Agenda packet — Palo Alto City Council, December 15, 2025 (part 2 of 4)

survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30.

19.4. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement, unless made in accordance with Section 17 (Waivers).

SECTION 20. NOTICES.

All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows:

To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303

With a copy to the Purchasing Manager

To CONSULTANT: Attention of the Project Manager at the address of CONSULTANT recited on the first page of this Agreement.

CONSULTANT shall provide written notice to CITY of any change of address.

SECTION 21. CONFLICT OF INTEREST.

21.1. In executing this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services.

21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subcontractors or other persons or parties having such an interest.

CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Al to Municipal Code and the Government Code of the State of California, as amended from time to time . CONSULTANT agrees to notify CITY if any conflict arises.

21.3. If the CONSULTANT meets the definition of a “Consultant” as defined by the Regulations of the Fair Political Practices Commission, CONSULTANT will file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act of 1974, as amended from time to time.

SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.

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identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section

2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment.

22.2. CONSULTANT understands and agrees that pursuant to the Americans Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor or subcontractor, are required to be accessible to the disabled public. CONSULTANT will provide the Services specified in this Agreement in a manner that complies with the ADA and any other applicable federal, state and local disability rights laws and regulations, as amended from time to time. CONSULTANT will not discriminate against persons with disabilities in the provision of services, benefits or activities provided under this Agreement.

SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department , hereby incorporated by reference and as amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include , first, minimizing and reducing waste; second, reusing waste ; and, third, recycling or composting waste. In particular, C ONSULTANT shall comply with the following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT to C ITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwi se approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by C ONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed.

SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE .

CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) h ours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code Section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code Section 4.62.060.

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SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code , as amended from time to time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement.

SECTION 2 6. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS.

26.1. This Project is not subject to prevailing wages and related requirements. CONSULTANT is not required to pay prevailing wages and meet related requirements under the California Labor Code and California Code of Regulations in the performance and implementation of the Project if the contract:
(1) is not a public works contract;
(2) is for a public works construction project of $25,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j); or (3) is for a public works alteration, demolition, repair, or maintenance project of $15,000 or less, per California Labor Code Sections 1782(d)(1), 1725.5(f) and 1773.3(j).

26.1. This Project is subject to prevailing wages and related requirements as a “public works” under California Labor Code Sections 1720 et seq. and related regulations.

CONSULTANT is required to pay general prevailing wages as defined in California Labor Code Section 1773.1 and Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq., as amended from time to time. Pursuant to Labor Code Section 1773, the CITY has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the State of California Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the CITY’s Purchasing Department office. The general prevailing wage rates are also available at the DIR, Division of Labor Statistics and Research, web site (see e.g. http://www.dir.ca.gov/DLSR/PWD/index.htm) as amended from time to time. CONSULTANT shall post a copy of the general prevailing wage rates at all Project job sites and shall pay the adopted prevailing wage rates as a minimum. CONSULTANT shall comply with all applicable provisions of Division 2, Part 7, Chapter 1 of the California Labor Code (Labor Code Section 1720 et seq.), including but not limited to Sections 1725.5, 1771, 1771.1, 1771.4, 1773.2, 1774, 1775, 1776, 1777.5, 1782, 1810, 1813 and 1815 , and all applicable implementing regulations, including but not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq. (8 CCR Section 16000 et seq.) , as amended from time to time. CONSULTANT shall comply with the requirements of Exhibit E , entitled “ DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS”, for any contract for public works construction, alteration, demolition, repair or maintenance , including but not limited to the obligations to register with, and furnish certified payroll records directly to, DIR.

SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS” . For Docusign Envelope ID: 65FB9527-8355-4D29-84F3-6CE49122734C Item 15
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purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects , certain claims procedures shall apply , as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.

This Project is a 9204 Public Works Project and is required to comply with the claims procedures set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.

This Project is not a 9204 Public Works Project.

SECTION 28. CONFIDENTIAL INFORMATION.

28.1. In the performance of this Agreement, CONSULTANT may have access to CITY’s Confidential Information (defined below). CONSULTANT will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose.

CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information.

Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONSULTANT’s obligations to CITY under this Agreeme nt and for no other purpose, provided that the CONSULTANT informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement.

28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY.

28.3. Notwithstanding the foregoing, CONSULTANT may disclose Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONSULTANT will notify CITY in writing of such order immediately upon receipt and prior to any such disclosure (unless CONSULTANT is prohibited by law from doing so), to give CITY an opportunity to oppose or otherwise respond to such order.

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28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal In formation, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time.

28.5. Prior to or upon termination or expiration of this Agreement, CONSULTANT will honor any request from the CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and nothing contained in this Agreement grants or confers any rights to such Confidential Information on CONSULTANT.

28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.

SECTION 29. MISCELLANEOUS PROVISIONS.

29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions.

29.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California.

29.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys’ fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties.

29.4. This Agreement, including all exhibits, constitutes the entire and integrated agreement between the parties with respect to the subject matter of this Agreement, and supersedes all prior agreements, negotiations, representations, statements and undertakings, either oral or written. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code, as amended from time to time.

29.5. If a court of competent jurisdiction finds or rules that any provision of this Agreement is void or unenforceable, the unaffected provisions of this Agreement will remain in full force and effect.

29.6. In the event of a conflict between the terms of this Agreement and the exhibits hereto (per Section 30) or CONSULTANT’s proposal (if any), the Agreement shall control. In the event of a conflict between the exhibits hereto and CONSULTANT’s proposal (if any), the exhibits shall control.

29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.

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29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement.

29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement.

SECTION 30. EXHIBITS. Each of the following exhibits, if the check box for such exhibit is selected below, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein:

EXHIBIT A: SCOPE OF SERVICES
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS
EXHIBIT E: DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS
EXHIBIT F: CLAIMS FOR PUBLIC CONTRACT CODE SECTION 9204

PUBLIC WORKS PROJECTS

THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED.

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CONTRACT No. C26193655

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written.

CITY OF PALO ALTO

____________________________
City Manager

APPROVED AS TO FORM:

__________________________
City Attorney or designee

CANOPY

Officer 1

By: ________________________________

Name: ______________________________

Title: _______________________________

Officer 2

By: ________________________________

Name: ______________________________

Title: _______________________________

Docusign Envelope ID: 65FB9527-8355-4D29-84F3-6CE49122734C Executive Director
Jean-Pal Renaud
Maria Chai
Board Chair
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EXHIBIT A

SCOPE OF SERVICES

CONSULTANT shall provide the Services detailed in this Exh ibit A, entitled “SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualific ations, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project.

CONSULTANT’s participation in t he planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications.

CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services.

CONSULTANT will provide the Services detailed in this Exhibit A (Scope of Services) in accordance with the provisions of this Agreement.

1) The responsibilities of the CITY will include the following:

CITY Arborists, Urban Forestry Section and Community Services Department staff will coordinate and cooperate with CONSULTANT to facilitate special events such as the annual Mayor’s tree planting, Arbor Day event(s) public right-of-way plantings, Young Tree Care Survey, Right Tree Right Place program and CITY-wide educational events. CITY staff will be responsible for identifying planting sites for these events.

2) CONSULTANT’s Responsibilities. CONSULTANT shall perform the following Services, as further detailed in the Action Plans below:

A. Community Education, Outreach, and Advocacy.
i) Organize and conduct the annual Mayor’s Tree Planting event. (1) In partnership with the CITY Urban Forestry Section, CONSULTANT shall organize and conduct the annual Mayor’s Tree Planting event, coordinating with the incoming mayor on a suitable date and event size. CONSULTANT will work closely with CITY staff to ident ify tree species and planting location, while coordinating an event that reaffirms the community’s commitment to growing and caring for the city’s urban forest.
ii) Coordinate the annual Arbor Day Festival or Celebration. (1) CONSULTANT shall work closely with the CITY as well as other environmentally aligned community groups to determine the location, size, and timing of the event.

Secondary goals for the event include but are not limited to, highlighting the importance of trees in Palo Alto, motivating community engagement during a time of the year traditionally focused on sustainability, and meeting Arbor Day recognition criteria for the CITY to continue qualifying as a Tree City USA with the Arbor Day Foundation.
iii) Comply with all applicable legal and regulatory requirements regarding working with Docusign Envelope ID: 65FB9527-8355-4D29-84F3-6CE49122734C Item 15
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minors, where applicable (including, but not limited to, conducting all required background checks and health screenings).
iv) Maintain an online, searchable arborist list of ISA Certified Arborists for distribution to the community.
v) CONSULTANT shall serve as a liaison to the Palo Alto School District (PAUSD) to increase awareness of the value of the trees on school district land, which could include educational events for students.
(1) CONSULTANT will work closely with PAUSD to promote urban forestry awareness and education on their campuses. CONSULTANT will work with PAUSD to identify tree planting locations at campuses to help increase canopy coverage at PAUSD schools.
vi) CONSULTANT will conduct donor and membership recruitment to leverage this contract and ensure a broad base of support for CONSULTANT and its activities. (1) CONSULTANT will leverage this contract with the CITY to expand support of our mutual mission to engage Palo Alto residents in caring for their urban forest. vii) Education, Outreach and Advocacy
(1) CONSULTANT shall present on topics relating to the urban forest at the City’s Parks and Recreation Commission each Spring.
(2) CONSULTANT shall lead four (4) tree walks in Palo Alto per each FY of the contract term with the goal of educating and motivating Palo Alto residents to plant, steward, and celebrate trees.
(3) CONSULTANT will offer free participation to Palo Alto residents in its Community Forestry School, a nine-week program to learn proper tree planting and tree care techniques from certified arborists and CONSULTANT staff. (4) CONSULTANT shall maintain and update educational materials on topics such as young tree care maintenance, watering, and tree species selection. CONSULTANT shall distribute these resources to the Palo Alto tree stewards and the broader community regularly throughout the year.
(5) CONSULTANT shall maintain and update the “Trees in Palo Alto” landing page on CONSULTANT’s website, which includes the history of community forestry in Palo Alto, information on the Palo Alto Tree Protection Ordinance, and City Trees Q&A.
viii) CONSULTANT shall seek participation and support from the commercial and industrial community.
ix) CONSULTANT shall seek other financial support (e.g., grants) outside of CITY government to provide increased services to the community and to increase public involvement.
x) CONSULTANT shall report quarterly on the governance, operations, and capacity building to engage new members and increase efficiency.

B. Tree Planting.
i) CONSULTANT shall plant 100 trees per each FY of the contract term for a total of at least 300 trees.
(1) CONSULTANT shall replace up to 25 trees per each FY of the contract term that have failed within the first three (3) years of planting date. ii) CONSULTANT shall organize and host at least three (3) community planting events per each FY of the contract term. Trees will be planted at these events using community volunteers and CONSULTANT Planting Leaders. Trees may also be planted through Docusign Envelope ID: 65FB9527-8355-4D29-84F3-6CE49122734C Item 15
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smaller planting events executed by CONSULTANT staff and volunteers. iii) CONSULTANT will work closely with the CITY to identify priority sites and areas for focused tree planting.
(1) CONSULTANT’s primary focus will be in the region south of the Oregon Expressway where data indicates canopy coverage is overall lower than other areas of Palo Alto.
(2) Secondary focus areas will include areas that are frequented by high volumes of individuals especially vulnerable to climate change, such as early childcare centers, schools, senior centers, etc.
(3) Additional focus areas will be neighborhoods with a large volume of documented tree removals.

C. Tree Assessment and Tree Care.
i) CONSULTANT shall conduct an annual Citywide survey of newly planted public trees and report this information to the Urban Forestry Section of the Public Works Department and to community residents. CONSULTANT will prepare the survey in consultation with the City and include all categories requested by the City. (1) CONSULTANT shall conduct this survey, called the Young Tree Care Survey (YTCS), of newly planted public trees utilizing an online based open data tree inventory portal.
(2) CONSULTANT will hire and manage a paid summer intern to assist in creating and executing YTCS routes, as well as preparing the report for the Urban Forestry Section of Public Works Department and community residents. ii) CONSULTANT shall organize and train a cadre of volunteers to monitor the condition of young trees and perform simple maintenance tasks on site. (1) CONSULTANT will provide tree care monitoring of newly planted trees for three (3) years post planting.
(2) CONSULTANT will implement a Digital Tree Health Survey to maintain open lines of communication with tree stewards to identify and prioritize young tree care work in Palo Alto via methods such as surveys or text campaigns. (3) CONSULTANT will train community volunteers on young tree care and host up to four (4) volunteer tree care workshops per each FY of the contract term in Palo Alto that are open to tree stewards and the public.

D. Urban Forestry Program Assistance.
i) CONSULTANT shall manage and maintain the City’s open data portal (currently Tree Plotter from PlanIT Geo) for data entry as a way of engaging the community as partners in stewardship and improving data currency and accuracy (UFMP Program 4.G.iii.).

CONSULTANT is responsible for any associated annual subscription costs for use of the open data portal. CONSULTANT will submit to the CITY for reimbursement of annual subscription costs as part of the regular monthly invoicing. ii) CONSULTANT shall administer Palo Alto Utility Department’s Right Tree in the Right Place Program (RTRP).
(1) CONSULTANT will administer the program for up to 25 trees per each FY of the contract term, managing the reimbursement process per CITY policies.

CONSULTANT will advertise, respond to, and screen inquiries about the RTRP program and will guide applicants i n completing the proper RTRP process.

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program's requirements, and the CITY shall reimburse CONSULTANT directly through monthly contract invoicing.
(2) Other Urban Forest Master Plan projects may be added to the contract through the amendment process in future FYs if warranted.

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EXHIBIT B

SCHEDULE OF PERFORMANCE

CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed (“NTP”) from the CITY.

Goals/Milestones Completion
Date
Goal A: Community Education and Outreach Ongoing
Goal A.i: Organize and conduct the annual Mayor’s Tree Planting event Annual, Q3 Goal A.ii: Coordinate the annual Arbor Day Festival or Celebration Annual, Usually Q4
Goal A.vii.2: Lead four (4) tree walks to educate and motivate residents to plant, steward, and celebrate trees
Ongoing, 4
per FY
Goal B.i: Plant 100 trees during each FY of the contract for a contract term total of at least 300 trees
Contract Term
Goal B.i.1: Replace up to 25 trees each FY that have failed within the first three (3) years of planting date
As Needed,
Contract Term
Goal B.ii: Organize and host at least three (3) community planting events for each FY of the contract
Annual
Goal C.i: Conduct an annual Citywide survey of newly planted public trees and report this information to the Urban Forestry Section of the Public Works Department and to community residents
Annual
Goal C.ii.1: Provide tree care monitoring of newly planted trees for three (3) years post planting
Ongoing
Goal C.ii.2: Implement a Digital Tree Health Survey to maintain open lines of communication with tree stewards to identify and prioritize young tree care work in Palo Alto
Annual
Goal C.ii.3: Host up to four (4) volunteer tree care workshops per each FY of the contract term
Annual
Goal D.i: Manage and maintain the City’s open data portal Ongoing Goal D.ii: Administer Palo Alto Utility Department’s Right Tree in the Right Place Program (RTRP).

Ongoing

Optional Schedule of Performance Provision for On-Call or Additional Services Agreements. (This provision only applies if checked and only applies to on-call agreements per Section 1 or agreements with Additional Services per Section 4.)

The schedule of performance shall be as provided in the approved Task Order, as detailed in Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement.

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EXHIBIT C

COMPENSATION

CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below.

CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below.

The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation f or Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement.

BUDGET SCHEDULE AMOUNT NOT TO EXCEED

TASK DESCRIPTION – FULL

DESCRIPTIONS IN EXHIBIT A
FY26 FY27 FY28 CATEGORY

SUBTOTAL
GOAL
NOT TO
EXCEED
Goal A: Community Education and Outreach $100,000 $103,000 $106,093 $309,093 Goal A.i: Mayor’s Tree Planting $10,000 $10,300 $10,609 $30,909 Goal A.ii: Arbor Day Events $15,000 $15,450 $15,914 $46,364 Goal A.vii: Community Tree Walks, Website and
Communication
$25,000 $25,750 $26,523 $77,273
Goal A: Other Basic Services Related to
Community Education and Outreach
$50,000 $51,500 $53,047 $154,547
Goal B: Tree Planting $135,000 $139,050 $143,223 $417,273 Goal B.i: Plant Trees (includes Volunteers) $100,000 $103,000 $106,090 $309,090 Goal B.i.1: Tree Replacement (if needed) $5,000 $5,150 $5,305 $15,455 Goal B.ii: Community Planting Events $5,000 $5,150 $5,305 $15,455 Goal B.iii: Canopy Disparity Strategy $25,000 $25,750 $26,523 $77,273 Goal C: Tree Assessment and Tree Care $130,000 $133,900 $137,918 $401,818 Goal C.i: Young Tree Care Survey $50,000 $51,500 $53,045 $154,545 Goal C.ii: Digital Tree Health Survey $25,000 $25,750 $26,523 $77,273 Goal C: Other Service Related to Tree Assessment
and Tree Care
$55,000 $56,650 $58,350 $170,000
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TASK DESCRIPTION – FULL

DESCRIPTIONS IN EXHIBIT A
FY26 FY27 FY28 CATEGORY

SUBTOTAL
GOAL
NOT TO
EXCEED
Goal D: Urban Forestry Program Assistance $35,000 $36,050 $37,132 $108,182 Goal D.i: Maintain and Manage Open Data Portal $20,000 $20,600 $21,218 $61,818 Goal D.ii: Administer Right Tree, Right Place
Program
$15,000 $15,450 $15,914 $46,364
Total Contract All Tasks Not to Exceed: $400,000 $412,000 $424,366 $1,236,366

Sub-total Basic Services $1,236,366 Reimbursable Expenses $0

Total Basic Services & Reimbursable expenses
$1,236,366
Additional Services (Not to Exceed) $0
Maximum Total Compensation $1,236,366

REIMBURSABLE EXPENSES

CONSULTANT’S ordinary business expenses , such as administrative, overhead, administrative support time/overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in-house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder.

All requests for reimbursement of expenses, if any are specified as reimbursable under this section, shall be accompanied by appropriate backup documentation and information.

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EXHIBIT C-1

SCHEDULE OF RATES

CONSULTANT’s schedule of rates is as follows:

SCHEDULE OF RATES FOR CONTRACT TERM - FY2026 TO FY2028

Position Title Hourly Rate ($)
Executive Director 173.00
Deputy Director 156.00
Director of Impact 151.00
Tree Program Manager 151.00
Community Forestry Coordinator II 71.00
Tree Care Coordinator II 71.00
Education Director 151.00
Adult Educator 71.00
Environmental Educator 79.00
Youth Programs Manager 79.00
Operations Manager 97.00
YTCS Intern 35.00
TUFs 32.00
Communications Manager 71.00
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EXHIBIT D

INSURANCE REQUIREMENTS

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

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

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

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY

STATUTORY

STATUTORY STATUTORY STATUTORY
YES

GENERAL LIABILITY, INCLUDING

PERSONAL INJURY, BROAD FORM

PROPERTY DAMAGE BLANKET

CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

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

$1,000,000

YES

AUTOMOBILE LIABILITY,

INCLUDING ALL OWNED, HIRED,

NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000

$1,000,000

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

$1,000,000

YES

PROFESSIONAL LIABILITY,

INCLUDING, ERRORS AND

OMISSIONS, MALPRACTICE (WHEN

APPLICABLE), AND NEGLIGENT

PERFORMANCE
ALL DAMAGES $1,000,000
YES

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

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

OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.

I. INSURANCE COVERAGE MUST INCLUDE:

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

II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: [email protected]

III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS:

A. PRIMARY COVERAGE

WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,

INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR

CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.

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B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER

THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE

INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE

INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.

C. NOTICE OF CANCELLATION

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

OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:

[email protected]

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EXHIBIT E

DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS (NOT APPLICABLE)

This Exhibit shall apply only to a contract for public works construction, alteration, demolition, repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement with CONSULTANT without proof that CONSULTANT and its listed subcontrac tors are registered with the California Department of Industrial Relations (“DIR”) to perform public work, subject to limited exceptions. City requires CONSULTANT and its listed subcontractors, if any, to comply with all applicable requirements of the California Labor Code including but not limited to Labor Code Sections 1720 through 1861, and all applicable related regulations, including but not limited to Subchapter 3, Title 8 of the California Code of Regulations Section 16000 et seq ., as amended from time to time. This Exhibit E applies in addition to the provisions of Section 26 (Prevailing Wages and DIR Registration for Public Works Contracts) of the Agreement.

CITY provides notice to CONSULTANT of the requirements of California Labor Code Section 1771.1(a), which reads:

“A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Co ntract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded.”

This Project is subject to compliance monitoring and enforcement by DIR. All contractors must be registered with DIR per Labor Code Section 1725.5 in order to submit a bid. All subcontractors must also be registered with DIR. No contractor or subcontractor may be awarded a contract for public work on a public works project unless registered with DIR. Additional information regarding public works and prevailing wage requirements is available on the DIR web site (see e.g. http://www.dir.ca.gov) as amended from time to time.

CITY gives notice to CONSULTANT and its listed subcontractors that CONSULTANT is required to post all job site notices prescribed by law or regulation.

CONSULTANT shall furnish certified payroll records directly to the Labor Commissioner (DIR) in accordance with Subchapter 3, Title 8 of the California Code of Regulations Section 16461 (8 CCR Section 16461).

CITY requires CONSULTANT and its listed subcontractors to comply with the requirements of Labor Code Section 1776, including but not limited to:

Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, CONSULTANT and its listed subcontractors, in connection with the Project.

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The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of CONSULTANT and its listed subcontractors, respectively.

At the request of CITY, acting by its Project Manager, CONSULTANT and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the CITY Project Manager within ten (10) days of receipt of CITY’s request.

CITY requests CONSULTANT and its listed subcontractors to submit the certified payroll records to CITY’s Project Manager at the end of each week during the Project.

If the certified payroll records are not pro vided as required within the 10 -day period, then CONSULTANT and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum total of penalties from the progress payment(s) then due and payable to CONSULTANT.

Inform CITY’s Project Manager of the location of CONSULTANT’s and its listed subcontractors’ payroll records (street address, city and county) at the commencement of the Project, and also provide notice to CITY’s Project Manager within five (5) business days of any change of location of those payroll records.

Eight (8) hours labor constitutes a legal day’s work. CONSULTANT shall forfeit as a penalty to CITY, $25.00 for each worker employed in the execution of the Agreement by CONSULTANT or any subcontractor for each calendar day during which such worker is req uired or permitted to work more than eight (8) hours in any one calendar day or forty (40) hours in any one calendar week in violation of the provisions of the Labor Code, and in particular, Sections 1810 through 1815 thereof, except that work performed by employees of CONSULTANT or any subcontractor in excess of eight (8) hours per day, or forty (40) hours during any one week, shall be permitted upon compensation for all hours worked in excess of eight (8) hours per day, or forty (40) hours per week, at no t less than one and one -half (1&1/2) times the basic rate of pay, as provided in Section 1815.

CONSULTANT shall secure the payment of workers’ compensation to its employees as provided in Labor Code Sections 1860 and 3700 (Labor Code 1861). CONSULTANT shall sign and file with the CITY a statutorily prescribed statement acknowledging its obligation to secure the payment of workers’ compensation to its employees before beginning work (Labor Code 1861).

CONSULTANT shall post job site notices per regulation (Labor Code 1771.4(a)(2)).

CONSULTANT shall comply with the statutory requirements regarding employment of apprentices including without limitation Labor Code Section 1777.5. The statutory provisions will be enforced for penalties for failure to pay prevailing wages and for failure to comply with wage and hour laws.

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EXHIBIT F
CLAIMS FOR PUBLIC CONTRACT CODE SECTION 9204 PUBLIC WORKS

PROJECTS

The provisions of this Exhibit are provided in compliance with Public Contract Code Section 9204; they provide the exclusive procedures for any claims pursuant to Public Contract Code Section 9204 related to the Services performed under this Agreement.

1. Claim Definition. “Claim” means a separate demand by the Contractor sent by registered mail or certified mail with return receipt requested, for one or more of the following:

(A) A time extension, including, without limitation, for relief from damages or penalties for delay assessed by the City.
(B) Payment by the City of money or damages arising from the Services performed by, or on behalf of, the Contractor pursuant to the Agreement and payment for which is not otherwise expressly provided or to which the Contractor is not otherwise entitled. (C) Payment of an amount that is disputed by the City.

2. Claim Process.

(A) Timing. Any Claim must be submitted to City in compliance with the requirements of this Exhibit no later than fourteen (14) days following the event or occurrence giving rise to the Claim. This time requirement is mandatory; failure to submit a Claim within four teen (14) days will result in its being deemed waived.

(B) Submission. The Claim must be submitted to City in writing, clearly identified as a “Claim” submitted pursuant to this Exhibit, and must include reasonable documentation substantiating the Claim. The Claim must clearly identify and describe the dispute, including relevant references to applicable portions of the Agreement, and a chronology of relevant events.

Any Claim for additional payment must include a complete, itemized breakdown of all labor, materials, taxes, insurance, and subcontract, or other costs. Substantiating documentation such as payroll records, receipts, invoices, or the like, must be submitted in support of each claimed cost.

Any Claim for an extension of time or delay costs must be substantiated with schedule analysis and narrative depicting and explaining claimed time impacts.

(C) Review. Upon receipt of a Claim in compliance with this Exhibit, the City shall conduct a reasonable review of the Claim and, within a period not to exceed 45 days from receipt, shall provide the Contractor a written statement identifying what portion of the Cla im is disputed and what portion is undisputed. Upon receipt of a Claim, the City and Contractor may, by mutual agreement, extend the time period provided in this paragraph 2.

(D) If City Council Approval Required. If the City needs approval from the City Council to provide the Contractor a written statement identifying the disputed portion and the undisputed portion of the Claim, and the City Council does not meet within the 45 days or within the mutually agreed to extension of time following receipt of a Claim sent by registered mail or certified mail, return receipt requested, the City shall have up to three days following the next duly publicly noticed meeting of the City C ouncil after the 45-day period, or extension, expires to provide the Contractor a written statement identifying the disputed portion and the undisputed portion.

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(E) Payment. Any payment due on an undisputed portion of the Claim shall be processed and made within 60 days after the City issues its written statement. If the City fails to issue a written statement, paragraph 3, below, shall apply.

3. Disputed Claims

(A) Meet and Confer. If the Contractor disputes the City's written response, or if the City fails to respond to a Claim submitted pursuant to this Exhibit within the time prescribed, the Contractor may demand in writing an informal conference to meet and confer for settlement of the issues in dispute. Upon receipt of a demand in writing sent by registered mail or certified mail, return receipt requested, the City shall schedule a meet and confer conference within 30 days for settlement of the dispute. Within 10 business days following the conclusion of the meet and confer conference, if the Claim or any portion of the Claim remains in dispute, the City shall provide the Contractor a written statement identifying the portion of the Claim that remains in dispute and the portion that is undisputed. Any payment due on an undisputed portion of the Claim shall be processed and made within 60 days after the City issues its written statement.

(B) Mediation. Any remaining disputed portion of the Claim, as identified by the Contractor in writing, shall be submitted to nonbinding mediation, with the City and the Contractor sharing the associated costs equally. The City and Contractor shall mutually agree to a mediator within 10 business days after the disputed portion of the Claim has been identified in writing by the Contractor. If the parties cannot agree upon a mediator, each party shall select a mediator and those mediators shall select a qua lified neutral third party to mediate the disputed portion of the Claim. Each party shall bear the fees and costs charged by its respective mediator in connection with the selection of the neutral mediator. If mediation is unsuccessful, the parts of the Cl aim remaining in dispute shall be subject to any other remedies authorized by the Agreement and laws.

(i) For purposes of this paragraph 3.B, mediation includes any nonbinding process, including, but not limited to, neutral evaluation or a dispute review board, in which an independent third party or board assists the parties in dispute resolution through negotiation or by issuance of an evaluation.

Any mediation utilized shall conform to the timeframes in this section.

(ii) Unless otherwise agreed to by the City and the Contractor in writing, the mediation conducted pursuant to this section shall excuse any further obligation, if any, under Public Contract Code Section 20104.4 to mediate after litigation has been commenced.

4. City’s Failure to Respond. Failure by the City to respond to a Claim from the Contractor within the time periods described in this Exhibit or to otherwise meet the time requirements of this Exhibit shall result in the Claim being deemed rejected in its entirety. A Claim that is de nied by reason of the City's failure to have responded to a Claim, or its failure to otherwise meet the time requirements of this Exhibit, shall not constitute an adverse finding with regard to the merits of the Claim or the responsibility or qualifications of the Contractor.

5. Interest. Amounts not paid in a timely manner as required by this section shall bear interest at seven (7) percent per annum.

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6. Approved Subcontractor Claims . If an approved subcontractor or a lower tier subcontractor lacks legal standing to assert a Claim against the City because privity of contract does not exist, the Contractor may present to the City a Claim on behalf of a subcontractor or lower tier subcontractor. A subcontractor may request in writing, either on his or her own behalf or on behalf of a lower tier subcontractor, that the Contractor present a Claim for work which was performed by the subcontractor or by a low er tier subcontractor on behalf of the subcontractor.

The subcontractor requesting that the Claim be presented to the City shall furnish reasonable documentation to support the Claim. Within 45 days of receipt of this written request, the Contractor shall notify the subcontractor in writing as to whether the Contractor presented the claim to the City and, if the Contractor did not present the claim, provide the subcontractor with a statement of the reasons for not having done so.

7. Waiver of Provisions . A waiver of the rights granted by Public Contract Code Section 9204 is void and contrary to public policy, provided, however, that (1) upon receipt of a Claim, the parties may mutually agree to waive, in writing, mediation and proceed directly to the commencement of a civil action or binding arbitration, as applicable; and (2) the City may prescribe reasonable change order, claim, and dispute resolution procedures and requirements in addition to the provisions of Public Contract Co de Section 9204, so long as the contractual provisions do not conflict with or otherwise impair the timeframes and procedures set forth in this section.

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: December 15, 2025
Report #:2511-5487
TITLE
Adoption of a Resolution Approving Conduit Financing for Charities Housing Development Corporation, on behalf of El Camino PA, L.P., for the 130-Unit Affordable Multifamily Housing Rental Project Located at 3001 El Camino Real, and Approving the Issuance of Revenue Bonds not to exceed $80 Million by the California Municipal Finance Authority (CMFA) for the Purpose of Financing and Refinancing the Acquisition, Development, Construction and Equipping of Project; CEQA Status: Not a Project

RECOMMENDATION
Staff recommend that City Council adopt a Resolution (Attachment A) approving the issuance of the Bonds by the CMFA for the benefit of El Camino PA, L.P. (the “Borrower”), to provide for the financing of the Project, such adoption is solely for the purposes of satisfying the requirements of TEFRA, and California Government Code Section 6500 (and following).

BACKGROUND
Charities Housing Development Corporation (the “Sponsor”), on behalf of El Camino PA, L.P. (the “Borrower”), has requested that the California Municipal Finance Authority (the “Authority”) issue one or more series of revenue bonds in an aggregate principal amount not to exceed $80 million (the “Bonds”), for the acquisition, development, construction, and equipping of a 130-unit multifamily rental housing development for low-income households (the “Project”), to be located in the City of Palo Alto, California (the “City”), at 3001 El Camino Real.

There is no financial impact to the City from its approval of the issuance of the Bonds. The Authority will act as issuer and perform all necessary legal and administrative responsibilities associated with the financing. The Bonds are special, limited, obligations of the Authority payable solely through the repayment of the loan by the Borrower, which will be used to pay the principal of, and interest on, the bonds. The bonds issued by the Authority are not an obligation of the City or any member of the Authority.

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ANALYSIS
In order for all or a portion of the bonds to qualify as tax-exempt bonds, the Federal Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) requires (a) a public hearing commonly referred to as a “TEFRA Hearing”, to be conducted, providing members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project and (b) adoption of a Resolution by the City Council approving the issuance of the Bonds by the Authority for the benefit of the Borrower’s Project.

According to TEFRA requirements, prior to the hearing, reasonable notice must be provided to the members of the community. Following the close of the TEFRA Hearing, an “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the deemed issuance of the bonds for the financing of the Project.

The public hearing requirement under TEFRA was satisfied by the Authority, which conducted a toll-free telephonic TEFRA hearing on November 20, 2025 at 10:30 A.M., in compliance with Section 147(f) of the Internal Revenue Code of 1986. As cited in the published notice on November 12, 2025 in the Daily Post, the public hearing is an opportunity for all interested persons to speak or to submit written comments concerning the proposals to issue the debt and the nature or location of the facility to be financed.

The next step, because the Project is located within the jurisdiction of the City of Palo Alto, is for City Council to adopt the resolution (Attachment A), approving the issuance of bonds by the Authority for the benefit of the Borrower.

The Bonds are intended to finance the acquisition, development, construction and equipping of the Project, to be located in the City at 3001 El Camino Real. TEFRA approval is a precondition to the use of tax-exempt obligations for the Project, without which financing of the Project as affordable housing would have to be abandoned.

The Authority is a joint powers authority that the City became a member of on April 14, 2008.

The Authority is a public entity, separate and apart from each member executing such agreement. The debts, liabilities and obligations of the Authority do not constitute debts, liabilities or obligations of the members executing such agreement. The Bonds to be issued by the Authority for the Project will be the sole responsibility of the Borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project. All financing documents with respect to the issuance of the bonds will contain clear disclaimers that the Bonds are not obligations of the City or the State of California but are to be paid for solely from funds provided by the Borrower.

Outside of adopting the required resolution approving issuance of the bonds, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds will be required. Based on the benefits of the Project to the Palo Alto community and the lack Item 16
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of any financial obligations on the part of the City, staff recommend that Council adopt the attached resolution.

POLICY IMPLICATIONS
Actions recommended in this report are consistent with Council’s prior actions in supporting non-profit financings under the TEFRA (e.g., approving tax-exempt financing through the California Municipal Finance Authority for Wilton Court in 2020 (CMR: 10976).)

FISCAL/RESOURCE IMPACT
The City will incur no financial obligation from approval of the recommendations.

STAKEHOLDER ENGAGEMENT
City staff coordinated with representatives of the Charities Housing Development Corporation and the California Municipal Finance Authority to prepare for this action. A telephonic public hearing was conducted on November 20, 2025 at 10:30 A.M., nothing to report out of the hearing.

ENVIRONMENTAL REVIEW
Action on this item does not constitute a project as defined by the California Environmental Quality Act (CEQA) because adoption of the resolution is a government funding mechanism or fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).

The 3001 El Camino Real Project itself was evaluated in Initial Study/Mitigated Declaration (MND), which was circulated for public review between February 13, 2023 and March 15, 2023 and approved on June 6, 2023.

ATTACHMENTS
Attachment A: Resolution of the City Council of the City of Palo Alto Approving a Plan of Finance of the California Municipal Finance Authority to Issue and Reissue Revenue Bonds for a Qualified Residential Rental Project for the Benefit of El Camino PA, L.P.

APPROVED BY:

Lauren Lai, Administrative Services Director
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RESOLUTION NO. 25-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALO ALTO

APPROVING A PLAN OF FINANCE OF THE CALIFORNIA MUNICIPAL

FINANCE AUTHORITY TO ISSUE AND REISSUE REVENUE BONDS FOR A

QUALIFIED RESIDENTIAL RENTAL PROJECT FOR THE BENEFIT OF EL CAMINO PA, L.P., AND CERTAIN OTHER MATTERS RELATING THERETO

WHEREAS, Charities Housing Development Corporation of Santa Clara County, a California nonprofit public benefit corporation (the “Developer”), on behalf of El Camino PA, L.P., a California limited partnership, or another ownership entity created by El Camino PA DE LLC, a Delaware limited liability company, its general partner (the “General Partner”), or by another affiliate of the Developer (such limited partnership or other ownership entity, the “Borrower”), has requested that the California Municipal Finance Authority (the “Authority”) undertake a proposed plan of finance to issue and reissue from time to time one or more series of revenue bonds in an outstanding principal amount not to exceed $80,000,000 (the “Bonds”) to finance and refinance the acquisition, construction, development and equipping of a 130 -unit qualified residential rental project (the “Project”) to be owned and operated by the Borrower and located at 3001–3017 El Camino Real within the City of Palo Alto, California (the “City”); and WHEREAS, an “applicable elected representative” of the jurisdiction in which the Project is to be located is required to approve the proposed plan of finance for the Project under Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”); and WHEREAS, the City Council of Palo Alto (the “City Council”) is the elected legislative body of the City and is an “applicable elected representative” for purposes of Section 147(f) of the Code; and
WHEREAS, the Authority has advised that the Bonds may be issued pursuant to a “plan of finance” to issue an original issue of Bonds and to issue or reissue one or more additional series of Bonds from time to time after the original issue of Bonds, if necessary or desirable to comply with applicable legal requirements, all in an aggregate principal amount not to exceed $80,000,000 to finance the Project, and all within the three-year period commencing on the date of the issuance of the first series of Bonds pursuant to this resolution; and WHEREAS, the Authority has requested that the City Council approve the proposed plan of finance in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”), among certain local agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, the Authority has, following notice duly given, held a public hearing regarding the issuance of the Bonds, and the City Council now desires to approve the proposed plan of finance for the Project; NOW, THEREFORE, BE IT RESOLVED, by the City Council of Palo Alto, as follows:

Section 1. The foregoing recitals are true and correct.

Section 2. The City Council hereby approves the proposed plan of finance of the Authority to issue and reissue from time to time of one or more series of revenue bonds in an outstanding Item 16
Attachment A - Resolution
of the City Council of the
City of Palo Alto Approving
a Plan of Finance of the
California Municipal Finance
Authority to Issue and
Reissue Revenue Bonds for
a Qualified Residential
Rental Project for the
Benefit of El Camino PA, L.P .

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principal amount not to exceed $80,000,000. It is the purpose and intent of the City Council that this resolution constitute approval of the proposed plan of finance for the Project for the purposes of (a) Section 147(f) of the Code by the applicable elected representative of a governmental unit having jurisdiction over the area in which the Project is to be located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement.

Section 3 . The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby.

Section 4. The City Clerk shall forward a certified copy of this Resolution to the Authority in care of its counsel:

Ronald E. Lee, Esq.

Jones Hall LLP
4 West 4th Street, Suite 406
San Mateo, CA 94402
Section 5. This resolution shall take effect immediately upon its adoption.

PASSED AND ADOPTED by the City Council of the City of Palo Alto this day of , 2025.

AYES:

NOES:

ABSTAIN:

ABSENT:

[SEAL]

Attest:

By:

City Clerk
Item 16
Attachment A - Resolution
of the City Council of the
City of Palo Alto Approving
a Plan of Finance of the
California Municipal Finance
Authority to Issue and
Reissue Revenue Bonds for
a Qualified Residential
Rental Project for the
Benefit of El Camino PA, L.P .

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: December 15, 2025
Report #:2509-5243
TITLE
Approval of General Services Contract No. C26195803 with Genuine Parts Company dba Napa Auto Parts for an Amount Not-to-Exceed $6,238,832 for an On-Site Fleet Parts and Inventory Program for a Six-Year Term Utilizing Pricing Set by Cooperative Sourcewell Contract No. 090624-GPC, and Approval of a Budget Amendment in the Vehicle Replacement and Maintenance Fund; CEQA Status - Not a Project

RECOMMENDATION
Staff recommends that the City Council:

1. Approve and authorize the City Manager or their designee to execute Contract No.

C25193345 with Genuine Parts Company dba Napa Auto Parts (“NAPA”) for an amount not-to-exceed $6,238,832 for an on-site fleet parts and inventory program for a term of six years (January 1, 2026 through December 31, 2031), with pricing set by cooperative Sourcewell Contract No. 090624-GPC with Genuine Auto Parts Company dba Napa Integrated Business Solutions; and

2. Amend the Fiscal Year 2026 Adopted Operating Budget Appropriation (2/3 vote needed) for the Vehicle Replacement and Maintenance Fund by:
a. Increasing the expense appropriation for Vehicle Operations and Maintenance contract services by $601,837; and
b. Decreasing the Vehicle Replacement and Maintenance Fund Balance by $601,837.

Note: Exhibit C allows adjustment between contract year amounts, provided that the total not- to-exceed amount of the contract over the life of the contract term is not exceeded.

EXECUTIVE SUMMARY
Staff recommends City Council approval of Contract No. C26195803 with Genuine Parts Company dba NAPA Auto Parts for an amount not-to-exceed $6,238,832 to continue the City’s on-site fleet parts and inventory program for a six-year term from January 1, 2026, through December 31, 2031. The proposed contract utilizes cooperative Sourcewell Contract No.

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090624-GPC to maintain competitive pricing and ensure continuity of service following a successful pilot and subsequent agreements with NAPA dating back to 2016. Approval of this contract will allow the City to avoid significant operational disruptions and additional staffing costs that would result if parts management services were brought back in-house, while maintaining the efficiencies and cost savings achieved under the existing program.

The recommended appropriations amendment is due to a misalignment of this contract with Fiscal Year timing. To correctly align this new NAPA contract, FY 2026 funding is needed for a portion of Year 4 of the current NAPA contract and the entirety of Year 1 of this new contract.

This is a one-time fix that will realign the encumbrances moving forward.

BACKGROUND
In August 2016, the City contracted parts operations to NAPA as a three-year pilot after approval by City Council on August 15, 2016 (CMR #7027). Analysis conducted by staff indicated that the pilot with NAPA was successful and benefited the City in overall cost savings. The following is a history of contractual relationships with NAPA:
The pilot ended on July 21, 2019 and was renewed for one additional year via Amendment No. 1 on August 12, 2019, which aligned with the term of NAPA’s cooperative contract with Sourcewell (CMR #10512).
Amendment No. 2 was executed on June 15, 2020 for a second one-year extension through July 21, 2021 and to add funding accordingly (CMR# 11263). Amendment No. 3 was entered into on July 7, 2021, to extend the term through January 20, 2022 at no added cost to the City, and an exemption to competitive solicitation was approved under municipal code section 2.30.290 (b)(1) to give staff time to bring forward the request to approve a new three-year contract with NAPA. Council approved the existing three-year contract with NAPA which began January 24, 2022 and was set to expire on January 23, 2025 (CMR# 13835)1 . Staff utilized the option to extend the contract an additional year via Amendment No. 1, with the contract expiring on December 29, 2025.

ANALYSIS
On January 8, 2025, NAPA entered into a new competitively-solicited cooperative contract with Sourcewell (a cooperative purchasing group for government, education, and nonprofit agencies), for an initial four-year term, expiring January 10, 2029, with the option to renew for three additional one-year terms through January 10, 2032 2. To align with the term of the 1 City Council, May 23, 2022; Agenda Item #4; SR #13835, https://portal.laserfiche.com/Portal/DocView.aspx?id=59479&repo=r-704298fc&searchid=c6d84985-ef08-4638- 8077-ce0a0c9a5c02
2 NAPA IBS Contract with Sourcewell for On-Site Parts Management, Contract #100124; Item 17
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https://www.paloalto.gov/files/assets/public/v/1/public-works/public-services/fleet/genuine-parts-company-dba- napa-contract-100124.pdf
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Sourcewell Contract, staff recommends Council approve a contract (Attachment B) between the City and NAPA for an initial three-year term, ending December 31, 2028, with the option to extend the contract for up to three additional one-year terms, ending December 31, 2031, if NAPA renews its contract with Sourcewell. This approach provides continuity of service while ensuring that the City‘s contract does not extend beyond the availability of cooperative pricing.

Although the contract delineates annual amounts, Exhibit C of the contract permits the parties to adjust these amounts and/or the City’s amount of services if the City exceeds or is projected to exceed the aforementioned contract year annual amounts. These adjustments are subject to the provision that the City does not surpass the total not-to-exceed amount of the recommended contract, which is $6,238,832 over a six-year term.

The Sourcewell Member Pricing identified in the contract provides the same pricing terms as the previous contract. Goods will be billed to the City at a 10% gross margin over NAPA’s acquisition cost, operating expenses will be billed at actual cost with no markup, and NAPA’s return is built into the price of parts, so that no separate fee is billed.

Procurement Process
The City’s Palo Alto Municipal Code Section 2.30.360 (j) identifies the process that allows the use of cooperative purchasing agreements. Quotes for this contract were obtained through the approved cooperative group, Sourcewell, and a proposal was received September 26, 2025 from NAPA (Attachment A) for a six-year proforma with a 10% gross margin.

The current contract included a three-year term with an additional one-year extension through 2025. The proposed contract is recommended for a three-year initial term with three optional one-year extensions to align with the Sourcewell agreement. The salary component reflects the NAPA staff and operating costs billed at actual with no markup; the parts component is based on estimated City usage, which is billed at NAPA’s acquisition cost plus a 10% gross margin.

Estimated parts costs assume a 3% annual escalation in Years 2 and 3, a 5% escalation in Years 4 and Year 5, and a 7% escalation in Year 6.

The following table summarizes the estimated annual cost of the current and proposed NAPA IBS contracts, broken out by salary/operating expenses and estimated parts purchases:

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Table #1: Comparison of Contract Rate Schedules

CURRENT CONTRACT PROPOSED CONTRACT
Term
Salary/
Operating
Expenses
Contract
(Parts Est.) Total
Salary/
Operating
Expense
Contract
(Parts Est.) Total
Year 1 $93,701 $652,500 $746,201 $127,656 $813,912 $941,568 Year 2 $96,512 $672,075 (3%↑) $768,587 $131,485 $838,329 (3%↑) $969,815 Year 3 $99,408 $692,237 (3%↑) $791,645 $135,430 $863,479 (3%↑) $998,909 Year 4 $104,378 $726,849 (5%↑) $831,227 $142,201 $906,653 (5%↑) $1,048,855 Year 5 N/A N/A N/A $149,311 $951,986 (5%↑) $1,101,297
Year 6 N/A N/A N/A $159,763 $1,018,625 (7%↑) $1,178,388 If this recommendation is not approved, Public Works Department Fleet staff would be required to reassume parts management services. By discontinuing services with NAPA, Fleet and Administrative Services Department Purchasing staff would encounter a substantial workload increase to manage all the parts-related contracts required to conduct business.

Insourcing this function would require approximately 1.5 full time equivalent staffing capacity plus parts inventory. The cost to purchase parts inventory necessary to keep on-hand is estimated to cost $320,000.

FISCAL/RESOURCE IMPACT
Partial funding for Year 1 of this contract is available in the Fiscal Year 2026 Vehicle Replacement and Maintenance Fund Adopted Operating Budget. For the remaining portion, staff recommends increasing the Public Works Department Vehicle Operations and Maintenance Operating Budget by $601,837 and decreasing the Vehicle Replacement and Maintenance Fund balance by the same amount. The recommended appropriations amendment is due to a misalignment of this contract with Fiscal Year timing. To correctly align this new NAPA contract, FY 2026 funding is needed for a portion of Year 4 of the current NAPA contract and the entirety of Year 1 of this new contract. This is a one-time fix that will realign the encumbrances moving forward.

The Vehicle Replacement and Maintenance Fund (VRM) is supported through an internal service fund model. Approximately 60% of VRM‘s costs are funded by the General Fund, with the remaining 40% supported by enterprise and special revenue funds. Funding for subsequent years of the contract is subject to appropriation of funds through the annual budget process and Council approval.

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STAKEHOLDER ENGAGEMENT
Staff coordinated with internal stakeholders throughout the procurement process to ensure alignment with operational needs and purchasing requirements. Pricing and contract terms were obtained through the City’s use of the competitively bid Sourcewell cooperative agreement, allowing staff to solicit and review vendor proposals in accordance with municipal code.

ENVIRONMENTAL REVIEW
Approval of this contract does not constitute a project and is exempt from the requirements of California Environmental Protection Act (CEQA) pursuant to Section 15061(b)(3).

ATTACHMENTS
Attachment A: NAPA Quote for 6-Year Pro Forma
Attachment B: Genuine Parts Company dba NAPA Auto Parts GSA Contract C26195803 APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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Pricing Option 10% Margin
Palo Alto IBS 10% Margin Model Item Description
Sourcewell Monthly First Year
Second Year Third Year Fourth Year Fifth Year
% of Purchases
Sixth Year
3%
escalation
3%
escalation
5%
Escalation
5%
Escalation
7%
Escalation
Customer Purchases 67,826 813,912 838,329 863,479 906,653 951,986 1,018,625 Parts Bill For Customer Cost of Goods to NAPA 61,043 732,521 754,496 777,131 815,988 856,787 916,762 90.00% NAPA IBS Cost of Goods NAPA Margin on Parts 6,783 81,391 83,833 86,348 90,665 95,199 101,862 10.00% NAPA IBS Gross Margin (Point of Sale) GROSS MARGIN 6,783 81,391 83,833 86,348 90,665 95,199 101,862 10.00% NAPA IBS Gross Margin (Point of Sale)

Centralized Accounting/Admin Fees 678 8,139 8,383 8,635 9,067 9,520 10,186 1.00% Fixed Expense at .99% of purchases, Accounting & Data Processing Fee Payroll These costs will vary based on scope, hours and responsibilities as required per each contract Manager/Counter Salaries 5,891.61 70,699 72,820 75,005 78,755 82,693 88,481 8.69% Cost of Dedicated Parts Manager/Project Manager and any parts clerks for IBS Site Delivery Driver Salaries 0 0 0 0 0 0 0 0.00% Delivery Driver Pay - if applicable for a site there will be a charge in this category Pension/401K 324 3,888 4,005 4,125 4,331 4,548 4,866 0.48% Fixed Expense at .45% of customer monthly purchases Insurance 626 7,513 7,739 7,971 8,369 8,788 9,403 0.92% Mainly Group Insurance Premiums for on-site NAPA IBS staff Workers Comp Insurance 0 0 0 0 0 0 0 0.00% Insurance - General and Worker's Comp for on-site NAPA IBS staff FICA 467 5,604 5,772 5,945 6,243 6,555 7,014 0.69% Payroll Taxes for NAPA IBS On-Site Employees Total IBS Payroll 7,309 87,705 90,336 93,046 97,698 102,583 109,764 10.78% Miscellaneous Expenses
Delivery Truck Insurance 0 0 0 0 0 0 0 0.00% Insurance Coverage for delivery trucks required per contract - if applicable Delivery Maintenance/Gas 0 0 0 0 0 0 0 0.00% Vehicle Repairs and Fuel for Delivery Vehicles required per contract - if applicable Truck Payment 0 0 0 0 0 0 0 0.00% Lease/Depreciation Payment for any Delivery Trucks required per contract - if applicable Inventory Insurance 0 0 0 0 0 0 0 0.00% Small insurance on our on-site inventory assets Shelving/Equipment Depreciation 0 0 0 0 0 0 0 0.00% Shelving needed for secure parts location - if customer requires us to add shelving. Cage, etc - if applicable Store Expenses 103 1,236 1,273 1,311 1,377 1,446 1,547 0.15% Misc. Store Expenses (Printer Ink, Paper, Barcode Labels etc.) P-Card Card Fees 0 0 0 0 0 0 0 0.00% Credit Card Processing Fees - only if agency uses a p-card to pay NAPA parts and or operating statements Phone/Internet 0 0 0 0 0 0 0 0.00% Phone and/or Internet Charges (if not provided from Customer) TAMS Inventory Computer 1,000 12,000 12,360 12,731 13,367 14,036 15,018 1.47% TAMS Computer & Equipment Lease/Depreciation Expense, Maint./Support Fee's & Tams Misc. Expenses Taxes 1,106 13,272 13,670 14,080 14,784 15,523 16,610 1.63% Sales and Use Taxes, Personal Property Tax - only if applicable Freight & Postage 442 5,304 5,463 5,627 5,908 6,204 6,638 0.65% Estimated Freight Charges Incurred by this Operation to procure special order parts Training 0 0 0 0 0 0 0 0.00% Training Materials for NAPA IBS (including Hazmat) Total IBS Misc Expense 2,651 31,812 32,766 33,749 35,437 37,209 39,813 3.91% TOTAL EXPENSES 10,638 127,656 131,485 135,430 142,201 149,311 159,763 15.68% Total Monthly Expenses to Operate this IBS Gross Margin Less Expenses -3,855 -46,264 -47,652 -49,082 -51,536 -54,113 -57,901 -5.68% ROI for NAPA 6,783 81,391 83,833 86,348 90,665 95,199 101,862 10.00% NAPA's contracted return on investment Sample Billing Summary
Customer Purchases 67,826 813,912 838,329 863,479 906,653 951,986 1,018,625 Parts Bill For Customer including 10% margin Management Fee 0 0 0 0 0 0 0 0.00%
Expense Bill 10,638 127,656 131,485 135,430 142,201 149,311 159,763 15.68% Expense Reimbursement by Customer Adjustment to Customer 0 0 0 0 0 0 0 0.00% Margin reimbursement to Customer after all expenses and NAPA ROI are realized Total Cost of Operation 78,464 941,568 969,815 998,909 1,048,855 1,101,297 1,178,388 *It is important to note that these sample operating statements are issued to inform new, existing and potential Sourcewell members of the flexibility of the NAPA IBS program. ** These sample operating statements reflect NAPA IBS's typical expense structure but all categories are subject to change based on scope, hours and responsibilities as required per each contract.

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Attachment A - NAPA Quote for 6-Year
Pro Forma

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City of Palo Alto General Services Agreement 1 Rev. April 9, 2025

CITY OF PALO ALTO CONTRACT NO. C26195803

GENERAL SERVICES AGREEMENT

THIS AGREEMENT made and entered into on the 1st day of January, 2026, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“ CITY”), and GENIUNE PARTS COMPANY dba NAPA AUTO PARTS, a Georgia Corporation, located at 2999 Wildwood Parkway, Atlanta, Georgia, 30339, Telephone Number: (303)799-1965 (“CONTRACTOR”). In consideration of their mutual covenants, the parties hereto agree as follows:

1. SERVICES. CONTRACTOR shall provide or furnish the services (the “Services”) described in the Scope of Services, attached at Exhibit A.

Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.)
Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The tota l price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 5 of this Agreement. CONTRACTOR shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section

5. 2. EXHIBITS. The following exhibits are attached to and made a part of this Agreement:

“A” – Scope of Services
“B” – Schedule of Performance
“C” – Schedule of Fees
“D” – Insurance Requirements
“E” – Sourcewell Contract No. 090624-GPC with Genuine Auto Parts Company dba NAPA Auto Parts
“F” – Cybersecurity Terms and Conditions

CONTRACT IS NOT COMPLETE UNLESS ALL INDICATED EXHIBITS ARE ATTACHED.

3. TERM.
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Auto Parts GSA Contract
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City of Palo Alto General Services Agreement 2 Rev. April 9, 2025

The term of this Agreement is from January 1, 2026 to December 31, 2031 inclusive, subject to the provisions of Sections R and W of the General Terms and Conditions.

4. SCHEDULE OF PERFORMANCE. CONTRACTOR shall complete the Services within the term of this Agreement in a reasonably prompt and timely manner based upon the circumstances and direction communicated to CONTRACTOR, and if applicable, in accordance with the sc hedule set forth in the Schedule of Performance, attached at Exhibit B. Time is of the essence in this Agreement.

5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONTRACTOR agrees to accept as not-to-exceed compensation for the full performance of the Services and reimbursable expenses, if any:

T h e t o t a l m a x i m u m l u m p s u m c o m p e n s a t i o n o f d o l l a r s ( $ ) ; OR

T h e s u m o f d o l l a r s ( $ ) p e r h o u r , n o t t o e x c e e d a t o t a l m a x i m u m c o m p e n s a t i o n a m o u n t o f d o l l a r s ( $ ) ; OR

A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to exceed a total maximum compensation amount of Six Million Two Hundred Thirty-Eight Thousand Ei ght Hundred Thirty-Two dollars ($6,238,832).

CONTRACTOR agrees that it can perform the Services for an amount not to exceed the total maximum compensation set forth above. Any hours worked or services performed by CONTRACTOR for which payment would result in a total exceeding the maximum amount of compensation set forth above for performance of the Services shall be at no cost to CITY.

C I T Y h a s s e t a s i d e t h e s u m o f d o l l a r s ( $ ) f o r A d d i t i o n a l Services. CONTRACTOR shall provide Additional Services only by advanced, written authorization from the City Manager or designee.

CONTRACTOR, at the CITY’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONTRACTOR’s proposed maximum compensation, including reimbursable expense, for such services. Compensation shall be based on the hourly rates set forth above or in Exhibit C (whichever is applicable), or if such rates are not applicable, a nego tiated lump sum. CITY shall not authorize and CONTRACTOR shall not perform any Additional Services for which payment would exceed the amou nt set forth above for Additional Services. Payment for Additional Services is subject to all requirements and $"

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Auto Parts GSA Contract
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City of Palo Alto General Services Agreement 3 Rev. April 9, 2025

restrictions in this Agreement.

6. COMPENSATION DURING ADDITIONAL TERMS.

CONTRACTOR’S compensation rates for each additional term shall be the same as the original term; OR

CONTRACTOR’s compensation rates shall be adjusted effective on the commencement of each Additional Term. The lump sum compensation amount, hourly rates, or fees, whichever is applicable as set forth in section 5 above, shall be adjusted by a perc entage equal to the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco-Oakland- San Jose ar ea, published by the United States Department of Labor Statistics (CPI) which is published most immediately preceding the commencement of the applicable Additional Term, which shall be compared with the CPI published most immediately preceding the commencement date of the then expiring term. Notwithstanding the foregoing, in no event shall CONTRACTOR’s compensation rates be increased by an amount exceeding five percent of the rates effective during the immediately preceding term. Any adjustment to CONTRACTOR’s compensation rates shall be reflected in a written amendment to this Agreement.

7. CLAIMS PROCEDURE FO R “9204 PUBLIC WORKS PROJECTS”. For purposes of this Section 7, a “9204 Public Works Projec t” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind . Public Contract Code Section 9204 mandates certain claims procedures for Public Works Projects, which are set forth in “Appendix __ Claims for Public Contract Code Section 9204 Public Works Projects”.

This project is a 9204 Public Works Project and is required to comply with the claims procedures set forth in Appendix __, attached hereto and incorporated herein.

This project is not a 9204 Public Works Project.

8. INVOICING. Send all invoices to CITY, Attention: Fleet Manager. The Fleet Manager is: Danitra Bahlman, Dept.: Public Works, Telephone: (650)496-5920, E- mail: [email protected]. Invoices shall be submitted in arrears $"

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City of Palo Alto General Services Agreement 4 Rev. April 9, 2025

for Services performed. Invoices shall not be submitted more frequently than monthly. Invoices shall provide a detailed statement of Services performed during the invoice period and are subject to veri fication by CITY. CITY shall pay the undisputed amount of invoices within 30 days of receipt.

GENERAL TERMS AND CONDITIONS

A. ACCEPTANCE. CONTRACTOR accepts and agrees to all terms and conditions of this Agreement. This Agreement includ es and is limited to the terms and conditions set forth in sections 1 through 8 above, these general terms and conditions and the attached exhibits.

B. QUALIFICATIONS . CONTRACTOR represents and warrants that it has the expertise and qualifications to complete the serv ices described in Section 1 of this Agreement, entitled “SERVICES,” and that every individual charged with the performance of the services under this Agreement has sufficient skill and experience and is duly licensed or certified, to the extent such licensing or certification is required by law, to perf orm the Services. CITY expressly relies on CONTRACTOR’s representations regarding its skills, knowledge, and certifications.

CONTRACTOR shall perform all work in accordance with generally accepted business practices and performance standards of the industry, including all federal, state, and local operation and safety regulations.

C. INDEPENDENT CONTRACTOR. It is understood and agreed that in the performance of this Agreement, CONTRACTOR and any person employed by CONTRACTOR shall at all times be considered an independent CONTRACTOR and not an agent or employee of CITY. CONTRACTOR shall be responsible for employing or engaging all persons necessary to complete the work required under this Agreement.

D. SUBCONTRACTORS. Except as permitted under the last paragraph in Exhibit C (Schedule of Fees), CONTRACTOR may not use subcontractors to perform any Services under this Agreement unless CONTRACTOR obtains prior written consent of CITY. CONTRACTOR shall be solely responsible for directing the work of approved subcontractors and for any compensation due to subcontractors . For the avoidance of any doubt, and except as provided under the last paragraph in Exhibit C (Schedule of Fees), the parties agree that the term “subcontractors” shall specifically exclude all third-party suppliers and manufacturers of the products sold hereunder and all third-party delivery service providers (i.e. UPS and FedEx).

E. TAXES AND CHARGES. CONTRACTOR shall be responsible for payment of all taxes, fees, contributions or charges applicab le to the conduct of CONTRACTOR’s business.

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City of Palo Alto General Services Agreement 5 Rev. April 9, 2025

F. COMPLIANCE WITH LAWS. CONTRACTOR shall in the performance of the Services comply with all applicable federal, state and local laws , ordinances, regulations, and orders.

G. PALO ALTO MINIMUM WAGE ORDINANCE. CONTRACTOR shall comply with all requirements of the Palo Alto Municipa l Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimu m wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONTRACTOR shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62 .030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONTRACTOR shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060.

H. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONTRACTOR shall, at its sole expense, repair in kind, or as the City Manager or designee shall direct, any damage to public or private property that occurs in connection with CONTRACTOR’s performance of the Servic es. CITY may decline to approve and may withhold payment in whole or in part to such extent as may be necessary to protect CITY from loss because of defective work not remedied or other damage to the CITY occurring in connection with CONTRACTOR’s performance of the Services. CITY shall submit written documentation in support of such withholding upon CONTRACTOR’s request. When the grounds described above are removed, payment shall be made for amounts withheld because of them.

I. WARRANTIES. CONTRACTOR expressly warrants that all services provided under this Agreement shall be performed in a professional and workmanlike manner in accordance with generally accepted business practices and performance standards of the industry and the requirements of this Agreement. CONTRACTOR expressly warrants that all NAPA branded materials, goods and equipment provided by CONTRACTOR under this Agreement shall be fit for the particular purpose intended, shall be free from defects, and shall conform to the requirements of this Agreement. CONTRACTOR agrees to promptly replace or correct any NAPA branded material or service not in compliance with these warranties, including incomplete, inaccurate, or defective NAPA branded material or service, at no further cost to CITY. The warranties set forth in this section shall be in effect for a period of one year from completion of the Services or delivery of the NAPA branded materials, goods and equipment and shall survive the completion of the Services or delivery of NAPA branded materials, goods and equipment for a period of one (1) year (including following termination of this Agreement). In addition, all automotive parts supplied pursuant to this Agreement are subject to the terms of written warra nties provided by the manufacturer of each part, and CONTRACTOR shall use reasonable commercial efforts to assist the $"

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City of Palo Alto General Services Agreement 6 Rev. April 9, 2025

CITY in processing all warranty claims that the CITY may have against the manufacturer. Copies of the manufacturers’ warranties for all materials, goods, and equipment will be available to the CI TY upon request. With respect to non- NAPA branded materials, goods and equipment, the manufacturer’s warranty will be the sole and exclusive remedy for th e CITY in connection with any claims concerning such non-NAPA branded materials, goods and equipment supplied to the CITY pursuant to this Agreement. ALL OTHER WARRANTIES, BOTH EXPRESS

AND IMPLIED, INCLUDING ANY IMPLIED WA RRANTIES OF MERCHANTABILITY OR

FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY EXCLUDED FOR NON-NAPA BRANDED MATERIALS, GOODS AND EQUIPMENT.

J. MONITORING OF SERVICES. CITY may monitor the Services performed under this Agreement to determine whether CONT RACTOR’s work is completed in a satisfactory manner and complies with the provisions of this Agreement.

K. CITY’S PROPERTY. Any non-confidential reports, information, data or other material (including copyright interests) developed, collected, assembled, prepared, or caused to be prepared under this Agreement will become the property of CITY without restriction or limitation upon their use and will not be made available to any individual or organization by CONTRACTOR or its subcontractors, if any, without the prior written approval of the City Manager. For the avoidance of any doubt, the parties agree that all intellectual property rights owned by CONTRACTOR will remain owned by CONTRACTOR and will not become the property of the CITY hereunder. If and to the extent that any reports, information, data or other material that CONTRACTOR has marked as confidential are subject to disclosure pursuant to a lawful subpoena, court order, or public records request under applicable federal, state or local public records laws, the CITY may disclose such information or materials to the extent required thereby.

In the event CITY receives a subpoena, court order, or public records law request covering reports, information, data or other material that CONTRACTOR has marked as confidential, then prior to disclosing such information or materials, the CITY shall provide prompt written notice to CONTRACTOR of such subpoena, court order, or request, if legally permissible, in order to allow time for the CONTRACTOR to take legal action to prevent disclosure if CONTRACTOR so chooses. Nothing herein shall require CITY to take any action, or to refuse to disclose information or materials, where to do so would violate applicable law.

L. AUDITS. CONTRACTOR agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for three (3) years from the date of final payment, CONTRACTOR’s records pertaining to matters covered by this Agreement. CO NTRACTOR agrees to maintain accurate books and records in accordance with generally accepted accounting principles for at least three (3) following the terms of this Agreement.

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Parts Company dba NAPA
Auto Parts GSA Contract
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City of Palo Alto General Services Agreement 7 Rev. April 9, 2025

M. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial acceptance by CITY shall operate as a waiver on the part of CITY of any of its rights under this Agreement.

N. INSURANCE. CONTRACTOR, at its sole cost, sh all purchase and maintain in full force during the term of this Agreement, the insurance coverage described at Exhibit D. Insurance must be provided by companies with a Best’s Key Rating of A- :VII or higher and which are otherwise ac ceptable to CITY’s Risk Manager. In addition, all policies, endorsements, cert ificates and/or binders are subject to approval by the Risk Manager as to form and content. CONTRACTOR shall obtain a policy endorsement naming the City of Palo Alto as an additional insured under any general liability or automobile po licy. CONTRACTOR shall obtain an endorsement stating that the insurance is primary coverage and CONTRACTOR will use commercially reasonable efforts to provide the CITY with at least 30 days prior written notice of the cancellation or modification of the insurance policies described herein to the Risk Manager. CONTRACTOR shall provide certificates of such policies or other evidence of coverage satisfactory to the Risk Manager, together with the required endorsements and evidence of payment of premiums, to CITY concurrently with the execution of this Agreement and shall throughout the term of this Agreement provide current certificates evidencing the required insurance coverages and endorsements to the Risk Manager. CONTRACTOR shall include all subcontractors as insured under its policies or shall obtain and provide to CITY separate certificates and endorsements for each subcontractor that meet all the requirements of this section. The procuring of such required policies of insurance shall not operate to limit CONTRACTOR’s liability or obligation to indemnify CITY under this Agreement.

O. HOLD HARMLESS. To the fullest extent permitted by law and without limitation by the provisions of section N relating to insurance, CONTRACTOR shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents from and against any and all demands, claims, injuries, losses, or liabilities of any nature, including death or injury to any person, property damage or any other loss and including without limitation all damages, penalties, fines and judgments, associated investigation an d administrative expenses and defense costs, including, but not limited to reasonable attorney’s fees, courts costs and costs of alternative dispute resolution) (collectively, the “Losses”), arising out of, or resulting in any way from or in co nnection with the performance of this Agreement; provided, however, that the parties agree that CONTRACTOR shall not be obligated under any circumstances to indemnify, defend or harmless CITY, its council members, officers, employees or agents from any against any Losses arising from, resulting from, or attributable to: (I) the acts or omissions of any third party supplier or manufacturer of the products supplied hereunder and/or (ii) for liability arising from the sole negligence or willful misconduct of CITY. The acceptance of the Services by CITY shall not operate as a waiver of the right of $"

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City of Palo Alto General Services Agreement 8 Rev. April 9, 2025

indemnification. The provisions of this Section survive the completion of the Services or termination of this Agreement.

P. NON-DISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONTRACTOR certifies that in the performance of this Agreement, it shall not discriminate in the employment of any pe rson because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial stat us, weight or height of such person.

CONTRACTOR acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Munici pal Code relating to Nondiscrimination Requirements and the penalties for violat ion thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment.

Q. WORKERS' COMPENSATION . CONTRACTOR, by executing this Agreement, certifies that it is aware of the provisions of the Labor Code of the State of Califor- nia which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that Code, and certifies that it will comp ly with such provisions, as applicable, before commencing and during the performance of the Services.

R. TERMINATION. The City Manager may terminate this Agreement without cause by giving thirty (30) days’ prior written notice thereof to CONTRACTOR. Likewise, CONTRACTOR may terminate this Agreemen t without cause by giving sixty (60) days’ prior written notice thereof to CITY. If CONTRACTOR fails to perform any of its material obligations under this Agreement, in addition to all other remedies provided by law, the City Manager ma y terminate this Agreement immediately upon written notice of termination. Upon receipt of such notice of termination, CONTRACTOR shall immediately discontinue performance. Likewise, if the CITY fails to perform any of its material obligations under this Agreement and such failure is not cured within thirty (30) days following receipt of written notice thereof, in addition to all other remedies provided by law, CONTRACTOR may terminate this Agreement immediately upon written notice of termination. CITY shall pay CONTRACTOR for services satisfactorily performed up to the effective date of termination. If the termination is for cause, CITY may deduct from such payment the amount of actual damage, if any, sustained by CITY due to CONTRACTOR’s failure to perform its material obligations under this Agreement.

Upon termination, CITY shall allow CONTRACTOR full and unrestricted access to enter into the on-site store and immediately remove all equipment and other items owned by CONTRACTOR without being guilty of trespass or any other violations of the law. Upon termination, CONTRACTOR shall immediately deliver to the City Manager any and all copies of inventory records, sales history, sales analysis and all other information ge nerated by CONTRACTOR under this Agreement, whether or not completed, prepared by CONTRACTOR or given to $"

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Parts Company dba NAPA
Auto Parts GSA Contract
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Item 17: Staff Report
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15 Packet Pg. 212 of 637

City of Palo Alto General Services Agreement 9 Rev. April 9, 2025

CONTRACTOR, in connection with this Agre ement. Such materials shall become the property of CITY.

S. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their successors and assigns to all covenants of this Agreement. This Agreement shall not be assigned or transferred without the prior written consent of CITY. No amendments, changes or variations of any kind are authorized without the written consent of CITY and CONTRACTOR.

T. CONFLICT OF INTEREST. In accepting this Agreement, CONTRACTOR covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Agreement. CONTRACTOR further covenants that, in the performance of this Agreement, it will not employ any person having such an interest. CONTRACTOR certifies that no CITY officer, employee, or authorized representative has any financial interest in the business of CONTRACTOR and that no person associated with CONTRACTOR has any interest, direct or indirect, which could conflict with the faithful performance of this Agreement. CONTRACTOR agrees to advise CITY if any conflict arises.

U. GOVERNING LAW. This Agreement shall be governed and interpreted by the laws of the State of California.

V. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the entire agreement between the parties with respec t to the products and services that may be the subject of this Agreement. Any variance in the exhibits does not affect the validity of the Agreement and the Agreement itself controls over any conflicting provisions in the exhibits. This Agreement supersedes all prior agreements, representations, statemen ts, negotiations and undertakings whether oral or written.

W. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the fo llowing fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This Section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement.

X. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE
REQUIREMENTS. CONTRACTOR shall comply with CITY’s Environmentally Preferred Purchasing policies which are av ailable at CITY’s Purchasing Division, which are incorporated by reference and may be amended from time to time. $"

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City of Palo Alto General Services Agreement 10 Rev. April 9, 2025

CONTRACTOR shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Progra m. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONTRACTOR shall comply with the following zero waste requirements:
x All printed materials provided by CONTRACTOR to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double- sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-con sumer material and printed with vegetable based inks.
x Goods purchased by Contractor on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including, but not limited to, Extended Producer Respon sibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office.
x Reusable/returnable pallets shall be taken back by CONTRCATOR, at no additional cost to CITY, for reuse or recycling. CONTRACTOR shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed.

Y. AUTHORITY. The individual(s) executing this Agreement on behalf of the parties represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities.

Z. PREVAILING WAGES

This Project is not subject to prevailing wages. CONTRACTOR is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7, if the Agreement is not a public works contract, if Agreement does not include a public works construction project of more than $25,000, or the Agreement does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000.

Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Re gulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and $"

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City of Palo Alto General Services Agreement 11 Rev. April 9, 2025

overtime work in this locality for each craft, classification, or type of worker needed to execute the Agreement for th is Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any st aff or subcontractor hired, and shall pay the adopted prevailing wage rates as a mi nimum. Contractor shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages.

AA. DIR REGISTRATION. In regard to any public work construction, alteration, demolition, repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement with CONTRACTOR without proof that CONTRACTOR and its listed subcontractors are registered with the California Department of Industrial Relations (“DIR”) to perform public work, subject to limited exceptions.

City requires CONTRACTOR and its listed subcontractors to comply with the requirements of SB 854.

CITY provides notice to CONTRACTOR of the requirements of California Labor Code section 1771.1(a), which reads:

“A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the Agreement is awarded.”

CITY gives notice to CONTRACTOR and its listed subcontractors that CONTRACTOR is required to post all job site notices prescribed by law or regulation and CONTRACTOR is subject to SB 854-compliance monitoring and enforcement by DIR.

CITY requires CONTRACTOR and its listed subcontractors to comply with the requirements of Labor Code section 1776, including:

Keep accurate payroll records, showing the name, address, social security number, work classification, straight ti me and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, CONTRACTOR and its listed subcontractors, in connection with the Project.

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Parts Company dba NAPA
Auto Parts GSA Contract
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City of Palo Alto General Services Agreement 12 Rev. April 9, 2025

The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of CONTRACTOR and its listed subcontractors, respectively.

At the request of CITY, acting by its pr oject manager, CONTRACTOR and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the project manager within ten (10) days of receipt of CITY’s request.

[For state- and federally-funded projects] CITY requests CONTRACTOR and its listed subcontractors to submit the certified payroll records to the project manager at the end of each week during the Project.

If the certified payroll records are not produced to the project manager within the 10-day period, then CONTRACTOR and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum total of penalties from the progress payment(s) then due and payable to CONTRACTOR.

Inform the project manager of the location of CONTRACTOR’s and its listed subcontractors’ payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the project manager within five (5) business days of any change of location of those payroll records.

BB. CONTRACT TERMS. All unchecked boxes do not apply to this Agreement. In the case of any conflict between the terms of this Agreement and the exhibits hereto or CONTRACTOR’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONTRACTOR’s proposal, the exhibits shall control.

CC. CONFIDENTIAL INFORMATION.

CC.1. In the performance of this Agreement, CONTRACTOR may have access to CITY’s Confidential Information (defined below). CONTRACTOR will hold Confidential Information in strict confidence, not disclose it to any third party, and will use it only for the performance of its obligations to CITY under this Agreement and for no other purpose. CONTRACTOR will maintain reasonable and appropriate administrative,
technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information. Notwithstanding the foregoing, CONTRACTOR may disclose Confidential Information to its employees, agents and subcontractors, if any, to the extent they have a need to know in order to perform CONTRACTOR’s obligations to CITY under this Agreement and for no other purpose, provided that the CONTRACTOR informs them of, and requires them to follow, the confidentiality and security obligations of this Agreement. $"

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Auto Parts GSA Contract
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City of Palo Alto General Services Agreement 13 Rev. April 9, 2025

CC.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code Section 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONTRACTOR by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONTRACTOR can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONTRACTOR’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONTRACTOR from a third party without breach of any confidentiality obligation; (iv) is i ndependently developed by employees of CONTRACTOR without any use of or access to the Confidential Information; or (v) CONTRACTOR has written consent to disclose signed by an authorized representative of CITY.

CC.3.

Notwithstanding the foregoing, CONTRACTOR may disclose
Confidential Information to the extent required by order of a court of competent jurisdiction or governmental body, provided that CONTRACTOR will notify CITY in writing of such order immediately upon re ceipt and prior to any such disclosure ( u n l e s s C O N T R A C T O R i s p r o h i b i t e d b y l a w f r o m d o i n g s o ) , t o g i v e C I T Y a n opportunity to oppose or otherwise respond to such order.

CC.4. CONTRACTOR will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal In formation, CONTRACTOR will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time.

CC.5.

Prior to or upon termination or expiration of this Agreement, CONTRACTOR will honor any request from th e CITY to return or securely destroy all copies of Confidential Information. All Confidential Information is and will remain the property of the CITY and noth ing contained in this Agreement grants or confers any rights to such Confidential Information on CONTRACTOR.

CC.6.

If selected in Section 2 (Exhibits), this Agreement is also subject to the terms and conditions of the Cybersecurity Terms and Conditions.

[SIGNATURES ARE ON THE FOLLOWING PAGE]

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City of Palo Alto General Services Agreement 14 Rev. April 9, 2025 IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written.

CITY OF PALO ALTO GENUINE PARTS COMPANY dba NAPA

AUTO PARTS
_________________________ By________________________________ City Manager or Designee
Name _____________________________
Title_______________________________
_________________________
Purchasing Manager or Designee
Approved as to form:
___________________________
By________________________________
N
ame Christopher T. Galla
Title Senior Vice President
City Attorney or Designee
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Parts Company dba NAPA
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City of Palo Alto General Services Agreement 15 Rev. April 9, 2025

EXHIBIT A

SCOPE OF SERVICES

This Exhibit A (Scope of Services) of this Agreement between the CITY of Palo Alto and Genuine Parts Company dba NAPA Auto Parts (CONTRACTOR) details the on- site fleet parts and inventory program to be provided during the term of this Agreement per Section 3 (Term) herein.

1. DUTIES AND RESPONSIBILITIES OF CONTRACTOR. CONTRACTOR shall have the following duties and responsibilities during the term of this Agreement:

a) CONTRACTOR shall operate an on-site parts operation at the CITY’S Municipal Service Center, located at 3201 E. Bays hore Rd., Palo Alto, Ca. 94303, and provide the inventory as agreed upon by CONTRACTOR and the CITY. This includes operating and staffing a secu re on-site inventory storage facility (parts room), maintaining real-time trac king for all parts, fluids, equipment, and supplies, and ensuring stock availab ility for the City’s diverse fleet (e.g., light/heavy-duty trucks, sedans, emergency vehicles, and equipment).

b) CONTRACTOR shall supply OEM, aftermarket, and branded parts; source non- stock items promptly (including emergency procurements from competitors when necessary). Additional required services include warranty management, cores/returns processing, inventory reporting, and integration with the City’s fleet management software.

c) CONTRACTOR shall provide all personnel management, staff, parts and supplies necessary to run an efficient and effective on-site parts operation from 6:15 a.m. to 3:45 p.m. Monday through Fridays. Inventory must be stored in the City’s secure, climate-controlled facility with access restricted to Contractor staff. Cycle counts shall be conducted quarterly, with an annual physical inventory audit. A web-based portal must provide real-time stock checks, ordering, and reporting capabilities.

d) CONTRACTOR shall provide back-up em ergency service during non-working hours on an as-needed basis. This over time expense (calculated at time and one half) will be charged on a cost basis to the CITY and must be pre- approved by either the CITY’s Assistant Public Works Director, the Fleet Manager, or the Assistant Fleet Manager.

CONTRACTOR shall provide a list
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City of Palo Alto General Services Agreement 16 Rev. April 9, 2025

of personnel, including phone numbers, who will respond to emergency service requests.

e) CONTRACTOR shall supply all parts and shop supplies (including tires) necessary to maintain and repair the CITY’s fleet of vehicles and equipment and may include but not limited to Original Equipment Manufacturer (OEM) parts, aftermarket parts, small engine parts, agricultural parts, hydraulic hoses, fasteners, chemicals, tools and equipment and any other commodities including commercial plumbing, electrical, lumber and other related items/supplies determined by the CITY’s Fleet Manager. The CITY will have the ability to expand the scope of items required.

f) CONTRACTOR shall provide parts inventory to the Fleet Management facilities with accounting and security procedures. The on-site store location shall be appropriately secure d or otherwise maintained separate and apart from the business of the CITY. There shall be no intermingling of CITY parts or other inventory with CONTRACTOR’s parts or inventory.

Access to the secured on-site store shall be restricted to CONTRACTOR employees and authorized CONTRACTOR representatives only.

CONTRACTOR will assume all losses. CI TY employees, contractors or agents shall not be permitted to enter the secured on-site store area unless accompanied by a CONTRACTOR employee or other authorized CONTRACTOR representative.

g) All items/parts provided shall be new unless stated otherwise. CONTRACTOR agrees to provide any and all necessary documentation, including invoices from its suppliers, for all items provided to the CITY to ascertain basis for CITY payments to CONTRACTOR and for audi ting purposes upon request by the CITY.

h) CONTRACTOR shall provide a profit and loss statement of the parts operations to the CITY’s Fleet Manager on approximately the 25
th of each month.

i) CITY reserves the right to purchase parts and or services from other sources if CONTRACTOR cannot obtain the desire d part(s) by start of business day following CITY’s request, and in emergency situations. Emergency is defined as when a vehicle, or piece of equipmen t is down for repairs and needs to be repaired within 24 hours.
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City of Palo Alto General Services Agreement 17 Rev. April 9, 2025

j) CONTRACTOR shall accept industry standard cores of equal value for rebuilding where the parts are acceptable as core exchanges including water pumps, alternators, and starters . CONTRACTOR shall collect cores and returned items during new part deliveries and issue full credits monthly.

Returns are limited to ≤10% of total annual purchases and must be in saleable condition.

k) CONTRACTOR shall comply with all applicable environmental regulations (EPA, BAAQMD), safety standards (OSHA, BAR), and hazardous material/waste disposal laws.

l) CONTRACTOR shall have access to and control over sufficient inventory, either by CONTRACTOR’s on-site or off-site stock in its own warehouse, which must be within a thirty-minute driving distance from the on-site store location.

m) CONTRACTOR
shall furnish at least ninety (90%) percent of CITY’s
parts requirements on demand and the balance (10%) of CITY’s parts requirements within three (3) business days of request. CONTRACTOR shall provide CITY with cost information pertaining to the items provided to the CITY’s inventory and comprehensive activity reports from its computer database on a requested basis, as
defined by the CITY and reasonably
capable of being generated by CONTRACTOR’s system. The frequency of these reports will be as determined by the CITY.

n) CONTRACTOR shall at all times maintain current Material Safety Data Sheets (MSDS) for all chemical products purchased, and/or housed in the on- site store. MSDS binder(s) will be in a location available to all CITY staff.

o) CONTRACTOR shall provide parts that are equal to original equipment parts, supplies and equipment. All parts and components must meet OEM and the Society of Automotive Engineers specifications. CONTRACTOR will be required to supply OEM replacement parts upon request in lieu of aftermarket replacement parts.

p) CONTRACTOR shall not issue parts or supplies to CITY employees without a proper work order requisition. CONTRACTOR shall provide a receipt containing specific information with items delivered to CITY employees for each work order requisition. This receipt shall contain specific $"

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City of Palo Alto General Services Agreement 18 Rev. April 9, 2025

tracking information, i.e., equipment number, reference number, work order number, receiving employee name , parts quantities, part number and alpha description, price detail and any other data deemed necessary for effective tracking and accounting.

q) CONTRACTOR shall evaluate the usage history of its inventory of parts and supplies on a monthly basis to identify those items that should be removed from stock, added to stock, or remain in stock. CITY shall be notified a minimum of five working days in advance prior to parts being removed from inventory.

r) CONTRACTOR shall maintain warranty records of items sold to CITY and issue any credits including labor (based on CITY’s current labor rate) and parts, due to CITY that are covered under these warranties.

s) CONTRACTOR
shall pass through to CITY all available full
manufacturers warranties and guarantees of merchantability.

t) CONTRACTOR shall use current indust ry standards or better computer hardware and software to control and report on its operations and shall input all parts used into CITY’S Fleet Management Software. CONTRACTOR’s software control system shall interface with the CITY’s computer tracking system.

u) CONTRACTOR shall manage all inventory transactions through the CITY’S Fleet Management inventory management system provided by AssetWorks. CONTRACTOR shall provide sufficiently trained, knowledgeable and service-oriented personnel to efficiently and effectively operate the total parts function as detailed, including parts research requested by CITY staff.

v) CONTRACTOR will be responsible for any changes to the physical layout of non- affixed the parts room/storage areas, including security, however, Contractor is to make no changes to items affixed to the City’s building facilities or to the City’s building fac ilities themselves. Any changes made by Contractor to the non-affixed physical layout of the parts room/storage areas, including security, shall be approved in advance by the CITY’s Fleet Management and Facilities Management staff. Upon termination of this Agreement, within a reasonable time, CONTRACTOR may be required to $"

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restore the parts room/storage areas, including security, to such condition as existed prior to any changes made by Contractor, and to repair and to restore any damage caused by the Contractor’s permitted use of the area during the term of this Agreement, ordinary wear and tear excepted.

w) CONTRACTOR shall provide all necessary equipment required to successfully operate the on-site parts store, for instance, printers, office machines, phone, file cabinets, computers, software and other equipment as needed, including phone and data lines. CONTRACTOR shall provide computer ordering and cataloging for the on-site store.

x) CONTRACTOR shall provide all manufacturers’ temporary/seasonal special pricing discounts directly to the CI TY on the condition that such temporary/seasonal special pricing discounts: (i) are made known to CONTRACTOR by the applicable manufact urer or supplier and (ii) meet the supply chain goals mutually agreed upon between the CITY and CONTRACTOR, even if such discounts resu lt in pricing less than the then current CITY purchase price.

y) CONTRACTOR shall maintain security of information in order to safeguard confidentiality of undercover law enforcement vehicles, to include the special equipment inside these vehicles. Security is defined as prohibition on idle discussion about these vehicles, prohibition on tampering with these vehicles or their equipment and vehicle documentation remaining on CITY premises and secured at all times.

2. DUTIES AND RESPONSIBILITIES OF CITY. CITY shall have the following duties and responsibilities during the term of this Agreement:

a) The CITY shall provide, at its sole expense, usable space for CONTRACTOR’s on- site store and the inventory. The CITY shall provide access to restroom facilities for CONTRACTOR employees. Further, the CITY shall furnish at its sole expense, all utilities for the on-site store including water, sanitation, sewer, light, telephone, heat, gas, electricity, power and all other utilities and services rendered or delivered to the on-site store.

The CITY shall provide CONTRACTOR a safe work environment that is free from hostility, violence, and discrimination. CONTRACTOR reserves the right to terminate the contract immediately should CONTRACTOR

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encounter a hostile, violent, discriminatory, or unsafe work environment.

b) CITY shall, at all times during the term of this Agreement, at CITY’s sole expense, maintain in good condition and repair (so as to prevent any damage or injury to CONTRACTOR’s employees, the inventory or other personal property located in the on-site store) the roof, exterior walls, foundation, and structural portions of the on-site store and all portions of the electrical and plumbing system s lying outside of the on-site store but serving the on-site store.

c) CITY intends to use CONTRACTOR as its Primary Supplier, which means that the CITY shall purchase at least ninety percent (90%) of its inventory needs from CONTRACTOR. CITY reserves the right to purchase any item outside this Agreement where it is determined to be more economical or timely so long as the purchase of aforesaid part or parts does not result in CONTRACTOR no longer being CITY’s Primary Supplier in which case CONTRACTOR may terminate this Agreement.

d) CITY shall provide information regarding fleet changes to CONTRACTOR as soon as possible.

Fleet changes include but are not limited to the removal of types of vehicles from the fleet a nd the addition of new vehicles to the fleet.

3. ALTERNATIVE SUPPLIERS. The on-site store may be serviced by a CONTRACTOR Owned Store, or a CONTRACTOR Jobber (or “NAPA Jobber”) pursuant to an assignment and assumption agreement (“Assignment”) of this Agreement with the
CITY’s prior written consent as detailed under Section S (Assignments/Changes) herein, and accompanied by an assignment of Sourcewell Contract No. 100124 as detailed under Section 12 (Assignment, Transfer, and Administrative Changes) therein, each to the same assignee. Any Assignment of this Agreement will be on a form acce ptable to the CITY and will include the CITY signing as to CITY’s consent and as intended third party beneficiary thereto.

4. PERSONNEL. CONTRACTOR and the CITY shall attempt in good faith to mutually agree upon the identity of the person/s that will be selected to staff the on-site parts operation. If a CONTRACTOR employee has violated any CITY workplace policy provided to CONTRACTOR in writing, or has violated any applicable laws while on CITY’s premises, CONTRACTOR agrees to comply with CITY’s request to reassign from CITY duty, such CONTRACT OR employee. In all other cases where $"

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CITY wishes to remove or replace any of CONTRACTOR’s personnel in the on-site parts operation, CONTRACTOR and CITY will attempt to resolve the CITY’s request by mutual agreement. If CONTRACTOR and CITY fail to mutually resolve a personnel issue after good faith attempt to do so, CONTRACTOR and the CITY agree to immediately formally remove the person determined to be ineffective from all CITY operations, unless such removal is contrary to law.

5. BUY-BACK OF INVENTORY. Upon termination, expiration, or non-renewal of the contract, CONTRACTOR shall have the option to require CITY to purchase all non- CONTRACTOR branded inventory, and CITY shall have the option to purchase all CONTRACTOR branded inventory, owned by CONTRACTOR and located in the on- site store at CONTRACTOR’s current acquisition cost, not to exceed the CITY’s “not to exceed amount” cap. The CITY agrees to a “not to exceed amount” of $250,000 for the buy-back of non-CONTRACTOR branded inventory.

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EXHIBIT B

SCHEDULE OF PERFORMANCE

CONTRACTOR shall perform the Services according to the following schedule:

Throughout the term of this Agreement, CONTRACTOR shall provide an on-site fleet parts and inventory program in accordance wi th the services defined in the Scope of Services (Exhibit “A”). Throughout the term of this Agreement, CONTRACTOR will continuously monitor new vehicles an d equipment being added to the fleet and vehicles and equipment being removed from the fleet to ensure adequate parts availability for the City’s fleet, and to eliminate obsolete parts from the inventory.

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EXHIBIT C

SCHEDULE OF FEES

Compensation based upon fee schedule

CITY shall pay CONTRACTOR according to the pricing provided in the Sourcewell Contract No. 100124, which is restated in the following schedule of fees/rate schedule, which consists of the sections en titled “Pricing Plan” and “Pricing Plan Summary” below. The maximum amount of compensation to be paid to CONTRACTOR, including both payment for services and reimbursable expenses, shall not exceed the amounts set forth in Section 5 (Compensation for Original Term) of the Agreement, as detailed in said Section 5.

The City agrees to compensate the Contractor for general services and goods in accordance with the terms and conditions of this Agreement described in Section 7 (Invoicing).

PRICING PLAN
The overall goal of the CITY’s pricing plan is to achieve a ten percent (10%) net profit for CONTRACTOR (the “Net Profit Target”) by adjusting the pricing of two elements:

3. Product Costs. The pricing of the inve ntory to be supplied to the CITY by CONTRACTOR pursuant to this Agreement. Product costs shall be further divided into “CONTRACTOR Product Costs”, which is the pricing of CONTRACTOR supplier manufactured products, and “Non-CONTRACTOR Product Costs”, which is the pricing of products which have not been manufactured by CONTRACTOR suppliers but which have been acquired for CITY by CONTRACTOR pursuant to this Agreement.

4. Operational Costs. Any and all costs and expenses associated with the operation of the on-site store, including, but not limited to, salary and benefits payable to CONTRACTOR employee at th e on-site store, workers compensation benefits and insurance, unemployment insu rance, personal property insurance for on-site store and inventory, any deductible for losses covered under the personal property, or general liability policies of CONTRACTOR and all equipment supplied by CONTRACTOR.

PRICING PLAN SUMMARY

CONTRACTOR Product Costs:

Billed to CITY at a 10% gross profit rate (gross profit is store acquisition cost divided by .90)

Non-CONTRACTOR Product Costs:
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Billed to CITY at a 10% gross profit rate (gross profit is acquisition cost divided by .90) Operational Costs:

Billed to CITY at cost

Net Profit Target:
10% net profit for CONTRACTOR

Both CONTRACTOR Product Costs and Non-CONTRACTOR Product Costs shall be set by CONTRACTOR to yield a gross profit of ten percent (10%). Operational Costs will be charged to CITY at cost, with all such charges for Operational Costs to be included in CITY’s monthly billing statement. CITY will be billed at the end of each month for operational costs on an “in arrears” basis.

CITY and CONTRACTOR mutually agree that the CITY’s maximum payment obligation pursuant to this profit guarantee shall be set at $941,568 for the first year, as shown under the Compensation Summary subsection below; and CITY has encumbered such amount to cover this contract year one compensation amount.

The annual amounts for contract year 2 and contract year 3 each reflect a three percent (3%) increase over the immediately preceding contract year’s annual not-to- exceed amount. The annual amounts for contract year 4 and contract year 5 each reflect a five percent (5%) increase over the immediately preceding contract year’s annual not-to-exceed amount. The annual contract amount for year 6 reflects a seven percent (7%) increase over the immediately preceding contract year’s annual not-to- exceed amount. The parties agree to mutua l l y w o r k t o g e t h e r t o a d j u s t t h e a n n u a l contract year amounts, and/or the amount of Services used by City, if any contract year amount exceeds or appears that it may be on track to exceed the annual amounts provided in the Compensation Summary below, provided that the total not- to-exceed amount of the Ag reement under Section 5 (Compensation for Original Term) of this Agreement shall not be exceeded. . Any increase in the not-to-exceed amount of this Agreement may only be implemented via written amendment to this Agreement executed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code.

In addition, CONTRACTOR may use any subcontractor for the procurement of “outside” purchases or services (i.e. those parts or services not traditionally stocked or performed by CONTRACTOR), and CITY will be billed an additional charge for any such purchases so as to yield CONTRACTOR a ten percent (10%) gross profit on such purchases. CITY must provide pre-approval in writing of such outside purchases.

All requests for payment of expenses shall be accompanied by appropriate documentation/invoices and in accordance with Section 7 (Invoicing).

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Compensation Summary:

Contract Year Not-to Exceed Amounts*
Year One (2026) $941,568
Year Two (2027) $969,815
Year Three (2028) $998,909
Year Four (2029) $1,048,855
Year Five (2030) $1,101,297
Year Six (2031)
Total
$1,178,388
$6,238,832

*The annual amounts for contract year 2 and 3 reflect a three percent (3%) increase over the immediately preceding contract year’s annual not-to-exceed amount. Years 4 through 5 reflect a five percent (5%) increase over the immediately preceding contract year’s annual not-to-exceed amount. Year 6 reflects a seven percent (7%) increase over the immediately preceeding contract year’s annual not-to-exceed amount. Year Annual amounts may be subject to possible adjustment provided that the not-to-exceed amount of the Agreement is not exceeded, as detailed in this Exhibit C.

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City of Palo Alto General Services Agreement 26 Rev. April 9, 2025

EXHIBIT D

INSURANCE REQUIREMENTS

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

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

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

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS

EACH OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION EMPLOYER’S

LIABILITY

STATUTORY

YES

GENERAL LIABILITY, INCLUDING PERSONAL

INJURY, BROAD FORM PROPERTY DAMAGE

BLANKET CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

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

$1,000,000

$2,000,000

$1,000,000

$2,000,000

YES AUTOMOBILE LIABILITY, INCLUDING ALL

OWNED, HIRED, NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000

$1,000,000

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

$1,000,000

PROFESSIONAL LIABILITY, INCLUDING,

ERRORS AND OMISSIONS, MALPRACTICE
(WHEN APPLICABLE), AND NEGLIGENT

PERFORMANCE

ALL DAMAGES $1,000,000

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

EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FO RCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF

ANY RESULTANT AGREEMENT, THE INSURANCE COVERA GE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.

I. INSURANCE COVERAGE MUST INCLUDE:

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

II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE.

III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS”

A. PRIMARY COVERAGE
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WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED

BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.

B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL

NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS

ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS , SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.

C. NOTICE OF CANCELLATION

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

THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

NOTICES SHALL BE EMAILED TO: [email protected]

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EXHIBIT E
SOURCEWELL CONTRACT NO. 090624-GPC

Effective January 10, 2025 – January 10, 2029
with extensions available through 2031

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EXHIBIT F

CYBERSECURITY TERMS AND CONDITIONS

In order to assure the privacy and security of the personal information of the City's customers and people who do business with the City, including, without limitation, vendors, utility customers, library patrons, and other individuals and companies, who are required to share such information with the City, as a condition of receiving services from the City or selling goods an d services to the City, including, without limitation, the Software as a Service serv ices provider (the "Contractor") and its subcontractors, if any, including, without limitation, any Information Technology ("IT") infrastructure
services provider, shall design, install, provide, and maintain a secure IT environment, described below, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit B, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City's customers. The Contractor shall fulfill the data and information security requirements (the "Requirements") set forth in Part A below.

A "secure IT environment" includes (a) the IT infrastructure, by which the Services are provided to the City, including connection to the City's IT systems; (b) the Contractor's operations and maintenance processes needed to support the environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monito ring services to ensure a secure and reliable environment and service availability to the City. "IT infrastructure" refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate.

In the event that, after the Effective Date, the Contractor reasonably determines that it cannot fulfill the Requirements, the Contractor shall promptly inform the City of its determination and submit, in writing, one or more alternate countermeasure options to the Requirements (the "Alternate Requirements" as set forth in Part B), which may be accepted or rejected in the reasonable satisfaction of the Information Security Manager (the "ISM").

Requirements:

The Contractor shall at all times during the term of any contract between the City and the Contractor:

1) Appoint or designate an employee, preferably an executive officer, as the security liaison to the City with respect to the Services to be performed under this Agreement.

2) Conform to the NIST Cybersecurity Framework.
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3) Conduct routine data and information security compliance training of its personnel that is appropriate to their role.

4) Develop and maintain detailed documentation of the IT infrastructure, including software versions and patch levels. With its signature to the Agreement, Contractor acknowledges that the foregoing
documentation is in place and updated regularly.

5) Develop an independently verifiable process, consistent with industry standards, for performing professional and criminal background checks of its employees that (1) would permit verification of employees' personal identity and employment status, and (2) would enable the immediate denial of acce ss to the City's confidential data and information by any of its empl oyees who no longer would require access to that information or who are terminated.

6) Implement access accountability (ide ntification and authentication) architecture and support
role-based access control ("RBAC") and
segregation of duties ("SoD") mechanisms for all personnel, systems, and Software used to pr ovide the Services. "RBAC" refers to a computer systems security approach to restricting access only to authorized users. "SoD" is an approach that would require more than one individual to complete a security task in order to promote the detection and prevention of fraud and errors.

7) Provide and maintain secure intersystem communication paths that would ensure the confidentiality, integrity, and availability of the City's information.

8) Deploy and maintain IT system upgrades, patches and configurations conforming to current patch and/or release levels by not later than one (1) week after its date of release. Emergency security patches must be installed within 24 hours after its date of release. Provision of Contractor’s applicable standard patch management timelines is acceptable.

9) Provide for the timely detection of, response to, and the reporting of security incidents, including on-going incident monitoring with logging.

10) Notify the City within one (1) hour of detecting a security incident that results in the unauthorized access to or the misuse of the City's confidential data and information.
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11) Perform security self-audits on a regular basis and not less frequently than on a quarterly basis, and provide the required summary reports of those self-audits to the ISM on the annual anniversary date or any other date agreed to by the Parties. Pr ovision of a schedule of any annual security reviews and/or audits is acceptable.

12) Accommodate, as practicable, and upon reasonable prior notice by the City, the City's performance of rand om site security audits at the Contractor's site(s), including the site(s) of a third-party service provider(s), as applicable. The scope of these audits will extend to the Contractor's and its third-party servic e provider(s)' awareness of security policies and practices, systems configurations, access authentication and authorization, and incident detecti on and response. Response to audits within a 30-day timeframe is acceptable.

13) Cooperate with the City to ensure that to the extent required by applicable laws, rules and regulations, and the Confidential Information will be accessible only by the Contractor an d any authorized third-party service provider's personnel.

14) Maintain records relating to the Services for a period of three (3) years after the expiration or earlier termination of this Agreement and in a mutually agreeable storage medium. Within thirty (30) days after the effective date of expiration or earlier termination of this Agreement, all of those records relating to the performance of the Services shall be provided to the ISM.

15) Maintain the Confidential Informatio n in accordance with applicable federal, state, and local data and information privacy laws, rules, and regulations.

16) Provide Network Layer IP filtering serv ices to allow access only from the City of Palo Alto's IP address to the Vendor environment (primarily hosted for the City of Palo Alto).

17) Provide and support Single Si gn-on (SSO) and Multifactor Authentication (MFA) solutions for authentication and authorization services from the "City's environment to the Vendor's environment," and Vendor's environment to the Vendor's cloud services/hosted environment." The Vendor shall allow two employees of the City to have superuser and super-admin access to the Vendor's IT environment, and a cloud-hosted IT environment belongs to the City.
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18) Unless otherwise addressed in the Agreement, shall not hold the City liable for any direct, indirect or punitive damages whatsoever including, without limitation, damages for loss of use, data or profits, arising out of or in any way connected with the City's IT environment, including, without limitation, IT infrastructure communications.

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1 City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: December 15, 2025
Report #:2510-5385
TITLE
Approval of Professional Services Contract Number C26194283 with Keyser Marston Associates, Inc. in the Amount Not-to-Exceed $371,415 to Conduct Development Impact and In-Lieu Fee Study. CEQA Status: Exempt Under CEQA Guidelines Sections 15061(b)(2) and (b)(3).

RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to execute Contract No. C26194283 (Attachment A) with Keyser Marston Associates, Inc. to conduct development impact and in-lieu fee study for a term of three years and a total not-to-exceed $371,415, including $337,650 for basic services and $33,765 for additional services.

BACKGROUND
Under the Mitigation Fee Act (Assembly Bill [AB] 1600), cities can charge new development for its relative share of the cost to fund the acquisition of land and improvements to public facilities. These fees are established based on the nexus between impacts caused by new development and the improvements needed to mitigate those impacts that would be funded by the established fee.

AB 602 requires nexus studies to be updated every eight years beginning January 1, 2022.1 Palo Alto’s certified Housing Element Program 2.1B also requires the City to initiate a study to update the City’s nexus and feasibility study for residential and commercial housing impact fees by December 31, 2025. In addition, Housing Element Program 3.1B requires the City to prepare feasibility studies to analyze the implications of development impact fees for housing production. To comply with these policies in a timely manner, the City seeks to update all impact and related in-lieu fees citywide, including conducting policy research and providing key program recommendations. A detailed scope of work is provided in Exhibit A to Attachment A, but generally, this effort would include the preparation of an AB 602 compliant nexus study to 1 https://legiscan.com/CA/text/AB602/id/2434861
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2 update development impact and in lieu- fees for parks, community center, library, general government, citywide transportation, public safety, parkland, and public art. This effort will include market/peer benchmarking, and pro forma feasibility testing of residential prototypes, with policy/implementation recommendations and stakeholder outreach.

ANALYSIS
The development of nexus and feasibility studies require specialized technical expertise that is not readily available on staff.

Solicitation Process
On May 21, 2025, the City released a Request for Proposals (RFP194283) to solicit proposals from qualified consulting firms to conduct a Development Impact and In-Lieu Fee Nexus and Feasibility Study. Four complete proposals were received ahead of the July 11, 2025, deadline for submission. In August 2025, an executive and senior leadership team from the City of Palo Alto’s Planning and Development Services Department, Administrative Services Department, Public Works Department, and City Attorney’s Office, conducted a series of interviews and scored each team’s responses to select the City’s preferred consultant for this work. Proposals were evaluated using required and optional criteria established in the solicitation. Required criteria included: quality and completeness of the proposal; quality and performance characteristics of the proposed solution; experience with similar scope and complexity; proposed cost; financial condition and stability; ability to meet specified timelines; and compliance with applicable laws, regulations, and City policies. Optional criteria included: prior performance for government agencies and capacity to provide ongoing services or support.

Table 1: Summary of Request for Proposals
Proposal Description Conduct a development impact and in-lieu fee nexus and feasibility study
Proposed Length of the Project 12-18 months
Number of Vendors Notified 3633
Number of Proposal Packages
Downloaded
33 Total Days to Respond 51 days
Pre-Proposal Meeting and Date N/A
Number of Proposals Received 4
Proposed Price Range $124,500-$348,725
Public Link to Solicitation https://procurement.opengov.com/portal/palo-alto- ca/projects/171914/document?section=1580270
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3 On September 4, 2025, the City notified Keyser Marston Associates (KMA) of its intent to award the firm a contract for the services described in the RFP. Proposals were evaluated using the required criteria established in the solicitation, including proposal quality and completeness, the quality and performance characteristics of the proposed solution, experience with similar scope and complexity, proposed cost, financial stability, ability to meet specified timelines, and compliance with applicable laws and City policies. KMA’s overall performance placed it highest after all evaluation components were completed, supported by stronger results in proposal quality, proposed solution, relevant experience, and prior government performance while fully meeting compliance requirements. Its strong interview performance, including the clarity and completeness of its responses to questions, further strengthened its final ranking. KMA and its sub-consultant NBS Government Financial Group are well known for their work in this area and bring extensive experience in housing-related legislation, inclusionary housing programs, feasibility analysis, housing impact fee studies, and state law requirements for development impact fees. Together, they offer a comprehensive and complementary approach that will support the City in recommending a fee structure that offsets development impacts while preserving the feasibility of housing production.

Implementation of the attached recommended contract will position the City to meet upcoming Housing Element and AB 602 deadlines and will provide the City with a strong legal basis for the collection of development impact fees going forward. The feasibility study component of the scope will also provide policy and decisionmakers with critical information related to the short and long-term effects of impact and in-lieu fees on housing development in Palo Alto.

FISCAL/RESOURCE IMPACT
Funding was originally included in the FY 2025 budget for this work but the contract was not able to be completed before the end of FY 2025. Therefore, the City Council unanimously reappropriated necessary fundings from FY 2025 to FY 2026 on October 6, 2025 through CMR 2506-49003 as part of the annual reappropriation process.

STAKEHOLDER ENGAGEMENT
Consideration of this consent calendar item was included in the publicly posted agenda for the December 8, 2025, City Council meeting. Task C, Part 2 of the attached contract will also include stakeholder engagement in the form of virtual stakeholder meetings and the updated nexus and feasibility studies are expected to be considered by Council as part of one or more public hearings.

3https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=8738&meetingTemplateType=2&com piledMeetingDocumentId=17069
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4 ENVIRONMENTAL REVIEW
The recommendation in this report does not constitute a project requiring review under the California Environmental Quality Act (CEQA).

ATTACHMENTS
Attachment A: Draft Contract with Keyser Marston Associates for Development Impact and In- Lieu Fee Study
APPROVED BY:

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CITY OF PALO ALTO CONTRACT NO. C26194283

AGREEMENT FOR PROFESSIONAL SERVICES

BETWEEN THE CITY OF PALO ALTO AND
KEYSER MARSTON ASSOCIATES, INC.

This Agreement for Professional Services (this “Agreement”) is entered into as of the day of , 2025 (the “Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and KEYSER MARSTON ASSOCIATES, INC. , a California Corporation, located at 1299 Fourth Street, Suite 408 San Rafael, CA 94901 (“CONSULTANT”).

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

RECITALS

A. CITY intends to conduct a Development Impact and In -Lieu Fee Nexus and Feasibility Study (the “Project”) and desires to engage a consultant to review, update, and potentially expand the City’s current development impact and in-lieu fee program in accordance with California laws in connection with the Project (the “Services”, as detailed more fully in Exhibit A).

B. CONSULTANT represents that it, its employees and subconsultants, if any, possess the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services.

C. CITY, in reliance on these representations , desires to engage CONSULTANT to provide the Services as more fully described in Exhibit A, entitled “SCOPE OF SERVICES”.

NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree as follows:

SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY.

SECTION 2. TERM.

The term of this Agreement shall be from the effective date of this agreement through June 30, 2027, unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.

SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit B, entitled “SCHEDULE OF PERFORMANCE”. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT.

CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT.

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SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Three Hundred Thirty- Seven Thousand Six Hundred Fifty Dollars ($337,650). T he hourly schedule of rates , if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.

Optional Additional Services Provision (This provision applies only if checked and a not-to-exceed compensation amount for Additional Services is allocated below under this Section 4.)

In addition to the not-to-exceed compensation specified above, CITY has set aside the not- to-exceed compensation amount of Thirty-Three Thousand Seven Hundred Sixty Five Dollars ($33,765) for the performance of Additional Services ( as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall not exceed Three Hundred Seventy- One Thousand Four Hundred Fifteen Dollars ($371,415), as detailed in Exhibit C.

“Additional Services” means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A . CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional S ervices in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section . Additional Services , if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.

To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully exec uted Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4 .

CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4. Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement.

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invoices to the CITY describing the S ervices performed and the applicable charges (including, if applicable, an identification of personnel who performed the Services, hours worked, hourly rates, and reimbursable expenses), based upon Exhibit C or, as applicable, CONSULTANT’s schedule of rates set forth in Exhibit C -1. If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s invoices shall be subject to verification by CITY. CONSULTANT shall send all invoices to CITY’s Project Manager via email at the following address: [email protected].. CITY will generally process and pay invoices within thirty (30) days of receipt of an acceptable invoice.

SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it , its employees and subcontractors, if any, possess the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subcontractors, if any, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All Services to be furnished by CONSULTANT under this A greement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances.

SECTION 7. COMPLIANCE WITH LAWS . CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement, as amended from time to time . CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services.

SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services , arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any c hange order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions.

SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds the CITY’s stated construction budget by ten percent (10%) or more , CONSULTANT shall make recommendations to CITY for aligning the P roject design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY.

SECTION 10. INDEPENDENT CONTRACTOR. CONSULTANT acknowledges and agrees that CONSULTANT and any agent or employee of CONSULTANT will act as and shall be deemed at all times to be an independent contractor and shall be wholly responsible for the manner in which CONSULTANT performs the S ervices requested by CITY under this Agreement.

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pertaining to or in connection with any retirement, health or other benefits that CITY may offer its employees. CONSULTANT wi ll be responsible for all obligations and payments, whether imposed by federal, state or local law, including, but not limited to, FICA, income tax withholdings, workers’ compensation, unemployment compensation, insurance, and other similar responsibilities re lated to CONSULTANT’s performance of the Services, or any agent or employee of CONSULTANT providing same. Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and CONSULTANT or any agent or employee of CONSULTANT. Any terms in this Agreement referring to direction from CITY shall be construed as providing for direction as to policy and the result of CONSULTANT ’s provision of the Services only, and not as to the means by which such a result is obtained.

SECTION 11. ASSIGNMENT . The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder wit hout the prior written approval of the C ity Manager. Any purported assignment made without the prior written approval of the City Manager will be void and without effect. Subject to the foregoing, the covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, succes sors, executors, administrators and assignees of the parties.

SECTION 12. SUBCONTRACTING.

Subcontracts Authorized: Notwithstanding Section 11 ( Assignment) above, CITY agrees that subcontractors may be used to complete the Services with prior approval, documented in writing, including Scope of Services, cost, and schedule of performances. The use of subcontractors cannot increase compensation pursuant to Section 4 of this Agreement. The subcontractors identified at Agreement commencement are:

- NBS GOVERNMENT FINANCE GROUP (CA#1968655) 32605 Temecula Parkway #316 Temecula, CA 92592

CONSULTANT shall be responsible for directing the work of any subcontractors and for any compensation due to subcontractors . CITY assumes no responsibility whatsoever concerning compensation of subcontractors. CONSULTANT shall be fully responsible to CITY for all acts and omissions of subcontractors . CONSULTANT shall change or add subcontractors only with the prior written approval of the City Manager or designee.

SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Tim R. Bretz, Phone:
(213) 622-8095 ext. 404 , Email: [email protected] as the CONSULTANT’s Project Manager to have supervisory responsibility for the performance, progress, and execution of the Services and represent CONSULTANT during the day- to-day performance of the Services. If circumstances cause the substitution of the CONSULTANT’s P roject Manager or any other of CONSULTANT’s key personnel for any reason, the appointment of a substitute Project Manager and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s Project Manager. CONSULTANT, at CITY’s request, shall promptly remove CONSULTANT personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Services or a threat to the safety of persons or property.

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CITY’s Project Manager is Julia Knight , Planning & Development Services Department, 250 Hamilton Avenue Palo Alto, CA , 95014, Telephone: (650) 838-2839.. CITY’s Project Manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate Project Manager from time to time.

SECTION 14. OWNERSHIP OF MATERIALS . With the exception of CONSULTANT’S proprietary computer model s, all work product, including without limitation, all writings, drawings, studies, sketches, photographs, plans, reports, specifications, computations, models, recordings, data, documents, and other materials and copyright interests developed under this Agreement, in any form or media , shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work product pursuant to this Agreement are vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of CITY. Neither CONSULTANT nor its subcontractors, if any, shall make any of such work product available to any individual or organization without the prior written approval of the C ity Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the Scope of Services.

SECTION 15. AUDITS . CONSULTANT agrees to permit CITY and its authorized representatives to audit, at any reasonable time during the term of this Agreement and for four (4) years from the date of final payment, CONSULTANT’s records pertaining to matters covered by this Agreement, including without limitation records demonstrating compliance with the requirements of Section 10 (Independent Contractor). CONSULTANT further agrees to maintain and retain accurate books and records in accordance with generally accepted accounting principles for at least four (4) years after the expiration or earlier termination of this Agreement or the completion of any audit hereunder, whichever is later.

SECTION 16. INDEMNITY.

16.1. To the fullest extent permitted by law, CONSULTANT shall indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of the negligence, recklessness or willful misconduct related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party.

16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from a Claim arising from the active negligence or willful misconduct of an Indemnified Party that is not contributed to by any act of, or by any omission to perform a duty imposed by law or agreement by, CONSULTANT, its officers, employees, agents or contractors under this Agreement.

16.3. The acceptance of CONSULTANT’s Services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive Docusign Envelope ID: 00B63B9B-F785-417E-8BA7-5362DE7C06A4 Item 18
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the expiration or early termination of this Agreement.

SECTION 17. WAIVERS. No waiver of a condition or nonperformance of an obligation under this Agreement is effective unless it is in writing in accordance with Section 2 9.4 of this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted shall apply solely to the specific instance expressly stated. No single or parti al exercise of any right or remedy will preclude any other or further exercise of any right or remedy.

SECTION 18. INSURANCE.

18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit D, entitled “INSURANCE REQUIREMENTS”. CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies.

18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A -:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above.

18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primar y coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days ’ prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT , CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement.

18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT ’s liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired.

SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.

19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. If CONSULTANT fails to perform any of its material Docusign Envelope ID: 00B63B9B-F785-417E-8BA7-5362DE7C06A4 Item 18
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obligations under this Agreement, in addition to all other remedies provided under this Agreement or at law, the City Manager may terminate this Agreement sooner upon written notice of termination. Upon receipt of any notice of suspension or termination , CONSULTANT will discontinue its performance of the Services on the effective date in the notice of suspension or termination.

19.2. In event of suspension or termination, CONSULTANT wi ll deliver to the City Manager on or before the effective date in the notice of suspension or termination, any and all work product, as detailed in Section 14 (Ownership of Materials), whether or not completed, prepared by CONSULTANT or its contractors, if any, in the performance of this Agreement. Such work product is the property of CITY, as detailed in Section 14 (Ownership of Materials).

19.3. In event of suspension or termination, CONSULTANT will be paid for the Services rendered and work products delivered to CITY in accordance with the Scope of Services up to the effective date in the notice of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s S ervices provided in material conformity with this Agreement as such determination is made by the City Manager acting in the reasonable exercise of his/her discretion . The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 17, 19.2, 19.3, 19.4, 20, 25, 27, 28, 29 and 30.

SECTION 20. NOTICES.

All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows:

To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303

With a copy to the Purchasing Manager

To CONSULTANT: Attention of the P roject Manager at the address of CONSULTANT recited on the first page of this Agreement.

CONSULTANT shall provide written notice to CITY of any change of address.

SECTION 21. CONFLICT OF INTEREST.

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21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subcontractors or other persons or parties having such an interest.

SECTION 22. NONDISCRIMINATION; COMPLIANCE WITH ADA.

22.1. As set forth in Palo Alto Municipal Code S ection 2.30.510, as amended from time to time, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section

SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with t he CITY’s Environmentally Preferred Purchasing policies which are available at CITY ’s Purchasing Department , hereby incorporated by reference and as amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include, first, minimizing and reducing waste; second, reusing waste ; and, third, recycling or composting waste. In particular, C ONSULTANT shall comply with the following Zero Waste requirements:
(a) All printed materials provided by CONSULTANT to C ITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwi se approved by CITY ’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or Docusign Envelope ID: 00B63B9B-F785-417E-8BA7-5362DE7C06A4 Item 18
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greater post-consumer material and printed with vegetable-based inks. (b) Goods purchased by C ONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Department’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT , at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed.

SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE .

SECTION 25. NON-APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code , as amended from time to time. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This S ection shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement.

SECTION 2 6. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS.

SECTION 27. CLAIMS PROCEDURE FOR “9204 PUBLIC WORKS PROJECTS” . For purposes of this Section 27, a “9204 Public Works Project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. ( Cal. Pub. Cont. Code § 9204.) Per California Public Contract Code Section 9204, for Public Works Projects , certain claims procedures shall apply, as set forth in Exhibit F, entitled “Claims for Public Contract Code Section 9204 Public Works Projects”.

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This Project is not a 9204 Public Works Project.

SECTION 28. CONFIDENTIAL INFORMATION.

CONSULTANT will maintain reasonable and appropriate administrative, technical and physical safeguards to ensure the security, confidentiality and integrity of the Confidential Information.

28.2. “Confidential Information” means all data, information (including without limitation “Personal Information” about a California resident as defined in Civil Code S ection 1798 et seq., as amended from time to time) and materials, in any form or media, tangible or intangible, provided or otherwise made available to CONSULTANT by CITY, directly or indirectly, pursuant to this Agreement. Confidential Information excludes information that CONSULTANT can show by appropriate documentation: (i) was publicly known at the time it was provided or has subsequently become publicly known other than by a breach of this Agreement; (ii) was rightfully in CONSULTANT’s possession free of any obligation of confidence prior to receipt of Confidential Information; (iii) is rightfully obtained by CONSULTANT from a third party without breach of any confidentiality obligation; (iv) is independently developed by employees of CONSULTANT without any use of or access to the Confidential Information; or (v) CONSULTANT has written consent to disclose signed by an authorized representative of CITY.

28.4. CONSULTANT will notify City promptly upon learning of any breach in the security of its systems or unauthorized disclosure of, or access to, Confidential Information in its possession or control, and if such Confidential Information consists of Personal Information, CONSULTANT will provide information to CITY sufficient to meet the notice requirements of Civil Code Section 1798 et seq., as applicable, as amended from time to time.

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28.6. If selected in Section 30 (Exhibits), this Agreement is also subject to the terms and conditions of the Information Privacy Policy and Cybersecurity Terms and Conditions.

SECTION 29. MISCELLANEOUS PROVISIONS.

29.1. This Agreement will be governed by California law, without regard to its conflict of law provisions.

29.7. The provisions of all checked boxes in this Agreement shall apply to this Agreement; the provisions of any unchecked boxes shall not apply to this Agreement.

29.8. All section headings contained in this Agreement are for convenience and reference only and are not intended to define or limit the scope of any provision of this Agreement.

29.9. This Agreement may be signed in multiple counterparts, which, when executed by the authorized representatives of the parties, shall together constitute a single binding agreement.

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EXHIBIT A: SCOPE OF SERVICES
EXHIBIT A-1 PROFESSIONAL SERVICES TASK ORDER
EXHIBIT B: SCHEDULE OF PERFORMANCE
EXHIBIT C: COMPENSATION
EXHIBIT C-1: SCHEDULE OF RATES
EXHIBIT D: INSURANCE REQUIREMENTS

THIS AGREEMENT IS NOT COMPLETE UNLESS ALL SELECTED EXHIBITS ARE ATTACHED.

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CONTRACT No. C26194283

SIGNATURE PAGE

IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement as of the date first above written.

CITY OF PALO ALTO

____________________________
City Manager

APPROVED AS TO FORM:

__________________________
City Attorney or designee

KEYSER MARSTON ASSOCIATES,
INC.

Officer 1

By:

Name: Kathleen Head
Title: President
[email protected]

Officer 2 (Required for Corp. or LLC)

By:

Name: Tim Bretz
Title: Assistant Secretary
[email protected]

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EXHIBIT A

SCOPE OF SERVICES

CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “ SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualific ations, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project.

CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications.

TASK A. NEXUS STUDIES

Task A – Part 1 – Kick-Off Meeting

CONSULTANT and SUBCONSULTANT will prepare a meeting agenda and attend a virtual kick -off meeting with CITY staff.

CONSULTANT proposes to discuss the following at this kick off meeting:

• Discuss the goals, work plan and schedule for the project • Establish coordination, communication and reporting procedures • Conduct initial interviews with key CITY staff members • Evaluate available information resources
• Review the existing impact fee program and inclusionary housing program, and identify any issues of concern to the staff, CITY Council members or stakeholders • Assess the CITY’s current development patterns and growth potential

Upon project initiation, we plan to review impacts and explore methodology options relating to fee programs as a result of recent legislative changes such as AB 602 and legal decisions such as Sheetz v. County of El Dorado. We request the CITY involve legal counsel at this time to assist in discussion and direction setting for the study that will best serve the CITY’s needs.

Task A – Part 2 – Development Impact Fees for Non- Affordable Housing Fees

The scope of services proposed to be completed by SUBCONSULTANT is specific to section

5.1.A- Nexus Study (Legal Foundation) of the CITY’s RFP#194283 for a Development Impact and In- Lieu Nexus and Feasibility Study.

The following impact fees will be addressed in the scope of work for this agreement:
• Parks Development
• Community Center
• Library
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• General Government Facility
• Citywide Transportation (vehicle trips method)
• Public Safety Facility
• Charleston -Arastradero Corridor Pedestrian and Bicyclist Safety

The following In- Lieu fees will also be addressed:
• Parkland Dedication (Quimby Act)
• Public Art (as authorized by local ordinance requirements) • University Ave Non -Residential Parking

SUBCONSULTANT understands Water and Wastewater Connection/Capacity fees are excluded from the scope of review; however, SUBCONSULTANT can assist under an amended scope of services and project budget with these fees as needed.

SUBCONSULTANT is also available to initially discuss current or planned infrastructure with the CITY that could lead to identification of new fees, and the data available to support a solid nexus for new fees. Analysis and development of new fee calculations, however, would also be covered under a separate scope of services and project budget from this proposal.

INFORMATION TO BE PROVIDED BY THE CITY

The work to be performed by SUBCONSULTANT on this impact fee study will depend heavily on information to be provided by the CITY. Among the types of information needed are:
• The current General Plan, and any specific plans or other relevant planning studies • Data on the amount of existing development and planned future development in the study area, by land use type
• The Capital Improvement Program, level of service policies, facility master plans and other facility planning data, plus inventories of existing facilities, vehicles and equipment of types to be funded by impact fees
• Cost estimates for land, capital improvements, vehicles, and/or equipment to be funded by impact fees
• Information on capital improvement funding sources and financing plans and any outstanding debt related to existing capital facilities

This agreement assumes that all information needed to perform the work covered by the scope of this agreement will be provided by the CITY or is readily available from other sources such as the U.S. Census Bureau or the California Department of Finance.

Detailed Work Plan

The following subtasks comprise the detailed work plan for this fee study. These subtasks represent the typical requirements of a non -affordable housing impact fee study and may be adjusted to meet the needs of this project.

SUBTASK 1: COMPILE DATA ON EXISTING AND FUTURE DEVELOPMENT

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and future development in the CITY and compile it in a form useful for this study. Steps in that process may include:
• Establish boundaries of the study area to be used in the analysis (e.g., existing CITY vs. sphere of influence)
• Define the breakdown of land use types to be used in the study • A critical new requirement of AB 602 (Govt. Code Section 66016.5) is that residential impact fees must be calculated proportionately to the square footage of units unless another method is justified by specific findings. We will work with the CITY early in the study process to determine the most appropriate way to satisfy that requirement, including alternative fee structures such as housing -related fees based on bedroom count or a hybrid model based on both bedroom count and square footage. • Discuss applicability of fees to home additions and full rebuilds, based on incremental size increases
• Discuss options for charging fees to Junior/Accessory Dwelling Units (JADUs and ADUs), considering State requirements, local policy goals, and equity impacts • Analyze land use data provided by the CITY to establish a baseline of existing development and a forecast of future development by land use type • Identify demand variables and specify demand factors that will be used to represent the impact of development in the impact fee calculations
• Prepare development data tables to incorporate into the fee calculation model and the study report

SUBTASK 2: FACILITY NEEDS ANALYSIS

Using forecasts of future development from Subtask 1, SUBCONSULTANT will review the Capital Improvement Program and facility master plans and work with staff to identify new facilities, facility expansions, vehicles and equipment needed to serve future development. Steps in that process will include the following:
• Review adopted level -of-service standards and actual service levels for relevant facility types
• Work with CITY staff to identify the operative level -of-service standard to be used in the impact fee analysis for each facility type
• Identify any existing deficiencies or available capacity relative to the selected level of service standard
• Project the additional service demand that will be created by new development, based on selected service levels
• Translate service demand into facility needs by facility type • Compile cost estimates for relevant facilities and other assets\ • Identify costs eligible for impact fee funding

The scope of this study excludes any legal, engineering, architectural, cost estimating and appraisal services; SUBCONSULTANT will, however, provide guidance and recommendations to the CITY regarding typical sources of information utilized in impact fee studies for development of facility needs assumptions. To the extent the CITY is tasked with estimating costs for existing facilities or new and expanded facilities, SUBCONSULTANT will provide guidance as to the format and requirements of information needed to inform the impact fee calculation model.

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SUBTASK 3: IMPACT /IN-LIEU FEE ANALYSIS

Using the information developed in Subtasks 1 and 2, we will conduct the fee analysis and calculate impact fees by land use type for each type of facility addressed in the study. That process typically includes these steps:
• Review the methods used to calculate existing impact fees and consider alternative methods where appropriate
• Construct a spreadsheet fee calculation model incorporating data on existing and future development, demand factors and costs for land, buildings and other capital assets relevant to the fee calculations
• Specify formulas in the model to allocate facility costs in proportion to the impact of new development by land use type
• Calculate a cost per unit of service for each facility type • Convert the cost per unit of service into a schedule of impact fees per unit of development, by development type
• Project potential revenue from the proposed fees

In-Lieu fees will generally follow the same approach, as needed, depending on type of facility.

Specific to transportation- related fees, the CITY’s RFP for this project requests evaluation of transportation -related fees based on multimodal trips, vehicle miles traveled (VMT), combination of both vehicle trips and VMT, or an asset inventory method. The scope of work proposed for transportation- related fees will rely on the cost of transportation facilities needed to serve new development, as provided by the CITY, and apply a standard vehicle trips cost allocation method, relying on ITE data factors for trips and average trip length (if applicable). Other cost allocation methods such as VMT or multi -modal trips would require the CITY to provide data on how many trips, either multi- modal and/VMT , are added by new development, and specifically how those trips are associated with each type of development.

This typically requires a traffic model or third party traffic engineering study to support. If active transportation measures are to be incorporated that reduce the need for more roadway capacity, the CITY would also need to provide the engineering cost estimating and trip reduction factors associated with these improvements.

SUBTASK 3.1 ADDITIONAL TRANSPORTATION ANALYSIS (Optional)

CITY staff may direct CONSULTANT or SUBCONSULTANT to conduct further background analysis to refine transportation-related needs, models and assumptions to explore various fee structures. The focus of this task will be on enhancing the quality of existing transportation data, identifying gaps and incorporating new data and insights. The CONSULTANT will work closely with CITY staff to validate assumptions, ensuring they align with current standards and local needs. Deliverables may include one or more memos detailing the strengths and weaknesses of the different fee structures studied and/or recommending any additional analysis or next steps needed to select and implement an alternative transportation fee structure in the future.

This task is not included in the budget noted in Agreement’s Exhibit C - (SUPPLEMENTAL POLICY AND PROGRAM ANALYSIS & STAKEHOLDER ENGAGEMENT). If CITY staff Docusign Envelope ID: 00B63B9B-F785-417E-8BA7-5362DE7C06A4 Item 18
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initiate this task, they would utilize the provision of Exhibit C, to transfer funds between tasks, or utilize the additional services budget, or seek a contract amendment to increase the maximum total compensation.

SUBTASK 4: CAPITAL INFRASTRUCTURE PLANNING ASSISTANCE

Results of the impact fee analysis in Subtask 3, above, will provide estimated projections of potential revenue from impact fees based on growth assumptions developed in Subtask 1. The CITY will need to identify how the impact fees will be spent on specific projects.

A new provision in the Mitigation Fee Act, Government Code Section 66016.5(a)(6), was added by Assembly Bill 602 in 2021 and requires that large jurisdictions adopt a capital improvement plan as part of an impact fee study. “Large jurisdiction” means a county of 250,000 or more or any CITY within that county, to which Palo Alto qualifies. That requirement applies to all impact fee nexus studies adopted after January 1, 2022. Section 66002 (a) states that the capital improvement plan shall indicate the approximate location, size, time of availability and estimates of cost for all facilities or improvements to be financed with the fees.

For this task, the CITY will be responsible for identifying the list capital improvement projects needed to serve new development, including any architectural, engineering, or cost estimation required to describe and define each project. SUBCONSULTANT is available to assist the CITY in meeting the capital improvement plan requirements, as follows:
• Project additional facility requirements based on determinations of existing levels of service for each facility type developed in Subtask 2. This task applies to all facility types in the scope of work with the exception of engineered facilities such as transportation as well as in -lieu fees.
• Work with the CITY Attorney to obtain direction as to whether the CIP pertaining to impact fees is to be included in the actual consultant report, or through targeted amendments to the CITY’s overall Capital Improvement Program. • Assist in evaluation of proposed project eligibility for impact fee funding and standard approaches to determining whole or partial funding depending on the type of improvement proposed

The deliverable for this task includes development of report text and formatted appendices for inclusion in the Draft and Final Study Reports, as directed by the CITY.

SUBTASK 5: DRAFT AND FINAL STUDY REPORTS

The draft and final report for the study will explain the data, methodology and formulas used in the fee calculations and document the nexus between the proposed fees and the impacts of development for each type of impact fee calculated in the study. As the study progresses, SUBCONSULTANT will submit preliminary drafts of portions of the study report for review and comment by CITY staff. Once all sections are in draft form, an administrative draft of the entire study report, incorporating any previous staff comments, will be submitted for review.

Then a final draft document will be prepared for the CITY Council and public review. If necessary, additional changes will be incorporated into the final study report.

The study report will include the following components:

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• An Executive Summary including summary impact fee tables • A chapter discussing the legal requirements for impact fees and methods used to calculate the fees
• A chapter presenting data on existing and future development in the study area and the factors used to measure the impacts of development on individual facility types. • A separate chapter for each type of fee presenting the data and methodology used in the analysis, a detailed explanation the impact fee calculations, and documentation of the nexus
• A chapter on implementation recommendations, covering steps needed to comply with the Mitigation Fee Act through proper administration of the impact fees, including but not limited to:
o Findings and enactment of fees
o Collection and expenditure of fees
o Accounting and reporting requirements
o Administrative appeals, waivers, and exemptions
o Credits and reimbursements for developer -provided facilities o Updating and indexing the fees
o Recovery of administrative costs for the impact fee program

Deliverables include: (1) Preliminary chapter drafts; (2) a complete draft report for staff review; (3) a final draft report for CITY Council and public review; (4) the final report. All drafts and the final report will be submitted electronically in .pdf format. All original Microsoft Word and Excel files will be provided to the CITY at completion of the work if requested.

SUBTASK 6: MEETINGS

In general, SUBCONSULTANT has assumed all meetings with staff for the purpose of developing the final findings and reports for each work plan above will be conducted remotely.

We have the tools to accomplish all aspects of the project’s work plan remotely from SUBCONSULTANT offices. We utilize video conferencing, email, and telephone to coordinate on the project and review deliverables in an effective manner.

CONSULTANT, as the project manager, will participate in all meetings with SUBCONSULTANT and CITY staff with this time included in CONSULTANT’s project management task.

At the implementation stage of the project, we are available to present the Study’s outcomes in up to three (3) public meetings. During presentations, SUBCONSULTANT will review the study process, present study results and recommendations, receive input and guidance on the direction of the study, and answer questions. We will prepare a PowerPoint presentation for these meetings which will include visual aids, graphics, charts, and additional worksheets or handouts.

Task A – Part 3 – Development Impact Fees for Affordable Housing

The CITY desires to complete nexus studies to support the imposition of affordable housing impact fees on residential and/or non- residential development. To that end, CONSULTANT will prepare the following affordable housing nexus studies.

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• Residential Affordable Housing Nexus Study: The residential nexus study is used to document the impact of residential development on the need for affordable housing, to quantify the cost of providing affordable units to mitigate this increased affordable housing need and to determine the resulting mitigation cost on a per square foot and per unit basis. The Residential Affordable Housing Nexus Study results in the maximum legally supportable affordable housing impact fee that can be assessed against new mar ket rate residential development. For the purposes of the residential affordable housing nexus study, CONSULTANT proposes to analyze the following residential development types: detached single family development, attached single family development, and apartment s with varying densities/sizes ( e.g., small apartment project and large apartment project).
• Non -Residential Affordable Housing Nexus Study: The non -residential nexus study is used to document the relationship between new non- residential development, job growth and affordable housing needs for a range of non- residential development types. The Non-Residential Affordable Housing Nexus Study results in the maximum legally supportable affordable housing impact fee that can be assessed against new non - residential development. For the purposes of the non -residential affordable housing nexus study, CONSULTANT proposes to analyze the following non -residential land uses: retail, office, industrial, warehouse, lodging, and research and development.

For both the residential and non -residential nexus studies, CONSULTANT will include the following:
• Provide recommendations for assessing affordable housing impact fees on home additions and full rebuilds.
• Provide recommendations related to imposing affordable housing impact fees on Junior/Accessory Dwelling Units.
• Provide recommendations for methods for increasing the affordable housing impact fees on an annual basis.

Deliverables: CONSULTANT will prepare written nexus study reports summarizing the methodology, analysis and maximum legally supportable affordable housing impact fees. The reports will be separated between the residential nexus study and the non- residential nexus study. We propose to provide the CITY with one administrative draft of each respective report and one final draft based on the CITY’s comments.

Meetings: CONSULTANT is prepared to participate in virtual meetings with CITY staff and stakeholders throughout the engagement. We are also available to present at up to three (3) public meetings. CONSULTANT will prepare presentation materials for each of these meetings.

Given the scope of work proposed to be provided by CONSULTANT, we have included a separate meeting budget as part of Task D.

TASK B. FEASIBILITY STUDY (ECONOMIC AND MARKET ANALYSIS)

CONSULTANT proposes to complete the following scope of work related to the Feasibility Study Task:

Task B – Part 1 – Background Research
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CONSULTANT will review background information provided by the CITY. As part of this task, CONSULTANT will also prepare a market assessment. The market assessment will provide context and background information to inform decision -making. This research is important for understanding local real estate conditions and provides an initial foundation for the development of residential and non -residential prototypes, which is the starting point for financial feasibility analyses.

Current real estate conditions and trends will be identified including rents, vacancy rates, home sale prices, land values, development activity, and the status of major proposed projects.

CONSULTANT will first review any materials provided by the CITY and will then access additional data sources including recently developed projects, brokerage reports, market data firms, government reports and other sources.

CONSULTANT will create charts that summarize the pertinent requirements of development impact fee programs that are levied on residential and non -residential construction in other California locations. CONSULTANT will work with CITY staff to identify the relevant jurisdictions to be used in the comparative analysis. The chart will compare the magnitude of the impact fees imposed by the surveyed programs.

Task B – Part 2 – Creation of Residential Development Prototypes

CONSULTANT anticipates identifying up to six residential prototypes that vary in product type (detached, attached, etc.), size (bedrooms, square footage) and tenure (rental or ownership) that will be used to evaluate financial feasibility of varying impact fee amounts as well as to provide an analysis of potential modifications to the CITY’s 2020 Below Market Rate Financial Feasibility Report. The intent of the residential prototypes is to reflect the range of development types expected to occur within Palo Alto in the near term.

Task B – Part 3 – Financial Feasibility Analyses

To evaluate the impacts of proposed impact fees on financial feasibility, CONSULTANT will prepare pro forma analyses for each of the residential development prototypes identified in Task B – Part 2. For each of the development prototypes, CONSULTANT proposes to prepare a pro forma analysis for each of the following scenarios:
• Current Fee Amounts
• Proposed Fee Amounts
• Alternate Fee Level #1

As such, CONSULTANT proposes to prepare three pro forma analyses for each of the six development prototypes. This equates to a total of 18 pro forma analyses.

The CONSULTANT pro forma analyses will be based on the following assumptions:
• CONSULTANT will use construction and development cost information in its files, as well as any information provided by the CITY, to create development cost estimates.

CONSULTANT will also reach out to developers to get their input on current development costs.

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• CONSULTANT will utilize income and operating expense information drawn from CONSULTANT’s recent experience, as well as any information provided by the CITY or local developers.
• CONSULTANT will research current capitalization rates and typical return requirements for each of the land uses.

The CONSULTANT pro forma analyses will be utilized to evaluate the financial feasibility of each of development prototypes and fee levels. To that end, the pro forma analyses will solve for the financial surplus or financial gap exhibited by each prototype and impact fee level scenario. For the purposes of this analysis, CONSULTANT will evaluate the total amount of maximum financially feasible supportable impact fee amounts. The CITY will need to determine the individual impact fee amounts to be imposed.

EVALUATION OF POLICY QUESTIONS

The financial feasibility analysis will be used to evaluate the following policy questions :
• CONSULTANT will evaluate how fee waivers and reductions for projects that restrict at least 20% of the units to households earning 100% AMI or less affect financial feasibility.
• The results of the financial feasibility analysis will be used to assess the cumulative impact of development fees to housing feasibility . CONSULTANT will use the results of the financial feasibility analyses to recommend potential adjustments to the CITY’s fee amounts.

Task B – Part 4 – Final Feasibility Study

CONSULTANT will prepare a written report summarizing the pro forma analyses and financial feasibility conclusions. The report will include a description of the development protypes, the financial assumptions utilized in the pro forma analyses, and the financial surplus or financial gap generated by each scenario. In addition, CONSULTANT will provide recommendations and issues for the CITY to consider. The CONSULTANT recommendations will be based on a number of factors including the results of the financial feasibility analysis, the comparative survey completed in Task B – Part 1, and the CITY’s policy objectives.

CONSULTANT finds that it is best to prepare an executive summary level memorandum with summary tables and CONSULTANT recommendations. Separately, CONSULTANT will prepare a full written report discussing the CONSULTANT methodology and financial assumptions. CONSULTANT will provide the pro forma analyses as attachments to this full written report. CONSULTANT proposes to prepare one administrative draft and one final version.

TASK C. SUPPLEMENTAL POLICY AND PROGRAM ANALYSIS AND

STAKEHOLDER ENGAGEMENT

CONSULTANT proposes to assist the CITY with evaluating the following :

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Using the prototypes from Task B, CONSULTANT will evaluate the existing inclusionary housing program requirements as well as potential modified requirements for new residential construction. The feasibility analysis is needed to demonstrate that the requirements being imposed do not create a constraint to housing development. The feasibility analysis is also helpful in illustrating the real estate economic realities of residential development to stakeholders.

CONSULTANT will also create charts that summarize the inclusionary housing obligations for rental and for-sale units, as well as other important exemptions or thresholds included in the surveyed programs in other jurisdictions . CONSULTANT has compiled a database that includes a significant amount of this information for jurisdictions throughout California.

The feasibility analysis will also be used to assist in defining a menu of compliance options that adjust the percentage of affordable units required depending on the degree of affordability achieved (i.e., moderate -, low -, very low -, and extremely low income) in a manner that incentivizes desired outcomes. CONSULTANT will also research and provide recommendations related to tiered inclusionary housing requirements.

Deliverables:
• By June 2026, CONSULTANT proposes to prepare an executive summary -level memorandum that evaluates the CITY’s existing Inclusionary Housing Program.

CONSULTANT will provide recommendations related to potential modifications to the CITY’s existing Inclusionary Housing Program and/or a proposed action plan for updating the CITY’s Inclusionary Housing requirements.
• At the completion of the nexus studies and financial feasibility analyses, CONSULTANT will prepare a comprehensive report outlining the results of the nexus and financial feasibility studies. This report will include proposed recommendations related to modifications to the CITY’s impact fees as well as inclusionary requirements. It is anticipated that this report will be completed after June 2026.

Task C – Part 2 - Stakeholder Engagement

CONSULTANT considers it a best practice to hold stakeholder meetings at both the beginning of the process and after the nexus studies and feasibility analyses are completed. Meetings at the outset of the assignment work best when consultants and CITY staff are mostly there to listen.

After the analyses are completed, the meetings are used to discuss the evaluation results and recommendations for program implementation.

CONSULTANT recommends up to three virtual stakeholder meetings for the proposed scope of work, and we will work with CITY staff to determine the best approach and= schedule for the stakeholder meetings. We see the stakeholder sessions as preparation and warm- up for the public hearing process.

Task C – Part 3 – Assistance to CITY Staff

CONSULTANT will provide the following assistance to CITY staff:

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• Throughout the engagement, CONSULTANT will be available to assist CITY staff with the preparation of materials used for staff briefings, public workshops and formal hearings.
• CONSULTANT will prepare outreach materials and respond to stakeholder input, as requested.
• CONSULTANT will provide draft content for the CITY’s website or FAQs related to fee changes.

TASK D. MEETINGS AND PROJECT MANAGEMENT

Meetings

CONSULTANT is prepared to participate in virtual meetings with CITY staff and stakeholders throughout the engagement. We are also available to present at up to three (3) public meetings.

CONSULTANT will prepare presentation materials for each of these meetings. Given the scope of work proposed to be provided by CONSULTANT, we have included a separate meeting budget as part of Task D.

Project Management

CONSULTANT will act as the point -of-contact and project manager for this engagement. A CONSULTANT representative will attend meetings with both SUBCONSULTANT and CITY Staff throughout the engagement. In addition, CONSULTANT will coordinate the project schedule ensuring that timelines are met for key deliverables.

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EXHIBIT B

SCHEDULE OF PERFORMANCE

Milestones
Completion
Number of Days/Weeks (as specified below)
from NTP

1. TASK A: NEXUS STUDIES Projected August 2026, or to be determined by CONSULTANT and CITY’s Project Managers
within term of Agreement

2. TASK B: FEASIBILITY STUDY Projected September 2026, or to be determined by CONSULTANT and CITY’s Project
Managers within term of Agreement

3. TASK C: SUPPLEMENTAL POLICY

AND PROGRAM ANALYSIS &

STAKEHOLDER ENGAGEMENT
Projected June 2026, or to be determined by
CONSULTANT and CITY’s Project Managers
within term of Agreement

4. TASK D: MEETINGS & PROJECT

MANAGEMENT
Ongoing/Daily as directed by CITY Project with
term for Agreement

Optional Schedule of Performance Provision for Additional Services Agreements.

The schedule of performance shall be as provided as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement.

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EXHIBIT C

COMPENSATION

CITY agrees to compensate CONSULTANT for Services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as E xhibit C-1 up to the not to exceed budget amount for each task set forth below.

CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below , provided that the total compensation for the Services, including any specified reimbursable expenses, and the total compensation for Additional Services (if any, per Section 4 of the Agreement) do not exceed the amounts set forth in Section 4 of this Agreement.

CONSULTANT agrees to complete all Services , any specified reimbursable expenses, and Additional Services (if any, per Section 4) , within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY.

BUDGET SCHEDULE

TASK NOT TO EXCEED AMOUNT
Task A
(NEXUS STUDIES)
$153,025
Task B
(FEASIBILITY STUDY)
88,550
Task C
(SUPPLEMENTAL POLICY AND PROGRAM

ANALYSIS & STAKEHOLDER ENGAGEMENT)
$49,825
Task 4
(MEETINGS & PROJECT MANAGEMENT)
$37,750
Sub-total for Services $329,150
Reimbursable Expenses (if any) $8,500
Total for Services and Reimbursable Expenses $337,650
Additional Services (if any, per Section 4) $33,765
Maximum Total Compensation $371,415

REIMBURSABLE EXPENSES

CONSULTANT’S ordinary business expenses , such as administrative, overhead, administrative support time /overtime, information systems, software and hardware, photocopying, telecommunications (telephone, internet), in -house printing, insurance and other ordinary business expenses, are included within the scope of payment for Services and are not reimbursable expenses hereunder.

Reimbursable expenses, if any are specified as reimbursable under this section , will be reimbursed at actual cost. The expenses (by type, e.g. travel) for which CONSULTANT will Docusign Envelope ID: 00B63B9B-F785-417E-8BA7-5362DE7C06A4 Item 18
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be reimbursed are to purchase IMPLAN data for the residential nexus study, travel and meeting costs up to the not-to-exceed amount of: $8,500.

A. Travel outside the San Francisco Bay A rea, including transportation and meals , if specified as reimbursable, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses.

B. Long-distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges, if specified as reimbursable, will be reimbursed at actual cost.

All requests for reimbursement of expenses, if any are specified as reimbursable under this section, shall be accompanied by appropriate backup documentation and information.

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EXHIBIT C-1

SCHEDULE OF RATES

CITY and CONSULTANT may at any time mutually agree to add new position titles, rates, and adjust listed rates so long as the changes do not increase the not to exceed amount as noted in pursuant to Section 4 of the Agreement. CONSULTANT’s schedule of rates is as follows:

KEYSER MARSTON ASSOCIATES, INC.

HOURLY RATES

President $305
Senior Principal $295
Associate $185

NBS GOVERNMENT FINANCE GROUP

HOURLY RATES

Director $250
Impact Fee Specialist $150
Project Analyst $150

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EXHIBIT D

INSURANCE REQUIREMENTS

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

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

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

REQUIRED TYPE OF COVERAGE REQUIREMENT

MINIMUM LIMITS
EACH

OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY

STATUTORY

STATUTORY STATUTORY STATUTORY
YES

GENERAL LIABILITY, INCLUDING

PERSONAL INJURY, BROAD FORM

PROPERTY DAMAGE BLANKET

CONTRACTUAL, AND FIRE LEGAL

LIABILITY

BODILY INJURY

PROPERTY DAMAGE

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

$1,000,000

YES

AUTOMOBILE LIABILITY,

INCLUDING ALL OWNED, HIRED,

NON-OWNED

BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE

PROPERTY DAMAGE

BODILY INJURY AND PROPERTY

DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000

$1,000,000

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

$1,000,000

YES

PROFESSIONAL LIABILITY,

INCLUDING, ERRORS AND

OMISSIONS, MALPRACTICE (WHEN

APPLICABLE), AND NEGLIGENT

PERFORMANCE
ALL DAMAGES $1,000,000
YES

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

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

I. INSURANCE COVERAGE MUST INCLUDE:

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

THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: [email protected]

II.

III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS:

A. PRIMARY COVERAGE

WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,

INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR

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ADDITIONAL INSUREDS.

B. CROSS LIABILITY

THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER

THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE

INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE

INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.

C. NOTICE OF CANCELLATION

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

OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.

EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:

[email protected]
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: December 15, 2025
Report #:2510-5323
TITLE
Approval of a Professional Services Contract Number C26196324 with Santa Clara County Communications in an Amount Not to Exceed $100,000 for Public Safety Radio Maintenance and Support for a Period of Five (5) Years; CEQA Status - Not a Project

RECOMMENDATION
Staff recommend the City Council approve and authorize the City Manager or their designee to execute Contract No. C26196324 (Attachment A) with Santa Clara County Communications for the maintenance and support of multi-band portable and mobile radios and accessories for a term of five (5) years and a total amount not-to-exceed $100,000.

BACKGROUND
In 2010, the Palo Alto City Council approved an agreement to join and form the Silicon Valley Regional Interoperability Authority (SVRIA)—a Joint Powers Authority (JPA) established in collaboration with other Santa Clara County municipalities and agencies. The goal of the SVRIA is to enhance, coordinate, and govern regional public safety data and radio communications systems to improve interoperability among agencies.

In June 2015, the Council further approved a Memorandum of Understanding (MOU)1 for the City’s participation in a multi-year project with other SVRIA members to fund, construct, and deploy a new county-wide public safety radio communications network, formally known as the Silicon Valley Regional Communications System (SVRCS).
1 City Council, June 19, 2017; Agenda Item #7, SR#8157, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2015/id-5811.pdf
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ANALYSIS
The SVRCS is a trunked, digital communications system designed to meet nationally recognized specifications for unified public safety communications. It integrates multiple communication technologies, including:
Dual-band radio frequencies
Microwave transmission systems
A wired wide-area network (WAN)
This infrastructure connects Public Safety Answering Points (PSAPs), such as 9-1-1 dispatch centers, with key public safety facilities and radio sites throughout Santa Clara County. The system delivers secure, reliable voice and data communications for mission-critical operations involving police, fire, emergency medical, and other public service agencies.

As a fully integrated member of the SVRCS, the City of Palo Alto benefits from improved interoperability with regional and neighboring jurisdictions, enhancing public safety responses during routine operations and large-scale emergencies.

Radio Maintenance and Support Services: The City has an inventory of more than 750 two- way radios used by public safety and field personnel that operate under the SVRIA JPA and has contracted with Santa Clara County since 2020 to maintain and repair this equipment. Prior to 2020, maintenance, inspection, and operational support of this equipment were handled by a Communications Technician FTE. The agreement ensures timely service, replacement, and updates to critical radio communication assets. This contract was exempt from solicitation in accordance with Palo Alto Municipal Code 2.30.360(j), Cooperative purchases, with one or more other public agencies or through a cooperative purchasing agency, provided: (i) the services are solicited using methods substantially similar to those required by this chapter, as determined by the Procurement Officer; and (ii) the contract is consistent with the requirements specified in this municipal code. The city entered into a Memorandum of Understanding with all the Joint Powers Authority members in Silicon Valley Regional Interoperability Authority(SVRIA). An RFP process selected Motorola for the radio system and the County of Santa Clara to operate and maintain the system. Department recommends continuing work with Santa Clara County because of their experience, capacity, and skill maintaining equipment for other county agencies on the same system and the history the City has had with their service.

FISCAL/RESOURCE IMPACT
These services are funded through the Police Department’s Technical Services Division operating budget. Funding for the first year of this contract was budgeted as part of the Fiscal Year 2026 Adopted Budget. Funding for this contract in subsequent fiscal years is subject to annual appropriation of funds. Technical rates are the discretion of Santa Clara County and for subsequent fiscal years will be published annually in June and effective July 1.

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STAKEHOLDER ENGAGEMENT
This contract was reviewed and coordinated with internal departments including legal, procurement, and financial functions to ensure alignment with City policies and procedures.

ENVIRONMENTAL REVIEW
These services do not constitute a project for the purposes of the California Environmental Quality Act.

ATTACHMENTS
Attachment A : SCC and CPA Technical Services Agreement APPROVED BY: Andrew Binder, Police Chief
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Agreement between the County of Santa Clara and the
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AGREEMENT BETWEEN THE COUNTY OF SANTA CLARA AND

THE CITY OF PALO ALTO FOR COMMUNICATIONS TECHNICAL SERVICES (City of Palo Alto Agreement #C26196324)

BACKGROUND
This AGREEMENT (“Agreement”) is entered into by and between the County of Santa Clara (“COUNTY”) and the City of Palo Alto (“CITY”), collectively referred to herein as the “Parties” and individually as a “Party.”

RECITALS
The following recitals constitute a substantive portion of the Agreement.

WHEREAS, CITY wishes to contract with a provider of public safety communications services for the provision of technical services on its behalf that are critical to the protection of the lives and property of the residents and employees of CITY; and, WHEREAS, the COUNTY is qualified and prepared to provide effective, timely, and efficient technical communications services for CITY.

Article 1. Nature of Services

1.1 Scope of Services
The service obligations of the Parties are described in Exhibit A “Communications Technical Services Scope of Work,” which is attached and incorporated herein by this reference.

Article 2. Compensation

2.1 Amount of Payment
CITY shall compensate the COUNTY for the services provided under this Agreement in accordance with the cost methodology set forth in Exhibit B “Communications Technical Services Compensation,” which is attached and incorporated into this Agreement.

2.2 Payment Terms
CITY shall pay the COUNTY within thirty (30) calendar days of receipt of billing for communications services.

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Article 3. Term and Termination

3.1 Term of Agreement
(a) This Agreement is effective from January 15, 2026, through January 14, 2031, unless terminated earlier in accordance with Section 3.2.

3.2 Termination
(a) Termination for Cause
Either Party may terminate this Agreement for cause upon written notice to the other in accordance with Section 6.1 of this Agreement. For purposes of this Agreement, cause includes, but is not limited to, an uncured material breach of this Agreement or a violation of any applicable laws. Such notice will specify the reason for termination and will indicate the effective date of the termination. (b) Opportunity to Cure
(1) The non-breaching Party will give written notice of a material breach to the breaching Party, specifying the breach.
(2) The breaching Party will not be deemed in default of this Agreement and the nonbreaching Party will not institute proceedings or exercise any remedies against the breaching Party unless the breach has not been cured, corrected, or remedied within:
(A) 15 business days after notice of the breach is provided; or (B) upon mutual agreement of the Parties, within a longer period as may be reasonably required to cure, correct, or remedy the breach, provided the breaching Party has commenced to cure, correct, or remedy the breach within 15 business days after notice is provided and diligently and continuously pursues such cure, correction, or remedy.
(c) Termination for Convenience
Either Party may terminate this Agreement without cause by giving the other Party sixty (60) calendar days written notice.
(d) Compensation in the Event of Termination
In the event of termination, the COUNTY shall be entitled to compensation due for services performed prior to the effective date of the termination as provided herein.

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Article 4. Liabilities and Indemnification

4.1 Mutual Indemnification
In lieu of and notwithstanding the pro rata risk allocation that might otherwise be imposed between the Parties pursuant to Government Code Section 895.6, the Parties agree that all losses or liabilities incurred by a Party shall not be shared pro rata, but instead the COUNTY and CITY agree that pursuant to Government Code Section 895.4, each of the Parties hereto shall fully indemnify, defend with counsel acceptable to the non-indemnifying Party, whose approval shall not be unreasonably withheld, and hold each of the other Parties, their officers, board members, employees and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined by Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying Party, its officers, board members, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such Party under this Agreement. No Party, nor any officer, board member, employee or agent thereof shall be responsible for any damage or liability occurring wholly by reason of the negligent acts or omissions or willful misconduct of the other Party hereto, its officers, board members, employees, or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such other Party under this Agreement.

Article 5. Dispute Resolution
In the event of any dispute between the Parties arising from or relating to this Agreement, the Parties will attempt to resolve the dispute initially by informal means. Upon the request of either Party, the contract administrators of each Party will meet to discuss the dispute, will exchange any information that they mutually agree is relevant to the issues in dispute and will use all reasonable efforts to resolve the dispute without the need for further proceedings.

Article 6. Miscellaneous

6.1 Notice
All notices required by this Agreement will be deemed given when in writing and delivered personally, electronically via email, or deposited in the United States mail, postage prepaid, return receipt requested, addressed to the other Party at the address set forth below or at such other address as the Party may designate in writing:

To CITY:

Attn: Chief of Police
Palo Alto Police Department
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275 Forest Ave.

Palo Alto, CA 94301
To the COUNTY:

Attn: Communications Director
County of Santa Clara
Communications Department
2700 Carol Drive
San Jose, CA 95125

6.2 Compliance and Nondiscrimination
The Parties will comply with all applicable Federal, State, and local laws and regulations.

Such laws include but are not limited to the following: Title VII of the Civil Rights Act of 1964 as amended, the Americans with Disabilities Act of 1990, the Rehabilitation Act of 1973 (Sections 503 and 504), the California Fair Employment and Housing Act (Government Code sections 12900 et seq.), and California Labor Code sections 1101 and 1102. The Parties will not discriminate against any subcontractor, employee, or applicant for employment because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status in the recruitment, selection for training including apprenticeship, hiring, employment, utilization, promotion, layoff, rates of pay or other forms of compensation. Nor will the Parties discriminate in the provision of services provided under this Agreement because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status.

6.3 Relationship of Parties; Independent Contractor
COUNTY will perform all work and services described in this Agreement as an independent contractor and not as an officer, agent, servant, or employee of the CITY.

None of the provisions of this Agreement is intended to create, nor shall be deemed or construed to create any relationship between the Parties other than that of independent Parties contracting with each other for purpose of effecting the provisions of this Agreement. The Parties are not and will not be construed to be in a relationship of a joint venture, partnership, or employer-employee. Neither Party has the authority to make any statements, representations, or commitments of any kind on behalf of the other Party or to use the name of the other Party in any publications or advertisements, except with the written consent of the other Party or as is explicitly provided in this Agreement.

6.4 Governing Law
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This Agreement has been executed and delivered in, and will be construed and enforced in accordance with, the laws of the State of California. The proper venue for legal action regarding this Agreement shall be in Santa Clara County.

6.5 Assignment
The Parties may not assign this Agreement or the rights and obligations hereunder without the specific written consent of the other.

6.6 Entire Agreement
This document represents the entire Agreement between the Parties with respect to the subject matter hereof. All prior negotiations and written and/or oral agreements between the Parties with respect to the subject matter of this Agreement are merged into this Agreement.

6.7 Amendments
This Agreement may only be amended by an instrument signed by the Parties.

6.8 Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

6.9 Severability
If any provision of this Agreement is found by a court of competent jurisdiction to be void, invalid or unenforceable, the same will either be reformed to comply with applicable law or stricken if not so conformable, so as not to affect the validity or enforceability of this Agreement.

6.10 Waiver
No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted by a Party must be in writing and shall apply to the specific instance expressly stated.

6.11 Survival
All provisions of this Agreement allocating liability between CITY and the COUNTY, payment obligations, and the duty to defend, indemnify and hold harmless shall survive the termination of this Agreement.

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6.12 Integration and Order of Precedence
This Agreement, including all Exhibits, represents the entire and integrated contract between CITY and the COUNTY and supersedes all prior negotiations, representations, or agreements, either written or oral. In the event of a conflict between the provisions of the main body of the Agreement and its Exhibits, the provisions of the main body shall control. In the event of a conflict between Exhibits A and B, the provisions of Exhibit A shall control.

6.13 Time of the Essence
The Parties acknowledge that time is of the essence for this Agreement. Either Party’s failure to complete any of the obligations outlined herein during the term of the Agreement shall be deemed a breach of the Agreement.

6.14 Contract Execution
Unless otherwise prohibited by law or COUNTY policy, the Parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term “electronic copy of a signed contract” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the COUNTY.
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IN WITNESS WHEREOF, the COUNTY and CITY have caused this Agreement to be executed by their duly authorized representatives effective January 15, 2026.

SIGNATURES:

COUNTY OF SANTA CLARA: CITY OF PALO ALTO:
__________________________ ________ __________________________ ________ MATTHEW HADA Date ED SHIKADA Date Director of Procurement City Manager

APPROVED AS TO FORM AND LEGALITY: APPROVED AS TO FORM:
__________________________ __________________________ STEPHANIE M. JACKSON TIM SHIMIZU
Deputy County Counsel Assistant City Attorney
Exhibits to this Agreement:

Exhibit A - Communications Technical Services Scope of Work Exhibit B - Communications Technical Services Compensation Item 19
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Exhibit A of Agreement between County of Santa Clara and the City of Palo Alto for Communications Technical Services Page 1 of 1

EXHIBIT A

COMMUNICATIONS TECHNICAL SERVICES SCOPE OF WORK
The City of Palo Alto (“CITY”) two-way radio communications system (hereinafter “Radio System”) is currently comprised of 798 mobile and portable radios plus seven console positions located in Palo Alto and one console position located at Stanford University. The County of Santa Clara Communications Department (COUNTY) will not provide services for the eight total console positions. These eight console positions are currently maintained by Motorola Solutions, Inc. and are not included in this agreement. For the avoidance of doubt, this agreement applies only to the technical services service for the 798 mobile and portable radios.

The CITY has requested the COUNTY to provide professional engineering and technical support services as required to assist in the design, licensing, procurement, implementation, maintenance, repair, and future upgrades to the Radio System, based on the Communications Department’s proven performance, experience, specially trained and competent workforce that will perform the special services as required by this Agreement.

Under this Agreement, the COUNTY shall provide the CITY the following services upon CITY’s request:

1. Design and Procurement:

The COUNTY will assist the CITY with future Radio System design, upgrades, and procurement of equipment and services compatible with other similar radio systems currently maintained and operated by the COUNTY.

Quotations for design, engineering, initial implementation, and future upgrade services will be presented to the CITY in writing for approval prior to initiation of work. Cost estimates for COUNTY services, including any sub-contractor work if required, will be included in each quotation for the CITY’s approval prior to initiation of work.

The CITY is responsible for the cost of and contracting for system procurement.

2. FCC Licensing:

The COUNTY will assist the CITY with FCC licensing requirements.

3. Installation, Programming, and Optimization:

The COUNTY will provide the CITY installation, programming, and system optimization services necessary to implement upgrades and/or enhancements to the CITY’s existing Radio System. The CITY will be responsible for any permitting and associated professional engineering costs at the approved time and material (T&M) rate. The County will not provide services for mobile radio installation.

4. Maintenance, Repair, Enhancements, and Modifications to Radio System:

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Exhibit A of Agreement between County of Santa Clara and the City of Palo Alto for Communications Technical Services Page 2 of 1 The COUNTY will provide maintenance, repairs, modifications, and enhancements to the CITY owned Radio System infrastructure equipment charged at T&M cost recovery basis as defined in Exhibit B. Radio System modifications and enhancements will be provided by the COUNTY upon written request and quotation approval from the CITY.

5. Technical Support Services:

The COUNTY will provide the CITY full-time (24 hours a day, 7 days a week) technical support services for emergency repairs charged on a time and material cost recovery basis as defined in Exhibit B.

The CITY may also request repairs or service during the COUNTY’s normal business hours of 7:00 am to 3:30 pm by calling the COUNTY Technical Services Division at (408) 977- 3222. Repair or service requests made after normal business hours, on weekends and on holidays shall be submitted to the COUNTY Watch Commander in Dispatch Operations by calling (408) 294-4424. Depending on the nature and location of the requested repair or service, COUNTY technical support staff shall acknowledge receipt of the service request within 30 minutes, and an initial field response will occur within 60 minutes of notification.

Actual arrival times on scene will vary based on the location and required travel time.

Current COUNTY performance standards require that public safety radio systems operate 99% of the time without major system problems and 95% of the time without minor systems problems. This standard shall be applied to the CITY’s Radio System.

6. Annual Subscriber Maintenance:

The COUNTY will perform performance maintenance (PM) of the CITY’s 798 mobile and portable radios on an annual (approximate 12-month interval) basis. The County will perform radio version upgrades, code plug development, and programming of subscribers upon request of the CITY. Fees for PM Service, programming, code plug development, version upgrades, and alignment will be charged on a time and material cost recovery basis as defined in Exhibit B and shall include a maximum not-to-exceed cost recovery cap of 576 hours annually. Any identified repair work will be additional and billed separately.

7. Subscribers:

The COUNTY will provide programming, optimization, code plug development, version upgrades, and repairs of the CITY’s 262 mobile radios and 536 portable radios. These services will be performed during normal operating hours and not-to-exceed 576 hours annually to ensure the radios are operating within FCC and manufacturer specifications.

8. Inspection of Work:

The COUNTY shall provide opportunities for the CITY, or the CITY’s designee, to inspect work performed to ensure quality assurance, and quality control, are maintained to the CITY’s standards and to the COUNTY performance standards set out in this Agreement.

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Exhibit B of Agreement between County of Santa Clara and The City of Palo Alto for Communications Technical Services Page 1 of 1

EXHIBIT B

COMMUNICATIONS TECHNICAL SERVICES COMPENSATION
The City of Palo Alto (“CITY”) shall compensate the County of Santa Clara Communications Department (“COUNTY”) for goods and services provided in accordance with the payment terms, conditions, and rates set forth in this Exhibit B. Any work shall be performed upon request and approval by the CITY.

County Communications Technical services are billed on a T&M basis as follows:

1. Quotations and Approval:

The COUNTY shall prepare quotations and shall only perform major system installation work and any future system enhancements following the CITY’s written approval.

Quotations will be based on a not-to-exceed estimated amount, with final charges being billed at actual costs. Any increase to the original not-to-exceed estimated amount caused by unforeseen issues must be agreed to in writing by both Parties.

2. Subscriber Maintenance:

Fees for PM Service will be charged on a T &M cost recovery basis with a maximum not-to- exceed cost recovery cap of 576 hours annually. Any repair work identified during the PM will be additional and billed separately. The CITY will pay the COUNTY for the field services and maintenance of subscriber radios that are connected to the Silicon Valley Regional Communications System (SVRCS). The fees for service maintenance of 262 mobile radios and 536 portable radios will be billed at time and materials using technical service hourly rates. Fleet mapping of radio operations will not exceed 16 hours at T&M rates.

3. Engineering and Technical Support:

The COUNTY shall provide the CITY engineering and technician support as required to maintain and repair CITY owned equipment as identified through this Agreement based on fiscal year published rates.

All non-regular business hour work will be billed at overtime (1.5 x regular hours) rates with a 4- hour minimum charge of $1,068.00 ($267.00 hourly x 4) for Technician support, if not contiguous with normal business hours. If contiguous with normal business hours (i.e., work begins less than four hours prior to normal business hours or work is initiated before the close of normal business hours), then the 4-hour minimum charge does not apply, and only actual hours worked (regular/overtime) will be billed to the CITY based on when the work is performed.

4. Communications Technical Services Rates:

The rates for engineering and technical support are updated each fiscal year. Effective July 1, 2025, rates for Communications Technical Services for the Fiscal Year 2025-26 are set as follows:

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Attachment A - SCC and CPA
Technical Services
Agreement

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Exhibit B of Agreement between County of Santa Clara and The City of Palo Alto for Communications Technical Services Page 2 of 1 Regular Rate After-hours Rate
oTechnician $178.00/hr. $267.00/hr.
oEngineering Services $215.00/hr. $322.50/hr.
* Technical rates for subsequent fiscal years will be published annually in June and effective July 1.

5. Billing for Services
The CITY will be billed by the COUNTY on a monthly basis for work performed.

The CITY:
c/o Police Department Finance Administrator Eric Jensen Palo Alto Police Department
275 Forest Ave.

Palo Alto, CA 94301
Email: [email protected]
Unless otherwise agreed to by both Parties, all payments will be made to the COUNTY within 30 calendar days of the date invoiced to:

The COUNTY:

Attn: Accounts Payable
County of Santa Clara
Communications Department
2700 Carol Drive
San Jose, CA 95125
Monthly billing will include the total amount billed for the month and documentation will provide all invoices for work requested and performed during the billing period, including at minimum an itemized description of services provided by the COUNTY (e.g., breakdown of all services rendered, hours worked and travel time by service location, labor type, and a breakdown of all goods provided/billed by the County).

The COUNTY shall maintain documentation of all services requested by the CITY and work performed by the COUNTY under this Agreement as detailed in “Exhibit A”. Documentation will include, but not be limited to, Radio System related engineering designs, quotations, FCC licensing, installation, preventative maintenance, and repair services.

The CITY has the right to inspect COUNTY documentation upon request. Billing questions may be directed to Accounts Payable at [email protected].

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Attachment A - SCC and CPA
Technical Services
Agreement

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Transportation
Meeting Date: December 15, 2025
Report #:2503-4330
TITLE
Approval of Professional Services Contract No. C26190778A with Turbo Data LLC, in an Amount Not to Exceed $989,138 to Provide Development, Implementation, Support and Maintenance of a Comprehensive Parking Permit and Citation Management System for five years; CEQA status - not a project.

RECOMMENDATION
Staff recommends that City Council approve and authorize the City Manager or their designee to execute a five-year contract, C25190778A (Attachment A) with Turbo Data LLC in the amount not to exceed $989,139 to provide development, implementation, support, and maintenance of a comprehensive Parking Permit and Citation Management System (CPMS) and related services in support of the City’s parking programs.

EXECUTIVE SUMMARY
In October 2023, City staff engaged the services of Dixon Resources Unlimited (Dixon) to assist in developing a comprehensive Request for Proposals (RFP) for a new Parking Citation and Permit Management System (CPMS). The scope of the RFP included system development, implementation, support, and ongoing maintenance. The timing of the RFP was intended to coincide with the conclusion of the five-year term of Professional Services Contract No.

C19171363 with Professional Account Management, LLC (dba Duncan Solutions), which currently provides CPMS services through no later than June 30, 2026.

The City’s current CPMS lacks several desirable features, including enhanced online processing capabilities for permits and robust reporting functionality for revenue reconciliation. To address these limitations and ensure access to modern, industry-leading technology and solutions, the City pursued a competitive procurement process for CPMS services.

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An RFP was released on September 6, 2024, and remained open for 28 days.1 The City received four proposals from: Turbo Data Systems, IPS Group, Duncan Solutions, and Enforce App.

Submissions from Turbo Data Systems, IPS Group, and Duncan Solutions were deemed to be responsive. The proposal from Enforce App was disqualified as multiple required documents were not submitted by the due date. An evaluation committee comprising representatives from the Office of Transportation, Police Department, Administrative Services Department, and the City Clerk’s Office reviewed the responsive proposals and vendor demonstrations were conducted with each proposer on November 13 and December 12, 2024.

Following the demonstrations, the City requested Best and Final Offers (BAFOs) from the three responsive firms. Based on a comprehensive review of written proposals, demonstration performance, system capabilities, and BAFO pricing, the evaluation committee recommended initiating contract negotiations with Turbo Data Systems.

BACKGROUND
Parking Permit Programs
The City of Palo Alto has instituted an approach to manage parking that exempts select motorists from short-term parking restrictions in qualified residential neighborhoods and the commercial cores (on- and off-street parking). There are 7,700 households within the five (5) Residential Preferential Parking (RPP) districts that are eligible to obtain parking permits. The businesses and/or employees that are located within some of the RPP districts and the Downtown and California commercial areas are eligible to obtain a limited number of permits.

In FY 2024, the City issued approximately 12,300 parking permits across these seven (7) parking programs with programmatic variations between districts, such as the number of vehicles per permit, fees, duration, renewal dates, eligibility, and limits. The 12,300 parking permits included:
4,700 RPP Annual Resident Parking Permits
2,000 RPP Annual Employee Parking Permits
5,600 Annual Garage and Lot Permits
Additionally, approximately 32,000 daily off-street parking permits were sold in FY 2024 through in-person sales at Palo Alto City Hall and at permit vending machines located in City garages and lots. Revenues for the 7 parking programs, including annual permits and off-street dailies, City employee permits, EV charging, and returns on investments, totaled $2,171,342 in FY 2024.

In support of these programs, the City’s current contractor, Duncan Solutions, receives approximately 1,200 customer service calls annually related to permit processing. 1 https://procurement.opengov.com/portal/palo-alto-ca/projects/114823 Item 20
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Parking Enforcement & Citation Management
The City of Palo Alto operates two distinct parking enforcement processes, one involving citations issued by contracted enforcement officers in five Residential Preferential Parking Program (RPPP) zones, which is managed by the Office of Transportation, and one with citations issued by Community Service Officers (CSOs) from the Police Department in all other parking areas (including the University Avenue and California Avenue parking districts, with garages and lots, and the two remaining RPPP areas). The purpose of these efforts is to encourage orderly parking conditions and generate parking turnover and/or on-street parking availability for premier users (such as residents in residential neighborhoods and shoppers in retail areas). Nevertheless, over the past five years, the City has issued an average of approximately 16,400 parking citations annually, generating an average of $875,000 in annual revenue.

The City of Palo Alto’s Office of Transportation staff engaged the services of a consultant, Dixon Resources Unlimited, in 2024 to facilitate the development of a comprehensive Request for Proposals (RFP) for a Parking Permit and Citation Management System, building off similar work done in previous years. This process began with City staff from Administrative Services, Police, and the Office of Transportation conferring on the requirements of the subsequent RFP.

The development, implementation, support, and maintenance of a Parking Permit and Citation Management System is intended to enhance the customer experience for online permit and citation activity, streamline processes for parking programs and provide City staff with enhanced technology.

ANALYSIS
The current CPMS implemented and supported by Duncan Solutions, was introduced to replace pre-pandemic legacy systems and manual processes. While the existing system represents a significant improvement over past operations, further enhancements are needed to better support the administrability of parking programs, community interface, and City staff. The next generation CPMS will focus on improving customer service, optimizing functionality for financial and operational reporting, and increasing system efficiency.

Solicitation Process
The City received four bids, of which three bids were deemed responsive. Written proposals were supplemented with a vendor demonstration where proposers outlined their team and subcontractor experience, particularly in California. They also demonstrated their Permit and Citation Management Systems, including software and hardware capabilities, adjudication capabilities, as well as their Customer Portals and customer service support processes.

Based on this process, City staff recommend an award of contract to Turbo Data Systems, Inc., for a term of five- years.

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Table 1: Summary of Request for Proposal
Proposal Description Parking Citation and Permit Management System - RFP190778A
Proposed Length of Project 5 Years
Number of Vendors Notified 3244
Number of Proposal Packages Downloaded 31
Total Days to Respond to Proposal 28
Pre-Proposal Meeting N/A
Pre-Proposal Meeting Date N/A
Number of Proposals Received 4
Proposal Price Range $337,048 - $394,000
Public Link to Solicitation https://procurement.opengov.com/portal/palo- alto-ca/projects/114823
Turbo Data will build a custom parking permit and citation processing platform and provide support and maintenance of the system for a period of five years. The proposed platform will continue to transition City programs from manual processes to a cloud-based program. The proposed management system is expected to provide for enhanced user security, complete and immediate information for the City, and collect data for auditing and reporting purposes.

The proposed transition to Turbo Data Systems will introduce updated handheld technology for enforcement and improved integration with parking management systems. These upgrades are expected to streamline the citation issuance process, enhance administrative review workflows, and provide a more user-friendly experience for both staff and the public.

Key System Requirements
Key requirements for CPMS services requested in the RFP include:
Provision, maintenance, and support of hardware and software for citation and permit issuance and management;
A centralized online portal for citation payments, permit applications, and related processes;
Support for both physical and virtual permits;
Automated renewal notifications sent via mail and email; Full-service processing capabilities, including:
oOnline and mail-in payments,
oPermit fulfillment, and
oAdjudication request processing;
Permit management capabilities for all City permit programs; Access to in-state and out-of-state registered vehicle owner information; Item 20
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Delinquent citation collections, including:
oNoticing,
oDMV hold processing, and
oFranchise Tax Board (FTB) referrals;
Secondary collections;
Customer service support through a staffed call center; Interactive Voice Response (IVR) system;
Technical assistance for website users via phone and email; Enhanced reporting and noticing capabilities;
Real-time ad-hoc reporting tools; and
Ongoing staff training and technical support.

Staff remain committed to maintaining in-person customer service at the Palo Alto Civic Center for all parking permit programs. Additionally, City staff are evaluating opportunities to introduce new permit types and to transition select existing permit types from physical to virtual formats. These changes are intended to enhance program flexibility and improve convenience for permit applicants. Staff will also reassess in house resources and services are appropriately balanced with these additional customer service functions.

System Pricing
The RFP included a standardized Cost Proposal Workbook that all vendors were required to complete and submit as part of their proposals. The workbook was structured to facilitate a consistent, side-by-side comparison of pricing for core system features and services. It captured key cost elements such as per-citation and per-permit processing fees, monthly service and support costs, and upfront equipment expenditures.

Processing fees are invoiced monthly based on the actual number of citations or permits processed. As volumes fluctuate month-to-month, the workbook included average annual processing figures derived from FY 2024 totals to ensure a fair and uniform cost comparison across proposals.

Pricing submitted by the three responsive firms is summarized below, reflecting both first-year costs, which include one-time setup, configuration, and equipment expenses, and total estimated costs over a five-year period. All amounts have been rounded to the nearest whole dollar.

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Table 2: Annual Contract Cost Bid by Vendor
Turbo Data Systems IPS Group Duncan Solutions
Year 1 5-Year Year 1 5-Year Year 1 5-Year
Citation Management
System
$105,950 $529,750 $147,150 $735,750 $126,919 $638,024
Enforcement Equipment
(hardware and software)
$40,790 $104,950 $48,890 $95,050 $76,410 $256,410
Permit Management
System
$48,600 $243,000 $71,350 $356,750 $18,081 $90,405
Customer Service Center $988 $4,938 $29,775 $148,875 $27,375 $136,875 Processing Services
(citations / permits)
$21,300 $106,500 $58,500 $292,500 $69,015 $213,390
Total $217,628 $989,138 $355,665 $1,628,925 $317,800 $1,335,104 Turbo Data Systems submitted the lowest overall cost proposal among the three responsive bidders. However, it is important to note that the cost estimates summarized in the table above do not include customer-facing convenience fees associated with online citation and permit payments. These transaction-based fees, which are paid directly by users at the time of payment, are detailed in the table below:

Table 3: Customer Facing Convenience Fees by Vendor
Turbo Data Systems IPS Group Duncan Solutions
Per Citation Convenience Fee $3.95 $1.00 $1.50
Per Permit Convenience Fee $2.00 $1.00 $1.50
While Turbo Data Systems proposed the lowest overall system costs, its customer-facing convenience fees for online citation and permit payments are higher than those proposed by IPS Group and Duncan Solutions. City staff are committed to maintaining existing mail-in and in- person payment options for both permit programs and parking citations. This ensures that users continue to have flexible payment options and can choose the method that best meets their needs, whether paying online, by mail, or in person. It is also important to note that parking demand and revenues for both citations and permits, though, have been substantially lower over the past five years than pre-pandemic times.

Timeline
Pending City Council approval, Turbo Data Systems is expected to begin work immediately, beginning with Citations management by January 2026 and then with all new permit sales and Item 20
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existing permits management by June 30, 2026. Staff from the Office of Transportation, City Manager’s Office, Police Department, and Administrative Services Department will collaborate closely with Turbo Data Systems and the current vendor, Duncan Solutions, to transition permit and citation processing services no later than an estimated 90- to 180-day period following contract execution.

To support a smooth transition, City staff have already provided high-level program information to Turbo Data Systems to inform early planning efforts. Initial transition priorities include expanding options for online permit sales and management, with the goal of deploying these features ahead of full system implementation, currently targeted for June 2026. A phased implementation approach will allow for system configuration, testing, and refinement prior to major permit renewal periods.

Turbo Data Systems will be required to submit a detailed project plan following contract execution, outlining key milestones and a final implementation timeline, subject to City review and approval. During the transition period, Turbo Data Systems will provide system training and ongoing support to City staff.

In parallel, City staff will work with the vendor to prepare outreach and educational materials for the community. Staff are committed to ensuring uninterrupted services and delivering a positive customer experience throughout the transition process.

FISCAL/RESOURCE IMPACT
Parking Program Funds
These efforts are funded by designated parking program funds that distribute and receive program revenues (permit fees and citation payments) and costs (program administration, etc.) across three separate fund accounts. The estimated share of the costs of the new contract across the three parking funds is based on permit and citation sales volumes in each district and reflected in Table 4. Revenues in the three parking funds do not currently cover all expenses, and these funds have been supplemented by the General Fund as reoccurring loans since FY 2021, FY 2026 assumes approximately a $2 million General Fund subsidy. See the summary of all program expenses from a late 2024 Staff Report to Finance Committee3.

In the first year of the new contract, savings from the current vendor Duncan’s contract will cover the first year of new contract expenses, as the various programs generally operate with annual renewal programs with separate start and end dates, and Turbodata will take over each program on a schedule to be worked out with City department staff and the previous vendor, Duncan Solutions. Savings from the Duncan contract will be realized in the Parking 3 October 15, 2024 Staff Report #:2409-3537:
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Management and System Implementation capital project (PL-16002). Funding for this project was originally transferred from the three parking funds to the Capital Improvement Fund, so the respective savings will be transferred back to parking funds to cover the first year of contract costs. This is estimated to happen as part of the FY 2026 Mid-Year Budget Review, once the final work by Duncan has been completed. The table below estimates the share of the contract expenses spread across the various program funds involved.

Table 4: Turbo Data Contract Funding Share
Period
Annual
Contract
Expense
Est Annual
University Ave Fund
contribution (55%)
Est Annual
California Ave Fund
contribution (7%)
Est Annual Residential
Permit Parking Fund
contribution (38%)
Year 1 $218,000 $120,000 $15,000 $83,000
Years 2-5 $193,000 $106,000 $14,000 $73,000
The estimated cost for the services over a five-year term is an amount not to exceed $989,138 and is based on the number of permits and citations processed. This cost is likely to be offset by revenues generated from both citations and permit payments. Funding for future years of the contract will be subject to Council appropriation as part of the annual budget process, including any additional subsidized funding from the General Fund. Note also that parking demand following 2020 decreases due to work from home trends continues to recover, but is not back to previous levels.

ENVIRONMENTAL REVIEW
Approval of the attached agreement described in this staff report does not meet the definition of a project under the California Environmental Quality Act (CEQA), pursuant to the California Public Resources Code Section 21065, because it is not an activity that will cause a direct physical change in the environment.

Palo Alto City CouncilDecember 15, 2025

Palo Alto City Council
December 15, 2025