PROJECT STATS
FY 26 Project Status Pre-Design Design ConstrucƟon Complete Total One Time Projects 0 2 1 0 3
Recurring Projects 7
ONE-TIME PROJECTS
Water Main Replacement Project 30 (WS-16001)
Prior Years Actuals Total Project Budget ImplemenƟng Department Project Phase Project CompleƟon $5,371 $4,470,560 UƟliƟes Design Summer 2027
Project Status: This project replaces structurally deficient water mains and appurtenances in Fiscal Year 2027. Mains are selected by researching the maintenance history of the system and idenƟfying those that are undersized, corroded, and subject to breaks. The project scope includes approximately 2,589 linear feet (which represents 0.2 percent of the City’s Water DistribuƟon System) of mains and services on various streets within the City, including areas in Duveneck/St. Francis and Evergreen Park neighborhoods.
Water Main Replacement Project 31 (WS-19001)
Prior Years Actuals Total Project Budget ImplemenƟng Department Project Phase Project CompleƟon $0 $6,641,796 UƟliƟes Design Spring 2028
Project Status: This project replaces structurally deficient water mains and appurtenances in Fiscal Year 2028. Mains are selected by researching the maintenance history of the system and idenƟfying those that are undersized, corroded, and subject to breaks. The project scope includes approximately 8,000 linear feet (which represents 0.6 percent of the City's Water DistribuƟon System) of mains and services on various streets within the City.
Water Tank Seismic Upgrade and RehabilitaƟon (WS-09000) Prior Years Actuals Total Project Budget ImplemenƟng Department Project Phase Project CompleƟon $9,952,452 $29,099,691 UƟliƟes ConstrucƟon Fall 2031
Project Status: This project is for Seismic Water System Upgrades and RehabilitaƟon of drinking water storage tanks.
The project includes rehabilitaƟon and seismic upgrades at the Montebello, Mayfield, Corte Madera, Park, Boronda, and Dahl Reservoirs. Mayfield Reservoir was seismically retrofiƩed in 2011, and rehabilitaƟon and seismic upgrades of Boronda and Montebello Reservoirs were completed in 2016 and 2018, respecƟvely. The new concrete Corte Item C
Attachment A - Semiannual
Update on the Status of
Capital Improvement
Program Projects
Item C: Staff Report Pg. 68 Packet Pg. 1120 of 1165
Water Fund Projects
Status as of December 2025
Water Fund Projects Page 2 of 4
Madera Reservoir was completed in April 2022. The Park Reservoir and Dahl Reservoir Tanks are scheduled next for retrofit or replacement. An Engineering condiƟon assessment of Park Reservoir was completed in spring 2023, and Dahl Reservoir will be assessed in 2026.
RECURRING PROJECTS
Water DistribuƟon System Improvements (WS-11003)
Prior Year Actuals Current Year Budget ImplemenƟng Department Project Phase Project CompleƟon $154,920 $288,120 UƟliƟes N/A Recurring
Project Status: This project enables improvements to water distribuƟon system deliverability and reliability. Typical acƟviƟes include installing restraining joints at criƟcal pipelines and bridge crossings, increasing the size of inadequate faciliƟes, system leakage surveys, network modeling, and fire flow studies or other system improvements as required. ConƟnuous evaluaƟon of system needs and making required improvements is necessary to maintain adequate quanƟƟes of quality water, meeƟng local, state, and federal safe drinking water standards. The Pump StaƟon PainƟng project to paint the five foothill pump staƟons was completed in May 2024. A three-year services contract for an annual full system leakage survey of the water distribuƟon system was solicited in 2025, and the first year of full system leak survey is expected to be completed by 2026.
Water, Gas, Wastewater UƟlity GIS Data (WS-02014)
Prior Year Actuals Current Year Budget ImplemenƟng Department Project Phase Project CompleƟon $ 519,095 $499,160 UƟliƟes N/A Recurring
Project Status: This project enables contracts related to UƟliƟes GIS (Geographic InformaƟon System) needs. AME database is heavily uƟlized by UƟliƟes Engineering staff to update the uƟlity informaƟon in GIS. The updated informaƟon is used by various City staff, such as marking/locaƟng underground uƟliƟes to comply with USA (Underground Service Alert) requirements; developing design drawings for pipeline replacement projects; verifying exisƟng underground uƟliƟes during construcƟon acƟviƟes; creaƟng customized uƟlity map books for field crews and on-call personnel to meet their specific needs. Annual surveying contracts collect GPS points of exisƟng aboveground uƟlity features within CIP project areas. The data being collected conƟnues to be used to correct the GIS database. Accurate uƟlity data helps the design to select new pipe alignment to minimize construcƟon conflicts and provides data for addiƟonal road feature linework to be corrected in the older GIS/AVEC database via ESRI. A migraƟon from AME to ArcGIS is planned as the primary plaƞorm for maintaining and updaƟng GIS data, with work scheduled to begin in February 2026 and conƟnue through December 2026.
Item C
Attachment A - Semiannual
Update on the Status of
Capital Improvement
Program Projects
Item C: Staff Report Pg. 69 Packet Pg. 1121 of 1165
Water Fund Projects
Status as of December 2025
Water Fund Projects Page 3 of 4
Water General Equipment Tools (WS-13002)
Prior Year Actuals Current Year Budget ImplemenƟng Department Project Phase Project CompleƟon $0 $46,300 UƟliƟes N/A Recurring
Project Status: This project acquires new equipment and tools, the replacement of exisƟng fusion equipment, and other associated tools. The fusion equipment is used to fuse together pipe joints in the City's water distribuƟon system. Equipment and tools are required to be upgraded on an annual basis to maintain high quality standards for the installaƟon of the City's water distribuƟon mains, along with the associated service standards and worker safety and producƟvity measures. New equipment purchases made in the 1st half of FY 2026 include a new clamp-on ultrasonic flow meter, portable transient pressure monitoring device, and a water service tapping machine.
Water Meters (WS-80015)
Prior Year Actuals Current Year Budget ImplemenƟng Department Project Phase Project CompleƟon $220,617 $314,090 UƟliƟes N/A Recurring
Project Status: This project enables the purchasing of meters for new customers, upgrading meters for current customers, installing meter bypasses, and replacing obsolete meters that are no longer repairable. This funding also allows for annual tesƟng and calibraƟon of selected meters to maintain meter accuracy and reliability. During the AMI implementaƟon process, approximately 90% of the meters will be replaced with a focus on meters more than twenty years old. Staff conƟnue to test addiƟonal larger diameter meters.
Water Service and Hydrant Replacement (WS-80014)
Prior Year Actuals Current Year Budget ImplemenƟng Department Project Phase Project CompleƟon $207,973 $389,050 UƟliƟes N/A Recurring
Project Status: This project replaces system control valves, deteriorated galvanized service lines, lead goosenecks, and fire hydrant valves and assemblies per the Fire Department’s flow tesƟng, upgrades fire hydrants in main line replacement project areas, replaces damaged fire hydrants, and replaces exisƟng undersized or deteriorated copper water services on an as needed basis.
Water System Customer ConnecƟons (WS-80013)
Prior Year Actuals Current Year Budget ImplemenƟng Department Project Phase Project CompleƟon $1,373,706. $907,480 UƟliƟes N/A Recurring
Project Status: This project allows for improvements that include new main extensions, valves, domesƟc services, meters on upgraded services, backflow devices, fire services, and fire hydrants. System extensions are required to provide service to new large developments and to serve exisƟng customers requesƟng expanded service on Development Services projects. A total of 66 water services were installed in the second half of FY 2025.
Item C
Attachment A - Semiannual
Update on the Status of
Capital Improvement
Program Projects
Item C: Staff Report Pg. 70 Packet Pg. 1122 of 1165
Water Fund Projects
Status as of December 2025
Water Fund Projects Page 4 of 4
Water System Supply Improvements (WS-11004)
Prior Year Actuals Current Year Budget ImplemenƟng Department Project Phase Project CompleƟon $743,603 $3,643,622 UƟliƟes N/A Recurring
Project Status: This project evaluates and improves the City’s water distribuƟon system on an as-needed basis. This project includes piping modificaƟons, equipment replacements associated with water delivery, supervisory control soŌware upgrades, system modificaƟons for water system quality compliance, condiƟonal assessment of the reliability of transmission mains, and security system installaƟons. The water system includes the connecƟon faciliƟes between the City’s and the San Francisco Public UƟlity Commission’s pipelines, water wells within the City’s pumping staƟons, water reservoirs, and pipelines.
Item C
Attachment A - Semiannual
Update on the Status of
Capital Improvement
Program Projects
Item C: Staff Report Pg. 71 Packet Pg. 1123 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
PL-20000
Churchill Avenue Alma Street
Railroad Crossing Safety
Improvements
This project completed the railroad crossing improvement project to enhance safety at the intersection of Churchill Avenue and Alma Street. The design included traffic signal modifications, street lighting improvements, roadway resurfacing, sidewalk realignment, drainage improvements, utility relocations, signage, and striping. After obtaining approval from Caltrain, the traffic system was switched over to new signals in June 2025. Construction was completed in fall 2025.
Construction
Traffic and
Transportation Public Works Fall 2025 $ 8,853,852.00
AC-24000
Lucie Stern Community Theatre
Stage Rigging System
Refurbishment
This project refurbished the most heavily used components of the stage rigging system at the Lucie Stern Community Theatre. The construction contract was approved by Council on June 3, 2024. Work was completed in July 2025 with additional follow up work that occurred in October 2025.
Construction
Buildings and
Facilities
Community
Services Fall 2025 $ 116,113.00
PE-15001 New Public Safety Building
This project built a new, modern Public Safety Building (PSB) to meet current essential services standards and the future needs of the public safety departments. Construction on the PSB started in March 2021. The project obtained temporary certificate of occupancy at the end of May 2025.
The City held a grand opening ceremony in November 2025.
Construction Buildings and
Facilities Public Works Fall 2025 $ 126,700,000.00
PE-17005 Boulware Park Improvements
A Park Improvement Ordinance for the improvements was adopted by the City Council in October 2021 and a construction contract began in August 2023. Project construction was completed and opened to the public in spring 2025, pending punch list items. All contract punch list items were completed in December 2025.
Construction
Parks and Open
Space
Public Works Fall 2025 $ 6,107,473.00
PG-26000
Stanford Palo Alto
Community Playing Fields
Turf Replacement
The project replaced the synthetic turf at the Stanford Palo Alto Community Playing Fields. The design was completed in fall 2024, and construction began in summer 2025. Work was performed through an approved sole source contract and the turf replacement was completed in December 2025.
Construction
Parks and Open
Space
Community
Services Fall 2025 $ 2,707,547.00
GS-14003 Gas Main Replacement
Project 24
This project enableds the design and construction to replace approximately 20,100 linear feet (which represents 1.9% of the City's Gas distribution main system) of distribution main and 260 gas services constructed mainly of PVC on various streets within the University Park and Crescent Park neighborhoods. This project was completed in spring 2025.
Construction Gas Utilities Spring 2025 $ 11,409,309.00
CB-17002 Cubberley Field Restroom
This project will install a new restroom in the sports field area of the Cubberley Community Center.
In June 2023, Council approved a purchase order with the Public Restroom Company for a four-stall prefabricated restroom building. The construction contract for was completed in spring 2025.
Construction
Parks and Open
Space
Public Works Spring 2025 $ 1,452,876.00
AP-23000 Airport Zero Emission Vehicle
Fleet Replacement Program
This project provided the funding to replace existing support vehicles used by Airport staff with zero emission vehicles. The Airport received delivery of the final new electric truck in fall 2024 which replaced both airport vehicles with electric vehicles.
Procurement Airport Airport Summer 2024 $ 377,696.00
PE-24000 Baylands Boardwalk Piling
Repair
This project provided funding for the identification and implementation of a long-term repair solution to damage caused by aquatic borers to the Lucy Evans Baylands Interpretive Center’s boardwalk pilings. The project received permits from the San Francisco Bay Regional Water Quality Control Board, Bay Conservation and Development Commission, United States Fish and Wildlife Services, and United States Army Corps of Engineers. Project construction was completed in October 2024.
Construction
Buildings and
Facilities Public Works Fall 2024 $ 276,461.00
PG-14002 Cameron Park Improvements
This project upgraded and renovated safety and accessibility features at Cameron Park with a primary focus on the park playground improvements. The Cameron Park Improvements Project were completed in November 2024.
Construction Parks and Open
Space
Community
Services
Fall 2024 $ 205,627.00
June 2025
December 2025
1 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 72 Packet Pg. 1124 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
PE-20002
City Facilities Assessment and
Record Plan Management
System
This project provided a complete Facility Condition Assessment (FCA) to renew cost estimates of the deferred maintenance, planned maintenance, capital renewal and electrification costs of city facilities over the next 30 years. A detailed list of buildings for electrification has been analyzed to determine prioritization to help meet SCAP goals. The data has been updated into the City of Palo Alto’s newly customized Infrastructure Management System to provide long range capital planning based on the results of the FCA. The Record Plan Management System is being implemented through TE-13004. The project reached completion in fall 2024.
Construction
Buildings and
Facilities Public Works Fall 2024 $ 333,134.00
SD-22000 East Meadow Drive System
Upgrades
This project added 407 linear feet of new twenty-four inch high density polyethylene (HDPE) to be parallel to the existing thirty-six inch pipe within East Meadow Drive to increase the capacity of the storm drain system. This project included upsizing manholes based on new pipes and reconnecting laterals from private property and catch basins. Project was completed in September 2024.
Construction
Stormwater
Management
Public Works Summer 2024 $ 636,405.00
SD-26000
East Meadow Circle
Connection to Adobe Creek
Pump Station
This project installed 506 linear feet of fifteen-inch pipe and manholes along East Meadow Circle.
The upgraded line will eliminate flooding that occurs within East Meadow Circle when the water level within Barron Creek is higher than the flap-gate, and flows are not able to drain into the creek.
The new fifteen-inch HDPE line extension allows flows to drain away from Barron Creek and into Adobe Creek, where they can be pumped. The project also included a small bioretention area to treat low flow runoff within East Meadow Circle before discharging into either creek. The project was completed in September 2024.
Construction
Stormwater
Management
Public Works Summer 2024 $ 634,016.00
SD-22002 Trash Capture Device
Installation
This project included both the design and construction of a large trash capture device (TCD) installed in the planting strip along Embarcadero Road located in front of the Palo Alto Baylands Golf Links parking lot. The TCD was integrated into a thirty-six inch storm pipe to capture trash as small as five millimeters from a section of the storm drain system prior to discharging to the San Francisco Bay. The 189-acre drainage area treated by the TCD consists of 169 acres of commercial and office land use in the City’s jurisdiction and twenty acres in the California Department of Transportation (Caltrans) right-of-way. Construction was completed October 1, 2024.
Construction
Stormwater
Management
Public Works Fall 2024 $ 818,837.00
EL-24001
Hanover Substation
Improvement
This project installed two 12 kV 50 MVA transformers to replace two 4kV transformers that served 1501 Page Mill Road and make all substation improvements necessary to accommodate the installations. Project construction is 100% complete and new Hanover substation transformers and switchgear have been successfully tested and commissioned and released to the Utility Operations group. Final project close out and settlement of Public-Private Partnership Contract between the City and Tesla still remain.
Construction Electric Utilities Fall 2024 $ 15,000,000.00 WS-15002 Water Main Replacement
Project 29
This project funded the design and replacement of structurally deficient water mains and appurtenances. Mains are selected by researching the maintenance history of the system and identifying those that are undersized, corroded, and/or subject to breaks. The project scope included approximately 7,500 linear feet (which represents 0.6 percent of the City’s Water Distribution System) of mains and services on various streets within the City, including areas in the Evergreen Park and Ventura neighborhoods. The project was completed in September 2024.
Construction Water Utilities Fall 2025 $ 9,307,828.00
OS-24000 Baylands Nature Preserve
Entrance Gate
This project installed a new automated gate at the Baylands Nature Preserve main entrance. The existing gate was manually opened and closed by staff each day for public access. The scope of work included an electrical transformer, trenching, wiring, and gate automation equipment. The project started June 24, 2024 and reached substantial completion on June 30, 2024.
Construction
Parks and Open
Space
Community
Services Spring 2024 $ 132,701.00
December 2024
2 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 73 Packet Pg. 1125 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
PE-13011 Charleston Arastradero
Corridor Project
The Charleston Arastradero Corridor was reconfigured to provide new landscaped median islands, bulb outs, enhanced bike lanes, traffic signal improvements, and new street trees to complement the new lane configurations that were approved for permanent retention. Phase 1 (Arastradero Road between Foothill Expressway to Clemo Avenue), Phase 2 (Charleston Road from Alma Street to Middlefield Road) and Phase 3 (Arastradero Road from Los Palos Avenue to El Camino Real, Charleston Road from El Camino Real to Alma Street and from Middlefield Road to San Antonio Road) have all been completed as of spring 2024.
Construction
Traffic and
Transportation Public Works Spring 2024 $ 20,788,951.00 WC-19001
Wastewater Collection
System Rehabilitation
Augmentation Project 31
This project funded the design and construction of high priority main replacement work, which reduces inflow of rainfall and groundwater into the collection system. The project replaced approximately 11,000 linear feet (which represents 1.0 percent of the City's Wastewater Collection System) for El Camino Real from Page Mill Road to Cesano Court, and Page Mill Road from Ramos Way to Ash Street. The project wais comprised of mains identified in video inspection work or through maintenance records as structurally deficient and in need of replacement. The work was in Caltrans (El Camino Real) and the County of Santa Clara (Page Mill Road) right-of-way. Construction was completed May 5, 2024.
Construction Wastewater
Collection Utilities Spring 2024 $ 8,635,244.00
WQ-14003 Primary Sedimentation Tank
Rehabilitation
This project enabled the design and construction for new protective coatings on each of the four concrete primary sedimentation tanks, with replacement of worn rotating parts and mechanical and electrical equipment. These tanks were installed in 1972 and the recoating project will will extend the concrete life for another thirty years. Substantial completion was achieved on June 1, 2024.
Construction
Wastewater
Treatment
Public Works Spring 2024 $ 20,449,644.00
WS-07000 Water Regulation Station
Improvements
This project for Water Regulation Station Improvements included seismic upgrades, piping improvements and other various upgrades to increase the structural reliability of two of the City's turnouts with SFPUC. Work under this project includes Seismic Upgrades of California Avenue and Page Mill Road Turnouts. Structural evaluation for restraining the Page Mill turnout and piping was included in the design. The construction was completed in May 2024.
Construction Water Utilities Spring 2024 $ 2,960,477.00 PE-19001
Water, Gas, Wastewater
Office Remodel
This project incorporated renovations to the Utilities Water Gas Wastewater (WGW) office space at the Municipal Service Center (MSC). The new work area includes a small reception area, a renovated kitchen and printer area, additional offices and cubicles, upgrades to the HVAC system, lighting improvements and fire life safety systems upgrade. Construction was completed in April 2023.
Construction
Buildings and
Facilities Public Works Spring 2023 $ 1,234,354.00
FD-22000 Extrication Tool Replacement
This project provided funding for the replacement of all extrication tools for the Fire Department.
Extrication tools, also known as "Jaws of Life", are used to rescue victims of car accidents and other emergencies where the victims are trapped in confined spaces. Equipment was purchased in winter 2023 and the project is complete.
Procurement
Buildings and
Facilities Fire Department Winter 2023 $ 298,200.00
June 2024 June 2023
3 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 74 Packet Pg. 1126 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
WS-14001
Water Main Replacement
Project 28
This project has replaced approximately 18,600 linear feet (which represents 1.6% of the City's water distribution system) of mains and 265 services on various streets in the City, including areas in the Duveneck, St. Francis, Barron Park and Charleston Meadows neighborhoods. Construction started in April 2022 and the project was substantially completed in spring 2023.
Construction Water Utilities Spring 2023 $ 10,305,619.00 WC-17001
Wastewater Collection
System Rehabilitation
Augmentation Project 30
This project included the design and construction of high priority mains with structural defects that could not be addressed with routine maintenance. The wastewater mains on various streets in the City were replaced with approximately 10,000 linear feet of HDPE sanitary sewer mains and associated laterals in the Ventura, Charleston Meadows, Fair Meadow, and Palo Verde neighborhoods. The project achieved substantial completion in April 2023.
Construction
Wastewater
Collection Utilities Spring 2023 $ 4,656,777.00
AP-16000 Airport Apron Reconstruction
This project included the design and reconstruction of the Palo Alto Airport apron. The need to reconstruct the aircraft parking apron is critical to airport safety. Construction Phase I was completed in November 2017. Construction Phase II was completed in winter 2020. Construction on Phase III reached substantial completion in June 2023 Construction Airport Airport Spring 2023 $ 41,563,570.00 PE-21003
Magical Bridge Playground
Rubber and Synthetic Turf
Resurfacing
This project replace rubberized and synthetic turf surfacing in the playground and replace play equipment including swings, climbing net, and playhouse. An IFB was issued in November 2021 and Council awarded a construction contract in spring 2022. Installation of rubberized and synthetic surfacing, replacement of climbing nets and renovation of the playhouse took place in fall 2022.
Project was completed in December 2022.
Construction Parks and Open
Space
Public Works Fall 2022 $ 857,380.00
GS-13001
Gas Main Replacement
Project 23
This project designed and constructed approximately 21,700 linear feet (which represents 1.9% of the City's Gas distribution main system) of distribution main and 320 gas services constructed mainly of PVC material on various streets within the Midtown, Evergreen Park, Ventura, College Terrace, Charleston Terrace, and Research Park neighborhoods. Construction began in winter 2021and was completed in summer 2022
Construction Gas Utilities Summer 2022 $ 7,951,858.00
FD-21000
Automated External
Defibrillator Replacement
This project replaced the entire complement of Automated External Defibrillators (AEDs) throughout City facilities and emergency response vehicles, which currently totals 93 AEDs. The RFP process was completed in fall 2021. The new AEDs were purchased and deployed in summer 2022.
Procurement
Buildings and
Facilities Fire Department Summer 2022 $ 237,500.00
PF-17000
Municipal Service Center A, B,
& C Roof Replacement
This project replaced the existing MSC roofs. The existing asphalt and gravel roofs have reached the end of their useful life and needed to be replaced. The new roofs will meet current cool roofing codes to optimize energy efficiency. Construction was completed in November 2022.
Construction
Buildings and
Facilities Public Works Fall 2022 $ 2,013,475.00
December 2022 June 2023
4 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 75 Packet Pg. 1127 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
EL-16002 Capacitor Bank Installation
This project installed capacitor banks at electric substations and on distribution lines to ensure Northern California Power Association Power Factor requirements are met. Capacitor banks were installed at Hanover Avenue, Hansen Way, Maybell Avenue, and Park Boulevard Substations. The project was substantially completed in June 2022 and will be commissioned and energized in summer 2022.
Construction Electric Utilities Spring 2022 $ 1,050,443 EL-17007 Facility Relocation for Caltrain
Modernization Project
The Utilities Department removed the overhead lines allowing for the installation of the Overhead Catenary System above the rails for the Caltrain Modernization. This project was completed in spring 2022
Construction Electric Utilities Spring 2022 $ 3,055,472 PE-08001 Rinconada Park Improvement
This project upgraded safety, site amenities, playground facilities, a new restroom, irrigation, drainage, and ADA accessibility improvements at Rinconada Park. These improvements were identified in the Rinconada Long Range Plan (LRP). Phase 1 of construction started in August 2021 and construction was completed in spring 2022.
Construction
Parks and Open
Space
Public Works Spring 2022 $ 4,646,247
EL-14005 Reconfigure Quarry Feeders
This project reconfigured the distribution circuits to the substation transformer at Quarry Substation. Design of QR 27 feeder replacement was completed in spring 2021. Construction was completed in December 2021 .
Construction Electric Utilities Fall 2021 $ 792,034
AC-18001 JMZ Renovation
This project provided for the relocation of the Junior Museum and Zoo to Cubberley for two years while a new JMZ was being built, tenant improvements to the Cubberley Auditorium and then removal of tenant improvements post-construction. Construction of the new Junior Museum and Zoo started in June 2018 and was completed in late 2021. The new Junior Museum and Zoo was opened to the public on November 12, 2021.
Construction
Buildings and
Facilities
Community
Services Fall 2021 $ 2,927,870.00
PE-18002
High and Bryant Street
Garages Waterproofing and
Repairs
This project included a systems analysis and repaired the water proofing system in the High Street and Bryant Street parking garages. Water proofing repairs were completed in the High Street parking garage. Additional funding was added and the contractor completed waterproofing repairs in the subterranean stairwells in the Bryant Street garage in fall 2021.
Construction Buildings and
Facilities Public Works Fall 2021 $ 264,235.00
PE-11011
Highway 101 Pedestrian
Bicycle Overpass Project
As part of the 2014 Council Infrastructure Plan, this project designed and constructed a new pedestrian bridge across Highway 101 at Adobe Creek. Council approved a contract with Granite Construction in November 2019. Construction began in January 2020. The project construction completed on November 20, 2021, with a ribbon-cutting ceremony and a community celebration.
Construction
Traffic and
Transportation Public Works Fall 2021 $ 22,889,453
June 2022 December 2021
5 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 76 Packet Pg. 1128 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
EL-12001
Underground District 46
Charleston
This project undergrounded the existing overhead utility systems in the area along the 400 block of West Charleston and El Camino Real. Staff completed cable, equipment installation and 100% of customer service conversions. The construction for the final phase of the project to install two 60 foot tall steel poles and to reconductor the 60 kV sub-transmission lines was completed in the fall 2021.
Construction Electric Utilities Fall 2021 $ 3,904,425
OS-18001
Pearson Arastradero Preserve
Parking lot Improvement
This project improved the Pearson Arastradero Preserve parking lot by improving the base rock surfacing, adding drainage, widening the entrance for safety, and new fencing. This new improvement will allow the overflow parking area to be open year round. The work was completed in May 2021.
Construction Parks and Open
Space
Community
Services
Spring 2021 $ 170,300
CB-16001
Cubberley Community Center
Master Plan
This project developed the master plan for future use of the Cubberley Community Center site by the City and Palo Alto Unified School District. Study Buildings and Facilities Community
Services Spring 2021 $ 926,792
CB-19001
Cubberley Building
Management Systems
This project replaced the Building management System(BMS) controls for the pavilion, Theater, Wing I, and Gyms A and B boiler rooms at the Cubberley Community Center. The project included the installation of control points for each building along with controllers, valve and damper actuators.
Construction
Buildings and
Facilities Public Works Spring 2021 $ 350,000
FD-14002
Fire Ringdown System
Replacement
This project replaced the current ring down system that provides an audible alert of calls in the fire stations. Ongoing installations started in 2018 and were completed with Fire Station #3. Construction Buildings and
Facilities Fire Departent Spring 2021 $ 400,144
PD-14000
Internal Alarm System
Replacement
The project replaced the citywide internal alarm system. The alarms at City Hall migrated to this new system in FY 2019, but was completed in early 2021. Construction Buildings and
Facilities
Police
Department
Winter 2021 $ 77,569
FD-20001
Self Contained Breathing
Apparatus (SCBA) Air
Compressor Replacement
This project replaced the central air compressor that provides air for the self-contained breathing apparatus (SCBA) tanks to ensure firefighter safety when entering environments with hazardous air quality.
Construction
Buildings and
Facilities Fire Department Spring 2021 $ 94,500
AP-20000
Airport Electrical
Improvements
This project replaced the outdated electrical panels for the Palo Alto Airport office rental spaces.
Construction was completed in January 2021. Construction Airport Public Works Winter 2021 $ 146,466 PE-18000
New California Avenue Area
Parking Garage
This project built the California Avenue Area Parking Garage, as part of the 2014 Council Infrastructure Plan. The parking garage has 627 parking spaces with 2 basement levels and 4 above grade floors. The garage features an automated parking space guidance system, EV charging stations, bicycle parking, and motorcycle parking. The garage was opened to the public on December 8, 2020.
Construction
Buildings and
Facilities Public Works Fall 2020 $ 50,119,976
PF-14002 Fire Station 1 Improvements
This project updated the individual sleeping quarters in the firehouse to address gender issues and privacy concerns. Fire Station #1 was the only fire station in the City that did not have separate bedrooms to accommodate male and female firefighters. This project was completed in fall 2020.
Construction
Buildings and
Facilities Public Works Fall 2020 $ 187,064
Decembe
June 2021
6 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 77 Packet Pg. 1129 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
GS-18000
Gas ABS/Tenite Replacement
Project
This project replaced gas services laterals constructed of Acrylonitrile-butadiene-styrene (ABS) or Tenite material on various streets. Council approved funding in June 2019. The project replaced 104 ABS and Tenite gas services. The WQCP ABS gas service is assigned to Utility Operations for replacement and the remaining five ABS gas services will be scheduled for replacement once the five-year moratorium ends on those streets. As of November 2020, this project is complete.
Construction Gas Utilities Fall 2020 $ 2,615,100
SD-19000
Loma Verde Avenue Trunk
Line Improvements
This project replaced 1,750 linear feet of storm drain with 48-inch diameter High Density Polyethylene (HDPE) pipe and associated catch basins, laterals and manholes. In addition to underground work, additional street restoration and concrete work was completed. Work includes resurfacing one full lane on Loma Verde from the beginning to the end of the project limits, replacement of driveways, sidewalk, and 718 linear feet of curb and gutter. The contract was awarded in June 2020, construction work began in August 2020, and was completed in December 2020.
Construction Storm Drain Utilities Fall 2020 $ 2,976,813 WS-19000
Mayfield Reservoir Subgrade
and Venting Repair
This project is part of the City’s recent Seismic Upgrade and Emergency Water Supply and Storage Projects. The reservoir was drained in 2012 for approximately two years to allow extensive seismic rehabilitation work to be performed and construction of a new pump station. Subsequently hairline cracks were sealed in the reservoir. A geotechnical consultant was hired to evaluate the tank foundation. This study was completed and there were several options identified. Staff has completed the design and construction of the vent screen replacement and crack sealing.
Construction Water Utilities Fall 2020 $ 600,000
EL-11010
Underground District 47
Middlefield, Homer, Webster,
Addison
This project undergrounded the existing overhead distribution system in the area bounded by Middlefield Road, Homer Avenue, Webster Street, and Addison Avenue. Installation of substructures and utility electric system is completed. Where possible, the overhead electric lines were removed and poles cut down to the level of the communication lines.
Construction Electric Utilities Fall 2020 $ 3,649,356
WC-16001
Wastewater Collection
System Rehabilitation
Augmentation Project 29
This project replaced of 8,972 linear feet of wastewater mains. The sanitary sewer mains, laterals, and manholes to be rehabilitated or replaced in this project are located in the Charleston Meadows neighborhood. Construction started in February 2020 and was suspended for almost 3 months due to COVID-19 County’s Shelter-in-Place Order. The project is complete as of December 2020.
Construction
Wastewater
Collection Utilities Fall 2020 $ 4,434,839
PF-18000
Parking Lot J Elevator
Modernization
This project modernized the existing elevators at parking Lot J. The project involves upgrading the interior of the elevators, elevator control interface, call buttons, and meeting current ADA standards. Construction started in April 2019. Project is complete except for the State final inspection on the second car. State is behind because of COVID, but the inspection should be done by the end of July 2020.
Construction
Buildings and
Facilities Public Works Spring 2020 $ 781,324
PE-15003 Fire Station 3 Replacement
This project replaced the existing Fire Station at Embarcadero Road and Newell Road with a new structure that meets essential services standards and current program needs. Construction completed in March 2020.
Construction Buildings and
Facilities Public Works Winter 2020 $ 10,080,258
December 2020
7 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 78 Packet Pg. 1130 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
WS-08001
Water Reservoir Coating
Improvements
This project included the recoating of four steel tanks. Work under this project was included in the Seismic Upgrade of four Steel Tanks and the three Turnout Projects. Once construction started, it was found that the Montebello Reservoir was in very poor condition. Due to escalating costs associated with roof replacement, staff decided to complete construction of the Montebello Reservoir and re-evaluate the remaining three tanks for replacement.
Construction Water Utilities Spring 2020 $ 2,141,172
WS-13001
Water Main Replacement -
Project 27
This project replaced approximately 9,600 linear feet of structurally deficient, aging, or corroded water mains and services along the mains on Sand Hill Road, Oak Creek Drive (5%) and Fulton Avenue.
Construction Water Utilities Spring 2020 $ 7,786,998
WC-15001
Wastewater Collection
System Rehabilitation
Augmentation Project 28
This project enabled the design and construction of a high priority wastewater main and lateral replacement work to reduce inflow of rainfall and ground water into the collection system. The project replaced or rehabbed a total of 7,655 linear feet of wastewater mains located in the Leland Manor/Garland, Midtown West, and Lower Page Mill/Los Altos Hills areas of the City.
Construction
Wastewater
Collection Utilities Spring 2020 $ 5,665,897
EL-17003
VA Hospital - Customer Load
Requirements
This project met the growing electric needs of the VA Hospital. Staff has had numerous discussions with VA Hospital on electric load growth at the hospital and anticipated needs from the utility.
Much of the cost is reimbursed to the City by the VA Hospital. Staff has prepared preliminary designs for interim solutions and is awaiting additional information from VA to develop long range plans to meet their future needs.
Design Electric Utilities Spring 2020 $ 84,984
EL-04012
Utility Site Security
Improvements
This project added electronic security systems at utility sites to protect equipment at electric substations, water pumping plants, reservoirs, and gas stations from intrusion and vandalism.
Cameras and detection systems have been installed at nine electric substations, three water stations, and one natural gas station to monitor facilities.
Construction Electric Utilities Spring 2020 $ 1,644,681 EL-11008
Rebuild Underground District
19 This project rebuilt and replaced the underground electric system in Underground District 19, the area bounded by Forest Avenue, Waverley Street, Addison Avenue, and Alma Street. Construction Electric Utilities Spring 2020 $ 149,023 FD-18000
Self Contained Breathing
Apparatus Replacement
This project replaced Self Contained Breathing Apparatus equipment (SCBA) used by firefighters when entering hazardous conditions when responding to fire and hazardous materials incidents.
The SCBA provides breathable air for firefighters when entering environments where the atmosphere is immediately dangerous to life or health. The expected service life for SCBAs is 15 years.
Purchase Buildings and
Facilities Fire Department Spring 2020 $ 799,999
June 2020
8 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 79 Packet Pg. 1131 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
FD-20000 Cardiac Monitor Replacement
This project replaced the entire complement of twenty cardiac monitors in the Department. Along with other tools needed for patient assessment and airway verification, cardiac monitors assess cardiac activity in patients and provide defibrillation and pacing.
Purchase Buildings and
Facilities Fire Department Spring 2020 $ 850,000
PL-16001
Downtown Mobility and
Safety Improvements
This project included the construction of curb extensions and the installation of new pedestrian signal heads and traffic signal modifications in 2019 as part of the Upgrade Downtown project. Construction Traffic and
Transportation
Office of
Transportation Fall 2019 $ 1,819,847
FD-20002
Thermal Imaging Cameras
Replacement
This project replaced the Thermal Imaging Cameras (TICs) on all fire and response vehicles used to help identify the location of victims; assess the source of fires, smoke, and heat; to assist in creating a plan of action.
Purchase Buildings and
Facilities Fire Department Fall 2019 $ 99,000
WC-11000
Wastewater Collection
System Rehabilitation
Augmentation Project 24
This project addressed areas that were identified in Wastewater Capital Improvement Project 17 (Cleaning and Video Inspection of the Collection System) as needing rehabilitation. This project was combined with Project 25 and 26(WC-12001; WC-13001).
Construction
Wastewater
Collection Utilities Fall 2019 $ 3,131,595
WC-13001
Wastewater Collection
System Rehabilitation
Augmentation Project 26
This project was combined with Project 24 and 25(WC-11001; WC-12001). All new service laterals were installed from the new sewer main to the new sewer cleanouts located in the City’s right-ofway.Construction Wastewater
Collection Utilities Fall 2019 $ 3,309,998
CB-19000
Cubberley Track and Field
Replacement This project replaced the synthetic turf field, installed an all-weather track and a fitness area. Construction Parks and Open
Space
Public Works Fall 2019 $ 1,851,708
PE-14018 Baylands Boardwalk
Improvements
This project replaced the existing boardwalk with similar alignment and configuration. Construction Buildings and Facilities Public Works Winter 2019 $ 2,123,681
PE-17009 City Hall Floor 4 Remodel This project improved the Administrative Services Department offices on the fourth floor of City Hall. Construction
Buildings and
Facilities Public Works Winter 2019 $ 494,818
PE-14015
Lucie Stern Buildings
Mechanical and Electrical
Upgrades
This project replaced and upgraded the mechanical, electrical, and fire/life safety systems at Lucie Stern Children’s Theater, Lucie Stern Community Theater, and Lucie Stern Community Center. Construction Buildings and
Facilities Public Works Spring 2019 $ 6,142,607
PL-16000 Quarry Road Improvements
and Transit Center Access
This project included planning, design and construction of bicycle and pedestrian improvements along Quarry Road. Construction Traffic and Transportation Planning and
Community
Environment
Spring 2019 $ 5,148,378
EL-17008 Utility Control Center
Upgrades This project upgraded the Utility Control Center working environment. Construction Electric Utilities Winter 2019 $ 499,997 GS-12001 Gas Main Replacement
Project 22
This project replaced approximately 23,700 linear feet of gas mains and services along University Avenue and other streets in the Downtown North nieghborhood. Construction Gas Utilities Spring 2019 $ 11,658,997 WC-12001
Wastewater Collection
System Rehabilitation /
Augmentation Project 25
This project was combined with Project 24 and 26 (WC-11001; WC-13001) replacing 45,294 linear feet of sanitary sewer mains in university South, Professorville and Old palo Alto neigborhoods. Construction Wastewater
Collection Utilities Spring 2019 $ 3,211,998
December 2019
June 2019
9 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 80 Packet Pg. 1132 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
WQ-14001 Dewatering and Loadout
Facility
This project provides funding for the design and construction of the sludge dewatering facility and truck loadout to retire existing dewatering and sewage sludge incinerators. Construction Wastewater
Treatment
Public Works Spring 2019 $ 27,497,551
WS-12001 Water Main Replacement –
Project 26
This project replaced approximately 11,000 linear feet of aging water mains and services which included water main replacement as part of the Upgrade Downtown Project. Construction Water Utilities Spring 2019 $ 7,506,161 PE-17009 City Hall Floor 5 Remodel This project improved the Planning and Community Environment (PCE) Department offices on the fifth floor of City Hall. Construction
Buildings and
Facilities
Public Works Summer 2018 $ 525,000
AC-14001 Baylands Nature Interpretive
Center Exhibit Improvements
This project replaced worn out or non-functioning exhibits at the Baylands Nature Interpretive Center.
Construction Buildings and
Facilities
Community
Services
Summer 2018 $ 56,000
PE-17000 Mitchell Park Adobe Creek
Bridge Replacement This project replaced the existing bridge over Adobe Creek in Mitchell Park. Construction Parks and Open
Space
Public Works Summer 2018 $ 250,000
PD-14000 Internal Alarm System
Replacement
This project replaced the citywide system of panic alarms from various departments and the Council chambers. Construction
Buildings and
Facilities Police Summer 2018 $ 78,000
EL-14004 Maybell 1&2 4/12kV
Conversion
This project converted circuits 1 & 2 at Maybell substation from 4kV to 12kV. Construction Electric Utilities Fall 2018 $ 364,796 GS-15001 Security at City Gas Receiving
Stations
This project equiped the City’s four Gas Receiving Stations with video surveillance systems. Construction Gas Utilities Summer 2018 $ 150,000 SD-13003
Matadero Creek Storm Water
Pump Station and Trunk Line
Improvements
This project upgraded the capacity to the Matadero Creek Storm Water Pump Station, which serves a low-lying 1200-acre area of southeastern Palo Alto. Construction Storm Drain Public Works Summer 2018 $ 6,685,317 AP-16002 Wildlife Hazard Management
Plan
The Wildlife hazard Management Plan identified the specific actions the airport will take to mitigate the risk of wildlife strikes on or near the airport. Study Airport Public Works Summer 2018 $ 63,415 WC-14001
Wastewater Collection
System Rehabilitation
Augmentation Project 27
This project replaced 16,859 linear feet of sanitary sewer mains of various sizes on various streets. Construction Wastewater Collection Utilities Winter 2018 $ 4,022,455
PG-15000 Buckeye Creek Hydrology
Study
This project analyzed flooding conditions and recommended flood control structures and drainage and erosion control solutions for the creek located within Foothills Park. Study Parks and Open Space Public Works Spring 2018 $ 167,741
PE-17004
CalTrain Corridor Video
Management System
Installation
This project replaced two existing gateway signs in the right-of-way for the California Avenue business district. Construction
Streets and
Sidewalks Public Works Spring 2018 $ 1,550,000
June 2019 June 2018 December 2018
10 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 81 Packet Pg. 1133 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
PF-16003 Parking Lot Q Elevator
Modernization This project modernized the existing elevator at Parking Lot Q. Construction Buildings and
Facilities Public Works Fall 2017 $ 170,608
PE-13003 Parks, Trails, Open Space, and
Recreation Master Plan
This master plan provided guidance on the recreation and improvement needs for Palo Alto’s parks, trails, open space and recreational programs. Study Parks and Open Space Community
Services
Fall 2017 $ 627,057
PE-12003 Rinconada Park Master Plan
This project developed a plan for short, medium and long range improvements to the regional park including the consideration of pathways, new restrooms and playgrounds, new landscaping, and revitalization of underutilized areas within the park.
Study Parks and Open
Space
Community
Services
Fall 2017 $ 541,355
PE-13012 Structural Assessment of City
Bridges
The project developed an inventory of all City-owned bridges and culvert structures, condition assessment, cost estimate for rehabilitation, and recommendation for future inspection frequencies, assessment and improvements.
Study Buildings and
Facilities Public Works Fall 2017 $ 198,529
WC-11000
Wastewater Collection
System Rehabilitation /
Augmentation Project 24
Combined with Project 25 and 26 (WC-12001; WC-13001), this project replaced and/or rehabilitated approximately 42,398 linear feet of sanitary sewer mains of various sizes, 779 sewer laterals, and 121 sewer manholes.
Construction
Wastewater
Collection Utilities Fall 2017 $ 3,119,806
WC-13001
Wastewater Collection
System Rehabilitation /
Augmentation Project 26
Combined with Project 25 and 26 (WC-12001; WC-13001), this project replaced and/or rehabilitated approximately 42,398 linear feet of sanitary sewer mains of various sizes, 779 sewer laterals, and 121 sewer manholes.
Construction
Wastewater
Collection Utilities Fall 2017 $ 3,361,118
PG-13003
Golf Reconfiguration and
Baylands Athletic Center
Improvements
This project completed the rehabilitation of the Palo Alto Municipal Golf Course, including a new layout for the course, new prefabricated restroom, new water-saving turf and irrigation system, and rebranded the course as the Baylands Golf Links.
Construction
Parks and Open
Space
Public Works Fall 2017 $ 13,675,177
GS-11000 Gas Main Replacement –
Project 21
This project combined with GWR 19B & GMR 20 and replaced ABS gas mains and services. Construction Gas Utilities Winter 2017 $ 2,364,937 WS-11000 Water Main Replacement –
Project 25
This project provided installation of approximately 11,869 linear feet of new High Density Polyethylene (HDPE) water mains, 232 new HDPE water services, and 15 new fire hydrants within the City limits.
Construction Water Utilities Winter 2017 $ 5,445,069
WS-15004 Water System Master Plan
The 2015 Water System Master Plan identified present capital improvements and replacement rates required to ensure optimal reliability levels of service to the existing distribution and transmission systems.
Study Water Utilities Spring 2017 $ 500,000
WC-10002
Wastewater Collection
System Rehabilitation /
Augmentation Project 23
Combined with Project 22 (WC-09001). This project replaced and/or rehabilitated approximately 33,497 linear feet of sanitary sewer mains of various sizes, 554 sewer laterals, and 102 sewer manholes.
Construction
Wastewater
Collection Utilities Winter 2017 $ 1,272,289
EL-10009
Street Light System Street
Light System Conversion
Project
This project converted HPS streetlights to LED and the conversion of approximately 4500 cobrahead streetlight fixtures. Construction Electric Utilities Spring 2017 $ 696,918 December 2017
11 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 82 Packet Pg. 1134 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
EL-13006 Sand Hill / Quarry 12kV
InterTie This project installed new wire to connect circuits QR-24 and QR-27 in the Sand Hill/Quarry area. Construction Electric Utilities Winter 2017 $ 208,648 EL-15001 Electric Substation Battery
Replacement This project replaced the batteries in all nine of the City's electric substations. Construction Electric Utilities Winter 2017 $ 400,000 PG-13001
Stanford/Palo Alto Playing
Fields Soccer Turf
Replacement
This project replaced the synthetic turf at the Stanford/Palo Alto Playing Fields. Construction Parks and Open
Space
Community
Services
Fall 2016 $ 1,499,979
PG-09003 Park Maintenance Shop
Remodel
This project renovated and remodeled the Parks maintenance shop for safety and efficienciency upgrades. Construction
Parks and Open
Space
Community
Services
Summer 2016 $ 94,419
PE-12017 City Hall First Floor
Renovations
This project installed new elevator control panels and replaced the gray-painted panels inside the elevators. Construction
Buildings and
Facilities Public Works Summer 2016 $ 3,974,963
PE-11012 Temporary Main Library This project created a temporary main Library to be used while the new one was being constructed. Construction Buildings and
Facilities Public Works $ 156,254
PE-15029 Baylands Nature Interpretive
Center Facility Improvement
The project replaced decking, railings, structural framing members, exterior wood flooring, and cabinetry, restroom reconfiguration, and provided Americans with Disabilities Act (ADA) improvements.
Construction
Buildings and
Facilities Public Works Spring 2017 $ 889,452
PE-13008 Bowden Park Improvements
This project improved the children’s playground and included park amenity upgrades such as new playground equipment, a new retaining wall, surfacing and pathway upgrades, planting restoration and irrigation renovations, and replaced of damaged wood benches and the playground perimeter fence.
Construction
Parks and Open
Space
Community
Services
Summer 2016 $ 421,126
PE-13020 Byxbee Park Trails This project provided trail and site amenities over the remaining area of the landfill cap. Construction Parks and Open
Space
Public Works Fall 2016 $ 334,607
PE-17002 City Hall Floor 3 Remodel
This project improved the Utilities Department administrative offices on the third floor of City Hall.
It included new carpet, wall reconfiguration, a kitchenette, cabinets, paint, soundproofing, office furniture, doors, and associated building systems.
Construction
Buildings and
Facilities Public Works Spring 2017 $ 440,000
PE-14015
Lucie Stern Buildings
Mechanical and Electrical
Upgrades – Phase 1
This project replaced and upgraded the mechanical, electrical, and fire/life safety systems at Lucie Stern Children’s Theater, Lucie Stern Community Theater, and Lucie Stern Community Center. Construction Buildings and
Facilities Public Works Summer 2016 $ 3,247,248
PG-12004 Sarah Wallis Park
Improvements
This project improved site amenities with new concrete pathways, replaced old furnishings, and upgraded landscape with drought tolerant species. Construction Parks and Open
Space
Community
Services
Winter 2017 $ 65,000
June 2017
12 Item C
Attachment B - Completed One-Time
CIP Projects since FY 2016
Item C: Staff Report Pg. 83 Packet Pg. 1135 of 1165
List of Completed Projects
CIP # Project Name Project Description Project Type Fund Source Department Season
Completed
Year
Completed
Total Project Budget
**
CMR
Date
AP-16003 Airport Perimeter Fence
This project replaced the perimeter fencing and gates surrounding the Palo Alto Airport boundaries to prevent unauthorized access to the airport runway in accordance with Federal and State standards.
Construction Airport Public Works Spring 2017 $ 2,003,540 SD-11101
Channing Avenue/Lincoln
Avenue Storm Drain
Improvements
This project installed of 5,800 linear feet of 36-inch to 60-inch diameter storm drain along Channing and Lincoln Avenues over three project phases to increase drainage system capacity. Construction Storm Drain Public Works Winter 2016 $ 7,676,275 GS-14004 Gas Distribution System
Model
This project included the development, model installation, testing, documentation, and staff training of a natural gas distribution system model. Study Gas Utilities Summer 2016 $ 149,500 AC-14000 Art Center Auditorium Audio,
Visual and Furnishings
This project replaced outdated audio visual equipment and furnishings following the auditorium’s use as a temporary library. Construction
Buildings and
Facilities
Community
Services
Winter 2016 $ 150,000
PF-15000 Rinconada Pool Locker Room This project renovated the Rinconada Pool locker room including the changing area, restrooms, and showers in the women's and men's locker rooms. Construction Buildings and
Facilities Public Works Winter 2016 $ 464,433
PE-13016 El Camino Park Restoration
This project installed new athletic fields, synthetic turf, field lighting, fencing, a new restroom, scorekeeper booth and storage buildings, an expanded parking lot, new bike and pedestrian pathways, landscaping, benches, and other amenities.
Construction
Parks and Open
Space
Community
Services
Fall 2015 $ 5,611,122
Notes: ** Final Project Actuals may be different from Total Project Budget amounts Grand Total $ 591,454,847 December 2016
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CIP Projects since FY 2016
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City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: June 15, 2026
Report #:2512-5673
TITLE
City of Palo Alto's Energy Risk Management Report for the first half of Fiscal Year 2026 (July 1, 2025 - December 31, 2025) CEQA Status – Not a Project
RECOMMENDATION
This is an informational report, and no City Council action is required.
EXECUTIVE SUMMARY
Staff continues to manage electricity and natural gas purchases in compliance with the City’s Energy Risk Management Policies, Guidelines, and Procedures. During the first half of FY 2026, Staff used fixed-price forward contracts, spot market purchases, diversified supply sources, and counterparty credit monitoring to reduce exposure to market volatility, supply disruptions, and counterparty defaults. As of December 31, 2025, the City’s fixed-price electricity purchases were $1.44 million above market value; however, active monitoring confirms this exposure remains within Energy Risk Management Guidelines.
These risk management actions strengthen cost stability, support reliable service delivery, and help protect the City from sudden price increases or replacement power costs. Staff also monitors reserve adequacy, liquidity, Expected Default Frequency, credit ratings, and market conditions to identify emerging risks before they materially affect operations or financial planning. Electric and Gas Supply Operations Reserves remain above FY 2026 minimum guideline levels, providing continued capacity to absorb market, operational, and infrastructure-related pressures. Staff identified no exceptions to the Energy Risk Management Policies, Guidelines, or Procedures during this reporting period.
BACKGROUND
The purpose of this report is to inform the Council about the status of the City’s energy portfolio and transactions executed with energy suppliers. The City’s Energy Risk Management Policy requires that staff report on a semi-annual basis on: 1) the City’s energy portfolio; 2) the City’s credit and market risk profile; 3) portfolio performance; and 4) other key market and risk information.
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The City’s most recent Energy Risk Management Report covered the second half of FY2024 (January 1, 2024 – June 30, 2024). That report stated there were no exceptions to the City’s Energy Risk Management Policies, Guidelines, or Procedures in the second half of FY2024.
Following the issuance of that report, the regular reporting cadence established under the Energy Risk Management Policy was temporarily paused due to staffing transitions.1 To maintain transparency and provide continued oversight during this transition period, staff reports included relevant updates regarding the City’s energy portfolio, market conditions, portfolio performance, and associated credit and market risk exposures, which are described below:2
Fixed-price forward electricity purchases continue to reduce exposure to hourly market volatility by securing future supply at known prices. There were five purchase transactions from NextEra Energy, an approved counterparty with a Master Agreement with the City. These purchases were of minimal credit exposure.
Staff proposed the Trolley Battery Energy Storage System project with the counterparty, Aypa Power. Although Aypa did not have a credit rating or an extensive balance sheet, the agreement mitigated credit risk through cash or letter-of-credit collateral and payment terms tied to available capacity. Aypa's collateral requirement was initially $20 million. Once the project begins operating in June 2029, the collateral requirement will be $32 million throughout the term of the agreement.
1 Energy Risk Management Report for the second half of Fiscal Year 2024; March 24, 2025; \Clerk's Office\Staff Reports\City Council\2025\2025-03-24 Mar 24\Staff Report 2411-3789 2 Resolution 10204; Transact Electric Supplies to Meet the City’s Electrical Loads Under Electric Master Agreements, Under Specified Terms and Conditions During Calendar Years 2025 Through 2039, Inclusive; December 16, 2024: \Clerk's Office\Resolutions\2024 (#10142 - 10210)\RESO 10204 Staff Report 2411-3830; Utilities Quarterly Report for FY25-Q1; February 5, 2025; \Clerk's Office\Staff Reports\Utilities Advisory Commission\2025\2025-02-05 Feb 5\Staff Report 2411-3830 Staff Report 2411-4066; Utilities Quarterly Report for FY25-Q2; April 2, 2025; \Clerk's Office\Staff Reports\Utilities Advisory Commission\2025\2025-04-02 Apr 2\Staff Report 2411- 4066 Staff Report 2506-4778; Approval of a Third Phase Agreement with Northern California Power Agency for the Purchase of Battery Energy Storage Capacity from Trolley Pass Project LLC, Over a Term of up to 20 Years for a Total Not to Exceed Amount of $161.7 Million; July 9, 2025; \Clerk's Office\Staff Reports\Utilities Advisory Commission\2025\2025-07-09 July 9\Staff Report 2506-4778 Staff Report 2501-4079; Utilities Quarterly Report for FY 2025- Q3/4; October 1, 2025; \Clerk's Office\Staff Reports\Utilities Advisory Commission\2025\2025-10-01 Oct 1\Staff Report 2501-4079 Item D
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Resolution 10204 increased the electric Master Agreement transaction cap from $50 million to $75 million because supplier transaction volumes had approached the prior limit and are expected to increase over the next 12 to 15 years. This change improves procurement flexibility while maintaining oversight in accordance with the City’s Energy Risk Management policy.
As of March 2026, responsibility for Energy Risk Management and related reporting functions transitioned to the City’s current Risk Manager in the Administrative Services Department. This report re-establishes the City’s Energy Risk Management reporting cadence and provides an overview of the City’s energy portfolios, transactions, and risk exposures for the first half of FY2026 (July 1, 2025 – December 31, 2025).
The City’s Energy Risk Management Policy describes the organizational structure, authority, and processes for monitoring, measuring, and controlling market risks. “Market risks” include price and counterparty credit risk. These are risks the City is exposed to regularly when procuring electric supplies and, to a lesser extent, gas supplies, which are purchased at market rates via a monthly index price. The City’s Energy Risk Management function, whose role is to monitor and mitigate the energy market risks, is a part of the Administrative Services Department. This semi-annual report of FY 2026 Energy Risk Management contains information on the following:
• Electricity Supplies
• Hydroelectricity
• Fixed-Price Forward Electricity Purchases
• Gas Supplies
• Counterparty Credit Risk
• Electric Forward Mark-to-Market Values
• Electric and Gas Supply Operations Reserves Adequacy
• Exceptions to Energy Risk Management Policies, Guidelines, or Procedures
ANALYSIS
Electricity Supplies
To serve the City’s electric supply demands, the City utilizes a diversified portfolio of electric supply resources, including hydroelectric generation, long-term renewable energy contracts, fixed-priced wholesale purchases, and participation in the electric spot market. This diversified procurement strategy increases reliability, supports long-term cost stability, mitigates exposure to market volatility, and strengthens the City’s energy risk management framework.
Hydroelectric resources from the Calaveras and Western Hydroelectric Projects provide the City with long-term, carbon-free electricity that supports sustainability initiatives and reduces the City’s reliance on higher-cost market purchases. These hydroelectric resources are highly flexible and help balance the grid’s load and supply fluctuations. The City receives additional Item D
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revenue as a result of these resources providing these grid stabilization services.
Renewable Energy contracts facilitate long-term electricity procurement from landfill gas converted to electricity, wind, geothermal, and solar resources. These contracts support the City’s commitment to clean energy and reducing greenhouse gas (GHG) emissions by 80%, as outlined in the 2022 Sustainability and Climate Action Plan.5 Wholesale purchases through fixed-price forward market contracts secure future electricity supplies at predetermined pricing. These contracts reduce the City’s financial exposure to energy market volatility and sudden price escalations, improving long-term budget stability and procurement planning.
The energy spot market addresses short-term demand fluctuations in the event of supply constraints or unforeseen operational conditions. Spot market purchases and sales, made at prevailing market prices, enable the City to reduce its exposure to potential supply shortfalls, therefore supporting continuity and reliability of electric service to the community.
The projected monthly load and supply sources and expected purchases of electricity supplies for 24 months from January 2026 to December 31, 2027, in gigawatt-hours (GWh), are shown in Figure 1. Hydroelectricity and solar are the predominant sources in the projection, complemented by wholesale purchases and other renewable energy sources. The negative bars represent wholesale market sales of excess electricity. These sales are a result of the City having large energy surpluses in the spring and summer seasons from our hydroelectric and solar resources. Selling surpluses during those periods enables the City to effectively mitigate financial and load exposures in the fall and winter seasons, when energy supplies are significantly lower.
5 2022 Sustainability and Climate Action Plan; June 5, 2023; \Clerk's Office\Staff Reports\City Council\2023\Staff Report 2303-1158 Item D
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Hydroelectricity
In an average year, the City receives about 40% of its energy via hydroelectricity from the Calaveras project in Calaveras County and the Western project in the Central Valley corridor.
The cost of hydroelectricity received from Calaveras and Western is higher in $/MWh than the market value of electricity during on-peak hours. This cost is offset by gains during off-peak hours, which are at no cost to the City. The Calaveras project currently incurs higher costs than the Western project due to debt service related to the facility's construction. Once the debt is retired in 2032, the City is expected to benefit from lower ongoing project costs and improved value relative to prevailing electricity market prices. This will strengthen long-term rate stability and reduce the City’s exposure to market price volatility. Calaveras also provides the City with resource adequacy (RA) capacity and ancillary services (e.g., the ability to regulate energy output when the electric grid needs change), which are critical for load management and continuity of service. The values of RA capacity and ancillary services are not reflected in the mark-to-market calculation.
Fixed-Price Forward Electricity Purchases
All fixed-priced forward contracts mark-to-market (MTM) values are tracked by City staff.
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contractual commitments, forcing the City to purchase replacement electricity in the market to reduce the impact of financial risk exposures.
As of December 31, 2025, the City secured fixed-priced electricity purchase contracts totaling 150,875 MWh for delivery over the next 15 months at an average price of $64.54 per MWh.
The City contracted these purchases with one of its approved counterparties: NextEra Energy Resources, which is rated Baa1 with a stable outlook by Moody’s. This rating and outlook adhere to PAMC Section 2.30.340.7
The City secured fixed-priced electricity sales contracts totaling 76,640 MWh over the next 20 months at an average price of $47.70 per MWh. The City contracted these sales to three of its approved counterparties: SENA, which is rated Ba1 with a stable outlook by Moody's; BP Energy Company, which is rated Ba1 with a stable outlook; and NextEra Energy Resources.
The 6-month MTM value of the City’s forward transactions for wholesale power was $-1.44 million for the first half of FY2026. While this negative MTM indicates the market value of these supplies was lower than the contract cost (for energy purchases), the MTM remains within the credit risk limits set by the Energy Risk Management Guidelines and presents minimal risk to the City’s financial outlook.
The City continues to track the mark-to-market value of its forward contracts.
The electric forward volumes in MWh, and MTM positions for each electric supplier by month of delivery for all forward fixed-price electricity contracts over the 6-month period ending December 31, 2025 are shown in Figure 2 and Figure 3.
7 Palo Alto Municipal Code(PAMC) Section 2.30.340 – Contracts for Wholesale Utility Commodities and Services https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-61721 Item D
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Gas Supplies
To serve the City’s natural gas needs, the City purchases gas on the monthly and daily spot markets.9 The City purchases all its forecasted gas needs for the month ahead at a price based on the published monthly spot market index price for that month. Within the month, the City’s gas operator, EDF Trading North America LLC, who is rated Ba1 with a stable outlook by Moody’s Credit Ratings, buys and sells gas to match the City’s daily needs if the actual daily usage is different from the forecasted daily usage. Those daily transactions are made at an average price based on the published daily spot market index. The monthly rate adjustment mechanism helps mitigate the City’s exposure to natural gas price volatility and minimizes counterparty risk exposure for the gas utility.
Counterparty Credit Risk
Staff monitors and reports on counterparty credit risk based on the major credit rating agencies’ (Moody’s and Fitch) scores. In accordance with the City’s policy and guidelines, a credit rating of Baa3 investment grade, or its equivalent, is the minimum recommended credit rating for counterparties.
It is important to note that, for contracts with renewable energy companies, Council waived the investment grade credit rating requirement of Section 2.30.340(d) of the Palo Alto Municipal Code, which applies to energy companies that do business with the City. In addition, the City structures Power Purchase Agreements with renewable energy companies based on “take or pay contracts”, and includes a firm liquidated damages provision. “Take or pay contracts” eliminate costs to the City if the energy purchased is not delivered due to delays or other events, caused by or in part by the counterparty. This contract basis reduces the City’s exposure to short-term market volatility and fluctuating spot market prices by providing the City with long-term price certainty and supply reliability. The liquidated damages provision mitigates performance risk in the event the counterparty fails to perform, and the City is forced to procure replacement power.
The City follows credit rating agency standards when establishing the acceptable threshold for Expected Default Frequency (EDF) of counterparties. The current threshold is 0.8%; this reflects a relatively low probability of default consistent with counterparties considered financially stable and operationally reliable.
The credit risk analysis for electric counterparties with whom the City has executed Master Agreements is summarized in Table 1. As of December 31st, 2025, Avangrid Renewables Holdings, Inc. and Silicon Valley Clean Energy Authority exceed the City’s maximum recommended EDF threshold. However, because the City does not have any outstanding transactions with these counterparties, there is no current credit exposure that would require an exception to the Energy Risk Management Policy. The policy only applies when the City is entering into or maintaining transactions with a counterparty whose EDF exceeds 9 Natural gas spot market purchases allow the City to procure gas at prevailing market prices, address short-term operational needs, supply imbalances or unanticipated changes in energy demand.
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the recommended limit. . Staff is monitoring Avangrid Renewables Holdings, Inc. and Silicon Valley Clean Energy Authority’s EDF on a quarterly basis. Counterparties experiencing minor increases in EDF, such as Powerex, BP, and SENA, will also be monitored by Staff. Staff will continue to report findings to City Council in this semi-annual report.
The credit risk analysis for gas counterparties with whom the City has executed Master Agreements is summarized in Table 2. As of December 31st, 2025, the City’s gas counterparties have maintained credit ratings that exceed City policy and guidelines minimums. Although the counterparties' EDF exceed the City's preferred threshold of 0.8%, staff continue to monitor these counterparties on an as-needed basis and, at a minimum, annually evaluate changes in financial condition, market activity, and overall creditworthiness. Gas counterparties generally have lower operational and financial exposures due to their ability to store gas, access liquid replacement markets, and more readily secure alternative supply arrangements in the event of a counterparty default. In addition, gas markets are typically less volatile and less timesensitive, reducing the potential impact of supply distribution or contract failure.
The transactions with and credit exposure of the City’s electric and gas suppliers is summarized in Table 3. As of December 31, 2025, the City’s counterparty credit exposure remained within established counterparty credit limits. SENA and BP had positive mark-to-market positions of approximately $0.4M and $0.025M, respectively, creating minimal current credit exposure to the City. These amounts remain well below the approved exposure limits of $30.0M for SENA and $20.0M for BP. NextEra had a negative mark-to-market position of approximately $1.9 million, which represents an unfavorable market position for the City but does not create Table 1: Credit Risk Analysis of Approved Electric Counterparties as of 12/31/2025 Counterparty Name Credit Rating EDF Outlook Ratings Agency Issue Date BP Energy Company Ba1 0.96 Stable Moodys 12/31/2025
Constellation Energy Generation, LLC Aa2 0.03 Stable Moodys 12/31/2025 Avangrid Renewables Holdings, Inc. Ba1 1.01 Developing Moodys 12/31/2025 NextEra Energy Baa1 0.64 Stable Moodys 12/31/2025
PacifiCorp Baa2 0.15 Stable Moodys 12/31/2025
Powerex Baa1 0.97 Stable Moodys 12/31/2025
Shell Energy North America Ba1 0.96 Stable Moodys 12/31/2025 Turlock Irrigation District AA- Stable Fitch 12/31/2025 Silicon Valley Clean Energy Authority B2 3.97 Developing Moodys 12/31/2025 Table 1: Credit Risk Analysis of Approved Gas Counterparties as of 12/31/2025 Counterparty Name Credit Rating EDF Outlook Ratings Agency Issue Date EDF Trading North America Ba1 0.97 Stable Moodys 12/31/2025 Powerex Baa1 0.97 Stable Moodys 12/31/2025
Shell Energy North America Ba1 0.96 Stable Moodys 12/31/2025 ConocoPhillips Aa2 0.04 Stable Moodys 12/31/2025
BP Energy Company Ba1 0.96 Stable Moodys 12/31/2025
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current counterparty credit exposure. Staff will continue to monitor mark-to-market values, credit ratings, and exposure limits as part of ongoing Energy Risk Management oversight.
Electric and Gas Supply Operations Reserves Adequacy
Electric and Gas Supply Operations Reserve levels remain adequate to support ongoing utility operations; however, both utilities continue experiencing financial pressures associated with infrastructure investments, CIP expenditures, and market volatility. The projected FY2026 Operations Reserve balance for Electric is $41.6M, which is below the target guideline of $49.6M, but is above the minimum guideline of $33.3M. The projected FY2026 Operations Reserve for Gas is $12.1M, which is below the target guideline of $14.1M, but above the minimum guideline of $9.4M.
Staff, in coordination with Energy Risk Management, continue to monitor reserve adequacy, liquidity exposure, and funding strategies.
Reserve Levels for Electric and Gas
The projected reserves of the Electric utility for FY 2026 as of December 31, 2025 is shown in Table 4.
Table 3: Transactions and Credit Exposure of Counterparties as of 12/31/2025 (in $000's) Counter Party Name
Cost of
Outstanding
Transactions
Market Value of
Transactions
Mark-toMarket (MTM) Supplier Credit
Exposure Limit
MTM < Credit
Limit? Credit Rating
SENA (1,785) (1,370) 414 30,000 Yes Ba1
BP (169) (144) 25 20,000 Yes Ba1
NextEra 7,980 6,101 (1,879) 15,000 Yes Baa1
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The Electric Utility’s projected FY 2026 ending reserves total $125.9 million, compared to $127.2 million in FY 2025. Operations Reserves are projected to decrease from $46.6 million to $41.6 million, below the FY 2026 target guideline of $49.6 million, but above the minimum guideline of $33.3 million. Reserve levels continue to reflect financial pressures associated with grid modernization projects, CIP expenditures, infrastructure funding needs, and temporary cash flow demands prior to anticipated bond financing in FY 2027.
Staff continues to monitor reserve levels, cash flow impacts, and funding strategies as planned CIP expenditures and infrastructure commitments increase operational funding demands. Staff Table 4: Electric: Projected Reserves for Fiscal Year End 2026 as of December 31, 2025) FY 2025 Actual FY 2026 Projected
Starting Reserves
Operations Reserves 32,219 46,581
Hydro Stabilization Reserve 17,400 18,767
Electric Special Projects Reserve 22,649 30,149
Capital Reserves 880 880
Electrification Reserve 4,500 2,037
Other 26,229 28,784
Total Starting Reserves 103,877 127,198
Revenues
Net Sales 186,620 199,175
Wholesale Revenues 44,275 45,316
Other Revenues and Transfers In 13,181 12,010
Total Revenues 244,076 256,501
Expenses
Electric Supply Purchases 115,701 134,879
Operating Expenses 72,394 84,956
Capital Expenses 40,857 35,591
Total Expenses 228,952 255,426
Ending Reserves
Operations Reserves 46,581 41,634
Hydro Stabilization Reserve 18,767 18,767
Electric Special Projects Reserve 30,149 31,169
Capital Reserves 880 5,880
Electrification Reserve 2,037 2,037
Other Reserves 28,784 26,373
Total Ending Reserves 127,198 125,860
Operations Reserve Guidelines
Minimum Guideline 28,181 33,306
Target Guideline 42,271 49,960
Maximum Guideline 56,361 66,613
Electric Supply and Distribution
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completed a $5.0M transfer from the Supply Operations Reserve to the Distribution Operations Reserve in FY 2025 and is evaluating an additional transfer of up to $5.0M in FY 2026 to support near-term infrastructure and CIP funding needs. While these actions support operational liquidity and service delivery, they also reduce available reserve capacity during periods of wholesale power market volatility, lower-than-forecasted electric sales revenue, or unplanned operational events.
To mitigate the impact of lower reserve capacity, Staff continue to evaluate reserve replenishment strategies, future transfer needs, year-end financial results, and the timing of planned debt issuance for grid modernization projects.
The projected reserves of the Gas utility for FY 2026 as of December 31, 2025 are shown in Table 5.
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The Gas Utility’s projected FY 2026 ending reserves total $19.0M, compared to $19.6M in FY 2025. Operations Reserves are projected to increase from $9.9M to $12.1M; however, the FY 2026 balance remains below the target guideline of $14.2M. Reserve levels continue to reflect Table 5: Gas Projected Reserves for Fiscal Year End 2026 as of December 31, 2025) FY 2025 Actual FY 2026 Projected
Starting Reserves
Operations Reserve 4,257 9,897
Supply Rate Stabilization - -
Distribution Rate Stabilization - 1,049
CIP Reserve -
Cap-and-Invest Reserve 13,568 15,046
Debt-Service Reserve 313 326
Other 14,776 8,281
Total Starting Reserves 32,914 34,599
Revenues
Total Revenues 60,176 79,185
Total Revenues 60,176 79,185
Expenses
Total Supply Purchases 19,159 22,084
Total Supply and Distribution Operations 17,427 19,231
Debt Service 776 802
CIP Expenses 8,176 19,499
Other 558 573
Total Expenses 46,096 62,189
Transfers
General Fund 10,918 9,735
Cap-and-Invest Reserve 1,326 3,068
Other 2,370 1,952
Total Transfers 14,614 14,755
Ending Reserves
Operations Reserve 9,897 12,139
Supply Rate Stabilization - -
Distribution Rate Stabilization 1,049 2,413
CIP Reserve - -
Debt-Service Reserve 326 326
Other 8,281 4,140
Total Ending Reserves 19,553 19,018
Operations Reserve Guidelines
Minimum Guideline 8,636 9,443
Target Guideline 12,953 14,164
Maximum Guideline 17,271 18,886
Gas Supply and Distribution
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financial pressures associated with natural gas market volatility, capital improvement program (CIP) expenditures, and infrastructure funding needs.
Utilities staff continue monitoring reserve levels, cash flow impacts, and funding strategies as projected FY 2026 CIP expenditures increase from $8.2M in FY 2025 to $19.5M in FY 2026.
Planned reserve transfers of up to $1.5M will support near-term infrastructure and CIP funding needs, but will also reduce available contingency funding for unplanned operational, market, or infrastructure-related events.
Several financial and operational risks continue to warrant monitoring, including wholesale natural gas market volatility, lower-than-forecasted revenues, rising infrastructure costs, and timing risks associated with reserve replenishment. Utilities staff, in coordination with Energy Risk Management, will continue monitoring reserve adequacy, liquidity exposure, and funding strategies to help maintain stable operations and support long-term infrastructure investment needs.
Exceptions to Energy Risk Management Policies, Guidelines, or Procedures The only exception made was when Council waived the investment grade credit rating requirement of Section 2.30.340(d) of the Palo Alto Municipal Code for Aypa Power. There were no other exceptions to the Energy Risk Management Policies, Guidelines, or Procedures to report during the first half of FY 2026.
ENVIRONMENTAL REVIEW
This report is for informational purposes only with no action required by the Council.
APPROVED BY:
Lauren Lai, Administrative Services Director
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Item No. 3. Page 1 of 2
City Council
Supplemental Report
From: Lauren Lai, Administrative Services Director
Meeting Date: June 15, 2026
Item Number: 3
Report #:2606-6464
TITLE
PUBLIC HEARING: Adoption of an Ordinance Adopting the Operating and Capital Budgets, Revised Table of Organization, and Municipal Fee Schedule for Fiscal Year 2027; Adoption of a Resolution Proposing the Appropriations Limit for Fiscal Year 2027 - State Law/ City Charter; Accept the Bi-Annual Actuarial Valuation Report of Palo Alto's Retiree Healthcare and Other Post-Employment Benefits (OPEB) as of June 30, 2025 and Approve Annual Actuarially Determined Contribution for Fiscal Years 2027 and 2028; Authorize the City Manager or their Designee to Negotiate and Execute a Memorandum of Understanding and Funding Agreement (or Lease Agreement Amendment) with the Palo Alto Museum to Provide Cost Sharing for Repairs to the Basement and Waterproofing in the Roth Building and Improvements to Heritage Park
BACKGROUND
The Palo Alto Municipal Code requires the Planning and Transportation Commission to review the City’s capital improvement program, review each project for consistency with the City’s Comprehensive Plan, and submit an annual report to the City Council. The Council considers this report as part of budget adoption process.
The Finance Committee unanimously recommended adoption of the proposed Fiscal Year 2027 Operating and Capital Budgets at its May 19, 2026 meeting. At the time , the Planning and Transportation Commission (PTC) had not yet reviewed the new projects in the 2027-2031 Capital Improvement Program for each of the projects’ consistency with the City’s 2030 Comprehensive Plan. The PTC reviewed the 2027-2031 Capital Improvement Program at its May 27, 2026 meeting, and determined that the new projects are consistent with the Comprehensive Plan 2030 policies and programs. The letter attached to this supplemental report includes the PTC’s recommendation to forward this finding to the Finance Committee and City Council.
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ATTACHMENTS
Supplemental Report Attachment A - Planning and Transportation Commission 2027-2031 Capital Improvement Plan Consistency Letter to the City’s Comprehensive Plan APPROVED BY:
Lauren Lai, Administrative Services Director
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June 3, 2026
Honorable City Council
C/O City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
RE: Review of 2027-2031 Capital Improvement Projects
The Planning and Transportation Commission (PTC) reviewed the proposed 2027-2031 Capital Improvement Projects (CIPs) on Wednesday May 27, 2026. The PTC determined that the new projects included in the 2027-2031 Capital Budget are consistent with the Comprehensive Plan 2030 policies and programs. The PTC recommends forwarding this finding to the Finance Committee and City Council at this time.
The motion was made by Vice Chair Kevin Ji and it was seconded by Commissioner Allen Akin. The motion was approved by a vote of 6-0.
Respectfully,
Bryna Chang, Chair
Planning and Transportation Commission
Docusign Envelope ID: 9B578808-90FA-817C-81DC-54A50D132816 6/3/2026
Attachment A
Item 3
Supplemental Report
Attachment A - Planning
and Transportation
Commission 2027-2031
Capital Improvement Plan
Consistency Letter to the C
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Item No. 23. Page 1 of 2
City Council
Supplemental Report
From: Jonathan Lait, Planning and Development Services Director Meeting Date: June 15, 2026
Item Number: 23
Report #:2606-6465
TITLE
SECOND READING and Adoption of Temporary Ordinances Implementing Senate Bill (SB) 79, and Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Historic Resource Sites and Transit-Oriented Development (TOD) Eligible Sites from Government Code Section 65912.157 and Authorizing Corresponding Zoning Map Updates. CEQA Status: Exempt Under Government Code Section 65912.160(c)(2).
RECOMMENDATION
This supplemental report transmits updated versions of attachments B and D for Council consideration.
ANALYSIS
This report transmits updated versions of attachments B and D, which incorporate an additional clarifying provision in the proposed Transit Oriented Development (TOD) Combining District regulations. This revision is intended to confirm that property may develop at the density and residential floor area required under state law. While staff believe the proposed standards are sufficient, the compressed timeline for development of the ordinance did not permit an exhaustive review of standards otherwise applicable in the underlying zoning or analysis of unusual site configurations.
To address the potential for unanticipated conflicts between the density and floor area required for the TOD Combining District and other applicable standards, staff have added the following clarifying language to proposed Section 18.14.070, subd. (a):
”(a) The purpose of the TOD Combining District is to implement Senate Bill 79 (2025), California Government Code sections 65912.155 through 65912.162. For purposes of this section, definitions in California Government Code section 65912.156 shall apply. It is the intention of the City Council that the TOD Combining District permit development in accordance with the development Item 23
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standards set forth herein. Therefore, to the extent standards contained elsewhere in this Title 18 necessarily preclude development of the densities and residential floor areas required for a site within the TOD Combining District to qualify under Government Code section 65912.161, subd. (b)(1)(A), such standards shall be applied to allow for development on that site of the densities and residential floor areas set forth in subdivision (c).” This provision would permit the Director of Planning and Development Services, in consultation with the City Attorney, to respond to unanticipated situations without requiring immediate legislative action or jeopardizing the validity of the ordinance more broadly. Pursuant to Palo Alto Municipal Code section 2.04.270, subd. (c), because this amendment retains the general scope and original intention of the temporary ordinance introduced on June 1, 2026, a new first reading would not be required.
ATTACHMENTS
Supplemental Attachment A: Temporary Ordinance for SB 79 50 Percent Option (Attachment B) Supplemental Attachment B: Interim Urgency Ordinance for SB 79 50 Percent Option (Attachment D)
APPROVED BY:
Jonathan Lait, Planning and Development Services Director Item 23
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Ordinance No. _____
Temporary Ordinance of the Council of the City of Palo Alto Adding Section
18.14.070 to the Palo Alto Municipal Code to Create the Transit Oriented Development (TOD) Combining District and Excluding from the Effect of Government Code Section 65912.157 Those Properties that Permit Density and Floor Area Ratio at No Less Than 50% of the Standards in the Government Code and Amending the Zoning Map (Palo Alto Municipal Code Section 18.08.040) The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On October 10, 2025, the Governor of the State of California signed Senate Bill 79 (SB 79), which adopted California Government Code sections 65912.155 through 65912.162 and requires local agencies, effective July 1, 2026, to permit high density residential development in designated transit-oriented development (TOD) zones within one-half mile of certain TOD stops.
B. There are three TOD zones in Palo Alto, centered on the Palo Alto, California Avenue, and San Antonio Road Caltrain stations.
C. California Government Code section 65912.157 sets forth residential development standards that apply to housing development projects within TOD zones, such as a height of 75 feet, density of 120 dwelling units per acre, and floor area ratio of 3.5 for projects within one-quarter mile of a Caltrain station.
D. Government Code section 65912.161, subdivision (b), permits local agencies to exclude certain properties from compliance with Government Code section 65912.157 by adopting an ordinance implementing SB 79, including:
a. A site that permits density and residential floor area ratio at no less than 50 percent of the standards specified under Government Code section 65912.157. b. Sites with a historic resource designated as of January 1, 2025, on a local register.
E. The City Council desire to adopt an ordinance pursuant to Government Code section 65912.161, excluding sites designated as local historic resources on the Palo Alto Historic Resources Inventory pursuant to Palo Alto Municipal Code (PAMC) Chapter 16.49.
F. SB 79 charges the California Department of Housing and Community Development (HCD) with promulgating regulations relating to the bill by July 1, 2026. SB 79 further chargers metropolitan planning organizations with creating maps of TOD stops and zones in accordance with HCD guidance.
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Temporary Ordinance for SB
79 50 Percent Option
(Attachment B)
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G. HCD issued a set of “advisory clarifications on definitions for Metropolitan Planning Organizations” on March 23, 2026. The Metropolitan Transportation Commission (MTC), the metropolitan planning organization for the San Francisco Bay Area, released preliminary draft maps on April 8, 2026.
H. Due to the short time between the issuance of guidance from HCD and MTC and the July 1, 2026 effective date of Government Code section 65912.157, there is insufficient time for the amendments to the zoning map proposed in this ordinance to be presented for review by the Planning and Transportation Commission.
I. The City Council finds and declares that the implementation of Government Code section 65912.157 on July 1, 2026 will create significant incentive for redevelopment of properties in the TOD zones that the City has not already identified as being suitable locations for higher-density development, allow densities that would create unanticipated strain on public infrastructure and cause additional points of conflict between vehicles and bicycles or pedestrians in the affected areas. Existing infrastructure, including but not limited to water supply for fire suppression, stormwater management to reduce flooding, and wastewater mains will require significant increases in capacity to serve high density development in the TOD zones that may not be fully funded by proposed development under current standards. The rezoning and exclusion actions set forth in this ordinance would reduce these impacts for a temporary period, during which the City may plan for increased demands on infrastructure and transportation resources.
Accordingly, pursuant to PAMC section 18.80.090, the City Council adopts this ordinance as a temporary measure to preserve the public health, safety, or welfare.
SECTION 2. Section 18.14.070 (Transit Oriented Development (TOD) Combining District) of Chapter 18.14 (Housing Incentives) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby added to read:
18.14.070 Transit Oriented Development (TOD) Combining District (a) Purpose.
(b) Applicability. The TOD Combining District shall apply to all sites within a TOD zone, except: (1) sites owned by the City of Palo Alto and (2) sites excluded by ordinance from the effect of Government Code section 65912.157 because they were designated as local historic resources on the Palo Alto Historic Resources Inventory as of January 1, 2025. It is the intention of the City Council that the TOD Combining District permit development in accordance with the development standards set forth herein. Therefore, to the extent standards contained elsewhere in this Title 18 necessarily preclude development of the densities and residential floor areas required for a site within the TOD Combining District to qualify under Government Code section 65912.161, subd. (b)(1)(A), such standards shall be applied to allow for development on that site of the densities and residential floor areas set forth in subdivision (c).
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(c) Development Standards. Transit-oriented housing development projects may elect to utilize the following development standards in-lieu of the standards set forth in the underlying district. Except as provided herein, the standards in the underlying district shall apply:
(1) For sites within ¼ mile of a TOD stop, unless the underlying district is more permissive:
Maximum Residential Floor
Area Ratio 1.75:1
Minimum setbacks (feet)
Front and rear 10
Side 4
Daylight Plane for lot lines
abutting a low density
residential district (RE, R1,
NV-R1, R2, NV-R2, RMD)
Initial height: 16 feet,
measured at the property line
Slope: 45 degrees
Maximum density None
Minimum density Greater of:
30 du/ac or 5 units
Maximum site coverage 70%
(2) For sites further than ¼ mile but within ½ mile of a TOD stop, unless the underlying district is more permissive:
Maximum Residential Floor
Area Ratio 1.5:1
Minimum setbacks (feet)
Front and rear 10
Side 4
Daylight Plane for lot lines
abutting a low density
residential district (RE, R1,
NV-R1, R2, NV-R2, RMD)
Initial height: 16 feet,
measured at the property line
Slope: 45 degrees
Maximum density None
Minimum density Greater of:
30 du/ac or 5 units
Maximum site coverage 70%
(3) For sites adjacent to a TOD stop, Maximum Residential Floor Area Ratio shall be the greater of 2.25 or the FAR provided in the underlying zone.
SECTION 3. Pursuant to Government Code section 65912.161, subdivision (b)(1), sites subject to the TOD Combining District are hereby temporarily excluded from the application of Item 23
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Government Code section 65912.157. These sites shall be excluded until one year following the adoption of the City’s seventh cycle Housing Element.
SECTION 4. The Director of Planning and Development Services is hereby authorized and directed to update Section 18.08.040 (the Zoning Map) of Title 18 (Zoning) of the Palo Alto Municipal Code to indicate which sites within the TOD zones are and are not covered by Government Code section 65912.157, including sites excluded pursuant to this Ordinance.
SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional.
SECTION 6. The Council finds that the Ordinance is not a project under the California Environmental Quality Act (CEQA) pursuant to Government Code section 65912.160, subdivision (c)(2), because it makes the City’s zoning code consistent with the provisions of SB 79 as set forth in Government Code section 65912.161, subdivision (b), and by amending the zoning map to indicate which sites are and are not subject to Government Code section 65912.157.
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79 50 Percent Option
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Item 23: Staff Report Pg. 6 Packet Pg. 1159 of 1165
***NOT YET APPROVED***
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SECTION 7. This Ordinance shall be effective on the 31st day following its adoption and shall expire on July 1, 2027 unless extended or superseded.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Assistant City Attorney City Manager
____________________________
Director of Planning and
Development Services
Item 23
Supplemental Attachment A
Temporary Ordinance for SB
79 50 Percent Option
(Attachment B)
Item 23: Staff Report Pg. 7 Packet Pg. 1160 of 1165
***NOT YET APPROVED***
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Ordinance No. _____
Interim Urgency Ordinance of the Council of the City of Palo Alto Adding Section
18.14.070 to the Palo Alto Municipal Code to Create the Transit Oriented Development (TOD) Combining District and Excluding from the Effect of Government Code Section 65912.157 Those Properties that Permit Density and Floor Area Ratio at No Less Than 50% of the Standards in the Government Code and Amending the Zoning Map (Palo Alto Municipal Code Section 18.08.040) The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On October 10, 2025, the Governor of the State of California signed Senate Bill 79 (SB 79), which adopted California Government Code sections 65912.155 through 65912.162 and requires local agencies, effective July 1, 2026, to permit high density residential development in designated transit-oriented development (TOD) zones within one-half mile of certain TOD stops.
B. There are three TOD zones in Palo Alto, centered on the Palo Alto, California Avenue, and San Antonio Road Caltrain stations.
C. California Government Code section 65912.157 sets forth residential development standards that apply to housing development projects within TOD zones, such as a height of 75 feet, density of 120 dwelling units per acre, and floor area ratio of 3.5 for projects within one-quarter mile of a Caltrain station.
D. Government Code section 65912.161, subdivision (b), permits local agencies to exclude certain properties from compliance with Government Code section 65912.157 by adopting an ordinance implementing SB 79, including:
a. A site that permits density and residential floor area ratio at no less than 50 percent of the standards specified under Government Code section 65912.157. b. Sites with a historic resource designated as of January 1, 2025, on a local register.
E. The City Council desire to adopt an ordinance pursuant to Government Code section 65912.161, excluding sites designated as local historic resources on the Palo Alto Historic Resources Inventory pursuant to Palo Alto Municipal Code (PAMC) Chapter 16.49.
F. SB 79 charges the California Department of Housing and Community Development (HCD) with promulgating regulations relating to the bill by July 1, 2026. SB 79 further chargers metropolitan planning organizations with creating maps of TOD stops and zones in accordance with HCD guidance.
Item 23
Supplemental Attachment B
Interim Urgency Ordinance
for SB 79 50 Percent Option
(Attachment D)
Item 23: Staff Report Pg. 8 Packet Pg. 1161 of 1165
***NOT YET APPROVED***
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G. HCD issued a set of “advisory clarifications on definitions for Metropolitan Planning Organizations” on March 23, 2026. The Metropolitan Transportation Commission (MTC), the metropolitan planning organization for the San Francisco Bay Area, released preliminary draft maps on April 8, 2026.
H. Due to the short time between the issuance of guidance from HCD and MTC and the July 1, 2026 effective date of Government Code section 65912.157, there is insufficient time for the amendments to the zoning map proposed in this ordinance to be presented for review by the Planning and Transportation Commission.
I. The City Council finds and declares that the implementation of Government Code section 65912.157 on July 1, 2026 will create significant incentive for redevelopment of properties in the TOD zones that the City has not already identified as being suitable locations for higher-density development, allow densities that would create unanticipated strain on public infrastructure and cause additional points of conflict between vehicles and bicycles or pedestrians in the affected areas. Existing infrastructure, including but not limited to water supply for fire suppression, stormwater management to reduce flooding, and wastewater mains will require significant increases in capacity to serve high density development in the TOD zones that may not be fully funded by proposed development under current standards. The rezoning and exclusion actions set forth in this ordinance would reduce these impacts for a temporary period, during which the City may plan for increased demands on infrastructure and transportation resources.
Accordingly, pursuant to PAMC sections 18.80.090 and 2.04.270, the City Council adopts this ordinance as a temporary measure and emergency measure to preserve the public health, safety, or welfare.
J. Additionally, the City Council finds and declares that the impacts described above present a current and immediate threat to the public health, safety, or welfare that would be realized by approval of projects under the standards set forth in Government Code section 65912.157. There are no pending project applications that would be impacted by this ordinance and this ordinance would not have the effect of denying any approvals needed for the development of projects containing multifamily housing. Accordingly, for the reasons set forth above, this ordinance is necessary as an interim, urgency measure pursuant to Government Code section 65858 to protect the public health, safety, or welfare.
SECTION 2. Section 18.14.070 (Transit Oriented Development (TOD) Combining District) of Chapter 18.14 (Housing Incentives) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby added to read:
18.14.070 Transit Oriented Development (TOD) Combining District (a) Purpose. The purpose of the TOD Combining District is to implement Senate Bill 79 (2025), California Government Code sections 65912.155 through 65912.162. For purposes of this section, definitions in California Government Code section 65912.156 shall apply. It is the Item 23
Supplemental Attachment B
Interim Urgency Ordinance
for SB 79 50 Percent Option
(Attachment D)
Item 23: Staff Report Pg. 9 Packet Pg. 1162 of 1165
***NOT YET APPROVED***
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intention of the City Council that the TOD Combining District permit development in accordance with the development standards set forth herein. Therefore, to the extent standards contained elsewhere in this Title 18 necessarily preclude development of the densities and residential floor areas required for a site within the TOD Combining District to qualify under Government Code section 65912.161, subd. (b)(1)(A), such standards shall be applied to allow for development on that site of the densities and residential floor areas set forth in subdivision (c). (b) Applicability. The TOD Combining District shall apply to all sites within a TOD zone, except: (1) sites owned by the City of Palo Alto and (2) sites excluded by ordinance from the effect of Government Code section 65912.157 because they were designated as local historic resources on the Palo Alto Historic Resources Inventory as of January 1, 2025. (c) Development Standards. Transit-oriented housing development projects may elect to utilize the following development standards in-lieu of the standards set forth in the underlying district. Except as provided herein, the standards in the underlying district shall apply:
(1) For sites within ¼ mile of a TOD stop, unless the underlying district is more permissive:
Maximum Residential Floor
Area Ratio 1.75:1
Minimum setbacks (feet)
Front and rear 10
Side 4
Daylight Plane for lot lines
abutting a low density
residential district (RE, R1,
NV-R1, R2, NV-R2, RMD)
Initial height: 16 feet,
measured at the property line
Slope: 45 degrees
Maximum density None
Minimum density Greater of:
30 du/ac or 5 units
Maximum site coverage 70%
(2) For sites further than ¼ mile but within ½ mile of a TOD stop, unless the underlying district is more permissive:
Maximum Residential Floor
Area Ratio 1.5:1
Minimum setbacks (feet)
Front and rear 10
Side 4
Daylight Plane for lot lines
abutting a low density
residential district (RE, R1,
NV-R1, R2, NV-R2, RMD)
Initial height: 16 feet,
measured at the property line
Slope: 45 degrees
Item 23
Supplemental Attachment B
Interim Urgency Ordinance
for SB 79 50 Percent Option
(Attachment D)
Item 23: Staff Report Pg. 10 Packet Pg. 1163 of 1165
***NOT YET APPROVED***
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Maximum density None
Minimum density Greater of:
30 du/ac or 5 units
Maximum site coverage 70%
(3) For sites adjacent to a TOD stop, Maximum Residential Floor Area Ratio shall be the greater of 2.25 or the FAR provided in the underlying zone.
SECTION 3. Pursuant to Government Code section 65912.161, subdivision (b)(1), sites subject to the TOD Combining District are hereby temporarily excluded from the application of Government Code section 65912.157. These sites shall be excluded until one year following the adoption of the City’s seventh cycle Housing Element.
SECTION 4. The Director of Planning and Development Services is hereby authorized and directed to update Section 18.08.040 (the Zoning Map) of Title 18 (Zoning) of the Palo Alto Municipal Code to indicate which sites within the TOD zones are and are not covered by Government Code section 65912.157, including sites excluded pursuant to this Ordinance.
SECTION 5. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional.
SECTION 6. The Council finds that the Ordinance is not a project under the California Environmental Quality Act (CEQA) pursuant to Government Code section 65912.160, subdivision (c)(2), because it makes the City’s zoning code consistent with the provisions of SB 79 as set forth in Government Code section 65912.161, subdivision (b), and by amending the zoning map to indicate which sites are and are not subject to Government Code section 65912.157.
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Item 23
Supplemental Attachment B
Interim Urgency Ordinance
for SB 79 50 Percent Option
(Attachment D)
Item 23: Staff Report Pg. 11 Packet Pg. 1164 of 1165
***NOT YET APPROVED***
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SECTION 7. This Ordinance shall be effective upon adoption by a four-fifths vote of City Council members present and shall expire 45 days thereafter unless extended.
INTRODUCED and ADOPTED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Assistant City Attorney City Manager
____________________________
Director of Planning and
Development Services
Item 23
Supplemental Attachment B
Interim Urgency Ordinance
for SB 79 50 Percent Option
(Attachment D)
Item 23: Staff Report Pg. 12 Packet Pg. 1165 of 1165