Item No. AA1. Page 1 of 3
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City Council
Supplemental At-Places Report
From: Brad Eggleston, Director Public Works/City Engineer Meeting Date: April 20, 2026
Item Number: AA1
Report #:2604-6269
TITLE
Amend the FY 2026 Budget Appropriation for the Capital Improvement Fund to Establish the Embarcadero Road Improvement Project, and Authorize the City Manager or Their Designee to Award a Construction Contract with a Qualified Contractor for the Embarcadero Road Improvement Project, Phase 1; CEQA Status – Exempt under CEQA Guidelines Section 15301(c)
RECOMMENDATION
Staff recommends that the City Council:
1. Authorize the City Manager or their designee to execute a construction contract with a qualified contractor to implement the Embarcadero Road Improvement Project, Phase 1; and
2. Authorize the City Manager or their designee to negotiate and execute change orders for related additional but unforeseen work that may develop during the project, the total value of which shall not exceed 10% of the construction contract value; and
3. Amend the Fiscal Year Budget Appropriation for the Capital Improvement Fund (requires a 2/3 vote) by:
a. Establishing the Embarcadero Road Improvements (Alma Street to Emerson Avenue) Project (TR-26000) in the amount of $2,886,000; b. Establishing revenue from Other Agencies (2016 Measure B Local Streets and Roads for Congestion Relief Projects) in the amount of $2,886,000 in TR-26000; c. Reducing expenditures in the Bicycle and Pedestrian Transportation Plan Implementation Project (PL-04010) by $877,000; and
d. Reducing transfers from the General Fund of Measure K business tax revenue to PL-04010 by $877,000.
Item No. AA1. Page 2 of 3
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BACKGROUND/ANALYSIS
On April 15, 2026, Council discussed the possibility of temporarily closing the Churchill Avenue Crossing at Alma Street.1 The agenda item was continued to Council’s May 11, 2026 meeting.
However, at the meeting, Councilmembers supported providing approvals for staff to proceed with awarding the construction contract for the Embarcadero Road Improvement Project (TR- 26000) in order to complete the project prior to school starting in August 2026.
The Embarcadero Road Improvement Project, Phase 1 will reduce conflicts between vehicles and pedestrians and bicyclists through several improvements on the north side of Embarcadero Road. (The south side of Embarcadero Road will be addressed in Phase 2 of the Project.) The Phase 1 improvements include squaring up the corners, eliminating the slip lane at Kingsley Avenue on the north side of Embarcadero Road, and widening the existing sidewalk path on Embarcadero Road from Emerson to High Street. The project will reconfigure High Street and Emerson Street intersections to reduce conflicts, reduce the speed of turning vehicles, and increase visibility for pedestrians and bicyclists. Staff recommends moving forward with improvements on the north side of Embarcadero Road (Phase 1) at this time to ensure completion of the project during summer 2026. The project will improve pedestrian and bicyclist conditions and is needed whether or not Council decides to temporarily close Churchill Avenue. The cost estimate for Embarcadero Road Improvement Project is approximately $3.2 million. However, the north side improvements (Phase 1) are estimated to cost approximately $1.7 million. The remaining funding in Capital Improvement Program Project TR-26000 will be used to construct the south side of the project (Phase 2) at a later date.
Staff recommends authorizing the City Manager to negotiate and execute a construction contract with a responsible contractor selected by Public Works. Palo Alto Municipal Code Sections 2.30.210 and 2.30.360 authorize the City Manager to award emergency contracts without following the standard contract solicitation and award procedures. The City Manager expects to provide additional reports to the Council on the project as it progresses.
FISCAL/RESOURCE IMPACT
To fund these improvements, staff recommends creating a new capital improvement project, the Embarcadero Road Improvements Project (TR-26000), in the Capital Improvement Fund in the amount of $2,886,000, offset by Measure B Local Streets and Roads (LSR) revenue in the same amount. An additional $260,000 of appropriation and LSR revenue will be requested as part of the Fiscal Year 2027 Amendment to Proposed Capital Budget. The Embarcadero Road Improvement Project was previously budgeted in the Bicycle and Pedestrian Transportation Plan Implementation Project (PL-04010) in FY 2026, but staff recommends creating the new project for improved transparency and tracking. Expenditures and offsetting Measure K 1 City Council, April 15, 2026, Agenda Item #1 SR #2604-6209 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87333&dbid=0&repo=PaloAlto&cr=1 Item No. AA1. Page 3 of 3
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business tax revenues in the amount of $877,000 are recommended to be reduced in PL-04010 since they will no longer be used for Embarcadero Road improvements; they will instead be applied towards Quiet Zone improvements in future years.
STAKEHOLDER ENGAGEMENT
Extensive community engagement occurred during the earlier concept planning and engineering design phases of this project. Additional outreach will be conducted before and during the construction phase to keep the community informed throughout the process, including flyers sent to adjacent residences and business, and notices posted online on Nextdoor.
ENVIRONMENTAL REVIEW
Given the nature of the proposed improvements for the project, the project qualifies for a Class 1 Categorical Exemption under California Environmental Quality Act (CEQA) Guidelines Section 15301. The Class 1 exemption covers minor alterations to existing facilities so long as they involve no negligible expansion of use.
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer