City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: December 15, 2025
Report #:2508-5130
TITLE
Approval of Professional Services Agreement No. C26193655 with Canopy to Support the City of Palo Alto's Urban Forestry Programs for a Term of Three Years and a Not-To-Exceed Amount of $1,236,366, and Approval of a Budget Amendment in the General 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 Professional Services Agreement No. C26193655 with Canopy to support Palo Alto's Urban Forestry programs and assist with the implementation of the Urban Forest Master Plan for a term of three years and a not-to-exceed amount of $1,236,366; and
2. Amend the Fiscal Year 2026 Budget Appropriation for the General Fund (requires a 2/3 vote) by:
a. Increasing the Public Works Department Public Services Division Operating Expenditure Budget by $150,000; and
b. Increasing the Public Works Department Public Services Division Operating Revenue Budget by $150,000 (use of funds in the Tree Preservation Non- Refundable Deposits Account).
EXECUTIVE SUMMARY
Palo Alto’s Urban Forest is an essential economic, community, environmental, and ecological asset for the City. Since the early 2000s, the City has contracted with the non-profit organization Canopy to assist in the protection, creation, restoration, and enhancement of this forest. The recent City Council-approved contract with Canopy expired on June 30, 2025.
On April 2, 2025, a Request for Proposals for Urban and Community Forestry Services (RFP193655)1 was released. One responsive proposal was received from Canopy before the RFP deadline. Canopy’s proposal was reviewed, accepted, and a draft contract was created and has been partially executed.
BACKGROUND
Canopy was created in 1996 to support Palo Alto’s Urban Forestry Section and engage residents through its tree and tree care education activities. Since becoming an independent 501(c)(3) non-profit corporation in 2002, Canopy has greatly expanded its programs of tree planning and planting, stewardship, hands-on learning, and environmental education. Since the early 2000s, the City has contracted with Canopy, with a primary focus on assisting the City with projects and outreach to support and expand a healthy and sustainable urban forest.
In 2020, City Council approved a one-year, sole source contract2 with Canopy to support Palo Alto’s urban forestry programs by serving as a comprehensive information source on trees, educating and motivating Palo Alto residents to plant, care for, and celebrate trees, and assisting the City with special projects associated with the Urban Forest Master Plan (UFMP).
In 2021, the contract’s term expiration was extended via Amendment No. 13 to June 7, 2022. In 2022, City Council approved Amendment No. 24, extending the contract term to June 30, 2024, as well as adding additional projects to the scope of services.
At the end of the Amendment No. 2 term, staff had anticipated conducting a solicitation to obtain proposals for the next contract for these services as recommended by the best practices included in the 2022 Baker Tilly Non-Profit Audit.5
However, new data became available in early 2024 that required further analysis and possible updates to the long-term planning for the City’s Urban Forestry program. Specifically, the City obtained updated urban tree canopy coverage numbers for 2020 and 2022 and learned of the presence of Invasive Shothole Borers (ISHB) in the City of San Jose. A review of the tree canopy 1 RFP#193655 for Urban and Community Forestry Services, https://www.paloalto.gov/files/assets/public/v/1/public-works/public- services/contracts/urban_and_community_forestry_services-2025-11-13-22-56-29.pdf 2 City Council, December 7, 2020; Agenda Item #5; SR#10882, https://portal.laserfiche.com/Portal/DocView.aspx?id=49786&page=3&repo=r-704298fc&searchid=ec11fb42- 95af-49ab-883d-d2da53d586bc
3 Canopy Contract C21180324, Amendment 1, https://www.cityofpaloalto.org/files/assets/public/v/1/public- works/tree-section/new-folder/contracts/c21180324-canopy_amendment-1_fully-executed.pdf 4 City Council, June 21, 2022; Agenda Item #1; SR#14389, https://portal.laserfiche.com/Portal/DocView.aspx?id=59544&repo=r-704298fc&searchid=ec11fb42-95af-49ab- 883d-d2da53d586bc
5 Policy and Services Committee, June 14, 2022; Agenda Item #1; SR#13910 https://portal.laserfiche.com/Portal/DocView.aspx?id=64761&repo=r-704298fc&searchid=e01e4a30-b7df-448a- baaa-9d811b692039
data showed a decrease in canopy coverage in every Palo Alto neighborhood between 2020 and 2022. ISHB has yet to be found outside of San Jose, but staff is participating in regional meetings and coordinated response planning sessions regarding ISHB. Staff has also begun preparations to deal with ISHB when it arrives within the city limits of Palo Alto. Initial analysis of both areas of concern was used to help inform the types of programs and services that are included in the scope of services for this new contract.
In 2024, City Council approved Amendment No. 311, adding to the scope of services and extending the contract term through June 30, 2025.
ANALYSIS
Canopy is well-established with the residents of Palo Alto and has the expertise, experience, professional stature, and key personnel to provide the City with urban and community forestry services. Canopy is highly qualified as a non-profit organization to connect projects and programs with cooperating agencies and organizations to leverage funding and increase the effectiveness of projects and outreach. Canopy’s combination of deep arboricultural background, robust educational framework, and strong local volunteer base make it uniquely qualified to provide these services to the City.
Procurement Details
On April 2, 2025, a Request for Proposals for Urban and Community Forestry Services (RFP193655) was released. The RFP was open for a total of 21 days, closing on April 25, 2025.
More than 3,500 vendors and portal users were notified of the RFP, approximately 20 vendors downloaded or followed the RFP, and the RFP was viewed 409 times. One responsive proposal was received from Canopy before the RFP deadline.
Canopy’s proposal was reviewed and evaluated by a panel of three Public Works Public Services staff. Canopy was chosen as the vendor for this contract (Attachment A) based on past performance when working with the city and the firm’s unique combination of arboricultural background, educational framework, and existing volunteer base.
Contract Comparison
The scope of work presented in the RFP as well as the solutions included in Canopy’s proposal are organized differently than previous contracts for Urban and Community Forestry Servies.
These changes serve to better align the contract with the current goals of the Urban Forestry Program. Services to be provided by Canopy have been divided into four categories. These categories and some of the major tasks are:
Community Education, Outreach, and Advocacy
11 City Council, June 18, 2024; Agenda Item #3; SR#2403- 2749;https://portal.laserfiche.com/Portal/DocView.aspx?id=73858&repo=r-704298fc&searchid=ec11fb42-95af- 49ab-883d-d2da53d586bc
oArbor Day Events, Community Tree Walks, Website and Communication, Mayor’s Tree Planting
Tree Planting
oOrganize Volunteers to Plant Trees, Replace Trees (if needed), Community Planting Events, Canopy Disparity Strategy
Tree Assessment and Tree Care
oYoung Tree Care Survey, Digital Tree Health Survey
Urban Forestry Program Assistance
oUFMP Goal D.i: Maintain and Manage Open Data Portal
oUFMP Goal D.ii: Administer Utilities funded Right Tree, Right Place Program The previous four contracts with Canopy were completed without undergoing the formal RFP process as it was determined there was no other source available to provide the services included in the contract scope. The new contract’s scope of work format allows for improved tracking of individual deliverables and aligns contract costs with the scope for improved contract management.
The overall cost of the first year of the new contract increased by 6.2% over the final year of the previous contract. Some of the increase can be attributed to standard annual 3% cost escalation (as is shown in Table 2 in the “Fiscal/Resource Impact” section). New contract scope of work components such as specific line items for certain tasks have contributed to a portion of the remaining 3.2% increase. An example would be “Maintain and Manage Open Data Portal”. This was an UFMP goal that has ongoing maintenance costs that were not accounted for in the previous contracts. Canopy also provided an updated “Schedule of Rates” for each job title in their organization. The full schedule is included in Exhibit C-1 of the contract and includes changes to job titles and hourly rates from previous contracts. This updated schedule captures changes to Canopy’s organization over the course of the previous contract terms and accounts for the remaining cost increase between the two contracts.
FISCAL/RESOURCE IMPACT
Partial funding for Year 1 of this contract is available in the Public Works Department General Fund, Community Services Department General Fund, and Utilities Department Electric Fund Fiscal Year 2026 Adopted Operating Budgets.
Additionally, $150,000 in costs can be offset by the revenue recognized from the non- refundable Forestry Fund Deposits account (also known as the Tree Preservation Deposits Account). Funding for this account comes from in-lieu payments from development projects in the City that cannot plant all the required trees on site. These funds can only be used for tree planting projects throughout the City. The fund balance as of October 31, 2025 is $241,422. To account for this offset, staff recommends two budget amendments to the Fiscal Year 2026 General Fund Appropriations: an Operating Expenditure Appropriation increase of $150,000 and an Operating Revenue Appropriation increase in the same amount.
However, $11,200 in unbudgeted cost increases remain, as these services do not fall under the usage guidelines of the Tree Preservation Deposits Account. The department is expecting to absorb these costs in FY 2026. The department contributions and funding sources proposed in this staff report for Year 1 of this contract are outlined in Table 1 below.
Table #1: Department and Funding Sources for Year 1 of Canopy Contract Department / Funding Source New Contract
Proposed Fiscal Year
2026
Public Works Department
General Fund (Tree Preservations Deposits Account)
$150,000
Public Works Department
General Fund (Amount Included in Fiscal Year 2026 Operating Budget) $217,800
Public Works Department
General Fund (From Public Works Public Services Fiscal Year 2026 Operating Budget)
$11,200
Community Services Department
General Fund (Amount Included in Fiscal Year 2026 Operating Budget) $6,000
Utilities Department
Electric Fund (Amount Included in Fiscal Year 2026 Operating Budget) $15,000
Totals $400,000
Subsequent years of the contract are subject to Council approval of annual operating budgets.
In the context of budget reductions needed in FY 2027, staff is evaluating potential reductions to this contract. If the City Manager’s proposed budget includes such reduction proposals, they would be considered during the FY 2027 budget process and, if approved by City Council, implemented via a subsequent contract amendment. The table below shows each year of the three-year contract and the associated amounts for each task item.
Table #2: Contract Costs and Services
TASK DESCRIPTION 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 Table #2: Contract Costs and Services
TASK DESCRIPTION FY26 FY27 FY28 CATEGORY
SUBTOTAL
GOAL NOT
TO EXCEED
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
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
STAKEHOLDER ENGAGEMENT
Stakeholder engagement is an ongoing component of this contract. Many programs included in this contract (South Palo Alto Tree Planting, Mayor’s Tree Planting, Arbor Day celebrations, general Urban Forestry Education and Outreach) have an outreach/engagement component included as part of the implementation process. This allows Canopy and the City to inform stakeholders of projects and programs, incorporate stakeholder feedback into implementation plans, and engage stakeholders directly as volunteers and participants in growing and maintaining the City’s Urban Forest.
ENVIRONMENTAL REVIEW
The recommended action is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301(h) (maintenance of existing landscape).
ATTACHMENTS
Attachment A: Canopy Contract C26193655
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer