ATTACHMENT D
FISCAL YEAR 2023-2024 ANNUAL REPORT SUPPLEMENT
SUMC Development Agreement Annual Reporting
Background and Purpose
On June 6, 2011, the City Council approved Comprehensive Plan amendments, zoning changes, a conditional use permit, annexation and design applications for the Stanford University Medical Center Facilities Renewal and Replacement Project (the “Projects”). The Projects include the construction of a new Stanford Hospital and clinics buildings, an expansion of the Lucile Packard Children’s Hospital, construction of new School of Medicine buildings, renovation of the existing Hoover Pavilion, construction of a new medical office building and parking garage at Hoover Pavilion, roadway improvements along Welch Road and Durand Way, and SUMC design guidelines. A Development Agreement (the “Agreement”) vesting these approvals was entered into between the SUMC Parties and the City and was effective on June 6, 2011 and continues for thirty (30) years from the effective date.
The Agreement requires an annual report, prepared by SUMC that outlines the activities of the preceding year and the efforts to fulfill the obligations of the Agreement.
Per the requirements of sections 12(a) and 12(c) of the Agreement, The City of Palo Alto is to prepare a supplement to the annual report that contains an accounting of the funds described in the Section 5 of the Agreement (“SUMC Parties’ Promises”) including the fund balances and expenditures and the purposes for which the expenditures were used.
Public Benefit Fund Accounting
This SUMC Annual Report Supplement covers the period during the thirteenth year of the Agreement:
June 6, 2023 through June 6, 2024. Accounting for the funds outlined extends through the end of the City’s FY 2024.
The specific funding accounts reported in this SUMC Annual Report Supplement are consistent with Section 5 of the Agreement. These funds have been assigned a unique cost center number for accounting purposes. This SUMC Annual Report Supplement also contains the investment earnings and the earnings allocation to the various cost centers.
In summary, the SUMC Parties have paid approximately $44.3 million in public benefit fees to the City since June 6, 2011 through the FY 2023-2024 reporting period. There were no required new payments from the SUMC Parties during the FY 2023-2024 reporting period.
The first payment of $20,800,333 on August 11, 2011 was for the following funds:
•Fund for Community Health and Safety, Project Safety Net (Section 5(a)(iii)); •Fund for Expansion Cost Mitigation (Section 5(b)(iii)); •Fund for Pedestrian and Bicycle Connections from Intermodal Transit Center to El Camino Real/Quarry Road Intersection (Section 5(d)(i));
•Fund for Public Right of Way Improvements to Enhance Pedestrian and Bicycle Connections on Quarry Road (Section 5(d)(ii));
•Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing (Section 5(e)), and
•Fund for Climate Change - Sustainable Programs Benefit (Section 5(f)(i)).
The second payment of $11,733,333 payment on December 5, 2012 was for the following funds:
• Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing (Section 5(e)) and
• Fund for Climate Change - Sustainable Programs Benefit (Section 5(f)(i)).
The third payment and final payment of $11,744,533 on December 12, 2017 was for the following funds:
•Fund for Infrastructure, Sustainable Neighborhoods and Communities and Affordable Housing (Section 5(e));
•Fund for Climate Change -Sustainable Programs Benefit (Section 5(f)(i)); and •Fund for Community Health and Safety, Project Safety Net (Section 5(a)(iii)).
Public Benefit Fund Expenditures
Expenditures and other activity occurred in the following funds in FY 2023-2024:
Budgeted:
•$366,000 transfer from the Community Health and Safety Fund to the General Fund (Police Department) for a Psychiatric Emergency Response Team (PERT); •$3.3 million transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project Fire Station 4 Replacement (PE-18004); •$2.0 million transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project Roth Building Rehabilitation (PF- 23001);
Actual:
•The total transfer from the Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing Fund to Capital Improvement Project was slightly lower than budgeted, at $4,575,000;
•$750,000 was transferred from the Expansion Cost Mitigation fund for the Fire Station #4 Replacement (PE-18004)