Palo Alto City Council
November 17, 2025

CITY COUNCIL
Regular Meeting
Monday, November 17, 2025
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended agenda items appear below in RED (Time Estimates Updated)

Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda.

The meeting will be broadcast on Cable TV Channel
26, live on YouTube
https://www.youtube.com/c/cityofpaloalto
, and streamed to Midpen Media
Center
https://midpenmedia.org
.

VIRTUAL PARTICIPATION

CLICK HERE TO JOIN

(
https://cityofpaloalto.zoom.us/j/362027238
)
Meeting ID: 362 027 238 Phone:1(669)900-6833

PUBLIC COMMENTS
General

Public

Comment

for

items

not

on

the

agenda

will

be

accepted

in

person

for

up

to

three
minutes

or

an

amount

of

time

determined

by

the

Chair.

General

public

comment

will

be

heard
for

30 minutes.

Additional

public

comments,

if

any,

will

be

heard

at

the

end

of

the

agenda.

Public

comments

for

agendized

items

will

be

accepted

both

in

person

and

via

Zoom

for

up

to
three

minutes

or

an

amount

of

time

determined

by

the

Chair.

Requests

to

speak

will

be

taken
until

5 minutes

after

the

staff’s

presentation

or

as

determined

by

the

Chair.

Written

public
comments

can

be

submitted

in

advance

to

[email protected]

and

will

be

provided

to
the

Council

and

available

for

inspection

on

the

City’s

website.

Please

clearly

indicate

which
agenda item you are referencing in your subject line.

PowerPoints,

videos,

or

other

media

to

be

presented

during

public

comment

are

accepted

only
by

email

to

[email protected]

at

least

24 hours

prior

to

the

meeting.

Once

received,

the

Clerk

will

have

them

shared

at

public

comment

for

the

specified

item.

To

uphold

strong
cybersecurity

management

practices,

USB’s

or

other

physical

electronic

storage

devices

are

not
accepted.

Signs

and

symbolic

materials

less

than

2 feet

by

3 feet

are

permitted

provided

that:

(1)

sticks,
posts,

poles

or

similar/other

type

of

handle

objects

are

strictly

prohibited;

(2)

the

items

do

not
create

a

facility,

fire,

or

safety

hazard;

and

(3)

persons

with

such

items

remain

seated

when
displaying

them

and

must

not

raise

the

items

above

shoulder

level,

obstruct

the

view

or

passage
of other attendees, or otherwise disturb the business of the meeting.

TIME ESTIMATES
Listed

times

are

estimates

only

and

are

subject

to

change

at

any

time,

including

while

the
meeting

is

in

progress.

The

Council

reserves

the

right

to

use

more

or

less

time

on

any

item,

to
change

the

order

of

items

and/or

to

continue

items

to

another

meeting.

Particular

items

may

be
heard

before

or

after

the

time

estimated

on

the

agenda.

This

may

occur

in

order

to

best
manage the time at a meeting or to adapt to the participation of the public.

1 November 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

CALL TO ORDER

CLOSED SESSION

1. CONFERENCE WITH CITY ATTORNEY - EXISTING LITIGATION
Swinerton v. City of Palo Alto (JAMS Reference #:5100003409) Authority: Government Code Section 54956.9(d)(1)
Item Removed Off Agenda

AGENDA CHANGES, ADDITIONS AND DELETIONS

PUBLIC COMMENT (5:35 - 6:05 PM)
Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (6:05 - 6:20 PM) Members of the public may not speak to the item(s).

CONSENT CALENDAR (6:20 - 6:25 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2. Approval of Minutes from November 3, 2025 Meeting

3. Climate Action and Sustainability Committee Recommendation to Approve Program Design Guidelines for Successor to Multi-family Electric Vehicle Charger Program; CEQA Status - Not a Project

4. Climate Action and Sustainability Committee Recommendation to Approve Program Design Guidelines for the Advanced Packaged HVAC Pilot Program; CEQA Status – Categorically Exempt Under CEQA Guidelines Section 15302 (Replacement of Existing Facilities)

5. Review and Approve the Williamson Act Contract Renewals Within Palo Alto City Limits (2025).

6. QUASI-JUDICIAL. 3200 Park/340 Portage: Final Map and Street Naming [25PLN-00104]:

Request for a Final Map to Merge and Subdivide 11 Existing Parcels Totaling Approximately 14.65 Acres To Create Five Resulting Parcels, Consistent with the Approved Development Agreement and to Name the New Private Streets and Rename Portage Avenue. Authorization for the City Manager to Take All Actions Necessary to Acquire a 3.25 Acre Parcel by Grant Deed. Zone District: The Site Has a Split Zoning

2 November 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

Designation of Five Planned Community Zone Districts Where Each Zone District Aligns with the Resulting Parcels (PC 5596, PC 5597, PC 5598, PC 5599, PC 5600). CEQA Status:

Council adopted resolution 10123 certifying the EIR for the project on September 12, 2023 (SCH # 2021120444).

7. Approval of Funding Agreements with Stanford University to Receive up to $600,000 and VTA for up to $456,000 to Partially Fund Palo Alto Link through June 2026, and Related Budget Amendments in the General Fund; CEQA status – not a project.

8. Approval of Contract No. C26196096 with Soudi Consultants, Inc. in an Amount Not-to- Exceed of $1,500,000 over a Period of Three Years to Provide As-Needed Electric Engineering Consulting Services for System Protection Related to Palo Alto’s Electric Sub- Transmission, Substations, and Distribution Systems, and Technical Training and Peer Review Services; CEQA Status: Exempt Under CEQA Guidelines Sections 15302, 15303, and 15183.

CITY MANAGER COMMENTS (6:25 - 6:40 PM)

BREAK (15 MINUTES)

ACTION ITEMS (Item 9: 6:55 - 8:25 PM, Item 10: 8:25 - 9:25 PM, Item 11: 9:25 - 9:45 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

9. 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.

10. 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.

11. 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

ADJOURNMENT

3 November 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action or discussion during this meeting’s agenda.

A.

Investment Activity Report for the First Quarter, Fiscal Year 2026. CEQA Status – Not a Project.

B.

Q2 CY 2025 Sales Tax Digest (April-June 2025)

OTHER INFORMATION
Standing Committee Meetings this week

Rail Committee November 18, 2025
Finance Committee November 18, 2025
Policy & Services Committee November 19, 2025
Climate Action & Sustainability Committee November 20, 2025 Public Comment Letters
Schedule of Meetings

AMENDED AGENDA ITEMS

1. CONFERENCE WITH CITY ATTORNEY - EXISTING LITIGATION
Swinerton v. City of Palo Alto (JAMS Reference #:5100003409) Authority: Government Code Section 54956.9(d)(1)
Item Removed Off Agenda

4 November 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

PUBLIC COMMENT INSTRUCTIONS
Members

of

the

Public

may

provide

public

comments

to

teleconference

meetings

via

email,
teleconference, or by phone.

1. Written public comments
may be submitted by email to
[email protected]
.

2. For

in

person

public

comments

please

complete

a

speaker

request

card

located

on

the
table

at

the

entrance

to

the

Council

Chambers

and

deliver

it

to

the

Clerk

prior

to
discussion of the item.

3. Spoken

public

comments

for

agendized

items

using

a

computer

or

smart

phone

will

be
accepted

through

the

teleconference

meeting.

To

address

the

Council,

click

on

the

link
below to access a Zoom-based meeting. Please read the following instructions carefully. ◦
You

may

download

the

Zoom

client

or

connect

to

the

meeting

in-

browser.

If

using
your

browser,

make

sure

you

are

using

a

current,

up-to-date

browser:

Chrome

30 ,
Firefox

27 ,

Microsoft

Edge

12 ,

Safari

7 .

Certain

functionality

may

be

disabled

in
older

browsers

including

Internet

Explorer.

Or

download

the

Zoom

application

onto
your

smart

phone

from

the

Apple

App

Store

or

Google

Play

Store

and

enter

in

the
Meeting ID below.
◦
You

may

be

asked

to

enter

an

email

address

and

name.

We

request

that

you
identify

yourself

by

name

as

this

will

be

visible

online

and

will

be

used

to

notify

you
that it is your turn to speak.
◦
When

you

wish

to

speak

on

an

Agenda

Item,

click

on

“raise

hand.”

The

Clerk

will
activate

and

unmute

speakers

in

turn.

Speakers

will

be

notified

shortly

before

they
are called to speak.
◦
When

called,

please

limit

your

remarks

to

the

time

limit

allotted.

A

timer

will

be
shown on the computer to help keep track of your comments.

4. Spoken

public

comments

for

agendized

items

using

a

phone

use

the

telephone

number
listed

below.

When

you

wish

to

speak

on

an

agenda

item

hit

*9

on

your

phone

so

we
know

that

you

wish

to

speak.

You

will

be

asked

to

provide

your

first

and

last

name

before
addressing

the

Council.

You

will

be

advised

how

long

you

have

to

speak.

When

called
please limit your remarks to the agenda item and time limit allotted.

CLICK HERE TO JOIN
Meeting ID: 362-027-238 Phone: 1-669-900-6833
Americans

with

Disability

Act

(ADA)

It

is

the

policy

of

the

City

of

Palo

Alto

to

offer

its

public
programs,

services

and

meetings

in

a

manner

that

is

readily

accessible

to

all.

Persons

with
disabilities

who

require

materials

in

an

appropriate

alternative

format

or

who

require

auxiliary
aids

to

access

City

meetings,

programs,

or

services

may

contact

the

City’s

ADA

Coordinator

at
(650)

329-2550

(voice)

or

by

emailing

[email protected]
.

Requests

for

assistance

or
accommodations

must

be

submitted

at

least

24 hours

in

advance

of

the

meeting,

program,

or
service.

California

Government

Code

§84308
,

commonly

referred

to

as

the

"Levine

Act,"

prohibits

an
elected

official

of

a

local

government

agency

from

participating

in

a

proceeding

involving

a
license,

permit,

or

other

entitlement

for

use

if

the

official

received

a

campaign

contribution
exceeding

$500

from

a

party

or

participant,

including

their

agents,

to

the

proceeding

within

the
last

12 months.

A

“license,

permit,

or

other

entitlement

for

use”

includes

most

land

use

and
planning

approvals

and

the

approval

of

contracts

that

are

not

subject

to

lowest

responsible

bid
procedures

and

have

a

value

over

$50,000.

A

“party”

is

a

person

who

files

an

application

for,

or
is

the

subject

of,

a

proceeding

involving

a

license,

permit,

or

other

entitlement

for

use.

A
“participant”

is

a

person

who

actively

supports

or

opposes

a

particular

decision

in

a

proceeding

5 November 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

involving

a

license,

permit,

or

other

entitlement

for

use,

and

has

a

financial

interest

in

the
decision.

The

Levine

Act

incorporates

the

definition

of

“financial

interest”

in

the

Political

Reform
Act,

which

encompasses

interests

in

business

entities,

real

property,

sources

of

income,

sources
of

gifts,

and

personal

finances

that

may

be

affected

by

the

Council’s

actions.

If

you

qualify

as

a
“party”

or

“participant”

to

a

proceeding,

and

you

have

made

a

campaign

contribution

to

a
Council

Member

exceeding

$500

made

within

the

last

12 months,

you

must

disclose

the
campaign contribution before making your comments.

6 November 17, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: November 17, 2025
Report #:2511-5415
TITLE
Approval of Minutes from November 3, 2025 Meeting

RECOMMENDATION
Staff recommends that the City Council review and approve the minutes.

ATTACHMENTS
Attachment A: November 3, 2025 Draft Action Minutes
APPROVED BY:

Mahealani Ah Yun, City Clerk
Item 2
Item 2 Staff Report

Item 2: Staff Report
Pg.
1 Packet Pg. 7 of 303

CITY COUNCIL

DRAFT ACTION MINUTES

Special Meeting
November 3, 2025
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 4:30 P.M.

Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone Lythcott-Haims arrived at 4:33 P.M.

Present Remotely: Veenker (Remote Teleconference Location: Arena Leme Hotel, Av.

Atlantica 324, Leme, Rio de Janeiro, RJ, 22010 -000, Brazil, Sala Pedro Leme (the Pedro Leme Room)

Absent:

Special Orders of the Day

1. Proclamation Expressing Appreciation to Fire Chief Geo Blackshire Upon His Retirement

NO ACTION

Agenda Changes, Additions and Deletions

Public Comment

Council Member Questions, Comments and Announcements

Action Items

2. Approval of three reports: the City of Palo Alto Community Wildfire Protection Plan, the Emergency Preparedness: Wildfire Audit Report by the City Auditor (as recommended by the Policy and Services Committee), and Adopt a Resolution Approving the City of Palo Alto Emergency Operations Plan. CEQA status: not a Project Item 2
Attachment A - November
3, 2025 Draft Action
Minutes

Item 2: Staff Report
Pg.
2 Packet Pg. 8 of 303

DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 11/03/2025
MOTION: Councilmember Stone moved, seconded by Councilmember Reckdahl to:

1. Adopt a resolution approving the City of Palo Alto Emergency Operations Plan (EOP),

2. Approve the City of Palo Alto Community Wildfire Protection Plan (CWPP) and authorize submittal to the County of Santa Clara, and

3. Approve the Emergency Preparedness: Wildfire Audit Report by the City Auditor (as recommended by the Policy & Services Committee).

MOTION PASSED: 7-0

Closed Session

3. CONFERENCE WITH CITY ATTORNEY-POTENTIAL LITIGATION
Subject: Initiation of litigation in one case
Authority: Potential Exposure to Litigation Under Government Code Section 54956.9(d)(4)
Number of potential cases: 1, as Plaintiff.

4. Public Employee Performance Evaluations
Authority: Cal. Gov. Code section 54957 (b)
Title: City Manager
MOTION: Councilmember Reckdahl moved, seconded by Councilmember Lythcott-Haims to go into Closed Session.

MOTION PASSED: 7-0
Council went into Closed Session at 6:38 P.M.

Council returned from Closed Session at 10:26 P.M.

Mayor Lauing announced no reportable action.

Consent Calendar
MOTION: Council member Reckdahl moved, seconded by Council member Lythcott-Haims to approve Agenda Item Numbers 5-10, 12-13 (Agenda Item Number 11 Removed Off Agenda).

MOTION PASSED: 6-0-1, Veenker Absent

5. Approval of Minutes from October 15, October 20, and October 22, 2025 Meetings Item 2
Attachment A - November
3, 2025 Draft Action
Minutes

Item 2: Staff Report
Pg.
3 Packet Pg. 9 of 303

DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 11/03/2025

6. FIRST READING: Adoption of an Ordinance Repealing Chapter 15.04 of the Palo Alto Municipal Code and Adopting a New Chapter 15.04, the California Fire Code (2025 Edition) With Local Amendments and Related Findings. CEQA Status: Exempt Pursuant to Section 15061 of the CEQA Guidelines.

7. Approval of Budget Amendments in the Local Housing Trust Fund, Residential Housing In-Lieu Fund, Residential Housing Impact Fee Fund, and Commercial Housing Impact Fee Fund to Reflect Prior City Council Funding Commitments for the Development of 3001 El Camino Real 100% Affordable Multi-Family Housing Project; CEQA Status: Not a Project.

8. Approval of Professional Services Contract Number C26194191 with TJC and Associates, Inc. in the Amount Not -to-Exceed $242,483 for Dahl & Park Reservoirs Structural Evaluation and Condition Assessment. CEQA Status – Exempt Under CEQA Guidelines Sections 15061(b)(2) and (b)(3).

9. Adoption of a Resolution Approving The Palo Alto Museum‘s Facility Naming Plan for the Roth Building; CEQA status – not a project.

10. Approval and Authorization for the City Manager or Designee to Execute Purchase Orders as Needed with the Okonite Company for Underground Cable for the Utility's Electric Underground System in an Annual Amount of $800,000 for a Total Not- to- Exceed Amount of $4,000,000 for a Period of Five (5) Years. CEQA Status: Not a Project.

11. Approval of Seven Items to Support the Automated Weather Observation System Project, AP -19000, at Palo Alto Airport: 1) Approval of Construction Contract No.

C26194026 with Vellutini Corporation DBA Royal Electric Company, in an Amount Not to Exceed $1,699,810; 2) Authorization for the City Manager or Designee to Negotiate Change Orders Up to a Not -to-Exceed Amount of $254,971; 3) Approval and Authorization for the City Manager or Designee to Execute Contract Amendment 3 to Contract No. C21178372C with C&S Engineers, Inc. for a Not -to-Exceed Amount of $464,613 and a Contract Extension Through December 31, 2026; 4) Authorization and Approval for the City Manager or Designee to Execute Contract Amendment 1 to Contract No. C21178372B with Burns & McDonnell for a Contract Extension Through December 31, 2026; 5) Approval and Authorization for the City Manager or Designee to Execute Contract Amendment 1 to Contract No. C211783782A with Centurion Planning & Design LLC to extend the contract term through December 31, 2027; 6) Adoption of a Resolution Authorizing the Submittal of Applications and Execution of Grant Agreements with the California Department of Transportation for Airport Improvement Program Matching Grants; and 7) Approval of a Budget Amendment in the Airport Enterprise Fund; CEQA Status - Exempt Under CEQA Guidelines Section 15302 ( Agenda Item Number 11 Removed Off Agenda)

12. Approve a Cost-Sharing Agreement with Stanford University Not-to-Exceed $878,200 for Design and Engineering Services for the Quarry Road Improvements and Transit Center Item 2
Attachment A - November
3, 2025 Draft Action
Minutes

Item 2: Staff Report
Pg.
4 Packet Pg. 10 of 303

DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 11/03/2025
Access Capital Project (PL -16000) and approve budget amendments in the General Fund, Capital Improvement Fund, and the Stanford University Medical Center (SUMC) Fund; CEQA status – statutorily exempt under Pub. Res. Code § 21080(b)(12).

13. Approval of the Acceptance of State of California Citizens Options for Public Safety (COPS) Funds of $211,715 and a Budget Amendment in the Supplemental Law Enforcement Services Fund for municipal police service expenses; CEQA status – not a project.

City Manager Comments
Ed Shikada, City Manager

Study Session

14. Establishing the City Council Annual Calendar of Meetings, Recesses, and City Council Events for the Calendar Year 2026; CEQA status – not a project NO ACTION – Item deferred to a date uncertain.

Adjournment: The meeting was adjourned at 10:32 P.M.

ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)

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

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

Item 2
Attachment A - November
3, 2025 Draft Action
Minutes

Item 2: Staff Report
Pg.
5 Packet Pg. 11 of 303

City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: November 17, 2025
Report #:2508-5087
TITLE
Climate Action and Sustainability Committee Recommendation to Approve Program Design Guidelines for Successor to Multi-family Electric Vehicle Charger Program; CEQA Status - Not a Project

RECOMMENDATION
The Climate Action and Sustainability Committee and staff recommend that the City Council approve the Program Design Guidelines for Successor to Multi-family Electric Vehicle Charger Program to guide development of a revised multi-family electric vehicle (EV) charger program in the coming months.

EXECUTIVE SUMMARY
The City has had success expanding EV access for multi-family buildings with its current multifamily EV program, but this program’s success has required substantial incentive money, meaning it is not financially scalable. The City must experiment with new program financial models to provide service more broadly and at a greater scale. Gathering input from several multi-family EV charger installers and operators, staff developed the attached program design guidelines (Attachment A). The guidelines focus on financial models aimed at scaling installations communitywide and implementation strategies aimed at serving different types of multi-family buildings with different levels of EV adoption utilizing a variety of EV charging technologies. They focus on deploying shared charging at low levels of adoption and individual chargers where demand supports them. They specify grid-friendly installations and inclusion of active and shared transportation facilities where appropriate. And they highlight the need for complementary programming to help drive adoption of e-mobility and use of active and shared transportation.

Since 2017, the City has run an EV Charger Rebate Program providing incentives and technical assistance to help multi-family property owners and condominium associations install EV charging. This program has to date resulted in 325 shared EV chargers across 26 multifamily residential buildings representing a total of 1,324 units, or about 12.4% of the multi-family units Item 3
Item 3 Staff Report

Item 3: Staff Report
Pg.
1 Packet Pg. 12 of 303

in Palo Alto. However, to reach the community’s climate goals, multi-family residents will need significantly greater EV charger access. The EV Charger Needs Assessment study done in support of the E-Mobility Strategic Roadmap1 found that providing EV charger access at home is more cost-effective than providing public charging to serve that same need.

The Climate Action and Sustainability Committee (CASC) reviewed these guidelines on September 19, 2025 and unanimously recommended them for approval.2

BACKGROUND
EV adoption is critical to achieving the community’s climate goals. The emissions reduction pathway evaluated in the Sustainability and Climate Action Plan (S/CAP) Impact Analysis3 requires that 55% of residents adopt EVs, including 33% of multi-family residents. As of the end of 2024, EVs accounted for 19.3% of all vehicle registrations in Palo Alto; only 15.7% of all EVs in Palo Alto were registered to multifamily addresses, while 79.3% were registered to single family homes. EV charging access has been one of the major barriers to multi-family EV adoption as multifamily residents have little to no direct ability to install their own charging units and multifamily property owners/managers/HOAs often are dealing with competing priorities, may lack subject matter expertise, and face complex decision-making processes, challenging infrastructure installations, high out-of-pocket costs, and electric service capacity constraints when considering more comprehensive EV charging infrastructure projects.

ANALYSIS
Staff drew on its experience with the current EV program and interviews with a number of electrical contractors (e.g. EV installers) and electric vehicle service providers (EVSPs) (e.g. EV operators) detailed in the Stakeholder Engagement section below, to develop the attached Design Guidelines for Successor to Current Muti-Family Electric Vehicle Charger Program (Program Design Guidelines). Staff has learned from its existing program the importance of the convenience of providing charging at individual parking spaces rather than shared guest spaces and the need for technical assistance and facilitation. Several additional topics emerged from discussions with EVSPs as important in designing the next multi-family EV program: financing, technology and design considerations, and providing flexible solutions for different types of 1 City Council, August 18, 2025, Staff and the Climate Action and Sustainability Committee Recommendation to Accept the E-Mobility Strategic Roadmap, Attachment B,
https://cityofpaloalto.primegov.com/meetings/ItemWithTe mplateType?id=8714&meetingTemplateType=2&compiledMeetingDocumentId=15432 2 Climate Action and Sustainability Committee, September 19, 2025, Staff Report 2507-5023, Review and Discussio n of Design Guidelines for Successor to Current Multi-family Electric Vehicle Charger Program, https://cityofpaloalto .primegov.com/meetings/ItemWithTemplateType?id=9234&meetingTemplateType=2&compiledMeetingDocumen tId=16878
3 AECOM Palo Alto Action Impact Memo, June 7, 2021, page 10, https://www.paloalto.gov/files/assets/public/v/2/ sustainability/reports/aecom-palo-alto-action-impactmemo_final_rev-210607.pdf Item 3
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buildings and levels of EV adoption. These are discussed in more detail in the CASC report, but in summary:
Financing: The current model for EV charger development, providing incentives to cover the majority of the cost, is not scalable to the entire community. These design guidelines envision a system of financing where the cost of repaying the original investment comes from charges to drivers and landlords while ensuring competitive charging rates. Technology and system design: Staff’s discussions with EV charging installers revealed a range of strategies for installing chargers, and these design guidelines envision a flexible program that can accommodate a wide range of strategies. Staff also received feedback on various aspects of the City’s permitting and interconnection requirements it will consider in designing the program.
Risk Management: The program design guidelines envision a program that uses a range of different tools to deliver charging appropriate to the density of EV owners nearby, ranging from mobility hubs and on-street charging to shared on-site chargers to chargers in individual assigned spaces. Individual space installations would only be done when there are enough drivers in a building to make it worthwhile to install all the electrical upgrades needed for EV chargers in individual spaces. Complementary Programming and Grid Impacts: The design guidelines address grid impacts by incorporating load management systems and address risk by including outreach to EV drivers in the area to ensure chargers are used once installed.

FISCAL/RESOURCE IMPACT
Funding has already been approved in the FY 2026 budget for a revised multi-family EV charger program, using $3.1 million from Low Carbon Fuel Standard (LCFS) funds in the Utilities Department Operating Budget. Staff intends to launch a program using this funding and based on these Program Design Guidelines. Staff’s preliminary estimates show that the FY 2026 approved LCFS funding could be adequate to support at least 200 to 500 chargers, depending on the program structure. In designing the program, staff may determine that additional Council approvals are needed, such as for a contract with a financing partner or other service provider, for a budget amendment, or for amendments to the City’s planned use of LCFS funds.

Staff will, at minimum, provide an informational report to Council on program design prior to program launch.

STAKEHOLDER ENGAGEMENT
Staff solicited feedback from electrical contractors and EVSPs that have completed EV infrastructure installations in Palo Alto and are particularly interested in doing more work in the multi-family residential space in the future. Staff spoke with nine different companies focused on EV charger installations, operations, and maintenance. Feedback is described in detail in the Item 3
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CASC staff report but included extensive discussions on financing, permitting and interconnection, risk management, and outreach.

The CASC reviewed these design guidelines on September 19, 20257 and unanimously recommended them for approval. Discussion and questions focused on public on-street charging, how financing for this program compares to other financing programs available in California, streamlining permitting and interconnection, funding sources, and transformer upgrade fees.

The Climate Action and Sustainability Working Group also discussed these design guidelines on September 17, 2025. Two members were in attendance, one of whom was a Utilities Advisory Commissioner. They were generally supportive of the proposal, especially focusing on financing over incentives, the outreach to drivers in complexes with EV charging, and the concept of including e-bike charging and shared vehicles as features of the program. The pros and cons of managed or low power charging and the fire risks of batteries were also discussed.

ENVIRONMENTAL REVIEW
Committee action on this item is not a project as defined by the California Environmental Quality Act (CEQA) because approval of program design guidelines is a is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).

Future work to implement a potential program is within the scope of the EV Strategic Plan (now E-Mobility Strategic Roadmap, adopted by Council on August 18, 2025, Staff Report #2507- 4943), whose environmental impacts were analyzed as part of the Sustainability and Climate Action Plan (S/CAP) Addendum to the Comprehensive Plan Environmental Impact Report. On June 5, 2023 (Staff Report #2303-1158), Council certified the Addendum, which found that S/CAP programs would not result in any significant or substantially more severe effects beyond what was previously analyzed in the Comprehensive Plan EIR.

ATTACHMENTS
Attachment A: Design Guidelines for Successor to Multi-family Electric Vehicle Charger Program APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
7 Climate Action and Sustainability Committee, September 19, 2025, Staff Report 2507-5023, Review and Discussio n of Design Guidelines for Successor to Current Multi-family Electric Vehicle Charger Program, https://cityofpaloalto .primegov.com/meetings/ItemWithTemplateType?id=9234&meetingTemplateType=2&compiledMeetingDocumen tId=16878
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Design Guidelines for
Successor to Current Multi-Family Electric Vehicle Charger Program These design guidelines are meant to guide development of an electric vehicle (EV) charging program designed to meet current EV charging demands, anticipate market- and policy-driven charging trends, and inspire future electric charging demand specifically for the multi-family customer segment.

Program goals and scope
The program should:

1. Enable convenient, affordable, and accessible EV charging for multi-family residents

2. Pilot financial designs that can be deployed community-wide with little or no additional funding from the City

3. Enable participation by a wide range of EV infrastructure providers

4. Pilot options for participation by all feasible multi-family property sizes and ownership structures with varying levels of existing EV adoption
Program financial design
To ensure the program is cost-effective and scalable:

1. It should provide financing (rather than up-front incentives) such as charging as a service (CaaS) that aims to reduce the impact to a property owner’s balance sheet.

2. Subsidies should be temporary, and ideally should be repaid over time. Only designated affordable housing should receive subsidies not meant to be repaid.

3. The beneficiaries of the investment – e.g. drivers and landlords – should be responsible for the repayment financing and temporary subsidies, as:
a. Drivers benefit by saving on fueling and car maintenance when buying an EV b. Landlords benefit from higher rents once EV charging becomes an amenity

4. Where a landlord or homeowner’s association (HOA) pays a share of up-front project costs, the program should enable that up-front investment to be repaid in a reasonable amount of time.

5. Charging rates resulting from the program should remain attractive to drivers.

6. Charging facilities should only be built if existing and anticipated future demand will support them.

Program technical design
To ensure the program is accessible to a wide range of infrastructure providers serving a range of needs in the multi-family space:

1. Develop program solutions compatible with EV chargers either 1) using separate meters and/or separate utility services, or 2) installed on existing house or unit meters.

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Guidelines for Successor to
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2. Upgrades to electrical infrastructure should be designed to accommodate or be easily upgraded to accommodate future on-site vehicle and building electrification, using load management and shared infrastructure to minimize the need for service upgrades.

3. The program should install facilities appropriate to the site’s EV adoption levels while enabling future expansion by using strategies such as:
a. Installing chargers in individual spaces at a multi-family property when EV adoption is high enough to support cost recovery of the investment b. Installing shared chargers at a multi-family property when EV adoption is not high enough to support installation of chargers in individual spaces c. Deploying nearby public charging infrastructure (e.g. neighborhood EV charging hubs or on-street charging) when EV adoption within nearby properties does not yet support an on-site installation or when an on-site installation is technically or financially infeasible
Complementary Infrastructure
The program should involve deployment of infrastructure for alternative transportation (e.g. shared and micro mobility) in conjunction with EV chargers. Examples include:

1. Exterior e-bike and e-scooter charging infrastructure

2. Secure facilities for bicycles, e-bikes, and other small vehicles (interior or exterior)

3. Shared e-car, e-bike / bike, e-scooter / scooter, or other shared micromobility options Complementary Programming
The program should involve outreach, engagement, and other customer-facing efforts that support the transition to e-mobility. Examples include:

1. EV advisor service / project management support to assist with technical equipment specifications, navigating City processes, connecting with contractors/EV service providers, and identifying/leveraging stackable funding opportunities

2. Property Owner / Asset Manager / HOA education and outreach campaigns, including multi-family focused EV charging workshops

3. EV and e-bike community events/showcases and educational workshops

4. Efforts that facilitate e-mobility adoption amongst income-qualified customers

5. EV-aligned building/zoning code updates and permit streamlining Electric Grid Compatibility
The program should install facilities that minimize impact on the electric grid. Potential strategies include:

1. Low-power EV charging

2. Peak load and/or dynamic load management

3. EV demand response (via load management or vehicle to grid) Item 3
Attachment A - Design
Guidelines for Successor to
Multi-family Electric Vehicle
Charger Program

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: November 17, 2025
Report #:2508-5088
TITLE
Climate Action and Sustainability Committee Recommendation to Approve Program Design Guidelines for the Advanced Packaged HVAC Pilot Program; CEQA Status – Categorically Exempt Under CEQA Guidelines Section 15302 (Replacement of Existing Facilities)

RECOMMENDATION
The Climate Action and Sustainability Committee and staff recommend the City Council approve the Program Design Guidelines for an Advanced Packaged HVAC Pilot Program to guide development of a large-scale program to help non-residential community members replace packaged HVAC units.

EXECUTIVE SUMMARY
As part of the City’s Sustainability and Climate Action Plan (S/CAP), staff launched a pilot program in summer 2024 to encourage commercial customers to replace gas-fired packaged HVAC units with electric heat pump HVAC systems.1 To date, 14 customers have enrolled in the pilot, six projects have secured permits, and three projects have been completed.

Preliminary results confirm that heat pump replacements are technically feasible and ranged from an 18% savings in up-front cost to a 40% additional cost compared to like-for-like gas system replacements. When there is additional cost, voluntary adoption can be difficult without financing options. Early projects also highlighted permitting challenges that add to overall project costs and complexity. While these requirements are necessary for safety and compliance, they can discourage voluntary adoption. A study of non-residential building equipment performed by a City consultant indicated heat pump replacements may result in bill savings, but this is yet to be confirmed by the projects in progress. 1https://www.paloalto.gov/Departments/Utilities/Electrification/Business-Electrification/Commercial-Heat- PumpHVAC-Program
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Building on these lessons, staff proposes an Advanced Commercial Heat Pump HVAC (HPHVAC) Pilot Program. The goal of the program would be to replace direct incentives with scalable financing options while providing optional technical assistance. The program is designed to reduce barriers to adoption while maintaining compliance with all applicable permitting requirements.

The Climate Action and Sustainability Committee (CASC) reviewed these design guidelines at its October 17, 2025 meeting and unanimously recommended approval. $1.1 million was approved in the Utilities Department budget in the FY 2026 budget for the Advanced Commercial HPHVAC Pilot Program, funded by Gas Cap and Trade funds.

BACKGROUND
The City’s S/CAP identifies building electrification as a primary strategy for achieving community-wide greenhouse gas (GHG) reductions. Commercial buildings account for 16% of the City’s total natural gas use, with packaged HVAC units representing about 70% of commercial space-heating systems.

In summer 2024, staff introduced a pilot program to incentivize early adoption of heat pump HVAC systems funded by up to $1.2 million in Public Benefits (Research and Development) funding. Incentives were temporarily increased for the first 10 complete projects. The program was designed to generate cost and performance data, inform customer decision-making, and identify barriers to broader adoption.

Results to date show:
•14 customers enrolled in the pilot
•6 projects permitted
•3 projects completed
While technically successful, the pilot demonstrated that incremental costs remain a major adoption barrier for property owners. On average, cost estimates for electric heat pump HVAC systems were approximately 22% higher than comparable gas system quotes, ranging from 18% below to 40% higher. Among the three completed projects, the average increase in final cost relative to the initial estimate for electric heat pump HVAC installations was $34,024, and the average project cost was $244,751. The average price per ton for the installed heat pump HVAC units was $9,819.

Contractor and customer feedback further indicated that, outside of the program, many customers replacing gas packaged HVAC units do not obtain permits.

Permitting requirements identified through the pilot included:
•Structural engineering studies on roof integrity for rooftop units. •Sound studies to demonstrate compliance with noise standards.

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•Visual screening/line-of-sight reviews.
•Fire Department permits, including hazardous materials documentation and equipment labeling.

Because participation in the pilot required securing all necessary permits, this added an average of $3,118 in permit costs plus a variable amount of cost in consulting and contractor fees to comply, sometimes in the tens of thousands of dollars. Since only three participants in the program have completed projects so far, staff has limited data points. One community member was quoted over $10,000 to complete a sound study, while another completed the study for a negligible increase to their overall project quote. One community member incurred a $5,000 cost for hazardous materials services. Another was looking at potential increases of over $10,000 related to roof structural calculations related to the HVAC roof attachment method.

Staff is continuing to gather information on how these additional consulting and engineering services needs increase project costs, and ways to help community members comply at lower cost. These requirements are necessary to ensure safety, compliance, and community standards, but the additional project costs and time can sometimes create uncertainty and frustration for customers. Two customers withdrew from the program due to the cost and permitting requirements, despite the enhanced rebates.

ANALYSIS
Staff drew on its experience with the current HVAC enhanced rebate program,3 research done as part of the S/CAP Funding Study and corresponding Non-Residential Building Sector Study (which are not yet final), and some interviews (participants, contractors, a financing provider, and a consultant) as detailed in the Stakeholder Engagement section below, to develop the Program Design Guidelines for the Advanced Commercial Heat Pump Heating, Ventilation, and Cooling (HVAC) Pilot Program (Program Design Guidelines) in Attachment A. Staff has learned from its existing program how to navigate the permitting process and the associated costs. The studies gave staff indications that packaged space heating electrification should provide long- term utility bill savings. In the participant and business partner interviews, staff found potential interest in financing, particularly on-bill financing, and especially if it enabled the cost of improvements that benefit tenants to be passed through to them based on the bill savings they would realize.

Customers consistently noted that they would not have been able to pursue these projects without the boosted incentive, underscoring the importance of strong financial support for large-scale upgrades. They noted the short payback period needed for a property investor to do these projects. They also appreciated the technical guidance provided by the third-party electrification engineering consultant, Prospect Silicon Valley, highlighting the value of ongoing 3 https://www.paloalto.gov/Departments/Utilities/Electrification/Business-Electrification/Commercial-Heat- PumpHVAC-Program
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technical assistance for complex projects such as heat pump HVAC. In addition, customers valued the hands-on support and direct communication offered by Utilities and Planning and Development Services staff on permitting matters, which further facilitated successful project completion.

The Program Design Guidelines generally address the following topics:

Financing and Incentives
One of the main challenges in the non-residential sector is the short payback period (2-4 years) required by most private investors before making a building or energy investment. Based on staff modeling using information from the S/CAP Funding Study and Non-Residential Building Sector Study (not yet final), the payback period for electrification of packaged HVAC units that cost 10% to 15% more than gas units would be 12 to 17 years. This means that even though these projects potentially provide a net benefit, they will not get done without some assistance.

To date, staff has primarily used incentives. Incentives work if they are high enough, but high incentives are not a scalable solution for electrifying all of Palo Alto’s packaged HVAC units. In an Advanced HVAC Pilot Program staff would explore other approaches, primarily financing with on-bill repayment. Staff is in talks with a potential provider and has built the functionality in its billing system for on-bill repayment. Building owners prefer on-bill repayment, which they treat as an operating expense. They may be more willing to engage with this type of financing than traditional financing.

Building owners also hesitate to make significant energy investments that save money for their tenants rather than themselves. Staff is exploring a potential tool called “electrification as a service” to address this. Modeled on “efficiency as a service” programs some energy efficiency companies run, an “electrification as a service” feature would involve the customer repaying some or all of the financing provided by the City or a 3rd party with a charge that does not exceed their utility bill savings. This may enable the placement of the charge on commercial tenant utility bills, with the right agreements in place, enabling the recovery of some of the costs for energy improvements from tenants, who experience utility bill reductions as a result.

Funding sources and program structure are still being explored, though as noted in the Fiscal Impact section, some money is set aside for a program like this from Gas Cap and Trade revenues in the FY 2026 budget.

These financing and “as a service” features, if feasible, may lead to more financially efficient, attractive commercial energy programs, that minimize the use of incentive funding.

Technical Assistance
The technical assistance envisioned for the Advanced Commercial HPHVAC Pilot Program is similar to that provided in the existing HP HVAC Pilot Program. These services included:

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•Evaluating electrification project designs, including conducting preliminary reviews of project designs for Heat Pump HVAC installations and performing limited design checks on equipment, engineering plans, and project specifications. •Providing electrification technical guidance, including offering non-biased, expert technical advice to CPAU commercial customers and validating equipment selections to ensure projects meet technical standards.
•Providing electrification cost guidance, including performing savings calculations and general project cost evaluations, assessing financial feasibility, and providing cost insights for customer projects.

The consultant, Prospect Silicon Valley, provided electrification technical advisory services to three commercial customers to support their Heat Pump HVAC projects. Without the consultant’s guidance, these projects would likely have been delayed for years, potentially causing the customers to miss rebate opportunities or drop out of the program entirely.

To support the successful adoption of commercial Heat Pump HVAC projects, there is also a clear interest in some form of assistance finding qualified contractors. The guidelines envision some form of complementary contractor list, and possibly even providing services to contractors, such as the ability to use a City financing program or a contact for trying to understand common permitting pitfalls.

Permit Assistance and Streamlining
Early projects in the current enhanced rebate HVAC pilot have highlighted several permitting- related challenges that informed the design guidelines and will inform program design:
•Many gas-for-gas replacements proceed without permits, avoiding compliance costs that are unavoidable for heat pump projects participating in a City program. •Noise reports are required for all projects (per PAMC 18.42.190(B)(iii)). Equipment must be no louder than 15 dB above local ambient noise levels at 25 feet. Hiring an acoustical engineer can cost thousands of dollars and adds time to the overall project timeline. •Structural engineering analysis is required for all rooftop packaged HVAC projects. These studies incur a cost and sometimes trigger additional work that needs to be completed for safety reasons.
•Screening requirements add cost, and may result in additional roofing loads, which could then incur the cost of a roof structural analysis. If a roof upgrade is required, that can be prohibitively costly and can stop a project.
•Fire Department requirements related to HVAC and hazardous materials permits, equipment labeling, and integration with fire alarm systems need more communication to applicants up front.

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Planning and Development Services and the Fire Department have been active in helping the Climate Action Team understand permitting requirements and discussing potential approaches to ease compliance costs and workload.

FISCAL/RESOURCE IMPACT
$1.1 million was approved in the Utilities Department budget in the FY 2026 budget5 for the Advanced Commercial HPHVAC Pilot Program, funded by Gas Cap and Trade revenues (Gas Utility Funds), which will support incentives if needed, outreach, technical assistance, and 3rd party program operation. Launch and operation of the program is expected to require approximately 0.75 FTE, which will be performed by existing staff and will include program design and operation, outreach, customer care, and establishment and operation of a financing and on-bill repayment program if implemented. Staff will continue to explore opportunities to leverage State and Federal funds if available.

STAKEHOLDER ENGAGEMENT
Staff engaged with pilot program participants, HVAC contractors, property managers, and lenders to inform program design. Key feedback highlighted the need for financing options, accessible technical expertise, and contractor familiarity with permitting processes. Detailed notes from the program are included in Attachment B.

Staff reviewed the guidelines with the Climate Action Working Group on October 15, 2025.

There were many questions about the current pilot program, including questions about feedback the City has received on permitting, the reasons for cost disparities between electric and gas units, impact on operational expenses, and the drivers for owner action. There was a suggestion that outreach on what types of permits are required for replacements might lead to higher levels of compliance with permit requirements.

The CASC reviewed these design guidelines at its October 17, 2025 meeting and unanimously recommended approval. There were questions about the current pilot program, the permitting process and costs of compliance, whether financing would help with landlord-tenant split incentive issues, and details of the guidelines, such as how staff would do outreach and how staff would engage with making permit compliance easier. Committee members recommended learning from other agencies and looking for creative outreach opportunities, such as engaging business groups.

Further stakeholder engagement will be needed as staff develops more detailed program designs.

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ENVIRONMENTAL REVIEW
The proposed program is categorically exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15302 (Replacement of Existing Facilities). Replacement of existing HVAC equipment with more efficient units constitutes a minor alteration to existing facilities and is consistent with the S/CAP adopted in June 20237 and Comprehensive Plan adopted in November 2017.8

ATTACHMENTS
Attachment A: Design Guidelines for Advanced Commercial Heat Pump HVAC Program Attachment B: Summary of Results To-Date from HVAC Enhanced Rebate Pilot Program APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
7 https://www.paloalto.gov/City-Hall/Sustainability/SCAP 8 https://www.paloalto.gov/Departments/Planning-Development-Services/Housing-Policies- Projects/2030Comprehensive-Plan
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Program Design Guidelines for Advanced Heating, Ventilation, and Cooling (HVAC) Pilot Program
These design guidelines are meant to guide development of a financially accessible Advanced Packaged HVAC Pilot Program for non-residential customers.

Program goals and scope
The program should:

1. Ease electrification of non-residential packaged HVAC units

2. Pilot financial designs that can be deployed community-wide with little or no additional funding from the City

3. Enable participation by a wide range of contractors, building types, and landlord-tenant arrangements for payment of energy bills

4. Address landlord/tenant split incentives while being economically attractive to both landlords and tenants
Program financial design
To ensure the program is cost-effective, legally viable, and scalable:

1. It should provide financing rather than up-front incentives, and ideally financing that will encumber a property owner’s balance sheet as little as is feasible, such as on-bill repayment out of utility bill savings

2. Financial incentives may be offered only if legally appropriate and available, and are intended to be offered on a temporary basis.

3. Repayment of any financing offered should come from those who benefit, which could include both tenants and landlords

4. Should not increase tenant utility bills

5. Should be accessible to a range of contractors

6. Should incorporate risk management measures to control risks to the City Program technical design
To keep program costs lower and easier for participants, staff should explore:

1. Streamlining of permit processes

2. Technical and permitting assistance for participants

3. Contractor training on program rules and operation

4. A courtesy contractor list
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Guidelines for Advanced
Commercial Heat Pump
HVAC Program

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Commercial Heat Pump HVAC Program Update
September 16, 2025

Current Enrollment
As of September 16, 2025, a total of 14 customers applied for the Commercial Heat Pump HVAC Pilot program. Applicants have primarily learned about the pilot through the Business Electrification Technical Assistance Program, the Business Customer Rebate Program website, and the Commercial and Industrial Energy Efficiency Program.

Customers become eligible for rebate approval only after submitting all required documentation and securing an approved permit. Of the 14 applicants, seven have initiated the permitting process with the City, and six have received their permits. One customer has received their permit but has not submitted project cost estimates, resulting in only five customers being officially approved at this stage.

To date, three customers have completed installations and received program rebates. Detailed project information for these installations is provided in a subsequent section of this report. Two participants have unenrolled from the program. In one case, a customer required an emergency replacement and proceeded with equipment available through their contractor, which did not meet the program’s efficiency requirements. In the second case, permitting requirements significantly increased project costs, approximately doubling the original estimate, leading the customer to withdraw. Table 1 provides a summary of the status and progression of all pilot participants.

Table 1. Current Program Participation for the Commercial Heat Pump HVAC Program

Cost Analysis
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Results To-Date from HVAC
Enhanced Rebate Pilot
Program

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The tables below address the current cost comparisons between project estimates, project costs, and rebate amounts. Table 2 compares heat pump HVAC quotes and gas quotes received from 10 customers against project cost estimates developed by Peninsula Clean Energy (PCE) in its 2021 commercial electrification analysis. PCE’s estimates were based on average equipment and labor costs at the time, calculated per ton across three equipment size categories: less than 5 tons, 5–10 tons, and 15–20 tons.

On average, heat pump HVAC project estimates were 21.8% higher than gas quotes.

Table 2. Heat Pump HVAC Project Estimate Comparison Between Gas, Electric Heat Pump, and Peninsula Clean Energy Predicted Costs

Project 2 High Quotes Explained:
• $6,980 out of the total cost is related to a heat pump water heater, meaning part of the total project estimate was associated with another project this customer plans to do simultaneously. • The address has a split system (one condenser and four heating units spread through the building) serving the downstairs and it requires more ducting and equipment. o The upstairs units use existing ducting, which is lower cost, because they are replacing a gas rooftop unit (RTU) with a heat pump packaged unit
Project 5 Quotes Explained:

This customer’s total project cost is significantly higher than usual for a project like this. This is because this customer redid their ducting and piping, which also resulted in added carpentry and painting costs.

They also had additional electrical work done.
• This is the percentage split cost breakdown of the $541,000 project total. o Carpentry, painting and electrical 21%
o Equipment (condensers outdoor units and fan coils with new stats) 13% Item 4
Attachment B - Summary of
Results To-Date from HVAC
Enhanced Rebate Pilot
Program

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o Piping (drain pans, condensate piping and hard copper piping for long runs) Labor and material 28%
o HVAC & Refrigerant (line sets, refrigerant and duct connections, including new plenums) Labor and material 37%
Project 8 Low Gas Quote Explained:

This participant did not address the cost differential in his documentation. The contractor who provided him with these quotes has been unresponsive, so he is now going to reach out to a new potential contractor to receive new quotes.

Project 10 Quotes Explained:

This participant’s higher heat pump HVAC quote reflects several factors: higher equipment and material costs compared to the gas alternative, additional work such as line setting, conduit, and breaker installation, and higher anticipated permitting expenses. In contrast, the gas quote did not account for replacement of the AC units. If those costs had been included, the “like-for-like” comparison would have been closer.

Completed Project Details
As of September 16, 2025, three customers have fully completed their projects. Table 3-5 highlights the cost comparison between these customer’s initial quote, final project cost, and rebate paid.

Table 3. Dollar Comparison Between Project #1’s Quote, Project Cost, and Rebate

Please note that this customer’s total project cost is less than the original price estimate received in the quote because the customer negotiated a lower cost when hiring the contractor to work on multiple projects at once. The City’s rebate covered 96% of this customer’s project cost.

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Program

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Table 4. Dollar Comparison Between Project #5’s Quote, Project Cost, and Rebate

This customer’s costs increased from the original quote due to added work by the contractor and permitting costs, which were $1,268.90. The City’s rebate covered 17% of this customer’s project cost.

Table 5. Dollar Comparison Between Project #7’s Quote, Project Cost, and Rebate

This customer’s total project cost was higher due to the addition of a phase 2 to their project and the $1,437.84 permit fee. This addition came after the quotes were processed and phase 1 was completed.

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Results To-Date from HVAC
Enhanced Rebate Pilot
Program

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The reason for their decision to replace another unit was due to the increased rebates offered by CPAU and the ease of completing phase 1. Due to the added unit on this project, their rebate came out to be $43,750, which covered 67% of their total project cost.

Installation Location for HP HVAC Equipment
At this time, we do not have complete data on the installation locations of the heat pump HVAC equipment for all applicants. Among those who have submitted site plans or permit information, four projects consist of rooftop HVAC units. Due to the structure of the rooftop, three projects are ground- level installations. The installation location for the remaining 6 active participants is currently unknown.

It is also possible that some customers may install equipment in both rooftop and ground locations, but this has not been confirmed. Table 6 below summarizes the number of customers in each category.

Table 6. Locations of Installed Heat Pump HVAC Equipment

Summary of Permitting Comments
As of September 15, 2025, 7 customers have applied for the commercial heat pump HVAC permit through the City’s Planning and Development Services (PDS) Department. Here is a consolidated list of corrective comments provided to the customers and their contractors from the City’s PDS Department.

Many customers who participated in the pilot program received similar feedback on their permit submissions. Learning about these recurring comments help us understand where there are gaps in permitting instructions and opportunities on where we can smooth out the process for customers.

When submitting plans, PDS wants all details to be accurate and documentation to be complete, including manufacturer’s specs that match the project plan details, showing where equipment and electrical panels will be located, and clearly labeling the mechanical and electrical scope. Plans must show property lines and setbacks. For rooftop equipment, engineers need to confirm the roof can Item 4
Attachment B - Summary of
Results To-Date from HVAC
Enhanced Rebate Pilot
Program

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handle the added weight, show how it will be anchored, and provide details on ductwork, drains, and demolition. Wood blocks (sleepers) aren’t allowed unless fully roofed over.

The City also checks for noise and safety. Equipment must meet local noise limits, and an acoustical engineer’s report or post-installation testing is required. Fire safety permits are needed for both refrigerant removal and installation, and the Fire Department requires notes on the plans and how the HVAC system connects with the fire system in the building. A special inspection form must also be submitted, listing contractors, agencies, and required safety checks. Overall, the City’s goal is to make sure projects are well-documented, safe, and considerate of the community.

Based on the permitting requirements outlined above, some customers were able to provide details on the additional costs some of these requirements added to their projects. For the structural analysis, one customer’s initial cost for this study was around $25,000. There is a possibility there will be an added cost of $12,000-$15,000 if the City’s PDS requires additional analysis for the curbs. For the HazMat permitting, one customer was quoted $5,000. This is not confirmed though, since the customer hasn’t completed this portion of the permit yet. There has been mixed feedback on the added cost for the sound engineering analysis. One customer was told the cost would be “insignificant.” On the other hand, another customer was quoted $10,000-$12,000. It has been challenging to pinpoint the exact cost of each study because most engineers group the costs in the final invoice. We are waiting for more feedback on these items as projects move forward.

Item 4
Attachment B - Summary of
Results To-Date from HVAC
Enhanced Rebate Pilot
Program

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: November 17, 2025
Report #:2507-4985
TITLE
Review and Approve the Williamson Act Contract Renewals Within Palo Alto City Limits (2025).

RECOMMENDATION
Staff recommends that the City Council take the following actions:

1. Find that the project is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15317; and

2. Approve the renewal of Williamson Act contracts listed in Attachment A.

BACKGROUND
The Williamson Act is a state program that discourages conversion of agricultural lands to urban uses, preserves open space, and promotes efficient urban growth patterns. Under the Williamson Act, private landowners can voluntarily restrict their land to agricultural and compatible open space land uses under a minimum 10-year rolling term contract. These contracts are administered by the respective jurisdictions. In return, the state assesses the restricted parcels for property taxes at a rate consistent with their actual use or generated income, rather than potential market value. The program provides property tax relief to owners of agricultural land who agree to limit the use of their property to agricultural or other approved compatible uses.

On July 24, 1974, the City of Palo Alto adopted the rules for both establishing and administering Williamson Act contracts for Palo Alto properties. The rules regarding the administration of established contracts limit the allowable uses of the property to what is described in the contract. The regulations also provide that the contract must remain in place when a property is sold, ensuring that the new owners are subject to the same use restrictions. The contracts are for a rolling 10-year term with a renewal date of January 1 each year, at which time one year is added to the contract term. The term would remain a total of 10 years unless the City or property owner provides notice of non-renewal.

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Previously, the California Department of Conservation’s Williamson Act Program required participating cities and counties to complete and submit applications for an Open Space Subvention Act payment as per Government Code Section 16144, but now with the suspension of the subvention payments, reporting of Williamson Act enrollment is no longer collected through the Open Space Subvention Survey; instead, enrollment reporting is through the collection of data via GIS files before January 30 of each year. It now requires each city or county in which an agricultural preserve is located to provide the Department of Conservation with geographical information system (GIS) data files of all agricultural preserves and Williamson Act contracted land in existence at the end of the preceding year. Every year, prior to the January 1 renewal date, the City Council reviews the contracts. At that time, the Council may initiate a notice of non-renewal for any contract or approve a notice of non-renewal submitted by a landowner. If the Council takes such action, then that contract does not renew on January 1 and terminates 10 years later. Under certain conditions, the Council may also approve a landowner’s request to cancel a contract. Should Council not approve a notice of non-renewal or cancellation, the contract automatically renews for the 10-year term each January 1. The City did not receive any request for nonrenewal during this reporting cycle.

Following Council action, the City will submit its annual report to the California Department of Conservation by January 31, 2026.

ANALYSIS
The Williamson Act Property Report for the calendar year 2025 (Attachment A) includes information on the 23 existing parcels in Palo Alto currently under contract, in addition to one parcel undergoing the process of non-renewal. Attachment A lists 2025 assessed land values, acreages, and the land class (prime and non-prime land) for these parcels. Attachment B is a map showing the locations of these individual parcels.

Properties Under Contract Renewal: The owners of all 23 parcels are renewing their contracts with the City for another 10-year term, starting from January 1, 2026. Of the 23 contracts, the privately-operated Palo Alto Hills Golf and Country Club is not eligible for tax benefits. Although this golf course is a permitted use, only golf courses that are open to the public and charge minimal green fees are eligible for tax benefits.

A total of 350 acres of land is under Williamson Act contract in the City. Approximately 42% of this land (147 acres) is defined as prime land with a Class I or Class II natural resource conservation service rating. Class I or II lands are considered to have the features to sustain long-term agricultural production. Private individuals own about 70% of the land under contract, Stanford University Board of Trustees owns another 27%, and the City of Palo Alto owns the remaining three percent.

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The Williamson Act Status Report 2020-21,1 last published by the California Department of Conservation in May 2022, provides a detailed report of all lands enrolled in the program throughout the State of California from January 1, 2020, through December 31, 2021.

Properties Under Contract Non-Renewal: To initiate nonrenewal for the next calendar year, an owner must submit a notice of nonrenewal. There were no applications for Williamson Act contract non-renewal filed with the City between January 1, 2024, and December 1, 2024. At present, there is only one parcel, previously approved for non-renewal by the Council (2016), that is undergoing the 10-year non-renewal process for termination. The parcel will reach the end of the remaining term on December 31, 2026. (See Attachment A for parcel details)

FISCAL/RESOURCE IMPACT
The City does not receive any property tax revenue for those parcels enrolled in the Williamson Act program. The State of California bases property tax assessment for Williamson Act parcels on a rate consistent with the actual land use or generated income, rather than its potential market value. Based on data collected from the County Assessor’s Office, the City would have received approximately $18,579 in tax revenue in 2025 if the parcels were not under Williamson Act contracts.

Historically, the City received approximately $1,000 a year in subvention payments from the State to partially offset the foregone revenue. However, during the recession, the State suspended funding for these payments. In 2011, Assembly Bill 1265 allowed participating cities and counties to recapture ten percent (10%) of the benefits; however, the implementation of this provision is generally only cost effective for cities and counties that have significant acreage under contract.

STAKEHOLDER ENGAGEMENT
This is a required annual report for the Department of Conservation. The City does not typically perform public outreach or contact affected property owners unless the property owners initiate changes. This type of reporting does not require any additional public engagement.

ENVIRONMENTAL REVIEW
The proposed project is exempt from review under the California Environmental Quality Act (CEQA) pursuant to Section 15317 (Open Space Contracts or Easements) of the CEQA Guidelines.

ATTACHMENTS
Attachment A: List of Williamson Act Properties, 2025
Attachment B: Williamson Act Parcels Map, 2025
APPROVED BY: Jonathan Lait, Planning and Development Services Director 1 Williamson Act Status Report 2020-2021:
https://www.conservation.ca.gov/dlrp/wa/Documents/stats_reports/2022%20WA%20Status%20Report.pdf Item 5
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Number APN Street
Name
Full
Address
Owner
Name
Williamson
Act Land
Ownership
Zoning
Acreage
after
Deducting
Homesite
Exclusion
Homesite
Exclusion
Land
Class
Contract
Start Date
Contract
Status
Assessed Land
Value 20211
(Assessed Information as
of 6/30/2021)
Factored Base
Year Value 2021
Assessed Land
Value 20221
(Assessed Information
as of 6/30/2022)
Factored Base
Year Value
2022
Assessed Land
Value 20231
(Assessed Information
as of 6/30/2023)
Factored Base
Year Value
2023
Assessed Land
Value 20241
(Assessed Information
as of 6/30/2024)
Factored
Base Year
Value 2024
Assessed Land
Value 20251
(Assessed Information
as of 6/30/2025
Factored Base
Year Value 2025
1 120-31-0012 El Camino
Real
103 El
Camino
Real
Leland
Stanford
Jr., Univ.

Board of
Trustees
Stanford
University
Land
PF 0.72 No acreage
deducted Prime Unknown
Unchanged;
contract will
continue for at
least another
10 years.
$12,988 $54,771 $12,988 $55,866 $12,988 $56,983 $12,266 $58,122 $11,040 $59,284 2 120-31-0092 El Camino
Real
103 El
Camino
Real
Leland
Stanford
Jr., Univ.

Board of
Trustees
Stanford
University
Land
PF 10.00 No acreage
deducted Prime Unknown
Unchanged;
contract will
continue for at
least another
10 years.
$180,705 $1,695,534 $180,705 $1,729,444 $180,705 $1,764,032 $170,666 $1,799,312 $153,600 $1,835,298 3 142-16-052 Coyote Hill
Road
No Street
Number
Leland
Stanford
Jr., Univ.

Board of
Trustees
Stanford
University
Land
AC (D) 36.02
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$17,421 $1,130,471 $17,421 $1,153,080 $17,421 $1,176,141 $16,453 $1,199,663 $14,808 $1,223,656 4 142-16-057 Coyote Hill
Road
No Street
Number
Leland
Stanford
Jr., Univ.

Board of
Trustees
Stanford
University
Land
AC( D) 15.33
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$9,605 $1,590,936 $9,605 $1,622,754 $9,605 $1,655,209 $9,072 $1,688,313 $8,165 $1,722,079 5 142-16-064 Deer Creek
Road
No Street
Number
Leland
Stanford
Jr., Univ.

Board of
Trustees
Stanford
University
Land
AC( D) 4.04
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$2,964 $490,693 $2,964 $500,506 $2,964 $510,516 $2,799 $520,726 $2,520 $531,141 6 142-16-065 Deer Creek
Road
No Street
Number
Leland
Stanford
Jr., Univ.

Board of
Trustees
Stanford
University
Land
AC( D) 16.70
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$10,411 $1,723,851 $10,411 $1,758,328 $10,411 $1,793,494 $9,833 $1,829,363 $8,850 $1,865,950 7 142-16-069 Coyote Hill
Road
No Street
Number
Leland
Stanford
Jr., Univ.

Board of
Trustees
Stanford
University
Land
AC( D) 12.48
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$7,929 $1,312,489 $7,929 $1,338,738 $7,929 $1,365,512 $7,488 $1,392,822 $6,740 $1,420,678 8 182-33-0143 Arastradero
Rd
1525
Arastrader
o Rd
City of
Palo Alto
City of Palo
Alto Land PF 11.42 No acreage
deducted Prime Unknown
Unchanged;
contract will
continue for at
least another
10 years.
$0 $4,763,432 $0 $4,858,700 $0 $4,955,874 $0 $5,054,991 $0 $5,156,091 9 182-35-008 Alexis Dr Alexis Dr
Palo Alto
Hills Golf
and
Country
Club, Inc.

Private
Ownership OS 5.52 No acreage
deducted Prime 5/1/1973
Unchanged;
contract will
continue for at
least another
10 years.
$56,600 $56,600 $57,732 $57,732 $58,886 $58,886 $60,063 $60,063 $61,264 $61,264 10 182-35-035 Alexis Dr 3000
Alexis Dr
Palo Alto
Hills Golf
and
Country
Club, Inc.

Private
Ownership OS 119.92 No acreage
deducted Prime 5/1/1973
Unchanged;
contract will
continue for at
least another
10 years.
$1,559,988 $1,559,988 $1,591,187 $1,591,187 $1,623,010 $1,623,010 $1,655,470 $1,655,470 $1,688,579 $1,688,579 11 351-05-024 Page Mill Rd 3845 Page
Mill Rd
Judith A.

Block
Trustee
Private
Ownership OS 7.72
One acre
deducted for
homesite
Non Prime2/16/1976
Unchanged;
contract will
continue for at
least another
10 years.
$57,145 $108,840 $58,277 $111,016 $59,430 $113,236 $60,577 $115,500 $61,726 $117,810 List of Parcels under Williamson Act Contract to Renew on January 1, 2026 Item 5
Attachment A - List of Williamson Act
Properties, 2025

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Number APN Street
Name
Full
Address
Owner
Name
Williamson
Act Land
Ownership
Zoning
Acreage
after
Deducting
Homesite
Exclusion
Homesite
Exclusion
Land
Class
Contract
Start Date
Contract
Status
Assessed Land
Value 20211
(Assessed Information as
of 6/30/2021)
Factored Base
Year Value 2021
Assessed Land
Value 20221
(Assessed Information
as of 6/30/2022)
Factored Base
Year Value
2022
Assessed Land
Value 20231
(Assessed Information
as of 6/30/2023)
Factored Base
Year Value
2023
Assessed Land
Value 20241
(Assessed Information
as of 6/30/2024)
Factored
Base Year
Value 2024
Assessed Land
Value 20251
(Assessed Information
as of 6/30/2025
Factored Base
Year Value 2025
List of Parcels under Williamson Act Contract to Renew on January 1, 2026 12 351-05-042 Page Mill Rd 3837 Page
Mill Rd
David P.
and
Cynthia
Lautzenhei
ser
Trustee
Private
Ownership OS 9.00
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$434,050 $674,223 $442,718 $687,707 $451,559 $701,461 $460,542 $715,490 $469,680 $729,800 13 351-05-043 Page Mill Rd No Street
Number
Richard D.

Guhse
Trustee
Private
Ownership OS 19.01 No acreage
deducted Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$1,411 $448,222 $1,411 $457,186 $1,411 $466,329 $1,333 $475,655 $1,200 $485,168 14 351-05-044 Page Mill Rd 3905 Page
Mill Rd
Michael R.

Lowry
Private
Ownership OS 5.43
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$198,854 $198,854 $202,831 $202,831 $206,887 $206,887 $211,024 $211,024 $215,244 $215,244 15 351-05-045 Page Mill Rd 3895 Page
Mill Rd
Marc and
Lesley
Wilkinson
Private
Ownership OS 9.00
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$1,137,647 $1,137,647 $1,160,399 $1,160,399 $1,183,606 $1,183,606 $1,207,278 $1,207,278 $1,231,424 $1,231,424 16 351-05-046 Page Mill Rd 3885 Page
Mill Rd
William W.
and
Sharon T.

Luciw
Trustee
Private
Ownership OS 7.45
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$1,136,471 $1,146,594 $1,159,190 $1,159,190 $1,200,525 $2,410,000 $1,224,496 $2,458,200 $1,248,927 $2,507,364 17 351-05-047 Page Mill Rd 3875 Page
Mill Rd
Richard D.

Kniss
Trustee &
Et Al
Private
Ownership OS 10.00 No acreage
deducted Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$705 $3,003,170 $705 $3,093,233 $705 $3,155,097 $666 $3,218,198 $600 $3,282,562 18 351-05-048 Page Mill Rd 3865 Page
Mill Rd
Grace
Carland
Trustee
Private
Ownership OS 9.00
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$39,306 $223,849 $40,079 $228,325 $40,868 $232,891 $1,700,600 $2,040,000 $1,734,540 $2,080,800 19 351-05-049 Page Mill Rd 3855 Page
Mill Rd
Patrick K.

Suppes
Private
Ownership OS 10.00 No acreage
deducted Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$566,399 $566,399 $577,726 $577,726 $589,280 $589,280 $601,065 $601,065 $613,086 $613,086 20 351-12-062 Skyline Blvd
5061
Skyline
Blvd
Rogers
Noah
Private
Ownership OS 10.39 No acerage
deducted Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$223,058 $555,698 $227,503 $566,811 $232,037 $578,147 $236,619 $589,709 $241,263 $601,503 21 351-12-063 Skyline Blvd
5065
Skyline
Blvd
Robert
Schulte
Trustee Et
al
Private
Ownership OS 11.35
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$523,314 $523,314 $533,780 $533,780 $544,455 $544,455 $555,344 $555,344 $566,450 $566,450 22 351-12-066 Skyline Blvd
2287
Skyline
Blvd
Robert
Schulte
Trustee Et
al
Private
Ownership OS -0.76 No acreage
deducted Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$30 $66,890 $30 $68,227 $30 $69,591 $28 $70,982 $25 $72,402 Item 5
Attachment A - List of Williamson Act
Properties, 2025

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Number APN Street
Name
Full
Address
Owner
Name
Williamson
Act Land
Ownership
Zoning
Acreage
after
Deducting
Homesite
Exclusion
Homesite
Exclusion
Land
Class
Contract
Start Date
Contract
Status
Assessed Land
Value 20211
(Assessed Information as
of 6/30/2021)
Factored Base
Year Value 2021
Assessed Land
Value 20221
(Assessed Information
as of 6/30/2022)
Factored Base
Year Value
2022
Assessed Land
Value 20231
(Assessed Information
as of 6/30/2023)
Factored Base
Year Value
2023
Assessed Land
Value 20241
(Assessed Information
as of 6/30/2024)
Factored
Base Year
Value 2024
Assessed Land
Value 20251
(Assessed Information
as of 6/30/2025
Factored Base
Year Value 2025
List of Parcels under Williamson Act Contract to Renew on January 1, 2026 23 351-25-015 Page Mill Rd 4201 Page
Mill Rd
Bruce A
Leak
Private
Ownership OS 10.31
One acre
deducted for
homesite
Non PrimeUnknown
Unchanged;
contract will
continue for at
least another
10 years.
$1,740,820 $1,774,209 $1,775,580 $1,809,693 $1,811,035 $1,845,886 $1,847,043 $1,882,803 $1,883,664 $1,920,459 24 351-12-006 Skyline Blvd
1405
Skyline
Blvd
Midpenins
ula
Regional
Open
Space
District
Midpeninsula
Regional
Open Space
District
OS 138.59 Non Prime 2/26/1973
Contract
Terminates
12/31/24
$0 $174,386 $0 $177,873 $0 $181,430 $0 $185,058 $0 $188,759 25 351-05-050 Page Mill Rd3849 Page
Mill Rd
Jeffrey A.
and Mary
L. Thomas
Private
Ownership OS 10 Non Prime 2/7/1977
Contract
Terminates
12/31/26
$1,608,303 $1,608,303 $1,606,500 $1,640,469 $1,673,278 $1,673,278 $1,706,743 $1,706,743 $1,740,877 $1,740,877 Source: City of Palo Alto, Williamson Act Parcel Database 2023.

Note1
Note2
Note3
Santa Clara County Assessors Office, Website:https://www.sccassessor.org/online-services/property-search/real-property The City of Palo Alto leases this land for public use; however, it is privately owned.

Value not assessed because land is owned by public agency.

List of Parcels undergoing Non-Renewal Process
Item 5
Attachment A - List of Williamson Act
Properties, 2025

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Arastradero Lake
F e
lt L a k
e
B o r o
n d a L
a k e
351-12-006
351-05-050
Heritage
Park
Foothills
Park
Los Trancos
Open Space
Preserve
Monte Bello Open
Space Preserve
Upper Stevens
Creek Canyon
County Park
Skyline Ridge Open
Space Preserve
Long Ridge Open
SP
Russian Ridge
Open Space
Preserve
Coal Creek
Open Space
Preserve
Jasper
Ridge
Biological
Preserve
Rancho San Antonio
Open Space Preserve
Palo Alto
Baylands
Nature
Preserve
Foothill
Open Space
Preserve
Arastradero
Preserve
Cameron
Park
Weisshaar
Park
Mayflield
Park
Peers
Park
El
Pal o
Alto
Park
Lytton
Pl aza
Cogswell
Plaza
Scott
Park
Kellogg
Park
Bol
Park
Rinconada
Park
Bowden
Park
Johnson
Park
Eleanor
Pardee
Park
Boulware
Park
Terman
Park
Robles
Park
Monroe
Park
Mitchell
Park
D Jesus Ramos
Park
Hoover
Park
Greer
Park
Baylands
Atheletic
Byxbee
Park
Bowling
Green
Henry
Seale
Park
Sarah
Wallis
Park
Werry
Park
Juana
Briones
Park
Esther
Clark
Park
Williams
Park
Stanford/Palo Alto
Community
Playing Fields
San Antonio Rd
280
Boulevard
A l ame d a d e
l a s P
u l g as
S a nd H i l l R o a d
2 8
0 J u n i pero
Se r r a
B o u l e va r d
Pa ge
M
ill
Road
Ar a s t r adero Road
E l
C a m i
no

R
ea
l
S
an
Anton
io
A
v
enu
e
Cha r l e s t on Ro ad
G
5 M o
n
t e B e l
l
o
R
o a
d
Moody Road
A l t a m on
t
R
o a
d
O
r e gon
Exp r e
s sw
a y
Mi d d l e f i el
d R
o a d
Uni
vers
101
A l m
a S t r e e t
l
A
l
p
i
n e
R
o
a
d
F o o t h i l l
E x p r essw
ay
H i g h
w
a
y

2 8
0 Lo
s Tr
ancos Road
Hillview
East Bayshore
West Bayshore
Fabian
El Monte Road
Sand Hill Road
Road
MillPage
Skyline
Embarcadero Road
Stanford
University
Park
Mountain
View
Los
AltosLos Altos
Hills
Santa Clara
County
San Mateo County
Portola
Valley
El Camino
Park
This map is a product of the
City of Palo Alto GIS
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Williamson Act Parcels Under Contract for 2025
Parcels with Non Renewal Notices Approved
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Williamson Act Parcels
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The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto Item 5
Attachment B - Williamson
Act Parcels Map, 2025

Item 5: Staff Report
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: November 17, 2025
Report #:2510-5309
TITLE
QUASI-JUDICIAL. 3200 Park/340 Portage: Final Map and Street Naming [25PLN-00104]: Request for a Final Map to Merge and Subdivide 11 Existing Parcels Totaling Approximately 14.65 Acres To Create Five Resulting Parcels, Consistent with the Approved Development Agreement and to Name the New Private Streets and Rename Portage Avenue. Authorization for the City Manager to Take All Actions Necessary to Acquire a 3.25 Acre Parcel by Grant Deed. Zone District: The Site Has a Split Zoning Designation of Five Planned Community Zone Districts Where Each Zone District Aligns with the Resulting Parcels (PC 5596, PC 5597, PC 5598, PC 5599, PC 5600). CEQA Status: Council adopted resolution 10123 certifying the EIR for the project on September 12, 2023 (SCH # 2021120444).

RECOMMENDATION
Staff recommends that City Council:

1. Approve Phase 1 of the final subdivision map (Attachment B), consistent with the approved Vesting Tentative Map, for the previously approved project at 320 Acacia Avenue, pursuant to Palo Alto Municipal Code (PAMC) Section 21.16 and the Subdivision Map Act;

2. Approve the private street names Bayside Lane, Precita Lane, and Thomas Foon Chew Avenue recommended by the Palo Alto Historical Association (PAHA) for the three new private streets as shown on the Final Map;

3. Adopt the Resolution in Attachment D Approving the renaming of Portage Avenue to Thomas Foon Chew Avenue, consistent with Council’s motion to approve the project and with PAHA’s recommendation; and

4. Authorize the City Manager or their designee to take all actions necessary, including negotiating and executing a memorandum in substantially the form provided in Attachment C, to acquire the BMR/Parkland Parcel (as detailed in the Development Agreement) by grant deed.

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EXECUTIVE SUMMARY
The applicant requests approval of a final map to merge 11 existing parcels totaling 14.65 acres and to subdivide those parcels into five resulting lots consistent with the approved Development Agreement adopted in accordance with Ordinance 5595.1 The final map also includes the street names for the proposed private streets shown on this map. The Resolution in Attachment D also renames the Portage Avenue to Thomas Foon Chew Avenue in accordance with Council’s motion on September 12, 2025, and Vesting Tentative Map Condition of Approval 5 set forth in Section 7 of Record of Land Use Action 2023-03 (Attachment A). This street name would continue through the proposed private street to Park Boulevard.

The Development Agreement contemplates that the final map will include an offer to dedicate a 3.25-acre parcel to the City. Upon further consideration, the applicant and City staff believe it would be mutually advantageous for the applicant to transfer the parcel to the City by grant deed. The parties have prepared a memorandum (Attachment C) that would facilitate this transfer.

BACKGROUND
In September 2023, Council approved the Development Agreement between the City and Sobrato Organization, subsequently re-designating the Comprehensive Plan land use designation, rezoning the site into five Planned Community Zone Districts based on the boundaries of the resulting parcels set forth in the Vesting Tentative Map, and approving the Vesting Tentative Map in accordance with Record of Land Use Action 2023-03 in Attachment A.

Development Agreement Construction Status Update
Exhibit C of the Development Agreement1 sets forth a detailed schedule of the parties’ obligations and the remedies available in the event of a breach of the agreement. The Development Agreement set forth the construction of the project in the following general phases:

1. Construction of the parking garage.

2. Demolition of the portion of the cannery necessary to accommodate the townhomes.

3. Recordation of a final map creating five new parcels and offering to dedicate the BMR/Parkland parcel to the City.

4. Construction of the townhomes.

In July 2024, Sobrato began construction of the project. Sobrato recently completed construction of the parking garage and has completed demolition of the portion of the former cannery building (3200 Park Boulevard) and adjacent standalone building (3040 Park Boulevard) necessary to accommodate the future townhomes. Construction of the site improvements 1 Ordinance 5595 is available online at: https://portal.laserfiche.com/Portal/DocView.aspx?id=68711&repo=r- 704298fc
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(streets, sidewalks, bioswales, and remodel of the remaining cannery building are ongoing and expected to be complete before the end of 2025). The project is currently in Phase 3 and the Final map recordation will allow for the conveyance of the ”BMR/Parkland Dedication Parcel” to the City and for the “Townhome Parcel” to be sold to a perspective housing developer.

Final Map Application and Process
On April 21, 2025, Sobrato Organization filed a Final Map application. The Final Map application is the second of a two-part subdivision mapping process, which follows approval of the Vesting Tentative Map. As detailed in the Development Agreement, the Final Map process will be completed in two phases. This first phase includes merging and subdividing 11 existing parcels (including one grant deed) totaling 14.65 acres to create five resulting parcels, consistent with the approved Vesting Tentative Map and Development Agreement. The second phase of the Final Parcel Map is anticipated to return to Council in 2026 and will include the condominium subdivision of the resulting Townhome Parcel as well as dedication of the streets internal to the townhome parcel.

The Final Map is the official, legal document that is recorded with the County that establishes the property lines, streets, and easements within the subdivision. The Final Map must be prepared under the direction of a registered civil engineer or a licensed land surveyor and be based on a survey. Approval of a Final Map is ministerial if the Final Map is in substantive compliance with the approved Vesting Tentative map and the subdivider has satisfied the conditions of approval attached to the tentative map. While many cities delegate approval of the Final Map to the City Engineer, under PAMC Section 21.16.240, the Palo Alto City Council is responsible for the approval.

Public and Private Access Easements
In accordance with Mitigation Measure T-1 (MM T-1) in the adopted Environmental Impact Report (Attachment B), the project is required to dedicate a public access easement over Private Street B, connecting Portage Avenue through to Park Boulevard. This first phase of the Final Map includes recordation of that public access easement in addition to other relevant private ingress/egress easements and utility easements between the resulting properties. In accordance with the approved Planned Community Development Plans and MM T-1, Sobrato is also in the process of constructing a two-way bicycle/pedestrian pathway on the southeast side of Private Street B (Thomas Foon Chew Avenue) and within the Public Access easement so that vehicles, bicyclists and pedestrians all have a safe means of access through this site, providing a complete streets connection between Ash Street and Park Boulevard in accordance with the North Ventura Coordinated Area Plan.

ANALYSIS
The Final Map is the document containing the statements, acknowledgements, and agreements from the property owner, surveyor, City officials and beneficiaries that the Final Map is in conformance with all applicable regulations and the approved Vesting Tentative Map. The Item 6
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proposed subdivision includes private streets and related easements for vehicular access between parcels, utility easements, and the required public access easement.

In accordance with City’s Street Naming policy (Resolution 57393) and Condition of Approval 5 in Section 7 of the approved Record of Land Use Action for the project (Attachment A), the Palo Alto Street Naming Committee selected, and the Palo Alto Historical Association (PAHA) board voted on proposed street names for the new private streets. The proposed street names for the project site are Bayside Lane (Street A), Thomas Foon Chew Avenue (Street B), and Precita Lane (Street C). These recommended names are now forwarded to Council for approval, as reflected on the Final Map.

PAHA recommended the names for Street A (Bayside Avenue) and C (Precita Lane) to reflect the historic Bayside Cannery on this property and to honor Thomas Foon Chew’s father, Sai Yin Chew’s cannery, named Precita Canning Company, that was in San Francisco and destroyed during the 1906 earthquake. PAHA also reviewed Council’s motion to rename Portage Avenue and the new Private Street B to Thomas Foon Chew Avenue in honor of his role in the construction and operation of the Bayside Cannery at this property, which he constructed in 1918 and operated until his death in 1931. PAHA concurred with the proposed street name.

BMR/Parkland Dedication Parcel Acceptance
In accordance with the approved Development Agreement, one of the five resulting parcels, a

3.25-acre parcel spanning Matadero Creek, and referred to in the Development Agreement as the “BMR/Parkland Dedication Parcel” is proposed to be conveyed to the City. The Development Agreement anticipated that the parcel would be offered for dedication on the Final Map. Following additional discussion, the applicant and City staff have agreed to transfer the property instead through a grant deed. An operating memorandum has been prepared to facilitate this transfer, and staff recommends that the Council authorize the City Manager to execute the memorandum and take other actions necessary to take possession of the parcel.

Following Council’s authorization and the City’s acceptance of the grant deed, the City will be responsible for any site maintenance and will take over the existing lease with Comcast for the operational use within the switch building.

At this time there is no specific timeline for construction of improvements on the BMR/Parkland Dedication Parcel; however, following this action and at Council’s direction, the City would begin pursuing improvements. The City, supported by a Metropolitan Transportation Commission grant, is currently completing early implementation work to inform a Request for Proposal to partner with an affordable housing developer, as detailed further in CMR #2507- 4927.

3 Resolution 5739 is available online at https://portal.laserfiche.com/Portal/DocView.aspx?id=3754&repo=r- 704298fc
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FISCAL/RESOURCE IMPACT
Fees for processing of the Final Map have been paid by the applicant in accordance with the adopted municipal fee schedule. In accepting the grant deed for the 3.25-acre parcel, the City will take on all operational costs for maintenance of the parcel such as landscaping maintenance and utilities. As part of the conveyance of the resulting BMR/Parkland Dedication parcel to the City, the City will also take over the lease for the switch building on the southeast side of the Creek at 278 Lambert.

The City is working to refine the operational costs associated with the parcel, which are expected to be offset by revenue from the switch building, both of which are expected to be approximately $95,000 annually. As these costs are refined and coordinated with City departments, necessary appropriation actions will be included as part of the FY 2026 Mid-year budget process and incorporated into the development of the FY 2027 Operating Budget. At the time of construction of the townhomes, Sobrato or the subsequent property owner shall be responsible for payment of the associated development impact fees at final occupancy for each respective townhome. Impact fees associated with the townhome development are currently estimated at $1,282,856 in addition to the public art in-lieu fees that will be collected for the townhomes. In addition, at the time of occupancy of the townhomes, payment of the $5 million public benefits fee is due. This shall be assessed pro rata at the time of delivery of the individual townhomes if delivery for occupancy is phased. It should be noted that the impact fees do not include park fees, parkland dedication fees, housing impact fees, nor housing in-lieu fees. Those fees are addressed through the dedication of the 3.25-acres and the $5 million in accordance with the Development Agreement.

STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper 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. In addition, although not required, because the project includes renaming of a public street (Portage Avenue) noticing was provided to a 600-foot radius as well as all property owners and tenants with addresses on Portage Avenue. This notice was mailed on November 6, 2025.

At the time of this staff report, staff has not received any public comments on the final map, street naming, or acceptance of the land to be conveyed by Sobrato.

ENVIRONMENTAL REVIEW
The project was previously evaluated in accordance with the California Environmental Quality Act and Council certified the Environmental Impact Report for this project, making overriding considerations, on September 12, 2023, through adoption of Resolution 10123. The proposed action to record the Final Map is ministerial if the map is found to be in substantial conformance with the previously approved Vesting Tentative Map. That said, the recordation of Item 6
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the Final Map and authorization to complete the necessary documents for conveyance of the property is consistent with the approved Development Agreement and associated EIR.

ATTACHMENTS
Attachment A: Approved Record of Land Use Action for the Development Agreement, including the Vesting Tentative Map
Attachment B: Final Map and Link to Environmental Documents Attachment C: Draft Operation Memorandum No. 1 to the Development Agreement Attachment D: Resolution Renaming Portage Avenue
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 6
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
7 Packet Pg. 45 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
10 Packet Pg. 48 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
15 Packet Pg. 53 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
16 Packet Pg. 54 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
18 Packet Pg. 56 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
19 Packet Pg. 57 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
21 Packet Pg. 59 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
23 Packet Pg. 61 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
24 Packet Pg. 62 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
25 Packet Pg. 63 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
26 Packet Pg. 64 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
27 Packet Pg. 65 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
28 Packet Pg. 66 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
29 Packet Pg. 67 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
30 Packet Pg. 68 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
31 Packet Pg. 69 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
32 Packet Pg. 70 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
33 Packet Pg. 71 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
34 Packet Pg. 72 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
37 Packet Pg. 75 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
38 Packet Pg. 76 of 303

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/31/30/27/32/13/14/90/i255
/12/13/14/15/i255/17/18/i255/19/20/21/17/i255/22/21/14/17/i255 /19/21/20/26/26/13/26/25/i255/119/i255
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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
39 Packet Pg. 77 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
40 Packet Pg. 78 of 303

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/1/2/3/4/i255/5/6/i255/7/8/9/5/i255/10/9/3/5/i255
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/114/18/15/52/2/50/18/49/i255
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/139/140/141/142/143/144/145/146/i255/148/146/149/150/151/140/152/150/i255/153/139/154/i255/155/156/157/158/159/160/161/162/163/164/165/160/160/163/166/148/156/159/163/157/148/162/158/163/162/166/164/139/165/157/167/161/164/168/161/166 DocuSign Envelope ID: E77297D3-ABD0-4DC5-A03B-797ABB58FF32 Item 6
Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
41 Packet Pg. 79 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
42 Packet Pg. 80 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
43 Packet Pg. 81 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
44 Packet Pg. 82 of 303

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Attachment A - Approved
Record of Land Use Action
for the Development
Agreement, including the
Vesting Tentative Map

Item 6: Staff Report
Pg.
45 Packet Pg. 83 of 303

Project Plans
The Final Map is available to the public online. Hardcopies of the Final Map have been provided to Councilmembers.

Environmental Document
Council certified the Revised Final EIR on September 12, 2025 through adoption of Resolution 10123
Directions to review Project plans online:

1. Go to: bit.ly/PApendingprojects

2. Scroll down to find “340 Portage” and click the address link

3. On this project specific webpage you will find a link to the project plans as well as links to the EIR
Direct Link to Project Webpage:
https://www.paloalto.gov/Departments/Planning-Development-Services/Current- Planning/Projects/3200-Park-Boulevard
Item 6
Attachment B - Final Map
and Link to Environmental
Documents

Item 6: Staff Report
Pg.
46 Packet Pg. 84 of 303

This document is recorded
for the benefit of the City
of Palo Alto and is entitled
to be recorded free of charge
in accordance with Section 6103
of the Government Code.

After Recordation, mail to:

OFFICE OF THE CITY ATTORNEY
City of Palo Alto
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, Ca 94303
SPACE ABOVE THIS LINE FOR RECORDER’S USE
OPERATING MEMORANDUM NO. 1

DEVELOPMENT AGREEMENT
By and Between
CITY OF PALO ALTO, A Chartered City
and
SI 45, LLC,
A California Limited Liability Company
3200 Portage Avenue
Item 6
Attachment C - Draft
Operation Memorandum
No. 1 to the Development
Agreement

Item 6: Staff Report
Pg.
47 Packet Pg. 85 of 303

1 OPERATING MEMORANDUM NO. 1

DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF PALO ALTO AND SI 45, LLC
THIS OPERATING MEMORANDUM NO. 1 (“MEMORANDUM”) is executed by the Parties (defined below), to become effective upon recordation of this Memorandum in the Official Records (defined below), by and between the CITY OF PALO ALTO, a chartered city of the State of California (“City”), and SI 45, LLC, a California limited liability company (sometimes incorrectly referred to in the Development Agreement (defined below) as a Delaware limited liability company) (“Owner”). City and Owner are each a “Party” and collectively, the “Parties.”

RECITALS
THIS MEMORANDUM is entered into on the basis of the following facts, understandings and intentions of the parties:

A. The City and Owner entered into that certain Development Agreement effective November 1, 2023 and recorded on December 20, 2023 in the Official Records of Santa Clara County, California (“Official Records”) as Document No. 25577229 (“Development Agreement’) concerning the redevelopment of the Property, as that term is defined by the Development Agreement. All capitalized terms herein shall have the meaning set forth in the Development Agreement unless expressly provided otherwise.

B. Owner has made substantial, good faith progress on the redevelopment under the terms of the Development Agreement, including the satisfaction of those certain milestones listed on Exhibit C of the Development Agreement (“Exhibit C”), and the Parties intend to use this Memorandum to document the satisfaction of certain of these milestones.

C. Among the milestones on Exhibit C that the Owner has satisfied, the Owner has:
(i) maintained regular updates to the City (Row 1), (ii) timely submitted the applications for the Phase A Work (Row 2), (iii) timely Commenced Construction of the Phase A Work (Row 3), (iv) timely completed the Parking Garage and completed demolition of the applicable portion of the Cannery (Row 4), (v) submitted a Final Map to the City that includes creation of the Townhome Parcel and the BMR/Park Dedication Parcel (Row 6).

D. The Development Agreement Section 5.3 and Exhibit C, Row 6 requires the City to accept the offer of dedication of the BMR/Park Dedication Parcel (sometimes also referred to as the BMR/Parkland Dedication Parcel in the Development Agreement) on the Final Map and to accept such offer expeditiously and in good faith.

E. For a number of reasons, the Parties have mutually agreed that it is preferable for the Owner to convey the BMR/Park Dedication Parcel to the City by separate grant deed rather than by dedication on the Final Map.

F. The Owner has entered into a purchase and sale agreement with a townhome developer for the Townhome Parcel and intends to close promptly, and this Memorandum clarifies Item 6
Attachment C - Draft
Operation Memorandum
No. 1 to the Development
Agreement

Item 6: Staff Report
Pg.
48 Packet Pg. 86 of 303

2 and confirms the agreement between Owner and City regarding certain aspects of the Development Agreement to assist with this sale and the future development of the Townhomes.

G. This Memorandum is intended to document the terms of the agreements described in Recitals E and F above and other matters described in the Memorandum below, consistent with the spirit, intent and material terms of the Development Agreement and pursuant to Section 10.4 of the Development Agreement.

NOW, THEREFORE, the parties agree as follows:

AGREEMENT

1.1Recordation of Final Map and Dedication of BMR/Park Dedication Parcel.

Notwithstanding anything to the contrary in Section 5.3 of the Development Agreement or Exhibit C Row 5 and Row 6, the Owner and City hereby mutually agree that (i) the Final Map will create, among other parcels, the BMR/Park Dedication Parcel, as well as the Townhome Parcel, and (ii) the Owner hereby irrevocably offers the BMR/Park Dedication Parcel to the City and shall convey the BMR/Park Dedication Parcel by grant deed, in substantially the form attached hereto as Exhibit A (“Grant Deed”), subject to the terms in this Memorandum and the provisions of the Development Agreement applicable to the BMR/Park Dedication Parcel to the extent not modified by the terms of this Memorandum, rather than by dedication on the Final Map. Upon the City’s execution and delivery to escrow of the Certificate of Acceptance attached to the Grant Deed (the “Certificate of Acceptance”), the City shall be deemed to have accepted Owner’s irrevocable offer to dedicate the BMR/Park Dedication Parcel. City shall deliver written notice to Owner (the “Acceptance Notice”) at least five (5) business days prior to its delivery of the Certificate of Acceptance to escrow.

1.2Environmental Conditions.

Notwithstanding anything to the contrary in Section 5.4 of the Development Agreement, the Owner has provided the City with an updated Phase I report prepared by PES (“Phase I”) and the City has retained, at the Owner’s expense, Northgate Environmental to peer review the Phase I.

As set forth in Section 5.4 of the Development Agreement: “The PES Limited Phase II Report identified a single location (SB-39) with an isolated detection of total lead (390 mg/kg) at a depth of one foot below ground surface (bgs) as shown on Plate 3 (the “Lead Outlier”). To remediate this Lead Outlier, upon the City’s development of the park, Owner and the City shall share equally in the cost of any soil removal on APN 132-38-043 to remove the Lead Outlier to a maximum depth of three feet and its replacement with clean soil. Upon the request of either Party, the Parties will meet and confer in good faith on other options to address this Lead Outlier at an earlier time to achieve a similar results.” If this work is not completed by Owner prior to the City’s acceptance of the BMR/Park Dedication Parcel, then the City shall complete this work and the Owner shall pay for one-half of the City’s actual third party out of pocket costs plus staff oversite oversight costs incurred in completing such work.

Item 6
Attachment C - Draft
Operation Memorandum
No. 1 to the Development
Agreement

Item 6: Staff Report
Pg.
49 Packet Pg. 87 of 303

3 In addition, the Parties reaffirm Section 5.4 of the Development Agreement: “Owner shall only be responsible for removing any new Hazardous Materials deposited on the BMR/Dedication Parcel to the residential environmental screening thresholds of the agency responsible for oversight of this Property to the City’s reasonable satisfaction. Owner shall not be responsible for any environmental conditions already identified and known (or that should have been known) to the Parties prior to the Effective Date of this Agreement, or any changes in regulatory screening levels related to those already known conditions.”

1.3Switch Building.

Pursuant to Section 5.5 of the Development Agreement, the City has confirmed a desire to accept assignment to the City of the existing lease of the Switch Building with Comcast of California IX, Inc., as tenant, dated August 1, 2000, as amended by First Amendment of Lease dated May 15, 2003, Second Amendment to Lease Agreement dated February __, 2019, and Third Amendment to Lease Agreement dated December 16, 2021 (such lease, together with all such amendments being collectively, the “Lease”). Therefore, within two (2) business days after City’s delivery of the Acceptance Notice to Owner, (i) the Parties shall execute and deliver into escrow the Switch Building assignment and assumption agreement in substantially the form attached hereto as Exhibit B, and (ii) Owner shall deposit into escrow the notice to tenant signed by Owner in substantially the form attached hereto as Exhibit C (“Tenant Notice”) and an amount equal to the unapplied security deposit currently held by Owner under the Lease (“Security Deposit”).

Upon the recording of the Grant Deed in the Official Records, by the joint escrow instructions described in Section 1.6, below, the Parties shall direct the escrow holder to (y) deliver the Tenant Notice to the parties addressed thereto, and (z) deliver the Security Deposit to the City.

All revenues and expenses of the BMR/Park Dedication Parcel and the Switch Building, including without limitation, real property taxes, special taxes, assessments, utility charges and any other expenses normal to the operation and maintenance of the BMR/Park Dedication Parcel and the Switch Building, shall be prorated and apportioned between Owner, on the one hand, and City, on the other hand, as of the date of recordation of the Grant Deed. Such proration shall be performed by Owner and City outside of escrow after the recordation of the Grant Deed. In the event any prorations shall require final adjustments, then the Parties shall make the appropriate adjustments promptly when accurate information becomes available, but in no event shall such final adjustment occur later ninety (90) days following the recordation of the Grant Deed. If the Lease requires the tenant to reimburse landlord for real property taxes and operating expenses, then within ninety (90) days following the recordation of the Grant Deed, Owner shall provide a written statement of expense reconciliation for the applicable period up to the date of recordation of the Grant Deed.

1.4Development of Townhomes and Park Building; Payment of Fees.

Following recordation of the Final Map in the Official Records and the execution of this Memorandum, and issuance of all applicable ministerial permits, and as otherwise dictated by the market, Owner (or any subsequent owner of the Townhome Parcel) may begin construction and complete the Townhomes consistent with the Approvals and shall, subject to the payment of the Public Benefit Fee, when due, pursuant to Section 5.8(b) of the Development Agreement, have the immediate right to full and complete satisfaction of any and all parkland dedication requirements Item 6
Attachment C - Draft
Operation Memorandum
No. 1 to the Development
Agreement

Item 6: Staff Report
Pg.
50 Packet Pg. 88 of 303

4 under Palo Alto Municipal Code Chapter 21.50 and inclusionary housing requirements under Chapter 16.65.

The City acknowledges and understands that the Owner is under contract to sell the Townhomes to a third party homebuilder and that the necessary credits and documentation are fully assignable to such builder or any other third party to whom the Townhome Parcel is conveyed. This right to such credits shall accrue regardless of when or whether the City has formally accepted the irrevocable offer to dedicate the BMR/Park Dedication Parcel pursuant to this Memorandum. There shall be no cross-defaults between the Owner and subsequent owners of the Townhome Parcel. Consistent with Section 6.2 of the Development Agreement, the City shall promptly review and act upon any Subsequent Approvals for the Townhomes, whether or not the City has completed its review and acceptance of the BMR/Park Dedication Parcel under this Memorandum and shall not withhold any permits on the Townhome Parcel related in any way to the dedication of the BMR/Park Dedication Parcel.

1.5Acceptance of BMR/Park Dedication Parcel; Outside Acceptance Date The Parties hereby reaffirm, acknowledge and agree that: (a) subject to the provisions of Section 1.2 of this Memorandum and this Section 1.5, pursuant to Section 6.2 of the Development Agreement, Owner makes no representation or warranty, express or implied, regarding the title, physical, environmental, or legal condition of BMR/Park Dedication Parcel or its fitness or suitability for any particular purpose or use and City, by signing the Certificate of Acceptance attached to the Grant Deed, shall be deemed to have accepted the dedication and conveyance of the BMR/Park Dedication Parcel in its “AS IS” and “WITH ALL FAULTS” condition; (b) City shall not be required to accept title to the BMR/Park Dedication Parcel subject to any deeds of trust or other monetary liens or monetary encumbrances; (c) subject to (b) immediately above, but otherwise without limiting the foregoing, City shall accept dedication, title, and ownership of the BMR/Park Dedication Parcel subject to (i) all matters of record, including easements, encumbrances, covenants, conditions, restrictions, reservations, and rights-of-way; (ii) installments of general and special real property taxes and assessments not then delinquent; (iii) any encumbrance or possessory interest arising from the acts of City; and (iv) matters that would have been disclosed by an inspection or a survey; and (d) except as otherwise expressly set forth in the Development Agreement, City shall be solely responsible for all costs and expenses attendant upon the transfer of title to the BMR/Park Dedication Parcel from Owner to City, including, but not limited to any recording fees, any fees charged by the title company assisting with the recordation of documents and transfer of title to the BMR/Park Dedication Parcel and assignment of the Lease.

City, at its sole expense, may obtain any title insurance policies that City desires with respect to the BMR/Park Dedication Parcel. City shall be responsible for obtaining whatever assurances and/or commitments it desires from the title company issuing such policies. The foregoing notwithstanding, the filing of the Final Map for record, the recordation of the Operating Memorandum, the dedication of the BMR/Park Dedication Parcel and the issuance of permits applicable to the Townhome Parcel shall in no event be conditioned upon, contingent or otherwise subject to the title company’s issuance of (or commitment to issue) any such policies. Owner shall not be obligated to incur costs related to such policies or to provide any representations, warranties, assurances or certifications in order to induce the title company to issue such policies.

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5 The Parties agree the outside date for the City to accept the BMR/Park Dedication Parcel will be six (6) months from the date of recordation of this Memorandum, unless extended by mutual written agreement of the Parties.

1.6Recordation; Joint Escrow Instructions. Promptly after signing and delivery of this Memorandum into escrow by the Parties, the Parties shall cause this Memorandum to be recorded in the Official Records in accordance with those certain joint closing instructions executed by the Parties.

1.7Effect of Agreement. The Development Agreement shall remain in full force and effect. In the case of a conflict between the terms of this Memorandum and the Development Agreement, this Memorandum shall control.

IN WITNESS WHEREOF, City and Owner have signed this Memorandum as of the date first written above.

Signatures to follow on following pages
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S-1
“City”:

CITY OF PALO ALTO,
a California charter city and municipal corporation
By:

Name:

Title:

Attest:

Name:

Title:

APPROVED AS TO FORM:

Name:

Title:

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S-2
“Owner”:

SI 45, LLC,
a California limited liability company
By: Sobrato Interests 3
a California limited partnership
Its: Sole Member
By: Sobrato Development Companies, LLC,
a California limited liability company
Its: General Partner
By: ____________________________
John Michael Sobrato
Its: Manager
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S-2
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California }
} ss.

County of Santa Clara }
On ______________________________, before me, ___________________, a Notary Public in and for said County and State, personally appeared _____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct.

WITNESS my hand and official seal

NOTARY PUBLIC, STATE OF CALIFORNIA
My Commission #_______________
Expires: _____________________
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California }
} ss.

County of Santa Clara }
On ______________________________, before me, ___________________, a Notary Public in and for said County and State, personally appeared _____________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing is true and correct.

WITNESS my hand and official seal

NOTARY PUBLIC, STATE OF CALIFORNIA
My Commission #_______________
Expires: _____________________
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Exhibit A - 1

EXHIBIT A
[Form of] Grant Deed
BMR/Park Dedication Parcel
Recording Requested by :
___________________________
When recorded mail to
and tax statement to:

City of Palo Alto
Real Property Manager
250 Hamilton Avenue
Palo Alto, CA 94301
Property
Adress:

APN:

SPACE ABOVE THIS LINE FOR

RECORDER'S USE

GRANT DEED
The Undersigned Grantor(s) Declare(s): DOCUMENTARY TRANSFER TAX $0.00; CITY TRANSFER TAX $0.00; SURVEY MONUMENT FEE $N/A
[ ] computed on the consideration or full value of property conveyed, OR [ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale,
[ ] unincorporated area; [ X ] City of Palo Alto, and EXEMPT FROM:

RECORDING FEES PURSUANT TO GOVERNMENT CODE 6103 AND 27383.

DOCUMENTARY TRANSFER TAX PURSUANT TO REVENUE AND TAXATION CODE 11922. DEED TO PUBLIC ENTITY.

BUILDING HOMES AND JOBS ACTS FEE PER GOVERNMENT CODE
27388.1(a)(2).

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, SI 45 LLC, a California limited liability company (“Grantor”), hereby grant(s) to City of Palo Alto, a California chartered municipal corporation (“Grantee”), in dedication for public use as provided in the Development Agreement described below,
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Exhibit A - 2
that certain real property in the City of Palo Alto, County of Santa Clara, State of California, which is more particularly described on Exhibit A attached hereto and made a part of (the “Property”).

THE PROPERTY IS CONVEYED SUBJECT TO: all covenants, conditions, and restrictions, reservations, rights, rights of way, easements, encumbrances, liens, and other matters of record, including, but not limited to, a Development Agreement effective November 1, 2023 and recorded on December 20, 2023 as Document No. 25577229 (the “Development Agreement”), in the Official Records of Santa Clara County, California (the “Official Records”), and an Operating Memorandum No. 1 dated November __, 2025 and recorded on _______________, as Document No. _________, in the Official Records; any lease affecting the Property to the extent assigned by Grantor to Grantee; all matters which would be revealed or disclosed in an accurate survey or by physical inspection of the Property; liens for non- delinquent real property taxes and assessments; zoning ordinances and regulations and any other laws, ordinances, notices, orders and other governmental regulations and restrictions affecting the use, occupancy or enjoyment of the Property. [signature page follows on next page]
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Exhibit A - 2
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Exhibit A - 3
In witness whereof, the undersigned have executed this document on the date set forth below.

GRANTOR:

SI 45, LLC,
a California limited liability company
By: Sobrato Interests 3
a California limited partnership
Its: Sole Member
By: Sobrato Development Companies, LLC,
a California limited liability company
Its: General Partner
By: ____________________________
John Michael Sobrato
Its: Manager
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Exhibit A - 4
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Exhibit A - 4
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Exhibit A - 5

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the real property conveyed by the Grant Deed dated ___________________________, from SI 45 LLC, a California limited liability company, to City of Palo Alto, a California chartered municipal corporation, is hereby accepted in accordance with the authority granted to the City Manager by the City Council of the City of Palo Alto acting in session on ___________________________, and the Grantee consents to recordation thereof by its duly authorized officer.

City of Palo Alto,
a California chartered municipal corporation
By:

Name:

Title:

Date:

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Exhibit A - 5
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Exhibit A - 6

EXHIBIT A

LEGAL DESCRIPTION
Real property in the City of Palo Alto, County of Santa Clara, State of California, described as follows:

Lot 2 as shown on the map of Tract No. 10662, a Five Lot Subdivision, filed for record in the Office of the Recorder for the County of Santa Clara on ______, 2025 in Book ____ of Maps, at Pages _____.

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Exhibit B - 1

EXHIBIT B
[Form of] Assignment and Assumption Agreement
Switch Building

ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this “Assignment”) is made and dated for reference purposes as of the ____ day of _____________, 20___, by and between SI 45, LLC, a California limited liability company (“Assignor”), and the CITY OF PALO ALTO, a chartered city of the State of California (“Assignee”), with reference to the following facts:

RECITALS
Pursuant to Section 5.3 of that certain Development Agreement dated November 1, 2023, and recorded on December 20, 2023, in the Official Records of the Santa Clara County Recorder’s Office (the “Official Records”) as Document No. 25577229 (the “Development Agreement”), entered into by and between Assignor and Assignee, upon recordation of a final map, Assignor is required to (i) offer to dedicate the BMR/Park Dedication Parcel (as described and referred to in the Development Agreement) to Assignee, and (ii) upon Assignee’s acceptance of such offer, convey the BMR/Park Dedication Parcel to Assignee.

In accordance with the Development Agreement, Assignor has filed for record on _____________, as Instrument No. ______, in Book ____ of Maps, Page ___, in the Official Records, a final map for Tract No. 10662 (the “Final Map”). The BMR/Park Dedication Parcel is shown on the Final Map as Lot 2.

Assignor, as the current lessor, and Comcast of California IX, Inc., a Pennsylvania corporation (“Tenant”), as the current lessee, are parties to that certain Lease Agreement dated as of August 1, 2000 (the “Original Lease”), as amended by that certain First Amendment of Lease dated May 15, 2003, by that certain Second Amendment to Lease Agreement dated February __, 2019, and by that certain Third Amendment to Lease Agreement dated December 16, 2021 (the Original Lease, as so amended, collectively the “Lease”), for certain premises consisting of approximately one thousand six hundred fifty (1,650) square feet of building space located at the end of the driveway adjacent to 270 Lambert Street, also known as 278 Lambert Street, in the City Palo Alto, Santa Clara County, California, which premises are situated on a portion of the BMR/Park Dedication Parcel.

Assignor has offered to dedicate the BMR/Park Dedication Parcel to Assignee, and Assignee has accepted such offer. To effectuate the dedication of the BMR/Park Dedication Parcel to Assignee, Assignor is transferring and conveying the BMR/Park Dedication Parcel to Assignee subject to the Lease.

In accordance with Section 5.5 of the Development Agreement, Assignor desires (concurrently with its transfer and conveyance of the BMR/Park Dedication Parcel to Assignee) Item 6
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Exhibit B - 2
to assign and transfer to Assignee all of Assignor’s right, title and interest, as lessor, in and to the Lease, upon the terms and conditions set forth herein, and Assignee desires to assume all of Assignor’s obligations pursuant to the Lease, upon the terms and conditions set forth in this Assignment.

NOW, THEREFORE, Assignor and Assignee agree as follows:

As of the date on which the BMR/Park Dedication Parcel is conveyed to Assignee (the “Conveyance Date”), Assignor does hereby assign and transfer to Assignee all of Assignor’s right, title and interest in and to the Lease, including, without limitation the unapplied tenant security deposit held by Assignor pursuant to the Lease.

As of the Conveyance Date, Assignee does hereby assume the obligations and agrees to perform and comply with the terms, provisions, covenants and conditions of the Lease to be performed and complied with by Assignor from and after the Conveyance Date.

Assignee agrees to indemnify, protect, defend with counsel reasonably acceptable to Assignor and hold harmless Assignor from and against any and all claims, demands, damages, suits, causes of action, judgments, obligations, costs, liabilities, losses and expenses (including without limitation, reasonable attorneys fees) relating to the Lease to the extent arising on or after the Conveyance Date or due to Assignee’s breach of its obligations pursuant to this Assignment.

Subject to this Paragraph 4 below, Assignor agrees to indemnify, protect, defend with counsel reasonably acceptable to Assignee and hold harmless Assignee from and against any and all claims, demands, damages, suits, causes of action, judgments, obligations, costs, liabilities, losses and expenses (including without limitation, reasonable attorneys fees) relating to the breach of the landlord’s obligation of the Lease which occurred during the period of Assignor’s ownership of the BMR/Park Dedication Parcel; except however that in no event shall Assignor have any such obligations as it relates to the physical condition of the BMR/Park Dedication Parcel or any improvements located thereon or the environmental conditions affecting the BMR/Park Dedication Parcel or any improvements located thereon.

Assignor makes no representations, guaranties, promises, statements, assurances or warranties of any kind concerning the Lease.

This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns; shall be governed by and construed in accordance with the laws of the State of California applicable to agreements made and to be wholly performed within said State without regard to any choice of law principles; and may not be modified or amended in any manner other than by a written agreement signed by the party to be charged therewith. Venue for all court proceedings or alternative forms of dispute resolution proceedings shall be Santa Clara County, California. In the event of any litigation or arbitration proceeding between Assignor and Assignee arising out of this Assignment, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs incurred in any such action. If any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to persons or circumstances other than those as to which it is Item 6
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Exhibit B - 3
held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforced to the fullest extent permitted by law. This Assignment may be signed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures and initials to this Assignment created by the signer by electronic means and/or transmitted by email or other electronic transmission (including without limitation via DocuSign) shall be valid and effective to bind the party so signing and/or transmitting, and copies of this signed Assignment shall be valid and effective to bind the signing parties and be treated as originals.

ARBITRATION OF DISPUTES:

ASSIGNOR AND ASSIGNEE AND ANY OTHER PARTY THAT MAY BECOME A

PARTY TO THIS ASSIGNMENT, AND THEIR RESPECTIVE SUCCESSORS AND

ASSIGNS, AGREE THAT, EXCEPT FOR ANY CLAIM (I) FOR SPECIFIC PERFORMANCE

OR INJUNCTIVE RELIEF WITH RESPECT TO THIS ASSIGNMENT, OR (II) WITHIN THE

JURISDICTION OF THE SMALL CLAIMS COURT (WHICH SMALL CLAIMS COURT

SHALL BE THE SOLE COURT OF COMPETENT JURISDICTION FOR SUCH SMALL

CLAIMS MATTER), ANY CONTROVERSY, DISPUTE, OR CLAIM OF WHATEVER

NATURE ARISING OUT OF, IN CONNECTION WITH OR IN RELATION TO THE

INTERPRETATION, PERFORMANCE OR BREACH OF THIS ASSIGNMENT, INCLUDING

ANY CLAIM BASED ON CONTRACT, TORT, OR STATUTE, SHALL BE RESOLVED AT

THE REQUEST OF ANY PARTY TO THIS ASSIGNMENT THROUGH A DISPUTE RESOLUTION PROCESS ADMINISTERED BY J.A.M.S., OR IF J.A.M.S. NO LONGER

EXISTS THEN SUCH OTHER DISPUTE RESOLUTION SERVICE REASONABLY

SELECTED BY ASSIGNOR, OR IF THE PARTIES AGREE TO ANOTHER DISPUTE

RESOLUTION SERVICE THEN PURSUANT TO SUCH OTHER DISPUTE RESOLUTION

SERVICE MUTUALLY ACCEPTABLE TO THE PARTIES, LOCATED IN SANTA CLARA COUNTY, CALIFORNIA. THE DISPUTE RESOLUTION PROCESS SHALL CONSIST OF A

FINAL AND BINDING ARBITRATION ADMINISTERED BY AND IN ACCORDANCE WITH THE THEN EXISTING RULES AND PRACTICES OF J.A.M.S. OR OTHER DISPUTE

RESOLUTION SERVICE SELECTED, AND JUDGMENT UPON ANY AWARD RENDERED

BY THE ARBITRATOR(S) MAY BE ENTERED BY ANY STATE OR FEDERAL COURT

HAVING JURISDICTION THEREOF AS PROVIDED BY CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 ET. SEQ, AS SAID STATUTES THEN APPEAR, INCLUDING

ANY AMENDMENTS TO SAID STATUTES OR SUCCESSORS TO SAID STATUTES OR

AMENDED STATUTES, AND IN CONNECTION WITH THE PROCEEDINGS SHALL

HAVE THE RIGHT TO DISCOVERY AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1283.05 AS SAID STATUTE THEN APPEARS, INCLUDING ANY

AMENDMENTS TO SAID STATUTE OR SUCCESSOR TO SAID STATUTE, EXCEPT THAT

IN NO EVENT SHALL THE PARTIES BE ENTITLED TO PROPOUND INTERROGATORIES OR REQUESTS FOR ADMISSIONS DURING THE ARBITRATION PROCESS. THE

ARBITRATOR SHALL BE A RETIRED JUDGE OR A LICENSED CALIFORNIA ATTORNEY. THE VENUE FOR ANY SUCH ARBITRATION SHALL BE IN SANTA CLARA COUNTY, CALIFORNIA.

NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING TO

HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE Item 6
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Exhibit B - 4
“ARBITRATION OF DISPUTES” PROVISION DECIDED BY NEUTRAL ARBITRATION AS

PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL.

BY INITIALLING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL

RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION. IF YOU REFUSE TO

SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE

COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO

SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION TO NEUTRAL ARBITRATION.

ASSIGNOR’S INITIALS: ______ ASSIGNEE’S INITIALS: ____ [Remainder intentionally left blank; signatures appear beginning on the next page.] Item 6
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Exhibit B - 4
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Exhibit B - 5
IN WITNESS WHEREOF, Assignor and Assignee have signed this Assignment as of the date first set forth above, to be effective as of the Conveyance Date.

ASSIGNOR:

SI 45, LLC,
a California limited liability company
By: Sobrato Interests 3
a California limited partnership
Its: Sole Member
By: Sobrato Development Companies, LLC,
a California limited liability company
Its: General Partner
By: ______________________________
John Michael Sobrato
Its: Manager
ASSIGNEE:

CITY OF PALO ALTO,
a chartered city of the State of California
By:

Name:

Its:

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Exhibit B - 5
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Exhibit C - 1

EXHIBIT C
[Form of] Notice to Tenant
Switch Building

NOTICE TO TENANT
________________, 20___
Via U.S. Certified Mail and E-Mail
Comcast of California IX, Inc.
9401 E. Panorama Circle
Centennial, CO 80112
Attn: Director of Real Estate, West Division
Comcast of California IX, Inc.
3011 Triad Place
Livermore, CA 94551
Attn: Real Estate Department
Comcast Cable Communications, LLC
One Comcast Center
1701 John F. Kennedy Boulevard
Philadelphia, PA 19103-2838
Attn: Real Estate Counsel
[email protected]
[email protected]
RE: Notice of Change of Ownership – Your lease dated August 1, 2000, as amended by First Amendment of Lease dated May 15, 2003, Second Amendment to Lease Agreement dated February __, 2019, and Third Amendment to Lease Agreement dated December 16, 2021 (such lease, together with all such amendments being collectively, the “Lease”) for Premises located at the end of driveway adjacent to 270 Lambert Street, Palo Alto, California and more particularly described in the Lease (“Premises”) Dear Tenant:

Please be advised that, as of _______________ [Insert date of recordation of grant deed conveying title to City of Palo Alto] (the “Conveyance Date”), the above-referenced Premises, Item 6
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the Complex described in the Lease, and the parcel of land upon which such Premises and Complex are located, have been acquired by, and the landlord’s interest in your Lease and the unapplied portion of your security deposit that was held by the landlord pursuant to the Lease have been assigned to, the CITY OF PALO ALTO, a chartered city of the State of California (“City”).

All future rental and other payments under your Lease accruing from and after the Conveyance Date shall be paid to City.

Future rental payments and correspondence with respect to your Premises should be made to City as follows:

For rent payments and
correspondence:
__________________________
__________________________
Attn: _____________________
Email: _____________________
Sincerely,
SI 45, LLC,
a California limited liability company
By: Sobrato Interests 3
a California limited partnership
Its: Sole Member
By: Sobrato Development Companies, LLC,
a California limited liability company
Its: General Partner
By: ____________________________
John Michael Sobrato
Its: Manager
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NOT YET ADOPTED
6055477RV2
Resolution No. ________
Resolution of the Council of the City of Palo Alto
Renaming Portage Avenue to Thomas Foon Chew Avenue

R E C I T A L S

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

B. City engaged consultants Page & Turnbull to prepare a Historic Resource Evaluation dated February 26, 2019 for the cannery building located at 340 Portage Avenue (“Cannery Building”), which concluded that the cannery building was eligible for listing in the California Register of Historical Resources at the local level of significance under Criterion 1 (Events) for its association with Thomas Foon Chew, Bay Side Cannery, and the history of the canning industry in Santa Clara County.

C. The Development Agreement Project involves partial demolition and rehabilitation of the Cannery Building, as well as the installation and maintenance of interpretive materials and public artwork honoring the history associated with the Cannery Building.

D. As part of its action adopting the Development Agreement, the City Council desired to further honor the historic significance of the Cannery Building by renaming Portage Avenue to Thomas Foon Chew Avenue.

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

SECTION 1. Portage Avenue is hereby renamed Thomas Foon Chew Avenue, as generally depicted in Exhibit A.

SECTION 2. The City Manager is directed to take all appropriate actions to implement this name change, including the installation or replacement of necessary wayfinding signage.

//

//

//

//

//
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Attachment D - Resolution
Renaming Portage Avenue

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NOT YET ADOPTED
6055477RV2
SECTION 3. The Council finds that the adoption of this resolution is exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3), because it can be seen with certainty that there is no possibility of a significant environmental effect.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

__________________________ _____________________________ City Clerk Mayor

APPROVED AS TO FORM: APPROVED:

__________________________ _____________________________ Assistant City Attorney City Manager

Item 6
Attachment D - Resolution
Renaming Portage Avenue

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Portage Avenue
Ash Street
Acacia Avenue
El Camino Real
Lambert Avenue
Acacia Avenue
El Camino Real
This map is a product of
City of Palo Alto GIS
[
0 0.015 0.030.0075
Miles
Exhibit A
Portage Avenue
Ash Street
Acacia Avenue
El Camino Real
Lambert Avenue
Acacia Avenue
El Camino Real
Thomas Foon Chew Avenue
Existing
Proposed
Item 6
Attachment D - Resolution
Renaming Portage Avenue

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: November 17, 2025
Report #:2508-5125
TITLE
Approval of Funding Agreements with Stanford University to Receive up to $600,000 and VTA for up to $456,000 to Partially Fund Palo Alto Link through June 2026, and Related Budget Amendments in the General Fund; CEQA status – not a project.

RECOMMENDATION
Staff recommends that the Council:

1. Approve and authorize the City Manager or their designee to execute a Cost Sharing Agreement to receive funding from Stanford University to fund Palo Alto Link Services to Stanford Research Park up to $600,000 through June 30, 2026 (Attachment A);

2. Approve and authorize the City Manager or their designee to approve a Funding Agreement with VTA to Receive $456,500 from the Transportation Fund for Clean Air (TFCA) grant program to Fund Palo Alto Link in FY26 (Attachment B);

3. Amend the Fiscal Year 2026 Budget Appropriation for the General Fund in the Office of Transportation (requires 2/3 approval) by:
a. Increasing the revenue estimate from Stanford University by $340,000; b. Increasing the revenue estimate for grants by $456,500; c. Increasing the Office of Transportation contract services appropriation by $796,500.

EXECUTIVE SUMMARY
The recommended action to approve funding agreements with Stanford University for $600,000, along with confirmed additional grant funds awarded from the VTA’s Transportation Fund for Clean Air (TFCA) program ($456,500), to support Palo Alto Link (PAL) services through June 2026, while maintaining the service’s reliance upon the General Fund at $250,000 for FY 2026.

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BACKGROUND
On December 12, 2022, City Council approved the contract for Palo Alto Link (PAL) service.1 This service addresses first-/last-mile access in Palo Alto and provides a convenient and affordable transportation option for residents, employees, and vulnerable or transit-dependent populations. PAL currently provides on-demand service Monday-Friday for a 12-hour service span 7:00 am-7:00 pm. The service operates within most of the City, except the areas of open space in the Foothills and East Bayshore areas and very low-density housing at the urban-wildland interface. With the help of a web application, PAL utilizes a ten (10) vehicle fleet to provide virtually positioned pick-up and drop-off locations within an acceptable walking distance of origins and destinations. Door-to-door service a booking agent available by phone is available for riders who require extra assistance.

On April 10, 2023, Council approved a cost sharing agreement with Stanford University for service to the Stanford Research Park, extending the program service area and providing full fare and trip cost coverage for all riders‘ trips into and out of the Park, with Stanford reimbursing 30% of the monthly operating costs of the total Palo Alto Link program. 2 On October 28, 2024, the cost sharing agreement was updated to a usage-based agreement, such that Stanford would cover the portion of the total operating costs reflective of their monthly percentage of trips to/from the Stanford Research Park. 3 Since that agreement, Stanford’s cost sharing portion has ranged between 35% and 50% per month, calculated as a percentage of each month’s total costs for the service.

While the initial Measure B Innovative Transit Grant funds of $2,000,000 have been spent down, staff have partnered with Via to pursue additional grant funds to extend the term of service of Palo Alto Link and decrease reliance upon City funds. As a result of these grant writing efforts, the City has successfully obtained two successive rounds of the Bay Area Air Quality District’s (BAAQMD) Transportation for Clean Air (TFCA) fund, which is administered by VTA. The initial $441,000 grant was utilized for services provided from January 1, 2025 through June 30, 2025. A second award has been granted in the most recent round, and is available for services through the current fiscal year.

As part of the annual budget process, City Council considers and approves PAL service levels and funding. As part of the FY 2026 Adopted Operating Budget, 4 the Council approved funding of $550,000 in the General Fund for six months of PAL Services on June 16, 2025. On June 17, 2025 1 City Council meeting 12/12/2022, Item#8:
https://cityofpaloalto.primegov.com/portal/item/?meetingItemId=20f80994-de00-4d1a-aa0b-9e37365ba583 2 City Council meeting 4/10/2023, Item#7:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=1109 3 City Council meeting 10/28/2024, Item#10:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14449 4 FY 2026 Adopted Operating Budget - Office of Transportation pages 347-358:
https://www.paloalto.gov/files/assets/public/v/1/administrative-services/city-budgets/fy-2026-city- budget/adopted/fy-2026-adopted-operating-budget_final.pdf Item 7
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an amendment to authorize $1.1 million in Palo Alto Link services for Fiscal Year 2026 pending support from other sources 9 was approved. This contract was expected to be partially offset by revenue from Stanford (up to $600,000) and fare revenue from riders ($40,000) for a cost to the General Fund of $250,000. The contract enables service through June 2026 were grants to be received to fund services.

Council also directed staff to explore options for decreasing the use of City General Funds for PAL ongoing, such as grant funding, replacing the service with more cost-effective transit options, or helping existing users to find alternatives if service is discontinued in June 2026.

ANALYSIS
Finding and securing funding partnerships such as the cost sharing agreement for trips to Stanford Research Park (SRP) has been integral to funding PAL services. The cost sharing agreement provided in Attachment A allows the City to continue offering PAL service throughout the service area for the remainder of FY 2026, with trips that start, are internal to, or end in SRP fully subsidized by SRP.

This funding agreement and the most recent award of TFCA grant funds, of $456,500, will allow the City to continue PAL services through the end of FY 2026 with the currently contracted $1.1 million.

NEXT STEPS
Based on this cost sharing agreement, the City will continue to provide PAL service to and from Stanford Research Park with costs reimbursed by Stanford through June 30, 2026.

In Fall 2025, staff will present future service and funding options for PAL to PTC and to City Council in early calendar year 2026. Specifically, staff will provide options for decreasing the use of City General Funds for PAL ongoing, such as grant funding, and/or replacing the service with more cost-effective transit options and the resulting transition to aid existing users to find alternatives if service is discontinued in June 2026

FISCAL/RESOURCE IMPACT
As part of the FY 2026 Adopted Operating Budget, the Council approved funding of $550,000 in the General Fund for six months of PAL Services. These costs were partially offset by revenue from Stanford ($260,000) and fare revenue from riders ($40,000) for a cost to the General Fund of $250,000. The up to $600,000 cost sharing agreement and the $456,500 TFCA grant funding increases revenue to support the previously approved $1.1 million PAL contract. This maintains the use of City General Fund for PAL in FY 2026 at $250,000.

Funding for PAL services in future years will be subject to funding appropriation by the Council as part of the annual budget process; however, as part of the FY 2026 Adopted Budget the Council 9 City Council meeting 6/17/2025, Item#AA2:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=17567 Item 7
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only approved funding through June 2026 11, indicating that General Fund support may not be provided in future years.

STAKEHOLDER ENGAGEMENT
This cost-sharing agreement reflects engagement with stakeholders and potential funding partners on Palo Alto Link (PAL). Since PAL service launched on March 7, 2023, community engagement and marketing activities has also included tabling at community events and destinations, social media campaigns, and online campaigns provided by the vendor to existing users. Additional community engagement will occur in Fall 2025 to discuss options for the future of the program.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA under CEQA regulation 15061(b)(3).

ATTACHMENTS
Attachment A: Cost-Sharing Agreement between the City of Palo Alto and Stanford for On- Demand Transit Services (Sept. 2025-June 2026)
Attachment B: Santa Clara Valley Transportation Authority Congestion Management Program Transportation Fund For Clean Air Agreement FY2025/26
APPROVED BY:

Ria Hutabarat Lo, Chief Transportation Official
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Stanford Agreement No.

PURCHASING GUIDE – APPENDIX L PAGE 1 OF 7 Appendix L:

Short Form Agreement for
Revenue Contracts

Commented [TS1]: Stanford should put in their contract number in the header
Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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Stanford Agreement No.

PAGE 2 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS

Short Form Agreement for Revenue Contracts
Cost-Sharing Agreement between the City of Palo Alto and Stanford for On-Demand Transit Services (Sept. 2025-June 2026)Contract #:

BY THIS AGREEMENT MADE AND ENTERED INTO ON OCTOBER X, 2025 BY AND BETWEEN THE CITY OF PALO ALTO (“CITY”) AND THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY (“STANFORD”), 3215 Porter Drive, Palo Alto, CA 94304-1286. IN CONSIDERATION OF THEIR MUTUAL COVENANTS, THE PARTIES HERETO AGREE AS FOLLOWS:
CITY SHALL PROVIDE OR FURNISH THE FOLLOWING SPECIFIED 1) GOODS AND MATERIALS, 2) SERVICES OR 3) A COMBINATION THEREOF AS SPECIFIED IN THE EXHIBITS NAMED BELOW AND ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE: EXHIBIT A – SCOPE OF SERVICES. EXHIBITS THE FOLLOWING ATTACHED EXHIBITS HEREBY ARE MADE PART OF THIS AGREEMENT:

CONTRACT IS NOT COMPLETE UNLESS ALL EXHIBITS ARE ATTACHED Exhibit A - Scope of Services
Exhibt B- Payment Plan
Exhibit C- Insurance Requirements
TERM THE SERVICES AND/OR MATERIALS FURNISHED UNDER THIS AGREEMENT SHALL COMMENCE ON SEPTEMBER 1, 2025 AND SHALL BE COMPLETED NO LATER THAN JUNE 30, 2026. COMPENSATION FOR THE FULL PERFORMANCE OF THIS AGREEMENT: STANFORD SHALL PAY CITY AN AMOUNT NOT TO EXCEED $600,000 IN ACCORDANCE WITH EXHIBIT B. CITY ACCOUNT NUMBER:

COST CENTER GL ACCTPROJECT /INTERNAL ORDER PHASE NO.DOLLAR AMOUNT

GENERAL TERMS AND CONDITIONS ARE INCLUDED ON ALL PAGES OF THIS AGREEMENT. .

HOLD HARMLESS. Each party shall indemnify, defend and hold harmless the other party, its Council Members, officers, employees, and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or arising out of the other party, its officers’, directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful misconduct.

ENTIRE AGREEMENT. This agreement and the terms and conditions on the following pages represent the entire agreement between the parties with respect to the purchase and sale of the goods, equipment, materials or supplies or payment for services which may be the subject of this agreement. All prior agreements, representations, statements, negotiations and undertakings whether oral or written are superseded hereby.

Commented [TS2]: Remember to put City’s contract #
here
Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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Stanford Agreement No.

PAGE 2 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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PURCHASING GUIDE – APPENDIX L PAGE 3 OF 7

IN WITNESS THEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT THE DAY, MONTH, AND YEAR FIRST WRITTEN ABOVE.
PROJECT MANAGER AND REPRESENTATIVEFOR STANFORD

FOR CITY
NAME: Nathan Baird BY: Patricia Moss
DEPT: Office of Transportation TITLE: Procurement Director P.O, BOX 10250
PALO ALTO, CA 94303 Date:

Telephone 650-329-2520
INVOICING SEND ALL INVOICES TO THE CITY, ATTN: PROJECT MANAGER CITY OF PALO ALTO APPROVALS: (ROUTE FOR SIGNATURES ACCORDING TO NUMBERS IN APPROVAL

BOXES BELOW)
APPROVAL OVER $25,000
CITY DEPARTMENT  Funds Have Been
Budgeted
(1)

PURCHASING & CONTRACT

ADMINISTRATION INSURANCE
REVIEW
(2) (3) PURCHASING MANAGER APPROVAL OVER $25,000 APPROVAL OVER $85,000

CITY OF PALO ALTO
BY:_____________________________________

CITY ATTORNEY

ATTEST:

BY:________________________ _______________________

MAYOR CITY CLERK
Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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PURCHASING GUIDE – APPENDIX L PAGE 3 OF 7 Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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Stanford Agreement No.

PAGE 4 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS

CITY OF PALO ALTO

GENERAL TERMS AND CONDITIONS
A. ACCEPTANCE. This agreement is limited to the terms
and conditions on pages 1 through 4 inclusive and any exhibits referenced.

B. GOVERNING LAW AND VENUE. This agreement
shall be governed by the laws of the state of California. The courts of the State of California in the County of Santa Clara and the federal court for the Northern District of California have sole jurisdiction over any disputes that arise over this agreement.

C. NO EMPLOYMENT; CONFLICTS. It is understood and
agreed that this agreement is not a contract of employment in the sense that the relation of master and servant exists between the CITY and undersigned. At all times CITY shall be deemed to be an independent contractor and STANFORD is not
authorized to bind CITY to any contracts or other obligations.

In executing this agreement, STANFORD certifies that no one who has or will have any financial interest under this
agreement is an officer or employee of CITY.

D. INSURANCE. STANFORD agrees to provide the
insurance specified in the “Insurance Requirements” form attached hereto as Exhibit C or self-insure to equivalent standards. In the event STANFORD is unable to secure a policy endorsement naming the City of Palo Alto as an
additional insured under any comprehensive general liability or comprehensive automobile policy or policies, STANFORD
shall at a minimum, and only with the written approval of City’s Risk Manager or designee, cause each such insurance policy obtained by it to contain an endorsement providing that the insurer waives all right of recovery by way of subrogation against CITY, its officers, agents, and employees in connection with any damage, claim, liability personal injury, or wrongful death covered by any such policy. Each such policy obtained by STANFORD shall contain an endorsement requiring thirty (30) days' written notice from the insurer to CITY before cancellation or reduction in the coverage or limits of such policy. STANFORD shall provide certificates of such policies or other evidence of coverage satisfactory to City's Risk Manager, together with evidence of payment of premiums, to CITY at the commencement of this agreement, and on renewal of the policy, or policies, not later than twenty (20) days before expiration of the terms of any such policy. CITY agrees to maintain insurance of equivalent standards as STANFORD.

E. TERMINATION. This agreement may be terminated by
either party upon thirty (30) days written notice to the other party. Monies then owing based upon work satisfactorily accomplished shall be paid to CITY.

F. CHANGES. This agreement shall not be assigned or
transferred without the written consent of the either party. No changes or variations of any kind are authorized without the written consent of the both parties.

G. Reserved.

H. NO IMPLIED WAIVER. No payment, partial payment,
acceptance, or partial acceptance by either party shall operate as a waiver on the part of such party of any of its rights under this agreement.

I. Reserved.

J. Reserved.

K. Reserved.

L. Reserved.

M. PRICE TERMS. Extra charges, invoices and payment.

No extra charges of any kind will be allowed unless
specifically agreed to in writing by CITY. All state and federal excise, sales and use taxes shall be stated separately on the invoices. In event CITY reduces its price for such materials or services during the term of this agreement, CITY agrees to reduce the prices or rates hereof correspondingly.

N. Reserved.

O. Reserved.

P. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement shall give any rights to any person other than the Parties to this Agreement.

Q. USE OF STANFORD TRADEMARKS. CITY agrees not
to use Stanford's name or other Stanford trademarks (together referred to herein as the "Marks"), or the name or trademarks of any related organization, or to quote any of Stanford's faculty, staff, students, volunteers or agents ("Quotes"), either in writing or orally, without the prior written consent of STANFORD’s Senior Director, University Brand
Management. This prohibition includes, but is not limited to, use of the Marks or Quotes in press releases, advertising, marketing materials, other promotional materials,
presentations, photographs for commercial use, case studies, reports, websites, application or software interfaces, and other electronic media.

Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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Stanford Agreement No.

PURCHASING GUIDE – APPENDIX L PAGE 5 OF 7 Exhibit A – Scope of Services
In consideration for Stanford’s payment under this Agreement, City shall:

1. Expand the City’s On-Demand Transit program delivered under City contract C23184827 or its successors with Nomad Transit LLC (“program”) to include the Stanford Research Park during all regular hours of the program.

2. Provide free rides to and from the Stanford Research Park as part of the program in lieu of charging riders the regular fee.

3. Provide Stanford with ride data on a periodic basis regarding rides to/from Stanford Research Park. Such data will not include personal information of the riders.

Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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Stanford Agreement No.

PAGE 2 OF 7 APPENDIX L – SHORT FORM AGREEMENTS FOR REVENUE CONTRACTS Exhibit B – Payment Plan
Stanford shall pay City a pro-rata amount based upon the total monthly cost of the service and the percentage of trips to and from the Standford Research Park (SRP), with a not-to-exceed amount of $600,000. For each month, the formula shall be the total monthly cost invoiced, multiplied by the total percentage of completed trips to and from the SRP with the trip data being provided by Nomad Transit LLC.

Example of Monthly Billing to SRP:

Month
Monthly
Invoice Total
SRP % of all
completed trips
Total Monthly
Cost to SRP
January $ 100,000.00 35% $35,000
Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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PURCHASING GUIDE – APPENDIX L PAGE 3 OF 7 Exhibit C – Insurance Requirements

STANFORD WARRANTS THAT IT HAS INSURANCE TO SUPPORT THIS AGREEMENT AND THAT IT WILL MAINTAIN COVERAGE FOR THE DURATION OF THIS AGREEMENT AS PROVIDED BELOW.

CONTRACT IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN.

MINIMUM LIMITS

REQUIRED TYPE OF COVERAGE REQUIREMENT EACH

OCCURRENCEAGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY

STATUTORY

STATUTORY STATUTORY STATUTORY

YES GENERAL LIABILITY, INCLUDING

PERSONAL INJURY, BROAD FORM

PROPERTY DAMAGE BLANKET

CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

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

YES AUTOMOBILE LIABILITY,

INCLUDING ALL OWNED, HIRED,

NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE
$250,000
$500,000
$100,000
$250,000
$500,000
$100,000

NO PROFESSIONAL LIABILITY,

INCLUDING, ERRORS AND

OMISSIONS, MALPRACTICE (WHEN

APPLICABLE), AND NEGLIGENT

PERFORMANCE
ALL DAMAGES $1,000,000
Item 7
Attachment A - Cost-Sharing
Agreement between the
City of Palo Alto and
Stanford for On-Demand
Transit Services (Sept. 2025-
June 2026)

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1 SANTA CLARA VALLEY TRANSPORTATION AUTHORITY

CONGESTION MANAGEMENT PROGRAM

TRANSPORTATION FUND FOR CLEAN AIR

AGREEMENT
FY 2025/26

This agreement (“Agreement”) is entered into between the Santa Clara Valley Transportation Authority (“VTA”) and the City of Palo Alto (“Sponsor”) and sha ll be effective beginning on July 1, 2025 (“Effective Date”). Hereinafter, Sponsor and VTA may be individua lly referred to as a “PARTY” or collectively referred to as the “PARTIES”.

RECITALS
This Agreement is made with reference to the following facts:

A. VTA has been designated, by reso lutions of the County of Santa Clara and most of the cities therein, as the Program Manage r for Santa Clara County’s Tran sportation Fund for Clean Air (“TFCA”) funds under the State of California Health and Safety Code Section 44241.

B. Pursuant to that designation, VTA is responsible for allocating and administering the County of Santa Clara’s TFCA County Progr am Manager (“CPM”) Fund to e ligible project sponsors in accordance with the State of California Heal th and Safety Code Sections 44241 and 44242 and VTA’s current agreement with the Bay Area Air Quality Management District (“Air District”).

C. On October 2, 2025, the VTA Board approved the programming of Fiscal Year (“FY”) 2025/26 TFCA CPM funds for the Palo Alto Link project (“Project(s)”).

D. This Agreement specifies the conditions und er which VTA will allocate and administer a grant(s) from the TFCA CPM Fund to Sponsor for FY 2025/26.

Now, therefore the Parties agree as follows:

AGREEMENT
Section 1. Grant of TFCA Funds; Description of Projects A. Subject to appropriation and rece ipt of TFCA funds (as further set forth in Section 10, below), VTA hereby agrees to allocate to Sponsor a TFCA grant in an amount not to exceed $456,500 (the “Grant Funds”) in consid eration for Sponsor’s agreement to implement and complete the Project(s), as further set forth in the Pr oject Summary(ies) attached hereto as Attachment A, in accordance with the terms and conditions set forth in this Agreement.

B. In consideration of VTA providi ng Sponsor with the Grant Funds , Sponsor hereby agrees to implement and complete the Project(s) in conformance with the terms of this Agreement. In implementing the Project(s), Spons or shall comply with reporting requirement s as described in Section 13.

Item 7
Attachment B - Santa Clara
Valley Transportation
Authority Congestion
Management Program
Transportation Fund For
Clean Air Agreement
FY202526

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2 Section 2. Proper Expenditure; Return of Funds
A. Sponsor must assure that all Grant Funds received under this Agreement are expended only in accordance with all applicable provisions of fede ral, state, and local laws, and Sponsor shall require any other sub-recipients of Grant Funds for the Project(s) to do the same.

B. Sponsor must comply with all TFCA program requi rements, as set forth in the Air District’s County Program Manager Fund Expenditure Plan Guidance Fiscal Year Ending (FYE) 2026 (“Guidance”) and the 26-SC Funding Agreemen t between VTA and the Air District. These documents, including appendices an d revisions, are incorporated he rein and made a part hereof by this reference as if fully set forth here in and will be provided by VTA to Sponsor upon written request.

C. Since the Air District mandates th at all TFCA Funds that are not expended in accordance with applicable provisions of law must be returne d, Sponsor must reimburse VTA all Grant Funds that are not expended in accordance with the te rms and conditions of this Agreement and/or applicable provisions of law upon VTA's written notification to Sponsor.

D. Sponsor must also return the Gr ant Funds to VTA if the Project( s) are not maintained and/or operated throughout and until the conclusion of the years of effectiveness (“Years of Effectiveness”). This is the default value stated in the Air District’s Guidance for the applicable project type, unless a different value was approved by the Air Di strict and shown to yield a project that meets the cost-effectiveness requirement specified in the TFCA Guidance document cited above. The amount of Grant Funds returned to the Program Manage r must be calculated on a prorated basis based on the length of a project’s Years of Effectiveness.

Section 3. Administrative project costs
Grant Funds may not be expended on Administrative Project Costs. As explained in the Guidance, these are costs associated with the administration of a TFCA project and include the costs to prepare proposals and/or grant applications.

Section 4. Term
A. The term of this Agreement is retroactiv e beginning on July 1, 2025, through December 31, 2031, or terminated in accordance with Section 17 (Termination).

B. The Grant Funds must be expended within two (2) y ears of receipt of the first transfer of funds from the Air District to the VTA in the applic able fiscal year, unless one of the following applies:
a. Multi-Year Funded Project: If VTA requests multi-year fund ing in compliance with the Guidance; and the Air District approves the request for multi-year funding. b. Extensions of Expenditure Deadline: If VTA finds that a project will take a longer period to implement or that significant pr ogress has been made on a project, then Item 7
Attachment B - Santa Clara
Valley Transportation
Authority Congestion
Management Program
Transportation Fund For
Clean Air Agreement
FY202526

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3 VTA can approve no more than two one ‐year schedule extensions for a project, as memorialized in writing by VTA. Any subsequent schedule extensions for projects may be given on a case ‐by‐case basis only by written amendment to this Agreement, if the Air District finds that significant progress has been made on a project, and the Funding Agreement is amended to reflect the revised schedule.

C. In addition to the specific term of this Agreem ent, Sponsor must maintain each Project for the Years of Effectiveness prescribed in Section 2D herein.

Section 5. Work Product
Sponsor must place in the public domain any so ftware, written document, or other product developed with funds received through this Agreem ent, to the extent no t otherwise prohibited by law, and to the extent required by the California Public Records Act (California Government Code Sections 7920.000 et seq.).

Section 6. Acknowledgement of Funding Sources
A. Sponsor must acknowledge both VTA and Ai r District as funding sources during the implementation of the Project(s) and must use the VTA and the Air District approved logos as specified below:
(1) The logos must be used on signs posted at the site of any project construction; (2) The logos must be displayed on any vehicles or equipment operated with or obtained as part of the Project(s);
(3) The logos must be used on any material inte nded for public consumption associated with the Project(s), such as websites and printed mate rials, including transit schedules, brochures, handbooks, maps created for public distribution, and promotional material; and (4) Sponsor will demonstrate to VTA, through evidence such as photographs of vehicles, equipment, construction signs, a nd copies of press releases, that the logos are used and displayed as required by this Section.

B. VTA will provide a copy of Air District and VTA logos to Sponsor for use in fulfilling Sponsor’s obligations under this Section.

C. Sponsor must acknowledge VTA and Air District as a funding sour ce in any related articles, news releases, or other publicity materials for th e Project(s) that are produced or caused to be produced by Sponsor.

Section 7. Indemnity a nd Insurance Requirements
A. Sponsor must indemnify, defend, and hold harmless VTA, the Air District, their respective directors, officers, officials, agents, employees, representatives, and successors-in-interest from any claim, liability, loss, expense, including reasonable attorneys’ fees, and/ or claims for injury or damage arising out of, or in connection with, performance of this Agreement by Sponsor Item 7
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4 and/or its agents, employees, representatives, an d subcontractors, excepting only loss, injury or damage caused by the gross negligence or willful misconduct of personnel employed by VTA.

B. Sponsor must adhere, throughout the term of this Agreement, to th e insurance requirements specified in Attachment B “Insurance Requirements”, whic h are hereby incorporated by reference. In any agreement be tween Sponsor and a third party for purposes related in any way to the subject matter of this Agreement (“Third Party Contract”), Sponsor must require that VTA and Air District be named as (i) additional insured on all policies of insurance required by Sponsor in the Third-Party Contract and (ii) indemnified party in any indemnity provision contained in the Third-Party Contract. Such Th ird-Party Contracts must contain requirements for General Liability, Automobile Liability, Wo rkers’ Compensation and Employer’s Liability, and Pollution Liability. The Insurance Requireme nts may be satisfied by self-insurance or pooled risk plans that provide comparable coverage.

Section 8. Invoicing
Sponsor must submit invoices at qu arterly intervals to VTA for reimb ursement of costs incurred to implement the Project(s). Sponsor must email requests for reimbursement to VTA Accounts Payable at [email protected]. Sponsor must include relevant, auditable back-up documentation (time sheets, bills, etc.) with each invoice.

Section 9. Reimbursement
A. All funds allocated by VTA to Sponsor will be paid on a cost-reimbur sement basis only. VTA will pay no funds in advance.

B. Upon review and approval of invoices and documentation, VTA will, within fifteen (15) days of receipt of an invoice that confor ms to the requirements set fort h in this Agreem ent, reimburse Sponsor for all eligible expend itures up to the maximu m amount described in Section 1 of this Agreement. Only those expenses incurred by Sponsor on or after July 1, 2025, will be considered reimbursable expenditures.

C. Funds for the Projects described in this Agreement, which are not spent by prior to June 30, 2028 and submitted for reimbursement within four months, will not be available to reimburse Project costs unless a Project schedule, which extends the Project completion date beyond June 30, 2028, has been approved by either VTA or the Air District.

Section 10. Funds Subject to Appropriatio n/Allocation of Funds Contingent on Appropriation
VTA’s obligations under the terms of this Ag reement are contingent upon and subject to the allocation of TFCA funds to VTA by the Air Dist rict under VTA’s “26-SC” agreement with the Air District for approved projects during Fiscal Year 2025/26.

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5 Section 11. Audit
This Agreement is subject to the examination and audit of the California St ate Auditor pursuant to California Government Code Section 8546.7 for a pe riod of five (5) years after each Project(s) Years of Effectiveness. Audits ma y also be conducted by an audito r chosen by the Air District or VTA.

Section 12. Sponsor’s Record Keeping
Sponsor must:

A. Allow VTA and Air District staff, authorized re presentatives, and inde pendent auditors, during the term of this Agreement and for five (5) y ears from the end of each Project(s) Years of Effectiveness, to conduct performance and financial audits and to inspect the Project(s). During audits, Sponsor must make available to the audito r, in a timely manner, all records relating to Sponsor’s implementation of the Project(s). Du ring inspections, Sponsor will provide, at the request of VTA or the Air District, access to inspect the Project(s) and related records.

B. Maintain employee time sheets documenting those hourly labor costs incurred in the implementation of the Project(s) , including both administrative and implementation costs, or to establish an alternative method to document staff costs charged to the Project(s). Sponsor must keep such documents in a central location for a period of five (5) ye ars from the end of each Project’s Years of Effectiveness.

C. Keep all financial and implemen tation records necessary to demonstrate compliance with this Agreement and the TFCA Program. Such records must include documentation that demonstrates significant progress made for those Project(s) seeking extensions to the completion date.

Sponsor must keep such documents in a central locati on for a period of five (5) years from the end of each Project’s Years of Effectiveness.

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6 Section 13. Reporting Requirements.

A. Sponsor must submit an interim project repo rt to VTA in each May and October until the Project(s) is/are completed, and all closeout requirements have been fulfilled. The interim report must utilize Air District-approve d report forms. One form should be submitted for each Project listed in Attachment A. VTA will supply the Inte rim Project Report form to Sponsor for this requirement.

B. Sponsor must submit a Final Report for each co mpleted Project on the Air District-approved report form appropriate for th e specific project type. Sponsor must also submit a post ‐project Cost-Effectiveness spreadsheet. Post‐project evaluations should be completed using the version of the Cost‐Effectiveness worksheet for the year the purchased, insta lled, or constructed project became available for use by the public. VTA will provide the Final Report Forms and spreadsheets for this requirement.

Section 14. Review
VTA will review Sponsor’s progress in implementing the Project(s) at the end of the sixth (6 th) quarter following execution of this Ag reement. If progress at the sixth (6 th) quarter review is insufficient to implement any Project or to expend the funds within the period described in Section 4, VTA will develop an action plan with S ponsor to ensure that the Grant Funds are not required to be repaid to VT A and/or the Air District. The action plan may include reprogramming funds to other proj ects within Santa Clara County to ensure their expenditure prior to the term expiration date described in Section 4.

Section 15. Non-Performance
If Sponsor causes all or part of these Grant F unds to be subject to repayment to the CPM Fund because of failure to complete the Project(s ) according to the work scope described in Attachment A, Sponsor’s next grant allocation of any kind that is from or passes through VTA may be reduced by the amount that VTA repaid to the CPM Fund.

Section 16. General Terms and Conditions
A. Notices. Any notice required to be given by either Party, or whic h either Party may wish to give, must be in writing and serv ed either by personal delivery or sent by certified or registered mail, postage prepaid, addressed as follows:

To VTA: Santa Clara Valle y Transportation Authority
Chief Planning & Programming Officer
3331 North 1st Street
San José, CA 95134-1906
To SPONSOR: City of Palo Alto
Office of Transportation
250 Hamilton Avenue
Palo Alto, CA 94301

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7 B. Program Liaison. Within thirty (30) days from the Effective Date of this Agreement, Sponsor must notify VTA of Sponsor’s “Program Liaison” and provide the Program Liaison’s address, telephone number, and email address. The Progr am Liaison must be the contact to VTA pertaining to implementation of this Agreemen t and for information about the Project(s).

Sponsor must notify VTA of the change of Program Liaison or of the Program Liaison’s contact information in writing no later than thirty (30) days from the date of any change.

C. Non-Waiver. The failure of either part y to insist upon the strict performance of any of the terms, covenants, and conditions of this Agreemen t will not be deemed a waiver of any right or remedy that either party may have and will not be deemed a waiver of their right to require strict performance of all of the terms, covenants, and conditions thereafter.

D. Assignment: Sponsor must not assign, se ll, license, or otherwise transfer any rights or obligations under this Agreement without the prior written consent of VTA.

E. Integration. This Agreement, including all attachments and references, constitutes the entire Agreement between the Parties pertaining to the subject matter contained herein and supersedes all prior or contemporaneous agreements, repr esentations, and understandings of the Parties relative thereto.

F. Amendments. Future amendments and modifications to this Agreement must be made in writing and signed by both parties.

G. Independent Contractor : Sponsor is an independent contr actor and shall no t be considered employees or agents of VTA or the Air District.

H. Governing Law: Any dispute that arises under or relate s to this Agreement shall be governed by California law, excluding any laws that direct the application of anothe r jurisdiction’s laws.

Venue for resolution of any disput e that arises under or relates to this Agreement shall be San Jose, California.

I. Attachments. Each attachment hereto is incorporated into this Agreement as if fully set forth herein.

J. Severability. If any term, covenant, condition, or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the terms, covenants, conditions, and provisi ons of this Agreement, or the application thereof to any person or circumstance, must remain in full for ce and effect and shall in no way be affected, impaired or invalidated thereby.

K. Warranty of Authority to Execute Agreement. Each Party to this Agreement represents and warrants that each person whose signature appear s hereon has been duly authorized and has the full authority to execute this Agreement on behalf of the entity that is a Party to this Agreement.

L. Survival. Any provision that, by its nature, extends beyond the term or termination of this Agreement, including but not limited to Sections 2D and Section 7, will survive the expiration or termination of this Agreement.

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8 Section 17. Termination.

A. Voluntary. Either Party may terminate this Agreemen t and/or a Project at any time by giving written notice of termination to the other Party which must specify the effective date thereof.

Notice of termination under this paragraph must be given at leas t ninety (90) days before the effective date of such termination unless the Pa rties mutually agree to an earlier termination date. This Agreement will also terminate at the end of the fiscal year during which VTA loses its designation as County Program Manager for Santa Clara County.

If VTA terminates this Agreement and/or a Project pursuant to this provision, the Sponsor must cease all work under this Agreement and cease fu rther expenditures of Grant Funds received under this Agreement for the terminated Proj ect immediately upon rece ipt of the notice of termination, excepting any work permitted to continue that is specified in the notice of termination. VTA will review the project to deter mine if it will still reduce emissions, and if it does, VTA may reimburse Sponsor for eligible funds and no further Grant Funds will be provided for that Project.

If Sponsor terminates this Agreement and/or a Project pursuant to this provision, the Sponsor must return all Grant Funds pr ovided by VTA for the specific Pr oject up to and including the date of termination.

B. After Breach. VTA may terminate this Agreement and/or a Project for breach. Upon any breach, VTA will deliver a written notice of termination for breach to Sponsor that specifies the date of termination, which will be no less than ten (10) business days from delivery of such notice and will provide the Sponsor an opportunity to contest such breach within that period of time. If Sponsor contests the notice of terminat ion for breach, VTA will provide written notice of VTA’s determination of Sponsor’s contestation. If VTA upholds the te rmination for breach, the written notice will specify the effective date of termination and Sponsor will have ten (10) business days to cure. If the breach is not cure d within the allotted time, the Agreement will automatically terminate. The no tice of termination will specify the Total Grant Funds VTA has paid to the Sponsor, which Sponsor must reimburse to the VTA within thirty (30) days of the effective date of termination.

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9 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date shown below.

City of Palo Alto Santa Clar a Valley Transportation Authority (Sponsor) (VTA)

Dated: ____________________________ Dated: _____________________________

__________________________________ ___________________________________ Ed Shikada Carolyn Gonot
City Manager General Manager and CEO
City of Palo Alto
VTA

Approved as to Form: Approved as to Form:

_________________________________ _________________________________ Tim Shimizu Judith Propp
Assistant City Attorney VTA Counsel

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1 ATTACHMENT A – PROJECT INFORMATION SHEET

A. Project Number: 26SC04
B. Project Title: Palo Alto Link
C. Project Category (project will be evaluated under this category): 5e D. TFCA County Program Manager Funds Allocated: $456,500 E. TFCA Regional Funds Awarded (if applicable): $0
F. Total TFCA Funds Allocated (sum of C and D): $456,500 G. Total Project Cost: $1,800,000
H. Project Description:

With $456,500 in support from the BAAQMD Transportation Fund for Clean Air (TFCA), the City of Palo Alto seeks to continue operating its microtransit program (Palo Alto Link or PAL) through June 2026. This project is aligned with TFCA’s directive to reduce greenhouse gas emissions, improve transportation options for riders, reduce traffic congestion in the region, and reduce air pollution. The service will address multiple high-priority needs for the community including:

1. Reduce reliance on the single-occupancy vehicle and decrease overall greenhouse gas emissions

2. Facilitate east-west service and connections across the city

3. Increase accessibility for Palo Alto’s priority populations including low-income individuals and older adults

Project History and Need
Beginning in December 1999, the City of Palo Alto ran two free shuttle bus services on weekdays between the Palo Alto Caltrain station and destinations throughout the city limits. In addition, on both routes, the City ran a special school commute shuttle service on school days. The shuttle programs serviced numerous vulnerable and transit-dependent populations including students and seniors, with an estimated 550 riders per day and 140,000 riders per year.1 On July 1, 2020, both shuttle bus services were discontinued due to a temporary lack of riders during the COVID-19 pandemic and constraints on the City budget. Additionally in 2019, VTA implemented reductions in bus service in Palo Alto, making it much more difficult for those who work and live in Palo Alto to reach medical appointments, run errands, and get to work and school. VTA has rejected the idea of providing funds to backfill bus service reductions with local shuttle service.

Additionally, the Caltrain rail corridor and State Highway 82/El Camino Real bifurcate the City from north to south creating a lack of east-west transit connections. This makes it extremely difficult for residents to live a car-lite (or car-free lifestyle). If an individual is without access to a car entirely, their long-distance commute will require local bus service on both ends and local services are often infrequent and slow.

To remedy these critical transportation cuts and address the lack of east-west connections, the City of Palo Alto applied for the Innovative Transit Service Models Competitive Grant from the Measure B Program to implement an on-demand transit service. The City received funds to begin and run the microtransit service for 18 months and is now requesting funds through TFCA to fund continuation of the service. PAL is a dynamically routed on-demand microtransit service that is designed to reduce single-occupancy vehicle trips, improve mobility, and enable multimodal connections. PAL Item 7
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2 serves the entire city of Palo Alto and currently provides an average of 1,000 trips per week. The service allows riders to request trips anywhere within the zone; riders are picked up shortly after their trip is requested, and trips are grouped with others going in the same direction. There are 10 vehicles in the fleet, 3 of which are hybrid-electric and 7 that are electric. Funds through TFCA will support operating costs for the service and facilitate the transition to electric vehicles.

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1 ATTACHMENT B – INSURANCE REQUIREMENTS

SPONSOR’S ATTENTION IS DIRECTED TO THE INSURANCE REQUIREMENTS BELOW. IT IS HIGHLY RECOMMENDED TH AT SPONSOR CONFER WITH THEIR

INSURANCE CARRIERS OR BROKERS IN ADVANCE OF PROPOSAL SUBMISSION

TO DETERMINE THE AVAI LABILITY OF INSURANCE CERTIFICATES AND ENDORSEMENTS REQUIRED BY THIS CONTRACT.

INSURANCE

Without limiting Sponsor’s oblig ation to indemnify and hold harmless VTA, Sponsor must procure and maintain for the durat ion of the Contract insurance ag ainst claims for injuries to persons or damages to property which may arise from or in conn ection with the performance of the Work hereunder by Sponsor, its agents, representatives, or employees, or subcontractors. The cost of such insurance must be included in Contr act price. In the event of any material change in the Contract Scope of Services, VTA reserves the right to change the insurance requirements set forth herein. Sponsor must furnis h complete copies of all insura nce policies, within three (3) business days of any request for such by VTA.

A. Liability and Workers’ Compensation Insurance

1. Minimum Scope of Coverage
Coverage must be at least as broad as:

a. Insurance Services Offi ce General Liability coverage (“occurrence” form CG 0001).

General Liability insurance written on a “claims made” basis is not acceptable.

b. Insurance Services Office Business Auto Coverage, Insurance Services Office form number CA 0001, covering Automobile Liability , code 1 “any auto.” Auto Liability written on a “claims-made” basis is not acceptable.

c. Workers’ Compensation insurance as re quired by the Labor Code of the State of California and Employer’s Liability insurance.

d. Professional Liability, including limited contractual liability coverage, covering liability arising out of any negligent ac t, error, mistake or omission in the performance of Sponsor’s services under this Agreement. This coverage must be continuously maintained for a minimum of two (2) years following completion of this Agreement. This coverage may be written on a claims made basis, if so, see special provisions in Section B.

e. Sponsor’s Pollution/Environmental Impair ment Liability: covering liability arising out of the treatment, handling, storage, tran sportation, or accident al release of any hazardous material.

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2 2. Minimum Limits of Insurance
Sponsor must maintain limits no less than:

a. General Liability (including umbr ella/excess liabil ity): $4,000,000 limit per occurrence for bodily injur y, personal injury, and pr operty damage. If General Liability Insurance or other form with a ge neral aggregate limit is used either the general aggregate limit must apply separately to this project/location or the general aggregate limit must be twice the required o ccurrence limit. This requirement may be satisfied by a combination of General Liabili ty with Excess or Umbrella, but in no event may the General Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies fe ature inception and expiration dates concurrent with the underlying General Liability policy, “Follow Form” coverage, and a “Drop Down”.

b. Automobile Liability (including umbr ella/excess liabi lity): $4,000,000 limit per accident for bodily injury and property damage . This requirement may be satisfied by a combination of Auto Liability with Excess or Umbrella, but in no event may the Automobile Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature in ception and expiration dates concurrent with the underlying auto liability polic y, “Follow Form” coverage, and a “Drop Down”.

c. Workers’ Compensation and Employer’s Liability: Statutory Workers’ Compensation limits and Employer’s Liability limits of $1,000,000 per accident.

d. Professional Liability: $2,000,000 each occurrence/aggregate minimum limit per claim. This requirement may be satisfied by a combination of Pr ofessional Liability insurance with Excess or Umbrella policies, but in no event may the Professional Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature inception a nd expiration dates concurrent with the underlying policy, “Follow Form”, and a “Drop Down” provision.

e. Sponsor’s Pollution/Environmental Im pairment Liability: $3,000,000 per occurrence.

This requirement may be satisfied by a combination of Pollution Liability insurance with Excess or Umbrella policies, but in no event may the Pollution Liability primary policy limit per occurren ce be less than $2,000,000, unless Umbrella/Excess policies feature inception and expiration dates conc urrent with the underlying policy, “Follow Form” coverage, and a “Drop Down” provision.

3. Self-Insured Retention
The certificate of insurance must disclose the actual amount of a ny deductible or self- insured retention, or lack thereof, for all coverages required here in. Any self-insured retention or deductible in excess of $50,000 ($100,000 if Sponsor is a publicly-traded Item 7
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3 company) must be declared to and appr oved by VTA. If Sponsor is a governmental authority such as a state, municipality or speci al district, self-insuran ce is permitted. To apply for approval for a level of retenti on or deductible in excess of $50,000, Sponsor must provide a current financial report incl uding balance sheets and income statements for the past three years, so that VTA can as sess Sponsor’s ability to pay claims falling within the self-insured retention or deductib le. Upon review of the financial report, if deemed necessary by VTA in its sole discretion, VTA may elect one of the following options: to accept the existing self-insured re tention or deductible; require the insurer to reduce or eliminate the self-insured retention or deductible as respects VTA, its directors, officers, officials, employees and volunteers; or to requ ire Sponsor to procure a bond guaranteeing payment of loss es and related investigations, claim administration and defense expenses. Applicable costs resulting therefrom will be bor ne solely by Sponsor.

Sponsor may request execution of a nondisclo sure agreement prior to submission of financial reports.

B. Claims Made Provisions (not applicable to General Liability or Auto Liability) Claims-made coverage is never acceptable for General Liability or Auto Liability. Claims- made may be considered for Professional, Environmental/Pollution, or Cyber Liability. If coverage is written on a claims-made basis, the Certificate of Insurance must clearly state so.

In addition to all other coverage requirements, such policy must provide that:

1. The policy must be in effect as of the date of this Agr eement and the retroactive date must be no later than the date of this Agreement.

2. If any policy is not renewed or the retroactive date of such policy is to be changed, the Sponsor must obtain or cause to be obtai ned the broadest ex tended reporting period coverage available in the commercial in surance market. This extended reporting provision must cover at least two (2) years.

3. No prior acts exclusion may be added to the policy during the contract period.

4. The policy allows for reporting of circumstan ces or incidents that might give rise to future claims.

C. Other Provisions

The policies must contain, or be endorsed to contain, the following provisions:

1. General Liability, Automobile Liabilit y, and Sponsor’s Pollution Liability

a. VTA, its directors, officers, officials, employees and volunteers are to be named as additional insureds as respects: liability arising out of activities performed by or on behalf of the Sponsor, including VTA’s general supervision of the Sponsor; products Item 7
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4 and completed operations of the Sponsor and its subcontractors; premises owned, occupied or used by the Sponsor; or automobiles owned, leased, hired or borrowed by the Sponsor. The coverage must contain no special limitations on the scope of protection afforded to VTA, its directors, officers, officials, employees, or volunteers.

Additional Insured endorsements must provide coverage at least as broad as afforded by the combination of ISO CG 20 10 10 01 and CG 20 37 10 01.

b. Any failure to comply with reporting pr ovisions of the polic ies may not affect coverage provided to VTA, its directors, officers, officials, employees, or volunteers.

c. Sponsor’s insurance must apply separate ly to each insured ag ainst whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

a. The General Liability General Aggregate limit must apply per project, not per policy.

b. The General Liability policy mu st be endorsed to remove the exclusion for railroad liabilities, with coverage at least as broad as afforded by ISO CG 24 17.

2. All Coverages

a. Sponsor’s insurance coverage must be primary insurance as respects VTA, its directors, officers, officials, employees, and volunteers. Self-insurance or insurance that may be maintained by VTA, its direct ors, officers, offici als, employees, or volunteers may apply only as excess to the Sponsor’s insurance. Sponsor’s insurance must not seek contribution from VTA’s insurance program.

b. The insurer must agree to waive all rights of subrogation against VTA, its directors, officers, officials, employees, and voluntee rs for losses arising from work performed by the Sponsor and its subcontractors for VTA

3. Other Insurance Provisions

a. The Certificate must disclose the actual amounts of all deductib les or self-insured retentions.

b. If any coverage forms or endor sements required by this Cont ract are updated by their publishers, whether they be the insurance carrier(s), the Insurance Services office, or the American Association of Insurance Serv ices, during the duration of this Contract, VTA reserves the rights to require the Spons or to procure said coverage forms or endorsements using the updated versions upon the next renewal cycle.

D. Acceptability of Insurers
Insurance and bonds must be placed with insurers with an A.M. Best’s rating of no less than A VII (financial strength rating of no less than A and financial size category of no less than VII), unless specific prior written approval has been granted by VTA.

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5 E. Certificates of Insurance
Sponsor must furnish VTA with a Certificat e of Insurance. The certificates for each insurance policy are to be signed by an author ized representative of that insurer. The certificates must be issued on a standard ACORD Form. The Sponsor must instruct their insurance broker/agent to submit all insurance certificates and required notices electronically in PDF format to [email protected] g. All endorsements must be attached to the ACORD certificate in a single PDF document.

The certificates must (1) identify the insurers, the types of insurance, the insurance limits, the deductibles, and the policy term , (2) include copies of all the actual policy endorsements required above, and (3) in the “Certificate Holder” box include:

Santa Clara Valley Transportation Authority (“VTA”)
3331 North First Street
San Jose, CA 95134-1906

In the Description of Operations/Locations/V ehicles/Special Items Box, the VTA Contract number must appear, the list of policies sche duled as underlying on the Umbrella/Excess policy must be listed, Certificate Holder must be named as additional insured, and Waiver of Subrogation must be indicated as endorsed to all policies as stated in the Contract Documents.

It is a condition precedent to award of this Contract that all insu rance certificates and endorsements be received and approved by VTA before Contract execution. No work may be performed until insurance is in full compliance. VTA reserves the rights to require complete, certified copies of all required insurance policies, at any time.

If the Sponsor receives notice th at any of the insurance policie s required by this Exhibit may be cancelled or coverage reduced for any reason whatsoever, Spons or must immediately provide written notice to VTA that such insuranc e policy required by this Exhibit is canceled or coverage is reduced.

F. Maintenance of Insurance

If Sponsor fails to main tain insurance as required herei n, VTA, at its option, may suspend payment for work performed and/or may order the Sponsor to suspend work at Sponsor’s expense until a new policy of insurance is in effect.

Ed. Rev. 10-1-19
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Utilities
Meeting Date: November 17, 2025
Report #:2504-4536
TITLE
Approval of Contract No. C26196096 with Soudi Consultants, Inc. in an Amount Not-to-Exceed of $1,500,000 over a Period of Three Years to Provide As-Needed Electric Engineering Consulting Services for System Protection Related to Palo Alto’s Electric Sub-Transmission, Substations, and Distribution Systems, and Technical Training and Peer Review Services; CEQA Status: Exempt Under CEQA Guidelines Sections 15302, 15303, and 15183.

RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute contract C26196096 (Attachment A) with Soudi Consultants, Inc. (Soudi), for as-needed and specialized electric engineering consulting of system protection related to Palo Alto’s electric sub-transmission, substations, and distribution systems, including technical trainings and peer review for utilities staff, in the amount of $1,500,000 over a period of three years.

BACKGROUND
On June 22, 2020, Council approved three professional service agreements for electric engineering consulting services on an as-needed basis for a five-year term and an aggregate not- to-exceed amount of $5,000,000 (Staff Report #112171). Soudi was one of the three consultants awarded the 2020 contract after a competitive bid. The electric engineering consulting solicitation sought technical expertise for individual assignments that arise for on-call utilities electric engineering consulting services. These services include substation engineering, distribution engineering, system protection, supervisory control and data acquisition (SCADA), fiber optics, and customer service application reviews.

The original five-year contract ended on May 17, 2025. Amendment No. 1 to the agreement extended the term with Soudi for six months through November 17, 2025 or until a replacement agreement was approved. Amendment No. 1 provided no change in compensation or total not- 1 Staff Report #11217 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2020/id-11217-mini-packet-062220.pdf?t=39457.19 Item 8
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to-exceed amount. In aggregate, the City spent approximately $2,450,000 of the original not-to- exceed amount of $5,000,000 over 5.5 years with the three consulting firms and the unspent amount was returned to Electric reserves. The City spent $1,700,000 on the Soudi contract over the past 5.5 years for sub-transmission, substation, and distribution system protection engineering design and consulting.

A sole source exemption from competitive solicitation was granted pursuant to PAMC

2.30.360(d) as Soudi is the only consultant with extensive experience in sub-transmission, substation, and distribution system protection of the nine substations in the City of Palo Alto. It would take significant time to onboard a new consultant to gain a similar level of knowledge of the City’s substations relay protection design and operations which would significantly delay the grid modernization project and other substation equipment upgrades over the next three years.

ANALYSIS
The Utilities Electric Engineering Division has been working with Soudi since 2014 on substation relay protection. Due to staffing challenges in hiring principal engineers with electric distribution experience, the Electric Engineering Division relies on technical engineering consultants such as Soudi in specialized areas where Engineering has limited in-house expertise.

Soudi possesses extensive experience in sub-transmission and substation system protection.

They have demonstrated their technical expertise in successfully completed substation and distribution projects for Palo Alto. These projects include the 60kV sub-transmission breaker study, 60kV relay coordination projects, generation interconnections, development of relay settings templates, developing protection settings on the 60kV system to meet industry best- practices, and 12kV distribution protection support. Soudi is also a primary electric protection consultant for PG&E and can serve as the City’s professional liaison and provide technical communication to integrated designs on joint projects.

Soudi is currently supporting multiple facets of the City’s grid modernization project including Relay installation and replacement of existing mechanical or microprocessor relays Breaker replacement design at 115kV/60kV and 60kV/12kV substations Replacement design of distribution and power transformer breakers Substation protection design at Colorado, East Meadow, and Adobe Creek Substation capacitor bank design
In addition to the active projects and areas of expertise listed above, the proposed scope of work will provide the City with access to employee training by Soudi Consultants to develop internal knowledge and skills regarding system protection settings. Additionally, as the City builds an internal knowledge and skill in system protection, the proposed agreement and scope of work will allow Soudi to provide peer review of protection settings and schemes completed Item 8
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by internal City staff. This will help the City to increase internal knowledge regarding system protection and relay protection settings and lessen the City’s dependance on consultants.

Over the past 11 years, Soudi has demonstrated higher than satisfactory performance and assisted the City’s Utilities Department in successfully completing various maintenance activities and Capital Improvement Projects. Soudi is also knowledgeable of the protective network of Palo Alto’s nine substations and is well positioned to provide technical support for unplanned replacements and emergencies.

The Council’s approval of the consulting agreement will enable staff to utilize the agreement for multiple projects - it does not guarantee any work will be carried out. When staff has a specific project or task that requires consulting services, City staff will solicit a proposal from the consultant and evaluate using objective criteria. A task order with scope, timeline, and budget will be established with the consultant and require internal reviews for approval that include the Project Manager and/or Assistant Director of the Electric Utility. Any task order over $100,000 also requires approval from the City Manager or their designee.

FISCAL/RESOURCE IMPACT
Funding for agreement is available in the FY 2026 Electric CIP budget under EL-24000 (Grid Modernization), EL-19001 (Colorado Power Station Equipment Upgrades), EL-17002 (Substation Breaker Replacement), and EL-89038 (Substation Protection Improvements). Subsequent years are subject to City Council’s approval of the annual budget process and appropriation of funds.

POLICY IMPLICATIONS
The approval of this Enterprise Fund’s professional services contract is consistent with existing City policies. This recommendation is consistent with the Council-approved Utilities 2018 Strategic Plan ( Staff Report 9022 3), especially the strategic objectives to: “Establish a proactive infrastructure replacement program, based on planned replacement before failure to support reliability and resiliency.”

STAKEHOLDER ENGAGEMENT
This agreement with Soudi Consultants does not impact customers that would require community outreach.

ENVIRONMENTAL REVIEW
The services covered by this agreement are categorically exempt from California Environmental Quality Act (CEQA) review under CEQA Guidelines section 15302 (replacement or reconstruction of existing structures and facilities) and section 15303 (construction and location of limited 3 Staff Report 9022 https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/reports/city- manager-reports-cmrs/year-archive/2018/final-staff-report-id-9022_2018-utilities-strategic-plan.pdf Item 8
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numbers of new, small facilities or structures; installation of small new equipment and facilities in small structures); work related to the Grid Modernization for Electrification Project is also exempt under CEQA guidelines section 15183 (projects consistent with a general plan, community plan, or zoning) since it is consistent with the Environmental Impact Report (EIR) Addendum to the City of Palo Alto Comprehensive Plan Final Environmental Impact Report Council approved on June 5, 2023.

ATTACHMENTS
Attachment A: Contract Number C26196096 With Soudi Consultants, Inc.

APPROVED BY:

Alan Kurotori, Director of Utilities
Staff: Gopal Jagannath, Utilities Management Specialist Item 8
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Professional Services
Rev. Oct 16,2024