Palo Alto City Council
February 2, 2026

CITY COUNCIL
Regular Meeting
Monday, February 02, 2026
Council Chambers & Hybrid
5:30 PM

Palo

Alto

City

Council

meetings

will

be

held

as

“hybrid”

meetings

with

the

option

to

attend

by
teleconference

or

in

person.

Information

on

how

the

public

may

observe

and

participate

in

the
meeting

is

located

at

the

end

of

the

agenda.

The

meeting

will

be

broadcast

on

Cable

TV

Channel
26,

live

on

YouTube

https://www.youtube.com/c/cityofpaloalto
,

and

streamed

to

Midpen

Media
Center
https://midpenmedia.org
.

VIRTUAL PARTICIPATION

CLICK HERE TO JOIN

(
https://cityofpaloalto.zoom.us/j/362027238
)
Meeting ID: 362 027 238 Phone:1(669)900-6833

PUBLIC COMMENTS
General

Public

Comment

for

items

not

on

the

agenda

will

be

accepted

in

person

for

up

to

three
minutes

or

an

amount

of

time

determined

by

the

Chair.

General

public

comment

will

be

heard
for

30 minutes.

Additional

public

comments,

if

any,

will

be

heard

at

the

end

of

the

agenda.

Public

comments

for

agendized

items

will

be

accepted

both

in

person

and

via

Zoom

for

up

to
three

minutes

or

an

amount

of

time

determined

by

the

Chair.

Requests

to

speak

will

be

taken
until

5 minutes

after

the

staff’s

presentation

or

as

determined

by

the

Chair.

Written

public
comments

can

be

submitted

in

advance

to

[email protected]

and

will

be

provided

to
the

Council

and

available

for

inspection

on

the

City’s

website.

Please

clearly

indicate

which
agenda

item

you

are

referencing

in

your

subject

line.

Multiple

individuals

who

wish

to

speak

on
the

same

item

may

designate

a

spokesperson.

Spokespersons

must

be

representing

five

or

more
verified

individuals

who

are

present

either

in

person

or

via

zoom.

Spokespeople

will

be

allowed
up

to

10 minutes,

at

the

discretion

of

the

presiding

officer.

Speaking

time

may

be

reduced

if

the
presiding officer reduces the speaking time for individual speakers.

PowerPoints,

videos,

or

other

media

to

be

presented

during

public

comment

are

accepted

only
by

email

to

[email protected]

at

least

24 hours

prior

to

the

meeting.

Once

received,

the

Clerk

will

have

them

shared

at

public

comment

for

the

specified

item.

To

uphold

strong
cybersecurity

management

practices,

USB’s

or

other

physical

electronic

storage

devices

are

not
accepted.

Signs

and

symbolic

materials

less

than

2 feet

by

3 feet

are

permitted

provided

that:
(1)

sticks,

posts,

poles

or

similar/other

type

of

handle

objects

are

strictly

prohibited;

(2)

the
items

do

not

create

a

facility,

fire,

or

safety

hazard;

and

(3)

persons

with

such

items

remain
seated

when

displaying

them

and

must

not

raise

the

items

above

shoulder

level,

obstruct

the
view or passage of other attendees, or otherwise disturb the business of the meeting.

TIME ESTIMATES
Listed

times

are

estimates

only

and

are

subject

to

change

at

any

time,

including

while

the
meeting

is

in

progress.

The

Council

reserves

the

right

to

use

more

or

less

time

on

any

item,

to
change

the

order

of

items

and/or

to

continue

items

to

another

meeting.

Particular

items

may

be
heard

before

or

after

the

time

estimated

on

the

agenda.

This

may

occur

in

order

to

best

manage
the time at a meeting or to adapt to the participation of the public.

1 February 02, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

CALL TO ORDER

SPECIAL ORDERS OF THE DAY (5:30 - 5:40 PM)

1. Proclamation Honoring Christopher Fujimoto for 25 Years of Service to the City of Palo Alto
CLOSED SESSION (5:40 - 6:10 PM)

2. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Subject: Sami Gerges vs Yolanda Franco Clausen, City of Palo Alto, Santa Clara County Superior Court
Case No. 25CV473428
Authority: Government Code Section 54956.9(d)(1)

AGENDA CHANGES, ADDITIONS AND DELETIONS

PUBLIC COMMENT (6:10 - 6:40 PM)
Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (6:40 - 6:55 PM) Members of the public may not speak to the item(s).

STUDY SESSION (6:55 - 7:55 PM)

3. 44 and 88 Encina Avenue [25PLN-00308]. Request for Council Prescreening to Rezone the Subject Properties from Community Commercial (CC) to Planned Community/Planned Home Zoning (PC/PHZ) and to Allow Construction of 158 Units and 315 Parking Spaces in Two Seven-Story Structures. The Formal Application Will be Subject to California Environmental Quality Act (CEQA) Review. Zoning District: CC (Community Commercial).

CONSENT CALENDAR (7:55 - 8:00 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

2 February 02, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

4. Approval of Minutes from January 12, January 15, and January 20, 2026 Meetings

5. Approve and Authorize the City Manager to Execute an MOU Between the City of Palo Alto and the County of Santa Clara to Support the City's Psychiatric Emergency Response Team (PERT) Program for a Term of Five Years and a Not-To-Exceed Amount of $1.4 Million and Approval of a Budget Amendment in the General Fund and Stanford University Medical Center Fund; CEQA status - not a project.

6. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter

4.54 (“Massage Establishments”) and Chapter 4.56 (Hot Tub/Sauna Establishments) of Title 4 (Business Licenses and Regulations) (FIRST READING: January 12, 2025, PASSED 7- 0)
CITY MANAGER COMMENTS (8:00 - 8:15 PM)

BREAK (15 MINUTES)

ACTION ITEMS (Item 7: 8:30 - 9:30 PM, Item 8: 9:30 - 11:00 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

7. Approval of FY 2026 Architectural Review Board, Historic Resources Board, Planning and Transportation Commission, and Utilities Advisory Commission Work Plans; CEQA status– not a project

8. Review the 2024 Greenhouse Gas Inventory and S/CAP Key Performance Indicators Annual Progress Report, and Approve the 2026-2027 S/CAP Work Plan and Receive Six S/CAP Studies Recommended by the Climate Action and Sustainability Committee; CEQA Status: Review GHG Inventory and Key Performance Indicators: Not a Project; Potential Environmental Impacts of the S/CAP Work Plan were Studied in the June 5, 2023 S/CAP Addendum to the 2017-2031 Comprehensive Plan EIR; this Project is also Exempt Pursuant to CEQA Guidelines Section 15183
Supplemental Report added

ADJOURNMENT

INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action or discussion during this meeting’s agenda.

A.

Monthly Investment Report - December 2025 (Unaudited)

3 February 02, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

B.

Informational Report on Calendar Year 2024 Annual Update for the Cap-and-Trade Program

OTHER INFORMATION
Standing Committee Meetings this week

Finance Committee February 3, 2026 CANCELED

Public Comment Letters
Schedule of Meetings

SUPPLEMENTAL / AMENDED AGENDA ITEMS

8. Review the 2024 Greenhouse Gas Inventory and S/CAP Key Performance Indicators Annual Progress Report, and Approve the 2026-2027 S/CAP Work Plan and Receive Six S/CAP Studies Recommended by the Climate Action and Sustainability Committee; CEQA Status: Review GHG Inventory and Key Performance Indicators: Not a Project; Potential Environmental Impacts of the S/CAP Work Plan were Studied in the June 5, 2023 S/CAP Addendum to the 2017-2031 Comprehensive Plan EIR; this Project is also Exempt Pursuant to CEQA Guidelines Section 15183
Supplemental Report added

4 February 02, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

PUBLIC COMMENT INSTRUCTIONS
Members

of

the

Public

may

provide

public

comments

to

teleconference

meetings

via

email,
teleconference, or by phone.

1. Written public comments
may be submitted by email to
[email protected]
.

2. For

in

person

public

comments

please

complete

a

speaker

request

card

located

on

the
table

at

the

entrance

to

the

Council

Chambers

and

deliver

it

to

the

Clerk

prior

to
discussion of the item.

3. Spoken

public

comments

for

agendized

items

using

a

computer

or

smart

phone

will

be
accepted

through

the

teleconference

meeting.

To

address

the

Council,

click

on

the

link
below to access a Zoom-based meeting. Please read the following instructions carefully. ◦
You

may

download

the

Zoom

client

or

connect

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in-

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If

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make

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current,

up-to-date

browser:

Chrome

30 ,
Firefox

27 ,

Microsoft

Edge

12 ,

Safari

7 .

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disabled

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Internet

Explorer.

Or

download

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application

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App

Store

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Play

Store

and

enter

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Meeting ID below.
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enter

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address

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request

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identify

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online

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you
that it is your turn to speak.
◦
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speak

on

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Agenda

Item,

click

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“raise

hand.”

The

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in

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Speakers

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are called to speak.
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When

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please

limit

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time

limit

allotted.

A

timer

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shown on the computer to help keep track of your comments.

4. Spoken

public

comments

for

agendized

items

using

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phone

use

the

telephone

number
listed

below.

When

you

wish

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speak

on

an

agenda

item

hit

*9

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your

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know

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you

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speak.

You

will

be

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to

provide

your

first

and

last

name

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addressing

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Council.

You

will

be

advised

how

long

you

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to

speak.

When

called
please limit your remarks to the agenda item and time limit allotted.

CLICK HERE TO JOIN
Meeting ID: 362-027-238 Phone: 1-669-900-6833
Americans

with

Disability

Act

(ADA)

It

is

the

policy

of

the

City

of

Palo

Alto

to

offer

its

public
programs,

services

and

meetings

in

a

manner

that

is

readily

accessible

to

all.

Persons

with
disabilities

who

require

materials

in

an

appropriate

alternative

format

or

who

require

auxiliary
aids

to

access

City

meetings,

programs,

or

services

may

contact

the

City’s

ADA

Coordinator

at
(650)

329-2550

(voice)

or

by

emailing

[email protected]
.

Requests

for

assistance

or
accommodations

must

be

submitted

at

least

24 hours

in

advance

of

the

meeting,

program,

or
service.

5 February 02, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

California

Government

Code

§84308
,

commonly

referred

to

as

the

"Levine

Act,"

prohibits

an
elected

official

of

a

local

government

agency

from

participating

in

a

proceeding

involving

a
license,

permit,

or

other

entitlement

for

use

if

the

official

received

a

campaign

contribution
exceeding

$500

from

a

party

or

participant,

including

their

agents,

to

the

proceeding

within

the
last

12 months.

A

“license,

permit,

or

other

entitlement

for

use”

includes

most

land

use

and
planning

approvals

and

the

approval

of

contracts

that

are

not

subject

to

lowest

responsible

bid
procedures

and

have

a

value

over

$50,000.

A

“party”

is

a

person

who

files

an

application

for,

or
is

the

subject

of,

a

proceeding

involving

a

license,

permit,

or

other

entitlement

for

use.

A
“participant”

is

a

person

who

actively

supports

or

opposes

a

particular

decision

in

a

proceeding
involving

a

license,

permit,

or

other

entitlement

for

use,

and

has

a

financial

interest

in

the
decision.

The

Levine

Act

incorporates

the

definition

of

“financial

interest”

in

the

Political

Reform
Act,

which

encompasses

interests

in

business

entities,

real

property,

sources

of

income,

sources
of

gifts,

and

personal

finances

that

may

be

affected

by

the

Council’s

actions.

If

you

qualify

as

a
“party”

or

“participant”

to

a

proceeding,

and

you

have

made

a

campaign

contribution

to

a
Council

Member

exceeding

$500

made

within

the

last

12 months,

you

must

disclose

the
campaign contribution before making your comments.

6 February 02, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.

City Council
Staff Report
From: City Manager
Report Type: SPECIAL ORDERS OF THE DAY
Lead Department: Public Works
Meeting Date: February 2, 2026
Report #:2512-5766
TITLE
Proclamation Honoring Christopher Fujimoto for 25 Years of Service to the City of Palo Alto

ATTACHMENTS
Attachment A: Retirement Proclamation of Appreciation for Christopher (Chris) Fujimoto APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 1 Packet Pg. 7 of 228

EXPRESSING APPRECIATION TO CHRISTOPHER (CHRIS) FUJIMOTO

UPON HIS RETIREMENT
WHEREAS, Chris Fujimoto joined the City of Palo Alto in July 2000 as a Code Enforcement Officer with the City of Palo Alto Planning Department, and then joined Public Works Department Environmental Services – Watershed Protection in June 2005 as an Industrial Waste Investigator; and
WHEREAS, Chris inspected construction sites, green stormwater infrastructure, commercial and industrial businesses, municipal facilities, construction dewatering, and other locations to ensure the City of Palo Alto Stormwater Ordinance and regional stormwater permit requirements were followed to protect local creeks and the San Francisco Bay from stormwater runoff pollutants; and WHEREAS, Chris responded to illicit discharges to reduce the extent of harm to local creeks and watersheds and coordinated with the City of Palo Alto Fire Department, Public Works Public Services Division, and others for cleanup, enforcement, and resolution; and WHEREAS, Chris actively participated in Santa Clara Valley Water District’s Creek Connections Action Group and led creek cleanups during his tenure with Watershed Protection to improve the health of the watershed and engage the public in environmental protection; and WHEREAS, Chris established trash booms on Matadero and Adobe creeks in coordination with the Santa Clara Valley Water District and led trash boom cleanouts to prevent trash from flowing downstream to the Palo Alto Baylands and San Francisco Bay; and WHEREAS, Chris represented the City of Palo Alto at regional meetings and during daily public service with expertise and professionalism; and
WHEREAS, Chris was certified by ReScape and trained in green stormwater infrastructure maintenance practices, bringing expertise to green stormwater infrastructure design and maintenance and best practices for landscaping maintenance; and WHEREAS, Chris completed 25 years of dedicated service to both the City of Palo Alto’s Code Enforcement Team and the Watershed Protection Stormwater Program.

NOW, THEREFORE, I, Vicki Veenker, Mayor of the City of Palo Alto, on behalf of the entire City Council , do hereby recognize Chris Fujimoto for his years of dedicated service.

PRESENTED: February 2, 2026

APPROVED:

______________________
Mayor Vicki Veenker

______________________ ______________________
Vice Mayor Greer Stone Councilmember Pat Burt

______________________ ______________________
Councilmember Ed Lauing Councilmember George Lu

______________________ ______________________
Councilmember Julie Lythcott-Haims
Councilmember Keith Reckdahl

ATTEST:

______________________
City Clerk

APPROVED AS TO FORM:

______________________ ______________________
City Manager City Attorney
Proclamation

Item 1
Attachment A - Retirement
Proclamation of Appreciation for
Christopher (Chris) Fujimoto

Item 1: Staff Report
Pg.
2 Packet Pg. 8 of 228

City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: Planning and Development Services
Meeting Date: February 2, 2026
Report #:2512-5619
TITLE
44 and 88 Encina Avenue [25PLN-00308]. Request for Council Prescreening to Rezone the Subject Properties from Community Commercial (CC) to Planned Community/Planned Home Zoning (PC/PHZ) and to Allow Construction of 158 Units and 315 Parking Spaces in Two Seven- Story Structures. The Formal Application Will be Subject to California Environmental Quality Act (CEQA) Review. Zoning District: CC (Community Commercial).

RECOMMENDATION
Staff recommends Council conduct a prescreening and provide informal comments regarding the applicant’s request to rezone 44 and 88 Encina Avenue from Community Commercial to Planned Community/Planned Home Zoning (PHZ).1 Comments provided during the prescreening process are not binding on the City or the applicant.

EXECUTIVE SUMMARY
This prescreening is a request by the applicant to rezone the subject properties, which are currently zoned Community Commercial to “Planned Home Zoning (PHZ)”. The project site consists of nine parcels that currently serve as surface parking lots for Town & Country Village Shopping Center with approximately 150 parking spaces. The project proposes to construct two non-contiguous structures at 44 and 88 Encina Avenue crossing nine individual parcels. The buildings would include three levels of parking for Town & Country Village as well as the proposed residential use and four levels of residential rental units with 158 units in total.

This prescreening application responds to the City Council’s expressed interest in learning from home builders what it takes to create more housing opportunities in Palo Alto. To be eligible for the Planned Community (PC) zoning process, a PHZ application must meet two initial qualifying 1 Referred to in this report as "Planned Home Zoning" to emphasize the focus on housing as the benefit to the community. Palo Alto Municipal Code (PAMC) Section 18.38, which outlines the requirement and process for Planned Community (PC) Zoning, remains the underlying code supporting application of this policy.

Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 1 Packet Pg. 9 of 228
criteria established by the City Council: 1) provide 20% of the total units as affordable housing selected from a prescribed menu of options, and 2) provide housing units that meet or exceed the demand generated by any net new jobs. In this case, no new jobs are proposed, as this project is exclusively residential. The project would still be required to meet the 20% affordable requirement.

The project would require a formal rezoning application consistent with Palo Alto Municipal Code (PAMC), Zoning Regulations, Chapter 18.38 to allow for a Development Plan with deviations from required development standards, including but not limited to, increased height, and increased floor area ratio (FAR) compared to existing CC requirements.

BACKGROUND
In February 2020, Council unanimously endorsed using Planned Housing Zoning (PHZ) for housing and mixed-use housing projects to help spur housing production. In exchange for deviation from certain standards as allowed under the rezoning, if approved by Council, the project must include at least 20% of the housing units as deed restricted for lower income households. Moreover, the number of housing units must offset the number of net new commercial jobs that are generated by the project.

In accordance with PAMC Section 18.79.030(A), a prescreening review is required for legislative changes, including rezoning, prior to submitting a formal application. Prescreenings are intended to solicit early feedback on proposed projects and, like all study sessions, cannot result in any formal action. Since this proposal may return to the City Council as a formal application, Councilmembers should refrain from forming firm opinions supporting or opposing the project.

Project Description
A location map of the proposed site is included in Attachment A. The preliminary schematic drawings included in Attachment C, are conceptual, as is appropriate at this stage of project consideration. As shown in these schematic drawings, the applicant is proposing two multi- family residential buildings on nine separate lots. These two buildings would be located on either side of the 70 Encina Avenue property, which recently received approval for a new 10- unit, three-story townhome development.

Building 1 would be 88,771 square feet in area (not including the parking area) and provide 78 apartment units. Building 2 would be 99,296 square feet (not including the parking area) and provide 80 apartment units, for a total of 158 residential rental units across the project. The units would be a mix of studio (19), one-bedroom (78), two-bedroom (47), and three-bedroom (14).3 Proposed Building 1 would have a lot coverage of approximately 28,852 square feet (93% 3 Units indicated as “urban” on the project plans are counted as one-bedroom units Item 3
Item 3 Staff Report

Item 3: Staff Report
Pg.
2 Packet Pg. 10 of 228

of the site) and proposed Building 2 would have a lot coverage of approximately 29,246 square feet (71%).

The proposed buildings would be seven stories tall and extend to a height of 85 feet to the gable midpoint. Parking would be provided on the first three levels of each building (ground floor through floor 3) with a total of 315 parking spaces, 165 of which would be for residents of Building 1 and Building 2, and 150 which would be commercial parking spaces for visitors of the Town & Country shopping center. The 150 commercial parking stalls are being proposed in an effort to replace the existing parking stalls on the subject lots that would be lost as a result of the proposed development. In addition to parking, the proposed ground floor for Building 1 includes three separate lobby areas, a trash room, and electrical and transformer areas. The ground floor of Building 2 would also include parking, two separate lobby areas, a trash room, and mechanical areas. The residential units would be on the upper four floors.

The primary entrances for pedestrians and cars would be provided from Encina Avenue. Parking is proposed on the ground floor level through level three of each building with a total of 315 parking stalls being proposed (165 residential stalls and 150 commercial stalls). A bike room has been provided on the ground floor level of Building 2; however, details regarding how much bike parking will be accommodated in the bike room was not included in the conceptual plans.

Surrounding Uses
Adjacent zoning and uses include the Town & Country Village shopping center and associated parking areas to the south, east, and west which also have a designation of Community Commercial. To the north across Encina Avenue are primarily one and two-story office buildings as well as the LifeMoves Opportunity Center within the Service Commercial (CS) zone district.

The portion of Town & Country adjacent to the site is mostly developed within one-story structures, though the building height increases to two stories towards the eastern side of the building. Between the two proposed buildings is the 70 Encina Avenue property, which recently received approval for a new 10-unit, three-story townhome development.

ANALYSIS
A thorough analysis of Comprehensive Plan and Zoning compliance will be prepared upon submittal of a formal application, if filed. A review of the conceptual plans, however, highlights key concessions that the applicant is requesting.

Comprehensive Plan Compliance
The Comprehensive Plan designation is Community Commercial, which is defined as:
“Larger shopping centers and districts that have a wider variety of goods and services than the neighborhood shopping areas. They rely on larger trade areas and include such uses as department stores, bookstores, furniture stores, toy stores, apparel shops, restaurants, theaters and non-retail services such as offices and banks. Examples include Stanford Shopping Center and Town & Country Village. Non-retail uses such as medical Item 3
Item 3 Staff Report

Item 3: Staff Report
Pg.
3 Packet Pg. 11 of 228

and dental offices may also locate in this designation. In some locations, residential and mixed-use projects may also locate in this category. Non-residential FARs range from

0.35 to 2.0. Consistent with the Comprehensive Plan’s encouragement of housing near transit centers, higher density multi-family housing may be allowed in specific locations.”
The proposed project includes multi-family residential development within close proximity to the University Avenue Caltrain station, which is consistent with this land use designation. The project is also consistent with Policy L2.4, which encourages housing near “retail, employment, and transit, in a way that connects to and enhances existing neighborhoods.” The site is located near retail, the Palo Alto Caltrain station (.5 miles), and VTA bus lines in addition to being close to Stanford University and the Stanford University Medical Center, and Downtown Palo Alto.

Although located on a separate parcel, the project is also located within the boundaries of the area defined as Town & Country Village. There are several policies that apply to this area, including:
Program L-2.4.4 - Assess non-residential development potential in the Community Commercial, Service Commercial and Downtown Commercial Districts (CC, CS and CD) and the Neighborhood Commercial District (CN), and convert non-retail commercial FAR to residential FAR, where appropriate. Conversion to residential capacity should not be considered in Town and Country Village.
Policy L-4.12 - Recognize and preserve Town and Country Village as an attractive retail center serving Palo Altans and residents of the wider region. Future development at this site should preserve its existing amenities, pedestrian scale and architectural character while also improving safe access for bicyclists and pedestrians and increasing the amount of bicycle parking.
Policy L-4.13 - In Town and Country Village, encourage a vibrant retail environment and urban greening.
Policy L-4.14 - In Town and Country Village, encourage improvement of pedestrian, bicycle and auto circulation and landscaping improvements, including maintenance of existing oak trees and planting additional trees.

These policy statements seek to preserve existing amenities and commercial floor area but the concept to convert a portion of the surface parking lot to housing does not appear inconsistent with these Comprehensive Plan polices, especially as the parking would be replaced.

Specifically, the proposal does not reduce commercial floor area or otherwise impede the vitality of the Town & Country Village. The placement of new residential structures at the subject location would temporarily disrupt the availability of parking spaces and requires consideration of drive aisle re-alignment. However, this also holds true if the parcels were developed with commercial uses as well. Moreover, adding housing to this location may actually prove beneficial to the Town & Country Village as it introduces new residents that Item 3
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could shop at the center and enjoy many of the other restaurants and retail stores within the immediate proximity.

Housing Element
The proposed project would contribute 158 units, including below market rate units, toward the City’s Regional Housing Needs Allocation (RHNA). None of the parcels on which the project is located are identified as housing inventory sites in the adopted Housing Element, though neighboring properties were included in the Housing Element and have received entitlements for development of those parcels. Development of this site with 158 units would provide additional units toward the City’s housing needs, consistent with various goals and policies in the housing element to encourage housing, particularly below market rate housing and transit- oriented housing.

Zoning Compliance
For projects rezoning to a PHZ, Council has the authority to set the parameters for most development standards, which would be reflected in the tailored ordinance for the new PHZ District. However, for informational purposes, Attachment B compares the required development standards under the current CC zone district with the proposed project. Staff notes that this analysis assumes that the parcels underlying each proposed building would be merged to create a single parcel, which is anticipated to be necessary in order to develop the project as proposed. If the parcels were not merged, development standards would be analyzed for each existing parcel. The project is located within the immediate vicinity of the approved residential project at 70 Encina Avenue and therefore subject to the special standards outlined in PAMC Section 18.38.150.

In comparison to the existing zoning, the applicant is requesting to deviate from the CC Zone district in the following manner:
Increases in floor area (2.86:1 for Building 1 and 2.41:1 for Building 2 where a total of

0.5:1 total FAR and 0.15:0 residential FAR is allowed). Increase in height (85 feet where 35 feet is allowed). An allowance for a 100% residential project where only mixed-use is allowed. No rear setback where a 10 foot setback is required.
Reduce 0- to 5-foot side yard where 10-foot side yard is required adjacent a residential zone district (the PC approved at 70 Encina Avenue).

The project also appears to conflict with several objective design standards set forth in PAMC Chapter 18.24. Particularly with respect to daylight planes adjacent existing residential uses as well as privacy impacts adjacent residential uses. Although not yet constructed, Council recently approved the 70 Encina Avenue project, a three-story, ten-unit townhome development which is located between these two proposed buildings. However, further analysis for consistency with all of the objective standards requires more detailed plans and would be completed upon Item 3
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submittal of a formal application.

Building Code Compliance
The applicant has expressed a preference to maintain the existing parcels on which the two structures are located and to not merge them. However, this proposal would not be compliant with California Building Code. The lots underlying each proposed structure would need to be merged as part of the proposed project.

Utilities
The proposed project would conflict with numerous existing utilities on the site including electical utility lines along the frontage and rear of the building and numerous underground utilties, particularly at the rear of the building and adjacent to Caltrans right-of-way. Further discussions would be required to determine whether active underground utilities could be relocated as well as to asses potential impacts to customers during relocation, if feasible. It is anticipated that all overhead lines would need to be undergrounded, and further discussions and design coordination would be required to ensure that this undergrounding would not conflict with existing utilities.

Multi-Modal Access & Site Circulation
The project is located close to high-frequency transit, including the Valley Transit Authority 22 bus line (El Camino Real and Embarcadero Road stop) and within walking distance of the Palo Alto Caltrain station (less than 0.5 mile). Stanford University’s Marguerite Shuttle also provides service from the Caltrain Station, as well as stops near El Camino Real and Encina Avenue, and El Camino Real and Galvez Street.

This project has not yet been analyzed for consistency with the City’s Bicycle and Pedestrian Transportation Plan and other transportation policies such as Council’s Local Transportation Impact Analysis Policy adopted on June 15, 2019 (CMR 11256). This analysis would be conducted as a part of any formal application.

The subject application presents an opportunity to also examine site access to Town and Country Village. It is anticipated that some residents would utilize existing access points other than Encina Avenue to access or leave the housing site. If an application is filed, staff would want to review and analyze driveway access and traffic and nearby intersections, including at El Camino Real and Encina Avenue and the signal accessing the Palo Alto Medical Foundation, for possible improvement.

The PTC previously has also expressed an interest in improvements to bicycle and pedestrian connections to this area.

Parking
The project would include 315 vehicle parking spaces on the ground floor and Levels 2 and 3 of each building. Of the 315 proposed parking spaces, 165 spaces are proposed for the residents Item 3
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of the two apartment buildings and 150 commercial spaces for patrons of the Town & Country Village shopping center. This does not meet the Code required minimum off-street parking spaces. As shown in Attachment B, PAMC Section 18.52 requires one parking space for both studio and one-bedroom units and two parking spaces for units that are two-bedrooms or larger (with at least one covered space). Based on the proposed units, the PAMC would require a total of 218 parking spaces for the proposed residential use; however, only 165 are proposed.

While the parcel is within a one-half mile radius from the University Avenue Caltrain station and subject to the provisions of AB 2097, because the applicant is seeking a PHZ application, the City can still require parking.

As previously mentioned, the 150 commercial parking stalls are being proposed to replace existing parking stalls on the subject parcels, which would be removed as a result of the proposed development. No loading space is required for residential use. Long-term bicycle parking is currently shown within the ground level parking garage at Building 2, with access from within the garage. Short-term bicycle parking is not currently shown on the plans. Details regarding the capacity of the proposed bike room were not provided in the conceptual plans and would need to be reviewed for compliance when the formal application is submitted.

Inclusionary Requirement and Jobs Housing Imbalance
The intent of limiting PC projects to residential and residential mixed-use is to address the job/housing imbalance. PHZ projects are required to provide more housing than jobs on site. As this is a 100% residential project, no new jobs would be created.

The project would also provide 20% of the units at Below Market Rate (BMR) in accordance with Council’s requirements for projects seeking to rezone using the PHZ process. The applicant’s team has not provided details as to how the BMR units would be allocated at this time, or the affordability levels, but would be required to do so through the formal application.

Senate Bill 79
Senate Bill (SB) 79 was signed into law by Governor Newsom on October 10, 2025, and is expected to become effective on July 1, 2026. Due to the proposed project’s proximity to a transit stop (within 0.5 mile of the Palo Alto Caltrain station), the applicant may decide to take advantage of SB 79 allowances at the time a formal application is submitted, once the law is effective. SB 79 is intended to simplify the development of housing when located near major transit stops and allows qualified housing developments on land zoned for residential, mixed- use, or commercial uses in jurisdictions with 15 or more passenger rail stations. SB 79 further identifies statewide development standards related to building height, density, and floor area ratio for such projects.

If the applicant were to pursue an SB 79 project in the future, it would be limited to 65 feet in height, a 3.0:1 FAR, and 100 dwelling units per acre.

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POLICY IMPLICATIONS
Prescreenings are intended to solicit early feedback on proposed projects and, like all study sessions, cannot result in any formal action. Therefore, informal comments from Councilmembers would not impart policy. That said, there is interest among other home builders and property owners to learn of the Council’s initial reaction to the subject request, which may influence the filing of future prescreening requests.

TIMELINE
Following the prescreening review, the applicant will consider Council’s comments and determine how they want to proceed. Any formal application to rezone the property to a PHZ would be subject to hearings before the Planning and Transportation Commission (PTC), Architectural Review Board (ARB), and City Council.

FISCAL/RESOURCE IMPACT
The recommendation in this report does not have any significant fiscal or budgetary impacts since it is tied to the prescreening review; however, should the project proceed it will yield development impact fees and will likely generate additional tax revenues through property taxes and sales taxes.

STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper and mailed to owners and occupants of property within 600 feet of the subject property at least ten days in advance. Notice of a public hearing for this project was published in the Daily Post on January 23, 2026, which is 10 days in advance of the meeting. Postcard mailing occurred on January 22, 2026, which is 11 days in advance of the meeting.

As of the writing of this report no project-related public written comments were received.

ENVIRONMENTAL REVIEW
The prescreening is a preliminary review process in which Councilmembers may provide comment, but no formal action will be taken. Therefore, no review under the California Environmental Quality Act (CEQA) is required at this time. A full review in accordance with CEQA would be initiated with the formal filing of a development application.

ATTACHMENTS
Attachment A: Location Map
Attachment B: Zoning Comparison Analysis
Attachment C: Project Plans
APPROVED BY:

Jonathan Lait, Planning and Development Services Director Item 3
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30 Bldg 3
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ALMA STREET
CHANN

EL CAMINO REAL

EL CAMINO REAL

RCADERO ROAD

URBAN LANE

ENCINA AVENUE

ENCINA AVENUE
LANE A
C-4782CS
RT-50PC-4389
S
CS
CC
PAMF

PARKING

STRUCTURE
This map is a product of the
City of Palo Alto GIS
This document is a graphic representation only of best available sources.

Legend
Assessment Parcel
Project Site
0' 124'
Location map

CITY OF PALO ALTO
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P a l o A l t o
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4 The City of Palo Alto assumes no responsibility for any errors ©1989 to 2016 City of Palo Alto chodgki, 2026-01-15 13:47:24
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1 0
2 8
7 ATTACHMENT B

ZONING COMPARISON TABLE
44 and 88 Encina Avenue, 25PLN-00308
Table 1: COMPARISON WITH CHAPTER 18.16 (CC DISTRICT)
Mixed-use and Residential Development Standards
Note: 100% Residential not typically allowed in CC District Bold indicates exceedance of base zone district development standards Regulation Required Existing Proposed
Minimum Site Area, Width,
and Depth No Requirement
Building 1 Parcel –
31,025 sf area, 256 ft
wide, 121 ft deep
Building 2 Parcel –
41,191 sf area, 374 ft
wide, 121 ft deep
No change
Minimum Front Yard (Encina
Ave) No Requirement Vacant/parking lot Building 1 – 0 feet Building 2 – 0 feet
Rear Yard 10 feet 0 feet
Side Yard None
Building 1 – 0 feet
(western PL)
Building 2: 0 feet
(western PL),
Side Yard Minimum yard for
lot lines abutting or opposite
residential districts or
residential PC districts
10 feet
Building 1 – 9 feet, 7
inches (eastern PL)
Building 2: 5 feet
(eastern PL)
Build-to-lines (1) 50% of frontage built
to setback on Encina
Ave.

Complies
Max. Site Coverage
50%
Lot 1 - 15,512.5 sf
Lot 2 – 20,595.5 sf
Building 1 – 93%,
28,852 sf
Building 2 – 71%,
29,246 sf
Max. Building Height 35 feet
Building 1 – 85 feet, 7
stories
Building 2 – 85 feet, 7
stories
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Comparison Analysis

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1 0
2 8
7 Maximum Floor Area Ratio
(FAR)
See note (e)

0.15 to 1 for residential
Building 1 - 28,852 sf,

2.86: 1
Building 2 – 29,246 sf,

2.41: 1
Daylight Plane for lot lines
abutting one or more
residential zone districts other
than an RM-40 or PC Zone
Not applicable
Landscape Open Space 30% Additional
information needed
Useable Open Space 150 sf per unit (Private
and/or Common)
24,389 sf –
Approximately 154 sf
per unit

(e) CC District Shopping Center Floor Area Ratio Regulations (1) The maximum floor area ratio for the Town and Country Village Shopping Center shall be .35 to 1; and office uses at said shopping center shall be limited to 15% of the floor area of the shopping center existing as of August 1, 1989. Hotel use shall not be included as part of the .35 to 1 maximum floor area ratio, but shall not exceed an additional .25 to 1 floor area ratio, for a maximum site floor area ratio of .60 to 1.
(2) The maximum floor area ratio for mixed use development for the Town and Country Village Shopping Center shall be limited to .50 to 1; provided that no more than .35 to 1 floor area shall be nonresidential, consistent with part (1) above, and not more than .15 to 1 floor area shall be residential.
(3) Stanford Shopping Center shall not be permitted to add more than 80,000 square feet of floor area to the total amount of floor area of the shopping center existing as of June 14, 1996, 1,332,362 square feet, for a total square footage not to exceed 1,412,362. Any hotel or mixed use development for the Stanford Shopping Center shall only be included if approved as part of a Development Agreement for the site.

Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) for Residential
Type Required Existing Proposed
Vehicle Parking 1 per Studio unit
1 per 1-bedroom unit
2 per 2-bedroom or
larger unit At least one
space per unit must be
covered
Tandem parking
allowed for any unit
requiring two spaces
(one tandem space per
unit, associated directly
with another parking
space for the same
unit, up to a maximum
of 25% of total required
spaces for any project
with more than four (4)
units)
218 residential stalls
required
Approximately 263
parking spaces
315 parking stalls
provided (165
residential and 150
commercial)
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Comparison Analysis

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1 0
2 8
7 Bicycle Parking 1 long term space per
unit
1 guest space per 10
units
Bike Room provided
on ground floor at
Building 2. Additional
details needed from
applicant regarding
bicycle parking counts.

Loading Space None required Loading area shown on
ground floor at
Building 2.

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Attachment B - Zoning
Comparison Analysis

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If you need assistance reviewing the above documents, please contact the Project Planner or call the Planner-on-Duty at 650-617-3117 or email [email protected]
Project Plans
In order to reduce paper consumption, a limited number of hard copy project plans are provided to Council members for their review. The same plans are available to the public, at all hours of the day, via the following online resources.

Directions to review Project plans and environmental documents online:

1. Go to: bit.ly/PApendingprojects

2. Scroll down to find “44 Encina Avenue” and click the address link

3. On this project-specific webpage you will find a link to the project plans and other important information
Direct Link to Project Webpage:
44 Encina Avenue – City of Palo Alto, CA
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 2, 2026
Report #:2601-5830
TITLE
Approval of Minutes from January 12, January 15, and January 20, 2026 Meetings

RECOMMENDATION
Staff recommends that the City Council review and approve the minutes.

ATTACHMENTS
Attachment A: January 12, 2026 Draft Action Minutes
Attachment B: January 15, 2026 Draft Action Minutes
Attachment C: January 20, 2026 Draft Action Minutes
APPROVED BY:

Mahealani Ah Yun, City Clerk
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CITY COUNCIL/PUBLIC

IMPROVEMENT CORPORATION

DRAFT ACTION MINUTES

Special Meeting
January 12, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M.

Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely:

Absent:

Closed Session

1. Subject: Initiation of litigation in one case
Authority: Potential Exposure to Litigation Under Government Code Section 54956.9(d) (4)
Number of potential cases: 1, as Plaintiff
MOTION: Council member Lauing moved, seconded by Council member Lu to go into Closed Session.

MOTION PASSED: 7-0
Council went into Closed Session at 5:32 P.M.

Council returned from Closed Session at 6:20 P.M.

Mayor Veenker announced that the City Council authorized the City Attorney to initiate litigation in one case.

Agenda Changes, Additions and Deletions

Public Comment

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2026 Draft Action Minutes

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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/12/2026
Council Member Questions, Comments and Announcements

Study Session

2. Review and Discuss 2025 Q4 Council Priorities & Objectives and format of the 2026 City Council Annual Retreat. CEQA Status – Not a project.

NO ACTION

Consent Calendar
Councilmember Lythcott-Haims registered a no vote on Agenda Item Number 10 and 11.

MOTION: Council member Reckdahl moved, seconded by Council member Lauing to approve Agenda Item Numbers 3-12.

MOTION PASSED ITEMS 3-9, 12: 7-0
MOTION PASSED ITEMS 10, 11: 6-1, Lythcott-Haims no

3. Approval of Minutes from December 8, December 10, and December 15, 2025 Meetings

4. Adoption of Memorandum of Agreement with Service Employees International Union Hourly Unit effective upon adoption through December 31, 2027; and Adoption of Compensation Plan for Unrepresented Limited Hourly Employee effective upon adoption through June 30, 2028; CEQA Status - Not a project

5. Approval of Professional Services Contract Number C26195486 with Baron Contracting in an Amount Not-to-Exceed $514,528 for Gas Leak Survey Services for a Period of Three Years. CEQA Status – Exempt Under CEQA Guidelines Sections 15301(c) and 15308 (Existing Facilities).

6. Approval of a Contract with the Media Center for Cable Casting Services of Public Meetings for a Term of Three Years and a Not to Exceed Amount of $540,000 with Two One-Year Options to Extend for a Potential Not to Exceed amount of $900,000 over a five-year term, for cablecasting, production, and streaming services; CEQA Status – Not a Project.

7. Approve the City Manager or Designee to Execute Purchase Order C26196045 with Insight Public Sector, Utilizing a County of Riverside Cooperative Contract ITARC -00930, to Procure Microsoft Enterprise Software Licensing, Cloud Services, and Server/Data Item 4
Attachment A - January 12,
2026 Draft Action Minutes

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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/12/2026
Center Licensing for a 3 -Year Term with a maximum Total Not -To-Exceed Amount of $2,506,936, inclusive of a Contingency in the Amount of $50,000 Annually.

8. FIRST READING: Adoption of an ordinance to Amend Chapters 4.54 and 4.56 of the Palo Alto Municipal Code to Amend the Regulation of Massage Establishments and Hot Tub/Sauna Establishments as Recommended by the Policy & Services Committee; and Adoption of a Resolution to Amend the Administrative Penalty Schedule to Amend Related Penalties; CEQA status - not a project.

9. SECOND READING: Ordinance of the Council of the City of Palo Alto Renewing the Military Equipment Use Policy in Compliance with Govt. Code Section 7070 et seq. (2025-2026) (FIRST READING: December 8, 2025; PASSED 7-0)

10. SECOND READING: Ordinance of the Council of the City of Palo Alto Prohibiting Parking of Detached Trailers and Other Non -Motorized Vehicles on Public Streets (FIRST READING: December 8, 2025; PASSED 6-1, Lythcott-Haims no)

11. SECOND READING: Ordinance of the Council of the City of Palo Alto Prohibiting Rental of Vehicles for Human Habitation (FIRST READING: December 8, 2025; PASSED 6 -1, Lythcott-Haims no)

12. SECOND READING: Interim Ordinance of the Council of the City of Palo Alto Temporarily Extending Interim Ordinance 5645, Amending Various Chapters of Title 16 (Building Regulations) and Title 18 (Zoning) and Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code to Implement Recent State Housing Laws (FIRST READING: December 8, 2025, PASSED 7-0)

City Manager Comments
Ed Shikada, City Manager

Action Items

13. Study and Assessment of Palo Alto Turf Systems and Direct Staff to Proceed with El Camino Park Synthetic Turf Replacement and Natural Grass Pilot; CEQA Status – Categorically and Statutorily Exempt
MOTION: Councilmember Lu moved, seconded by Councilmember Lythcott-Haims to:

1. Proceed with replacing the existing synthetic turf at El Camino Park with improved synthetic turf using organic infill and to implement risk management measures, Item 4
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2026 Draft Action Minutes

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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/12/2026
including stormwater filtration, enhanced maintenance practices, and related mitigation measures; and
MOTION PASSED: 6-1, Stone no

MOTION SPLIT FOR THE PURPOSE OF VOTING
MOTION: Councilmember Lu moved, seconded by Councilmember Lythcott-Haims to:

3. Pursue a natural grass pilot project to enhance playability and durability; and

4. Continue to explore opportunities to transition from synthetic turf at Cubberley.

MOTION PASSED: 7-0

Recess City Council Meeting and Convene Public Improvement Corporation Meeting All Board Members of the Public Improvement Corporation are present in-person.

14. Approval of Fiscal Year 2025 Palo Alto Public Improvement Corporation's Annual Financial Report. CEQA Status - Not a Project
MOTION: Board Member Lauing moved, seconded by Board Member Reckdahl to approve the Fiscal Year (FY) 2025 Annual Financial Report for the Palo Alto Public Improvement Corporation.

MOTION PASSED: 7-0

Reconvene City Council Meeting

15. Review and Approval of Suggested Changes to the City Council Procedures and Protocols Handbook as Recommended by the Policy and Services Committee. CEQA Status – Not a project.

Agenda Item Number 15 not heard and deferred to a date uncertain.

Adjournment: The meeting was adjourned at 10:08 P.M.

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Attachment A - January 12,
2026 Draft Action Minutes

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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/12/2026

ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)

2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section

2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.

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2026 Draft Action Minutes

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CITY COUNCIL

DRAFT ACTION MINUTES

Special Meeting
January 15, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:41 P.M.

Present In Person: Burt, Lu, Lythcott-Haims, Reckdahl, Veenker Councilmember Lu arrived at 5:49 P.M.

Councilmember Lythcott-Haims departed during closed session.

Present Remotely:

Absent: Lauing, Stone

Call to Order

Closed Session

1. Public Employee Appointment
Title: City Attorney
Authority: Gov. Code Section 54957(b)

2. Conference with Labor Negotiators
Authority: Gov. Code section 54957.6;
Agency representative: Sandra Blanch and Nicholas Raisch, Teri Black, Teri Black & Co.

Unrepresented Employee: City Attorney
MOTION: Councilmember Reckdahl moved, seconded by Council member Burt to go into Closed Session.

MOTION PASSED: 4-0-3 (Lauing, Lu, Stone absent)
Council went into Closed Session at 5:47 P.M.

Council returned from Closed Session at 7:00 P.M.

Mayor Veenker announced no reportable action.

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Attachment B - January 15,
2026 Draft Action Minutes

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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/15/2026
Agenda Changes, Additions and Deletions

Adjournment: The meeting was adjourned at 7:01 P.M.

ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)

2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section

2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.

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CITY COUNCIL

DRAFT ACTION MINUTES

Special Meeting
January 20, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M.

Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely:

Absent:

Special Orders of the Day

1. Proclamation honoring Aaron (Bunk) Miller for 34 Years of Service to the Palo Alto Regional Water Quality Control Plant and its partner agencies.

NO ACTION

Agenda Changes, Additions and Deletions

Public Comment

Council Member Questions, Comments and Announcements

Study Session

2. Presentation of the 2025 Annual Community Survey Results. CEQA Status -- Not a project.

NO ACTION

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2026 Draft Action Minutes

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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/20/2026
Consent Calendar
Councilmember Lythcott-Haims registered a no vote on Agenda Item Number 10.

MOTION: Vice Mayor Stone moved, seconded by Councilmember Reckdahl to approve Agenda Item Numbers 3-10.

MOTION PASSED ITEMS 3-9: 7-0
MOTION PASSED ITEM 10: 6-1, Lythcott-Haims

3. Approval of Minutes from January 5, 2026 Meeting

4. Accept CalPERS Pension Annual Valuation Report as of June 30, 2024; CEQA Status – Not a project.

5. Approval of the Advisory Report: Contract Solicitation & Authority Levels and Subsequent Management Response as recommended by the Policy & Services Committee. CEQA Status – Not a Project.

6. Approval of the City of Palo Alto’s Updated 2026 Water, Gas, and Wastewater Utility Standards (Design and Construction); CEQA Status- Not a Project.

7. Adopt a Resolution to Allow Consumption of Alcohol under PAMC section 9.04.010 on Certain Days and Times through May 31, 2026, on California Avenue.

8. Approve Recommended Changes that will Align Increased General Liability Insurance Costs in the General Liability Fund to be Included in the Mid -Year Budget Report as Recommended by the Finance Committee. CEQA Status—Not a project.

9. Approval of Contract Amendment Number 3 to Contract C23183770 with Townsend Public Affairs, Inc. in the amount of $186,000 to Revise the Not -to-Exceed Total to $744,000 and to Extend the Term for an Additional Year of Service (the third of four one-year options to renew) for State and Federal Legislative Advocacy and Grant Consulting and Compliance Services; CEQA Status - Not a Project

10. SECOND READING: Ordinance of the Council of the City of Palo Alto Repealing and Replacing Section 18.40.250 (Lighting) of Chapter 18.40 (General Standards and Exceptions) and Amending Chapters 18.10, 18.12, 18.28 and Section 18.40.230 of Title 18 (Zoning) of the Palo Alto Municipal Code to Adopt New Outdoor Lighting Regulations (REINTRODUCED FIRST READING: December 8, 2025; PASSED:6-1, Lythcott-Haims, no)

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2026 Draft Action Minutes

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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/20/2026
City Manager Comments
Ed Shikada, City Manager

Action Items

11. Policy and Services Committee Recommendation to Adopt the 2026 State and Federal State Legislative Guidelines and 2026 Utility Policy Guidelines, and Receive an Update on State and Federal Legislative Advocacy; CEQA Status – Not a Project MOTION: Mayor Veenker moved, seconded by Councilmember Reckdahl to:

1. Adopt the 2026 State and Federal Legislative Guidelines and 2026 Utility Policy Guidelines and receive an update on State and Federal Legislative Advocacy and add the following amendments to the Housing Section of Guidelines:
a. Clarify and streamline the process for developing affordable housing on city - owned land
b. Advocate for additional state and federal funding in support of affordable housing
c. Advocacy for reevaluations to the RHNA requirements for mid- cycle mandates on cities
d. Support changes to the legislative guidelines that align with Council’s recommended reforms to SB79, if any.

2. Direct staff to next year review and revise, as appropriate, the Utilities Legislative Guidelines and the Climate and Environment Section Guidelines to be consistent with each other and mutually supportive.

MOTION PASSED: 7-0

PORTION OF MOTION REMOVED WITH THE CONSENT OF THE MAKER AND SECONDER

MOTION SPLIT FOR THE PURPOSE OF VOTING
MOTION: Mayor Veenker moved, seconded by Councilmember Reckdahl to:

3. Adopt a support position for SB63 advocacy (Connect Bay Area Transit Committee) and follow up accordingly.

MOTION PASSED/FAILED: X-X
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DRAFT ACTION MINUTES

Sp. City Council Meeting
Draft Action Minutes: 01/20/2026

12. Review the FY 2027 -FY 2036 Long Range Financial Forecast (LRFF) and FY 2027 Budget Development Guidelines using the LRFF as the Baseline for Developing the FY 2027 Budget as Recommended by the Finance Committee, CEQA Status – Not a Project MOTION: Councilmember Lauing moved, seconded by Council member Reckdahl to accept the Long Range Financial Forecast (LRFF) for Fiscal Year 2027 -2036 (Attachment A) and the FY 2027 annual Budget Development Guidelines (Attachment B) and direct staff to use this forecast as the baseline for developing the FY 2027 budget.

MOTION PASSED: 7-0

Adjournment: The meeting was adjourned at 10:42 P.M.

ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)

2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section

2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.

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2026 Draft Action Minutes

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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: February 2, 2026
Report #:2512-5757
TITLE
Approve and Authorize the City Manager to Execute an MOU Between the City of Palo Alto and the County of Santa Clara to Support the City's Psychiatric Emergency Response Team (PERT) Program for a Term of Five Years and a Not-To-Exceed Amount of $1.4 Million and Approval of a Budget Amendment in the General Fund and Stanford University Medical Center Fund; CEQA status - not a project.

RECOMMENDATION
Staff recommends that the City Council:

1. Approve and Authorize the City Manager to Execute an MOU Between the City of Palo Alto and the County of Santa Clara to Support the City's Psychiatric Emergency Response Team (PERT) Program for a Term of Five Years and a Not-To-Exceed Amount of $1.4 million (Attachment A); and

2. Amend the Fiscal Year 2026 Budget Appropriation for the General Fund (requires a 2/3 vote) by:
a. Increasing the transfer from the Stanford University Medical Center (SUMC) Development Fund by $135,500; and
b. Increasing the expenditure appropriation for the Police Department by $135,500.

3. Amend the Fiscal Year 2026 Budget Appropriation for the Stanford University Medical Center Fund (requires 2/3 vote) by:
a. Increasing transfer to the General Fund by $135,500; and b. Decreasing fund balance in the Stanford University Medical Center Fund, Community Health and Safety by $135,500.

EXECUTIVE SUMMARY
The Psychiatric Emergency Response Team (PERT) consists of one police officer employed by the Palo Alto Police Department (PAPD) paired full-time with one clinician employed by the Santa Clara County Behavioral Health Services Department (BHSD). The PERT unit Item 5
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responds to calls of people experiencing mental health crisis. The City and County successfully deployed a pilot PERT program in November 2021 and Council converted the program to ongoing in FY 2023. The County notified the City in late 2025 that their funding to hire clinicians assigned to PERT units no longer existed. BHSD now has a clinician if the City provides funding. This MOU (Attachment A) would provide funding to County to staff one clinician for PAPD for five years. The City’s cost will not exceed $1.4 million through December 31, 2030, subject to the annual availability and appropriation of funds.

BACKGROUND
The PERT co-response model pairing police officers with mental health clinicians originally began in Southern California in the 1990s and continues there to this day. PERT units respond to the most acute calls for service involving a person experiencing a mental health crisis; the combined resources of a police officer and a clinician allow for a more comprehensive response that is designed to provide the best possible resolution for the client. When BHSD began exploring the idea of bringing a PERT program to Santa Clara County in the early 2010s, the PAPD was the first municipal law enforcement agency in the county to volunteer to host a clinician.

In 2020 and 2021, the City’s race and equity efforts to supplement law enforcement response options accelerated the desire to bring a PERT program to Palo Alto. Once BHSD developed the program and identified third-party funding to hire PERT clinicians, the City became the first municipality within Santa Clara County to field a PERT unit in November 2021. The City’s PERT unit operated as a pilot program until October 2022. The PERT unit operates in an unmarked police car, with the assigned officer wearing a plainclothes-style uniform to be distinct from a regular patrol officer. The 11-month deployment was a success, as the PAPD PERT unit handled more than 350 calls for service, conducted more than 175 follow-up visits with clients, provided mental health resources to more than 290 people not associated with calls for service or follow- up visits, and diverted at least 110 people to services in lieu of involuntary hospitalizations. For more background information on the original legislative process to bring PERT to Palo Alto, refer to the staff report issued to the Policy and Services Committee on March 9, 20211 .

In June 2022, Council converted the PERT program from a pilot to an ongoing one, adding one FTE police officer position in the FY2023 adopted budget2 to fund the PERT officer moving forward. The County would still fund and supply the clinician; however, BHSD efforts to hire a new clinician for Palo Alto continued but were ultimately unsuccessful. 1 Policy and Services Committee, March 9, 2021; Agenda Item #1; SR # 12051 https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/reports/city-manager-reports- cmrs/year-archive/2021/id-12051.pdf
2 City of Palo Alto FY2023 Adopted Operating Budget, June 2022; page 345 https://www.paloalto.gov/files/assets/public/v/1/administrative-services/city-budgets/fy-2023-city- budget/adopted-fy23/operating-budget_final-4.pdf
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In late 2025, County notified the City that they can no longer fund a PERT clinician for Palo Alto, but they could supply one if Palo Alto provided the funding.

ANALYSIS
Staff recommends that Council authorize the City Manager to execute this MOU to provide funding to County to staff one clinician for PAPD for five years using the Stanford University Medical Center (SUMC) development fund for the remainder of FY 2026, and through the annual budget process thereafter through the term of the agreement. This will bring a PERT unit back to Palo Alto through 2030 and in so doing, provide a more comprehensive response to community members experiencing acute mental health crises. The PERT program is unique among the various mental health response models; the pairing of a police officer with a licensed clinician, with all their diverse training and experience brought together to every call, allows them to provide service to clients in the most comprehensive and compassionate way possible.

A weekly shift cycle for the PAPD Field Services Division (patrol) is 24 hours per day, seven days per week. One PERT team covers approximately 24% of the weekly shift cycle, working four 10- hour shifts. As mentioned in a May 2023 update to the Policy & Services Committee5, the Department still believes it would be most ideal for the community to have PERT coverage seven days a week (approximately 48% of the weekly shift cycle). If resources become available in the future, the Department intends to return to Council to seek to add a second PERT unit.

FISCAL/RESOURCE IMPACT
This agreement establishes a five-year partnership with Santa Clara County for the PERT program, beginning January 1, 2026. The County will provide one full-time licensed clinician and invoice the City monthly for the personnel costs of employing the clinician. The County estimates minimum cost to the City is $271,000 annually, which would translate to $135,500 for the six months remaining in FY2026.

While the County is not providing a guaranteed cost after the first year, it does detail the cost basis which includes the fully weighted cost of salary, benefits, and any training for the clinician in accordance with the County’s memorandum of understanding with the applicable bargaining unit.

The City can limit escalated financial exposure by terminating the agreement at any time, without cause, with 60-day written notice. The City will update funding as needed with every annual budget cycle through the term of the agreement, which is estimated to cost $1.4 million over five years subject to annual approval.
5 Policy & Services Committee, May 9, 2023; Agenda Item #1; SR # 2303-1142 https://cityofpaloalto.primegov.com/viewer/preview?id=1889&type=0 Item 5
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For the remainder of FY2026, the Department is requesting use of the Stanford University Medical Center (SUMC) development fund set-aside for public safety, specifically, mental health public safety as noted in the FY2026 Adopted Operating budget (which had a fund balance of $1.2 million as of last reporting7). As outlined in the FY 2026 Adopted Budget, the PERT Police Officer assigned to this team is also funded from this SUMC resource. Upon exhaustion of the remaining one-time SUMC funding of $1.2 million, an alternative source will need to be identified prior to the completion of this contract.

STAKEHOLDER ENGAGEMENT
The Police Department has engaged the Santa Clara County Behavioral Health Services Department to explore funding for a PERT clinician. The Police Department also consulted with the City Manager's Office, City Attorney, Community Services Department, and Office of Management and Budget to ensure that the PERT program continued to serve the community in collaboration with other urgent/crisis mental health response initiatives such as the Mobile Crisis Response Team (MCRT) and the Trusted Response Urgent Support Team (TRUST).

ENVIRONMENTAL REVIEW
Council action on this item is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3), as it can be seen with certainty that the activity will not have a significant effect on the environment.

ATTACHMENTS
Attachment A: MOA Between County of Santa Clara and City of Palo Alto for PERT Clinician, 2026 through 2030
APPROVED BY:

Andrew Binder, Police Chief
7 City of Palo Alto FY2026 Adopted Operating Budget, June 2025; page 151 https://www.paloalto.gov/files/assets/public/v/1/administrative-services/city-budgets/fy-2026-city- budget/adopted/fy-2026-adopted-operating-budget_final.pdf Item 5
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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

MEMORANDUM OF UNDERSTANDING

BETWEEN THE

CITY OF PALO ALTO AND THE

COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)

JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

WHEREAS, the mission of the City of Palo Alto (hereinafter “CITY”) is to provide quality public services, facilities and opportunities that create, sustain, and enhance a safe, livable, and vibrant community for its diverse residents, businesses, and visitors. The CITY’s Palo Alto Police Department (hereinafter “PAPD”) is a progressive and professional organization dedicated to maintaining community partnerships which promote a high quality of life for the City’s diverse population; and

WHEREAS, the mission of the County of Santa Clara (hereinafter “COUNTY”) is to plan for the needs of a dynamic community, provide quality services, and promote a healthy, safe, and prosperous community for all; and

WHEREAS, COUNTY and CITY seek to collaborate to increase public safety and reduce recidivism among high-risk individuals experiencing a mental health crisis, including individuals with mental illnesses and co-occurring mental illness and substance abuse through the Psychiatric Emergency Response Team Justice and Mental Health Collaboration Program (or “PERT Program”); and

WHEREAS, the partners listed above have agreed to enter into a collaborative agreement in which CITY and COUNTY Behavioral Health Services Department (hereinafter “BHSD”) will be partners on this collaborative effort to combine the unique resources, skills, experience, and training of personnel from two different professions (law enforcement and mental health services) to provide the best possible response to situations involving persons with mental illness; and

WHEREAS, the partners herein desire to enter into a Memorandum of Understanding (hereinafter "MOU") setting forth the roles, responsibilities, and services to be provided by the PERT Program; and

WHEREAS, the agencies recognize the need for cross-system collaboration to improve responses and outcomes for individuals experiencing a mental health crisis, including individuals with mental illnesses and substance abuse who come into contact with the justice system; and

WHEREAS, the partners recognize the need to increase public safety and to provide rapid intervention to an individual experiencing a mental health crisis by de-escalating the situation and helping to stabilize the individuals in the least restrictive way possible, and then striving to get that individual the help they need; and

WHEREAS, the partners are committed to providing services to those in need in a nondiscriminatory manner such that no individual is turned away based on their ethnicity, gender, gender identity, sexual orientation, origin, religious or political beliefs, age, insurance status, mental health status, disability, and/or creed;

NOW, THEREFORE, it is hereby agreed by and between the partners as follows:

Item 5
Attachment A - MOA
Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

ARTICLE 1
TERM; EXTENSIONS; TERMINATION

1.1 Term of Agreement. The initial term of this MOU is from January 1, 2026, through December 31, 2030.

1.2 Termination without Cause. Any Party may terminate this MOU without cause by providing sixty (60) day written notice.

ARTICLE 2

SCOPE OF SERVICES

2.1 The COUNTY shall provide the following for the PERT Program:
a. Participate in proactive responses for high-risk individuals experiencing a mental health crisis in conjunction with the PAPD PERT officer(s); b. Develop and modify protocols for PERT Program response and information sharing policies and procedures, as necessary;
c. Identify one (1) full time BHSD clinician (hereinafter “BHSD PERT Clinician), who must be licensed to provide mental health services by appropriate State of California licensing authorities and must participate in a CITY background investigation and fingerprinting, prior to beginning work with the CITY. d. Assign the identified BHSD PERT Clinician to work with the PAPD PERT officer(s) to perform the following tasks:
1) Conduct mental health evaluations, assessments, and crisis screening, for individuals with serious mental illnesses including individuals who are frequent users of emergency psychiatrist services, dual diagnosed individuals and individuals who are mentally ill;
2) Assist in determining the appropriate disposition supporting individuals’ needs and safety;
3) Consult with PAPD PERT officer(s) regarding disposition of individuals and law enforcement issues;
4) Maintain knowledge of the criteria for psychiatric disorders according to the current Diagnostic and Statistical Manual (DSM) of Mental Disorders;
5) Maintain knowledge of current legal and ethical issues as they relate to mental illness;
6) Maintain licensing as required;
7) Ensure requirements for detention and transportation pursuant to Welfare and Institutions Code (WIC) Section 5150 are met;
8) Provide documentation to the PERT officer(s) supporting the decision to detain and transport a subject pursuant to WIC Section 5150; 9) Assist in coordination of transportation to mental health service centers, or facilities when such support and services would be beneficial (regardless of whether a 72-hour evaluation hold is issued), and there is cooperation from the subject;
10) Maintain a law enforcement security clearance;
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Attachment A - MOA
Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

11) Conduct presentations to inform the community about the mission and focus of the PERT Program;
12) Provide mental health training and expertise to other PAPD Department staff;
13) Contribute toward providing metrics related to the PERT Program; 14) Provide mental health services for law enforcement activities that are related only to the PERT mission and focus; and
15) Abide by and follow all CITY policies while performing services under this MOU.
e. Collaborate with the CITY in determining what training, if any, is necessary for the BHSD PERT Clinician during the duration of the MOU; and f. Work with PAPD to identify available trainings to officers to assist with appropriately responding to incidents involving individuals with mental illness and substance abuse. Any identified training courses must be certified by Peace Officer Standards Training (POST) to ensure a consistent level of quality.

2.2 The CITY shall provide the following for the PERT Program:

a. Develop a detailed policy, procedure, process, and plan on implementing a specialized police mental health PERT Program;
b. Expand training for law enforcement to identify and respond to individuals with mental illness and provide cross -training of criminal justice and mental health personnel;
c. Establish a dedicated PAPD officer(s) to work with the BHSD PERT Clinician;
d. Participate in the process of identifying the BHSD PERT Clinician to work with PAPD;
e. Assume primary responsibility for site control when responding to a crisis; f. Assume role of the primary responder when engaged with BHSD PERT Clinician;
g. Issue basic tools to BHSD PERT Clinician to perform their duties and provide access to certain CITY facilities.
h. Determine whether phone consultation or on-site consultation is needed from the BHSD PERT Clinician;
i. Coordinate training exercises with the BHSD PERT Clinician to ensure proper collaboration when needed during a crisis;
j. Collaborate with the BHSD PERT Clinician by participating in trainings and meetings to ensure proper understanding of roles and responsibilities during crisis situations;
k. Facilitate transportation for individuals to the appropriate receiving facility when a WIC 5150 hold has been placed by the BHSD PERT clinician in response to a call for service to PAPD;
l. Agree to provide a review on the overall effectiveness of the BHSD PERT clinician deployments;
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Attachment A - MOA
Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

m. Agree to provide information to BHSD PERT clinician regarding individuals who are involved in a crisis incident, when such information provides critical value to the safe resolution of those incidents;
n. Have an officer on scene with the PERT Clinician to assess and provide safety and security.
o. Offer referrals or other assistance through the officer and PERT Clinician as the situation warrants, and if needed, assist the individual to the appropriate setting (either voluntarily or involuntarily);
p. Collaborate with the COUNTY in determining what training, if any, is necessary for the BHSD PERT Clinician during the duration of the MOU; q. Modify and enhance policies, procedures, and protocols for the PERT Program and information sharing process, as necessary; and
r. The CITY shall work in conjunction with the PERT Clinician, to draft and submit a Monthly Program Narrative Report to County no later than seven (7) days after the end of each month. The Quarterly Narrative Report shall include a summary of the PERT Program’s performance goals, milestones achieved, and any issues/concerns encountered during the reporting period.

ARTICLE 3

RELATIONSHIP OF PARTIES AND FINANCIAL REQUIREMENTS

3.1 Relationship of Parties. The COUNTY acknowledges and agrees that the work/services provided by the BHSD PERT Clinician under this MOU are performed as an independent contractor relative to the CITY. The BHSD PERT Clinician is part of the COUNTY workforce and will remain as employee of the COUNTY while providing services under this MOU.

3.2 Funding/Financial Responsibilities. Unless amended by the Board of Supervisors and the City of Palo Alto, the annual contribution of the COUNTY and CITY for Program expenses shall be as follows.
a. The COUNTY shall provide the following funding/financial responsibilities:
1) The COUNTY shall pay, upfront, all personnel costs of the PERT Program (i.e., the fully weighted costs of salary, benefits, and any training for the BHSD PERT Clinician) in accordance with the COUNTY’s memorandum of understanding with the applicable bargaining unit.
2) The COUNTY shall procure and supply the BHSD PERT Clinician with a laptop and cellphone. The initial and on-going costs for such equipment, maintenance and/or replacement shall be incurred by the COUNTY. The COUNTY shall retain ownership of the property at the conclusion of the MOU term.
3) The COUNTY shall invoice the CITY for the previous month to pay for staff time, benefits, and any training as applicable.
4) The COUNTY is not obligated to provide services for which no reimbursement will be made when the CITY’s maximum financial obligation has been fully exhausted.

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Attachment A - MOA
Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

b. The CITY shall provide the following funding/financial responsibilities:
1) The CITY will reimburse the COUNTY for all personnel costs of the PERT Program (i.e., the fully weighted costs of salary, benefits, and any training for the BHSD PERT Clinician, where, for FY26, the full cost for one full-time position is approximately $224k salary and $47k benefits) in accordance with the COUNTY’s memorandum of understanding with the applicable bargaining unit.
2) The CITY shall provide the BHSD PERT Clinician with \a fitted protective vest at its sole expense.
3) The CITY shall pay for related expenses such as registration, meal per diem, and lodging for any required attendance by the BHSD PERT Clinician to any conference, workshop, or training program(s) as agreed upon by the Parties pursuant to Section 2.1.e and Section 2.2.p above and section 3.2.c below.
c. Both the COUNTY and CITY shall collaboratively determine what training, if any, is necessary during the duration of the MOU.

3.3 Staffing. The CITY shall be involved with the process of identifying one (1) COUNTY PERT Clinician who must be licensed to provide mental health services by appropriate State of California licensing authorities.
a. If the identified COUNTY PERT Clinician has previously completed a previous City’s background investigation and fingerprinting requirements, the COUNTY PERT Clinician shall be allowed to work in full capacity as the identified COUNTY PERT Clinician for the new City pending their ability to complete and pass the newly assigned CITY’s background investigation and fingerprinting requirements. The CITY shall notify COUNTY when the CITY’s background investigation and fingerprinting requirements are complete for the COUNTY PERT Clinician.
b. The CITY shall issue the COUNTY PERT Clinician basic tools to perform their duties and provide access to certain CITY facilities.
c. The COUNTY PERT Clinician shall follow all CITY policies while performing services under this MOU.

ARTICLE 4

MISCELLANEOUS PROVISIONS

4.1 Collaboration. Both the CITY and the COUNTY have jointly developed this MOU.

The CITY and the COUNTY are committed to working together to achieve the stated project goals through monthly meetings designed to monitor and evaluate the project. The CITY and the COUNTY shall meet informally and as often as needed.

4.2 Record Retention . The CITY and COUNTY shall maintain all documents and records which demonstrate performance under this MOU for a minimum period of three (3) years, from the date of termination or completion of this MOU.

Item 5
Attachment A - MOA
Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

4.3 Compliance with Non-Discrimination and Equal Opportunity Laws: The CITY and COUNTY shall comply with all applicable Laws concerning nondiscrimination and equal opportunity in employment and contracting, including but not limited to the following: Santa Clara County’s policies for contractors on nondiscrimination and equal opportunity; Title VII of the Civil Rights Act of 1964 as amended; Americans with Disabilities Act of 1990; the Age Discrimination in Employment Act of 1967; the Rehabilitation Act of 1973 (Sections 503 and 504); the Equal Pay Act of 1963; California Fair Employment and Housing Act (Gov. Code § 12900 et seq.); California Labor Code sections 1101, 1102, and 1197.5; and the Genetic Information Nondiscrimination Act of 2008. CITY and COUNTY shall not discriminate in the provision of services provided under this contract because of age, race, color, national origin, ancestry, religion, sex, gender identity, gender expression, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status.

4.4 California Public Records Act. The Parties are public agencies subject to the disclosure requirements of the California Public Records Act (“CPRA”). In the event either Party receives a CPRA request for records related to the PERT program the Parties shall collaborate to comply with the CPRA and to prevent disclosure of exempt records, such as medical or mental health records.

4.5 Records and Confidentiality. Records created by the BHSD PERT Clinician, even while operating in collaboration with CITY, shall be considered COUNTY records, free from the control and direction of any other party to this MOU. Such records will be subject to all federal, state, and local laws and regulations regarding the protection of client/patient privacy and confidentiality.

Both Parties agree that all BHSD PERT Clinicians are COUNTY employees and shall follow the privacy requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The BHSD shall train all BHSD PERT Clinicians on federal, state, and local policies and procedures with respect to the confidentiality, use and/or disclosure of protected health information of clients as necessary and appropriate for the BHSD PERT Clinicians to perform their functions. The BHSD shall provide BHSD PERT Clinicians with the appropriate Health System(s) policies and procedures, which are subject to change from time to time. The BHSD reserves the right to take appropriate action for violation of its policies; such action may include immediate termination of any BHSD PERT Clinician who violates Federal, State, or local law and policy.

4.6 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. This MOA may be executed in counterparts, and when each party has signed and delivered at least one such counterpart, each one shall be deemed an original.

4.7 Indemnification and Insurance

a. Indemnification. In lieu of and notwithstanding the pro rata risk allocation, which might otherwise be imposed between the Parties pursuant to Government Code Section 895.6, the Parties agree that all losses or liabilities incurred by Party shall not Item 5
Attachment A - MOA
Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

be shared pro rata but, instead, COUNTY and CITY agree that, pursuant to Government Code Section 895.4, each of the Parties hereto shall fully indemnify 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 in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees or agents, und er or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this MOU. No party, nor any officer, board member or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other Parties hereto, their officers, board members, employees, or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other Parties under this MOU.
b. Insurance. Without limiting the indemnification of either party to this Agreement, each party shall maintain or cause to be maintained throughout the term of the Agreement the following insurance coverage: (i) a policy of commercial general liability with limits of liability not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) annual aggregate; (ii) a policy of automobile liability with limits of liability not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) annual aggregate (iii) a policy of workers’ compensation providing statutory coverage; and (iv) such other insurance or self-insurance as shall be necessary to insure it against any claim or claims for damages arising under the Agreement.

Insurance afforded by a commercial general liability policy shall be endorsed to provide coverage to the other party of the Agreement as an additional insured. Each party to this Agreement shall provide a Certificate of Insurance certifying that coverage as required herein has been obtained. The requirements of this section may be satisfied by the provision of similar coverage through a self-insurance program.

4.8 Notices. All notices required under the terms of this MOU will be in writing and must be transmitted by electronic mail or deposited in the United States Mail, certified mail, return receipt requested, addressed to the parties as set forth below:

COUNTY OF SANTA CLARA: CITY OF PALO ALTO:

Soo Jung, Director Office of the City Manager
Cross Systems Initiatives & Housing [email protected] [email protected] 250 Hamilton Avenue
South Bascom Avenue, Suite 200 Palo Alto, CA 94301
San Jose, CA 95128 (650) 329-2392
(408) 885-3885
Office of the City Clerk
[email protected]
250 Hamilton Avenue
Palo Alto, CA 94301
(650) 329-2571
Item 5
Attachment A - MOA
Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

4.9 Miscellaneous provisions .
a. No Agency. It is understood that each of the Parties operate independently from one another and cannot enter into agreements or contracts as agents of the other. It is expressly understood and agreed that none of the Parties are in any way or for any purpose an agent of each other related to this MOA.
b. No Assignment. No party to this MOA can assign any portion of this MOA without the other Parties’ prior written consent, unless otherwise stated herein. c. Entire Agreement. This MOA contains the entire agreement of the Parties with respect to the matters contained herein, and each party acknowledges there were no other oral agreements, representations, warranties, or statements of fact made prior to or at the time of the signing of this Agreement.
d. Severability. If any term or provision of this MOA is declared invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.
e. Waiver. Waiver by any Party of any portion of this MOA shall not constitute a waiver of the same or any other portion hereof.

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Item 5
Attachment A - MOA
Between County of Santa
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for PERT Clinician, 2026
through 2030

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MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM FOR FISCAL YEARS 2026 THROUGH 2030

By signing below, each agency approves the conditions set forth in this MOU as well as the submitted application and proposed project budget.

“COUNTY” County of Santa Clara “CITY” City of Palo Alto, a Municipal Corporation and Charter City

Sherri Tereo, E.d.D. Date City Manager Date
Director Office of the City Manager
Behavioral Health Services Department

APPROVED AS TO FORM AND

LEGALITY

APPROVED AS TO FORM

Deputy County Counsel Date Tim Shimizu Date
Assistant City Attorney

APPROVED:

Vincent DePaul Robben Date
Health Care Financial Manager
County of Santa Clara Health System
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Between County of Santa
Clara and City of Palo Alto
for PERT Clinician, 2026
through 2030

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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: February 2, 2026
Report #:2601-5828
TITLE
SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Chapter 4.54 (“Massage Establishments”) and Chapter 4.56 (Hot Tub/Sauna Establishments) of Title 4 (Business Licenses and Regulations) (FIRST READING: January 12, 2025, PASSED 7-0)

BACKGROUND
The City Council heard this item on January 12, 2026 for a first reading and approved it on a 7-0 vote. No changes were made to the ordinance, and it is now before the City Council for a second reading.

ATTACHMENTS
Attachment A: Ordinance of the Council of the City of Palo Alto Amending Chapter 4.54 (“Massage Establishments”) and Chapter 4.56 (Hot Tub/Sauna Establishments) of Title 4 (Business Licenses and Regulations)
APPROVED BY:

Mahealani Ah Yun, City Clerk
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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapter 4.54 (“Massage Establishments”) and Chapter 4.56 (Hot Tub/Sauna Establishments) of Title 4 (Business Licenses and Regulations)

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

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

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

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

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

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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

4.54.010 Purpose and intent.

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

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

4.54.020 Definitions.

For the purpose of this chapter, unless the co ntext clearly requires a different meaning, the words, terms, and phrases set forth in this sect ion shall have the meanings that are given them in this section:

"Authorized massage professional" means a massage professional who is identified in a permit issued pursuant to this chapter as a person employed or retained by a massage establishment to practice massage.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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"California massage therapy council" or "CAMTC" means the massage therapy organization formed pursuant to Business and Professions Code Section 4600 et seq.

"CAMTC-certified massage professional" means any individual currently certified by the California Massage Therapy Council as a massage therapist or massage practitioner pursuant to Business and Professions Code Section 4600 et seq.

"Compensation" means the payment, loan, advance, donation, contribution, deposit, exchange, or gift of money or anything of value.

"Department" means the Chief of the Palo Alto Police Department or designee charged with the administration of this chapter.

"Inspector" means the person or persons designated by the city to conduct any inspections required or permitted under this chapter.

"Massage," "massage therapy," and/or "bodywork" for purposes of this chapter mean the skillful application of touch, including but not limited to, pressure, stroking, kneading, compression on or movement of the external surfaces of the body by a practitioner to produce increased awareness, relaxation, pain relief, injury rehabilitation, or neuromuscular reeducation.

"Massage establishment" means any business that offers massage therapy, baths or health treatments including, but not limited to, aromatherapy, vapor, shower, electric tub, sponge, hot towels, mineral fermentation, sauna, steam or any other type of bath, involving massages or baths in exchange for compensation. Home-based massage businesses and businesses that provide mobile massage services are also considered to be massage establishments. For purposes of this chapter, the term "massage establishment" may be applied to include establishments which offer or advertise themselves as providing "relaxation" or "tanning" Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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where the essential nature of the interaction between the employee and the customer involves "massage" as defined herein. The terms, names or phrases listed on business license or fictitious name application forms are not necessarily conclusive as to the nature of the business.

"Owner" or "massage establishment owner" means any of the following persons:
(1) The sole proprietor of a sole proprietorship operating a massage establishment. (2) Any general partner of a general or limited partnership that owns a massage establishment.
(3) Any person who has a ten percent or greater ownership interest in a corporation that owns a massage establishment.
(4) Any person who is a member of a limited liability company that owns a massage establishment.
(5) All owners of any other type of business association that owns a massage establishment. "Operator" or "massage establishment operator" means any person who is an owner or manager of a massage establishment.

"Mobile massage service" means the engaging in or carrying on of massage therapy for compensation at locations other than a massage establishment at a fixed location.

"Patron" means an individual on the premises of a massage establishment for the purpose of receiving massage therapy.

"Person" means any individual, firm, association, partnership, corporation, joint venture, limited liability company, or combination of individuals.

"Reception and waiting area" means an area immediately inside the main entry door of the massage establishment dedicated to the reception and waiting of patrons or visitors of the massage establishment and which is not a massage therapy room or otherwise used for the provision of massage therapy services.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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“School of massage” means any school or institution of learning that is recognized as an approved school pursuant to Business and Professions Code Division 2, Chapter 10.5 (known as the Massage Therapy Act), as may be amended.

"Sole proprietorship" means a massage establishment where the owner owns one hundred percent of the business and has one or no other employees or independent contractors.

"Visitor" means any individual not retained or employed by the massage establishment and not receiving or waiting to receive massage therapy services, but excluding law enforcement personnel or governmental officials performing governmental business.

4.54.030 Business registration required.

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

4.54.040 Other permits and authorizations required.

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

4.54.050 Exemptions.

This chapter shall not apply to the following classes of individuals while engaged in the performance of the duties of their respective professions:
(a) Physicians, surgeons, chiropractors, osteopaths, podiatrists, physical therapists, nurses, acupuncturists or any other person licensed to practice any healing art under the provisions of Division 2 (commencing with Section 500) of the Business and Professions Code when engaging in such practice within the scope of his or her license. This subsection (a) shall apply only to a person who meets the qualifications above and shall Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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not extend to any other person, including by virtue of being a tenant, independent contractor, employee, or co-worker of the exempted person. (b) Trainers of any amateur, semi-professional, or professional athlete or athletic team, so long as such persons do not practice massage therapy as their primary occupation at any location where they provide such services in the city. (c) Barbers, estheticians, and cosmetologists who are duly licensed under the laws of the State of California, while engaging in practices within the scope of their licenses. This subsection (c) shall apply only to a person who meets the qualifications above and shall not extend to any other person, including by virtue of being a tenant, independent contractor, employee, or co-worker of the exempted person. (d) Individuals administering massages or health treatments involving massage to persons participating in single occurrence athletic, recreational, or educational events such as road races, track meets, triathlons, educational events, or conferences, provided that the event is open to the public or to a significant segment of the public such as employees of sponsoring or participating corporations, and the massage services are provided at the site of the event during, immediately preceding, or immediately following the event.
(e) Individuals administering massages or health treatments involving massage to persons at a state-licensed “general acute care hospital” or other “health facilities” as defined by California Health and Safety Code section 1250 when employed or contracted at the direction of the hospital or health facility.
(f) Somatic practitioners who use no physical touch of any kind at any time in their practice.
(g) Enrolled students of a school of massage when they are performing massage within the city as part of a formal supervised internship or training program operated by the school, without compensation other than school credit, on the premises of a massage establishment duly authorized to operate pursuant to the terms of this chapter; and provided that the operator of the massage establishment has first notified the Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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

4.54.060 CAMTC certification required.

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

4.54.070 Reserved.

4.54.080 Massage establishment permit required—Prohibited conduct.

(a) It is unlawful for any person to operate a massage establishment within the city without first obtaining a massage establishment permit from the Department. (b) It is unlawful for a massage establishment operator to employ or retain any person to practice massage therapy for compensation, or to allow any person to perform massage therapy for compensation on the premises of a massage establishment, unless that person is a CAMTC-certified massage professional and unless that person is identified as an authorized massage professional on the permit issued pursuant to this chapter. For purposes of this chapter, a massage establishment operator "employs or retains" a person to practice massage therapy for compensation when:
(1) That person is a directly paid employee of the massage establishment; or (2) That person's association with a massage establishment is that of an independent contractor who receives compensation for massage therapy provided to patrons of the massage establishment; or
(3) That person receives a referral of patrons from the massage establishment and, at any time before or after the referral, arranges in any way for compensation to flow to the massage establishment operator.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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(c) It is unlawful for a massage establishment to operate under any name or conduct business under any designation not specified in the massage establishment permit issued pursuant to this chapter.
(d) It is unlawful for a massage establishment to continue to operate following the sale or transfer of any interest in the massage establishment to a person who was not identified as an owner in the massage establishment permit application.

4.54.090 Permit application.

The owners of the massage establishment shall file an application for a permit on a form provided by the Department. The application shall be accompanied by the fee established by the city's fee schedule. The application shall include the following information:
(a) The name, address, and telephone number of the massage establishment. (b) The name, residence address and telephone number, and business address and telephone number of each owner of the massage establishment. (c) The form of business under which the applicant will be conducting the massage `establishment, i.e., corporation, general or limited partnership, limited liability company, or other form. If the applicant is a corporation, the name of the corporation shall be set forth exactly as shown in its articles of incorporation, together with the names and residence addresses of each of its officers, directors, and each shareholder holding more than ten percent of the stock of the corporation. If the applicant is a general or limited partnership, the application shall set forth the name and residence address of each of the partners, including limited partners. If one or more of the partners is a corporation, the provisions of this section pertaining to a corporate applicant shall apply. If the applicant is a limited liability company, the application shall set forth the name and residence address of each of the members. If one or more of the members is a partnership, limited liability company, or corporation, the provisions of this section pertaining to a partnership, limited liability company, or corporate applicant shall apply, as applicable.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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(d) The name, address, and telephone number of the owner of the real property upon, in, or from which the certified massage establishment is to be operated. In the event the applicant is not the legal owner of the property, the application shall be accompanied by a copy of any written lease between the applicant and the property owner authorizing use of the premises for a massage establishment, or, alternatively, if there is no written lease, then a written, notarized acknowledgment from the property owner that the property owner has been advised that a massage establishment will be operated by the applicant upon, in, or from the property owner's property. (e) If the massage establishment will be located on a property in a residential or commercial condominium or other common interest development, the applicant shall submit a notarized statement from the homeowner's association or condominium owner's association acknowledging that the association has been advised that a massage establishment will be operated by the applicant and that such use of the property is allowed by the property's covenants, codes, and restrictions. This requirement is in addition to any applicable zoning code requirements or regulations. (f) A description of the proposed massage establishment, including the type of treatments to be administered.
(g) The name of each individual who the massage establishment employs or retains to perform massage therapy for compensation, whether on or off the massage establishment premises.
(h) The name of each individual who is regularly employed or retained by the massage establishment to perform services on the premises other than massage therapy, and the nature of their services.
(i) For each individual who the massage establishment does or will employ or retain to perform massage therapy for compensation, whether on or off the massage establishment premises, a copy of that individual's current certification from the CAMTC as a certified massage practitioner or certified massage therapist, and a copy of his or her current CAMTC-issued identification card.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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(j) For each owner of the massage establishment who is a CAMTC-certified massage professional, a copy of his or her current certification from the CAMTC as a certified massage practitioner or as a certified massage therapist and a copy of his or her current CAMTC-issued identification card.
(k) For each owner of the massage establishment who is not a CAMTC-certified massage professional, the following information:
(1) Whether any owner of the massage establishment has within the five years immediately preceding the date of application been convicted of any felony in any state.
(2) Whether any owner of the massage establishment is currently required to register under the provisions of Section 290 of the California Penal Code. (3) The business, occupation, and employment history of each owner of the massage establishment for five years preceding the date of application, and the inclusive dates of same.
(4) One set of fingerprints, and any required fee for such fingerprinting shall be paid by the applicant.

(l) Whether any certificate, license or permit has ever been issued to the applicant by any jurisdiction under the provisions of any ordinance or statute governing massage or somatic practice, and as to any such certificate, license or permit, the name and address of the issuing authority, the effective dates of such certificate, license or permit, whether such certificate, license or permit was ever suspended, revoked, withdrawn, or denied; and copies of any documentary materials relating to such suspension, revocation, withdrawal, or denial.
(m) Such other information as may be required by the permit authority to determine compliance with any other eligibility requirements for issuance of the permit as specified by federal, state, or local law.
(n) A statement that within the last five years the applicant has not failed to comply with a final court order or administrative action of an investigatory agency finding a violation of Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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applicable federal, state and local wage and hour laws, including, but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and any local minimum wage ordinance or prevailing wage requirements. For purposes of this subsection, a final court order or administrative action is one as to which there is no pending appeal and the time for filing an appeal has passed.

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

The Department may impose conditions on the permit consistent with this chapter and applicable law.
(b) Notice to Property Owner. If the applicant is not the record owner of the property where the massage establishment is located, the Department may send a written notice to the property owner advising of the issuance of the permit and of the regulations applicable to the massage establishment. The Department may also provide the property owner with copies of any other notices or communications with the applicant sent at any time before or after issuance of the permit.
(c) Term. A massage establishment permit issued pursuant to the terms of this chapter shall be valid for a term of one year from the date of issuance, and, unless suspended or revoked, must be renewed by the massage establishment operator annually so long as the massage establishment is operating within the city. (d) Insurance. Insurance coverage is a condition of receiving a permit and proof of such coverage is required. Unless specified otherwise by Department regulation, proof of liability insurance, or the equivalent, for not less than one hundred thousand dollars ($100,000) per massage therapist licensed, or to be licensed, at the massage establishment up to a maximum of one million dollars ($1,000,000) shall be required by the time of permit issuance. This requirement can be satisfied by insurance provided in the name of a massage therapist or the massage establishment. Coverage must be Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
12 Packet Pg. 58 of 228

NOT YET APPROVED

12 149_20251222_ts24
maintained for the entirety of the permit period. The Department may establish regulations governing insurance requirements that do not conflict with this section.

4.54.110 Permit denial.

The Department may deny an application for a massage establishment permit on any of the following grounds:
(a) The massage establishment, as proposed by the applicant, would not comply with the requirements of this chapter.
(b) The massage establishment, as proposed by the applicant, would not comply with any applicable law, including, but not limited to the city's building, fire, zoning, and health regulations or regulations under the CAMTC.
(c) The applicant has knowingly made any false, misleading or fraudulent statement of material fact in the application for a massage establishment permit. (d) Any owner of the massage establishment, within five years immediately preceding the date of filing of the application, has been convicted in a court of competent jurisdiction of any offense that relates directly to the operation of a massage establishment whether as a massage establishment owner or operator or as a person practicing massage for compensation, or as an employee of either; or has at any time been convicted in a court of competent jurisdiction of any felony the commission of which occurred on the premises of a massage establishment.
(e) Any owner of the massage establishment is currently required to register under the provisions of Section 290 of the California Penal Code. (f) Any owner of the massage establishment, within five years of the date of application, has been convicted in a court of competent jurisdiction of any violation of Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, 647(b) of the California Penal Code, or conspiracy or attempt to commit any such offense, or any offense in a jurisdiction outside of the State of California that is the equivalent of any of the aforesaid offenses.
(g) Any owner of the massage establishment has been subjected to a permanent injunction against the conducting or maintaining of a nuisance pursuant to Sections 11225 through Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
13 Packet Pg. 59 of 228

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13 149_20251222_ts24
11235 of the California Penal Code, or any similar provision of law in a jurisdiction outside the State of California.
(h) Any owner of the massage establishment, within five years of the date of application, and as established by clear and convincing evidence, has engaged in acts prohibited under California Penal Code Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, 647(b).
(i) Any owner of the massage establishment is an individual who has not attained the age of eighteen years.
(j) Any owner of the massage establishment, within five years immediately preceding the date of filing of the application, has had a certificate, permit or license to practice massage for compensation or to own and/or operate a massage establishment revoked or denied in any jurisdiction, including CAMTC.
(k) Any owner of the massage establishment currently owns or operates a massage establishment in the city of Palo Alto that is not in good standing due to the existence of uncorrected violations or unpaid fines or fees.
(l) Within the last five years, the applicant has failed to comply with a final court order or administrative action of an investigatory agency finding a violation of applicable federal, state and local wage and hour laws, including, but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and any local minimum wage ordinance or prevailing wage requirements. For purposes of this subsection, a final court order or administrative action is one as to which there is no pending appeal and the time for filing an appeal has passed.

4.54.120 Notice of denial—Appeal.
(a) If an application for a massage establishment permit is denied, the Department shall give written notice to the applicant specifying the grounds for denial. (b) The applicant may appeal the decision to deny a massage establishment permit by filing a written notice of appeal with the Department within fifteen days after deposit of the decision in the mail, specifying in detail the grounds for such appeal.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
14 Packet Pg. 60 of 228

NOT YET APPROVED

14 149_20251222_ts24
(c) The City Clerk shall set a time and place for the hearing on the appeal not less than thirty days after the date the appeal was received by the Department, and shall give written notice by mail to the applicant of the date, time, and place for the hearing. The hearing may be conducted virtually or by phone at the discretion of the City. The hearing shall be conducted in accordance with Section 4.54.180. (d) After the hearing on the appeal, the City’s hearing officer may refer the matter back to the Department for a new investigation and decision, may affirm the decision of the Department, or may direct the Department to issue the license. The decision of the hearing officer or designee upon such appeal shall be final and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6.

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
15 Packet Pg. 61 of 228

NOT YET APPROVED

15 149_20251222_ts24

4.54.140 Requirements for all massage establishment facilities and operations. (a) Operational Requirements. Except as otherwise specifically provided in this chapter, the following operational requirements shall be applicable to all massage establishments located within the city:
(1) No massage establishment shall be kept open for business between the hours of ten p.m. of one day and eight a.m. of the following day. A massage begun any time before ten p.m. must nevertheless terminate at ten p.m. This restriction does not apply to the use of hot tubs at a massage establishment that also has hot tubs in compliance with PAMC Chapter 4.56, but must follow any other applicable law or condition of permit as to hours of operation. (A) After ten years of co ntinuous operation, a massage establishment may be exempted from the hours restrictions of this section by the Department upon a written request which details the factual reasons supporting good cause for the exemption. The Department, in determining what constitutes good cause for this exemption from the hours restrictions, shall consider and weight the following factors: (i) ongoing compliance with this Chapter including updated review of permit requirements; (ii) the impact which the massage establishment has had on the health, safety, and welfare of the local community, including, but not limited to, parking and traffic congestion; and (iii) the massage establishment's compliance or noncompliance with all federal, state, and local laws, including, but not limited to, this municipal code. If, upon review of those factors, the Department determines that good cause does exist for the requested exemption, the Department may then exempt the massage establishment from the hours restrictions of this section. However, in no event shall any massage end later than midnight or begin earlier than six a.m. If the Department denies an application for an exemption under this subsection (A), the massage establishment may appeal under the process in PAMC section 4.54.120. The Department may revoke an exemption issued under this subsection (A) for the Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
16 Packet Pg. 62 of 228

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16 149_20251222_ts24
reasons stated in PAMC section 4.54.170 and such revocation is subject to hearing under PAMC section 4.54.180.
(2) The hours of operation of the massage establishment shall be displayed in a conspicuous public place in the reception and waiting area and in any front window clearly visible from outside of the massage establishment. (3) Patrons and visitors shall be permitted in the massage establishment only during the hours of operation.
(4) During the hours of operation, patrons shall be permitted in massage therapy rooms only if at least one duly authorized certified massage professional is present on the premises of the massage establishment. Patrons shall not be permitted in any employee break room on the premises.
(5) During the hours of operation, visitors shall not be permitted in massage therapy rooms except as follows:
(A) The parents or guardian of a patron who is a minor child may be present in the massage therapy room with that minor child;
(B) The minor child of a patron may be present in the massage therapy room with the patron when necessary for the supervision of the child; or (C) The conservator, aid, or other caretaker of a patron who is elderly or disabled may be present in the massage therapy room with that elderly or disabled person.
(6) During the hours of operation, except as otherwise provided herein, no visitors shall be permitted in massage therapy rooms, break rooms, dressing rooms, showers, or any other room or part of the massage establishment premises other than the reception and waiting area or toilet rooms. (7) Except for a patron who is inside a massage therapy room for the purpose of receiving a massage, no patrons or visitors shall be permitted in or on the massage establishment premises at any time who are less than fully clothed in outer garments of nontransparent material, or who display or expose themselves in underclothing or similar intimate apparel.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
17 Packet Pg. 63 of 228

NOT YET APPROVED

17 149_20251222_ts24
(8) A list of massage services available and the cost of such services shall be posted in an open and conspicuous public place on the premises. The massage services shall be described in English and may also be described in such other languages as may be convenient. No massage establishment operator shall permit, and no person employed or retained by the massage establishment shall offer to perform any massage services or request or demand fees other than those posted.
(9) The massage establishment shall keep on the premises a complete and current roster of all owners, operators, and managing employees of the massage establishment and all massage professionals and other persons employed or retained by the massage establishment. The roster shall include the name, residence address, and phone number of each individual. The roster shall be available for inspection by city officials charged with the enforcement of this chapter.
(b) Physical Facility and Building and Fire Code Requirements. Except as otherwise specifically provided in this chapter, the following physical facility and building code requirements shall be applicable to all massage establishments located within the city:
(1) Main entry door and reception and waiting area required. One or more main entry door shall be provided for patron entry to the massage establishment, which shall open to an interior patron reception and waiting area immediately.

All patrons and any persons other than individuals employed or retained by the massage establishment shall be required to enter and exit through the main entry door(s). Unless the massage establishment is a sole proprietorship or a home occupation with one or no other employees, the main entry door shall be unlocked at all times during business hours.
(2) No massage establishment located in a building or structure with exterior windows fronting a public street, highway, walkway, or parking area shall block visibility into the interior reception and waiting area through the use of curtains, Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
18 Packet Pg. 64 of 228

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18 149_20251222_ts24
closed blinds, tints, or any other material that obstructs, blurs, or unreasonably darkens the view into the premises.
(3) All interior doors, including massage therapy rooms or cubicles (but excluding individual dressing rooms, showers, and toilet rooms, storage/equipment rooms, offices for staff only, and rooms for hot tubs at massage establishments that are also a hot tub/sauna establishment in compliance with PAMC Chapter 4.56) shall be incapable of being locked and shall not be blocked to prevent opening. Draw drapes, curtain enclosures, or accordion-pleated closures in lieu of doors are acceptable on all inner massage therapy rooms or cubicles. (4) Minimum lighting equivalent to at least one forty-watt light shall be provided in each massage therapy room or cubicle.
(5) A massage table or professional massage chair specifically designed for seated massage shall be used for all massage therapy, with the exception of "Thai," "Shiatsu," and similar forms of massage therapy, which may be provided on a padded mat on the floor, provided the patron is fully attired in loose clothing, pajamas, scrubs, or similar style of garment. Massage tables shall have a minimum height of eighteen inches.
(6) Beds, floor mattresses, and waterbeds are not permitted on the premises of the massage establishment, and no massage establishment shall be used for residential or sleeping purposes, which may be shown by circumstantial evidence such as the presence of bedding, pillows, sleeping bags, suitcases, clothing, toiletries or other personal belongings, cooking appliances, utensils or food in excess of a business establishment's normal requirements. A massage establishment that is also a hot tub/sauna establishment in compliance with PAMC Chapter 4.56 may have beds or floor mattresses only in rooms used for hot tubs and shall not be used for massage or residential purposes. (7) All locker facilities that are provided for the use of patrons shall be fully secured for the protection of the patrons' valuables, and each patron shall be given control of the key or other means of access.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
19 Packet Pg. 65 of 228

NOT YET APPROVED

19 149_20251222_ts24
(8) The massage establishment shall comply with all applicable state and local building and fire codes as adopted in Title 16 of this code. (9) Any signage referring to the massage establishment located on or adjacent to the building housing the massage establishment must match the business name that is listed on the massage establishment permit. A massage establishment shall not have signage that refers to another business name. (c) Health and Safety Requirements. Except as otherwise specifically provided in this chapter, the following health and safety requirements shall be applicable to all massage establishments located within the city:
(1) The massage establishment shall at all times be equipped with an adequate supply of clean sanitary towels, coverings, and linens. Massage table or chair shall be covered with a fresh, clean sheet or other clean covering appropriate to the equipment for each patron, just before the client arrives. After a towel, covering, or linen has been used once, it shall be deposited in a closed receptacle and not used again until properly laundered and sanitized. Towels, coverings, and linens shall be laundered either by regular commercial laundering, or by a noncommercial laundering process that includes immersion in water at least one hundred forty degrees Fahrenheit for not less than fifteen minutes during the washing or rinsing operation. Clean towels, coverings, and linens shall be stored in closed, clean cabinets when not in use. A certified massage professional engaged in the practice of mobile massage shall carry a sufficient quantity of clean and sanitary towels, sheets, and linens to comply with the requirements. (2) All massage therapy rooms or cubicles, wet and dry heat rooms, toilet rooms, shower compartments, hot tubs, and pools shall be thoroughly cleaned and disinfected as needed, and at least once each business day when the premises has been or will be open and such facilities in use. All bathtubs shall be thoroughly cleaned and disinfected after each use.
(3) All liquids, creams, or other preparations used on or made available to patrons shall be kept in clean and closed containers. Powders may be kept in clean Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
20 Packet Pg. 66 of 228

NOT YET APPROVED

20 149_20251222_ts24
shakers. All bottles and containers shall be distinctly and correctly labeled to disclose their contents. When only a portion of a liquid, cream, or other preparation is to be used on or made available to a patron, it shall be removed from the container in such a way as not to contaminate the remaining portion. (4) No invasive procedures shall be performed on any patron. Invasive procedures include, but are not limited to:
(A) Application of electricity that contracts the muscle; (B) Penetration of the skin by metal needles;
(C) Abrasion of the skin below the nonliving, epidermal layers; (D) Removal of skin by means of any razor-edged instrument or other device or tool;
(E) Use of any needle-like instrument for the purpose of extracting skin blemishes; and
(F) Other similar procedures.
(5) All bathrobes, bathing suits, and/or other garments that are provided for the use of patrons shall be either fully disposable and not used by more than one patron, or shall be laundered after each use pursuant to subsection (c)(1) of this section. (6) All combs, brushes, and/or other personal items of grooming or hygiene that are provided for the use of patrons shall be either fully disposable and not used by more than one patron, or shall be fully disinfected after each use. (7) All massage establishments must provide patrons with slip-resistant sandals or flip-flops to wear while in the shower compartment. All footwear such as sandals or flip-flops that are provided for the use of patrons either shall be fully disposable and not used by more than one patron, or shall be fully disinfected after each use.
(8) Patrons' genitals and female patrons' breasts must be fully draped at all times while any individual employed or retained by the massage establishment is in the massage room or cubicle with the patron. No massage shall be provided to a Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
21 Packet Pg. 67 of 228

NOT YET APPROVED

21 149_20251222_ts24
patron that results in intentional contact, or occasional and repetitive contact, with the genitals or anal region of a patron.
(9) No alcoholic beverages shall be sold, served, or furnished to any patron; nor shall any alcoholic beverages be kept or possessed on the premises of a massage establishment. A massage establishment that is also a hot tub/sauna establishment in compliance with PAMC Ch. 4.56 is not subject to this limitation for non-massage areas of the establishment, but must adhere to all other applicable laws, including any applicable zoning code provisions and California Department of Alcohol Beverage Control requirements.
(d) Attire and Physical Hygiene Requirements. The following attire and physical hygiene requirements shall be applicable to all employees and any other persons who work permanently or temporarily on the premises of a massage establishment within the city, including, but not limited to, all persons who are employed or retained to practice massage for the massage establishment:
(1) No person shall dress in:
(A) Attire that is transparent, see-through, or substantially exposes the person's undergarments;
(B) Swim attire, unless providing a water-based massage modality approved by the CAMTC;
(C) A manner that exposes the person's chest, breasts, buttocks, or genitals; (2) No massage establishment operator, employee, or visitor shall, while on the premises of a massage establishment or while performing any mobile massage service, and while in the presence of any patron, customer, employee or visitor, expose his or her chest, breast, buttocks, or genitals. (3) All persons shall thoroughly wash their hands with soap and water or any equally effective cleansing agent immediately before providing massage to a patron. No massage shall be provided upon a surface of the skin or scalp of a patron where such skin is inflamed, broken (e.g., abraded or cut), or where a skin infection or eruption is present.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
22 Packet Pg. 68 of 228

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22 149_20251222_ts24
(e) Display of Permit and Certifications.
(1) The massage establishment permit shall be displayed in an open and conspicuous place on the premises visible from the main entry door and/or reception and waiting area of the massage establishment. (2) Each person employed or retained by a massage establishment to perform massage in or on the premises or through a mobile massage service shall display on his or her person the valid current photograph-bearing identification card issued to that employee by the CAMTC. A copy of each such identification card and the person's original CAMTC certificate shall also be displayed in an open and conspicuous place visible from the main entry door and/or reception and waiting area of the massage establishment. The home address of any employee need not be displayed. If a massage establishment has more than 25 massage therapists and can demonstrate to the Department it is not reasonably practical to display a copy of each identification card and original CAMTC certificate as required above, then the massage establishment may request from the Department an alternative method of displaying copies of identification cards and CAMTC certificates. Such alternatives may only be approved in writing and shall comply with any applicable state law requirements. (f) Display of Human Trafficking Notices. The massage establishment shall comply with the requirements in California Civil Code Section 52.6 related to the posting of information for victims of human trafficking.
(g) Home Occupation and Mobile-Only Businesses—Exemptions. (1) Where a certified massage establishment is a home occupation, and the operator has complied with the provisions of Section 18.42.010 of this code pertaining to home occupations, the provisions of subsections (a)(2), (b)(1)—(3), and (b)(6) of this section shall not apply, and the portions of the residence subject to the requirements of subsections (b) and (c) of this section shall be only those portions that are used at any time by the patron of the massage establishment.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
23 Packet Pg. 69 of 228

NOT YET APPROVED

23 149_20251222_ts24
(2) For massage establishments that provide mobile-only services and have no fixed location for performing massage, provisions of this section related to businesses with fixed locations shall not apply. Specifically, the provisions of subsections (a)(2)—(9), (b)(1)—(4), (b)(6)—(8), (c)(2) a nd (7), (e)(1), and (f) of this section shall not apply to mobile-only establishments.

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

4.54.160 Reserved.

4.54.170 Revocation or suspension.

All massage establishment operators shall be deemed to know and understand the requirements and prohibitions of this chapter. Any massage establishment permit issued pursuant to this chapter may be suspended or revoked by the Department after a hearing, where the Department finds that any of the following have occurred on even a single occasion:
(a) The permittee or any person employed or retained by the massage establishment has violated any provision of this chapter.
(b) The permittee or any person employed or retained by the massage establishment has been convicted in a court of competent jurisdiction of having violated, or has engaged in conduct constituting a violation of, any of the following: California Penal Code Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, 647(b), or conspiracy or Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
24 Packet Pg. 70 of 228

NOT YET APPROVED

24 149_20251222_ts24
attempt to commit any such offense, or any offense in a jurisdiction outside of the State of California that is the equivalent of any of the aforesaid offenses. (c) The permittee or any person employed or retained by the massage establishment is required to register under Section 290 of the California Penal Code. (d) The permittee has been subject to a permanent injunction against the conducting or maintaining of a nuisance pursuant to this code, or Sections 11225 through 11235 of the California Penal Code, or any similar provision of law in any jurisdiction outside the State of California.
(e) The permittee or any person employed or retained by the massage establishment has engaged in fraud or misrepresentation or has knowingly made a misstatement of material fact while working in or for the massage establishment as it pertains to the massage establishment.
(f) The permittee has continued to operate the massage establishment after the massage establishment permit has been suspended.
(g) Massage has been performed on the premises of the massage establishment, with or without the permittee's actual knowledge, by any person who is not a duly authorized CAMTC-certified massage professional.
(h) A person who is not a duly authorized CAMTC-certified massage professional has provided mobile massage services through or on behalf of the massage establishment. (i) There have been one or more acts prohibited under California Penal Code Sections 266, 266a, 266e, 266f, 266g, 266h, 266i, 266j, 315, 316, 318, or 647(b), taking place on the premises of the massage establishment, whether or not any criminal prosecution has been pursued or conviction obtained for such acts, and whether or not they occurred with or without the actual knowledge of the permittee.
(j) The permittee or any person employed or retained by the massage establishment or any other person on the premises of the massage establishment has engaged in conduct or committed acts that a reasonable person in the patron's position would understand as an offer to perform on or engage in with the patron acts that are sexual in nature or that involve touching of the patron's genitals, or anal region.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
25 Packet Pg. 71 of 228

NOT YET APPROVED

25 149_20251222_ts24
(k) The permittee or any person employed or retained by the massage establishment has engaged in sexually suggestive advertising related to massage services available at the massage establishment, including, but not limited to displaying photographs of individuals clothed in swim attire, or attire that is transparent, see-through or substantially exposes the individual's undergarments, breasts, buttocks, or genitals, describing massage services as "erotic," "sensual" or similarly sexual in nature, listing advertisements in any media (including online) intended for adults only, or describing the appearance or age of massage providers.
(l) If the applicant has failed to comply with a final court order or administrative action of an investigatory agency finding a violation of applicable federal, state and local wage and hour laws, including, but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and any local minimum wage ordinance or prevailing wage requirements. For purposes of this subsection, a final court order or administrative action is one as to which there is no pending appeal and the time for filing an appeal has passed. In addition, any disciplinary action taken by CAMTC shall be considered in determining grounds for revocation, suspension or nonrenewal.

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
26 Packet Pg. 72 of 228

NOT YET APPROVED

26 149_20251222_ts24
(c) Within ten days from the deposit of the decision letter in the mail or its receipt by the permittee, whichever occurs first, the permittee may appeal the decision in writing to the city manager or designee, setting forth with particularity the ground or grounds for the appeal.
(d) The hearing officer shall give written notice of the hearing on the appeal not less than ten days from the date the appeal was received by the city. The hearing shall be conducted in accordance with Section 4.54.190.
(e) After the hearing on the appeal, the hearing officer or designee may refer the matter back to the Department for a new investigation and decision, may affirm the decision of the Department, may dismiss the disciplinary action, or may revoke or suspend the permit. The decision of the hearing officer upon such appeal shall be final and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6.
(f) The notices provided to the massage establishment pursuant to this section may also be sent to the owner of the premises where the massage establishment is located.

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

4.54.190 Hearing rules.

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

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

Any massage establishment operated, conducted, or maintained contrary to the provisions of this chapter shall be, and the same is hereby declared to be, unlawful and a public nuisance, and Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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the city attorney may, in addition to or in lieu of prosecuting a criminal action hereunder, commence an action or actions, proceeding or proceedings, for the abatement, removal and enjoinment thereof, in the manner provided by la w. Such remedies shall be in addition to any other judicial and administrative penalties and re medies available to the city under this code or under state law.
(a) For the purpose of enforcing the requirements of this chapter, all owners and operators of the massage establishment shall be jointly and severally responsible for the conduct of all massage establishment employees, agents, independent contractors, or other representatives while such persons are on the premises of the massage establishment or providing mobile massage services on behalf of the massage establishment. (b) In addition to any other remedy available to the city under applicable law, a massage establishment permit may be suspended or revoked as provided in Sections 4.54.170 and 4.54.180. Upon issuance of a final order by the Department or Hearing Officer to revoke the massage permit, the massage establishment shall immediately cease operation, and, if so ordered by the hearing officer, no other massage establishment shall be permitted to operate at that location by any person for a period of not less than five years ("the moratorium period"). If the operator is not also the legal owner of the real property on which the massage establishment is situated, notice of such revocation and the five-year prohibition shall be provided by the permit authority to the owner of record of the property as shown on the latest county assessment roll.
(c) In addition to any other remedy available to the city under applicable law, a massage establishment permit may not be renewed or amended unless and until all due and unpaid citations issued pursuant to this chapter are paid in full, and all outstanding violations have been corrected.
(d) Notwithstanding any other provision of this chapter, where a Notice of Revocation or Suspension has been issued to the operator of a massage establishment pursuant to Section 4.54.180 of this chapter, the Department shall not process or grant an application for a massage establishment permit for a new massage establishment at the Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
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28 149_20251222_ts24
same premises unless and until such Notice of Revocation or Suspension is dismissed; or a final determination is made pursuant to that section that the current operator's massage establishment permit is not or should not be revoked; or any moratorium period imposed pursuant to this chapter has expired.

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

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

4.56.010 Purpose and intent.

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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29 Packet Pg. 75 of 228

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4.56.020 Definitions.

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

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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(c) "License" means the license to operate a hot/tub sauna establishment as required by this chapter.
(d) "Permit" means the permit to engage in the activities of a hot tub/sauna establishment employee as required by this chapter.
(e) "Person" means any individual, partnership, firm, association. joint venture, corporation. or combination of individuals.

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

4.56.030 Hot tub/sauna establishment County license required.

It is unlawful for any person to engage in, conduct or carry on, in or upon any premises within the city the operation of a hot tub//sauna establishment without the any applicable valid license(s) or permit(s) required by and obtained from the chief of police as required by this chapter. A. hot tub/sauna establishment license the County of Santa Clara. shall be issued to any person who has complied with the requirements of Sections 4.56.050 and 4.56.110, and all applicable provisions of the code; unless grounds for denial of such license are found to exist. In addition to those set forth in Section 4.04.140, grounds for denial shall include:
(a) The applicant made a material misstatement in the application for a license; (b) The applicant has, within five years immediately preceding the date of the filing of the application, been convicted in a court of competent jurisdiction of an offense involving conduct which requires registration under California Penal Code Section 290, or any violations of Sections 311 through 311.7, 313.1, 314, 315, 316, 318, or 647(a), 647(b), 647(d), or 647(h) of the California Penal Code, or of any offense involving theft of property or violence; (c) That the operation of a hot tub/sauna establishment, as proposed by the applicant, if permitted, would not comply with all applicable laws including, but not limited to, all city ordinances and regulations;
(d) That the operation of the proposed hot tub/sauna establishment is likely to be injurious to the health, safety and welfare of the people of the city; Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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(e) That the applicant is lacking in the background and qualifications to conduct a bona fide hot tub/sauna establishment; or
(f) That the applicant has violated any provision of this chapter, or of any similar ordinance, law, rule or regulation of another public agency which regulates the operation of hot tub/sauna or related establishments.

4.56.040 Hot tub/sauna establishment license application fee.

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

Reserved.

4.56.050 Application for hot tub/sauna establishment license.

Any application for a license to operate a hot tub/sauna establishment shall be made with the chief of police. Within thirty working days following receipt of a completed application, the chief of police shall either issue the permit or mail a written statement of his reasons for denial thereof. The application shall set forth the exact nature of the hot tub/sauna operations or activities to be conducted, the proposed place of business and facilities therefor, and the name and address of each applicant. In addition to the requirements of Chapter 4.04 and this section, any applicant shall furnish the following information:
(a) The previous address of applicant, if any, for a period of three years immediately prior to the date of the application and the dates of residence at each; (b) Written proof that the applicant is at least eighteen years of age; (c) Applicant's height, weight, color of eyes and hair; Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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(d) The applicant shall allow the police department official processing the application to take photographs and fingerprints of the applicant;
(e) Business, occupation or employment history of the applicant for the three years immediately preceding the date of the application;
(f) If the applicant is a corporation, the name of the corporation shall be set forth exactly as shown in its articles of incorporation, together with the names and residence addresses of each of its officers, directors, and each stockholder holding more than five percent of the stock of the corporation. If the applicant is a partnership, the application shall set forth the name and residence address of each of the partners, including limited partners. If one or more of the partners is a corporation, the provisions of this section pertaining to a corporate applicant shall apply;
(g) The names and residence addresses of all persons currently employed or intended to be employed in the hot tub/sauna establishment, regardless of the nature of the employment, other than any person licensed pursuant to Section 4.56.060, along with the proposed or actual nature of the work performed or to be performed, and recent passport-size photographs, suitable to the police department official processing the application, of each such employee. All such employees shall be requested to obtain the permit specified in Section 4.56.060. Any applicant or licensee shall notify the city in writing of the names, addresses, and nature of the work, of any new or proposed employees, and supply the photographs described in this subsection upon determining to employ such person. No such person shall commence such employment until a permit has been obtained as specified in Section 4.56.060. "Employee" means "hot tub/sauna establishment employee" as defined herein. It shall be unlawful for any licensee to employ any hot tub/sauna establishment employee who does not possess a valid permit provided for in Section 4.56.020. Any licensee shall notify the chief of police in writing of the termination of employment of any employee, whether terminated by the licensee or employee, within five days of such termination;
(h) Such other information as may be deemed necessary by the chief of police.

Reserved.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
33 Packet Pg. 79 of 228

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33 149_20251222_ts24

4.56.060 Hot tub/sauna establishment employee permit required.

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

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

Reserved.

4.56.070 Hot tub/sauna establishment employee application fee.

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
34 Packet Pg. 80 of 228

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Reserved.

4.56.080 Application for hot tub/sauna establishment employee permit.

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

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

Reserved.

4.56.090 Appeal.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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35 Packet Pg. 81 of 228

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

Reserved.

4.56.100 Hot tub/sauna establishment and operations requirements.

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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(e) All walls, ceilings, floors, pools, showers, bathtubs, hot tubs, jacuzzis, saunas, steam rooms, and all other physical facilities within the establishment must be in good repair and maintained in a clean and sanitary condition. Wet and dry heat rooms, steam or vapor rooms, or steam or vapor cabinets, shower compartments, bathrooms, toilet rooms, saunas, jacuzzis, hot tubs, and individual suites shall be thoroughly cleaned and disinfected each day the business is in operation. Bathtubs (not including hot tubs) shall be cleaned and thoroughly disinfected after each use. Not more than one hot tub or similar water-holding device shall be operated from the same heating or filtering device or any similar mechanism unless each such hot tub or other similar device is capable of being emptied and refilled independent of any other hot tub.
(f) The walls in all rooms where water or steam baths are given shall have a washable, mold- resistant surface.
(g) All lavatories or wash basins shall be provided with hot and cold running water, soap and single-service towels in wall-mounted dispensers.
(h) Cabinets or other covered space shall be provided for the storage of clean linen. (i) To protect patrons from potential health and sanitary hazards, all hot tub/sauna establishment employees shall be clean and shall perform all services on the premises in full, clean outer garments.
(j) Security deposit facilities capable of being locked by the patron or a waterproof security bag that may be carried by the patron shall be available for the protection of the valuables of the patron.
(k) Each service or facility offered, the price thereof, and the minimum length of time such service shall be performed shall be posted in a conspicuous public location within the hot tub/sauna establishment. If the hot tub/sauna establishment contains within it one or more individual rooms or suites, the hourly rental rate for such individual rooms or suites shall also be posted in a conspicuous public location, along with the minimum and maximum periods of time such individual rooms or suites can be rented. All letters and numbers shall be capitals, and not less than one-half inch in height.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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(l) No mirrors of any type shall be placed at any location within or inside the hot tub/sauna establishment unless the approval of the chief of police has first been obtained; provided, however, that if the hot tub/sauna establishment is comprised of one or more individual rooms or suites, a small mirror, not more than three square feet in size, may be placed on the interior of such room or suite on the door leading from such individual room or suite into any interior hallway within such establishment, or such other comparable location not visible from the exterior of such individual room or suite when the door thereto is open as may be approved by the chief of police.
(m) If the hot tub/sauna establishment is comprised of one or more individual rooms or suites which are rented to patrons, the interior of any such individual room or suite shall not be visible from any point outside the room or suite when the door leading from such individual room or suite into any interior hallway is closed.
(n) No alcoholic beverages of any type shall be permitted to be brought into or consumed within or upon the premises or property of any hot tub/sauna establishment. (o) No nudity shall be permitted or allowed to occur in any interior hallways of the establishment, or in any other open patron area or areas located within the hot tub/sauna establishment. Nudity shall only be permitted or allowed within the confines of an individual room or suite located within the establishment and then only by the patrons who have rented such room or suite.
(p) No individual under the age of eighteen years shall be allowed to enter into or to remain upon or within the premises of any hot tub/sauna establishment unless such individual is accompanied by his or her parent or guardian.
(q) All hot tub/sauna establishment employees, while on duty:
(1) Shall remain fully clothed at all times;
(2) Shall not remain inside any of the individual rooms or suites with any patrons of the establishment while the doors leading to the hallways from such rooms or suites are closed.

Said doors shall remain closed at all times during which the individual room or suite is occupied and utilized by any patron;
Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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(3) Shall not perform, for compensation or otherwise, any type of personal services for the patrons of the establishment, which personal services consist of the touching of any part of the body of a patron with any part of the employee's body, or any implement utilized by an employee.
(r) (1) Hot tub/sauna establishments shall close and remain closed from eleven p.m. to nine a.m.
(2) After one year of operation, a hot tub/sauna establishment may be exempted from the hours restrictions of this section by the chief of police upon a written request which details the factual reasons supporting good cause for the exemption. The chief of police, in determining what constitutes good cause for this exemption from the hours restrictions, shall consider and weight the following factors:
(A) The criteria outlined in Section 4.04.140 of Chapter 4.04; (B) The criteria outlined in Section 4.56.030 of this chapter; (C) The impact which the hot tub/sauna establishment has had on the health, safety, and welfare of the local community, including, but not limited to, parking and traffic congestion; (D) The hot tub/sauna establishment's compliance or noncompliance with all federal, state, and local laws, including, but not limited to, this municipal code.

If, upon review of these factors, the chief of police determines that good cause does exist for the requested exemption, the chief may then exempt the particular hot tub/sauna establishment from the hours restrictions of this section. However, in no event shall any hot tub/sauna establishment close later than two a.m. nor open earlier than six a.m. (3) The exemption from the hours restrictions of this section shall be subject to review and renewal annually at the same time as the renewal of the underlying license and the same factual showing shall be made as that required for the initial exemption. The chief shall not grant an hours exemption unless said establishment has maintained the criteria specified in Section 4.56.100(r)(2).
(s) No hot tub/sauna establishment shall be allowed in the following locations:
(1) Within two hundred fifty feet of the exterior property limits of any public or private elementary school, junior high school or high school;
Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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(2) Within two hundred fifty feet of the exterior limits of any district where residential use is the principal permitted use, including all R and RM districts, O-S districts, and any P-C or P-F districts where the principal use permitted or maintained is residential; or (3) Within twelve hundred feet of the exterior property limits of any other premises lawfully occupied by a hot tub/sauna establishment or by any establishment subject to the provisions of Chapters 4.54 or 4.55, or any cardroom licensed pursuant to Chapter 4.52. Notwithstanding the provisions of this subdivision, subject to all other provisions of this chapter, a hot tub/sauna establishment license may be issued for an establishment located within twelve hundred feet of another hot tub/sauna establishment, an establishment subject to the provisions of Chapters

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

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
Pg.
40 Packet Pg. 86 of 228

NOT YET APPROVED

40 149_20251222_ts24
Any hot tub/sauna establishment legally existing on the effective date of this subsection and which is not in compliance with the provisions of this subsection shall comply with said provisions within three years of the effective date of this subsection; provided, however, that any such establishment which intends to in any way transfer ownership or alter or change the nature of any such hot tub/sauna establishment on or after the effective date of this subsection shall comply with the provisions of this subsection prior to such transfer, alteration or change.

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

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

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

Reserved.

4.56.110 Inspection by officials.

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

4.56.120 Business name.

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

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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NOT YET APPROVED

41 149_20251222_ts24

4.56.130 Business location change.

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

Reserved.

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

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

Reserved.

4.56.150 Display of permits, licenses.

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

Reserved.

4.56.160 Grounds for denial, probation, and disciplinary action.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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NOT YET APPROVED

42 149_20251222_ts24
In addition to any provisions contained in this chapter, the provisions of Section 4.04.140 shall apply to licenses and permits required under this chapter. Any circumstances constituting grounds for denial shall also constitute grounds for revocation, suspension or disciplinary action.

Reserved.

4.56.170 Hearing.

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

Reserved.

4.56.180 Application to existing establishments and employees.

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

Reserved.

4.56.190 Application of other code provisions.

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

Reserved.

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

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

Reserved.

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

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43 Packet Pg. 89 of 228

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

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

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

INTRODUCED:

PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

A T T E S T :

____________________________ ________ ____________________ C i t y C l e r k M a y o r

APPROVED AS TO FORM: APPROVED:

____________________________ ________ ____________________ Assistant City Attorney City Manager

________ ____________________
C h i e f o f P o l i c e

Item 6
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Chapter

4.54 (“Massage
Establishments”) and
Chapter 4.56 (Hot TubSauna
Establishments) of Title 4
(Business Licenses and
Regulations)

Item 6: Staff Report
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City Council
Staff Report
Report Type: ACTION ITEMS
Lead Department: City Clerk
Meeting Date: February 2, 2026
Report #:2512-5593
TITLE
Approval of FY 2026 Architectural Review Board, Historic Resources Board, Planning and Transportation Commission, and Utilities Advisory Commission Work Plans; CEQA status– not a project

RECOMMENDATION
The Architectural Review Board, Historic Resources Board, Planning and Transportation Commission, and Utilities Advisory Commission recommend approval of their respective Fiscal Year 2026 Work Plans.

BACKGROUND
This item was originally scheduled on the Consent Calendar of the September 29, 2025 City Council Meeting and was pulled for further discussion as an Action Item.

On November 30, 2020, the City Council adopted the Boards, Commissions and Committees (BCC) Handbook1, which implemented an annual review and approval of BCC work plans. Each BCC is required to prepare an annual work plan for Council’s review and approval. The annual report should include the results of the prior year’s work plan and should consist of up to three priorities. When applicable, the City Council would like to see metrics of community involvement and participation in meetings and activities included in the work plan.

Council may refer additional items to the BCC in response to new developments. If the BCC would like to add an issue for review after an annual work plan has been approved, a prompt request by the BCC Chair to the City Council is required and the item will then be addressed by the City Council as a whole.
1 Boards, Commissions, Committees Handbook: https://www.paloalto.gov/files/assets/public/v/4/city-clerk/board- and-commission-handbook.pdf
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At its December 2, 2024 meeting3, the City Council approved dividing BCC recruitments and work plan approvals into fall and spring cycles. Per the adopted schedule, work plans for the Architectural Review Board, Historic Resources Board, Planning and Transportation Commission, and Utilities Advisory Commission are before the City Council for consideration.

City Council will consider work plans for the remaining BCCs (Human Relations Commission, Public Art Commission, Parks and Recreation Commission, and Storm Water Management Oversight Committee) in the spring.

FISCAL/RESOURCE IMPACT
Projects included in commission work plans ultimately require staff time and other City resources to complete. When possible, staff provide input to the commissions during work plan development to ensure the impact on staff time and resources is reasonable given staff workload and other competing priorities.

STAKEHOLDER ENGAGEMENT
Commission work plans are discussed publicly either at regular BCC meetings or retreats.

ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because this is a continuing administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).

ATTACHMENTS
Attachment A: 2025-2026 Architectural Review Board Work Plan Attachment B: 2025-2026 Historic Resources Board Work Plan Attachment C: 2025-2026 Planning and Transportation Commission Work Plan Attachment D: 2025-2026 Utilities Advisory Commission Work Plan APPROVED BY:

Mahealani Ah Yun, City Clerk
3 City Council, December 2, 2024; Agenda Item #14; SR # 2409-3480 https://portal.laserfiche.com/Portal/DocView.aspx?id=112709&repo=r-704298fc&searchid=22a967c7-0889-4b81- bbd2-d030b3f8cfe0
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Architectural Review Board
2025-2026 Workplan
Staff Liaison: Steven Switzer, Historic Preservation Planner Lead Department: Current Planning, Planning and Development Services Division

About the Board

The Architectural Review Board is composed of five members , at least three of whom are architects, landscape architects, building designers or other design professionals . Terms are for three years . See Palo Alto Municipal Code (PAMC) Chapter 2.21. Residency is not required. For the ARB webpage go to bit.ly/paloaltoARB.

Boardmembers
• David Hirsch
• Kendra Rosenberg (Chair)
• Marton Jojarth
• Mousam Adcock
• Yingxi Chen (Vice Chair)

Mission Statement

The Architectural Review Board reviews and makes recommendations to the Planning Director on the building design, site planning, landscape planning, massing and facades, material selection, lighting, signage and other related issues for most ma jor new construction including additions and renovations that alter the exterior building face. The type of buildings reviewed include commercial, industrial, and multiple-family residential. In addition, the ARB is a resource as knowledgeable observers of many varied urban environments, to assist Palo Alto as it develops area plans to accommodate additional housing.

The ARB Scope of Review is fully noted in Title 18 of the Municipal Code, Chapter 18.76 under Section 18.76.020 as well as in Chapter 18.77 under Section 18.77.073.

Prior Year
Accomplishments

• See attached summary for more information.

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Architectural Review Board Work Plan

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PROJECT/GOAL 1:

Review Planning applications for conformance with ARB Findings and Objective Standards

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
This is the Board's main mission and serves to
ensure the City develops high quality projects
On-Going Planning staff prepare staff reports,
packets and presentations. They ensure
paper plan sets and material boards are
ready for ARB review. Other
departments, such as, City Attorney,
Urban Forestry, Transportation, etc., may
be required from time to time.

Consultants, including CEQA
consultants, may also be required.

Issuance of recommendations on
projects and high-quality architecture
throughout the City.

Yes

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
N/A

PROJECT/GOAL 2: Provide feedback to staff and Council on the creation of new guidelines, ordinances, and/or streetscapes, as directed by Council

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
The ARB has unique feedback to provide as a
stakeholder as they have interest in approving
the aesthetic environment of the City while
also understanding constraints that
architects/developers may come across when
implementing standards being considered
Anticipated to return to the Board
in spring/summer 2025
Staff time. Council Approval Yes

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE

• Housing generation and feasibility.
• Innovative housing structures (e.g., micro-units, intergenerational housing, aging adults, students and lower-income units, etc.) consistent with Housing Element Program 6.5.

• Review and recommend aesthetic standards for Wireless Communication Facilities (WCFs) as part of an ongoing WCF Ordinance update.

Yes

PROJECT/GOAL 3: Assist the City as it considers modifications to Objective Standards; Provide feedback based on research from projects as they go through the objective standards ministerial processes. Suggest ways to better address different housing typology.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
Streamline the objective standard review
process and ensure that projects using the
streamlined review process/objective
standards conform to the City’s
Comprehensive Plan, Goals and Policies,
including its high-quality design standards
Provide high level modifications
to objective standards to Council
by the end of FY 2026; If
directed by Council, work with
staff to propose specific code
language for Council adopted by
the end of FY 2026
Additional staff at Planning so that the
quality and completeness of the work is
maintained.

Council Approval No
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PROJECT/GOAL 3: Assist the City as it considers modifications to Objective Standards; Provide feedback based on research from projects as they go through the objective standards ministerial processes. Suggest ways to better address different housing typology.

HIGH

PRIORITY
LOWER

PRIORITY

COUNCIL-DIRECTED

POLICY UPDATE

• Modifications to South of Forest Area Coordinated Area Plan (SOFA) subjective development standards with objective standards consistent with Housing Element Program 3.7.

• Modifications to address objective standards (18.24) based on review of several projects using the standards at Council’s direction.

Yes

PROJECT/GOAL 4: Discuss specific Coordinated Area Plans/ streetscape improvements and provide comments that the ARB would recommend exploring/implementing.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW /

COUNCIL-APPROVED
This project would enhance implementation of the
City's Comprehensive Plan.

On-going Planning staff to help research policies
and programs; coordination with long
range planning section staff.

Increased adherence to
Comprehensive Plan policies
Yes

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
• San Antonio Road Area Plan
• Downtown Housing Plan
• California Avenue streetscape improvements
• University Avenue streetscape improvements

Yes

PROJECT/GOAL 5: Improve Coordination between the Architectural Review Board and other boards, commissions, and Council.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL LAW / COUNCIL-APPROVED
Improved coordination between
boards/commissions and council to get
feedback from colleagues on other boards.

Provide more coordinated feedback from the
City for developers.

On-going Staff time. • Have staff continue to provide
updates in the pending projects
attachment on development
proposals.
• The ARB can appoint a
representative to attend Council
and PTC and to provide feedback
on reviewed projects.

No

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
No

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Architectural Review Board Work Plan

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ARCHITECTURAL REVIEW BOARD ANNUAL REPORT
PRIOR YEAR ACCOMPLISHMENTS AND ARB RECOMMENDATIONS FOR FISCAL YEAR 2025

ITEMS OF NOTE
• The ARB reviewed roughly 100 projects for the 2025 Design Awards and selected six winners to recognize their contributions to Palo Alto. • The ARB provided a comprehensive review and made recommendations on updates to the objective standards to better address townhome style designs and modifications to SB 9 objective standards. This work was consistent with Goal 2 of the 24/25 Work Plan. • The ARB provided valuable feedback to assist Council with respect to Car Free Streets Implementation Plan, specifically for California Avenue Signage. Although not explicitly identified in the work plan, this work was consistent with Goal 3 of the 24/25 Work Plan. • The ARB provided valuable feedback to assist Council with respect to the Lighting and Bird Safe Glazing Ordinances, Parklet designs, El Camino Real Focus Area, and Housing Incentive Program (HIP) consistent with Goal 4 of the 24/25 Work Plan. • The ARB reviewed around 20 projects, including multi-family housing with below-market units, mixed-use developments, master sign programs, and retail modifications at Stanford Shopping Center, aligning with Goal 1 of the 24/25 Work Plan.

APPLICATION REVIEW
The ARB prides itself on its collaborative review process, where board member’s diverse perspectives enhance proposed projects and improve Palo Alto's built environment. Our oversight has made a significant impact, as shown in the renderings section of this report, comparing initial proposals to final designs.

ADDRESS/PROJECT DESCRIPTION
4075 El Camino Way Assisted Living
Lighting Standards (PAMC 18.40.250) Ordinance
Bird Friendly Design (PAMC 18.40.250) Ordinance
525 University Avenue Master Sign Program
530 Lytton Avenue Master Sign Program
180 El Camino Real The Melt Façade
3000 El Camino Real Office Conversion
4335-4345 El Camino Real Housing (with inclusionary units) Housing Incentive Program (HIP) Ordinance
3150 El Camino Real Housing (with inclusionary units)
70 Encina Ave Housing (with inclusionary units) -Townhomes 3265 El Camino Real Affordable Housing
824 San Antonio Mixed Use (Retail and Assisted Living) 3950 Fabian Way Private Middle School
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ADDRESS/PROJECT DESCRIPTION
660 University Avenue Mixed Use (Office with Housing)
El Camino Real Focus Area Ordinance
Architecture Review Board Awards Award Program (Occurs every 5 years) 640 Waverley Street Mixed Use (Office with Housing)
164 Hamilton Avenue Façade
180 El Camino Real Delarosa Façade
California Ave Signage Car Free Street improvements
City Parking Garages Signage Exceptions
180 El Camino Real Cedar & Sage Façade
340 Portage Avenue Master Sign Program

Additionally, several projects were submitted for preliminary review to gather early feedback from the ARB. This early input helped incorporate key programming and design changes, streamlining the formal application process. These projects including 540 University Avenue and 640 Waverley Street.

ARB RECOMMENDATIONS TO COUNCIL
Palo Alto Municipal Code (PAMC) Section 2.21.030 directs the Architectural Review Board to report annually our “concerns… with respect to the city’s plans, policies, ordinances and procedures as these affect the projects which the board reviews.” Our reviews are site specific, focusing on individual development proposals rather than broad policies. However, we evaluate each project in its physical and regulatory context—considering its impact on the neighborhood and its alignment with City policies, from the Comprehensive Plan to the various design guidelines. Because the ARB looks at many projects each year, and its board members have years of experience in Palo Alto, patterns emerge and specific areas of concern have been identified.

Our comments this year are centered around the increasing importance of housing projects to the city.

1. Objective Design Standard Refinements. In our continuing response to recently enacted state legislation, Palo Alto previously adopted objective design review standards for housing projects, effectively eliminating architectural review on residential and mixed-use projects where objective standards can be met in order to streamline review of those applications.

Several residential projects over the past years were townhouse type developments (3200 Park Boulevard, 739 Sutter Avenue, 420 Acacia, and 70 Encina). In our review, it was noted that some of the current standards focused more on larger multi-family buildings. Therefore, some aspects of townhouse style design were not fully addressed/accommodated for in the standards. Through an Ad Hoc committee we studied many local townhouse developments and have provided the planning department with recommendations to modify the Objective Design Standards to address townhome designs as well as larger multi-family designs.

The ARB recommends that refinements be made to the objective standards based on implementation of the standards for a series of projects as well as with the recommendations from the ARB regarding modifications for townhome designs.

2. Coordinated Area Plans to Encourage Housing Development and Better Planning. • San Antonio Avenue: The San Antonio Avenue area is experiencing increasing residential development but our zoning regulations for the area are outdated and focused on commercial development, resulting in applicant uncertainty and long entitlement processes. The existing Item 7
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one-story light industrial and commercial buildings will be substantially replaced in the coming decade. A coordinated area plan will allow us to consider larger issues such as transportation, neighborhood parks, city services, pedestrian/bicycle pathways, and integration with nearby developments in Mountain View as this area transforms.
• Downtown Housing Plan: To increase housing, the downtown area needs revised standards to accommodate redevelopment of parking lots as to encourage housing additions while maintaining the vibrancy of the downtown area and its pedestrian friendly streetscape. • California Avenue: With State requirements as outlined in AB 2097 and Builder’s Remedy, the California Avenue area will experience more development then in the past. This area should have a coordinated area plan to better scope future development.

3. City Council/Planning Commission Communication. The Architecture Review Board has very little formal interaction with the City Council, the Planning Commission and the Historic Resources Board. Board members are forced to act on individual initiative to gain input from council members and other commissioners. Joint meetings with full boards are rarely productive; yet uncoordinated serial meetings leave commissioners unaware of feedback from colleagues on other boards. Applicants often feel that they are ‘running a gauntlet’ of approvals rather than facing a coordinated review.
• Have staff continue to provide updates in the pending projects attachment on development proposals. • Take direct feedback from the ARB on reviewed projects up for Council approval where Council approval is required. The ARB can appoint a member to represent the board directly to the Council.
• Request staff to schedule joint preliminary discussions between the ARB, PTC and HRB chairs/vice-chairs on projects of common interest.

These ‘preliminary meetings’ would not be to review specifics of a project; rather they would serve to coordinate the review process between boards and planning staff.
• Appoint HRB, PTC and Council liaisons to the ARB to facilitate open communication between boards and commissions and city council. ARB liaisons will provide a clear channel for passing information between reviewing bodies, enabling all board and commission and council members, as well as the general public, direct access to relevant information on a project-by-project basis.

RENDERINGS
Below are renderings of approved projects, showcasing the evolution from their initial proposal to designs with the incorporated ARB feedback. A summary of key design modifications made based on ARB feedback is also provided.

70 ENCINA AVE
Initial Proposal: Final Design:

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70 ENCINA AVE
Incorporated Feedback:
• Encouraged more usable landscaped area.
• Encouraged the design to better address privacy between units, including views from the public parking lot into the units. • Consideration of material choices and how the project would be visually compatible to the adjacent Town and Country.

640 WAVERLEY STEET
Initial Proposal: Final Design:

Incorporated Feedback:
• The ARB provided feedback to enhance an already well-designed project, resulting in improving its interface with the neighboring building at 636 Waverley Street through reduced concrete on the façade, a clearer and more efficient parking layout, and refined landscape planting with long- term maintenance details.
• The project provides a good mixed-use development, integrating office and retail spaces on the ground floor with residential units on the upper floors.

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3265 EL CAMINO REAL
Initial Proposal: Final Design:

Incorporated Feedback:
• The ARB encouraged for a window or decorative reveal and extended around to the back of the building and for the rooftop terrace to be more engaging.
• The ARB provided feedback on the internal programing and suggestions for the vehicles utilizing the stacking stalls. • The applicant incorporated feedback and also added an additional floor to the development to increase density.

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4335-4345 El Camino Real
Initial Proposal: Final Design:

Incorporated Feedback:
• The initial roof forms were complex and recommended to be reevaluated, while still maintaining separate roofs for each unit. This involved the removal of the third story balconies and fake roof dormers for a more simplified rooftop. • The ARB encouraged accenting the doors for more variation, but overall approved the color scheme with its subtle differences in color.

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824 San Antonio Rd
Initial Proposal: Final Design:

• Refined material and color selections to ensure better contrast. Simplify the front façade by reducing the visual segments from three to two. • The ARB encouraged the drop-off area to be redesigned in a way that did not impede the front entrance and more simplified balcony designs in relation to their usage by residents.

3950 Fabian Way
Initial Proposal: Final Design:

• Relocated bicycle parking to the front of the building for better site circulation and adding additional skylights to provide more light into the interior of the building.
• The project utilized an existing office building with a new gymnasium addition and interior improvements to accommodate a private middle school.

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ARB AWARDS
Beginning in 1998, the awards program has been held every five years to honor the creative and responsive designs that help shape Palo Alto’s unique visual character. By recognizing these outstanding architectural contributions, the program celebrates the efforts of architects and designers who enrich the community and foster a healthy, vibrant environment. From a pool of approximately 100 reviewed projects, the following six were selected:

620 Emerson Street | Nobu 180 El Camino Real | Sushi Roku

588 Webster Street | Arbora Apartments 3705 El Camino Real | Wilton Court Apartments

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1700 Embarcadero Road | Mercedes Benz Dealership 3215 Porter Drive | The Hub at Stanford Research Park

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Prior Year
Accomplishments
The HRB recommended that a total of 21 new properties be designated on the Palo Alto Historic Inventory, and that five (5) existing properties on the local inventory to be upgraded in their category listing. These additions were the result of the 2023 Reconnaissance Survey efforts and represented the continued implementation of Palo Alto’s Comprehensive Plan Policy (L7.2).

The HRB reviewed five (5) development proposals on historic properties, recommended naming for the Fred Eyerly Tower Well Park, reviewed updated public education materials on the City’s website, and established a local Historic Preservation Award program that will be held in 2026.

The HRB reviewed the Certified Local Government Program (CLG) annual report to maintain the City’s CLG status, held since 1992. Continued participation in the CLG program supports local historic preservation efforts by providing added credibility, access to resources, and increased opportunities for funding.

Historic Resources Board
Staff Liaison: Steven Switzer, Historic Preservation Planner Lead Department: Planning and Development Services
About the Commission
The City is a Certified Local Government (CLG) responsible for historic preservation - to identify, evaluate, register, and preserve historic properties within its jurisdictions and promote the integration of local preservation interests and concerns into local planning and decision-making processes. Staff prepares an annual report of the activities of the Certified Local Government each spring for the prior year and submits these to the State Office of Historic Preservation. This HRB Work Plan covers July 2025 - July 2026. The HRB consists of five members with terms for 3 years and are staggered per PAMC Section 2.27.020. For more information please visit https://www.cityofpaloalto.org/City-Hall/Boards-Commissions/Historic-Resources-Board. The Department webpages are a wealth of information, go to:
https://www.cityofpaloalto.org/Departments/Planning-Development-Services/Historic-Preservation 2025-2026 Workplan
Mission Statement
Per Palo Alto Municipal Code Chapter 2.27 Historic Resources Board, Section 2.27.040 Duties, HRB purview is:
(a) Render advice and guidance to a property owner upon the owner's application for alteration of any historic single-family or duplex building in the downtown area and any such building designated as significant elsewhere in the city (b) Inform the ARB of the historical and/or architectural significance of historic commercial and multiple-family structures in the downtown area and any such buildings designated as significant elsewhere in the City that are under review by the ARB. Submit recommendations to the ARB regarding proposed exterior alterations of such historic structures
(c) Recommend to the Council the designation of additional buildings and districts as historic. Research available information and add historical information to the inventory sheets of historic structures/sites. This inventory is maintained in the department of planning and development services. (d) Perform such other functions as may be delegated from time to time to the HRB by the City Council.

Current Commissioners Alisa Eagleston-Cieslewicz (Chair), Samantha Rohman (Vice Chair), Christian Pease, Caroline Willis, and Geddes Ulinskas Item 7
Attachment B - 2025-2026 Historic
Resources Board Work Plan

Item 7: Staff Report
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15 Packet Pg. 105 of 228

TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
Subject to Council direction, to begin in the
second quarter
City Council direction and accommodation
in the PDS department workplan would be
needed. HRB subcommittee and staff of
planning and city attorney departments to
prepare draft amendments for Council
review and adoption
Well-written ordinance language that
assists the public's understanding and
calms the fears of property owners
about governmental overreach
Council may provide
direction to modify
PAMC 16.49; CLG
cities maintain historic
preservation
ordinances.

COUNCIL-DIRECTED

POLICY UPDATE
Council may provide
direction to modify
PAMC 16.49; CLG
cities maintain historic
preservation
ordinances
2025-2026 Workplan
The benefits are providing clarification of the
HRB's role for the public
Historic Resources Board
PROJECT/GOAL 1:

BENEFICIAL IMPACTS
Limited modification to PAMC 16.49, historic preservation, providing clarifications regarding the HRB’s role. The HRB could discuss language providing clarifications of its role with respect to three potential topics: (a) the nomination process, (b) the effect of HRB recommendations regarding exterior modifications to residential historic resources, and (c) category changes (upgrades, downgrades, removals) Staff Liaison: Steven Switzer, Historic Preservation Planner Lead Department: Planning and Development Services
PURPOSE STATEMENT:

The Board/Commission's goals and purposes (purview) are set in Palo Alto Municipal Code Chapter 2.27 Historic Resources Board, Section 2.27.040 Duties. These duties include reviewing alterations to historic resources and providing recommendations on nominations to the local historic resources inventory. The City's historic program includes the implementation of Comprehensive Plan policies on an ongoing basis including Policy L7.2 (preparation of historic evaluations to determine eligibility for the California Register of Historical Resources and associated tracking), Policy L7.1.1 (recommend eligible resources to the local inventory), and Policy L7.1.2: Reassess Historic Preservation Ordinance.

HIGH PRIORITY
Priority is high to enable greater understanding of the HRB's role and address property owners' concerns with respect to Goal items (a) and (b)

LOWER PRIORITY
Lower priority: Goal item (c) - listed historic resources placed on the City's inventory in the late 1970s and 1980s have not been reviewed to determine whether any modifications reduce critical aspects of integrity and drop or lower the properties' local historic resource category.

Item 7
Attachment B - 2025-2026 Historic
Resources Board Work Plan

Item 7: Staff Report
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
To begin in the first quarter and continue
throughout the duration of the 25/26 work
plan cycle
Staff of PDS would be tasked as well as an
HRB ad hoc committee to make progress.

Website contains links to information
resources and videos, to assist property
owners, staff, and others.

N/A

COUNCIL-DIRECTED

POLICY UPDATE
N/A

TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
To begin in the first quarter and continue
throughout the duration of the 25/26 work
plan cycle
Staff of PDS would be tasked as well as an
HRB ad hoc committee to make progress.

Website contains links to updated
Inventory List, to assist property owners,
staff, and others.

No

COUNCIL-DIRECTED

POLICY UPDATE
No
PROJECT/GOAL 3: Prepare an updated Local Inventory Resource list that incorporates the recently designated properties from the 2023 Historic Reconnaissance Survey efforts, Category Upgrades, and removal of properties that have been demolished.

BENEFICIAL IMPACTS
The benefits would be to improve
preservation in Palo Alto and clarity for
owners of historic properties.

Item (a) a table of existing zoning code incentives and another table of historic building code provisions and Item (b) improvements to types of communications used to promote historic preservation.

PROJECT/GOAL 2:

BENEFICIAL IMPACTS
Education and Creating New User-Friendly Resources/Communication Regarding Historic Preservation. (a) find new ways to promote preservation, including use of the existing zoning code incentives and State historic building code (b) improve upon communication types to provide the community accessible information, including the use of videos (linked to the City’s and State’s webpages) to help property owners understand the local and State preservation incentives and codes, (c) continue to provide updates to the historic review process bulletin as needed to communicate CEQA requirements related to PAMC 16.49 and listed historic resources, and (d) enable the HRB staff liaison(s), the City’s historic preservation consultant, and Chief Building Official to implement training providing an ongoing opportunity for HRB members, staff, and the community to gain working knowledge as to the use of the State’s historic building code

HIGH PRIORITY LOWER PRIORITY
Items (c) and (d)
Providing the public with updated
information

HIGH PRIORITY LOWER PRIORITY
Properties that have been demolished remove from local inventory Properties that have lost integrity over time that may need a category change Item 7
Attachment B - 2025-2026 Historic
Resources Board Work Plan

Item 7: Staff Report
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TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
Goal 4 to begin during plan quarter 2 (item
a) and subject to Council direction,
continue through quarter 4 (April - June
2025, items b and c)
PDS staff and CAO staff. City Council
direction and accommodation in the PDS
department workplan would be needed.

More historic properties are preserved
for future enjoyment of the owners and
community, due to the additional
incentives.

Council may provide
direction to modify
PAMC title 18.

COUNCIL-DIRECTED

POLICY UPDATE
N/A

TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
To begin in the first quarter and continue
throughout the duration of the 25/26 work
plan cycle
Staff of PDS would be tasked as well as an
HRB ad hoc committee to make progress.

Establish historic preservation award
selection criteria and frequency of
awards by end of 25-26 Fiscal Year.

Comprehensive Plan
Policy L-7.6

COUNCIL-DIRECTED

POLICY UPDATE
No

BENEFICIAL IMPACTS
A HRB historical preservation award
program would express appreciation for the
efforts to preserve and protect Palo Alto’s
culturally, historically, and architecturally
significant places that create a vibrant and
sustainable community that fully reflects
Palo Alto’s diverse past.

HIGH PRIORITY LOWER PRIORITY
Item (a) discuss and determine the selection criteria for eligible projects and/or properties and establish award frequency, and Item (b) discuss and determine award frequency (e.g., annual, bi-annual, 5-year cycle, etc.) Items (c) and (d)
PROJECT/GOAL 5:

Establish a Historical Preservation Award Program. (a) discuss and determine the selection criteria for eligible projects and/or properties; (b) discuss and determine frequency of awards (e.g., annual, bi-annual, 5-year cycle, etc.); (c) select projects and/or properties to award; (d) conduct an award ceremony and present historic preservation awards.

BENEFICIAL IMPACTS
PROJECT/GOAL 4:

Additional preservation incentives (a) discuss and recommend additional zoning code incentives to continue the community engagement process that began with the 2023 reconnaissance survey/ inventory update; (b) represent the HRB’s interests during public hearings, or participate in joint meetings with the Planning and Transportation Commission and City Council, to review any proposed zoning code modifications incentivizing historic preservation incentives; (c) outreach to the community after adoption of any adopted new incentives.

Benefit will be for all property owners who do
not currently see any benefit to listing their
property on the City's historic inventory

HIGH PRIORITY LOWER PRIORITY
Item a is to gather ideas for new incentives in the zoning code to add to a table of existing incentives in the zoning code. Subject to Council direction, items b and c would follow item a.

Item 7
Attachment B - 2025-2026 Historic
Resources Board Work Plan

Item 7: Staff Report
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8 Planning and Transportation Commission (PTC)
2025-26 Work Plan Date Reviewed by PTC July 9, 2025
Staff Liaison: Jennifer Armer, Assistant Director, Planning and Development Services (PDS) Lead Department: Planning and Development Services (PDS); Office of Transportation (OOT)

About the Commission The seven-member Planning & Transportation Commission adopted its 2025-26 work plan on July 9, 2025. The members and chairs are listed below. Members serve 4-year terms. See Planning & Transportation Commission (PTC) webpage link: http://www.paloalto.gov/gov/boards/ptc/default.asp Current Commissioners • Allen Akin (Chair)
• Bryna Chang (Vice Chair)
• Todd James
• Bart Hechtman
• Kevin Ji
• Dr. Forest Olaf Peterson
• Cari Templeton
Mission Statement The Planning & Transportation Commission advises the City Council, Planning Director, and Chief Transportation Official on land use and transportation matters, including the Comprehensive Plan, zoning, transportation programs, and related matters. The Commission's primary responsibilities include:
• Preparing and making recommendations to the City Council on the City's Comprehensive Plan and applying the Comprehensive Plan to proposed development, public facilities, and transportation in Palo Alto; • Considering and making recommendations to the City Council on zoning map and zoning ordinance changes; any changes to Title 18 of the Palo Alto Municipal Code must be reviewed by the PTC and the City Council; • Reviewing and making recommendations to the City Council on subdivisions and Site and Design Reviews, on appeals on variances and use permits;
• Considering other policies and programs affecting development and land use in Palo Alto for final City Council action;
• Reviewing and making recommendations on individual projects as described in the Municipal Code, and Open Space development;
• Reviewing and making recommendations to the City Council on transportation, parking, and other related mobility issues; and
• Ensuring robust community engagement and dialogue regarding planning, land use, and transportation and providing recommendations to the City Council regarding these matters and incorporating the public discussion. The PTC hearings provide a forum for public comment and public interaction.

Item 7
Attachment C - 2025-2026 Planning
and Transportation Commission Work
Plan

Item 7: Staff Report
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8 Prior Year Work Plan On October 21, 2024, the City Council accepted the April 24, 2025 PTC recommended 2024-25 Work Plan:
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas-minutes/planning-and- transportation-commission/ptc-2024-2025-work-plan.pdf
Prior Year
Accomplishments
During the period of the PTC 2024-25 Work Plan:
• The PTC's transportation efforts included study sessions and/or recommendations on: Shared Micromobility Program; Safe Streets for All (SS4A) Safety Action Plan; Bicycle and Pedestrian Transportation Plan Update; Crescent Park Traffic Calming; South Palo Alto Bike/Ped Connectivity; Parking Data Report; Car-Free Streets; VTA Speed and Reliability; and Palo Alto Link.
• The PTC's work on implementing the Comprehensive Plan, Housing Element, and Council Priorities included study sessions and/or recommendations on: Retail Code Amendments; Stream Corridor Protections; Bird Friendly Design Ordinance; Lighting Ordinance Update; Annual Review of Comprehensive Plan and Housing Element progress report; Code Amendment for Housing Element Implementation including amendments to the HIP/AHIP regulations; El Camino Real Focus Area; El Camino Real Retail Preservation Nodes Map; and ADU regulations.
• The PTC's work on development projects included review and recommendations on three Vesting Tentative Maps; a Planned Community (PC) amendment; and two Planned Home Zone (PHZ) applications.

PROJECT/GOAL 1: Retail Ordinance Updates: As part of adoption of an interim ordinance, Council has directed PTC to amend Zoning Code. This is a Council priority (objective ED 4): “Council consideration of an ordinance that expands retail opportunities and promotes retail resiliency. ”
Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Overall, this project aims to
ensure a strong climate for
retail businesses in Palo Alto
that can allow residents to
meet their daily needs and
have a high quality of life.

The PTC is likely to discuss
a retail ordinance in fall
2025, with consideration
of an ordinance by the end
of the year.

Consultant work, staff
oversight, and meetings
preparation, and participation
from the local retail
community.

Development of new
ordinances and/or broader
policy recommendations to
the City Council.

Yes – Council
assigned.

High Priority Lower Priority Council-Directed
Policy Update
Any shifts in retail trends that will endure, are occurring, and can benefit from further and refined action by the City.

While this is an impactful body of work, the need to get it right and coordinate with existing and new resources outweighs the need to quickly pursue the work.

Yes

Item 7
Attachment C - 2025-2026 Planning
and Transportation Commission Work
Plan

Item 7: Staff Report
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8 PROJECT/GOAL 2: Area Planning: This goal carries forward the prior year goal for neighborhood planning approaches and overall effectiveness of various approaches to neighborhood planning. The staff and PTC will consider new neighborhoods that result from the 6th cycle Housing Element sites and demand for public facilities/services. This goal includes continued work on both the Downtown Housing Plan and the San Antonio Road Area Plan.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Development policy
recommendations and
preferred alternatives for the
new area plans enable City
Council to provide direction to
guide the City's future
development.

By June 2026 Staff time to research and
prepare a staff report to PTC
and ARB. Consultant budgets
have already been allocated
Successful conversation and
recommendations of policies
and preferred alternatives to
City Council.

Yes – Council
assigned.

High Priority Lower Priority Council-Directed
Policy Update
Council directed work toward future area plans. N/A Yes

PROJECT/GOAL 3: Housing Program Implementation: The Housing Element was adopted by City Council on April 15, 2024, and certified by California Department of Housing and Community Development (HCD) on August 20, 2024. PTC will continue work on Housing Element implementation programs as scheduled within the Housing Element.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Complying with the
requirements of the adopted
Housing Element to encourage
housing development and
comply with State Law.

PTC and Council review of
a number of programs will
proceed over the work
plan year, as required by
the Housing Element.

Staff and consultant
resources employed.

Implementation of programs
by target dates.

Yes - State Mandated
High Priority Lower Priority Council-Directed
Policy Update
Program 3.9 (incentivizing multi-family as an alternative to commercial development) and Program 6.5 (supporting
innovative housing types).

SOFA objective standards Yes

Item 7
Attachment C - 2025-2026 Planning
and Transportation Commission Work
Plan

Item 7: Staff Report
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8 PROJECT/GOAL 4: State Law Implementation – Laws with Prior Effective Dates and any new 2025 Laws to Become Effective in 2026: The State adopts new laws every year, some like Assembly Bill (AB) 2097, required quick action through an interim ordinance during the last fiscal year, that will then require consideration and recommendation from PTC of a permanent ordinance, others like Senate Bill (SB) 9 will require modifications to maintain consistency with State law and Housing Element goals.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Provide clarity to property
owners and potential
developers.

Ordinance
Recommendation during
2025-26 work plan term.

Staff resources. Adoption of ordinance
amendments.

Yes - State
High Priority Lower Priority Council-Directed
Policy Update
Implementing State laws and discuss policy considerations N/A Possibly

PROJECT/GOAL 5: Parking Programs: The PTC will receive periodic updates regarding options for improving the City’s parking programs. This includes a Roadmap for Residential Parking Permit Program improvements and commercial parking improvements. Parking Data Portal - PTC will receive an update regarding parking availability data. The new license plate reader technology allows for regular collection and reporting of parking availability.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Improved parking operations. Ongoing. Ongoing. Feedback from PTC and continued engagement from
the public.

Yes
High Priority Lower Priority Council-Directed
Policy Update
The staff work behind the project continues; proposed
updates help advance the work. Additionally, the PTC
welcomes opportunities to engage w/the public on this
topic.

This project represents a large body of ongoing work to manage parking supply and parking policy.

Yes

Item 7
Attachment C - 2025-2026 Planning
and Transportation Commission Work
Plan

Item 7: Staff Report
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8 PROJECT/GOAL 6: Bicycle and Pedestrian Transportation Plan Update: A citywide evaluation of the bicycle network and pedestrian network. The plan will identify opportunities to enhance and connect the network.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Updated Bicycle and
Pedestrian Transportation Plan
and increase safe connectivity
across the City.

Public review draft plan
and discussion of South
Palo Alto bike/ped
connectivity in fall 2025.

Fully funded by a TDA3 grant Updated bike and ped plan No High Priority Lower Priority Council-Directed
Policy Update
N/A Update is timely, but not mandated by any State laws. No

PROJECT/GOAL 7: Comprehensive Plan Policy Implementation: This includes Streamside Corridor and Bird Friendly Design changes in Title 18 and other Comp Plan policies that lead to Title 18 revisions.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Comprehensive Plan policies
and programs to completion.

Revised stream corridor
ordinance at July 30, 2025
PTC. Others as directed by
Council.

Staff and consultant
assistance – particularly
when staff resources will be
focused on implementation of
the Housing Element.

Adopted ordinances to amend
Title 18.

No
High Priority Lower Priority Council-Directed
Policy Update
N/A N/A Yes – Comprehensive
Plan

Item 7
Attachment C - 2025-2026 Planning
and Transportation Commission Work
Plan

Item 7: Staff Report
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8 PROJECT/GOAL 8: Title 18 Updates: Considering and making recommendations to the City Council on any changes to Title 18 of the Palo Alto Municipal Code as directed by City Council, for example updates to the City’s Wireless Communications Facilities Ordinance.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Development of code
recommendations to support
City Council updates.

As directed by Council. Staff and consultant
resources would be identified
based on specific projects.

Wireless Ordinance update is
currently unsourced.

Adopted ordinances to amend
Title 18.

No
High Priority Lower Priority Council-Directed
Policy Update
N/A N/A Yes

PROJECT/GOAL 9: Project Review: The PTC will provide review as part of their regular ongoing responsibility for recommendations to City Council and staff on quasi-judicial development projects and transportation projects.

Beneficial Impacts Timeline Resources Needed Measure Of Success State Mandated/ Local Law/ Council
Approved
Public review of planning and
transportation projects.

Ongoing. Ongoing. Feedback from PTC and
continued engagement from
the public.

Yes
High Priority Lower Priority Council-Directed
Policy Update
N/A N/A Yes

Item 7
Attachment C - 2025-2026 Planning
and Transportation Commission Work
Plan

Item 7: Staff Report
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Utilities Advisory Commission
2025-2026 Workplan
Staff Liaison: Alan Kurotori, Utilities Director
Lead Department: Utilities

About the
Commission

The Utilities Advisory Commission (UAC) is charged with providing advice on long range planning and policy matters, acquisition, development, and financial review of electric, gas and water resources; joint action projects with other public or private entities which involve electric, gas or water resources; environmental implications of proposed electric , gas or water utility projects; and conservation and demand management. Additionally, the UAC is charged with providing advice on the acquisition, development and financial review of the dark fiber network and wastewater collection utilities. As a highly regulated industry, there may be matters not listed below that will be presented to the UAC in accordance with current or future (local, state, or federal) legislative requirements. .

The Commission is composed of seven (7) members.

Terms are for three ( 3) years and commence on the first meeting in April.

See Palo Alto Municipal Code (PAMC) Sections 2.23.010 (Membership), 2.23.030 (Term of Office), 2.23.040 (Officers), 2.23.050 (Purpose and Duties), and 2.23.060 (Meetings).

Current
Commissioners

• Greg Scharff (Chair)
• Meagan Mauter (Vice Chair)
• Rachael Croft
• Utsav Gupta
• Phil Metz
• Robert Phillips
• Chris Tucher

Mission Statement The purpose of the Utilities Advisory Commission shall be to advise the City Council on present and prospective long- range planning, policies, major program, and project matters relating to the electric, gas, water, wastewater collection, fiber optics utilities, and recycled water matters, excluding daily operations.

The Utilities Advisory Commission shall have the following duties:

• Advise the City Council on long-range planning and policy matters pertaining to:
o Joint action projects with other public or private entities which involve, affect or impact the utilities; o Environmental aspects and attributes of the utilities; o Water and energy conservation, energy efficiency, and demand side management; and o Recycled water matters not otherwise addressed in the preceding sub-paragraphs; • Review and make recommendations to the City Council on the consistency with adopted and approved plans, policies, and Item 7
Attachment D - 2025-2026 Utilities
Advisory Commission Work Plan

Item 7: Staff Report
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programs of any major utilities.
• Formulate and review legislative proposals regarding the utilities, to which the city is a party, in which the city has an interest, or by which the city may be affected.
• Review the utilities capital improvement programs, operating budgets and related reserves, rates, and the recycled water program, budget, rate, and thereafter forward any comments and recommendations to the finance committee or its successor.
• Provide advice upon such other matters as the City Council may from time to time assign.

The Utilities Advisory Commission shall not have the power or authority to cause the expenditure of city funds or to bind the city to any written, oral, or implied contract.

The Utilities Advisory Commission may, subject to its City Council-approved bylaws and at the discretion of the City Council, foster and facilitate engagement with the general public, not excluding representatives of commerce and industry, in regard to the utility matters referred to in subsections above.

Prior Year
Accomplishments

Advanced Heat Pump Water Heater (HPWH) Pilot Program:
• Over 500 customers have installed a heat pump water heater using the city’s rebate, full service, or emergency replacement program. The pace of installations is approximately 20% of annual water heater replacements in the city.

Advanced Meter Infrastructure (AMI)
• 21,492 gas meter installations completed.
• 18,035 water meter installations completed.
• 21,411 electric meter installations completed.

Renewable Energy Credit (REC) Exchange Program
• Approved by City Council on December 12, 2022 to continue the program and return to the UAC and Council in 2025 • Sold 161,900 Portfolio Content Category 1 (PCC1 or Bucket 1) RECs and purchased 160,000 PCC3 RECs (Bucket 3), yielding $10.86 million in net revenue for 2024.

Fiber-to-the-Premises (FTTP)
• Began coordinating electric grid modernization project with FTTP. • Identified and began addressing key challenges.
o Established pilot project to align grid modernization with FTTP. o CEQA initial study for FTTP.

Electric Grid Modernization (Grid Mod)
• An Electrification Study was performed by a consultant with the goal of identifying any electric system upgrades needed across the electric distribution system. The focus of the Study resulted in recommendations for upgrades to line transformers, feeder capacity, increasing the number of switches and connections on the system between feeders and substations, and upgrading substation equipment.
• Staff prepared plans and construction drawings for a pilot area selected within the Phase 1 boundary of the Grid Modernization (Grid Mod) project. Construction began in Q2 2024 for a 1200-home neighborhood area bounded by Embarcadero Road, Louis Road, Colorado Avenue, Greer Road, and West Bayshore Road.

Item 7
Attachment D - 2025-2026 Utilities
Advisory Commission Work Plan

Item 7: Staff Report
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• The grid modernization activities will be coordinated with fiber to the premise (FTTP) construction. To capitalize on synergies between Grid Mod and FTTP, the city identified a pilot project boundary area to combine construction activities for both Grid Mod and FTTP. The city contracted with consultant Entrust for Grid Mod and construction began in Q3 of 2024. Construction is anticipated to be complete near the end of Q2 2025. As of January 9, 2025, 60 out of 74 identified electric utility poles have been replaced, 51 new transformers installed, and electric service to over 500 households in the pilot area upgraded and prepared for electrification. Engineering staff have started planning and design work for the remainder of the Phase 1 area and expect construction to be completed by Q4 of 2025.

Gas Main Replacement (GMR) Project #24B
• Successfully completed GMR Project #24B along University Ave between Webster Street and Fulton Street and on Middlefield Road between Hamilton Avenue and Lytton Avenue.
• Replaced approximately 20,000 linear feet of natural gas mains and services with polyethylene pipe.

Sewer System Replacement (SSR) Project #31
• Successfully completed SSR Project #31 along El Camino Real and Page Mill Road. • Replaced approximately 10,924 linear feet of sanitary sewer collection system pipe, mains, and replaced or rehabilitated 43 sewer manholes.
• The existing vitrified clay pipe (VCP) mains were replaced with high-density polyethylene pipe (HDPE). In addition, 89 existing city-owned sewer service laterals and cleanouts were replaced with new 4” and 6” HDPE service laterals and cleanouts.

Water Main Replacement (WMR) Project #29
• Successfully completed WMR Project #29 to replace asbestos cement and other aging pipelines with high density polyethylene mains in six different areas throughout the city.
• Installed approximately 8,000 linear feet of new water mains of various sizes, 124 new water services, 17 new fire hydrants, 22 isolation valves, and 101 water meters.

Lead Service Line Inventory
• Completed an inventory of the entire city service area to identify potential lead in water lines serving customers. No lead was identified.

Item 7
Attachment D - 2025-2026 Utilities
Advisory Commission Work Plan

Item 7: Staff Report
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STANDING TOPIC 1

Annual Budget: Rate changes to Water, Gas, Electric, Wastewater Collection, Fiber Optic Services, Electric Time-of-Use Rates and review of credit card fees for utilities bill payment.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
The community will have a better
understanding of the rates and why
they are being charged.

Rates are reviewed annually
and each rate change is
determined by the Cost-of-
Service Analysis (COSA)
reports. UAC review is in March,
Finance Committee review is in
April and City Council approval
is in June.

Staff time, legal review time,
Consultant time to create the
COSA report.

Council approval of budget. N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Rates are always a high priority. The change has an impact on the community and economy.

N/A N/A

STANDING TOPIC 2

Water Supply: Consider potential future sources of water supply and water quality. This includes recycled water, demand management programs, graywater, treatment efforts, use of effluent, and testing for contaminants.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
The benefit to the community is to
have ample water source and
supply when needed in the event of
a drought or for basic uses
This is not a single effort or
project; however, a year-round
effort
Staff time, legal review time, and
consultant time for work products.

Council approval of water
supply plan(s).

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Having knowledge of where the city's water supply comes from and how we manage that supply is a maintained priority.

N/A N/A

Item 7
Attachment D - 2025-2026 Utilities
Advisory Commission Work Plan

Item 7: Staff Report
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STANDING TOPIC 3

Electric System and Supply: Discuss and advise City Council regarding electric system and supply portfolio, including grid modernization, second transmission corridor, power portfolio, smart home technologies, distributed energy resources, competitiveness of the city for datacenters, and coordination with Palo Alto Planning Department to enable technological improvements.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
Reliability for customers, health
benefits, and clean energy
responsible for the vast carbon
reduction the city has achieved
over the past decade
This is an ongoing regularly
monitored effort and does not
have a start or completion time
Approved budget, staff time,
legal review time, consultants as
needed, and technology
Release of RFP for more
renewable energy supply
options in the Integrated
Resource Plan (IRP). Have the
IRP near completion to
present to the UAC for review
and approval. Maintaining and
expanding the zero emissions
portion of the portfolio and
carbon neutral plan.

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY
UPDATE
The health and well-being of the community is a high priority for Council and Utilities

N/A N/A

STANDING TOPIC 4

Gas System and Supply: Consider aspects of the gas system and supply portfolio, including the City of Palo Alto Utilities (CPAU) development of a long-term plan to accommodate anticipated decrease in gas use.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
Gas is a type of energy used to
provide some residences and
businesses in Palo Alto with heat
for their facilities and some
cooking appliances.

This is not a single effort or
project; however, a year-round
effort
Staff time, legal review time,
consultant time when necessary
CPAU rates on average are
10% below PG&E's rates year-
round.

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY
UPDATE

The health and well-being of the community is a high priority for Council and Utilities

N/A N/A
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STANDING TOPIC 5

Utilities Capital Improvement Projects (CIP): Discuss CIP projects.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED / LOCAL

LAW / COUNCIL-APPROVED
The Utilities Department manages
multiple CIPs each year for the
benefit to the city and community.

CIPs may include rebuilding water
reservoirs, repairing and replacing
sewer lines or water mains,
maintaining street lights, building
out the fiber optic backbone, or
upgrading the utility meters.s
Council approve multiple CIPs
in the annual budget. Most of
these projects are multiyear
based.

Staff time, legal review time,
procurement time for setting up
contracts, contractors for work
completion.

Utilities CIP success is
measured by completion of
the project within the
timeline and budget
approved by Council.

N/A

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED POLICY
UPDATE
Maintaining quality of life for the community is a priority for the Utilities Department and projects.

N/A N/A

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STANDING TOPIC 6

Reliability, Resiliency and Adaptation: Ongoing discussions regarding the reliability and resiliency of the City of Palo Alto Utilities (CPAU), including Utilities emergency preparedness plan and annual discussion of efficiency programs, demand side management and performance against plan.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
This matter encompasses a
number of situations including but
not limited to the Sustainability and
Climate Action Plan ( S/CAP). The
benefit of any of the reliability or
resiliency projects is to support the
city and community now and into
the future with reliable, safe
connections, water, electricity, fiber
and natural gas
These programs and projects
are year-round and do not have
a beginning or an end. For
example, the S/CAP is set to
accomplish its primary goals by
2030.

Budget approval, staff time,
additional staff, and some use of
consultants
Maintaining a high level of
efficient, safe, economic, and
reliable services.

Utilities Emergency
Preparedness:

1. Determination of the
“design emergencies” to
be used as the basis for
CPAU emergency
preparedness.

2. Establishment of
CPAU’s risk
assessment framework
in coordination with the
Office of Emergency
Services (OES).

3. Determination of
CPAU’s roles and
specific actions in each
such emergency.

4. Completion of action
planning and
implementation in
coordination with
OES.

YES

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
The S/CAP is a Council priority and therefore a high priority for the Utilities Advisory Commission.

N/A N/A
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STANDING TOPIC 7

Legislative Initiatives: Utilities tracks many local, state and federal bills that touch on utilities. Should any new laws, regulations, or ordinances pass during the year, the UAC may need to discuss the changes.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
Staff track the possible changes in
laws and regulations and presents
the proposed changes to the UAC
for review and consideration to the
Council.

The Legislature meets
throughout the year and
possible changes can occur at
any point that affect utilities
Staff time, travel, and legal
review time
This is a non-measurable
project
State Mandated

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
N/A The level of priority is based on the particular legislation being proposed and how it affects the Utilities Department.

N/A

STANDING TOPIC 8

Council-Driven Initiatives: The UAC will address any matter assigned by the City Council.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
The UAC is made up of a diverse
group with knowledge of the utilities
industry and related issues.

Timeline will be addressed once
assigned.

UAC, staff and legal review time. Council approval of completed task.

YES

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Typically when Council requests a review of an item it is considered a high priority.

N/A N/A

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Standing Topic 9
Sustainability and Climate Action Plan (S/CAP) Support: Discuss community engagement, technology (current & emerging), finance, and community scaling of S/CAP plans to meet the city’s goals for sustainability and climate action.

This includes electrification efforts, possible code modifications, potential full or partial retirement of the gas distribution system, and electrification of gas appliances. It also includes permitting and inspection processes for customers wishing to upgrade panels, electrify appliances, or install solar photovoltaics (PV), energy storage, and/or electric vehicle (EV) charging systems.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
UAC expertise will help the Council
Climate Action and Sustainability
Committee (CASC) make progress
on achieving S/CAP goals with
benefits to reducing the impacts of
climate change.

Ongoing support to the CASC Staff time and funding devoted to executing coordinating planning
efforts, incentives, programs,
and infrastructure investments to
support S/CAP efforts.

Completion of Council Priorities
and S/CAP Work Plan items in
collaboration with other
departments.

S/CAP and 2023-
2025 Work Plan
approved by Council
in June 2023,
Council Priorities in
this area adopted
annually.

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE
Support relevant Council Priority Objectives in the Climate Action and Adaptation and Natural Environment Protection Priority area and 2023- 2025 S/CAP Work Plan Items

N/A N/A

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STANDING TOPIC 10

Fiber to the Premises (FTTP): Review Pilot and Phase 1 progress and outcomes, business model, and metrics affecting city’s decision whether to move forward with full city rollout.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
Enhances high‐speed internet and
provides equitable access for
residents & businesses.

Provides residents and businesses
another option among broadband
providers which could lower prices,
accelerate network upgrades,
and/or improve customer
satisfaction.

2025 – 2026: Complete Pilot,
begin marketing, gather data on
construction cost, operating
expense, and take‐rate.

2026 – 2027: Evaluate pilot
results, refine delivery
strategies, marketing, staffing,
and product offerings for Phase
1 rollout.

Strategic partners for customer
service, home installation, and
after-hours troubleshooting.

Capital investment for fiber
deployment.

Marketing budget.

Ongoing operational &
maintenance funding.

Demonstration of operational
success from Pilot.

Exceeding take rate of 20% for
pilot and 33% for Phase 1.

Positive customer feedback and
subscription growth.

Sustainable financial model to
cost‐recover operationally within
five years.

Council-approved on
December 19, 2022.

City Council Priority
May 2025

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE

High priority. Provide UAC and Council with status updates as it relates to metrics for success during Pilot and Phase 1 (i.e. take rate, customer satisfaction, cost per passing, cashflow projection)

N/A

N/A

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Standing Topic 11
Long-Term Strategy for CPAU’s Natural Gas Utility: Develop a comprehensive 5–20 year plan to align the gas utility with climate goals, financial stability, and regulatory changes, while evaluating options for electrification, biogas integration, and long-term infrastructure strategy.

BENEFICIAL IMPACTS TIMELINE RESOURCES NEEDED MEASURE OF SUCCESS STATE MANDATED /

LOCAL LAW / COUNCIL-

APPROVED
Integrates climate impact,
regulatory environment, and
evolving market conditions (e.g.,
supply, building electrification
trends).

Ensures financial stability by
addressing costs, procurement
strategies, tariffs, revenues, and
the utility’s contribution to the
city.

Identifies how best to align the
gas utility with Palo Alto’s
sustainability goals and
community expectations over the
long term.

Timeline will be designed for a 2-
3 year planning horizon.

2025 expected work to share
preliminary analysis of strategies
for a physical and financial
transition of the gas utility to
relevant policymakers and
shareholders.

Staff analysis (Utilities,
Administrative Services
Department, S/CAP) and
potential consultants for policy,
engineering, and market
assessments.

Consulting support for hydraulic
model development, analysis,
rate studies, and financial
modeling.

Legal counsel for evolving
regulations

Stakeholder outreach resources
for public engagement.

Completion and City Council
adoption of a 5–20 year gas
utility strategy.

Clear articulation of how
externalities and climate goals
are addressed (e.g., cost of
carbon, supply reliability, how
pricing of gas rates should be
adjusted to reflect
externalities).

Stable or well‐managed utility
finances, including city
payment, without undermining
broader climate goals.

Positive feedback from
community stakeholders on
transparency and alignment
with city values.

Gas regulation
intersects with state and
federal laws (CPUC,
etc.).

Local ordinances or
building codes may
require revision (Council
approval).

Council likely to be
involved if new rate
structures or code
changes are required.

HIGH PRIORITY LOWER PRIORITY COUNCIL-DIRECTED

POLICY UPDATE

High Priority, but not urgent.

N/A

Expected

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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Public Works
Meeting Date: February 2, 2026
Report #:2512-5688
TITLE
Review the 2024 Greenhouse Gas Inventory and S/CAP Key Performance Indicators Annual Progress Report, and Approve the 2026-2027 S/CAP Work Plan and Receive Six S/CAP Studies Recommended by the Climate Action and Sustainability Committee; CEQA Status: Review GHG Inventory and Key Performance Indicators: Not a Project; Potential Environmental Impacts of the S/CAP Work Plan were Studied in the June 5, 2023 S/CAP Addendum to the 2017-2031 Comprehensive Plan EIR; this Project is also Exempt Pursuant to CEQA Guidelines Section 15183

RECOMMENDATION
Staff recommends that the City Council:

1. Review the 2024 Citywide and Municipal Greenhouse Gas Emissions Inventories; and

2. Review the Sustainability and Climate Action Plan (S/CAP) Key Performance Indicators Annual Progress Report for calendar year 2024.

The Climate Action and Sustainability Committee and staff recommend that the City Council:

3. Approve the 2026-2027 S/CAP Work Plan; and

4. Receive the following studies:
a. S/CAP Funding and Financing Study;
b. S/CAP Funding Source Survey;
c. EV Charger Needs Assessment; and
d. Single-family, Multi-family, and Non-Residential Building Sector Studies.

EXECUTIVE SUMMARY
This staff report presents the Palo Alto Citywide and Municipal GHG Emissions Inventories for calendar year 2024, a historical comparison of Citywide GHG Inventories, the Sustainability and Climate Action Plan (S/CAP) Key Performance Indicators (KPI) Annual Progress Report for calendar year 2024, and the Climate Action and Sustainability Committee recommended priorities for the 2026-2027 Sustainability and Climate Action Plan Work Plan.

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In addition, the Climate Action and Sustainability Committee is recommending the City Council’s receipt of six studies that were attached to and summarized in the staff report for the December 13, 2025 Climate Action and Sustainability Committee (CASC) workshop on electrification funding and financing strategies. These studies document the work done to develop models and data for City staff and policy makers to use to support strategic decision- making about community-scale electrification funding, financing, and program design. They also include insights about the financial dynamics of community-scale electrification based on three illustrative scenarios analyzed. One key insight surfaced is that if the City were to rely on up- front incentives available to all community members as a way to achieve its goals, it would result in City expenses that exceed currently available resources for climate action. This points to the need for new strategies and additional modeling. Staff intends to use these tools and data throughout 2026 and 2027 to support strategic planning efforts under 2026-2027 S/CAP Work Plan item C13 (Develop Funding and Financing Strategies for Consideration) and to model different strategies and scenarios for community-wide electrification.

The City has made significant strides in implementing the Sustainability and Climate Action Plan (S/CAP) to meet its sustainability goals, including its goals of reducing greenhouse gas (GHG) emissions 80% below 1990 levels by 2030 (the “80 x 30” goal) and achieving carbon neutrality by 2030. By 2024, Palo Alto reduced total citywide GHG emissions 50.2% from the 1990 baseline, despite a population increase of 22% during that same time period. This is a 4% reduction from 2023, when GHG emissions reductions were 48.3%. For municipal operations, in 2024 the City emitted a total of 14,590 MT CO2e, which is a slight reduction from 2023, and roughly a 64% reduction from the 2005 baseline, although an equivalent comparison cannot be made due to significant changes in methodology.

The City has reached the end of its 2023-2025 S/CAP work planning period. The 2023-2025 S/CAP Work Plan guided S/CAP Implementation with 77 work items, of which 27 focused on sustainability and 50 on climate action. The proposed 2026-2027 S/CAP Work Plan includes 28 strategies focused on Climate Action, 16 strategies focused on Sustainability, and 3 strategies for overall S/CAP Communications for all areas of the S/CAP.

BACKGROUND
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In June 2023, City Council adopted the 2022 Sustainability and Climate Action Plan (S/CAP),2 certified the Comprehensive Plan Environmental Impact Report Addendum: Update to the Sustainability and Climate Action Plan,3 and accepted the 2023-2025 S/CAP Work Plan.4 The S/CAP aligns with several goals of the 2030 Comprehensive Plan Implementation plan, as well as the City Council 2025 Priority Area ”Climate Action and Adaptation, & Natural Environment Protection”.5,6
Both the Palo Alto Citywide and Municipal GHG Emissions Inventories calculate emissions for calendar year 2024. As a result of various City-led initiatives, programs, and activities focused on sustainability and climate action, by the end of 2024 Palo Alto reduced total citywide greenhouse gas (GHG) emissions 50.2% from the 1990 baseline, despite a population increase of 22% during that same time period. Due to changes in methodology, it is not possible to do an equivalent comparison of the 2024 Municipal GHG Inventory with previous inventories.

However, by the end of 2024 the City reduced total municipal GHG emissions roughly 64% from the 2005 baseline.

Due to delays associated with the COVID-19 pandemic, the 2019 GHG inventory was not completed until 2021. Previous GHG inventories were all completed by the following calendar year. Staff and external experts worked to complete both the 2023 and 2024 GHG inventories in 2025 to provide more timely reporting on the City’s progress towards the 80 x 30 and carbon neutrality goals. While this report focuses on the 2024 GHG inventory, new data from the 2023 GHG inventory is also included in figures, tables, and attachments. In addition, staff and external experts updated the 1990 Citywide GHG inventory to align with the methodology used for the 2019 through 2024 Citywide GHG inventories. This allows for a more equivalent comparison between the inventories.

The City has reached the end of its 2023-2025 S/CAP work planning period. The 2023-2025 S/CAP Work Plan guided S/CAP Implementation with 77 work items, of which 27 focused on sustainability and 50 on climate action.

Staff developed a proposed 2026-2027 S/CAP Work Plan to continue progress towards achieving the S/CAP goals. Development of the 2026-2027 S/CAP Work Plan aligns with one of 2 2022 Sustainability and Climate Action Plan;
https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/2022-scap-report_final.pdf 3 Comprehensive Plan Environmental Impact Report Addendum: Update to the Sustainability and Climate Action Plan, 2023; https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes-reports/agendas- minutes/city-council-agendas-minutes/2023/2023comprehensive-plan-environmental-impact-report-addendum- update-to-the-scap.pdf
4 2023-2025 S/CAP Workplan, 2023;
https://www.cityofpaloalto.org/files/assets/public/v/1/sustainability/reports/2023-2025-scap-work-plan_final.pdf 5 2030 Comprehensive Plan; https://www.cityofpaloalto.org/Departments/Planning-Development- Services/Housing-Policies-Projects/2030-Comprehensive-Plan 6 City Council, May 5, 2025; Agenda Item #8; SR #2504-4466, https://portal.laserfiche.com/Portal/DocView.aspx?id=170163&repo=r-704298fc Item 8
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the four Council Priorities for CY 2025: Climate Action and Adaptation, and Natural Environment Protection, and fulfills Council Priority Objective CA 23 - Develop and obtain Council approval for strategies and a 2026/2027 work plan for the next phase of S/CAP implementation of climate and sustainability goals. At the January 9, 2026 Climate Action and Item 8
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Sustainability Committee meeting, the Committee received an update on the status of the 2023-2025 S/CAP Work Plan and discussed the recommended priorities for the 2026-2027 S/CAP Work Plan.11 The Committee voted unanimously, inclusive of staff and committee consensus modifications, to recommend that the City Council approve the work plan.

Council recognized the importance of developing a long-term financial strategy as part of S/CAP implementation in the 2023–2025 Work Plan, which included initiation of an S/CAP Funding Study to explore potential funding and financing sources, as well as several complementary studies (an EV Charger Needs Assessment, studies of electrification opportunities in multi- family and non-residential buildings, and a Funding Source Survey).

The City issued a Request for Proposals for these studies in August 2023 and retained a consultant team - Willdan, E3 (a Willdan company), and Rincon - to complete them.12 This model and its input studies – including assessments of gas equipment in single-family, multi- family, and non-residential buildings, an Electric Vehicle (EV) charger needs assessment, and a survey of funding sources – provide data to evaluate different electrification rollout scenarios and their financial implications.

ANALYSIS
The City is committed to a sustainable future. The City owns, operates, and maintains a full- service utilities portfolio that provides electric, natural gas, fiber, water, refuse, and wastewater services to residents and businesses in Palo Alto. Palo Alto’s continued leadership in advancing sustainability commitments has succeeded mainly because of the continued collaboration of community stakeholders, City departments, and the leadership of the City Council.

This report presents a 2026-2027 S/CAP Work Plan to continue the City’s progress on sustainability and emissions reduction, a 2024 update to the Citywide and Municipal GHG Emissions Inventories showing progress to-date, and asks the City Council to receive six reports related to the S/CAP Funding Study that provide data and a modeling framework that will be used for policy discussions on funding community-wide electrification through 2026 and 2027.

Starting with the 2019 Citywide GHG Emissions Inventory, the City followed the calculation and reporting standards outlined in the Global Protocol for Community-Scale GHG Emissions Inventories (GPC). However, the 1990 Citywide GHG Emissions Inventory followed a different methodology, and did not include several emissions sources, including: Airport Emissions, Off- Road Vehicles and Equipment, Caltrain Commuter Rail, Composting, Palo Alto Landfill Gas Flaring, and Wastewater Biosolid Treatment. Staff and external experts corrected this error and the 1990 Citywide GHG Emissions Inventory now follows the same GPC Protocol used in the 11 Climate Action and Sustainability Committee, January 9, 2026; Agenda Item 1; SR #2507-5027, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18309 12 City Council, January 16, 2024; Agenda Item #4; SR #2308--1939, https://portal.laserfiche.com/Portal/DocView.aspx?id=70170&repo=r-704298fc Item 8
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2019 through 2024 Citywide GHG Emissions Inventories. Historical comparisons are now more equivalent and provide a clearer picture of the City’s sustainability and climate action progress.

Palo Alto’s 2024 Citywide Greenhouse Gas Emissions Inventory In 2024, Palo Alto emitted an estimated 397,791 metric tons (MT) of carbon dioxide equivalent (CO2e) from the residential, commercial, industrial, transportation, waste, water, and municipal sectors. In comparison to the 1990 base year emissions (which have increased to 798,868 MT from the previously calculated 780,119 MT due to corrections in methodology and additions of excluded emissions sources), these emissions represent a 50.2% decrease in total community emissions, despite a population increase of 22% during that same period. Emissions in 2024 equated to 5.9 MT per capita. The California Air Resource Board’s 2017 Scoping Plan Update recommends a goal for local governments of 6 MT CO2e per capita by 2030 and 2 MT CO2e per capita by 2050.15 In order to achieve 80 x 30, Citywide GHG Emissions need to be at 160,000 MT CO2e (corrected from the previous target of 156,024 MT CO2e).

Of the GHG emissions reductions to date, 46.4% came from providing carbon free electricity for the City’s electricity portfolio, 23.4% from declines in transportation emissions, 16.7% from reduction in natural gas (methane) consumption, 11.5% from declines in solid waste emissions, and 1.9% from declines in wastewater-related emissions.

For citywide GHG emission sources in 2024, 64.1% of GHG emissions were from Transportation and Mobile Sources, 31.9% from Natural Gas (Methane) Use, and the remainder are from other sources. As shown in Figure 1, the two largest categories of emissions are Transportation and Mobile Sources (including On-Road Transportation, Airport Emissions, Off-Road Vehicles and Equipment, and Caltrain Commuter Rail) and Natural Gas (Methane) Use (including Residential, Commercial, and Industrial). The full 2024 Citywide GHG Emissions Inventory can be found in Attachment A.
15 California Air Resources Board 2022 Scoping Plan Appendix D Local Actions, November 2022; https://ww2.arb.ca.gov/sites/default/files/2022-11/2022-sp-appendix-d-local-actions.pdf Item 8
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Figure 1: 2024 Palo Alto Citywide Greenhouse Gas Emissions by Sector As shown in Figure 2, total GHG emissions steadily decreased between 1990 and 2021.

However, emissions increased between 2021 and 2022 and slightly increased between 2022 and 2023. The main driver of the increase in 2022 was On-Road Transportation, in part due to the shift away from pandemic-level (reduced) driving frequency, returning to the office after working from home, and economic recovery. These effects likely continued into 2023 as employers continued to change hybrid work policies and economic and travel activities continued to shift.

GHG emissions from Transportation and Mobile Sources are estimated to have increased slightly (by less than 1%) between 2023 and 2024 but remain 27% lower than 1990 Transportation and Mobile Sources emissions. Within Transportation and Mobile Sources, On- Road Transportation increased slightly (less than half a percent). However, this estimate is preliminary due to lack of data. Vehicle miles traveled (VMT) data for 2024 were not yet available when the 2024 GHG inventory was prepared. City staff and external experts calculated a preliminary estimate of 2024 VMT by scaling 2023 per capita VMT based on 2024 population for passenger vehicles and service population for commercial vehicles and buses. This estimate reflects demographic growth and may not capture actual VMT trends. The largest increase between 2023 and 2024 within Transportation and Mobile Sources was from Airport Emissions, Item 8
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which increased 22.4% from 2023. The full comparison between GHG inventories can be found in Attachment B.

Figure 2: Palo Alto Citywide GHG Emissions by Sector, 1990 and 2019 – 2024 Of the estimated 64.1% of GHG emissions from Transportation and Mobile Sources in 2024, the majority are attributed to internal combustion engine (ICE) vehicles: 69% of all Transportation and Mobile Sources emissions are attributed to ICE passenger vehicles, 18% to ICE commercial vehicles, and 2% to ICE buses. No emissions are attributed to electric vehicles because all electricity in the City is carbon neutral. Of the remaining Transportation and Mobile Sources emissions, 8% are attributed to Off-Road Vehicles and Equipment (including lawn and garden equipment), 2% to Caltrain Commuter Rail, and 1% to Aviation fuel.

GHG emissions decreased by 4% between 2023 and 2024. This decrease was primarily driven by reductions in Natural Gas (Methane) Use: residential natural gas GHG emissions decreased by

14.2%, commercial by 10.9%, and industrial by 20.1% since 2023. Overall, Natural Gas (Methane) Use GHG emissions in 2024 were 34.5% lower than 1990 levels. Residential and commercial natural gas (Methane) use contributed nearly equally to GHG emissions (44% and 45% of emissions from Natural Gas (Methane) Use, respectively), with a remaining 7% of the emissions attributed to industrial natural gas use.

Palo Alto’s 2024 Municipal Greenhouse Gas Emissions Inventory In 2024, the City emitted a total of 14,590 MT CO2e from municipal operations, which is a slight reduction from 2023. As shown in Figure 3, GHG emissions from Palo Alto’s municipal operations are from five main sectors: Buildings and Other Facilities, Streetlights and Traffic Signals, Wastewater Facilities, City Vehicles and Equipment, and Indirect Emissions. Since the methodology has changed significantly for certain sectors since the first Municipal GHG Item 8
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Inventory was conducted in 2005, it is no longer possible to do an equivalent comparison with previous Municipal GHG inventories. However, the methodologies for Buildings and Other Facilities, Streetlights and Traffic Signals, and City Vehicles and Equipment are similar enough to do rough comparisons for those sectors. By the end of 2024 the City reduced total municipal GHG emissions roughly 64% from the 2005 baseline.

Figure 3: 2024 Palo Alto Municipal Greenhouse Gas Emissions by Sector The largest contributor to municipal GHG emissions, about 37%, is attributed to the Regional Water Quality Control Plant (RWQCP). Since the RWQCP is owned and operated by the City, 100% of GHG emissions are attributed to the City. These GHG emissions include indirect nitrous oxide (N2O) emissions from wastewater effluent (about 95% of total wastewater GHG emissions), process nitrous oxide emissions from the treatment of wastewater without nitrification/denitrification (about 4% of total Wastewater Facilities sector GHG emissions), and natural gas combustion/leakage (about 1% of total Wastewater Facilities GHG emissions).

The second major contributor to GHG emissions is attributed to the Indirect Sources sector, or the City’s Scope 3 sources. These indirect sources account for about 33% of total GHG emissions and include GHG emissions resulting from employee commute mobile combustion (about 44% of the Indirect Emission Sources GHG emissions) and methane emissions resulting from landfilled solid waste (about 56% of the Indirect Emissions Sources GHG emissions).

The third major contributor to GHG emissions includes GHG emissions from natural gas usage in Buildings and Other Facilities (excluding the RWQCP). These GHG emissions accounted for 22% of total GHG emissions and are driven by natural gas combustion (about 97% of Buildings and Item 8
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Other Facilities GHG emissions), and natural gas leakage (about 3% of Buildings and Other Facilities GHG emissions).

The final contributor to GHG emissions includes the City’s vehicle and equipment fleet sector.

Together, these account for about 9% of total GHG emissions and are mainly driven by the City’s on-road vehicle fleet powered by gasoline, renewable diesel, and compressed natural gas (CNG) and off-vehicle/equipment fleet powered by gasoline and diesel. The City’s on-road vehicle fleet makes up about 97% of City Vehicle and Equipment Fleet GHG emissions, while off-road vehicles and equipment make up the remaining 3%.

Since electricity in the City is carbon-neutral, there are no GHG emissions from electricity consumption in City-owned buildings and facilities, streetlight and traffic signals, EVs, or City water-energy consumption.

A comparison of 2005 and 2022 through 2024 Palo Alto Municipal GHG emissions is shown in Figure 4. Overall GHG emissions declined slightly, with about a 5% reduction from 2022 to 2023, about a 1% reduction from 2023 to 2024, and about a total decrease of 6% over the three-year period. For reference only, in 2005 the City emitted a total of 40,499 MT CO2e from municipal operations. The full Palo Alto Municipal Greenhouse Gas Inventory for calendar year 2024 can be found in Attachment C.

Figure 4. Palo Alto Municipal GHG Emissions, 2005 and 2022-2024 The City prioritizes GHG emissions reductions in its municipal fleet. In 2023, the City transitioned from conventional fossil diesel to renewal diesel, which has a roughly 70% lower Item 8
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GHG emissions factor than conventional fossil diesel. Table 1 and Figure 5 show a historical comparison of On-Road Vehicle GHG emissions by City Department.

Table 1: On-Road Vehicle GHG emissions by City Department (MT CO2e) City Department 2022 2023 2024 % of Total in
2024
Administrative Services 8.3 2.8 2.6 0.2%
Community Services 88.9 87.9 93.2 7.4%
Fire 228.9 118.7 118.5 9.3%
Information Technology 2.5 2.4 2.3 0.2%
Planning and Development 18.1 22.2 18.7 1.5%
Police 430 421.7 420.5 33.2%
Public Works 337.8 323.5 274.9 21.7%
Utilities 435.7 328.5 337.4 26.6%
Total MT CO2e 1550.2 1307.6 1268.1 100.0%
Note: Percentages and MT CO2e may not add to the total due to rounding Figure 5: Palo Alto On-Road Vehicle GHG Emissions by City Department Item 8
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Palo Alto’s Progress Toward Carbon Neutrality
Carbon neutrality focuses on balancing the amount of GHGs emitted against the amount of GHGs removed from the atmosphere. The City strives for net zero emissions – reducing GHG emissions as close to zero as possible, then “offsetting” remaining emissions. This is similar to trying to balance a scale. If there are GHG emissions remaining after reduction strategies have been exhausted, “offsets” are used to balance out or get to zero. Offsets are actions, such as carbon sequestration, taken to reduce – or “offset” - the amount of GHGs emitted. Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide. For example, buying into new forest growth to store carbon in trees in one geographic area can offset GHGs emitted in another area.

The City currently purchases carbon offsets to balance emissions from natural gas (methane) use, but the offsets are not included in the Citywide GHG Inventory. These offsets are included, however, for the purpose of estimating progress towards achieving carbon neutrality. As shown in Figure 6, the inclusion of natural gas (methane) carbon offsets results in 66.1% emissions reductions.

Figure 6: 2024 Progress Toward Carbon Neutrality
Palo Alto in Context
The City aims to lead by example in its climate goal setting and progress. Palo Alto is among the most ambitious cities in California in carbon neutrality goals: in a review of cities engaged in the Green Cities California coalition, only four aim to achieve carbon neutrality by 2030 (Palo Alto, Item 8
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Half Moon Bay, Menlo Park, and Watsonville). Many cities’ targets cannot be compared directly because of different baseline years. Table 2 displays the emission reduction targets of surveyed cities using the same baseline year as Palo Alto (1990).

Table 2: Comparison of Select Greenhouse Gas Emission Reduction Targets City Reduction Target Reduction Target Year Baseline Year Palo Alto 80% 2030 1990
Santa Monica 80% 2030 1990
Watsonville 80% 2030 1990
Cupertino 66% 2030 1990
Belmont 40% 2030 1990
Beverly Hills 40% 2030 1990
San Mateo 45% 2030 1990
Irvine* 90% 2040 1990
Santa Barbara 100% 2035 1990
*The City Council of Irvine has not ratified their climate action plan.

Most cities have reduced their emissions by less than half their target reduction percentage, and seven of the 21 surveyed cities have reduced emissions by less than 20% compared to their baselines (ranging between 1990 and 2016). Three of the surveyed cities have achieved reductions of more than 30%, as shown in Table 3.

Table 3: Greenhouse Gas Emission Reductions of Surveyed Cities City Reduction Target Baseline Year GHG Inventory Year GHG Reduction Cities with 1990 baseline year
Palo Alto 80% by 2030 1990 2024 50%
Santa Monica 80% by 2030 1990 2023 54%
Santa Barbara 100% by 2035 1990 2019 15%
Belmont 40% by 2030 1990 2023 15%
Beverly Hills 40% by 2030 1990 2019 8%
Burbank 40% by 2030 1990 2022 6%
San Mateo 45% by 2030 1990 2023 1%
Irvine* 90% by 2040 1990 No data No data
Watsonville 80% by 2030 1990 No data No data
Cities with other baseline years
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Sunnyvale 56% by 2030 2008 2023 37%
Berkeley 100% by 2045 2000 2023 41%
Hayward 55% by 2030 2005 2023 35%
Millbrae 49% by 2030 2005 2023 30%
Menlo Park 90% by 2030 2005 2023 27%
Half Moon Bay 40% by 2030 2005 2023 27%
Brisbane 66% by 2030 2005 2023 16%
Santa Barbara 100% by 2035 1990 2019 15%
Belmont 40% by 2030 1990 2023 15%
Solana Beach 85% by 2045 2016 2018 9%
Mountainview 80% by 2050 2005 2019 14%
Burlingame 40% by 2030 2005 No data No data
*The City Council of Irvine has not ratified their climate action plan.

S/CAP Key Performance Indicators Annual Progress Report Achieving 80 x 30 and carbon neutrality by 2030 are the overarching goals for the S/CAP. The S/CAP also outlines Goals and Key Actions in eight areas: Climate Action, Energy, Electric Vehicles, Mobility, Water, Climate Adaptation and Sea Level Rise, Natural Environment, and Zero Waste. The climate action areas of Climate Action, Energy, Electric Vehicles, and Mobility primarily focus on the 80 x 30 and carbon neutrality by 2030 goals. The sustainability areas of Water, Climate Adaptation and Sea Level Rise, Natural Environment, and Zero Waste do not necessarily have a direct impact on greenhouse gas reductions, but have critically important sustainability, public health and safety, regional, resource conservation, and equity benefits that contribute to overall climate action. Progress towards achieving the S/CAP Key Performance Indicators can be found in Attachment D and are summarized in Attachment E. 2026 – 2027 S/CAP Work Plan
The City has reached the end of its 2023-2025 S/CAP work planning period. The 2023-2025 S/CAP Work Plan guided S/CAP Implementation with 77 work items, of which 27 focused on sustainability and 50 on climate action.
Of the 50 climate action items, 16 were ongoing work items and 34 were discrete projects, of which 27 were completed, 6 are in progress, and 1 is delayed (not started). Of the 27 sustainability work items, 14 were ongoing and 13 were discrete projects, of which 8 were completed. Five of the remaining items are in progress and one is delayed.

A summary of the progress of the 2023 – 2025 S/CAP Work Plan can be found in Attachment F.

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The proposed 2026-2027 S/CAP Work Plan includes 28 strategies focused on Climate Action, 16 strategies focused on Sustainability, and 3 strategies for overall S/CAP Communications for all areas of the S/CAP. The full 2026 – 2027 Work Plan can be found in Attachment G.

At a high level, the Climate Action priorities in the Work Plan are intended to help the community develop a funding strategy for community-wide electrification at a pace that balances community willingness to fund climate action, utility rate impacts, and the community’s desire to maintain leadership in this area. It will do this through piloting cost- efficient building electrification and EV charging program models in the single-family, multi- family, and non-residential sectors that minimize the cost to the City while remaining attractive to customers. In parallel, staff will present different strategies and scenarios for funding community-wide electrification and carbon neutrality using the data and modeling frameworks developed in the S/CAP Funding Study.

The key areas of focus for the Sustainability priorities in the Work Plan are water, sea level rise, wildfire protection, natural environment, green stormwater infrastructure, and zero waste.

While sustainability strategies do not necessarily have a direct impact on greenhouse gas reductions, they have critically important sustainability, public health and safety, regional, resource conservation, and equity benefits that contribute to overall climate action. These strategies contribute towards achieving the goals of the S/CAP and are directly tied to the Sustainability Key Actions.

The City developed a 2026-2027 S/CAP Work Plan to continue progress towards achieving the S/CAP goals. Development of the 2026-2027 S/CAP Work Plan aligns with one of the four Council Priorities for CY 2025: Climate Action and Adaptation, and Natural Environment Protection, and fulfills Council Priority Objective CA 23 - Develop and obtain Council approval for strategies and a 2026/2027 work plan for the next phase of S/CAP implementation of climate and sustainability goals. At the January 9, 2026 Climate Action and Sustainability Committee meeting, the Committee received an update on the status of the 2023-2025 S/CAP Work Plan and discussed the recommended priorities for the 2026-2027 S/CAP Work Plan.17 The development of the 2026-2027 S/CAP Work Plan is described in more depth in the staff report for the January 9, 2026 Climate Action and Sustainability Committee meeting. At that meeting the Committee voted unanimously, inclusive of staff and committee consensus modifications, to recommend that the City Council approve the work plan.

Six Studies Requested to be Received
The Climate Action and Sustainability Committee and staff recommend the City Council receive six studies that were attached to and summarized in the staff report for the December 13, 2025 17 Climate Action and Sustainability Committee, January 9, 2026; Agenda Item 1; SR #2507-5027, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18309 Item 8
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Climate Action and Sustainability Committee (CASC) workshop on electrification funding and financing strategies.19 These include:
The S/CAP Funding and Financing Study (Attachment H), which uses an “S/CAP Funding Model” developed via collaboration between the consultant and City staff and the data and analysis from the other studies to model three illustrative electrification scenarios that show various financial dynamics of community-scale electrification. The EV Charger Needs Assessment (Attachment I), which evaluates illustrative scenarios for EV adoption and charging strategies in Palo Alto to show charging capacity needs and the financial and operational dynamics of different business models and strategies for providing EV charging.
Three studies of building electrification strategies and costs in the single-family (Attachment J), multi-family (Attachment K), and non-residential sectors (Attachment L) that provide data and insights that can be used for program design and strategic planning.
The S/CAP Funding Source Survey (Attachment M), an inventory of potential funding sources for community-wide electrification.

The City intends to use these tools and data throughout 2026 and 2027 to support strategic planning efforts under 2026-2027 S/CAP Work Plan item C13 (Develop Funding and Financing Strategies for Consideration).

All studies are described in more depth in the staff report for the December 13, 2025 Climate Action and Sustainability Committee workshop.

FISCAL/RESOURCE IMPACT
Most of the proposed work of the 2026-2027 Work Plan will draw from funding approved as part of the Adopted FY 2026 Operating and Capital Budgets, or with funding appropriations proposed for FY 2027, with the intent of achieving the goals of the 2026-2027 Work Plan without significant increases to overall Council spending authority in FY 2027. Resource availability for each Work Plan Item can be found in Attachment G. Funding for FY 2027 will be subject to Council appropriation as part of the annual budget process and in recognition of funding constraints, may impact the ability to pursue all items. There are also several grant opportunities that staff will pursue in order to mitigate costs to the City.

The City will also be considering the costs of expanding beyond the levels of climate action in the 2026-2027 S/CAP Work Plan to community-wide electrification. While more work is needed on strategy and scenario modeling of the funding needed for community-wide electrification, the three illustrative scenarios modeled in the S/CAP Funding Study showed it is highly likely 19 Climate Action and Sustainability Committee, December 13, 2025; Agenda Item #A; SR #2507-5025, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18114 Item 8
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that significant financial investment would be needed that exceeds current available resources if the City were to pay for all the needed incremental investment using incentives. As part of the 2026-2027 S/CAP Work Plan, staff will need to work with the City Council and the community to grapple with the funding needs for community-wide electrification in a current environment where federal support has changed and with the local competing priority of maintaining low utility rates.

In the illustrative 80x30 scenario modeled by E3, there are large up-front investments that are offset by other avoided investments in gas equipment and other long-term savings. Within the 2025-2030 period, the time it takes to reach 80% reductions, the total incremental investment need is $491 million but the community would realize more than that in net benefits over the next 20 years. Notably, the net benefits and costs are not evenly distributed through the community, and further modeling included in the 2026-2027 S/CAP Work Plan will help staff understand the needs of each part of the community better. The study also notes investment costs and benefits beyond 2030 and beyond achievement of the 80x30 goal which are uncertain, and the modeling will help refine those elements further as well.

The scenario did find that if the City alone were to pay that debt service (in other words, providing up-front incentives for 100% of the incremental cost), it would create an ongoing City expense that exceeds currently available funding sources. Finding creative program designs that avoid the need for large up-front incentives will be critical to achieving success in community electrification. Brainstorming alternative program ideas was a focus of a December 13, 2025 CASC public workshop and is the main focus of the 2026-2027 S/CAP Work Plan.

Further modeling included in the 2026-2027 S/CAP Work Plan will refine these numbers, update assumptions, and model more cost-efficient strategies for City Council consideration.

STAKEHOLDER ENGAGEMENT
Outreach and communications is an integral part of S/CAP implementation and is a component of all S/CAP initiatives. The communications focus of the 2026 - 2027 S/CAP Work Plan includes building widespread awareness about sustainability and climate action, running effective outreach campaigns to drive community action and program participation in initiatives to achieve S/CAP goals, and tracking community sentiment and engagement to guide decision making. The following work items are included:
C1. Build awareness about sustainability and climate action and City programs available to the community
C2. Drive community actions to achieve S/CAP goals
C3. S/CAP Data Collection and Annual Reporting
The City seeks community-wide feedback through a variety of ways, including the annual Palo Alto Community Survey. The Palo Alto Community Survey is a community feedback tool that helps the City Council and City staff understand community perspectives on current services Item 8
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and programs, as well as unmet needs and priorities. The 2024 and 2025 Community Surveys included a question about familiarity with the S/CAP and 80 x 30, with 42% of residents noting they were familiar with the S/CAP and 80 x 30 in both surveys. The only difference is that in 2025 6% of respondents noted that they were very familiar with the S/CAP and 80 x 30 compared to 5% in 2024. The communications focus of the 2026 – 2027 Work Plan will strive to increase awareness from the current 42% of residents who are familiar with the S/CAP and 80 x

30. The City will continue stakeholder engagement through the City Council or a Council Committee and the Climate Action Working Group and will also continue engagement through other outreach depending on the program or strategy included in the workplan. As the 2026-2027 S/CAP Work Plan is implemented, additional outreach will evolve with the work plan elements.

The City is also coordinating regionally with other municipalities on programs and regulations that could inform future outreach planning and activities.

While much of the policymaker interaction on the 2026-2027 S/CAP Work Plan will be with the City Council, staff will also consult with Council-appointed Commissions for the following work items:
Mobility-related work items (CA21 – CA25) may require consultation with the Planning and Transportation Commission depending on the project. Infrastructure-related Climate Action items (CA19 – CA20) and Water-related work items (S1-S3) would require consulting or informing the Utilities Advisory Commission (UAC) at various stages of the projects. The UAC would also discuss the potential rate impacts of any utility-related climate action programs as part of the utility financial planning process.

Stakeholder engagement for the development of the 2026-2027 S/CAP Work Plan is described in more depth in the staff report for the January 9, 2026 Climate Action and Sustainability Committee meeting.

ENVIRONMENTAL REVIEW
The Council’s review of the 2024 Greenhouse Gas Inventory and S/CAP Key Performance Indicators Progress Report does not meet the definition of a project requiring CEQA review, under Public Resources Code section 21065, since it will not cause a physical change in the environment. In June 2023, City Council certified the Comprehensive Plan Environmental Impact Report Addendum: Update to the Sustainability and Climate Action Plan. The strategies proposed in the 2026-2027 S/CAP Work Plan are consistent with the Sustainability and Climate Action Plan (S/CAP), the 2023-2025 S/CAP Work Plan, and the Comprehensive Plan. Potential environmental impacts of this project were studied in the June 5, 2023 S/CAP Addendum to the 2017-2031 Comprehensive Plan EIR. In addition, the City Council’s discussion and review of the proposed 2026-2027 S/CAP Work Plan is not a project as defined by CEQA because it is Item 8
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consistent with an existing general or comprehensive plan and does not require additional CEQA review (CEQA Guidelines section 15183).

ATTACHMENTS
Attachment A: 2024 Citywide Greenhouse Gas Emissions Inventory Attachment B: Historical Comparison of Citywide Greenhouse Gas Emissions by Sector Attachment C: 2024 Municipal Greenhouse Gas Emissions Inventory Attachment D: S/CAP Key Performance Indicators Progress Report Attachment E: S/CAP Key Performance Indicators Progress Summary Attachment F: 2023-2025 SCAP Work Plan Status
Attachment G: 2026-2027 S/CAP Work Plan
Attachment H – M Links
APPROVED BY:

Brad Eggleston, Director Public Works/City Engineer
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