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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: December 1, 2025
Report #:2511-5472
TITLE
Approval of Seven Items to Support the Automated Weather Observation System Project, AP- 19000, at Palo Alto Airport: 1) Approval of Construction Contract No. C26194026 with Vellutini Corporation DBA Royal Electric Company, in an Amount Not to Exceed $1,699,810; 2) Authorization for the City Manager or Designee to Negotiate Change Orders Up to a Not-to- Exceed Amount of $254,971; 3) Approval and Authorization for the City Manager or Designee to Execute Contract Amendment 3 to Contract No. C21178372C with C&S Engineers, Inc. for a Not-to-Exceed Amount of $464,613 and a Contract Extension Through December 31, 2026; 4) Authorization and Approval for the City Manager or Designee to Execute Contract Amendment 1 to Contract No. C21178372B with Burns & McDonnell for a Contract Extension Through December 31, 2026; 5) Approval and Authorization for the City Manager or Designee to Execute Contract Amendment 1 to Contract No. C211783782A with Centurion Planning & Design LLC to extend the contract term through December 31, 2027; 6) Adoption of a Resolution Authorizing the Submittal of Applications and Execution of Grant Agreements with the California Department of Transportation for Airport Improvement Program Matching Grants; and 7) Approval of a Budget Amendment in the Airport Enterprise Fund; CEQA Status - Exempt Under CEQA Guidelines Section 15302
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager or their designee to execute construction contract No. C26194026 with Vellutini Corporation DBA Royal Electric Company, in the amount not to exceed $1,699,810 for the Airport Automated Weather Observation Project (AP-19000);
2. Approve and authorize the City Manager or their designee to execute one or more change orders to the contract with Vellutini Corporation DBA Royal Electric Company for related, additional but unforeseen work that may develop during the project, the total value of which shall not exceed $254,971;
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3. Approve and authorize the City Manager or their designee to execute Amendment 2 to Contract No. C21178372C with C&S Engineers Inc. to increase compensation by $464,613 and extend the contract term through December 31, 2027 to provide construction administration and management services related to the Airport Automated Weather Observation Project;
4. Approve and authorize the City Manager or their designee to execute Amendment 1 to Contract No. C21178372B with Burns & McDonnell to extend the contract term through December 31, 2027 to provide construction engineering services;
5. Approve and authorize the City Manager or their designee to execute Amendment 1 to Contract No. C211783782A with Centurion Planning & Design LLC to extend the contract term through December 31, 2027 to provide construction environmental services;
6. Adopt a Resolution authorizing the submittal of an application and execution of grant agreements with the California Department of Transportation, for Airport Improvement Program matching grants; and
7. Amend the Fiscal Year 2026 Budget Appropriation for the Airport Fund by (requires a 2/3 vote):
a. Increasing the estimate for revenue from the Federal Government by $1,140,739;
b. Increasing the estimate for revenue from the State of California by $70,239; c. Increasing the Advanced Weather Observation System Project (AP-19000) expenditure appropriation by $1,164,157; and
d. Increasing the fund balance in the Airport Fund by $46,821 (reimbursement of expenses already incurred).
EXECUTIVE SUMMARY
This report was initially agendized on the consent agenda for the November 3, 2025 City Council meeting. Following concerns raised by community members, the City Manager removed the item from the agenda to allow time for more stakeholder outreach, including a community meeting about the project that was held on November 13.
The Palo Alto Airport Automated Weather Observation System Project will install new weather monitoring equipment and replace aging navigational aids to enhance flight safety and operational reliability. The project includes constructing a 24/7 AWOS to provide continuous real-time weather data, as well as replacing the Precision Approach Path Indicators and Runway End Identifier Lights, both of which have reached the end of their useful life. The City has received three grants from the Federal Aviation Administration (FAA) totaling $2,431,789 for the project.
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Staff recommends the City Council approve multiple contracts totaling $2,504,394, including the construction contract with Vellutini Corporation DBA Royal Electric Company1, consultant contract extensions, and a resolution allowing the City Manager to apply for California Department of Transportation (CalTrans) matching grants in the amount of $70,239. With the FAA and CalTrans funding, the Airport Fund’s contribution to the project is $104,460.
BACKGROUND
As a General Aviation Reliever Airport for three major Bay Area airports, Palo Alto Airport (PAO) is a critical facility included in the National Plan of Integrated Airport Systems, making it eligible for FAA Airport Improvement Program (AIP) grant funding. This funding supports capital improvements necessary to ensure the continued safe and efficient operation of the airport.
Currently, PAO relies on the FAA control tower, staffed daily from 7:00 a.m. to 9:00 p.m., to provide weather and visibility information to pilots using basic tools from the FAA-owned Surface Weather System (SWS) such as ceilometers (which is currently out of service), wind indicators, and altimeters. Outside of tower hours, however, real-time weather information is limited, which can impact both flight safety and operational decision-making. The proposed Automated Weather Observation System (AWOS) will provide continuous, 24/7 real-time weather data and automatically generate METARs—one-minute weather observations broadcast via UHF/VHF radio, telephone, and online weather services. This information will be available to pilots, flight service stations, the National Weather Service, and other weather platforms, ensuring accurate, up-to-date, and FAA-compliant weather reporting.
In addition to the AWOS installation, the project includes replacing the aging Precision Approach Path Indicators and Runway End Identifier Lights, both of which are required FAA navigational aids. The existing equipment has reached the end of its useful life, has become increasingly difficult to service, and lacks readily available replacement parts. Upgrading these systems is essential to maintaining safe approach and landing operations at PAO. These improvements have been strongly requested by airport users and will significantly enhance the safety and reliability of airport operations.
ANALYSIS
This project will install a new AWOS to replace the existing FAA SWS and upgrade critical airfield infrastructure at the Palo Alto Airport to enhance safety and operational efficiency. The work includes installing AWOS equipment, foundations, electrical systems, and communication connections to the FAA tower, as well as fully integrating the system for seamless operation. In 1 Vellutini Corporation DBA Royal Electric Company Construction Contract Contract for AWOS C26194026; https://www.paloalto.gov/files/assets/public/v/1/public-works/palo-alto-airport/c26194026-awos-final-contract- revised-10.21.25.pdf
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addition, the project will replace aging Precision Approach Path Indicators and Runway End Identifier Lights by demolishing outdated equipment, installing new systems, upgrading control relays, and improving power connections and conduits. These upgrades will provide continuous, real-time weather information, improve navigational aids, and support the safe and efficient operation of the airport.
These improvements are considered maintenance and replacement of existing navigational and weather reporting systems and do not modify the airport’s runway, airfield geometry, or operational procedures. The project does not expand airport facilities, increase airfield capacity, or otherwise enable additional aircraft operations. The installation of the AWOS and replacement of the PAPI and REIL systems are intended solely to enhance safety, reliability, and continuity of existing airport operations, and no increase in number, timing, or type of aircraft operations is anticipated as a result of this project.
Some community members have raised concerns that the AWOS system would increase PAO flight operations during non-staffed hours. Currently, aircraft are using weather at other local airports to navigate into the Palo Alto Airport. The new equipment will provide pilots with more accurate on-field information to improve pilot decision making regarding current weather conditions at the airport. Given the marginal change reflected by AWOS, staff recommends approval to proceed with the project.
Solicitation Process
On March 10, 2025, a formal invitation for bids for the AWOS project was posted on the City’s eProcurement system. The City received two bids from qualified contractors on April 21, 2025, as listed on the attached Bid Summary (Attachment A).
Bid Summary
Table 1: Summary of invitation for Bids
Project Bid Name/Number Automated Weather Observation System Installation IFB #194026
Proposed Length of Project 296 days
Number of Bid Packages Downloaded by Contractors 21
Total Day to Respond to Bid 31
Pre-Bid Meeting (Non-mandatory) Yes
Number of Company Attendees at Pre-Bid Meeting 1
Number of Bids Received 2
Public Link to Solicitation https://procurement.opengov.com/portal/palo- alto-ca/projects/154303
Bid Range $1,699,810.00 - $1,979,900.00
The bid was $1,699,810, which is 20% above the engineer’s estimate of $1,416,264. Staff has reviewed the bid submitted and recommends acceptance of the base bid submitted by Vellutini 8 1
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Corporation DBA Royal Electric Company in the amount of $1,699,810, and that Vellutini Corporation DBA Royal Electric Company be declared the responsible lowest bidder. The construction contingency amount of $254,971, which equals 15% of the contract value, is requested for related, additional, but unforeseen work which may develop during the project, implemented via City-approved Change Order. A contingency amount of 15% is the maximum allowed contingency by the FAA, and is requested for this project to maximize eligible funding beyond the City’s standard 10% contingency.
The project is broken down into 3 portions with the base bid including infrastructure for all portions of the project and the PAPIs, while Bid Alternative 1 includes the REILs, and Bid Alternative 2 includes the AWOS. The breakdown of the costs can be seen below:
Base Bid – $1,151,200
Alternative 1 - $79,810
Alternative 2 - $468,800
The above costs are for construction only.
Consultant Services
Consultant services are critical to the successful delivery of Airport Capital Improvement Program (ACIP) projects, providing on-call design services, construction administration, environmental studies, and planning support. On December 7, 2020, the City executed3 the original contracts with C&S Engineers, Burns & McDonnell, and Centurion Planning and Design.
All of the contracts are set to expire on December 31, 2025 and require extensions to allow for the completion and closeout of the project with the FAA. The FAA permits contract extension beyond five years if the project was included in the ACIP at the time of the original Request for Qualifications; these projects were included.
C&S Engineers, who have been closely involved in the project, will provide construction management and grant administration services. Contract Amendment 2 (Attachment B) to Contract No #C21178372C will add additional funds to cover the costs and extend the contract to December 31, 2027 to allow time for closeout of the grant.
As the design engineer, Burns & McDonnell will continue to provide construction administration services as needed. Contract Amendment 1 (Attachment C) to Contract No #C21178372B will extend the contract to December 31, 2027 to allow for time to close out the grant.
3 City Council, December 7, 2020, Agenda Item #10; SR#11654; https://portal.laserfiche.com/Portal/DocView.aspx?id=228694&repo=r-704298fc 8 1
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Centurion Planning & Design performed the environmental review for the project, and will provide environmental services during construction. Contract Amendment 1 (Attachment D) to Contract No #C21178372A will extend the contract to December 31, 2027 to allow for time to closeout the grant.
FISCAL/RESOURCE IMPACT
Partial funding for the recommended contracts is available in the FY 2026 Adopted Budget for the Advanced Weather Observation System project (AP-19000). The existing budget and recommended adjustments are summarized in the following table:
Contracts and Awarded
Grants
Recommended
Total Amount
Included in FY 2026
Adopted Budget
Recommended
Budget Adjustment
Federal Grants $2,431,789 $1,291,050 $1,140,739
State Grants $70,239 $ - $70,239
Total Revenue $2,502,028 $1,291,050 $1,210,978
Recommended Contracts $2,504,394 $1,340,237 $1,164,157 Total Expenditure $2,504,394 $1,340,237 $1,164,157
Net Impact ($2,366) ($49,187) $46,821
As shown in the table, $1,340,237 was budgeted for the AWOS project in Fiscal Year 2026, thus requiring a $1,164,157 budget amendment to cover the costs of the recommended contracts.
Also budgeted was $1,291,050 of FAA grant reimbursements. Previously, FAA grants for general aviation airports covered 90% of eligible project costs. However, under the FAA Reauthorization Act of 2024, general aviation airports like Palo Alto Airport are now eligible for up to 95% federal funding for this project. The net impact of $2,366 will be paid for by the Airport Fund with the $46,821 being returned to the Airport Fund.
The Airport Enterprise Fund previously pre-funded $241,357 for design, engineering, and environmental services due to limited federal funds at the time. These costs are eligible for reimbursement and are included in the FAA grant agreements. The total FAA grant funding for the project is $2,431,789 through three (3) grants:
Airport Infrastructure Grant (AIG): $1,027,000
Airport Improvement Program (AIP) Grant #1: $677,822
Airport Improvement Program (AIP) Grant #2: $726,967
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Additionally, staff requests Council adopt a Resolution (Attachment E) authorizing the City Manager to execute matching grant agreements with the California Department of Transportation (Caltrans) for the two AIP grants. Caltrans does not match the AIG grant; therefore, no funding is requested for that grant. The matching funds from Caltrans contribute the following:
Caltrans Match Agreement for AIP Grant #1: $33,891
CalTrans Match Agreement for AIP Grant #2 $36,348
As $1,291,050 in Federal revenues had already been budgeted in this project, only $1,140,739 in Federal funds and $70,239 in State funds remain unbudgeted in the AWOS project.
These adjustments ensure sufficient funding to cover the full scope of the AWOS project while maximizing available federal and state reimbursements. The overall project cost, including amounts from prior years, is $2,608,854, with $2,502,028 funded by the FAA and CalTrans, and $104,460 contributed from the Airport Fund.
STAKEHOLDER ENGAGEMENT
Airport user stakeholders have been actively involved since the outset of the AWOS project design. Airport staff conducted ongoing outreach to the Palo Alto Airport Association, airport businesses, and other tenants to ensure that the system’s design reflects the operational needs of the airport community. Regular discussions and feedback sessions have provided valuable input on siting, functionality, and anticipated benefits of the AWOS.
In response to public interest and concerns raised when the staff report was initially agendized for the November 3, 2025 City Council meeting, staff hosted a community meeting on November 13, 2025. Staff shared a presentation to provide an overview of the AWOS project, describe the planned replacement of aging equipment, and respond to questions from stakeholders. The discussion at the meeting focused primarily on the AWOS component of the project, and particularly whether a 24-hour weather reporting system could lead to an increase in nighttime aircraft operations. Staff explained that aircraft already operate at night and that pilots currently rely on weather observations from nearby airports such as Moffett Field and San Carlos Airport when flying to or from Palo Alto Airport. The AWOS will provide more accurate and specific weather observations for the Airport, but does not alter flight procedures or increase the Airport’s operational capacity. Pilots noted that overflights of the City could potentially be reduced, because aircraft will not need to fly the approach into San Carlos Airport, but could fly directly to Palo Alto Airport.
Participants also raised questions regarding the project’s Categorical Exclusion under NEPA and the CEQA exemption. Staff clarified that the project qualifies as replacement of existing 8 1
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facilities, that the required environmental review processes were completed, and that the project was designed to minimize environmental impact. Since the project involves replacement of existing equipment, no public outreach was required under NEPA or CEQA for the environmental review.
Participants requested that staff share the presentation slides, environmental documentation, and grant assurances5. Those documents were provided after the meeting.
An additional request to separate the cost of the REIL and PAPI portion from the AWOS portion of the project is reflected in this report.
At the meeting, staff was asked whether, if the AWOS project was determined to have increased nighttime operations, the City would be able and willing to turn the AWOS off at night. Following the meeting, staff confirmed that due to federal grant assurances and the AWOS project’s function as a safety facility, the City would not be able to do so.
Finally, some community members expressed dissatisfaction that the stakeholder communications about the project had included Airport users but not general community outreach. Staff explained that, although the project had been mentioned in budget process discussions and other Council staff reports, staff had not considered that there would be general community interest in what were considered to be equipment replacements to enhance safety. Considering the community input, staff will better ensure that residents and stakeholders have clear avenues for participation as Airport projects proceed.
ENVIRONMENTAL REVIEW
National Environmental Policy Act
Per FAA guidance, Centurion Planning prepared documentation to comply with NEPA requirements for the AWOS Project. Since the project involves only the replacement of existing facilities, it qualifies as a Categorical Exclusion (CATEX) under FAA Order 1050.1: Environmental Impacts, Policies, and Procedures.
California Environmental Quality Act
The project is exempt from CEQA review per Guideline Section 15302 (Replacement or Reconstruction).
ATTACHMENTS
Attachment A: Bid Summary
Attachment B: CS C211783782C Amendment 2
5 https://www.faa.gov/airports/aip/grant_assurances/assurances-airport-sponsors-2025 8 1
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Attachment C: BM C21178372B Amendment 1
Attachment D: Centurion C21178372A Amendment 1
Attachment E: RESO DOT Grant Agreement
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer