Gardner and a Director of Finance, Teri Dunwoody. Along with Dr. Barbara Laderman-Jones, Director of Shelter Medicine and Laura Birdsall, Director of Shelter Operations the team has improved efficiencies and services, including reduced wait times for spay/neuter surgeries, increased numbers of vaccinations, and expanded hours of operation (open 7 days a week). PIN has also provided deeply discounted and free outreach care to animals in Palo Alto, Los Altos and Los Altos Hills.

The collaboration between Police Department staff and PIN shelter staff has greatly improved, fostered by regular staff meetings and ongoing, open communication on issues of mutual concern. Both parties have continued to demonstrate their joint commitment to ensure the health and wellbeing of animals and wildlife in the community and have been working together to develop and refine policies that are acceptable to all shelter and animal control staff.

New Agreement Terms
The terms included in the Agreement are based on the Term Sheet (Attachment B) approved by the Council on August 14, 2023 and summarized below.
•Term: Five Years with ability to mutually extend an additional five years. •Annual Compensation: $1.37M increasing annually at a percentage equal to the higher of: (a) three percent or (b) the yearly percentage change in CPI using the Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers for all items for the San Francisco-Oakland-Hayward area.
•Contingency: $20,000 per year, a total of $100,000 over the initial five-year term •Improvements to Premises: City to budget $2.5M in one lump sum in Fiscal Year 2025 for capital improvements. Improvements, to be completed by the City, will be prioritized in the following order:
oNew cat and small animal area
oAdditional dog kennel improvements
oMedical suite retrofits to accommodate large animals
•Scope of Services:

PIN Responsibilities -
oMaintain public access hours to shelter seven days per week, for a minimum of 40 hours per week.
oProvide 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 Item 8
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times for surgery for in-jurisdiction animals will be no more than one month, except in the event of unexpected and exceptional circumstances. oProvide low-cost vaccination clinics in Palo Alto a minimum of one time per week and will work toward one after-hours or weekend clinic per month. oProvide veterinary care for live animals impounded as part of cruelty investigations.
oSubmit monthly activity reports.
oSubmit quarterly financial reports.

City Responsibilities –
oCosts for after-hours emergency veterinary services for animals on stray hold. oCost for additional services related to cruelty investigations, including after- hours emergency veterinary care, post-mortem examinations of animals that are deceased upon arrival at the Shelter, and off-site crime scene investigations. oCosts to dispose of dead wildlife.
oCapital improvements to shelter facilities.
oAnimal control services.

In addition, both parties agree to work together on a feral cat policy, review best animal welfare practices and keep policies up to date, and work collaboratively when revising or creating a new policy.

FISCAL/RESOURCE IMPACT
The FY 2024 Adopted Operating Budget includes $1.3 million for contract costs to manage the Animal Shelter. An additional $194,433 is requested to align with the new operating agreement at $1.4 million, plus an additional month of the supplemental payment for June 2023. The FY 2025 Proposed Budget will recognize additional revenue for licensing fees collected from pet owners residing in Palo Alto. The Animal Control Division of the Police Department will initially absorb the additional program costs and bring forward a budget request in FY 2025, including adding 0.5 FTE Administrative Associate for licensing and up to $20,000 annually for after-hours veterinarian costs and $5,000 annually for other general services costs associated with re- directed animal services. Staff are negotiating new animal service agreements with the partners cities of Los Altos and Los Altos Hills and any additional revenue recognized as part of these agreements will be brought forward to the Council at a future meeting.

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 total of $6.0 million has been allocated to this project and $2.9 million has been expended on shelter improvements. Staff will recommend a reappropriation of funding from FY 2024 to FY 2025 as part of the annual budget process and is subject to Council approval of the FY 2025 Proposed Capital Improvement Program (CIP).

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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 over the past 24 months have provided the community the opportunity to follow the negotiations and provide comments.

ENVIRONMENTAL REVIEW
The site improvements in this Agreement are categorically exempt under CEQA regulation 15301 (existing facilities).

ATTACHMENTS
Attachment A: Professional Services Agreement (Contract No. C24190819) Between the City of Palo Alto and Pets in Need
Attachment B: Term Sheet Approved by City Council on August 14, 2023 APPROVED BY:

Kristen O'Kane, Community Services Director
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CITY OF PALO ALTO CONTRACT NO. C24190819

AGREEMENT BETWEEN THE CITY OF PALO ALTO AND PETS IN NEED

FOR PROFESSIONAL SERVICES

This Professional Services Agreement (“Agreement”), dated for convenience on April 1, 2024, is entered into by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY” or “City of Palo Alto” ), and PETS IN NEED , a California non-profit public benefit corporation, located at 871 Fifth Ave, Redwood City, CA 94063 ("CONSULTANT" or “Pets In Need”).

RECITALS

The following recitals are a substantive portion of this Agreement and are hereby incorporated herein by this reference.

A. CITY intends to provide animal sheltering and veterinary care, as more fully described in Exhibit “A” (Scope of Services), attached to and made a part of this Agreement, for the City of Palo Alto , and for the City of Los Altos and the Town of Los Altos Hills (the “Contract Cities”), at the Palo Alto Animal Shelter, 3281 East Bayshore Road, Palo Alto, CA 94303 (the “Palo Alto Animal Shelter” or the “Premises”).

B. CITY and CONSULTANT desire for CONSULTANT to perform the Services (as defined below) at the Palo Alto Animal Shelter pursuant to the terms and conditions set forth in this Agreement.

C. CITY acknowledges that CONSULTANT is entering into this Agreement in furtherance of its no -kill mission, and that, to the extent permitted by law, CONSULTANT will operate the Palo Alto Animal Shelter as a no-kill shelter.

D. CITY and CONSULTANT are entering into this Agreement with the intention of establishing a long - term partnership to offer exceptional shelter services for Palo Alto and its partner cities of Los Altos and Los Altos Hills, while working together towards building a new Pets in Need Palo Alto animal shelter facility.

NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree:

AGREEMENT

SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the services described at Exhibit “A” (“Services”) in accordance with the terms and conditions contained in this Agreement.

SECTION 2. TERM. The term of this Agreement shall be from April 1, 2024 (the “Effective Date”) through March 31, 2029 unless terminated earlier pursuant to Section 19 of this Agreement. The term of this Agreement may be renewed or extended upon the mutual written agreement of the parties for a subsequent five-year term (or any other length). One year prior to the expiration of the term (or other such timeline as may be mutually agreed upon by the parties), either party may request the parties to begin negotiating in good faith a renewal or extension of this Agreement.

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SECTION 3. USE OF PREMISES. CONSULTANT’s use of the premises shall be subject to the additional terms set forth on Exhibit “D” (Use of Premises) attached hereto.

SECTION 4. NOT TO EXCEED COMPENSATION . The compensation to be paid to CONSULTANT for performance of the Services shall be in the amount of, and shall not exceed $7,273,516.00 as detailed in Exhibit “B” (Compensation). CONSULTANT agrees to complete all Services within this amount. Any work perfo rmed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Notwithstanding the foregoing, a contingency fund of one hundred thousand dollars ( $100,000) (the “Contingency Fund”) shall be available. In the event the Contingency Fund is utilized as provided for herein, the total compensation for Services, reimbursable expenses and the costs payable by CITY to CONSULTANT under this Agreement , shall be and shall not exceed $7,373,516.00 as detailed in Exhibit “B” (Compensation) , subject to Section 19 (“ TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES”).

SECTION 5. INVOICES. In order to request payment, CONSULTANT shall invoice the CITY for payment on a m onthly basis. Invoices shall describe the services performed and, if reasonably requested by CITY, supporting documentation. CONSULTANT’s invoice shall be submitted to the City’s project manager for payment at which point the CITY has 30 business days from the date of the submission to render payment to the CONSULTANT.

Invoices must also include CONSULTANT name, address, contract number, description of services, date of services, and compensation amount.

SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform or supervise, as applicable, the Services required by this Agreement and that its personnel have sufficient skill and experience to perform the Services assigned to them.

CONSULTANT represents that it , and its employees have and shall maintain (and that it shall require its subcontractor s, if any , to have and maintain) during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services.

Notwithstanding anything to the contrary in this Agreem ent, the representations and warranties in this Section 6 are exclusive and are in lieu of all other warranties of any kind, whether express or implied (including, without limitation, the implied warranties of merchantability, fitness for a particular purpose and noninfringement, and all warranties that may arise from course of dealing, course of performance or usage of trade), all of which are hereby expressly disclaimed.

SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that are applicable to the performance of the Services or those engaged to perform Services under this Agreement. These include, but are not limited to, Palo Alto Municipal Code Title 6 “Animals”. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services.

SECTION 8. ERRORS/OMISSIONS . CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of correcting such errors and omissions, any change order markup costs, or costs arising from delay DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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caused by such errors and omissions or unreasonable delay in correcting such errors and omissions.

SECTION 9. [RESERVED].

SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, any person employed by CONSULTANT, and any subcontractor retained by CONSULTANT to perform any of CONSULTANT’S obligations under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY.

SECTION 11. ASSIGNMENT . The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations without the prior written consent of the City Manager. The City Manager shall have sixty (60) days from receipt of Consultant’s notice of proposed assignment to accept or decline the proposed assignment in writing. If the City Manager declines the proposed assignment, he or she shall state the basis for the decision in the written notice to CONSULTANT.

Consent to one assignment shall not be deemed to be
consent to any subsequent assignment. Any assignment not expressly contemplated under this Agreement, or made without the approval of the City Manager shall be void.

SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 above, CITY agrees that subcontractors may be used to perform CONSULTANT’S obligations under this Agreement.

The subcontractors authorized by CITY to perform work on this Project are:
a. Sage Veterinary Center; and
b. MedVet, and
c. Pets Rest Cemetery, and
d. Flinstone Enterprises/San Jose Tallow Co.
e. Any other subcontractors retained by CONSULTANT to perform CONSULTANT’S obligations under this Agreement.

CONSULTANT shall be responsible for directing the work of any subcontractor and for any compensation due to subcontractors . CITY assumes no responsibility what soever concerning subcontractor compensation.

CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subcontractor as more fully set forth in Section 16 of this Agreement.

SECTION 13. PROJECT MANAGEMENT. CONSULTANT shall assign its chief executive officer, who currently is Laura Toller Gardner, as the project manager to have supervisory responsibility for the performance, progress, and execution of the Services and as the project coordinator to represent CONSULTANT during the day -to-day performance of the Services. If circumstances cause the substitution of the project manager (including if, at any time, Laura Toller Gardner no longer serves as Chief Executive Officer of CONSULTANT), CONSULTANT shall promptly notify the CITY’s project manager of such substitution and consider in good faith CITY’s requests with respect to such substitution.

The parties agree that during the t erm of this Agreement and for all purposes of this Agreement, CONSULTANT’S project manager shall be authorized to act as the “Superintendent” of the City’s animal services division pursuant to Section 6.04.100 of the Palo Alto Municipal Code, for purposes of Sections 6.12.010, 6.12.030, 6.12.050, 6.16.050, and 6.32.040 of the Palo Alto Municipal Code.

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CITY’s project manager is the Director of Community Services , Community Services Department, 1305 Middlefield Road, Palo Alto, CA 94303, Telephone (650) 463-4900, who is currently Kristen O’Kane. The project manager shall be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time with prompt written notice to CONSULTANT.

SECTION 14. INTELLECTUAL PROPERTY RIGHTS.

14.1 Definition of Intellectual Property Rights. “Intellectual Property Rights” m eans patents of any type, design rights, utility models or other similar invention rights, copyrights, mask work rights, trade secret or confidentiality rights, trademarks, goodwill, trade names, logos and service marks and any other intangible property ri ghts, including applications and registrations for any of the foregoing, in any country, arising under statutory or common law or by contract and whether or not perfected, now existing or hereafter filed, issued, or acquired.

14.2 “Pets In Need” Ownership. The parties acknowledge and agree that, as between the parties, Pets In Need owns all Intellectual Property Rights in its name (“Pets In Need”), logos and marks, as may be amended from time to time by Pets In Need.

14.3 “City of Palo Alto” Ownership. The parti es acknowledge and agree that, as between the parties, the City of Palo Alto owns all Intellectual Property Rights in its name (“City of Palo Alto”), logos and marks, as may be amended from time to time by the City of Palo Alto, and in accordance with Palo Alto Municipal Code as may be amended from time to time.

14.4 “Palo Alto Animal Shelter” Ownership. The parties acknowledge and agree that, as between the parties, the City of Palo Alto owns all Intellectual Property Rights in the name “Palo Alto Animal Shelter”.

14.5 Grant of License by City of Palo Alto. The City of Palo Alto hereby grants to Pets In Need a royalty-free, non-transferable term license, for the term of this Agreement, to use, reproduce, make derivative works, display, and perform publicly the name “Palo Alto Animal Shelter” solely in conjunction with “Pets in Need”, for example, and without limitation, “Pets in Need Palo Alto Animal Shelter” and “Palo Alto Animal Shelter, operated by Pets in Need,” for purposes of the performance of this Agreement, as provided for herein.

14.6 Name Changes; Development of Logos or Marks. Any
name changes, derivative works, or logos or marks as may be developed by Pets In Need with regard to such animal shelter are required to be approved in writing by the City of Palo Alto City Manager or designee prior to any publication, or any other public use, in any form or media. The City Manager shall approve or deny such requests in writing within 45 days of receipt of CONSULTANT’s complete written proposal, and shall set forth its basis for any denial in writing. During the term of this Agreement, the City of Palo Alto shall not change such name of such animal shelter, nor develop any derivative works, or logos or marks, with regard to such animal shelter, except as is mutually agreed in writing with the Pets In Need Executive Director or designee prior to any publication, or any other public use, in any form or media. The City Manager shall approve or deny such requests within 45 days of Consultant’s complete written proposal, and shall set forth its basis for any denial in writing.

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CONSULTANT may offer naming rights for any wing, room, kennel, or other area within the shelter in compliance with the City’s Naming Policy and Procedure.

14.7 Limitations on “Pets In Need Palo Alto Animal Shelter”.

The City of Palo Alto agrees that its use of the name “Pets In Need Palo Alto Animal Shelter”, and as may be changed as provided for herein, with regard to the animal shelter that is the subject of this Ag reement, as well as any logos or marks that may be developed and approved as provided for herein with regard to such shelter, are strictly limited to the term of this Agreement, and that, unless otherwise agreed by the parties in writing, upon expiration or termination of this Agreement, the City of Palo Alto shall cease and desist all use of such names, logos and marks with regard to such animal shelter in relation to the ongoing operation of such shelter as of the date of such termination or expiration.

14.8 Use of City of Palo Alto Seal or Logo. Any use by Pets In Need of any City of Palo Alto seal or logo is required to be approved in writing by the City of Palo Alto City Manager or designee prior to any publication or any other public use, in any form or media, and in accordance with Palo Alto Municipal Code as may be amended from time to time, provided that the City Manager or his designee shall approve or deny in writing a written request by Pets in Need within ten (10) days of the date of the request, and shall set forth his or her basis for any denial in writing.

14.9 Use of Pets in Need Seal or Logo. Any use by the City of Palo Alto of any Pets In Need seal or logo is required to be approved in writing by the Pets In Need Executive Director or designee prior to any publication, or any other public use, in any form or media, provided that the Executive Director of PIN or designee shall approve or deny in writing a written request by CITY within twenty (20) days of the date of the request.

14.10 Reservation of Rights. All Pets In Need Intellectual Property Rights not expressly granted under this Agreement are reserved to and retained by Pets In Need. All City of Palo Alto Intellectual Property Rights not expressly granted under this Agreement are reserved to and retained by the City of Palo Alto.

SECTION 15. AUDITS. CONSULTANT shall permit CITY to audit, with two business days’ advanced notice, during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to CONSULTANT’S performance of the Services under this Agreement. (It is understood that such records do not i nclude those pertaining solely to CONSULTANT’s operations in Redwood City or to any services it provides that are not listed on Exhibit A of this Agreement.) CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement.

SECTION 16. INDEMNITY; LIMITATION OF LIABILITY.

16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees , volunteers, and contractors (each a “CITY Indemnified Party”) from and against any and all third party demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including reasonable attorneys’ fees, experts fees, court costs and disbursements (“Claims”) to the extent resulting from , or arising out of (i) any act or omission of CONSULTANT that is outside the scope of CONSULTANT’s authority under this Agreement and/or (ii) the negligence or willful misconduct of CONSULTANT or its officers, employees, contractors or subcontractors in the performance of this Agreement . To the fullest extent DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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permitted by law, CITY shall indemnify, defend and hold harmless CONSULTANT, its directors, officers, employees , volunteers, and contractors (each a “CONSULTANT Indemnified Party”) from and against any and all third party Claims to the extent resulting from or arising out of (i) the negligence or willful misconduct of CITY or its officers, employees, contractors or subcontractors in the performance of this Agreement , (ii) any condition in or about the Premises, except to the extent caused by the negligence or willful misconduct of CONSULTANT or a CONSULTANT Indemnified Party. or (iii) CITY’s decision to transition to a consultant-provided service delivery model and City’s decision, based on CONSULTANT’s representations contained in its proposal to the City and herein, to contract with CONSULTANT to provide the Services.

16.2. In the event of concurrent negligence of more than one party, its Council members (or directors), officers, employees , contractors or subcontractors, the liability for any and all Claims shall be apportioned under the California theory of comparative negligence as presently established or as may hereafter be modified. Nothing in this Agreement shall constitute a waiver or limitation of any rights that a party may have under applicable law in the event of concurrent negligence of persons or entities other than the parties to this Agreement.

16.3. The parties agree to cooperate with each other in the investigation and disposition of third-party Claims hereunder. It is the intention of the parties to reasonably cooperate in the disposition of all such Claims. Such cooperation may include joint investigation, defense and disposition of claims of third parties hereunder. The parties agree to promptly inform one another whenever an incident report, claim or complaint is filed or when an investigation is initiated concerning this Agreement. Notwithstanding the foregoing, in the event of a conflict in interest, each party may conduct its own investigation and engage its own counsel.

16.4. Each party agrees to mitigate any loss or damage which it may suffer in consequence of any breach by the other party of the terms of this Agreement. or any fact, matter, event or circumstance giving rise to a Claim.

16.5. LIMITATION OF L IABILITY. NOTWITHSTANDING

ANYTHING TO THE CONTRARY CONTAINED HEREIN OR ELSEWHERE, NEITHER

PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL ,

CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES,

INCLUDING BUT NOT LIMITED TO LOST PROFIT S IN CONNECTION WITH THIS

AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH POTENTIAL CLAIM, LOSS OR DAMAGE.

16.6. LIMITATION OF LIABILITY OF CITY . EXCEPT WITH

REGARD TO CITY'S OBLIGATIONS TO INDEMNIFY AND HOLD HARMLESS THE CONSULTANT PURSUANT TO THIS SECTION 16, CITY’S PAYMENT OBLIGATIONS

UNDER THIS AGREEMENT SHALL BE LIMITED TO THE PAYMENT PROVIDED FOR IN SECTION 4 (NOT TO EXCEED COMPENSATION) OF THIS AGREEMENT.

16.7. LIMITATION OF LIABILITY OF CONSULTANT. IN NO

EVENT SHALL THE TOTAL AGGREGATE LIABILITY UNDER THIS AGREEMENT OF CONSULTANT TO CITY EXCEED FIVE MILLION DOLLARS.

16.8. CITY represents and warrants that (i) it has complied with Section 2.30.250 of the Palo Alto Municipal Code and (ii) the CITY’s indemnification obligations contained in this is Section 16 represent the valid and enforceable obligations DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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of CITY.

SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, shall not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. No waiver of a condition or nonperformance of an obligation hereunder is effective unless it is in writing signed by the authorized representatives of the parties hereto and, as applicable, approved as required under the Palo Alto Municipal Code or Charter.

SECTION 18. INSURANCE. CONSULTANT, at its sole cost and expense, shall obtain, as soon as practicable following the date of this Agreement, and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "C".

CONSULTANT shall be responsible for ensuring that its subcontractors retained to perform Services under this Agreement, if any, shall obtain and maintain in full force and effect during the term of the subcontractor’s engagement, the insurance coverage described in Exhibit “C,” as well as a policy endorsement naming CITY as an additional insured under any policies required in this Section 18.

18.1. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A -VII or higher which are licensed or authorized to transact insurance business in the State of California.

18.2. CONSULTANT shall file with CITY c ertificates evidencing such insurance as soon as practicable following the date of execution of this Agreement but in any event prior to the first day any of CONSULTANT’S obligations are performed hereunder. The certificates shall be subject to the approval of CITY’s Risk Manager and shall contain an endorsement stating that the insurance is primary coverage and shall not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written no tice of the cancellation or modification within five (5) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement.

18.3. The procuring of such required policy or policies of insurance will not be construed to limit either party’s liability hereunder nor to fulfill the indemnification provisions of this Agreement.

SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.

19.1. The City Manager may terminate this Agreement or suspend the performance of the Servic es, in whole or in part, in the event of a material breach of CONSULTANT’s obligations to CITY under this Agreement, which breach is not cured by CONSULTANT within (60) days of receipt of written notice from CITY to CONSULTANT detailing the nature of such failure. The City Manager may terminate this Agreement without cause by giving one-year prior written notice thereof to CONSULTANT.

19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services, in whole or in part, in the event of a material breach of CITY’s DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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obligations to CONSULTANT under this Agreement, which breach is not cured by CITY (i) with respect to material breach of CITY’s payment obligations herein, within thirty (30) days of receipt of written notice from CONSULTANT to CITY, or (ii) with respect to material breach of all other CITY obligations hereunder, within sixty (60) days of receipt of written notice from CONSULTANT to CITY detailing the nature of such breach . CONSULTANT may terminate this Agreement without cause by giving one-year prior written notice thereof to CITY.

19.3. In the event of any suspension or termination hereunder, CITY shall pay CONSULTANT for the Services rendered and materials delivered to CITY (i) on or before the effective date of such suspension or termination and (ii) in accordance with this Agreement. CITY shall pay such amounts to CONSULTANT within thirty (30) days after receipt of CONSULTANT’s invoice. To the extent that CITY has prepaid any fees, CONSULTANT shall fund to CITY any prepaid fees on a pro -rata basis to the extent such fees are attributable to the period after the termination date, and CITY shall have no obligation to pay unpaid fees that would have become due during the remaining Term had this Agreement not been terminated.

19.4 The following Sections shall survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.3, this 19.4, 19.5, 20, 25, and 27.

19.5 Force Majeure. Neither Party shall be liable for a failure to perform obligations in this Agreement if such performance is made impossible by unforeseeable causes beyond the Party’s control due to acts of God, war, strike, acts of terrorism, or natural disaster or epidemic or quarantine resulting in a government-declared state of emergency or health order (“force majeure”) . The Party subject to the force majeure shall: (1) within 48 hours of suspension, give notice to the other Party of which specific obligations are being suspended and state the date and extent of such suspension and the cause thereof, (2) use its best efforts to mitigate the impacts of such force majeure on its obligations in this Agreement with the least practicable delay, and ( 3) resume the performance of its obligations as soon as reasonably practicable after the remediation or removal of the cause. In addition to any other right of either party to suspend or terminate this Agreement, if an event of force majeure can reasonably be expected to prevent the affected Party from performing one or more obligations of this Agreement for a period of forty-five (45) days, or already has prevented such performance for forty-five (45) days, then the other Party may terminate this Agreement upon fourteen (14) days written notice to the affected Party.

For the avoidance of doubt, except as otherwise provided by applicable law, force majeure shall not include: (1) financial distress nor the inability of either party to make a profit or avoid a financial loss, ( 2) changes in market prices or conditions, or ( 3) a party's financial inability to perform its obligations in this Agreement.

SECTION 20. NOTICES. Any notice provided for in this Agreement shall be in writing and shall be either ( i) personally delivered, (ii) received by certified mail, return receipt requested, or (iii) sent by reputable overnight courier service (charges prepaid) to the recipient at the address indicated below.

To CITY: City of Palo Alto, City Manager’s Office
250 Hamilton Ave., Palo Alto, CA 94301

With a copy also to the CITY’s Project Manager.

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To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above.

Notices will be deemed to have been given hereunder (i) when delivered personally to the recipient, (ii) one (1) business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (iii) five (5) business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid.

SECTION 21. CONFLICT OF INTEREST

21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and shall not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services.

21.2. CONSULTANT further covenants that, in the performance of this Agreement, it shall not employ subcontractors or other persons or entities having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision shall be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California.

21.3. CITY agrees and acknowledges that, as of the date of hereof, CONSULTANT is not a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, and that therefore CONSULTANT shall not be required to file the financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act.

SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section

2.30.510, CONSULTANT certifies that in the perf ormance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment.

SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department (and copies of which have been provided to CONSULTANT by CITY), incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements:

(a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double- sided and printed on a minimum of 30% or gre ater post -consumer content paper, unless otherwise approved by CITY’s project manager . Any submitted materials printed by a DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks.

(b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office, and a copy of the current policy has been provided to CONSULTANT by CITY.

(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed.

SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.

CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter

4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the C ITY, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.30 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regardi ng the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section

4.62.060.

SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement shall terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement.

SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS. The Services are not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance of the Services in accordance with applicable law including without limitation SB 7.

SECTION 27. MISCELLANEOUS PROVISIONS.

27.1. This Agreement shall be governed by the laws of the State of California without regard to its conflict of laws provisions.

27.2. In the event that an action is brought, the parties agree that trial of such action shall be vested exclusively in the courts of California in the County of Santa Clara, State of California or the United States District Court for the Northern District of California.

27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action.

27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties.

27.5. The covenants, terms, conditions and provisions of this Agreement shall apply to, and shall bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties.

27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto shall remain in full force and effect.

27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement w hich, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and shall be deemed to be a part of this Agreement.

27.8. In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), this Agreement shall control.

In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control.

27.9. If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform CITY as soon as practicable, but no later than 24 hours after learning that there has been a breach in the security of the system or in the security of the Personal Inf ormation. CONSULTANT shall not use Personal Information for direct marketing purposes without CITY’s express written consent.

27.10. All unchecked boxes do not apply to this Agreement.

27.11. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities.

27.12. This Agreement may be signed in multiple counterparts, which, when executed and delivered by the parties hereto, shall together constitute a single binding agreement. This Agreement may be signed using the City’s Docusign platform.

[signature page follows]

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CONTRACT No. C24190819 SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the dates below.

CITY OF PALO ALTO

City Manager
Date:

APPROVED AS TO FORM:

City Attorney or designee

PETS IN NEED
By:

Robert Kalman
President of the Board
Date:

By:

Laura Toller Gardner
Chief Executive Officer
Date:

Attachments:

EXHIBIT “A”: SCOPE OF SERVICES
EXHIBIT “B”: COMPENSATION
EXHIBIT “C”: INSURANCE REQUIREMENTS
EXHIBIT “D”: USE OF PREMISES

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EXHIBIT “A”

SCOPE OF SERVICES

PETS IN NEED (“CONSULTANT”) agrees to provide Animal Shelter Services as described in Section II below at the Palo Alto Animal Shelter, 3281 East Bayshore Road, Palo Alto, CA, for the City of Palo Alto (“CITY”) and the Contract Cities. CITY agrees to perform the obligations as described in Section III below.

I. DEFINITIONS The following terms as used in this Exhibit “A” Scope of Services shall have the meaning provided below:

A. “Diseased and crippled animal” means those animals which are known or believed to be infected with any dangerous or
communicable disease, or which have an incurable, crippled condition or which are afflicted with any painful disease which is believed to be incurable.

B. "Dangerous animal" means any dog or other animal which demonstrates a propensity to assault, bite, scratch or harass people or other animals without provocation. There shall be a rebuttable presumption that any animal that bites a person is a dangerous animal.

Capitalized terms used but undefined herein shall have the meanings set forth in the Agreement for Professional Services (this “Agreement”) to which this Exhibit is attached and of which it forms a part.

II. PETS IN NEED RESPONSIBILITIES:

1. Animal Shelter Services. CONSULTANT shall perform the following sheltering services and shall provide shelter supplies, animal attendants, supervisors and administrative personnel, and any other personnel, supplies and equipment, reasonably required to perform the following services (“Shelter Services”):
a) Shelter of abandoned, surrendered, impounded, lost or stray domestic animals brought to the shelter by CITY or its Contract Cities, its residents, or personnel.
b) CONSULTANT may shelter and provide services to
animals outside the scope of paragraph (a) above (“non-City animals”) including moving animals between the Palo Alto Animal Shelter and Pets In Need Redwood City facility on a space-available basis and at CONSULTANT’s sole expense
for all costs, including labor, equipment, supplies, food, and medication. At no time shall animals within the scope of paragraph (a) above be denied services due to services
provided to non-City animals at the Pets in Need Palo Alto Animal Shelter.
c) For the avoidance of doubt, to the maximum extent
permissible by law, CONSULTANT shall have exclusive
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discretion over how long an animal is sheltered, including exclusive discretion to shelter an animal for a longer period than the statutory minimum number of days This section shall not be interpreted to authorize funds in addition to those specified in this Agreement, and CONSULTANT shall be
responsible for managing the length of animal sheltering within the funds and resources authorized by this Agreement.
d) CONSULTANT shall provide veterinary care, including
appropriate medical records, for live animals that are
impounded as part of cruelty investigations. CONSULTANT shall 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 the Shelter, and off- site crime scene investigations, but may do so at its sole discretion upon City request and at the City’s expense. e) Quarantine of biting animals.
f) Provision for reclaim of abandoned, lost or stray domestic animals during established business hours.
g) Shelter staff shall make every effort to identify lost animals (through ID tags and microchips) and to contact owners. h) Be CITY’s and Contract Cities’ main point of contact (by phone, in-person, and electronic means) regarding animal shelter services, including inquiries regarding missing pets. i) Provide medical evaluation and treatment, if necessary, to all incoming animals. This includes vaccinations, and spay and neuter surgeries to domestic animals.
j) Euthanasia (if applicable) and disposal of abandoned, lost, impounded, or stray domestic animals that are unclaimed by their owners and found to be diseased and crippled and/or dangerous as defined by Palo Alto Municipal Code and
California State Law. The City acknowledges
CONSULTANT’s Euthanasia Policy and that CONSULTANT
will apply same at any proceeding it is a party to to determine if an animal is a dangerous animal.
k) For purposes of clarity, CONSULTANT shall not be
required to provide owner-requested euthanasia at any time, and CITY acknowledges that CONSULTANT has elected not
to provide or subcontract this service.
l) CONSULTANT shall maintain a public website, separate from the CITY’s website, with information including without
limitation: shelter hours, volunteer opportunities, adoption information, medical services offered and information about those services and contact information.

m) Consultant shall allow CITY Animal Control Officers
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off animals and provide reasonable accommodation for
Animal Control Officers to begin and end their shifts, and complete administrative work in the shelter.
n) CONSULTANT shall maintain, repair and replace all
surgical room equipment, cages, hoses, and other
equipment at the facility.
o) CONSULTANT shall comply with all federal, state, and local laws in effect applicable to the Services upon
commencement of the provision of the Services, and shall be subject to inspection by the CITY and other duly
authorized federal, state, and local authorities to insure such compliance. This includes the applicable provisions of Palo Alto Municipal Code Title 6, as amended from time to time. For the avoidance of doubt, this provision shall not be construed to expand the scope of the Services as
expressly set forth in this Exhibit “A”.
p) CONSULTANT shall use commercially reasonable efforts to offer comprehensive volunteer and educational programs which may include, without limitation: animal fostering programs, dog walker programs, and animal care trainings.
q) When appropriate, in CONSULTANT’S sole discretion,
CONSULTANT may partner and/or coordinate with adoption
programs, rescue groups, and other no-kill shelters to maximize the shelter’s adoption rate and/or place animals in suitable foster care. CONSULTANT shall seek CITY’s approval for partnerships in which CONSULTANT pays or receives money or other financial consideration, solely to the extent that such partnership relates to CONSULTANT’s performance of the
Services. CITY shall approve or deny in writing any such request within thirty (30) days after receipt of such request. r) Develop and maintain proactive and consistent communication and rapport with CITY by:

1. Responding in a timely manner to emails and phone
calls;

2. Communicating and resolving issues and concerns
immediately; and

3. Provide excellent service to CITY staff.
s) The Parties shall work together to develop a
transparent and humane feral cat program that reflects
sheltering best practices and takes into account the impact on public health and wildlife; the program shall continue the current practice of not releasing feral cats.
t) Develop, in cooperation with CITY, a disaster preparedness plan.

2. Medical Services
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trained personnel, employed or under subcontract or contract, necessary to perfo rm the following services (“Medical
Services”): Provision of veterinarian services 8.5 hours per day, six days a week to treat and provide veterinarian care for impounded animals, including for animals picked- up by
Animal Control Officers. Upon City approval, City shall pay for any after -hours emergency vet services, notwithstanding animals on stray hold, City shall pay for any after -hours emergency vet services. After hours is defined as 5pm - 8:30am Monday, Tuesday, Wednesday, Thursday, Friday,
and Saturday, and all day and night Sunday.
b) Monitor quarantined animals.
c) CONSULTANT shall provide low -cost vaccination clinics a minimum of one time per week. CONSULTANT shall work
toward providing one after-hours or weekend clinic per month. d) Conduct microchipping.
e) CONSULTANT shall provide low-cost, high quality spay and neuter services for dogs and cats to the best of its ability, prioritizing City and Contract City residents. Wait times for spay and neuter services for City and Contract City residents shall be no more than one month, except in the event of unexpected and exceptional circumstances.
f) The City’s Animal Control Officers shall be licensed through CONSULTANT’S medical authority to administer euthanasia as necessary for animals that are unclaimed by their owners and found to be diseased and crippled and/or dangerous as defined by Palo Alto Municipal Code.
g) Comply with all laws requiring reporting of animal-borne diseases, including rabies. This includes Municipal Code section 6.32.020, as amended from time to time.

3. Operating Schedules
a) CONSULTANT shall provide Shelter Services for the animals twenty-four (24) hours a day, seven (7) days a week.
b) CONSULTANT shall provide emergency veterinary services in accordance with Section 597(f) of the California Penal Code. c) CONSULTANT shall have shelter staff on site for care of shelter animals seven (7) days per week, 365 days per year.
d) CONSULTANT shall maintain public access hours to the shelter seven days per week, for a minimum of forty (40) hours per week.

CONSULTANT shall post the public hours on its website, and inform CITY and Contract Cities in writing of any change in hours. e) CONSULTANT shall observe the following holiday closures for public hours:

January 1 (New Year’s Day)
Martin Luther King’s birthday
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Memorial Day
July 4th (Independence Day)
Labor Day
Thanksgiving Day
Day after Thanksgiving
Christmas Eve (1/2 Day)
Christmas Day

4. Dead Animal Services
a) CONSULTANT shall provide storage facilities, disposal mechanisms, administrative personnel, and any other personnel, supplies and equipment reasonably required to perform the following services (“Dead Animal Services”):
i. Identification of and notification to the owner of the dead animal, whenever possible; and
ii. Disposal of the body of the dead animal. CONSULTANT shall offer animal owners the option to pay for cremation services, in which case, CONSULTANT shall arrange for cremation with the appropriate subcontractor.
b) CONSULTANT shall subcontract with one or more
subcontractors for the maintenance of a dead animal storage facility as well as collection of dead animals and maintenance of the facility and equipment, all at CONSULTANT’s sole expense.

5. Wildlife
a) The impoundment of wildlife shall be managed by CONSULTANT staff. An assessment of wildlife shall be done by medical staff, if necessary. If the animal is severely injured or sick, a licensed veterinarian shall be consulted, and the case shall be fully documented in accordance with AVMA guidelines. This
Agreement assumes that all wildlife animals will continue to be transferred to the Peninsula Humane Society at no cost to the CITY or to CONSULTANT, as set forth in the Memorandum of Understanding between CONSULTANT and Peninsula Humane
Society dated November 17, 2017. Should Peninsula Humane Society request fees for wildlife intake, CONSULTANT and the CITY shall negotiate in good faith to amend this Agreement per Section 27.4 herein, to provide for the reimbursement by CITY to CONSULTANT of such fees (upon documentation of such fees by CONSULTANT reasonably satisfactory to CITY).
b) Costs for disposal and cremation of dead wildlife shall be the responsibility of CITY.

6. Records Management
a) CONSULTANT may acquire and use, at its own cost, new shelter management software that best meets its needs. CONSULTANT shall be responsible for continuing to use and update Chameleon, and CITY shall be responsible for paying for the Chameleon DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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platform, including all licensing modules for use at the shelter, but excluding licenses for use at CONSULTANT’s offsite offices or for data migration or transfer to CONSULTANT’s own platform.

CONSULTANT and CITY shall jointly identify the minimum viable data that CONSULTANT shall be required to add to Chameleon upon animal intake.
b) CONSULTANT and CITY’s Animal Control shall maintain joint access to the Chameleon database, as provided for in this section.

CONSULTANT is responsible for keeping the Chameleon
database updated in a timely fashion. Chameleon data is designated “For Official Use Only,” meaning, CONSULTANT may only use such data for the performance of this Agreement, and not for marketing or any other purposes without the prior written consent of the CITY’s City Manager or designee. Annual
maintenance fees for the Chameleon software shall be paid by CITY. Repair and replacement cost of the server and supporting hardware, if any, shall also be paid by CITY. CONSULTANT shall not have access to certain areas of the database, such as saved criminal information (as required by law). CITY shall work with the database programmer/vendor to ensure that such areas of the database are not accessible by CONSULTANT. All data entered into the Chameleon database by any party shall be property of CITY.
c) Monthly Report
i. CONSULTANT shall deliver to CITY during the term of
this AGREEMENT, and within thirty (30) days of the end
of each month, a monthly Animal Shelter and Impound
Report summarizing monthly and year-to-date services
provided by CONSULTANT for CITY. This report shall
include, but not be limited to, the following information:
(1) Medical statistics including spay and neuter,
microchips, and vaccinations (number of
clinics and number of animals vaccinated) for
City, Contract City, and out-of-jurisdiction
animals.
(2) Number of animals in and out of facility by type of animal and type of intake and outcome.
(3) City of origin of all animals upon shelter intake.
d) Financial Reporting
i. CONSULTANT shall submit quarterly financial reports for the Shelter to CITY to include:
(1) Revenues from , adoption fees, and medical services to include vaccines and spay/neuter surgeries.
(2) Expenditures, to include staffing, contracts, animal care, indirect costs, and administrative operations.
e) Retention of Records, Right to Monitor and Audit
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i. CONSULTANT shall maintain records relating to
CONSULTANT’s operation of the Palo Alto Animal Shelter
for a period of four (4) years after the expiration or
termination of this Agreement or until any audits or reviews are completed, whichever comes later, and such records
shall be subject to examination and/or audit of CITY, a Federal grantor agency, and the State of California for a period of four (4) years after the expiration or termination of this Agreement or until any audits or reviews are completed, whichever comes later.
ii. Records/accounts relating to CONSULTANT’s operation of the Palo Alto Animal Shelter shall be open and accessible to inspection upon reasonable notice during normal
business hours throughout the term of this Agreement and for a period of four (4) years thereafter or until any audits or reviews are completed, whichever comes later.
iii. Parties, upon request by either party to the other, shall meet on occasion to consider revisions which may be needed to the reporting forms created to document performance of the Services provided.

7. Fundraising, Marketing and Branding
a) CONSULTANT shall create and manage fundraising, marketing, volunteer development and education programs. Local volunteer groups shall be integrated into fundraising and other activities and events when reasonably possible. The “Pets In Need Palo Alto Animal Shelter” shall be the initial brand name of the shelter to be operated by CONSULTANT pursuant to this Agreement, and any logo or name change shall be approved in writing by
CONSULTANT and the CITY’s City Manager or designee prior to use.

8. Licensing and other fee collection
a) CONSULTANT shall charge fees for services according to the CITY’s municipal fee schedule or according to state or local laws.

Fees for any services not covered by CITY’s municipal fee schedule or state or local laws shall be set by CONSULTANT.

CONSULTANT shall take CITY’s comments into consideration when setting such fees. CITY shall take CONSULTANT's
comments into consideration when setting its municipal fee schedule.
b) For the first three months of the Term of this Agreement (or any other period agreed upon in writing by the Parties),
CONTRACTOR shall continue to manage dog licensing, issuance, and renewals on behalf of CITY and Contract Cities.

CONSULTANT shall collect license fees at fee amounts set by the DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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CITY. CONSULTANT shall retain such fees. After this period, CITY shall manage dog licensing including processing, issuance, and renewals on behalf of CITY and Contract Cities. Licensing information shall be included on all Incident Reports and, additionally, provided to CITY on an as requested basis. CITY shall collect all associated license fees at the fee amounts set by CITY. Licensing includes the licensing of dogs as defined in Municipal Code Chapter 6.16 as amended from time to time.

When needed, CONSULTANT shall assist walk-in customers to navigate the online application process or provide a paper application and assist in filling out, as appropriate.
c) CITY shall process citation fees, and collect 100% of these fees.

PETS IN NEED shall process and retain all other fees and revenues, including without limitation adoption fees, spay, neuter, impoundment, and other fees as listed in the municipal fee schedule.

9. Contract Cities; WeCare Alliance
a) CITY and CONSULTANT shall provide services to the City of Los Altos and the Town of Los Altos Hills (the “Contract Cities”) pursuant to the CITY’s amended Regional Animal Care and Control contracts approved by City Council on June 24, 2019.

These contracts are valid through June 30, 2024 with an option for an additional five-year extension. The Parties agree that this Agreement assumes that the Contract Cities’ contracts will be in effect during the entire term of this Agreement.
b) CITY shall consult with CONSULTANT should the contracts with the Contract Cities be amended or terminated, provided that if any such amendment or termination is reasonably expected to result in increased costs to CONSULTANT, such amendment or
termination (if initiated by CITY) shall be subject to
CONSULTANT’s prior written consent. CONSULTANT shall notify CITY in writing of its consent or lack thereof within forty-five (45) days after receipt of CITY’s written request, which request shall include the precise language of such amendment or all relevant details of such termination (whichever applies). If CONSULTANT consents, the parties shall amend this Agreement (i) to adjust the scope of Services accordingly and (ii) to cover any reasonable cost increases to CONSULTANT.

c) CITY may contract with additional cities, subject to CONSULTANT’s prior written consent. CONSULTANT shall
notify CITY in writing of its consent or lack thereof within forty- five (45) days after receipt of CITY’s written request, which request shall include the text of such proposed contracts. If CONSULTANT consents, CONSULTANT and CITY shall
amend this Agreement (i) to adjust the scope of Services DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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accordingly and (ii) to cover any reasonable cost increases to CONSULTANT.
d) CONSULTANT shall continue membership in
the WeCare Alliance (www.sheltersfirst.org).

10. Cost Overruns or Changes
a) If CITY or state laws are passed during the term of this Agreement that require a greater level of service, CITY and CONSULTANT agree to negotiate in good faith regarding the reimbursement of CONSULTANT for additional costs associated with implementing the new laws. If Parties are unable to agree on reimbursement costs, CONSULTANT shall document the increased costs and submit to the City Auditor. The City Auditor shall conduct an independent audit. Parties agree to accept the City Auditor’s determination of any increased costs.
b) If current state laws are amended, repealed, otherwise changed or suspended during the term of this Agreement that reduce, alter, or remove existing relevant mandates, either party may require the other party to meet to discuss possible financial and operational impacts of levels of service per the change in law, including but not limited to any decrease in contract amounts paid to CONSULTANT, provided that no such decrease shall be
effective unless agreed by CONSULTANT.

11. PIN may also provide additional services not specified in this Agreement at its own expense. These services must comply with all applicable laws and City policies. CONSULTANT shall notify CITY 14 days before providing such services.

III. CITY RESPONSIBILITIES. CITY shall:

1. Provide an adequate and safe facility for CONSULTANT to perform the Services.

2. Provide Animal Control Officers (ACOs) and their services for CITY and Contract Cities. This shall include maintenance of ACO vehicles and equipment. Establish fees for dog licensing and animal impounding.

3. With regard to the shelter facility, provide and/or pay for utilities, taxes, electricity, water, gas, waste water, recycling, waste (not animal disposal except for dead wildlife), internet, Chameleon software/database and associated support, and Chameleon server hardware and support (if any), which collectively is estimated to cost approximately $55,000 per year.

4. Develop and maintain proactive and consistent communication and rapport with CONSULTANT
a) Respond in a timely manner to emails and phone calls DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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b) Communicate and resolve issues and concerns immediately c) Provide excellent customer service to CONSULTANT staff and customers

5. Develop, in cooperation with CONSULTANT, a disaster preparedness plan

6. Administer the agreements between the CITY and the Contract Cities regarding animal shelter services.

IV. Policies
All City and CONSULTANT policies relating to the operation of the Palo Alto Animal Shelter shall be kept in a shared online folder and be accessible to all CONSULTANT and City staff. CONSULTANT shall comply with the City’s shelter policies contained in such folder.

If either CONSULTANT or the City has an interest in revising or creating a new policy, it shall notify the other party in writing.

Such notices from CONSULTANT shall be addressed to the City’s Supervising Animal Control Officer. The Supervising Animal Control Officer will advise the PIN CEO in writing within five (5) business days whether review and approval are deemed necessary.

Review and approval shall be deemed necessary only if the proposed revision will result in (a) a change to the terms of the Services Agreement, or (b) a material change in the level of risk to the City, in services to residents of Palo Alto and/or the contract cities, or in roles and duties of City staff.

Notices from the City shall be addressed to the CONSULTANT’s CEO, who shall advise the City in writing within five (5) business days whether review and approval are deemed necessary. Review and approval shall be deemed necessary only if the proposed revision or addition shall result in (a) a change to the terms of the Agreement or the cost to CONSULTANT of performance of the Agreement, or (b) a material change in the level of risk to CONSULTANT, in services to residents of Palo Alto and/or the contract cities, or in roles and duties of CONSULTANT’s staff.

In either case, if the response is not an approval, the parties shall meet within five (5) business days of receipt of the response and attempt in good faith to reach an agreement.

The subject policy may be revised only upon the written agreement of both parties.

CONSULTANT and City shall regularly review generally accepted best animal welfare practices to ensure all policies in effect at the Palo Alto shelter are up-to-date and in line with shelter best practices.

V. Corrective Action Plan
The City and CONSULTANT agree to work in good faith to meet the obligations described in this Agreement. If either party determines that it will not meet a due date or will fail to deliver a service, it shall promptly send a written corrective action plan to the other party. The corrective action plan shall include the following information:

• Task that will not be met.
• Justification for failure to complete task
• Plan to correct including timeline to reach full compliance • Weekly progress updates to Project Manager (of either the City or PIN) DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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If the timeline to reach full compliance is not acceptable to the other party, or if compliance has not been met by the due date identified in the corrective action plan, the parties shall meet and confer to determine next steps.

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EXHIBIT “B”

COMPENSATION

CITY agrees to compensate CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the schedule below.

SCHEDULE TO EQUAL AND NOT TO EXCEED
(SUBJECT TO SECTION 19 “TERMINATION OR
SUSPENSION OF AGREEMENT OR SERVICES”)
Year 1 $1,370,000.00
Year 2 $1,411,100.00*
Year 3 $1,453,433.00*
Year 4 $1,497,036.00*
Year 5 $1,541,947.00*

Sub-total Basic Services $7,273,516.00*

Reimbursable Expenses $0.00

Contingency Funds $100,000
(not to exceed $2 0,000 per contract
year)

Maximum Total Compensation $7,373,516.00*

*Annual compensation to PIN will start at $1.37m for Year 1 and increase annually in a percentage equal to the higher of: (a) three percent (3%) or (b) the yearly percentage change in CPI using the Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers for all items for the San Francisco-Oakland-Hayward area, based on the change from October to October of each year (starting with October, 2023). The amounts above are estimates only reflecting a 3% annual increase each year.

CONTINGENCY FUNDS
To request contingency funds, the CONSULTANT shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, for such services. In addition to the factors above, CITY may consider whether contingency funds are appropriate within existing funding and workload, and contingency funds shall not be released if CONSULTANT has not exhausted unused or unallocated funds.

The CITY shall notify CONSULTANT in writing of its approval or lack thereof within ten (10) days after the date of CONSULTANT’s proposal. If CITY’s project manager does not approve CONSULTANT’s request, CONSULTANT may appeal that decision to the City Manager.

If authorized by CITY, the contingency services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s project manager DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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and CONSULTANT, and payment shall be made to CONSULTANT, no later than ten (10) days a fter the date of CITY’s authorization. Contingency funds are subject to all requirements and restrictions in this Agreement.

REIMBURSABLE EXPENSES
No Reimbursable Expenses are authorized by CITY through this Agreement, unless pursuant to a written amendment to this Agreement as provided for herein.

ADDITIONAL SERVICES
No Additional Services are authorized by the CITY through this Agreement, unless pursuant to a written amendment to this Agreement as provided for herein.

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EXHIBIT “C”

INSURANCE REQUIREMENTS

CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE

TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A- :VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.

AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:

REQUIRED

TYPE OF COVERAGE

REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES WORKER’S COMPENSATION
YES EMPLOYER’S LIABILITY

STATUTORY

YES GENERAL LIABILITY, INCLUDING

PERSONAL INJURY, BROAD FORM

PROPERTY DAMAGE BLANKET

CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

$5,000,000

YES AUTOMOBILE LIABILITY, INCLUDING

ALL OWNED, HIRED, NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000

$1,000,000

$1,000,000
$1,000,000
$1,000,000
$1,000,000

$1,000,000

YES PROPERTY INSURANCE

ALL RISK, FULL REPLACEMENT INSURANCE
VALUE

YES BUSINESS INTERRUPTION

INSURANCE

PROFESSIONAL LIABILITY,

YES INCLUDING, ERRORS AND

OMISSIONS, MALPRACTICE (WHEN

APPLICABLE), AND NEGLIGENT

PERFORMANCE

ALL DAMAGES

$2,000,000

YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND

EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY

RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONTRACTORS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S

LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.

I. INSURANCE COVERAGE MUST INCLUDE:

A. PRIMARY COVERAGE

WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,

INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO

OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.

B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS

OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF

MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF CONSULTANT UNDER THIS POLICY.

C. NOTICE OF CANCELLATION

1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR

ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM,
CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY

WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF
CANCELLATION.

2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR

THE NON-PAYMENT OF PREMIUM, CONSULTANT SHALL PROVIDE
CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE
EFFECTIVE DATE OF CANCELLATION.

II. INSURANCE COVERAGE MUST INCLUDE:

1. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE

TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE
CANCELLATION; AND

2. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING
INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO
INDEMNIFY CITY.

3. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.

Vendors are required to file their evidence of insurance and any other related notices with the City of Palo Alto to the following email at :

[email protected]
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EXHIBIT D

USE OF PREMISES

SECTION 1. USE OF PREMISES. Consultant shall have the exclusive right to enter and use the Premises during the term of this Agreement for the sole purposes of performing the Services and fulfilling Consultant’s obligations under the Agreement, as detailed in this Section 1 (“Use of Premises”) of this Exhibit D. Consultant shall have the right to permit Consultant’s employees, agents and subcontractors to enter and access the Premises for the sole purposes of performing the Services and fulfilling Consultant’s obligations under this Agreement. Consultant shall have the right to exclude third parties and trespassers onto the Premises. Notwithstanding the foregoing, City’s Animal Control Officers and their supervisors have the right to enter the Premises at any time. In addition, City has the right to enter Premises at any time for the purposes of inspection, emergency response and the performance of City obligations under this Agreement. Consultant shall, at City’s request, promptly remove any of Consultant’s property or Consultant-installed improvements on the Premises to allow City access to the utilities or other City owned facilities/property. In the event City deems it necessary, for purposes of health, safety or building code requirements, in City’s sole discretion, City shall have the right to move, alter or remove any such property or improvements and City shall be responsible for promptly restoring or returning the same to its prior condition.

SECTION 2. CONDITION OF PREMISES, CLEANING AND MAINTENANCE.

2.1 Condition of Premises, Routine Interior Cleaning and Janitorial Activities. In connection with its use, Consultant shall maintain the Premises in a clean, safe, secure, orderly, and sanitary condition, consistent with a commercially reasonable standard for a well-run animal shelter facility, so far as the Premises may be affected by Consultant’s activities under this Agreement.

Specifically, Consultant shall undertake routine cleaning and janitorial acti vities as necessary to maintain the interior of the Premises in an orderly condition, as above, provided that nothing in this section shall obligate Consultant to make any alterations or capital improvements to the Premises.

Consultant shall maintain all of its own equipment, furnishings and trade fixtures upon the Premises which are required for the maintenance and operation of the Palo Alto Animal Shelter.

2.2 Maintenance and Utilities. Outside of Consultant’s responsibilities for routine interior cleaning and janitorial activities in Section 2.1 of this Exhibit, City shall be responsible for the maintenance of the interior and exterior of the Premises and the surrounding grounds, including (without limitation) the maintenance, repair, and replacement of the roof, building structure, improvements, and the HVAC, electrical, plumbing, and other building systems. City shall perform any alterations to the Premises (1) required by applicable laws or laws of general application (i.e.

ADA, seismic regulations, and building codes) and (2) to ensure that utilities (including, without limitation, water, gas, and electricity) are available to the Premises, in amounts sufficient for Consultant to perform the Services. In the event of a utilities outage, the City will work diligently to restore availability as quickly as possible. City shall promptly perform its obligations under this Section 2.2 (“Maintenance and Utilities”). In the event of a maintenance issue that impacts the health and safety of the operations, the City shall respond within 24 hours of receipt of notice from Consultant to develop an action plan to address the issue in an expedited timeframe.

SECTION 3. HAZARDOUS MATERIALS.

3.1 Environmental Laws. “Environmental Laws” means any applicable federal, state or local laws and regulations relating to Hazardous Material (including, without limitation, its use, handling, transportation, production, disposal, discharge or storage) or to human health and safety, industrial hygiene or environmental conditions in, on, under or adjacent to the Premises, incl uding without limitation soil, air and groundwater conditions.

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3.2 Hazardous Materials. “Hazardous Materials” means any substance, material, waste, pollutant or contaminant which is regulated by applicable Environmental Laws as being hazardous, toxic, flammable, carcinogenic, explosive or radioactive, or is potentially injurious to the public health, safety or welfare or the environment.

3.3 Release. “Release,” when used with respect to Hazardous Materials, means any actual or imminent spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, depositing, or disposing on, in, under or adjacent to the Premises , or any improvements constru cted hereunder by or on behalf of the Consultant, or in, on, under or adjacent to the Premises or any portion thereof in violation of Environmental Laws.

3.4 Remediation. “Remediation” (and derivatives thereof such as an without limitation “remediate”), when used with reference to Hazardous Materials, means any activities undertaken to clean up, remove, contain, treat, stabilize, monitor or otherwise control Hazardous Materials located in, on or under or adjacent to the Premises, or which have been or are being, or risk of being Released into the environment. Remediation includes, without limitation, those actions included within the definition of “remedy” or “remedial action” in California Health and Safety Code Section 25322 and "remove" or "removal" in California Health and Safety Code Section 25323, and as may be amended from time to time.

3.5 No Hazardous Materials. Consultant covenants and agrees that Consultant shall not, nor shall Consultant permit any of Consultant’s officers, employees, agents, or subcontractors, to cause or permit any Hazardous Material to be brought upon, kept, used, stored, generated, deposited or disposed of in, on, under or adjacent to the Premises in violation of Environmental Laws, provided that Consultant may store and use such substances in and on the Premises in such limited amounts as are customarily used in the operation of an animal shelter such as the Premises so long as such storage and use is at all times in full compliance with all applicable Environmental Laws and permits. Consultant shall
notify the City as soon as possible within 24 hours if and when it learns or has reason to believe that there has been any Release of Hazardous Material in, on, under or adjacent to the Premises. The City may request Consultant to provide adequate information for City to determine that any Hazardous Material permitted hereunder is being handled in compliance with all applicable Environmental Laws, and Consultant shall promptly provide all such information. In the event that any Hazardous Material is Released in, on, under or adjacent to the Premises by Consultant or any of Consultant’s officers, agents, employees, or subcontractors, Consultant shall promptly undertake all necessary actions to Remediate the contaminating Hazardous Material from the Premises and to return the Premises and other City property affected thereby, to the condition existing prior to such Release, or its reasonable equivalent or better, and otherwise investigate and Remediate the Release in accordance with applicable Environmental Laws, at no cost to City. Notwithstanding the foregoing, and excluding Consultant’s notice obligations under this Section, Consultant shall have no Remediation obligations under this Section for (i) the mere discovery of any preexisting condition, or (ii) any conditions arising out of any action or inaction of C ity, its Council members, officers, employees, agents or subcontractors, and not contributed to by any action or inaction of Consultant or Consultant’s officers, employees, agents, or subcontractors, (iii) any conditions arising out of any action or inacti on of third party vendors that are not an agent or subcontractor of Consultant, and not contributed to by any action or inaction of Consultant or Consultant’s officers, employees, agents, or subcontractors, (iv) any conditions arising out of any action or inaction of a third party, not an agent or subcontractor of Consultant, and not contributed to by any action or inaction of Consultant or Consultant’s officers, employees, agents, or subcontractors.

3.6 Hazardous Material Indemnity. Consultant shall, on behalf of itself and its successors and assigns, indemnify, defend and hold harmless City, its Council members, officers, employees and contractors (each a “City Indemnified Party”) from and against any and all claims, DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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liabilities, penalties, forfeitures, losses and/or expenses (including, without limitation, diminution in value of the Premise, damages for the loss or restriction on use of the rentable or usable space or of any amenity of the Premise, damages arising from any adverse impact or marketing of the Premises and sums paid in settlement of claims, response costs, cleanup costs, site assessment costs, reasonable attorneys’ fees, reasonable expert fees, judgments, administrative rulings or orders, fines, penalties, costs of death of or injury), to any person or damage to any property whatsoever (including, without limitation, groundwater, sewer systems and atmosphere), arising from, or caused or resulting, in whole or in part, directly or indirectly, by the presence or discharge in, on, under or adjacent to the Premises by Consultant, or Consultant’s officers, employees, agents or subcontractors, of Hazardous Material, or by any such party’s failure to comply with any applicable Environmental Law, whether knowingly or by strict liability. Such Consultant indemnity obligations include, without limitation, and whether foreseeable or unforeseeable, all costs of any Hazardous Materials management plan, closure, investigation, repairs, and Remediation and restoration of the Premises to its prior condition.

For purposes of such indemnity obligations, any acts or omissions of Consultant, its officers, employees, agents, or subcontractors (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Consultant. Consultant shall provide the City with written notice of and afford City a full opportunity to participate in any discussions with governmental regulatory agencies regarding any settlement agreement, Remediatio n or abatement agreement, consent decree, permit, approvals, or other compromise or proceeding involving a Release of Hazardous Materials in, on, under, or adjacent to the Premises by Consultant or Consultant’s officers, employees, agents, or subcontractors as detailed in this Section. Notwithstanding the foregoing, Consultant shall have no obligation to indemnify the City or any City Indemnified Party for (i) the mere discovery of any preexisting c ondition, or (ii) any conditions arising out of any action or inaction of City, its Council members, officers, employees, agents or subcontractors and not contributed to by any action or inaction of Consultant or Consultant’s officers, employees, agents, or subcontractors, (iii) any conditions arising out of any action or inaction of third party vendors that are not an agent or subcontractor of Consultant, and not contributed to by any action or inaction of Consultant or Consultant’s officers, employees, agents, or subcontractors, (iv) any conditions arising out of any action or inaction of a third party, not an agent or subcontractor of Consultant, and not contributed to by any action or inaction of Consultant or Consultant’s officers, employees, agents, or subcontractors.

SECTION 4. DAMAGE TO UTILITIES. Consultant shall exercise reasonable care to not do anything in, on, under or adjacent to the Premises that damages any City utilities (e.g. gas, water, wastewater, fiber, electric) located in, on, under or about the Premises. Consultant agrees to reimburse City within thirty (30) calendar days of City’s written request for any damages caused to City owned utilities caused by a failure of PIN to exercise reasonable care the Premises.

SECTION 5. [RESERVED BY AGREEMENT OF THE PARTIES]

SECTION 6. SURRENDER; DUTIES UPON TERMINATION OR EXPIRATION. Upon the expiration or earlier termination of this Agreement, Consultant shall immediately surrender the Premises in the same condition as received upon completion of the improvements detailed in this Agreement and any other improvements completed by City during t he term of this Agreement (excepting reasonable wear and tear ; casualty not caused or contributed to by Consultant or its officials, employees, agents or subcontractors; or condemnation not caused or contributed to by Consultant or its employees, agents or subcontractors), broom cleaned, walk-through with City staff completed, and free from hazards that are not pre-existing and were not introduced by the City or its officials employees, agents or subcontractors and clear of all debris that is not pre-existing and was not introduced by the City or its officials, employees, agents or subcontractors. At such time, Consultant shall remove all of its property from the Premises hereunder, and shall repair, at its cost, any damage to the Premises caused by such removal. Consultant’s obligations under this Section shall survive any termination of this Agreement. Consultant shall deliver to the City the originals of DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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all books, permits, plans, records, licenses, contracts, and other documents pertaining to the Premises and its operation, any insurance policies, bills of sale or other documents evidencing title or rights of the City, and any and all other records or documents pertaining to the Premise, whether or not enumerated herein, which are requested by the City or necessary or desirable for the ownership and operation of the Premise, which are in the Consultant’s possession. Consultant shall also deliver to City all keys, alarm codes, passwords, and other items used to secure the Premise. Consultant further agrees to do all other reasonable things reasonably necessary to cause an orderly transition of the management and operation of the Premises. The provisions of this Section shall survive the expiration or earlier termination of this Agreement until the obligations of the Consultant under this Section are fulfilled to the reasonable satisfaction of the City.

SECTION 7. REPAIR OF DAMAGE. If any portion of the Premises or any property of City located in, on, under or adjacent to the Premises is damaged or at risk of damage by any of the activities conducted by Consultant or anyone acting by or through Consultant, Consultant shall immediately notify City in writing of such damage or risk of damage. City may remedy, but shall not be obligated to remedy, such damage or risk of damage at Consultant’s sole cost, or City may elect to witness Consultant’s repair work. In the event City elects not to remedy such damage or threat, Consultant shall repair any and all such damage and restore the Premises or such property to its previous condition subject to City’s inspection, review and approval.

SECTION 8. CITY’S RIGHT TO CURE DEFAULTS BY CONSULTANT. If Consultant fails to perform any of its obligations under this Exhibit D to restore the Premise, remove or alter improvements or repair damage, or if Consultant defaults in the performance of any of its other obligations under this Exhibit D within a reasonable time after demand by City, then City may, at its sole option, remedy such failure at Consultant’s expense; within ten (10) days of receipt of a bill, Consultant shall promptly reimburse the City’s actual reasonable costs (including without limitation all costs, damages, expenses or liabilities incurred by City, reasonable attorneys’, experts’ and Consultants’ fees) in remedying or attempting to remedy such failure, or City may reduce any outstanding amount due to Consultant under the Agreement by the cost to City of such remedial action. In the alternative, the cost thereof may be made a lien on Consultant’s property as provided in section 12.12.010 of the Palo Alto Municipal Code. Any such remedial action by City shall not be construed as a waiver of any rights or remedies of City under this Exhibit D or the Agreement, and nothing herein shall imply any duty of City to do any act that Consultant is obligated to perform.

Consultant’s obligations under this Section shall survive the expiration or earlier termination of this Exhibit D.

SECTION 9. GENERAL PROVISIONS. (a) If Consultant consists of more than one person, the obligations of each person shall be joint and several. (b) Consultant may not record this Exhibit D or any memorandum hereof. (c) Any sale or conveyance by City of the Premises, the provisions of Section 19 (“Termination or Suspension of Agreement or Services”) of this Agreement shall govern.

SECTION 10. HOLDING OVER. If Consultant remains in possession of the Premises or any part thereof after the expiration of the term of this Agreement, or any renewal option theret o, such occupancy shall be a revocable license from month to month with all the obligations of this Exhibit D applicable to Consultant. Nothing contained Exhibit D or in the Agreement shall give to Consultant the right to occupy the Premises after the expi ration of the term of this Agreement, or any renewal option thereto, or upon any earlier termination.

SECTION 11. WAIVER OF CIVIL CODE. Consultant expressly waives the benefit of any statute now or hereinafter in effect, including the provisions of sections 1941 and 1942 of the Civil Code of California, to the extent applicable, which would otherwise afford Consultant the right to make repairs at City’s expense or to terminate this Agreement because of City’s failure to keep Premises in good order, condition and repair.

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SECTION 12. ALTERATIONS BY CONSULTANT. Consultant may undertake improvements to the Premises not specified in this Agreement at its own cost and upon City approval. Consultant shall comply with all public agency and other legal requirements for such improvements, including prevailing wage laws as applicable. Without City approval, Consultant may make a lterations or improvements that cost less than Ten Thousand Dollars ($10,000.00) and which do not affect any building systems or the structural integrity or any structural components of the Premises. However, CITY approval is required for any CONSULTANT improvement involving the installation or use of equipment that can monitor and/ or record sound or video of the Premises or portions thereof, including surveillance cameras.

12.1 Ownership of Improvements. All improvements constructed, erected, or installed upon the Premises by Consultant must be free and clear of all liens, claims, or liability for labor or material and shall become the property of City, at its election, upon expiration or earlier termination of the term, and shall remain upon the Premises upon expiration or earlier termination of this Agreement. Any furniture, trade fixtures installed by Consultant , equipment or other property of Consultant (whether obtained prior to or during the term of this Agreement) shall remain the property of Consultant.

12.2 Indemnity for Claims Arising Out of Construction. For the avoidance of doubt, included in Consultant’s obligations under Section 16 (“Indemnity; Limitation of Liability”) of the Agreement to which this is an exhibit, is Consultant’s obligation to indemnify, defend and hold harmless City Indemnified Parties again st all Claims arising out of construction and maintenance work performed on the Premises by Consultant or caused to be performed on the Premises by Consultant.

12.3 Certificate of Inspection . In the event Consultant will perform, or cause to be performed, any construction, improvement or alteration or any other work on or to the Premises for which City requires a certificate of completion, then upon completion of any such construction, improvement or alteration, Consultant shall submit to the Cit y Manager a Certificate of Inspection, verifying that such construction, improvement or alteration was completed in conformance with Title 20 of the California Code of Regulations for residential construction, or in conformance with Title 24 of the California Code of Regulations for non-residential construction, as applicable.

12.4 As Built Plans. Consultant shall provide the City Manager with a complete set of reproducible “as built plans” reflecting actual construction within or upon the Premises upon completion of any: (i) new construction or (ii) structural alterations.

SECTION 13. ASBESTOS NOTIFICATION. Consultant acknowledges that City has advised Consultant that the Premises contains, or because of its age, is likely to contain asbestos-containing materials (“ACMs”). If Consultant undertakes any alterations, additions, or improvements to the Premises, Consultant shall do so in a manner that avoids disturbing any ACMs present on the Premises. If ACMs are likely to be disturbed in the course of such work, Consultant shall encapsulate or remove the ACMs in accordance with an asbestos-removal plan approved by the City and otherwise in accordance with all applicable laws, including giving all notices required, if any, by California Health and Safety Code §§ 25915-25919.7, as may be amended.

SECTION 14. MATERIAL CASUALTY

14.1 Damage and Repair. If a Material Casualty (as defined herein) occurs, then the City shall determine, in its sole and absolute discretion, whether it wishes to continue to operate the Premises as an animal shelter. The City’s failure to provide written notice to Consultant of such election within thirty (30) days after the occurrence of a Material Casualty or other damage or DocuSign Envelope ID: 9BAF36FC-2516-4D42-9D61-821E3C483DDB Item 8
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destruction of the Premises shall constitute the City’s election to continue the operation of the Premises as an animal shelter. If the City elects (or is deemed to elect) to continue the operation of the Premises as an animal shelter after a Material Casualty, or if the Premises is damaged but such damage does not constitute a Material Casualty, then the City shall promptly reconstruct or repair the destroyed or damaged portion of the Premises. City shall pay all costs of repairing and reconstructing the Premises. A “Material Casualty” is a total destruction of the Premises or any damage to the Premises the repair of which would exceed the City Manager’s Council -delegated contracting authority under Palo A lto Municipal Code section 2.30.210, depending on the applicable contract types in relation to the repairs required.

14.2 Termination. If City notifies Consultant in writing within thirty (30) days after the occurrence of a Material Casualty that the City elects to not continue the operation of the Premises as an animal shelter after such Material Casualty, then the Agreement shall immediately terminate as of the date such notice is delivered to Consultant. In the event of such termination, (i) City shall pay Consultant’s reasonable costs in winding down the operations at the Premises, including, but not limited to, any costs associated with the termination of employees by Consultant and (ii) Consultant shall be entitled to retain its prorated compensation amount for the quarter in which termination occurs (prorated for the number of days in such quarter that elapsed up to the date of termination).

14.3 Continuation. If the City elects (or is deemed to elect) or is obligated to reconstruct or repair the damaged portions of the Premises because such damage does not constitute a Material Casualty pursuant to Section 14.1 (“Damage and Repair”), the City and Consultant shall make a determination as to whether the Premises will continue to operate during the reconstruction/repair period. If the parties mutually determine (in their respective reasonable discretion) that the Premises will operate during such period, this Agreement shall remain in full force and effect. Otherwise, Consultant’s obligations to provide animal shelter services under this Agreement shall be suspended during such period. In the event of such suspension, (i) City shall pay Consultant’s reasonable costs incurred by Consultant during any such suspension of operations and (ii) Consultant shall be entitled to retain its prorated compensation amount for the quarter in which suspension occurs (prorated for the number of days in such quarter that elapsed up to the date of suspension). City shall further pay all reasonable costs incurred by Consultant due to such suspension. If the parties desire, during the suspension period, the parties may negotiate in good faith to try to provide for animal shelter services to the best of the parties’ reasonable abilities under the circumstances of such a suspension.

SECTION 15. CITY IMPROVEMENTS TO PREMISES. The City has worked with Consultant to identify improvements to the Premises. The City shall improve the Premises as follows:

15.1 Capital Improvement Budget. City shall allocate $2,500,000 in one lump sum in FY2025 for the shelter capital improvements listed in this Section 15. If such funds are unspent (or partially unspent) in any given yea r, the balance will be reappropriated to the same CIP in the following fiscal year, subject to City Council approval.

15.2 Capital Improvement Oversight. City will manage all phases of capital improvement projects, including planning, design, and con struction, with input from Consultant.

City shall contract with a reputable animal specialty architecture firm for design of any building improvements.

15.3 Priority of Capital Improvements. Capital improvements will be prioritized in the following order, subject to the budget limits in Section 15.1:

1. New cat and small animal area to include a specific intake area and meet and greet space.

2. Additional dog kennel improvements to include large guillotine doors and any needed safety retrofitting.

3. Retrofit medical suite to better accommodate large animals.

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15.8 All work performed by the City shall be performed in a workmanlike manner, in compliance with all applicable laws ., City shall take reasonable steps to perform such work in a manner which results in minimal disruption to Consultant’s activities in the Premises. Consultant will take reasonable steps to accommodate City’s work. The City shall enforce all applicable third party warranties at the request of Consultant. City shall promptly obtain final certificates of occupancy for all applicable portions of the Premises.

15.9 Renovation Timeline Updates . City shall provide renovation timeline updates to Consultant on a quarterly basis or more frequently upon request. Six months after the commencement of the construction of the improvements detailed in this Agreement, the parties will meet to review whether the renovation timelines stated herein are on track.

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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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•Medical statistics including spay and neuter, microchips, and vaccinations (number of clinics and number of animals vaccinated) for in jurisdiction and out of jurisdiction animals.
•Number of animals in and out of the shelter by type of animal and type of intake and outcome.
•City of origin of all animals upon shelter intake.

PIN will submit quarterly financial reports for the Palo Alto Animal Shelter to the City to include:
•Revenues from donations that benefit the Palo Alto Animal Shelter, adoption fees, and medical services to include vaccines and spay/neuter surgeries. •Expenditures, to include staffing, contracts, animal care, indirect costs, and administrative operations.

City and PIN agree to the following:

Q.Feral Cat Policy. Both parties will work together to develop a transparent and humane feral cat program that reflects sheltering 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.

R.Animal Welfare. PIN and the City will regularly review generally accepted best animal welfare practices to ensure all policies in effect at the Palo Alto shelter are up-to-date and in line with shelter best practices.

S.Animal Shelter Software. PIN is at liberty to acquire, at its own cost, new shelter management software that best meets its needs. The City will work with PIN to identify the minimum viable data that PIN will be required to add to the current, shared software system Chameleon upon PIN animal intake.

T.Existing City Policy. PIN will comply with all applicable municipal and other laws, and with the City’s shelter policies. PIN policies approved by the City will be specified in the new Agreement. If either PIN or the City has an interest in revising or creating a new policy, it will notify the other party in writing.

Notices from PIN will be addressed to the Supervising Animal Control Officer. The Supervising Animal Control Officer will advise the PIN CEO in writing within five (5) business days whether review and approval are deemed necessary. Review and approval will be deemed necessary only if the proposed revision will result in (a) a change to the terms of the Services Agreement, or (b) a material change in the level of risk to the City, in services to residents of Palo Alto and/or the contract cities, or in roles and duties of City staff.

Notices from the City will be addressed to the PIN CEO, who will advise the City in writing within five (5) business days whether review and approval are deemed Item 8
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necessary. Review and approval will be deemed necessary only if the proposed revision or addition will result in (a) a change to the terms of the Agreement or the cost to PIN of performance of the Agreement, or (b) a material change in the level of risk to PIN, in services to residents of Palo Alto and/or the contract cities, or in roles and duties of PIN staff.

In either case, if the response is not an approval, the parties will meet within five (5) business days of receipt of the response and attempt in good faith to reach an agreement. The subject policy may be revised only upon the written agreement of both parties.

All City and PIN policies relating to the operation of the Palo Alto Animal Shelter will be kept in a shared online folder and be accessible to all PIN and City staff.

U.Corrective Action Plan. The City and PIN agree to work in good faith to meet the obligations described in the Scope of Services and Capital Improvements sections of the Agreement. If either party determines that it will not meet a due date or will fail to deliver a service, it will promptly send a written corrective action plan to the other party. The corrective action plan will include the following information:
•Task that will not be met.
•Justification for failure to complete task
•Plan to correct including timeline to reach full compliance •Weekly progress updates to Project Manager (of either the City or PIN) If the timeline to reach full compliance is not acceptable to the other party, or if compliance has not been met by the due date identified in the corrective action plan, the parties will meet and confer to determine next steps.

Force Majeure
V. Standard Force Majeure provision to be added, including epidemics and quarantines.

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: March 18, 2024
Report #:2312-2330
TITLE
Adoption of a Resolution Authorizing Use of the City’s Activity (1) Permanent Local Housing Allocation (PLHA) 2019, 2020, and 2021 Allocations for Predevelopment Activities, Construction, and/or Permanent Financing of New Affordable Housing at the Matadero Creek Affordable Housing Site, and Approve FY 2024 Budget Amendments in the Permanent Local Housing Allocation Fund; CEQA Status – not a project.

RECOMMENDATION
Staff recommends that City Council take the following actions in support of the City using its Activity (1) PLHA 2019, 2020, and 2021 Allocations:

1. Adopt the Resolution (Attachment A) authorizing use of the City’s Activity (1) PLHA 2019, 2020, and 2021 allocations for predevelopment activities, construction, and permanent financing of new affordable housing at the Matadero Creek affordable housing site identified in the Sobrato Development Agreement, approved on September 12, 2023; and

2. Amend the Fiscal Year 2024 Budget Appropriation Ordinance (Required 2/3 vote) for the Permanent Local Housing Allocation (PLHA) Fund (Fund 253) by:
a. Increasing the Other Revenue estimate by $243,756; and b. Increasing the Planning and Development Services Contract Services by $243,756.

EXECUTIVE SUMMARY
Permanent Local Housing Allocation (PLHA) Program funding is a permanent, ongoing annual source of funding, but these funds need to be assigned to activities identified in the City’s 5- Year PLHA plan. The City is preparing to receive approximately $243,756 in PLHA Activity (1) funds, which were already programmed in the City’s 5-Year PLHA plan for affordable housing activities.

Approval of the recommended actions would assign the PLHA Activity (1) funds for PLHA Calendar Years 2019, 2020, and 2021 toward predevelopment activities, construction, and permanent financing of new affordable housing at the Matadero Creek affordable housing site, which is the dedicated affordable housing site identified in the approved Sobrato Development Item 9
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Agreement1,2 and in the City’s Housing Element. Execution of the draft Resolution and City submittal to HCD would allow HCD to release Calendar Year 2019 funds to the City by their deadline of April 30, 2024.

BACKGROUND
The Permanent Local Housing Allocation (PLHA) is a State funding source administered by the State of California Department of Housing and Community Development Department (HCD).

Like the Federal Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program, Palo Alto and other California jurisdictions are entitled to an annual allocation of funds coming from the Building Homes and Jobs Trust Fund (Fund). The Fund is established under the Building Homes and Job Act of 2017 Senate Bill 2 (SB 2) and started generating revenues in 2019. The Fund provides a permanent, ongoing annual source of local government funding for housing-related projects and programs that address unmet housing needs.

The City received approval from HCD for its PLHA Five-Year Funding Plan for the Entitled PLHA 2019-2023 Allocations (5-Year PLHA plan).3,4 The City’s 5-Year PLHA plan specified that the anticipated total of $1,388,976 for the PLHA calendar years 2019 through 2023 would be used for the following City priorities:
•Assistance to persons experiencing or at risk of homelessness (Activity (6)), including:
oOutreach and services to those experiencing homelessness, oOperating expenses for the forthcoming Homekey shelter, and •Affordable housing rental unit preservation, new construction, and operating subsidies (Activity (1)).
1 City Council September 5, 2023 and September 12, 2023, City Manager Report #:2306-1633, 3200 Park Boulevard/340 Portage [22PLN-00287 and 22PLN-00288]:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13288. 2 Staff refers to the dedicated affordable housing site in the Sobrato Development Agreement at the Matadero Creek affordable housing site as a placeholder name so that the City’s PLHA request for funds and future annual reporting will not use the Sobrato name.
3 City Council authorized submittal of the City’s PLHA 5-Year Funding Plan at City Council Meeting October 24, 2022, Agenda Item 5, City Manager Report ID # 14715:
https://www.cityofpaloalto.org/files/assets/public/v/7/agendas-minutes-reports/agendas-minutes/city-council- agendas-minutes/2022/20221024/20221024pccsm-amended.pdf; The 5-Year PLHA plan is contained within Resolution No. 10080:
https://www.cityofpaloalto.org/files/assets/public/v/1/city-clerk/resolutions/resolutions-1909-to- present/2022/reso-10080.pdf.
4 The following activities are allowable under PLHA Section 301(a) Activity (1): The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is Affordable to Extremely low-, Very low-, Low-, or Moderate-income households, including necessary Operating subsidies.

The following activities are allowable under PLHA Section 301(a) Activity (6): Assisting persons who are experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, supportive/case management services that allow people to obtain and retain housing, operating and capital costs for navigation centers and emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.

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The 5-Year PLHA plan contains the following funding distribution for Calendar Year amounts known at the time of application:

HCD recently announced each California jurisdiction’s PLHA allocation for Calendar Year 2022.5 Palo Alto is to receive $198,460 after the City submits a streamlined application in Spring/Summer 2024. The 5-Year PLHA plan already assigns this Calendar Year 2022 funding as follows:
•60% assigned to Activity (6) outreach and services;
•20% assigned to Activity (6) Homekey shelter operational expenses; and •20% to Activity (1) affordable housing activities.

The PLHA grant funds are used by different departments across the City. The City requested and HCD already sent the portions of the PLHA Calendar Year 2019, 2020, and 2021 Activity (6) allocations assigned for outreach and services to those experiencing homelessness, administered by the Community Services Department Human Services Division.6 The City Manager’s Office will request PLHA funding for Homekey shelter operating expenses later this year. The Planning & Development Services Department submitted a request to HCD for PLHA Activity (1) funds but needs Council budget recognition to receive and expend funds and a resolution is the most efficient way to provide HCD with documentation confirming that activities will be pursued.

ANALYSIS
HCD requires that PLHA Activity (1) funds result in actual construction; predevelopment activities alone do not qualify for funding. However, HCD will provide funding to support predevelopment activity for projects that have a high likelihood of materializing, provided that funds must be repaid if the project is not completed. The Matadero Creek affordable housing site was identified for this funding because City Council certified the Sobrato Development 5 HCD announces PLHA allocations each year via a Notice of Funding Availability (NOFA) for the preceding calendar year. For Calendar Year 2022 PLHA allocations, the NOFA had a planned release of September 2023. However, the NOFA was actually released in December 2023 with application materials following in February 2024. HCD now reviews PLHA applications on an over-the-counter basis and staff will submit an application in Spring 2024 for the City to receive Calendar 2022 funds.
6 City Council Meeting December 18, 2023, Agenda Item 17, City Manager Report # 2311-2216:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13074.

City Council Meeting June 19, 2023, Agenda Item 38, City Manager Report # 2305-1588:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1170.

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Agreement Environmental Impact Report and has already directed for the project to occur. This allows the Planning & Development Services Department and Real Estate to prepare for any next steps to commence predevelopment activities, including preparation and release of a Request for Information or a Request for Proposals for an affordable housing developer partner.

Given the development timeline in the Sobrato Development Agreement, the new affordable housing at the Matadero Creek site has a significant likelihood of being constructed by June 30, 2030 and within the current 6th Cycle Housing Element period. The location and site control for this future 100% affordable housing project has been approved by City Council through the Sobrato Development Agreement process, which anticipates dedication of 3.25 acres of a

14.65-acre site to the City for the purposes of an affordable housing project and adjacent public park.

Environmental clearance is complete, and the land use designation and zoning has been re- designated and rezoned, respectively, to support this affordable housing project and the adjacent proposed public park. Several aspects of the site preparation are completed or underway (e.g., Phase I reports, relocation of monitoring wells, and underground utility installation to accommodate the future development). Although the site has also been primed specifically for this development, this site is also considered a by-right housing site in accordance with the City’s adopted Housing Element. As part of the Sobrato Development Agreement, the City will also receive $5 million in funding that may be used toward the affordable housing project or the adjacent public park.

The draft Resolution (Attachment A) provides HCD with the documentation necessary to release the PLHA Activity (1) funds for Calendar Years 2019, 2020, and 2021. Execution of the draft Resolution and City submittal to HCD would allow HCD to release Calendar Year 2019 funds to the City by their deadline of April 30, 2024. The funds are assigned to only one project and three years are amassed for the following reasons:
•aggregating the available Activity (1) funds for one project responds to the significant overall cost of affordable housing construction per bedroom and per unit; •having more funds already dedicated and on hand could help expedite preconstruction activities after an affordable housing partner is identified for the project; and •using the funds for only one project reduces the City administrative time necessary to prepare loan and other regulatory documents and time required for annual grant reporting.

PLHA Activity (1) funds require that the funded affordable housing unit(s) be at the affordability level of at or below 60% AMI for a minimum of 55 years. Regulatory agreements and loan documents would reflect these terms. However, given that the cost of constructing a bedroom in an affordable housing unit is much more than $243,756, it is anticipated that PLHA Activity (1) funds themselves would contribute toward only one affordable housing unit; much more funding would be necessary to complete the project.

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In the future, PLHA Activity (1) funds for Calendar Years 2022, 2023, and even future years could be assigned to predevelopment activities, construction, and/or permanent financing for the Matadero Creek affordable housing site, or the City could identify a different affordable housing site.

FISCAL/RESOURCE IMPACT
Approval of the recommended actions would not have a fiscal or resource impact to the City beyond what has already been directed by City Council for staff pursuit of new affordable housing at the Matadero Creek affordable housing site and staff administration of PLHA grant funding. Execution of the draft Resolution (Attachment A) is the most efficient way to provide HCD with documentation confirming that activities will be pursued at the site so that PLHA Activity (1) funds could be released. The PLHA Activity (1) funds will be available to cover a portion of anticipated associated costs incurred by a future affordable housing developer partner, such as for future architectural and engineering services. The City’s 5-Year PLHA plan does not allocate PLHA funds toward staff administrative costs.

STAKEHOLDER ENGAGEMENT
The 5-Year PLHA plan was adopted at a City Council public hearing. The Sobrato Development Agreement involved community meetings and multiple City Council public hearings. Staff did not conduct any other stakeholder engagement, given that the recommended actions are consistent with pursuing new affordable housing at the Matadero Creek affordable housing site, consistent with PLHA grant administration duties, and involve budget recognition of previously anticipated PLHA funds.

ENVIRONMENTAL REVIEW
Adoption of the draft Resolution and approval of budget amendments are not considered projects under the California Environmental Quality Act (CEQA) per CEQA Guidelines 15061(b)(3). New affordable housing units at the Matadero Creek affordable housing site was reviewed as part of the certified Environmental Impact Report for the Sobrato Development Agreement, as documented in City of Palo Alto Resolution No. 10123.7

ATTACHMENTS
Attachment A: Resolution Directing Staff to Commence Predevelopment Activities for the Matadero Creek Affordable Housing Site
APPROVED BY:

Jonathan Lait, Planning and Development Services Director 7 City Council September 5, 2023 and September 12, 2023, City Manager Report #:2306-1633, 3200 Park Boulevard/340 Portage [22PLN-00287 and 22PLN-00288]:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13288.

City of Palo Alto Resolution No. 10123: https://portal.laserfiche.com/Portal/DocView.aspx?id=67824&repo=r- 704298fc.

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Resolution No. ______

Resolution of the Council of the City of Palo Alto Directing Staff to Commence Predevelopment Activities for the Matadero Creek Affordable Housing Site

R E C I T A L S

A. On October 2, 2023, the City Council of the City of Palo Alto adopted Ordinance 5595, adopting a Development Agreement for the redevelopment of the 14.65 acre property at 200-404 Portage Avenue, 3040- 3250 Park Boulevard, 3201 -3225 Ash Street, and 278 Lambert Avenue (“Development Agreement Project”).

B. One of the key public benefits provided under the Development Agreement i s the dedication of 3.25 acres of land to the City, of which approximately one acre is intended as the site of a future affordable housing project (“Matadero Creek Affordable Housing Site” or “Site”).

C. The certified Environmental Impact Report (“EIR”) for the Development Agreement Project included analysis of up to 75 affordable rental units on the site to be dedicated to the City.

D. On October 2, 2023, the City Council adopted Ordinance No. 5600, rezoning the Site to support the future development of a housing project.

E. Several aspects of site preparation for the Site are completed or underway (e.g. Phase I reports, relocation of monitoring wells, and underground utility installation to accommodate the future development);

F. The City has an urgent need for the development of affordable housing and has been awarded funds under the Permanent Local Housing Allocation (“PLHA”) grant program.

G. On July 14, 2023, the Department of Housing and Community Development (“HCD”) and the City executed a Standard Agreement 22 -PLHA-17554 which establishes the requirements and procedures for accessing the City’s entitled PLHA 2019 -2023 Allocations.

H. The City desires to use the City’s Activity (1) PLHA a llocations for calendar years 2019, 2020, and 2021, totaling approximately $ 243,756, for predevelopment activities, construction of, and/or permanent financing for new affordable housing units at the Site, at the affordability level of at or below 60% AMI for a minimum of 55 years.

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NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:

SECTION 1. The City Manager or designee is directed to issue a Request for In formation or Request for Proposals to solicit interest in development of an affordable housing project at the Matadero Creek Affordable Housing Site.

SECTION 2
. The City Council further directs the City Manager or designee to develop a timeline for predevelopment activities and construction of an affordable housing project at the Site that would result in occupancy of the project no later than June 30, 2030.

SECTION 3
. The City Council further directs the City Manager or designee to continue or commence all feasible predevelopment activities on the site as soon as practical.

SECTION 4
. To the extent PLHA funds are disbursed to the City to support predevelopment, construction, and permanent financing for an affordable housing project on the Site, the City certifies that it will use all such funds in a manner consistent and in compliance with all applicable state and federal statutes, rules, regulations, and laws, including without limitation all rules and laws regarding the PLHA Program, as well as any and all contracts the City may have with HCD, in accordance with Resolution No. 10080.

//
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SECTION 5. The Council finds that the adoption of this resolution does not meet the definition of a project under Public Resources Code Section 21065, thus, no environmental assessment under the California Environmental Quality Act is required . The environmental impacts of an affordable housing project of up to 75 units at the Site were analyzed in the 200 Portage Townhome Project Final EIR, which was certified by Resolution No. 10123 on September 12, 2023.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

__________________________ _____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

__________________________ _____________________________ Assistant City Attorney City Manager

_____________________________
Director of Planning and
Development Services

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: March 18, 2024
Staff Report: 2403-2726
TITLE
Approval of Amended Palo Alto CLEAN Program Rules and Requirements, Handbook, and Power Purchase Agreement; CEQA Status: Not a Project under CEQA Guidelines Sections 15378(a) and (b)

RECOMMENDATION
Staff recommends that the City Council:

1. Approve the attached amended Clean Local Energy Accessible Now (CLEAN) Program Eligibility Rules and Regulations (Attachment A) as follows:
a. Continue the CLEAN Program rate structure for local solar energy resources at 16.5 cents per kilowatt-hour (¢/kWh) until the program reaches 3 MW of solar energy resource capacity, after which the contract rate for solar energy resources reduces to the City’s estimated avoided cost of energy generated by these resources, which is updated to:
i. 9.5 ¢/kWh for a 15-Year Contract Term,
ii. 9.8 ¢/kWh for a 20-Year Contract Term, and
iii. 10.2 ¢/kWh for a 25-Year Contract Term; and
b. Continue the CLEAN Program rate structure for local non-solar eligible renewable resources without any participation cap at a contract price equal to the City’s estimated avoided cost of energy generated by these resources, which is updated to:
i. 9.4 ¢/kWh for a 15-Year Contract Term,
ii. 9.8 ¢/kWh for a 20-Year Contract Term, and
iii. 10.1 ¢/kWh for a 25-Year Contract Term.

2. Approve the attached amended CLEAN Program Handbook (Attachment B) to extend the allowable time to complete a project to three years from the date of execution of the Power Purchase Agreement (PPA) for affordable housing developments.

3. Approve the attached amended Palo Alto CLEAN Program Eligible Renewable Energy Resource PPA (Attachment C) to implement the recommended changes to the CLEAN Program.

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EXECUTIVE SUMMARY
The Palo Alto CLEAN program, established in March 2012, aimed to encourage local generation of solar energy by allowing property owners to install solar systems and sell energy to the City under a fixed-rate, long-term contract. Initially priced at 14 ¢/kWh for a 20-year term, the program failed to attract interest. In December 2012, the Council increased the contract price to

16.5 ¢/kWh, which has been maintained since. Despite no applications in the first four years, since 2016 the program has enrolled six currently operating solar projects totaling 2.84 MW of capacity.

Currently, a customer planning an affordable housing development wishes to submit a CLEAN solar project application but requires an extension of the completion deadline from one to three years to align with permitting and construction timelines for housing projects in Palo Alto. This modification, while maintaining the same initial rate and program capacity, would have minimal financial impact on the City. Staff supports the request and has proposed changes to the program rules and contract designed to accommodate the customer's needs as well as the needs of future residential construction developments that satisfy the basic affordable housing requirements.

Council action will also update the avoided costs for CLEAN projects and make conforming changes in the City’s CLEAN Power Purchase Agreement.

BACKGROUND
In March 2012 the Council adopted the Palo Alto CLEAN program (also commonly referred to as a feed-in tariff, or FIT, program). The program was designed to address the City’s objective of enhancing supply reliability through the pursuit of local generation opportunities. Palo Alto CLEAN enabled property owners to build a new solar system on their property and sell the energy to CPAU under a long-term, fixed-rate, standardized contract rather than simply using the energy on-site.

Though solar developers expressed interest in Palo Alto CLEAN in 2012, the initial contract price (14 ¢/kWh for a 20-year term) proved insufficient to attract any program applications. Council increased the Palo Alto CLEAN price to 16.5 ¢/kWh in December 2012, and has maintained it at that level ever since (last reaffirming it in May 2017). In May 2015, Council added a 25-year contract term option, and expanded the program to include non-solar eligible renewable energy resources, setting their contract prices at the avoided cost level. In May 2017, Council added a 15-year contract term option and updated the avoided cost rates. After receiving zero applications in its first four years, since 2016, the CLEAN program has executed contracts for six solar projects that account for about 2.84 MW of capacity.

ANALYSIS
Staff has recently discussed the program structure with a customer who is working on a residential development that consists of 100% affordable housing units and who intends to submit an application for a CLEAN solar project that would consume a significant portion of the remaining 160 kW of solar program capacity available at the 16.5 ¢/kWh rate. In order for this solar project to go forward, the customer requested that the CLEAN program rules be modified Item 10
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to extend the project completion deadline to align with the City’s permitting and construction timeline for housing developments, from the current one-year timeline to up to three years.

Making this modification to the CLEAN program – while maintaining the same contract rate and program capacity available at this rate – would have virtually no financial impact on the City. As such, staff supports the customer’s request, and the proposed program changes are designed to accommodate that request. Council action will also update the avoided costs for CLEAN projects for the first time since 2017. This change would result in no financial impact to the City.

FISCAL/RESOURCE IMPACT
The following table summarizes staff’s estimates of the current cost of buying energy from solar resources outside of Palo Alto (including transmission and capacity) over a 15-year, 20-year, or 25-year term, as well as the annual excess costs of purchasing the output from an additional 160 kW of local solar projects at a contract price of 16.5 ¢/kWh over those terms. (For non-solar renewable energy projects, and for solar capacity that exceeds the 3 MW program cap on the

16.5 ¢/kWh contract rate the excess cost is zero, because the contract rate is set based on the City’s avoided cost for the energy.)
Contract Term Contract Rate Avoided Cost Annual Excess Cost 15 years 9.5 ¢/kWh $24,500
20 years 9.8 ¢/kWh $23,500
25 years

16.5 ¢/kWh

10.2 ¢/kWh $22,000

STAKEHOLDER ENGAGEMENT
In considering the proposal to extend the completion deadline for certain projects in the CLEAN Program, staff has had multiple conversations with the customer who requested this modification about the impact it would have on their affordable housing development as well as the future residents of this development. Utilities staff also consulted with Planning and Development Services staff with regard to the City’s affordable housing standards and the typical timeline for completion of new residential housing developments. Finally, Utilities discussed the CLEAN Program modifications recommended here with the Utilities Advisory Commission (UAC) at their meeting on March 14, 2024. The UAC’s feedback is summarized in a supplemental memo to this report.

ENVIRONMENTAL REVIEW
Adoption of the attached resolution and the associated amendment of the CLEAN Program Eligibility Rules and Requirements and Power Purchase Agreement is not subject to California Environmental Quality Act (CEQA) review these are administrative government activities that will not result in any direct or indirect physical change to the environment as a result (CEQA Guidelines section 15378(b)(5)). Eligible customer projects are subject to CEQA analysis on a project-level basis through the City’s development permitting process.

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ATTACHMENTS
Attachment A: Palo Alto CLEAN Program Rules & Requirements (redline) Attachment B: Palo Alto CLEAN Program Handbook (redline) Attachment C: Palo Alto CLEAN Program Power Purchase Agreement (redline) APPROVED BY:

Dean Batchelor, Director of Utilities
Staff: James Stack, Ph.D., Senior Resource Planner
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PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW)

PROGRAM ELIGIBILITY RULES AND REQUIREMENTS
Effective __________
3 3
8 1
A. PARTICIPATION ELIGIBILITY:

The Palo Alto Clean Local Energy Accessible Now Program (the “CLEAN Program”) is open to participation by any Eligible Renewable Energy Resource, as defined in Section D.4, that satisfies these Program Eligibility Rules and Requirements.

B. TERRITORIALITY REQUIREMENT:

In order to be eligible to participate in the CLEAN Program, an Eligible Renewable Energy Resource must be located in and generating electricity from within the utility service area of the City of Palo Alto.

C. PRICES AND TERM FOR ELIGIBLE RENEWABLE RESOURCES:

The following purchase prices shall apply to the electricity produced by an Eligible Renewable Energy Resource participating in the Program, except as provided in Section D.5.

Solar Energy Resources:

Total Solar Capacity Reserved Contract Term Contract Price 0-3 MW 15, 20 or 25 years $0.165 / kWh
More than 3 MW 15 years $0.088095 / kWh
More than 3 MW 20 years $0.089098 / kWh
More than 3 MW 25 years $0.091102 / kWh
For Solar Energy Resources that straddle multiple pricing tiersmore than one capacity tier, the purchase price shall receivebe a weighted- average purchase priceof the above values based on the amount of their capacity that is contained in each tier.

Non-Solar Eligible Renewable Energy Resources:

Contract Term Contract Price
15 years $0.083094 / kWh
20 years $0.084098 / kWh
25 years $0.085101 / kWh
D. ADDITIONAL RULES AND REQUIREMENTS:

1. The owner of the Eligible Renewable Energy Resource shall enter into an Eligible Renewable Energy Resource Power Purchase Agreement (“PPA”) with the City of Palo Alto prior to delivering energy to the City.

2. An application for participation in the CLEAN Program to sell output to the City (the Item 10
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PROGRAM ELIGIBILITY RULES AND REQUIREMENTS
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“Application”) may be submitted at any time. Applications will be considered in the order received.

3. Eligible Renewable Energy Resource means an electric generating facility that: (a) is defined and qualifies as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended; and (b) meets the territoriality requirement set forth in Section B.

4. The California Energy Commission’s (“CEC”) certification of the Eligible Renewable Energy Resource shall be required within six (6) months of the commercial operation date of the generating facility; the facility’s owner shall provide written notice of the CEC’s certification to the City within ten (10) business days of receipt of said certification. If the City agrees, in its sole discretion, to take delivery of the generating facility’s electricity prior to the CEC’s certification, then, as the facility’s electricity cannot be considered in fulfillment of the City’s RPS requirements, the price that the City will pay for the generating facility’s electricity (the “Pre-Certification Price”) will be set to $0.072 per kWh (for a 15-year contract term), $0.076 per kWh (for a 20-year contract term)), or $0.08 per kWh (for a 25-year contract term), based on the City’s estimated levelized cost of browngeneric power over a 15-year, 20-year, or 25-year period, respectively. Upon the CEC’s certification of the generating facility and the provision of notice of such certification to the City in accordance with this section, the City will pay the Price set forth in Section C of these CLEAN Program Rules and Requirements and the PPA (collectively referred to as the “Contract Price”) for the generating facility’s electricity delivered on and after the date of the CEC’s certification. The City will, in its sole discretion, “true-up”, as appropriate, the difference between the Contract Price and the Pre-Certification Price for any electricity received and paid for by the City, effective as of the date of certification of the Eligible Renewable Energy Resource.

5. If an Eligible Renewable Energy Resource is authorized to participate in the CLEAN Program, then that Resource shall not be entitled to receive any rebate or other incentive from the City’s Photovoltaic (PV) Partners Program or any other similar incentive program funded by the City’s ratepayers. To the extent any rebate or incentive is paid to the owner of the Resource, that rebate or incentive shall be disgorged and refunded to the City upon 30 days’ notice, if the Eligible Renewable Energy Resource continues to participate in the CLEAN Program. If a rebate or an incentive has been paid to the Eligible Renewable Energy Resource, then that Resource shall be ineligible to participate in the CLEAN Program.

6. All electricity generated by the Eligible Renewable Energy Resource shall be delivered only to the City. No portion of the electricity may be used to offset any load of the generating facility (other than incidental loads associated with operating the generating facility).

7. A metering and administration fee will be charged to each Eligible Renewable Energy Item 10
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PALO ALTO CLEAN (CLEAN LOCAL ENERGY ACCESSIBLE NOW)

PROGRAM ELIGIBILITY RULES AND REQUIREMENTS
Effective __________
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Resource that participates in the CLEAN Program. See Utilities Rate Schedule E-15 (Electric Service Connection Fees).

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CLEAN Program Rules &
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PALO ALTO CLEAN

CLEAN LOCAL ENERGY ACCESSIBLE NOW

PROGRAM HANDBOOK

City of Palo Alto Utilities
March 2024

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CLEAN Program
Handbook (redline)

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Questions about Palo Alto CLEAN?
Contact:

Palo Alto CLEAN Program Manager

Ph: 650-329-2241
Email: [email protected]

City of Palo Alto Utilities
250 Hamilton Ave, 3rd Floor
Palo Alto, CA 94301

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CLEAN Program
Handbook (redline)

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Table of Contents
Table of Contents ................................................................................................................ 3 Program Overview .............................................................................................................. 4 Summary of Program Rules ................................................................................................ 4 Timeline of a Palo Alto CLEAN Project ................................................................................ 6 Development of Palo Alto CLEAN Projects ......................................................................... 8

1.0 Site Identification and Control ............................................................................ 8

1.1 Types of Projects Accepted.............................................................................. 8

1.2 Proof of Site Control ........................................................................................ 8

2.0 Application Process ............................................................................................. 8

2.1 Submittal Process ............................................................................................ 8

2.2 Where and When to Submit ............................................................................ 8

2.3 Submittal Requirements .................................................................................. 9

2.4 Reservation Deposit ......................................................................................... 9

2.5 Determining Priority ...................................................................................... 10

3.0 Permitting ......................................................................................................... 11

3.1 Time to Complete Project .............................................................................. 11

3.2 Permit Submittal ............................................................................................ 11

3.3 Interconnection Review ................................................................................. 11

4.0 Construction ...................................................................................................... 12

4.1 Building Inspection ........................................................................................ 12

4.2 CEC Pre-Certification...................................................................................... 12

4.3 WREGIS Registration ...................................................................................... 12

5.0 Commercial Operation ...................................................................................... 13

5.1 Meter Set and Commercial Operation Date .................................................. 13

5.2 CEC Certification ............................................................................................ 13

5.3 Metering and Payment .................................................................................. 13 Additional Resources ........................................................................................................ 14 Item 10
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Program Overview
Palo Alto CLEAN (Clean Local Energy Accessible Now) is a program to purchase electricity generated by eligible renewable energy resources located in City of Palo Alto Utilities (CPAU) service territory, which coincides with the Palo Alto city boundaries. The power is separately metered and delivered wholesale to CPAU, and it is then used to fulfill CPAU’s renewable goals. Programs like this are also known as "feed -in tariff" programs in reference to the fact that the power is "fed into" the electric grid. N one of the power is used to offset the host customer ’s load, in contrast to a net metering program.

The program was adopted in March 2012, and was revised in January 2013 , February 2014, May 2015 , March 2016 , February 2017, May 2017, and March 2024. CPAU is currently offering to purchase the output from renewable energy generation facilities according to the rates in the following table.

Resource Description Contract Term Contract Rate
Solar resources, up to 3 MW total 15, 20, or 25 years 16.5 ¢/kWh Solar resources, greater than 3 MW total 15 years 9.5 ¢/kWh

20 years 9.8 ¢/kWh
25 years 10.2 ¢/kWh
Non-solar resources
15 years 9.4 ¢/kWh
20 years 9.8 ¢/kWh
25 years 10.1 ¢/kWh
As shown in the table, there is no total program cap on the capacity participating in the program; there is only a cap on the solar capacity that can receive the 16.5 ¢/kWh contract rate.

CPAU staff will review and re-evaluate the program status, terms, and contract rates with the Palo Alto City Council on a regular basis.

Summary of Program Rules
 CPAU will sign power purchase agreements (PPAs) for the output of eligible renewable energy generation facilities.
 There is no total program capacity limit.

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 Each PPA will entitle CPAU to the entire output of the generating facility, including all energy, renewable energy credits (RECs), and capacity attributes, if any.
 The energy from the generating facility must be delivered to CPAU. No part of the energy may be used to serve the customer load on the host site or any other customer load.
 Generating facilities must be located in the CPAU service territory (which corresponds to the Palo Alto city limits).
 Generating facilities required by the California Independent System Operator (CAISO) to participate in ISO markets (typically those facilities larger than 1 MW) are subject to additional scheduling and forecasting requirements.  There are no limitations on how many generating facilities any single developer or customer may develop.
 Developers are responsible f or obtaining CEC Certification. RECs from the project will be created and tracked in the Western Renewable Energy Generation Information System ( WREGIS). CPAU will register each generator under the CPAU WREGIS account and will be responsible for uploading meter data.
 Project developers may not seek other CPAU ratepayer -funded rebates for the generating facility. Any facility that has already received a rebate is not eligible for the program.

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Timeline of a Palo Alto CLEAN Project
The chart below shows how you can expect your Palo Alto CLEAN project to progress:

Site Identification Identify a site for your project.

Site Control Obtain site control for the entire term of the PPA.

Preliminary Design Develop a preliminary design for the project.

Application Submittal Submit an application. Applications are accepted in the order received. Pay reservation deposit within ten days.

Permit Submittal P repare your project for Building Permit and Interconnection Submittal. Your permit application will be accepted at the City’s Development Center and
routed to our Electric Engineering Division for
interconnection review.

Permit Review Th
e Development Center and Electric Engineering
Division will return initial comments. At this time, if the interconnection will require no significant review or
costs, the Electric Engineering Division will send an
interconnection agreement for your signature. If
additional interconnection review is required, an
Advance Engineering Fee may be required.

Interconnection Agreement U
pon receipt of the Interconnection Agreement you will
be required to submit a deposit for any interconnection costs. At this time you may terminate your PPA instead of submitting the deposit and proceeding with
interconnection. If you exercise this option your full reservation deposit will be returned, but not any permit review fees.

Project Construction F
ollowing Building Permit issuance and signature of the
Interconnection Agreement the applicant can proceed
with project construction. At some point prior to
completing construction CPAU recommends you apply
for pre -certification of the project with the California Energy Commission (CEC) to ensure the entire output of
the project is certified as eligible to fulfill Renewable Portfolio Standard (RPS) requirements starting on the Commercial Operation Date . Uncertified energy is not
eligible for the full contract price. CPAU will commence registration of the project with WREGIS during this time.

Commercial Operation U
pon final building inspection CPAU will send a letter
memorializing the commercial operation date. At this
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point CPAU will return your total reservation deposit or any smaller portion of the deposit you are eligible to
receive. CPAU will begin sendin g payments for energy produced, but the payments will be made at the pre-
certification rate until the CEC certifies the project as eligible to fulfill RPS requirements.

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Development of Palo Alto CLEAN Projects

1.0 Site Identification and Control

1.1 Types of Projects Accepted
All projects must be eligible renewable energy resources. There are no limitations on the type of solar technology used to receive the contract price for solar resources. The eligible renewable energy generating facility may be located anywhere in Palo Alto city limits so long as it complies with all City codes and generator interconnection requirements. Ground mounted, rooftop mounted, or carport solar projects are acceptable, but CPAU recommends you investigate the codes and requirements applicable to your site prior to submitting an application.

1.2 Proof of Site Control
Evidence of site control for the entire term of the contract is required in order to submit an application. CPAU requires documen tation showing ownership of, a leasehold interest in, or a right to develop property upon which the Generating Facility will be located for the entire term of the contract being requested, or an option to acquire such ownership, leasehold interest, or right to develop.

2.0 Application Process

2.1 Submittal Process
Applications will only be accepted by e -mail, and must be sent to [email protected]. Applications will be considered in the order received.

2.2 Where and When to Submit
The application is considered “submitted” on the date and time CPAU has received all required documents in Section 2.3, below, with the exception of the r eservation deposit, which must be paid within ten business days following application submittal. See Section 2.4, below, for instructions on how to submit a reservation deposit. If the deposit is not received by t he end of the tenth business day, the application will be rejected. Please note that the maximum attachment size accepted by the City’s e -mail system is 20 MB. To ensure your application is accepted, we recommend sending attachments no larger than 10 MB. If it is necessary to send multiple e -mails to send all of the application materials, please note that fact in your first e -mail. The time and date of the first e-mail will be considered the time and date your application was submitted so long as all application materials are received within two hours of that e-mail.

CPAU will notify applicants of their application’s status by e -mail within five business days, and will mail a copy of the executed PPA within ten business days of receipt of the reservation deposit (see Section 2.4, below).

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2.3 Submittal Requirements
All of the following items are required before an application will be considered “submitted,” with the exception of the reservation deposit, which must be paid within ten business days of the submittal date of the application:
 Applicant, system owner, and site owner contact information.  Description of the generating system
 Preliminary single-line diagram
 Preliminary site diagram showing the project site and layout  Two signed copies of the Palo Alto CLEAN standard Power Purchase Agreement
 Proof of site control (see 1.2, above)
 Two signed copies of the WREGIS Assignment of Registration Rights Agreement (see 4.3, below)
 Federal Internal Revenue Service Form W-9
 Reservation deposit (see 2.4, below)

2.4 Reservation Deposit
The reservation deposit must be paid within ten business days of application submittal.

The preferred method for submitting a reservation deposit is a certificate of deposit payable to the City of Palo Alto, but submitting a payment by check or wire trans fer is also acceptable.

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 Check: Checks should be made out to the City of Palo Alto and may be submitted by mail to:

City of Palo Alto, Attn: PA CLEAN
Utilities RMD, 3rd Floor
250 Hamilton Ave
Palo Alto, CA 94301
or in person at the Revenue Collections Desk in the lobby of the Civic Center at 250 Hamilton Ave, Palo Alto, CA during normal business hours.  Wire Transfer: To submit by wire transfer, send notification of the payment to both PACLEAN@cityofpaloalt o.org and
[email protected]. The City’s wire transfer information is as follows:

Bank Name: Wells Fargo Bank, N.A.

Bank Routing (RTN/ABA) Number: 121 000 248
Account Number: 412 107 6145
Beneficiary Account Name: City of Palo Alto
Type of Account: Checking
Bank Address, City, State:
420 Montgomery Street, San Francisco, CA 94104
Federal Tax ID #: 94 6000 389
For International Transfer Only:

International SWIFT BIC WFBIUS6S
The deposit will be returned:
 If, for whatever reason, CPAU is unable to accept the application.  Upon early termination of the PPA by the applicant prior to Commercial Operation Date , subject to the rules regarding such early termination in Section 7.0 of the PPA.
 Upon the commercial operation date of the project, subject to the rules regarding timely completion of the project in Section 7.0 of the PPA.

2.5 Determining Priority
Applications are accepted in the order received based on the date and time stamp of the e -mailed application received by the City at [email protected] . In the
event multiple applications are received simultaneously, all will be assigned an application number and precedence will be established by the use of the random number generator at random.org, or another publicly verifiable random number generator in the event random.org is not available.

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For the purpose of determining whether applications were received simultaneously, applications will be considered received based on the date and time stamp on the e-mail.

If multiple copies of the same application are received, the time stamp on the first e - mail received will be used. The time stamp on the City’s e -mail system shows the hour, minute, and second the e-mail was received.

3.0 Permitting

3.1 Time to Complete Project
Applicants have one year from the execution date of the PPA to achieve Commercial Operation for the proposed project, or three years from the PPA ex ecution date if the project site is a new residential construction development that satisfies the basic affordable housing requirement for residential ownership projects under Palo Alto Municipal Code section 16.65.030. If Commercial Operation is achieved after that time, the amount of the Reservation Deposit returned is reduced for each full week the project is delayed (see Section 5.1 and Section 7.0 of the PPA). If Commercial Operation has not been achieved by ten weeks after the applicable deadline to complete the project, CPAU retains the option to terminate the PPA.

3.2 Permit Submittal
Applicants apply for a building per mit and interconnection agreement at the City’s Development Center. The Building Division manages the routing of applications for review by all necessary departments. Consult the City’s Building Division with questions about building permit requirements and the project review process. The Division maintains pre -submittal and inspection checklists that detail the City’s code requirements. Visit the City’s website
(http://www.cityofpaloalto.org/gov/depts/ds/default.asp ) for the most recent versions
of these checklists.

The City’s Planning Division typically does not review rooftop solar projects, but if a project will involve landscape changes or carport or ground mounted solar systems, the applicant should consult the Planning Division to understand the code requirements applicable to the proposed project site.

3.3 Interconnection Review
Upon receipt of a project application routed from the City’s Building Division, the Electric Engineering Division will review the project to determine whether it qualifies for simplified review or whether supplemental review or an interconnection study is required. If the project qualifies for simplified review the Electric Engineering Division will send the applicant an Interconnection Agreement for signature.

If the project does not qualify, the applicant must pay an Advance Engineering Fee for additional evaluation work. Once the additional review is complete the Electric Engineering Division will send the applicant an Interconnection Agreement with an Item 10
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estimate of any additional interconnection costs. Upon receiving the interconnection agreement the applicant may either 1) execute and return the interconnecti on agreement along with payment for any additional estimated interconnection costs, or 2) notify CPAU in writing that the applicant is terminating the agreement. If this notification is received within 30 calendar days of the day CPAU notifies the applicant of the interconnection costs, the reservation deposit will be returned in full per Section 7.0 of the PPA. No portion of the building permit fees or Advance Engineering Fees will be returned.

See Utility Rule and Regulation 27 (Generator Interconnectio n) for more detail on the interconnection process.

4.0 Construction

4.1 Building Inspection
Consult the City’s Building Division with questions about the building inspection process.

The Division maintains inspection checklists that detail the City’s code requir ements. If there are any interconnection facilities to be constructed CPAU will build those facilities during the construction process. Once construction is completed and actual costs are known, CPAU will issue a final invoice for the interconnection fac ilities. CPAU may require the applicant to make an additional payment to the extent actual costs differ from the estimated costs.

4.2 CEC Pre-Certification
CPAU recommends that the applicant apply for pre-certification of the project from the California Energy Commission (CEC) at some point prior to Commercial Operation. Once the generating facility is completed the applicant must apply for CEC certification (see Section 5.2, below), and pre -certification ensures that certification will begin on the Commercial Operation Date , meaning that all energy output will be certified as eligible to fulfill Renewable Portfolio Standard (RPS) requirements . Per Section 2.4 of the PPA , CPAU will pay for any energy not certified by the CEC at the “Pre -Certification Price” rather than the contract price. See form CEC -RPS-1 published by the CEC for instructions on how to apply.

4.3 WREGIS Registration
During the construction proce ss CPAU will begin registration of the project in WREGIS (the Western Renewable Energy Generation Information System). The system owner is required to assign to CPAU the right to register the project in WREGIS when submitting an application to the Palo Alto CLEAN program. This will enable CPAU to receive Renewable Energy Credits (RECs) from the system directly in its WREGIS account rather than having to execute a transfer of RECs each month. CPAU will be responsible for uploading the meter data to WREGIS each month to enable creation of the RECs.

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5.0 Commercial Operation

5.1 Meter Set and Commercial Operation Date
The Commercial Operation Date for the generator is the date of the final building inspection by the City’s Building Division . Prior to that CPAU ’s Electric Meter Shop will set a revenue meter that will be used for billing. Following the final inspection CPAU will send the applicant a letter memorializing the Commercial Operation Date , and the applicant must return a signed copy to CPAU . This letter is required before CPAU can complete WREGIS registration (see Section 4.3 above ). WREG IS registration is a prerequisite for CEC Certification (see Section 5.2 below). At this time CPAU will return the entire reservation deposit or any portion of that deposit that the applicant is entitled to under Section 7.0 of the PPA.

5.2 CEC Certification
Within six months following the Commercial Operation Date the applicant is required to have the sys tem certified by the California Energy Commission as eligible to fulfill Renewable Portfolio Standard (RPS) requirements. CPAU will pay for the output of the system at the pre -certification price until this certification is granted (see Section 2.4 of the PPA).

Typically CEC Certification is retroactive to the Commercial Operation Date if 1) the applicant has obtained CEC Pre-Certification for the project (see Section 4.2 above ) or 2) the applicant has submitted an application for CEC Certification prior to the commercial operation date. If CPAU receives energy prior to certification and pays for it at the Pre - Certification Price, and that energy is later certified by the CEC as eligible to fulfill RPS requirements, CPAU will issue a true -up equal to the difference between the Pre - Certification Price and the Contract Price upon CEC certification.

See also Sections 2.4 and 3.1 of the PPA, as well as form CEC-RPS-1 published by the CEC.

5.3 Metering and Payment
Payment for the project output will be made monthly by check based on a City-provided revenue meter . The applicant will be responsible for the cost associated with the meter’s telemetry system.

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Additional Resources
Palo Alto CLEAN program website
https://www.cityofpaloalto.org/Departments/Utilities/Business/Ways -to-Save/CLEAN

City of Palo Alto Utilities Electric Engineering and Operations https://www.cityofpaloalto.org/Departments/Utilities/Utilities-Services-Safety/Engineering-and-Operations

City of Palo Alto Utilities Rule and Regulation 27 (Generator Interconnection) https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=28741

City of Palo Alto Utilities Electric Standard Drawings
https://www.cityofpaloalto.org/Departments/Utilities/Utilities-Services-Safety/Engineering-and- Operations/Electric-Service-Requirements

City of Palo Alto Development Services
http://www.cityofpaloalto.org/gov/depts/ds/default.asp
California Energy Commission Renewables Portfolio Standard Handbook and Generator Certification Application Forms
https://www.energy.ca.gov/programs-and-topics/programs/renewables-portfolio-standard/renewables-portfolio- standard-0

Western Renewable Energy Generation Information System (WREGIS) https://www.wecc.org/WREGIS/Pages/Default.aspx

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POWER PURCHASE AGREEMENT

ELIGIBLE RENEWABLE ENERGY RESOURCE
(Palo Alto Clean Local Energy Accessible Now Program)

This Power Purchase Agreement - Eligible Renewable Energy Resource, dated, for convenience, (the “Effective Date”), is entered into by and between the CITY OF PALO ALTO, a California chartered municipal corporation, and ,
a corporation (individually, a “Party” and, collectively, the “Parties”).

RECITALS

1. The Buyer has adopted and implemented its CLEAN Program, which allows an owner of a qualifying electric generation system to sell to the Buyer the power output of a small-scale distributed generation Eligible Renewable Energy Resource, subject to the CLEAN Program’s rules and requirements.

2. The Seller owns or operates and desires to interconnect its Facility in parallel with Buyer’s Distribution System and sell the Energy produced by its Facility, net of Station Service Load, directly to the Buyer in furtherance of the CLEAN Program.

3. The Parties do not intend this Agreement to constitute an agreement by the Buyer to provide retail electrical service to the Seller.

4. The Parties wish to enter into a power purchase agreement for the sale and purchase of the Output of the Facility. The Parties will enter into a separate “Interconnection Agreement” in connection with this Agreement.

NOW THEREFORE, in consideration of the foregoing recitals and the following covenants, terms and conditions, the Parties agree, as follows:

AGREEMENT

1.1 DEFINITIONS

The initially capitalized terms, whenever used in this Agreement, have the meanings set forth below, unless they are otherwise herein defined. The terms “include,” “includes,” and “including,” when used in this Agreement, shall mean, respectively, “include, without limitation,“ “ includes, without limitation” and “including, without limitation.”

“Affordable Housing Development” means a new residential construction development that satisfies the basic affordable housing requirement for residential ownership projects under Palo Alto Municipal Code section 16.65.030.

“Agreement” means this Power Purchase Agreement – Eligible Renewable Energy Resource between the Buyer and the Seller.

“Business Day” means any day except a Saturday, Sunday, or a day that the City observes as a regular holiday under Palo Alto Municipal Code section 2.08.100(a).

“Buyer” refers to the City of Palo Alto, California, with a principal place of business at 250 Hamilton Avenue, Palo Alto, California 94301.

“Buyer’s Distribution System” means the wires, transformers, and related equipment used by the Buyer to deliver electric power to the Buyer’s retail customers, typically at sub-transmission level voltages or lower.

“CAISO” means the California Independent System Operator Corporation, or successor entity. “CAISO Tariff” means the CAISO FERC Electric Tariff, as amended.

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“Capacity” means the ability of a generator at any given time to produce Energy at a specified rate, as measured in megawatts (“MW”) or kilowatts (“kW”), and any reporting rights associated with it.

“Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Facility, intended to value any aspect of the Contract Capacity of the Facility to produce Energy or ancillary services, including contributions towards Resource Adequacy (including those requirements defined in Section 40 of the CAISO Tariff) or reserve requirements (if any), and any other reliability or power attributes.

“CEC” means the California Energy Resources Conservation and Development Commission, or successor agency.

“Certificate of RPS Eligibility” means a certificate issued by the CEC as evidence of RPS Certification of the Facility.

“City” means the government of the City of Palo Alto, California.

“CLEAN Program” refers to the Palo Alto Clean Local Energy Accessible Now Program, a renewable energy program established by the City by adoption of resolution number , dated , of the Palo Alto City Council, whereby the Buyer will purchase from the Seller the Output of Eligible Renewable Energy Resources that meet specified criteria set forth in the City’s applicable ordinances and resolutions.

“Commercial Operation” means the period of operation of the Facility, once the Commercial Operation Date has occurred.

“Commercial Operation Date” means the date specified in the Commercial Operation Date Confirmation Letter, which the Parties execute and exchange in accordance with this Agreement.

“Contract Capacity” means the installed electrical Capacity available upon the Commercial Operation Date of the Facility in an amount, as specified in Exhibit “PPA-A.” “Contract Capacity” is measured at the Buyer’s revenue meter at the Delivery Point and is net of any Station Service Loads, any applicable Facility step-up transformer losses, and distribution losses on Buyer’s Distribution System up to the Delivery Point.

“Contract Price” means the price paid by the Buyer to the Seller for the Output generated at the Facility and received by the Buyer, as set forth in Exhibit “PPA-A.”

“CPUC” means the California Public Utilities Commission, or successor agency.

“Delivery Point” means the point of interconnection to Buyer’s Distribution System, where the Buyer accepts title to the Output.

“Delivery Term” has the meaning set forth in Section 14.2 hereof.

“Eligible Renewable Energy Resource” means an electric generating facility that is defined and qualified as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended.

“Energy” means electrical energy generated from the Facility and delivered to Buyer’s Distribution System with the voltage and quality required by the Buyer, and measured in megawatt-hours (“MWh”) or kilowatt- hours (“kWh”), as metered at the Delivery Point.

“Facility” means the qualifying renewable energy generation equipment and associated power conditioning and interconnection equipment that deliver the Output to the Buyer at the Delivery Point.

“FERC” means the Federal Energy Regulatory Commission, or successor agency.

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“Forced Outage” means an unplanned outage of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity.

“Force Majeure” means an event or circumstance, which prevents a Party from performing its obligations under this Agreement, and which is not in the reasonable control of, or the result of negligence of, the Party claiming Force Majeure, and which by the exercise of due diligence is unable to overcome or cause to be avoided. “Force Majeure” shall include: (a) An act of nature, riot, insurrection, war, explosion, labor dispute, fire, flood, earthquake, storm, lightning, tidal wave, backwater caused by flood, act of the public enemy, terrorism, or epidemic; (b) Interruption of transmission or generation services as a result of a physical emergency condition (and not congestion-related or economic curtailment) not caused by the fault or negligence of the Party claiming Force Majeure and reasonably relied upon and without a reasonable source of substitution to make or receive deliveries hereunder, civil disturbances, strike, labor disturbances, labor or material shortage, national emergency, restraint by court order or other public authority or governmental agency, actions taken to limit the extent of disturbances on the electrical grid; or (c) Other similar causes beyond the control of the Party affected, which causes such Party could not have avoided by the exercise of due diligence and reasonable care. A Party's financial incapacity, the Seller’s ability to sell the Output at a more favorable price or under more favorable conditions, or the Buyer’s ability to acquire the Output at a more favorable price or under more favorable conditions or other economic reasons shall not constitute an event of Force Majeure. “Force Majeure” does not include a Forced Outage to the extent such event is not caused or exacerbated by an event of Force Majeure, as described above, and does not include the Seller’s inability to obtain financing, permits, or other equipment and instruments necessary to plan for, construct, or operate the Facility.

“Good Utility Practice” means those practices, methods and acts that would be implemented and followed by prudent operators of electric energy generating facilities in the western United States, similar to the Facility, during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known at the time the decision was made, could reasonably have been expected to accomplish the desired result consistent with good business practices, reliability, and safety. The Seller acknowledges that its use of Good Utility Practice does not exempt it from performing any of its obligations arising under this Agreement. “Good Utility Practice” includes, at a minimum, those professionally responsible practices, methods and acts described in the preceding paragraph that comply with manufacturers’ warranties, restrictions in this Agreement, the interconnection requirements of Buyer, the requirements of governmental authorities, and WECC and NERC standards. “Good Utility Practice” also includes the taking of reasonable steps to ensure that:

(a) Equipment, materials, resources, and supplies, including spare parts inventories, are available to meet the Facility’s needs;
(b) Sufficient operating personnel are available at all times and are adequately experienced and trained and licensed as necessary to operate the Facility properly and efficiently, and are capable of responding to reasonably foreseeable emergency conditions at the Facility and emergencies whether caused by events on or off the Facility’s site; (c) Preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable, long-term and safe operation of the Facility, and are performed by knowledgeable, trained, and experienced personnel utilizing proper equipment and tools; (d) Appropriate monitoring and testing are performed to ensure equipment is functioning as designed; and
(e) Equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in a manner unsafe to workers, the general public, or the connecting utility’s electric system or contrary to environmental laws, permits or regulations or without regard to defined limitations such as, flood conditions, safety inspection requirements, operating voltage, current, volt ampere reactive (VAR) loading, frequency, rotational speed, polarity, synchronization, and control system limits; and equipment and components are designed and manufactured to meet or exceed the standard of durability that is generally used for electric energy generating facilities operating in the western United States and will function properly over the full range of ambient temperature and weather conditions reasonably expected to occur at the Facility site and under both normal and emergency conditions.

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“Green Attributes” refers to the definition set forth in the Standard Terms and Conditions, Appendix A-2, as amended, Decision D.07-02-011, as modified by D.07-05-057, of the CPUC, which incorporates the definition of “Environmental Attributes” set forth in the Standard Terms and Conditions, Appendix A-1, as amended, D. 04-06-014. “Green Attributes” includes any and all credits, benefits, emissions reductions, environmental air quality credits, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility, and its displacement of conventional energy generation, whether existing now or arising in the future. “Green Attributes” includes RECs, as well as (1) any avoided emissions of pollutants to the air, soil or water, such as sulfur oxides (“SOx”), nitrogen oxides (“NOx”), carbon monoxide (“CO”) and other pollutants; (2) any avoided emissions of carbon dioxide (“CO2”), methane (“CH4”), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and other greenhouse gases (“GHGs”) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights and RECs. “Green Tag Reporting Rights” are the right of a Green Tag Purchaser to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag Purchaser’s discretion, and include those Green Tag Reporting Rights accruing under Section 1605(b) of the Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags are accumulated on a kWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Energy. “Green Attributes” do not include (i) any Energy, Capacity, reliability, or other power attributes of the Facility, (ii) production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered, used or created by the Facility for compliance with or sale under local, state, or federal operating and/or air quality permits or programs. If the Facility is a biomass or landfill facility and the Seller receives any tradable Green Attributes based on the Facility’s greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, the Seller shall provide the Buyer with sufficient Green Attributes to ensure that there are zero net emissions associated with the production of electricity from the Facility. “Green Attributes” includes any other environmental credits or benefits recognized in the future and attributable to Energy generated by the Facility during the Term that may not be represented by Green Tag Reporting Rights or RECs, unless otherwise excluded herein. Any Green Attributes provided under this Agreement shall be documented by RECs, or any other representation of the environmental benefits of the Output, the monthly cumulative total of which shall be provided to the Buyer, as specified herein.

“Interconnection Agreement” refers to the agreement between the Buyer and the Seller, specific to the interconnection of the Facility to Buyer’s Distribution System.

“NERC” means the North American Electric Reliability Corporation, or successor organization.

“NCPA” means Northern California Power Agency, a California joint action agency, or successor agency.

“Output” means all Capacity associated with Contract Capacity and associated Energy made available from the Facility, as well as any Capacity Attributes, Green Attributes, or other attributes existing now or in the future associated with Contract Capacity and/or associated Energy. “Output” does not include production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation.

“Planned Outage” means an outage, scheduled in advance, of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity.

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“Pre-Certification Price” means the contract price to be paid for all Energy delivered to the Buyer prior to the RPS Certification Date, as specified in Exhibit “PPA-A”.

“Renewable Energy Credit” or “REC” has the meaning set forth in Section 399.12(h)(1) and (2) of the California Public Utilities Code, and includes a certificate of proof that one unit of electricity was generated by an Eligible Renewable Energy Resource. Currently, RECs are used to convey all Green Attributes associated with electricity production by a renewable energy resource. RECs are accumulated on a kWh basis and one REC represents the Green Attributes associated with the generation of 1 MWh (1,000 kWhs) from the Facility. For purposes of this Agreement, the term REC shall be synonymous with the term Green Tag, green ticket, bundled or unbundled renewable energy credit, tradable renewable energy certificates, or any other term used to describe the documentation that evidences the renewable and Green Attributes associated with electricity production by an Eligible Renewable Energy Resource.

“Renewables Portfolio Standard” or “RPS” means the standard adopted by the State of California pursuant to Senate Bill 2 1st Extraordinary Session (SBX1 2, Chapter 1, Statutes 2011-12), and California Public Utilities Code Sections 399.11through 399.31, inclusive, as may be amended, setting minimum renewable energy targets for local publicly owned electric utilities.

“Reservation Deposit” means the monetary deposit submitted by the Seller (or the Facility sponsor on behalf of the Seller) to secure a reservation of the CLEAN Program’s prices. The Reservation Deposit is set forth in Exhibit “PPA-A.”

“Resource Adequacy” means a requirement by a governmental authority or in accordance with its FERC- approved tariff, or a policy approved by a local regulatory authority, that is binding upon either Party and that requires that Party to procure a certain amount of electric generating capacity.

“RPS Certification” means certification by the CEC that the Facility qualifies as an Eligible Renewable Energy Resource for RPS purposes, and that all Energy produced by the Facility qualifies as generation from an Eligible Renewable Energy Resource, as evidenced by a Certificate of RPS Eligibility.

“RPS Certification Date” means the date on which the RPS Certification begins, as specified in the Certificate of RPS Eligibility.

“Seller” means with a principal place of business at , , .

“Station Service Load” means the electrical loads associated with the operation and maintenance of the Facility, which may at times be supplied from the Facility’s Energy.

“Term” has the meaning set forth in Section 14.1 hereof.

“WECC” means the Western Electricity Coordinating Council, the regional entity responsible for coordinating and promoting regional bulk electric system reliability in the Western Canada and the United States, or any successor organization.

2.0 SELLER’S GENERATING FACILITY, PURCHASE PRICE AND PAYMENT

2.1 Facility. This Agreement governs the Buyer’s purchase of the Output from the Facility, as described in Exhibit “PPA-A.” The Seller shall not modify the Facility to increase or decrease the Contract Capacity after the Commercial Operation Date.

2.2 Products Purchased. During the Delivery Term, the Seller shall sell and deliver, or cause to be delivered, and the Buyer shall purchase and receive, or cause to be received, the Output from the Facility. The Seller shall not have the right to procure the Output from sources other than the Facility for sale or delivery to the Buyer under this Agreement or to substitute the Output.

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2.3 Delivery Term. The Delivery Term shall commence on the Commercial Operation Date under this Agreement, and shall continue for an uninterrupted period of [fifteen (15), twenty (20), or twenty -five (25) years]. This period will commence on the first day of the calendar month immediately following the Commercial Operation Date. As evidence of the Commercial Operation Date, the Parties shall execute and exchange the “Commercial Operation Date Confirmation Letter,” attached hereto as Exhibit “PPA- B.” The Commercial Operation Date shall be the date on which the Parties acknowledge, in writing, that the Facility starts operating and is otherwise in compliance with applicable interconnection and system protection requirements, including the final approvals by the City’s building department official.

2.4 Payment for Products Purchased.

2.4.1 Deliveries Prior to RPS Certification Date. Once the Facility has achieved Commercial Operation, if the CEC has not issued a Certificate of RPS Eligibility for the Facility or the Facility has not been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller for the Output by multiplying the Pre-Certification Price by the quantity of Energy.

2.4.2 Deliveries After RPS Certification Date. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer shall pay the Seller for all Output on or after the RPS Certification Date by multiplying the Contract Price by the quantity of Energy.

2.4.3 True-up Upon Issuance of Certificate of RPS Eligibility. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller an amount equal to the difference between the Contract Price and the Pre-Certification Price for the Output (a) that was delivered on or after the RPS Certification Date and (b) for which the Seller has already received payment at the Pre- Certification Energy Price.

2.4.4 Energy in Excess of Contract Capacity. The Seller shall not receive payment for any Energy or Green Attributes delivered in any hour to the Buyer in excess of the following amount of energy (in kilowatt-hours): 110% of the Contract Capacity (in kilowatts) multiplied by one hour. Any payment in excess of this amount shall be refunded to the Buyer, on demand.

2.5 Billing. The Buyer shall pay the Seller by check or electronic funds transfer, on a monthly basis, within thirty (30) days of the meter reading date.

2.6 Title and Risk of Loss. Title to and risk of loss related to the Output shall be transferred from the Seller to the Buyer at the Delivery Point. The Seller warrants that it will deliver to the Buyer the Output free and clear of all liens, security interests, claims, encumbrances or any interest therein or thereto by any person, arising prior to the Delivery Point.

2.7 No Additional Incentives. The Seller warrants that it has not received any other incentives funded by the Buyer’s ratepayers and it further agrees that, during the Term, it shall not seek additional compensation or other benefits from the Buyer pursuant to the following programs of the Buyer:
(a) Photovoltaic (PV) Partners Program; (b) Power from Local Ultra-Clean Generation Incentive (PLUG- In) Program; or (c) other similar programs that are or may be funded by the Buyer’s ratepayers.

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3.0 RPS CERTIFICATION; GREEN ATTRIBUTES

3.1 CEC Certification. The Seller, at its own cost and expense, shall obtain the RPS Certification within six (6) months of the Commercial Operation Date. The Seller shall maintain the RPS Certification at all times during the Delivery Term. The foregoing provision notwithstanding, the Seller shall not be in breach of this Agreement and the Buyer shall not have the right to terminate this Agreement, if the Seller’s failure to obtain or maintain the RPS Certification is due to a change in California law, occurring after the Commercial Operation Date, so long as the Seller has used commercially reasonable efforts to obtain and maintain the RPS Certification and the Seller’s actions or omissions did not contribute to its inability to obtain and maintain the RPS Certification.

3.2 Obligation to Deliver Green Attributes. The Seller shall sell and deliver to the Buyer, and the Buyer shall buy and receive from the Seller, all right, title, and interest in and to Green Attributes associated with Energy, produced by the Facility and delivered to the Buyer at the Delivery Point, whether now existing or that hereafter come into existence during the Term, except as otherwise excluded herein; provided, the Buyer shall not be obligated to purchase and pay the Seller for any Green Attributes associated with any amount of the Output, that is generated by any fuel which is not renewable and which cannot be counted for the purpose of the production of Green Attributes. The Seller agrees to sell and make all such Green Attributes available to the Buyer to the fullest extent allowed by applicable law, in accordance with the terms and conditions of this Agreement. The Seller warrants that the Green Attributes provided under this Agreement to the Buyer shall be free and clear of all liens, security interests, claims and encumbrances.

3.3 Conveyance of Green Attributes. The Seller shall provide Green Attributes associated with the Facility, which shall be documented and conveyed to the Buyer in accordance with the procedure described in Exhibit “PPA-D.”

3.4 Additional Evidence of Green Attributes Conveyance. At the Buyer’s request, the Seller shall provide additional reasonable evidence to the Buyer or to third parties of the Buyer’s right, title, and interest in the Green Attributes and any other information with respect to Green Attributes, as may be requested by the Buyer.

3.5 Modification of Green Attributes Conveyance Procedure. The Buyer may unilaterally modify Exhibit “PPA-D” in order to reflect changes necessary in the Green Attributes conveyance procedures, so that the Buyer may be able to receive and report the Green Attributes, purchased under this Agreement, as belonging to the Buyer.

3.6 Reporting of Ownership of Green Attributes. The Seller shall not report to any person or entity that the Green Attributes sold and conveyed to the Buyer belong to any person other than the Buyer.

The Buyer may report under any applicable program that Green Attributes purchased by the Buyer hereunder belong to it.

3.7 Greenhouse Gas Emissions. The Seller shall comply with any laws and/or regulations regarding the need to offset emissions of GHGs by delivering to the Buyer the Energy from the Facility with a net zero GHG impact.

4.0 CONVEYANCE OF CAPACITY ATTRIBUTES

4.1 Conveyance of Resource Adequacy Capacity. The Seller shall not report to any person or entity that the Resource Adequacy Capacity, as defined in the CAISO Tariff) associated with the Facility, if any, belongs to a person other than the Buyer, which may report that Resource Adequacy Capacity purchased hereunder belongs to it to fulfill the Resource Adequacy requirements, as defined in Section 40 of the CAISO Tariff, as amended, or any successor program. The Seller shall take those actions described in Section 6.0 hereof, as applicable, to secure recognition of Resource Adequacy Capacity by the CAISO.

4.2 Conveyance of Other Capacity Attributes. In addition to the obligations imposed on the Item 10
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Seller under Section 4.1, the Seller will undertake any and all actions reasonably needed to enable the Buyer to effect the recognition and transfer of any Capacity Attributes in addition Resource Adequacy, to the extent that such Capacity Attributes exist now or will exist in the future; provided, if such actions require any actions beyond the giving of notice by the Seller, then the Buyer shall reimburse all out-of- pocket costs and charges of such actions.

4.3 Reporting of Ownership of Capacity Attributes. The Seller shall not report to any person or entity that the Capacity Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any such program that such Capacity Attributes purchased hereunder belong to it.

5.0 METERING AND OPERATIONS

5.1 Timing of Outages. The Seller may not schedule or take any Planned Outage from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October.

5.2 Outage Reporting.

5.2.1 Buyer Request. The Seller is not required to report any Planned Outage or Forced Outage, unless the Buyer first submits a written request to the Seller to commence Outage reporting. Upon receipt of such a request, the Seller shall report all subsequent Planned Outages and the Forced Outages according to the procedures described in subsections 5.2.2 and 5.2.3, and shall continue such reporting until (a) the termination of this Agreement for any reason, or (b) the Buyer subsequently provides written notice to the Seller that the Seller may cease such reporting in the future.

5.2.2 Planned Outage Notifications. The Seller shall notify the Buyer at least 72 hours in advance of any Planned Outage that would result in a reduction in the effective Output of the Facility during the period over which the Planned Outage is scheduled. Notification shall be provided by e-mail to the e-mail address (or addresses) set forth in Exhibit “PPA-F.”

5.2.3 Forced Outage Notifications. Within 24 hours of the occurrence of a Forced Outage of the Facility that impacts the ability of the Facility to produce Energy, the Seller shall notify the Buyer of the Forced Outage, including the Capacity of the Facility that is impacted, and the expected duration of the Forced Outage. Within 24 hours of the return of the Facility to service following the Forced Outage, the Seller shall notify the Buyer of the return-to-service details.

Notification shall be made by e-mail to the address (or addresses) set forth in Exhibit “PPA-F.”

5.3 Metering. The Buyer shall furnish and install one or more standard watt-hour meters to read Energy generated by the Facility, and it will charge a meter fee to the Seller to cover the costs associated with the meter’s purchase and installation. As requested, the Seller shall provide and install a meter socket in accordance with the Buyer’s metering standards. The Buyer reserves the right to install additional metering equipment at its sole cost and expense.

6.0 PARTICIPATING GENERATORS

6.1 Applicability. This Section 6.0 shall apply if the Facility meets the definition of a “Participating Generator,” as may be defined by the CAISO Tariff. This Section 6.0 shall not apply if the definition applies to the Facility only upon the election by the Seller. For the purposes of this Section 6.0, all special terms not otherwise defined in Section 1.0 are defined in the CAISO Tariff.

6.2 Participating Generator Agreement. The Buyer will notify the CAISO of the Seller’s interconnection to Buyer’s Distribution System. If the CAISO requires it, the Seller, at its own expense, shall negotiate and enter in to two contracts, a “Participating Generator Agreement” and a “Meter Services Agreement for CAISO Metered Entities,” with the CAISO.

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6.3 Scheduling Coordination. If the CAISO requires the Seller to enter in to a Participating Generator Agreement, then the Seller shall designate NCPA as the Buyer’s scheduling coordinator. The Buyer, acting in its sole discretion, may replace NCPA as the scheduling coordinator for the Facility. If NCPA ceases to be the scheduling coordinator for the Facility and the Buyer has not, upon fourteen (14) days’ prior written notice of inquiry from the Seller, appointed a replacement scheduling coordinator, then the Seller shall have the right to appoint a replacement scheduling coordinator on the Buyer’s behalf.

Thereafter, the Buyer shall enter into all reasonable and appropriate agreements with such replacement scheduling coordinator at its own costs.

6.4 Scheduling Procedure. The Buyer may require the Seller to provide the Buyer with Energy forecasts on a periodic basis, as may be necessary for the Buyer to account for expected Facility generation in its daily power scheduling process. The requirements are set forth in Exhibit “PPA-C.”

6.5 Modification of Scheduling and Outage Notification Procedure. The Buyer may unilaterally modify Exhibit “PPA-C” to reflect changes necessary in the scheduling and Outage notification procedures. The Buyer shall give the Seller reasonable notice of any such changes.

6.6 Provision of Other Equipment. If the Seller is required to enter into a Participating Generator Agreement with the CAISO, then the Seller, at its own cost and expense, shall provide and maintain data transmission-grade phone line and telecommunications equipment at the meter location that complies with applicable requirements of the CAISO, the Buyer, and NCPA. Any meter installed by the Seller shall comply at all times with the CAISO’s metering requirements. If the Seller fails to provide or maintain any such required equipment or data connection, then the Buyer shall acquire, install and maintain the same at the Seller’s sole cost and expense.

6.7 Designation as Resource Adequacy Resource. The Buyer may submit a written request to the Seller to obtain the CAISO’s designation of the Facility as a Resource Adequacy Resource. Upon receipt of such request, the Seller shall provide such information and undertake such steps as may be required by the CAISO in order to complete such an assessment. If the Buyer makes such a request, then the Buyer shall be responsible for the following: (1) any costs charged to the Seller by the CAISO as a condition of applying for or receiving designation as a Resource Adequacy Resource, including any deposits required during the study process or the cost of any related studies or deliverability assessments performed by the CAISO; (2) the capital, installation, and maintenance costs of any additional equipment required by the CAISO as a condition of receiving designation as a Resource Adequacy Resource; (3) the costs of any Network Upgrades, as defined in the CAISO Tariff, as may be required by the CAISO, provided, the Buyer shall receive any subsequent repayments from the CAISO or the Participating Transmission Owner related to such upgrades; and (4) any charges or penalties assessed by the CAISO as a consequence of the Facility’s designation as a Resource Adequacy Resource.

6.8 CAISO Charges. The Buyer shall be solely responsible for paying all costs and charges associated with the receipt of Energy under this Agreement, at the Delivery Point, and for the transmission and delivery of Energy from the Delivery Point to any other point downstream of the Delivery Point, including transmission costs and charges, competition transition charges, applicable control area service charges, transmission congestion charges, inadvertent energy flows, any other CAISO charges related to the transmission of such Energy by the CAISO and any charge assessed or collected in the future pursuant to any utility tariff or rate schedule, however defined, for transmission or transmission-related service rendered by or for any transmission-owning or operating entity. The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and minimize any potential liability, under the CAISO tariff. If and to the extent that the Seller fails to comply with the notice provision in Exhibit “PPA-C,” concerning Outages, or with its obligations as outlined in the previous sentence, the Seller shall be wholly responsible for all imbalances, deviations, or any other CAISO charges or penalties associated with such Outage or other CAISO Tariff obligation.

6.9 Inclusion in Metered Subsystem. At the option of the Buyer, the Facility may be included within NCPA’s metered sub-system in connection with the scheduling of power over the CAISO grid and related functions; provided, however, that such inclusion shall have no adverse effect on the Facility’s operations or the Seller (or any such effect shall be fully mitigated by the Buyer). The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and Item 10
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minimize any potential liability, under the CAISO Tariff; provided, that if such actions require any actions beyond the giving of notice to be provided by the Buyer, then the Buyer shall reimburse the Seller for all out-of-pocket costs and charges of such actions.

7.0 COMMERCIAL OPERATION DATE; REFUND OF RESERVATION DEPOSIT

7.1 Commercial Operation Date. The Facility shall achieve Commercial Operation by the Commercial Operation Date deadline (the “Deadline”), which is one (1) year from the Effective Date, or, for Affordable Housing Developments, three (3) years from the Effective Date.

7.2 Reservation Deposit. The Buyer acknowledges that, as of the Effective Date or other date established by the Buyer, the Seller has provided the Reservation Deposit to the Buyer.

7.2.1 If the Commercial Operation Date occurs on or prior to the Deadline, the Buyer shall refund to the Seller the Reservation Deposit without interest.

7.2.2 If the Commercial Operation Date commences within seventy (70) days of the Deadline, the Seller, as liquidated damages and not as a penalty, shall relinquish its claim to a ten percent (10%) portion of the amount of the Reservation Deposit for every full week transpiring between the Deadline and the Commercial Operation Date, but the total amount to be relinquished to the Buyer shall not exceed 100% of the Reservation Deposit.

7.2.3 If the Facility has not achieved Commercial Operation within seventy (70) days of the Deadline, then the Buyer may terminate this Agreement without liability of either Party to the other (other than as set forth in Section 7.2.2) by giving written notice of termination to the Seller.

7.2.4 If the Seller gives notice of termination to terminate the Agreement before Commercial Operation occurs, then the Buyer shall refund a percentage of the Reservation Deposit equal to the following: the percentage to be refunded will equal A/B, where A equals the number of days between the date of the Seller’s notice of termination, received by the Buyer, and the Deadline, and B equals the number of days between the Effective Date and the Deadline.

7.3 Return of Reservation Deposit. The Buyer shall return to the Seller the Reservation Deposit, without interest, in the event that (a) the Buyer furnishes written notice of the costs of interconnection (defined in the Interconnection Agreement to include the costs related to the Interconnection Facilities and Distribution Upgrades) to the Seller and (b) within thirty (30) days of receipt of the notice regarding costs of interconnection, the Seller provides the Buyer with written notice that the Seller does not intend to sign the Interconnection Agreement and does intend to proceed with the project.

8.0 REPRESENTATION AND WARRANTIES; COVENANTS

8.1 Representations and Warranties. On the Effective Date, each Party represents and warrants to the other Party that:

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8.1.1 It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;

8.1.2 The execution, delivery and performance of this Agreement is within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it;

8.1.3 This Agreement and each other document executed and delivered in accordance with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms;

8.1.4 It is not bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt;

8.1.5 There is not pending or, to its knowledge, threatened against it or any of its affiliates, if any, any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement; and

8.1.6 It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of, and understands and accepts, the terms, conditions and risks of this Agreement.

8.2 General Covenants. Each Party covenants that, during the Term:

8.2.1 It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;

8.2.2. It shall maintain (or obtain from time to time as required, including through renewal, as applicable) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and

8.2.3 It shall perform its obligations under this Agreement in a manner that does not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it.

8.3 Covenant by Seller. The Seller covenants that, during the Term:

8.3.1 If the Eligible Renewal Energy Resource or the Facility is considered an ‘eligible qualifying facility’ under applicable law and has a net power production capacity of greater than one (1) megawatt, then the Seller covenants and agrees that, within thirty (30) days of the Effective Date or longer period allowed by law, it will complete and file Form No. 556 or other similar form with FERC as the same may be required by law.”

9.0 GENERAL CONDITIONS

9.1 Facility Care and Interconnection. During the Delivery Term, the Seller shall execute and maintain an “ Interconnection Agreement” with the Buyer, whereby the Seller shall pay and be responsible for designing, installing, operating, and maintaining the Facility in accordance with all applicable laws and regulations and shall comply with all applicable Buyer, WECC, FERC, and NERC requirements, including applicable interconnection and metering requirements. The Seller shall also comply with any modifications, amendments or additions to the applicable tariff and protocols. The Seller also shall arrange and pay independently for any and all necessary costs under the Interconnection Agreement with the Buyer.

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9.2 Standard of Care. The Seller shall: (a) operate and maintain the Facility in a safe manner in accordance with its existing applicable interconnection agreements, manufacturer’s guidelines, warranty requirements, Good Utility Practice, industry norms (including standards of the National Electrical Code, Institute of Electrical and Electronic Engineers, American National Standards Institute, and the Underwriters Laboratories, and in accordance with the requirements of all applicable federal, state and local laws and the National Electric Safety Code, as such laws and code norms may be amended from time to time; (b) obtain any governmental authorizations and permits required for the construction and operation thereof. The Seller shall make any necessary and commercially reasonable repairs with the intent of optimizing the availability of electricity to the Buyer. The Seller shall reimburse the Buyer for any and all losses, damages, claims, penalties, or liability that the Buyer incurs as a result of the Seller’s failure to obtain or maintain any governmental authorizations and permits required for the construction and operation of the Facility throughout the Term.

9.3 Access Rights. The Buyer, its authorized agents, employees and inspectors shall have the right to inspect the Facility on reasonable advance notice during normal business hours and for any purposes reasonably connected with this Agreement or the exercise of any and all rights secured to the Buyer by law, including, without limitation, its ordinances, resolutions, tariffs, utility rate schedules or utilities rules and regulations. The Buyer shall make reasonable efforts to coordinate its emergency activities with the safety and security departments, if any, of the Facility’s operator. The Seller shall keep the Buyer advised of current procedures for communicating with the Facility operator’s safety and security departments.

9.4 Protection of Property. Each Party shall be responsible for protecting its own facilities from possible damage resulting from electrical disturbances or faults caused by the operation, faulty operation, or non-operation of the other Party’s facilities and such other Party shall not be liable for any such damages so caused.

9.5 Insurance. During the Term, the Seller shall obtain and maintain and otherwise comply with the insurance requirements, as set forth in Exhibit “PPA-E.”

9.6 Buyer’s Performance Excuse; Seller Curtailment.

9.6.1 Buyer Performance Excuse. The Buyer shall not be obligated to accept or pay for the Output during Force Majeure that affects the Buyer’s ability to accept Energy.

9.6.2 Seller Curtailment. The Buyer may require the Seller to interrupt or reduce deliveries of Energy: (a) whenever necessary to construct, install, maintain, repair, replace, remove, or investigate any of its equipment or part of the Buyer’s Distribution System or facilities; or (b) if the Buyer determines that curtailment, interruption, or reduction is necessary due to a System Emergency, as defined in the CAISO Tariff, an unplanned outage on Buyer’s Distribution System, Force Majeure, or compliance with Good Utility Practice.

9.7 Notices of Outages. Whenever possible, the Buyer shall give the Seller reasonable notice of the possibility that interruption or reduction of deliveries may be required.

9.8 No Additional Loads. The Seller shall not connect any loads not associated with Station Service Loads at the location of the Facility in a manner that would reduce Energy provided from the Facility to the Buyer hereunder. The Seller shall obtain separate retail electric service under the Buyer’s rate schedules for the service of such additional loads.

10.0 FORCE MAJEURE

10.1 Effect of Force Majeure. A Party shall be excused from its performance under this Agreement to the extent, but only to the extent, that its performance hereunder is prevented by Force Majeure. A Party claiming Force Majeure shall exercise due diligence to overcome or mitigate the effects of Force Majeure; provided, that nothing in this Agreement shall be deemed to obligate the Party affected by Force Majeure (a) to forestall or settle any strike, lock-out or other labor dispute against its will; or (b) for Force Majeure affecting the Seller only, to purchase electric power to cure Force Majeure.

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10.2 Remedial Action. A Party shall not be liable to the other Party if the Party is prevented from performing its obligations hereunder due to Force Majeure. The Party rendered unable to fulfill an obligation by reason of Force Majeure shall take all action necessary to remove such inability with all due speed and diligence. The nonperforming Party shall be prompt and diligent in attempting to remove the cause of its failure to perform, and nothing herein shall be construed as permitting that Party to continue to fail to perform after that cause has been removed. Notwithstanding the foregoing, the existence of Force Majeure shall not excuse any Party from its obligations to make payment of amounts due hereunder.

10.3 Notice of Force Majeure. In the event of any delay or nonperformance resulting from Force Majeure, the Party directly impacted by Force Majeure shall, as soon as practicable under the circumstances, notify the other Party, in writing, of the nature, cause, date of commencement thereof and the anticipated extent of any delay or interruption in performance.

10.4 Termination Due to Force Majeure. If a Party will be prevented from performing its material obligations under this Agreement for an estimated period of twelve (12) consecutive months or longer due to Force Majeure, then the unaffected Party may terminate this Agreement, without liability of either Party to the other (other than any liability set forth in Section 7.2.2 arising prior to such extended Force Majeure), upon thirty (30) Days’ prior written notice at any time during Force Majeure.

11.0 INDEMNITY

11.1 Indemnity by the Seller. The Seller shall indemnify, defend, and hold harmless the Buyer, its elected and appointed officials, directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees, resulting from, or arising out of or in any way connected with claims by third parties associated with (A) (i) Energy delivered at the Delivery Point; (ii) the Seller’s operation and/or maintenance of the Facility; or (iii) the Seller’s actions or inactions with respect to this Agreement, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Buyer or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Buyer, its agents, employees, directors or officers.

11.2 Indemnity by the Buyer. The Buyer shall indemnify, defend, and hold harmless the Seller, its directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees resulting from, or arising out of or in any way connected with claims by third parties associated with acts of the Buyer, its officers, employees, agents, and representatives, relating to: (A) Energy delivered by the Seller under this Agreement after the Delivery Point, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Seller or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the Seller, its agents, employees, directors or officers.

12.0 LIMITATION OF DAMAGES

EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT THERE IS NO WARRANTY

OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. LIABILITY SHALL BE LIMITED TO DIRECT

ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND

EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED UNLESS EXPRESSLY HEREIN PROVIDED. NEITHER PARTY SHALL BE LIABLE

FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES,

LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR Item 10
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CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS EXPRESSLY HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF SECTION 11 (INDEMNITY), IT IS

THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES

AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES

RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE.

13.0 NOTICES

Notices shall, unless otherwise specified herein, be given, in writing, and may be delivered by hand delivery, United States mail, overnight courier service, facsimile or electronic messaging (e-mail) to the addresses set forth in Exhibit “ PPA-F.”. Whenever this Agreement requires or permits delivery of a “notice” (or requires a Party to “notify”), the Party with such right or obligation shall provide a written communication in the manner specified below. A notice sent by facsimile transmission or electronic mail will be recognized and shall be deemed received on the Business Day on which such notice was transmitted if received before 5 p.m. Pacific Time (and if received after 5 p.m., on the next Business Day) and a notice by overnight mail or courier shall be deemed to have been received two (2) Business Days after it was sent or such earlier time as is confirmed by the receiving Party unless it confirms a prior oral communication, in which case any such notice shall be deemed received on the day sent. A Party may change its addresses by providing notice of same in accordance with this provision. A Party may request a change to Exhibit “PPA- F” as necessary to keep the in formation current.

14.0 TERM, TERMINATION EVENT AND TERMINATION

14.1 Term. The Term shall commence upon the execution by the duly authorized representatives of each of the Parties, and shall remain in effect until the conclusion of the Delivery Term, unless terminated sooner pursuant to the terms and conditions of this Agreement. All indemnity rights shall survive the termination of this Agreement for twelve (12) months.

14.2 Delivery Term. The Delivery Term of the Agreement is _______ years and is defined as the period of time from the Commercial Operation Date through the expiration or early termination of this Agreement.

14.3 Termination Event.

14.3.1 The Buyer shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Facility has not achieved Commercial Operation within seventy (70) days following the Deadline; (b) After the Commercial Operation Date, the Seller has not sold or delivered Energy from the Facility to the Buyer for a period of twelve (12) consecutive months; (c) If the Facility does not obtain RPS Certification within six (6) months of the Commercial Operation Date and maintain RPS Certification as required by Section 3.2; or (d) The Seller breaches any other material obligation of this Agreement.

14.3.2 The Seller shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Buyer fails to make a payment due and payable under this Agreement within thirty (30) days after written notice that such payment is due; or (b) The Buyer breaches any other material obligation of this Agreement. The preceding sentence notwithstanding, the Seller may terminate this Agreement without cause at any time prior to the Commercial Operation Date, subject to the provisions of Section 7 of this Agreement.

14.4 Time to Cure. None of the events described in Section 14.3.1 and 14.3.2 shall constitute a Termination Event if the Buyer or the Seller cures the event, failure, or circumstance within thirty (30) days after receipt of written notification sent by the other Party, seeking termination, or such longer period as may be necessary to cure so long as the Party subject to the Terminating Event is exercising diligent efforts to cure.

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14.5 Termination.

14.5.1 Declaration of a Termination Event. If a Termination Event has occurred and is continuing, the Party with the right to terminate shall have the right to: (a) send notice, designating a day, no earlier than thirty (30) days after such notice is deemed to be received (as provided in Section 13), as an early termination date of this Agreement (the “Early Termination Date”), unless the Seller has timely communicated with the Buyer and the Parties have agreed to resolve the circumstances giving rise to the Termination Event; (b) accelerate all amounts owing between the Parties; and (c) terminate this Agreement and end the Delivery Term effective as of the Early Termination Date.

14.5.2 Release of Liability for Termination Event. Upon termination of this Agreement pursuant to this section neither Party shall be under any further obligation or subject to liability hereunder, except with respect to the indemnity provision in Section 11 hereof, which shall remain in effect for a period of 12 months following the Early Termination Date.

14.6 No Limitation on Damages. Nothing in this Agreement shall be deemed or construed to limit a Party’s right to recover damages from the other Party, except as otherwise provided in this Agreement.

15.0 RELEASE OF DATA

Except as may be exempt from disclosure under applicable law, the Seller authorizes the Buyer to release to any regulatory authority having jurisdiction over the Facility or a Party, or to any request made pursuant to the California Constitution or the California Public Records Act, information regarding the Facility, including the Seller’s name and location, operational characteristics, the Term of this Agreement, the Facility resource type, the scheduled Commercial Operation Date, the actual Commercial Operation Date, the Contract Capacity, payments made to the Seller and Energy production information. The Seller acknowledges that this information may be made publicly available.

16.0 ASSIGNMENT

Neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld.

16.1 Upon the written request of the Seller, the Buyer will execute a “ Lender Consent and Agreement” between the Seller and the Seller’s lender(s), if any, in the form acceptable to the Parties; provided, for illustration purposes only, an exemplar is attached hereto as Exhibit “PPA-G.”

16.2 Notwithstanding the foregoing, no Consent and Agreement shall be required for:

16.2.1 Any assignment or transfer of this Agreement by the Seller to an affiliate of the Seller, provided that such affiliate’s creditworthiness is equal to or better than that of Seller, as reasonably determined by the non-assigning or non-transferring Party; or

16.2.2 Any assignment or transfer of this Agreement by the Seller or the Buyer to a person succeeding to all or substantially all of the assets of such Party, provided that such person’s creditworthiness is equal to or greater than that of such Party, as reasonably determined by the non-assigning or non-transferring Party.

16.2.3 Notification of any assignment or transfer of this Agreement under Section 16.2.1 or 16.2.2 shall be given to the non-assigning or non-transferring Party in accordance with Exhibit “PPA-F.”

17.0 APPLICABLE LAW, VENUE, ATTORNEYS’ FEES, AND INTERPRETATION

This Agreement will be governed by and construed in accordance with the laws of the State of California. The Parties will comply with applicable laws pertaining to their obligations arising under this Item 10
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Agreement. In the event that an action is brought, the Parties agree that trial of such action will be vested exclusively in the state courts of California or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. If a court of competent jurisdiction finds or rules that any provision of this Agreement, the Exhibits, or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement, the Exhibits, or any amendment thereto will remain in full force and effect. The Parties agree that the normal rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any Exhibit or any amendment thereof.

18.0 SEVERABILITY

If any provision in this Agreement is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Agreement and the Parties shall use their best efforts to modify this Agreement to give effect to the original intention of the Parties.

19.0 COUNTERPARTS; INTERPRETATION OF CONFLICTING PROVISIONS

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile or portable document format (“PDF”) transmission will be deemed as effective as delivery of an originally executed counterpart. Each Party delivering an executed counterpart of this Agreement by facsimile or PDF transmission will also deliver an originally executed counterpart, but the failure of any Party to deliver an originally executed counterpart of this Agreement will not affect the validity or effectiveness of this Agreement. In the event of a conflict between the Agreement and any, some or all of the Exhibits, the document imposing the more specific duty or obligation will prevail.

20.0 GENERAL

No amendment to or modification of this Agreement shall be enforceable unless reduced to writing and executed by both Parties. This Agreement shall not impart any rights enforceable by any third party other than a permitted successor or assignee bound to this Agreement. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. The headings used herein are for convenience and reference purposes only.

//
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21. EXHIBITS
The following exhibits shall be deemed incorporated in and made a part of this Agreement.

Exhibit “PPA-A” - Facility Description, Prices, and Reservation Deposit Exhibit “PPA-B” - Commercial Operation Date Confirmation Letter Exhibit “PPA-C” - Scheduling and Outage Notification Procedure Exhibit “PPA-D” - Green Attributes Reporting and Conveyance Procedures Exhibit “PPA-E” - Insurance Requirements
Exhibit “PPA-F” - Notices
Exhibit “PPA-G” - Form of Lender Consent and Agreement

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their authorized representatives as of the Effective Date.

CITY OF PALO ALTO SELLER

APPROVED AS TO FORM

Senior Deputy City Attorney

APPROVED

City Manager

Director of Utilities
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EXHIBIT “PPA-A”

Facility Description, Rates, and Reservation Deposit

Program Rates

Contract Term: [ Fifteen (15), twenty (20), or twenty-five (25) years] Contract rate: $0.165 per kWh for solar resources, 15- or 20- or 25-year contract term (up to 3 MW solar energy resources program capacity)
$0.095 per kWh for solar resources, 15-year contract term (beyond 3 MW) $0.098 per kWh for solar resources, 20-year contract term (beyond 3 MW) $0.102 per kWh for solar resources, 25-year contract term (beyond 3 MW) $0.094 per kWh for non-solar resources, 15-year contract term $0.098 per kWh for non-solar resources, 20-year contract term $0.101 per kWh for non-solar resources, 25-year contract term Pre-certification rate: $0.08 per kWh

Reservation Deposit

Reservation Deposit ($20/kW of Contract Capacity): $

Service address:

Facility Description:

Contract Capacity: kW (CEC-AC), based on solar array rating (Panel rated output at PV USA test conditions x inverter efficiency) or inverter rating

Facility primary fuel/technology:

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EXHIBIT “PPA-B”

Commercial Operation Date Confirmation Letter

In accordance with the terms of the Power Purchase Agreement (Palo Alto CLEAN), dated (the “Agreement”) by and between the City of Palo Alto, as the Buyer, and , as the Seller, this Confirmation Letter serves to
document the Parties’ agreement that (i) the conditions precedent to the occurrence of the Commercial Operation Date have been satisfied, and (ii) the Buyer has received Energy, as specified in the Agreement, as of , . The actual installed Contract Capacity is kW.

This Confirmation Letter shall confirm the Commercial Operation Date, as defined in the Agreement, as of the date referenced in the preceding sentence.

IN WITNESS WHEREOF, each Party has caused this letter to be duly executed by its authorized representative as of the date of last signature provided below:

Buyer Seller
By: By:

Name: Name:

Title: Director of Utilities Title:

Date: Date:

In recognition of the Commercial Operation Date relative to the Effective Date of the Agreement by and between the Buyer and the Seller, the Seller hereby calculates the amount to return, if any, of the Seller’s deposit, as follows:

Original Reservation Deposit Amount: $

Commercial Operation Date Deadline:

□ Commercial Operation Date is prior to Deadline

□ Commercial Operation Date occurred weeks following the Deadline, meaning that % of the Reservation Deposit is relinquished by Seller per Section 7.2.2 of the Power Purchase Agreement.

Amount (if any) of Reservation Deposit to return to the Seller is: $ Item 10
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EXHIBIT “PPA-C”

Scheduling and Outage Notification Procedure

C.1 Applicability. This Exhibit” PPA-C” shall apply if the Facility is subject to Section 6.0 of this Agreement.

C.2 Annual Operations Forecast

C.2.1 By the tenth (10th) day September of each calendar year, the Seller will provide NCPA with an annual operations forecast detailing hourly expected generation and all proposed planned Outages for the next calendar year. The annual operations forecast for the calendar year shall be provided by not later than ninety (90) days prior to the scheduled Commercial Operation Date of the Generating Facility.

C.2.2 NCPA may request modifications to the annual operations forecast at any time, and the Seller shall use good faith efforts to accommodate the requested modifications.

C.2.3 The Seller shall not conduct Planned Outages at times other than as set forth in its annual operations forecast, unless approved in advance by NCPA, which approval shall not be withheld or delayed unreasonably.

C.2.4 The Seller shall not schedule or conduct Planned Outages from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October.

C.3. Short Term Operations Forecasts

C.3.1. Quarterly Operations Forecast

C.3.1.1 By the fifth (5th) day of January, April and July of each Contract Year, the Seller shall provide a calendar quarter-operations forecast by hour of expected generation and all proposed Planned Outages for the next full calendar quarter and the twelve (12) months following that calendar quarter. As an example, by January 5, 2014, the Seller would provide a calendar quarter-operations forecast by hour of expected generation for the period, April 1, 2014 through June 30, 2014, and identify all proposed Planned Outages for the period, April 1, 2014 through June 30, 2015.

C.3.1.2 NCPA will approve or require modifications to the proposed calendar quarter-operations forecast within ten (10) days of receipt of the forecast.

C.3.1.3 If required by NCPA, the Seller will provide a modified calendar quarter-operations forecast within seven (7) days after receipt of required modifications from NCPA.

C.3.2 Weekly Update

C.3.2.1 By 14:00 of each Wednesday, the Seller shall provide an electronic update, in a format specified by NCPA, to the calendar quarter-operations forecast for the following seven (7) days (Thursday through the next Wednesday).

C.3.2.2 The weekly update shall include hourly expected generation and all proposed planned Outages for the relevant seven (7) day period.

C.4 Outage Detail for Annual and Short Term Operations Forecasts. Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, capacity out of service (kW), the equipment that is or will be out of service, and the reason for the Outage.

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C.5 General Scheduling Protocols

C.5.1 Daily Modifications to Forecasts. Unless otherwise mutually agreed, the Seller may make changes to the weekly update to the calendar quarter-operations forecast by providing such changes to NCPA prior to 08:00 of the day that is two (2) Business Days before the active scheduling day as determined by the WECC prescheduling calendar. Example: For power that is scheduled for generation or delivery on Friday, March 29, 2014, changes must be submitted to NCPA by 08:00 on Wednesday, March 27, 2014.

C.5.2 Hourly Modifications to Active Schedules. Unless otherwise mutually agreed, the Seller may request changes to active schedules by providing such changes to NCPA with a minimum of four (4) hours’ notice prior to the applicable CAISO market deadline (e.g. Hour Ahead Scheduling Process (“HASP”) Scheduling deadline, as defined in the CAISO Tariff).

Active day Schedule changes are not binding. Changes to active Schedules are limited to two (2) changes per day, excluding forced Outages, unless otherwise agreed to between the Parties. One request for a Schedule change, of one-hour or multiple-hours duration, constitutes one Schedule change. Example: For power that is scheduled for generation or delivery in hour ending 15:00 (for the period from 14:01 to 15:00), changes must be submitted to NCPA by 10:00.

C.5.3. Unforeseen Circumstances. At the Seller’s request, NCPA may, but is not required to, modify the Schedules for the Generation Facility Output due to unforeseen circumstances in accordance with the above scheduling timeline constraints described in this Exhibit PPA-C.

C.5.4. Absence of Forecasts. In the absence of forecasts and schedules as required by this Agreement or this Exhibit, NCPA shall utilize the most current information the Seller provides in the development and submission of Schedules.

C.6 Outage Reporting Protocols

C.6.1. Notification. The Seller shall notify NCPA of all planned or forced Outages of the Generating Facility to ensure compliance with the CAISO Outage Coordination and Enforcement Protocols.

C.6.1.1 Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, Capacity out of service (kW), equipment out of service, and the reason for the Outage.

C. 6.1.2 Seller shall provide the Planned Outages not included in the annual operations forecast, the calendar quarter-operations forecast, or the weekly update, to NCPA at least four (4) Business Days prior to the start of the requested outage.

C. 6.1.3 At any time prior to the start of a Planned Outage, the CAISO may deny the Outage due to a System Emergency (as defined in the CAISO Tariff) or as otherwise permitted under the CAISO Tariff. If NCPA receives notice that the CAISO has denied an Outage in accordance with the CAISO Tariff, NCPA will notify the Seller as soon as possible and the Seller shall modify the planned Outage as required by the CAISO.

C.6.2 Commencement of an Outage. The Seller shall not begin any Planned Outage without the prior approval of NCPA and the CAISO.

C.6.3 Forced Outages

C.6.3.1 The Seller shall report the Forced Outages to NCPA within twenty (20) Item 10
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minutes of such Outages.

C.6.3.2 The Seller’s notice of a Forced Outage sent to NCPA shall include the reason for the Outage (if known), expected duration of the Outage, and the Capacity reduction.

C.6.3.3 By the end of the next Business Day following the day on which a Forced Outage has occurred, the Seller shall provide to NCPA a detailed written report, specifying the reason for the Outage, expected duration of such Outage, capacity reduction, and actions taken to mitigate such Outage.

C.6.4 Return to Service. The Seller shall notify NCPA as soon as possible, but in any case before the Generating Facility is returned to service.

C.7 Notices. All Scheduling notices and Schedules shall be submitted to NCPA by phone, fax or email, or other means as may be mutually agreed by the Parties, to the persons designated in Exhibit “PPA-F.”

C.8 Changes in Scheduling and Outage Procedure. The Buyer shall revise Exhibit “PPA-C,” or, as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-C,” which shall then become part of the Agreement to reflect changes in the scheduling and outage notification procedure.

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EXHIBIT “PPA-D”

Green Attributes Reporting and Conveyance Procedures

D.1 Additional Definitions for the Conveyance of Green Attributes

D.1.1 “Certificate Transfers” means the process, as described in the WREGIS Operating Rules, whereby a WREGIS account holder may request that WREGIS Certificates from a specific generating unit shall be directly deposited to another WREGIS account.

D.1.2 “WREGIS Certificates” means a certificate created within the WREGIS system that represents all Renewable and Green Attributes from one MWh of electricity generation from an Eligible Renewable Energy Resource that is registered with WREGIS.

D.1.3 “WREGIS Operating Rules” means the document published by WREGIS that governs the operation of the WREGIS system for registering, tracking, and conveying, among others, RECs produced from Eligible Renewable Energy Resources that shall be registered with WREGIS.

D.1.4 “WREGIS” means Western Renewable Energy Generation Information System.

D.2 RECs. Green Attributes shall be conveyed by the Seller to the Buyer through RECs, which shall be registered tracked and conveyed to the Buyer, using WREGIS.

D.3 WREGIS Registration. Prior to the Commercial Operation Date, the Buyer will register the Facility in the Buyer’s WREGIS account on behalf of the Seller. The Buyer shall charge back to the Seller any costs of registering and maintaining the registration of the Facility with WREGIS. The Seller shall provide to the Buyer any documents required by WREGIS and assign the Seller’s rights to register the Facility in WREGIS, using agreements provided by WREGIS.

D.4 B u yer ’s W REGI S Acco unt . The Buyer shall, at its sole expense, establish and maintain the Buyer’s WREGIS account sufficient to accommodate the WREGIS Certificates produced by the output of the Facility. The Buyer shall be responsible for all expenses associated with (A) establishing and maintaining the Buyer’s WREGIS Account, and (B) subsequently transferring or retiring WREGIS Certificates.

D.5 Qualified Reporting Entity. The Buyer shall be the Qualified Reporting Entity (as such term is defined by WREGIS) for the Facility, and shall be responsible for providing the metered Output data to WREGIS.

D.6 Reporting of Environmental Attributes. In lieu of the Seller’s transfer of t he WREGIS Certificates using Certificate Transfers from the Seller’s WREGIS account to the Buyer’s WREGIS account, the Buyer shall report the Facility as being held directly in its WREGIS account, which will preclude the Seller from reporting the Facility in its own WREGIS account.

D.6.1 By avoiding the use of Certificate Transfers, there will be no transaction costs to the Seller or the Buyer for the Certificate Transfers that would otherwise be used.

D.6.2 WREGIS Certificates for the Facility will be created on a calendar month basis in accordance with the certification procedure established by the WREGIS Operating Rules in an amount equal to the Energy generated by the Project and delivered to the Buyer in the same calendar month.

D.6.3 WREGIS Certificates will only be created for whole MWh amounts of energy generated. Any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate and all such accumulated Item 10
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MWh of Environmental Attributes will then be available to Buyer.

D.6.4 If a WREGIS Certificate Modification (as such term is defined by WREGIS) will be required to reflect any errors or omissions regarding the Green Attributes from the Facility, then the Buyer will manage the submission of the WREGIS Certificate Modification.

D.6.5 Due to the expected delay in the creation of WREGIS Certificates relative to the timing of invoice payments under Section 2, the Buyer will normally be making an invoice payment for the Output for a given month in accordance with Section 2 before the WREGIS Certificates for such month may be created in the Buyer’s WREGIS account. Notwithstanding this delay, the Buyer shall have all right and title to all such WREGIS Certificates upon payment to the Seller in accordance with Section 2.

D.7 Changes in Green Attributes Reporting and Conveyance Procedures. The Buyer shall revise this Exhibit “PPA-D,” as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-D,” which shall then become part of this Agreement in the event that:

D.7.1 WREGIS changes the WREGIS Operating Rules (as defined by WREGIS) after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this Exhibit “PPA-D” after the Effective Date; or,

D.7.2 WREGIS is replaced as the primary method that the Buyer uses for conveyance of Green Attributes, or additional methods to convey all Green Attributes, are required.

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EXHIBIT “PPA-E”

Insurance Requirements

CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, WILL FOR THE TERM OF THE

CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH A BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.

AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:

REQUIRED

TYPE OF COVERAGE

REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION

AUTOMOBILE LIABILITY

STATUTORY

YES

COMMERCIAL GENERAL

LIABILITY, INCLUDING

PERSONAL INJURY, BROAD FORM

PROPERTY DAMAGE BLANKET

CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

BODILY INJURY & PROPERTY DAMAGE
COMBINED.
$1,000,000

$1,000,000

$1,000,000
$2,000,000

$2,000,000

YES

COMPREHENSIVE AUTOMOBILE

LIABILITY, INCLUDING, OWNED,

HIRED, NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000

$1,000,000

$1,000,000
$1,000,000
$1,000,000
$1,000,000

$1,000,000

PROFESSIONAL LIABILITY,

INCLUDING, ERRORS AND

OMISSIONS, MALPRACTICE
(WHEN APPLICABLE), AND

NEGLIGENT PERFORMANCE

ALL DAMAGES

$1,000,000

YES

THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: PROPOSER, AT ITS SOLE COST AND

EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY

RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY PROPOSER AND ITS SUBCONSULTANS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S

LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.

I. INSURANCE COVERAGE MUST INCLUDE:

A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND

B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY – SEE, SAMPLE AGREEMENT FOR SERVICES.

II. SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS SECTION AND IV THROUGH V, BELOW.

A. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER):

B. NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER:

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C. POLICY NUMBER(S):

D. DEDUCTIBLE AMOUNT(S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL):

III. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AND PROPOSER’S SUBMITTAL OF CERTIFICATES OF INSURANCE EVIDENCING COMPLIANCE WITH THE REQUIREMENTS SPECIFIED HEREIN.

IV. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSURES”

A. PRIMARY COVERAGE

WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS

AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSURES.

B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES UNDER THE POLICY

SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER,

BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.

C. NOTICE OF CANCELLATION

1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

V. PROPOSER CERTIFIES THAT PROPOSER’S INSURANCE COVERAGE MEETS THE ABOVE REQUIREMENTS:

THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE SAME SIGNATURE(S) AS APPEAR(S) ON SECTION II, ATTACHMENT A, PROPOSER’S INFORMATION FORM.

Firm:

Signature:

Name:
(Print or type name)

Signature:

Name:
(Print or type name)
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NOTICES SHALL BE MAILED TO:

PURCHASING AND

CONTRACT ADMINISTRATION

CITY OF PALO ALTO
P.O. BOX 10250
PALO ALTO, CA 94303.

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EXHIBIT “PPA-F”

Notices

Contract Administration
BUYER: SELLER:

City of Palo Alto
Utilities Resource Management
250 Hamilton Avenue
Palo Alto, CA 94301
Ph: 650-329-2689
Email: [email protected]

Billing and Settlements
BUYER: SELLER:

City of Palo Alto
Utilities Resource Management
250 Hamilton Avenue
Palo Alto, CA 94301
Ph: 650-329-2689
Email: [email protected]

Forecasting and Outage Reporting under Section 6 of this Agreement Planned Outages:

BUYER: SELLER:

Northern California Power Agency Real-
Time Dispatch
651 Commerce Drive
Roseville, CA 95678
Ph: 916-786-3518

Forced Outages
BUYER: SELLER:

Northern California Power Agency Real-
Time Dispatch
651 Commerce Drive
Roseville, CA 95678
Ph: 916-786-3518

Forecasting and Scheduling
BUYER: SELLER:

Northern California Power Agency
Operations and Pre-Scheduling
651 Commerce Drive
Roseville, CA 95678
Ph: 916-786-0123
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EXHIBIT “PPA-G”

Form of Lender Consent and Agreement

This CONSENT AND AGREEMENT (this “Consent”), dated as of , 20 , is entered into by and among the CITY OF PALO ALTO, a California chartered municipal corporation (the “ City”), , a corporation (the “Lender),” by its agent,
(the “Administrative Agent”), and , a
corporation (the “Borrower”) (collectively, the “Parties”). Unless otherwise defined, all capitalized terms have the meaning given in the Contract (as hereinafter defined).

RECITALS

A. Borrower intends to develop, construct, install, test, own, operate and use an approximately MW electric generating facility located in the city of Palo Alto in the State of California, known as the Project (the “Project”).

B. In order to partially finance the development, construction, installation, testing, operation and use of the Project, Borrower has entered into that certain financing agreement dated as of (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), among Borrower, the financial institutions from time to time parties thereto (collectively, the “Lenders”) , and Administrative Agent for the Lenders, pursuant to which, among other things, Lenders have extended commitments to make loans and other financial accommodations to, and for the benefit of, Borrower.

C. The City and Borrower have entered into that certain Power Purchase Agreement, dated as of (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Power Purchase Agreement”).

D. The City and Borrower have entered into that certain Interconnection Agreement, dated as of _ (attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Interconnection Agreement”).

E. Pursuant to a security agreement executed by Borrower and Administrative Agent for the Lenders (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Financing Agreement and related documents (collectively, the “Financing Documents”), all of its right, title and interest in, to and under the Power Purchase Agreement and Interconnection Agreement to Administrative Agent for the benefit of itself, the Lenders and each other entity or person providing collateral security under the Financing Documents.

F. It is a requirement under the Financing Agreement that the Parties hereto execute this Consent.

AGREEMENT

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties agree, as follows:

1. CONSENT TO ASSIGNMENT. The City acknowledges the assignment referred to in Recital E above, consents to an assignment of the Power Purchase Agreement and Interconnection Agreement pursuant thereto, and agrees with Administrative Agent, as follows:

(a) Administrative Agent shall be entitled (but not obligated) to exercise all rights and to cure any Item 10
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defaults of Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, subject to applicable notice and cure periods provided in the Power Purchase Agreement and Interconnection Agreement. Upon receipt of notice from Administrative Agent, the City agrees to accept such exercise and cure by Administrative Agent if timely made by Administrative Agent under the Power Purchase Agreement or Interconnection Agreement, as the case may be, and this Consent. Upon receipt of Administrative Agent's written instructions and to the extent allowed by law, the City agrees to make directly to such account as Administrative Agent may direct the City, in writing, from time to time, all payments to be made by the City to Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may be, from and after the City’s receipt of such instructions, and Borrower consents to any such action. The City shall not incur any liability to Borrower under the Power Purchase Agreement, Interconnection Agreement, or this Consent for directing such payments to Administrative Agent in accordance with this subsection (a).

(b) The City will not, without the prior written consent of Administrative Agent (such consent not to be unreasonably withheld), (i) cancel or terminate the Power Purchase Agreement or Interconnection Agreement, or consent to or accept any cancellation, termination or suspension thereof by Borrower, except as provided in the Power Purchase Agreement or Interconnection Agreement and in accordance with subparagraph 1(c) hereof, (ii) sell, assign or otherwise dispose (by operation of law or otherwise) of any part of its interest in the Power Purchase Agreement or Interconnection Agreement, except as provided in the Power Purchase Agreement or Interconnection Agreement, or (iii) amend or modify the Power Purchase Agreement or Interconnection Agreement in any manner materially adverse to the interest of the Lenders in the Power Purchase Agreement and Interconnection Agreement as collateral security under the Security Agreement.

(c) The City agrees to deliver duplicates or copies of all notices of default delivered by the City under or pursuant to the Power Purchase Agreement or Interconnection Agreement to Administrative Agent in accordance with the notice provisions of this Consent. The City shall deliver any such notices concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement. To the extent that a cure period is provided under the Power Purchase Agreement or Interconnection Agreement, Administrative Agent shall have the same period of time to cure the breach or default that Borrower is entitled to under the Power Purchase Agreement or Interconnection Agreement, except that if the City does not deliver the default notice to Administrative Agent concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement, then as to Administrative Agent, the applicable cure period under the Power Purchase Agreement or Interconnection Agreement shall begin on the date on which the notice is given to Administrative Agent. If possession of the Project is necessary to cure such breach or default, and Administrative Agent or its designee(s) or assignee(s) declare Borrower in default and commence foreclosure proceedings, Administrative Agent or its designee(s) or assignee(s) will be allowed a reasonable period to complete such proceedings so long as Administrative Agent or its designee(s) continue to perform any monetary obligations under the Power Purchase Agreement or Interconnection Agreement, as the case may be. The City consents to the transfer of Borrower's interest under the Power Purchase Agreement and Interconnection Agreement to the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or a purchaser or grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance by Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale or conveyance, the City shall recognize the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or other purchaser or grantee as the applicable party under the Power Purchase Agreement and Interconnection Agreement (provided that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee assume the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement, including, without limitation, satisfaction and compliance with all credit provisions of the Power Purchase Agreement and Interconnection Agreement, if any, and provided further that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee has a creditworthiness equal to or better than Item 10
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Borrower, as reasonably determined by City).

(d) In the event that either the Power Purchase Agreement or Interconnection Agreement, or both is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within forty-five (45) days after such rejection, Administrative Agent shall so request, the City will execute and deliver to Administrative Agent a new power purchase agreement or interconnection agreement, as the case may be, which power purchase agreement or interconnection agreement shall be on the same terms and conditions as the original Power Purchase Agreement or Interconnection Agreement for the remaining term of the original Power Purchase Agreement or Interconnection Agreement before giving effect to such rejection, and which shall require Administrative Agent to cure any defaults then existing under the original Power Purchase Agreement or Interconnection Agreement. Notwithstanding the foregoing, any new renewable power purchase agreement or interconnection agreement will be subject to all regulatory approvals required by law. The City will use good faith efforts to promptly obtain any necessary regulatory approvals.

(e) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) elect to perform Borrower's obligations under the Power Purchase Agreement and Interconnection Agreement, succeed to Borrower’s interest under the Power Purchase Agreement and Interconnection Agreement, or enter into a new power purchase agreement or interconnection agreement as provided in subparagraph 1(d) above, the recourse of the City against Administrative Agent, Lenders or their designee(s) and assignee(s) shall be limited to such Parties’ interests in the Project, and the credit support required under the Power Purchase Agreement and Interconnection Agreement, if any.

(f) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) succeed to Borrower's interest under the Power Purchase Agreement and Interconnection Agreement, Administrative Agent, the Lenders or their designee(s) or assignee(s) shall cure any then-existing payment and performance defaults under the Power Purchase Agreement or Interconnection Agreement, except any performance defaults of Borrower itself, which by their nature are not susceptible of being cured. Administrative Agent, the Lenders and their designee(s) or assignee(s) shall have the right to assign all or a pro rata interest in the Power Purchase Agreement and Interconnection Agreement to a person or entity to whom Borrower’s interest in the Project is transferred, provided such transferee assumes the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement and has a creditworthiness equal to or better than Borrower, as reasonably determined by the City. Upon such assignment, Administrative Agent and the Lenders and their designee(s) or assignee(s) (including their agents and employees) shall be released from any further liability thereunder accruing from and after the date of such assignment, to the extent of the interest assigned.

2. REPRESENTATIONS AND WARRANTIES. The City hereby represents and warrants that as of the date of this Consent:

(a) It (i) is duly formed and validly existing under the laws of the State of California, and (ii) has all requisite power and authority to enter into and to perform its obligations hereunder and under the Power Purchase Agreement and Interconnection Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby;

(b) the execution, delivery and performance of this Consent, the Power Purchase Agreement and the Interconnection Agreement have been duly authorized by all necessary action on its part and do not require any approvals, material filings with, or consents of any entity or person which have not previously been obtained or made;

(c) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement is in full force and effect;
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(d) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement has been duly executed and delivered on its behalf and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law);

(e) there is no litigation, arbitration, investigation or other proceeding pending for which the City has received service of process or, to the City’s actual knowledge, threatened against the City relating solely to this Consent, the Power Purchase Agreement, or the Interconnection Agreement and the transactions contemplated hereby and thereby;

(f) the execution, delivery and performance by it of this Consent, the Power Purchase Agreement, and the Interconnection Agreement, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of any material contract or material agreement to which it is a party or by which it or its property is bound, or of any material requirements of law presently in effect having applicability to it, the violation, breach or default of which could have a material adverse effect on its ability to perform its obligations under this Consent;

(g) neither the City nor, to the City’s actual knowledge, any other party to the Power Purchase Agreement or Interconnection Agreement, is in default of any of its obligations thereunder; and

(h) to the City’s actual knowledge, (i) no Force Majeure Event exists under, and as defined in, the Power Purchase Agreement or Interconnection Agreement and (ii) no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either the City or Borrower to terminate or suspend its obligations under the Power Purchase Agreement or the Interconnection Agreement.

Each of the representations and warranties set forth herein shall survive the execution and delivery of this Consent and the consummation of the transactions contemplated hereby.

3. NOTICES. All notices required or permitted hereunder shall be given, in writing, and shall be effective (a) upon receipt if hand delivered, (b) upon telephonic verification of receipt if sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or three (3) Business Days after being sent registered or certified mail, return receipt requested, with proper postage affixed thereto, or by private courier or delivery service with charges prepaid, and addressed as specified below:

If to the City:
[ ]
[ ]
[ ]
Telephone No.: [ ]
Facsimile No.: [ ]
Attn: [ ]

If to Administrative Agent:
[ ]
[ ]
[ ]
Telephone No.: [ ]
Facsimile No.: [ ]
Attn: [ ]
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If to Borrower:
[ ]
[ ]
[ ]
Telephone No.: [ ]
Facsimile No.: [ ]
Attn: [ ]

Any party shall have the right to change its address for notice hereunder to any other location within the United States by giving thirty (30) days written notice to the other parties in the manner set forth above.

4. ASSIGNMENT, TERMINATION, AMENDMENT. This Consent shall be binding upon and benefit the successors and assigns of the Parties hereto and their respective successors, transferees and assigns (including without limitation, any entity that refinances all or any portion of the obligations under the Financing Agreement). The City agrees (a) to confirm such continuing obligation, in writing, upon the reasonable request of (and at the expense of) Borrower, Administrative Agent, the Lenders or any of their respective successors, transferees or assigns, and (b) to cause any successor-in-interest to the City with respect to its interest in the Power Purchase Agreement or Interconnection Agreement to assume, in writing and in form and substance reasonably satisfactory to Administrative Agent, the obligations of City hereunder. Any purported assignment or transfer of the Power Purchase Agreement or Interconnection Agreement not in conjunction with the written instrument of assumption contemplated by the foregoing clause (b) shall be null and void. No termination, amendment, or variation of any provisions of this Consent shall be effective unless in writing and signed by the parties hereto. No waiver of any provisions of this Consent shall be effective unless in writing and signed by the party waiving any of its rights hereunder.

5. GOVERNING LAW. This Consent shall be governed by the laws of the State of California applicable to contracts made and to be performed in California. The federal courts or the state courts located in California shall have exclusive jurisdiction to resolve any disputes with respect to this Consent with the City, Assignor, and the Lender or Lenders irrevocably consenting to the jurisdiction thereof for any actions, suits, or proceedings arising out of or relating to this Consent.

6. COUNTERPARTS. This Consent may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below, shall constitute a single binding agreement.

7. SEVERABILITY. In case any provision of this Consent, or the obligations of any of the Parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other Parties hereto, shall not in any way be affected or impaired thereby.

8. ACKNOWLEDGMENTS BY BORROWER. Borrower, by its execution hereof, acknowledges and agrees that neither the execution of this Consent, the performance by the City of any of the obligations of the City hereunder, the exercise of any of the rights of the City hereunder, or the acceptance by the City of performance of the Power Purchase Agreement by any party other than Borrower shall (1) release Borrower from any obligation of Borrower under the Power Purchase Agreement or Interconnection Agreement, (2) constitute a consent by the City to, or impute knowledge to the City of, any specific terms or conditions of the Financing Agreement, the Security Agreement or any of the other Financing Documents, or (3) except as expressly set forth in this Consent, constitute a waiver by the City of any of its rights under the Power Purchase Agreement or Interconnection Agreement. Borrower and Administrative Agent acknowledge hereby for the benefit of City that none of the Financing Agreement, the Security Item 10
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Agreement, the Financing Documents or any other documents executed in connection therewith alter, amend, modify or impair (or purport to alter, amend, modify or impair) any provisions of the Power Purchase Agreement.

CITY OF PALO ALTO ADMINISTRATIVE AGENT

APPROVED AS TO FORM

Senior Deputy City Attorney

BORROWER

APPROVED

City Manager

Director of Utilities
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: March 18, 2024
Report #:2403-2719
TITLE
SECOND READING: Adopt a Park Dedication Ordinance for the Tower Well site, 0.19 acres of land (8,437 square feet) at 201 Alma Street and approve the proposed name “Tower Well Park” as Recommended by the Parks and Recreation Commission. CEQA status ‐ not a project. (FIRST READING: March 4, 2024 PASSED 7-0)

BACKGROUND
This was heard by the City Council on March 4, 2024 for a first reading and was approved 7-0.

No changes were made to the ordinance; it is now before you for a second reading.

ATTACHMENTS
Attachment A: Park Dedication Ordinance for Tower Well Site at 201 Alma Street APPROVED BY:

Mahealani Ah Yun, City Clerk
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1 100_20231113_ts24

ORDINANCE NO.

Ordinance of the Council of the City of Palo Alto Dedicating the Area to Become the Tower Well Park

The Council of the City of Palo Alto does ORDAIN as follows:

SECTION 1. Findings and Improvements. The City Council finds and declares that:

(a) Article VIII of the Charter of the City of Palo Alto and section 22.08.00 4 of the Palo Alto Municipal Code specify that land intended to be used for park purposes can be dedicated for such use by ordinance.

(b) The Tower Well Park site (“site”) is defined as the area described in Exhibit A-31 to this ordinance. Generally, the site is at the corner of Alma Street and Hawthorne Avenue, and contains a water tower constructed in 1910. The Palo Alto Historical Association remarks that “[w]hen constructed in 1910, the water tower was the first major visible infrastructure of the City’s utilities and is a symbol of the City’s successful beginnings and forward thinking leaders.”

SECTION 2 . The City Council hereby dedicates the site pursuant to Article VIII of the Charter of the City of Palo Alto and section 22.08.004 of the Palo Alto Municipal Code.

SECTION 3. Section 22.08. 440 is hereby added to Chapter 22.08 (Park dedications) to read as follows:

22.08.440 Tower Well Park
That certain parcel of land known as the Tower Well Park, as delineated and described in Exhibit A-31, is hereby reserved for park, playground, recreation or conservation purposes.

SECTION 4. Exhibit A-31 of this ordinance shall be codified as Exhibit A -31 to the Exhibits of Title 22.

SECTION 5. The City Council finds that this ordinance is not a project within the meaning of CEQA.

//
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Dedication Ordinance for
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Alma Street

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SECTION 6. This ordinance shall be effective on the thirty -first day after the date of its adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager

Director of Community Services
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Dedication Ordinance for
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Alma Street

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A.P.NO. 120-25-060 APRIL 15, 1996
REQUESTED BY: JANET FREELAND
APPROVED BY: JAMES D. KIEHL ,~.K.

CREATED BY: JAMES T. BOURQUIN -’-’~
CHECKED BY: JAY E. REMLEY, SR. ffZ"

LEGAL DESCRIPTION
PARCEL 1
All that real property situated in the City of Palo Alto, County of Santa Clara, State of California ¯ described as follows.

Being a portion of Lot 1, Block 2, as shown upon that certain map of the re-subdivision of Block 2, recorded on September 6, 1902 in Volume F-3 of Maps, Page 4, said re-subdivision being a portion of that certain map entitled "UNIVERSITY PARK", recorded on February 27, 1889 in Book D of Maps, Page 69;
Beginning at the intersection of the northeasterly line of Alma Street with the southeasterly line of Hawthorne Avenue;
THENCE, northeasterly 112.50 feet along.the southeasterly line of Hawthorne Avenue; THENCE, southeasterly 75.00 feet and parallel with Alma Street; THENCE, southwesterly 112.50 feet and parallel with Hawthorne Avenue; THENCE, northwesterly 75.00 feet along the northeasterly line of Alma Street to the POINT

OF BEGINNING,
Said Parcel 1 contains 8,437.50 square feet more or~ less, Said Parcel 1 is shown on attached map Exhibit "B" .and made a part hereof, LEGAL: 12025060.wpd
PLAT: 12025060.DWG
End of Legal Description
Exhibit "A"
EXHIBIT A ( 1 of 2)
(to Deed)
Exhibit A-31
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Dedication Ordinance for
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35’
I,ii,I
Z

HAWTHORNE AVENUE
-- P.D.B. PARCEL
=:-XHIBTT_
35’
IIBSO¯
PARCEL
A.P.No, ]80-85-060
DRAWN BY: J. KIEHL
CHECKED BY: J. BI:]URQUIN..~rB
CHECKED BY: J. REMLEY/#’~:

LEGAL F]LENAME: 18085060
DRAWING F]LENAME: 12025060
112.50’
s°°& A,P.No ,

77.13’
PARCEL 1

WELL SITE

UNIVERSITY PARK
A.P,No.

CITY OF PALD ALTO, CALIFORNIA
EXHIBIT A (2 of 2)

35.37"
d
Z
O_
<£
180-85-053
SCALE: l" =
P.L.S. 7158
APPROVED:

REVISION: (4) 4/18/96
Item 11
Attachment A - Park
Dedication Ordinance for
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Public Works
Meeting Date: March 18, 2024
Report #:2402-2648
TITLE
SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter 8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations) (FIRST READING: January 16, 2024 PASSED 5-2, Lythcott-Haims, Tanaka no)

BACKGROUND
The ordinance has been amended to reflect part B of the Council’s motion. Specifically, a provision was added to Section 8.10.070 to require requests to prune trees in excess of the limits in Section 8.10.020(i) to be submitted to the urban forester fourteen days before pruning the tree with a statement explaining why pruning beyond the limits is warranted.

During passage of the tree ordinance updates in January, staff confirmed during the Council questions that based on CAO analysis of PAMC Chapter 18.09, the updated Title 8 and applicable state law, the tree ordinance would not apply to stand alone Table 1 ADU’s. Staff did not recommend adding specific language to that effect at that time.

At the second reading of the tree ordinance updates, several council members expressed concern that the updated tree ordinance did not explicitly state that PAMC 18.09 Table 1 ADUs were exempt. To address this concern, the following proposed language has been added as 8.10.050 (b)(4):

The tree is proposed for removal to accommodate an ADU constructed pursuant to Section 18.09.030, or because removal is necessary to allow an ADU constructed pursuant to Section 18.09.040 to achieve the minimum standards set forth in state law.

ATTACHMENTS
Attachment A: Ordinance of the Council of the City of Palo Alto Amending Chapter 8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations).

APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapter 8.04 (Street, Trees, Shrubs, and Plants) and Chapter 8.10 (Tree Preservation and Management Regulations).

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

SECTION 1. Chapter 8.04 (Street Trees, Shrubs, and Plants) of Title 8 (Trees and Vegetation) of the Palo Alto Municipal Code is hereby amended to read as follows (additions underlined and deletions struck through):

Chapter 8.04

PUBLIC TREES, SHRUBS, HEDGES, AND PLANTS
Sections:

8.04.005 Purpose.

8.04.010 Definitions.

8.04.015 Authority of city.

8.04.020 Permit required for certain work.

8.04.030 Application for permit.

8.04.040 Issuance of permit.

8.04.050 Public nuisances.

8.04.070 Enforcement.

8.04.080 Interference with enforcement.

8.04.090 Adoption of regulations.

8.04.005 Purpose.

The purpose of this chapter is to protect and promote trees, shrubs, hedges, and plants located on public property within the city. In establishing these procedures and standards, the city recognizes that trees, shrubs, hedges, and plants are an essential part of the city's infrastructure, with benefits that include promoting the health, safety, welfare, and quality of life of the residents of the city; addressing climate change by sequestering carbon and providing a cooling effect; reducing air, water, and noise pollution; preventing soil erosion and Item 12
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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stormwater runoff; providing wildlife habitat; and enhancing the aesthetic environment. It is the city's intent to encourage the preservation of trees, shrubs, hedges, and plants.

8.04.010 Definitions.

For the purposes of this title, the following words shall have the meaning ascribed to them in this section:
(a) "Person" means individuals, firms, associations and corporations, and agents, employees or representatives thereof.
(b) "City" means the city of Palo Alto acting by and through its authorized representatives. (c) "Street" means and includes all land lying between the boundaries of property abutting on all public streets, boulevards, alleys, and walks.
(d) "Parks" means and includes all parks to which names have been given by action of the city council.
(e) "Public places" means and includes all grounds, other than streets or parks, owned by, leased to, or under the control of the city of Palo Alto. (f) "Tree" means and includes any woody perennial plant generally having a single main stem and commonly achieving ten feet in height.
(g) "Shrub" means and includes any woody perennial plant generally having multiple stems and commonly less than ten feet in height.
(h) "Hedge" means and includes any tree, shrub, or plant, when planted in a dense, continuous line or area, as to form a thicket or barrier. (i) "Plant" means and includes all vegetation other than trees and shrubs. (j) "Public trees, shrubs, hedges, and plants" means and includes any tree, shrub, hedge, or plant in any street, park, or public place in the city of Palo Alto. (k) "Urban forester" means public works department staff including the urban forester or their designee.
(l) "Tree permit" means a permit issued by the urban forester for one or more of the following purposes:
(1) To permit removal of a public tree.
(2) To permit public tree care, work, or treatment.
(3) To permit removal of a protected tree under 8.10.050. (4) To establish a tree preservation bond.
(5) For payment of "in-lieu" fees for required mitigation measures.

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Attachment A - Ordinance
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of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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8.04.015 Authority of city.

The city of Palo Alto shall have control of all public trees, shrubs, hedges, and plants now or hereafter in any street, park or public place within the city limits, and shall have the authority to plant, care for, remove, replace, and maintain such trees, shrubs, hedges, and plants.

8.04.020 Permit required for certain work.

Unless authorized by a tree permit or other city approval, no person shall do any of the following:
(a) Plant, prune, trim, shape, remove, top, or in any way damage, destroy, injure or mutilate a public tree, shrub, hedge, or plant. A tree permit is not required for a property owner, resident, or their agent to maintain shrubs, hedges, or plants located within the city right-of- way associated with their property.
(b) Fasten a sign, wire, or injurious material to any public tree, shrub, hedge, or plant. (c) Excavate any ditch or tunnel; or place concrete or other pavement within a distance of ten feet of the center of the trunk of any public tree.

8.04.030 Application for permit.

Any person desiring to do any of the work described in Section 8.04.020 may apply for a tree permit so to do. The applicant shall state the nature of the work and the location where it will be done.

8.04.040 Issuance of permit.

A tree permit shall be issued authorizing work that meets all the following conditions:
(a) Will not create, continue, or aggravate any hazardous condition, or public nuisance. (b) Will not prevent or interfere with the growth, location or planting of any approved public tree.
(c) Is consistent with the planting plan being followed by the city.

8.04.050 Public nuisances*.

Any of the following are, for the purposes hereof, defined to be public nuisances:
(a) Any dead, diseased, infested, or dying tree, shrub, hedge, or plant in any street or on any public or private property so near to any public tree, shrub, hedge, or plant as to constitute a danger to a public tree, shrub, hedge, or plant, or street, or portion thereof or public property. (b) Any tree, shrub, hedge, or plant on any private property or in any street, of a type or species that will destroy, impair, or otherwise interfere with any street improvement, sidewalk, curb, approved public tree, gutter, sewer, other public improvement, including utility mains and services, or a public tree, shrub, hedge, or plant.

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(c) Any tree limb, shrub, hedge, or plant reaching a height more than three feet above the curb grade adjacent thereto, except a tree trunk having no limbs lower than nine feet above curb grade, within the thirty-five foot triangle of public or private property, measured from the projected curb lines, at the intersections of any street improved for vehicular traffic where either traffic signals, stop signs, or yield signs are not installed, or at any intersections which are determined by the chief transportation official to contain a tree limb, shrub, hedge, or plant that obscures or impairs the view of a passing motorist, cyclist or pedestrian so as to create a safety hazard.
(d) Vines or climbing plants growing into or over any public tree, shrub, hedge, or plant; or any public hydrant, pole or electrolier.
(e) Existence of any tree within the city limits that is infested or infected with objectionable insects, scale, fungus, or growths that are included in the California Department of Food and Agriculture’s detection and eradication programs or that are growth injurious to trees. (f) The existence of any branches or foliage which interfere with visibility on, free use of, access to, or obstruct public vehicular or pedestrian travel on any portion of any street improved for vehicular or pedestrian travel.
(g) Hedges or dense, thorny shrubs and plants on any street or part thereof. (h) Shrubs and plants more than two feet in height in any tree well or planting strip between the sidewalk and curb, measured above top of curb grade. (i) Any tree, shrub, hedge, or plant declared a public nuisance pursuant to state law and ordered removed by a court of competent jurisdiction.
* Abatement procedure - See Chapter 9.56 of this code.

8.04.070 Enforcement.
(a) Violation of any provision of this chapter is a misdemeanor, punishable as provided in this code. Each day of violation constitutes a separate offense and may be separately punished. (b) Persons employed in the following designated employee positions are authorized to exercise the authority provided in California Penal Code Section 836.5 and are authorized to issue citations for violations of this chapter, including but not limited to leveling fines under the city's administrative penalty authority: assistant director of public works public services division, urban forester, project manager in the urban forestry section, landscape architect, and code enforcement officer.
(c) Any person who damages a public tree, through any act or omission, whenever such act or omission is prohibited by or not authorized pursuant to this chapter, may be liable civilly in a sum not to exceed ten thousand dollars per tree, or the reproduction cost of each such tree, whichever amount is higher.

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Attachment A - Ordinance
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Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(d) Injunctive relief. A civil action may be commenced to abate, enjoin, or otherwise compel the cessation of such violation.
(e) Costs. In any civil action brought pursuant to this chapter in which the city prevails, the court shall award to the city all costs of investigation and preparation for trial, the costs of trial, reasonable expenses including overhead and administrative costs incurred in prosecuting the action, and reasonable attorney fees.
(f) The remedies and penalties provided in this section are cumulative and not exclusive.

8.04.080 Interference with enforcement.

No person shall interfere with or delay the authorized representatives of the city from the execution and enforcement of this chapter, except as provided by law.

8.04.090 Adoption of regulations.

The city may adopt regulations prescribing standards of landscaping and planting of streets, parks and public places, therein. A copy of such regulations shall be available for public inspection upon request, and all work performed in streets, parks or public places shall be performed in accordance therewith.

SECTION 2
. Chapter 8.10 (Tree and Landscape Preservation Management) of Title 8 (Trees and Vegetation) of the Palo Alto Municipal Code is hereby amended to read as follows (additions
underlined and deletions struck through):

Chapter 8.10
TREE AND LANDSCAPE PRESERVATION AND MANAGEMENT*
Sections:

8.10.010 Purpose.

8.10.020 Definitions.

8.10.030 Tree and Landscape Technical Manual.

8.10.040 Disclosure of information regarding existing trees.

8.10.050 Removal of protected trees.

8.10.055 Tree replacement.

8.10.060 No limitation of authority under Titles 16 and 18.

8.10.070 Care of protected trees.

8.10.080 Development conditions.

8.10.090 Designation of heritage trees.

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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8.10.092 Tree removal in wildland- urban interface area.

8.10.095 Tree removal in Hospital District Zone.

8.10.100 Enforcement.

8.10.110 Remedies for violation.

8.10.120 Fees.

8.10.130 Severability.

8.10.140 Applications, notice, and appeals.

8.10.010 Purpose.

The purpose of this chapter is to protect specified trees located on private property within the city, and establish standards for removal, maintenance, and planting of trees and landscaping.

In establishing these procedures and standards, the city recognizes that trees and landscaping are an essential part of the city's infrastructure. Their benefits include promoting the health, safety, welfare, and quality of life of the residents of the city; addressing climate change by sequestering carbon and providing a cooling effect; reducing air, water, and noise pollution; preventing soil erosion and stormwater runoff; providing wildlife habitat; and enhancing the aesthetic environment. It is the city's intent to encourage both the preservation of trees and the proactive incorporation of trees and their benefits within development.

8.10.020 Definitions.

For the purposes of this chapter, terms defined in Chapter 8.04 shall have the same meanings in this chapter, and the following terms shall have the meaning ascribed to them in this section:
(a) "Basal flare" means that portion of a tree where there is a rapid increase in diameter at the confluence of the root crowntrunk and trunkrootcrown. (b) "Buildable area" means that area of a parcel:
(1) Upon which, under applicable zoning regulations, a structure may be built without a variance, design enhancement exception, or home improvement exception; or (2) Necessary for construction of primary access to structures located on or to be constructed on the parcel, where there exists no feasible means of access which would avoid protected trees. On single-family residential parcels, the portion of the parcel deemed to be the buildable area for primary access shall not exceed ten feet in width. (c) "Building footprint" means the two-dimensional configuration of a building's perimeter boundaries as measured on a horizontal plane at ground level.

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(d) "Designated arborist" means an arborist certified by the International Society of Arboriculture or another nationally recognized tree research, care, and preservation organization, selected by the urban forester for inclusion in a list of approved arborists to be:
hired by:
(1) Hired by anAn applicant at their own expense, or
(2) Chosen by theThe city at an applicant's expense, if a project includes a public hearing. (e) "Development" means any work upon any property in the city which requires a subdivision, planned community zone, variance, use permit, building permit, demolition permit, or other city approval or which involves excavation, landscaping or construction within the tree protection zonedripline area of a protected tree or is subject to requirements of the California Model Water Efficient Landscape Ordinance (MWELO).
(f) "Director of planning and development services" means the director of planning and development services or their designee.
(g) "Director of public works" means the director of public works or their designee. (h) "Discretionary development approval" means planned community zone, subdivision, use permit, variance, home improvement exception, design enhancement exception, architectural review board approval, or any proposal or application that requires the discretion of the authorizing person or entity.
(i) "Dripline area" means the area defined by the projection to the ground of the outer edge of the canopy or a circle with a radius ten times the diameter of the trunk as measured four and one-half feet (fifty-four inches) above natural grade, whichever is greater. (j) "Excessive pruning" of a protected tree means any of the following:
(1) Removal of more than twenty-five percentone-fourth of the functioning leaf, stem, or root area of a tree in any twenty-four-month period.
(2) Removal of more than fifteen percent of the functioning root area of any Quercus (oak) species in any thirty-six-month period.
(3) Any removal of the functioning leaf, stem, or root area of a tree so as to cause a significant decline in health, increased risk of failure, or the unbalancing of a tree. (jk) "Hazardous" means an imminent hazard which constitutes a high or extreme threat to the safety of persons or property as defined by American National Standards Institute A300, Part 9.
(kl) "Protected" tree means any of the following:
(1) Any locally native tree of the species Acer macrophyllum (Bigleaf Maple), Calocedrus decurrens (California Incense Cedar), Quercus agrifolia (Coast Live Oak), Quercus douglasii (Blue Oak), Quercus kelloggii (California Black Oak), or Quercus lobata (Valley Oak) which is eleven Item 12
Attachment A - Ordinance
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Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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and one-half inches in diameter (thirty-six inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (2) Any Coast Redwood tree (species Sequoia sempervirens) that is eighteen inches in diameter (fifty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade.
(3) Any tree, other larger than a Coast Redwood Tree, fifteen inches in diameter (forty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade of any species except those invasive species described as weeds in Section

8.08.010 and those species classified as high water users by the Water Use Classificationwater use classification of Landscape Speciesthe landscape species list (WUCOLS) approved by the California Department of Water Resources.
(4) Any tree designated for protection during review and approval (with the exception of a current or previously completed development project. On parcels zoned other than single- family (R-1) or low density (RE, R-2, or RMD) residential, species exempted under subsection (3) of this Section may be designated as a protected tree.Coast Redwood). (4) Any tree designated for protection during review and approval of a development project. (5) Any tree designated for carbon sequestration and storage and/or environmental mitigation purposes as identified in an agreement between the property owner and a responsible government agency or recorded as a deed restriction. (6) Any heritage tree designated by the city council in accordance with the provisions of this chapter.
(7) Any replacement mitigation tree or other tree designated to be planted due to the conditions listed in Section 8.10.055.
(lm) "Protected tree removal permit" means a permit issued to allow a person to remove a protected tree.
(m) “Right tree in the right place principles” means the set of principles that determine if a tree is located in an appropriate location for its specific species requirements and characteristics, in accordance with the factors listed in the Tree and Landscape Technical Manual.
(n) "Remove" or "removal" means:
(1) Complete removal, such as cutting to the ground or extraction, of a tree; or (2) Taking any action foreseeably leading to the death of a tree or permanent damage to its health; including but not limited to excessive pruning, cutting, topping, girdling, poisoning, overwatering, underwatering, unauthorized relocation or transportation of a tree, or trenching, excavating, altering the grade, or paving within the tree protection zonedripline area of a tree.

Item 12
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(o) “Retrenchment” means the process in which trees may reconfigure as they age and deteriorate, often continuing to grow in trunk diameter while branches die and fail. (p) "Tree Protection Zone" means the area defined by a circle with a radius ten times the diameter of the trunk when measured four and one-half feet (fifty-four inches) above natural grade.
(q) "Tree Reportreport" means a report prepared by a designated arborist. (rp) "Tree and Landscape Technical Manual" means the regulations issued by the city manager to implement this chapter.

8.10.030 Tree and Landscape Technical Manual.

The city manager, through the urban forestry section, and public works and planning and development services departments, shall issue regulations necessary for implementation and enforcement of this chapter, which shall be known as the Tree and Landscape Technical Manual. In the event of a conflict between the provisions of this Title 8 and the Tree and Landscape Technical Manual, this Title 8 shall prevail. The Tree and Landscape Technical Manual will be made readily available to the public and shall include, but need not be limited to, standards and specifications regarding the following:
(a) Protection of trees during construction.
(b) Replacement of trees allowed to be removed pursuant to this chapter where such replacements:
(1) Prioritize the use of locally native species, as listed in Section 8.10.020(l)(1), consistent with Urban Forest Master Plan Goal 2: "Re-generated native woodland and riparian landscapes as the key ecological basis of the urban forest with focus on native species and habitat;" (2) Include climate adaptive, drought tolerant, non-native species as needed to satisfy right tree in the right place principles; and
(3) Incorporate a secondary goal of net tree canopy increase on the property within fifteen years.
(c) Maintenance of protected trees (including but not limited to pruning, irrigation, and protection from disease).
(d) The format and content of tree reports required to be submitted to the city pursuant to this chapter.
(e) The criteria for determining whether a tree is hazardous within the meaning of this chapter.
(f) Landscape design, irrigation, and installation standards consistent with the city's water efficient landscape regulations.

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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8.10.040 Disclosure of information regarding existing trees. (a) Any application for development or demolition shall be accompanied by a statement by a designated arborist which discloses whether any protected trees exist on the property which is the subject of the application, and describing each such tree, its species, size, tree protection zonedripline area, and location. This requirement shall be met by including the information on plans submitted in connection with the application.
(1) Notwithstanding subsection (a), applications involving only the development of an Accessory Dwelling Unit that conforms to Section 18.09.030, Table 1, require only a statement disclosing whether any protected trees are located on the property which is the subject of the application. This statement may be completed by the applicant. (b) In addition, the location and species of anyall other tree which is four inches in diameter (e.g., thirteen inches in circumference) or more when measured four and one-half feet (fifty- four inches) above natural grade shall be shown on the plans if the tree is:
(1) On the property or trees on the property and in the adjacent public right-of-way, and is which are within thirty feet of the building footprint proposed for development, or (2) Locatedand trees located on adjacent property within thirty feet of the proposed building footprint, or
(1)(3) Close enough that its canopy overhangswith canopies overhanging the project site, shall be shown on the plans, identified by species.
(c) The director of public works or urban forester may require submittal of such other information as is necessary to further the purposes of this chapter including but not limited to photographs.
(d) Disclosure of information regarding private protected trees pursuant to this section shall not be required when the development for which the approval or permit is sought does not involve any change in an existing building footprint nor any grading, trenching, paving, or any change in landscaping which could alter water availability to established plants, hedges, shrubs, or trees.
(e) The urban forester or the designated arborist for a project shall add identified protected trees into the city's tree inventory database, and in coordination with the planning and development services departments, into city parcel reports. (f) Knowingly or negligently providing false or misleading information in response to this disclosure requirement shall constitute a violation of this chapter.

8.10.050 Removal of protected trees.

It shall be a violation of this chapter for anyone to remove or cause to be removed a protected tree, except pursuant to a protected tree removal permit issued under Section

8.10.140 consistent with the following:

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(a) In the absence of proposed development:
(1) A protected tree shall not be removed unless the urban forester grants a protected tree removal permit, or on parcels zoned other than single-family (R-1) or low density residential (RE, R-2, or RMD), the director of planning and development services authorizes the removal through staff level architectural review pursuant to Section 18.76.020(b)(3), having determined, on the basis of a tree report prepared by a designated arborist and other relevant information, that treatments or corrective practices are not feasible, and that the tree should be removed because any of the following apply:
(i) It is dead, is hazardous, or constitutes a public nuisance under Section 8.04.050 of this code.
(ii) It is a detriment to or is crowding an adjacent protected tree. , or is impacting the foundation or eaves of a residence or any covered parking required under Title 18. (iii) It is at risk for retrenchment or other tree decline coping processes or does not conform with right tree in the right place principles.
(iv) It is impacting the foundation or eaves of a residence, or any covered parking required under Title 18 of this code.
(2) In the event a protected tree is removed pursuant to a protected tree removal permit granted under this subsection (a), a temporary moratorium on development of the subject property may be issued by the urban forester for up to twenty-four months or by, the director of planning and development services, in consultation with the urban forester, for up tomay issue a temporary moratorium on development of the subject property not to exceed thirty-six months, from the date the tree removal occurred. Completion of requiredFor any moratorium less than thirty-six months, the urban forester shall determine appropriate mitigation measures included infor the tree removal permit does not remove or shorten any such moratorium. A moratorium may be terminated early with approval of the urban forester or director of planning, and development services, as applicable, and may require additional mitigationensure measures. are incorporated into any future development approvals for the property. Mitigation measures included in the protected tree removal permit and any additional mitigation measures required to shorten a moratoriumas determined by the urban forester shall be imposed as a condition of any subsequent permits for development on the subject property. (b) In the case of any development on a single-family (R-1) or low density (RE, R-2, or RMD) residential zoned parcel, other than in connection with a subdivision, a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that any of the following apply:
(1) The tree is so close to the proposed development that construction would result in the death of the tree, and there is no financially feasible design alternative that would permit preservation of the tree, where financially feasible means an alternative that preserves the tree unless retaining the tree would increase project cost by more than twice the reproduction cost of the tree or ten percent of the given project valuation, whichever is greater.

Item 12
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(2) Retention of one or more trees would result in reduction of the otherwise-permissible buildable area of the lot by more than twenty-five percent, and there is no financially feasible design alternative that would allow for preservation of the tree(s). For the purposes of this subsection (a)(2), a financially feasible design alternative means a design alternative that preserves the tree(s) and would not increase the project cost by more than twice the reproduction cost of the tree(s) or ten percent of the given project valuation, whichever is greater. All tree protection zones impacting buildable area are included in the reduction of buildable area calculation. (1)(3) The tree could be removed due to the conditions listed in Section 8.10.050(a)(1)(i), (ii) or (iii) (2) The tree could be removed due to the conditions listed in Section 8.10.050(a)(1) and treatments or corrective practices are not feasible. (2)(4) The tree is proposed for removal to accommodate an ADU constructed pursuant to Section 18.09.030, or because removal is necessary to allow an ADU constructed pursuant to Section 18.09.040 to achieve the minimum standards set forth in state law. (c) In the case of development involving a proposed subdivision of land into two or more parcels, a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that either of the following apply:
(1) Removal is unavoidable due to restricted access to the property or deemed necessary to repair a geologic hazard (landslide, repairs, etc.), in which case only the protected tree or trees necessary to allow access to the property or repair the geologic hazard may be removed. (2) The tree could be removed due to the conditions listed in subsection (a)(1)(i), (ii), or (iii) and treatments or corrective practices are not feasible. (d) In the case of development requiring planning approval under Title 18, and not included under subsections (b) or (c), a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that anyeither of the following apply:
(1) Retention of one or more treesthe tree would result in reduction of the otherwise- permissible buildable area of the lot by more than twenty-five percent, and there is no financially feasible design alternative that would permit preservation of the tree(s),, where financially feasible means an alternative that preserves the tree(s) unless retaining the tree(s) would increase project cost by more than twice the reproduction cost of the tree or ten percent of the given project valuation, whichever is greater. All tree protection zones impacting buildable area are included in the reduction of buildable area calculation. (2) The tree should be removed because it is dead, hazardous, or constitutes a public nuisance under Section 8.04.050. In such cases, the tree protection zonedripline area of the removed tree, or an equivalent area on the site, shall be preserved for mitigation purposes from development of any structure.

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(3) Discretionary development review determines that the final project follows right tree in the right place principles and would result in a net tree canopy increase on the property within fifteen years, and replacement of trees, shrubs, and plants either:
(i) Is consistent with Urban Forest Master Plan Goal 2: "Re-generated native woodland and riparian landscapes as the key ecological basis of the urban forest with focus on native species and habitat," or
(ii) Uses climate adaptive, drought tolerant species.
(e) In any circumstance other than those described in subsections (a), (b), (c), or (d), a protected tree shall not be removed unless determined by the urban forester, on the basis of a tree report prepared by a designated arborist and other relevant information, that the tree is dead, is hazardous, or constitutes a public nuisance under Section 8.04.050.

8.10.055 Tree replacement.
(a) In the event a protected tree is removed pursuant to Section 8.10.050(a)(1)(i), mitigation for the removed tree, replacement tree ratio, in lieu fees, or a combination thereof shall be determined by the urban forester, based on factors including but not limited to the species, size, location, and specific reason for removal of the protected tree, in accordance with the standards and specifications in the Tree and Landscape Technical Manual. (b) In the event a protected tree is removed pursuant to Section 8.10.050(a)(1)(ii), (iii) or (iv), (b), (c), (d), or (e), the tree removed shall be replaced in accordance with the standards and specifications in the Tree and Landscape Technical Manual, including but not limited to prioritization of locally native species, satisfaction of right tree in the right place principles, and incorporation of a secondary goal of net tree canopy increase on the property within fifteen years. The urban forester shall approve the number, species, size, and location of replacement trees.

8.10.060 No limitation of authority under Titles 16 and 18.

Nothing in this chapter limits or modifies the existing authority of the city under Title 18 to require trees, shrubs, hedges, and other plants not covered by this chapter to be identified, retained, protected, and/or planted as conditions of the approval of development. In the event of conflict between provisions of this chapter and conditions of any permit or other approval granted pursuant to Title 16 or Title 18, the more protective requirements shall prevail.

8.10.070 Care of protected trees.
(a) All owners of property containing protected trees shall follow the maintenance standards in the Tree and Landscape Technical Manual, including avoiding any action foreseeably leading to the death of a tree or permanent damage to its health; including but not limited to excessive pruning, cutting, topping, girdling, poisoning, overwatering, underwatering, unauthorized relocation or transportation of a tree, or trenching, excavating, altering the grade, or paving within the tree protection zonedripline area of a tree.

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(b) At least seven days prior to pruning a protected tree, other than that required to remove a dead, diseased, or broken branch or branches, the property owner or their designee shall prominently post a notice on the property, in one or more locations readily visible to the public, that includes standards for pruning and a description of the tree including tree species, size, location, the date of work, and a contact phone number. The form for such notice will be available on the city's website as a printable document. Protected trees less than five years old are exempt from this provision.
(c) Any requests to exceed the limits for pruning set forth in Section 8.10.020(i) shall be submitted to the urban forester by the property owner or their designee at least fourteen days prior to pruning a protected tree. Each request shall be accompanied by a statement explaining why exceedance of the limits is warranted. No pruning that exceeds the limits set forth in Section 8.10.020(i) shall take place without the approval of the urban forester. (cd) The standards for protection of trees during construction contained in the Tree and Landscape Technical Manual shall be followed during any development on property containing trees.
(de) The urban forester shall add identified protected trees into the city's tree inventory database and, in coordination with the planning and development services departments, into city parcel reports.

8.10.080 Development conditions.
(a) Development approvals for property containing protected public trees shall include appropriate conditions as set forth in the Tree and Landscape Technical Manual, providing for the protection of such trees during construction and for maintenance of such trees thereafter.

Trees may be designated for protection that are significant visually or historically, provide screening, or are healthy and important to the nearby ecosystem. (b) It shall be a violation of this chapter for any property owner or agent of the owner to fail to comply with any development approval or building permit condition concerning preservation, protection, and maintenance of any tree, including but not limited to protected trees.

8.10.090 Designation of heritage trees.
(a) Upon nomination by any person and with the written consent of the property owner(s), the city council may designate a tree or trees as a heritage tree. (b) A tree may be designated as a heritage tree upon a finding that it is of importance to the community due to any of the following factors:
(1) It is an outstanding specimen of a desirable species. (2) It is one of the largest or oldest trees in Palo Alto. (3) It possesses distinctive form, size, age, location, and/or historical significance.

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Attachment A - Ordinance
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of Palo Alto Amending
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Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(c) After council approval of a heritage tree designation, the city clerk shall notify the property owner(s) in writing. A listing of trees so designated, including the specific locations thereof, shall be kept by the departments of public works. (d) Once designated, a heritage tree shall be considered protected and subject to the provisions of this chapter unless removed from the list of heritage trees by action of the city council. The city council may remove a tree from the list upon its own motion or upon written request by the property owner. Request for such action must originate in the same manner as nomination for heritage tree designation.

8.10.092 Tree removal in wildland-urban interface area.

Tree removal and relocation in the wildland-urban interface (WUI) area, as defined in Section

15.04.190, shall be subject to the provisions in Chapter 15.04. To the extent Chapter 15.04 is inconsistent with this chapter, Chapter 15.04 shall control.

8.10.095 Tree removal in Hospital District Zone.

Tree removal and relocation in the Hospital District (HD) shall be subject to the provisions in Section 18.36.070. To the extent Section 18.36.070 is inconsistent with this chapter, Section

18.36.070 shall control.

8.10.100 Enforcement.
(a) Violation of this chapter is a misdemeanor, punishable as provided in this code. Each day of violation constitutes a separate offense and may be separately punished. (b) Persons employed in the following designated employee positions are authorized to exercise the authority provided in California Penal Code Section 836.5 and are authorized to issue citations for violations of this chapter, including but not limited to leveling fines under the city's administrative penalty authority: assistant director of public works public services division, urban forester, project manager in the urban forestry section, landscape architect, and code enforcement officer.

8.10.110 Remedies for violation.

In addition to all other remedies set forth in this code or otherwise provided by law, the following remedies shall be available to the city for violation of this chapter:
(a) Stop Work - Temporary Moratorium.
(1) If a violation occurs in the absence of proposed development pursuant to Section

8.10.050(a)(1), or while an application for a building permit or discretionary development approval for the lot upon which the tree is located is pending, the director of planning and development services in consultation with the urban forester shall issue a temporary moratorium on development of the subject property, not to exceed five years from the date the violation occurred. The purpose of the moratorium is to provide the city an opportunity to study and determine appropriate mitigation measures for the tree removal, and to ensure Item 12
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Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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measures are incorporated into any future development approvals for the property. Mitigation measures as determined by the urban forester shall be imposed as a condition of any subsequent permits for development on the subject property. (2) If a violation occurs during development pursuant to Section 8.10.050(b), (c), (d), or (e), the city shall issue a stop work order suspending and prohibiting further activity on the property pursuant to the grading, demolition, and/or building permit(s) (including construction, inspection, and issuance of certificates of occupancy) until a mitigation plan has been filed with and approved by the director of planning and development services in consultation with the urban forester, agreed to in writing by the property owner(s), and either implemented or guaranteed by the posting of adequate security. The mitigation plan shall include measures for protection or repair of any remaining trees on the property, and shall provide for replacement of each tree removed on the property or at locations approved by the urban forester. The replacement ratio shall be in accordance with the standards set forth in the Tree and Landscape Technical Manual, and shall be at least twice the prescribed ratio required where tree removal is permitted pursuant to the provisions of this chapter. (b) Civil penalties.
(1) As part of a civil action brought by the city, a court may assess against any person who commits, allows, or maintains a violation of any provision of this chapter a civil penalty in the following amount:
(i) Ten thousand dollars per tree, or twice the reproduction cost of each tree, whichever amount is higher, for the complete removal of a tree, as defined in Section 8.10.020(n)(1). (ii) Ten thousand dollars per tree, or the reproduction cost of each tree, whichever amount is higher, for any of the actions set forth in Section 8.10.020(n)(2). (iii) Ten thousand dollars per tree, or twice the repair cost of each tree, whichever amount is higher, for damage to a tree protected or regulated by this chapter which can be rehabilitated. (2) Penalties shall be payable to the city.
(3) Reproduction or repair cost for the purposes of this chapter shall be determined utilizing the most recent edition of the Guide for Plant Appraisal, published by the Council of Tree and Landscape Appraisers.
(c) Administrative penalties. Persons listed in Section 8.10.100(b) may issue citations for violations of this chapter that level fines under the city's administrative penalty authority. (d) Injunctive relief. A civil action may be commenced to abate, enjoin, or otherwise compel the cessation of such violation.
(e) Costs. In any civil action brought pursuant to this chapter in which the city prevails, the court shall award to the city all costs of investigation and preparation for trial, the costs of trial, reasonable expenses including overhead and administrative costs incurred in prosecuting the action, and reasonable attorney fees.

Item 12
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(f) The remedies and penalties provided in this section are cumulative and not exclusive.

8.10.120 Fees.

Tree reports required to be submitted to the city for review and evaluation pursuant to this chapter shall be accompanied by the fee prescribed therefor in the municipal fee schedule.

8.10.130 Severability.

If any provision of this chapter or the application thereof to any person or circumstance is held to be invalid by a court of competent jurisdiction, such invalidity shall not affect any other provision of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.

8.10.140 Applications, notice, and appeals.
(a) Applications.
(1) All applications for removal of a protected tree pursuant to Section 8.10.050 shall be filed in accordance with this section and any applicable provisions of Chapter 18.77. Applications for removal of protected trees on non-residential zoned properties will follow review guidelines set forth in Section 8.10.050(d) and Section 18.76.020 and will follow the process set forth in Section 18.77.070.
(2) The application form shall be prescribed by the urban forester and shall contain a list of information that must be submitted in order for the application to be deemed complete. (3) Each application must be signed by all owners of the real property containing the protected tree, or an agent of the owner of record of the real property on which the protected tree occurs, when duly authorized by the owner in writing. (4) No application shall be deemed received until all fees for the application as set forth in the municipal fees schedule have been paid, and all documents specified as part of the application in this chapter or on the application form have been filed. (5) Protected tree removal permits shall automatically expire after twelve months, unless otherwise provided in the permit, from the date of issuance of the permit if within such twelve- month period, the proposed tree has not been removed.
(b) Notice.
(1) All applications for removal of a protected tree pursuant to Section 8.10.050 shall give notice in accordance with this section, the Tree and Landscape Technical Manual, and any applicable provisions of Chapter 18.77.
(2) After submittal of an application to remove a protected tree, notice shall be given consistent with subsection (b)(4) and shall include the date of the proposed removal and the basis for the application.

Item 12
Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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(3) Upon determination of a protected tree removal application, notice shall be given consistent with subsection (b)(4) and shall include a description of the decision and how to appeal it.
(4) Notices required pursuant to this section shall include the address of the property, a description of the protected tree, including species, size, and location, and urban forestry contact information, and shall be given as follows:
(i) In writing to all owners and residents of property within 300 feet of the exterior boundary of the property containing the protected tree, and to all principal urban forestry partner organizations.
(ii) By posting on the property, in one or more locations visible to the public. (iii) By posting on the city's website.
(c) Appeals.
(1) Any person applying to remove a protected tree in the absence of proposed development pursuant to Section 8.10.050(a), and any owner or resident of property within 600 feet of the exterior boundary of the property containing the protected tree, may request a public hearing by the director of public works to review the urban forester's decision, and may appeal the director of public works' determination to the city council. Any such request or appeal shall be filed with the public works department in a manner prescribed by the urban forester. (2) Any person applying to remove a protected tree pursuant to Section 8.10.050(b), (c), (d), or (e), and any owner or resident of property within 600 feet of the exterior boundary of the property containing the protected tree may request a hearing by appeal the director of planning and development services to review the decision. The request for a hearing shall be filed with the planning division in in a manner prescribed by the director of planning and development services. An appeal of the director of planning and development services determination shall be conducted in accordance with the procedures set forth in Chapter 18.78. (3) All appeals must be filed within fourteen days of posting of notice on the property pursuant to subsection (b)(4)(ii).

SECTION 3
. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, cl auses or phrases be declared invalid.

SECTION 4
. The Council finds that this ordinance is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certa inty that there is no possibility that the ordinance will have a significant effect on the environment. Alternatively, the ordinance is also exempt Item 12
Attachment A - Ordinance
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Chapter 8.04 Street Trees
Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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under CEQA Guidelines Section 15308 because it involves regulatory action for the protection of the environment.

SECTION 5
. This ordinance shall be effective on the thirty-first day after the date of its adoption. However, this ordinance shall not apply to any projects that have submitted a complete application as of the ordinance’s effective date. In addition, until such time as a list of designated arborists is established by the Urban Forester, the term “designated arborist” shall mean any arborist certified by the International Society of Arboriculture or another nationally recognized tree research, care, and preservation organization.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

____________________________ ____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

____________________________ ____________________________ Assistant City Attorney City Manager

____________________________
Director of Public Works

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
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Shrubs and Plants and
Chapter 8.10 Tree
Preservation

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: March 18, 2024
Report #:2312-2321
TITLE
Discussion and Direction Regarding the City Council Procedures and Protocols Handbook - Annual Discussion as Recommended by the Policy & Services Committee

RECOMMENDATION
The Policy and Services Committee recommends that the City Council discuss potential substantive edits, changes, and revisions to the City Council Procedures and Protocols Handbook (CPP or Handbook). These suggestions were discussed at Committee in November 2023 and the Committee forwarded them all to the full City Council for review and discussion.

After City Council discussion and direction regarding the items of interest, staff can return with complete text for review at a future meeting submitted directly to the full City Council or through the Policy and Services Committee, if so assigned.

BACKGROUND
The Municipal Code provides that the City Council shall adopt “a handbook of procedural rules governing any aspect of the conduct of meetings and hearings for the Council and its standing committees, including but not limited to, agenda requirements, the order of business, rules of order, rules of evidence, closed session procedures and rules for public participation in meetings” (PAMC section 2.04.100). The City Council adopted the first version of the City Council Procedures and Protocols Handbook in the early 2000s and have made modifications over the years.

The Handbook calls on the City Council to review its procedural rules and protocols annually (CPP, Procedures Section 8.1). This is typically done at the City Council’s January/February retreat (or soon thereafter depending on agenda availability). The Handbook has been amended numerous times over a 20-year period with updates to particular sections, but the Handbook had grown hard to follow. As a result, the whole document was revised, reorganized, and reformatted in early 2023. This was a significant effort, led by the City Council, to improve Handbook readability and ease of use for City Council Members, Staff and the public. Final Item 13
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action on this most recent version of the Handbook was on April 24, 20231; the Handbook is online at: https://www.cityofpaloalto.org/Departments/City-Clerk/City-Council (scroll to the bottom of the page).

Through that revision process, the City Council made seven (7) referrals to the Policy and Services Committee on various topics. The City Council discussed and approved language related to those referrals at various City Council meetings in early 2024 (February 26 and February 5) 2. Staff will provide an updated version of the Handbook as a supplemental report to this report and will also upload it to the aforementioned link.

The Policy and Services Committee discussed the suggested edits (Attachment A) for this annual discussion at its November 14, 2023 meeting3 and provided some initial thoughts on the topics. The Committee did not prioritize the items but rather did an initial review. The minutes summarizing the Committee discussion are included as Attachment B to this report.

ANALYSIS
The Handbook describes the way the Palo Alto City Council conducts its business and is a directional guide (PAMC section 2.04.100). It is intended to accomplish two goals: first, the Handbook is an informational guide for anyone doing business or appearing before the City Council. Second, the Handbook is a compilation of procedures and protocols that have been formally adopted by the City Council. Municipal Code 2.04.100 states the following related to the handbook:

Municipal Code 2.04.100 - Handbook of procedural rules The Council shall adopt by resolution a handbook of procedural rules governing any aspect of the conduct of meetings and hearings for the council and its standing committees, including but not limited to agenda requirements, the order of business, rules of order, rules of evidence, closed session procedures and rules for public participation in meetings. The handbook of procedural rules shall be deemed guidelines and failure to comply with any procedural rule shall not be the basis for challenge to or invalidation of any action of the council, nor shall they be construed to create any independent remedy or right of action of any kind.

Staff solicited the City Council for suggestions related to the annual discussion of the Procedures and Protocols Handbook (Handbook) in November 2023. Staff also compiled a list of staff-generated potential changes based on observations throughout the year. These 1 City Council April 24, 2023 Agenda Item 6:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=12660 2 City Council February 26 Agenda Item 15:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13357 City Council February 5 Agenda Item 13:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13345 3 November 14, 2023 Policy and Services Committee Item 3:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=12180 Item 13
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suggestions from City Council and staff are all included in Attachment A. These suggestions are included for City Council consideration and discussion. Staff requests City Council review of the list of suggested Handbook changes.

FISCAL/RESOURCE IMPACT
Depending on the nature and extent of the new/edited procedure or protocol revisions sought, the actual revision language could involve a moderate amount of staff resources to draft.

STAKEHOLDER ENGAGEMENT
The items included in Attachment A reflect feedback from Staff and the City Council. Staff received Handbook feedback from the City Council prior to the November Policy and Services Committee discussion.

ENVIRONMENTAL REVIEW
City Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) because revisions to the City Council Procedures and Protocols is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2).

ATTACHMENTS
Attachment A: City Council and Staff Proposed Changes to Council Handbook, as of Nov. 2023 Attachment B: Policy and Services November 2023 Summary Minutes APPROVED BY:

Ed Shikada, City Manager
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Attachment A – Page 1 of 2
Attachment A – Suggested Handbook Changes for 2024 Handbook Revisions Changes are as of late 2023

Note: Staff has not yet determined the exact sections to which these suggested changes will apply if the City Council chooses to include them as changes. In an effort to keep the revised Handbook organized, Staff requests the ability to draft the exact language and evaluate the best placement within the Handbook document as an administrative task and to bring the suggested final language to City Council for the items that the City Council chooses to advance from the list below.

Suggestions from Council Members (as of November 2023):
- Kou: no proposed changes
- Stone: no proposed changes
- Tanaka: no proposed changes
- Veenker:
o Revisit discussion on remote participation for public comment (audio and video) o Procedures Page 14 (Sec. 3) Order of the Agenda: Consider adding a land acknowledgement at the start of meetings
- Lauing:
o Procedures Page 30 (Sec. 5.1(b)1 says “The Council limits the total time up to 30 minutes per meeting for General Public Comment.” We sometimes don’t abide by that. Should we abide by it strictly or have an exception clause (such as “at the Mayor’s/Presiding Officer’s discretion the 30-minute limit can be extended”)?
o Consider eliminating call-in public comment.
- Lythcott-Haims:
o Procedures page 30, Sec 5.1(a)(1) Mentions that the public can access the meeting online. Given recent events, I feel we should discuss whether to discontinue online public comment for items not on the agenda. o Procedures page 34, Sec 7(b) says there is a 2-3-year time limit on City Council priorities. This limitation was of concern to many of us last year. Feels like we should discuss.
o Procedures page 34, Sec 7(b) also says Council will provide (only) 2-3 specific objectives within a priority whereas this year we had many more. We should discuss whether we are going to hold to this expectation in coming years or whether we need to amend the handbook.
- Burt:
o We don’t have anything under the Consent Calendar on how long the members of the public get to speak if speaking on multiple Consent items. I recommend limiting it to 3 minutes total and it can be reduced according to other procedures on public speaker time reductions.

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Attachment A - City
Council and Staff
Proposed Changes to
Council Handbook, as of
Nov. 2023

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Attachment A – Page 2 of 2
o When Council members vote no on a Consent item and get to speak about their no vote, we do not have a time limit set for them. I recommend it be limited to 3 minutes total, no matter how many items a Council member has voted no on. o Council members’ use of public-funded events for their own political purposes:
need to clarify rules on this per FPPC.
o Protocols Page 37, Sec. 1.4(b)1: Council members should address each other with formal titles. We should update this section to address that Committee meetings can be less formal.
o Procedures Page 6, Sec. 1.2(d): Under CAO Committee, there is nothing about an annual responsibility to schedule CAO performance evaluations. Language should be added to address this scheduling responsibility for this committee.

Also should add that the CAO committee can review the contract on who will do the CAO reviews as well as review and recommendation to Council related to CAO recruitments.
o Agenda setting for Committee Business: the CPP does not spell out how Committee agenda setting is done. It should say that Committee agenda setting is done between the staff and the Committee chair based on the Council referrals and annually assigned items. Can also include that agenda setting will include items within the Council guided delegated topics of the Committee. o New recommendation: That a Committee would be able to make recommendations to the City Council for a Committee to be able to discuss/explore a specific topic instead of always using a Colleagues’ Memo to Council to get a topic delegated to the Committee.

Note from Staff: For the Committee’s consideration when looking at the suggestions related to remote / call-in participation, it should be noted that the City Council may revise its procedures by ending (either indefinitely or temporarily) the call-in option for public comment. Doing so, however, would foreclose the ability of City Council Members to use streamlined noticing procedures under AB 2449 where there is just cause or emergency circumstances. To use streamlined remote attendance procedures under AB 2449, the agenda must provide an opportunity for all public comment via a call-in option, an internet-based option, and an in- person option. (Government Code section 54953 (f)(1)(C)).

Proposed Changes for City Council Handbook from Staff (as of November 2023):

A. Establish a protocol related to the gifts the City can receive from international partners such as Sister Cities. The intention is to set a maximum amount of a gift that a City representative can receive on behalf of the City. This would also include a note that City officials cannot accept hotel accommodations from an international partner.

B. Establish as a procedure, additional guidance for proclamations, specifically identifying guidelines on if and why proclamations can be brought forward.

C. Note: The suggestion related to additional ad hoc committee guidelines has been removed for the March 2024 City Council discussion
Item 13
Attachment A - City
Council and Staff
Proposed Changes to
Council Handbook, as of
Nov. 2023

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POLICY AND SERVICES COMMITTEE

SUMMARY MINUTES

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Palo Alto City CouncilMarch 18, 2024

Palo Alto City Council
March 18, 2024