Agenda packet — Palo Alto City Council, December 1, 2025 (part 6 of 6)

SOUTH PALO ALTO BIKE/PED CONNECTIVITY
PHASE 2 COMMUNITY ENGAGEMENT

SYNTHESIS OF STANDING MEETINGS
Planning and Transportation Commission (PTC) Meeting
(September 10, 2025)
Requested clarification on the relationship between the South Palo Alto Bike/Ped Connectivity Project and the Rail Grade Separation Project and noted that the analysis assumes Meadow Drive and Charleston Road would be grade separated for all travel modes (vehicles, bikes, and pedestrians) in the future.

Expressed opposition to design alternatives that require adding a new signalized intersection on Alma Street due to increases in motor vehicle travel delay and safety of bicyclists and pedestrians crossing Alma Street. However, it was noted that additional traffic signals and reduced lane widths on Alma Street may reduce vehicle speeds.

Clarified that weekday bicycle and pedestrian trip demand for Alternatives B and C would likely be different due to added travel times waiting at a traffic signal at Alma Street.

Expressed concern with design alternatives that require private homes and recommended the Alternatives Analysis made the number of homes impacted by each alternative clearer.

Supported crossing locations with the highest bicycle and pedestrian demand projections.

Generally, unsupportive of additional bicycle and pedestrian rail crossings between Meadow Drive and Charleston Road (Alternatives D and E) due to Rail Grade Separation Project, low demand projections (Alternatives D, E, and F), and in-direct roadways that would connect to/from the future tunnel.

Most supported Alternative B, followed by Alternatives A, C, G, and H.

City/School Transportation Safety Committee (10/23/2025) Requested clarification on the meaning of “right-of-way impacts”, number of bicycle and pedestrian crossings that would be built because of this effort, and relationship to the Rail Grade Separation Project.

Provided general feedback on the tunnel designs that would apply to all alternatives. o Suggested ramp grades are less than the ramps at California Avenue and are designed to accommodate larger bikes and discourage bike speeding. o Emphasized that tunnel lighting is very important at night as well as during the day as visibility can be limited when quickly transitioning from dark to light on a bright/sunny day.

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Attachment C - Phase 2
Community Engagement
Synthesis of Standing
Meetings
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November 19, 2025

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o Noted that tunnel width is very important to accommodate two-way travel and suggested that future tunnels are wider than those at California Avenue. o Expressed concern with situations where students would cross traffic to access tunnels due to potential safety risks.
o Encouraged City to consider way to avoid at-grade crossings of Alma Street and clarified that Alma Street at the Homer tunnel (which includes an at-grade crossing of Alma Street via a signalized intersection) has a speed limit of 25 mph and is in a more urban/downtown setting where vehicles travel at slower speeds.

Recommended placement of existing/future crossings be evenly spaced out and aligned with school routes to increase accessibility for users.

Suggested City also considers enhancements at the existing California Avenue crossing.

Generally supportive of Alternative B due to location and grade-separated crossing of Alma Street. However, noted there would be significant trade-offs as this design would require 2- 4 private lots.

Generally supportive of Alternative A due to limited property impacts (would not impact existing buildings) and encouraged City to consider refinements that would extend the tunnel to El Dorado and provide a grade-separated crossing of Alma Street.

Interested in exploring Alternatives G and H to support east-west bicycle and pedestrian connectivity due to future, high-density housing along San Antonio Road. However, noted that Alternative H does not provide family-friendly rail crossings for students.

Pedestrian and Bicycle Advisory Committee (11/4/2025)
Requested clarification on the relationship and potential construction sequencing of the South Palo Alto Bike/Ped Connectivity Project and the Rail Grade Separation Project, as well as number of crossings currently being considered in relation to their geographic distribution.

Expressed opposition to design alternatives that require adding a new signalized intersection on Alma Street due to increases in pedestrian and bicycle travel times waiting to cross Alma Street.

Supportive of Alternative B due to location and grade-separated crossing of Alma Street, however, noted significant trade-offs due to private property acquisitions on Park Boulevard and circulation disruptions to adjacent properties on Loma Verde Avenue.

Supportive of Alternative A due to limited property impacts and suggested modifying design to extend tunnel under Alma Street to El Dorado Avenue.

Supportive of Alternative G due to location and proximity to San Antonio Caltrain Station, connection with Del Medio and San Antonio Shopping Center in Mountain View.

Generally supportive of Alternative H due to enhanced bicycle and pedestrian access to the San Antonio Caltrain Station but noted center-running bikeway on San Antonio Road would be intimidating for many people (especially at signalized intersections on either end).

Suggested refinements to Alternative H included improvements at San Antonio Road/Mackay Drive intersection for better bicycle and pedestrian access to Nita Avenue, Item 18
Attachment C - Phase 2
Community Engagement
Synthesis of Standing
Meetings
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and use of the tunnel underneath San Antonio Road near Briarwood Way and a multi-use path connecting to Mayfield Avenue.

Generally unsupportive of Alternatives D, E, and F due to low demand projections.

Provided feedback that would apply to several alternatives:
o Recommended reduced tunnel heights and depths to reduce ramp lengths and property impacts.
o Suggested additional exploration of ramps/tunnels that use the landscaped planted area on the eastside of Alma Street rather than tunneling down the middle of the street due to adjacent property impacts and circulation disruptions. Noted Alternative D as favorable design due to grade-separated crossing under Alma Street and use of landscaped strip on Alma Street.
o Reinforced that this will be a major infrastructure project and will be used for a long time, so it should be forward-thinking.
o Encouraged enhanced pathway designs to more bicycle-oriented that can accommodate two-way travel.

Rail Committee (11/18/2025)
Requested clarification on the relationship and interplay between the South Palo Alto Bike/Ped Connectivity Project and the Rail Grade Separation Project and the sequencing of construction of these projects.

Requested clarification on the meaning of “parcel impacts”, including what is the worst and best case for these alternatives.

Commented that there may be Caltrain right-of-way impacts for alternatives proposing a ramp between Alma Street and the Caltrain tracks.

Provided feedback that Alternatives G and H primarily serve Mountain View and would require close collaboration and partnership with Mountain View.

Suggested eliminating D, E, and F from further consideration due to trade-offs.

Requested confirmation that it would be possible to mix and match design elements of the alternatives, for example modifying Alternative A to include a tunnel under Alma Street and the Caltrain tracks.

Commented that as concepts are advanced, trade-offs with slopes and ramp lengths as well as whether to cross Alma Street at-grade (via new signalized intersection) or belowgrade (via tunnel) should be explored.

Noted that the committee looked forward to feedback from Stanford University, Stanford Research Park, and Palo Alto Unified School District (PAUSD).

Discussed challenges with the exploration of steeper ramps with tighter switchbacks to reduce impacts to parcels and improbability of finding two willing property sellers at Alternatives B and C.

Supportive of Alternative A due to location near Matadero Creek, connections to El Dorado Avenue (as a lower volume street and future bicycle boulevard), Bryant Street, El Carmelo Elementary School, Hoover Park, NVCAP and Stanford Research Park, limited property impacts, higher bicycle and pedestrian use and opportunities for mode shift.

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Attachment C - Phase 2
Community Engagement
Synthesis of Standing
Meetings
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Unanimously passed a motion to recommend to Council Alternative A as the preferred alternative and remove all other alternatives from further consideration, and advance Alternative A as Alternative A1 and create a new Alternative A2 at El Dorado Avenue that would include a tunnel under Alma Street and the Caltrain tracks.

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Attachment C - Phase 2
Community Engagement
Synthesis of Standing
Meetings
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Human Resources
Meeting Date: December 1, 2025
Report #:2511-5436
TITLE
Approval of Amendments to the Employment Agreements between the City of Palo Alto and Council Appointed Officers, specifically the City Manager, City Attorney, and City Clerk. CEQA Status - Not a Project

RECOMMENDATION
Staff recommends that the City Council approve and authorize the Mayor to execute the following contract amendments for Council Appointed Officers:

1. Amendment No. 13 to Employment Agreement between the City of Palo Alto and Molly S. Stump (Attachment A);

2. Amendment No. 7 to Employment Agreement between the City of Palo Alto and Ed Shikada (Attachment B); and

3. Amendment No. 2 to Employment Agreement between the City of Palo Alto and Mahealani Ah Yun (Attachment C).

BACKGROUND
The City Council has completed the annual merit reviews for Council Appointed Officers (CAOs):

City Attorney Molly S. Stump, City Manager Ed Shikada, City Clerk Mahealani Ah Yun for the prior fiscal year’s performance (FY 2025).

For the FY 2025 performance evaluation period, City Council completed evaluations for the City Attorney, City Manager, and City Clerk. Council completed the evaluations with the assistance of an outside consultant. The consultant, a professional with the firm Municipal Resource Group (MRG), facilitates CAO evaluations for public agencies throughout California. The process includes surveys, 1-1 interviews, and facilitated closed session discussions as appropriate under the Brown Act.

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As appointed officers of the Council, the City Attorney, City Manager, and City Clerk are employed under employment agreements specifying that performance and salary are evaluated annually. CAO’s do not receive regular cost of living adjustments which are applied to other employee groups (all Management, Service Employees International Union, International Association of Firefighters, Palo Alto Police Officers Association, etc.), all salary compensation is determined by Council during the annual evaluation process and approved by Council in a public meeting.

ANALYSIS
The following paragraph is the specific provision in the City Manager’s employment agreement that addresses salary adjustments; the City Attorney and City Clerk’s employment agreements contain similar provisions.

Salary Adjustments. Not less than once each year, the City Council shall meet for the express purpose of evaluating the performance of Shikada and determining whether to grant him an increase in annual base salary based on performance. The City Council will act in good faith in determining whether to provide an increase based on performance, but the ultimate decision in this regard is within the sole discretion of the City Council. The Council may also adjust Shikada’s annual base salary due to labor market and/or internal equity conditions.

Staff has been directed by City Council to bring forward amendments to employment agreements to implement merit- based increases to the CAO’s annual salaries, effective July 1, 2025, as follows:
• City Attorney Molly S. Stump will receive a merit increase of 3% as a City contribution towards her 401(a) defined contribution retirement plan. (Attachment A) • City Manager Ed Shikada will receive a merit increase of 3%. Shikada‘s new salary will be $435,510.40 (Attachment B)
• City Clerk Mahealani Ah Yun will receive a merit increase and market-based adjustment to median of the market at $211,764.80 (Attachment C). Council conducted a thorough review of the Bay Area compensation for City Clerks and found the City Clerk’s salary to be significantly below the City’s target market. A market-based adjustment is warranted to ensure alignment with market.

At the conclusion of the CAO evaluation process, Council directed staff to prepare amendments to each employment agreement reflecting the increases outlined above. Amendments are attached to this staff report as exhibits and show the specific adjustments to each employment agreement.

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FISCAL/RESOURCE IMPACT
The recommendations in this report will result in additional costs of approximately $43,000.

These costs are anticipated to be absorbed by the respective departments‘ FY 2026 Adopted Operating Budgets. These changes will be incorporated as ongoing changes in the development of the FY 2027 annual budget.

STAKEHOLDER ENGAGEMENT
Employment agreements of local public agency executives are required to be voted on in open session when changes in salary or benefits are proposed to provide transparency for stakeholders.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) in that the amendments to the employment agreements are personnel-related actions. CEQA Guidelines Section 15378(b)(2).

ATTACHMENTS
Attachment A: Amendment No. 13 to the employment agreement between the City of Palo Alto and Molly Stump
Attachment B: Amendment No. 7 to the employment agreement between the City of Palo Alto and Edward Shikada
Attachment C: Amendment No. 2 to the employment agreement between the City of Palo Alto and Mahealani Ah Yun
APPROVED BY:

Sandra Blanch, Human Resources Director
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1 AMENDMENT NO. THIRTEEN TO EMPLOYMENT AGREEMENT

BETWEEN THE CITY OF PALO ALTO AND
MOLLY S. STUMP
This AMENDMENT NO. THIRTEEN to the EMPLOYMENT AGREEMENT(“Agreement”) is entered into on December 1, 2025, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and MOLLY S. STUMP (“Stump”), an individual, located at 250 Hamilton Avenue 8th Floor, Palo Alto, CA.

R E C I T A L S:

WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Molly S. Stump, attached hereto and incorporated herein as Exhibit “A” was entered into between the parties for the services of City Attorney on or about April 18, 2011; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about March 24, 2014; and
WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about December 8, 2014; and
WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about February 1, 2016; and
WHEREAS, AMENDMENT NO. FOUR to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about December 12, 2016; and
WHEREAS, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about November 6, 2017; and
WHEREAS, AMENDMENT NO. SIX to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about December 17, 2018; and
WHEREAS, AMENDMENT NO. SEVEN to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about December 17, 2019; and
WHEREAS, AMENDMENT NO. EIGHT to the Agreement, attached hereto and Item 19
Attachment A - Amendment
No. 13 to the employment
agreement between the
City of Palo Alto and Molly
Stump
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2 incorporated herein in Exhibit “B” was entered into between the parties on or about June 22, 2020; and
WHEREAS, AMENDMENT NO. NINE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about December 13, 2021; and
WHEREAS, AMENDMENT NO. TEN to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about November 28, 2022; and
WHEREAS, AMENDMENT NO. ELEVEN to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about December 11, 2023; and
WHEREAS, AMENDMENT NO. TWELVE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered into between the parties on or about December 2, 2024; and
WHEREAS, the parties wish to amend the Agreement;
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree:

SECTION 1.

Section 5.2 of the Agreement, 401(a) Defined Contribution Retirement Plan, is hereby amended to read as follows:

Effective the first full pay period of July 2025, the City shall contribute Forty Four Thousand and Forty Six dollars ($44,046) annually, prorated and contributed on the City’s normal paydays, to a 401(a) retirement plan account established for Stump.

SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the first written date above written.

Attest: City of Palo Alto
Approved as to form: Molly S. Stump
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Attachment A - Amendment
No. 13 to the employment
agreement between the
City of Palo Alto and Molly
Stump
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3 Attachments:

EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MOLLY S.

STUMP
EXHIBIT B: AMENDMENTS NO. ONE THROUGH NO. TWELVE.

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Attachment A - Amendment
No. 13 to the employment
agreement between the
City of Palo Alto and Molly
Stump
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1 AMENDMENT NO. SEVEN TO EMPLOYMENT AGREEMENT

BETWEEN

THE CITY OF PALO ALTO
AND

EDWARD SHIKADA
This AMENDMENT NO. SEVEN to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on, December 1, 2025, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and Edward Shikada (“Shikada”), an individual, located at 250 Hamilton Avenue 7th Floor, Palo Alto, CA.

R E C I T A L S:

WHEREAS, the original EMPLOYMENT AGREEMENT between the City and Shikada, attached hereto and incorporated herein as Exhibit “A” was entered between the parties for the services of City Manager on or about September 18, 2018; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered between the parties on or about December 16, 2019; and
WHEREAS, AMENDMENT NO. TWO to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered between the parties on or about June 22, 2020; and
WHEREAS, AMENDMENT NO. THREE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered between the parties on or about December 13, 2021; and
WHEREAS, AMENDMENT NO. FOUR to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered between the parties on or about November 28, 2022; and
WHEREAS, AMENDMENT NO. FIVE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered between the parties on or about December 11, 2023; and
WHEREAS, AMENDMENT NO. SIX to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered between the parties on or about December 2, 2024; and
WHEREAS, the parties wish to amend the Agreement;
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Attachment B - Amendment
No. 7 to the employment
agreement between the
City of Palo Alto and Edward
Shikada
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2 NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree:

SECTION 1.

Section 4.1 of the Agreement, Initial Compensation, is hereby amended to read as follows:

4.1. Compensation. At the recommendation of the Palo Alto City Council Appointed Officers Committee (CAO) and consistent with annual merit practices, effective the first full pay period following July 1, 2025, Shikada will receive a base annual salary of Four Hundred Thirty-Five Thousand Five Hundred and ten dollars ($435,510.40). This amount is subject to authorized or required deductions and withholding, prorated, and paid on City’s regular paydays. Shikada is an exempt employee under applicable wage and hour law and his base salary shall be compensation for all hours worked.

The City agrees that the amount of Shikada’s base annual salary will not decrease, except as part of the permanent decrease that is consistent with the Fair Labor Standards Act.

SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written.

ATTEST: CITY OF PALO ALTO
City Clerk Mayor
APPROVED AS TO FORM: EDWARD SHIKADA
City Attorney
Attachments:

EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO

ALTO AND EDWARD SHIKADA
EXHIBIT B: AMENDMENTS NO. ONE THROUGH NO. SIX TO SHIKADA Item 19
Attachment B - Amendment
No. 7 to the employment
agreement between the
City of Palo Alto and Edward
Shikada
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1 AMENDMENT NO. TWO TO EMPLOYMENT AGREEMENT

BETWEEN

THE CITY OF PALO ALTO
AND
Mahealani Ah Yun
This AMENDMENT NO. TWO to the EMPLOYMENT AGREEMENT (“Agreement”) is entered into on, December 1, 2025 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“City”), and Mahealani Ah Yun (“Ah Yun”), an individual, located at 250 Hamilton Avenue 7th Floor, Palo Alto, CA.

R E C I T A L S:

WHEREAS, the original EMPLOYMENT AGREEMENT between the City and Ah Yun, attached hereto and incorporated herein as Exhibit “A” was entered between the parties for the services of City Clerk on or about January 22, 2023; and WHEREAS, AMENDMENT NO. ONE to the Agreement, attached hereto and incorporated herein in Exhibit “B” was entered between the parties on or about December 2, 2024; and
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree:

SECTION 1.

Section 3 of the Agreement, Salary, is hereby amended to read as follows:

At the recommendation of the Palo Alto City Council Appointed Officers Committee (CAO) and consistent with annual merit practices, effective the first full pay period following July 1, 2025, Ah Yun will receive a base annual salary of Two Hundred Eleven Thousand Seven hundred and Sixty-Four dollars ($211,764.80). This amount is subject to authorized or required deductions and withholding, prorated, and paid on the City's regular paydays. Ah Yun is an exempt employee under applicable wage and hour law and her base salary shall be compensation for all hours worked. The City agrees that the amount of Ah Yun's base annual salary will not decrease, except as part of a permanent decrease that is consistent with the Fair Labor Standards Act.

SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written.

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Attachment C - Amendment
No. 2 to the employment
agreement between the
City of Palo Alto and
Mahealani Ah Yun
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2 ATTEST: CITY OF PALO ALTO
Mayor
APPROVED AS TO FORM: Mahealani Ah Yun
City Attorney
Attachments:

EXHIBIT A: EMPLOYMENT AGREEMENT BETWEEN THE CITY OF PALO ALTO AND Mahealani Ah Yun
EXHIBIT B: AMENDMENTS NO. ONE
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Attachment C - Amendment
No. 2 to the employment
agreement between the
City of Palo Alto and
Mahealani Ah Yun
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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Planning and Development Services
Meeting Date: December 1, 2025
Report #:2510-5367
TITLE
Final Accessory Dwelling Unit (ADU) - 2025 Quarter 3 (July - September 2025) Report

RECOMMENDATION
This informational report requires no action. Future quarterly reports will be prepared only at Council’s direction.

BACKGROUND
Quarterly ADU reports were initiated to provide Council with ongoing production updates.

Beginning in 2026, this information will be available and updated monthly on the City’s Housing Dashboard, eliminating the need for future reports.

ANALYSIS
This report summarizes accessory dwelling unit (ADU) and junior ADU (JADU) application activity for the first three quarters of 2025. Since 2015, the City has received 920 ADU/JADU building permit applications and issued 725 permits. In the first three quarters of 2025, 120 new applications were received, 101 permits issued, and 101 final inspections approved. These figures continue to support the Housing Element’s projected average of 64 ADU/JADU units per year (512 units over eight years).

ADU sizes for open applications range from 176 to 1,000 square feet, averaging 585 square feet. About 40% of applications are north of Oregon Expressway and 60% south, with the northsouth distribution varying annually since 2017. Additional details are provided in Table 1.

FISCAL/RESOURCE IMPACT
This action has no fiscal impact.

ATTACHMENTS
Attachment A: Q3 2025 ADU Location Table
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item A
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Table 1: Summary of ADU Permits from 2015-2025
Category 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
(Q1-Q3)
New ADU Applications
Filed1
10 9 28 55 75 78 136 151 122 136 120
Permits: Ready to Issue
(City Approved)2
8 5 12 39 62 46 112 127 135 131 106
Permits: Issued (Permit
Obtained)3
8 5 12 36 62 43 89 120 125 124 101
Permits: Final Inspection
Approved4
3 4 9 12 33 46 37 62 101 105 101
Permits Expired 1 1 1 6 3
Detached ADUs
(Submitted)5
20 35 52 52 80 80 48 53 46
Detached ADUs (Issued)5 8 24 41 33 55 64 57 48 36
Attached ADUs
(Submitted)6
8 20 23 20 56 44 43 47 45
Attached ADUs (Issued)6 4 11 21 9 34 32 40 52 34
Junior ADUs (Submitted)7 1 1 1 25 27 31 36 29
Junior ADUs (Issued)7 1 1 1 9 24 28 24 31
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Category 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
(Q1-Q3)
Average Application
Processing Time (Days
Including Weekends)8
127 214 118 183 135 197 162 193 187 193 178
Average Construction
Time (Days Including
Weekends)9
578 751 330 287 173 262 455 431 496 519 517
City Impact Fees
Collected for New ADUs10 $451,514 $402,012 $198,962 $44,057 $139,592 $540,453 $487,322 $498,101 $412,867 ADU Size Smallest 150 SF 159 SF 220 SF 208 SF 178 SF 192 SF 227 SF 165 SF 176 SF ADU Size Largest 900 SF 900 SF 1,031 SF 1,000 SF 1,218 SF 2,217 SF 1,000 SF 1,000 SF 1,000 SF Average ADU Size 470 SF 469 SF 383 SF 518 SF 550 SF 589 SF 571 SF 558 SF 585 SF ADU Location North 46% 49% 52% 55% 49% 52% 41% 44% 40%
Relative to
Oregon
Expressway South 54% 51% 48% 45% 51% 48% 59% 56% 60%
Source: City of Palo Alto Accela Data January 2015 through June 2025 Item A
Item A Staff Report
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Notes:

1. Any ADU/JADU Application SUBMITTED for the year

2. Any ADU/JADU application Permit 'READY TO Issue' for the year (regardless of when it was submitted)

3. Any ADU/JADU Permit ISSUED for the year (regardless of when it was submitted)

4. Any ADU/JADU Permit receiving a Final Inspection (Ready to Occupy) for the year, regardless of when the application wassubmitted. Years 2015-2017 data point not available.

5. Any Detached ADU Permit Application submitted for the year/Any Detached ADU Permit Issued for the year, regardless of when the application was submitted. Years 2015-2016 data point not available.

6. Any Attached ADU Permit Application submitted for the year/Any Attached ADU Permit Issued for the year, regardless of when the application was submitted. Years 2015-2016 data point not available.

7. Any JADU Permit Application submitted for the year/Any JADU Permit Issued for the year, regardless of when the application was submitted. Years 2015- 2016 data point not available.

8. Average number of days from permit application submittal to when permit is approved and ready to issue. This average includes weekends and days application is pending due to applicant preparation of resubmittal or additional information from applicant.

9. Average number of days from permit issued to final inspection completed. This average includes weekends and days staff is waiting for applicant to schedule the next required inspection; it also includes time related to the construction of a primary residence when the J/ADU is built at the same time.

10. Impact Fees collected for ADU’s permitted for the year. Years 2015-2016 data point not available.

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1 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
1 JADU South R-1 1/7/25
Pending
Resubmittal x x 1 200
2 JADU South R-1 (S) 1/14/25
Permit
Issued x x 1 493
3 JADU North R-1 1/27/25
Pending
Resubmittal x 1 265
4 JADU South R-1 2/11/25
Permit
Issued x 0 389
5 JADU North R-1 8/6/25
In Plan
Check x 1 498
6 JADU North R-1 8/13/25
Pending
Resubmittal x 1 427
7 JADU South
R-1
(7000) 4/28/25
Permit
Issued x x 1 390
8 JADU South R-1 4/18/25
Pending
Resubmittal x 1 468
9 JADU South R-1 4/15/25
Pending
Resubmittal x 1 176
10 JADU North R-1 2/5/25
Permit
Issued x 1 286
11 JADU North R-1 4/11/25
Pending
Resubmittal x 1 457
12 JADU South R-1 8/28/25
Pending
Resubmittal x 1 499
13 JADU North R-1 2/18/25
Permit
Issued x 0 246
14 JADU South R-1 7/17/25
Permit
Issued x 1 495
15 JADU South R-1 (S) 3/11/25
Permit
Issued x x 1 395
Item A
Attachment A - Q3 2025 ADU Location
Table
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2 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
16 JADU South R-1 5/19/25
Pending
Resubmittal x 1 498
17 JADU South R-1 3/19/25
Permit
Issued x 0 288
18 JADU South R-1 3/31/25
Pending
Resubmittal x x 1 420
19 JADU North
R-1
(10000) 3/31/25
In Plan
Check x 1 408
20 JADU North R-1 (S) 7/15/25
Pending
Resubmittal x x 1 222
21 JADU North R-1 7/15/25
Pending
Resubmittal x 1 484
22 JADU South R-1 2/20/25
Permit
Issued x 0 293
23 JADU South R-1 2/20/25
Permit
Issued x x 0 230
24 JADU South
R-1
(8000) 9/15/25
Pending
Resubmittal x 0 264
25 JADU North R-1 9/30/25
Pending
Resubmittal x x 1 410
26 JADU South R-1 2/25/25
Permit
Issued x 1 499
27 JADU South R-1 5/30/25
Pending
Resubmittal x 1 346
28 JADU North R-1 5/29/25
Pending
Resubmittal x 1 326
29 JADU North R-1 6/19/25
Permit
Issued x x 1 225
30 ADU South R-1 7/29/25
Pending
Resubmittal x x 1 630
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 7 Packet Pg. 772 of 828
3 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
31 ADU South R-1 7/29/25
Pending
Resubmittal x 1 416
32 ADU South
R-1
(8000) 7/25/25
Pending
Resubmittal x 1 750
33 ADU North R-1 6/23/25
Permit
Issued x x 1 341
34 ADU North R-1 7/22/25
Pending
Resubmittal x x 1 528
35 ADU South R-1 6/24/25
In Plan
Check x 2 749
36 ADU South
R-1
(8000) 6/24/25
Permit
Issued x x 1 749
37 ADU South
R-1
(8000) 7/8/25
Pending
Resubmittal x 1 799
38 ADU South RE 6/30/25
Pending
Resubmittal x 2 795
39 ADU South RE 6/30/25
In Plan
Check x 2 795
40 ADU North R-1 6/26/25
Pending
Resubmittal x 1 540
41 ADU South R-1 9/4/25
Pending
Resubmittal x 1 713
42 ADU South R-1 9/3/25
Pending
Resubmittal x 1 800
43 ADU South R-1 8/29/25
Pending
Resubmittal x 0 473
44 ADU North
R-1
(10000) 8/27/25
Pending
Resubmittal x 1 544
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 8 Packet Pg. 773 of 828
4 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
45 ADU North R-1 8/25/25
Pending
Resubmittal x 1 408
46 ADU South R-1 (S) 8/19/25
Pending
Resubmittal x 2 743
47 ADU North R-1 8/18/25
In Plan
Check x x 1 831
48 ADU South R-1 8/13/25
Pending
Resubmittal x 1 674
49 ADU North RMD (NP) 8/13/25
In Plan
Check x 2 749
50 ADU South R-1 8/11/25
Pending
Resubmittal x 1 499
51 ADU North R-1 8/6/25
Pending
Resubmittal x 1 744
52 ADU South R-1 (S) 9/30/25
Pending
Resubmittal x 0 397
53 ADU South RE 9/22/25
In Plan
Check x 1 869
54 ADU South R-1 9/22/25
Pending
Resubmittal x 2 799
55 ADU North R-1 9/9/25
Pending
Resubmittal x 2 876
56 ADU North R-1 9/4/25
Pending
Resubmittal x 2 999
57 ADU North R-1 6/9/25
Permit
Issued x 1 559
58 ADU South
R-1
(8000)(S) 6/5/25
Permit
Issued x 1 540
59 ADU North
R-1
(10000) 5/14/25
Permit
Issued x 2 1,000
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 9 Packet Pg. 774 of 828
5 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
60 ADU South R-1 4/29/25
Permit
Issued x x 1 711
61 ADU South R-1 4/17/25
Permit
Issued x 1 748
62 ADU South
R-1
(8000) 4/10/25
Permit
Issued x 2 649
63 ADU South
R-1
(8000) 3/20/25
Permit
Issued x 1 498
64 ADU South R-1 3/13/25
Permit
Issued x 1 796
65 ADU South R-1 2/25/25
Permit
Issued x 1 748
66 ADU South R-1 2/21/25
Permit
Issued x 1 545
67 ADU North R-1 (S) 2/4/25
Permit
Issued x 2 799
68 ADU North R-1 1/30/25
Permit
Issued x 1 647
69 ADU South
R-1
(7000) 1/28/25
Permit
Issued x 1 558
70 ADU South
R-1
(8000) 1/10/25
Permit
Issued x 2 728
71 ADU South R-1 2/6/25
Pending
Resubmittal x 2 745
72 ADU North
R-1
(10000) 2/3/25
Permit
Issued x 1 718
73 ADU South
R-1
(8000) 1/30/25
Permit
Issued x 2 800
74 ADU North R-1 1/28/25
In Plan
Check x x 2 944
75 ADU North R-1 1/13/25
Permit
Issued x 1 517
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 10 Packet Pg. 775 of 828
6 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
AD
U
Size
76 ADU South R-1 6/13/25
Pending
Resubmittal x x 1 402
77 ADU South
R-1
(7000) 6/11/25
Pending
Resubmittal x x 1 456
78 ADU South R-1 6/3/25
Pending
Resubmittal x 2 749
79 ADU North R-1 5/28/25
Pending
Resubmittal x 2 794
80 ADU North R-1 5/28/25
Pending
Resubmittal x 1 273
81 ADU South R-1 5/27/25
Pending
Resubmittal x 1 716
82 ADU South R-1 5/23/25
Pending
Resubmittal x 0 590
83 ADU South R-1 5/21/25
Pending
Resubmittal x 1 295
84 ADU South R-1 5/21/25
In Plan
Check x 1 295
85 ADU North R-1 5/15/25
In Plan
Check x 2 650
86 ADU South R-1 (S) 5/15/25
Pending
Resubmittal x 1 496
87 ADU South RM-30 5/13/25 Incomplete x x 2 749
88 ADU South R-1 5/7/25
In Plan
Check x 1 747
89 ADU North R-1 5/1/25
Pending
Resubmittal x 2 749
90 ADU North R-1 5/1/25
Pending
Resubmittal x x 0 401
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 11 Packet Pg. 776 of 828
7 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
91 ADU South R-1 4/29/25
Pending
Resubmittal x 1 698
92 ADU South R-1 4/28/25
Pending
Resubmittal x x 1 495
93 ADU North R-1 4/24/25
Pending
Resubmittal x 2 924
94 ADU South R-1 4/23/25
Permit
Issued x x 1 794
95 ADU North R-1 4/16/25
Permit
Issued x x 1 408
96 ADU South R-1 4/9/25
Permit
Issued x 2 700
97 ADU South R-1 4/8/25
Permit
Issued x 2 653
98 ADU North R-1 4/8/25
Permit
Issued x x 1 751
99 ADU North R-1 4/7/25
Permit
Issued x 1 360
100 ADU South R-1 4/4/25
Permit
Issued x 1 494
101 ADU South R-1 4/3/25
Pending
Resubmittal x 1 494
102 ADU South
R-1
(8000)(S) 3/27/25
Permit
Issued x x 1 749
103 ADU North 3/27/25
In Plan
Check x 1 667
104 ADU South R-1 3/25/25
Permit
Issued x x 1 423
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 12 Packet Pg. 777 of 828
8 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type of Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
105 ADU South R-1 (8000) 3/19/25
Permit
Issued x 2 998
106 ADU North R-1 3/19/25
Permit
Issued x 1 800
107 ADU North R-1 3/18/25
Pending
Resubmittal x 0 936
108 ADU North R-1 3/17/25
Permit
Issued x x 0 403
109 ADU North R-1 3/5/25
Pending
Resubmittal x x 1 453
110 ADU North R-1 2/24/25
Permit
Issued x 1 748
111 ADU South R-1 2/20/25
Permit
Issued x 2 400
112 ADU South R-1 (8000) 2/20/25
In Plan
Check x 2 781
113 ADU North R-1 2/18/25
Pending
Resubmittal x 1 430
114 ADU South RM-15 2/12/25
Pending
Resubmittal x x 2 680
115 ADU South R-1 2/12/25
Permit
Issued x 1 560
116 ADU North
R-1
(10000) 2/11/25
Pending
Resubmittal x 0 787
117 ADU South R-1 2/10/25
Pending
Resubmittal x x 1 825
118 ADU North R-2 9/2/25
In Plan
Check 0 749
119 ADU South R-1 9/29/25
In Plan
Check x 1 799
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 13 Packet Pg. 778 of 828
9 Q1-Q3 2025 ADU/JADUs Submitted New Construction Conversion Type on Conversion # of
Apps
Dwelling
Type
Project
Location
Zoning
District
Date
Files
Application
Status Attached Detached Attached Detached Garage
Other
Acc.

Structure
or Space
# of
Bdrms
ADU
Size
120 ADU North R-1 9/30/25
In Plan
Check x 1 799
Item A
Attachment A - Q3 2025 ADU Location
Table
Item A: Staff Report Pg. 14 Packet Pg. 779 of 828
City Council
Staff Report
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: December 1, 2025
Report #:2412-3914
TITLE
Monthly Investment Report - October 2025 (Unaudited)

RECOMMENDATION
This is an Information Report. No Council action is required.

ANALYSIS
The City’s Investment Policy1 (Policy) and California Government Code Section 53607 requires that a report of transactions (investments, reinvestment, sold, and exchanged securities) be made available to the Council on a monthly basis.

This reporting requirement is separate and distinct from the quarterly investment report submitted under California Government Code Section 53646 that includes portfolio composition, a detailed list of all securities, performance compared to the Policy, overall compliance with the Policy, and the City’s ability to meet expenditure requirements over the next six months.

ATTACHMENTS
Attachment A: Investment Portfolio Transaction Ledger – October 2025 APPROVED BY:

Lauren Lai
1 Investment Policy Fiscal Year 2025-2026 (Adopted June 16, 2025); "https://www.paloalto.gov/files/assets/public/v/2/administrative-services/investment-policies/investment-policyfy-2025-2026.pdf" Item B
Item B Staff Report
Item B: Staff Report Pg. 1 Packet Pg. 780 of 828
Buy
Call RedemptionMaturity
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount 91282CPB1 UNITED STATES
TREASURY 3.5 09/30/2027
US GOV Buy 10/28/2025 5,000,000.00 99.984 3.507 -4,999,218.75 13,461.54 -5,012,680.29 91282CNE7 UNITED STATES
TREASURY 3.87505/31/2027
US GOV Buy 10/24/2025 5,000,000.00 100.570 3.504 -5,028,515.63 77,288.25 -5,105,803.88 91282CMP3 UNITED STATES
TREASURY 4.12502/28/2027
US GOV Buy 10/24/2025 5,000,000.00 100.777 3.528 -5,038,867.19 30,766.57 -5,069,633.76 40139LBN2 GUARDIAN LIFE GLOBAL
FUNDING 4.327 10/06/2030
CORP Buy 10/24/2025 2,500,000.00 100.756 4.156 -2,518,900.00 5,408.75 -2,524,308.75 --- --- --- Buy 10/25/2025 17,500,000.00 --- 3.605 -17,585,501.57 126,925.11 -17,712,426.68 CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount 81618LAE7 Select Bank 5.4 03/31/2028 CD Call
Redemption
10/31/2025 -249,000.00 100.000 5.399 249,000.00 0.00 249,000.00 65504UAF4 Noble Federal Credit Union

4.5 11/09/2026
CD Call
Redemption
10/08/2025 -250,000.00 100.000 4.499 250,000.00 0.00 250,000.00 3130B3D75 FEDERAL HOME LOAN
BANKS 5.0 10/17/2034
AGCY BOND Call
Redemption
10/17/2025 -2,000,000.00 100.000 5.000 2,000,000.00 0.00 2,000,000.00 3130B32V4 FEDERAL HOME LOAN
BANKS 4.25 10/07/2031
AGCY BOND Call
Redemption
10/07/2025 -1,500,000.00 100.000 4.250 1,500,000.00 0.00 1,500,000.00 --- --- --- Call
Redemption
10/14/2025 -3,999,000.00 100.000 4.712 3,999,000.00 0.00 3,999,000.00 CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount 882723A90 TEXAS ST 2.831
10/01/2025
MUNI Maturity 10/01/2025 -500,000.00 100.000 1.043 500,000.00 0.00 500,000.00 8827237P8 TEXAS STATE 3.051
10/01/2025
MUNI Maturity 10/01/2025 -1,500,000.00 100.000 2.003 1,500,000.00 0.00 1,500,000.00 8827235K1 TEXAS ST 2.922
10/01/2025
MUNI Maturity 10/01/2025 -245,000.00 100.000 0.649 245,000.00 0.00 245,000.00 83086XAA8 Skyla Federal Credit Union

4.15 10/08/2025
CD Maturity 10/08/2025 -250,000.00 100.000 4.150 250,000.00 0.00 250,000.00 819866BR4 Sharonview Federal Credit
Union 5.0 10/31/2025
CD Maturity 10/31/2025 -249,000.00 100.000 5.036 249,000.00 0.00 249,000.00 70320KAR2 Pathfinder Bank 0.5
10/14/2025
CD Maturity 10/14/2025 -249,000.00 100.000 0.541 249,000.00 0.00 249,000.00 45950VPE0 INTERNATIONAL FINANCE
CORP 1.5 10/15/2025
SUPRANATIONAL Maturity 10/15/2025 -1,000,000.00 100.000 0.505 1,000,000.00 0.00 1,000,000.00 459058JL8 INTERNATIONAL BANK
FOR RECONSTRUCTIONAND DEVELOPM 0.510/28/2025
SUPRANATIONAL Maturity 10/28/2025 -4,500,000.00 100.000 0.629 4,500,000.00 0.00 4,500,000.00 404730DA8 Haddon Savings Bank 0.35
10/20/2025
CD Maturity 10/20/2025 -207,000.00 100.000 0.535 207,000.00 0.00 207,000.00 373384RX6 GEORGIA ST 4.0
10/01/2025
MUNI Maturity 10/01/2025 -250,000.00 100.000 2.777 250,000.00 0.00 250,000.00 3134GWZL3 FEDERAL HOME LOAN
MORTGAGE CORP 0.5710/29/2025
AGCY BOND Maturity 10/29/2025 -1,500,000.00 100.000 0.570 1,500,000.00 0.00 1,500,000.00 Palo Alto Monthly Transactions10/01/2025 - 10/31/2025
1 ATTACHMENT
A
Item B
Attachment A - Investment
Portfolio Transaction
Ledger - October 2025
Item B: Staff Report Pg. 2 Packet Pg. 781 of 828
Principal Paydown
Summary
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount 3134GWYZ3 FEDERAL HOME LOAN
MORTGAGE CORP 0.5310/28/2025
AGCY BOND Maturity 10/28/2025 -1,500,000.00 100.000 0.530 1,500,000.00 0.00 1,500,000.00 3134GWY26 FEDERAL HOME LOAN
MORTGAGE CORP 0.5710/08/2025
AGCY BOND Maturity 10/08/2025 -1,500,000.00 100.000 0.570 1,500,000.00 0.00 1,500,000.00 3134GWXX9 FEDERAL HOME LOAN
MORTGAGE CORP 0.5510/15/2025
AGCY BOND Maturity 10/15/2025 -1,500,000.00 100.000 0.550 1,500,000.00 0.00 1,500,000.00 3134GWVV5 FEDERAL HOME LOAN
MORTGAGE CORP 0.510/15/2025
AGCY BOND Maturity 10/15/2025 -1,500,000.00 100.000 0.500 1,500,000.00 0.00 1,500,000.00 3134GW3Z7 FEDERAL HOME LOAN
MORTGAGE CORP 0.610/28/2025
AGCY BOND Maturity 10/28/2025 -750,000.00 100.000 0.600 750,000.00 0.00 750,000.00 3134GW3X2 FEDERAL HOME LOAN
MORTGAGE CORP 0.62510/27/2025
AGCY BOND Maturity 10/27/2025 -1,500,000.00 100.000 0.625 1,500,000.00 0.00 1,500,000.00 3134GW3H7 FEDERAL HOME LOAN
MORTGAGE CORP 0.6110/29/2025
AGCY BOND Maturity 10/29/2025 -1,500,000.00 100.000 0.610 1,500,000.00 0.00 1,500,000.00 --- --- --- Maturity 10/20/2025 -20,200,000.00 100.000 0.823 20,200,000.00 0.00 20,200,000.00 CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount 3130B2RP2 FEDERAL HOME LOAN
BANKS 5.25 09/25/2034
AGCY BOND Principal
Paydown
10/30/2025 0.00 --- 5.250 171,428.57 0.00 171,428.57
3130B2RP2 FEDERAL HOME LOAN
BANKS 5.25 09/25/2034
AGCY BOND Principal
Paydown
10/30/2025 0.00 --- 5.250 171,428.57 0.00 171,428.57
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount --- --- --- --- 10/22/2025 -6,699,000.00 --- 2.378 6,784,927.00 126,925.11 6,658,001.89 Palo Alto Monthly Transactions10/01/2025 - 10/31/2025
2 ATTACHMENT
A
Item B
Attachment A - Investment
Portfolio Transaction
Ledger - October 2025
Item B: Staff Report Pg. 3 Packet Pg. 782 of 828
Item No. 14. Page 1 of 3
City Council
Supplemental Report
From: Andrew Binder, Police Chief
Meeting Date: December 1, 2025
Item Number: 14
Report #:2511-5586
TITLE
SUPPLEMENTAL REPORT - FIRST READING: Adoption of an ordinance to Amend Chapters 4.54 and 4.56 of the Palo Alto Municipal Code to Amend the Regulation of Massage Establishments and Hot Tub/Sauna Establishments as Recommended by the Policy & Services Committee; and Adoption of a Resolution to Amend the Administrative Penalty Schedule to Amend Related Penalties; CEQA status - not a project.

RECOMMENDATION
Staff recommend that the City Council adopt this updated ordinance (Attachment A to this Supplemental Memo) and the resolution amending the administrative penalty schedule as originally published for this item.

BACKGROUND
Since this item was published, City staff have done additional outreach to massage establishments in the City. After gathering feedback, staff propose the following minor changes to the ordinance as first published to address aspects of the ordinance that may inadvertently impact combined massage and hot tub establishments. Staff’s objective is to support and strengthen reputable businesses while ensuring that the updated code does not impose undue restrictions.

SUMMARY OF AMENDMENTS

1. Hours of Operation
The original ordinance required all massage establishments to close between 10:00 p.m. and 8:00 a.m. While a 10:00 p.m. closing time for massage services is standard in most jurisdictions, we recommend revising the language to allow non-massage services to continue past 10:00 p.m., provided all massage services conclude by that time and any other applicable business hour laws are followed. Additionally, staff recommend reinstating a more limited exemption process for massage establishments to extend their hours. Existing law allows massage establishments with at least one year of operation to extend their hours no later than 2 a.m. or open as early as 6 a.m. upon a showing of good cause to the Police Department. Staff propose Item 14
Item 14 Supplemental
Report
Item 14: Staff Report Pg. 1 Packet Pg. 783 of 828
Item No. 14. Page 2 of 3
narrowing this exemption for businesses with a track record of 10 years in operation to extend their hours no later than midnight or open no earlier than 6 a.m.

2. Posting of Price List
The original ordinance required all services and prices to be displayed in a public area. In recognition of a combination of massage and non-massage (hot tub) offerings and variable pricing (e.g., based on time, day, or holiday), we have revised the ordinance to require only that massage service prices be posted, with an allowance for price variability.

3. Main Entry Door
We have amended the ordinance to permit one or more entry doors leading directly to the reception and waiting area, rather than limiting establishments to a single entry. This change is intended to prevent patron entry from inconspicuous or rear entrances while allowing flexibility in business layout.

4. Locking of Interior Doors
The updated language now allows exceptions to the prohibition on locking interior doors. Hot tub rooms, private offices, storage rooms, and equipment rooms are now exempt from this requirement.

5. Beds and Soft Mattresses
The revised ordinance permits soft mattresses in hot tub rooms, recognizing their role in patron safety and comfort.

6. Alcohol Service
Massage establishments are not allowed to serve or sell alcohol. For businesses that are also a hot tub/sauna establishment, the revised ordinance clarifies that the restriction does not apply to the non-massage areas of the establishment. Alcohol service is still subject to other laws, including California Alcohol Beverage Control as may be applicable.

7. Sandal/Flip Flop Requirement
Staff have updated the requirement to state that sandals or flip flops must be provided to patrons if they are offered use of shower facilities. This replaces the previous language, which prohibited patrons from using shower facilities unless wearing slip-resistant sandals or flip flops.

Item 14
Item 14 Supplemental
Report
Item 14: Staff Report Pg. 2 Packet Pg. 784 of 828
Item No. 14. Page 3 of 3
These amendments aim to balance the integrity and intent of the municipal code with the operational realities of respected local businesses. We appreciate the input from stakeholders and remain committed to fostering a supportive regulatory environment.

ATTACHMENT
Attachment A – Revised Ordinance Amending Chapter 4.54 (“Massage Establishments”) and Chapter 4.56 (Hot Tub/Sauna Establishments) of Title 4 (Business Licenses and Regulations).

Ordinance text that has been updated since this item was originally published is printed in blue.

APPROVED BY:

Andrew Binder, Chief of Police
Item 14
Item 14 Supplemental
Report
Item 14: Staff Report Pg. 3 Packet Pg. 785 of 828

NOT YET APPROVED
1 147_202511117_ts24
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapter 4.54 (“Massage Establishments”) and Chapter 4.56 (Hot Tub/Sauna Establishments) of Title 4 (Business Licenses and Regulations).

The Council of the City of Palo Alto ORDAINS as follows:

SECTION 1. Findings and Declarations. The City Council finds and declares as follows:

A. Massage establishments are primarily regulated in the Palo Alto Municipal Code at PAMC Chapter 4.54. The last major update to this chapter was in 2012. Chapter 4.54 is currently enforced primarily by the Palo Alto Police Department.

B. Massage is also regulated in state law under the Massage Therapy Act, codified in the Business and Professions Code section 4600 et seq. The State Legislature enacted the Act in 2008. The Act was substantially amended in 2014 under AB 1147, and has been amended again in 2025 under AB 1504.

C. Through this ordinance, the City desires to amend Chapter 4.54 in order to respond to the changes to the Act and codify existing practices. Foremost, this ordinance will result in the City no longer licensing individual massage technicians; instead, technicians must be certified by the California Massage Therapy Council (“CAMTC”). The CAMTC is the staterecognized body in charge of such certification and enacts statewide standards for training and certification. The CAMTC also approves massage schools in an effort to uphold training standards and prevent bad actors from opening degree mills. This update also ensures that local regulations stay current with industry standards and public health requirements, enhancing safety and professionalism. These updates also help address new trends, prevent illicit activities, and clarify licensing procedures for businesses.

D. This ordinance also amends Chapter 4.56 (Hot Tub/Sauna Establishments) to remove existing permitting requirements. These establishments are already regulated by the County’s Department of Environmental Health.

Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 4 Packet Pg. 786 of 828

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SECTION 2. Chapter 4.54 (Massage Establishments) of the Palo Alto Municipal Code is hereby amended and restated in its entirety to read as follows:

4.54.010 Purpose and intent.

In enacting this chapter, the City Council recognizes that massage therapy is a professional pursuit which can offer the public valuable health and therapeutic services, but that unless properly regulated, the practice of massage therapy and the operation of massage businesses may be associated with unlawful activity and pose a threat to the quality of life in the local community. It is the purpose and intent of this chapter to provide for the orderly regulation of offices and establishments providing massage therapy services, and to prevent and discourage the misuse of massage therapy as a front for human trafficking, prostitution, and related activities in violation of state law, all in the interests of the public health, safety, and welfare, by providing certain minimum building, sanitation, and operation standards for such businesses, and by requiring certain minimum qualifications for the operators and practitioners of such businesses.

It is the further intent of this chapter to streamline local massage therapy permitting procedures, while still facilitating and advancing the ethical practice of massage therapy, by relying upon the uniform statewide regulations enacted by the Legislature in 2008 as Business and Professions Code Sections 4600 et seq., known as the Massage Therapy Act, as subsequently amended, and by restricting the commercial practice of massage in the city to those persons duly certified to practice by the California Massage Therapy Council formed pursuant to those statutes.

4.54.020 Definitions.

For the purpose of this chapter, unless the context clearly requires a different meaning, the words, terms, and phrases set forth in this section shall have the meanings that are given them in this section:
"Authorized massage professional" means a massage professional who is identified in a permit issued pursuant to this chapter as a person employed or retained by a massage establishment to practice massage.

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"California massage therapy council" or "CAMTC" means the massage therapy organization formed pursuant to Business and Professions Code Section 4600 et seq. "CAMTC-certified massage professional" means any individual currently certified by the California Massage Therapy Council as a massage therapist or massage practitioner pursuant to Business and Professions Code Section 4600 et seq.
"Compensation" means the payment, loan, advance, donation, contribution, deposit, exchange, or gift of money or anything of value.
"Department" means the Chief of the Palo Alto Police Department or designee charged with the administration of this chapter.
"Inspector" means the person or persons designated by the city to conduct any inspections required or permitted under this chapter.
"Massage," "massage therapy," and/or "bodywork" for purposes of this chapter mean the skillful application of touch, including but not limited to, pressure, stroking, kneading, compression on or movement of the external surfaces of the body by a practitioner to produce increased awareness, relaxation, pain relief, injury rehabilitation, or neuromuscular reeducation.
"Massage establishment" means any business that offers massage therapy, baths or health treatments including, but not limited to, aromatherapy, vapor, shower, electric tub, sponge, hot towels, mineral fermentation, sauna, steam or any other type of bath, involving massages or baths in exchange for compensation. Home-based massage businesses and businesses that provide mobile massage services are also considered to be massage establishments. For purposes of this chapter, the term "massage establishment" may be applied to include establishments which offer or advertise themselves as providing "relaxation" or "tanning" Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 6 Packet Pg. 788 of 828

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4 147_202511117_ts24
where the essential nature of the interaction between the employee and the customer involves "massage" as defined herein. The terms, names or phrases listed on business license or fictitious name application forms are not necessarily conclusive as to the nature of the business. "Owner" or "massage establishment owner" means any of the following persons:
(1) The sole proprietor of a sole proprietorship operating a massage establishment. (2) Any general partner of a general or limited partnership that owns a massage establishment.
(3) Any person who has a ten percent or greater ownership interest in a corporation that owns a massage establishment.
(4) Any person who is a member of a limited liability company that owns a massage establishment.
(5) All owners of any other type of business association that owns a massage establishment. "Operator" or "massage establishment operator" means any person who is an owner or manager of a massage establishment.
"Mobile massage service" means the engaging in or carrying on of massage therapy for compensation at locations other than a massage establishment at a fixed location. "Patron" means an individual on the premises of a massage establishment for the purpose of receiving massage therapy.
"Person" means any individual, firm, association, partnership, corporation, joint venture, limited liability company, or combination of individuals. "Reception and waiting area" means an area immediately inside the main entry door of the massage establishment dedicated to the reception and waiting of patrons or visitors of the massage establishment and which is not a massage therapy room or otherwise used for the provision of massage therapy services.

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“School of massage” means any school or institution of learning that is recognized as an approved school pursuant to Business and Professions Code Division 2, Chapter 10.5 (known as the Massage Therapy Act), as may be amended.
"Sole proprietorship" means a massage establishment where the owner owns one hundred percent of the business and has one or no other employees or independent contractors. "Visitor" means any individual not retained or employed by the massage establishment and not receiving or waiting to receive massage therapy services, but excluding law enforcement personnel or governmental officials performing governmental business.

4.54.030 Business registration required.

The requirements of this chapter are in addition to any business registration and business tax requirements imposed pursuant to PAMC Chapters 4.60 and 2.37, respectively of this code.

4.54.040 Other permits and authorizations required.

The requirements of this chapter are in addition to any permits or authorizations that may be required under other applicable laws including but not limited to the city's building, fire, zoning, and health regulations.

4.54.050 Exemptions.

This chapter shall not apply to the following classes of individuals while engaged in the performance of the duties of their respective professions:
(a) Physicians, surgeons, chiropractors, osteopaths, podiatrists, physical therapists, nurses, acupuncturists or any other person licensed to practice any healing art under the provisions of Division 2 (commencing with Section 500) of the Business and Professions Code when engaging in such practice within the scope of his or her license. This subsection (a) shall apply only to a person who meets the qualifications above and shall Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 8 Packet Pg. 790 of 828

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not extend to any other person, including by virtue of being a tenant, independent contractor, employee, or co-worker of the exempted person. (b) Trainers of any amateur, semi-professional, or professional athlete or athletic team, so long as such persons do not practice massage therapy as their primary occupation at any location where they provide such services in the city. (c) Barbers, estheticians, and cosmetologists who are duly licensed under the laws of the State of California, while engaging in practices within the scope of their licenses. This subsection (c) shall apply only to a person who meets the qualifications above and shall not extend to any other person, including by virtue of being a tenant, independent contractor, employee, or co-worker of the exempted person. (d) Individuals administering massages or health treatments involving massage to persons participating in single occurrence athletic, recreational, or educational events such as road races, track meets, triathlons, educational events, or conferences, provided that the event is open to the public or to a significant segment of the public such as employees of sponsoring or participating corporations, and the massage services are provided at the site of the event during, immediately preceding, or immediately following the event.
(e) Individuals administering massages or health treatments involving massage to persons at a state-licensed “general acute care hospital” or other “health facilities” as defined by California Health and Safety Code section 1250 when employed or contracted at the direction of the hospital or health facility.
(f) Somatic practitioners who use no physical touch of any kind at any time in their practice.
(g) Enrolled students of a school of massage when they are performing massage within the city as part of a formal supervised internship or training program operated by the school, without compensation other than school credit, on the premises of a massage establishment duly authorized to operate pursuant to the terms of this chapter; and provided that the operator of the massage establishment has first notified the Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 9 Packet Pg. 791 of 828

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Department in writing of the name, residence address, and school of the students and the dates of the trainings.

4.54.060 CAMTC certification required.

It is unlawful for any individual to practice massage therapy for compensation within the city unless that individual is a CAMTC-certified massage professional.

4.54.070 Reserved.

4.54.080 Massage establishment permit required—Prohibited conduct. (a) It is unlawful for any person to operate a massage establishment within the city without first obtaining a massage establishment permit from the Department. (b) It is unlawful for a massage establishment operator to employ or retain any person to practice massage therapy for compensation, or to allow any person to perform massage therapy for compensation on the premises of a massage establishment, unless that person is a CAMTC-certified massage professional and unless that person is identified as an authorized massage professional on the permit issued pursuant to this chapter. For purposes of this chapter, a massage establishment operator "employs or retains" a person to practice massage therapy for compensation when:
(1) That person is a directly paid employee of the massage establishment; or (2) That person's association with a massage establishment is that of an independent contractor who receives compensation for massage therapy provided to patrons of the massage establishment; or
(3) That person receives a referral of patrons from the massage establishment and, at any time before or after the referral, arranges in any way for compensation to flow to the massage establishment operator.
(c) It is unlawful for a massage establishment to operate under any name or conduct business under any designation not specified in the massage establishment permit issued pursuant to this chapter.

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(d) It is unlawful for a massage establishment to continue to operate following the sale or transfer of any interest in the massage establishment to a person who was not identified as an owner in the massage establishment permit application.

4.54.090 Permit application.

The owners of the massage establishment shall file an application for a permit on a form provided by the Department. The application shall be accompanied by the fee established by the city's fee schedule. The application shall include the following information:
(a) The name, address, and telephone number of the massage establishment. (b) The name, residence address and telephone number, and business address and telephone number of each owner of the massage establishment. (c) The form of business under which the applicant will be conducting the massage `establishment, i.e., corporation, general or limited partnership, limited liability company, or other form. If the applicant is a corporation, the name of the corporation shall be set forth exactly as shown in its articles of incorporation, together with the names and residence addresses of each of its officers, directors, and each shareholder holding more than ten percent of the stock of the corporation. If the applicant is a general or limited partnership, the application shall set forth the name and residence address of each of the partners, including limited partners. If one or more of the partners is a corporation, the provisions of this section pertaining to a corporate applicant shall apply. If the applicant is a limited liability company, the application shall set forth the name and residence address of each of the members. If one or more of the members is a partnership, limited liability company, or corporation, the provisions of this section pertaining to a partnership, limited liability company, or corporate applicant shall apply, as applicable.
(d) The name, address, and telephone number of the owner of the real property upon, in, or from which the certified massage establishment is to be operated. In the event the applicant is not the legal owner of the property, the application shall be accompanied by a copy of any written lease between the applicant and the property owner authorizing Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 11 Packet Pg. 793 of 828

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use of the premises for a massage establishment, or, alternatively, if there is no written lease, then a written, notarized acknowledgment from the property owner that the property owner has been advised that a massage establishment will be operated by the applicant upon, in, or from the property owner's property. (e) If the massage establishment will be located on a property in a residential or commercial condominium or other common interest development, the applicant shall submit a notarized statement from the homeowner's association or condominium owner's association acknowledging that the association has been advised that a massage establishment will be operated by the applicant and that such use of the property is allowed by the property's covenants, codes, and restrictions. This requirement is in addition to any applicable zoning code requirements or regulations. (f) A description of the proposed massage establishment, including the type of treatments to be administered.
(g) The name of each individual who the massage establishment employs or retains to perform massage therapy for compensation, whether on or off the massage establishment premises.
(h) The name of each individual who is regularly employed or retained by the massage establishment to perform services on the premises other than massage therapy, and the nature of their services.
(i) For each individual who the massage establishment does or will employ or retain to perform massage therapy for compensation, whether on or off the massage establishment premises, a copy of that individual's current certification from the CAMTC as a certified massage practitioner or certified massage therapist, and a copy of his or her current CAMTC-issued identification card.
(j) For each owner of the massage establishment who is a CAMTC-certified massage professional, a copy of his or her current certification from the CAMTC as a certified massage practitioner or as a certified massage therapist and a copy of his or her current CAMTC-issued identification card.

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(k) For each owner of the massage establishment who is not a CAMTC-certified massage professional, the following information:
(1) Whether any owner of the massage establishment has within the five years immediately preceding the date of application been convicted of any felony in any state.
(2) Whether any owner of the massage establishment is currently required to register under the provisions of Section 290 of the California Penal Code. (3) The business, occupation, and employment history of each owner of the massage establishment for five years preceding the date of application, and the inclusive dates of same.
(4) One set of fingerprints, and any required fee for such fingerprinting shall be paid by the applicant.
(l) Whether any certificate, license or permit has ever been issued to the applicant by any jurisdiction under the provisions of any ordinance or statute governing massage or somatic practice, and as to any such certificate, license or permit, the name and address of the issuing authority, the effective dates of such certificate, license or permit, whether such certificate, license or permit was ever suspended, revoked, withdrawn, or denied; and copies of any documentary materials relating to such suspension, revocation, withdrawal, or denial.
(m) Such other information as may be required by the permit authority to determine compliance with any other eligibility requirements for issuance of the permit as specified by federal, state, or local law.
(n) A statement that within the last five years the applicant has not failed to comply with a final court order or administrative action of an investigatory agency finding a violation of applicable federal, state and local wage and hour laws, including, but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and any local minimum wage ordinance or prevailing wage requirements. For purposes of this subsection, a Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 13 Packet Pg. 795 of 828

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final court order or administrative action is one as to which there is no pending appeal and the time for filing an appeal has passed.

4.54.100 Permit issuance.
(a) The Department shall issue a massage establishment permit if the applicant meets the requirements of this chapter and no grounds for denial exist under Section 4.54.110.

The Department may impose conditions on the permit consistent with this chapter and applicable law.
(b) Notice to Property Owner. If the applicant is not the record owner of the property where the massage establishment is located, the Department may send a written notice to the property owner advising of the issuance of the permit and of the regulations applicable to the massage establishment. The Department may also provide the property owner with copies of any other notices or communications with the applicant sent at any time before or after issuance of the permit.
(c) Term. A massage establishment permit issued pursuant to the terms of this chapter shall be valid for a term of one year from the date of issuance, and, unless suspended or revoked, must be renewed by the massage establishment operator annually so long as the massage establishment is operating within the city. (d) Insurance. Insurance coverage is a condition of receiving a permit and proof of such coverage is required. Unless specified otherwise by Department regulation, proof of liability insurance, or the equivalent, for not less than one hundred thousand dollars ($100,000) per massage therapist licensed, or to be licensed, at the massage establishment up to a maximum of one million dollars ($1,000,000) shall be required by the time of permit issuance. This requirement can be satisfied by insurance provided in the name of a massage therapist or the massage establishment. Coverage must be maintained for the entirety of the permit period. The Department may establish regulations governing insurance requirements that do not conflict with this section.

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4.54.110 Permit denial.

The Department may deny an application for a massage establishment permit on any of the following grounds:
(a) The massage establishment, as proposed by the applicant, would not comply with the requirements of this chapter.
(b) The massage establishment, as proposed by the applicant, would not comply with any applicable law, including, but not limited to the city's building, fire, zoning, and health regulations or regulations under the CAMTC.
(c) The applicant has knowingly made any false, misleading or fraudulent statement of material fact in the application for a massage establishment permit. (d) Any owner of the massage establishment, within five years immediately preceding the date of filing of the application, has been convicted in a court of competent jurisdiction of any offense that relates directly to the operation of a massage establishment whether as a massage establishment owner or operator or as a person practicing massage for compensation, or as an employee of either; or has at any time been convicted in a court of competent jurisdiction of any felony the commission of which occurred on the premises of a massage establishment.
(e) Any owner of the massage establishment is currently required to register under the provisions of Section 290 of the California Penal Code. (f) Any owner of the massage establishment, within five years of the date of application, has been convicted in a court of competent jurisdiction of any violation of Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, 647(b) of the California Penal Code, or conspiracy or attempt to commit any such offense, or any offense in a jurisdiction outside of the State of California that is the equivalent of any of the aforesaid offenses.
(g) Any owner of the massage establishment has been subjected to a permanent injunction against the conducting or maintaining of a nuisance pursuant to Sections 11225 through 11235 of the California Penal Code, or any similar provision of law in a jurisdiction outside the State of California.

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(h) Any owner of the massage establishment, within five years of the date of application, and as established by clear and convincing evidence, has engaged in acts prohibited under California Penal Code Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, 647(b).
(i) Any owner of the massage establishment is an individual who has not attained the age of eighteen years.
(j) Any owner of the massage establishment, within five years immediately preceding the date of filing of the application, has had a certificate, permit or license to practice massage for compensation or to own and/or operate a massage establishment revoked or denied in any jurisdiction, including CAMTC.
(k) Any owner of the massage establishment currently owns or operates a massage establishment in the city of Palo Alto that is not in good standing due to the existence of uncorrected violations or unpaid fines or fees.
(l) Within the last five years, the applicant has failed to comply with a final court order or administrative action of an investigatory agency finding a violation of applicable federal, state and local wage and hour laws, including, but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and any local minimum wage ordinance or prevailing wage requirements. For purposes of this subsection, a final court order or administrative action is one as to which there is no pending appeal and the time for filing an appeal has passed.

4.54.120 Notice of denial—Appeal.
(a) If an application for a massage establishment permit is denied, the Department shall give written notice to the applicant specifying the grounds for denial. (b) The applicant may appeal the decision to deny a massage establishment permit by filing a written notice of appeal with the Department within fifteen days after deposit of the decision in the mail, specifying in detail the grounds for such appeal. (c) The City Clerk shall set a time and place for the hearing on the appeal not less than thirty days after the date the appeal was received by the Department, and shall give Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 16 Packet Pg. 798 of 828

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written notice by mail to the applicant of the date, time, and place for the hearing. The hearing may be conducted virtually or by phone at the discretion of the City. The hearing shall be conducted in accordance with Section 4.54.180. (d) After the hearing on the appeal, the City’s hearing officer may refer the matter back to the Department for a new investigation and decision, may affirm the decision of the Department, or may direct the Department to issue the license. The decision of the hearing officer or designee upon such appeal shall be final and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6.

4.54.130 Amendments to permit required upon change of information. (a) Within 14 days of a change of the information provided in the application for a certified massage establishment on file with the City, the operator shall file an application to amend the permit to reflect such change. An application to amend a massage establishment permit shall be made by submitting an application on a form provided by the Department. The application shall be accompanied by the fee established by the city's fee schedule.
(b) The application shall not be approved unless the Department determines that the terms of the amended permit comply with all requirements of this chapter and all other local, state, and federal laws, and the massage establishment has no outstanding violations or unpaid citations or fees. Inspection of the massage establishment may be required prior to approval of the amendment.
(c) An amendment shall not be used to change the location or owners of a massage establishment. Instead, a new permit application is required. (d) A denial of an application to amend a massage establishment permit may be appealed in the same manner as a denial of an application for a permit under Section 4.54.120.

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4.54.140 Requirements for all massage establishment facilities and operations. (a) Operational Requirements. Except as otherwise specifically provided in this chapter, the following operational requirements shall be applicable to all massage establishments located within the city:
(1) No massage establishment shall be kept open for business between the hours of ten p.m. of one day and eight a.m. of the following day. A massage begun any time before ten p.m. must nevertheless terminate at ten p.m. This restriction does not apply to the use of hot tubs at a massage establishment that also has hot tubs in compliance with PAMC Chapter 4.56, but must follow any other applicable law or condition of permit as to hours of operation. (A) After ten years of continuous operation, a massage establishment may be exempted from the hours restrictions of this section by the Department upon a written request which details the factual reasons supporting good cause for the exemption. The Department, in determining what constitutes good cause for this exemption from the hours restrictions, shall consider and weight the following factors: (i) ongoing compliance with this Chapter including updated review of permit requirements; (ii) the impact which the massage establishment has had on the health, safety, and welfare of the local community, including, but not limited to, parking and traffic congestion; and (iii) the massage establishment's compliance or noncompliance with all federal, state, and local laws, including, but not limited to, this municipal code. If, upon review of those factors, the Department determines that good cause does exist for the requested exemption, the Department may then exempt the particular massage establishment from the hours restrictions of this section. However, in no event shall any massage establishment close later than midnight or open earlier than six a.m. If the Department denies an application for an exemption under this subsection (A), the massage establishment may appeal under the process in PAMC section 4.54.120. The Department may revoke an exemption issued under Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 18 Packet Pg. 800 of 828

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this subsection (A) for the reasons stated in PAMC section 4.54.170 and such revocation is subject to hearing under PAMC section 4.54.180. (2) The hours of operation of the massage establishment shall be displayed in a conspicuous public place in the reception and waiting area and in any front window clearly visible from outside of the massage establishment. (3) Patrons and visitors shall be permitted in the massage establishment only during the hours of operation.
(4) During the hours of operation, patrons shall be permitted in massage therapy rooms only if at least one duly authorized certified massage professional is present on the premises of the massage establishment. Patrons shall not be permitted in any employee break room on the premises.
(5) During the hours of operation, visitors shall not be permitted in massage therapy rooms except as follows:
(A) The parents or guardian of a patron who is a minor child may be present in the massage therapy room with that minor child;
(B) The minor child of a patron may be present in the massage therapy room with the patron when necessary for the supervision of the child; or (C) The conservator, aid, or other caretaker of a patron who is elderly or disabled may be present in the massage therapy room with that elderly or disabled person.
(6) During the hours of operation, except as otherwise provided herein, no visitors shall be permitted in massage therapy rooms, break rooms, dressing rooms, showers, or any other room or part of the massage establishment premises other than the reception and waiting area or toilet rooms. (7) Except for a patron who is inside a massage therapy room for the purpose of receiving a massage, no patrons or visitors shall be permitted in or on the massage establishment premises at any time who are less than fully clothed in outer garments of nontransparent material, or who display or expose themselves in underclothing or similar intimate apparel.

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(8) A list of massage services available and the cost of such services shall be posted in an open and conspicuous public place on the premises. The massage services shall be described in English and may also be described in such other languages as may be convenient. No massage establishment operator shall permit, and no person employed or retained by the massage establishment shall offer to perform any massage services or request or demand fees other than those posted.
(9) The massage establishment shall keep on the premises a complete and current roster of all owners, operators, and managing employees of the massage establishment and all massage professionals and other persons employed or retained by the massage establishment. The roster shall include the name, residence address, and phone number of each individual. The roster shall be available for inspection by city officials charged with the enforcement of this chapter.
(b) Physical Facility and Building and Fire Code Requirements. Except as otherwise specifically provided in this chapter, the following physical facility and building code requirements shall be applicable to all massage establishments located within the city:
(1) Main entry door and reception and waiting area required. One or more main entry door shall be provided for patron entry to the massage establishment, which shall open to an interior patron reception and waiting area immediately.

All patrons and any persons other than individuals employed or retained by the massage establishment shall be required to enter and exit through the main entry door(s). Unless the massage establishment is a sole proprietorship or a home occupation with one or no other employees, the main entry door shall be unlocked at all times during business hours.
(2) No massage establishment located in a building or structure with exterior windows fronting a public street, highway, walkway, or parking area shall block visibility into the interior reception and waiting area through the use of curtains, Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 20 Packet Pg. 802 of 828

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closed blinds, tints, or any other material that obstructs, blurs, or unreasonably darkens the view into the premises.
(3) All interior doors, including massage therapy rooms or cubicles (but excluding individual dressing rooms, showers, and toilet rooms, storage/equipment rooms, offices for staff only, and rooms for hot tubs at massage establishments that are also a hot tub/sauna establishment in compliance with PAMC Chapter 4.56) shall be incapable of being locked and shall not be blocked to prevent opening. Draw drapes, curtain enclosures, or accordion-pleated closures in lieu of doors are acceptable on all inner massage therapy rooms or cubicles. (4) Minimum lighting equivalent to at least one forty-watt light shall be provided in each massage therapy room or cubicle.
(5) A massage table or professional massage chair specifically designed for seated massage shall be used for all massage therapy, with the exception of "Thai," "Shiatsu," and similar forms of massage therapy, which may be provided on a padded mat on the floor, provided the patron is fully attired in loose clothing, pajamas, scrubs, or similar style of garment. Massage tables shall have a minimum height of eighteen inches.
(6) Beds, floor mattresses, and waterbeds are not permitted on the premises of the massage establishment, and no massage establishment shall be used for residential or sleeping purposes, which may be shown by circumstantial evidence such as the presence of bedding, pillows, sleeping bags, suitcases, clothing, toiletries or other personal belongings, cooking appliances, utensils or food in excess of a business establishment's normal requirements. A massage establishment that is also a hot tub/sauna establishment in compliance with PAMC Chapter 4.56 may have beds or floor mattresses only in rooms used for hot tubs and shall not be used for massage or residential purposes. (7) All locker facilities that are provided for the use of patrons shall be fully secured for the protection of the patrons' valuables, and each patron shall be given control of the key or other means of access.

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(8) The massage establishment shall comply with all applicable state and local building and fire codes as adopted in Title 16 of this code. (9) Any signage referring to the massage establishment located on or adjacent to the building housing the massage establishment must match the business name that is listed on the massage establishment permit. A massage establishment shall not have signage that refers to another business name. (c) Health and Safety Requirements. Except as otherwise specifically provided in this chapter, the following health and safety requirements shall be applicable to all massage establishments located within the city:
(1) The massage establishment shall at all times be equipped with an adequate supply of clean sanitary towels, coverings, and linens. Massage table or chair shall be covered with a fresh, clean sheet or other clean covering appropriate to the equipment for each patron, just before the client arrives. After a towel, covering, or linen has been used once, it shall be deposited in a closed receptacle and not used again until properly laundered and sanitized. Towels, coverings, and linens shall be laundered either by regular commercial laundering, or by a noncommercial laundering process that includes immersion in water at least one hundred forty degrees Fahrenheit for not less than fifteen minutes during the washing or rinsing operation. Clean towels, coverings, and linens shall be stored in closed, clean cabinets when not in use. A certified massage professional engaged in the practice of mobile massage shall carry a sufficient quantity of clean and sanitary towels, sheets, and linens to comply with the requirements. (2) All massage therapy rooms or cubicles, wet and dry heat rooms, toilet rooms, shower compartments, hot tubs, and pools shall be thoroughly cleaned and disinfected as needed, and at least once each business day when the premises has been or will be open and such facilities in use. All bathtubs shall be thoroughly cleaned and disinfected after each use.
(3) All liquids, creams, or other preparations used on or made available to patrons shall be kept in clean and closed containers. Powders may be kept in clean Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 22 Packet Pg. 804 of 828

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20 147_202511117_ts24
shakers. All bottles and containers shall be distinctly and correctly labeled to disclose their contents. When only a portion of a liquid, cream, or other preparation is to be used on or made available to a patron, it shall be removed from the container in such a way as not to contaminate the remaining portion. (4) No invasive procedures shall be performed on any patron. Invasive procedures include, but are not limited to:
(A) Application of electricity that contracts the muscle; (B) Penetration of the skin by metal needles;
(C) Abrasion of the skin below the nonliving, epidermal layers; (D) Removal of skin by means of any razor-edged instrument or other device or tool;
(E) Use of any needle-like instrument for the purpose of extracting skin blemishes; and
(F) Other similar procedures.
(5) All bathrobes, bathing suits, and/or other garments that are provided for the use of patrons shall be either fully disposable and not used by more than one patron, or shall be laundered after each use pursuant to subsection (c)(1) of this section. (6) All combs, brushes, and/or other personal items of grooming or hygiene that are provided for the use of patrons shall be either fully disposable and not used by more than one patron, or shall be fully disinfected after each use. (7) All massage establishments must provide patrons with slip-resistant sandals or flip-flops to wear while in the shower compartment. All footwear such as sandals or flip-flops that are provided for the use of patrons either shall be fully disposable and not used by more than one patron, or shall be fully disinfected after each use.
(8) Patrons' genitals and female patrons' breasts must be fully draped at all times while any individual employed or retained by the massage establishment is in the massage room or cubicle with the patron. No massage shall be provided to a Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 23 Packet Pg. 805 of 828

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21 147_202511117_ts24
patron that results in intentional contact, or occasional and repetitive contact, with the genitals or anal region of a patron.
(9) No alcoholic beverages shall be sold, served, or furnished to any patron; nor shall any alcoholic beverages be kept or possessed on the premises of a massage establishment. A massage establishment that is also a hot tub/sauna establishment in compliance with PAMC Ch. 4.56 is not subject to this limitation for non-massage areas of the establishment, but must adhere to all other applicable laws, including any applicable zoning code provisions and California Department of Alcohol Beverage Control requirements.
(d) Attire and Physical Hygiene Requirements. The following attire and physical hygiene requirements shall be applicable to all employees and any other persons who work permanently or temporarily on the premises of a massage establishment within the city, including, but not limited to, all persons who are employed or retained to practice massage for the massage establishment:
(1) No person shall dress in:
(A) Attire that is transparent, see-through, or substantially exposes the person's undergarments;
(B) Swim attire, unless providing a water-based massage modality approved by the CAMTC;
(C) A manner that exposes the person's chest, breasts, buttocks, or genitals; (2) No massage establishment operator, employee, or visitor shall, while on the premises of a massage establishment or while performing any mobile massage service, and while in the presence of any patron, customer, employee or visitor, expose his or her chest, breast, buttocks, or genitals. (3) All persons shall thoroughly wash their hands with soap and water or any equally effective cleansing agent immediately before providing massage to a patron. No massage shall be provided upon a surface of the skin or scalp of a patron where such skin is inflamed, broken (e.g., abraded or cut), or where a skin infection or eruption is present.

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(e) Display of Permit and Certifications.
(1) The massage establishment permit shall be displayed in an open and conspicuous place on the premises visible from the main entry door and/or reception and waiting area of the massage establishment. (2) Each person employed or retained by a massage establishment to perform massage in or on the premises or through an mobile massage service shall display on his or her person the valid current photograph-bearing identification card issued to that employee by the CAMTC. A copy of each such identification card and the person's original CAMTC certificate shall also be displayed in an open and conspicuous place visible from the main entry door and/or reception and waiting area of the massage establishment. The home address of any employee need not be displayed.
(f) Display of Human Trafficking Notices. The massage establishment shall comply with the requirements in California Civil Code Section 52.6 related to the posting of information for victims of human trafficking.
(g) Home Occupation and Mobile-Only Businesses—Exemptions. (1) Where a certified massage establishment is a home occupation, and the operator has complied with the provisions of Section 18.42.010 of this code pertaining to home occupations, the provisions of subsections (a)(2), (b)(1)—(3), and (b)(6) of this section shall not apply, and the portions of the residence subject to the requirements of subsections (b) and (c) of this section shall be only those portions that are used at any time by the patron of the massage establishment.
(2) For massage establishments that provide mobile-only services and have no fixed location for performing massage, provisions of this section related to businesses with fixed locations shall not apply. Specifically, the provisions of subsections (a)(2)—(9), (b)(1)—(4), (b)(6)—(8), (c)(2) and (7), (e)(1), and (f) of this section shall not apply to mobile-only establishments.

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4.54.150 Massage establishment inspections.
(a) As a condition of the massage establishment permit, investigating officials of the Department shall have the right to enter any massage establishment, other than an establishment providing mobile only services, during regular business hours, to make reasonable inspection to ascertain whether there is compliance with the provisions of this chapter. For home occupations, reasonable inspection shall be limited to the portions of the residence open to patrons.
(b) The massage establishment operator shall take immediate action to correct each violation noted by the inspector. A reinspection will be performed to ensure that each violation noted by the inspector has been corrected.

4.54.160 Reserved.

4.54.170 Revocation or suspension.

All massage establishment operators shall be deemed to know and understand the requirements and prohibitions of this chapter. Any massage establishment permit issued pursuant to this chapter may be suspended or revoked by the Department after a hearing, where the Department finds that any of the following have occurred on even a single occasion:
(a) The permittee or any person employed or retained by the massage establishment has violated any provision of this chapter.
(b) The permittee or any person employed or retained by the massage establishment has been convicted in a court of competent jurisdiction of having violated, or has engaged in conduct constituting a violation of, any of the following: California Penal Code Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, 647(b), or conspiracy or attempt to commit any such offense, or any offense in a jurisdiction outside of the State of California that is the equivalent of any of the aforesaid offenses. (c) The permittee or any person employed or retained by the massage establishment is required to register under Section 290 of the California Penal Code.

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(d) The permittee has been subject to a permanent injunction against the conducting or maintaining of a nuisance pursuant to this code, or Sections 11225 through 11235 of the California Penal Code, or any similar provision of law in any jurisdiction outside the State of California.
(e) The permittee or any person employed or retained by the massage establishment has engaged in fraud or misrepresentation or has knowingly made a misstatement of material fact while working in or for the massage establishment as it pertains to the massage establishment.
(f) The permittee has continued to operate the massage establishment after the massage establishment permit has been suspended.
(g) Massage has been performed on the premises of the massage establishment, with or without the permittee's actual knowledge, by any person who is not a duly authorized CAMTC-certified massage professional.
(h) A person who is not a duly authorized CAMTC-certified massage professional has provided mobile massage services through or on behalf of the massage establishment. (i) There have been one or more acts prohibited under California Penal Code Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, or 647(b), taking place on the premises of the massage establishment, whether or not any criminal prosecution has been pursued or conviction obtained for such acts, and whether or not they occurred with or without the actual knowledge of the permittee.
(j) The permittee or any person employed or retained by the massage establishment or any other person on the premises of the massage establishment has engaged in conduct or committed acts that a reasonable person in the patron's position would understand as an offer to perform on or engage in with the patron acts that are sexual in nature or that involve touching of the patron's genitals, or anal region. (k) The permittee or any person employed or retained by the massage establishment has engaged in sexually suggestive advertising related to massage services available at the massage establishment, including, but not limited to displaying photographs of individuals clothed in swim attire, or attire that is transparent, see-through or Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 27 Packet Pg. 809 of 828

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25 147_202511117_ts24
substantially exposes the individual's undergarments, breasts, buttocks, or genitals, describing massage services as "erotic," "sensual" or similarly sexual in nature, listing advertisements in any media (including online) intended for adults only, or describing the appearance or age of massage providers.
(l) If the applicant has failed to comply with a final court order or administrative action of an investigatory agency finding a violation of applicable federal, state and local wage and hour laws, including, but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and any local minimum wage ordinance or prevailing wage requirements. For purposes of this subsection, a final court order or administrative action is one as to which there is no pending appeal and the time for filing an appeal has passed. In addition, any disciplinary action taken by CAMTC shall be considered in determining grounds for revocation, suspension or nonrenewal.

4.54.180 Hearing for revocation or suspension.
(a) The Department shall give written notice of a hearing for the revocation or suspension of any permit granted pursuant to this chapter to the permittee. The notice shall set forth the time and place of the hearing, the ground or grounds upon which the hearing is based, the pertinent code sections, and a brief statement of the factual issues in support thereof. The notice shall be mailed, postage prepaid, addressed to the permittee at the last known address of the permittee, or it shall be delivered to the permittee personally, at least ten days prior to the hearing date. (b) Within ten days of the hearing the Department shall render its decision in writing, stating its findings and the action taken, if any. The decision letter shall be mailed, postage prepaid, addressed to the permittee at the last known address of the permittee, or it shall be delivered to the permittee personally. (c) Within ten days from the deposit of the decision letter in the mail or its receipt by the permittee, whichever occurs first, the permittee may appeal the decision in writing to the city manager or designee, setting forth with particularity the ground or grounds for the appeal.

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(d) The hearing officer shall give written notice of the hearing on the appeal not less than ten days from the date the appeal was received by the city. The hearing shall be conducted in accordance with Section 4.54.190.
(e) After the hearing on the appeal, the hearing officer or designee may refer the matter back to the Department for a new investigation and decision, may affirm the decision of the Department, may dismiss the disciplinary action, or may revoke or suspend the permit. The decision of the hearing officer upon such appeal shall be final and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6.
(f) The notices provided to the massage establishment pursuant to this section may also be sent to the owner of the premises where the massage establishment is located.

However, failure to provide notice to the property owner shall not invalidate any actions taken by the city.

4.54.190 Hearing rules.

The following rules shall apply to any hearing required by this chapter. All parties involved shall have the right to offer testimonial, documentary, and tangible evidence bearing on the issues, to be represented by counsel, and to confront and cross-examine witnesses. Any relevant evidence may be admitted if it is the sort of evidence upon which reasonable persons are accustomed to rely in the conduct of serious affairs. Any hearing under this chapter may be continued for a reasonable time for the convenience of a party or witness.

4.54.200 Violations a public nuisance—Penalties, nuisance abatement, and other remedies.

Any massage establishment operated, conducted, or maintained contrary to the provisions of this chapter shall be, and the same is hereby declared to be, unlawful and a public nuisance, and the city attorney may, in addition to or in lieu of prosecuting a criminal action hereunder, commence an action or actions, proceeding or proceedings, for the abatement, removal and enjoinment thereof, in the manner provided by law. Such remedies shall be in addition to any Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 29 Packet Pg. 811 of 828

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27 147_202511117_ts24
other judicial and administrative penalties and remedies available to the city under this code or under state law.
(a) For the purpose of enforcing the requirements of this chapter, all owners and operators of the massage establishment shall be jointly and severally responsible for the conduct of all massage establishment employees, agents, independent contractors, or other representatives while such persons are on the premises of the massage establishment or providing mobile massage services on behalf of the massage establishment. (b) In addition to any other remedy available to the city under applicable law, a massage establishment permit may be suspended or revoked as provided in Sections 4.54.170 and 4.54.180. Upon issuance of a final order by the Department or Hearing Officer to revoke the massage permit, the massage establishment shall immediately cease operation, and, if so ordered by the hearing officer, no other massage establishment shall be permitted to operate at that location by any person for a period of not less than five years ("the moratorium period"). If the operator is not also the legal owner of the real property on which the massage establishment is situated, notice of such revocation and the five-year prohibition shall be provided by the permit authority to the owner of record of the property as shown on the latest county assessment roll.
(c) In addition to any other remedy available to the city under applicable law, a massage establishment permit may not be renewed or amended unless and until all due and unpaid citations issued pursuant to this chapter are paid in full, and all outstanding violations have been corrected.
(d) Notwithstanding any other provision of this chapter, where a Notice of Revocation or Suspension has been issued to the operator of a massage establishment pursuant to Section 4.54.180 of this chapter, the Department shall not process or grant an application for a massage establishment permit for a new massage establishment at the same premises unless and until such Notice of Revocation or Suspension is dismissed; or a final determination is made pursuant to that section that the current operator's Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 30 Packet Pg. 812 of 828

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28 147_202511117_ts24
massage establishment permit is not or should not be revoked; or any moratorium period imposed pursuant to this chapter has expired.

4.54.200 Administrative Citations and Penalties
(a) Violations. Upon a finding by the City that a business has violated any provision of this chapter, the City may issue an administrative citation and/or compliance order resulting in administrative fines pursuant to PAMC Chapters 1.12 and 1.16. (b) Separate Violations. Each violation of any provision of this chapter shall constitute a separate violation. Each client to whom massage is provided or offered in violation of this chapter shall also constitute a separate violation. Each day upon which a massage business remains open for business in violation of this chapter shall also constitute a separate violation.
(c) Outstanding Fines. All outstanding penalties resulting from administrative citations and/or compliance orders must be paid prior to the issuance or renewal of any registration.
(d) Appeals. Appeals of administrative citations and compliance orders may be made pursuant to the appeal procedures in PAMC Chapters 1.12 and 1.16, respectively.

SECTION 3. Chapter 4.56 (Hot Tub/Sauna Establishments) of the Palo Alto Municipal Code is hereby amended and restated in its entirety to read as follows:

4.56.010 Purpose and intent.

It is the purpose and intent of this chapter to provide for the orderly regulation of hot tub/sauna establishments and hot tub/sauna establishment employees, as defined in this chapter in the interests of the public health, safety and welfare by providing certain minimum building, sanitation and health standards for hot tub/sauna establishments and by providing certain minimum standards and regulations regarding the conduct and activities of the owners and employees of hot tub/sauna establishments.Reserved.

4.56.020 Definitions.

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For the purpose of this chapter, unless the context clearly requires a different meaning, the words, terms, and phrases set forth in this section shall have the meanings given them in this section:
(a) "Hot tub/sauna establishment" means any establishment having a fixed place of business where any person, as defined in this section, for compensation, engages in, conducts, carries on or permits to be engaged in, conducted or carried on any of the following as the principal functions; provided, that any establishment wherein any employee provides any services defined as massage or adult entertainment by Sections 4.54.020 or 4.55.020 shall be licensed pursuant to the provisions of Chapters 4.54 or 4.55, respectively. (1) Where Russian, Turkish, Finnish, Swedish, hot air, vapor, electric cabinet, steam, mineral, sweat, salt, Japanese, sauna, fomentation, alcohol or baths of any kind whatsoever are furnished or made available; and/or
(2) Where the public has access, on a rental basis, to private rooms or suites located within the establishment, in which are located or provided hot tubs, jacuzzis, saunas, showers, similar and/or related facilities, or any combination thereof.

The term "hot tub/sauna establishment" does not include licensed hospitals, nursing homes, sanitaria, or individuals holding a valid certificate to practice the healing arts under the laws of the state of California, or individuals working under the direction of any such certificated persons. The term "hot tub/sauna establishment" does not include any type of a privately owned and operated health spa, gymnasium or exercise facility where the primary purpose of the establishment is the offering of exercise or physical fitness equipment and facilities to prospective patrons; even though such establishment may have, on its premises, facilities for hot baths, and/or hot tubs, jacuzzis, saunas and related facilities for the incidental use of patrons.
(b) "Hot tub/sauna establishment employee" means every owner, partner, manager, supervisor, employee or any other person, whether paid or not, who renders personal services of any type in the operation of a hot tub/sauna establishment. (c) "License" means the license to operate a hot/tub sauna establishment as required by this chapter.

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(d) "Permit" means the permit to engage in the activities of a hot tub/sauna establishment employee as required by this chapter.
(e) "Person" means any individual, partnership, firm, association. joint venture, corporation. or combination of individuals.

Whenever, in this chapter, the singular form of any of the terms defined in this section is used, the same includes the plural form of such term.

4.56.030 Hot tub/sauna establishment County license required.

It is unlawful for any person to engage in, conduct or carry on, in or upon any premises within the city the operation of a hot tub//sauna establishment without the any applicable valid license(s) or permit(s) required by and obtained from the chief of police as required by this chapter. A. hot tub/sauna establishment license the County of Santa Clara. shall be issued to any person who has complied with the requirements of Sections 4.56.050 and 4.56.110, and all applicable provisions of the code; unless grounds for denial of such license are found to exist. In addition to those set forth in Section 4.04.140, grounds for denial shall include:
(a) The applicant made a material misstatement in the application for a license; (b) The applicant has, within five years immediately preceding the date of the filing of the application, been convicted in a court of competent jurisdiction of an offense involving conduct which requires registration under California Penal Code Section 290, or any violations of Sections 311 through 311.7, 313.1, 314, 315, 316, 318, or 647(a), 647(b), 647(d), or 647(h) of the California Penal Code, or of any offense involving theft of property or violence; (c) That the operation of a hot tub/sauna establishment, as proposed by the applicant, if permitted, would not comply with all applicable laws including, but not limited to, all city ordinances and regulations;
(d) That the operation of the proposed hot tub/sauna establishment is likely to be injurious to the health, safety and welfare of the people of the city; (e) That the applicant is lacking in the background and qualifications to conduct a bona fide hot tub/sauna establishment; or
Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 33 Packet Pg. 815 of 828

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31 147_202511117_ts24
(f) That the applicant has violated any provision of this chapter, or of any similar ordinance, law, rule or regulation of another public agency which regulates the operation of hot tub/sauna or related establishments.

4.56.040 Hot tub/sauna establishment license application fee.

Any application for a license to operate a hot tub/sauna establishment shall be accompanied by a nonrefundable fee as set forth in the municipal fee schedule. The application fee shall be used to defray, in part, the costs of investigation and report, and is not made in lieu of any other fees or taxes required under this code. A license to operate a hot tub/sauna establishment shall be renewed annually. The renewal fee shall be as set forth in the municipal fee schedule.

Reserved.

4.56.050 Application for hot tub/sauna establishment license.

Any application for a license to operate a hot tub/sauna establishment shall be made with the chief of police. Within thirty working days following receipt of a completed application, the chief of police shall either issue the permit or mail a written statement of his reasons for denial thereof. The application shall set forth the exact nature of the hot tub/sauna operations or activities to be conducted, the proposed place of business and facilities therefor, and the name and address of each applicant. In addition to the requirements of Chapter 4.04 and this section, any applicant shall furnish the following information:
(a) The previous address of applicant, if any, for a period of three years immediately prior to the date of the application and the dates of residence at each; (b) Written proof that the applicant is at least eighteen years of age; (c) Applicant's height, weight, color of eyes and hair; (d) The applicant shall allow the police department official processing the application to take photographs and fingerprints of the applicant;
Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 34 Packet Pg. 816 of 828

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(e) Business, occupation or employment history of the applicant for the three years immediately preceding the date of the application;
(f) If the applicant is a corporation, the name of the corporation shall be set forth exactly as shown in its articles of incorporation, together with the names and residence addresses of each of its officers, directors, and each stockholder holding more than five percent of the stock of the corporation. If the applicant is a partnership, the application shall set forth the name and residence address of each of the partners, including limited partners. If one or more of the partners is a corporation, the provisions of this section pertaining to a corporate applicant shall apply;
(g) The names and residence addresses of all persons currently employed or intended to be employed in the hot tub/sauna establishment, regardless of the nature of the employment, other than any person licensed pursuant to Section 4.56.060, along with the proposed or actual nature of the work performed or to be performed, and recent passport-size photographs, suitable to the police department official processing the application, of each such employee. All such employees shall be requested to obtain the permit specified in Section 4.56.060. Any applicant or licensee shall notify the city in writing of the names, addresses, and nature of the work, of any new or proposed employees, and supply the photographs described in this subsection upon determining to employ such person. No such person shall commence such employment until a permit has been obtained as specified in Section 4.56.060. "Employee" means "hot tub/sauna establishment employee" as defined herein. It shall be unlawful for any licensee to employ any hot tub/sauna establishment employee who does not possess a valid permit provided for in Section 4.56.020. Any licensee shall notify the chief of police in writing of the termination of employment of any employee, whether terminated by the licensee or employee, within five days of such termination;
(h) Such other information as may be deemed necessary by the chief of police.

Reserved.

4.56.060 Hot tub/sauna establishment employee permit required.

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It is unlawful for any person to act as a hot tub/sauna establishment employee unless such person holds a valid permit issued by the chief of police. A hot tub/sauna establishment employee permit shall be issued to any person who has fulfilled the requirements of Section

4.56.080, and all other applicable provisions of this code; unless grounds for denial of such permit are found to exist. In addition to those set forth in Section 4.04.140, grounds for denial shall include:
(a) The applicant made a material misstatement in the application for the permit; (b) The applicant, within five years immediately preceding the date of the filing of the application, has been convicted in a court of competent jurisdiction of any offense involving conduct which requires registration under California Penal Code Section 290, or any violation of Sections 311 through 311.7, 313.1, 314, 315, 316, 318 or 647(a), 647(b), 647(d), or 647(h) of the California Penal Code or of any offense involving theft of property; (c) The issuance of the permit is likely to be injurious to the health, safety, welfare, and interest of the people of the city;
(d) The applicant has previously violated any provision of this chapter, or of any similar ordinance, law, rule or regulation of another public agency which regulates the operation of hot tub/sauna establishments or hot tub/sauna establishment employees; (e) The applicant is under eighteen years of age.

Reserved.

4.56.070 Hot tub/sauna establishment employee application fee.

Any application for a permit to act as hot tub/sauna establishment employee shall be accompanied by a nonrefundable fee as set forth in the municipal fee schedule. A hot tub/sauna establishment employee permit shall be renewed annually. The renewal fee shall be as set forth in the municipal fee schedule. Any person who applies for a license to operate a hot tub/sauna establishment and who desires to act as a hot tub/sauna establishment employee within said establishment shall not be required to pay the fee required by the municipal fee schedule, but shall be required to furnish the information set forth in Section 4.56.080.

Reserved.

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4.56.080 Application for hot tub/sauna establishment employee permit.

Any application for a permit to act as a hot tub/sauna establishment employee shall be made with the chief of police. Within thirty working days following receipt of a completed application, the chief of police shall either issue the permit, or mail a written statement of his reason for denial thereof. The chief of police may require the applicant to allow fingerprints to be taken. In addition to the requirements of Chapter 4.04, the applicant shall furnish the following information:
(a) Name, residence address and telephone number;
(b) Social security number and driver's license number if any; (c) Applicant's weight, height, color of hair and eyes; (d) The applicant shall furnish a recent photograph of applicant to the police department official who processes the application;
(e) Written evidence that the applicant is at least eighteen years of age; (f) Business, occupation or employment of the applicant for the three years immediately preceding the date of application;
(g) The name and address of the establishment where the applicant is to be employed, and the name of the owner or operator of the same. Any hot tub/sauna establishment employee granted a permit pursuant to this section must report any change in hot tub/sauna establishment employment within five days of said change; (h) Whether such person has ever been convicted of any crime mentioned in Section

4.56.060. If any person has been so convicted, a statement must be made giving the place and court in which said conviction was had, the specific charge or charges under which the conviction was obtained, and the sentence imposed as a result of such conviction; (i) Such other information as may be deemed necessary by the chief of police.

Reserved.

4.56.090 Appeal.

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In the event a permit or license application has been denied, the applicant shall proceed pursuant to the appeal and hearing provision of Chapter 4.04.

Reserved.

4.56.100 Hot tub/sauna establishment and operations requirements.

All hot tub/sauna establishments shall comply with the following facilities and operations requirements and each of the requirements listed in this section shall be conditions of any hot tub/sauna establishment license which is issued pursuant to the requirements of this chapter:
(a) Hot tub/sauna establishments shall comply with all applicable provisions of this code and with all applicable health and sanitation laws, rules and regulations of the county of Santa Clara and state of California.
(b) Toilet and lavatory facilities shall be provided for employees and patrons of a hot tub/sauna establishment in a number and type not less than the minimum number and type specified in the applicable code section for such type of use. (c) A manager or other supervisory representative of the licensee shall be and remain on the premises of the licensed hot tub/sauna establishment at all times during the operating hours of the establishment. The licensee shall furnish the chief of police with a list of all persons authorized by licensee to act as manager or representative of the licensee. Any change in said list shall be reported to the chief of police immediately. (d) All suites and rooms within hot tub/sauna establishments, for the use of patrons, shall be provided with clean laundered sheets, towels and linens in sufficient quantities which shall be laundered between consecutive uses thereof and stored in an approved sanitary manner. The same sheets, towels and linens shall not be used in excess of one rental period. No sheets, towels or linens shall be laundered or dried in any hot tub/sauna establishment unless such establishment is provided with approved laundry facilities comparable to commercial laundering facilities, for such laundering and drying. Approved receptacles shall be provided for the storage of soiled sheets, linens, and towels. Heavy white paper may be substituted for sheets; provided that such paper is used once for each person and then discarded into a sanitary receptacle.

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(e) All walls, ceilings, floors, pools, showers, bathtubs, hot tubs, jacuzzis, saunas, steam rooms, and all other physical facilities within the establishment must be in good repair and maintained in a clean and sanitary condition. Wet and dry heat rooms, steam or vapor rooms, or steam or vapor cabinets, shower compartments, bathrooms, toilet rooms, saunas, jacuzzis, hot tubs, and individual suites shall be thoroughly cleaned and disinfected each day the business is in operation. Bathtubs (not including hot tubs) shall be cleaned and thoroughly disinfected after each use. Not more than one hot tub or similar water-holding device shall be operated from the same heating or filtering device or any similar mechanism unless each such hot tub or other similar device is capable of being emptied and refilled independent of any other hot tub.
(f) The walls in all rooms where water or steam baths are given shall have a washable, moldresistant surface. (g) All lavatories or wash basins shall be provided with hot and cold running water, soap and single-service towels in wall-mounted dispensers.
(h) Cabinets or other covered space shall be provided for the storage of clean linen. (i) To protect patrons from potential health and sanitary hazards, all hot tub/sauna establishment employees shall be clean and shall perform all services on the premises in full, clean outer garments.
(j) Security deposit facilities capable of being locked by the patron or a waterproof security bag that may be carried by the patron shall be available for the protection of the valuables of the patron.
(k) Each service or facility offered, the price thereof, and the minimum length of time such service shall be performed shall be posted in a conspicuous public location within the hot tub/sauna establishment. If the hot tub/sauna establishment contains within it one or more individual rooms or suites, the hourly rental rate for such individual rooms or suites shall also be posted in a conspicuous public location, along with the minimum and maximum periods of time such individual rooms or suites can be rented. All letters and numbers shall be capitals, and not less than one-half inch in height.

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(l) No mirrors of any type shall be placed at any location within or inside the hot tub/sauna establishment unless the approval of the chief of police has first been obtained; provided, however, that if the hot tub/sauna establishment is comprised of one or more individual rooms or suites, a small mirror, not more than three square feet in size, may be placed on the interior of such room or suite on the door leading from such individual room or suite into any interior hallway within such establishment, or such other comparable location not visible from the exterior of such individual room or suite when the door thereto is open as may be approved by the chief of police.
(m) If the hot tub/sauna establishment is comprised of one or more individual rooms or suites which are rented to patrons, the interior of any such individual room or suite shall not be visible from any point outside the room or suite when the door leading from such individual room or suite into any interior hallway is closed.
(n) No alcoholic beverages of any type shall be permitted to be brought into or consumed within or upon the premises or property of any hot tub/sauna establishment. (o) No nudity shall be permitted or allowed to occur in any interior hallways of the establishment, or in any other open patron area or areas located within the hot tub/sauna establishment. Nudity shall only be permitted or allowed within the confines of an individual room or suite located within the establishment and then only by the patrons who have rented such room or suite.
(p) No individual under the age of eighteen years shall be allowed to enter into or to remain upon or within the premises of any hot tub/sauna establishment unless such individual is accompanied by his or her parent or guardian.
(q) All hot tub/sauna establishment employees, while on duty:
(1) Shall remain fully clothed at all times;
(2) Shall not remain inside any of the individual rooms or suites with any patrons of the establishment while the doors leading to the hallways from such rooms or suites are closed.

Said doors shall remain closed at all times during which the individual room or suite is occupied and utilized by any patron;
Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 40 Packet Pg. 822 of 828

NOT YET APPROVED
38 147_202511117_ts24
(3) Shall not perform, for compensation or otherwise, any type of personal services for the patrons of the establishment, which personal services consist of the touching of any part of the body of a patron with any part of the employee's body, or any implement utilized by an employee.
(r) (1) Hot tub/sauna establishments shall close and remain closed from eleven p.m. to nine a.m.
(2) After one year of operation, a hot tub/sauna establishment may be exempted from the hours restrictions of this section by the chief of police upon a written request which details the factual reasons supporting good cause for the exemption. The chief of police, in determining what constitutes good cause for this exemption from the hours restrictions, shall consider and weight the following factors:
(A) The criteria outlined in Section 4.04.140 of Chapter 4.04; (B) The criteria outlined in Section 4.56.030 of this chapter; (C) The impact which the hot tub/sauna establishment has had on the health, safety, and welfare of the local community, including, but not limited to, parking and traffic congestion; (D) The hot tub/sauna establishment's compliance or noncompliance with all federal, state, and local laws, including, but not limited to, this municipal code.

If, upon review of these factors, the chief of police determines that good cause does exist for the requested exemption, the chief may then exempt the particular hot tub/sauna establishment from the hours restrictions of this section. However, in no event shall any hot tub/sauna establishment close later than two a.m. nor open earlier than six a.m. (3) The exemption from the hours restrictions of this section shall be subject to review and renewal annually at the same time as the renewal of the underlying license and the same factual showing shall be made as that required for the initial exemption. The chief shall not grant an hours exemption unless said establishment has maintained the criteria specified in Section 4.56.100(r)(2).
(s) No hot tub/sauna establishment shall be allowed in the following locations:
(1) Within two hundred fifty feet of the exterior property limits of any public or private elementary school, junior high school or high school;
Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 41 Packet Pg. 823 of 828

NOT YET APPROVED
39 147_202511117_ts24
(2) Within two hundred fifty feet of the exterior limits of any district where residential use is the principal permitted use, including all R and RM districts, O-S districts, and any P-C or P-F districts where the principal use permitted or maintained is residential; or (3) Within twelve hundred feet of the exterior property limits of any other premises lawfully occupied by a hot tub/sauna establishment or by any establishment subject to the provisions of Chapters 4.54 or 4.55, or any cardroom licensed pursuant to Chapter 4.52. Notwithstanding the provisions of this subdivision, subject to all other provisions of this chapter, a hot tub/sauna establishment license may be issued for an establishment located within twelve hundred feet of another hot tub/sauna establishment, an establishment subject to the provisions of Chapters

4.54 or 4.55, or any cardroom licensed pursuant to Chapter 4.52 if the applicant has obtained, and has in effect, a valid conditional use permit pursuant to Chapter 18.76 (Permits and Approvals). Application for a license under this chapter shall be made and processed prior to an application for a use permit. In the event it is determined that a license under this chapter would be issued for the provisions of this subdivision, the application for a use permit shall then be processed. A license under this chapter shall not be issued until completion of the use permit application process. In the case of such an application, the time limit for action on a hot tub/sauna establishment license application contained in Section 4.56.050 shall be automatically extended as necessary to follow processing of the use permit application. For the purpose of determining compliance with standard (3), as to, between and with respect to establishments lawfully in operation on the effective date of this section, priority between such existing establishments shall be assigned in accordance with the dates upon which said establishments commenced such lawful operations. In the event any dispute arises regarding said dates, the applicant shall have the obligation to establish the date on which he commenced lawful operation.

Any hot tub/sauna establishment lawfully in operation on the effective date of this section shall, within sixty days of said date apply to the chief of police for a determination as to compliance with the provisions of this section. Said application shall be in such form as prescribed by the chief of police.

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Any hot tub/sauna establishment legally existing on the effective date of this subsection and which is not in compliance with the provisions of this subsection shall comply with said provisions within three years of the effective date of this subsection; provided, however, that any such establishment which intends to in any way transfer ownership or alter or change the nature of any such hot tub/sauna establishment on or after the effective date of this subsection shall comply with the provisions of this subsection prior to such transfer, alteration or change.

Any such use which at the expiration of said period is not in compliance with the provisions of this subsection shall at that time discontinue and abate its operation.

Any hot tub/sauna establishment lawfully in operation upon the effective date of this subsection failing to comply with the provisions of this subsection shall be issued a limited-term license containing a statement on its face reciting such noncompliance and the date by which compliance must be accomplished, and that said license shall not be renewed beyond said date.

All distances referred to in this subsection shall be measured between the closest points on the exterior property lines or area boundaries of the parcels or areas involved, except that when a hot tub/sauna establishment subject to the provisions of this section occupies one unit of a multi-unit structure located on a single parcel, distances shall be measured from the exterior boundaries of the unit so occupied.

Reserved.

4.56.110 Inspection by officials.

Any and all investigating officials of the city shall have the right to enter hot tub/sauna establishments from time to time during regular business hours to make reasonable inspections to observe and enforce compliance with building, fire, electrical, plumbing or other health safety regulations. A warrant shall be obtained whenever required by law.

4.56.120 Business name.

No person licensed to operate a hot tub/sauna establishment shall operate under any name or conduct business under any designation not specified in the a County license(s).

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4.56.130 Business location change.

Upon a change of location of a hot tub/sauna establishment, an application to the chief of police shall be made in the same form as an original application, and such application shall be granted, provided all applicable provisions of this code are complied with as in the case of an original application, and a change of location fee as set forth in the municipal fee schedule to defray, in part, the costs of investigation and report has been paid to the city.

Reserved.

4.56.140 Sale or transfer of hot tub/sauna establishment interest.

A sale or transfer of any interest in a hot tub/sauna establishment, which interest would be reported as required in this chapter upon application for a hot tub/sauna establishment license, shall be reported to the chief of police within ten days of such sale or transfer. The chief of police shall investigate any person receiving any interest in a hot tub/sauna establishment as a result of such sale or transfer, and if such person satisfies the requirements relating to hot tub/sauna establishment license applicants, the existing license shall be endorsed to include such person. A fee as set forth in the municipal fee schedule shall be paid to the city for the investigation by the chief of police necessitated by each such sale or transfer.

Reserved.

4.56.150 Display of permits, licenses.

The owner or operator of a hot tub/sauna establishment shall display the hot tub/sauna establishment license and the permit of each and every hot tub/sauna establishment employee employed in the establishment in an open and conspicuous place on the premises. Passportsize photographs of the licensee and permittees shall be affixed to the respective license and permits on display pursuant to this section. Home addresses of hot tub/sauna establishment employees need not be displayed.

Reserved.

4.56.160 Grounds for denial, probation, and disciplinary action.

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In addition to any provisions contained in this chapter, the provisions of Section 4.04.140 shall apply to licenses and permits required under this chapter. Any circumstances constituting grounds for denial shall also constitute grounds for revocation, suspension or disciplinary action.

Reserved.

4.56.170 Hearing.

Any licensee or permittee whose license or permit has been suspended or revoked shall proceed pursuant to the appeal and hearing provisions of Chapter 4.04.

Reserved.

4.56.180 Application to existing establishments and employees.

All operators of existing hot tub/sauna establishments, and all hot tub/sauna establishment employees in the city upon the effective date of this chapter shall comply with all application and other requirements within thirty days following the effective date of this chapter.

Reserved.

4.56.190 Application of other code provisions.

Chapter 4.04 shall apply to the subject matter of this chapter in all respects, including those not specifically mentioned in this chapter.

Reserved.

4.56.200 Employment of persons under the age of eighteen years prohibited.

No licensee shall employ, hire or retain the services of any individual who is under the age of eighteen years old. No licensee shall knowingly employ, hire or retain the services of, or continue to employ or retain, any individual who has been convicted of any of the offenses set forth in subsection (b) of Section 4.56.060, or who has failed to obtain the permit required by Section 4.56.060.

Reserved.

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SECTION 4. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid.

SECTION 5. The Council finds that this project is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the ordinance will have a significant effect on the environment.

SECTION 6. This ordinance shall be effective 31 days after adoption.

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Assistant City Attorney City Manager
____________________________
Chief of Police
Item 14
Attachment A - Revised
Ordinance Amending
Chapter 4.54 (Massage
Establishments) and
Chapter 4.56 (Hot TubSauna
Establishments) of Titles 4
(Business Licenses and
Regulations)
Item 14: Staff Report Pg. 46 Packet Pg. 828 of 828

Palo Alto City CouncilDecember 1, 2025

Palo Alto City Council
December 1, 2025