Palo Alto City Council
November 17, 2025

CITY OF PALO ALTO CONTRACT NO. C26196096

AGREEMENT FOR PROFESSIONAL SERVICES

BETWEEN THE CITY OF PALO ALTO AND SOUDI CONSULTANTS INC.

This Agreement for Professional Services (this “Agreement”) is entered into as of the 3rd day of November 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SOUDI CONSULTANTS INC. , a California corporation, located at 4230 Lilac Ridge Road, San Ramon, CA 94582 (“CONSULTANT”).

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

RECITALS

A. CITY intends to design substation, protection and communication systems, and overhead and underground construction projects within the City of Palo Alto on the City’s electric distribution system and dark fiber optic network on various capital improvements (“Project”) and desires to engage a consultant to provide on- call professional engineering services and technical trainings and peer review in connection with the Project (“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.

Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.)

CITY may elect to, but is not required to, authorize on- call Services up to the maximum compensation amount set forth in Section 4 (Not to Exceed Compensation).

CONSULTANT shall provide on- call Services only by advanced, written authorization from CITY as detailed in this Section. On -call Services, if any, s hall be authorized by CITY, as needed, with a Task Order assigned and approved 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 s ervices, schedule of performance and Docusign Envelope ID: C6EC9519-D4B3-4F42-9891-3B781748B144 Item 8
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maximum compensation amount, in accordance with the provisions of this Agreement.

Compensation for on-call 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 exec uted Task Order shall become part of this Agreement. The cumulative total compensation due to CONSULTANT for all Task Orders issued under this Agreement shall not exceed the amount of compensation set forth in Section 4. CONSULTANT shall only be compensated for on -call Services performed under an authorized Task Order and only up to the maximum compensation amount set forth in Section 4. Performance of and payment for any on-call Services are subject to all requirements and restrictions in this Agreement.

SECTION 2. TERM.

The term of this Agreement shall be from the effective date of this agreement through November 2, 2028, 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.

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 Million Five Hundred Thousand Dollars ($1,500,000.00). 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.

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.

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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 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 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 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.

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 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 Docusign Envelope ID: C6EC9519-D4B3-4F42-9891-3B781748B144 Item 8
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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 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.

Option B: Subcontracts Authorized: Notwithstanding Section 11 (Assignment) above, CITY agrees that subcontractors may be used to complete the Services. The subcon tractors authorized by CITY to perform work on this Project are:

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 Farajollah Soudi 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 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 Jim Pachikara, Utilities Department, Engineering Division, 1007 Elwell Court, Palo Alto, CA 94303, Telephone:650 -566-4532, Email:

[email protected] 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 1 4. OWNERSHIP OF MATERIALS . A ll work product, including without Docusign Envelope ID: C6EC9519-D4B3-4F42-9891-3B781748B144 Item 8
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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 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.

16.1. For CONSULTANT’s professional engineering design services: t o 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 third party demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’ s fees, experts fees, court costs and disbursements (“Claims”) to the extent that such Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. CITY will reimburse CONSULTANT for the proportionate percentage of defense costs exceeding CONSULTANT’s proportionate percentage of fault as determined by the final judgment of a court of competent jurisdiction.

For CONSULTANT’s technical training and peer oversight services: 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 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 Docusign Envelope ID: C6EC9519-D4B3-4F42-9891-3B781748B144 Item 8
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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 writing 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 primar y 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 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 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 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.

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 Docusign Envelope ID: C6EC9519-D4B3-4F42-9891-3B781748B144 Item 8
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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) h ours 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 Docusign Envelope ID: C6EC9519-D4B3-4F42-9891-3B781748B144 Item 8
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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 confidentiality 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 requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time.

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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 third 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 Docusign Envelope ID: C6EC9519-D4B3-4F42-9891-3B781748B144 Item 8
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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 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. C26196096

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

SOUDI CONSULTANTS INC.

By: ________________________________

Name: ______________________________

Title: _______________________________

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EXHIBIT A

SCOPE OF SERVICES

As directed by City in a Task Order and based on CONSULTANT’s professional expertise and ability to provide the requested Services, CONSULTANT shall provide the Services detailed in this Exhibit A , entitled “ SCOPE OF SERVI CES”, including all related and ancillary tasks necessary to perform the Services listed below, including documentation.

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.

A. CONSULTANT may be requested to provide the following engineering design services, such as plans, specs, and schematics, as directed by City in a Task Order, in substantially the same form as Exhibit A-1

1. Relay installation and replacement of existing mechanical or microprocessor relays

2. Breaker replacement design at 115kV/60kV or 60kV/12kV substations

3. Replacement design of line, feeder, and transformer breakers

4. Substation transformer replacement design at Colorado, East Meadow, and Adobe Creek

5. Substation capacitor bank design

6. Substation protection and control redesign

7. Switchgear replacements and upgrades

8. Colorado power and substation improvements

B. CONSULTANT may be requested to provide the following technical training and peer review services as directed by City in a Task Order, in substantially the same form as Exhibit A-1:

1. System protection training and oversight for CPAU employees

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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 as directed by the Project Managers per assigned task order approved by the Parties.

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 performance 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 the Services performed in accordance with the terms and conditions of this Agreement, including Services, any specified reimbursable expenses, and Additional Services (if any, per Section 4 of the Agreement), based on the hourly rate schedule attached as Exhibit C-1.

The compensation to be paid to CONSULTANT under this Agreement for all S ervices, any specified reimbursable expenses, and Additional Services (if any, per Section 4), shall not exceed the amount(s) stated 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.

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 reimburs able 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 hourly rates is as follows:

Director Engineer $200
Principal Engineer $185
Senior Engineer $175
Engineer $120
Design Engineer $115
Designer $ 60
Administrative $ 75

Rates are valid for the duration of the contract up to three (3) years.

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EXHIBIT D

INSURANCE REQUIREMENTS

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

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

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

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES

YES
WORKER’S COMPENSATION

EMPLOYER’S LIABILITY

STATUTORY

PER ACCIDENT, PER

POLICY, PER

EMPLOYEE

$1,000,000

YES

GENERAL LIABILITY, INCLUDING PERSONAL

INJURY, BROAD FORM PROPERTY DAMAGE

BLANKET CONTRACTUAL, PRODUCTS/COMPLETED

OPERATIONS AND FIRE LEGAL LIABILITY

LIMITS MAY BE MET BY A COMBINATION OF
PRIMARY AND EXCESS OR UMBRELLA POLICIES.

BODILY INJURY

PROPERTY DAMAGE

BODILY INJURY &

PROPERTY DAMAGE
COMBINED.

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

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

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 $2,000,000

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

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

RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR

AND ITS 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 PROVISION FOR A WRITTEN THIRTY DAY (30) ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND

B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.

C. DEDUCTIBLE AMOUNTS IN EXCESS OF $25,000 REQUIRE CITY’S PRIOR APPROVAL.

II. CONTRACTOR 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
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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.

IF ANY EXCESS OR UMBRELLA LIABILITY POLICIES ARE USED TO MEET THE LIMITS OF LIABILITY REQUIRED BY THIS AGREEMENT, THEN SAID POLICIES SHALL BE “FOLLOWING FORM” OF THE

UNDERLYING POLICY COVERAGE, TERMS, CONDITIONS, AND PROVISIONS AND SHALL MEET ALL OF

THE INSURANCE REQUIREMENTS STATED IN THIS DOCUMENT, INCLUDING, BUT NOT LIMITED TO, THE ADDITIONAL INSURED, CONTRACTUAL LIABILITY & “INSURED CONTRACT” DEFINITION FOR

INDEMNITY, OCCURRENCE, NO LIMITATION OF PRIOR WORK COVERAGE, AND PRIMARY & NON- CONTRIBUTORY INSURANCE REQUIREMENTS STATED THEREIN.

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. PRODUCTS-COMPLETED OPERATIONS LIABILITY

WITH RESPECT TO CLAIMS ARISING OUT OF THE PRODUCTS SOLD TO THE CITY OF PALO ALTO, THE

PRODUCTS MANUFACTURED FOR THE CITY OF PALO ALTO, AND THE COMPLETED OPERATIONS OF

THE NAMED INSURED, AS PER WRITTEN CONTRACT, INSURANCE AS AFFORDED BY THIS POLICY WILL INCLUDE PRODUCTS-COMPLETED OPERATIONS LIABILITY COVERAGE.

D. NOTICE OF CANCELLATION

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

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

IV. RENEWAL OF INSURANCE POLICIES
A. CONTRACTOR SHALL MAINTAIN INSURANCE FOR THE ENTIRE PERIOD OF THE WORK PLUS TWO (2) YEARS FROM FINAL COMPLETION AND ACCEPTANCE OF THE WORK.

B. CONTRACTOR MUST SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING INSURANCE

POLICIES HAVE BEEN RENEWED AND THAT COVERAGE HAS NOT BEEN TERMINATED OR REDUCED. CERTIFICATES CAN BE SUBMITTED TO THE FOLLOWING EMAIL:

[email protected]

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Community Services
Meeting Date: November 17, 2025
Report #:2508-5070
TITLE
Approval of the Study and Assessment of Turf Systems: Findings and Recommendation for El Camino Park Synthetic Turf Replacement as Recommended by the Parks and Recreation Commission; CEQA status - categorically and statutorily exempt.

RECOMMENDATION
Staff and the Parks and Recreation Commission recommend that the City Council:

1. Receive and accept the findings and recommendations of the Study and Assessment of Turf Systems for the City of Palo Alto Playing Fields (Appendix A, Appendix B, Appendix C, Appendix D, Appendix E, Appendix F); and

2. Direct staff to proceed with replacement of the synthetic turf at El Camino Park in a manner consistent with the Study’s findings and recommendations.

EXECUTIVE SUMMARY
The Study and Assessment of Turf Systems for the City of Palo Alto Playing Fields provides a comprehensive evaluation of synthetic, natural, and hybrid turf systems with respect to playability, environmental health, cost efficiency, and community priorities. The purpose of the study was to inform future turf replacement decisions, particularly for El Camino Park, where the existing synthetic field has reached the end of its service life.

Following an extensive data analysis and robust stakeholder engagement process, findings indicate that synthetic turf offers the most reliable and cost-effective option for maintaining field capacity and equitable community access at heavily programmed locations, while natural grass systems present opportunities for long-term improvement through a focused pilot program. Based on these findings, staff and the Parks and Recreation Commission recommend that the City Council accept the Study and direct staff to proceed with resurfacing El Camino Park with synthetic turf consistent with current environmental standards and best practices, while advancing a parallel pilot to enhance natural grass field performance citywide.

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BACKGROUND
The City of Palo Alto’s Community Services Department manages natural and synthetic athletic fields citywide, including El Camino Park, Stanford-Palo Alto Playing Fields (Mayfield), and Cubberley Community Center. The synthetic field at El Camino Park is at its end of life and requires replacement.

A Capital Improvement Project (PG-24000) to replace El Camino Park’s synthetic turf was included in the FY 2024 Adopted Capital Budget. However, at the Finance Committee’s May 21, 20241 meeting recommended the City Council direct staff to conduct additional study to provide informed decisions on future field selections. Focusing on the environmental, health, safety, and cost impacts of synthetic and natural turf, the study was incorporated into the FY 2025 Budget2.

Additionally, the replacement of El Camino Park’s synthetic turf was placed on hold pending the study’s findings. Replacement of the Stanford-Palo Alto Community Playing Fields (PG-26000) was approved June 9, 20253, and is currently underway with completion anticipated in December, 2025. This phased approach helps maintain field availability while the study progresses. The goal is to provide the City Council with the necessary data needed to make informed decisions about future field installations and renovations. The report includes sixteen sections encompassing acknowledgments, background, community feedback, data analysis, and topic-specific findings. These sections address playability, life cycle costs, health and environmental impacts, City park inventory and field availability, a case study of El Camino Park, and supporting materials such as a glossary, references, and appendices.

The Santa Clara County Board of Supervisors considered prohibiting new installation of synthetic turf on County property in January 2025. The report included a Public Health Department Review of Scientific Literature of the potential health risks associated with artificial turf.4. To avoid duplication of effort, the City’s scope of work was adjusted to incorporate the County’s findings on environmental and health impacts. The community engagement and maintenance components of the study were conducted by City staff. This item was first scheduled to be discussed at the August 26, 2025 Parks and Recreation Commission meeting5, 1 Finance Committee, May 21, 2024; Agenda Item #1; SR# 2402-2664, https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=543c404f-2b05-4cbb-b9df-75ffb768545d 2 City Council, June 17, 2024; Agenda Item #28; SR# 2406-3140, https://portal.laserfiche.com/Portal/DocView.aspx?id=73983&repo=r-704298fc&searchid=004d1d0a-4344-4816- ab2d-c044073c40cb
3 City Council, June 9, 2025; Agenda Item #9; SR #2501-3998, https://portal.laserfiche.com/Portal/DocView.aspx?id=182834&repo=r-704298fc&searchid=a59660f1-1e15-47f0- beac-c9d5573bbaab
4 Santa Clara County Board of Supervisors, January 28, 2025, Agenda Item #13, SR# 122722; https://sccgov.iqm2.com/Citizens/Detail_Meeting.aspx?ID=16789 5 Parks and Recreation Commission, August 26, 2025, Agenda Item #6, SR# 2508-5075, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=17508 Item 9
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however,only public comment was heard due to the late hour, and this item was placed the following month’s agenda.

On September 23, 202511, the Parks and Recreation Commission heard a staff presentation, reviewed the Draft Turf Study and provided feedback. On October 28, 202512 an updated draft returned to the Parks and Recreation Commission for a recommendation to the City Council.

ANALYSIS
Following the September Parks and Recreation Commission meeting and community feedback received during the public comment phase, staff and the consultant refined the Study and Assessment of Turf Systems for the City of Palo Alto Playing Fields to clarify methodologies, strengthen environmental and health findings, and improve overall readability. These refinements did not alter the overall conclusions of the study.

Key updates incorporated into the final draft include:
• Refinement of the Executive Summary and Recommendations • Community Comments Summary Page and Response to each comment • Enhanced graphics, tables, and formatting to improve clarity and accessibility of key data The key findings by sections are as follows:

Playability and Carrying Capacity
The City’s synthetic turf fields are heavily programmed year-round for youth leagues, adult sports, and community recreation, while natural grass fields are more seasonally used. The City’s approach to concentrate programming on synthetic turf during periods when natural grass recovery is limited represents a strategic use of resources. Synthetic turf fields can sustain approximately three to four times more use than native-soil grass fields before surface conditions deteriorate. Several of the City’s natural grass fields are currently operating near or above sustainable capacity. Hybrid grass systems may enhance stability but do not substantially increase total carrying capacity. Maintaining all fields within their sustainable limits is critical to ensuring safe, playable, and cost-effective operations.

Cost Efficiency
A 20-year life cycle analysis found that synthetic turf provides the lowest cost per playable hour, approximately $79 per hour, when used within its capacity. This advantage is due to extended usability and lower weather-related downtime. However, synthetic turf systems 11 Parks and Recreation Commission, September 23, 2025, Agenda Item #4, SR# 2509-5208, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=17515 12 Parks and Recreation Commission, October 28, 2025, Agenda Item #5, SR# 2510-5333, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=17522 Item 9
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require greater capital investment, requiring about $3.5 million for a synthetic turf field over 20 years compared to $1.8 million for a native-soil natural grass field. In contrast, natural grass fields are less expensive to construct, but offer lower playable hours and require higher ongoing maintenance, resulting in $179-$203 per hour when utilized within their carrying capacities.

Environmental and Health Considerations
Synthetic turf contributes microplastics through fiber and infill wear, maintenance, and weather exposure. Using natural or organic infills can reduce but not eliminate this migration.

The study also examined PFAS (per- and polyfluoroalkyl substances) in turf materials. While there is growing awareness and concern associated with PFAS, research efforts to assess potential impacts and mitigation practices continue. There is currently no industry standard for PFAS thresholds nor a PFAS-free certification. Manufacturers’ “PFAS-reduced” or “PFAS-free” claims can be independently verified through material testing.

Maintenance and Operations
The City’s current turf maintenance program aligns with industry standards and reflects a reasonable, sustainable approach to turf management. Continued investment in staff training, monitoring tools, and programming adjustments will be needed to ensure long-term durability, safety, and equity in field access. Maintenance best practices continue to evolve as equipment and materials improve.

Community Input
Public engagement included focus groups, meetings, and written comments. Key themes included safety, access, scheduling conflicts, equity, environmental impacts, and sustainability.

Sports organizations generally favored synthetic turf for its reliability and scheduling flexibility.

Environmental advocates emphasized reducing plastic use, improving stormwater quality, and protecting public health.

El Camino Park Case Study
El Camino Park’s synthetic turf field, installed in 2015, has reached the end of its service life.

Converting to natural grass would cost an estimated $1.5–$2 million, take approximately 18 months, and require three to four additional grass fields to offset displaced use (about 2,753 annual hours). The additional fields are not readily available in the City’s inventory. Given current demand and programming levels, resurfacing the field with synthetic turf would maintain reliability and scheduling consistency, while providing time to evaluate natural grass performance improvements elsewhere.

General Recommendations
The Turf Study emphasizes the importance of balancing environmental and health considerations with the community’s ongoing need for equitable and reliable field access.

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Based on the study’s findings and the Parks and Recreation Commission’s deliberations, staff and the Commission recommend resurfacing El Camino Park with synthetic turf consistent with current environmental standards and best practices, while concurrently implementing a pilot program to enhance the playability and carrying capacity of the City’s natural grass fields.

This balanced approach would:
Maintain short-term field capacity and ensure continued community access. Engage an agronomy expert to refine maintenance practices, establish measurable performance benchmarks, and identify opportunities to optimize performance of existing native-soil fields and expand or enhance natural grass field inventory. Support long-term field management and capital planning decisions that incorporate higher-performing natural grass systems as technology, research, and policy evolve.

The Parks and Recreation Commission considered the Turf Study and recommendations at its October 28, 2025 meeting. The Commission voted 4–1 in support of resurfacing El Camino Park with synthetic turf and advancing the natural grass pilot program, with two commissioners absent. Draft Action meeting minutes are included as Attachment A.

FISCAL/RESOURCE IMPACT
A Capital Improvement Project (PG-24000) to replace El Camino Park’s synthetic turf was included in the FY 2024 Adopted Capital Budget. The Turf Study was incorporated into the FY 2025 Budget and funded through PG-24000 in the amount of $139,613. The current project balance for PG-24000 after the turf study is approximately $660,000.

If the City Council supports the staff and Parks and Recreation Commission recommendation to replace the existing surface with synthetic turf, the project cost is anticipated to range between $1.0 million and $1.3 million, with construction targeted for Spring 2026.

As part of the recommendation, staff and the Parks and Recreation Commission also proposes establishing a pilot program to evaluate and enhance the performance of existing natural grass fields. The pilot would focus on three core principles: 1. Optimization of existing native-soil fields through improved soil health, turf cultivar, drainage, and irrigation practices; 2.

Implementation of higher-performing sand-based field profiles to evaluate durability and playability under intensive use and seasonal conditions; and 3. Integration of additional natural grass fields into the City’s athletic inventory to meet current and future demand. The specific cost of this pilot will depend on the number of test sites, scope of agronomic evaluation, and level of maintenance adjustment undertaken. The costs would be refined during program development and could be funded through future operating budgets or existing park maintenance allocations.

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Alternatively, if City Council directs staff to replace El Camino Park with natural grass, staff estimates the project would require 18 months or longer for design, procurement, removal, and installation, at a cost between $1.5 million and $2.0 million. In either scenario, the project will require a future budget adjustment at the Mid-Year Budget Review.

In addition, based on the study’s findings, maintaining current user capacity and field availability under a natural grass scenario would require the City to either acquire additional land or redevelop existing land to construct two to three additional athletic fields.

STAKEHOLDER ENGAGEMENT
Robust stakeholder engagement played a central role in the development of the Turf Study and in shaping the final recommendations. Throughout the process, City staff facilitated multiple opportunities for public input and stakeholder dialogue. In July 2025, three focus groups were held representing El Camino Park field users, the Sierra Club Loma Prieta Chapter, and the Parks and Recreation Commission Playing Fields Ad Hoc Committee. Standardized questions were distributed in advance, with participants invited to provide written and/or verbal feedback during virtual discussions. A summary of the focus group outreach, questionnaire, and responses are included in Appendix C of the report.

The City also maintained a dedicated project webpage to provide transparent, up to date information and encourage community participation. Interested members of the public could sign up for project updates, which were distributed through online newsletters. The draft Study was released for public review on August 13, 2025, initiating a formal community engagement comment period that ran through September 3, 2025.

During this period, and through subsequent Parks and Recreation Commission meetings on August 26, and September 23 the City received a total of 32 public comments, including 22 submitted online and 10 provided during Commission meetings. In total, 21 unique contributors shared perspectives. Appendix F of the report summarizes these comments and provides a table of key themes and responses.

This extensive engagement process ensured that the study and resulting recommendations reflect a broad range of community values and viewpoints related to environmental health, playability, and equitable access to athletic fields.

ENVIRONMENTAL REVIEW
Council action on this item is exempt from CEQA review under section 15306 (information gathering) and 15262 (feasibility and planning studies) of the CEQA Guidelines because the Study and Assessment of Turf Systems for the City of Palo Alto Playing Fields involves basic data collection, research, experimental management, and resource evaluation activities, as well as feasibility studies for future action. Approval of this report does not legally bind the City to a Item 9
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specific project or allocate funding for such project. CEQA review of specific turf replacement projects will occur as required by law.

ATTACHMENT
Attachment A: Parks and Recreation Commission Special Meeting 10.28.25 Draft Action Minutes
APPROVED BY:

Kristen O'Kane, Community Services Director
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Parks Recreation Commission

DRAFT ACTION MINUTES
Regular Meeting
October 28, 2025
The Parks & recreation Commission of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 6:00 P.M.

Present In Person: Shani Kleinhaus, Jeff Greenfield, Nellis Freeman, Anne Cribbs, Yudy Deng (arrives 6:12, Left 10:30)
Others Present: Julie Lythcott Haimes (arrived 6:25) (left 9:43 PM) Present Remotely:

Absent: Commissioner Bing Wei , Commissioner Amanda Brown Call to Order
Public Comment
Agenda Changes, Additions and Deletions
Approval of Minutes

1. Approval of Draft Minutes from September 23, 2025, Parks & Recreation Regular Meeting MOTION:Commissioner Cribbs moved, seconded by Vice Chair Greenfield to approve Agenda the minutes
MOTION PASSED: 5-0-2 ,Brown, Wei absent
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DRAFT ACTION MINUTES

Parks & Recreation Commission
Meeting Draft Action Minutes: 10/20/2025
City Official Reports

1. Council Liaison Report – 5 minutes

NO ACTION

2. Department Report – 20 minutes

NO ACTION

3. Ad Hoc Committees and Liaison Updates (Discussion) – 15 minutes ITEM HEARD OUT OF ORDER AFTER ITEM # 7.

NO ACTION
Business Items

4. Review and provide feedback on the Foothills Nature Preserve Improvements Project Scope Reduction – 60 minutes

5. Study and Assessment of Turf Systems: Findings and Recommendation for El Camino Park Synthetic Turf Replacement – 90 minutes
MOTION: Vice Chair Greenfield moved, seconded by commissioner Cribbs to accept staff recommendations with the addition of moving the risk mitigation measures (RMM) plan back into the general recommendations.

Staff recommend that the Parks and Recreation Commission recommend that the City Council accept the findings and recommendations of the Study and Assessment of Turf Systems for the City of Palo Alto Playing Fields and direct staff to proceed with replacement of the synthetic turf at El Camino Park in a manner consistent with the Study’s findings and recommendations.

MOTION PASSED: 4-1-2, Kleinhaus no, Brown, Wei absent

6. Update on Ad Hoc Nature Policy and Proposal Trail Closure Pearson Arastradero Preserve – 45 minutes

7. Update on the Baylands Comprehensive Conservation Plan (BCCP) – 45 minutes

8. Recognition of Service for Commissioner Cribbs, Greenfield, and Freeman (Pending Reappointment)
ITEM HEARD OUT OF ORDER AFTER ITEM #1

NO ACTION
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DRAFT ACTION MINUTES

Parks & Recreation Commission
Meeting Draft Action Minutes: 10/20/2025
Commissioner Questions, Comments, Announcements or Future Agenda Items Adjournment: The meeting was adjourned at 11:44 P.M.

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: November 17, 2025
Report #:2507-4927
TITLE
Review and Provide Feedback on an Analysis of a Conceptual Affordable Housing Project on Land to be Conveyed to the City and Associated With the Sobrato Development Agreement (340 Portage Avenue); Consideration and Possible Direction to Staff to Prepare a Future Request for Proposal for a Future Affordable Housing Project. CEQA Status: Not a Project.

RECOMMENDATION
Staff recommends that Council:

1. Review the evaluation material including, massing diagrams and shadow studies (Attachment B) and associated proforma analyses (Attachment C) presenting three possible development scenarios and provide feedback to staff;

2. Provide direction to staff to prepare and release a Request for Proposals for a future partnership to build an affordable housing project at the subject property or defer release of the RFP as a future consideration.

EXECUTIVE SUMMARY
On September 12, 2023, City Council adopted Ordinance 55951 approving a Development Agreement (DA) for an approximately 14.65-acre parcel located 3200 Park Boulevard/340 Portage Avenue. The terms of the development agreement included dedication of a 3.25-acre parcel intended to be used for the development of an affordable housing project and a public park.

Following Council’s decision on the DA, the City applied for a Metropolitan Transportation Commission (MTC) grant, which provides funding to support housing development. On May 22, 2024, MTC awarded the City of Palo Alto funding for technical assistance to prepare initial planning work for a future affordable housing development that could potentially take place on the future dedicated parcel adjacent Matadero Creek across and from 340 Portage Avenue.

This report shares the work prepared under this grant and requests Council’s feedback on whether the conceptual typology is aligned with its interest, including aspects related to 1 Ordinance 5595 is available online at: https://www.paloalto.gov/Departments/City-Clerk/City-Records Item 10
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building height, density, unit mix, parking, or other characteristics. This feedback is anticipated to inform preparation of an RFP and, in turn, better inform the proposals from affordable housing partners.

BACKGROUND
In September 2023 Council approved the Sobrato DA, which included development of a 14.65- acre site located at 200-404 Portage Avenue, 3040- 3250 Park Boulevard, 3201-3225 Ash Street & 278 Lambert Avenue, as shown in the Location Map in Attachment A, with a mix of housing, retail, research and development, and public park uses. The DA included dedication of a 3.25- acre parcel to the City for the purposes of developing an affordable housing project and a public park. The Comprehensive Plan designation and Zoning for the site was modified as part of the same application to align with these future uses. In a separate action on this same Council agenda, Council will consider the Final Map, which will create the subject parcel for this affordable housing project, as well as consider authorization for the City Manager to complete the necessary documentation conveying the City dedication parcel to the City. The DA and relevant documentation anticipate that the affordable housing project would sit on approximately one acre of the resulting 3.25-acre parcel.

Metropolitan Transportation Commission Grant
Following approval of the DA, the City nominated the site as a MTC priority site. Following MTC’s award of that designation to this site in November 2023, staff applied for an MTC grant funded through the State’s Regional Early Action Planning (REAP) 2.0 funds, which provides funds to support early planning for housing projects on priority sites. MTC awarded the grant for this technical assistance on May 22, 2024, contingent on approval of the State’s Regional Early Action Planning (REAP) 2.0 funding in California’s budget, which was approved in June 2024. The grant provides funding in addition to selecting consultants and overseeing the contracts for technical assistance to complete the following work:

1. Prepare a proforma analysis of the project’s feasibility under three different unit mix scenarios;

2. Prepare conceptual massing studies for each of those three scenarios;

3. Prepare shadow studies; and

4. Prepare a Request for Proposal (RFP) for the City to partner with an affordable housing developer for the project.

Van Meter Williams Pollock (VMWP) and Street Level Advisors were selected by MTC, in coordination with the City, as the consultants to complete this technical assistance.

Additionally, to inform the selected scenarios and the RFP, Street Level Advisors conducted interviews with several affordable housing developers in the area. Key takeaways from those interviews are discussed further in Attachment C.

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ANALYSIS
The three potential scenarios presented in this report are not recommendations. Rather, they are examples of what a developer may reasonably propose given the City’s goals and site conditions. The massing diagrams and proformas for the three scenarios provide a conceptual understanding both from a visual and cost perspective to better inform Council’s feedback.

Experienced housing developers have expressed that clarity and predictability in the RFP process is a key consideration in determining whether to respond to an RFP and in a successful partnership. Therefore, Council’s early feedback is intended to encourage responsiveness to the RFP and set forth clear expectations for respondents.

Massing Diagrams and Shadow Studies
Table 1 provides a summary of the three scenarios, including key physical and programmatic characteristics including building height, total square footage, unit mix, and parking ratios.

Table 1: Building Scenarios Summary
Scenario 1 Scenario 2 Scenario 3
Building Height ± 55 ft (5 stories) ± 65 ft (6 stories) ± 75 ft (7 stories) Total Gross Floor Area (square feet) 110,935 150,030 173,950 Residential Floor Area (square feet) 73,200 92,200 110,780 1-Bedroom Units 37 (42%) 49 (44%) 59 (44%)
2-Bedroom Units 26 (29%) 30 (28%) 36 (28%)
3-Bedroom Units 26 (29%) 30 (28%) 36 (28%)
Total Units 89 109 131
Average Unit Size (square feet) 1BR: 590
2BR: 870
3BR: 1,080
1BR: 590
2BR: 870
3BR: 1,080
1BR: 590
2BR: 870
3BR: 1,080
Parking Provided 45 (90 with
stackers)
52 (104 with
stackers)
52 (104 with
stackers)
Parking Ratio 0.5 (1.0 with
stackers)

0.47 (0.95 with
stackers)

0.4 (0.8 with
stackers)
Additionally, staff requested that at least one scenario evaluate the open space opening to the future public park to understand how it may modify the building’s interface with the park and the effect of shadows from the building. For consistency with the NVCAP, all scenarios assumed a 50-foot setback from the mid-line of the creek.

Staff did not explore an eight-story scenario based on feedback from affordable housing developers that because of cost escalation and construction complexity, there was a preference for pursuing projects of seven stories or less. In particular, they indicated that adding a level of parking to meet desirable parking ratios increases the cost significantly without improving financing potential. Additionally, staff did not seek scenarios that explore a greater number of larger units as affordable housing developers have expressed that too many large family units Item 10
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increases the cost per unit and that in order to achieve a minimum number of units the overall size of the building needs to increase.

Different building sizes and layouts can change both the number of homes delivered and the amount of subsidy required to make the project feasible. Therefore, staff is seeking Council’s feedback on key development standards that they may want to prescribe for the purposes of the RFP. Some examples may include: a minimum parking ratio; a preferred height maximum or number of stories; a minimum or maximum number of units; any preference regarding unit mix; preferred creek setback; or similar.

Council’s input on key design features such as opening the courtyard toward the park or away from the park and design of the ground floor facing the park is also encouraged. Staff has expressed a desire to have either ground floor units facing the park or ground floor amenities wrapping the ground floor parking so that facades facing the future park are activated. In interviews with affordable housing developers they expressed a desire for this as well.

Shadow studies
VMWP generated the shadow diagrams using 3D simulations, illustrating the difference in shadows cast between the proposed development building height and courtyard orientation.

The analysis considered critical times of day (e.g., 9:00 a.m., 12:00 p.m., and 3:00 p.m.) on June 21st, the longest day of the year, and on December 21st, the shortest day of the year, to represent the minimum and maximum shading that would occur on the park. Overall, the shadow study analysis in Attachment B indicates that the proposed development would not result in significant adverse shadow impacts under any of the scenarios for the majority of the year. Maximum shadow for a seven-story building of 32.9% at two hours before sunset on December 21, leaves 67.1% of the park unshaded. Locating the courtyard on the north side of the building reduces the shadow and reduces the size and impact on the park.

Financial Analysis
Street Level Advisors prepared three detailed project proformas corresponding with the three prototypes developed by Van Meter, Williams, Pollack. For each scenario they evaluated the likely range of development costs based on a review of the costs of comparable affordable projects in the region and developed realistic financing scenarios for each prototype. Affordable housing financing is very competitive: there are far more projects seeking funds than there are funds available. However, a 100% affordable housing project will generally need to compete successfully for federal Low-Income Housing Tax Credits and critical gap funding from the State of California to be viable.

Therefore, Street Level Advisors evaluated each of the three scenarios against the scoring criteria used in the most recent rounds of these key funding sources. The analysis found that an affordable housing development of any of the three prototypes at this location would have been competitive for state funding in recent years. Because the available State funds may be more limited in the coming years and because the scoring systems used to allocate these funds change, it may nonetheless take time for the selected development team to assemble the Item 10
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necessary funding. But this analysis suggests that this is a competitive location for affordable housing. Table 2 provides a high-level summary of the three scenarios. Attachment C includes a more detailed breakdown.

Table 2: Summary of Financing Scenarios
Scenario 1 Scenario 2 Scenario 3
Hard Costs/Foot (excluding parking) $535 $600 $650
Cost per Parking Space $65,000 $65,000 $65,000
Total Development Cost $88,771,732 $119,276,186 $153,411,200 TDC/Unit $997,435 $1,094,277 $1,171,078
Anticipated Gap Funding $24,124,634 $36,594,275 $50,218,646 Estimated City Contribution* $5 Million $5 Million $5 Million *For the City to reach the level of local subsidy per unit that was typical of the winning projects in the most recent State SuperNOFA, the City would need to commit at least $5 million in addition to the land.

One key question Street Level Advisors considered was the necessary level of contribution toward the gap funding from the City of Palo Alto. Local funding is critical to feasibility for two reasons. First, affordable housing projects generally struggle to assemble the funding needed from a limited number of sources so local funding is often a key opportunity to close the gap. Second, the State funding sources often use the level of local funding as a tiebreaker when they determine which projects to fund. Projects with stronger local investment are more likely to secure State funding. For the purposes of this analysis Street level Advisors assumed that under any scenario the land would be provided at essentially no cost and that the development would receive the development impact fee waivers that Palo Alto provides for any affordable housing project. Both will be treated as local contributions under state program rules. They considered the extent to which an additional cash investment from the City’s housing trust fund would improve the competitiveness of the project. For the City to reach the level of local subsidy per unit that was typical of the winning projects in the most recent State SuperNOFA, the City would need to commit at least $5 million in addition to the land. Higher levels of funding would further strengthen the project’s competitiveness and likely shorten the timeline for development of the site noticeably. With this level of contribution, anticipated gap funding that would be needed from the state or another source ranges from approximately $24 million to $50 million, as shown in the table. This is shown in further detail in Table 5 of Attachment C.

Request for Proposal (RFP)
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this document to solicit and select a development partner to construct affordable housing units.

The decision to release the RFP, and the timing of that release, rests with the City. Staff seeks Council direction either to: (1) proceed with issuing the RFP once the grant is complete and the subject property is under City control; or (2) defer issuance until the City has a clearer vision for redevelopment of the entire parcel. At present, only one acre of the 3.25-acre site is anticipated for affordable housing, with the balance expected to support a future park. No plans are currently under evaluation for the park portion. If Council wishes to understand how the park and housing components will integrate before proceeding, it may be prudent to delay the RFP until that relationship is defined.

FISCAL/RESOURCE IMPACT
Work prepared for Council’s consideration tonight was developed under a grant awarded to the City of Palo Alto and therefore has no fiscal impact on the City. The three proforma scenarios presented tonight provide conceptual feedback on possible financing sources, anticipated total cost, and anticipated gap funding that would be needed under each of the scenarios. Gap funding would generally need to be provided from a state funding source and, in part, through the City’s Affordable Housing funds.

The City currently has approximately $7.5 million in its Affordable Housing funds that are not yet allocated for any specific project and an additional $2.35 million in Measure K funding for Affordable Housing. The Council has recently considered use of these funds for initiatives like the investments to address oversized vehicles and the unhoused community member needs and the development of Lot T which anticipates a funding gap as well.

No specific additional costs for Oversized Vehicles beyond the $157,000 approved by the City Council on October 20 have yet been appropriated. However, it is anticipated that additional resource needs may be identified by the City Council ad hoc when it returns to the City Council with its evaluation of activities in ‘Phase 2’ of the City’s response.

As discussed with City Council on October 22, any development of housing on Lot T would also require funding from the City. Although no formal action was taken, based on City Council discussion that night it seems likely that Alta Housing will request funding of $5.5 million from the City, which would significantly decrease the available funding for other affordable housing projects. Additionally, pursuant to the DA, at the time of occupancy of the townhomes, the City will receive $5 million in revenue that may be used toward the construction of a public park at this site and/or construction of this affordable housing project. Building permit submittals for the townhomes is currently anticipated in Spring 2026.

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of the Citywide Affordable Housing funds toward this use so that all respondents assume the same funding from the City in preparing their proposal.

STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper and mailed to owners and occupants of property within 600 feet of the subject property at least ten days in advance. Notice of a public hearing for this project was published in the Daily Post on November 7, 2025, which is 10 days in advance of the meeting. Postcard mailing occurred on November 6, 2025, which is 11 days in advance of the meeting.

The location of this planned affordable housing development was identified in approved Sobrato Development Agreement. The Development Agreement went through a public review process that included 17 public hearings before the Architectural Review Board, Planning and Transportation Commission, Public Arts Commission, Historic Resources Board Commission and City Council. Additionally, as part of the preparation of the Environmental Impact Report for the DA, the impacts of a 75-unit development were evaluated in accordance with the public review process for an EIR.

However, the DA and associated development plan did not include specific architectural plans for the housing project. Therefore, a key criterion for evaluation of the RFP is anticipated to include the affordable housing developer’s proposed community engagement effort. The community engagement process for this project is expected to be a collaborative effort with the selected developer and the City to conduct community meetings and solicit feedback that will inform the overall design.

ENVIRONMENTAL REVIEW
Feedback on the preferred direction to inform the RFP is not a project under CEQA as it would have no potential to result in a direct impact on the environment. The City circulated a Draft Environmental Impact Report (“Draft EIR”) for public review from September 16, 2022 through November 15, 2022. The Revised Final Environmental Impact Report, published June 2, 2023, is comprised of the Draft EIR, together with the Revised Final Responses to Comment (collectively, all of said documents are referred to herein as the “EIR”). City Council adopted Resolution 10123 on September 12, 2025, certifying the EIR and making overriding considerations. The EIR (SCH # 2021120444) analyzed the development agreement under Alternative 3 in the EIR and assumed the development of approximately 75 affordable housing units on the subject property. All three scenarios assume more than the 75 units previously evaluated. If the future project exceeds 75 units, additional analysis, such as an addendum or supplement to the previously approved EIR may be warranted to evaluate the increase in the number of units.

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ATTACHMENTS
Attachment A: Location Map
Attachment B: Massing Diagrams and Shadow Studies
Attachment C: Financial Analysis
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 10
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JOB
DR. BY
SCALE
DATE
SHEET NO.

PORTAGE AVENUE - LOT 2

PALO ALTO CALIFORNIA
10/4/2023
N/A
MC
A10128-7
LOT 1LOT 3
LOT 4 LOT 2
LOT 5
Exhibit A: Plat and Legal
Description
Attachment A: Project Site
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1 PALO ALTO, CA | NOvember 4, 2025 | mTC
0 100’50’
340 POrTAGe Ave | eXISTING AerIAL + ZONING SUmmArY

ZONING INFORMATION
APN # 132-38-071
Site Area 3.25 acres
Zoning
RM-30 (Medium Density Multiple-Family Residence District) *New Zoning from Specific Plan: NV-R4 (High Density Multiple-Family Residential District)
Comprehensive
Plan Land Use
Designation
MF
Development
Standards
FAR 0.6:1
Density Min. 16 DU/ Acre - Max. 30 DU/Acre
Height 35 Feet
Setbacks
• Front = 20 Feet
• Interior side yards = 10 Feet
• Interior rear yards = 10 Feet
• Street side = 16 Feet
Parking
• 1 space per micro unit
• 1 spaces per studio unit
• 1 space per 1-bedroom unit
• 2 spaces per 2-bedroom unit (at least 1
covered)
Bicycle Parking 1 space per unit
Min. landscape/open
space coverage (percent) 30%
Min. usable open space
(sf per unit) 150 SF/Unit
Min. common open space
(sf per unit) 75 SF/Unit
Min. Private Open Space
(sf per unit) 50 SF/Unit
**See North Ventura Coordinated Area Plan (August 2024)

PARK BLVD

LAMBERT AVE
matadero Creek
PrOJeCT SITe

3.25 ACre
ASH ST
89’
664’
42’
131’
215’
40’
100’
274’
240’
168’
160’
25’
160’
45’
126’
* NV-R4 district provides high-density apartment living, primarily along major transportation corridors near mass transit and employment centers. Density ranges anticipated from 61 to 100 dwelling units per acre, with a maximum FAR of 3.0:1

PORTAGE AVE
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2 PALO ALTO, CA | NOvember 4, 2025 | mTC
0 100’50’
340 POrTAGe Ave | OPTION 1 - 50’ CreeK SeTbACK, SOUTH FACING COUrTYArD, eLevATeD GrOUND FLOOr reS.

PARK BLVD

PORTAGE AVE
89’
matadero Creek
664’
42’
ASH ST
131’
215’
40’
100’
274’
240’
Park

2.25 Acre
Common
Room
Trash
Bike Room
Office
Mech
Courtyard exit stair
Parking (45 spaces or 90 w/stackers)
GrOUND FLOOr PLAN
LeveL 2 FLOOr PLAN
LeveL 3-5 FLOOr PLAN
Courtyard
9,730 SF
20’
Front
setback
10’
Side
setback
16’
Street side
setback
Lobby
L
T
T
OPTION 1: 5 STOrIeS bUILDING (± 55 FeeT)
OPTION 1: 5 STORIES (± 55 FEET)

UNIT MIX
Unit Type 1-BR 2-BR 3-BR Total
1st floor 2 2 2 6 units
2nd floor 8 6 6 20 units
3rd floor 9 6 6 21 units
4th floor 9 6 6 21 units
5th floor 9 6 6 21 units
TOTAL 37 26 26 89 units
Mix % 42% 29% 29% 100%
Average Size 590 sf 870 sf 1,080 sf

PARKING
Provided 45 spaces; 0.5 spaces / unit
(90 spaces if stackers; 1 space / unit)
BUILDING AREAS (OPTION 1 - 5 STORIES BUILDING)
Gross Area Residential Common Circulation / Services Parking / Ramp Ground Floor 30,070 5,270 2,320 4,460 18,020
Floor 2 20,220 16,540 595 3,085 -
Floor 3 21,215 17,130 - 3,085 -
Floor 4 21,215 17,130 - 3,085 -
Floor 5 21,215 17,130 - 3,085 -
5 STORIES TOTAL 110,935 73,200 2,915 16,800 18,020
Affordable housing site
1 Acre
Raised residential entrances
Elec
168’
160’
25’
160’
45’
126’

LAMBERT AVE
Alley with special
paving connecting
Lambert Ave to the park
50’ creek centerline
setback
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3 PALO ALTO, CA | NOvember 4, 2025 | mTC
0 100’50’
340 POrTAGe Ave | OPTION 2 - 50’ CreeK SeTbACK, NOrTH FACING COUrTYArD, COmmUNITY USeS ON GrOUND FLOOr 89’
matadero Creek
664’
42’
131’
215’
40’
100’
274’
240’
Park

2.25 Acre
Trash
Bike Room
Mech
Courtyard
exit stairs
Office
Mail
Parking (52 spaces or 104 w/stackers)
GrOUND FLOOr PLAN
LeveL 2 FLOOr PLAN
LeveL 3-6 FLOOr PLAN
Courtyard
6,265 SF
20’
Front
setback
10’ Side
setback
16’
Street side
setback
Lobby
L
T
T
OPTION 2: 6 STOrIeS bUILDING (± 65 FeeT)
OPTION 2: 6 STORIES (± 65 FEET)

UNIT MIX
Unit Type 1-BR 2-BR 3-BR Total
1st floor - - - -
2nd floor 9 6 6 21 units
3rd floor 10 6 6 22 units
4th floor 10 6 6 22 units
5th floor 10 6 6 22 units
6th floor 10 6 6 22 units
TOTAL 49 30 30 109 units
Mix % 44% 28% 28% 100%
Average Size 590 sf 870 sf 1,080 sf

PARKING
Provided 52 spaces; 0.5 spaces / unit
(104 spaces if stackers)
BUILDING AREAS (OPTION 2 - 6 STORIES BUILDING)
Gross Area Residential Common Circulation / Services Parking / Ramp Ground Floor 30,430 - 4,780 5,120 20,530
Floor 2 23,920 17,880 700 5,340 -
Floor 3 23,920 18,580 - 5,340 -
Floor 4 23,920 18,580 - 5,340 -
Floor 5 23,920 18,580 - 5,340 -
Floor 6 23,920 18,580 - 5,340 -
6 STORIES TOTAL 150,030 92,200 5,480 31,820 20,530
Affordable housing site
1 Acre
Elec
168’
160’
25’
160’
45’
126’
Community/
Amenity
50’ creek centerline
setback
Alley with special
paving connecting
Lambert Ave to the park

PARK BLVD

PORTAGE AVE
ASH ST

LAMBERT AVE
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4 PALO ALTO, CA | NOvember 4, 2025 | mTC
0 100’50’
340 POrTAGe Ave | OPTION 3 - 50’ CreeK SeTbACK, NOrTH FACING COUrTYArD, COmmUNITY USeS ON GrOUND FLOOr 89’
matadero Creek
664’
42’
131’
215’
40’
100’
274’
240’
Park

2.25 Acre
Trash
Bike Room
Mech
Courtyard
exit stairs
Office
Mail
Parking (52 spaces or 104 w/stackers)
GrOUND FLOOr PLAN
LeveL 2 FLOOr PLAN
LeveL 3-7 FLOOr PLAN
Courtyard
6,265 SF
20’
Front
setback
10’ Side
setback
16’
Street side
setback
Lobby
L
T
T
BUILDING AREAS (OPTION 3 - 7 STORIES BUILDING)
Gross Area Residential Common Circulation / Services Parking / Ramp Ground Floor 30,430 - 4,780 5,120 20,530
Floor 2 23,920 17,880 700 5,340 -
Floor 3 23,920 18,580 - 5,340 -
Floor 4 23,920 18,580 - 5,340 -
Floor 5 23,920 18,580 - 5,340 -
Floor 6 23,920 18,580 - 5,340 -
Floor 7 23,920 18,580 - 5,340 -
7 STORIES TOTAL 173,950 110,780 5,480 37,160 20,530
Affordable housing site
1 Acre
Elec
168’
160’
25’
160’
45’
126’
Community/
Amenity
50’ creek centerline
setback
Alley with special
paving connecting
Lambert Ave to the park
OPTION 3: 7 STOrIeS bUILDING (± 75 FeeT)
OPTION 3: 7 STORIES (± 75 FEET)

UNIT MIX
Unit Type 1-BR 2-BR 3-BR Total
1st floor - - - -
2nd floor 9 6 6 21 units
3rd floor 10 6 6 22 units
4th floor 10 6 6 22 units
5th floor 10 6 6 22 units
6th floor 10 6 6 22 units
7th floor 10 6 6 22 units
TOTAL 59 36 36 131 units
Mix % 44% 28% 28% 100%
Average Size 590 sf 870 sf 1,080 sf

PARKING
Provided 52 spaces; 0.4 spaces / unit
(104 spaces if stackers; 0.8 spaces / unit)

PARK BLVD

PORTAGE AVE
ASH ST

LAMBERT AVE
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5 PALO ALTO, CA | NOvember 4, 2025 | mTC
340 POrTAGe Ave | SHADOW STUDY
NOTe: THIS SHADOW STUDY SHOWS THe SHADOWS CASTeD bY eACH OF THe OPTIONS, ON THe LONGeST DAY OF THe YeAr(JUNe 21) AND THe SHOrTeST DAY OF THe YeAr(DeC 21), AT TWO HOUrS PAST SUNrISe, NOON, AND TWO HOUrS PrIOr TO SUNSeT.

JUNe 21; 8 Am
JUNe 21; 12 NOON
JUNe 21; 6 Pm
DeCember 21; 9 Am
DeCember 21; 12 NOON
DeCember 21; 3 Pm
OPTION 1: 5 STOrIeS, 50’ CreeK SeTbACK, SOUTH FACING COUrTYArD, eLevATeD GrOUND FLOOr reSIDeNTIAL JUNe 21; 8 Am
JUNe 21; 12 NOON
JUNe 21; 6 Pm
DeCember 21; 9 Am
DeCember 21; 12 NOON
DeCember 21; 3 Pm
OPTION 2: 6 STOrIeS, 50’ CreeK SeTbACK, NOrTH FACING COUrTYArD, COmmUNITY USeS ON GrOUND FLOOr JUNe 21; 8 Am
JUNe 21; 12 NOON
JUNe 21; 6 Pm
DeCember 21; 9 Am
DeCember 21; 12 NOON
DeCember 21; 3 Pm
OPTION 3: 7 STOrIeS, 50’ CreeK SeTbACK, NOrTH FACING COUrTYArD, COmmUNITY USeS ON GrOUND FLOOr Item 10
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6 PALO ALTO, CA | NOvember 4, 2025 | mTC
0 100’50’
340 POrTAGe Ave | SHADOW STUDY - DeCember 21, 3 Pm - mAX SHADe OPTION 1: 5 STOrIeS, 50’ CreeK SeTbACK, SOUTH FACING COUrTYArD, eLevATeD GrOUND FLOOr reSIDeNTIAL
OPTION 2: 6 STOrIeS, 50’ CreeK SeTbACK, NOrTH FACING COUrTYArD, COmmUNITY USeS ON GrOUND FLOOr
OPTION 3: 7 STOrIeS, 50’ CreeK SeTbACK, NOrTH FACING COUrTYArD, COmmUNITY USeS ON GrOUND FLOOr
(25,480 SF)
26%

32.9%
(27 ,280 SF) (32,245 SF)
27 .8%
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1 To: Claire Raybould, Current Planning Manager, City of Palo Alto From: Rick Jacobus, Street Level Advisors Date: October 8, 2025 Re: Matadero Creek Affordable Housing – Financial Feasibility Analysis Summary of Findings Street Level Advisors conducted a financial feasibility analysis to understand the potential for 100% affordable housing developments on a 1-acre portion of the 340 Portage Avenue site. We developed three detailed project proformas for building prototypes that correspond with the three scenarios developed by Van Meter, Williams, Pollack including 5, 6, and 7 story heights with varying amounts of parking. For each of the three scenarios we evaluated the likely range of development costs based on a review of the costs of comparable affordable projects in the region and developed realistic financing scenarios . Affordable housing financing is very competitive: there are far more projects seeking funds than there are funds available. Generally, a 100% affordable housing project will need to compete successfully for federal Low-Income Housing Tax Credits and critical gap funding from the State of California. Therefore, we evaluated the site and each of the three scenarios against the scoring criteria used in the most recent rounds of these key funding sources. We found that an affordable housing development of any of the three scenarios at this location would have been competitive for state funding in recent years. Because the available State funds may be more limited in the coming years and because the scoring systems used to allocate these funds change, it may nonetheless take time for the selected development team to assemble the necessary funding. But our analysis suggests that this is a competitive location for affordable housing.

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2 Table 1: Financing Scenario Summary
One key question we considered was the necessary level of gap funding from the City of Palo Alto. Local funding is critical to feasibility for two reasons. First, every affordable housing project struggles to assemble the funding needed from a limited number of sources so local funding is often the only way to close the gap. Second, the state funding sources often use the level of local funding as a tie-breaker when they determine which projects to fund. Projects with stronger local investment are more likely to secure state funding. We assumed that in all of the three scenarios the development would receive the land at essentially no cost and would receive development impact fee waivers that Palo Alto provides for all affordable housing projects. Both of these would be treated as local contributions under state program rules. We also considered the extent to which an additional cash investment from the City’s Affordable Housing Fund would improve the competitiveness of the project. and concluded that the City would need to commit at least $5 million, in addition to the land, in order for the project to reach the level of local subsidy that was typical of the winning projects in the most recent state SuperNOFA. Higher levels of funding, up to $10 million would strengthen the project’s competitiveness and likely shorten the timeline for development of the site noticeably.

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3 Why We Did This Analysis As the City prepares to issue a Request for Proposals (RFP) for the Matadero Creek Affordable Housing site, we want to understand the range of projects that developers might propose. Different building sizes and layouts can change both the number of homes delivered and the amount of subsidy required to make the project feasible. Because the funding landscape for affordable housing is constantly changing, we can’t exactly project what the most effective funding strategy will be, even a few years from now. But we can ensure that the site and potential projects would have been competitive for funding under the conditions available in recent years. Ultimately, the City will select a development partner with a strong track record lining up the many sources of funding needed to make these projects possible and that partner will determine the most promising funding strategy available at that time. Developer Feedback Between late April and early May 2025, we conducted five in-depth interviews with organizations representing a broad cross-section of the affordable housing developers and affordable housing finance experts. Each interview lasted roughly one hour and followed a consistent discussion guide covering site design, financing, affordability strategy, and RFP structure. The purpose was not to solicit proposals but to understand how experienced developers view the site’s opportunities and challenges, and what process design would make the project most attractive and feasible. Design and Site Considerations: Developers were largely aligned on design principles. There was little appetite for buildings taller than 7 stories, both because of cost escalation and construction complexity. Most agreed that one level of podium parking is the upper limit of what remains feasible. Beyond that, costs rise sharply without improving financing potential. Developers also encouraged the City to identify a long-term operating plan for community-serving spaces to ensure their financial sustainability. Several respondents noted that orienting units and shared spaces toward the park would help activate the public edge and strengthen the relationship between housing and open space. Parking: Developers agreed that parking ratios are a key feasibility driver. Most suggested between 0.5 and 0.75 spaces per unit, depending on unit mix and transit access. There was broad consensus that mechanical stackers are disfavored, citing maintenance costs and operational reliability – though several developers might consider using them if necessary. Target Populations and Unit Mix: Developers urged the City to clarify target populations early. If the City intends to include supportive housing or veteran units, they suggested doing so only if funding or service commitments are already identified. They also advised allowing flexibility in unit mix so developers can Item 10
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4 align designs with evolving funding opportunities, market conditions, and management strategies. Rigid requirements can make projects less competitive in state funding rounds. Financing Strategy and Funding Sources: All interviewees recognized that 340 Portage will require layered financing, with state programs playing a central role. Most agreed that the project would rely on 4% Low-Income Housing Tax Credits rather than 9% credits, given the competitive limits of the regional allocation pool. One developer floated the idea of splitting the site into two smaller 9% projects, but most favored a single 4%-credit project paired with MHP funding as the most practical structure. Leveraging State Programs: Developers highlighted the opportunity to maximize MHP and AHSC scoring through the site’s high-resource location, transit proximity, and City land contribution. They recommended that the City document Surplus Lands Act compliance early, since formal designation as “exempt surplus land” earns critical MHP points. Several developers noted that AHSC (Affordable Housing and Sustainable Communities) funds could be attainable if the City partners with a transit agency (VTA or Caltrain) to include a modest mobility improvement, such as a new bike connection or crosswalk enhancement near the site. Need for Local Match Funding: Interviewees pointed out that state programs reward local match commitments. While the land contribution counts, adding $100,000–$200,000 per unit in City housing trust funds could strengthen competitiveness. To be recognized, such funds must be committed prior to application submission. Overall, developers expressed strong interest in an affordable housing project at this site, but emphasized the importance of clarity, predictability, and simplicity. They view the project as financially feasible under a 4% LIHTC + MHP model, assuming clear direction on parking, affordability targets, and local participation. Developers also noted that an efficient, well-scoped RFP—focused on developer qualifications, capacity and readiness rather than design detail—would attract a strong pool of proposers while reducing administrative burden for both applicants and City staff. Three Development Scenarios We tested three different building sizes, each consistent with the massing studies prepared by the design team. The table below compares the three building prototypes studied for a potential affordable housing project at this site. It summarizes key physical and programmatic characteristics, including building height, total square footage, unit mix, and parking ratios.

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5 Table 2: Building Prototypes Studied Option 1 – 5 stories Option 2 – 6 stories Option 3 – 7 stories Building Height ± 55 ft ± 65 ft ± 75 ft Total Gross Area (sf) 110,935 150,030 173,950 Residential Area (sf) 73,200 92,200 110,780 1-Bedroom Units 37 49 59 2-Bedroom Units 26 30 36 3-Bedroom Units 26 30 36 Total Units 89 109 131 Average Unit Size (sf) 1BR 590 / 2BR 870 / 3BR 1,080 1BR 590 / 2BR 870 / 3BR 1,080 1BR 590 / 2BR 870 / 3BR 1,080 Parking Provided 45 (90 with stackers) 52 (104 with stackers) 52 (104 with stackers) Parking Ratio 0.5 (1.0 w/stackers) 0.5 (1.0 w/stackers) 0.4 (0.8 w/stackers) Development Cost Estimates In order to evaluate the financing need, we first estimated the total cost to develop each of the prototypes. We reviewed detailed proformas for several recently proposed affordable projects in and around Palo Alto, development cost proposals provided to the State for dozens of other projects as part of the most recent affordable housing SuperNOFA, as well as a detailed study on the cost of development of both market rate and affordable housing commissioned by the City of San Jose in 20241. We intentionally selected cost assumptions at the high end of the ranges suggested by these sources, both to reflect the likely cost increases that have occurred since these projects were proposed and to provide a somewhat more conservative estimate of the financing need. Note that we have not attempted to adjust these costs to reflect future cost inflation. This project will take many years to develop, and the actual costs will certainly be somewhat higher than these present-day projections. Appendix A includes the detailed cost assumptions we used to construct the proformas. Table 3 summarizes the high-level cost break down for each prototype. 1 San Jose Cost of Development Study, Century Urban 2024 Item 10
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6 Table 3: Development Cost Summary
The taller, denser projects cost more to build, both because there is more building to construct and because we assume that the cost per foot is higher for denser buildings. Affordability For each scenario we assumed that all units (aside from 1 managers unit) would be restricted to households earning less than 60% of Area Median Income (AMI). For reasons of competitiveness for State funding, we have assumed that 20% of units in each scenario would target Extremely Low Income (ELI) households earning less than 30% of AMI. We assumed that the remaining units would serve a mix of incomes between 40% and 60% of AMI. Table 4: Income Mix Key State and Federal Financing Sources Affordable housing projects in California almost always require a combination of federal and state subsidies in addition to local funds and tax credit equity. The primary programs are administered by the California Department of Housing and Community Development (HCD), the California Tax Credit Allocation Committee (TCAC/CDLAC), and federal agencies such as the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury. Federal Programs Item 10
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7 Low-Income Housing Tax Credit (LIHTC) What it is: The main federal incentive for building affordable rental housing, created under Section 42 of the Internal Revenue Code. How it works: Provides a dollar-for-dollar tax credit to investors who finance affordable housing. Projects receive either 4% or 9% credits depending on the financing structure. Why it matters: LIHTC is the financial backbone of nearly all affordable rental developments in the U.S., generating about 40–50% of the total project funding. Tax-Exempt Multifamily Housing Bonds (Private Activity Bonds) What it is: Long-term, below-market-rate financing made possible when states and localities issue tax-exempt bonds for affordable housing. How it works: Developers borrow bond proceeds to finance construction and permanent loans. Projects using these bonds automatically qualify for 4% LIHTCs if at least 50% of the project’s costs are financed with bond proceeds. The loans are generally made by commercial banks with tax exemption facilitated by a public agency. Why it matters: This pairing of bonds and 4% tax credits is a cornerstone of financing for larger affordable projects like 340 Portage. Project-Based Vouchers (PBVs) What it is: HUD-funded rental assistance administered by local housing authorities. How it works: Provides long-term rental subsidies tied to specific units, ensuring that very low-income households pay no more than 30% of their income toward rent. Why it matters: PBVs make the deepest affordability levels financially sustainable by guaranteeing stable rental income for the most vulnerable residents. State Programs Multifamily Housing Program (MHP) What it is: The state’s core subsidy program for new affordable rental housing. How it works: Provides long-term, low-interest loans (often 55 years) to help fill the gap between development costs and other financing sources. Why it matters: Almost every competitive affordable housing project in California applies for MHP funds. Affordable Housing and Sustainable Communities (AHSC) What it is: Funding from the state’s cap-and-trade revenues to support housing near transit. How it works: Provides loans for housing plus grants for related infrastructure Item 10
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8 (sidewalks, bike lanes, transit stops). Why it matters: 340 Portage, located near jobs and transit, would be a strong candidate for this program. Infill Infrastructure Grant Program (IIG) What it is: Grants to help cover infrastructure costs for infill housing sites. How it works: Can fund utilities, streets, sidewalks, and other improvements needed to make a site ready for housing. Why it matters: Helps reduce the amount of subsidy needed for construction by covering upfront site prep. No Place Like Home (NPLH) What it is: Funds permanent supportive housing for people experiencing homelessness and mental illness. How it works: Counties receive allocations and may partner with affordable housing developers. Why it matters: If supportive units are included in the mix, NPLH could provide both capital and operating support. Other Targeted Programs • Veterans Housing and Homelessness Prevention (VHHP): For projects that include units for veterans. • Joe Serna Jr. Farmworker Housing Grant Program: For developments serving farmworker households. • Transit-Oriented Development (TOD) Program: For projects adjacent to major public transit corridors. Financing Strategy The 9% tax credits are more generous (they provide a higher share of cost per project) but also more competitive. The 9% tax credits are allocated by the State into regional pools and the South Bay pool may be too small to support a large project like this. The 4% tax credits are a more likely source, but they leave a larger gap for the developer to fill. Based on a review of the 4% projects funded in 2024, we assumed that tax credits would provide 47% of the total development cost in each of our prototypes (though a number of factors could mean that more or less tax credit equity was available to a project at this site). The 4% tax credits must be paired with tax exempt bond financing which lowers the cost of the permanent debt on the project. In each case we have calculated the maximum supportable permanent loan given the restricted rents. But the tax credits and debt together cover less than 60% of the cost of the project. This leaves a ‘gap’ that has to be filled with affordable housing subsidies from one source or another (often many different sources). The most promising sources are the State MHP and AHSC programs. Most of the 4% LIHTC projects receive one or the other or sometimes both of these sources.

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9 The MPH Program is promising because it provides significant scoring incentives both to projects located in “High Resource Areas” and to projects developed on surplus public land. The Portage Ave site would qualify for both of these bonus categories. Only 19% of projects that applied in the last round qualified for both. The challenge with MHP is that ongoing funding for the program is uncertain. It seems likely that the State will continue to invest, but the budget situation in Sacramento makes it difficult to anticipate the level of funding. The other large state program, AHSC, was recently extended. The program will receive $800 million annually in proceeds from the state’s cap and trade greenhouse gas emissions auctions through 2045. Portage Avenue also appears to be a competitive site for AHSC funding. AHSC requires pairing an affordable housing project with a transportation infrastructure project serving the same area. A successful award funds both projects. The other critical source for any project is local government funding. For the purpose of this analysis, we assumed that the City of Palo Alto would commit additional Affordable Housing Fund resources to the project to help fill the gap. Figure 1: Capital Stack The Impact of Local Investment In order to understand the critical role that local government investment can play in making projects like this feasible, we evaluated the data from recently funded projects. We looked at all the 4% LIHTC projects funded in the most recent State SuperNOFA2. The State awards funding from several sources including MHP, IIG and VHHP in a single competitive process. In 2025 they funded 16 projects that also received 4% tax credits. These projects received between $2 and $42.5 million in state funding. This funding represented between 4% and 2 February 2025 Multifamily Finance SuperNOFA (Round 3). https://www.hcd.ca.gov/grants-and-funding/supernofa Item 10
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10 51% of total development costs with the average State share representing 22% of total development costs. Table 5: Financing Mix with $5 Million in City funding Table 5 shows the financing mix for each of the prototypes under the assumption that the City committed $5 million in funding3. The table shows that, at this level of City funding, the project would require between $24 and $50 million in State funding. That funding would represent between 27 and 33% of total development cost. This is well above the average State funding share from the last SuperNOFA but not outside of the range. We also considered an alternative where the City contribution to the project was $10 million. As Table 6 shows, at this level the State share of funding would range from 22 to 29% of cost – closer to the average among winning projects in the last State funding round. Table 6: Financing Mix with $10 Million in City funding

3 While the need for subsidy increases for the larger projects we assumed a flat level of funding regardless of project size on the assumption that the City would either commit a given level of funding or indicate that a given amount is being held aside for future commitment for this site prior to issuance of an RFP. This would mean that developers would receive the same level of city funding regardless of the density of their project. An alternative approach would be to allow developers to request funds from the City either as part of the RFP or through the City’s regular award process after selection. Either of those approaches might result in a higher award of City funding for projects with more units. The developers we interviewed, however, indicated that a clear statement of available City funding would strengthen the RFP and make it more attractive to potential developers.

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11 What This Means Going Forward These three scenarios are not recommendations. They are examples of what a developer could reasonably propose given the City’s goals and site conditions. A developer responding to the RFP might bring forward something that looks like Option 1, Option 3, or something in between. The takeaway is that all are financially possible — but each comes with different tradeoffs. Smaller buildings mean fewer homes but easier financing. Larger buildings mean more homes but bigger gaps to close.

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12 Appendix A – Key Assumptions Behind All Scenarios This project’s financial analysis is based on a common set of assumptions. Below we outline those assumptions and explain in plain language what they mean. Affordability Who the housing is for: For each prototype we assumed that all units would be restricted to households earning less than 60% of Area Median Income (AMI). For reasons of competitiveness for State funding, we have assumed that 20% of units in each scenario would target Extremely Low Income (ELI) households earning less than 30% of AMI. We assumed that the remaining units would serve a mix of incomes between 40% and 60% of AMI. How rents are set: Rents are capped for each income group based on LIHTC rent limits published by the California Department of Housing and Community Development. How big are the units: For all the prototypes we assumed roughly the same mix of 1, 2- and 3-bedroom units based on Van Meter, Williams, Pollack’s designs.

Voucher support: In the case of scenarios that take advantage of Project Based Vouchers, we assume rental income based on HUD’s Fair Market Rent (FMR) for the unit size rather than the tenant’s income. Tenants in voucher units pay a share of their income and HUD makes up the difference between this payment and FMR. Rent and Utilities Maximum affordable rents: The rent shown in the model is the most a household at that income level could be asked to pay, based on federal and state formulas. Utility deductions: Because tenants pay utilities, we subtract a standard allowance from the maximum rent. For example, about $98 is taken off for a 1-bedroom, $128 for a 2-bedroom, and $157 for a 3-bedroom. Manager’s unit: One apartment in each scenario is set aside for an on-site manager and doesn’t generate rent. Costs to Build Construction type: Costs assume modern wood-frame apartments over a concrete podium (the most common and efficient structure for this type of project). Hard costs: We budget between $535 to $650 per gross residential foot for the direct costs to build the building. Parking cost: In addition, we assume a cost of $65,000 per parking space to build the parking.

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13 Soft costs: Professional fees, permits, and other non-construction costs are assumed to be about 18% of hard construction costs. Land: The site is contributed by the City, so no land purchase cost is included. How It’s Paid For Permanent loan: Each scenario assumes a long-term mortgage funded with tax exempt bond financing. This loan is sized conservatively based on the project’s income, so it can be safely repaid. We assume a Debt Service Coverage Ratio of 1.15 meaning that the Net Operating Income (after all expenses) for the building must be at least 15% greater than the monthly loan payment. This ratio limits the amount that the project can borrow because the rents are limited. We assume a permanent loan interest rate of 6.5% and a loan term of 35 years. Construction loan: We assume a construction loan interest rate of 6.85% and that the construction loan will cover 60% of the total development cost. Tax Credit Equity: While the exact amount of tax credit equity depends on both building cost and market factors, we assumed that tax credit equity would contribute 47% of total development cost for each prototype. This was the average tax credit investment among 15 projects funded with 4% LIHTC credits in 2023 in San Mateo and Santa Clara counties. State funding: For each prototype we calculated the amount of funding from the State that would be necessary to fill the remaining gap after accounting for all other sources. We then compared the resulting funding levels to the typical amounts awarded to successful 4% LIHTC projects in recent rounds of State funding. This State funding could come from MHP, AHSC or any of several other state programs. City contribution: We assumed, for the purpose of analysis a City of Palo Alto commitment of $5,000,000 for each project prototype. Other contributions: The financial model includes a standard “owner’s equity” contribution of $84,000 per unit and a small portion of the developer fee being deferred until after the building is operating. Operations Once Built Operating expenses: We assumed that the operating expenses for each building would be $10,000 per unit per year.

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14 Net Operating Income (NOI): This is the project’s annual bottom line after paying for operating costs. The first year NOI ranges from about $1.1M to $1.6M depending on building size. No extras included: For now, the models don’t count potential income from things like commercial rent, parking, or services.

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15 Appendix B – Project Prototype Pro formas
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Matadero Creek Affordable Housing ProjectOption 1 - 5 Stories Unit Mix and Rent StructureRent InformationArea Median Income30% (PBV)50% (PBV)30% AMI40% AMI50% AMI60% AMIMGRStudio 968$ 1,291$ 1,613$ 1,936$ -$ 1-Bed -$ 1,037$ 1,383$ 1,728$ 2,074$ -$ 2-Bed 3,124$ 1,244$ 1,659$ 2,073$ 2,488$ -$ 3-Bed 4,004$ 4,033$ 1,437$ 1,917$ 2,396$ 2,875$ -$ 4-Bed 1,603$ 2,138$ 2,672$ 3,207$ -$ Commercial BedroomsUtility AllowanceStudio -$ 1-Bed 98$ 2-Bed 128$ 3-Bed 157$ 4-Bed Unit Mix# of BedroomsNumber of UnitsSquare FeetTotal Sq FtAMI LevelMonthly RentMax Affordable Rent (with Utilities) Utility Allowance1st Year Annual Revenue
Studio 0 500 0 30% AMI$968$968$0 $0Studio 0 500 0 40% AMI$1,291$1,291$0 $0Studio 0 500 0 60% AMI$1,936$1,936$0 $01-Bed 7 590 4,13030% AMI$939$1,037$98$78,8761-Bed 11 590 6,49040% AMI$1,285$1,383$98$169,6201-Bed 19 590 11,21060% AMI$1,976$2,074$98$450,5282-Bed 5 870 4,35030% AMI$1,116$1,244$128$66,9602-Bed 8 870 6,96040% AMI$1,531$1,659$128$146,9762-Bed 12 870 10,44060% AMI$2,360$2,488$128$339,8402-Bed 1 870 870MGR-$128$0 $128($1,536)3-Bed 5 1,0805,40030% AMI$1,280$1,437$157$76,8003-Bed 8 1,0808,64040% AMI$1,760$1,917$157$168,9603-Bed 13 1,08014,04060% AMI$2,718$2,875$157$424,008 Total 89 72,530 $1,921,032
AMI Units % Total Units% Tot Rev.AMIUnits% Total Units30% (PBV) 0 0%0.0% ELI 1719.1%50% (PBV) 0 0%0.0% VLI 2730.3%30% AMI 17 19%11.6% Low Income4449.4%40% AMI 27 30%25.3% MGR 1 1.1%50% AMI 0 0%0.0% Total 89 100%60% AMI 44 49%63.2%MGR 1 1%-0.1% ParkingSpacesSpaces/unit450.51 Total 89 100%100% BuildingNet FeetEfficiencyGross FeetUnit TypeUnits % Total Units% Tot Rev. 72,53065%110,935 Studio 0 0%0.0%1-Bed 37 42%36.4%2-Bed 26 29%28.7%3-Bed 26 29%34.9%4-Bed 0 0%0.0%Total 89 100%100% Project Proforma
Construction SourcesTotal Per Unit Financing AssumptionsConstruction Loan53,263,039$ 598,461$ Debt Coverage Ratio 1.15Tax Credit Investor Proceeds14,602,950$ 164,078$ Construction Loan Amount (%TDC)60%GP Equity 7,480,094$ 84,046$ Construction Interest Rate6.85%HCD/Other -$ Permanent Interest Rate6.50%City of Palo Alto5,000,000$ 56,180$ Permanent Loan Term 35Total 80,346,083$ 902,765$ LIHTC Price 0.95Basis Boost TRUELIHTC Eligible % 100%LIHTC Investor Proceeds % TDC47%City of Palo Alto Investment Limit5,000,000$ HCD/Other %TDC 20%Permanent SourcesTotal Per Unit% GP Equity per Unit 84046Amortizing Permanent Loan10,017,980$ 112,562$ 11% Tax Credit $ During Construction35%Tax Credit Investor Proceeds41,722,714$ 468,795$ 47% Deferred Developer Fee per Unit4790GP Equity 7,480,094$ 84,046$ 8%Deferred Developer Fee426,310$ 4,790$ 0% Development AssumptionsHCD/Other 24,124,634$ 271,063$ 27% Construction Costs Per Gross Foot535City of Palo Alto5,000,000$ 56,180$ 6% Site Acquisition Cost Per Acre0Total 88,771,732$ 997,435$ 100% Parking Cost per Space65000Soft Costs (as % of hard costs)18%Financing Costs per unit53,000 Developer Fee % of TDC12.5% Operating AssumptionsUses Total Per UnitPer GSF Operating Costs10,000$ Per UnitAcquisition -$ -$ -$ Expense Inflation Rate3.50%Hard Cost 59,350,225$ 666,856$ 535$ Resident Services1,700$ Per unitParking Cost 2,925,000$ 32,865$ 26$ Reserves 500$ Per UnitFinancing Costs4,717,000$ 53,000$ 43$ Other Soft Costs10,683,041$ 120,034$ 96$ Developer Fee11,096,467$ 124,679$ 100$ Total Development Costs88,771,732$ 997,435$ 800$ Cash FlowYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Effective Gross Income1,921,032$ 1,988,268$ 2,057,858$ 2,129,883$ 2,204,428$ 2,281,583$ 2,361,439$ 2,444,089$ 2,529,632$ 2,618,169$ Operating Expenses(890,000)$ (921,150)$ (953,390)$ (986,759)$ (1,021,295)$ (1,057,041)$ (1,094,037)$ (1,132,329)$ (1,171,960)$ (1,212,979)$ Services (151,300)$ (156,596)$ (162,076)$ (167,749)$ (173,620)$ (179,697)$ (185,986)$ (192,496)$ (199,233)$ (206,206)$ Reserves (44,500)$ (46,058)$ (47,670)$ (49,338)$ (51,065)$ (52,852)$ (54,702)$ (56,616)$ (58,598)$ (60,649)$ Net Operating Income835,232$ 864,465$ 894,721$ 926,037$ 958,448$ 991,994$ 1,026,713$ 1,062,648$ 1,099,841$ 1,138,335$ Debt Service (726,289)$ (726,289)$ (726,289)$ (726,289)$ (726,289)$ (726,289)$ (726,289)$ (726,289)$ (726,289)$ (726,289)$ Net Cash Flow 108,943$ 138,176$ 168,433$ 199,748$ 232,159$ 265,705$ 300,425$ 336,360$ 373,552$ 412,047$ Debt Coverage Ratio1.15 1.19 1.23 1.28 1.32 1.37 1.41 1.46 1.51 1.57 Bedrooms
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Attachment C - Financial
Analysis

Item 10: Staff Report
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Matadero Creek Affordable Housing ProjectOption 2 - 6 Stories Unit Mix and Rent StructureRent InformationArea Median Income30% (PBV)50% (PBV)30% AMI40% AMI50% AMI60% AMIMGRStudio 968$ 1,291$ 1,613$ 1,936$ -$ 1-Bed -$ 1,037$ 1,383$ 1,728$ 2,074$ -$ 2-Bed 3,124$ 1,244$ 1,659$ 2,073$ 2,488$ -$ 3-Bed 4,004$ 4,033$ 1,437$ 1,917$ 2,396$ 2,875$ -$ 4-Bed 1,603$ 2,138$ 2,672$ 3,207$ -$ Commercial BedroomsUtility AllowanceStudio -$ 1-Bed 98$ 2-Bed 128$ 3-Bed 157$ 4-Bed Unit Mix# of BedroomsNumber of UnitsSquare FeetTotal Sq FtAMI LevelMonthly RentMax Affordable Rent (with Utilities) Utility Allowance1st Year Annual Revenue
Studio 0 500 0 30% AMI$968$968$0 $0Studio 0 500 0 40% AMI$1,291$1,291$0 $0Studio 0 500 0 60% AMI$1,936$1,936$0 $01-Bed 10 590 5,90030% AMI$939$1,037$98$112,6801-Bed 15 590 8,85040% AMI$1,285$1,383$98$231,3001-Bed 24 59014,16060% AMI$1,976$2,074$98$569,0882-Bed 6 870 5,22030% AMI$1,116$1,244$128$80,3522-Bed 9 870 7,83040% AMI$1,531$1,659$128$165,3482-Bed 14 87012,18060% AMI$2,360$2,488$128$396,4802-Bed 1 870 870MGR-$128$0 $128($1,536)3-Bed 6 1,0806,48030% AMI$1,280$1,437$157$92,1603-Bed 9 1,0809,72040% AMI$1,760$1,917$157$190,0803-Bed 15 1,08016,20060% AMI$2,718$2,875$157$489,240 Total 109 87,410 $2,325,192
AMI Units % Total Units% Tot Rev.AMIUnits% Total Units30% (PBV) 0 0%0.0% ELI 2220.2%50% (PBV) 0 0%0.0% VLI 3330.3%30% AMI 22 20%12.3%Low Income5348.6%40% AMI 33 30%25.2%MGR 1 0.9%50% AMI 0 0%0.0% Total 109100%60% AMI 53 49%62.6%MGR 1 1%-0.1% ParkingSpacesSpaces/unit520.48 Total 109 100%100% BuildingNet FeetEfficiencyGross FeetUnit TypeUnits % Total Units% Tot Rev. 87,41065%134,477 Studio 0 0%0.0%1-Bed 49 45%39.3%2-Bed 30 28%27.6%3-Bed 30 28%33.2%4-Bed 0 0%0.0%Total 109 100%100% Project Proforma
Construction SourcesTotal Per Unit Financing AssumptionsConstruction Loan71,565,711$ 656,566$ Debt Coverage Ratio 1.15Tax Credit Investor Proceeds8,408,971$ 77,147$ Construction Loan Amount (%TDC)60%GP Equity 9,161,014$ 84,046$ Construction Interest Rate6.85%HCD/Other -$ Permanent Interest Rate6.50%City of Palo Alto5,000,000$ 45,872$ Permanent Loan Term 35Total 94,135,696$ 863,630$ LIHTC Price 0.95Basis Boost TRUELIHTC Eligible % 100%LIHTC Investor Proceeds % TDC47%City of Palo Alto Investment Limit5,000,000$ HCD/Other %TDC 35%Permanent SourcesTotal Per Unit% GP Equity per Unit 84046Amortizing Permanent Loan11,938,979$ 109,532$ 10% Tax Credit $ During Construction15%Tax Credit Investor Proceeds56,059,807$ 514,310$ 47% Deferred Developer Fee per Unit4790GP Equity 9,161,014$ 84,046$ 8%Deferred Developer Fee522,110$ 4,790$ 0% Development AssumptionsHCD/Other 36,594,275$ 335,727$ 31% Construction Costs Per Gross Foot600City of Palo Alto5,000,000$ 45,872$ 4% Site Acquisition Cost Per Acre0Total 119,276,185$ 1,094,277$ 100% Parking Cost per Space65000Soft Costs (as % of hard costs)18%Financing Costs per unit53,000 Developer Fee % of TDC12.5% Operating AssumptionsUses Total Per UnitPer GSF Operating Costs10,000$ Per UnitAcquisition -$ -$ -$ Expense Inflation Rate3.50%Hard Cost 80,686,154$ 740,240$ 600$ Resident Services1,700$ Per unitParking Cost 3,380,000$ 31,009$ 25$ Reserves 500$ Per UnitFinancing Costs5,777,000$ 53,000$ 43$ Other Soft Costs14,523,508$ 133,243$ 108$ Developer Fee14,909,523$ 136,785$ 111$ Total Development Costs119,276,185$ 1,094,277$ 887$ Cash FlowYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Effective Gross Income2,325,192$ 2,406,574$ 2,490,804$ 2,577,982$ 2,668,211$ 2,761,599$ 2,858,255$ 2,958,294$ 3,061,834$ 3,168,998$ Operating Expenses(1,090,000)$ (1,128,150)$ (1,167,635)$ (1,208,502)$ (1,250,800)$ (1,294,578)$ (1,339,888)$ (1,386,784)$ (1,435,322)$ (1,485,558)$ Services (185,300)$ (191,786)$ (198,498)$ (205,445)$ (212,636)$ (220,078)$ (227,781)$ (235,753)$ (244,005)$ (252,545)$ Reserves (54,500)$ (56,408)$ (58,382)$ (60,425)$ (62,540)$ (64,729)$ (66,994)$ (69,339)$ (71,766)$ (74,278)$ Net Operating Income995,392$ 1,030,231$ 1,066,289$ 1,103,609$ 1,142,235$ 1,182,213$ 1,223,591$ 1,266,417$ 1,310,741$ 1,356,617$ Debt Service (865,558)$ (865,558)$ (865,558)$ (865,558)$ (865,558)$ (865,558)$ (865,558)$ (865,558)$ (865,558)$ (865,558)$ Net Cash Flow 129,834$ 164,672$ 200,731$ 238,051$ 276,677$ 316,655$ 358,033$ 400,858$ 445,183$ 491,059$ Debt Coverage Ratio1.15 1.19 1.23 1.28 1.32 1.37 1.41 1.46 1.51 1.57 Bedrooms
Item 10
Attachment C - Financial
Analysis

Item 10: Staff Report
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Matadero Creek Affordable Housing ProjectOption 3 - 7 Stories Unit Mix and Rent StructureRent InformationArea Median Income30% (PBV)50% (PBV)30% AMI40% AMI50% AMI60% AMIMGRStudio 968$ 1,291$ 1,613$ 1,936$ -$ 1-Bed -$ 1,037$ 1,383$ 1,728$ 2,074$ -$ 2-Bed 3,124$ 1,244$ 1,659$ 2,073$ 2,488$ -$ 3-Bed 4,004$ 4,033$ 1,437$ 1,917$ 2,396$ 2,875$ -$ 4-Bed 1,603$ 2,138$ 2,672$ 3,207$ -$ Commercial BedroomsUtility AllowanceStudio -$ 1-Bed 98$ 2-Bed 128$ 3-Bed 157$ 4-Bed Unit Mix# of BedroomsNumber of UnitsSquare FeetTotal Sq FtAMI LevelMonthly RentMax Affordable Rent (with Utilities) Utility Allowance1st Year Annual Revenue
Studio 0 500 0 30% AMI$968$968$0 $0Studio 0 500 0 40% AMI$1,291$1,291$0 $0Studio 0 500 0 60% AMI$1,936$1,936$0 $01-Bed 12 590 7,08030% AMI$939$1,037$98$135,2161-Bed 18 59010,62040% AMI$1,285$1,383$98$277,5601-Bed 29 59017,11060% AMI$1,976$2,074$98$687,6482-Bed 7 870 6,09030% AMI$1,116$1,244$128$93,7442-Bed 11 870 9,57040% AMI$1,531$1,659$128$202,0922-Bed 17 87014,79060% AMI$2,360$2,488$128$481,4402-Bed 1 870 870MGR-$128$0 $128($1,536)3-Bed 7 1,0807,56030% AMI$1,280$1,437$157$107,5203-Bed 11 1,08011,88040% AMI$1,760$1,917$157$232,3203-Bed 18 1,08019,44060% AMI$2,718$2,875$157$587,088 Total 131 105,010 $2,803,092
AMI Units % Total Units% Tot Rev.AMIUnits% Total Units30% (PBV) 0 0%0.0% ELI 2619.8%50% (PBV) 0 0%0.0% VLI 4030.5%30% AMI 26 20%12.0%Low Income6448.9%40% AMI 40 31%25.4%MGR 1 0.8%50% AMI 0 0%0.0% Total 131100%60% AMI 64 49%62.7%MGR 1 1%-0.1% ParkingSpacesSpaces/unit520.40 Total 131 100%100% BuildingNet FeetEfficiencyGross FeetUnit TypeUnits % Total Units% Tot Rev. 105,01065%161,554 Studio 0 0%0.0%1-Bed 59 45%39.3%2-Bed 36 27%27.7%3-Bed 36 27%33.1%4-Bed 0 0%0.0%Total 131 100%100% Project Proforma
Construction SourcesTotal Per Unit Financing AssumptionsConstruction Loan92,046,720$ 702,647$ Debt Coverage Ratio 1.15Tax Credit Investor Proceeds10,815,490$ 82,561$ Construction Loan Amount (%TDC)60%GP Equity 11,010,026$ 84,046$ Construction Interest Rate6.85%HCD/Other -$ Permanent Interest Rate6.50%City of Palo Alto5,000,000$ 38,168$ Permanent Loan Term 35Total 118,872,236$ 907,422$ LIHTC Price 0.95Basis Boost TRUELIHTC Eligible % 100%LIHTC Investor Proceeds % TDC47%City of Palo Alto Investment Limit5,000,000$ HCD/Other %TDC 35%Permanent SourcesTotal Per Unit% GP Equity per Unit 84046Amortizing Permanent Loan14,451,774$ 110,319$ 9% Tax Credit $ During Construction15%Tax Credit Investor Proceeds72,103,264$ 550,407$ 47% Deferred Developer Fee per Unit4790GP Equity 11,010,026$ 84,046$ 7%Deferred Developer Fee627,490$ 4,790$ 0% Development AssumptionsHCD/Other 50,218,646$ 383,348$ 33% Construction Costs Per Gross Foot650City of Palo Alto5,000,000$ 38,168$ 3% Site Acquisition Cost Per Acre0Total 153,411,200$ 1,171,078$ 100% Parking Cost per Space65000Soft Costs (as % of hard costs)18%Financing Costs per unit53,000 Developer Fee % of TDC12.5% Operating AssumptionsUses Total Per UnitPer GSF Operating Costs10,000$ Per UnitAcquisition -$ -$ -$ Expense Inflation Rate3.50%Hard Cost 105,010,000$ 801,603$ 650$ Resident Services1,700$ Per unitParking Cost 3,380,000$ 25,802$ 21$ Reserves 500$ Per UnitFinancing Costs6,943,000$ 53,000$ 43$ Other Soft Costs18,901,800$ 144,289$ 117$ Developer Fee19,176,400$ 146,385$ 119$ Total Development Costs153,411,200$ 1,171,078$ 950$ Cash FlowYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Effective Gross Income2,803,092$ 2,901,200$ 3,002,742$ 3,107,838$ 3,216,613$ 3,329,194$ 3,445,716$ 3,566,316$ 3,691,137$ 3,820,327$ Operating Expenses(1,310,000)$ (1,355,850)$ (1,403,305)$ (1,452,420)$ (1,503,255)$ (1,555,869)$ (1,610,324)$ (1,666,686)$ (1,725,020)$ (1,785,396)$ Services (222,700)$ (230,495)$ (238,562)$ (246,911)$ (255,553)$ (264,498)$ (273,755)$ (283,337)$ (293,253)$ (303,517)$ Reserves (65,500)$ (67,793)$ (70,165)$ (72,621)$ (75,163)$ (77,793)$ (80,516)$ (83,334)$ (86,251)$ (89,270)$ Net Operating Income1,204,892$ 1,247,063$ 1,290,710$ 1,335,885$ 1,382,641$ 1,431,034$ 1,481,120$ 1,532,959$ 1,586,613$ 1,642,144$ Debt Service (1,047,732)$ (1,047,732)$ (1,047,732)$ (1,047,732)$ (1,047,732)$ (1,047,732)$ (1,047,732)$ (1,047,732)$ (1,047,732)$ (1,047,732)$ Net Cash Flow 157,160$ 199,331$ 242,978$ 288,153$ 334,909$ 383,302$ 433,388$ 485,227$ 538,881$ 594,412$ Debt Coverage Ratio1.15 1.19 1.23 1.28 1.32 1.37 1.41 1.46 1.51 1.57 Bedrooms
Item 10
Attachment C - Financial
Analysis

Item 10: Staff Report
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City Council
Staff Report
From: City Clerk
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: November 17, 2025
Report #:2511-5414
TITLE
Adopt a Resolution Establishing the City Council Annual Calendar of Meetings, Recesses, and City Council Events for the Calendar Year 2026; CEQA status – not a project

RECOMMENDATION
Staff recommends that the City Council provide direction on the preferred Annual Retreat/Priority Setting Meeting date and on Option 1 vs. Option 2 for special City Council meetings, and adopt a resolution establishing its calendar of meetings, recesses, and City Council events for calendar year 2026.

BACKGROUND
This item was previously agendized at City Council’s November 3, 2025 meeting and was deferred.

The City Council annually adopts a schedule of meetings and recesses for the upcoming calendar year. This year is the second iteration of a calendar setting process that implements Item 1.3 of the City’s Equity Action Plan (Create a process that includes the Human Relations Commission (HRC) for annual calendar setting related to holidays and heritage months) 1. The goal of this process is to create an inclusive City Council calendar that considers cultural observances that could prevent the public from participating in meetings and provide an opportunity for input from the public, City Council, and HRC. This process will continue to evolve in response to community and City Council feedback.

Palo Alto’s Municipal Code sets the City Council’s regular meeting time as 5:30pm on the first three Mondays of the month2. Staff, in consultation with the Mayor and Vice Mayor, may 1 2024 and 2025 Equity Action Plan: https://www.paloalto.gov/files/assets/public/v/1/city-manager/wellness-and- belonging/equity-workplan-2024.pdf
2 Palo Alto Municipal Code Section 2.04.010 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0- 0-0-60060
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reschedule regular meetings and schedule additional special meetings, should they be necessary to conduct City Council business.

Staff has developed a list of dates to avoid scheduling City Council meetings based on feedback from the public, City Council, and HRC. These dates fall into two categories:
Days on which City administrative offices are closed
Certain cultural dates of significance that could fall on a Monday and whose main celebrations begin in the evening, which would prevent observants from participating in City Council meetings.

Based on City Council and HRC’s 2024 recommendations, the days to avoid scheduling City Council meeting dates are:
New Year’s Day
Martin Luther King, Jr. Day
Lunar New Year
Presidents’ Day
Eid al-Fitr
Passover
Memorial Day
Eid al-Adha
Juneteenth
Fourth of July
Labor Day
Rosh Hashanah
Yom Kippur
Indigenous Peoples’ Day
Veterans Day
Thanksgiving
Day after Thanksgiving
Christmas

ANALYSIS
Staff does not propose any changes to the list of dates to avoid scheduling meetings. The proposed 2026 City Council meeting calendar is included as Attachment A.

The following dates occur on Mondays in 2026, and thus the draft calendar shows rescheduled dates for regular City Council meetings that would conflict with these holidays. The City Council has expressed interest in scheduling special meetings on the third Wednesday of the month instead of the fourth Monday. This is reflected in italics as Option 1 and Option 2 in the draft calendar.

Observance Date Option 1
(3rd Wednesday)
Option 2
(4th Monday)
Martin Luther King, Jr. Day January 19, 2026 January 21, 2026 January 26, 2026 Presidents’ Day February 16, 2026 February 18, 2026 February 23, 2026 Labor Day September 7, 2026 September 8, 2026 n/a
Yom Kippur September 21, 2026 September 16, 2026 September 28, 2026 Indigenous Peoples’ Day October 12, 2026 October 21, 2026 October 26, 2026 Item 11
Item 11 Staff Report

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HRC provided input on the calendar and dates of significance at its October 16, 2025 meeting.

The commission asked staff to explore adding Diwali given the presence of Palo Alto residents who may celebrate the holiday and the recent addition of Diwali to the list of state holidays state employees and public schools and community colleges may choose to take off. Upon further research, staff found that unlike other holidays on the list, Diwali’s primary observance is not tied to an evening celebration. HRC also suggested additions to the dates of significance list, which staff have incorporated into Attachment C.

Equity Action Plan item 1.3 and this item are intended to provide a consistent cadence for residents, HRC, City Council, and staff to review and update the lists of dates to avoid scheduling meetings and the citywide dates of significance. It is an opportunity to engage with the City to help expand awareness and visibility about the many observances significant to members of the Palo Alto community. Staff also asks for any City Council feedback on the Attachment C list of dates of significance.

FISCAL/RESOURCE IMPACT
None

STAKEHOLDER ENGAGEMENT
Staff the City Manager’s Office, City Clerk’s Office, and Community Services Department collaborated on the proposed schedule and citywide dates to of significance. The HRC discussed and provided feedback the proposed calendar at its October 16, 2025 public meeting.

ENVIRONMENTAL REVIEW
This action is not a project under section 15378(b)(25) of the California Environmental Quality Act Guidelines (administrative activities that will not result in direct or indirect physical change in the environment).

ATTACHMENTS
Attachment A: Proposed 2026 City Council Meeting Schedule Attachment B: Resolution Establishing Council Calendar for Calendar Year 2026 Attachment C: Citywide Dates of Significance
APPROVED BY:

Mahealani Ah Yun, City Clerk
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Item 11: Staff Report
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City Council Calendar 2026
Date Meeting Body
Mon, January 5 City Council – City Council Reorganization Mon, January 12 City Council
Wed, January 21 Option 1: City Council (special)
Mon, January 26 Option 2: City Council (special)
Sat, January 24 or Sat, January 31 City Council (special) – Annual Retreat/Priority Setting Meeting
Mon, February 2 City Council
Tues, February 3 Finance Committee
Mon, February 9 City Council
Tues, February 10 Policy & Services Committee
Tues, February 17 Finance Committee
Wed, February 18 Option 1: City Council (special)
Thurs, February 19 City/Schools Liaison Committee
Mon, February 23 Option 2: City Council (special)
Mon, March 2 City Council
Tues, March 3 Finance Committee
Mon, March 9 City Council
Tues, March 10 Policy & Services Committee
Mon, March 16 City Council
Tues, March 17 Finance Committee
Thurs, March 19 City/Schools Liaison Committee
Mon, April 6 City Council
Tues, April 7 Finance Committee
Mon, April 13 City Council
Tues, April 14 Policy & Services Committee
Thurs, April 16 City/Schools Liaison Committee
Mon, April 20 City Council
Tues, April 21 Finance Committee
Mon, May 4 City Council
Tues, May 5 Finance Committee
Wed, May 6 Finance Committee (special)
Mon, May 11 City Council
Tues, May 12 Policy & Services Committee
Mon, May 18 City Council
Tues, May 19 Finance Committee
Thurs, May 21 City/Schools Liaison Committee
Mon, June 1 City Council
Tues, June 2 Finance Committee
Mon, June 8 City Council
Tues, June 9 Policy & Services Committee
Mon, June 15 City Council
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Attachment A - Proposed
2026 City Council Meeting
Schedule

Item 11: Staff Report
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Tues, June 16 Finance Committee
Wed, June 17 City Council (special additional standby meeting) Thurs, June 18 City/Schools Liaison Committee
Fri, June 19 – Fri, July 31 Summer Recess
Mon, August 3 City Council
Tues, August 4 Finance Committee
Mon, August 10 City Council
Tues, August 11 Policy & Services Committee
Mon, August 17 City Council
Tues, August 18 Finance Committee
Thurs, August 20 City/School Liaison Committee
Tues, September 8 City Council (special)
Mon, September 14 City Council
Tues, September 15 Policy & Services Committee
Wed, September 16 Option 1: City Council (special)
Thurs, September 17 City/Schools Liaison Committee
Tues, September 22 Finance Committee
Mon, September 28 Option 2: City Council (special)
Mon, October 5 City Council
Tues, October 5 Finance Committee
Tues, October 13 Policy & Services Committee
Thurs, October 15 City/Schools Liaison Committee
Mon, October 19 City Council
Tues, October 20 Finance Committee
Wed, October 21 Option 1: City Council (special)
Mon, October 26 Option 2: City Council (special)
Mon, November 2 City Council
Wed, November 4 Finance Committee (special)
Mon, November 9 City Council
Tues, November 10 Policy & Services Committee
Mon, November 16 City Council
Tues, November 17 Finance Committee
Thurs, November 19 City/Schools Liaison Committee
Tues, December 1 Finance Committee
Mon, December 7 City Council
Tues, December 8 Policy & Services Committee
Mon, December 14 City Council
Tues, December 15 Finance Committee (canceled if Council chooses Option 1) Option 1: Tues, December 15 City Council (special)
Option 2: Wed, December 16 City Council (special)
Thurs, December 17 City/School Liaison
Option 3: Mon, December 21 City Council
Tues, December 22 – Fri, January 1 Winter Recess
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Attachment A - Proposed
2026 City Council Meeting
Schedule

Item 11: Staff Report
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City Council Events 2026

Date Event
Mon, January 5, 2026 City Council Reorganization
Sat, January 24, 2025 or Sat, January 31, 2025 Annual Priority Setting Meeting TBD State of the City
Fri, June 19 – Fri, July 31 Summer Recess
Tues, December 22 – Fri, January 1 Winter Recess

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Attachment A - Proposed
2026 City Council Meeting
Schedule

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Dec 2025

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JANUARY 2026
Feb 2026

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SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 28 29 30 31 1 2 3

4 5

6 7

8 9

10 City Council –
Reorganization
11 12 13 14 15 16 17
City Council

18 19 20 21 22 23 24
Martin Luther
King, Jr. Day
Option 1:

City Council
(special)

City Council
(special) –
Annual Retreat
25 26 27 28 29 30 31

Option 2:

City Council
(special)

City Council
(special) –
Annual Retreat

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Jan 2026

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FEBRUARY 2026
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City Council Finance

8 9

10 11

12 13

14 City Council Policy &
Services
15 16 17 18 19 20 21
Presidents’
Day Finance
Option 1:

City Council
(special)
City/Schools
Liaison

22 23

24 25

26 27

28 Option 2:

City Council
(special)

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Feb 2026

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MARCH 2026
Apr 2026

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SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 2 3 4 5 6 7
City Council Finance

8 9

10 11

12 13

14 City Council Policy &
Services
15 16 17 18 19 20 21
City Council Finance City/Schools
Liaison

22 23

24 25

26 27

28 29 30 31 1 2 3 4

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Mar 2026

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APRIL 2026
May 2026

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9 10

11 City Council Finance
12 13 14 15 16 17 18
City Council Policy &
Services City/Schools
Liaison

19 20

21 22

23 24

25 City Council Finance
26 27 28 29 30 1 2

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Apr 2026

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MAY 2026
Jun 2026

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SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 26 27 28 29 30 1 2

3 4

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7 8

9 City Council Finance Finance
(special)
10 11 12 13 14 15 16
City Council Policy &
Services

17 18

19 20

21 22

23 City Council Finance City/Schools
Liaison
24 25 26 27 28 29 30
Memorial Day
31 1 2 3 4 5 6

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May 2026

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City Council Finance

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9 10

11 12

13 City Council Policy &
Services
14 15 16 17 18 19 20
City Council Finance
City Council (Special
additional standby
meeting)
City/Schools
Liaison
Summer
Recess Starts

21 22

23 24

25 26

27 28 29 30 1 2 3 4

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Jun 2026

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JULY 2026
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AUGUST 2026
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Summer
Recess Ends

2 3

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8 City Council Finance
9 10 11 12 13 14 15
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Services

16 17

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20 21

22 City Council Finance City/Schools
Liaison
23 24 25 26 27 28 29

30 31 1 2 3 4 5

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Aug 2026

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SEPTEMBER 2026
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SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 30 31 1 2 3 4 5

6 7

8 9

10 11

12 Labor Day
Finance (Cancel for
CC)
City Council
(Special)

13 14 15 16 17 18 19
City Council Policy &
Services
Option 1:

City Council
(Special)
City/Schools
Liaison

20 21

22 23

24 25

26 Yom Kippur Yom Kippur Finance
27 28 29 30 1 2 3

Option 2:

City Council
(Special)

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Sep 2026

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OCTOBER 2026
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4 5

6 7

8 9

10 City Council Finance
11 12 13 14 15 16 17
Indigenous
Peoples’ Day
Policy &
Services City/Schools
Liaison

18 19

20 21

22 23

24 City Council Finance
Option 1:

City Council
(Special)

25 26 27 28 29 30 31

Option 2:

City Council
(Special)

Item 11
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City Council Election Day Finance
(special)

8 9

10 11

12 13

14 City Council Policy &
Services
15 16 17 18 19 20 21
City Council Finance City/Schools
Liaison

22 23

24 25

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Nov 2026

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DECEMBER 2026
Jan 2027

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31 SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 29 30 1 2 3 4 5
Finance

6 7

8 9

10 11

12 City Council Policy &
Services
13 14 15 16 17 18 19
City Council
Finance (Cancel for
CC)
Option 1: City
Council (special)
Option 2:

City Council
(special)
City/Schools
Liaison

20 21

22 23

24 25

26 Option 3:

City Council
(Regular)
Start of
Winter Recess
27 28 29 30 31 1 2
End of Winter
Recess

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Council Meeting Schedule

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NOT YET APPROVED

20261017 jf 872
Resolution No. ________

Resolution of the Council of the City of Palo Alto Establishing the Council Calendar of Meetings, Summer and Winter Breaks, and Schedule of Events for Calendar Year 2026

R E C I T A L S

A. Pursuant to Section 2.04.010 of the Municipal Code, the City Council must schedule its annual summer and winter breaks for each calendar year no later than the third meeting in February.

B. The Council also wishes to establish a calendar of meetings and schedule of events for 2025.

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

SECTION 1. The City Council’s summer break for calendar year 2026 is scheduled for Friday, June 19, 2026 through Friday, July 31, 2026 and its winter break is scheduled for Tuesday, December 22, 2026 through Friday, January 1, 2027.

SECTION 2. The City Council adopts a regular calendar of meetings of the Council, the Finance Committee, the Policy & Services Committee, and the City School Liaison Committee (including holidays and days of significance) and a schedule of Council events, which is incorporated into the resolution by reference. Council and committee meetings dates are subject to change as directed by the Mayor or committee chair in consultation with the City Manager or designee.

/ /

/ /

/ /

/ /

/ /

/ /

/ /

/ /

Item 11
Attachment B - Resolution
Establishing Council
Calendar for Calendar Year
2026

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NOT YET APPROVED

20261017 jf 872

SECTION 3. The Council finds that the adoption of this resolution not a project under the California Environmental Quality Act (CEQA) Guidelines 15378(b)(5) because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment and thus, an environmental assessment under CEQA is not required.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST: APPROVED:

___________________________________ ____________________________________ City Clerk Mayor

APPROVED AS TO FORM:

______________________________ ____________________________________ City Attorney City Manager

Item 11
Attachment B - Resolution
Establishing Council
Calendar for Calendar Year
2026

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1 Citywide Dates of Significance
Please Note: The curation of this list is an iterative process. It is not exhaustive and will evolve over time based on input from the City Council, Human Relations Commission, and community members.

New Year’s Day
Martin Luther King, Jr. Day
Holocaust Remembrance Day
Lunar New Year
Black History Month
President’s Day
Ramadan
Women’s History Month
American Red Cross Month
International Women’s Day
Eid al-Fitr
International Transgender Day of Visibility
Cesar Chavez Day
Autism Awareness Month
Palo Alto Day
Dolores Huerta Day
National Day of Silence (LGBTQI+)
Passover
Easter
Earth Day
Armenian Genocide Remembrance Day
Arbor Day
AAPI Heritage Month
Older Americans Month
Affordable Housing Month
Mental Health Awareness Month
Cinco de Mayo
Shavout
Vesak
Memorial Day
Pride Month
Immigrant Heritage Month
Juneteenth
Eid al-Adha
Juneteenth
Independence Day
Labor Day
Item 11
Attachment C - Citywide
Dates of Significance

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2 Emergency Preparedness Month
Hispanic Heritage Month
Rosh Hashanah
Yom Kippur
Sukkot
Indigenous Peoples' Day
Dia De Los Muertos
Diwali
National Native American Heritage Month
Veterans Day
Transgender Day of Remembrance
Thanksgiving
Day after Thanksgiving
Hanukkah
Las Posadas
Christmas
Kwanzaa

Item 11
Attachment C - Citywide
Dates of Significance

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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: November 17, 2025
Report #: 2501-4033
TITLE
Investment Activity Report for the First Quarter, Fiscal Year 2026. CEQA Status – Not a Project.

RECOMMENDATION
This is an informational report and no City Council action is required.

EXECUTIVE SUMMARY
This report is presented in accordance with California Government Code Section 53646 and the City’s Investment Policy.

As of September 30, 2025, the consolidated portfolio totaled $606.2 million (par value), including $534.6 million in investments and $71.6 million in liquid accounts. The investment portfolio was in full compliance with the City’s Investment Policy, and staff projects adequate liquidity to meet expenditure requirements for the next six months.

Attachments in this report provide detailed cash and investment information, including portfolio holdings, performance metrics, and related financial summaries.

BACKGROUND
The City’s Investment Policy is reviewed and approved annually by Council and establishes the framework for managing public funds in accordance with the Prudent Investor Standard under state law. The policy outlines authorized investment types, maturity and credit quality limits, diversification requirements, and reporting standards to ensure the objectives of safety, liquidity, and yield.

The policy also requires the Administrative Services Department to provide the City Council with monthly and quarterly investment reports, consistent with California Government Code 53646. Monthly reports provide details on investment activity during the period, such as purchases, calls, redemptions, and maturities. This quarterly report summarizes the City’s investment holdings, portfolio performance, and compliance with the City’s Investment Policy and California Government Code.

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Beginning in FY 2026, the City transitioned from managing its investment portfolio in-house to partnering with Chandler Asset Management (Chandler) for professional investment management services, including cash flow forecasting, investment advisory and strategy, policy review, and active portfolio management.

A comprehensive view of all City cash and investment holdings, including trust and debt-related funds is included in Attachment A. The Investment Quarterly Report as of September 30, 2025 is included in Attachment B.

Previously issued investment reports are available on the City’s website:
www.paloalto.gov/Departments/Administrative-Services/Financial-Reporting

ANALYSIS
Portfolio Overview: As of September 30, 2025, the City’s consolidated portfolio totaled $606.2 million (par value), including $534.6 million in investments and $71.6 million in liquid accounts.

The investment portfolio had an average duration of 2.3 years and an average credit quality of AA+. The duration is slightly below Chandler’s recommended positioning of 2.5 years within a one-to-five-year maturity range.

Graph 1 below illustrates the City’s portfolio by security type, reflecting how funds are allocated across permitted investment categories.

Investments by Type - $606.2 Million (Par Value)
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Table 1 summarizes the portfolio’s maturity structure, which supports the City’s liquidity objectives and duration strategy.

Investment Performance and Activity: For the quarter ended September 30, 2025, the City’s portfolio average market yield was 4.01% compared to 3.66% for the ICE BofA 1-5 Year U.S.

Treasury & Agency Index benchmark. The portfolio earned a total return of 0.40% for the quarter, exceeding the benchmark return of 0.24%. Because Chandler began managing the City’s portfolio mid-quarter, results reflect a shorter timeframe and early portfolio positioning.

Future reports will show performance over longer periods as the strategy takes shape.

During the quarter, approximately $12.5 million in securities were purchased, $10.8 million were called or redeemed, and $44.9 million matured.

Table 2 outlines the portfolio’s average maturity, modified duration, purchase yield, market yield and average credit rating quality. As of September 30th, yield for LAIF and the two-year U.S. Treasury were 4.20% and 3.57%, respectively.

Table 2: Portfolio Characteristics
Benchmark*
Portfolio as of
Sept 30
Average Maturity (yrs) 2.65 3.07
Average Modified Duration 2.48 2.64
Average Purchase Yield 2.61%
Average Market Yield 3.66% 4.01%
Average Credit Quality ** AA+ AA+
*Benchmark: ICE BofA 1-5 Unsubordinated US Treasury & Agency Indez **The credit quality is a weighted average calculation of the highest S&P, Moody’s and Fitch Item A
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Although these are not direct performance benchmarks, they provide useful context for evaluating the portfolio’s positioning relative to short-term liquidity returns and broader market conditions.

Compliance and Credit Standards: All new purchases met or exceeded the policy’s minimum credit rating of AA or Aa2. No corporate note securities experienced downgrades requiring review1, and the portfolio remained in full compliance with policy credit standards.

The Investment Policy establishes several structural limits and controls. General requirements include a maximum stated maturity of 10 years, no more than 30% of the portfolio in maturities beyond five years, at least $50 million maturing within two years, and maintaining a market value above 95% of book value. All marketable securities are held by a third-party custodian, and valuations are independently verified.

Specific limits also apply to each authorized investment type, covering maximum allocations, issuer exposure, credit quality, and maturity restrictions. The Investment Quarterly Report provides detailed compliance information and the portfolio’s current status relative to these limits.

At quarter end, the portfolio’s market value was 97.9% of book value, exceeding the 95% minimum threshold, and remained in full compliance with all policy limits.

Economic Outlook: Economic growth slowed in the third quarter of 2025, with easing inflation and continued uncertainty from tariffs and fiscal policy. Signs of a softer labor market emerged, and the Federal Reserve lowered the federal funds rate by 0.25% to a range of 4.00 to 4.25%, signaling the possibility of additional cuts later in the year.

U.S. Treasury yields declined modestly, with the 2-year yield at 3.57% and the 10-year at 4.12%, resulting in a slightly flatter yield curve. Broader trade and fiscal uncertainties continued to cloud forecasts, though market conditions supported stable fixed-income performance consistent with the City’s conservative investment approach.

Cash Flow Outlook: Cash flow needs fluctuate over the course of the fiscal year as a result of cyclical revenue patterns, with larger inflows from major revenue sources such as property tax receipts occurring in the second half of the year. One-time activities, such as the annual prepayment of pension obligations and large capital expenditures, also influence these 1 The Investment Policy (https://www.paloalto.gov/files/assets/public/v/2/administrative-services/investment- policies/investment-policy-fy-2025-2026.pdf) requires that if a medium term corporate note is downgraded to a level below AA or Aa2, that staff review the credit situation of the issuer and determine whether to sell or retain the investment.

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patterns. The City’s investment strategy aligns with these cycles by timing maturities and maintaining sufficient liquidity to meet ongoing needs as they occur.

The portfolio is expected to meet all expenditure needs for the next six months.

Funds Held by Fiscal Agents and Trustees: The City holds bond proceeds, reserves, and debt service funds with fiscal agents, which are invested in accordance with the respective bond indentures. The City also maintains a Section 115 Pension Trust with Public Agency Retirement Services (PARS), governed by the City’s Retiree Benefit Funding Policy.

These funds are outside of the scope of the Chandler investment portfolio and therefore excluded from Attachment B, however are included in Attachment A of this report to provide a comprehensive view of City funds.

FISCAL/RESOURCE IMPACT
This report is for informational purposes only and has no direct fiscal impact.

STAKEHOLDER ENGAGEMENT
Staff collaborated with internal teams and external financial partners to gather the information included in this report.

ENVIRONMENTAL REVIEW
This informational report is not a project under the California Environmental Quality Act (CEQA) as defined in CEQA Guidelines Section 15378, as it is presented for informational purposes only and requires no Council action.

ATTACHMENTS
Attachment A: Consolidated Report of Cash Management
Attachment B: Investment Quarterly Report (as of September 30, 2025) APPROVED BY:

Lauren Lai, Administrative Services Director
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Book Value Market Value
City Investment Portfolio 529,924,263$ 517,930,715$ Other Liquid Accounts
Cash with Wells Fargo Bank 6,214,026 6,214,026 Cash with US Bank 23,524,388 23,524,388 Fidelity Money Market Funds 10,111,633 10,111,633 Local Agency Investment Fund (LAIF) 31,717,378 31,717,378 Total - Other Liquid Accounts 71,567,424 71,567,424 CONSOLIDATED PORTFOLIO TOTAL (Attachment B) 601,491,687 589,498,139 Other Debt Service Funds*
Debt Service Proceeds
US Bank Trust Services **
2009 Water Revenue Bonds (Build America Bonds)
Debt Service and Reserve Funds 2,307,768 2,307,768 2011 Utility Revenue Refunding Bonds
Debt Service and Reserve Funds 599,264 599,264 2018 Capital Improvement (Golf Course & 2002B COP Refinance) (Taxable- Green Bond) Certificates of Participation
Debt Service Funds 271 271 2019 California Avenue Parking Garage Certificates of Participation (Tax-Exempt and Taxable Bonds)
Debt Service and Reserve Funds 1,773 1,773 2021 Public Safety Building Certificates of Participation Debt Service Funds 2,182 2,182 2022A & B General Obligation (Library) Bond
Cost of Issuance Funds 4,344 4,344 California Asset Management Program (CAMP) ***
2012 University Ave. Parking Refunding Bonds
Reserve Fund 3,126,189 3,126,189
Public Agencies Post-Employment Benefits Trust ****
Public Agency Retirement Services (PARS) 115,414,494 115,414,494 Total Other Funds 121,456,285 121,456,285 GRAND TOTAL 722,947,972$ 710,954,424$
* These funds are subject to the requirements of the underlying debt indenture. ** U.S. Bank investments are in money market mutual funds that exclusively invest in U.S. Treasury securities. *** CAMP investments are in money market mutual fund which invest in bankers acceptance, certificate of deposit, commercial paper, federal agency securities, and repurchase agreements.

This value reflects prior quarter values and will be updated in the next quarterly report issuance. **** PARS investments are in moderately conservative index plus funds Attachment A
First Quarter, Fiscal Year 2025-26
(Unaudited)
Consolidated Report of Cash Management
City of Palo Alto Cash and Investments
Item A
Attachment A - Consolidated
Report of Cash Management

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INVESTMENT REPORT
City of Palo Alto | As of September 30, 2025
CHANDLER ASSET MANAGEMENT | chandlerasset.com
Chandler Team:

For questions about your account, please call (800) 317-4747, or contact [email protected]
Information contained herein is confidential. We urge you to compare this statement to the one you receive from your qualified custodian. Please see Important Disclosures at the end of the statement.

Attachment B
Item A
Attachment B - Investment Quarterly
Report (as of September 30, 2025)

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TABLE OF CONTENTS

ECONOMIC UPDATE

ACCOUNT PROFILE

CONSOLIDATED INFORMATION
PORTFOLIO HOLDINGS (Please refer to https://www.paloalto.gov/Departments/Administrative-Services/Financial-Reporting) 1 Item A
Attachment B - Investment Quarterly
Report (as of September 30, 2025)

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ECONOMIC UPDATE
2 Item A
Attachment B - Investment Quarterly
Report (as of September 30, 2025)

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▪
▪
▪
Recent economic data suggest slower growth in 2025 and greater market uncertainty as the effects of fiscal policy unfold. Inflation pressures have eased, though core levels remain above the Federal Reserve’s target, while tariffs continue to cloud forecasts. Signs of a softer labor market are emerging, prompting expectations that the Fed will move cautiously toward policy normalization. Given the economic outlook, we expect gradual normalization of monetary policy and a steeper yield curve.

The Federal Reserve lowered the Federal Funds Rate a quarter percentage point to the range of 4.00 – 4.25% upon conclusion of the September Federal Open Market Committee meeting. The move was telegraphed by the Fed and in line with market expectations. Stephen Miran was the only opposing vote in the 11-1 decision as Governor Miran called for a larger 50 basis point rate cut. Chair Powell said concerns over signs of a softening labor market prompted the policy shift. Policymakers also updated their economic forecasts penciling in two additional quarter-point cuts through year-end.

The US Treasury yield curve flattened in September,as the 2-year Treasury yield declined 13 basis points to 3.57%, the 5-year Treasury also down 13 basis points to 3.66%, and the 10-year Treasury yield declined 14 basis points to 4.12%. The spread between the 2-year and 10- year Treasury yield points on the curve decreased to +54 basis points at September month-end versus +61 basis points at August month- end. The spread between the 2-year Treasury and 10-year Treasury yield one year ago was 14 basis points. The spread between the 3- month and 10-year Treasury yield points on the curve was +21 basis points in September versus +8 basis points in August.

ECONOMIC UPDATE
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-400
-200
0 200
400
600
800
1,000MOM Change In Thousands (000's)
Nonfarm Payroll (000's)
Non-farm Payroll (000's)
3-month average (000's)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%
Unemployment Rate
Underemployment Rate (U6)
Unemployment Rate (U3)
Rate (%)
The U.S. economy added just 22,000 jobs in August, falling short of consensus expectations and punctuating the softening trend in the labor market. The three-month moving average and six-month moving average payrolls totaled 29,000 and 64,000 respectively. The unemployment rate rose to 4.3% in August from 4.2% in July. The labor participation rate inched up to 62.3%, remaining below the pre- pandemic level of 63.3%. The U-6 underemployment rate, which includes those who are marginally attached to the labor force and employed part time for economic reasons jumpedto 8.1% in August from 7.9% in July. Average hourly earnings fell to 3.7% year-over-year from 3.9% last month.

Source: US Department of Labor Source: US Department of Labor

EMPLOYMENT
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0 2,000
4,000
6,000
8,000
10,000
12,000
14,000
Job Openings
Recession
Historical Average
In Thousands (000's)
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) showed a modest increase to 7.227 million new job openings in August from 7.2 million in July. The quits rate and layoffs remained relatively stable. Job openings indicate a ratio of approximately 1 job for each unemployed individual, representing a relatively balanced labor market.

Source: US Department of Labor

JOB OPENINGS & LABOR TURNOVER SURVEY
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0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%
Consumer Price Index (CPI)
CPI YOY % Change
Core CPI YOY % Change
YOY (%) Change

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%
Personal Consumption Expenditures (PCE)
PCE Price Deflator YOY % Change
PCE Core Deflator YOY % Change
Fed Target
YOY (%) Change
In August, the Consumer Price Index (CPI) increased more than expected at 0.4% month-over-month and 2.9% year-over-year, while the Core CPI rose 0.3% month-over-month and 3.1% year-over-year, in line with expectations. The Personal Consumption Expenditures (PCE) price index rose 0.3% month-over-month and 2.7% year-over-year in August. The Core PCE deflator, which excludes food and energy and is the Fed’s preferred gauge, was up 0.2% from July leaving it unchanged at 2.9% on an annual basis in August.

Source: US Department of Labor Source: US Department of Commerce

INFLATION
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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%
Retail Sales YOY % Change
YOY (%) Change
Advance Retail Sales showed continued strength jumping 0.6%in August as July data was also revised up to 0.6% month-over-month. The increase elevated retail sales to 5.0% on an annual basis after jumping 4.1% year-over-year in July. Back-to-school shopping was a likely catalyst as online shopping, clothing, and sporting goods saw some of the largest increases. Control group sales, which feed into GDP, also jumped 0.74% in August from the prior month. The Conference Board’s Consumer Confidence Index fell to 94.2 in September from a revised 97.8 in August, marking the lowest level since April 2025. Measures of current conditions and future expectations fell, signaling weaker sentiment toward employment and income. Consumers have remained resilient,but rising debt burdens, higher delinquency rates, lingering inflation worries, and emerging signs of labor market cooling could weigh on future spending. 0 20
40 60
80 100
120
140
160
Index Level
Consumer Confidence
Recession
Source: US Department of Commerce Source: The Conference Board All time high is 144.70 (1/31/00); All time low is 25.30 (2/28/09)

CONSUMER
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-25.0%
-20.0%
-15.0%
-10.0%
-5.0%

0.0%

5.0%

10.0%

15.0%
Leading Economic Indicators (LEI)
Recession
YOY (%) Change
-1.00
-0.75
-0.50
-0.25

0.00 0.25

0.50 0.75

1.00 Chicago Fed National Activity Index (CFNAI)
Recession
3 Month Average
The Conference Board’s Leading Economic Index (LEI) fell by 0.5% in August, following a 0.1% increase in July. The LEI decreased by 3.6% year-over-year. The Conference Board is expecting economic growth to slow in the second half of 2025 due to consumer pessimism, soft manufacturing new orders, and negative impacts from tariffs. The Chicago Fed National Activity Index (CFNAI) came in at -0.12% in August after a downwardly revised -0.28 in July, indicating that economic momentum remained below its historical trend for the fifth consecutive month. The three-month moving average shows a similar trend at -0.18 in August from -0.20 in the prior month signaling ongoing below-trend growth in national economic activity.

Source: The Conference Board Source: Federal Reserve Bank of Chicago

LEADING INDICATORS OF ECONOMIC ACTIVITY
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0 200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
In Thousands of Units
Annualized Housing Starts
Multi Family Housing Starts
Single Family Housing Starts
Housing starts dropped 8.5% in August to 1.307 million units, marking a pullback amid elevated inventory levels and a softening labor market. Single-family starts fell 7.0% in August to 890,000 units, hitting their lowest level since July 2024. The S&P Cotality Case Shiller 20- City Home Price Index recorded a 0.07% month-over-month decline in July, marking the fifth consecutive month of losses, while still posting a modest year-over-year gain of 1.8%. Persistently high asking prices and elevated mortgage rates have continued to challenge affordability, contributing to the recent cooling across the housing market. However, the Freddie Mac 30-year fixed mortgage rate continued recent declines to 6.3% as of September.

Source: US Department of Commerce Source: S&P
-20.0%
-16.0%
-12.0%
-8.0%
-4.0%

0.0%

4.0%

8.0%

12.0%

16.0%

20.0%

24.0%
S&P/Case-Shiller 20 City Composite Home Price Index
Recession
YOY (%) Change

HOUSING
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40 45
50 55
60 65
70 Institute of Supply Management (ISM) Surveys
ISM Manufacturing ISM Services

EXPANDING

CONTRACTING
Manufacturing activity contractedat a slightly slower rate as the Institute for Supply Management (ISM) Manufacturing Index edgedup to

49.1 in September, from 48.7 in August yet remaining below the expansion threshold, signaling the seventh consecutive month of contraction in the manufacturing sector. Production growth factored into the gain, although dropsin new orders and inventories offset the increase. The ISM Services Index fell to 50.0 in September from 52.0 in August, which is the breakeven point between expansion and contraction. The 2.0-point decline generally indicated moderate to weak growth, with only isolated reports of supplier delivery delays.

Employment remained in contraction territory, reflecting delayed hiring plans and ongoing challenges in finding qualified workers.

Source: Institute for Supply Management

SURVEY BASED MEASURES
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Components of GDP 9/24 12/24 3/25 6/25

2.7% 2.6% 0.4% 1.7%

0.2% -1.3% 3.8% -2.7%
-0.4% -0.1% -4.7% 4.8%

0.5% 0.3% -0.4% -0.4%

0.4% 0.3% 0.2% 0.3%

3.4% 1.9% -0.6% 3.8%
Personal Consumption Expenditures
Gross Private Domestic Investment
Net Exports and Imports
Federal Government Expenditures
Total
State and Local (Consumption and Gross
Investment)
-40.0%
-30.0%
-20.0%
-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%
Gross Domestic Product (GDP)
GDP QOQ % Change
GDP YOY % Change
Source: US Department of Commerce Source: US Department of Commerce In a sharp rebound from the first quarter, real GDP increasedat an annualized rate of 3.8% in the second quarter of 2025 according to the final data revision from the Bureau of Economic Analysis. The increase in real GDP in the second quarter was driven by the drop in imports following the significant rise in the first quarter in anticipation of higher tariffs and an increase in consumer spending. The consensus projection calls for 1.7% growth for the third quarter and 1.8% for the full year 2025.

GROSS DOMESTIC PRODUCT (GDP)
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Source: Federal Reserve Source: Bloomberg
0 1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
Federal Reserve Balance Sheet Assets
Recession
In $ millions
The Federal Reserve lowered its benchmark interest rate by a quarter point to a range of 4.00% to 4.25% at its September meeting, as officials responded to mounting signs of labor market weakness. Chair Jerome Powell said the move was aimed at cushioning the slowdown while keeping policy restrictive enough to fight lingering inflation. The Fed kept its balance-sheet runoff unchanged, maintaining a $5 billion monthly cap on Treasuries and $35 billion on agency and mortgage-backed securities. Since launching its Quantitative Tightening campaign in June 2022, the Fed has reduced its securities holdings by about $2.35 trillion, bringing the total down to roughly $6.6 trillion.

FEDERAL RESERVE

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%
Effective Federal Funds Rate
Recession
Yield (%)
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Source: Bloomberg Source: Bloomberg

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%
US Treasury Note Yields
2-Year
5-Year
10-Year
Yield (%)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%
US Treasury Yield Curve
Sep-25
Jun-25
Sep-24
Yield (%)
At the end of September, the 2-year Treasury yield was 5 basis points lower, and the 10-Year Treasury yield was 40 basis points higher, year-over-year. The spread between the 2-year and 10-year Treasury yield points on the curve decreased to +54 basis points at September month-end versus +61 basis points at August month-end. The prior 2-year/10-year yield curve inversion, which spanned from July 2022 to August 2024, was historically long. The average historical spread (since 2005) is about +99 basis points. The spread between the 3-month and 10-year Treasury yield points on the curve was +21 basis points in September versus +8 basis points in August.

BOND YIELDS
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ACCOUNT PROFILE
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OBJECTIVES
Investment Objectives
Safety of principal is the foremost objective of the investment program. The investment portfolio shall remain sufficiently liquid to meet all requirements that may be reasonably anticipated. The investment portfolio shall be designed with the objective of attaining a market rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs.

Chandler Asset Management Performance Objective
The performance objective for the portfolio is to earn a total rate of return through a market cycle that is equal to or above the return on the benchmark index.

Strategy
In order to achieve these objectives, the portfolio invests in high quality fixed income securities that comply with the investment policy and all regulation governing the funds. 15 Item A
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STATEMENT OF COMPLIANCE
City of Palo Alto Consolidated | Account #11465 | As of September 30, 2025 Rules Name Limit Actual Compliance
Status Notes

BANKERS' ACCEPTANCES
Max % 30.0 0.0 Compliant
Max Amount Issuer 5,000,000.0 0.0 Compliant
Max Maturity (Days) 180.0 0.0 Compliant

COLLATERALIZED TIME DEPOSITS (NON-

NEGOTIABLE CD/TD)
Max % 20.0 0.0 Compliant
Max % Issuer 10.0 0.0 Compliant

COMMERCIAL PAPER
Max % 15.0 0.0 Compliant
Max Amount Issuer 3,000,000.0 0.0 Compliant
Max Maturity (Days) 270.0 0.0 Compliant
Min Rating (A-1+ or AAA by 1) 0.0 0.0 Compliant

CORPORATE MEDIUM TERM NOTES
Max % 10.0 5.4 Compliant
Max Amount Issuer 5,000,000.0 4,985,491.7 Compliant
Max Maturity (Years) 5.0 4.7 Compliant
Min Rating (AA by 1) 0.0 0.0 Compliant

FDIC INSURED TIME DEPOSITS (NON-NEGOTIABLE
CD/TD)
Max % 20.0 0.0 Compliant
Max % Issuer 10.0 0.0 Compliant

FEDERAL AGENCIES
Max % 100.0 24.7 Compliant
Max Callables 25.0 15.5 Compliant
Max Maturity (Years) 10.0 9.5 Compliant

GENERAL INVESTMENT GUIDELINES
Max % 5-10 Years Maturities 30.0 19.5 Compliant
Max Maturity (Years) 10.0 9.5 Compliant
Minimum Maturing Less Than 2 Years 50.0 213.4 Compliant 16 Item A
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STATEMENT OF COMPLIANCE
City of Palo Alto Consolidated | Account #11465 | As of September 30, 2025 Rules Name Limit Actual Compliance
Status Notes

LOCAL AGENCY INVESTMENT FUND (LAIF)
Max Concentration 75.0 31.7 Compliant

MONEY MARKET MUTUAL FUNDS
Max % 20.0 2.7 Compliant
Min Rating (AAA by 2) 0.0 0.0 Compliant

MUNICIPAL SECURITIES
Max % 40.0 36.4 Compliant
Max Maturity (Years) 10.0 9.3 Compliant
Min Rating (AA by 1) 0.0 0.0 Compliant

NEGOTIABLE CERTIFICATES OF DEPOSIT (NCD)
Max % 20.0 4.1 Compliant
Max Issuer Amount 5,000,000.0 499,111.8 Compliant

REPURCHASE AGREEMENTS
Max Maturity (Years) 1.0 0.0 Compliant

SUPRANATIONAL OBLIGATIONS
Max % 20.0 12.0 Compliant
Max % Issuer 10.0 6.9 Compliant
Max Maturity (Years) 5.0 4.5 Compliant
Min Rating (AA by 1) 0.0 0.0 Compliant
U.S. TREASURIES
Max % 100.0 2.5 Compliant
Max Maturity (Years) 10.0 2.6 Compliant
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PORTFOLIO CHARACTERISTICS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Benchmark* 9/30/2025
Portfolio
6/30/2025
Portfolio
Average Maturity (yrs) 2.65 3.07
Average Modified Duration 2.48 2.64
Average Purchase Yield 2.61%
Average Market Yield 3.66% 4.01%
Average Quality** AA+ AA+
Total Market Value 517,930,715
*Benchmark: ICE BofA 1-5 Year Unsubordinated US Treasury & Agency Index **The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch. 18 Item A
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SECTOR DISTRIBUTION
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Sector as a Percentage of Market Value
Sector 09/30/2025 06/30/2025
Muni Bonds 41.49% --
Agency 28.18% --
Supras 13.70% --
Corporate 6.10% --
Neg CD 4.62% --
Money Mkt Fd 3.05% --
US Treasury 2.82% --
CD 0.05% --
Cash 0.00% --
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
Federal Home Loan Banks Agency 8.52%
Federal Agricultural Mortgage Corp Agency 7.95%
International Bank for Recon and Dev Supras 7.82%
Federal Home Loan Mortgage Corp Agency 5.56%
Farm Credit System Agency 4.67%
International Finance Corporation Supras 3.28%
U.S. Bancorp Money Mkt Fd 3.05%
United States US Treasury 2.82%
Inter-American Development Bank Supras 2.21%
State of Hawaii Muni Bonds 1.59%
San Francisco City & County of Muni Bonds 1.33%
City of Oakland, California Muni Bonds 1.32%
State of Oregon Muni Bonds 1.22%
State Of Georgia Muni Bonds 1.18%
San Francisco California City & Coun Muni Bonds 1.12%
Commonwealth of Massachusetts Muni Bonds 1.10%
Santa Monica Community College Distr Muni Bonds 0.99%
City of Los Angeles Muni Bonds 0.99%
Microsoft Corporation Corporate 0.97%
Apple Inc. Corporate 0.93%
Stanford University Corporate 0.93%
Los Angeles Community College Distri Muni Bonds 0.91%
State of Wisconsin Muni Bonds 0.90%
Alphabet Inc. Corporate 0.89%
FNMA Agency 0.89%
Texas Public Finance Authority Muni Bonds 0.86%
San Bernardino Community College Dis Muni Bonds 0.83%
Solano California Community College Muni Bonds 0.80%
State of New York Muni Bonds 0.78%
Contra Costa Community College Distr Muni Bonds 0.72%
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
San Mateo Union High School District Muni Bonds 0.72%
San Diego County Water Authority Muni Bonds 0.72%
Andrew W. Mellon Foundation, The Corporate 0.71%
Marin California Community College D Muni Bonds 0.71%
Palo Alto Unified School District Muni Bonds 0.65%
State Of Mississippi Muni Bonds 0.64%
San Diego Unified School District Muni Bonds 0.61%
County of Alameda, California Muni Bonds 0.61%
The University of Chicago Corporate 0.60%
Tennessee Valley Authority Agency 0.59%
City of Glendora, California Muni Bonds 0.58%
Johnson & Johnson Corporate 0.58%
Ohlone Community College District Muni Bonds 0.57%
City of Manhattan Beach, California Muni Bonds 0.54%
City of Corona, California Muni Bonds 0.51%
San Diego Community College District Muni Bonds 0.51%
Northwestern Mutual Global Funding Corporate 0.49%
Santa Clara VY California Water Dist Muni Bonds 0.47%
City of Chula Vista, California Muni Bonds 0.45%
San Ramon Valley Unified School Dist Muni Bonds 0.44%
Santa Monica-Malibu Unified School D Muni Bonds 0.42%
City of Huntington Beach, California Muni Bonds 0.42%
Redwood City School District Muni Bonds 0.40%
State Of Rhode Island Muni Bonds 0.39%
International Bank for Reconstructio Supras 0.39%
City of Fairfield, California Muni Bonds 0.39%
Riverside Community College District Muni Bonds 0.38%
Los Angeles Department of Water and Muni Bonds 0.38%
Cabrillo California Community Colleg Muni Bonds 0.38%
San Jose Unified School District Muni Bonds 0.37%
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
City of Santa Ana, California Muni Bonds 0.35%
Metropolitan Transportation Commissi Muni Bonds 0.34%
The New York State Urban Development Muni Bonds 0.32%
Antelope Valley Community College Di Muni Bonds 0.31%
State Of Colorado Muni Bonds 0.29%
Yosemite Community California Colleg Muni Bonds 0.28%
Glendale California Unified School D Muni Bonds 0.28%
South Pasadena Unified School Distri Muni Bonds 0.26%
Fullerton School District, Californi Muni Bonds 0.26%
The Regents Of The University Of Cal Muni Bonds 0.26%
Redondo Beach California Unified Sch Muni Bonds 0.25%
Palomar California Community College Muni Bonds 0.25%
City of Covina, California Muni Bonds 0.25%
Tustin Unified School District Schoo Muni Bonds 0.25%
San Dieguito Union High School Distr Muni Bonds 0.25%
Calleguas California Municipal Water Muni Bonds 0.25%
Minnesota Housing Finance Agency Muni Bonds 0.24%
State of Texas Muni Bonds 0.24%
Santa Clarita California Community C Muni Bonds 0.24%
Sequoia Union High School District Muni Bonds 0.24%
Mountain View Whisman School Distric Muni Bonds 0.22%
Desert Community College District Muni Bonds 0.21%
San Jose Evergreen California Commun Muni Bonds 0.21%
Maryland Department of Housing and C Muni Bonds 0.21%
State of Alabama Muni Bonds 0.19%
Sierra Joint Community College Distr Muni Bonds 0.19%
State Of Tennessee Muni Bonds 0.19%
Burbank California City Unified Scho Muni Bonds 0.19%
Menlo Park California City School Di Muni Bonds 0.19%
Santa Cruz Metropolitan Transit Dist Muni Bonds 0.19%
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
Mount San Antonio California Communi Muni Bonds 0.19%
Los Angeles County California Public Muni Bonds 0.18%
City of La Habra, California Muni Bonds 0.18%
State of California Muni Bonds 0.18%
Beverly Hills Unified School Distric Muni Bonds 0.18%
Placentia-Yorba Linda California Uni Muni Bonds 0.17%
Desert Sands Unified School District Muni Bonds 0.17%
City of El Segundo, California Muni Bonds 0.16%
San Francisco Bay Area Rapid Transit Muni Bonds 0.16%
Beverly Hills California Public Fina Muni Bonds 0.16%
Huntington Beach California Public F Muni Bonds 0.14%
Santa Cruz County Capital Financing Muni Bonds 0.14%
California Infrastructure and Econom Muni Bonds 0.13%
City of Auburn, California Muni Bonds 0.13%
Rancho Water District Financing Auth Muni Bonds 0.12%
Rancho Santiago Community College Di Muni Bonds 0.12%
City of Buena Park, California Muni Bonds 0.12%
San Mateo-Foster City School Distric Muni Bonds 0.12%
Milpitas Unified School District Muni Bonds 0.11%
City of Ontario, California Muni Bonds 0.11%
Temecula Valley Unified School Distr Muni Bonds 0.11%
City of Pacifica, California Muni Bonds 0.11%
Pasadena Public Financing Authority, Muni Bonds 0.11%
San Juan Unified School District Muni Bonds 0.10%
Santa Clara County Muni Bonds 0.10%
State of Ohio Muni Bonds 0.10%
Morgan Stanley Neg CD 0.10%
Liberty Union High School District Muni Bonds 0.10%
Oxnard Union High School District Muni Bonds 0.09%
Chabot-Las Positas Community College Muni Bonds 0.09%
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
City of Monterey Park, California Muni Bonds 0.09%
Tracy Joint Unified School District Muni Bonds 0.09%
Campbell California Union High Schoo Muni Bonds 0.09%
Santa Barbara Unified School Distric Muni Bonds 0.09%
Santa Maria Joint Union High School Muni Bonds 0.09%
Roseville California Finance Authori Muni Bonds 0.08%
Torrance California Joint Powers Fin Muni Bonds 0.08%
San Jose, California Muni Bonds 0.07%
San Jose Financing Authority Muni Bonds 0.07%
City of San Ramon, California Muni Bonds 0.06%
Carlsbad Unified School District Muni Bonds 0.06%
Chaffey Community College District C Muni Bonds 0.05%
Sunnyvale School District, Californi Muni Bonds 0.05%
LEDYARD NATIONAL BANK Neg CD 0.05%
Global Federal Credit Union Neg CD 0.05%
The Bippus State Bank Neg CD 0.05%
Alliant Credit Union Neg CD 0.05%
American Express Company Neg CD 0.05%
The Pitney Bowes Bank Inc. Neg CD 0.05%
Signature Federal Credit Union Neg CD 0.05%
SPCO Credit Union Neg CD 0.05%
The Peoples Bank Co. Neg CD 0.05%
Enterprise Bank Neg CD 0.05%
Workers Federal Credit Union Neg CD 0.05%
Austin Telco Federal Credit Union Neg CD 0.05%
County Schools Federal Credit Union Neg CD 0.05%
Baxter Credit Union Neg CD 0.05%
UBS Bank USA Neg CD 0.05%
General Electric Credit Union Neg CD 0.05%
First Technology Federal Credit Unio Neg CD 0.05%
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
Southern Bank Neg CD 0.05%
Healthcare Systems Federal Credit Un Neg CD 0.05%
Amerant Bank N.A. Neg CD 0.05%
Ally Bank Neg CD 0.05%
Truist Bank Neg CD 0.05%
First Southwest Bank Neg CD 0.05%
CNB Bank, Inc. Neg CD 0.05%
CFG Bank Neg CD 0.05%
GreenWay Bank Neg CD 0.05%
Diversified Members Credit Union Neg CD 0.05%
Wings Financial Credit Union Neg CD 0.05%
Noble Federal Credit Union Neg CD 0.05%
JPMorgan Chase Bank, N.A. Neg CD 0.05%
Sherwin Williams Employees Credit Un Neg CD 0.05%
Skyla Federal Credit Union Neg CD 0.05%
First Guaranty Bank Neg CD 0.05%
Cornerstone Community Federal Credit Neg CD 0.05%
Transportation Alliance Bank, Inc. Neg CD 0.05%
Achieve Financial Credit Union Neg CD 0.05%
Metropolitan Capital Bank & Trust Neg CD 0.05%
Liberty First Credit Union Neg CD 0.05%
Chambers State Bank Neg CD 0.05%
CIBM Bank Neg CD 0.05%
Rogue Credit Union Neg CD 0.05%
Select Bank Neg CD 0.05%
Mutual Savings Association Neg CD 0.05%
Evolve Bank & Trust Neg CD 0.05%
Finwise Bank Neg CD 0.05%
Sharonview Federal Credit Union Neg CD 0.05%
Community Choice Credit Union Neg CD 0.05%
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
Oak Bank Neg CD 0.05%
Public Service Credit Union Neg CD 0.05%
County of Riverside, California Muni Bonds 0.05%
Pathfinder Bank Neg CD 0.05%
Ponce Bank Neg CD 0.05%
BMW Bank of North America Neg CD 0.05%
BankFirst Neg CD 0.05%
First Wyoming Bank & Trust Neg CD 0.05%
Banner Capital Bank Neg CD 0.05%
Bank Hapoalim B.M. - New York Branch Neg CD 0.05%
Western State Bank Neg CD 0.05%
Texas Bank Neg CD 0.05%
Decorah Bank and Trust Company Neg CD 0.05%
BankUnited NA CD 0.05%
Farmers Insurance Federal Credit Uni Neg CD 0.05%
Meritrust Federal Credit Union Neg CD 0.05%
Kennett Trust Bank Neg CD 0.05%
Merrick Bank Neg CD 0.05%
Toyota Financial Savings Bank Neg CD 0.05%
Eaglemark Savings Bank Neg CD 0.05%
GreenState Credit Union Neg CD 0.05%
Monet Bank Neg CD 0.05%
Beal Bank USA Neg CD 0.05%
Delta National Bank and Trust Compan Neg CD 0.05%
Institution for Savings in Newburypo Neg CD 0.05%
Synchrony Bank Neg CD 0.05%
Pentagon Federal Credit Union Neg CD 0.05%
Capital One Financial Corporation Neg CD 0.05%
Connexus Credit Union Neg CD 0.05%
Rockland Federal Credit Union Neg CD 0.05%
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ISSUERS
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Issuer Investment Type % Portfolio
First Oklahoma Bank Neg CD 0.05%
First National Bank of America Neg CD 0.05%
First Community Credit Union of Belo Neg CD 0.05%
Encore Bank Neg CD 0.05%
Cinfed Federal Credit Union Neg CD 0.05%
Live Oak Banking Company Neg CD 0.05%
Fremont Union High School District Muni Bonds 0.05%
Silicon Valley Clean Water Muni Bonds 0.05%
Gesa Credit Union Neg CD 0.05%
Jonesboro State Bank Neg CD 0.05%
Sunwest Bank Neg CD 0.05%
Bank of Montreal Neg CD 0.04%
Minnwest Bank Neg CD 0.04%
Farmers and Merchants State Bank Neg CD 0.04%
The Farmers & Merchants Bank Neg CD 0.04%
Legacy Bank & Trust Company Neg CD 0.04%
Central Bank Neg CD 0.04%
Country Club Bank Neg CD 0.04%
USF Federal Credit Union Neg CD 0.04%
Pony Express Bank Neg CD 0.04%
Peoples Bank Neg CD 0.04%
Berkeley California Unified School D Muni Bonds 0.04%
Haddon Savings Bank Neg CD 0.04%
San Diego Association Of Governments Muni Bonds 0.04%
City of Downey, California Muni Bonds 0.03%
Sonoma County California Junior Coll Muni Bonds 0.03%
Southern California Public Power Aut Muni Bonds 0.02%
Orchard California School District Muni Bonds 0.02%
Cash Cash 0.00%
TOTAL 100.00%
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QUALITY DISTRIBUTION
Rating 09/30/2025 06/30/2025
AAA 27.55% --
AA 59.11% --
A 0.77% --
BBB 0.24% --
B 0.05% --
NA 12.29% --
Rating 09/30/2025 06/30/2025
Aaa 27.77% --
Aa 59.16% --
A 0.24% --
Baa 0.05% --
NA 12.78% --
Rating 09/30/2025 06/30/2025
AAA 11.49% --
AA 41.51% --
A 0.15% --
BBB 0.09% --
NA 46.76% --
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 S&P Rating Moody’s Rating Fitch Rating
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0-.25 .25-.5 .5-1 1-2 2-3 3-4 4-5 5-7 7+
Portfolio 10.8% 8.7% 14.2% 15.5% 8.7% 11.1% 15.4% 12.8% 2.8% ICE BofA 1-5 Year Unsubordinated US Treasury &
Agency Index 0.0% 0.1% 2.6% 35.0% 27.7% 22.6% 12.0% 0.0% 0.0%

DURATION DISTRIBUTION
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Portfolio Compared to the Benchmark
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3 Months 12 Months 2 Years 3 Years 5 Years 10 Years Since Inception TOTAL RATE OF RETURN*
Palo Alto Managed Acct 0.40%
Benchmark 0.24%
*Periods over 1 year are annualized.

Total rate of return: A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending market value; it includes interest earnings, realized and unrealized gains and losses in the portfolio. Realized rate of return: A measure of a portfolio’s return over time. It is the internal rate which equates the beginning book value of the portfolio with the ending book value; it includes interest earnings, realized gains and losses in the portfolio.

Benchmark: ICE BofA 1-5 Year Unsubordinated US Treasury & Agency Index

INVESTMENT PERFORMANCE
Palo Alto Managed Acct | Account #11463 | As of September 30, 2025 Total Rate of Return : Inception | 09/01/2025
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PORTFOLIO CHARACTERISTICS
City of Palo Alto Reporting | Account #11464 | As of September 30, 2025 9/30/2025
Portfolio
6/30/2025
Portfolio
Average Maturity (yrs) 0.00
Average Modified Duration 0.00
Average Purchase Yield 1.86%
Average Market Yield 1.86%
Average Quality** AAA
Total Market Value 71,567,424
*Benchmark: NO BENCHMARK REQUIRED
**The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch. 31 Item A
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SECTOR DISTRIBUTION
City of Palo Alto Reporting | Account #11464 | As of September 30, 2025 Sector as a Percentage of Market Value
Sector 09/30/2025 06/30/2025
Cash 55.68% --
LAIF 44.32% --
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CONSOLIDATED INFORMATION
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PORTFOLIO CHARACTERISTICS
City of Palo Alto Consolidated | Account #11465 | As of September 30, 2025 9/30/2025
Portfolio
6/30/2025
Portfolio
Average Maturity (yrs) 2.70
Average Modified Duration 2.31
Average Purchase Yield 2.52%
Average Market Yield 3.75%
Average Quality** AA+
Total Market Value 589,498,139
*Benchmark: NO BENCHMARK REQUIRED
**The credit quality is a weighted average calculation of the highest of S&P, Moody’s and Fitch. 34 Item A
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Report (as of September 30, 2025)

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SECTOR DISTRIBUTION
City of Palo Alto Consolidated | Account #11465 | As of September 30, 2025 Sector as a Percentage of Market Value
Sector 09/30/2025 06/30/2025
Muni Bonds 36.42% --
Agency 24.74% --
Supras 12.03% --
Cash 6.80% --
LAIF 5.41% --
Corporate 5.35% --
Neg CD 4.05% --
Money Mkt Fd 2.68% --
US Treasury 2.47% --
CD 0.04% --
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IMPORTANT DISCLOSURES
2025 Chandler Asset Management, Inc, An Independent Registered Investment Adviser.

Information contained herein is confidential. Prices are provided by ICE Data Services Inc (“IDS”), an independent pricing source. In the event IDS does not provide a price or if the price provided is not reflective of fair market value, Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures. Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A.

Performance results are presented gross-of-advisory fees and represent the client’s Total Return. The deduction of advisory fees lowers performance results. These results include the reinvestment of dividends and other earnings. Past performance may not be indicative of future results. Therefore, clients should not assume that future performance of any specific investment or investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Economic factors, market conditions or changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio.

Index returns assume reinvestment of all distributions. Historical performance results for investment indexes generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results. It is not possible to invest directly in an index.

Source ICE Data Indices, LLC (“ICE”), used with permission. ICE permits use of the ICE indices and related data on an “as is” basis; ICE, its affiliates and their respective third party suppliers disclaim any and all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither ICE data, its affiliates or their respective third party providers guarantee the quality, adequacy, accuracy, timeliness or completeness of the indices or the index data or any component thereof, and the indices and index data and all components thereof are provided on an “as is” basis and licensee’s use it at licensee’s own risk. ICE data, its affiliates and their respective third party do not sponsor, endorse, or recommend chandler asset management, or any of its products or services.

This report is provided for informational purposes only and should not be construed as a specific investment or legal advice. The information contained herein was obtained from sources believed to be reliable as of the date of publication, but may become outdated or superseded at any time without notice. Any opinions or views expressed are based on current market conditions and are subject to change. This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as indicator of future results. Past performance is not indicative of future results. This report is not intended to constitute an offer, solicitation, recommendation or advice regarding any securities or investment strategy and should not be regarded by recipients as a substitute for the exercise of their own judgment.

Fixed income investments are subject to interest, credit and market risk. Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market in general could decline due to economic conditions, especially during periods of rising interest rates.

Ratings information have been provided by Moody’s, S&P and Fitch through data feeds we believe to be reliable as of the date of this statement, however we cannot guarantee its accuracy.

Security level ratings for U.S. Agency issued mortgage-backed securities (“MBS”) reflect the issuer rating because the securities themselves are not rated. The issuing U.S. Agency guarantees the full and timely payment of both principal and interest. 36 Item A
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BENCHMARK DISCLOSURES
Benchmark Disclosure
ICE BofA 1-5 Yr US Treasury & Agency Index
The ICE BofA 1-5 Year US Treasury & Agency Index tracks the performance of US dollar denominated US Treasury and nonsubordinated US agency debt issued in the US domestic market. Qualifying securities must have an investment grade rating (based on an average of Moody’s, S&P and Fitch). Qualifying securities must have at least one year remaining term to final maturity and less than five years remaining term to final maturity, at least 18 months to maturity at time of issuance, a fixed coupon schedule, and a minimum amount outstanding of $1 billion for sovereigns and $250 million for agencies. 37 Item A
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Report (as of September 30, 2025)

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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: November 17, 2025
Report #:2501-4034
TITLE
Q2 CY 2025 Sales Tax Digest (April-June 2025)

ANALYSIS
This report transmits information regarding the City of Palo Alto’s sales tax receipts for the second quarter (April to June) of 2025. Listed below are highlights from the report. Detailed discussion and data can be found in the attached City of Palo Alto Sales Tax Digest (Attachment A).

Regional and statewide sales tax - adjusted benchmark year (rolling four-quarter) (Attachment A, p. 2):
• Palo Alto: decreased by 7.7%
• San Francisco Bay Area: decreased by 2.5%
• California statewide: decreased by 2.5%
Benchmark year comparisons reflect a rolling four-quarter view of economic activity, adjusted to exclude non-period-related payments.

City’s most significant activity – benchmark year (rolling four-quarter) (Attachment A, p. 1):
• Business to Business – Leasing: decreased by 41.6%; represents 12.7% of total sales tax • Transportation – New autos: decreased by 32.2%; represents 11.7% of total sales tax These two segments account for over 20% of Palo Alto’s total sales tax for the period and were the primary drivers of the overall decline.

County Pool - quarterly year-over-year comparison (Q2 2024 and Q2 2025) (Attachment A, p. 4)
• City share: decreased from 6.3% to 6.1%, or 20 basis points. • Total County pool: increased $0.1 million, from $1.6 million to $1.7 million Over the most recent four quarters, the City received approximately $6.6 million from the County Pool, representing about 19% of the City’s total sales tax revenue of $34.2 million during that period.

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ATTACHMENTS
Attachment A: 2025 Q2 Sales Tax Digest Summary
APPROVED BY:

Lauren Lai, Administrative Services Director
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City of Palo Alto
Sales Tax Digest Summary
Collections through August 2025
Sales April through June 2025 (2025Q2)
neumo.com (800) 800-8181 Page 1 California Overview
For the year ending in the second quarter of 2025, cash receipts had a 0.0% change statewide and increase of 0.1% in the S.F. Bay Area. However, when adjusted for non-period-related payments, the overall economic sales tax activity for the year ending in the second quarter of 2025 decreased by 2.5% statewide and decreased by 2.5% in S.F. Bay Area.

City of Palo Alto
For the year ending in the second quarter of 2025, sales tax cash receipts for the city decreased by 6.0% from the prior year. However, when adjusted for non-period related payments, the overall economic sales tax activity in Palo Alto for the year ending in the second quarter of 2025 decreased by 7.7%. The decrease in Palo Alto's sales tax revenue was primarily driven by the leasing and new auto sales sectors. On an economic basis, leasing sales tax revenue decreased by 41.6%, representing 12.7% of the city's total sales tax for the year ending in the second quarter of 2025. New auto sales decreased by 32.2% over the same period, contributing 11.7% to the total sales tax revenue for the same period.

Same quarter sales tax cash receipts increased by 2.0% in California from Q2 2024 to Q2 2025. Palo Alto citywide sales tax cash receipts increased by 0.5% over the Q2 2024 to Q2 2025 period. In addition to negative misallocations in Q2 2024, it should be noted that the primary reason for the 0.5% increase this quarter was due to a significant increase in cash related to activity in prior periods. Otherwise, from an economic basis (actual sales activity solely during the Q2 quarter) there was a 5.3% decline. The key reasons for the Palo Alto economic decrease this period was due to significant declines in two segments:
the leasing segment, which decreased by 50.7%, a segment that comprises 10.0% of the city's total sales tax, and the new auto sales segment decreased by 21.9%, which comprises 11.2% of the total sales tax for the city. According to the California New Car Dealers Association (CNCDA), California’s new light vehicle registrations increased by 5.4% in 2025Q2. Lastly, increases for restaurants (7.8%) and miscellaneous relation (16.8%) partially mitigated the decreases for leasing and new auto sales.

Regional Overview
The chart on page two shows adjusted economic benchmark year amounts, which shows the year ended second quarter of 2025 compared to the year ended second quarter of 2024 (benchmark years are rolling annual comparisons through the current quarter). The divergence in growth rates between California and Palo Alto is attributed to the stronger overall performance of sales tax generating businesses statewide compared to those operating in Palo Alto.

Regional Overview Chart (Economic)
BENCHMARK YEAR 2025Q2 COMPARED TO BENCHMARK YEAR 2024Q2 Item B
Attachment A 2025 Q2
Sales Tax Digest Summary

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City of Palo Alto
neumo.com (800) 800-8181 Page 3 % of Total / % Change Palo Alto California
Statewide S.F. Bay Area Sacramento
Valley Central Valley South Coast Inland Empire North Coast Central Coast General Retail30.3 / 9.6 29.6 / -0.7 25.8 / -3.6 30.5 / 7.5 38.7 / -3.6 27.6 / -0.3 36.1 / 0.7 27.4 / -1.6 29.1 / 0.6 Food Products20.5 / 7.2 21.8 / -0.3 23.2 / -0.4 17.3 / -0.4 15.2 / -2.3 24 / -0.2 18.5 / 1.1 19.3 / 1.6 27.2 / 3 Transportation15.3 / -28.2 22 / -7 18.4 / -6.4 25.8 / -5.5 21.3 / -8.8 22.7 / -7.3 22.3 / -5.3 27.5 / -4.5 27.2 / -9.9 Business to Business27.3 / -24 15.9 / -2.2 21.5 / -0.3 13.6 / -7.7 14.6 / -5.3 15.7 / -1.5 10.3 / -4.2 10.6 / -2.9 7.9 / 8.1 Misc/Other6.5 / 51.8 10.7 / -2.4 24.6 / -0.3 18.6 / 0.4 10.2 / -6.3 25 / -0.4 12.7 / -4.1 16.1 / -19.4 8.6 / 12.6 Total 100.0 / -7.7 100.0 / -2.5 100.0 / -2.5 100.0 / -1.5 100.0 / -5.1 100.0 / -2.2 100.0 / -1.8 100.0 / -2.3 100.0 / -0.5 Palo Alto California
Statewide S.F. Bay Area Sacramento
Valley Central Valley South Coast Inland Empire North Coast Central Coast Largest Segment Restaurants Restaurants Restaurants Miscellaneous Retail
Miscellaneous
Retail Restaurants Apparel Stores Restaurants Restaurants % of Total / % Change 18.6 / 7.8 16 / 0.3 17.5 / 0.6 13.5 / 21.6 18.2 / 3.6 17.9 / 0.4 19.1 / 3 12.5 / 3 17.7 / 2.9 2nd Largest Segment Leasing Miscellaneous
Retail
Miscellaneous
Retail Restaurants Department
Stores
Auto Sales -
New
Auto Parts-
Repair
Department
Stores
Auto Sales -
New
% of Total / % Change 12.7 / -41.6 12.2 / 6.9 10.9 / 6.2 12 / 0.3 10.9 / -3.8 11.7 / -5.3 12.2 / 2.7 11.2 / -3.4 17.3 / -4.1 3rd Largest Segment Auto Sales -
New
Auto Sales -
New
Auto Sales -
New
Auto Sales -
New Restaurants Miscellaneous
Retail
Auto Sales -
New
Auto Sales -
New
Miscellaneous
Retail
% of Total / % Change 11.7 / -32.2 10.7 / -4.7 8.8 / -7.4 11.3 / -0.6 10.1 / -4 10.1 / 7.6 10.7 / -1.4 11 / -0.9 8.7 / 6 ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 2nd Quarter 2025 ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 2nd Quarter 2025 Item B
Attachment A 2025 Q2
Sales Tax Digest Summary

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City of Palo Alto
neumo.com (800) 800-8181 Page 2 Leasing

12.8%
Restaurants

18.7%
Auto Sales - New

11.8%
Office Equipment

7.4%
Apparel Stores

7.6%
All Other

41.8%
Net Pools & Adjustments

22.3%
Gross Historical Sales Tax Cash Receipts by Benchmark Year and Quarter (Before Adjustments) Net Cash Receipts for Benchmark Year Second Quarter 2025: $34,183,031 *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2025Q2 BMY is sum of 2025 Q2, 2025 Q1, 2024 Q4, 2024 Q3) Item B
Attachment A 2025 Q2
Sales Tax Digest Summary

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City of Palo Alto
neumo.com (800) 800-8181 Page 4 County Pool Results
The California sales tax system is known as a "sales and use tax" system. County Pool revenues primarily reflect the use tax generated from transactions that do not involve a physical point of sale within California. Businesses report their use tax quarterly, based on activity conducted throughout the county.

The County Pool is distributed each quarter based on a proportional formula. A jurisdiction's quarterly percentage is determined by dividing its total gross sales tax receipts for the quarter by the total gross sales tax receipts of all jurisdictions within the county. Consequently, if Palo Alto's gross sales tax receipts increase relative to the rest of the county during a quarter, the city's share of the total County Pool will also increase. This quarterly percentage is multiplied by the total countywide pool to determine the jurisdiction's quarterly County pool revenue.

In the second quarter of 2025, cash receipts for the overall County Pool increased by 8.3% from the same quarter in the prior year. The City’s share of the Countywide Pool decreased to 6.1%. The City’s revenues from the County Pool increased from $1,611,681 in 2024Q2 to $1,685,234 in 2025Q2.

TOP 25 SALES/USE TAX CONTRIBUTORS
The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended in the second quarter of 2025. The Top 25 Sales/Use Tax contributors generate 54.1% of Palo Alto’s total sales and use tax revenue. 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 2024Q4 2025Q1 2025Q2 Quarter
Over
Quarter
Total County Pool 28,701,701 29,548,556 24,937,663 27,690,772 22,345,960 24,427,230 25,411,165 25,387,888 23,265,567 31,312,972 27,268,380 27,503,817 8.3% Jurisdiction Share 1,683,544 1,817,421 1,499,631 1,755,562 1,489,193 1,638,965 1,523,986 1,611,681 1,377,891 1,834,044 1,673,551 1,685,234 4.6% Jurisdiction % of Total 5.9% 6.2% 6.0% 6.3% 6.7% 6.7% 6.0% 6.3% 5.9% 5.9% 6.1% 6.1% Anderson Honda Macy's Department Store Shreve & Co.

Apple Stores Magnussen's Toyota Of Palo Alto Stanford Health Care Audi Palo Alto Neiman Marcus Tesla
Bloomingdale's Nordstrom Tesla Lease Trust
Hermes Restoration Hardware Tiffany & Company
Hp Enterprise Services Richemont Varian Medical Systems Louis Vuitton Sephora Volvo Cars Palo Alto
Lucile Packard Children's Hospital Shell Service Stations Wilkes Bashford Item B
Attachment A 2025 Q2
Sales Tax Digest Summary

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City of Palo Alto
neumo.com (800) 800-8181 Page 4 Item B
Attachment A 2025 Q2
Sales Tax Digest Summary

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City of Palo Alto
neumo.com (800) 800-8181 Page 5 $-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Benchmark Year 2025Q2 Benchmark Year 2024Q2
Sales Tax from Largest Non-Confidential Sales Tax Segments (Economic) Item B
Attachment A 2025 Q2
Sales Tax Digest Summary

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City of Palo Alto
neumo.com (800) 800-8181 Page 5 Item B
Attachment A 2025 Q2
Sales Tax Digest Summary

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City of Palo Alto
neumo.com (800) 800-8181 Page 6 Economic Category % 2025Q2 2025Q1 2024Q4 2024Q3 2024Q2 2024Q1 2023Q4 2023Q3 2023Q2 2023Q1 2022Q4 Bus ines s To Bus ines s 20.8% 1,829,261 2,584,832 2,352,638 2,228,773 2,366,493 2,149,237 2,343,293 2,943,907 2,683,293 2,135,883 2,490,368 Mis cellaneous /Other 17.1% 1,504,679 1,542,138 1,284,493 1,682,849 1,595,196 1,951,428 1,870,170 1,546,096 1,302,322 1,517,005 1,597,816 General Retail 23.8% 2,096,092 1,813,504 2,466,315 1,828,014 2,044,006 1,739,261 2,315,882 1,834,297 2,017,885 1,640,927 2,305,038 Food Products 17.2% 1,514,585 1,396,065 1,448,644 1,349,524 1,394,270 1,288,207 1,348,051 1,277,173 1,349,926 1,195,458 1,260,287 Subtotal Economic (Local Bus ines s ) 78.9% 6,944,617 7,336,539 7,552,090 7,089,160 7,399,964 7,128,134 7,877,395 7,601,473 7,353,426 6,489,274 7,653,508 Net Pools & Adjus tments 21.1% 1,856,667 633,409 1,737,280 1,033,269 1,359,165 1,143,798 1,867,172 1,986,175 2,084,763 1,586,938 1,935,580 Total Cas h Receipts 100.0% 8,801,284 7,969,948 9,289,370 8,122,429 8,759,129 8,271,932 9,744,567 9,587,647 9,438,189 8,076,212 9,589,088 Economic Segment % 2025Q2 2025Q1 2024Q4 2024Q3 2024Q2 2024Q1 2023Q4 2023Q3 2023Q2 2023Q1 2022Q4 Mis cellaneous /Other 37.4% 3,294,198 4,175,255 3,939,826 4,070,462 4,102,841 4,114,784 4,409,850 4,635,983 4,197,978 3,818,384 4,490,992 Res taurants 15.6% 1,376,526 1,268,403 1,307,103 1,222,917 1,259,885 1,162,863 1,214,598 1,154,189 1,214,502 1,073,621 1,114,637 Mis cellaneous Retail 6.8% 602,137 529,255 717,726 512,154 582,600 489,040 689,939 480,649 512,077 448,322 545,797 Apparel Stores 6.1% 534,216 455,466 633,554 480,138 531,926 440,402 586,863 478,973 509,894 423,470 538,573 Department Stores 5.7% 503,087 406,470 570,391 432,925 501,499 411,345 549,893 435,388 492,374 356,626 533,032 Service Stations 2.1% 183,941 187,356 187,487 201,591 226,411 198,584 214,900 229,911 222,029 192,723 215,640 Food Markets 1.3% 118,511 107,424 117,774 111,242 114,071 107,031 112,372 103,251 111,465 101,978 116,810 Bus ines s Services 3.8% 332,000 206,909 78,229 57,730 80,732 204,085 98,980 83,130 93,106 74,150 98,027 Subtotal Economic (Local Bus ines s ) 78.9% 6,944,617 7,336,539 7,552,090 7,089,160 7,399,964 7,128,134 7,877,395 7,601,473 7,353,426 6,489,274 7,653,508 Net Pools & Adjus tments 21.1% 1,856,667 633,409 1,737,280 1,033,269 1,359,165 1,143,798 1,867,172 1,986,175 2,084,763 1,586,938 1,935,580 Total Cas h Receipts 100.0% 8,801,284 7,969,948 9,289,370 8,122,429 8,759,129 8,271,932 9,744,567 9,587,647 9,438,189 8,076,212 9,589,088 Historical Analysis by Calendar Quarter
The chart above shows the categories and segments in quarterly economic-based amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount.

Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 7 Economic Category % 2025Q2 2024Q2 2023Q2 2022Q2 2021Q2 2020Q2 2019Q2 2018Q2 2017Q2 2016Q2 Bus ines s To Bus ines s 22.4% 7,666,142 10,084,171 9,988,442 8,236,182 7,355,834 8,102,570 7,601,876 6,528,872 4,809,596 4,575,031 Mis cellaneous /Other 17.6% 6,014,819 7,162,077 5,829,335 6,964,576 6,164,841 6,109,816 8,481,510 6,808,251 5,861,861 5,718,307 General Retail 24.9% 8,510,616 7,763,626 7,739,196 7,554,354 5,663,144 5,910,350 7,945,988 8,134,343 8,712,822 8,613,532 Food Products 16.8% 5,759,455 5,370,830 5,063,640 4,412,316 2,883,218 3,948,623 4,903,383 4,743,028 4,670,072 4,716,766 Subtotal Economic (Local Bus ines s ) 81.8% 27,951,032 30,380,704 28,620,612 27,167,428 22,067,037 24,071,358 28,932,757 26,214,494 24,054,351 23,623,636 Net Pools & Adjus tments 18.2% 6,231,999 5,982,571 7,171,291 4,368,279 6,057,714 5,820,866 7,157,071 3,505,528 5,275,942 3,728,792 Total 100.0% 34,183,031 36,363,275 35,791,903 31,535,707 28,124,751 29,892,225 36,089,829 29,720,022 29,330,293 27,352,428 Economic Segment % 2025Q2 2024Q2 2023Q2 2022Q2 2021Q2 2020Q2 2019Q2 2018Q2 2017Q2 2016Q2 Mis cellaneous /Other 41.9% 14,330,797 17,897,256 16,836,602 15,840,333 14,393,440 15,135,645 17,036,114 15,082,343 12,391,585 11,837,137 Res taurants 15.3% 5,226,871 4,849,896 4,537,576 3,908,881 2,452,584 3,439,950 4,320,409 4,223,808 4,142,644 4,199,182 Mis cellaneous Retail 7.2% 2,457,655 2,053,427 1,840,260 2,018,775 1,680,503 1,275,393 1,636,751 1,816,125 2,447,265 2,374,255 Apparel Stores 6.2% 2,111,069 2,041,197 1,914,334 1,834,472 1,292,269 1,399,599 1,993,176 2,510,823 1,950,598 1,921,754 Department Stores 5.7% 1,932,805 1,898,124 1,809,413 1,736,032 1,124,054 1,260,329 1,885,562 1,268,109 1,788,350 1,993,949 Service Stations 2.2% 756,181 871,018 869,156 814,968 493,597 571,923 698,074 612,394 589,879 581,616 Bus ines s Services 2.0% 678,082 325,852 382,432 618,224 294,931 579,335 908,303 274,336 288,370 265,547 Food Markets 1.3% 457,572 443,933 430,840 395,742 335,659 409,184 454,368 426,556 455,660 450,196 Subtotal Economic (Local Bus ines s ) 81.8% 27,951,032 30,380,704 28,620,612 27,167,428 22,067,037 24,071,358 28,932,757 26,214,494 24,054,351 23,623,636 Net Pools & Adjus tments 18.2% 6,231,999 5,982,571 7,171,291 4,368,279 6,057,714 5,820,866 7,157,071 3,505,528 5,275,942 3,728,792 Total 100.0% 34,183,031 36,363,275 35,791,903 31,535,707 28,124,751 29,892,225 36,089,829 29,720,022 29,330,293 27,352,428 Historical Analysis by Calendar BMY from 2016Q2 to 2025Q2 The chart above shows the categories and segments in benchmark year economic basis amounts. The total amount is the net cash receipts, and it was obtained by adding up the categories/segments with the “Net Pools & Adjustments” amount. Benchmark year (BMY) is the sum of the current and 3 previous quarters (2025Q2 BMY is sum of 2025 Q2, 2025 Q1, 2024 Q4, 2024 Q3).

Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 8 General Retail
Food Products
Transportation
Business to Business
Misc/Other
2025/2 Total
2024/2 Total
% Chg
Largest Gain
Second Largest
Gain
Largest Decline
Second Largest
Decline
Campbell 0.4% -0.9% -7.6% -4.4% -5.4% 2,583,893 2,580,042 0.1% I.T. Infrastructure Miscellaneous Retail Service Stations Bldg.Matls-Retail Cupertino 4.1% 0.4% -15.0% -0.9% 17.7% 3,358,869 7,059,293 -52.4% Electronic Equipment Restaurants Office Equipment Service Stations Gilroy -2.2% 1.4% -3.1% -6.8% -0.8% 4,140,758 4,254,276 -2.7% Restaurants Miscellaneous Retail Apparel Stores Auto Sales - New Los Altos 5.0% -4.0% -4.5% 6.8% 14.5% 613,437 638,888 -4.0% Recreation Products Bldg.Matls-Whsle Restaurants Electronic Equipment Los Gatos 4.7% 0.5% -26.3% -20.9% -7.4% 1,369,989 1,440,442 -4.9% Miscellaneous Retail Business Services Auto Sales - New Bldg.Matls-Retail Milpitas -0.2% 3.9% -3.0% 2.6% 1.9% 6,138,483 5,931,932 3.5% Office Equipment Miscellaneous Retail Electronic Equipment Light Industry Morgan Hill 36.7% 3.0% -2.6% -13.0% -11.4% 2,668,734 2,542,451 5.0% Apparel Stores Heavy Industry Bldg.Matls-Whsle Service Stations Mountain View 3.2% 1.9% -12.9% 14.2% 12.1% 4,319,310 4,271,754 1.1% Business Services Restaurants Auto Parts/Repair Service Stations Palo Alto 6.0% 7.4% -19.8% 48.5% 62.7% 6,973,129 7,365,226 -5.3% Business Services Miscellaneous Retail Leasing Auto Sales - New San Jose -2.3% 2.3% -12.0% 1.8% 5.6% 48,429,408 47,715,045 1.5% Office Equipment Restaurants Auto Sales - New Green Energy Santa Clara 13.1% 0.8% 9.4% 17.3% 18.9% 14,904,801 13,474,969 10.6% Office Equipment Electronic Equipment Light Industry Business Services County of Santa Clara 1.6% 0.6% -41.8% 26.2% 13.2% 2,354,594 1,277,673 84.3% Green Energy Bldg.Matls-Whsle Misc. Vehicle Sales Auto Parts/Repair Saratoga -3.0% 0.1% -2.7% -14.1% 36.8% 267,089 270,061 -1.1% Health & Government Business Services Light Industry Auto Parts/Repair Sunnyvale -22.9% 3.5% 15.3% 0.0% -34.0% 8,729,826 7,745,317 12.7% Business Services Light Industry Miscellaneous Retail Office Equipment Quarterly Analysis by Sales Tax Category: Change from 2024Q2 to 2025Q2 (Economic) Unlike the chart on page one which showed a ‘benchmark year’ through the second quarter of 2025, the chart above shows a comparison of one quarter only – second quarter of 2025 to second quarter of 2024. This chart is for local ‘brick and mortar’ businesses, and it excludes county pools and adjustments.

Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 9 California Avenue % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL FOOD PRODUCTS 13.4% 110,743 97,674 65.0% 58.9%
GENERAL RETAIL -12.0% 20,131 22,889 11.8% 13.8%
ALL OTHER -12.3% 39,619 45,194 23.2% 27.3%
TOTAL 2.9% 170,493 165,757 100.0% 100.0%
El Camino Real and Midtown % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL FOOD PRODUCTS 3.3% 163,529 158,310 32.4% 30.0%
GENERAL RETAIL -3.2% 34,869 36,020 6.9% 6.8%
ALL OTHER -8.0% 306,702 333,489 60.7% 63.2%
TOTAL -4.3% 505,100 527,819 100.0% 100.0%
Greater Downtown % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL FOOD PRODUCTS 6.3% 585,368 550,647 63.5% 61.8%
GENERAL RETAIL 8.7% 245,622 225,966 26.6% 25.4%
BUSINESS TO BUSINESS 7.5% 58,828 54,743 6.4% 6.1%
MISCELLANEOUS 214.9% 20,596 6,540 2.2% 0.7%
CONSTRUCTION -84.1% 7,735 48,795 0.8% 5.5%
TRANSPORTATION -6.5% 3,599 3,848 0.4% 0.4%
TOTAL 3.5% 921,748 890,538 100.0% 100.0%
Stanford Shopping Center % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL GENERAL RETAIL -10.0% 1,303,080 1,448,482 85.8% 77.9%
FOOD PRODUCTS -5.4% 160,820 170,015 10.6% 9.1%
ALL OTHER -77.5% 54,523 241,854 3.6% 13.0%
TOTAL -18.4% 1,518,424 1,860,351 100.0% 100.0%
City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2024Q2 to 2025Q2 (Economic) City of Palo Alto Geo Areas & Citywide Chart Data: Change from 2024Q2 to 2025Q2 (Economic) Cont.

Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 10 Town And Country Shopping Center % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL FOOD PRODUCTS -2.9% 118,717 122,242 60.3% 59.9%
GENERAL RETAIL -5.4% 77,090 81,532 39.1% 39.9%
ALL OTHER 263.1% 1,140 314 0.6% 0.2%
TOTAL -3.5% 196,947 204,088 100.0% 100.0%
All Other Geos combined with Balance of Jurisdiction % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL BUSINESS TO BUSINESS -35.0% 1,426,714 2,194,362 25.4% 32.9% GENERAL RETAIL -7.0% 1,766,886 1,900,089 31.5% 28.4%
FOOD PRODUCTS 5.5% 1,257,542 1,191,920 22.4% 17.8%
TRANSPORTATION -19.8% 1,024,663 1,278,284 18.3% 19.1%
MISCELLANEOUS 127.5% 108,930 47,880 1.9% 0.7%
CONSTRUCTION -59.6% 26,773 66,264 0.5% 1.0%
TOTAL -16.0% 5,611,508 6,678,799 100.0% 100.0%
All Geo Areas Total Comparison 25Q2 & 24Q2 % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL Balance of Jurisdiction -24.1% 2,298,741 3,030,247 41.0% 45.4% Stanford Shopping Center -18.4% 1,518,424 1,860,351 27.1% 27.9% Greater Downtown 3.5% 921,748 890,538 16.4% 13.3%
El Camino Real and Midtown -4.3% 505,156 527,819 9.0% 7.9% Town And Country Shopping Center -3.5% 196,947 204,088 3.5% 3.1% California Avenue 2.9% 170,493 165,757 3.0% 2.5%
TOTAL -16.0% 5,611,508 6,678,799 100.0% 100.0%
Palo Alto citywide QE 25Q2 & 24Q2 % CHANGE QoQ 2025Q2 QE 2024Q2 QE 25Q2 % OF TOTAL 24Q2 % OF TOTAL BUSINESS TO BUSINESS -23.0% 1,829,261 2,376,217 26.2% 32.3% GENERAL RETAIL 6.0% 2,096,092 1,976,918 30.0% 26.8%
FOOD PRODUCTS 7.4% 1,514,585 1,410,663 21.7% 19.2%
TRANSPORTATION -19.8% 1,031,422 1,285,629 14.8% 17.5%
MISCELLANEOUS 69.2% 365,817 216,188 5.2% 2.9%
CONSTRUCTION 48.5% 147,905 99,612 2.1% 1.4%
TOTAL -5.2% 6,985,082 7,365,226 100.0% 100.0%
Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 10 Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 11

FOOD PRODUCTS,

13.4% CHANGE, $110,743,

65.0% TOTAL

GENERAL RETAIL,
-12.0.% CHANGE, $20,131,

11.8% TOTAL
ALL OTHER, -12.3%
CHANGE, $39,619 , 23.2%
TOTAL
California Avenue 2025Q2 SALES TAX AMOUNTS
FOOD PRODUCTS, $97,674,

58.9% TOTAL

GENERAL RETAIL,
$22,889, 13.8% TOTAL
ALL OTHER, $45,194 ,

27.3% TOTAL
California Avenue 2024Q2 SALES TAX AMOUNTS

FOOD PRODUCTS,

3.3% CHANGE, $163,529 ,

32.4% TOTAL

GENERAL RETAIL,
-3.2% CHANGE,
$34,869 , 6.9%

ALL OTHER,
-8.0% CHANGE,
$306,702

60.7% TOTAL
El Camino Real and Midtown 2025Q2 SALES TAX AMOUNTS
FOOD PRODUCTS, $158,310 ,

30.0% TOTAL

GENERAL RETAIL,
$36,020 , 6.8% TOTAL
ALL OTHER, $333,489 ,

63.2% TOTAL
El Camino Real and Midtown 2024Q2 SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts
Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 11 Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 12

FOOD PRODUCTS,
-0.7% CHANGE, $111,452 ,

62.6% TOTAL

GENERAL RETAIL,
-1.7% CHANGE, $66,281 ,

37.2% TOTAL
ALL OTHER, 110.4% CHANGE, $263 , 0.1% TOTAL
T own And Country Shopping Center 2025Q1 SALES TAX AMOUNTS

FOOD PRODUCTS,
$112,234 ,

62.4% TOTAL

GENERAL RETAIL,
$67,403 ,

37.5% TOTAL
ALL OTHER, $125 , 0.1% TOTAL
T own And Country Shopping Center2024Q1 SALES TAX AMOUNTS

BUSINESS TO BUSINESS,

8.5% CHANGE,
$2,293,821 ,

37.0% TOTAL

GENERAL RETAIL,
-8.1% CHANGE, $1,523,243 ,

24.6% TOTAL

FOOD PRODUCTS,

5.9% CHANGE,
$1,171,805 ,

18.9% TOTAL

TRANSPORTATION,
-23.0% CHANGE, $1,088,246 ,

17.6% TOTAL
MISCELLANEOUS, 133.8% CHANGE,
$88,885 , 1.4% TOTAL

CONSTRUCTION,
-51.2% CHANGE, $29,056 ,

0.5% TOTAL
All Other Geos combined with Balance of Jurisdiction 2025Q1

SALES TAX AMOUNTS

BUSINESS TO BUSINESS,
$2,114,926 ,

33.1% TOTAL
GENERAL RETAIL, $1,657,831 ,

25.9% TOTAL

FOOD PRODUCTS,
$2,114,926 ,

17.3% TOTAL

TRANSPORTATION,
$1,414,019 ,

22.1% TOTAL

MISCELLANEOUS,
$38,011 , 0.6% TOTAL

CONSTRUCTION,
$59,518 , 0.9% TOTAL
All Other Geos combined with Balance of Jurisdiction 2024Q1

SALES TAX AMOUNTS

FOOD PRODUCTS,

6.3% CHANGE, $585,368

63.5% TOTAL

GENERAL RETAIL,

8.7% CHANGE,
$245,622 ,

26.6% TOTAL

BUSINESS TO BUSINESS,

7.5% CHANGE, $58,828 ,

6.4% TOTAL

MISCELLANEOUS,
214.9% CHANGE, $20,596 ,

2.2% TOTAL

CONSTRUCTION ,
-84.1% CHANGE, $7,735 ,

0.8% TOTAL

TRANSPORTATION ,
-6.5% CHANGE, $3,599 ,

0.4% TOTAL
Greater Downtown 2025Q SALES TAX AMOUNTS

FOOD PRODUCTS,
$550,647 , 61.8% TOTAL

GENERAL RETAIL,
$225,966 , 25.4% TOTAL

BUSINESS TO BUSINESS,
$54,743 , 6.1% TOTAL
MISCELLANEOUS, $6,540

0.7% TOTAL
CONSTRUCTION , $48,795

5.5% TOTAL TRANSPORTATION , $3,848

0.4% TOTAL
Greater Downtown 2024Q2 SALES TAX AMOUNTS

GENERAL RETAIL
$1,448,482

77.9% TOTAL
FOOD PRODUCTS, $170,015

9.1% TOTAL
ALL OTHER, $241,854

13.0% TOTAL
Stanford Shopping Center 2024Q2 SALES TAX AMOUNTS

GENERAL RETAIL,
-10.0% CHANGE, $1,303,080

85.8% TOTALFOOD PRODUCTS,

5.4% CHANGE
$160,820 ,

10.6% TOTAL
ALL OTHER, -77.5% CHANGE
$54,523 , 3.6% TOTAL
Stanford Shopping Center 2025Q2 SALES TAX AMOUNTS
City of Palo Alto Geo Area Pie Charts
Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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City of Palo Alto
neumo.com (800) 800-8181 Page 13 Balance of Jurisdiction,
-24.1%CHANGE,
$ 2,298,741 ,

41.0% TOTAL
Stanford Shopping Center,
-18.4% CHANGE, $1,518,424 ,

27.1% TOTAL
Greater Downtown,

3.5% CHANGE, $
921,748 , 16.4%
TOTAL
El Camino Real and Midtown,
-4.3% CHANGE, $505,156 ,

9.0% TOTAL
Town And Country Shopping Center,
-3.5% CHANGE, $196,947 , 3.5% TOTAL California Avenue, 2.9% CHANGE, $ 170,493 , 3.0% TOTAL
All Geo Area Totals 2025Q2 SALES TAX AMOUNTS
Balance of Jurisdiction, $
3,030,247 , 45.4%TOTAL
Stanford Shopping Center, $
1,860,351 , 27.9%TOTAL
Greater Downtown, $
890,538 , 13.3%TOTAL
El Camino Real and Midtown,
$ 527,819 , 7.9% TOTAL
Town And Country Shopping Center, $
204,088 , 3.1% TOTAL
California Avenue, $
165,757 , 2.5% TOTAL
All Geo Area Totals 2024Q2 SALES TAX AMOUNTS

BUSINESS TO BUSINESS,
-23.0% CHANGE, $1,829,261 ,

26.2% TOTAL

GENERAL RETAIL,

6.0% CHANGE, $2,096,092 ,

30.0% TOTAL

FOOD PRODUCTS,

7.4% CHANGE,
$1,514,585 ,

21.7% TOTAL

TRANSPORTATION,
-19.8% CHANGE,
$1,031,422 ,

14.8% TOTAL
MISCELLANEOUS, 69.2% CHANGE,
$365,817 , 5.2% TOTAL

CONSTRUCTION,

48.5% CHANGE, $147,905 ,

2.1% TOTAL
Palo Alto citywide 2025Q2 SALES TAX AMOUNTS

BUSINESS TO BUSINESS,
$2,376,217 ,

32.3% TOTAL
GENERAL RETAIL, $1,976,918 ,

26.8% TOTAL

FOOD PRODUCTS,
$1,410,663 ,

19.2% TOTAL

TRANSPORTATION,
$1,285,629 ,

17.5% TOTAL
MISCELLANEOUS, $216,188 ,

2.9% TOTAL
CONSTRUCTION, $99,612 ,

1.4% TOTAL
Palo Alto citywide 2024Q2 SALES TAX AMOUNTS
City of Palo Alto Geo Area & Citywide Pie Charts
Item B
Attachment A 2025 Q2 Sales Tax Digest
Summary

Item B: Staff Report
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