City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: March 10, 2025
Report #:2410-3571
TITLE
Approval of a Revenue Agreement with Santa Clara County to Provide up to $447,849 in Funding through September 15, 2026 to enable the County to Expand Its Operating Agreement with Move Mountain View for Expanded Safe Parking Operations at 2000 Geng Road; Approve FY 2025 Budget Amendment in the General Fund and PLHA Fund; and Authorize Reallocation of PLHA Activity (6) Funds Accordingly; CEQA status – categorically exempt.
RECOMMENDATION
Staff recommends that the City Council review and approve the following:
1. Approve and authorize the City Manager or their designee to execute the attached Revenue Agreement with the County of Santa Clara (County), authorizing the City to provide funding in the amount of $447,849 through September 15, 2026 to enable the County to execute an expanded operating agreement with Move Mountain View for expanded safe parking operations at 2000 Geng Road;
2. Approve and authorize the City Manager or their designee to allocate PLHA Activity (6) funds towards expanded safe parking operations relating to case management; and
3. Amend the Fiscal Year 2025 Budget Appropriation Ordinance a. In the PLHA Fund (Fund 253) (required 2/3 vote) by:
i. Increasing the Revenue from Other Agencies estimate by $71,963; and ii. Increasing the City Manager Other Contract Services by $71,963. b. In the General Fund (required majority vote) by:
i. Increase the appropriation for City Manager’s Office Other Contract Services and Allocated Charges in the amount of $66,891 and $12,394 respectively; and
ii. Decrease the appropriation for Reserve: Business Tax Revenue in the amount of $79,285.
EXECUTIVE SUMMARY
Approval of the Revenue Agreement will allow expanded safe parking operations at 2000 Geng Road to continue. The initiation of the expanded operations was supported through community donations meant to bridge the time gap between the immediate need for expansion and when the City could bring forward a recommendation for funding needs. Council approved site expansion on August 19, 20241 to accommodate up to 10 additional RVs, increasing the maximum site number from 12 to 22. The County provides funding for the original 12 safe parking spaces and manages the operating contract with Move Mountain View.
Staff is recommending the City pay for expanded operations through a combination of business tax revenue for affordable housing and homeless services and PLHA funds. PLHA Program funding is a permanent, ongoing annual source of funding, but these funds are restricted to particular activities. The City is preparing to receive approximately $71,963 in PLHA Activity (6)2 funding, which were already programmed for Homekey shelter operations in the City’s PLHA 5- Year Plan.3 However, the Homekey opening is delayed. Given PLHA timelines and activity restrictions, staff recommends applying these funds to support case management costs related to expanded safe parking.
Approval of the recommended actions would assign the PLHA Activity (6) funds for PLHA Calendar Year 2020 toward case management for the expanded operations at 2000 Geng Road.
Execution of the draft Resolution and City submittal to the California Department of Housing and Community Development (HCD) would allow HCD to release Calendar Year 2020 funds to the City by their deadline of April 30, 2025.
BACKGROUND
Safe Parking
Council approved expanding the safe parking program at 2000 Geng Road to accommodate increased demand due to the displacement of vehicle dwellers from El Camino Real (SR 82) as a result of the Caltrans SR 82 Repaving Project (Caltrans Project). The Geng Road site is currently the only location in Palo Alto that permits recreational vehicles (RVs) and often operates at 1 Council Staff Report, August 19, 2024
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=5535&meetingTemplateType=2&comp iledMeetingDocumentId=11540
2 HCD clarifies activities under supportive services as those necessary to assist program participants to obtain and maintain housing (e.g., street outreach, mental health services, emergency health services, employment assistance/job training, life skills training, and substance abuse treatment). HCD describes case management as assessing, arranging, coordinating, and monitoring the delivery of individualized services to meet the needs of program participants. https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/plha/plha-frequently- asked-questions.pdf
3 Council Staff Report, October 24, 2022, Item 5, packet page 130. https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=9096&compileOutputType= 1 capacity with a waiting list. Safe parking programs provide a secure, legal place for individuals sheltering in their vehicles to stay while connecting them with essential services and pathways to stable housing.
The safe parking program at Geng Road began under a three-year lease agreement between the City and County in September 2020,4 with operations managed and paid for by the County and provided by the nonprofit Move Mountain View. The site provides essential amenities, including a kitchen, laundry facilities, showers, and a children’s library. The program prioritizes people with ties to Palo Alto, defined by employment, schooling, or previous residency in the city.
In response to Council’s June 18, 2024 directive to mitigate displacement relating to Caltrans project,5 an amendment to the lease agreement was approved on August 19, 2024 to expand the site’s capacity from 12 to 22 RV spaces. While the County funds the original 12 spaces, the expansion was understood to require City funding of approximately $266,162 annually, with interim fundraising efforts led by Move Mountain View and community partners.
Funding
The Permanent Local Housing Allocation (PLHA) Entitlement Funding is a state grant administered by California’s Department of Housing and Community Development (HCD) to local jurisdictions. The City received its PLHA award letter in December 2022, but the final agreement, allowing fund disbursement, was not signed until July 2023. PLHA funds have accrued since 2019, and the state is now disbursing them.6 The City's estimated five-year PLHA allocation is up to $1,388,976,7 distributed annually. For each funding allocation year, funding is allocated at a percentage level towards specified activity areas, as shown in the table below.
Table 1: PLHA 5-Year Funding Allocation Overview8
Funding Allocation Year 2019 2020 2021 2022 2023
4 Council Staff Report, September 14, 2020, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020-2/id-11513.pdf?t=58031.91 5 Council Action Minutes, June 18, 2024, Item AA4
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=14318&compileOutputType =1
6 The PLHA program is funded through revenues collected in each county based on the $75 recording fee on real estate documents. This is not a funding source tied to federal funding. https://www.hcd.ca.gov/grants-and- funding/programs-active/permanent-local-housing-allocation 7 Council Staff Report, October 24, 2022, Item 5, packet page 130. https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=9096&compileOutputType= 1 8 https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/plha/nofa-plha-formula-calendar-year- 2023-allocation.pdf
Activity 1 – Affordable Rental
Housing 40% 20% 20% 20% 20%
Activity 6 –Persons Experiencing
or At Risk of Homelessness 60% 80% 80% 80% 80%
Total Awarded Amount $231,496 $359,817 $395,967 $198,4609 $152,112 In the original five-year plan, staff indicated specific proposed recipients of the funding, such as Homekey shelter operations. However, HCD has confirmed that it is holding the City to the activity allocation (i.e., “Persons Experiencing or At Risk of Homelessness) and that staff can provide detail and confirm the proposed recipient at the time of fund request.
ANALYSIS
City Proposed Expansion Budget Share
The original expansion budget estimate for a 12-month period totaled $266,162. It included additional staffing (facilities management, case management, outreach), utilities, portable restrooms and sinks, and administrative costs.
To minimize administrative burden associated with timely utilities payment, the City proposed paying the cost for all site utilities and reducing by an equivalent amount the funding it provides towards the expansion. The cost for all site utilities for a 12-month period would be $29,746 — an additional $12,730 over the cost of expansion utilities alone.
Given the proposed term mirrors the site lease and covers multiple fiscal and utility rate years, staff has prepared a forecast taking these variables into account. The overall budget for the term of the revenue agreement is $447,849. The below table show the budget breakdown per fiscal year. There are adjustments included for forecasted changes to utility rates and assuming typical seasonal fluctuations in usage.
Table 2: City Proposed Expansion Budget Share per Time Period 2/1/25 - 6/30/25 7/1/25 - 6/30/26 7/1/26 - 9/15/26
Expansion-related personnel costs for facilities
management, case management, & outreach $84,645 $202,362 $50,787 Expansion-related portable restrooms & sinks $9,746 $23,194 $5,848 Expansion-related administrative costs/clerical $4,116 $9,682 $2,470 9 Staff has not officially submitted the application for award years 2022 and 2023, so the monies for these years have not yet been “awarded” yet.
Full site (original + expansion) utilities,
including electric, gas, refuse, sewer, and
water10
$12,394 $30,924 $8,026
Total $110,901 $266,162 $67,130
City Contribution of Monies to County11 $98,507 $235,238 $59,104 Revenue Agreement
City and County staff have met regularly to discuss a Revenue Agreement (Attachment A) for pass-through funding for expanded safe parking operations at 2000 Geng Road for an initial term to coincide with the term of the lease, retroactively starting in February 2025 and sunsetting with lease end date of September 15, 2026,12 subject to approval by the Board of Supervisors or their designee. The County has been overseeing (and paying for) safe parking operations at 2000 Geng Road through a contract with the operator, Move Mountain View, since it opened in 2020.
Over the summer, the City and County were in discussions about the need to expand safe parking to address the anticipated displacement of vehicle dwellers in relation to the Caltrans Project. Although a solution had not been identified at the time, City and County staff felt it reasonable to assume that Move Mountain View, the only safe parking operator operating in Palo Alto at the time, would likely be tasked with absorbing expanded operations, once a location for expanded safe parking was identified. In anticipation of the expanded operations, the County included room in its contract scope with Move Mountain View to accommodate the expansion.
The below table provides a summary of the Revenue Agreement key terms.
The Revenue Agreement sets performance expectations for safe parking expansion based on data collected by the County. These performance expectations are included in the Operating Agreement (Attachment B) between the County and Move Mountain View. Key performance expectations are shown in Exhibit A, section 6, in the table below.
Table 3: Revenue Agreement Summary
Agreement Section Summary of Terms
1. TERM February 1, 2025 through September 15, 2026
10 This row contains estimates, including forecasted changes to utility rates and anticipated usage. However, the contract itself, instead of assuming $51,344 ($12,394 + $30,924 + $8,026), allows for a ceiling of up to $55,000 for the term of the revenue agreement.
11 This is the amount of funding the City would pay to the County directly and does not include the City interdepartmental transfer of funds to cover the costs of utilities. 12 Council Staff Report, September 18, 2023
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=3115&meetingTemplateType=2 Table 3: Revenue Agreement Summary
2. ROLES AND
RESPONSIBILITIES13
•City will designate a Program Manager to act as a liaison with the County, assist in Programs development and improvement to meet goals, and remit payments to the County for expenses associated with the Agreement up to the maximum amounts specified below, within 30 days of the start of each time period:
Time Period Total Maximum
Financial Obligation
February 1, 2025 – June 30, 2025 $98,507
July 1, 2025 – June 30, 2026 $235,238
July 1, 2026 – September 15,
2026 $59,104
Utility Charges (as defined
below) February 1, 2025 –
September 15, 2026
$55,000
TOTAL $447,849
•Notwithstanding anything to the contrary in the Geng Road lease, the City shall pay for electricity, gas, refuse, sewer, and water for the Geng Road site during the time periods above up to an amount of $55,000.
•County will designate a Program Manager to serve as liaison with the City, lead Programs development and improvement to meet goals, and lead coordination with stakeholders. County will provide or subcontract Programs’ services. •Both parties will together establish success and outcome measures, meet regularly to discuss performance and progress, and jointly monitor Programs’ expenses and outcomes.
EXHIBIT A: PROGRAM SPECIFICS
1. Program
Description
Safe Parking programs provide homeless households a temporary, overnight, safe location to park, as well as case management support.
2. Ordinance The County agrees to comply with all terms and conditions set forth in the City’s Safe Parking Ordinance.
3. Target Population Homeless households who are unsheltered and sleeping in their vehicle with priority for households with students enrolled in a school district within Palo Alto as outlined in the Safe Parking Ordinance.
4. Number of
Households
Up to 10 households at a given point in time
5. Program Funding
Amount
In accordance with Section 2 of the Agreement
6. Reporting
Requirements
County shall provide quarterly reports to the City that include:
•Number of unduplicated clients served (total and City-connected), •Exit destinations (total and City-connected, number per period by exit category), •Enrollments of City-connected clients (total and new enrollments), •Average time in program,
•Returns to homelessness (within 12 months and within 2 years), 14 and 13 These roles and responsibilities are related to County management of an Operating Agreement with Move Mountain View for safe parking operations at 2000 Geng Road. 14 Data on returns to homelessness will be provided as it becomes available (e.g., 12 months after initial client exits).
Table 3: Revenue Agreement Summary
•Summary budget and actual report of operation and maintenance costs spent using City funds.
PLHA Funding
The City expects to receive $71,963 in PLHA Activity (6) funding, originally planned for Homekey shelter operations in April 2025. However, Homekey operations are not anticipated to start until later this year and this amount of funding cannot be used to defray, only supplement the City pledged $1,000,000 towards shelter operations annually. Expanded safe parking operations, in comparison are a little over a quarter of a million annually and are already underway. Since this PLHA funding allocation must be drawn down from HCD by April 30, 2025 and is restricted for use as assistance to persons experiencing or at risk of homelessness, staff is recommending the funds be applied to PLHA-allowable supportive/case management services15 within the expanded safe parking operations.16
FISCAL/RESOURCE IMPACT
As noted in the August 19, 2024 report to Council (Staff Report # 2407-3274), safe parking expansion at Geng Road requires City funding. Previously, a portion of the site was leased by the City’s Utilities Department for staging the Advanced Metering Infrastructure (AMI) Project.
Utilities has since relocated the meters to temporary storage containers at the Municipal Service Center, freeing the Geng Road location for safe parking expansion.
While the County funds the original 12-space safe parking operation, it does not have funding to cover the expansion. Due to the urgent need, expansion occurred relying on community fundraising, with an understanding staff would bring forward a funding recommendation mid- year in FY 2025.
If approved, the appropriation actions will 1) recognize the Calendar Year 2020 PLHA grant funds ($71,963) and appropriate that funding to support the safe parking services and 2) appropriate funds for the pro-rata remaining costs of FY 2025 safe parking expansion contract and utilities costs, offset by business tax receipts collected and identified for support of affordable housing and homeless services. In total, over the term of the contract, approval of the recommended actions would decrease the General Fund business tax revenue for 15 HCD clarifies activities under supportive services as those necessary to assist program participants to obtain and maintain housing (e.g., street outreach, mental health services, emergency health services, employment assistance/job training, life skills training, and substance abuse treatment). HCD describes case management as assessing, arranging, coordinating, and monitoring the delivery of individualized services to meet the needs of program participants. https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/plha/plha-frequently- asked-questions.pdf
16 Per HCD, supportive/case management services that allow people to obtain and retain housing is eligible for PLHA Activity 6 funding specifically, but not safe parking operations generally. affordable housing and homeless services fund by $321,58217 to approximately $0.8 million; FY 2026 and additional future years of the contract will be brough forward as part of the annual budget process.
Additionally, while Council already directed staff administration of PLHA grant funding towards homelessness activities, this would reallocate that funding from Homekey shelter operations to expanded safe parking operations. However, the City has already earmarked and accounted for the $1 million annually needed for Homekey operations and was not assuming a PLHA contribution in its calculations. For the revenue agreement term (2/1/2025-9/15/2026), the proposed funding total from PLHA would be $126,268 towards supportive/case management services relating to the expanded safe parking instead of for Homekey operations. The $126,268 of PLHA funds consists of allocations from calendar years 2020, 2021 and 2022.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement includes regular and as-needed meetings between partners (e.g., Office of Supportive Housing, Move Mountain View). Additionally, the City is coordinating with Move Mountain View on an Open House tentatively scheduled for March 21. This will be an opportunity for the public to engage and learn more about the expanded safe parking operations. As details come together, event information will be posted at www.cityofpaloalto.org/calendar and shared via City communication channels.
ENVIRONMENTAL REVIEW
Safe Parking at 2000 Geng Road is exempt from CEQA in accordance with Section 15301 and 15303 of the CEQA Guidelines. Section 15301 applies to leasing or minor alterations of existing public or private structures and facilities involving negligible or no expansion of use; allowing the use of this existing parking lot for temporary safe parking would not constitute a significant expansion of use. Section 15303 applies to conversion of small structures from one use to another where only minor modifications are made to the structure. This applies to buildings up to 10,000 sf in urban areas. No modifications are proposed to the existing structures and the existing buildings total 5,500 sf in this urbanized area. This site is further from the Baylands and closer to nearby roadways. Only a portion of these existing structures would be open for use to facilitate safe parking at the site.
ATTACHMENTS
Attachment A - Revenue Agreement Between Santa Clara County and the City of Palo Alto Attachment B - Operating Agreement Between Santa Clara County and Move Mountain View APPROVED BY:
Ed Shikada, City Manager
17 Staff has included some contingency to allow for unanticipated fluctuations in utilities. While staff has estimated $51,344 in utilities, the revenue agreement allows for up to a ceiling of $55,000.