Palo Alto City Council
February 24, 2025

Item 3
Attachment A - Comp Plan
Implementation Program Status,
2024

Item 3: Staff Report
Pg.
42 Packet Pg. 62 of 246

Target
Completion Date
at Comp Plan
Adoption
2024 Completion
Status
(as of December
31, 2024)
2024 Level of
Effort to
Complete
Program
Number Program Text Lead Department Staff Comments 2024 Consider reducing parking requirements for retail and restaurant uses as a way to encourage new businesses and the use of alternative modes.

Planning and
Development Services
Council Ad Hoc has requested additional parking study that may inform next steps as part of retail revitalization efforts.T5.1.2 2022‐2027 Significant Standard
Partially Complete
Planning and
Development Services
and Office of
Work with stakeholders in each commercial center and employment district to monitor conditions and determine the appropriate timing for revisions to parking requirements.

Retail revitalization efforts and preliminary Downtown Housing Plan work are advancing this program.T5.1.3
T5.1.4
2022‐2027 Partially Complete
Transportation
Planning and
Development Services
and Office of
Study the feasibility of unbundled parking for office, commercial, and multi‐family residential developments (including senior housing developments) that are well‐ served by transit and demonstrated walking and biking connections.

Preliminary Downtown Housing Plan and Housing Incentive Program work may advance this program.By 2022
By 2022
Standard Partially Complete
Transportation
The Housing Incentive Program and Affordable Housing Incentive Program updates are underway and a recommendation to City Council from the Planning and Transportation Commission on code amendments are anticipated before the end of 2024. The efforts include consideration of appropriate parking standards.

Consider reducing parking requirements for multi‐ family uses as a way to encourage new multi‐family housing and the use of alternative modes, where reduction in parking would not impact the neighborhood.

Planning and
Development ServicesT5.1.5
T5.2.1
Standard Partially Complete
Partially Complete Staff and a consultant will present in December 2024 options for improved permit and fee payment options.Use technology to help identify parking availability and make it easy to pay any parking fees. Office of Transportation By 2022 Substantial Study and implement pricing strategies for public parking in commercial districts, taking into consideration both employee parking demand and the needs of retailers and customers. Use pricing to encourage short term parking on street, long term parking in parking garages, and the use of alternative modes of transportation
Staff will present in December 2024 options for a pilot curb management pricing strategies in select Downtown parking facilities, on‐street and in select city‐owned parking lots.T5.2.2 T5.2.3
Office of Transportation Continuous Task Significant
Substantial
Partially Complete
Partially Complete
Implement Council‐adopted recommendations from the parking management study for the Downtown area, which address the feasibility of removing color‐ coded parking zones, and dynamic pricing and management policies to prioritize short‐term parking spaces closest to the commercial core for customers, garage parking for employees, and neighborhood parking for residents.

Staff will present in December 2024 next steps for potential curb management strategies in select Downtown parking facilities, on‐street and in select city‐owned parking lots.Office of Transportation By 2022 Explore incentives to encourage privately initiated shared parking among individual property owners when developments have excess parking that can be available for other businesses to use.T5.4.1 T5.8.1
Office of Transportation By 2022
Department of Public
Standard Pending
Ongoing
Work has not commenced.

Study the feasibility of retrofitting City‐owned surface parking lots to implement best management practices for stormwater management and urban heat island mitigation, including green infrastructure, permeable pavement and reflective surfaces.

By 2022 Significant This is an ongoing program. There are no substantial actions to report at this time.Works Identify incentives to encourage the retrofit of privately owned surface parking areas to incorporate best management practices for stormwater management and urban heat island mitigation as well as incentives for the provision of publicly accessible pavement and reflective surfaces.

Department of Public
WorksT5.8.2 By 2022 Standard Ongoing This is an ongoing program, no updates to report at this time.

Update City requirements regarding trees and other landscaping that capture and filter stormwater within Department of PublicT5.8.3 Continuous Task Standard Ongoing Ongoing
This is an ongoing program. There are no substantial actions to report at this time.

This is an ongoing program. There are no substantial actions to report at this time. surface parking lots to take advantage of new technology. Works Coordinate with neighborhood groups and local businesses and other stakeholders to evaluate the need for a residential parking permit program in areas without existing programs.T5.11.1 Office of Transportation By 2022 Significant Work with employers, merchants, schools, and community service providers, to identify ways to provide more bicycle parking, including e‐bike parking with charging stations, near existing shops, services and places of employment.

This is an ongoing program via 311 requests for parking in the public Right‐of‐Ways and through coordination with the Safe Routes to School program.T5.12.1 Office of Transportation Continuous Task Standard Ongoing

Item 3
Attachment A - Comp Plan
Implementation Program Status,
2024

Item 3: Staff Report
Pg.
43 Packet Pg. 63 of 246

Target
Completion Date
at Comp Plan
Adoption
2024 Completion
Status
(as of December
31, 2024)
2024 Level of
Effort to
Complete
Program
Number Program Text Lead Department Staff Comments 2024 Install secure electronic bike lockers such as the BikeLink system, at high theft locations, including transit stations and parking garages.T5.12.2 Office of Transportation 2022‐2027 Office of Transportation 2022‐2027
Significant
Significant
Pending
Ongoing
Work has not commenced.

T5.12.3 Assess the need to provide additional bicycle parking in City‐owned parking lots and rights‐of‐way. This is an ongoing program via 311 requests for parking in the public Right‐of‐Ways.

Goal T‐6: Provide a safe environment for motorists, pedestrians, and bicyclists on Palo Alto streets.

Bicycle network planning has commenced with the current update of the Bicycle and Pedestrian Transportation Plan. In addition, a roadway safety plan funded by a federal grant and currently under development, will identify systemic transportation network changes to improve safety for all road users.

Follow the principles of the safe routes to schools program to implement traffic safety measures that focus on Safe Routes to work, shopping, downtown, community services, parks, and schools, including all Office of Transportation Continuous Task designated school commute corridors.

T6.1.1
T6.1.2
Significant
Significant
Ongoing
Ongoing
Develop, distribute and aggressively promote maps and apps showing safe routes to work, shopping, community services, parks and schools within Palo Alto in collaboration with stakeholders, including PAUSD, major employers, TMAs, local businesses and community organizations.

This is an ongoing program. A Palo Alto bike route map is posted on the City website.

School Walk and Roll Maps and the Walk and Roll to Libraries Map are posted online, updated as needed, and distributed at libraries, schools, and community events.

Office of Transportation Continuous Task
T6.1.3
T6.1.4
Address pedestrian safety along Alma Street between Embarcadero Road and Lytton Street. Office of Transportation By 2022 Significant Standard
Pending
Ongoing
Work has not commenced.

Address pedestrian safety on shared‐use paths through the use of signs, pavement markings, and outreach to users, encouraging them to be safe and courteous. Office of Transportation Continuous Task This is an ongoing program, no updates to report at this time.

Regularly collect severity and location data on roadway collisions for all modes of travel, including fatalities and severe injuries, and use this data to make roadway design decisions. In collaboration with Santa Clara County, develop an up‐to‐date, public database for this information.

T6.2.1
T6.4.1
Office of Transportation Continuous Task Standard
Standard
Ongoing
Ongoing
This is an ongoing program via the County's collision database.

This is an ongoing program, no updates to report at this time.

Consider the Adopted School Commute Corridors Network and adopted “Walk and Roll” maps when reviewing development applications and making land use and transportation planning decisions.

Incorporate these requirements into City code when feasible.

Office of Transportation Continuous Task
Office of Transportation Continuous TaskEstablish standards and procedures for maintaining safe bicycling routes, including signage for warnings and detours during construction projects.T6.4.2
T6.4.3
Standard Ongoing
Ongoing
The Traffic Control Plan Guidelines were updated in 2016 and are regularly reviewed.

Two intersections added to the contract this year per Council direction.In collaboration with PAUSD, provide adult crossing guards at school crossings that meet established warrants. Police Department Continuous Task Significant Periodically evaluate safety on roadways and at intersections and enhance conditions through the use of signal technology and physical changes. Consider the construction of traffic circles for improved intersection safety.

The Safe Streets for All Safety Action Plan currently under development will provide strategies for eliminating traffic‐related deaths and serious injuries by a target date to be chosen by Council.

T6.6.1
T6.6.2
Office of Transportation Continuous Task
Office of Transportation Continuous Task
Substantial
Significant
Ongoing
Ongoing
Continue to provide educational programs for children and adults, in partnership with community‐based educational organizations, to promote the safe walking and safe use of bicycles, including the City‐ sponsored bicycle education programs in the public schools and the bicycle traffic school program for juveniles.

This is an ongoing program, no updates to report at this time.

This is an ongoing program, no updates to report at this time.

Work with PAUSD and employers to promote roadway safety for all users, including motorized alternatives to cars and bikes such as mopeds and e‐bikes, through educational programs for children and Office of Transportation Continuous Task adults.

T6.6.3
T6.6.4
Significant
Significant
Ongoing
The City began the development of a new federally funded Safe Streets for All (SS4A) Safety Action Plan in August of 2023 to identify systemic transportation network changes to improve safety for all road users.

Complete a mobility and safety study for downtown Palo Alto, looking at ways to improve circulation and safety for all modes. Office of Transportation 2022‐2027 Partially Complete

Item 3
Attachment A - Comp Plan
Implementation Program Status,
2024

Item 3: Staff Report
Pg.
44 Packet Pg. 64 of 246

Target
Completion Date
at Comp Plan
Adoption
2024 Completion
Status
(as of December
31, 2024)
2024 Level of
Effort to
Complete
Program
Number Program Text Lead Department Staff Comments 2024 T6.6.5 Identify and construct safety improvements for pedestrian underpasses, including on Embarcadero Road. Office of Transportation After 2027 Substantial Substantial
Pending Work has not commenced.

The City began the development of a new federally funded Safe Streets for All (SS4A) Safety Action Plan in August of 2023 to identify systemic transportation network changes to improve safety for all road users. it includes a toolbox of roadway safety strategies.

Improve pedestrian crossings by creating protected areas and better pedestrian and traffic visibility. Use aT6.6.6 Office of Transportation Continuous Task Ongoingtoolbox including bulb outs, small curb radii, high visibility crosswalks, and landscaping.

Establish a program to educate residents to keep sidewalks clear of parked cars, especially on narrow local streets in neighborhoods with rolled curbs. Survey for compliance annually.T6.6.7 T6.7.1
Office of Transportation 2022‐2027 Significant
Standard
Pending
Ongoing
Work has not commenced. A rolled curb parking flyer is available on the City website.

This is an ongoing program, no updates to report at this time.Evaluate the performance of safety improvements and identify methods to encourage alternative transportation modes. Office of Transportation Continuous Task Goal T‐7: Provide mobility options that allow people who are transit dependent to reach their destinations.

The on‐demand transit service vendor is currently operating electric and hybrid vehicles in Palo Alto and offers fare discounts for the disabled, seniors, youth, low‐income, and wheelchair users. This pilot project provides transit service to most of Palo Alto on weekdays from 7am to 7pm. While staff have won grant funding to convert to an all‐ electric fleet, long‐term funding of this service has not been identified.

Expand transportation opportunities for transit‐ dependent riders by supporting discounts for taxi fares, rideshare services, and transit, by coordinating transit systems to be shared by multiple senior housing developments, and by maintaining a database of volunteer drivers, and other transit options.

T7.1.1 Office of Transportation 2022‐2027 Significant
Substantial
Partially Complete
The on‐demand transit service vendor is currently operating electric and hybrid vehicles in Palo Alto and offers fare discounts for the disabled, seniors, youth, low‐income, and wheelchair users. This pilot project provides transit service to most of Palo Alto on weekdays from 7am to 7pm. While staff have won grant funding to convert to an all‐ electric fleet, long‐term funding of this service has not been identified.

Coordinate with social service agencies and transit agencies to fill gaps in existing transportation routes and services accessible to transit‐dependent riders no matter their means and design new bus routes that Office of Transportation Continuous Task enable them to access those services.

T7.1.2
T7.1.3
Ongoing
Pursue expanded evening and night time bus service to enhance mobility for all users during off‐peak times.

Goal T‐8: Influence the shape and implementation of regional transportation policies and technologies to reduce traffic congestion and greenhouse gas emissions.

This program is unlikely to be pursued with VTA's 2025 New Service Plan as post‐pandemic transit funding is limited.Office of Transportation Continuous Task Standard Standard
Pending
OngoingContinue to participate in regional efforts to develop technological solutions that make alternatives to the automobile more convenient.T8.1.1
T8.3.1
Office of Transportation Continuous Task
Office of Transportation By 2022
The Dumbarton Forward Project is in construction by AC Transit.

Advocate for provision of a new southbound entrance ramp to Highway 101 from San Antonio Road, in conjunction with the closure of the southbound Charleston Road on‐ramp at the Rengstorff Avenue interchange in Mountain View.

With grant funding, VTA is leading work effort to identify and analyze project alternatives.

Public engagement is forthcoming.Standard
Standard
Ongoing
PendingWork with regional transportation providers to improve connections between Palo Alto and the San Francisco International Airport and Norman Y. Mineta San Jose International Airport.T8.7.1 T8.8.1
Office of Transportation Continuous Task
Office of Transportation Continuous Task
No Updates to Report
Identify and improve bicycle connections to/from neighboring communities in Santa Clara and San Mateo counties to support local trips that cross city boundaries. Also advocate for reducing barriers to bicycling and walking at freeway interchanges, expressway intersections, and railroad grade crossings.

This will be addressed in the ongoing Bicycle and Pedestrian Transportation Plan Update that is expected to conclude in 2025.Substantial Ongoing Source: City of Palo Alto, Planning and Development Services, January 2025

Item 3
Attachment A - Comp Plan
Implementation Program Status,
2024

Item 3: Staff Report
Pg.
45 Packet Pg. 65 of 246

2023‐2031 Housing Element Program Implementation, 2024
Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status Amend the Comprehensive Plan and zoning districts as needed for properties identified to meet the City’s RHNA obligations. The amendments include changes to allow increased residential densities shown in Appendix D in developments and relevant development standards to accommodate increased density, and modifications to allowable uses to permit multi‐family residential uses where it is not currently allowed. Examples of possible changes include adjustments to building height, lot coverage, floor area ratios, ground floor landscaping requirements, and parking, as discussed in Chapter 4, Analysis of Land Use Controls. This also includes zoning updates to create the El Camino Real Focus Area, which would allow up to 4.0 FAR and 85 feet in height in exchange for the provision of 20 percent inclusionary housing on site. Located between Page Mill Road and Matadero Avenue, this location has excellent access to services, shopping, California Avenue, jobs, Stanford, and transit.

The rezone/upzoning shall include the following provisions of Government Code Section 65583.2(h) and (i) for specified sites accommodating lower incomes: (1) By‐right development of multi‐family developments in which 20 percent or more of units are affordable to lower‐income households; (2) Accommodation of at least 16 units per site; (3) Minimum density of 20 units per acre; (4) Because 50 percent of the lower‐income need cannot be accommodated on sites designated for residential use only, a portion shall be accommodated on sites zoned for mixed uses that allow 100 percent residential use and require that residential use occupy at least 50 percent of the total floor area of a mixed‐use project.

The City will amend the Comprehensive Plan or
zoning designation of 291 properties located in
commercial, industrial, or residential zoning
districts, which together will generate a realistic
yield of 4,063 housing units.

Complete. Ordinance and
Comprehensive Plan update were
adopted by City Council in
November 2023.

Adequate Sites

1.1 Program
Planning and
Development Services General Fund A The rezoning includes the following requirements for these Stanford‐owned properties: Complete by January 31, 2024 Complete by January 31, 2024
Complete by January 31, 2024
Complete by January 31, 2024
Complete by January 31, 2024
i. For the housing opportunity site located at the corner of Pasteur Drive and Sand Hill Road and the adjoining property at 1100 Welch Road, as an alternative to the State Density Bonus law, amend zoning regulations to allow approximately net new 425 units up to 85 feet in height; redevelopment of the Welch Road property shall comply with the replacement housing provisions of the Housing A Crisis Act, which will substantially protect tenants from displacement.

The City will amend the Comprehensive Plan or
zoning designation of 291 properties located in
commercial, industrial, or residential zoning
districts, which together will generate a realistic
yield of 4,063 housing units.

Complete. Ordinance and
Comprehensive Plan update were
adopted by City Council in
November 2023.

Adequate Sites

1.1 Program
Planning and
Development Services General Fund
The City will amend the Comprehensive Plan or
zoning designation of 291 properties located in
commercial, industrial, or residential zoning
districts, which together will generate a realistic
yield of 4,063 housing units.
ii. For the housing opportunity site located at 3128 El Camino Real (McDonald’s), as an alternative to the State Density Bonus law and as part of the El Camino Real Focus Area, amend zoning regulations to allow at least 144 housing units with a maximum height of 85 feet; allow a minimum of 315 A housing units if combined with an adjacent property, and require 20 percent inclusionary housing.

Complete. Ordinance and
Comprehensive Plan update were
adopted by City Council in
November 2023.

Adequate Sites

1.1 Program
Planning and
Development Services General Fund
The City will amend the Comprehensive Plan or
zoning designation of 291 properties located in
commercial, industrial, or residential zoning
districts, which together will generate a realistic
yield of 4,063 housing units.
iii. For the housing opportunity site located at 3300 El Camino Real, as an alternative to the State Density Bonus law and as part of the El Camino Real Focus Area, allow up to 200 housing units, up to a 4:1 floor area ratio (FAR) with a 20 percent inclusionary housing requirement. Commercial office A approved or permitted on this property is inclusive of the total floor area allowed for this site.

Complete. Ordinance and
Comprehensive Plan update were
adopted by City Council in
November 2023.

Adequate Sites

1.1 Program
Planning and
Development Services General Fund
Rezone ROLM and GM zoned properties to allow multi‐family residential housing with a density of 90 dwelling units per acre for properties nearest Bayshore Freeway and generally bounded by East Charleston Road and Loma Verde Avenue. This action will require additional changes to the related development standards to accommodate higher‐density development. Examples of specific changes B to development standards are discussed in Chapter 4, Analysis of Land Use Controls.

The City will rezone approximately 146 sites in the Complete. Ordinance and designated area, including the already identified Comprehensive Plan update were housing inventory sites, to allow for development adopted by City Council inAdequate Sites

1.1 Program
Planning and
Development Services General Fund at approximately 90 dwelling units per acre. November 2023.

Ongoing/Standard Operations.

The City maintains an updated
inventory of housing sites and
Maintain an updated inventory of housing sites and actively promote sites available for lower‐ and moderate‐income housing development to potential developers, private and non‐profit organizations, and other interested persons. Post information on the City’s website and update as C necessary to maintain accurate information.

Support the development of 1,556 units for very‐ continues to communicate low income, 896 units for low income, 1,013 units availability of site for lower‐ and Post information on the City’s website by June 2024 and update annually, or for moderate income, and 2,621 above‐moderate moderate‐income housing toAdequate Sites

1.1 Program
Planning and
Development Services General Fund more often if needed. households during the planning period. potential partners.

Ongoing/Standard Operations.

Provide technical assistance and information on parcels available for lower‐income developments to private or non‐profit housing developers. Technical assistance includes land development counseling Develop technical assistance program by December 2024 and set/publish Support the development of 1,556 units for very‐ City staff regularly provide low income, 896 units for low‐income households technical assistance toAdequate Sites

1.1 Program
Planning and
Development Services General Fund D by staff planners. regular hours for assistance on the City’s website. during the planning period. developers.

Engage owners of parcels owned by faith‐based institutions to educate them on legislation (SB 4) that streamlines the residential development process for religious institutions, and funding opportunities for this type of development. Because the outreach, engagement, and site design will take time, the City anticipates that the majority of production will happen during the second half of the planning period. To track program implementation, monitor faith‐based community interest and production.

By 2027, halfway through the planning period, if less than 35 percent of the Quantified Objective (i.e., 48 affordable housing units) has been entitled, update the Site Inventory to identify new E opportunities to achieve the Quantified Objective in this program.

Support the development of 135 units on sites
owned by faith based institutions during the
planning period
Adequate Sites

1.1 Program
Site Inventory
Monitoring
Planning and
Development Services General Fund Initiate discussions in 2025 and then annually.

Update inventory annually every April.

Pending/Not Started.

Ongoing/Standard Operations.

The City maintains a regularly
updated site inventory.

Planning and
Development Services General Fund
Maintain an updated inventory of residential housing developments that have been submitted and A acted upon.

Management of site inventory through the
Annual Progress Report to HCD.1.2 Program
The City will maintain a sufficient number of
reserve housing inventory sites to remain
compliant with State law. In the event the City
falls short of that requirement, it has committed City monitors the status of the to adding or rezoning additional properties within sites inventory to ensure a Monitor the development of vacant and nonvacant properties identified in the sites inventory and ensure that adequate sites are available to meet the remaining RHNA by income category; amend the sites inventory list and rezone additional properties as needed. In the event that sites in zones that allow 100% nonresidential sites that are identified for lower‐income RHNA develop with non‐ B residential uses, the City will prioritize its buffer allocation to accommodate any shortfall Ongoing/Standard Operations.

Site Inventory
Monitoring Planning and Conduct review of sites inventory annually and report findings in housing

1.2 Program Development Services General Fund element progress report; correct any deficiency within 180 days if identified. 180 days of noticed shortfall of units. sufficient number of reserve sites.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
46 Packet Pg. 66 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status Site Inventory
Monitoring

1.2 Program
Actively promote, through outreach and discussions, sites available for lower‐ and moderate‐income housing development to potential developers, private and non‐profit organizations, and other C interested persons and organizations.

The City shall rezone or amend its Municipal Code to allow by‐right approval on non‐vacant sites Conduct a minimum of four (4) meetings annually Ongoing/Standard Operations.

Planning and
Development Services General Fund
with potential developers about lower‐ and City continues to discuss housing sites with interested parties.Update inventory annually every April. moderate income housing sites.

Complete rezoning and amend development
Sites Used in
Previous Housing Planning and

1.3 Cycle Development Services General Fund
included in one previous housing element inventory and on vacant sites included in two previous housing elements and designated for lower‐income housing, provided that the proposed housing A development consists of at least 20 percent lower‐income housing units. standards for qualifying sites to enable a
projected realistic housing yield of 390 housing
units.Complete by January 31, 2024 Complete.

The City will take a phased approach to developing these lots. An RFI was issued in 2023 with the intent to select a development partner in 2024 and solicit feedback from community partners. The City will assist its development partner in securing tax credits and other financing, with the goal of awarding construction contracts on both the housing project and replacement public parking in 2026. Based on the results of the initial effort, the City will issue one or more additional RFIs or RFPs for any remaining units no later than 2026, with the goal of selecting development partners in 2027.

The City will coordinate with development partners and community partners, to ensure units are entitled during the planning period. The City anticipates that the majority of production will happen during the second half of theAny future project on the six City‐owned surface parking lots identified in Appendix D for redevelopment shall include replacement public parking and provide 100% affordable housing units planning period. The City will monitor progress during the planning period. If serving households earning up to 80% of the Area Median Income (AMI) or for workforce housing for the City is not on track to meet the Quantified Objective by 2027, halfway Develop 50 lower income units through the initial RFI process, with the intent to develop theCity employees and Palo Alto Unified School District (PAUSD) employees. The City will prepare a request for proposals to solicit interest in a public/private partnership for redevelopment of one or through the planning period, the City will remove these sites and identify alternate sites with zoning sufficient to accommodate any shortfall of units, remaining 240 units that can be accommodated City Council directed staff to In Progress. In January 2025, the
more sites in the City’s University Avenue Downtown area. The City will comply with the provisions of likely resulting from the Downtown Housing Plan by December 31, 2027. Any on City‐owned sites through one or more enter into an exclusive negotiating agreement with a
non‐profit partner.

City‐Owned Land Planning and

1.4 Lots Development Services General Fund
the Surplus Lands Act, ideally by using the streamlined provisions for affordable housing dispositions additional selected sites will meet the requirements of Government Code separate efforts to follow during the planning periodA under Government Code Section 37364. Section 65583.2.

Upon completion of the Project Homekey project, the City anticipates that sufficient transitional housing capacity to serve Palo Alto’s needs will be available. If additional capacity for interim or transitional housing is required, the City will examine City owned parcels and other sites based on availability, size, access to services and related metrics. If additional parcel(s) are identified, pursue B partnerships and funding opportunities to build interim or transitional housing.

Subject to identification of suitable sites and
formation of public/private partnership; provide progress of the Project Homekey If additional capacity is needed, complete site identification within 180 days transitional housing opportunities for 75 or more project, which is currently under In Progress. City is monitoring the
City‐Owned Land Planning and

1.4 Lots Development Services General Fund of identification of need. beds during the planning cycle. construction.

Complete. The ordinance update
to remove the CUP for residential
uses within the RP and RP5 zones
except for sites that are subject
to or impacted by the City'sRemove the Conditional Use requirement for residential uses in the Research Park zone district, which is specific for the Stanford Research Park, except for properties subject to or impacted by the City’s hazardous materials ordinance. Sites included in Appendix D will have the Conditional Use A requirement removed under Program 1.1.

This will remove a governmental housing hazardous waste ordinance was Stanford Planning and constraint that may encourage greater residential adopted by Council in January

1.5 University Lands Development Services General Fund Complete by January 31, 2025. uses in the Stanford Research Park. 2025.

If Stanford University and long‐term lease holder
are receptive to future residential development, Pending/Not Started. Outreach establish a memorandum of understanding with and engagement with StanfordEngage Stanford University in a dialogue about future multi‐family housing opportunities within the Stanford Research Park, including consideration of a new neighborhood along Foothill Expressway.

Identify locations suitable for housing and mixed‐use development and zoning modifications and B housing incentives as appropriate for consideration in the Seventh Cycle Housing Element Update appropriate stakeholders that identify the
Initiate conversations with Stanford University, Simon Properties, and other location and amount of future housing at these and Simon Properties for possible
residential redevelopment will be
initiated in early 2025.

Stanford Planning and

1.5 University Lands Development Services General Fund stakeholders prior to December 31, 2025. locations by the end of the planning period.

If Stanford University and long‐term lease holder
are receptive to future residential development, Pending/Not Started. Outreach establish a memorandum of understanding with and engagement with Stanford Engage Stanford University and long‐term leaseholder Simon Properties for possible residential redevelopment opportunities at the Stanford Shopping Center for consideration in the Seventh Cycle Initiate conversations with Stanford University, Simon Properties, and other location and amount of future housing at these C Housing Element Update.
appropriate stakeholders that identify the and Simon Properties for possible residential redevelopment will be
initiated in early 2025.

Stanford Planning and

1.5 University Lands Development Services General Fund stakeholders prior to December 31, 2025. locations by the end of the planning period.

Over the planning period, the City anticipates it
would generate approximately twenty million Ongoing/Standard Operations. dollars ($20 M) for use toward affordable housing City regularly monitors available Use funds available through the City’s residential and commercial affordable housing fund to provide gap funding for qualifying affordable housing projects. Housing funds are derived from development Annually review fund balances and if sufficient funds warrant, prepare a and homelessness projects. Based on this
projection, the City would expect to be able to
funds and issued an Affordable
Housing Notice of Funding
Affordable impact fees, in‐lieu inclusionary fees and proceeds from a local business tax approved by the voters in Notice of Funding Availability. The fund balance will vary over time based on support gap funding for the production of 55 Availability in September 2024 Housing

2.1 Development
Planning and
Development Services General Fund
November 2022. The City will continue to seek funding sources, including supporting the ongoing A development of the Bay Area Housing Financing Authority (BAHFA). development activity and for the business tax, first collection is anticipated to start no sooner than January 2024.
affordable housing units during the planning cycle with funds awarded in January or support other housing priorities. 2025.

Use the study to adjust impact fees as necessary
Prepare an updated nexus and feasibility study and adjust the residential and commercial housing development impact fee as appropriate, to support affordable housing production, while ensuring that the fee is set appropriately to maintain project feasibility. As part of this study, the City will engage local developers and building industry stakeholders to gain feedback on impact fees and will Initiate study prior to December 31, 2025 with implementation of adjusted B incorporate feedback into the study.
to support continued contribution to the City’s
affordable housing fund without burdening
housing production with excessive fees that
cannot be supported by the City’s development
standards.

Affordable
Housing

2.1 Development
Planning and
Development Services General Fund impact fees, if needed, by January 2026. Pending/Not Started.

Partner with qualified housing developers to identify affordable housing development opportunities with emphasis on promoting housing choices that serve the needs of special needs populations, including seniors, homeless, female‐headed households, large families, low‐income, and/or persons with disabilities. Opportunities along Alma Street, Embarcadero Road northeast of Highway 101, and the South Ventura neighborhood should be prioritized to provide additional opportunities where C special needs populations are located. Meet annually throughout the housing cycle.

Through annual meetings, identify with partners Ongoing/Standard Operations.

Affordable
Housing

2.1 Development
at least three affordable housing opportunity
sites and facilitate project approval and
permitting to realize implementation.

Meetings have been held with a
number qualified housing
developers..

Planning and
Development Services General Fund
By December 2024 initiate meetings with housing developers to discuss affordable housing opportunities.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
47 Packet Pg. 67 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status Ongoing/Standard Operations.

The City continually shares
Affordable
Housing

2.1 Development
Research and identify additional State and federal funding opportunities for affordable housing projects. Disseminate information on funding opportunities on the City’s website and/or to potential D developers during technical assistance meetings and meetings with housing developers.

Support the development of 1,556 units for very‐ information about affordable Planning and
Development Services General Fund
low income, and 896 units for low‐income housing funding opportunities with several developers.Ongoing task as part of meetings with housing developers. households during the planning period. 15 percent of the net new multi‐family ownership
housing stock will be deed‐restricted to
affordable housing (two‐thirds at 100 percent
AMI and one‐third at 120 percent AMI), except in
instances where an in‐lieu payment may be
accepted. The City will collect in‐lieu payments for
new multi‐family rental housing based on project
floor area times a dollar amount set by the City’s Ongoing/Standard Operations. fee schedule, currently $24.52; payments will be Per Palo Alto Municipal Code, the used to support qualifying affordable housing City continues to require projects. Some rental home builders may elect to developments of three or more provide inclusionary units to qualify for the State net‐new residential units to Density Bonus, in such instances no additional in‐ provide at least fifteen percent of Below Market
Rate (BMR)

2.2 Program
Continue to require development of three or more net‐new residential units to provide at least fifteen (15 percent) of those units as inclusionary units at below market rates for ownership housing A or pay a fee toward the City’s affordable housing fund.

Planning and
Development Services General Fund Ongoing lieu payment will be received. units as BMR inclusionary units.

Update study and present findings to the City
Council with options to modify the City’s
Update the City’s 2020 financial feasibility report prepared by Strategic Economics and research a tiered inclusionary housing requirement for ownership and rental housing where market conditions support a higher inclusionary rate; establish requirements for lower income units at a reduced inclusionary requirement based on feasibility findings and discussion with developers and community inclusionary requirements. If supported, enact
municipal code changes to implement changes.

Implementation of this objective may have the
effect of modifying the quantified objective in A
Below Market
Rate (BMR) Planning and

2.2 Program Development Services General Fund B members. Complete study and implement recommendations by June 30, 2026.

Complete by December 31, 2028.
above. Pending/Not Started.

Pending/Not Started.

Amend the City’s BMR program to ensure continued affordability of income‐restricted ownership Conduct outreach with home builders and other Below Market
Rate (BMR)

2.2 Program
units for the life of the project (exempting certain affordable projects taking advantage of tax credit financing). Once amended, conduct outreach with home builders and other stakeholders regarding stakeholders and draft an ordinance to extend
income restrictions in accordance with the
implementing objective.

Planning and
Development Services General Fund C amended program.

Review the City's Below Market Rate rental procedures for households who exceed the maximum income limit during their tenancy. Update rental procedures to ensure reasonable transition time for households whose incomes increase but end up disqualifying households from deed restricted housing. [Note: this can only apply to units in the City’s BMR program, 100 percent affordable D projects may have other lender‐dictated requirements.] Update rental procedures to respond to input
from rental community to ensure that affordable
housing units are occupied by qualified
individuals.

Below Market
Rate (BMR)

2.2 Program
Planning and
Development Services General Fund Complete by December 31, 2025. Pending/Not Started.

Complete. The Palo Alto
Reduce application processing costs by
approximately $20,000 per affordable housing
application and processed for a planning
entitlement.

Municipal Fee Schedule outlines a
Planning Application Fee Waiver
for 100% Affordable Housing
Projects.

Fee Waivers and Planning and Amend the City’s municipal fee schedule to waive City staff costs associated with the processing of an A affordable housing planning application, except for directly related consultant supported costs.

Prepare an economic feasibility study to analyze implications that the park fee, may have on housing

3.1 Adjustments Development Services General Fund Amend fee schedule by December 2024 production; adjust fees as appropriate to enable a reasonable return on investment and ensure sufficient fee collection to support City services. Complete additional study by December 2025. If study demonstrates that park fees are acting as a constraint on housing production, amend fee B schedule by September 2026.

Fee Waivers and Planning and Complete and implement studies by September 2024. Complete additional study by 2025. Amend fee schedule by September 2026.

In Progress. Initial study has been
completed.

In Progress. Initial study has been

3.1 Adjustments Development Services General Fund
completed. The Municipal Fee
amendment to covert
development impact fees that
are applied on a per unit basis to
a per square foot basis has been
completed.

By September 2024, complete and implement studies to convert existing park, community center, and library development impact fees that are applied on a per unit basis to a per square foot basis.

Complete additional study by December 2025. If study demonstrates that development impact fees are acting as a constraint on housing production, amend fee schedule or modify development C standards by September 2026.

Fee Waivers and Planning and Complete and implement studies by September 2024. Complete additional study by 2025. Amend fee schedule by September 2026.3.1 Adjustments Monitor
Development Services General Fund
Constraints to

3.2 Housing
Planning and
Development Services General Fund
Monitor new local policy initiatives for effectiveness in combatting identified constraints to housing Complete review and implementation of required edits once during the planning period, by January 2027.A development. Ongoing/Standard Operations.

Ongoing/Standard Operations.

When new land use regulations, impact fees, or procedural changes are being considered by the Monitor
Constraints to

3.2 Housing
Monitor
Constraints to

3.2 Housing
Planning and Transportation Commission and City Council, the City shall prepare an analysis in the accompanying staff report detailing how the regulation may impact housing production, if at all, and Complete review and implementation of required edits once during the B provide recommended solutions to address those impacts.

The City shall monitor the application of the Municipal Code standards for potential constraints to housing projects and recommend changes annually, as appropriate, to enhance the feasibility of C affordable housing.

Planning and
Development Services General Fund planning period, by January 2027.

Planning and
Development Services General Fund
Complete review and implementation of required edits once during the planning period, by January 2027. Ongoing/Standard Operations.

In Progress. Ordinance
Amend the zoning code and comprehensive plan recommendation went before as necessary to extend the provision of affordable the Planning and Transportation housing incentive program to sites in the housing Commission in December 2024 Affordable
Housing
Development

3.3 Incentives
Amend the municipal code to extend the affordable housing incentive program to apply to all housing opportunity sites identified in the Housing Element and zoned for commercial, industrial or multi‐family residential use; research potential AHIP regulations for religious institution sites located A in the R1 district with a reduced density provision.

Planning and
Development Services General Fund
inventory and codify additional incentives
described herein.
and is anticipated to go before
the City Council in early 2025.Complete zoning changes by December 31, 2024 Complete zoning changes by December 31, 2024
Amend the affordable housing overlay (incentive program) regulations to allow housing projects to achieve a residential floor area ratio of 2.4:1.0 without requiring commercial floor area (except where required on University and California Avenues). The City will modify AHIP development and parking standards commensurate with FAR increases, and, for housing projects income restricted to 60 percent of the area median income level or below, allow up to sixty (60) feet in height on all B opportunity sites
In Progress. Ordinance
Amend the zoning code and comprehensive plan recommendation went before as necessary to extend the provision of affordable the Planning and Transportation housing incentive program to sites in the housing Commission in December 2024 Affordable
Housing
Development

3.3 Incentives
Planning and
Development Services General Fund
inventory and codify additional incentives
described herein.
and is anticipated to go before
the City Council in early 2025.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
48 Packet Pg. 68 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status In Progress. Ordinance
Amend the zoning code and comprehensive plan recommendation went before as necessary to extend the provision of affordable the Planning and Transportation housing incentive program to sites in the housing Commission in December 2024 Affordable
Housing
Development

3.3 Incentives
Planning and
Development Services General Fund
Amend Zoning Code to incorporate all recent changes to State density bonus law and develop C summary materials to promote the use of density bonuses. inventory and codify additional incentives
described herein.

The timeframes associated with permit
and is anticipated to go before
the City Council in early 2025.Complete zoning changes by December 31, 2024 processing can be viewed as a constraint to
affordable development. The City aims to
In Progress. Ordinance
recommendation went before
Affordable
Housing
Development
complete the processing of planning entitlements the Planning and Transportation Amend the PAMC to streamline all 100% affordable housing development projects. Implement a procedure that prioritizes affordable housing projects for staff resources and, if applicable, hearing D dates, above other projects, regardless of submission date. for affordable housing projects exempt from
environmental review within 90 days from
application submittal.

Commission in December 2024
and is anticipated to go before
the City Council in early 2025.

Planning and
Development Services General Fund3.3 Incentives Complete by December 2024 In Progress. Ordinance
Monitor projects for compliance with desired
review schedule, track application processing
recommendation went before
the Planning and Transportation
timelines and number of applications appealed to Commission in December 2024 Council; use data to inform future modifications and is anticipated to go beforeHousing Incentive Planning and

3.4 Program (HIP) Development Services General Fund
HIP qualifying projects that also comply with City approved objective standards shall be A administratively reviewed with one courtesy meeting before the Architectural Review Board. Revise review process instructions by December 2024.

Complete Municipal Code amendments by December 31, 2024.

Complete Municipal Code amendments by December 31, 2024.

Complete Municipal Code amendments by December 31, 2024. to the HIP program. the City Council in early 2025.

In Progress. Ordinance
recommendation went before
the Planning and Transportation
Commission in December 2024
and is anticipated to go before
Amend the municipal code and comprehensive
plan to codify implementing objective with the
goal of encouraging the development of
Amend the local Housing Incentive Program to include specific expanded development standards, as an alternative to state density bonus provisions. Reduce barriers by removing Planning Director B discretion to define applicable standards in each instance.

Housing Incentive Planning and

3.4 Program (HIP) Development Services General Fund approximately 550 units over the planning period. the City Council in early 2025.

In Progress. Ordinance
recommendation went before
the Planning and Transportation
Commission in December 2024
and is anticipated to go before
Allow for sites subject to the City’s retail preservation ordinance – except in the ground floor (GF) and retail (R) combining districts and strategic locations generally depicted in the draft South El Camino Real Design Guidelines – to have a reduction in the amount of retail replacement floor area needed for redevelopment and waive the retail preservation requirement for identified housing opportunity C sites.

Amend the municipal code and comprehensive
plan to codify implementing objective with the
goal of encouraging the development ofHousing Incentive Planning and

3.4 Program (HIP) Development Services General Fund approximately 550 units over the planning period. the City Council in early 2025.

In Progress. Ordinance
recommendation went before
the Planning and Transportation
Commission in December 2024
and is anticipated to go before
Extend the local Housing Incentive Program to the multi‐family residential districts (RM‐20, RM‐30, and R‐40).as well as the ROLM and GM district focus area The Housing Incentive Program development standards shall be amended to increase height and floor area allowances for housing projects; reduce parking requirements to match or improve upon state density bonus, and D adjustment to other development standards to enable greater housing production.

Amend the municipal code and comprehensive
plan to codify implementing objective with the
goal of encouraging the development ofHousing Incentive Planning and

3.4 Program (HIP) Development Services General Fund approximately 550 units over the planning period. the City Council in early 2025.

In Progress/Ongoing. The effort
to expand the boundaries of the
El Camino Real Focus Area is
underway and a
Expand the geographic boundaries of the El Camino Real Focus Area (adopted in 2023) to incentivize housing production at appropriate locations. Increase building height and floor area ratios and apply other objective standards, such as transitional height restrictions, to address single family zoning E district adjacencies. The proposed standards will be an alternative to the state density bonus. recommendation is expected to
Amend municipal code with the goal of go before the Planning and encouraging development of approximately 500 Transportation Commission inHousing Incentive Planning and

3.4 Program (HIP) Development Services General Fund Complete municipal code amendments by June 30, 2025.

Complete by June 30, 2024 and maintain annually thereafter. units over the planning period. spring 2025.

Ongoing/Standard Operations.

An updated version of the City
Summary Guide to ADUs andAccessory
Dwelling Unit Planning and Develop, maintain and update a City Summary Guide to ADUs and JADUs to promote, educate, and A assist homeowners with developing ADUs/JADUs.

Facilitate the development of 512 ADUs over the JADUs was made available in

3.5 (ADU) Facilitation Development Services General Fund planning period. 2024.

In Progress. Resources on
Provide informational workshop(s) and publish resources on City’s website on building ADUs and JADUs. Target outreach to property owners in neighborhoods designated as racially concentrated Facilitate construction of 512 ADUs over the
planning period, with a goal of at least 128 (25%) published on the website in 2024. building ADUs and JADUs were
Accessory
Dwelling Unit Planning and areas of affluence to promote housing mobility for lower‐ and moderate‐income households. Provide Publish material on the City’s website by December 2024 and facilitate one B workshops and materials in English, Spanish, and Chinese. workshop annually in multiple languages. of these to be in neighborhoods with higher
median incomes.

Facilitate construction of 512 ADUs over the
Staff is available to provide
information as needed.3.5 (ADU) Facilitation Development Services General Fund Accessory planning period, with a goal of at least 128 (25%) In Progress. An ADU Plans Gallery Dwelling Unit Planning and In accordance with AB 1332, and in coordination with Santa Clara County’s ongoing efforts, develop a Create program by January 1, 2025 and annually inform residents and of these to be in neighborhoods with higher median incomes.

Prepare bi‐annual reports documenting findings
is available on the City's ADU
webpage.3.5 (ADU) Facilitation Development Services General Fund C program for pre‐approved standards for ADU foundation plans or prefabricated plans. developers of available plans. to facilitate construction of 512 ADUs over the
planning period, with a goal of at least 128 (25
Meet with ADU stakeholders at least once every two years starting in 2024; percent) of these to be in neighborhoods with Accessory
Dwelling Unit
Continue to monitor and publish information related to ADU production and application review timelines; meet with ADU stakeholders and review application processing performance to identify D potential impediments and make adjustments as needed.

In progress. Quarterly reports are
published related to production
and review timelines.

Planning and

3.5 (ADU) Facilitation Development Services General Fund prepare information reports bi‐annually. higher median incomes.

Accessory
Dwelling Unit
Eliminate variations in impact fees for similarly
sized ADUs to increase the supply of affordable
housing in higher opportunity areas
Planning and Realign development impact fees for ADUs larger than 750 sq. ft. to utilize per‐square‐foot E methodology, likely reducing fee applied to ADUs.

Complete. Impact fees for ADUs
have been realigned.

Ongoing/Standard Operations.

3.5 (ADU) Facilitation Development Services General Fund Adopt changes to fee schedule by September 2024.

Initial ordinance amendment has
taken place. Staff monitors ADU
law to ensured continued
Accessory
Dwelling Unit
Amend ordinance by May 2023. If further amendments are made to state ADU law, amend ordinance within 6 months to ensure continued compliance Ensure that the City’s ADU ordinance complies with ADU law. with State law.

Planning and

3.5 (ADU) Facilitation Development Services General Fund F Amend ADU ordinance as required to comply with State law and submit to HCD compliance with State law.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
49 Packet Pg. 69 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status Review ADU production and affordability levels every two years to determine if assumptions made in Housing Element are accurate. Prepare and circulate survey of ADUs to determine affordability levels and determine where any improvements can be made to the process and whether non‐governmental constraints to construction of ADUs, such as financing and construction costs, are restricting Meet with ADU stakeholders at least once every two years starting in 2024. development. If assumptions are not met, and depending on the results of the survey, take additional Review ADU trends every two years starting in January 2025. If assumptions Undertake affordability survey and prepare bi‐ actions, which could include additional public outreach efforts, modifications to process, pre‐ are not met, take actions within six months of receiving results to increase annual report documenting findings to promote In progress. Quarterly reports are approved plans, additional zoning flexibility, ADU incentives, financial assistance, and identification of ADU production and ensure that the City continues to have adequate Accessory
Dwelling Unit Planning and income integration and increase the supply of affordable housing in higher opportunity areas
published related to production
and review timelines.3.5 (ADU) Facilitation Development Services General Fund G new sites. housing sites.

Amend the Municipal Code to exempt housing projects from Architectural Review to the extent they comply with the City’s objective design standards, requiring only one study session or courtesy review by the Architectural Review Board. Clarify staff‐level approval process for ministerial and by‐right A reviews.

Expedited Project Planning and

3.6 Review Development Services General Fund
Development Services General Fund
Complete by January 31, 2024. Complete.

The City aims to complete the processing of
planning entitlements for housing projects
exempt from environmental review within 90 City‐Expedited Project Planning and

3.6 Review
For projects subject to Architectural Review, develop process for early review by the ARB (within 45‐ B 60 days of submittal), even if application is not yet complete. Implement by December 2024.

Complete by July 1, 2024
processing days from application completeness. Pending/Not Started.

Provide a no‐cost pre‐consultation meeting for up
to 120 minutes for any multi‐family housingExpedited Project Planning and Formalize a procedure to offer no‐cost pre‐application consultation services for new housing C developments.

Complete. Process has been
implemented as of June 30, 2024.3.6 Review Development Services General Fund project.

Amend the zoning code to limit multi‐family
housing projects to two hearings before the City’s
ARB unless additional review is agreed upon by
the home builder and City; document the City’s
performance.

Complete. The ordinance
amendments was adopted by
Council in January 2025.

Expedited Project Planning and For housing projects subject to the City’s Architectural Review Board, limit the number of hearings D before the ARB to a maximum of two meetings.3.6 Review Development Services General Fund Complete by December 31, 2024 Objective Design
Standards for

3.7 SOFA
Planning and
Development Services General Fund
Develop Objective Design Standards for the SOFA Area to accommodate future residential A development at higher densities.

Support additional residential development
proposed for the SOFA area.Complete and adopt objective design standards by December 31, 2026 Pending/Not Started.

Complete.

Zoning Ordinance Planning and

3.8 Monitoring Development Services General Fund
Amend the zoning code to ensure compliance with all provisions of current state law as specified in A Program 6.5.

Ensure that the zoning code is consistent with
state law.Complete by December 31, 2023
In addition, by December 31 of each year, review adopted changes in state law effective January 1 of the next year and adopt additional ordinance changes as required to comply with state law. This program would continue to be implemented on an ongoing basis through the remainder of the planning period as state law is amended.

Ongoing/Standard Operations.

Staff regularly monitors changes
in State law.

Zoning Ordinance Planning and

3.8 Monitoring Development Services General Fund
Review future adopted changes in state law and adopt additional zoning ordinance changes as B required to comply with state law.

Ensure that the zoning code is consistent with
state law.

Conversion of
Commercial Uses
to Mixed‐Use
Amend the City’s Municipal Code to reduce commercial floor area allowances or other commercial incentives at strategic locations to shift the economic benefit of redevelopment toward home A building.

Planning and
Development Services General Fund
Support the development of 716 units on sites
with existing commercial uses.

In Progress. The project has been
initiated.3.9 Development Complete amendments to Municipal Code by December 31, 2025 The City shall conduct outreach with home builders and other stakeholders to assess the feasibility of marketing different housing typologies without on‐site parking (paid through an in‐lieu fee) and the implications for City parking resources. Findings will be presented to the City Council along with options on how to proceed, including the potential extension of the University Avenue In‐Lieu Parking program to residential projects and the creation of an in‐lieu parking program for the California Conversion of
Commercial Uses
to Mixed‐Use Planning and
Development Services General Fund
Present findings to City Council by December 31, 2025 with amendments to municipal code by December 31, 2026.

In Progress. The project has been
initiated.3.9 Development B Avenue area.

Enforce replacement housing requirements as required by state law. Amend the City’s municipal code to require all sites listed in the housing element, all projects utilizing density bonuses, and all projects demolishing residential dwelling units to meet the replacement housing requirements of state law contained in housing element law, density bonus law, the Housing Crisis Act of 2019 as amended by replacement housing requirements. Adopt ordinance as part of planned Continue to implement state law for all development projects subject to Complete. The ordinance amendments were adopted by
Council in January 2025.

Replacement

4.1 Housing
Planning and
Development Services General Fund
Amend the municipal code to implement
replacement housing obligations.

Prepare relevant information, provide to all
A AB 1218. rezonings by January 31, 2025.

Housing and
Neighborhood

4.2 Preservation
Annually communicate with renters through direct mailing to multi‐family apartment buildings and through the City’s website, resources available to renters, including expectations for housing quality A and steps to take for suspected substandard housing conditions. renters by mail, and post online, implement best
outreach approaches to communicate withPlanning and
Development Services General Fund Initiate in 2025 and annually thereafter. renters. Pending/Not Started.

Staff will respond to any complaints received,
conduct code inspections of all reported units,
provide access to relevant information, and,
when necessary, connect the complainant with
mediation services offered by the City through a partners with a non‐profit service contract provider, or undertake enforcement
Ongoing/Standard Operations.

City responds to complaints
received as appropriate and
In response to any complaint about substandard housing received by the City’s Code Enforcement Program, staff will provide information to the resident or homeowner about the City’s Rehabilitation Program and conduct residential code inspections to determine if the property is substandard in accordance with PAMC 16.40.020 and the state Housing Code. If the property is substandard, the City B will begin code enforcement action.

Housing and
Neighborhood

4.2 Preservation
Planning and
Development Services General Fund
provider to offer mediation
services.Ongoing. action, as appropriate.

Disseminate information to the public to increase
the awareness of support for tenant protections
with the goal of reaching at least five new
households annually. The City will engage with
community‐based organizations to gauge the
effectiveness of the workshops. If new
households are not reached, City will increase
outreach efforts.

Ongoing/Standard Operations.

City has held multiple workshops
to provide housing resources
throughout the year, in part
through contract with non‐profit
service providers.

The City will conduct increased outreach to increase awareness of housing resources, fair housing workshops, and tenant protection. Specifically, the City will conduct at least one fair housing workshop annually for community‐based organizations that serve residents and housing providers in areas of the City with the highest number of substandard housing complaints to Code Enforcement.

C Non‐profit partners provide fair housing information and advice to individual tenants.

Housing and
Neighborhood

4.2 Preservation
Planning and
Development Services General Fund Ongoing and annually, with first workshop to occur by December 2024.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
50 Packet Pg. 70 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status The City will develop options for limiting short‐term rentals in all areas of the City to ensure housing stock is used for long‐term rentals. Strategies to evaluate include prohibiting short‐term rentals (no less than 30 days allowed), limiting the number of days the unit can be used for short‐term rentals, prohibiting short‐term rentals in all multi‐unit dwellings, allowing for short‐term rentals only if the property is the owner’s primary residence, and benchmarking the number of short‐term rentals D allowed to no more than a specific percentage of the community’s rental housing stock Housing and
Neighborhood

4.2 Preservation
Initiate study of short‐term rentals in 2025 and determine impact on City housing supply. Adopt ordinance by July 1, 2027 to limit short‐term rentals as required to minimize impacts on properties available for long‐term use.

Planning and
Development Services General Fund Pending/Not Started.

Housing and
Neighborhood

4.2 Preservation
Initiate study of short‐term rentals in 2025 and determine impact on City housing supply. Adopt ordinance by July 1, 2027 to limit short‐term rentals as required to minimize impacts on properties available for long‐term use.

Planning and
Development Services General Fund
The City will evaluate the feasibility of adding regulations to incentivize the use of housing units for E residential purposes to support retention of housing stock.

Amend the municipal code to codify regulations
limiting short‐term rentals. Pending/Not Started.

Ongoing/Standard Operations.

City continues to partner with
home rehabilitation
organizations to support home
repair needs of low‐income
homeowners.

Home

4.3 Rehabilitation
Planning and
Development Services CDBG
General Fund & Continue to work with home rehabilitation organizations to assist qualifying low‐income A homeowners with home rehabilitation projects.

Disseminate information to the public to increase
the awareness of support for home rehabilitation
with the goal of reaching at least five new
households annually.

Home

4.3 Rehabilitation
Planning and
Development Services CDBG
General Fund & Develop CDBG outreach program to educate residents about opportunities for services, such as RV B parking and rental assistance regarding mediation.

Develop program by December 2026. The City’s partnership with home rehabilitation organizations is ongoing. Pending/Not Started.

Ongoing/Standard Operations.

City continues to partner with
home rehabilitation
organizations to support home
repair needs of low‐income Palo
Participate and remain in good standing with the Alto homeowners and monitors CBDG program, with the goal of providing funding availability of funds to supportAnnually dedicate CDBG funds as available to support the City’s Rehabilitation Program; seek additional funding to supplement CDBG funding to expand the program and recipients to households C above low‐income levels.

Home Planning and General Fund & to support the rehabilitation of at least five homes annually
households at other income
levels.4.3 Rehabilitation Development Services CDBG Annually budget CDBG funds for City’s Rehabilitation Program.

Disseminate information to the public to increase
the use of available CDBG funds with the goal of
supporting the rehabilitation of at least 5 homes Ongoing/Standard Operations. annually. Market home rehabilitation program City conducts annual outreach opportunities as part of Housing Resources Fair. and workshop to increase City will conduct increased outreach to increase awareness of CDBG funds and availability of said funds. The City will conduct one CDBG workshop annually to disseminate information regarding Home

4.3 Rehabilitation
Planning and
Development Services CDBG
General Fund & program requirements and availability of funds. The City will also update their website annually with Ongoing and annually, with first workshop to occur by December 2024 and Continue to update the new Housing Portal on the City’s website.
awareness of availability of CDBG
funds.D information on the program. website updated after adoption of each CDBG budget.

Amend the City’s seismic regulations to advance
implementation objective, including a compliance
schedule for approximately 130 soft‐story multi‐
family buildings in Palo Alto located near
Amend the City’s seismic hazards identification program to strengthen regulations and require seismic upgrades of vulnerable housing stock through a combination of mandatory provisions and A voluntary incentives.

Downtown, Midtown and the Ventura
neighborhood, along California Avenue, College
Terrace, San Antonio Road, and elsewhere.

Planning and
Development Services General Fund
In progress. The effort has been
initiated.4.4 Seismic Retrofit Initiate effort in 2024 begin outreach in 2025, complete by 2026.

Establish list by December 31, 2026.

Encourage Local

4.5 Hiring
Planning and
Development Services General Fund
Develop local labor program list. Establish and post a list of local labor unions and apprenticeship A programs on City’s website and encourage developers and contractors to hire local labor. Develop local labor program list.

Track the status of units with high risk of
Pending/Not Started.
conversion to market‐rate to preserve
affordability for extremely low and very low
income households.

Ongoing/Standard Operations.

Staff continually monitors status
of units at high risk of conversion.

Preservation of At‐ Planning and

5.1 Risk Housing Development Services and HOME
General Fund Monitor the status of the 72 units at high risk of conversion to market rate units during the planning A period and seek to preserve these affordable units at their existing affordability levels.

Provide direct notification to property owners and tenants of low‐income deed restricted housing units of the state requirement to notify affected households about the termination of the Monitor annually.

Preservation of At‐ Planning and General Fund Mail requirements to qualifying property owners In Progress. First mailing to occur

5.1 Risk Housing Development Services and HOME B affordability restrictions at six and twelve months, and three years. Twice during the reporting period, once in 2024 and again in 2028.

Send notice to property owner three years prior to potential project as specified. in early 2025.

Inform property owners of their obligation to comply with noticing requirements stipulated under Ongoing/Standard Operations. state law to ensure that qualified nonprofit entities from the State’s qualified entities list are Ensure qualified non‐profit entities are notified of Staff continually monitors Preservation of At‐ Planning and General Fund informed of the opportunity to acquire the affordable property and that tenants are informed about conversion. Provide follow‐up with contacts one years and six months prior acquisition opportunities and to ensure tenants affordable units that are at‐risk

5.1 Risk Housing Development Services and HOME C their rights and potential resources. to conversion if property owner fails to comply. are aware of the impending changes. of conversion.

Ongoing/Standard Operations.

Contingent on funding availability, in the event that a property is scheduled for conversion, contact property owner regarding funding availability. If the property owner intends to sell the property D encourage sale to a qualified non‐profit entity.

Continue to engage with HUD and the property owner of 4230 Terman Drive (Terman Apartments) Staff continually monitors
affordable units that are at‐risk
Incentivize the sale to a qualified non‐profit entity. of conversion.

Preservation of At‐ Planning and

5.1 Risk Housing Development Services and HOME
General Fund Inform property owner three years prior to potential project conversion whether funding is available to preserve the affordability restrictions. with 72 affordable housing units at risk of conversion to market rate units during the housing cycle to explore opportunities for continued affordability. At present, the owners have no intention to sell the project or transfer the affordable units out of the Section 8 contract, based on correspondence with a E HUD representative on September 14, 2022.

Preservation of At‐ Planning and

5.1 Risk Housing Development Services and HOME
General Fund Preserve 72 affordable housing units that are at risk of conversion.

In Progress. Conversation with
Initiate conversation in 2024. HUD was initiated in 2024.

Complete. Certified Housing
Element has been shared with
the City's Utility Department.

In Progress. Affordable Housing
Guidelines update to be
Water and Sewer Planning and

5.2 Suppliers Development Services General Fund
Provide a copy of the adopted 2023‐31 Housing Element to the City’s Utility Department, which A provides water and sewer service to the City.

Update Utilities Department Rules and
Regulations.Within 30 days of adoption.

Housing for
Persons with Planning and General Fund & For extremely low‐income housing units, update the City’s affordable housing guidelines to establish

6.1 Special Needs Development Services CDBG A preferences for populations with special needs in those units. Adopt revised guidelines by December 31, 2024. approved in early 2025.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
51 Packet Pg. 71 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status Ongoing/Standard Operations.

The City continues to contract
Housing for
Persons with

6.1 Special Needs
Contract with and financially support non‐profit services providers through the Community Development Block Grant program, such as the Opportunity Center, that help meet the supportive B services needs of the City’s diverse community, especially those with extremely low incomes.

Support the Opportunity Center with the goal of with multiple organizations to providing services to 50 low‐income households provide supportive services toPlanning and Development Services CDBG
General Fund &
Starting in 2023 and annually thereafter, as funds are available. during the planning period. residents.

In order to assist in the housing needs for special needs populations, the City will facilitate the development of housing for persons with disabilities through incentives including streamlined processing, scoring priorities in future Notices of Funding Availability, and/or direct subsidies drawing from City affordable housing funding such as CDBG, HOME, Affordable Trust fund, and other State/federal funding sources for affordable housing development with services, resources, and assistance: a)Establish procedures by June 2024 in Notice of Funds Available (NOFA) that create incentives for the development of various types of housing units, including units for persons with disabilities and seniors, such as bonus points or preference for special needs housing. b)Annually engage with housing stakeholders and housing providers, on the identification of needs and new solutions, including lessons learned from the operators of the City’s recently approved AB2162 Ongoing/Standard Operations.

The City awarded funds through
an Affordable Housing NOFA
issued in September of 2024 and
Meet annually with housing service providers and remains in conversation with the Santa Clara County representatives to identify housing stakeholders and opportunities to further support special needs providers. A proposed 100% Housing for
Persons with

6.1 Special Needs
Housing for
housing project for persons with disabilities. c)Partner with the County and other agencies to pursue Conduct outreach to housing providers and County starting in 2024 and populations. Develop at least 5 units annually for affordable development in Palo Planning and
Development Services CDBG
General Fund & funding sources, such as County Measure A funds, designated for housing for special needs groups, C including persons with disabilities.
annually thereafter. Prepare a NOFA in 2024 and review annually thereafter a total of 40 housing units for special needs Alto received Measure A funding based on adequate availability of funds. households in 2024.

Continue to implement the Municipal Code and facilitate requests for reasonable accommodation to Persons with Planning and General Fund & land use decisions and procedures regulating the siting, funding, development, and use of housing for Annually report on reasonable accommodation requests received, and their Support the development of additional housing

6.1 Special Needs Development Services CDBG D people with disabilities. outcomes, in the Annual Progress Report.

Support additional development of large housing units in areas with larger opportunities for those with disabilities. Ongoing/Standard Operations.

Research and implement incentives to encourage larger units, such as FAR exemptions for three or more bedroom units, and creation of family‐friendly design standards. Meet with housing stakeholders and conduct public hearings before the Planning and Transportation Commission to concentrations of overcrowding (along Embarcadero Road northeast of Highway 101 and south of Alma Street) through code amendments that incentive large family housing units and family‐friendly designs, with the goal In Progress. As part of HIP/AHIP
Ordinance, provisions are
Family Housing

6.2 and Large Units
Planning and
Development Services General Fund
receive public and commissioner input on ways to achieve stated objective. Make recommendations of a housing stock where large units comprise 10 percent of all new rental A to Council and follow up with an ordinance to effect a change in local zoning regulations as directed. units.

Initiate study of possible incentives by June 2025 included to incentivize larger and adopt recommended actions by June 2026.

Development of 40 net new units, other than
units.

Increase the floor area limitation from 800 to 1,200 square feet per unit for SB 9 projects that result in creation of three or more detached units on a single‐family lot. Refine objective design standards A and development standards based on experience with project applications.

ADU development, on single‐family zoned lots in
racially concentrated areas of affluence during
the planning period
Development of 40 net new units in smaller‐scale
development projects in racially concentrated
Middle Housing

6.3 Program
Planning and
Development Services General Fund Initiate by 2025, complete by December 2026.

See timeframes for referenced programs
Pending/Not Started.

Middle Housing

6.3 Program
Planning and
Development Services General Fund
Prioritize adoption of development standards that support smaller‐scale “missing middle” B development when implementing Programs 1.1, 3.4, 3.5, and 3.6 Expand geographic and service areas of the City’s Safe Parking Program. Research the feasibility and areas of affluence.

Support the City’s existing population living in
Ongoing/Standard Operations.
extend the safe parking program to City parks, parking lots and commercial lots. Expand program services to include case management and explore opportunities to provide supervised access to City A facilities.
vehicles by annually moving 40 percent of
individuals using Safe Parking to housing as it
becomes available.

Homelessness

6.4 Program
Planning and
Development Services General Fund Initiate by 2026, complete by December 2028.

Complete by December 2023.

Pending/Not Started.

Complete. A Social Services
directory has been created and
widely distributed.

In Progress. A security deposit
Homelessness

6.4 Program
Planning and
Development Services General Fund
Create a social services directory and make it available to residents at public counters, on the City B website, and at Safe Parking areas.

Expand the City’s homeless prevention program to include renter protections, including security deposit limits, eviction reductions and financial assistance for utilities. Identify funding sources, such as Human Services Resource Allocation Process (HSRAP) funds to support households at risk of homelessness; engage with homelessness stakeholders, conduct hearings before the Planning and Transportation and City Council and make recommendations to support objective; implement based limit of 1.5x of monthly rent was
adopted by City Council in 2023.

Just cause eviction protections
were enacted by City Council in
2023.

Homelessness

6.4 Program
Planning and
Development Services General Fund
Adopt new renter protection ordinances to
advance objective.

Advance the project and ensure robust uptake by
C on available funding. Initiate code amendments in 2023 and complete by June 2024.

Continue to pursue the Homekey Palo Alto at 1237 San Antonio Road for use as a temporary bridge housing facility to provide accommodations for individuals who are actively engaged in services leading to permanent housing. Engage with stakeholders, including the State Department of Housing and Community Development, LifeMoves, Santa Clara County Office of Supportive Housing, and the Continue engagement efforts on an ongoing basis throughout the planning engaging in ongoing outreach to the unhoused,
ensuring support services, connectivity, and
transitional housing for, at a minimum 88
households annually.

In Progress. City is monitoring the
progress of the Project Homekey
project, which is currently under
construction.

Homelessness

6.4 Program
Planning and
Development Services General Fund D Santa Clara County Housing Authority. period.

Ongoing/Standard Operations.

City regularly accesses suitability
of new sources of funding to
support the homeless population
and those at risk of homelessness.

Explore and implement, where feasible, additional opportunities for Homekey funding or other similar funding sources to convert hotels to permanent or interim housing for persons experiencing homelessness or at risk of homelessness. Work with stakeholders to identify additional funding E opportunities and locations to support homelessness population and those at risk of homelessness. Ongoing Coordinate with HIP Housing or similar house sharing services to provide shared housing Homelessness

6.4 Program
Planning and
Development Services General Fund
Planning and arrangements. Identify opportunities to extend home sharing services to Palo Alto and promote on A the City’s website as appropriate
In Progress. Discussions have
been initiated.6.5 Alternate Housing Development Services General Fund Initiate conversations in 2024.

Allow innovative housing structures, such as micro‐unit housing and new shared and intergenerational housing models, to help meet the housing needs of aging adults, students, and lower‐income individuals citywide. Meet with housing stakeholders and conduct public hearings before the Planning and Transportation Commission to receive public and commissioner input on ways to achieve stated objective. To the extent that density presents a constraint on development of alternative housing types, identify sites where elimination of maximum dwelling units per acre is appropriate. Because impact fees assessed per unit inordinately impact alternative housing types, adjust fees to apply to square footage. Make recommendations to Council and follow up with an B ordinance to effect a change in local zoning regulations as directed.

Initiate study of alternative models in 2024 and present initial findings in 2025 to Commission, public, and stakeholders. Adopt ordinance revisions as appropriate before December 31, 2026. Adjust fees to apply by square footage, to encourage alternative housing types, in Fall 2024 Planning and In Progress. Project has been
initiated.

Complete. The ordinance
amendments were adopted by
Council in January 2025.

6.5 Alternate Housing Development Services General Fund Planning and Amend the PAMC to include group homes by right in all residential zones. Include a set of objective C standards to provide certainty to applicants through the permitting process.6.5 Alternate Housing Development Services General Fund Adopt ordinance amendments by June 2025.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
52 Packet Pg. 72 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status Amend the PAMC to be consistent with Government Code Sections 65650 et seq., which require that Supportive Housing meeting the standards in the statute be treated as a by‐right use where multifamily and mixed uses are permitted, including nonresidential zones permitting multifamily uses.

Amendments will also be made to allow transitional and supportive housing, as defined in Government Code Section 65582, to be permitted as a residential use in all zones allowing residential uses and only subject to those restrictions that apply to other residential dwellings of the same type D in the same zone.

Complete. The ordinance
amendments were adopted by
Council in January 2025.

Planning and

6.5 Alternate Housing Development Services General Fund Adopt ordinance amendments by January 2025 Amend by January 2025
Amend the PAMC to be consistent with Government Code sections 65660 et seq., which require a Low Barrier Navigation center to be a use by‐right in areas zoned for mixed‐use and nonresidential E zones permitting multifamily uses, provided specific requirements of the law are met.

Amend the PAMC parking regulations for Homeless and Emergency Shelters and Navigation Centers Complete. The ordinance
amendments were adopted by
Council in January 2025.

Planning and

6.5 Alternate Housing Development Services General Fund to comply with Government Code section 65583, subdivision (a)(4)(A). Allow emergency shelters in the ROLM(E) zone to be approved ministerially, without discretionary action, remove distance requirements, adjust length of stay requirements, and ensure that the development standards for F shelters are in compliance with statutory requirements Complete. The ordinance
amendments were adopted by
Council in January 2025.

Planning and

6.5 Alternate Housing Development Services General Fund Amend by January 2025 Amend by January 2025
Amend the PAMC zoning code to ensure compliance with the Employee Housing Act (including California Health and Safety Code sections 17021.5, 17021.6, and 17021.8) to state that farmworker housing up to 36 beds or 12 units are to be permitted as an agricultural use and therefore “by right” in the AC and OS zones and no discretionary permit would be required of employee housing providing accommodation for six or fewer employees if discretionary permits are not required of a family G dwelling of the same type in the same zone.

Complete. The ordinance
amendments were adopted by
Council in January 2025.

Planning and

6.5 Alternate Housing Development Services General Fund Outreach to 100 residents, housing providers, and
housing professionals. Prioritize neighborhoods
with lower income residents and cost burdened
Ongoing/Standard Operations.

The City has contracted with aDistribute educational materials to property owners, apartment managers, and tenants relative to fair housing requirements, regulations, and services via public counters, the City’s website, social media, community announcements and in response to telephone inquires. Provide materials in A English, Spanish, and Chinese.

City will require affirmative marketing of all residential projects and will require developers to renters, including at least 20 individuals in South fair housing services organization Planning and General Fund Ventura and North of Downtown, adjacent to Initiate first distribution by May 31, 2024 and implement annually thereafter. Menlo Park. to conduct outreach and
distribute materials.6.6 Fair Housing

6.6 Fair Housing
Development Services and CDBG
advertise to under‐represented, socio‐economically sensitive communities (as defined in Appendix C, AFFH Analysis) along Alma Road to indicate the availability of housing units that meet affordable B housing requirements.

Complete. Affirmative marketing
Inclusion of marketing materials as a condition of of residential projects is requiredPlanning and General Fund Development Services and CDBG Develop policy and initiate by May 31, 2024. residential permit approvals Citywide. as a condition of approval.

Improve assets in areas of lower opportunity and
Prepare an area plan for the San Antonio Road Corridor, including the ROLM/GM Focus Area.

Collaborate with local organizations and residents to facilitate neighborhood planning that integrates housing with safe multi‐modal transportation and provides access to amenities, parks and open C space, placemaking improvements, and mitigations for environmental impacts. in
areas projected for growth in lower income
housing, along the San Antonio
Road corridor.

In Progress. Work has been
initiated on the San Antonio AreaPlanning and
Development Services and CDBG
General Fund

6.6 Fair Housing Initiate work on area plan by December 31, 2024. Plan.

Ongoing/Standard Operations.

The City has contracted with a
fair housing services organization
to support the public awareness
of related programs and
opportunities.

Ongoing/Standard Operations.

The City has contracted with a
non‐profit service provider to
conduct compliance testing.

Ongoing/Standard Operations.

The City continues to allocate
CDBG funding to fair housing‐
related service providers.

Provide public announcements, via different media (e.g., social media, newspaper ads, and public service announcements at local radio and television channels) related to fair housing programs and opportunities for Palo Alto residents. Public announcement will be provided in English, Spanish, andPlanning and Development Services and CDBG
General Fund Provide biannual announcements during the
planning period.6.6 Fair Housing

6.6 Fair Housing

6.6 Fair Housing
D Chinese. Initiate in January 2024 and biannually thereafter.

Ongoing; maintain contract with non‐profit service providers.

Annually as part of the CBDG update.

Partner with non‐profit service providers to conduct random compliance testing of rental properties in South Ventura at least twice per year during the planning period. Refer individuals to State Fair Employment and Housing, HUD Fair Housing and Equal Opportunity division, and other legal services E as appropriate
Aim to reduce fair housing complaints by
approximately 10 percent annually in the years
following implementation of this program.

Planning and
Development Services and CDBG
General Fund
Planning and
Development Services and CDBG
General Fund Allocate annual funding for fair housing services through the Action Plan process for the use of CDBG F funds.

Continue to require mixed‐income developments accessible to lower income residents citywide, especially in high opportunity and resource‐rich areas through use of the City’s Below Market Rate (BMR) requirements. Continue to give priority for use of Housing Trust Funds, development of city‐ owned properties, and use of grant funding for housing to projects located in high opportunity and G resource‐rich areas. Pursue additional funding sources, such as State grants.

Support the development of 1,556 units for very‐ Ongoing/Standard Operations. low income, and 896 units for low‐income The City continues to enact its Ongoing as housing projects are proposed and City prepares notices of grant households in high opportunity and resource‐rich Below Market Rate HousingPlanning and Development Services and CDBG
General Fund

6.6 Fair Housing

6.6 Fair Housing
funding. during the planning period. requirements.

Ongoing/Standard Operations.

The City continues to monitor
available funds and apply as
In addition to existing funding, develop or identify a source for the City to provide expanded funding to non‐profit service providers. Ongoing and expanded funding will support efforts to address housing discrimination in the City, to conduct site tests, and to educate the general public on fair H housing issues.

Planning and
Development Services and CDBG
General Fund Identify and, if applicable, prepare an application for new funding by Fall 2024.

Goal for expanded funding to reach an additional applicable, such as for the HCD 20 residents annually. Encampment Resolution Funding.

In Progress. A security deposit
limit of 1.5x of monthly rent was
adopted by City Council in 2023.

Just cause eviction protections
were enacted by City Council in
2023. The City's Rental Registry
Program implementation began
in 2024. Staff will receive
Adopt tenant protections to prevent anti‐displacement including the following: eviction reduction; rental registry program; security deposit limit; right to counsel. Specific proposals include: Fair Chance Ordinance for persons with criminal records, self‐funded rental registry and survey program; expanding AB 1482 protections to apply to new construction and limiting security deposits 1.5x of monthly rent for unfurnished units. Local relocation assistance requirements were significantly I expanded in 2022.

Begin implementation in December 1, 2023 with implementation completed Develop a database for tracking tenant by the following dates: June 2024 (Fair Chance Ordinance, rental registry program, eviction reduction and security deposit limit legislation) and December 2027 (right to counsel)
displacement and evictions to establish baseline, additional direction on the a Planning and General Fund trends, and develop policies that would reduce unjust evictions.
potential Fair Chance Ordinance
in early 2025.6.6 Fair Housing Development Services and CDBG Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
53 Packet Pg. 73 of 246

Implementing
Objective #Program # Program Text Responsible Agency Funding Source Implementing Objective Time Frame Quantified Objective Status As state law permits, require a 90‐day notice for a rent increase of 6% instead of the State’s 10% Planning and General Fund threshold for noticing. Provide educational materials to landlords and tenants as part of Programs 6.6 Begin implementation in December 1, 2023, with legislation adopted by June

6.6 Fair Housing Development Services and CDBG J A, B, D, and L. 2024. Pending/Not Started.

Ongoing/Standard Operations.

Promote Housing Choice Vouchers to support housing mobility by educating landlords about income discrimination (i.e., Cannot post “NO Section 8” on applications), with a goal to increase acceptance of Housing Choice Vouchers in high opportunity and high resource areas. Include educational K materials as part of Programs 6.6 A, B, D, and L.

Assist 200 households annually or the number of The City has provided mailings vouchers allocated under the housing choice
voucher program, including project‐based
vouchers
and workshops for landlords to
provide education regarding
income discrimination.

Planning and
Development Services and CDBG
General Fund

6.6 Fair Housing Ongoing
Ongoing/Standard Operations.

The City has contracted with a
fair housing services organization
to educate tenants and landlords
throughout the year. This
Work with non‐profit service providers and renter organizations to conduct an annual workshop in the South Ventura and Downtown North neighborhoods to educate tenants and landlords about fair L housing requirements.

Aim to reduce fair housing complaints by
educating at least 20 tenants and landlords
annually
includes multiple workshops for
tenants and landlords regarding
fair housing requirements.

Ongoing/Standard Operations.

The City has contracted with a
fair housing services organization
to respond to discrimination
complaints and provide
Planning and
Development Services and CDBG
General Fund

6.6 Fair Housing

6.6 Fair Housing
Ongoing, annually.

Ongoing.

Work with non‐profit service providers to respond to complaints of discrimination (i.e. intaking, investigation of complaints, and resolution) within 3 days and follow up with information on the M resources and services available through fair housing services.

Planning and
Development Services and CDBG
General Fund Aim to reduce fair housing complaints by
ensuring timely attention to complaints. mediation services.

Ongoing/Standard Operations.

The City has contracted with a
fair housing services organization
to educate tenants and landlords
throughout the year. This
Educate tenants and landlords about their rights and responsibilities related to relocation assistance required by the City or state law in the event of an owner move‐in, Ellis Act eviction, or property redevelopment. Conduct one workshop for tenants and one workshop for landlords annually, in N multiple languages
Planning and General Fund Aim to educate at least 20 tenants and landlords includes multiple workshops for

6.6 Fair Housing

6.6 Fair Housing
Development Services and CDBG Annually.

Ongoing
annually. tenants and landlords.

Establish a complaint tracking system by June
2024 through Code Enforcement with a goal of
minimizing complaints through outreach and
Ongoing/Standard Operations. A
complaint tracking system
education and of ensuring that all tenants receive through Code Enforcement is inPlanning and General Fund Enforce relocation payment required through imposition of liens in cases where landlords fail to pay O required assistance.Development Services and CDBG required relocation payments place.

Ongoing/Standard Operations.

The Planning and Development
Services Department regularly
communicates with the Human
Services team. Collaborative
events are held to engage the
City's most vulnerable
populations, such as a May 2024
Resource Fair for the unhoused
and their allies.

Partner with Human Services for community outreach with a focus on additional engagement to traditionally underrepresented groups. Meet with Human Services representatives bi‐annually to formulate strategies aimed at engaging the City’s most vulnerable populations located in areas with lower income households, particularly along Alma Street and Embarcadero Road northeast of A Highway 101.

Community Planning and Reach at least 20 households annually through work with Human Services.6.7 Outreach Program Development Services General Fund Bi‐annually; initiate first meeting by January 2024.

The City shall continue to facilitate opportunities for all residents and stakeholders to provide meaningful and effective input on proposed planning activities early on and continuously throughout plan development and the public review process. Outreach efforts to disadvantaged communities, , particularly areas with higher poverty rates (University Avenue and Downtown North, and South Ventura neighborhood) and areas designated as moderate resource (along Embarcadero Road northeast of Highway 101) will be a priority. Engagement materials will be made available in multiple B languages and the City will ensure that all public meetings are in locations accessible to all persons.

Ongoing/Standard Operations.

Increase public participation rates amongst City’s The City widely distributes underrepresented groups by at least 20% by the materials for outreach efforts inCommunity Planning and

6.7 Outreach Program Development Services General Fund Ongoing. end of the planning period. multiple languages.

Ongoing/Standard Operations.

Support the development of 1,556 units for very‐ Housing application and low income, 896 units for low income, 1,013 units processing information is posted for moderate income, and 2,621 above‐moderate on the City's website and isCommunity Planning and Create a website that provides relevant housing application and processing information to the home C building community.6.7 Outreach Program Development Services General Fund Complete by June 30, 2024 and update annually. households during the planning period. updated regularly.

Ongoing/Standard Operations.

Promote availability of lower‐income housing
opportunities to lower‐income residents
Information about housing
developments is posted on the
Community Planning and Promote general awareness of lower‐income housing availability by providing the location, type, and concentrated along Alma Street and Embarcadero City's website and updated

6.7 Outreach Program Development Services General Fund D contact information of housing developments in the City on the website. Complete by January 15, 2024 and update annually Road northeast of Highway 101. regularly.

Community Planning and Develop language accessibility improvements to ensure residents with limited English proficiency E have access to housing information.

Complete policy by January 15, 2025 and full implementation by December Promote housing opportunities to limited English 31, 2025. proficiency residents.6.7 Outreach Program Development Services General Fund Pending/Not Started.

Item 3
Attachment B - 2023-2031 Housing
Element Implementation Program
Status, 2024

Item 3: Staff Report
Pg.
54 Packet Pg. 74 of 246

2023‐2031 Sixth Housing Element Cycle ‐ Regional Housing Needs Allocation Progress Total Units Permitted by Year
YEAR 011
2023
0 YEAR 02 YEAR 03 YEAR 04 YEAR 05 YEAR 06 YEAR 07 YEAR 08 YEAR 09 TotalTotal Units
Permitted by
Income Level
RHNA Allocation
by Income Level
Remaining % of RHNA
RHNA by
Income Level
Income Level 2024 2025 2026 2027 2028 2029 2030 2031 Permitted Deed Restricted
Non‐Deed Restricted
Deed Restricted
Non‐Deed Restricted
Deed Restricted
Non‐Deed Restricted
Deed Restricted
Non‐Deed Restricted
0 0
0 0
89 0
Extremely Low
Very Low
778
778
778
778
807
942

0.00%

0.00%

9.93%

7.01%
39 71
50 0Low 896
71 0Moderate 1,013
Above Moderate 2,621 159
269
126
176
1 1
286 2,335 10.91%

7.33%TOTALS 6,086 0 0 0 0 0 0 446 5,640
SB35 50% Affordability
Requirements Above Mod DU
Need
328
159
655
285
983
286
1,311 1,638 1,966 2,293 2,621
SB35 50% Affordability
Requirements CPA Above Mod
DU Permitted (Cumulative)
286 286 286 286 286
SB35 50% Affordability
Requirements Met/Not Met Not Met
127
Not Met Not Met Not Met Not Met Not Met Not Met Not Met ADU Permitted by Year 122 1
Item 3
Attachment C - City's RHNA Progress
2024

Item 3: Staff Report
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6 2
5 3
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Community Services
Meeting Date: February 24, 2025
Report #:2501-4039
TITLE
Approval of two Professional Services Contracts 1) Fairbank, Maslin, Maullin, Metz and Associates (C25193598) in an Amount Not to Exceed $126,225 for Cubberley Project Public Opinion Research Services for a Period of 20 Months, 2) The Lew Edwards Group(C25193673) in an Amount Not to Exceed $138,375 for Public Communication Consulting Services related to the November 2026 General Obligation Bond Ballot Measure for a Period of 20 Months, and Approval of Budget Amendments in the General Fund and the Cubberley Property Infrastructure Fund; CEQA Status - Not a Project

RECOMMENDATION
Staff recommends that Council:

1. Authorize the City Manager or designee to execute Contract No. C25193598 (Attachment A) with Fairbank, Maslin, Maullin, Metz and Associates, Inc. for Cubberley Project and November 2026 ballot measure public opinion research services for a term of 20 months and a total not-to-exceed $126,225, including $114,750 for basic services and $11,475 for additional services;

2. Authorize the City Manager or designee to execute Contract No. C25193673 (Attachment B) with The Lew Edwards Group for strategy and communication consultant services for a term of 20 months and a total not-to-exceed $138,375; and

3. Amend the Fiscal Year 2025 Budget Appropriation for:
a. General Fund (requires majority approval) by:
i. Increasing the transfer to the Cubberley Property Infrastructure Fund by $165,712; and
ii. Decreasing the Real Property Investment Reserve by $165,712; b. Cubberley Property Infrastructure Fund (requires 2/3 approval) by:
i. Increasing the transfer from the General Fund by $165,712; and ii. Increasing the Cubberley Community Center Redevelopment Capital Improvement Project (CB-26000) by $165,712.

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BACKGROUND
The Cubberley Project Workplan, adopted by the City Council on December 2, 20241 outlines several key milestones that must be accomplished to meet the goal of placing a measure on the November 2026 ballot. The timeframe to place a bond measure on the November 2026 ballot Is short and will require a focused effort to be successful. Major elements of work to be completed include:
•Master planning of the site with Concordia
•Advanced evaluation of infrastructure systems to support construction •Defining the ballot measure
•Coordination and support for Friends of the Palo Alto Recreation Wellness Center •Naming of a new community recreation and resource center •Development of an operating plan for a new community recreation and resource center •Development of a financial plan for a community recreation and resource center •Stakeholder engagement throughout the project

ANALYSIS
Engagement with the community and key stakeholders is arguably the most important element of this effort as resident support of the project will be needed for a successful ballot measure.

Council support and involvement in the stakeholder engagement process will be crucial for the success of the ballot measure. In defining the ballot measure, the project must be carefully and strategically crafted for the ballot measure (the “what”, “why”, and “how”), requiring a comprehensive approach and the City Council’s support. Opinion research, stakeholder engagement, and ballot measure development efforts are recommended to be facilitated by consultants whose expertise and familiarity with the community, economic, and political landscape of the City is necessary.

Procurement Process
Staff contacted public opinion research and strategy firms for interviews and to discuss this potential engagement. After reviewing the firms and their experience, qualifications, pricing, and proposed role, staff recommends engaging with Fairbank, Maslin, Maullin, Metz & Associates (FM3) for public opinion research services and with The Lew Edwards Group for strategy, communication, and engagement services. FM3 has most recently worked with the City on the 2022 business tax measure (Measure K) and measure to affirm the natural gas transfer (Measure L). Lew Edwards Group has previously worked with the City on the 2008 Library Bond Measure (Measure N) in 2007 and 2008 and, alongside FM3, the 2022 business tax measure and the measure to affirm the natural gas transfer. 1 City Council, December 2, 2024, Item #18:
https://portal.laserfiche.com/Portal/DocView.aspx?id=112713&repo=r-704298fc&searchid=ae5b84a3-97aa-40a4- add4-3498327cbb23
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Professional services contracts exceeding $85,000 shall be solicited by formal request for proposals in accordance with Palo Alto Municipal Code (PAMC) 2.30.400, they may also be exempted from competitive solicitation requirements under PAMC 2.30.360. In order to move forward with stakeholder outreach efforts within the timeframe outlined in the workplan for consideration of a ballot measure, an exemption to the competitive solicitation process was approved by the City Manager under PAMC 2.030.360(b)(2) that the time necessary to complete a competitive solicitation process would result in interference with the Council‘s directed workplan.

FISCAL/RESOURCE IMPACT
The FY 2025 Adopted Budget included a reserve of $1.0 million to support real property acquisition activities. Subsequent to the Council approval of the Memorandum of Understanding (MOU) between the City of Palo Alto and the Palo Alto Unified School District for the potential acquisition of an additional seven acres of land at the former Cubberly Site, the Council has authorized $834,288 of this reserve leaving $165,712 remaining. Funding has been allocated for the Cubberley Master Plan and the CEQA environmental review in alignment with the original intention of the reserve.

The award of these two contracts, in total $264,600, will be partially funded by the remaining funding in the Real Property Acquisition Reserve in FY 2025, bringing the reserve to zero, and the remainder, to be spent in FY 2026 will be supported by the FY 2026 allocation of this reserve, subject to the Council annual appropriation of funds through the budget process.

Additional costs expected to support this initiative include, but are not limited to, a municipal financial advisor and outside counsel.

To ease tracking and enhance visibility, the Cubberley Property Infrastructure Fund Cubberley Community Center Redevelopment Capital Improvement Project (CIP CB-26000) was established and is where expenses related to this effort will continue to be consolidated.

STAKEHOLDER ENGAGEMENT
Stakeholder engagement is integrated through master plan development, constituent polling, and stakeholder outreach. Staff, throughout the process and from previous conversations, has solicited input from the City Council and stakeholders for Cubberley. Staff recommends that the City Council authorize staff to engage with FM3 and The Lew Edwards Group to facilitate these goals.

ENVIRONMENTAL REVIEW
The services in this report are not a project for the purposes of the California Environmental Quality Act (CEQA) pursuant to CEQA regulation 15061(b)(3).

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ATTACHMENTS
Attachment A: Fairbank, Maslin, Maullin, Metz & Associates Contract C25193598 Attachment B: The Lew Edwards Group Contract C25193673
APPROVED BY:

Kristen O'Kane, Community Services Director
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CITY OF PALO ALTO CONTRACT NO. C25193598

AGREEMENT FOR PROFESSIONAL SERVICES

BETWEEN THE CITY OF PALO ALTO AND FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES, INC.

This Agreement for Professional Services (this “Agreement”) is entered into as of the 24th day of February, 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and FAIRBANK, MASLIN, MAULLIN, METZ & ASSOCIATES, INC. , a California, located at 1999 Harrison Street, Suite 2020, Oakland, CA 94612 (“CONSULTANT”).

The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference:

RECITALS

A. CITY intends to develop a Master Plan and pl ace a General Obligation Bond Measure on the November 2026 Election Ballot for the Cubberley Project (the “Project”) and desires to engage a consultant to assess and conduct research on public responses in connection with the Project (the “Services”, as detailed more fully in Exhibit A).

B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services.

C. CITY, in reliance on these representations, desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.

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

SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY.

SECTION 2. TERM.

The term of this Agreement shall be from the effective date of this agreement through October 31, 2026, unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.

SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of Docusign Envelope ID: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120 Item 4
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this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE OF PERFORMANCE”. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT.

CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT.

SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed One Hundred Fourteen Thousand Seven Hundred Fifty Dollars ($114,750). The hourly schedule of rates, if applicable, is set out in Exhibit C -1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.

Optional Additional Services Provision (This provision applies only if checked and a not-to-exceed compensation amount for Additional Services is allocated below under this Section 4.)

In addition to the not-to-exceed compensation specified above, CITY has set aside the not- to-exceed compensation amount of Eleven Thousand Four Hundred Seventy -Five Dollars ($11,475) for the performance of Additional Services ( as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall not exceed One Hundred Twenty-Six Thousand Two Hundred Twenty-Five Dollars ($126,225), as detailed in Exhibit C.

“Additional Services” means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A . CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional S ervices in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section . Additional Services, if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.

To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4 .

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CONSULTANT shall only be compensated fo r Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4 . Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement.

SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the Services performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the address specified in Section 13 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice.

SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it , its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall 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. All Services to be furnished by CONSULTANT under this Agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances.

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 may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement, as amended from time to time . 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 corrections such errors and omissions, any change or der markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions.

SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds the CITY’s stated construction budget by ten percent (10%) or more , CONSULTANT shall make recommendations to CITY for aligning the P roject design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY.

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SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the S ervices requested by CITY under this Agreement.

CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT wi ll be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities related to CONSULTANT’s performance of the S ervices, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT ’s provision of the Services only, and not as to the means by which such a result is obtained.

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 hereunder without the prior written approval of the City Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, succes sors, executors, administrators and assignees of the parties.

SECTION 12. SUBCONTRACTING.

Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the Services to be performed under this Agreement without the prior written authorization of the City Manager or designee. In the event CONSULTANT does subcontract any portion of the work to be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and omissions of subcontractors.

CONSULTANT shall be responsible for directing the work of any subcontractors and for any compensation due to subcontractors . CITY assumes no responsibility whatsoever concerning compensation of subcontractors . CONSULTANT shall be fully responsible to CITY for all acts and omissions of subcontractors . CONSULTANT shall change or add subcontractors only with the prior written approval of the City Manager or designee.

SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Dave Metz as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day- to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s Project Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project Manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s P roject Manager. CONSULTANT, at CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not Docusign Envelope ID: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120 Item 4
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perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property.

CITY’s Project Manager is Christine Paras, Administrative Services Department, Administration Division, 250 Hamilton Avenue, 4 th Floor, Palo Alto, CA , 94301, Telephone: (650) 329-2486.

CITY’s Project Manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate P roject Manager from time to time.

SECTION 1 4. OWNERSHIP OF MATERIALS . A ll work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its sub contractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the C ity Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services.

SECTION 15. AUDITS . CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4 ) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later.

SECTION 16. INDEMNITY.

[Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any othe r loss, including all costs and expenses of whatever nature including attorney’ s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party.

16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, Docusign Envelope ID: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120 Item 4
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or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, i ts officers, employees, agents or contractors under this Agreement.

16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement.

SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 29.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or parti al exercise of any right or remedy will preclude any other or further exercise of any right or remedy.

SECTION 18. INSURANCE.

18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies.

18.2. 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. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above.

18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will 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 notice of the cancellation or modification within two (2) 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.

18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT ’s liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired.

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SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.

19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination , CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination.

19.2. In event of suspension or termination, CONSULTANT will deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).

19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s S ervices provided in material conformity with this Agreement as such determination is made by the City Manager acting in the reasonable exercise of his/her discretion . The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30.

19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers).

SECTION 20. NOTICES.

All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows:

To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303

With a copy to the Purchasing Manager

To CONSULTANT: Attention of the P roject Manager at the address of CONSULTANT recited on the first page of this Agreement.

CONSULTANT shall provide written notice to CITY of any change of address.

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SECTION 21. CONFLICT OF INTEREST.

21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will 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 will not employ subcontractors or other persons or parties having such an interest.

CONSULTANT certifies that no person who has or will have an y financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California, as amended from time to time. CONSULTANT agrees to notify CITY if any conflict arises.

21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time.

SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.

22.1. As set forth in Palo Alto Municipal Code S ection 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregna ncy, genetic information or condition, 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.

22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement.

SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with t he CITY’s Environmentally Preferred Purchasing policies which are available at CITY ’s Purchasing Department , hereby incorporated by reference and as 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, C ONSULTANT shall comply with the following Zero Waste requirements:

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(a) All printed materials provided by CONSULTANT to C ITY 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 greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by C ONSULTANT 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 Department’s office.
(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 amended from time to time. In par ticular, 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 City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding 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 , as amended from time to time. This Agreement will 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 S ection shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement.

SECTION 2 6. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS.

26.1. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract:
(1) is not a public works contract;
(2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j).

SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, Docusign Envelope ID: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120 Item 4
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alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. ( Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects , certain claims procedures shall apply, as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.

This Project is not a 9204 Public Works Project.

SECTION 28. CONFIDENTIAL INFORMATION.

28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose.

CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information.

Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreeme nt and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement.

28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code S ection 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentia lity obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY.

28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order.

28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requ irements of Civil Code Section 1798 et seq., as applicable, as amended from time to time.

28.5. Prior to or upon termination or expiration of this Agreement, Docusign Envelope ID: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120 Item 4
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CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT.

28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.

SECTION 29. MISCELLANEOUS PROVISIONS.

29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions.

29.2. 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 in the County of Santa Clara, State of California.

29.3. 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. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to t hird parties.

29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings , either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time.

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

29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30 ) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control.

29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.

29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement.

29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement.

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SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein:

EXHIBIT A: SCOPE OF SERVICES
EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS

THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED.

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CONTRACT No. C25193598

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written.

CITY OF PALO ALTO

____________________________
City Manager

APPROVED AS TO FORM:

__________________________
City Attorney or designee

CONSULTANT

FAIRBANK, MASLIN, MAULLIN,
METZ & ASSOCIATES, INC.

Officer 1

By: ________________________________

Name: ______________________________

Title: _______________________________

Officer 2

By: ________________________________

Name: ______________________________

Title: _______________________________

Docusign Envelope ID: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120 President

DAVID METZ
Partner and COO
Curt Below
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EXHIBIT A

SCOPE OF SERVICES

CONSULTANT shall provide the Services detailed in this Exh ibit A , entitled “SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project.

CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications.

CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services.

CONSULTANT shall conduct research assessing potential approaches for the CITY to consider in the Cubberley Project and in the November 2026 election. Research will be performed as follows:

Task 1:

CONSULTANT shall conduct surveys with the following specifications:

Questionnaire: Three (3) 15-to 20-minute questionnaires to assess public reactions to various components of a potential tax options. Work includes drafting polling outlines and questions, for staff, political strategy consultant, and City Council review, prior to conducting the surveys.

Methodology: Dual-mode survey obtaining interviews via cell phone, landline, email and text message invitation

Sample 400 to 600 voters likely to participate in the November 2026 election

Questionnaire 15 to 20 minutes

Community Engagement and Outreach for the Site Master Plan:

a) A community needs survey to assess perceived need for funding for a community center, and priorities in its design. This survey could also evaluate voter willingness to pay at the household level for a new center. The survey could also track key community satisfaction questions such as quality of life, satisfaction with specific services, and/or approval ratings for specific departments, as well as any other topics of interest to the city.

Potential General Obligation Bond Measure:

b) A baseline survey to assess potential ballot measure language, willingness to pay at the household level, the importance of a range of project elements, and messaging for and Docusign Envelope ID: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120 Item 4
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against a measure. This could be conducted early in 2026. c) A tracking survey in the weeks before a ballot measure placement vote, assessing viability of the 75-word title and summary, tracking key perceptions, and messaging for and against a measure. A tracking survey is typically shorter than a baseline survey, and often has a slightly smaller sample size.

Task 2:

Following completion of the survey, the CONSULTANT shall provide the following deliverables:

• A questionnaire with the topline results of the survey for easy reference. • A complete set of crosstabs in an easy-to-read, comprehensive format. • Verbatim responses to any open-ended questions.
• A complete analysis of survey results in PowerPoint.
• A presentation of the survey results.

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EXHIBIT A-1

PROFESSIONAL SERVICES TASK ORDER

CONSULTANT shall perform the Services detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into this Task Order by this reference. CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below.

CONTRACT NO.

OR PURCHASE ORDER REQUISITION NO. ( AS APPLICABLE)

1A. MASTER AGREEMENT NO. (MAY BE SAME AS CONTRACT / P.O. NO. ABOVE):
1B. TASK ORDER NO.:

2. CONSULTANT NAME:

3. PERIOD OF PERFORMANCE: START: COMPLETION:
4 TOTAL TASK ORDER PRICE: $__________________
BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $_______________

5. BUDGET CODE_______________
COST CENTER________________
COST ELEMENT______________
WBS/CIP__________
PHASE__________

6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:_____________________________________

7. DESCRIPTION OF SCOPE OF SERVICES (Attachment A)
MUST INCLUDE:

SERVICES AND DELIVERABLES TO BE PROVIDED

SCHEDULE OF PERFORMANCE
MAXIMUM COMPENSATION AMOUNT AND RATE SCHEDULE (as applicable) REIMBURSABLE EXPENSES, if any (with “not to exceed” amount)

8. ATTACHMENTS: A: Task Order Scope of Services B (if any): _____________________________

I hereby authorize the performance of the
work described in this Task Order.

APPROVED:

CITY OF PALO ALTO

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

I hereby acknowledge receipt and acceptance of this
Task Order and warrant that I have authority to
sign on behalf of Consultant.

APPROVED:

COMPANY NAME: ______________________

BY:____________________________________
Name __________________________________
Title___________________________________
Date ___________________________________

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EXHIBIT B

SCHEDULE OF PERFORMANCE

CONSULTANT shall perform the Services so as to complete each milestone within the number of days/ weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed (“NTP”) from the CITY.

Milestones
Completion
Number of Days/Weeks (as specified below)
from NTP

1. a. Assess Community Needs Summer 2025

2. b. Baseline for Potential Ballot Measure Winter 2025/2026

3. c. Tracking for Potential Ballot Measure Spring/Summer 2026

Optional Schedule of Performance Provision for On-Call or Additional Services Agreements. (This provision only applies if checked and only applies to on-call agreements per Section 1 or agreements with Additional Services per Section 4.)

The schedule of p erformance shall be as provided in the approved Task Order, as detailed in Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement.

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EXHIBIT C

COMPENSATION

CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as E xhibit C-1 up to the not to exceed budget amount for each task set forth below.

CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below , provided that the total compensation for the Services, including any specified reimbursable expenses, and the total compensation for Additional Services (if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this Agreement.

CONSULTANT agrees to complete all Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4), within this /these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY.

BUDGET SCHEDULE

TASK NOT TO EXCEED AMOUNT
Task 1
(a. Assess Community Needs)
$38,250
Task 3
(b. Baseline for Potential Ballot Measure)
$38,250
Task 4
(c. Tracking for Potential Ballot Measure)
$38,250

Sub-total for Services $114,750
Reimbursable Expenses (if any) $0
Total for Services and Reimbursable Expenses $114,750
Additional Services (if any, per Section 4) $11,475
Maximum Total Compensation $126,225

REIMBURSABLE EXPENSES

CONSULTANT’S ordinary business expenses , such as administrative, overhead, administrative support time /overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in -house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder.

Reimbursable expenses, if any are specified as reimbursable under this section , will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be reimbursed are: NONE up to the not-to-exceed amount of: $0.00.

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EXHIBIT C-1

SCHEDULE OF RATES

CONSULTANT’s schedule of rates is as follows:

Hourly
Rate Tier
$230 Partner
$170 Senior Vice President
$145 Manager
$115 Senior Analyst/Researcher
$90 Analyst
$60 Administrative/Associate
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EXHIBIT D

INSURANCE REQUIREMENTS

CONSULTANTS 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 HEREIN.

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

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

STATUTORY

STATUTORY STATUTORY STATUTORY
YES

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

$1,000,000

$1,000,000

$1,000,000

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

$1,000,000

YES

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: CONSULTANT, 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

CONSULTANT AND ITS SUBCONSULTANTS, 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. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.

II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: [email protected]

III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS:

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.

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B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS 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 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, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:

[email protected]

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Certificate Of Completion
Envelope Id: C2AC55B8-CDC7-468F-B0F2-E5403F5B6120
Status: Completed
Subject: Complete with Docusign: FINAL Contract C25193598 FM3 Polling.pdf Source Envelope:

Document Pages: 21
Signatures: 2
Envelope Originator:

Certificate Pages: 2
Initials: 0
Alice Harrison
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
[email protected]
IP Address: 199.33.32.254
Record Tracking
Status: Original
1/14/2025 1:39:27 PM
Holder: Alice Harrison
[email protected]
Location: DocuSign
Security Appliance Status: Connected
Pool: StateLocal
Storage Appliance Status: Connected
Pool: City of Palo Alto
Location: DocuSign
Signer Events
Signature
Timestamp

DAVID METZ
[email protected]
President
Security Level: Email, Account Authentication
(None)

Signature Adoption: Pre-selected Style
Using IP Address: 73.189.64.26
Sent: 1/14/2025 1:41:59 PM
Viewed: 1/14/2025 2:35:56 PM
Signed: 1/14/2025 2:36:14 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Curt Below
[email protected]
Partner and COO
Security Level: Email, Account Authentication
(None)

Signature Adoption: Drawn on Device
Using IP Address: 150.252.241.1
Sent: 1/14/2025 2:36:16 PM
Viewed: 1/14/2025 2:43:24 PM
Signed: 1/14/2025 2:43:39 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
In Person Signer Events
Signature
Timestamp
Editor Delivery Events
Status
Timestamp
Agent Delivery Events
Status
Timestamp
Intermediary Delivery Events
Status
Timestamp
Certified Delivery Events
Status
Timestamp
Carbon Copy Events
Status
Timestamp
Christine Paras
[email protected]
Asst. Director Administrative Services
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Sent: 1/14/2025 2:43:41 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
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Carbon Copy Events
Status
Timestamp
Cayla Koga
[email protected]
Administrative Assistant
City of Palo Alto
Security Level: Email, Account Authentication
(None)
Sent: 1/14/2025 2:43:42 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Witness Events
Signature
Timestamp
Notary Events
Signature
Timestamp
Envelope Summary Events
Status
Timestamps
Envelope Sent
Hashed/Encrypted
1/14/2025 1:41:59 PM
Certified Delivered
Security Checked
1/14/2025 2:43:24 PM
Signing Complete
Security Checked
1/14/2025 2:43:39 PM
Completed
Security Checked
1/14/2025 2:43:42 PM
Payment Events
Status
Timestamps
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CITY OF PALO ALTO CONTRACT NO. C25193673

AGREEMENT FOR PROFESSIONAL SERVICES

BETWEEN THE CITY OF PALO ALTO AND THE LEW EDWARDS GROUP

This Agreement for Professional Services (this “Agreement”) is entered into as of the 24th day of February, 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and THE LEW EDWARDS GROUP , a California corporation, located at 5454 Broadway, Oakland, CA 94618 (“CONSULTANT”).

The following recitals are a substantive portion of this Agreement and are fully incorporated herein by this reference:

RECITALS

A. CITY intends to develop a Master Plan and place a General Obligation Bond Measure on the November 2026 Election Ballot for the Cubberley Project (the “Project”) and desires to engage a consultant to provide strategy and communication services in connection with the Project ( the “Services”, as detailed more fully in Exhibit A).

B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services.

C. CITY, in reliance on these representations , desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.

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

SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the S ervices described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY.

SECTION 2. TERM.

The term of this Agreement shall be from the effective date of this agreement through November 15, 2026 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.

SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE OF PERFORMANCE”. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT.

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of damages for delay if the extension is required due to the fault of CONSULTANT.

SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed One Hundred Thirty Eight Thousand Three Hundred Seventy Five Dollars ($138,375). T he hourly schedule of rates, if applicable, is set out in Exhibit C -1, entitled “ SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.

SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the S ervices performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of rates set forth in Exhibit C-1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager at the address specified in Section 13 (Project Management) below. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice.

SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it , its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall 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. All Services to be furnished by CONSULTANT under this A greement s hall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances.

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 may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement , as amended from time to time . 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 corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions.

SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of Docusign Envelope ID: B8B3B851-0CB7-4C37-BC07-6C2466E0F508 Item 4
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design submittal. If the total estimated construction cost at any s ubmittal exceeds the CITY’s stated construction budget by ten percent (10%) or more , CONSULTANT shall make recommendations to CITY for aligning the P roject design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY.

SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the S ervices requested by CITY under this Agreement.

CONSULTANT and any agent or employee of CONSULTANT will not have employee status with CITY, nor be entitled to participate in any plans, arrangements, or distributions by CITY pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT wi ll be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities re lated to CONSULTANT’s performance of the Se rvices, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT ’s provision of the Services only, and not as to the means by which such a result is obtained.

SECTION 11. ASSIGNMENT . The parties a gree 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 hereunder without the prior written approval of the C ity Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators and assignees of the parties.

SECTION 12. SUBCONTRACTING.

Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the Services to be performed under this Agreement without the prior written authorization of the City Manager or designee. In the event CONSULTANT does subcontract any portion of the work to be performed under this Agreement, CONSULTANT shall be fully responsible for all acts and omissions of subcontractors.

SECTION 13. PROJECT MANAGEMENT . CONSULTANT will assign Catherine Lew Email: [email protected] and Jennifer Longley Email:
[email protected] as the CONSULTANT’s Project Managers to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day- to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s P roject Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute P roject Manager and the assignment of Docusign Envelope ID: B8B3B851-0CB7-4C37-BC07-6C2466E0F508 Item 4
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any key new or replacement personnel will be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property.

CITY’s Project Manager is Christine Paras, Administrative Services Department, Administration Division, 250 Hamilton Avenue, 4 th Floor, Palo Alto, CA , 94301, Telephone: (650) 329-2486.

CITY’s Project Manager will 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.

SECTION 14. OWNERSHIP OF MATERIALS . A ll final work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media, shall be and remain the exclusive property of CITY without restriction or limitation upon their use. This provision spec ifically excludes CONSULTANT’S working notes and drafts which will be owned by CONSULTANT, provided however that CONSULTANT shall at all times comply with the confidentiality obligations of this Agreement (which survive the Agreement’s expiration or termination) in relation to any such working notes and drafts and CITY information contained therein. CONSULTANT agrees that all copyrights which arise from creation of the final work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the C ity Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services.

SECTION 15. AUDITS . CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later.

SECTION 16. INDEMNITY.

[Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all 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 attorney’ s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related Docusign Envelope ID: B8B3B851-0CB7-4C37-BC07-6C2466E0F508 Item 4
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to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party.

16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its officers, employees, agents or contractors under this Agreement.

16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement.

SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in wr iting in accordance with Section 2 9.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or partial exercise of any right or remedy will preclude any other or further exercise of any right or remedy.

SECTION 18. INSURANCE.

18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies.

18.2. 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. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above.

18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will 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 notice of the cancellation or modification within two (2) 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.

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18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT ’s liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired.

SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.

19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination , CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination.

19.2. In event of suspension or termination, CONSULTANT wi ll deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).

19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s S ervices provided in material conform ity with this Agreement as such determination is made by the City Manager acting in the reasonable exercise of his/her discretion . The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30.

19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers).

SECTION 20. NOTICES.

All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows:

To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303

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With a copy to the Purchasing Manager

To CONSULTANT: Attention of the P roject Manager at the address of CONSULTANT recited on the first page of this Agreement.

CONSULTANT shall provide written notice to CITY of any change of address.

SECTION 21. CONFLICT OF INTEREST.

21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will 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 will not employ subcontractors or other persons or parties 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 will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California, as amended from time to time . CONSULTANT agrees to notify CITY if any conflict arises.

21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time.

SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.

22.1. As set forth in Palo Alto Municipal Code S ection 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, 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.

22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement.

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WASTE REQUIREMENTS. CONSULTANT shall comply with t he CITY’s Environmentally Preferred Purchasing policies which are available at CITY ’s Purchasing Department , hereby incorporated by reference and as 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, C ONSULTANT shall comply with the following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT to C ITY 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 greater post-consumer content paper, unless otherwise approved by CITY ’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by C ONSULTANT 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 Department’s office.
(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 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 City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding 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, as amended from time to time. This Agreement will 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 2 6. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS.

26.1. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract:
(1) is not a public works contract;
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Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j).

SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. ( Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects , certain claims procedures shall apply, as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.

This Project is not a 9204 Public Works Project.

SECTION 28. CONFIDENTIAL INFORMATION.

28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose.

CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information.

Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreement and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement.

28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code S ection 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentia lity obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY.

28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order.

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28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time.

28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT.

28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.

SECTION 29. MISCELLANEOUS PROVISIONS.

29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions.

29.2. 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 in the County of Santa Clara, State of California.

29.3. 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. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to t hird parties.

29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings , either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time.

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

29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control.

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29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.

29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement.

29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement.

SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein:

EXHIBIT A: SCOPE OF SERVICES EXHIBIT B: SCHEDULE OF

PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS

THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED.

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CONTRACT No. C25193673

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written.

CITY OF PALO ALTO

____________________________
City Manager

APPROVED AS TO FORM:

__________________________
City Attorney or designee

THE LEW EDWARDS GROUP
Officer 1

By: ________________________________

Name: ______________________________

Title: _______________________________

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President
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EXHIBIT A

SCOPE OF SERVICES

CONSULTANT shall provide the Services detailed in this Exhibit A , entitled “ SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project.

CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications.

CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services.

CONSULTANT will provide strategy, outreach, and communication services related to the Cubberley Project and November 2026 ballot measure, including timely response and support as needed, including but not limited to:

Feasibility Assessment
Conduct a thorough assessment of the local election landscape, analyze recent election practices, trends, and results, and work with the City’s polling consultant to design a statistically reliable opinion survey of the City’s local voters.

- Develop potential strategies to meet project funding needs to be tested in polling. - Collaborate with polling consultant to design, conduct and analyze one or more opinion surveys of voters.
- Conduct a demographic analysis of voters in Palo Alto and analyze how they break into sub-groups by age, ethnicity, political party, length of residency and other criteria potentially impacting the viability of the project.
- Analyze past election results in Palo Alto and the region to understand voter turnout trends and other relevant voting patterns.

Awareness Building
Develop and implement an informational communication plan to raise awareness of the Cubberley Project and funding needs. Coordinate with CITY to write all copy and either refer vendors for City to include on its procurement list, or facilitate/coordinate design/production vendors with expertise in public agency projects who are within City’s project budget for services such as graphic design, printing and mailing, online or media advertising. These production expenses are to be budgeted for separately by the City outside of Consultant’s professional fee.

- Develop informational messaging and fact sheets to be distributed in the community - Provide talking points, frequently asked questions, and message training to city leaders who will be interfacing with the public on this issue.

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- Provide content related to your funding needs and proposed measure to be added to the City website, used in social media, and/or included in email updates and newsletters - Prepare presentations for public and community meetings - Write, design, and produce mailings and advertising to inform local residents if requested by City (actual design and production expenses are in addition to Consultant’s professional feee)
- Develop strategies and plans to inform external groups including elected leaders, business leaders, neighborhood leaders, and others

Measure Development
Based on the results of the feasibility assessment and community input received during the awareness building efforts, work with CITY to develop measure for the ballot that it is closely aligned with the community’s priorities and sensitivities. CONSULTANT will work with financial advisors, legal advisors and other experts to accomplish this work, including:

- Recommend the final bond amount, tax rate and other measure components. - Refine the final funding plans to reflect community priorities and ensuring projects eligible for funding are described in clear language that the general public will understand.
- Coordinate with legal counsel to develop the 75-word ballot question and to develop and refine all language that will appear in the ballot pamphlet mailed to all voters. - Work with City staff and local elections officials for timely, complete measure placement needs.

Legal services or advice is not within Consultant’s scope of services.

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EXHIBIT B

SCHEDULE OF PERFORMANCE

CONSULTANT shall perform the Services as specified in Exhibit “A” Scope of Services during the term defined in Section 2 of this Agreement on the timeline for specific tasks as specified by the CITY’s Project Manager after consultation with CONSULTANT.

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EXHIBIT C

COMPENSATION

CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as E xhibit C-1 up to the not to exceed budget amount for each task set forth below.

CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below , provided that the total compensation for the Services, including any specified reimbursable expenses, and the total compensation for Additional Services (if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this Agreement.

CONSULTANT agrees to complete all Services , any specified reimbursable expenses, and Additional Services (if any, per Section 4), within this /these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY.

BUDGET SCHEDULE

TASK NOT TO EXCEED AMOUNT
Task 1
(Consulting Services per Exhibit A)
$138,375
Sub-total for Services $138,375
Reimbursable Expenses (if any) $0
Total for Services and Reimbursable Expenses $138,375
Additional Services (if any, per Section 4) $0
Maximum Total Compensation $138,375

REIMBURSABLE EXPENSES

CONSULTANT’S ordinary business expenses, such as administrative, overhead, administrative support time /overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in -house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder.

Reimbursable expenses, if any are specified as reimbursable under this section , will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will be reimbursed are: NONE up to the not-to-exceed amount of: $0.00.

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EXHIBIT C-1

SCHEDULE OF RATES

CONSULTANT’s schedule of rates is as follows:

For CONSULTANT’s Lead Consulting and Communications services, the fee is Six Thousand Three Hundred Seventy Five Dollars ($6,750) per month, commencing March 1, 2025 and ending on November 15, 2026 with the month of November 2026 to be prorated to half the monthly fee, or Three Thousand Seven Hundred Fifty Dollars ($3,375).

Fees are due and payable in accordance with Section 5 (Invoices) of this Agreement.

Fees to not include other hard PROJECT costs such as graphic design, translation, printing, bulk postage, mail house processing fees, or digital media buys, which will be budgeted separately by CITY throughout the PROJECT.

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EXHIBIT D

INSURANCE REQUIREMENTS

CONSULTANTS 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 HEREIN.

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

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

STATUTORY

STATUTORY STATUTORY STATUTORY
YES

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

$1,000,000

$1,000,000

$1,000,000

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

$1,000,000

YES

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: CONSULTANT, 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

CONSULTANT AND ITS SUBCONSULTANTS, 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. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.

II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: [email protected]

III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS:

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.

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B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS 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 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, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:

[email protected]

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City Council
Staff Report
From: City Attorney
Report Type: CONSENT CALENDAR
Lead Department: City Attorney
Meeting Date: February 24, 2025
Report #:2501-4053
TITLE
Authorization to Execute an Amendment to Legal Services Contract Number S23186556 with Law Office of Clare Gibson in the Amount of $75,000 for Construction Claims Dispute Resolution and Defense regarding the Public Safety Building, for a Total Not-to-Exceed Amount of $310,000; CEQA Status – Not a Project.

RECOMMENDATION
Staff recommends that the City Council authorize the City Attorney or their designee to amend Contract S23186556 with the Law Office of Clare Gibson to increase compensation by $75,000 for construction claims dispute resolution and defense regarding the Public Safety Building. This amendment results in a revised total contract not-to-exceed amount of $310,000.

BACKGROUND
Law Office of Clare Gibson is a law office representing cities in public contract, procurement and construction law.

In September 2022, the City entered into a three-year agreement (S23186556) with the Law Office of Clare Gibson to represent the City with respect to disputes regarding the construction of the Public Safety Building. Legal services contracts are exempt from competitive solicitation requirements under PAMC Sec. 2.30.360(g).

Staff now seeks authority to increase the contract amount by $75,000, which will bring the new not to exceed amount to $310,000. Dispute resolution and defense is continuing in this matter.

FISCAL/RESOURCE IMPACT
Funding for this contract amendment does not require additional budgetary authority as it can be accommodated within existing appropriated funds.

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STAKEHOLDER ENGAGEMENT
The City Attorney’s Office works closely with the City Manager and department personnel on dispute resolution and defense.

ENVIRONMENTAL REVIEW
Council action on this item is not a project requiring environmental review under the California Environmental Quality Act (CEQA) because amendment of a legal services contract is an administrative activity that will not result in direct or indirect physical changes in the environment not a project requiring environmental review under (See CEQA Guidelines 15378(b)(5)).

APPROVED BY:

Molly Stump, City Attorney
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 24, 2025
Report #:2502-4135
TITLE
Approval of Use of City Facilities and Staff Time to Support Santa Clara Valley Transportation Authority Palo Alto Mobility Hub Meetings and Peninsula Corridor Joint Powers Board/Caltrain Board of Directors Meeting; CEQA status – not a project.

RECOMMENDATION
Staff recommends the City Council approve the use of City Facilities and Staff Time to support Valley Transportation (VTA) Palo Alto Mobility Hub meetings and a Peninsula Corridor Joint Powers Board/Caltrain Board of Directors meeting; and allow the City Manager and the City Clerk to negotiate and execute any terms or agreements for such use, as may be necessary.

EXECUTIVE SUMMARY
VTA and Caltrain have requested using City Hall meeting spaces to host upcoming public meetings. Unlike other City facilities, meeting rooms in City Hall, primarily the Community Meeting Room (CMR) and City Council Chambers, do not have a policy governing use by non-City organizations. In addition, limited staff time will likely be required for the VTA project. Staff recommends the City Council consider and approve these two requests.

BACKGROUND
The Palo Alto Mobility Hub is an Ad Hoc Committee of VTA that was established in response to a VTA Board referral. Its purpose is to work collaboratively with regional partners to make improvements to the Palo Alto station for the short, medium, and long term. The Ad Hoc Committees members are Margaret Abe-Koga (County of Santa Clara Supervisor), Pat Burt (City of Palo Alto Councilmember), and Sergio Lopez (City of Campbell Mayor). VTA asked to host Ad Hoc Committee meetings in the CMR, or other similar City facility, on February 27, May 22, August 29, and November 21. The room is needed for roughly 3 ½ hours for each day, which includes set up and break down time.

The Peninsula Corridor Joint Powers Board owns and operates Caltrain. Its Board of Directors consists of representatives from the City and County of San Francisco, San Mateo County, and Santa Clara Valley Transportation Authority. The San Mateo County Transit District asked to hold Item 6
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its Joint Powers Board/Caltrain Board of Directors budget meeting in Council Chambers on April 29 or 30 for roughly four hours.

ANALYSIS
The VTA Palo Alto Mobility Hub effort is clearly of interest to the City of Palo Alto, and the City should support VTA and other agencies focusing on needs at this important community asset.

The resources required from the City to support this effort are uncertain. At this point staff anticipates spending 5-10 hours per month on related activities.

Other City facilities available for outside use have policies and/or application processes in place establishing appropriate uses and impacts to staff time and resources. This includes the City’s community centers, the Junior Museum and Zoo, and the Art Center.

The City historically has allowed government bodies that include a Palo Alto Councilmember appointed by the Mayor to use of Council Chambers for public meetings, for example, the San Francisquito Creek Joint Power Authority. The City does not, however, have guidelines in place for determining which other types of public (and potentially private) meetings should be allowed and with what cost recovery and other requirements. Established guidelines delineate the responsibilities and expectations of the user and the City, including use of City A/V equipment and staff time.

Staff intends to bring a draft use policy to the Policy & Services Committee this year.

FISCAL/RESOURCE IMPACT
Some staff time from the City Clerk’s Office will be required to assist VTA and Caltrain to run their meetings. The VTA Ad Hoc meetings will be in-person only, using the audio-visual projection system, and not recorded or streamed. In addition, roughly 5-10 hours per month of staff time from the City Manager’s Office or Office of Transportation is anticipated for the VTA effort.

VTA has requested that the City contribute roughly $25,000 toward a planning study to support the Mobility Hub project. Staff is confirming the availability of transportation funds for this use, and expects to proceed administratively upon confirmation.

STAKEHOLDER ENGAGEMENT
City Clerk’s Office staff coordinated with staff from VTA, SamTrans, the City Manager’s Office and Office of Transportation.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).

APPROVED BY: Mahealani Ah Yun, City Clerk
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 24, 2025
Report #:2502-4148
TITLE
SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3265 El Camino Real from Service Commercial (CS) Zone to Planned Community Zone (PC) for the Construction of a 100 Percent Affordable Housing Project (FIRST READING: February 10, 2025, PASSED 7-0)

BACKGROUND
The City Council heard this item on January 21, 2025 for a first reading and approved it on a 7-0 vote. No changes were made to the ordinance, and it is now before the City Council for a second reading.

ATTACHMENTS
Attachment A - Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 3265 El Camino Real from Service Commercial (CS) Zone to Planned Community Zone (PC) for the Construction of a 100 Percent Affordable Housing Project

APPROVED BY:

Mahealani Ah Yun, City Clerk

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Section 18.08.040 of the
Palo Alto Municipal Code

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Attachment A - Ordinance
of the Council of the City
of Palo Alto Amending
Section 18.08.040 of the
Palo Alto Municipal Code

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of the Council of the City
of Palo Alto Amending
Section 18.08.040 of the
Palo Alto Municipal Code

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of the Council of the City
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Palo Alto Municipal Code

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Palo Alto Municipal Code

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CITY COUNCIL
Colleague’s Memo
Sponsor(s): Mayor Lauing and Vice Mayor Veenker
Meeting Date: February 24, 2025
TITLE
Colleague’s Memo: Proposed Adoption of a Resolution Underscoring Council’s Commitment to Sustaining Palo Alto Values and Interests in the Face of Trump Administration Actions

RECOMMENDATION
Mayor Lauing and Vice Mayor Veenker request City Council adopt a Resolution Underscoring Council’s Commitment to Sustaining Palo Alto Values and Interests in the Face of Trump Administration Actions.

DISCUSSION
The first few weeks of the Trump Administration have been filled with an unprecedented series of Executive Orders, many of which impact Palo Alto residents and threaten our city government’s ability to serve.

City Council has previously adopted values that guide our decision making. This resolution underscores our commitment to residents that our stated values will continue to guide our actions, and that we will take future actions consistent with those values as Council determines.

We expressly disassociate Palo Alto from the actions of prominent Silicon Valley technology executives actively supporting or executing troubling Executive Orders.

To protect the ability of the City to provide necessary services to its residents, from time to time Palo Alto may wish to file amicus curiae (friend of the court) briefs to inform courts of the impacts of potential decisions to cities like ours. Additionally, the City may wish to join lawsuits to protect its rights and those of its residents. We recommend that Council consider efficient means for considering whether to authorize such action consistent with this resolution.

Accordingly, we urge our colleagues to adopt the attached resolution.

FISCAL/RESOURCE IMPACT
Staff does not anticipate any direct resource impacts with the proposed Resolution. Should subsequent actions be required following adoption, staff will return for City Council approval, as needed.

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ATTACHMENTS
Attachment A: Resolution of the Council of the City of Palo Alto Denouncing Trump Administration Threats to Palo Alto Values and Interests Report #: 2502-4169
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NOT YET APPROVED
Resolution No. ________
Resolution of the Council of the City of Palo Alto Denouncing Trump Administration Threats to Palo Alto Values and Interests

R E C I T A L S
A. The Palo Alto City Council has previously adopted values to guide its decision making:

1. Balance revenues and expenses, now and in the future.

2. Are environmentally sustainable, now and in the future.

3. Will integrate equity into our decisions, considering how decisions affect people differently based on their identity or circumstances.

4. Create a healthy, safe and welcoming community for all.

5. Will safeguard public trust through transparent practices and open communication.

6. Will embrace innovation.

B. The Trump Administration has already issued a relentless stream of Executive Orders, including those that would dismantle or cripple federal agencies providing services to Palo Alto, withhold funds upon which Palo Altans rely, are likely illegal, and are in conflict with our values.

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

SECTION 1. The City Council of the City of Palo Alto, consistent with our statement of values, hereby
•Supports the rule of law, in contrast to the Administration’s actions ignoring constitutional and other legal norms; already necessitating the filing of numerous lawsuits to restrain such behavior.
•Strongly opposes freezing federal grant funding or cancelling federal contracts upon which the City government or residents rely, such as Community Development Block Grants for local human services nonprofits, COPS funding, and airport and grade separation grants. Palo Alto has recently received grants from HUD, DOI, DOJ, DOT, Treasury, NEH, HHS, and Homeland Security;
•Supports federal workers providing valuable services for the City and its residents, such as the critical safety services provided by the Federal Aviation Administration; and denounces attempts to subvert the civil service system with unlawful terminations; and further denounces disregard for the critical expertise of government workers; •Denounces reversing climate action and environmental justice policies, such as pulling out of the Paris Accords and ramping up oil and gas production on federal lands, and opposes attempts to limit local authority to address climate change; Item 8
Attachment A -
Resolution of the Council
of the City of Palo Alto
Denouncing Trump
Administration Threats to
Palo Alto Values and
Interests

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NOT YET APPROVED
•Supports the safety of sensitive data of the City, our residents, and our businesses, and objects to improper access to critical information that violates privacy rights and risks misuse of valuable proprietary information;
•Opposes threatening the safety of Palo Altans by diminishing the ability of the FBI and CIA to respond to security threats, protect innovation, and prevent domestic terrorism; •Supports science and denounces replacing experts with lay decision makers on issues of scientific protocol and funding priorities;
•Strongly objects to any illegal and inhumane immigration enforcement; and •Supports equity and racial justice and commits to continuing the City’s DEI efforts and priority to be a place of belonging for all.

SECTION 2. In furtherance of these positions, the City will •Share this Resolution with our Congressional representatives and offer our support to advocate for these principles
•Communicate with residents about risks to the City and its residents due to Administration activity inconsistent with these positions, and about the City’s response; •Seek Council approval to bring or join lawsuits or file or join in amicus briefs consistent with these positions, our statement of values, and council-approved legislative guidelines; and
•Support other cities and counties taking similar actions, and partner with others to build collective action.

SECTION 3. 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.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

Item 8
Attachment A -
Resolution of the Council
of the City of Palo Alto
Denouncing Trump
Administration Threats to
Palo Alto Values and
Interests

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NOT YET APPROVED
ATTEST:
__________________________ _____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ _____________________________ City Attorney City Manager
Item 8
Attachment A -
Resolution of the Council
of the City of Palo Alto
Denouncing Trump
Administration Threats to
Palo Alto Values and
Interests

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City Council
Staff Report

From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services

Meeting Date: February 24, 2025
Report #:2412-3865

TITLE
Discuss the FY 2025 Mid-Year Budget Review and Approve 1) FY 2025 Budget Amendments in Various Funds and 2) Amendments to the FY 2025 Table of Organization to add 2.00 Full Time Equivalent (FTE) Positions and Eliminate 1.00 FTE Position and 3) Authorize overstrength of 1.00 FTE Fire Captain. CEQA Status – Not a Project.

RECOMMENDATION
Staff recommends that the City Council review, discuss, and approve:
1) Amendments to the Fiscal Year 2025 Budget Appropriation for various funds and various capital projects, as identified in Attachment A and Attachment A, Exhibit 1 and 2 (requires a supermajority, 2/3 approval);
2) Amendments to the FY 2025 Table of Organization consistent with the budget amendments in Attachment A, adding 1.00 FTE Senior Buyer and 1.00 FTE Program Assistant I and eliminating 1.00 FTE Contract Administrator; and 3) Authorization of an overstrength 1.00 FTE Fire Captain position.

EXECUTIVE SUMMARY
This report provides an extensive update on the City’s financial status as of December 31, 2024. Included in this report are:

1) Recommended budget adjustments to FY 2025 that reflect urgent or high priority fiscal needs, revenue supported program activities, and technical adjustments; 2) Recommended changes in staffing levels in FY 2025 adding 2.00 FTE positions, deleting 1.00 FTE position, and authorizing an overstrength 1.00 FTE Fire Captain position;
3) Updated information on the City’s financial position and FY 2025 outlook, including positioning for the upcoming FY 2026 budget process; and 4) FY 2025 2nd quarter financial status updates (Attachment B).

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The next significant financial planning and budget discussions will be the review of the FY 2026proposed operating and capital budgets and municipal fee schedule (May 2025 – June 2025) and recommended utility rate updates (March 2025 – June 2025).

This report also updates the status of Council Referrals that were approved from the FY 2025 budget development process. Any recommended budget adjustments to address the referrals are included in this report as recommended funding actions.

The fiscal strategy continues to balance the guidelines of funding ongoing activities with ongoing revenue sources while supporting Council priority investments and continuing the two-year budget balancing approach adopted in FY 2025. This strategy continues recommended use of the uncertainty reserve and excess savings in the Budget Stabilization Reserve (BSR) to offset projected deficits for the FY 2026 budget process. If this report is approved as recommended, the City will maintain current service levels while addressing urgent needs to enhance staffing a fire engine at Fire Station 4, funding repairs at the golf course, and increasing customer service staffing at the Palo Alto Junior Museum and Zoo (JMZ). The Uncertainty Reserve will increase to a balance of $12.0 million and the BSR will be at $54.0 million, $0.4 million below the Council approved 18.5% level or $54.4 million. Staff will continue to monitor these estimates and may bring forward a year-end budget adjustment report in June with any additional refinements to budgeted levels based on the most current information available.

The City Council may amend the annual budget through appropriate motion. Attachment A, if approved as recommended, provides the necessary transactional information for the official amendment of the annual budget. The budget appropriation actions require a supermajority approval by the City Council (PAMC 2.28.080(c)(1)), or five (5) votes.

BACKGROUND
Staff provides the Mid-Year Budget Review to report the financial status of major funds and the Capital Improvement Program as of the second quarter (Q2) of the current fiscal year and recommends adjustments to the FY 2025 Budget, including aligning estimates for significant changes that have occurred in FY 2025, such as projections for major tax revenues. This Mid- year Budget Review also provides the status of Council Referrals that did not require additional funding at the time of budget adoption but were recommended for staff to address.

In the first half of FY 2025, staff brought forward the FY 2024 Annual Comprehensive Financial Report (ACFR) (Staff Report 2406-3118)
1 for Council approval and the First Quarter (Q1) FY

1 City Council, December 16, 2024, Agenda Item #20; Staff Report # 2406-3118, https://portal.laserfiche.com/Portal/DocView.aspx?id=117750&repo=r -704298fc&searchid=c7622316-8993-4045- a48c-fee95dc39be6
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2025 Financial Report (Staff Report 2405-3096)2 as an informational report. FY 2024 General Fund revenues finished the year exceeding budget estimates by approximately 1% or $2 million. Unfortunately, this revenue trend has not continued in the first and second quarters of FY 2025, with some major tax revenue categories tracking below budgeted levels. This downward revenue trend is not unique to Palo Alto, as the State and many other municipalities including those within Santa Clara County are being affected by lower sales tax revenue and an uncertain economic future. Staff is recommending that the City Council recognize this reduced funding as part of this report which will factor into a slight reduction of the BSR below the 18.5% target level by $0.4 million. Over the longer term, staff anticipates continued uncertainty with the new Federal administration. Impacts to major taxes and other key sources of revenue will be monitored in light of this change and staff will continue to update the Council regarding changes to the FY 2025 fiscal outlook and beyond.

Where possible, budget change recommendations are brought forward for City Council consideration as part of the approval of the Mid-Year Budget Review to consolidate requests and streamline changes to budget appropriations. These adjustments are necessary as revenues and expenditures vary from the original budget plan for many reasons, such as changes in economic factors, project estimates and scope, and City Council policy and direction. The Mid-Year Budget Review reflects adjustments to align with prior City Council approved direction, technical adjustments, and clean-up actions based on FY 2024 actual experience or current FY 2025 trends and activities.

As discussed in the FY 2026-2035 Long Range Financial Forecast (LRFF) 3, and consistent with the
projections in the FY 2025 Adopted Budget, deficits are reflected in the near term due to projected economic uncertainty and ongoing resources added to support priority initiatives and service levels. Based on the forecast, ensuring ongoing financial stability will require continued prioritization of spending and utilization of one-time surplus funding and the Uncertainty Reserve to address short term deficits in the next few years.

ANALYSIS
This item serves as a continuation of the many check-in points as the City follows through on established commitments, while balancing and responding to emergent priorities. Findings and recommended adjustments in this report are based on the data available at the time of reporting and reflect preliminary 2
nd Quarter financial activity in FY 2025 (Attachment B). Final Q2 data is anticipated to be available at the end of March 2025.

2 Finance Committee, December 3, 2024, Informational Item #4; Staff Report # 2 405-3096, https://portal.laserfiche.com/Portal/DocView.aspx?id=111745&repo=r -704298fc&searchid=0d8e6b04-eee6-42ed- 9850-110dad4c1e5e
3 City Council, January 13, 2024, Agenda Item # 12; Staff Report # 2412-3846, https://portal.laserfiche.com/Portal/DocView.aspx?id=125154&repo=r -704298fc&searchid=8ead6587-1600-48b6- 8148-a1dee53dc104
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This staff report discusses the balancing strategy as well as key highlights from the detailed adjustments, and is organized as follows:
1) FY 2025 Mid-Year Budget Adjustments
a) General Fund
i) Mid-Year Budget Review Balancing Strategy Summary
ii) Recommended Amendments to the FY 2025 Adopted Budget iii) Position/Table of Organization Changes Summary
iv) FY 2025 Council Referrals
v) City’s Financial Position in FY 2025 and FY 2026
b) Capital Funds
c) Enterprise Funds
d) Internal Service Funds
e) Special Revenue Funds
2) Preliminary Q2 Financial Status & public safety overtime (Attachment B & C) 3) Timeline and Next Steps

The following is an overview of the status for the General Fund, Enterprise Funds, and other funds including recommended budget adjustments as they pertain to the City’s FY 2025 Operating and Capital Budgets.

1.a. General Fund

1.a.i Mid-Year Budget Review Balancing Strategy Summary The following table outlines the major drivers of the General Fund mid-year recommended balancing strategy to mitigate the collective impact of these activities:
• Completion of FY 2024 year-end financial transactions which ended with funds $8.9 million above the 18.5% Council adopted target level in the BSR as discussed in the FY 2024 ACFR and approved by City Council.
• Alignment with current FY 2025 estimated major tax revenue projections to reflect trends experienced through the first half of FY 2025.
• Support to continue Council priority investments as referred during the FY 2025 Adopted Budget process and near-term emergent operational needs.

This report continues work to balance the near-term needs with the mid- and longer-term forecast needs, using one-time funds as a key tool in bridging uneven economic trends. There are potential risks and benefits associated with continuing this balancing strategy that should be considered when looking beyond FY 2025. The risks would further reduce the City’s ability to fund the current level of services over the next several years, while the benefits could offset Item 9
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costs for a longer period or even increase available funding sources. These are discussed further in the Proposed Balancing Solutions section of this report.

Table 1: General Fund Mid-Year Adjustments and Balancing Solutions

Summary of General Fund Adjustments
Net $ Impact
(Cost)/Benefit
Recommended Funding:

Public Safety Services $(0.6) M
Community Services $(0.1) M
Subtotal Recommending Funding: $(0.7) M

Technical Adjustments:

Utility Electric Equity Transfer $0.9 M
Paramedic Transport Revenue $0.6 M
Purchasing Staffing for Utilities Capital Projects
(Reclassify 1.00 FTE Contracts Administrator in ASD to 1.00 FTE Sr. Buyer in Utilities) $0.1 M
Increase Uncertainty Reserve
($5.9M of the excess FY 2024 BSR)
$(5.9) M
Capital Improvement Funding
($3.0M of the excess FY 2024 BSR)
$(3.0) M
Major Tax Revenues & Investment Earnings
(Property Tax, Sales Tax, Utility Users Tax, Transient Occupancy Tax, Documentary Transfer Tax)
$(0.6) M
Electric Sales to the City $(0.4) M
Public Safety Analog Radio Contract $(0.1) M
Subtotal Technical Adjustments: $(8.4) M

Use of Budget Stabilization Reserve
(BSR at 18.4% and $0.4 M below the 18.5% target level)
$9.1 M*
Total Net Impact General Fund Mid-Year Adjustments $0.0 M

* $8.9M use of BSR represents distribution of FY 2024 fund balance to maintain 18.5% BSR level.

1.a.ii. Recommended Amendments to the FY 2025 Adopted Budget This report includes budget adjustments to 1) recommend funding urgent or timely needs, or 2) technical adjustments needed to align budget with current trends; recognize revenue for grants and reimbursements and appropriate associated funding; or support previous direction approved by the City Council.

Major changes are recommended as directed by the City Council and/or recommended by staff are below, and all transactions can be found in greater detail in Attachment A. It should Item 9
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be noted that recommended budget adjustments have been prorated for the remainder of the fiscal year where appropriate.

Recommended Additional Funding
In limited areas staff recommends appropriation of additional funding to continue operations and support needed investment. Key investments are summarized here by service delivery area and all transactions can be found in greater detail in Attachment A. • Public Safety Services: $0.1 million revenue increase; $0.7 million expense increase Recommended funding requests for public safety services includes fire services solution of $315,000 to add a fire engine to the current ambulance at Fire Station 4. The near- term proposal is a cross-staffing model, which authorizes an overstrength 1.00 FTE Fire Captain position at Fire Station 4 funded through overtime, for a total of three shift personnel. These three personnel would staff both the fire engine and the ambulance.

This is consistent with pre-COVID staffing at Fire Station 4. The Palo Alto Fire Department (PAFD) will determine which apparatus (engine or ambulance) responds to a call based on the nature of the emergency. This action also involves putting into service one of PAFD’s two reserve fire engines. This near-term approach provides additional resources to the area and the City as a whole, while long-term staffing proposals and funding decisions continue. Should Council approve this recommendation, it would take approximately 30-60 days to implement. Longer term staffing strategies already began with Finance Committee review in Fall 2024 and will continue into the FY 2026 budget process.

Other funding requests include $236,400 for firefighter academy related costs, $63,000 for paramedic supplies, and $8,100 for Fire Department annual health physical exams.

This also includes $81,400 in revenue reimbursed through the fire response services agreement with Stanford. Other public safety funding requests also include $44,000 for Police uniforms, equipment, and Crime Laboratory services. These funding proposals will allow both the Fire and Police Departments to maintain operations and augment response capabilities.

• Community Services: Add 1.00 FTE; $0.1 million expense increase This report recommends an additional 1.00 FTE Program Assistant I for the Palo Alto Junior Museum and Zoo to support customer service, reservations, and admissions. In FY 2025 the cost of the position will be absorbed with vacancy savings; ongoing costs are estimated at $125,000. This report also recommends one-time funding of $0.1 million for repairs at the Palo Alto Golf Course. This will allow for the repair of key infrastructure such as the storm and irrigation pump stations. This will support operational resilience, prevent service disruptions, and enhance the user experience.

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Technical Adjustments and Previous Council Direction
This report includes actions that are technical in nature and are needed to align budget with current trends; recognize revenue for grants and reimbursements and appropriate associated funding; or support previous direction approved by the Council. Brief descriptions of changes that impact the BSR as directed by the City Council and/or recommended by staff are discussed below, and all transactions, including actions that have net zero impact to the BSR, can be found in greater detail in Attachment A.

• Utility Equity Transfer FY 2024 True-up ($0.9 million revenue increase): This action increases the equity transfer from the Electrical Fund to the General Fund by $864,000, based on California Public Utilities Commission’s authorized return on equity for PG&E of

10.28% (up from 10%), and actuals reported in the FY 2024 ACFR. • Paramedic Transport Revenue ($0.6 million revenue increase): This action increases paramedic transport revenue by $600,000 to align estimates with current trends through the first half of FY 2025 for revenues generated at current service level. • Purchasing Staffing for Utilities Capital Projects (-1.00 FTE; $0.1 million expense reduction):

This action reclassifies a vacant Contracts Administrator position into a Senior Buyer role in the Utilities Department to support purchasing for Utilities related capital projects. • Uncertainty Reserve ($5.9 million expense increase): This action increases the Uncertainty Reserve by $5.9 million, bringing the Uncertainty Reserve to a total of $12.0 million for use in the development of the FY 2026 Budget. This action was approved by the City Council on December 16, 2024 in the FY 2024 ACFR for BSR exceeding the 18.5% target level. • Capital Improvement Funding ($3.0 million expense increase): This action transfers $3.0 million to the Infrastructure Reserve in the Capital Improvement Fund, as approved by the City Council on December 16, 2024 in the FY 2024 ACFR for BSR exceeding the 18.5% target level.
• Major Tax Revenue ($0.4 million revenue decrease; $0.2 million expense increase): Staff evaluated departmental and major tax revenue trends experienced through Q2 and recommends actions that result in a net $0.4 million decrease. Major tax revenue categories that are trending lower than budgeted are Sales Tax, $3.9 million decrease, and Property Tax, $0.1 million decrease. These decreases are partially offset by increases to Documentary Transfer Tax (DTT), $1.4 million increase; Utility Users Tax (UUT), $1.1 million increase; Transient Occupancy Tax (TOT), $0.6 million increase; and Investment Earnings, $0.5 million increase. A portion of TOT revenue has been dedicated to fund capital improvements, per Council direction, the increased TOT revenue estimates warrant an increase in the transfer from the General Fund to the Capital Improvement Fund totaling $0.2 million.
• Electric Sales to the City ($0.4 million expense increase): This correction revises the budget Item 9
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distribution for electric energy use across all City departments to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. • Public Safety Analog Radio Contract ($0.1 million expense increase): This action adds $64,500 in funding for Public Safety Analog Radio System contract costs. The contract was initially approved by the City Council on June 17, 2024 (Staff Report 2405-3086)4 the same day the FY 2025 Budget was adopted by the City Council. An adjustment to align the budget with the annual contract amount is recommended as part of the FY 2025 Mid-Year Review.

1.a.iii. Position/Table of Organization Changes Summary Two position actions are recommended in this report amending the Table of Organization as stipulated in the Municipal code:

1. The addition of 1.00 FTE Senior Buyer funded in the Utilities Department, offset by the elimination of 1.00 FTE Contract Administrator in the Administrative Services Department.

2. The addition of 1.00 FTE Program Assistant I in the Community Services Department.

3. Authorization of an overstrength 1.00 FTE Fire Captain position.

These actions will increase full-time staffing levels citywide from the FY 2025 adopted level of 1,092.10 to 1,093.10, and in the Utilities Enterprise Funds from 283.96 to 284.96. Although staffing challenges remain citywide, staff is focusing on recruitments of current vacant positions and all other staffing requests will be addressed through the annual budget process.

1.a.iv. FY 2025 Council Referrals
As part of the FY 2025 Adopted Budget, a list of Council Referrals was included that did not require additional funding at the time of budget adoption but were recommended for staff to address in FY 2025 as follows:
• Ability Path (Funding Request: $250,000) – Council directed staff to bring this request back at mid-year for Council review. Staff recommends consideration of this request during the FY 2026 budget development, noting that the Policy & Services Committee is currently considering a proposed approach to this review. • Analyze Fire Emergency Medical Response Fee Adjustments (Ongoing Revenue: TBD) – Progress is underway in 2025.
• Fire Emergency Medical Response; Supplemental Resources (Estimated costs:
$1,000,000 - $4,000,000 Ongoing) – Staff will resume discussion with the Finance Committee in Spring 2025.
• Review Parks Restroom Prioritization, Specifically Pardee Park (Ongoing capital project costs: TBD) – Progress underway with community engagement.

4 City Council, June 17, 2024, Agenda Item # 25; Staff Report # 2405-3086, https://portal.laserfiche.com/Portal/DocView.aspx?id=131606&repo=r -704298fc Item 9
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• Active Recruitment Digital Marketing Services (Estimated Contract Services costs:

TBD) – Staff is developing the Request for Proposal (RFP). • Establish Organizational Development & Safety Division (Estimated ongoing costs:
$135,000 50% General Fund/50% Internal Service Fund) – Staff recommends consideration of this request during the FY 2026 budget development. • Explore financial, outreach, and policy processes for adding East Palo Alto to resident rates for the golf course (Ongoing revenue reduction: TBD) – Propose to incorporate into FY 2026 fee update.
• Increasing Revenue-Generating CSD Programming to Meet Demand (Ongoing cost & revenue TBD) – CSD staff continues to review existing revenue generating programs to identify areas that are in high demand that can be expanded, as well as adding additional revenue generating programs to meet community demand. Expanded program areas include classes such as Voice Lessons, cooking, STEM camps, LEGO, pickleball, kids and teen art classes, and in-school programs facilitated by the Children’s Theatre. New revenue generating classes have been added including Pilates and Salsa classes, and woodworking camps for kids. Staff continue to be constrained to fully meet community demand by limited physical space, contract thresholds, and staffing limitations.
• Geng Road Safe Parking (Ongoing cost: $266,000) – As noted in the August 19, 2024 staff report (Staff Report # 2407-3274)
5 to Council, staff previously indicated an
intention to recommend $266,000 in annual funding for the expansion of safe parking at Geng Road during the Fiscal Year 2025 Midyear Budget Review. To cover operational costs from February to June 2025, a pro-rated amount of $111,000 is required, with $79,000 sourced from the General Fund and $32,000 from the Permanent Local Housing Allocation (PLHA) grant. Staff is currently finalizing the necessary agreements for this funding and will bring this recommendation forward for Council consideration in a future staff report.

1.a.v. City’s Financial Position in FY 2025 and FY 2026 With any forecast and adjustments based on projections, there are inherent risks and benefits.

Staff seeks to position the City in order to provide organizational stability, while acknowledging the service and resource needs, capacity to implement, and project pipeline to continue to invest in infrastructure at a pace the organization can support.

Benefits and risks are associated with the strategy and actions recommended in the Mid-Year Review. On the benefits side, this report will allow the City to maintain current service levels while addressing urgent needs in FY 2025, such as staffing a fire engine at Fire Station 4, funding repairs at the golf course, and increasing customer service staffing at the JMZ, while maintaining a BSR close to the 18.5% target level for any emergency needs that may occur. The

5 City Council, August 19, 2024, Agenda Item #: 10; Staff Report #: 2407-3274, https://portal.laserfiche.com/Portal/DocView.aspx?id=88920&repo=r -704298fc&searchid=6494c525-bcb7-49f3- b528-725377a2d6c6
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City is also positioned well to address the gap of $12.0 million in FY 2026 identified in the 2026- 2035 LRFF with one-time funds in the Uncertainty Reserve. Other benefits that could materialize are revenue and expense estimates may change and lead to additional available funds, and the City’s diligence in funding long term liabilities has the potential to fund annual pension and retiree healthcare costs to provide short-term relief.

The risks include but are not limited to funding additional services or needs in FY 2026 that are requested above the base level of services used in the 2026-2035 LRFF. In addition, the unresolved deficit beyond FY 2026 - estimated deficits in FY 2027 and FY 2028 (approximately $14.4 million in total) need to be resolved. Labor contracts are currently being negotiated and the cost of final contract terms may exceed budget estimates. The new Federal administration and economic downturn may cause increased deficits over the next several years.

Should the Council approve the actions recommended in this report, there will be four (4) reserves in the General Fund with the following status:

1. Budget Stabilization Reserve (BSR) estimated to be $54.0 million, which is below the adopted 18.5% level of $54.4 million by $0.4 million
The City’s BSR serves as the primary General Fund reserve and Council’s policy is to maintain the BSR at a level between 15% and 20% of General Fund operating expenses in any given year. This is both intended for catastrophic events as well as a repository for unspent operating funds at year-end used to fund one-time unexpected needs that arise outside of the regular budget preparation process. Prudent financial management practices dictate that the BSR not be used to fund or solve on-going, recurring financial needs.

2. Budget Uncertainty Reserve $12.0 million, from $6.1 million Planned to be used to offset the FY 2026 projected deficit of $12.0 million. This reserve was established to help the City manage the near-term recovery and uncertainty, ensuring that the City has a stable financial plan to address current service levels while investing in core priority service areas. As a reminder the City also is facing a forecasted deficit in FY 2027 of $7.8 million as indicated in the 2026-2035 LRFF.

3. Reserve: Business Tax Revenue $0.3 million in FY 2025 added to $1.8 million in FY 2024 for a total of $2.1 million
Actions in this report increase the Reserve for Business Tax Revenue in the General Fund in order to account for business tax funding collected but not allocated for specific programs relating to public safety; affordable housing and homeless services; and transportation and grade separation projects. This segregated reserve ensures that business tax revenue is accounted for and funds approved for specific programs. Table 2 below summarizes the FY 2025 Business Tax Revenue & Programmed Expenses.

4. Reserve: Utility Transfer Litigation (Equity Transfer) $0, from $3.1 million Fully used to fulfill remaining obligations under the Green v. City of Palo Alto (Santa Item 9
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Clara Superior Court, Case No. 1-16-CV-300760) settlement.

Table 2: FY 2025 Business Tax Revenue and Programmed Expenses

Transportation &
Safe Train
Crossings
Housing
Affordability &
Services for
Unhoused
Public
Safety Administration
Total
Funding
Revenue $1.5M $1.5M $1.5M $0.3M $4.8M
Expenses
(programmed) $1.5M $1.5M $1.5M $0.3M $4.8M
Net Available $0 $0 $0 $0 $0

Transportation ($1.5 million): $0.75 million for Churchill Ave Rail Grade Separation & Safety Improvement (PL-24001) and $0.75 million for Meadow Drive & Charleston Road Rail Grade Separation and Safety Improvements (PL-24000)

Housing Affordability & Services for Unhoused ($1.5 million): $0.8 million for HomeKey and $0.7 million for San Antonio Coordinated Area Plan (CAP)

Public Safety ($1.5 million): $1.5 million spent on public safety services appropriations as authorized within the Council adopted budget. Expenses include but are not limited to additional dispatch staffing, staffing for traffic team, fully staffing a fire engine at station 2, and support recruitment and retention efforts through competitive labor agreements.

Administration ($0.3 million): HdL business tax administration and Administrative Services support staff

1.b. Capital Funds – Mid-Year Budget Adjustments
Several projects in the Capital Improvement Fund require technical adjustments in FY 2025 to recognize and appropriate external funding such as Gas Tax funds from the state, grant funds from the Valley Transportation Authority (VTA) and the federal government and aligning impact fee funds with appropriate projects.

In addition to adjustments to specific projects, several technical adjustments are recommended to the overall Capital Improvement Fund. These include an increased transfer from the General Fund due to FY 2024 year-end savings as well as increased TOT funding for capital infrastructure, a reduction in estimated investment earnings, and a refund from the General Benefits Fund. In total, these adjustments increase the Capital Improvement fund balance by $2.5 million, which will offset New Public Safety Building (PE-15001) project cost increases, as well as increase the fund balance in the Capital Improvement Fund for use in the development of the upcoming 2026-2030 five-year Capital Improvement Plan. For more details, refer to Attachment A, Exhibits 1 and 2.

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1.c. Enterprise Funds – Mid-Year Budget Adjustments
Mid-year budget adjustments for the Enterprise Funds focus on aligning budgets with current market conditions and operational priorities. For more details, refer to Attachment A, Exhibit

1. Key recommendations include:
• Increasing the Electric Fund equity transfer to reflect updated PG&E Return on Equity rates.
• Revising budget allocations for electric energy usage across City departments. • Reclassifying a vacant Contracts Administrator position in Purchasing to a Senior Buyer role funded in the Electric Fund to support grid modernization efforts. • Recognizing rebate revenue from the State TECH Clean Program to fund residential rebates for advanced heat pump water heaters.
• Final Occupational Safety and Health Administration (OSHA) settlement resulting from a workplace safety appeal process.

1.d. Internal Service Funds – Mid-Year Budget Adjustments See Attachment A, Exhibit 1 for further information regarding the recommended changes in the Internal Service Funds and their impacts to other funds. Mid-Year actions recommended in these funds are technical and needed to align the budget with anticipated activities through the remainder of FY 2025 including:

General Benefits Fund
• Transfer from the General Benefits Fund: $1.7 million expense This adjustment increases transfers by $1.7 million from the General Benefits (GB) Fund to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the GB Fund in prior years that has accumulated in fund balance. It represents a proportional refund to align with the FY 2025 General Fund refund.

• Implied Subsidy Adjustment: $0.3 million expense
This adjustment increases funding for the implied subsidy in the General Benefits Fund by $254,500. This is a technical correction to the action taken during the FY 2025 budget process and will result in a full offset of the implied subsidy transfer to the Retiree Health Benefit Fund in accordance with City policy. The calculation of implied subsidy requires an agency to recognize that it pays the same medical premiums for active employees as those that are retired. The implied subsidy identifies and accounts for the agency paying the same blended premium for both active employees and retirees, even though the medical cost for active employees is lower than retirees. The most recent study was completed in May 2024 and adopted by the City Council on Item 9
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June 17, 2024 (Staff Report 2406-3140)6.

General Liabilities Fund
• Litigation Reimbursement Revenue and Settlement Costs: $2.5 million revenue and expense
This cost neutral adjustment appropriates $2.5 million in litigation settlement costs, offset by $2.5 million in revenue to be reimbursed by the City's liability insurance. • Property Loss Insurance Premium: $0.3 million expense In total, these adjustments add $299,100 in expense for property loss insurance as a result of higher than anticipated premium costs and increasing insurance coverage for new city facilities, the California Avenue Parking Garage and the Public Safety Building.

1.e. Special Revenue Funds – Mid-Year Budget Adjustments Mid-Year actions recommended in these funds are related to technical adjustments to align updated revenue projections from the State for Gas Tax funding and recommended funding to provide enhanced cleaning services in the California Avenue and University Avenue business districts and increased parking enforcement services in residential parking areas. See Attachment A, Exhibit 1 for further information regarding the recommended changes in the Special Revenue Funds.

Gas Tax Fund
• Gas Tax Revenue for Street Maintenance: $0.1 million decrease in revenue and expense The City receives revenues from California’s Highway Users Tax Account (HUTA) and the Road Maintenance and Rehabilitation Account (RMRA SB1). In January, the Department of Finance’s updates for estimated revenues from these accounts indicated that receipts would be lower than what is currently in the City’s budget. To align with the new estimates, gas tax revenues will be reduced by $68,070, and transfers to the Capital Improvement Fund for the Street Maintenance project (PE- 86070) will be reduced by the same amount.

University Avenue and California Avenue Parking Funds
• Enhanced Cleaning Services: $0.3 million expense
Consistent with Staff Report 2412-39367, this action appropriates funding of $280,000 to support enhanced cleanliness efforts in the University Avenue and California Avenue business areas. The additional funding increases the frequency of pressure

6 City Council, June 17, 2024, Agenda Item #: 28; Staff Report #: 2406-3140, https://portal.laserfiche.com/Portal/DocView.aspx?id=73983&repo=r -704298fc&searchid=6f8d0911-1772-4c36- 8644-9d493c0108f6
7 City Council, January 13, 2025, Agenda Item #: 7; Staff Report #: 2412-3936, https://portal.laserfiche.com/Portal/DocView.aspx?id=125149&repo=r -704298fc&searchid=a72a120e-3eb1-4e81- 8d4c-049e770ee712
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washing from once a month to twice a month, as well as overtime pay for enhanced in- house cleaning services.

Residential Permit Parking Fund
• Parking Permit Revenue and Enhanced Parking Enforcement: $0.2 million revenue and expense
This action increases parking permit revenue estimates by $0.2 million to align with increased permit activity. The increased revenue will offset increased funding for parking enforcement services in residential parking permit areas around the City.

2. Preliminary Q2 General Fund Financial Status & Public Safety Overtime (Attachment B & C)
Attachments B and C provide summary information on actual preliminary financial activity through December 2025. These actuals have been factored into the analysis and projections used in the development of this Mid-Year Budget Review. Overall, they remain consistent with trends seen in the first quarter of the fiscal year. Staff will continue to monitor trends and update assumptions as part of the FY 2026 budget process as necessary.

3. Timeline and Next Steps
Staff is actively working on the FY 2026 budget and the Council and Finance Committee will continue to be updated through discussions with adjustments brought forward as necessary.

Below is a list of expected reports and Council updates planned for the remainder of FY 2025.

March/April 2025:
• Utility Advisory Commission (UAC) and Finance Committee Meetings – Five Year Utility Financial Plans and FY 2026 Rate Recommendations • Continuing Labor Negotiations
• Finance Committee Review of the Planning & Development Services Fee Adjustments and Citywide Municipal Fee Study
May 2025:
• Release of the FY 2026 Proposed Operating and Capital Budgets • Public Budget Hearings on the Proposed Budgets with Finance Committee, including Utility Rates, Municipal Fees, and the 5-Year Capital Improvement Plan June 2025:
• FY 2025 Third Quarter (Q3) Fiscal Analysis Report (informational) • FY 2026 Operating and Capital Budget Adoption
• FY 2026 Municipal Fee Schedule Adoption
• FY 2026 Utility Rates Adoption

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FISCAL/RESOURCE IMPACT
Approval of the attached transactions is required to amend the FY 2025 budget appropriation.

With the approval of these amendments, the BSR will be reduced by $9.1 million and the projected ending balance of the General Fund BSR is anticipated to be $54.0 million, which is within the target range of 15% to 20% of the General Fund Budget expenses; however, it is below the City Council target level of 18.5%, or $54.4 million, by $0.4 million.

The projected changes to the fund balance for all other funds including Capital Funds, Enterprise Funds, Internal Services Funds, and Special Revenue Funds are outlined in Attachment A and accompanying exhibits and impacts to fund balances in these fund types are summarized in the table below:

Table 3: Fund Balance Impact (Non-General Fund)
Fund Type Fund Amount
Capital Capital Improvement Fund $2.5 M
Enterprise Airport Fund $34,000
Electric Fund $(0.5 M)
Fiber Optics Fund $47,000
Gas Fund $0.2 M
Refuse Fund $53,000

Stormwater Management Fund $56,000

Wastewater Collection Fund $0.1 M

Wastewater Treatment Fund $0.5 M

Water Fund $0.2 M
Internal Service General Benefits Fund $(2.0 M)

General Liabilities Fund $(0.3 M)

Information Technology Fund $0.1 M

Print and Mail Services Fund $3,000

Vehicle Replacement Fund $40,000
Special Revenue California Avenue Parking Fund $(18,000)

General Government Facility Impact Fee Fund $(69,000)

Parkland Dedication Fee Fund $(0.1 M)

Public Art Fund $4,000

Residential Permit Parking Fund $7,000

University Avenue Parking Fund $(0.2 M)

Item 9
Item 9 Staff Report

Item 9: Staff Report
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STAKEHOLDER ENGAGEMENT
The Office of Management and Budget has coordinated with all departments city-wide and the City Manager’s Office, as appropriate, to bring forward the changes discussed and recommended in this report.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by California Environmental Quality Act (CEQA) because the amendments to the FY 2025 Budget Appropriation and FY 2025 Table of Organization are fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).

ATTACHMENTS
Attachment A, Exhibit 1: FY 2025 Recommended Operating Budget Adjustments Attachment A, Exhibit 2: FY 2025 Recommended Capital Budget Adjustments Attachment B: Preliminary FY 2025 2nd Quarter Financial Status Attachment C: Public Safety Overtime Analysis

APPROVED BY:

Lauren Lai, Administrative Services Director

Item 9
Item 9 Staff Report

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)
Administrative
Services
Technical Adjust: Business Tax Revenue/Business Tax Administration Contract This action allocates funding to administer the Business Tax program to cover additional costs associated with contractor fees for identifying and collecting from businesses subject to the tax. These fees, similar to a finder’s fee, are incurred as the contractor brings in additional business tax revenue through discovery, notifications, and delinquent account collections. Payments to the contractor are expected to total $0.2 million through the remainder of the year, generating an estimated $0.5 million in revenue during the same period. The additional $0.3 million will be set aside in the Reserve for Business Tax Revenue as described below to be used for Council approved programs related to public safety; affordable housing and homeless services; and transportation and grade separation projects. (Ongoing costs: $0)
- 487,000$ 185,000$
Administrative
Services
Technical Adjust: Purchasing Staffing for Utilities Capital Projects This action reclassifies a vacant 1.00 FTE Contracts Administrator position to a 1.00 FTE Senior Buyer position in the Utilities Department to support expanded purchasing needs for the electric grid modernization. Working closely with Utilities engineers, this position will help maintain efficient build-out timelines and support the project’s long-term success. This position will sit in the Administrative Services Purchasing Division, but it will work solely on Utilities related purchasing projects and programs. (Ongoing savings: $218,000) (1.00) -$ (71,574)$
Community
Services
Recommended Funding: Junior Museum and Zoo (JMZ) Staffing This action adds 1.00 FTE Program Assistant I to the Guest Services team of the Junior Museum and Zoo. This position will provide customer service, membership oversight, reservation booking, event coordination, and support admissions. During the Finance Committee review of the FY 2025 Budget, it was recommended that this position be brought back as part the FY 2025 Mid-Year Review in order to align with the business consultant's staffing recommendation of an additional 4.08 total FTE to support the JMZ. In FY 2025, the cost of this position is estimated to be $40,000, which will be completely offset by vacancy savings within the Community Services Department. (Ongoing costs: $125,000)

1.00 -$ -$
Community
Services
Recommended Funding: Golf Course Repairs
This action allocates funding for repairs at the Palo Alto Golf Course. This will allow for the repair of key infrastructure such as the storm and irrigation pump stations, along with the replacement of the recycled water meter at the irrigation pump station. This work is necessary to ensure operational resilience, preserve the course’s integrity, prevent service disruptions, and ensure the facility remains functional during inclement weather, while also enhancing the overall user experience. (Ongoing costs: $0) - -$ 105,000$
Fire Recommended Funding: Revenue from Stanford/Firefighter Academy This action adds one-time funding of $236,400 for new hire uniforms, personal protective equipment (PPE), academy fees, and background checks as the Department has hired 10 entry-level firefighters in FY 2025. These costs are not budgeted as part of the adopted budget and are typically funded as part of Mid-Year because the number of new hires may vary from year to year. This action also adds $10,000 in ongoing funding for the Department's annual health physical exams. Lastly, this action includes $81,400 in revenue reimbursed through the fire response services agreement with Stanford. (Ongoing costs: $8,100) - 81,400$ 246,400$
Fire Recommended Funding: Paramedic Supplies
This action adds $63,000 in funding for Emergency Medical Services (EMS) supplies such as laryngoscopes, intubation tubes, needles, and drugs needed to provide emergency medical treatment. This funding addresses vendor supply cost increases as well as EMS call volume increases. (Ongoing costs: $40,000) - -$ 63,000$
Fire Recommended Funding: Cross-Staff Fire Engine 64 on Overtime This action adds $315,000 in funding to cross-staff one additional overtime position per shift to put a fire engine in service starting March/April at Fire Station 4. This is a fast, near-term strategy that activates a reserve fire engine operating in the pre-existing cross-staffing model. The ongoing service model and related costs will be discussed as part of the FY 2026 Budget process. (Ongoing costs: $1.0 million) - -$ 315,000$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Fire Technical Adjust: Salaries and Overtime Adjustment This net-neutral action transfers $1.5 million of Department vacancy savings from salary & benefits to overtime salaries. This adjustment, along with other related Mid-Year adjustments, will result in a total overtime budget of $5.2 million for the Fire Department in FY 2025. The Department has had 10 vacancies during the first six months of FY 2025; this action will transfer the vacancy savings to offset Fire Department overtime costs. (Ongoing costs: $0)
- -$ -$
Fire Technical Adjust: Revenue from Other Agencies/Overtime for Strike Teams and Fire Station 8 This net-neutral action recognizes $592,436 in reimbursement revenue for eight Strike Teams that the Department participated in through the California Fire Assistance Agreement. Additionally, this action recognizes $272,267 in reimbursement revenue from the County of Santa Clara, based on an agreement to cover the costs of staffing Fire Station 8 on alternate months during high fire season months on behalf of the City of Los Altos Hills. (Ongoing costs: $0)
- 864,703$ 864,703$
Fire Technical Adjust: Charges for Service Revenue/Fire and Life Safety Inspection Program This cost neutral action adjusts Fire and Life Safety Inspection Program revenue and expenses to reflect six months of activity in FY 2025. The program experienced hiring delays which impacted the ability to provide inspections. (Ongoing costs: $0)
- (397,500)$ (397,500)$
Fire Technical Adjust: Paramedic Transport Revenue
This action increases paramedic transport revenue by $600,000 to align estimates with current trends through the first half of FY 2025. In recent years, this revenue has exceeded budget due to an increase in Emergency Medical Service (EMS) calls. (Ongoing savings: $600,000) - 600,000$ -$
Non-
Departmental
Technical Adjust: Projected Tax Revenue/Transfer to the Capital Improvement Fund This action recognizes negative adjustments to estimates for Sales Tax ($3.9 million decrease) and Property Tax ($0.1 million decrease), partially offset by increases to Documentary Transfer Tax (DTT) ($1.4 million increase), Utility Users Tax (UUT) ($1.1 million increase), Transient Occupancy Tax (TOT) ($0.6 million increase), and Investment Earnings ($0.5 million increase) based on trends experienced in the first half of FY 2025. This adjustment would bring Property Tax revenue to $68.5 million, Sales Tax revenue to $35.7 million, TOT revenue to $28.4 million, UUT revenue to $21.0 million, DTT to $8.7 million, and Investment Earnings to $3.8 million.

This action also increases the transfer to the Capital Infrastructure Reserve by $0.2 million due to the increased TOT revenue that Council designated to fund Capital Improvements. (Ongoing costs: $1.0 million) - (429,000)$ 209,000$
Non-
Departmental
Technical Adjust: Transfer to the Capital Improvement Fund (FY 2024 Year-End Savings) This action transfers $3.0 million to the Infrastructure Reserve in the Capital Improvement Fund, as approved by the City Council on December 16, 2024 in the FY 2024 Annual Comprehensive Financial Report (ACFR) for BSR exceeding the 18.5% target level. This funding will offset cost increases for the New Public Safety Building project (PE-15001) as well as increase the fund balance in the Capital Improvement Fund for use in the development of the upcoming 2026-2030 five-year Capital Improvement Plan. (Ongoing costs: $0) - -$ 3,000,000$
Non-
Departmental
Technical Adjust: Increase Uncertainty Reserve (FY 2024 Year-End Savings) This action increases the Uncertainty Reserve by $5.9 million, bringing the Uncertainty Reserve to a total of $12.0 million for use in the development of the FY 2026 Budget. This action was approved by the City Council on December 16, 2024 in the FY 2024 Annual Comprehensive Financial Report (ACFR) for BSR exceeding the

18.5% target level. (Ongoing costs: $0)
- -$ 5,900,000$
Non-
Departmental
Technical Adjust: FY 2024 Year-End Cleanup for the Equity Transfer This action increases the equity transfer from the Electric Fund by $0.9 million, aligning it with FY 2024 year-end actuals and the updated PG&E Return on Equity of 10.28%. As a result, the total electric equity transfer is $16.0 million in FY 2025. (Ongoing savings: $0).
- 864,000$ -$
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Non-
Departmental
Technical Adjust: Grant Revenue/TRUST Grant Closeout
This action recognizes the City accepted a $2.0 million grant awarded by the Department of Health and Human Services Substance Abuse and Mental Health Services Administration (SAMHSA) for assistance related to North County TRUST (Trusted Response Urgent Support Team). The grant spending period ended at the end of calendar year 2024, and this adjustment reflects the actual expenditures and reimbursements for the $2.0 million grant, with a total of $1.74 million expended. This adjustment reduces the budget to align with the actual spending and revenue reimbursed to the City. (Ongoing costs: $0) - (261,246)$ (261,246)$
Non-
Departmental
Technical Adjust: Reduce Utility Transfer Legal Cost Reserve This action reduces the Utility Transfer Legal Cost Reserve by $3.1 million to fund the final settlement-related disbursement under the Green v. City of Palo Alto (Santa Clara Superior Court, Case No. 1-16-CV-300760) settlement. This action fully depletes the reserve. (Ongoing savings: $0) - -$ (3,100,000)$
Non-
Departmental
Technical Adjust: Utility Transfer Settlement Funding (Green v. City of Palo Alto) This action appropriates $3.1 million from the Utility Transfer Legal Cost Reserve to the General Fund to fulfill the remaining obligations under the Green v. City of Palo Alto (Santa Clara Superior Court, Case No. 1-16-CV-300760) settlement. With this appropriation, the reserve will be fully utilized. (Ongoing costs: $0) - -$ 3,100,000$
Office of
Transportation
Recommended Funding: Measure B Revenue/Safe Routes to School Bicycle and Pedestrian Safety Classes This action recognizes $0.1 million in grant revenue from the Valley Transportation Agency's (VTA) 2016 Measure B Bicycle and Pedestrian Education and Encouragement Funding and increases contract services by the same amount. Staff will use the grant funding to continue consultant services to manage the Safe Routes to School Program Bicycle and Pedestrian Safety Classes. (Ongoing costs: $0) - 126,235$ 126,235$
Police Technical Adjust: Public Safety Analog Radio Contract This action adds $64,500 in funding for Public Safety Analog Radio System contract costs. The year one contract amount of $145,000 and ongoing annual amount of $125,000 was approved by the City Council on June 17, 2024 (Staff Report 2405-3086), the same day the FY 2025 Budget was adopted by the City Council. An adjustment to align the budget with the annual contract amount is recommended as part of the FY 2025 Mid- Year Review. (Ongoing costs: $44,500)
- -$ 64,500$
Police Recommended Funding: Crime Lab Services, Uniforms, and Equipment This action adds $25,000 in one-time funding for the Department to purchase uniforms and equipment for new hires. The Department budgets for an anticipated 10 new hires each year; however, in FY 2025, the Department has hired 16. This action allows the Department to purchase uniforms and equipment for the additional six new hires. This action also adds $19,000 for Crime Laboratory Services due to cost increases implemented by the Santa Clara County Crime Laboratory; these services are critical for the Department to process evidence. (Ongoing costs: $29,000)
- -$ 44,000$
Various Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ 366,170$
Fund Balance Reserve: Business Tax Revenue
This action increases a Reserve for Business Tax Revenue in the General Fund in order to account for business tax funding collected but not allocated for specific programs relating to public safety; affordable housing and homeless services; and transportation and grade separation projects. This reserve ensures that business tax revenue is accounted separately from the Budget Stabilization Reserve to be used in the future for approved programs in the previously mentioned areas. (Ongoing costs: $0) - -$ 302,000$
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment
GENERAL FUND (102)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Fund Balance Adjustment to Fund Balance FY 2024 Year End use of BSR This action reduces the current Budget Stabilization Reserve (BSR) FY 2025 projected level by $8.9 million in alignment with the actions recommended and approved by the City Council in the FY 2024 Year-End Annual Comprehensive Financial Report (ACFR) and Year End Budget transactions approved by Council on December 16, 2024. This reflects allocation of funds above the Council goal of 18.5% of General Fund expenses based on FY 2024 year end actual financial activity.
- -$ (8,900,000)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance as a result of actions recommended in this report and decreases the Budget Stabilization Reserve (BSR) projected for June 30, 2025 to an estimated level of $54.0 million. This leaves the BSR at 18.4% of the adopted expenditure budget or $0.4 million below the Council target of 18.5%. - -$ (225,096)$
GENERAL FUND (102) SUBTOTAL - 1,935,592$ 1,935,592$ Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment

CAPITAL IMPROVEMENT FUNDS
GENERAL FUND CAPITAL IMPROVEMENT FUND (471)
Capital Technical Adjust: Transfer from the General Fund (FY 2024 Year-End Savings) This action transfers $3.0 million from the General Fund to the Infrastructure Reserve in the Capital Improvement Fund, as approved by the City Council on December 16, 2024 in the FY 2024 Annual Comprehensive Financial Report (ACFR) for BSR exceeding the 18.5% target level. This funding will offset cost increases for the New Public Safety Building project (PE-15001) as well as increase the fund balance in the Capital Improvement Fund for use in the development of the upcoming 2026-2030 five-year Capital Improvement Plan. (Ongoing costs: $0)
- 3,000,000$ -$
Capital Technical Adjust: Investment Returns Revenue
This action decreases investment returns revenue in the Capital Improvement Fund to align with annual approved interest revenue in this fund of approximately $1.1 million. (Ongoing costs: $878,100) - (878,100)$ -$
Capital Technical Adjust: Transfer from General Fund (TOT) This action reduces transfers from the General Fund to the Infrastructure Reserve in the Capital Improvement Fund in alignment with adjustments to estimates for Transient Occupancy Tax (TOT) revenue based on trends experienced in the first half of FY 2025. (Ongoing costs: $0) - 209,000$ -$
Capital Technical Adjust: Transfer from the Gas Tax Fund/Street Maintenance Project (PE-86070) This action reduces the transfer from the Gas Tax Fund by $68,070, and reduces the funding for the Streets Improvement project (PE-86070) by the same amount. This is based on the State's updated January HUTA and SB1 gas tax revenue estimates. (Ongoing costs: $0)
- (68,070)$ (68,070)$
Capital Technical Adjust: Transfer from General Government Facility Impact Fee Fund and Revenue Realignment from Rinconada Pool Family Changing Room Project (PE-24004) to New Public Safety Building Project (PE- 15001)
To comply with prescribed uses of impact fees, this action reallocates $121,165 of General Government Facility Impact Fee revenue from the Rinconada Pool Family Changing Room Project (PE-24004) to the New Public Safety Building Project (PE-15011) and also transfers the remaining $68,835 balance of the General Government Facility Impact Fee Fund to PE-15011, with a corresponding $190,000 appropriation increase in PE-15011. (Ongoing costs: $0)
- 68,835$ 190,000$
Capital Technical Adjust: Transfer from Parkland Dedication Fund/Rinconada Pool Family Changing Room Project (PE-24004)
To comply with prescribed uses of impact fees, this action transfers $121,165 from the Parkland Dedication Fund to the Rinconada Pool Family Changing Room Project (PE-24004) to offset a $121,165 reallocation of General Government Facility Impact Fee revenue from PE-24004 to the New Public Safety Building Project (PE-15011). (Ongoing costs: $0)
- 121,165$ -$
Capital Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 134,300$ -$
Capital Recommended Funding: Revenue from Federal Government/Safe Routes to School Project (PL-00026) Consistent with Staff Report #2411-3763, approved by the City Council on December 16, 2024, this action increases appropriation and revenue by the same amount in PL-00026 to reflect the award of the Federal Highway Administration (FWHA) Safe Streets and Roads for All (SS4A) planning demonstration grant. The funding will be used for quick-build treatments to improve bikeways and crossings on East Meadow Drive and Fabian Way. (Ongoing costs: $0)
- 888,000$ 888,000$
Capital Recommended Funding: Measure B Local Streets and Roads Revenue/Traffic Signal and Intelligent Transportation Systems Project (PL-05030)
This action increases appropriation and revenue by the same amount in PL-05030 to reflect the Valley Transportation Agency's (VTA) approval of the City's annual Program of Projects (POP) for Measure B Local Streets and Roads (LSR) revenue. The funding will be used to upgrade the City's traffic signal network communications systems in support of traffic congestion relief. (Ongoing costs: $0)
- 500,000$ 500,000$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment

CAPITAL IMPROVEMENT FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Capital Recommended Funding: Shift Funding from Churchill Avenue Enhanced Bikeway Project (PL-14000) to Bicycle and Pedestrian Transportation Plan Implementation Project (PL-04010) and Transportation Parking Improvements Project (PL-12000)
This cost-neutral action transfers $800,000 of appropriation remaining from lower-than-expected construction costs in PL-14000 to two projects: $555,000 to PL-04010 to support bicycle and pedestrian plan implementation, and $245,000 to PL-12000 to support street improvement work on California Avenue and El Camino Real. (Ongoing costs: $0)
- -$ -$
Capital Recommended Funding: Insurance Settlement Reimbursement Revenue/Art in Public Spaces Project (AC- 86017)
This cost neutral action recognizes the expense for refabrication of a sculpture in the Art in Public Spaces Project (AC-86017). This expense is offset by revenue received as claim reimbursement from the insurance settlement for the damaged sculpture. (Ongoing costs: $0) - 52,900$ 52,900$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 2,465,200$
GENERAL FUND CAPITAL IMPROVEMENT FUND (471) SUBTOTAL - 4,028,030$ 4,028,030$ Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment

ENTERPRISE FUNDS
AIRPORT FUND (530)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 20,800$ -$
Utilities Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (13,610)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 34,410$
AIRPORT FUND (530) SUBTOTAL - 20,800$ 20,800$ ELECTRIC FUND (513 & 523)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 524,229$ -$
Utilities Technical Adjust: FY 2024 Year-End Cleanup for the Equity Transfer This action increases the equity transfer to the General Fund by $0.9 million, aligning it with FY 2024 year- end actuals and the updated PG&E Return on Equity of 10.28%. As a result, the total electric equity transfer is $16.0 million. (Ongoing savings: $0).
- -$ 864,000$
Utilities Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (11,190)$
Utilities Technical Adjust: Purchasing Staffing for Utilities Capital Projects This action reclassifies a vacant 1.00 FTE Contracts Administrator position to a 1.00 FTE Senior Buyer position in the Utilities Department to support expanded purchasing needs for the electric grid modernization.

Working closely with Utilities engineers, this position will help maintain efficient build-out timelines and support the project’s long-term success. This position will sit in the Administrative Services Purchasing Division, but it will work solely on Utilities related purchasing projects and programs. (Ongoing costs:
$166,000)

1.00 -$ 53,835$
Utilities Technical Adjust: Revenue From the State TECH Clean Program/Advanced Heat Pump Water Heater Program
This one-time action recognizes $350,000 in rebate revenue received from the State of California's TECH Clean Program for the Advanced Heat Pump Water Heater (HPWH) program. These funds will fully offset rebate payments for the same amount to residential customers participating in the HPWH program. (Ongoing costs: $0)
- 350,000$ 350,000$
Utilities Technical Adjust: Occupational Safety and Health Administration (OSHA) Settlement This allocation addresses the final penalty assessed by the California OSHA Appeals Board, concluding a workplace safety appeal process. The penalty, totaling $68,175, resulted from citations related to electrical safety violations issued in 2020. Following review, some citations were vacated or reduced, but the remaining amount represents the City's final settlement obligation. (Ongoing costs: $0) - -$ 68,175$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ (450,591)$
ELECTRIC FUND (513 & 523) SUBTOTAL 1.00 874,229$ 874,229$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
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Revenues
Department FTE Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
FIBER OPTICS FUND (533)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 46,695$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 46,695$
FIBER OPTICS FUND (533) SUBTOTAL - 46,695$ 46,695$ GAS FUND (514 & 524)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 196,688$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 196,688$
GAS FUND (514 & 524) SUBTOTAL - 196,688$ 196,688$ REFUSE FUND (525)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 50,100$ -$
Utilities Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (2,770)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 52,870$
REFUSE FUND (525) SUBTOTAL - 50,100$ 50,100$ STORMWATER MANGEMENT FUND (528)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 48,800$ -$
Utilities Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (7,450)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 56,250$
STORMWATER MANGEMENT FUND (528) SUBTOTAL - 48,800$ 48,800$ Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
Pg.
24 Packet Pg. 161 of 246

Revenues
Department FTE Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
WASTEWATER COLLECTION FUND (527)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 101,568$ -$
Utilities Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (120)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 101,688$
WASTEWATER COLLECTION FUND (527) SUBTOTAL - 101,568$ 101,568$ WASTEWATER TREATMENT FUND (526)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 243,800$ -$
Utilities Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (226,090)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 469,890$
WASTEWATER TREATMENT FUND (526) SUBTOTAL - 243,800$ 243,800$ WATER FUND (522)
Utilities Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 172,920$ -$
Utilities Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (73,180)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 246,100$
WATER FUND (522) SUBTOTAL 172,920$ 172,920$
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
Pg.
25 Packet Pg. 162 of 246

Revenues
Department FTE Adjustment Adjustment

INTERNAL SERVICE FUNDS
GENERAL BENEFITS FUND (687)
Human
Resources
Technical Adjust: Transfer from General Benefits Fund
This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - -$ 1,739,300$
Human
Resources
Technical Adjust: Implied Subsidy Adjustment
This adjustment increases funding for the implied subsidy in the General Benefits Fund by $254,500. The implied subsidy identifies and accounts for an agency paying the same blended premium for both active employees and retirees, even though the medical cost for active employees is lower than retirees. This is a technical correction to the action taken during the FY 2025 budget process and will result in an accurate offset of the implied subsidy transfer to the Retiree Health Benefit Fund. (Ongoing costs: $0) - -$ 254,500$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ (1,993,800)$
GENERAL BENEFITS FUND (687) SUBTOTAL - -$ -$ GENERAL LIABILITIES INSURANCE FUND (689)
Human
Resources
Technical Adjust: Property Loss Insurance Premium
This action increases the estimate for property loss insurance to align with higher than anticipated premium costs as well as increasing insurance coverage for new city facilities, the California Avenue Parking Garage and the Public Safety Building. (Ongoing costs: $400,000) - -$ 299,100$
Human
Resources
Recommended Funding: Litigation Reimbursement Revenue/Litigation Settlement Costs This cost neutral adjustment appropriates $2.5 million in litigation settlement costs, offset by $2.5 million in revenue to be reimbursed by the City's liability insurance. (Ongoing costs: $0) - 2,500,000$ 2,500,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ (299,100)$
GENERAL LIABILITIES INSURANCE FUND (689) SUBTOTAL - 2,500,000$ 2,500,000$ INFORMATION TECHNOLOGY FUND (682)
Information
Technology
Technical Adjust: Transfer from General Benefits Fund
This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 129,300$ -$
Information
Technology
Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (790)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 130,090$
INFORMATION TECHNOLOGY FUND (682) SUBTOTAL - 129,300$ 129,300$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
Pg.
26 Packet Pg. 163 of 246

Revenues
Department FTE Adjustment Adjustment

INTERNAL SERVICE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
PRINT AND MAIL SERVICES FUND (683)
Administrative
Services
Technical Adjust: Transfer from General Benefits Fund
This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 3,000$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 3,000$
PRINT AND MAIL SERVICES FUND (683) SUBTOTAL - 3,000$ 3,000$ VEHICLE REPLACEMENT & MAINTENANCE FUND (681)
Public Works Technical Adjust: Transfer from General Benefits Fund This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 40,300$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 40,300$
VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL - 40,300$ 40,300$ Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
Pg.
27 Packet Pg. 164 of 246

Revenues
Department FTE Adjustment Adjustment

SPECIAL REVENUE FUNDS
CALIFORNIA AVENUE FUND (237)
Office of
Transportation
Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (9,750)$
Office of
Transportation
Technical Adjust: Transfer from General Benefits Fund
This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 3,500$ -$
Public Works Recommended Funding: Enhanced Cleaning Services Consistent with Staff Report #2412-3936, approved by the City Council on January 13, 2025, this action adds appropriation to support enhanced cleanliness efforts in the California Avenue downtown area, including $5,250 to increase the frequency of contracted pressure washing from six times per year to twelve times per year, and $26,000 for the staff overtime that is required for enhanced in-house cleaning services. An ongoing service model and related costs will be discussed as part of the FY 2026 Budget process. (Ongoing costs: $0) - -$ 31,250$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ (18,000)$
CALIFORNIA AVENUE FUND (237) SUBTOTAL - 3,500$ 3,500$ GAS TAX FUND (231)
Public Works Technical Adjust: Gas Tax Revenues/Transfer to the Capital Improvement Fund for Streets Improvement Project (PE-86070)
This action reduces Fund 231 Gas Tax revenue by $68,070, and reduces the transfer to the Capital Improvement Fund by the same amount for the Streets Improvement project (PE-86070). This is based on the State's updated January HUTA and SB1 gas tax revenue estimates. (Ongoing costs: $0) - (68,070)$ (68,070)$
GAS TAX FUND (231) SUBTOTAL - (68,070)$ (68,070)$ GENERAL GOVERNMENT FACILICTY IMPACT FEE FUND (226)
Capital Technical Adjust: Transfer to the Capital Improvement Fund for New Public Safety Building Project (PE- 15001)
To comply with prescribed uses of impact fees, this action transfers the remaining $68,835 balance of the General Government Facility Impact Fee Fund to PE-15011. (Ongoing costs: $0) - -$ 68,835$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ (68,835)$
GENERAL GOVERNMENT FACILICTY IMPACT FEE FUND (226) SUBTOTAL - -$ -$ PARKLAND DEDICATION FEE FUND (209)
Capital Technical Adjust: Transfer to the Capital Improvement Fund for Rinconada Pool Family Changing Room Project (PE-24004)
To comply with prescribed uses of impact fees, this action transfers $121,165 from the Parkland Dedication Fund to the Rinconada Pool Family Changing Room Project (PE-24004) to offset a $121,165 reallocation of General Government Facility Impact Fee revenue from PE-24004 to the New Public Safety Building Project (PE-15011). (Ongoing costs: $0)
- -$ 121,165$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ (121,165)$
PARKLAND DEDICATION FEE FUND (209) SUBTOTAL - -$ -$

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
Pg.
28 Packet Pg. 165 of 246

Revenues
Department FTE Adjustment Adjustment

SPECIAL REVENUE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 BUDGET Expenses
ATTACHMENT A, EXHIBIT 1
PUBLIC ART FUND (207)
Community
Services
Technical Adjust: Transfer from General Benefits Fund
This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 3,800$ -$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 3,800$
PUBLIC ART FUND (207) SUBTOTAL - 3,800$ 3,800$ RESIDENTIAL PARKING PERMIT FUND (239)
Office of
Transportation
Technical Adjust: Transfer from General Benefits Fund
This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 6,900$ -$
Office of
Transportation
Recommended Funding: Parking Permit Revenue/Parking Enforcement Services This action increases parking permit revenue estimates by $0.2 million to align with increased permit activity. The increased revenue will offset increased funding for parking enforcement services in residential parking permit areas around the City. (Ongoing Costs: $0) - 200,000$ 200,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ 6,900$
RESIDENTIAL PARKING PERMIT FUND (239) SUBTOTAL - 206,900$ 206,900$ UNIVERSITY AVENUE FUND (236)
Office of
Transportation
Technical Adjust: Electric Sales to the City
This one-time technical correction updates the budget distribution for electric energy use across all City departments and funds to align with expected electricity usage in FY 2025 and correct for an error in the FY 2025 Adopted Budget. While this adjustment does not impact overall charges and revenue collected by the Electric Fund for electricity use across the City, the adjustment reallocates anticipated electricity charges among departments and funds to ensure the budget aligns with anticipated charges. (Ongoing costs: $0) - -$ (21,210)$
Office of
Transportation
Technical Adjust: Transfer from General Benefits Fund
This action transfers $1.7 million from the General Benefits Fund (687) to non-General Fund funds. This is a partial refund of allocated charges paid from non-General Fund funds into the General Benefits Fund in prior years that has accumulated in fund balance and a proportional refund across the City in alignment with the General Fund refund of $2.0 million approved in the FY 2025 Adopted Budget. (Ongoing costs: $0) - 12,600$ -$
Public Works Recommended Funding: Enhanced Cleaning Services Consistent with Staff Report #2412-3936, approved by the City Council on January 13, 2025, this action adds appropriation to support enhanced cleanliness efforts in the University Avenue downtown area, including $15,000 to increase the frequency of contracted pressure washing from once a month to twice a month, and $234,000 for the staff overtime that is required for enhanced in-house cleaning services. An ongoing service model and related costs will be discussed as part of the FY 2026 Budget process. (Ongoing costs: $0) - -$ 249,000$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report. - -$ (215,190)$
UNIVERSITY AVENUE FUND (236) SUBTOTAL - 12,600$ 12,600$ Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
Pg.
29 Packet Pg. 166 of 246

Project
Number Title Revenue Expense Comments
AC-86070 Art in Public Spaces $ 52,900 $ 52,900 This action adds appropriation for refabrication of a damaged sculpture to AC-86070, offset by
insurance settlement revenue in the same
amount.

PL-04010 Bicycle and Pedestrian Transportation
Plan Implementation
$ - $ 555,000 This action transfers appropriation remaining from lower-than-expected construction costs in
PL-14000 to PL-04010 to support bicycle and
pedestrian plan implementation.

PL-14000 Churchill Avenue Enhanced Bikeway $ - $ (800,000) This action is one of three transactions to transfer appropriation remaining from lower-
than-expected construction costs in PL-14000 to
PL-04010 to support bicycle and pedestrian plan
implementation, and to PL-12000 to support
street improvement work on California Avenue
and El Camino Real.

PE-15001 New Public Safety Building $ 190,000 $ 190,000 To comply with prescribed uses of impact fees, this action reallocates $121,165 of General
Government Facility Impact Fee revenue from PE-
24004 to PE-15001 and also transfers the
remaining $68,835 balance of the General
Government Facility Impact Fee Fund to PE-
15001, with a corresponding $190,000
appropriation increase in PE-15001.

PE-24004 Rinconada Pool Family Changing Room $ - $ - To comply with prescribed uses of impact fees, this action transfers $121,165 of General
Government Facilities Impact Fee Fund revenue
from PE-24004 to PE-15001 and replaces it with
a transfer from the Parks Dedication Fee Fund in
the same amount.

PL-00026 Safe Routes to School $ 888,000 $ 888,000 Consistent with Staff Report #2411-3763 (12/16/24), this action increases appropriation
and revenue by the same amount in PL-00026 to
reflect the award of the Federal Highway
Administration (FWHA) Safe Streets and Roads
for All (SS4A) planning demonstration grant. The
funding will be used for quick-build treatments
to improve bikeways and crossings on East
Meadow Drive and Fabian Way.

PE-86070 Streets Maintenance $ (68,070) $ (68,070) This action aligns the budget for PE-86070 with the State's updated January HUTA & SB1 Gas Tax
revenue estimates.

PL-05030 Traffic Signal and Intelligent
Transportation Systems
$ 500,000 $ 500,000 This action increases appropriation and revenue by the same amount in PL-05030 to reflect the
Valley Transportation Agency's (VTA) approval of
the City's annual Program of Projects (POP) for
Measure B Local Streets and Roads (LSR)
revenue. The funding will be used to upgrade the
City's traffic signal network communications
systems in support of traffic congestion relief.

PL-12000 Transportation Parking Improvements $ - $ 245,000 This action transfers appropriation remaining from lower-than-expected construction costs in
PL-14000 to PL-12000 to support street
improvement work on California Avenue and El
Camino Real.

Total $ 1,562,830 $ 1,562,830
TOTAL CIP ADJUSTMENTS $ 1,562,830 $ 1,562,830

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2025 CAPITAL IMPROVEMENT PROGRAM ATTACHMENT A, EXHIBIT 2

CAPITAL IMPROVEMENT FUND
Item 9
Attachment A, Exhibits 1
and 2 FY 2025
Recommended Budget
Adjustments

Item 9: Staff Report
Pg.
30 Packet Pg. 167 of 246

Attachment B

Attachment B – Page 1 of 7

Preliminary FY 2025 2nd Quarter Financial Status
General Fund
Overall, the General Fund is tracking closely to the adopted revenue estimates and within the adopted expenditure levels. Actual total revenue and expenditures increased by 5.1% and 15.6% compared to the same period in FY 2024. However, certain major revenue categories, such as sales tax, have declined with partial offsets by other major categories with higher trends. Although the data remains preliminary and will not be finalized until March 2025, staff believes the recommended adjustments are measured and aligned with the current financial outlook.

Revenues
The FY 2025 Adjusted revenue budget, prior to changes recommended in the Mid- Year Review, totals $259.7 million (excluding Operating Transfers-i
n), of which $ 98.2 million or 37.8% of the
budget, has been collected as of the end of the 2 nd quarter. Overall, tax revenue and return on investments revenue estimates in the FY 2025 Adjusted budget are $4.7 million higher than the FY 2024 Actual revenue collected, from approximately $166.6 million to $171.3 million. Business Tax is included in totals and used for specific programs related to public safety, affordable housing and homeless services, and transportation and grade separation projects , per Council direction. A Reserve for Business Tax Revenue is used to ensure that business tax revenue is accounted separately from the Budget Stabilization Reserve (BSR) to be used in accordance with approved programs in the previously mentioned areas.

A
djustments to align revenue estimates based on current experience through the first half of FY 2025 are recommended in this Mid
-Y
ear Budget Review , including adjustments for Documentary Transfer Tax ($1.4 million increase), Utility Users Tax (UUT) ($1.1 million increase), Transient Occupancy Tax (TOT) ($0.6 million increase), Investment Earnings ($0.5 million increase), and business tax ($ 0.5 million increase) offset by Sales Tax ($ 3.9 million decrease) and P roperty Tax ($0.1 million decrease) for a net increase of $0.1 million.

T
able 1 below outlines General Fund revenue performance, as of the end of the 2 nd quarter, compared to the adjusted budget. The adjusted budget does not assume staff’s recommended adjustments presented in this Mid
-Y
ear report as these changes have not been approved by the City Council.

Item 9
Attachment B -
Preliminary FY 2025 2nd
Quarter Financial Status

Item 9: Staff Report
Pg.
31 Packet Pg. 168 of 246

Attachment B

Attachment B – Page 2 of 7

Table 1

Property Tax
T
he FY 2025 Budget is $ 68.6 million, a $ 2.3 million or 3.5% increase from the FY 202 4 actual receipts of $ 66.3 million. Transfer of ownership has been a significant driver of growth . This revenue source has a one-year lag when compared to fluctuations in the economy, and during an economic downturn lower mortgage interest rates are expected. For example, the median sales price for a detached single-f
amily residential home in the 4th quarter of calendar year 2024 or as of December 31, 2024, increased by 3.6% compared to the previous quarter and by 21.5% over the prior year’s same quarter; however, due to the lag in collections, staff recommends a modest $0.1 million decrease in this Mid
-Y
ear Review to reflect lower secured property taxes from sales activity than initially expected.

As of the e
nd of FY 2024, the reserve for Excess Education Revenue Augmentation Fund (ERAF), representing the at
-r
isk amount related to the State Controller’s Office auditing finding on Marin County, totaled $ 5.6 million. As of December 2023, the State Controller’s Office has issued a negative audit finding against Marin County. The state’s assertion is that former Redevelopment Agency funds, which are now part of the regular property taxes, should be excluded from the excess ERAF calculation. Marin County is challenging this finding and in late- De cember 2023, the
County of Santa Clara filed a lawsuit against the State Controller’s Office on this matter . The estimate is, if this audit finding is sustained, 20% to 22% of excess ERAF is at risk for fiscal years 2021, 2022, 2023, 2024, and 2025. If the finding holds, the County of Santa Clara, along with other Excess ERAF counties, will also face the impact of the audit findings. The practice of excluding the at-risk ERAF funding from the City’s budget and keeping it in a reserve is consistent with the City’s prior methodology for addressing this challenge.

Revenues Inc / (Dec) % change F Y 2025 % FY 2024 %

Property Tax $1,288 6.3% $68,623 31.6% $63,785 32.0%
Sales Tax (1,535) -12.1% 39,577 28.2% 36,272 35.1% Charges for Services 704 4.9% 38,637 38.9% 35,131 40.7% Transient Occupancy Tax 839 8.0% 27,857 40.6% 26,834 39.1% Utility User Tax 829 9.7% 19,943 47.0% 18,457 46.3% Permits and Licenses (664) -12.7% 10,877 41.8% 10,256 50.8% Documentary Transfer Tax 1,254 44.9% 7,260 55.7% 5,920 47.1% Business Tax 1,340 - 4,763 28.1% 1,660 0.0% All Other Revenue Sources 693 3.7% 42,159 46.6% 44,856 42.2%

Total Revenue 4,748 5.1% $259,696 37.8% $243,171 38.4% General Fund Revenue
FY 2025 2nd Quarter YTD
(000's)
2nd Quarter Actuals Adjusted Budget
FY 2025 FY 2024
$21,716 $20,428
11,180 12,715
15,017 14,313
11,318 10,479
9,379 8,550
$98,169 $93,421
4,544 5,208
4,045 2,791
19,630 18,937
1,340 -
Item 9
Attachment B -
Preliminary FY 2025 2nd
Quarter Financial Status

Item 9: Staff Report
Pg.
32 Packet Pg. 169 of 246

Attachment B

Attachment B – Page 3 of 7

Sales Tax
The FY 2025 Adopted Budget is $39.6 million, an increase of 5.6% compared to the actual Sales Tax receipts of $37.5 million in FY 2024. Sales Tax for the first four months of FY 2025 is 12.1% lower than the same period of the prior year. This is primarily due to lower auto sales and leasing.

FY 2025 auto related activities may normalize to FY 2023 levels, though federal actions may further affect sales. In FY 2024, elevated car sales, driven by pent- up demand and attractive pricing for electric cars, resulted in higher sales tax collections . In the Mid-Year report, staff recommends a decrease in Sales Tax revenue by $3.9 million to account for these trends mainly due to weaker auto sales and leasing activities.

Transient Occupancy Tax (TOT)
The FY 2025 Budget is $27.9 million, similar to the FY 2024 actual receipts of $ 27.8 million and higher than the pre -pandemic actuals of $25.7 million in FY 2019. TOT economic performance for the first five months of FY 202 5 is 2.8% higher than the same period in the prior fiscal year.

Table 1 shows an 8.0% increase in TOT, which represents 4 ½ months of collection. On a monthly basis, TOT performance has been volatile. For the first five months actual receipts, the average occupancy rate is 79.1% (compared to 78.8% the prior fiscal year) and the average room rate is $244 (down from $251 the prior fiscal year). Staff continues to monitor trends and estimates that TOT levels will modestly increase and recommends a $0.6 million increase to TOT revenue, with a corresponding $0.2 million increase in the transfer to the Capital Fund for capital improvements.

Utility User Tax (UUT)
The FY 2025 Budget is $19.9 million, slightly higher than the $19.0 million FY 2024 actual receipts.

Actual receipts in the 2 nd quarter are 11.4% higher than the same period of the prior year. Staff recommends increasing the budget by $1.1 million in this report as a result of higher utility revenues.

Documentary Transfer Tax
The FY 2025 Budget is $7.3 million, an increase of $0.2 million or 3.5% over FY 2024 actual receipts.

Cash receipts through the 2nd Quarter total $4.0 million, or 55.7% of the FY 2025 adjusted budget and $1.3 million, or 44.9% higher compared to the 2 nd Quarter of FY 2024, due to higher total property sales activity. This revenue source is highly unpredictable, as it depe nds on the value of properties being sold. Staff continues to monitor these receipts closely due to significant fluctuations that can occur depending on the real estate sales activity . Staff recommends increasing the budget by $1.4 million in this report due to current increased trends in FY 2025. As of December 2024, t his revenue has increased by 43.7% and the number of sales activit ies have increased by 21.6%.

Return on Investments
The FY 2025 Budget is $3.3 million, a 10.8% decrease ($0.4 million) from FY 2024 actual receipts.

Cash receipts for FY 2025 total $0.9 million, or 26% of the FY 2025 budget, but this only represents the 1st quarter earnings. Based on continued higher interest rate environment, staff recommends Item 9
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Preliminary FY 2025 2nd
Quarter Financial Status

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increasing the budget by $0.5 million in this report.

Business Tax
The FY 2025 Adopted Budget includes $4.8 million for Business Tax revenue and as of the 2 nd quarter, revenue collected totals $ 1.3 million or 27.1% of the FY2025 budget due to the timing of collections being in arrears compared to the end of the 2 nd quarter. Staff will continue to monitor collections and begun compliance and enforcement activities. A budget increase of $0.5 million in business tax revenue is recommended in this report to align with delinquent account collections anticipated to be brought in by the business tax administration contractor in FY 2025.

In November 2022, voters approved Measure K (Business Tax) to provide additional funding for critical public safety needs ; transportation safety improvements and grade separations ; and affordable housing and unhoused services. The first BT payment was due on January 1, 2024, for the calendar year of 2023. As a result, the FY 2024 receipt of $5.3 million represents a year and half of collection. However, the initial collection was based on a BT rate of 3.75 cents per square foot which will increase to 7.5 per square foot starting on January 1, 2025. The tax applies to non- exempt businesses above 10,000 square feet with an annual single business cap of $500,000. Both the rate and the cap will be increased annually by 2.5% beginning in FY 2027. A limited number of businesses have the option to offset this tax by their sales/use tax collection. After the initial first payment, filings will be submitted on a quarterly basis.

Charges for Services & Permits and Licenses
The FY 2025 Budget assumes an estimate of $38.6 million in Charges for Services, a $2.0 million, or

5.5% increase, compared to the FY 2024 actual receipt. The FY 2025 Budget assumes an estimate of $10.9 million in permit and license revenue, which aligns with the $10.9 million FY 2024 actual receipts. Together, these revenue categories make up nearly half of all non-tax revenues. In total, $47.5 million was received during FY 202 4, above the revised budget estimates by $ 1.6 million.

These revenue categories consist of charges to Stanford for fire services and paramedic services, fees related to the City’s golf course, arts and science classes, plan check fees, Building Permits, Fire Permits, and miscellaneous health and safety -related licenses. Several minor adjustments to revenue in Charges for Service and Permits and Licens es are recommended in this report and discussed below. Overall revenues in these categories are in line with activity levels anticipated thus far with Permits and Licenses tracking lower than budget through second quarter due to vacancies limiting fire and life safety inspections. In addition, the timing of collection of revenue in these categories did not align with the end of the second quarter, for example the revenue from Stanford for fire and paramedic s ervices only reflects the first quarter payment as the second payment was recorded after the end of second quarter.

• Fire Department Revenue: Overall revenue for the Fire Department is recommended to increase by $0.3 million in these categories as part of the Mid- Year Review. Revenue from Stanford University will increase by $ 0.1 million to offset costs related to the fire academy and other programs per the fire response services agreement between the City and Stanford University. Paramedic Transport Revenue is recommended to increase Item 9
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by $0.6 million to align estimates with current trends through the first half of FY 2025 .

These increases are partially offset by a recommended decrease of $0.4 million due to hiring delays which impacted the ability to provide Fire and Life Safety inspections in the first half of FY 2025.

Expenditures
Overall General Fund expenditures are currently expected to remain within the FY 2025 Adjusted budget levels of $286.1 million (excluding transfers to infrastructure or other funds). General Fund expenditures (excluding operating transfers) for second quarter are 15.6% higher than the prior fiscal year and are tracking at 44.8% of the Adjusted Budget (excluding encumbrances). This trend exceeds prior fiscal year expenditure levels which were at 39.0% at the end of the 2 nd quarter in FY 2024. This is still under the 50% par level that is expected halfway through the fiscal year, and staff will continue to monitor expense trends and inform Council regarding anticipated savings or overages compared to budgeted levels.

Table 2

Salaries and Benefits
As a service driven organization, the largest expenditures are salaries and benefits. Preliminary salary and benefits expenditures through December 2024 are approximately $99.0 million, or 53.4% of the $179.8 million FY 2025 Budget, compared to $81.7 million or 49.0% in the same period in the prior fiscal year. The City continues to maintain vacancies of approximately 125 positions; though this changes frequently, this reflects approximately a 1 1.5% vacancy rate. See Table 3 below for more detailed information regarding citywide vacancies by department and bargaining unit as of the beginning of February.

Vacancy levels impact service capacity; however, departments use vacancy savings to mitigate these impacts through other staffing strategies such as filling staffing gaps by contracting for professional services, hiring ahead to allow overlap and smooth transitions, piloting new technologies to increase Expenditures FY 2025 FY 2024 I nc/(Dec) % change FY 2025 % FY 2024 % Police 30,414$ 26,032$ 4,382$ 16.8% 56,388$ 53.9% 52,241$ 49.8% Fire 28,688 23,925 4,763 19.9% 55,441 51.7% 47,464 50.4% Community Services 20,325 17,976 2,349 13.1% 42,553 47.8% 40,356 44.5% Public Works 11,541 9,761 1,780 18.2% 27,805 41.5% 25,763 37.9% Planning and Development Services 11,081 10,938 143 1.3% 29,336 37.8% 33,049 33.1% Library 6,496 5,289 1,207 22.8% 12,840 50.6% 12,599 42.0% Administrative Services 5,650 4,971 679 13.7% 12,154 46.5% 11,250 44.2% All Other Departments 13,973 12,022 1,951 16.2% 49,605 28.2% 61,530 19.5%

Total Expenditures 128,168$ 110,914$ 17,254$ 15.6% 286,122$ 44.8% 284,252$ 39.0% General Fund Expenditures
FY 2025 2nd Quarter YTD
(000's)
2nd Quarter Actuals Adjusted Budget
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efficiency in the absence of staff, and supporting a summer internship program.

Table 3
Citywide Vacancies by Department and Bargaining Unit

Public Safety Overtime
Table 4

Police and Fire
Salaries and Overtime Expense
FY 2025 2nd Quarter YTD
(000's)
FY 2025 FY 2024 % change FY 2025 % FY 2024 %
Inc (Dec)
Police - Salaries 10,562$ 9,110$ 15.9% 22,548$ 47% 21,577$ 42.2% Police - Overtime 2,162 1,687 28.2% 5,903 37% 1,029 163.9% Total Police 12,724 10,797 17.8% 28,451 45% 22,606 47.8% Fire - Salaries 9,808 8,413 16.6% 21,628 45% 18,417 45.7% Fire - Overtime 3,010 2,050 46.8% 2,721 111% 2,146 95.5% Total Fire 12,818 10,463 22.5% 24,349 53% 20,563 50.9% Total Public Safety
Salaries & Overtime 25,542$ 21,260$ 20.1% 52,800$ 48% 43,169$ 49.2% 2nd Quarter YTD Actuals Adjusted Budget
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Police Department overtime is 28.2% higher than the prior fiscal year, accounting for 37 .0 % of the adjusted budget. As of the second quarter of FY 2025, the department began with 7 full-time vacancies and ended the quarter with 4 (3 Dispatchers and 1 Police Lieutenant). Of the 78 filled PAPOA positions, 13(17%) were in long -term police training, 10 (13%) were on long -term leave, and 55(70%) were available for duty.

Currently, 8 officers are assigned to investigations, 3 to traffic enforcement, 2 to personnel and training, and 2 to special operations, leaving 40 officers available for patrol. These officers handle approximately 110 calls per day, conduct enforcement stops, and engage in community outreach initiatives. The department operates 5 patrol teams, each consisting of 4 to 5 members. Overtime is primarily attributed to covering patrol officer vacancies due to absences and staffing gaps, as well as responding to fluctuations in demand, such as major accidents. The department will continue to monitor overtime expenses and assess their impact on budget, including additional overtime incurred as part of recent retail theft grant activities. Vacancy savings in the Police Department are offset by overtime costs required to maintain service levels. Additional information regarding public safety overtime tracking is included in Attachment C.

Fire Department overtime is primarily driven by the need to backfill vacancies on shift. Under the current deployment model, 24 positions are required daily for Fire Engines and Ambulances to remain fully operational. Vacancies, whether due to unfilled positions, injury leave, probationary training, or scheduled time off, must be backfilled with overtime. In FY 2025 Q2, 7 positions were vacant, and 6 employees were on injury leave, contributing to elevated overtime levels as these positions were covered dai ly. As part of this report, the department is recommending a total increase of $2.5 million for overtime related activities. This includes a net- zero action to shift salary savings of $1.5 million to overtime in order to better align the budget between anticipated salary and overtime spending through the end of FY 2025; Reimbursement of $0.7 million for staffing Fire Station 8 and providing resources for s trike teams around California; and $0.3 million to add a fire engine to the current ambulance at Fire Station 4. The near-term proposal is a cross -staffing model, which authorizes an overstrength 1.00 FTE Fire Captain position, funded through overtime, at Fire Station 4, for a total of three shift personnel starting March/April. More information about these actions can be found in Attachment A of this report.

The Department conducted an entry-level hiring process in the summer and has sent 10 new hires to the Fire Academy, which commenced in October 2024. The academy requires a minimum of 20 weeks for completion, during which overtime remains necessary to cover daily positions, as the new hires are not yet trained or authorized for assignment to an Engine or Ambulance. Additional information regarding public safety overtime tracking is included in Attachment C.

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Attachment C
2023 2024 2025 Q2

POLICE DEPARTMENT
Overtime Expense
Adopted Budget (A) $972,512 $1,028,988 $1,098,939
Modified Budget (B) 972,512 1,028,988 1,098,939 Net Overtime Cost - see below 1,107,518 1,160,290 1,358,886 Variance to Budget (135,006) (131,303) (259,947) Overtime Net Cost
Actual Expense $2,940,019 $3,467,691 $2,161,548
Less Reimbursements
Other Program Reimbursements 878 259,747 278,041 California OES/FEMA (Strike Teams) - - - Stanford Communications 124,868 99,161 56,356 Utilities Communications Reimbursement 64,599 56,429 34,476 Local Agencies (C) 4,949 6,574 3,449 Police Service Fees 100,413 117,433 46,162 Total Reimbursements 295,707 539,345 418,485 Less Department Vacancies (A) 1,536,794 1,768,057 384,177 Net Overtime Cost $1,107,518 $1,160,290 $1,358,886
Department Vacancies (number of days) 4,876 5,419 1,176 Workers' Compensation Cases 23 21 6 Department Disabilities (number of days) 739 381 453

FIRE DEPARTMENT
Overtime Expense
Adopted Budget (D) $2,124,054 $2,146,234 $2,721,066
Modified Budget (E) 3,801,054 2,146,234 5,216,682 Net Overtime Cost - see below 1,740,750 1,734,841 1,912,095 Variance to Budget 2,060,304 411,393 3,304,587 Overtime Net Cost
Actual Expense $3,589,198 $4,099,233 $3,009,868
Less Reimbursements
California OES/FEMA (Strike Teams) 341,629 - 308,239 Total Reimbursements 341,629 - 308,239 Less Department Vacancies (D) 1,506,819 2,364,392 789,534 Net Overtime Cost $1,740,750 $1,734,841 $1,912,095
Department Vacancies (number of days) 4,105 5,297 1,746 Workers' Compensation Cases 32 8 8 Department Disabilities (number of days) 484 274 133 NOTES:
(A) The FY 2025 Police Department budget was increased by 1.0 Police Lieutenant. (B) Police Department adopted budget has not been adjusted in FY 2025. (C) Includes Animal Control Services contract with Los Altos and Los Altos Hills. (D) The FY 2025 Fire Department budget was increased by 3.0 Fire Fighters. (E) As part of the FY 2025 Mid-Year Review, staff is recommending actions that will result in a Fire Department overtime budget of $5.2 million.

Public Safety Departments
Overtime Analysis for Fiscal Years 2023 through 2025
Item 9
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Safety Overtime Analysis
Q2 2025

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: February 24, 2025
Report #:2501-4037
TITLE
Approval of the 2025 City Council Priority Objectives, as well as Committee Objectives and Workplans. CEQA Status -- Not a Project.

RECOMMENDATION
Staff recommends the City Council approve: (a) 2025 City Council Priority Objectives, and (b) Committee Objectives and Workplans

BACKGROUND
On January 25, 2025, the City Council held its annual retreat to discuss and establish the 2025 Council Priorities. The City Council Protocols and Procedures Handbook defines a priority as a topic that will receive significant attention during the year. The City Council established the following Priorities for 2025:
•Economic Development & Retail Vibrancy
•Climate Action and Adaptation & the Natural Environment Protection •Implementing Housing Strategies for Social and Economic Balance •Public Safety, Wellness & Belonging
As has been the City’s practice for the past few years, staff has followed the City Council approval of its priorities by developing and recommending for City Council approval a set of objectives to advance each priority throughout the calendar year.

These objectives reflect “SMARTIE” principles - Specific, Measurable, Attainable, Relevant, Time-bound, Inclusive, and Equitable. These Objectives primarily consist of City Council actions and engagement and where significant staff resources are required throughout the calendar year to further the Priorities. City Council engagement may include a variety of forms, such as City Council approval, committee/council ad hoc review and recommendations, legislative advocacy, regional board/committee representation, and budgetary actions. Using the 2024 City Council Priorities and Objectives as a baseline, along with department proposed and City Item 10
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Council suggested objectives during its Annual Retreat, staff has evaluated and included a proposed list for City Council consideration in 2025.

In addition to City Council Priorities and Objectives, the City Council evaluates progress on topics and issues of interest through the approval of Committee objectives, both for standing and ad hoc committees. These are also included for consideration and approval.

ANALYSIS
The proposed 2025 City Council Priority Objectives lists a total of 68 objectives, compared to last year’s 78. Attachment A includes the summary table with the following elements to help guide the City Council in its decision making:

Carryforward/Revised/New- Objectives annotated by (C) are objectives that are carried over from the 2024 list. (R) are objectives from the 2024 list that may have a second phase to the project and have been revised to reflect 2025 goals. The number designation from the 2024 workplan is shown in parentheses. New Objectives (N) reflect a project that is new in 2025.

Objective Description- Summarizes the activity to be accomplished in calendar year 2025, and if needed, a brief sentence describing the project. Once approved, a more thorough description of the project and milestones will return to City Council at a later meeting.

Estimated Completion- Reflects the 2025 calendar quarter in which the Objective is expected to be completed, subject to change. Q1 is January-March, Q2 is April-June, Q3 is July- September, and Q4 is October-December.

City Council Priority Crossover- Identifies objectives that advance more than one City Council Priority.

Funding Needed- Reflects a project that requires additional resources (staffing, capital investment, or professional services) to achieve and complete the activity beyond current budgeted levels. $ - up to 50K, $$ - 51-400K, $$$ - 500K+. Additional resources will be considered for inclusion in the 2025-26 annual budget.

Staff Not Recommended- For a variety of reasons, any objectives that may have been carried over from last year or suggested during the Annual Retreat that staff is not recommending be considered in 2025 are identified in Attachment B.

Committee Objectives
The City Council retreat provided an opportunity to engage in a “big picture” discussion of what the City Council would like to achieve over the year, and how the City’s decision-making structure should be used to this end. The City Council selected its ad hoc committees for 2025, with the understanding that these committees will adhere to Brown Act requirements:
•Retail Ad Hoc Committee
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•Rail Ad Hoc Committee
•Cubberley Ad Hoc Committee
•Climate Action & Sustainability Ad Hoc Committee
Based on the City Council action, staff has drafted Objectives for each of these committees and are provided in Attachment C. In drafting these recommended Objectives, staff used the principles presented at the City Council retreat:
•Ad hocs facilitate efficient Council meetings by vetting complex topics in advance •Priorities and assignments, including ad hoc missions (objectives), will be made by the full Council to ensure transparent management of resources •Ad hoc recommendations proceed directly to the full Council, not heard by more than one committee
•Recommendations from ad hocs will be developed in public Objectives for the perennial Council Appointed Officers Committee and City/Schools Liaison Committee are also included in Attachment C.

Recommended workplans for the standing Policy & Services Committee and Finance Committee are provided in Attachments D and E.

As work proceeds over the year, it is likely that changes to committee objectives may be desired. Staff or committees may recommend such changes for City Council approval at any point during the year.

FISCAL/RESOURCE IMPACT
City Council approval of Priority Objectives does not have an immediate fiscal impact; however, resources will need to be allocated to implement Council Priorities. Opportunities to allocate resources to projects include the FY 2026 annual budget process, with adoption scheduled for June 2025. In addition, the City Council may amend the budget throughout the year.

STAKEHOLDER ENGAGEMENT

City Council, community and stakeholder engagement is a key area of focus that is woven into the workplans to implement the proposed City Council objectives contained in this report.

The City uses the International Association for Public Participation (IAP2) as a guide to structure community participation and align that participation with the type of input or feedback needed based on the project/issue. Workplan engagement typically fit within these general focus areas- Inform: Fact sheets, webpages, blog posts, information sessions, open houses, frequently asked questions, community briefings, and website feedback forms Item 10
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Consult & Involve: Surveys, focus groups, questions and answer sessions, office hours, public meetings like community meetings, town halls, panel discussions, workshops, and polling Collaborate & Empower: Working groups, ad hoc groups, feedback groups, boards, commissions and committee meetings, community advisory panels, advisory groups, digital engagement platforms, and voter ballot measures

ENVIRONMENTAL REVIEW
City Council action on this item is not a project as defined by CEQA because the City Council discussion on 2025 Priority and Committee Objectives are a continuing administrative or maintenance activity. CEQA Guidelines section 15378 (b)(2).

ATTACHMENTS
Attachment A: Proposed 2025 City Council Priority Objectives Attachment B: 2025 Staff Not Recommended Objectives
Attachment C: Committee Objectives
Attachment D: 2025 Policy & Services Committee Workplan Attachment E: 2025 Finance Committee Workplan
APPROVED BY:

Ed Shikada, City Manager
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ATTACHMENT A
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22

A B C D E F G H I J O
ED
CA
IHS
PS
X R Council approval of outdoor activation guidelines for California Avenue. Council approval of outdoor activity guidelines informed by continued engagement with stakeholders on a refined priorities and recommendations and Initiate implementation. (2) X
X R Resume work on new parking structure in downtown core (Lot D). Staff will present parking garage design options to City Council for selection. (8) X X R Complete build-out of fiber-to-the-premises (FTTP) pilot Phase 1 with grid modernization. Complete building out of a reliable and high-speed municipal fiber service in a pilot area and work to establish internet service provider operations including necessary business tools such rate setting, billing and operations software to roll out services in the initial build. (9) X
X R Council consideration of an ordinance that expands retail opportunities and promotes retail resiliency. Consider further refinement to retail and retail-like definition and explore changes to retail preservation ordinance. (12) X
X N Council consideration of an ordinance restoring subjective wireless communication facility regulations. Hold a public hearing on a draft ordinance implementing the City Council's direction from late 2024 to eliminate objective standards for the placement of wireless antennas within the public right of way on street light or utility poles.

X
X R Enhance partnerships with private-sector stakeholders. Meet regularly with businesses, brokers, property owners, and other private-sector partners to shape, inform, and enhance economic development efforts . (10) X N Council approval of funding to continue Downtown cleanliness enhancements and other medium-term investments. Include necessary proposals and budget appropriations as part of the development of the FY 2026 Operating Budget to continue enhanced Downtown Cleanliness enhancements.

X $$
X R Council approval of Ramona Street design and funding appropriations. Engage stakeholders to develop design proposals for Car-Free Ramona Street and present to Council for necessary funding appropriations to implement initial phase(s). (4) X $$
X R Council approval of a final signage plan for California Avenue and funding appropriations. Review the signage plan for California Avenue with the Architectural Review Board (ARB), incorporate feedback, and seek Council approval to implement the plan. (2) X $$$
X R Council approval of a design option for California Ave. Engage stakeholders to refine alternative street designs for California Avenue and present them to Council for discussion and action, including funding appropriations to pursue a street design. (3) X $$$
X N Begin feasibility analysis of Assessment District for University Avenue Streetscape. Conduct analysis to determine practicality of an assessment district or similarly funding strategy as a funding mechanism for capital enhancements to University Avenue Streetscape.

X $$
X N Propose and implement outdoor activation guidelines for Car-Free Ramona Street. Initiate implementation of Council approved outdoor activity guidelines informed by continued engagement with stakeholders on a refined priorities and recommendations.

X $$
X N Refine destination marketing efforts and enhance Palo Alto’s reputation. Meet with hospitality partners to assess willingness to partner with the City on destination marketing efforts and propose next steps, including necessary appropriation actions, to City Council.

X $$
X R Council Adoption of the Safe Streets for All (SS4A) Safety Action Plan. Informed by feedback from the Policy & Services Committee, bring forward a Safety Action Plan providing a roadmap for eliminating traffic deaths and severe injuries through the reduction of vehicle miles traveled enabling staff to seek grant funding for implementation. (14)
X
X X R Begin construction of the Newell Road Bridge Replacement project. Award of a construction contract for the replacement of Newell Road Bridge in time to begin construction taking advantage of the 2025 in-channel construction season. (32) X
X C Complete construction of initial pilot area of electric grid modernization. Project will increase electrical capacity and reliability in initial pilot area bounded by Louis, Amarillo, 101, & Embarcadero about 1,200 homes; once completed, staff will continue the grid upgrades to the "Phase 1" area which impacts approx 6,000

X
X X R Begin construction of Hamilton Avenue storm drain system capacity upgrades project. Prioritization of the Hamilton Avenue project from the list of 2017 ballot measure priority projects will increase the ability of the storm drain system to convey water in the event of a San Francisquito Creek overflow. (31) X
N/R/C
2025 CITY COUNCIL PRIORITIES AND OBJECTIVES
Climate Action and Adaptation, & Natural Environment Protection (CA) Ongoing
Council Priority
Economic Development & Retail Vibrancy (ED)
Q1
Q2
Q3
Q4
$ Needs

OBJECTIVES
(68 in total)