City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: December 15, 2025
Report #:2511-5412
TITLE
Approval of Partnership Agreement with Metropolitan Transportation Commission, in an Amount Not to Exceed $108,888 to Provide Unlimited Transit Access Available Through the Clipper BayPass Pilot Program for City of Palo Alto Employees Through December 31, 2026; CEQA Status - Not a Project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute the Partnership Agreement (Attachment B) with Metropolitan Transportation Commission to provide unlimited transit access available through the Clipper BayPass Pilot Program for eligible City of Palo Alto employees through December 31, 2026 and total not-to- exceed $108,888.
BACKGROUND
The City supports sustainable transportation efforts to meet Palo Alto’s environmental goals and reduce traffic. For decades, the City has provided commuter benefits for its employees who voluntarily use commute alternatives to and from work. As part of its employee benefits package, the City of Palo Alto offers a range of commuter benefits to support a variety of sustainable transportation options. These benefits include carpooling ($30/month), biking ($20/month), and a 25% discount on monthly vanpool, parking, and transit costs. In the past, the City also offered the Caltrain GO Pass. This benefit allowed employees to ride CalTrain unlimited times and in all zones at no cost. However, the GO Pass benefit was limited to City employees located in downtown Palo Alto at City Hall, the Development Center, and the Downtown Library. In order to expand and enhance commuter benefits for City employees working in facilities outside of Downtown Palo Alto, effective May 1, 2025, the City entered into
a partnership agreement with Metropolitan Transportation Commission (MTC) to provide a pilot Clipper BayPass program to all City benefited employees1.
The Clipper BayPass provides participants with unlimited travel on Bay Area transit services.
Attachment A provides list of all eligible Bay Area transit services under this program. Palo Alto and Menlo Park are the only two Bay Area cities participating in this pilot program.
ANALYSIS
In an effort to support the City’s commitment to environmental sustainability and emission reduction, and in addition expand and enhance the accessibility of commuter benefits, City staff engaged with representatives from the Metropolitan Transportation Commission (MTC) and launched the pilot Clipper BayPass program on May 1, 2025. The Clipper BayPass provides eligible participants with unlimited travel on Bay Area transit services, including bus, rail, and ferry routes such as Caltrain, BART, VTA, MUNI, Dumbarton Express, and other transit operators.
Since the launch of Clipper BayPass seven months ago, the program has received positive reception. Approximately 50% of eligible participants have signed up for the Clipper BayPass benefit and approximately 32% of the eligible participants have used at least one of the transit services provided under the program to travel in calendar year 2025. An enhanced benefit of Clipper Baypass is the ability for participants to use multiple Bay Area transit services, which was not available under the GO Pass benefit as it limited travel to CalTrain only. Participants continue to use CalTrain, however they are also using BART, SF Muni and VTA. The availability of various transit options has provided employees who do not reside along the Caltrain corridor an opportunity to consider using public transportation for their commute. This more expansive offering creates more equity within our commute incentives program by expanding to the East Bay and by including bus systems which help shrink the “last mile gap.” Following a review of the Clipper BayPass program and its usage for a portion (7 months) of calendar year 2025, staff recommends that the City continue participating in the pilot Clipper BayPass program. The Clipper BayPass program has helped enhance the accessibility and equity of our commuter benefit and provides usage reports such as active participants, types of transits used for travel, and also the number of trips taken by participants. Employees outside of the downtown locations now have an option to use transit services to commute to work.
Additionally, participants are also utilizing a key benefit of this program, the ability to ride various transit services to commute.
1 City Council, April 7, 2025; Agenda Item # 5; SR #2503-4369, https://portal.laserfiche.com/Portal/DocView.aspx?id=160387&repo=r-704298fc&searchid=904d0535-bc5b-4a7b- 95ac-4a52acad5f55
FISCAL/RESOURCE IMPACT
The contract period will be from January 1 through December 31, 2026 and will cost $108,888.
Effective March 1, 2026, participants enrolled in the BayPass Program will be required to pay a pretax fee of $5 per month. Ongoing costs are estimated to be $110,000 annually, which will be partially offset with the new participant fee. Funding for this contract is available in the FY 2026 Adopted Operating Budget of the General Benefits Fund. The General Benefits Fund is an internal service pass-through fund that allocates the costs of benefits for current City employees out citywide to all departments. The General Fund represents approximately 52% of General Benefit Fund cost allocation. Funding for future fiscal years will be subject to Council appropriation as part of the annual budget process. Staff will analyze usage data to assess the continuation of the program prior to the conclusion of the December 2026 term.
STAKEHOLDER ENGAGEMENT
Human Resources will implement a communication plan to continue promoting this commuter benefit to city employees, and information is readily available on the City intranet site.
Additional outreach will be conducted as needed to ensure the Clipper BayPass program grows.
All participants will be informed of any cost sharing prior to implementation.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because approval of this contract to provide a public transportation benefit is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).
ATTACHMENTS
Attachment A: List of Transit Operators Included with Clipper BayPass Attachment B: Partnership Agreement Between MTC and City of Palo Alto APPROVED BY:
Sandra Blanch, Human Resources Director