CITY COUNCIL
Special Meeting
Wednesday, September 09, 2026
Council Chambers & Hybrid
5:00 PM
City
Council
meetings
will
be
held
as
“hybrid”
meetings
with
the
option
to
attend
virtually
or
in
person.
Information
on
how
the
public
may
observe
and
participate
in
the
meeting
is
located
at
the
end
of
the
agenda.
Translation
services
are
available
upon
request
at
least
24 hours
before
the
meeting.
The
meeting
will
be
broadcast
on
Cable
TV
Channel
76,
live
on
YouTube
https://www.youtube.com/c/cityofpaloalto
,
and
streamed
to
Midpen
Media
Center
https://midpenmedia.org
.
VIRTUAL PARTICIPATION
CLICK HERE TO JOIN
(
https://cityofpaloalto.zoom.us/j/362027238
)
Meeting ID: 362 027 238 Phone:1(669)900-6833
PUBLIC COMMENTS
Public
Comment
for
items
not
on
the
agenda
will
be
accepted
for
up
to
3 minutes
or
an
amount
of
time
determined
by
the
Chair.
In-person
comments
will
be
heard
at
the
beginning
of
the
agenda
and
remote
comments
will
be
heard
at
the
end
of
the
agenda.
In-person
general
public
comment
will
be
heard
for
30 minutes.
Additional
in-person
public
comments,
if
any,
will
be
heard
at
the
end
of
the
agenda.
Public
comments
for
agendized
items
will
be
accepted
both
in
person
and
via
Zoom
for
up
to
3 minutes
or
an
amount
of
time
determined
by
the
Chair.
Requests
to
speak
will
be
taken
until
5 minutes
after
the
staff’s
presentation
or
as
determined
by
the
Chair.
Written
public
comments
can
be
submitted
in
advance
and
will
be
provided
to
the
Council
and
available
for
inspection
on
the
City’s
website.
Multiple
individuals
wishing
to
speak
on
the
same
item
may
designate
a
spokesperson.
Spokespeople
must
be
representing
5 or
more
verified
individuals
who
are
present
in
person
or
via
Zoom.
Spokespeople
are
allowed
up
to
10 minutes,
at
the
discretion
of
the
Chair.
Speaking
time
may
be
reduced
if
the
Chair
reduces
the
speaking
time
for
individual
speakers.
PowerPoints,
videos,
or
other
media
to
be
presented
during
public
comment
are
accepted
only
by
to
at
least
24 hours
before
the
meeting.
Once
received,
the
Clerk
will
share
them
at
public
comment
for
the
specified
item.
To
uphold
strong
cybersecurity
management
practices,
USB’s
or
other
physical
electronic
storage
devices
are
not
accepted.
Signs
and
symbolic
materials
less
than
2 feet
by
3 feet
are
permitted
provided
that:
sticks,
posts,
poles
or
similar/other
type
of
handle
objects
are
strictly
prohibited;
the
items
do
not
create
a
facility,
fire,
or
safety
hazard;
and
persons
with
such
items
remain
seated
when
displaying
them
and
must
not
raise
the
items
above
shoulder
level,
obstruct
the
view
or
passage
of other attendees, or otherwise disturb the business of the meeting.
TIME ESTIMATES
Listed
times
are
estimates
only
and
are
subject
to
change
at
any
time,
including
while
the
meeting
is
in
progress.
The
Council
reserves
the
right
to
use
more
or
less
time
on
any
item,
change
the
order
of
items
and/or
continue
items
to
another
meeting.
Items
may
be
heard
before
or
after
the
time
estimated
on
the
agenda.
This
may
occur
in
order
to
best
manage
the
time at a meeting or to adapt to the participation of the public.
1 September 09, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
CALL TO ORDER
SPECIAL ORDERS OF THE DAY (5:00 - 5:45 PM)
1. Interview Candidates for Vacancies on the Historic Resources Board (HRB); CEQA Status - Not a Project
2. Proclamation Honoring the 25th Anniversary of September 11, 2001 CLOSED SESSION (5:45 - 7:45 PM)
3. PUBLIC EMPLOYEE PERFORMANCE EVALUATIONS
Authority: Cal. Gov. Code section 54957(b)(1)
Titles: City Manager, City Attorney and City Clerk
AGENDA CHANGES, ADDITIONS AND DELETIONS
IN-PERSON PUBLIC COMMENT (7:45 - 8:15 PM)
Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda.
COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (8:15 - 8:25 PM) Members of the public may not speak to the item(s).
CONSENT CALENDAR (8:25 - 8:30 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.
4. Approval of Minutes from August 17 and August 24, 2026 Meetings
5. Approval of Response to Civil Grand Jury Report “VTA‘s Management and Oversight of BART Silicon Valley Phase II”; CEQA Status: Not a Project
6. Approval of Five-year Memorandum of Agreement with Stanford University to Provide and be Reimbursed for Traffic Control Services during Stanford Stadium Events; CEQA status – not a project.
7. Approval of Amendment No. 1 to Contract No. S25186778 with Municipal Resources Group, LLC to increase the Contract Amount by $85,000 to a Total Not-to-Exceed of 2 September 09, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. $340,000 for Organizational Development Services and Extend the Contract Term by One Year through September 4, 2027; CEQA Status – Not a Project.
8. Approval of Amendment No. 1 to the Cost-Sharing Agreement with the County of Santa Clara for Continued Operation of the Safe Parking Program at 2000 Geng Road to Extend the Term Through June 30, 2027 and Not-to-Exceed $196,032; Approval of Amendment No. 3 to Contract No. 1557819, the Lease Agreement with the County of Santa Clara, Extending the County’s Temporary Use of the Site Through June 30, 2027; Approval of FY 2027 Budget Amendment in the Permanent Local Housing Allocation (PLHA) Fund; and Authorization to Use PLHA Activity 6 Funds Accordingly; CEQA status – statutorily exempt.
9. Approval of Amendment No. 2 to Contract C23187298C with Hinderliter, de Llamas & Associates (HdL) to Add Sales Tax and Transactions Tax Analysis, Reporting, Forecasting, and Audit Recovery Services and Increase Compensation by $165,000 for a New Total Not-to-Exceed Amount of $3,035,000 over Two Years and Adoption of a Resolution Authorizing HdL and Designated City Staff to Examine Sales or Transactions and Use Taxes from the California Department of Tax and Fee Administration (CDTFA); CEQA Status - Not a Project
10. Adoption of Side Letter Between the City of Palo Alto and Utilities Management and Professional Association of Palo Alto for a Hiring Incentive; CEQA Status - Not a Project.
11. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations), Title 18 (Zoning), and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units (FIRST READING: August 17, 2026; PASSED: 4-3, Stone, Veenker, Lythcott-Haims no)
CITY MANAGER COMMENTS (8:30 - 8:40 PM)
BREAK (15 MINUTES)
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress.
ACTION ITEMS (Item 12: 8:55 - 9:55 PM, Item 13: 9:55 - 10:15 PM; Item 14: 10:15 - 11:00 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.
12. PUBLIC HEARING / QUASI-JUDICIAL. 470 Olive Avenue [25PLN-00228]: Recommend City Council Adopt an Ordinance Amending the Zoning Map to Change the Zoning District for 470 Olive Avenue from NV-R1 (Single-Family Residential) to NV-MXM (Medium
3 September 09, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
Density Mixed Use) and Adopt a Resolution Changing the North Ventura Coordinated Area Plan (NVCAP) Land Use Designation from Low Density Residential to Medium Density Mixed Use to Align it With the NVMXM Zoning of the Adjacent and Connected Parcel at 2951 El Camino Real. This Action Supports a Staff Determination to Add 470 Olive Avenue as a Housing Inventory Site to Address No Net Loss Requirements. CEQA Status: Statutorily Exempt per Public Resources Code Section 21080.085.
13. Designation of Voting Delegate and Alternate for the League of California Cities 2026 Annual Conference, to be held September 23-25, 2026 in Anaheim, California; CEQA Status – Not a Project
14. Colleagues’ Memo: Council Discussion and Public Release of the Investigation Report Regarding Forest Peterson
VIRTUAL PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. In-person Public Comment is limited to 30 minutes. Additional in-person public comments, if any, will be heard at the end of the agenda.
ADJOURNMENT
INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action or discussion during this meeting’s agenda.
A. Notification of 2023-2031 Housing Element Site Inventory Modifications for State Law Compliance. CEQA Status: The City Council approved a Revised Addendum to the Comprehensive Plan Environmental Impact Report on December 23, 2023 that fully analyzed the impacts of the 2023-2031 Housing Element, including maintenance of the site inventory.
B. 2026 City Council Priorities Q2 Update Supplemental Report
OTHER INFORMATION
Standing Committee Meetings this week
Rail Committee September 8, 2026
Policy & Services Committee September 8, 2026
4 September 09, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
Public Comment Letters
Schedule of Meetings
SUPPLEMENTAL/AMENDED AGENDA ITEMS
B.
2026 City Council Priorities Q2 Update
Supplemental Report Added
5 September 09, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
PUBLIC COMMENT INSTRUCTIONS
Members
of
the
Public
may
provide
public
comments
to
teleconference
meetings
via
email,
teleconference, or by phone.
1. Written public comments
may be submitted by email to
[email protected]
.
2. For in person public comments
please complete a speaker request card located on the
table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item.
3. Spoken
public
comments
using
a
computer
or
smart
phone
will
be
accepted
through
the
teleconference
meeting.
To
address
the
Council,
click
on
the
link
below
to
access
a
Zoom-
based meeting. Please read the following instructions carefully. ◦
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may
download
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Zoom
client
or
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browser.
If
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are
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current,
up-to-date
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Chrome
30 ,
Firefox
27 ,
Microsoft
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Safari
7 .
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Internet
Explorer.
Or
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Apple
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Store
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online
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◦
When
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on
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Agenda
Item,
click
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hand.”
The
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When
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limit
allotted.
A
timer
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shown on the computer to help keep track of your comments.
4. Spoken
public
comments
using
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phone
use
the
telephone
number
listed
below.
When
you
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speak
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agenda
item
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You
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how
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When
called
please
limit
your
remarks
to
the agenda item and time limit allotted.
CLICK HERE TO JOIN
Meeting ID: 362-027-238 Phone: 1-669-900-6833
Americans
with
Disability
Act
(ADA)
It
is
the
policy
of
the
City
of
Palo
Alto
to
offer
its
public
programs,
services
and
meetings
in
a
manner
that
is
readily
accessible
to
all.
Persons
with
disabilities
who
require
materials
in
an
appropriate
alternative
format
or
who
require
auxiliary
aids
to
access
City
meetings,
programs,
or
services
may
contact
the
City’s
ADA
Coordinator
at
(650)
329-2550
(voice)
or
by
emailing
Requests
for
assistance
or
accommodations
must
be
submitted
at
least
24 hours
in
advance
of
the
meeting,
program,
or
service.
6 September 09, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
California
Government
Code
§84308
,
commonly
referred
to
as
the
"Levine
Act,"
prohibits
an
elected
official
of
a
local
government
agency
from
participating
in
a
proceeding
involving
a
license,
permit,
or
other
entitlement
for
use
if
the
official
received
a
campaign
contribution
exceeding
$500
from
a
party
or
participant,
including
their
agents,
to
the
proceeding
within
the
last
12 months.
A
“license,
permit,
or
other
entitlement
for
use”
includes
most
land
use
and
planning
approvals
and
the
approval
of
contracts
that
are
not
subject
to
lowest
responsible
bid
procedures
and
have
a
value
over
$50,000.
A
“party”
is
a
person
who
files
an
application
for,
or
is
the
subject
of,
a
proceeding
involving
a
license,
permit,
or
other
entitlement
for
use.
A
“participant”
is
a
person
who
actively
supports
or
opposes
a
particular
decision
in
a
proceeding
involving
a
license,
permit,
or
other
entitlement
for
use,
and
has
a
financial
interest
in
the
decision.
The
Levine
Act
incorporates
the
definition
of
“financial
interest”
in
the
Political
Reform
Act,
which
encompasses
interests
in
business
entities,
real
property,
sources
of
income,
sources
of
gifts,
and
personal
finances
that
may
be
affected
by
the
Council’s
actions.
If
you
qualify
as
a
“party”
or
“participant”
to
a
proceeding,
and
you
have
made
a
campaign
contribution
to
a
Council
Member
exceeding
$500
made
within
the
last
12 months,
you
must
disclose
the
campaign contribution before making your comments.
7 September 09, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
City Council
Staff Report
Report Type: SPECIAL ORDERS OF THE DAY
Lead Department: City Clerk
Meeting Date: September 9, 2026
Report #:2606-6477
TITLE
Interview Candidates for Vacancies on the Historic Resources Board (HRB); CEQA Status - Not a Project
BACKGROUND
Recruitment for the Historic Resources Board opened on January 13, 2026, and was extended until a sufficient number of applications were received. There are three full-term vacancies on the Historic Resources Board, with terms expiring on March 31, 2029. City Council selected candidates to interview at the August 24, 2026 City Council meeting. Applications may be accessed online1.
Each candidate interview is scheduled for 10 minutes. Candidates will have an opportunity to summarize their experiences, and the remaining time will be allocated to Councilmember questions. Candidates have been informed of the following:
1. Each interview is scheduled for 10 minutes. Candidates may begin with 1-2 minutes describing their experience and/or desire to serve. The remaining time will be Q+A with the City Council;
2. Interviews are located in Council Chambers on the ground floor of City Hall (250 Hamilton Ave) or on Zoom;
3. If joining in person, please arrive 15 minutes before the scheduled time, and check in with the Clerk upon arrival; and
4. If joining via Zoom, please log-on 15 minutes before the scheduled time, and make sure to use your name so the clerk can identify the candidate. Please use this link to join https://cityofpaloalto.zoom.us/j/362027238. The clerk will allow you to unmute and turn on your video when it’s your turn.
1 August 24, 2026, City Council Staff Report #2605-6350 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=897164&dbid=0&repo=PaloAlto Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 1 Packet Pg. 8 of 284
Appointments are tentatively scheduled for the September 14, 2026 City Council meeting.
Councilmembers will appoint candidates through live voting conducted during the meeting. The City Clerk will announce the results of the vote.
Interview Schedule
Time Candidate Name Participation Method
5:00 – 5:10 pm Aleksandar Patrick Dusan Rakicevic More In-Person 5:10 – 5:20 pm Nandini Ramamurthi In-Person
5:20 – 5:30 pm Alisa Eagleston-Cieslewicz Virtual
ANALYSIS
A summary of the openings, eligibility requirements, and term lengths for the HRB vacancies are included below. In addition to the eligibility requirements below, no commissioners can be Councilmembers, officers, or employees of the City.
Historic Resources Board (HRB)
Vacancies and
Term Dates
Seat Numbers Number of
Applicants
Number of Candidates to
Interview
3 Full Terms
4/1/26 – 3/31/29
1, 2, 3 3 3 (Interview all candidates per
Council’s approved process3)
HRB Eligibility Requirements4:
Palo Alto residency is not required
All members shall have demonstrated interest in and knowledge of history, architecture or historic preservation.
Two members shall be professionals in the disciplines of architecture, architectural history, planning, landscape architecture, or related disciplines, or pre-historic and historic archeology, folklore, cultural anthropology, curation, or conservation. oThis requirement is currently fulfilled by three members of the commission, two of which do not have expiring terms. Therefore, this requirement will remain fulfilled regardless of applicant selection in this recruitment. At least one member shall possess academic education or practical experience in history or a related field such as American studies, American civilization, or cultural geography. 3 City Council, May 5, 2025; Agenda Item #11, SR# 2504-4537 https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=83381 4 Palo Alto Municipal Code 2.27.010
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-61517 Item 1
Item 1 Staff Report
Item 1: Staff Report
Pg.
2 Packet Pg. 9 of 284
oThis requirement is currently fulfilled by three members of the commission, and all three have expired terms in this recruitment. At least one new appointment must meet this requirement.
FISCAL/RESOURCE IMPACT
None.
STAKEHOLDER ENGAGEMENT
City staff publicized the recruitment through the City’s Uplift Local community newsletter, City Clerk’s Office newsletters, the City’s website, and the City’s social media channels. The recruitment was also advertised in both print and online in the Palo Alto Daily Post, as well as the Palo Alto Weekly print and a LinkedIn online ad. Recruitment information was also posted at Palo Alto libraries, City Hall, and public facing facilities. Information was also emailed to previous applicants, community-based organizations, and businesses related to the commission’s issue areas.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).
ATTACHMENTS
None.
APPROVED BY:
Mahealani Ah Yun, City Clerk
Item 1
Item 1 Staff Report
Item 1: Staff Report
Pg.
3 Packet Pg. 10 of 284
City Council
Staff Report
From: City Clerk
Report Type: SPECIAL ORDERS OF THE DAY
Lead Department: Police Department
Meeting Date: September 9, 2026
Report #:2608-6705
TITLE
Proclamation Honoring the 25th Anniversary of September 11, 2001
ATTACHMENTS
Attachment A: Proclamation Honoring the 25th Anniversary of September 11, 2001 APPROVED BY:
Mahealani Ah Yun, City Clerk
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
1 Packet Pg. 11 of 284
25th Anniversary of September 11, 2001
Patriot Day and Day of Remembrance, September 11, 2026
WHEREAS, September 11, 2026 marks twenty-five years since the terrorist attacks of September 11, 2001, which forever changed our nation and the lives of millions of Americans; and WHEREAS, the September 11, 2001 attack was the deadliest terrorist attack in American history, killing 2996 people (including 342 members of the New York City Fire Department, 60 law enforcement officers from the New York City Police Department and the Port Authority of New York and New Jersey, and 55 military personnel); and
WHEREAS, on-duty and off-duty firefighters, police officers, emergency medical technicians, and other responders rushed to the scenes and took heroic action to save lives at the World Trade Center and the Pentagon; and
WHEREAS, office workers, military personnel, and residents showed incredible courage and support for their fellow Americans in helping each other escape the attack and flee to safety, often at the expense of their own lives; and
WHEREAS, the impact of September 11, 2001 continues today, as first responders, recovery workers, survivors, and others exposed to toxic conditions have suffered serious illnesses, and many have since lost their lives as a result; and
WHEREAS, amid profound tragedy, Americans came together to support one another and demonstrated extraordinary courage, compassion, unity, and service; and WHEREAS, twenty-five years later, we honor those who were lost, those who survived, the families forever changed, and all who responded and served in the days, months, and years that followed; NOW, THEREFORE, I, Vicki Veenker, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby proclaim September 11, 2026, as a day of remembrance and call upon our community to honor the lives lost, recognize the heroism and enduring sacrifice of our nation’s first responders, and carry forward the courage, compassion, service, and unity demonstrated in the aftermath of September 11, 2001. Twenty-five years later, we remember their lives, we honor their sacrifice, and we renew our promise: we will never forget.
Presented: September 9, 2026
______________________________
Vicki Veenker
Mayor
Proclamation
Item 2
Attachment A -
Proclamation Honoring the
25th Anniversary of
September 11, 2001
Item 2: Staff Report
Pg.
2 Packet Pg. 12 of 284
City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: September 9, 2026
Report #:2608-6651
TITLE
Approval of Minutes from August 17 and August 24, 2026 Meetings
RECOMMENDATION
Staff recommends that the City Council review and approve the minutes.
ATTACHMENTS
Attachment A: August 17, 2026 Draft Action Minutes
Attachment B: August 24, 2026 Draft Action Minutes
APPROVED BY:
Mahealani Ah Yun, City Clerk
Item 4
Item 4 Staff Report
Item 4: Staff Report
Pg.
1 Packet Pg. 13 of 284
CITY COUNCIL
DRAFT ACTION MINUTES
Regular Meeting
August 17, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M.
Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely:
Absent:
Closed Session
1. CONFERENCE WITH CITY ATTORNEY-EXISTING LITIGATION
Subject: Swinerton v. City of Palo Alto (JAMS Reference # 5100003409) Authority: Government Code Section 54956.9(d)(1)
One Case, as Defendant
2. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Authority: Government Code Section 54956.8
Property: 4000 Middlefield Road, Palo Alto (Informally known as the Cubberley Site) Negotiating Party: Palo Alto Unified School District City Negotiators: Ed Shikada, Kristen O'Kane, Sunny Tong
Subject of Negotiations: Purchase, Exchange, and/or Lease Price and Terms of Payment MOTION: Council Member Lauing moved, seconded by Council Member Lu to go into Closed Session.
MOTION PASSED: 7-0
Council went into Closed Session at 5:38 P.M.
Council returned from Closed Session at 8:08 P.M.
Mayor Veenker announced no reportable action. Agenda Item Number 2 is continu ed to a date uncertain.
Agenda Changes, Additions and Deletions
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In-Person Public Comment
Council Member Questions, Comments and Announcements
Consent Calendar
MOTION: Council member Reckdahl moved, seconded by Council member Lu to approve Agenda Item Numbers 3-5.
MOTION PASSED: 7-0
3. Adoption of a Resolution Authorizing the City Manager or Their Designee to Transact for Electric Supplies to Meet the City’s Electrical Needs under Electric Master Agreements; CEQA Status: Not a project, CEQA Guidelines 15378(b)(5)
4. Approve Expansion of the City’s Overnight Warming/Cooling Location Program, Approve an Operating Framework for Emergency Inclement Weather Response; CEQA status.
5. Approval of Contract Number C27196410 with Salas O’Brien Engineers, Inc. for an Amount Not- to-Exceed $298,716 to Provide Professional Design Services for the Electrification of City Facilities Capital Improvement Program Project PE -24001, for a Contract Term through August 24, 2029; CEQA Status – Exempt under CEQA Guidelines Section 15301
City Manager Comments
Ed Shikada, City Manager
Action Items
6. Adoption of an Ordinance Amending Various Palo Alto Municipal Code Chapters in Titles 16 and 18 to Address Changes in State Law and Direction from City Council Regarding Accessory and Junior Accessory Dwelling Units. CEQA Status: Exempt From the Provisions of the California Environmental Quality Act (CEQA) Pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines Section 15061(b)(3).
MOTION: Councilmember Lythcott-Haims moved, seconded by Vice Mayor to:
A) Approve staff & Planning and Transportation Commission recommendation; Item 4
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B) Direct staff to return to Council on C onsent Calendar an ordinance to allow for separate ADU conveyance (attachment C) with the feedback provided by council, including:
1. Removal of the 600-foot notice requirement
2. Require units be used only for residential purposes
3. Clarify Section M of the Ordinance related to fees and establish a set fee MOTION PASSED/FAILED: X-X
SUBSTITUTE MOTION: Councilmember Lauing moved, seconded by Council member Reckdahl to:
A) Approve staff & P lanning and Transportation Commission recommendation outlined in the packet;
B) Direct staff to return to Planning and Transportation Commission with an Ordinance to allow streamlined separate ADU conveyance, and come back to Council with their recommendation before the end of 2026.
SUBSTITUTE MOTION PASSED: 4-3, Stone, Veenker, Lythcott-Haims no
7. P
UBLIC HEARING/QUASI -JUDICIAL. 762 San Antonio Road [24PLN -001 20]: Request for
Approval of a Major Architectural Review Application to Demolish Three Existing Commercial Buildings and Construct an Eight -Story Multi -Family Residential Building Containing 228 Rental Apartments. The Project is Proposed in Accordance with California Government Code Section 65589.5(d)(5) “Builders Remedy". CEQA Status: An Addendum to the Previously Certified Environmental Impact Report for the Housing Incentive Program Expansion and 788 San Antonio Mixed Use Project (SCH # 2019090070) has Been Prepared. Zoning District: CS (AD); Service Commercial (Automobile Dealership).
M
OTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to:
1. Consider the Addendum to the previously certified Environmental Impact Report (EIR) (SCH#2019090070) (Attachment F); and
2. Approve the Major Architectural Review application based on findings and subject to conditions of approval in the Record of Land Use Action (RLUA) in Attachment B a. Including SECTION 4 conditions of approval; and,
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b. To modify conditions of approval 99 as follows:
c. Modify SECTION 1. Background. B. to read:
Waiver 2: Upper Floor Step-back (6-foot step-back where 10-foot is required) and step-back beginning at 65 feet in height rather than 55 feet.
3. Refer to staff to evaluate and return to Council with a review of accelerating the San Antonio Road bike lane initiative.
MOTION PASSED: 7-0
Virtual Public Comment
Adjournment: The meeting was adjourned at 11:28 P.M.
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ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.
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CITY COUNCIL
DRAFT ACTION MINUTES
Special Meeting
August 24, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 P.M.
Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely:
Absent:
Special Orders of the Day
1. Review Applications and Select Candidates to Interview for Vacancies on the Historic Resources Board (HRB); CEQA Status – Not a Project
NO ACTION
Agenda Changes, Additions and Deletions
In-Person Public Comment
Council Member Questions, Comments and Announcements
Study Session
2. Semi-Annual City Council Discussion with the Independent Police Auditor (IPA)
NO ACTION
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Consent Calendar
MOTION: Council member Lu moved, seconded by Council member Reckdahl to approve Agenda Item Numbers 3-4, 6-8 (Agenda Item Number 5 Removed Off Agenda).
MOTION PASSED: 7-0
3. Approval of Minutes from August 10, 2026 Meeting
4. Approval of Response to Civil Grand Jury Report “Pothole Damage: Improving Claims Processes within Santa Clara County”
5. Approval of Five -year Memorandum of Agreement with Stanford University to Provide Traffic Control Services during Stanford Stadium Events; CEQA status – not a project.
Item Removed Off Agenda
6. Approval of a Purchase Order with Pivot Interiors Inc. in the Amount of $441,056 for Furniture for the New Laboratory and Environmental Services Building Project (WQ - 14002); CEQA Status – Not a Project
7. Approval of Amendment No. 2 to Contract No. C22182372 with CSWST2 to Add $170,450, Increasing the Not -to-Exceed Amount to $360,302 and Extending the Contract Term to December 31, 2028 for Preliminary Design Services to Support Assessment District Planning and Stakeholder Engagement for the University Avenue Streetscape Capital Improvement Program Project, PE -21004; CEQA Status – Not a Project
8. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Section
2.28.240 [Settlement of Claims and Actions] and Chapter 2.30 [Contracts and Purchasing Procedures] of the Palo Alto Municipal Code to increase the thresholds for solicitation of goods and services, increase contract approval and settlement authority, and to make other technical changes. (FIRST READING: August 10, 2026; PASSED: 7-0)
City Manager Comments
Ed Shikada, City Manager
Action Items
9. Authorization for the City Manager to Execute New and Amended Regulatory Agreements for the Buena Vista Mobilehome Park Redevelopment/3980 El Camino Real. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3).
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MOTION: Council member Lu moved, seconded by Council member Reckdahl to authorize the City Manager to execute and make non -substantive changes (e.g., editing recitals and adding APNs and legal descriptions) to the new and amended regulatory agreements and related documents to facilitate improvements to the Buena Vista Mobilehome Park at 3980 El Camino Real with a referral to staff to work with Housing Authority for local preferences.
MOTION PASSED: 7-0
10. Recommendation from the Oversized Vehicles (OSV) Ad Hoc Committee to Launch Two Pilot OSV Parking Programs, Including Adoption of an Ordinance Establishing an OSV Parking Permit Program, an Ordinance Amending the Municipal Fee Schedule to Add an OSV Parking Permit Fee, Resolutions Establishing OSV Parking Permit Districts on Embarcadero Road and Coyote Hill Road, a Resolution Prohibiting OSV Parking on Numerous Streets in Palo Alto; a Resolution Adding Related Penalties to the Administrative Penalty Schedule; and Related Amendments to the FY 2027 Operating and Capital Budget; CEQA status – categorically and statutorily exempt.
MOTION: Councilmember Burt moved, seconded by Councilmember Reckdahl to:
1. Approve a pilot OSV parking permit program on Embarcadero Road and Coyote Hill Road for an initial term of 12 months, substantially as described in this report by January 1, 2027. This includes adoption of the following:
a. An ordinance adding new PAMC Chapter 10.49 to establish an OSV Parking Permit Program and amending PAMC section 10.60.010 allowing civil penalties for parking violations of several chapters of the PAMC; b. An ordinance amending the FY 2027 Municipal Fee Schedule to add an OSV parking permit fee of up to $15 per month;
c. A resolution establishing an OSV Parking Permit District on a section of Embarcadero Road. This will prohibit parking except for vehicles with permits; d. A resolution establishing an OSV Parking Permit District on a section of Coyote Hill Road. This will prohibit parking except for vehicles with permits; and e. A resolution amending the Administrative Penalty Schedule to add penalties for violations of PAMC Chapter 10.49.
2. Direct staff to begin to provide red curbs daylighting in the commercial areas that are identified for pilot 2 and evaluate a 10-foot daylighting;
3. Direct s taff come back to Council with appropriate ordinance changes to recognize residential, including PCs and mixed use, be treated the same as residential zoning; Item 4
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4. Any future consideration of a p ilot 2 excludes streets that have significant residential components or bike lane (Park, Olive, Lambert, Ash);
5. Direct s taff to pursue data collection to have a better understanding of the demographics of our current RV population;
6. Explore with major employers’ willingness to accommodate workers who reside in RVs, their workers who reside in RVs on their sites;
7. Direct staff continue to pursue the permitted pilot program on both sides of Coyote Hill Road;
8. Direct staff to continue to seek safe parking solutions in collaboration with County, State, Federal, public and private partners;
9. Direct staff to explore any other sites that would be eligible for RV parking in the greater downtown area;
10. Direct the City Manager to appropriate the funding needed for the scope of work in this Motion as needed.
MOTION PASSED: 7-0
Virtual Public Comment
Adjournment: The meeting was adjourned at 11:59 P.M.
ATTEST: APPROVED:
____________________ ____________________
City Clerk Mayor NOTE: Action minutes are prepared in accordance with Palo Alto Municipal Code (PAMC)
2.04.160(a) and (b). Summary minutes (sense) are prepared in accordance with PAMC Section
2.04.160(c). Beginning in January 2018, in accordance with Ordinance No. 5423, the City Council found action minutes and the video/audio recordings of Council proceedings to be the official records of both Council and committee proceedings. These recordings are available on the City’s website.
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City Council
Staff Report
From: City Attorney
Report Type: CONSENT CALENDAR
Lead Department: City Attorney
Meeting Date: September 9, 2026
Report #:2606-6489
TITLE
Approval of Response to Civil Grand Jury Report “VTA‘s Management and Oversight of BART Silicon Valley Phase II”; CEQA Status: Not a Project
RECOMMENDATION
Staff recommends that Council approve the following response to the 2025-2026 Santa Clara County Civil Grand Jury Report entitled, “VTA’s Management and Oversight of BART Silicon Valley Phase II”.
BACKGROUND
On June 17, 2026, the Civil Grand Jury of Santa Clara County released a report entitled “VTA‘s Management and Oversight of BART Silicon Valley Phase II”(“BSVII”). The Grand Jury investigated the role of the VTA Board, its Oversight Committee, its staff, and officials in the management and oversight of the BSVII project for this report.
The only findings and recommendations relevant to the City of Palo Alto relate to the process for appointing VTA Board members. VTA Board members are appointed to two-year terms by appointing agencies, organized into six groups. Appointing agency groups are established and defined by the VTA Administrative Code. The Administrative Code encourages, but does not require, the agency groups to (1) appoint individuals with appropriate experience and qualifications in transportation; (2) ensure that there is sufficient remaining time in the elected official’s term of office to allow full completion of their term as a Director; and (3) reappoint representatives to consecutive terms. (VTA Administrative Code, § 2-14.) The City of Palo Alto is a member of Appointing Agency Group 2, along with the cities of Los Altos, Los Altos Hills, and Mountain View. The Group 2 Bylaws (Attachment B, Exhibit 1) define the process for appointing the Group 2 representative to the VTA Board and incorporate the requirements of VTA Administrative Code section 2-14 into the appointment process, including (1) minimum requirements for transportation-related experience and (2) a requirement that any eligible sitting Board Member or alternate be appointed to a second term after serving their first term.
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A copy of the Grand Jury Report is included as Attachment A.
ANALYSIS
The City’s detailed response to the Grand Jury Report findings and recommendations are included in Attachment B. There are two findings that apply to City of Palo Alto. Out of the two findings, the City agrees with one and disagrees with one. The findings and the City’s responses are summarized below.
Summary of Findings and City Response:
Civil Grand Jury Finding 6: VTA Administrative Code
VTA Board Appointing Authority Groups 2 through 5 often do not follow VTA Administrative Code (Section 2-14) admonitions to “appoint individuals with appropriate experience and qualifications in transportation” and to “reappoint representatives to consecutive terms.” City of Palo Alto Response to Finding 6:
The City of Palo Alto disagrees with Finding 6, to the extent this finding applies to the City of Palo Alto and VTA Board Group 2. Group 2 Cities Working Group Resolution No. 2022-01 (enclosed herewith) governs the appointment of the Group 2 representative to the VTA Board.
The Resolution incorporates the requirements of VTA Administrative Code section 2-14 into the appointment process, including (1) requirements for transportation-related experience and (2) a requirement that any eligible sitting Board Member or alternate be appointed to a second term after serving their first term. The Resolution also requires that appointment of the Board Member and alternate shall take place at a noticed meeting open to the public.
The last two Group 2 representatives (a Palo Alto Councilmember and Los Altos Councilmember) have both had relevant transportation experience, including local and regional experience with transportation issues and/or service on the VTA Policy Advisory Committee.
The Palo Alto Councilmember continues to serve as an ex officio member of the VTA Board by virtue of his role as the Cities Association of Santa Clara County City Selection Committee representative to the Metropolitan Transportation Commission. In addition, both recent Group 2 appointees either served two terms on the VTA Board or are expected to do so, consistent with Resolution No. 2022-01.
Civil Grand Jury Recommendation 6:
VTA Board Appointing Authority Groups 2 through 5 should certify to the VTA Board that they will adhere to VTA Administrative Code (Section 2-14) admonitions, regarding Board member expertise and appointment to consecutive terms.
City of Palo Alto Response to Recommendation 6:
The City of Palo Alto has already implemented this recommendation to the extent it applies to the City and other Group 2 cities. Group 2 Cities Working Group Resolution No. 2022-01 complies with VTA Administrative Code section 2-14. Information regarding the two most Item 5
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recent Group 2 appointees to the VTA Board is provided in the City’s response to Finding No. 6.
No further report to the VTA Board is required.
Civil Grand Jury Finding 7: Board Appointments
VTA Board Appointing Authority Groups 2 through 5 have different processes for making Board appointments.
City of Palo Alto Response to Finding 7:
The City of Palo Alto agrees with this finding. The VTA Administrative Code allows members of VTA Board Groups 2 through 5 to determine the process for appointing their respective Board members. The Administrative Code allows each group to have a different process. While Palo Alto lacks first-hand knowledge of the appointment processes for Groups 3 through 5, publicly available sources indicate that not all of the groups use the same process that Palo Alto and other Group 2 cities use to appoint their VTA Board members.
Civil Grand Jury Recommendation 7:
The cities represented in Appointing Authority Groups 2 through 5 should agree on a uniform process for making Board appointments.
City of Palo Alto Response to Recommendation 7:
This recommendation will not be implemented by the City of Palo Alto, because Palo Alto does not have authority over the VTA or other VTA members. However, Palo Alto and other Group 2 cities currently comply with VTA Administrative Code section 2-14. The City of Palo Alto remains open to discussing a uniform process for making Board appointments, consistent with the VTA Administrative Code.
FISCAL/RESOURCE IMPACT
There is no fiscal impact resulting from this report.
STAKEHOLDER ENGAGEMENT
The City Attorney’s Office worked with City Manager’s Office to discuss an appropriate response.
ENVIRONMENTAL REVIEW
This response to the Civil Grand Jury Report is not a project under the California Environmental Quality Act (CEQA).
ATTACHMENTS
Attachment A: Civil Grand Jury Report
Attachment B: City of Palo Alto Civil Grand Jury Response Draft APPROVED BY:
Christopher Jensen, City Attorney
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2025-2026 Santa Clara County Civil Grand Jury
VTA’s Management and
Oversight of BART
Silicon Valley Phase II
June 17, 2026
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
TABLE OF CONTENTS
SUMMARY ................................................................................................................................... 2 BACKGROUND ........................................................................................................................... 3 METHODOLOGY ....................................................................................................................... 7 INVESTIGATION........................................................................................................................ 8 Financial Risks .......................................................................................................................... 8 Oversight Concerns ................................................................................................................ 13 Coordination with BART ....................................................................................................... 21 Board Experience and Continuity ......................................................................................... 22 Public Communication ........................................................................................................... 25 CONCLUSION ........................................................................................................................... 26 FINDINGS AND RECOMMENDATIONS ............................................................................. 27 REQUIRED RESPONSES......................................................................................................... 31 APPENDIX A: BART Management Letter ............................................................................. 32 CONFLICTS ............................................................................................................................... 34 REFERENCES............................................................................................................................ 34 Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
SUMMARY
The Santa Clara Valley Transportation Authority (VTA) project to extend rapid transit rail service through downtown San José is controversial and the most costly and complex project it has ever undertaken. Known as BART Silicon Valley Phase II (BSVII), the $12.7 billion project extends rail service six miles and includes a large, single-bore underground tunnel and will take 10 years or more from 2026 to complete (VTA, March 2024).
Despite significantly reduced ridership projections and uncertainty about funding sources for both capital and operating costs, VTA has awarded major construction contracts, including for the construction of a launch structure to stage a specialized one-of-a-kind Tunnel Boring Machine (TBM), which will be owned by VTA. Over the next few years, VTA anticipates awarding further construction contracts worth billions of dollars. To reduce uncertainty, the spokesperson for an independent peer review of the project urged VTA to move quickly to “build as much as you can, as fast as you can” (VTA Special Board Meeting, 2025). Such an approach assumes that there will be political will and taxpayer support to finish an incomplete project regardless of cost increases, delays, or reduced ridership.
The VTA’s Board of Directors (Board) has recognized the need for additional oversight and guidance, but the Board has failed to exercise its obligation to provide the strategic direction needed for a successful project. The Oversight Committee it created has been left to define its own role. It was not required to, and does not, provide reports that share available independent analyses of critical issues. The Oversight Committee does not routinely make policy recommendations to the Board and does not hold VTA staff accountable for providing the timely analysis it has requested.
The 2025-26 Santa Clara County Civil Grand Jury (Civil Grand Jury) investigated the role of the VTA Board, its Oversight Committee, its staff, and officials in the management and oversight of the BSVII project.
This report identifies financial challenges, risks, and accountability issues that VTA must address to earn the public’s trust in delivering the Bay Area Rapid Transit (BART) extension to Silicon Valley and to secure support for future sales tax measures.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
BACKGROUND
The Valley Transportation Authority is a transportation agency established by state law. It is responsible for operating public transit services, including buses, light rail, and paratransit within Santa Clara County. In addition to public transit, VTA is a planning and funding agency for transportation infrastructure projects throughout Santa Clara County. As established by the California Public Utilities Code Sections 100060-100070, the VTA is governed by a 12-person Board of Directors composed of elected officials appointed by the County of Santa Clara (County) and the cities in Santa Clara County, who each serve two-year terms. The Board has many responsibilities and its monthly meeting agendas are lengthy.
The San Francisco Bay Area Rapid Transit District provides regional commuter rail service and is governed by a nine-person Board of Directors elected to four-year terms from districts representing San Francisco, Alameda, and Contra Costa counties. As part of its larger regional system, BART operates the commuter rail service within Santa Clara County.
By contract with BART, VTA is solely responsible for paying the capital and net operating costs of extending commuter rail service into Santa Clara County (BART and VTA, Comprehensive Agreement, 2001). Although the County was not included in the legislation establishing BART, voters of Santa Clara County supported three sales tax measures which provided funds to plan, build, and operate the extension of BART to Santa Clara County. Today, 1.625% of sales tax collected in Santa Clara County supports VTA and other local jurisdictions (see Table 1). If a currently proposed measure qualifies for the ballot, in November 2026, voters will decide whether to approve an additional 0.5% sales tax to fund local transit, which would increase the County’s base sales tax rate from the current 9.75% to 10.25%.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Table 1: Countywide Sales Tax in Santa Clara County, Effective April 2026 Description Sales Tax % Expiration Funding Purpose
California Base 7.250% No Expiration
State General Fund
Local Revenue Fund
Local Public Safety
Health & Social Services
1976 Measure A 0.500% No Expiration Transit: VTA
2000 Measure A 0.500% 2036 Transit: VTA, BART Silicon
Valley
2008 Measure B 0.125% 2042 Transit: BART Silicon Valley 2016 Measure B 0.500% 2047
Transit: VTA +
County/City/Caltrain/Caltrans
Infrastructure
2012 Measure A 0.125% No Expiration County General Fund 2020 Measure RR 0.125% 2050 Transit: Caltrain
2026 Measure A 0.625% 2031 General incl. Healthcare
Total Base Sales Tax
Rate 9.750%
Data extracted from: California Department of Tax and Fee Administration. 2026. (https://cdtfa.ca.gov/formspubs/cdtfa105.pdf); VTA Annual Comprehensive Financial Report.
Financial-Report-ACRF-FY-2024.pdf).
Note: Some cities have higher voter-approved rates in addition to the County base rate; Highlighted section of the table refers to sales tax measures that fund VTA.
The first phase of BART to Silicon Valley extended service to Milpitas and then to the Berryessa Transit Center (Berryessa). Construction started in 2012 and was completed in 2020. Ridership for Phase I has not met forecasts, and due to operational, maintenance, and depreciation expenses, VTA has experienced significant financial losses. According to data reviewed by the Civil Grand Jury, BART to Silicon Valley Phase I has lost an average of $69 million annually during the first five years of operation.
The second phase consists of a six-mile, four-station extension from Berryessa through downtown San José to the City of Santa Clara. For this phase, VTA is targeting completion by 2037. As a condition of federal funding, the Federal Transit Administration (FTA) has appointed a Project Management Oversight Consultant (PMOC). The PMOC uses a more conservative schedule and forecasts completion in 2039 (AtkinsRéalis USA Holdings LLC, 2026).
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II At an early planning stage in 2014, the BSVII project cost was estimated at $4.7 billion. By 2020, the cost estimate increased to $6.9 billion. In 2022, based on the PMOC’s projected cost analysis, VTA submitted an estimate of $9.1 billion to the federal government for an Early Start Grant. In October 2023, VTA estimated the construction cost at $12.2 billion with operations to begin in 2036. The most recent estimate is $12.7 billion, and operations are pushed back to 2037 (VTA Auditor General Report, January 2024).
The project's funding sources include federal and state grants, as well as local revenues from voter- approved sales tax measures. All the funding sources are subject to risks, which are identified in this report. Figure 1 shows the funding sources with $700 million to be determined (TBD) and $375 million from a potential ballot measure in November 2026.
Figure 1: Components of $12.7 Billion in BSVII Funding Sources as of April 2026 Source: vtabart.org website (accessed April 9, 2026)
Although two years earlier, VTA had asked for a federal commitment of $6.3 billion, in August 2024, the FTA announced that its share of funding would be capped at $5.1 billion (Geha, 2024).
VTA was forced to increase its reliance on local sales tax revenue and still faced a gap of approximately $700 million (VTA, Summer 2025). To reduce project costs, VTA has been studying design changes while maintaining the full six-mile extension with four stations. Options discussed by VTA staff and officials include (VTA, November 11, 2024):
• Simplifying station configurations;
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II • Modifying the Santa Clara Newhall Yard and Maintenance Facility; • Modifying the tunnel and station ventilation systems; • Substituting a surface parking lot for a parking structure; • Reconfiguring the tunnel to use less concrete and steel.
In addition, the funding strategy assumes $375 million from the yet-to-be-approved regional sales tax measure for a total outstanding gap of $1.075 billion.
Due in part to the significant increase in estimated cost and a perceived lack of communication about the project’s cost, risks, and schedule, the Board conducted a workshop in October 2023 to review the project’s status. At this workshop, individual Board members expressed a lack of confidence in the VTA staff’s management of the project and requested a new system of oversight and project management.
In response, the Board chair established an Ad Hoc BART Silicon Valley Phase II oversight committee (Oversight Committee) responsible for overseeing all aspects of the project, focusing on a full, independent, and transparent review of costs, funding, risks, and completion schedule.
The Oversight Committee’s bylaws later stated that its purpose was to provide “guidance and oversight” of the project (VTA, April 4, 2024).
The VTA independent auditor general was tasked with providing staff support to the Oversight Committee and was authorized to contract with Subject Matter Experts (SMEs) to independently review and comment on VTA staff recommendations regarding costs, risks, and schedule. In turn, the Oversight Committee authorized the SME firm, Gall Zeidler (GZ), to independently assess the risks and viability of cost-saving alternatives.
In a 2001 Agreement, VTA and BART agreed to cooperate in the project’s planning, design, and construction. They established a series of interagency committees, the latest of which is the Joint VTA/BART Working Committee, which depending on the availability of its members, is scheduled to meet quarterly. BART staff members have been assigned to co-locate with VTA engineers to participate in the preparation and review of BSVII designs in accordance with the agreed Project Design Criteria Manual. According to the BART Inspector General, VTA has reimbursed BART $19.2 million through 2025 for the cost of the assigned employees (BART, December 19, 2025). In August 2025, the BART assistant general manager, operations, rejected some of VTA’s proposed design changes and scope reductions and complained about inadequate coordination (see Appendix A). The BART inspector general issued a report in December 2025 that also raised concerns about inadequate coordination and criticized VTA’s communication with BART officials (Id.).
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
METHODOLOGY
The Civil Grand Jury reviewed every meeting of the BSVII Oversight Committee, as well as select VTA Board meetings. This included reviewing agendas, minutes, agenda item reports, public comment submittals, and associated discussions.
In addition, the Civil Grand Jury conducted 17 interviews of officials from VTA, BART, and the State of California. The Civil Grand Jury also reviewed publicly available documents as described in the reference section, as well as documents requested from VTA and submitted to the Civil Grand Jury.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
INVESTIGATION
The Civil Grand Jury investigation of the BSVII project covered critical aspects of VTA’s management and oversight, including:
• VTA’s funding strategy and its reliance on voter-approved sales tax measures, some of which expire before completion of the project, and some of which have yet to be approved; • The establishment of a separate Oversight Committee which provides guidance on the BSVII project and how it evaluates independent analyses provided by the VTA auditor general, contracted SMEs, and the federally mandated PMOC; • The contractual and practical requirement to closely coordinate with BART, which will serve as the system operator;
• The impact of the VTA Board’s governance structure on the effectiveness of strategic direction, management, and oversight of the project;
• VTA’s approach for keeping the public informed of costs, risks, and schedule.
Financial Risks
The 10-year project completion timeline of BSVII exposes VTA to financial risks that require careful, ongoing assessment of capital and operating costs, including that:
• Rising labor and material costs, combined with aggressive construction methods and schedules, may increase total project costs and strain the budget’s contingency for unforeseen risks and unexpected expenses;
• Delays or reductions in state and federal funding will create greater pressure to rely on local funding sources or scale back the scope of the project; • Lower ridership levels will increase VTA’s ongoing obligation to pay net operating costs, which would necessitate service level reductions or voter approval of new or extended sales tax measures;
• Failure to maintain a cash-flow model exclusive to BSVII, means that contracting options for accelerating work may not be able to be financed with available resources.
Risk of Increased Costs of Labor and Materials
The FTA fiscal year 2025 New Starts Financial Assessment report for BSVII stated the VTA inflation estimate was optimistic. If labor and material costs were to rise above those estimated in VTA’s budget, it could lead to funding shortfalls (FTA, 2024).
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II The VTA auditor general’s May 1, 2025, report to the Board also identified BSVII financial risks associated with project construction costs. The report found that the assumptions and historical data underlying VTA’s financial plan could be more robust to enable the Board and the public to evaluate the financial risk associated with the potential cost increases (VTA, 2025).
Another factor that increases the difficulty in predicting materials and labor costs is the possible extension of the 2037 project completion date. The longer timeline for BSVII increases the likelihood that future costs will differ from current estimates, thereby increasing financial risk.
Local, State, and Federal Funding Risks
The capital cost of construction and the net operating costs are to be paid by VTA from specific revenue sources, some of which are grants with fixed amounts.
The financial risks identified by the Civil Grand Jury have been experienced by other major transit agencies. For example, the various rail projects of the Los Angeles County Metropolitan Transportation Authority (LA Metro) faced escalating cost estimates, reductions in federal funding, cuts into smaller construction segments to match available funding, and shifting agency priorities (Shalby, 2026).
Local Funding Risks
VTA’s capital financing plan calls for the 2016 Measure B to pay $2.5 billion and for the 2000 Measure A to pay $2.0 billion of the estimated $12.7 billion BSVII project. Measure A expires in 2036, before BSVII is expected to be completed. Measure B expires in 2047 (VTA, About 2016 Measure B, n.d.). As the project’s cost estimates have evolved, so have the planned funding sources. Measure B has become a much more significant source of proposed funding.
Because Measure B also funds bus transit, local streets, and highway projects, there are built-in limitations on the amount available to close a BSVII financing gap. Measure B limits spending on BSVII to 23.8% of net sales tax revenue over its 30-year life (FTA, 2024). Net sales tax revenue (defined as Program Tax Revenue in the measure) is calculated as the amount remaining after deducting administrative costs and any debt service.
To close current and potential future funding gaps, VTA could issue bonds to be repaid from Measure B sales tax revenue. However, this would reduce the revenue available for other voter- approved projects. Every dollar spent on debt service for BSVII is a dollar that cannot be spent on Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II the other transportation projects approved by the voters. Because of bond issuance and interest costs, the total project costs would exceed the current estimate of $12.7 billion.
Another risky approach to filling funding gaps would allow the Board to change the rules and permit a greater percentage of Measure B net sales tax revenue to be used for BSVII. One VTA official acknowledged to the Civil Grand Jury that this would be a “heavy lift” because VTA would first have to notify all the local agencies of the proposed increase in the percentage limit and then approve it by a ¾ vote of the Board (9 of 12 Board members). The County and the cities that have planned other transportation measures are likely to object to reduced funding for their projects.
Of course, more Measure B funds could become available to support the capital costs of BSVII if the expected sales tax revenue exceeds previously anticipated levels. While early projections were based on 2016 economic conditions, it is important for the strategic funding plan that the sales tax forecast be updated regularly. The Civil Grand Jury was informed that VTA has ordered an updated forecast.
Because two key sales tax measures are set to expire, several VTA officials stated in interviews that they would simply place a measure on a future ballot for voter consideration if an extension were needed. Given the current sales tax rates applicable within Santa Clara County and the need for management and oversight reforms identified in this report, there is a risk that voters may not approve such a measure.
State Funding Risk
As of April 2026, the capital construction funding strategy required $1.5 billion from two State of California grants. The VTA has received commitments for nearly $200 million of that total. The sources of funding are the Transit and Intercity Rail Capital Program (TIRCP) and transportation funds administered by the Metropolitan Transportation Commission (MTC), both of which may be affected by a recent state decision to provide a bridge loan to Bay Area transit agencies (MTC, 2026).
In February 2026, the California legislature appropriated $590 million from the same TIRCP account to provide a 12-year loan to MTC. These loan proceeds will be made available to San Francisco Municipal Transportation Agency, AC Transit, BART, and Caltrain to help address a greater need for public transit subsidies. The agencies are required to repay the loan over 12 years (MTC, 2026).
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II The state justified the loan on the basis that the transit agencies would be able to stabilize their financial situations and avoid service reductions pending the anticipated approval in November of a regional sales tax measure. If the regional measure does not pass, or if for any other reason the agencies do not repay the loans on time, the timing of the receipt of funding to VTA might create some cash flow risk for the project.
Further, the TIRCP account itself is funded by payments from private parties who agree to purchase pollution credits in the state’s Cap and Invest program. The program’s future is uncertain in light of federal changes to environmental regulations and pending legal challenges from the State of California (California State Transportation Agency, n.d.).
Federal Funding Risk
In August 2024, the FTA advised VTA that the federal government’s total contribution to the project would be limited to $5.1 billion. To receive these funds, VTA plans to apply for a Full Funding Grant Agreement (FFGA) by the end of 2026.
Federal support for large-scale rail projects is uncertain. In 2025, the FTA canceled a $4.2 billion commitment to the California High-Speed Rail Project (Shalby, 2025). VTA’s lobbyists have suggested delaying the FFGA application until similar requests from other states are resolved.
Considering the political, economic, and budgetary conditions of the United States, approval of VTA’s request for an FFGA is highly uncertain. It may be delayed, reduced, or denied.
Low Levels of Ridership Could Increase VTA’s Future Costs BART ridership on the current regional system has not recovered to pre-pandemic levels.
Ridership in January 2026 remains only 48% of the levels in January 2019 (BART, January 2026; BART, 2019). Recovering ridership may prove difficult due to the growth of hybrid work patterns.
The Civil Grand Jury also reviewed the forecasts for the first phase of the project, which included the new Milpitas and Berryessa stations. For January 2026, ridership was 86% below estimates (see Table 2).
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Table 2: BART Ridership at Milpitas and Berryessa Stations Forecast for Average Daily
Weekday Ridership for
June 2021 at launch
Actual Ridership,
January 2026
Ridership/Day 20,110 2,789
Source: Joint VTA/BART Working Committee Meeting, December 4, 2020; BART February 2026 Monthly Ridership Snapshot.
Note: VTA created forecasts in 2020, expressed as rides per day. BART actuals are based on recorded station entries and exits. To normalize BART actuals to the VTA forecast, entries and exits were averaged to produce a daily ridership figure.
An overall decrease in ridership has led BART to project a $376 million budget deficit for FY2026-
27. To seek additional revenue, BART is relying on a 0.5% additional sales tax measure on the November 2026 ballot that would begin in 2027 and remain in place for 14 years. If the ballot measure does not pass, BART has proposed closing up to 15 stations and reducing service hours and train frequency (BART, February 26, 2026). Ironically, the proposed station closures would not affect Santa Clara County because VTA is solely responsible for the net operating costs.
According to VTA records reviewed by the Civil Grand Jury, for the first three years of operation, VTA forecasts annual average costs of $274 million for operations, maintenance, and capital costs.
Average fare revenue is forecast at $60 million, offsetting VTA's financial obligation to BART, resulting in an average annual financial loss of $214 million. Any drop in ridership will lead to further financial losses.
The Need for a BSVII Cash Flow Model
With a price tag of $12.7 billion, BSVII is the largest public infrastructure project in Santa Clara County (Aragon, 2025). Nearly 60% of the planned funding sources include revenue from grants that will not be distributed in advance but will be reimbursed in accordance with each grant’s draw schedule (See Figure 1). The timing of those cash inflows must be carefully matched with the timing of payment schedules for construction contracts worth billions of dollars.
VTA staff is evaluating different approaches to contracting the construction work. Alternatives are being evaluated for the following reasons: 1) to identify segments of work that could be bid out separately to accelerate the overall schedule; and 2) to identify segments for which there is a greater likelihood of strong competitive bids. For each contract, the cash outflows will be specified and must be carefully matched with the cash inflows.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II A cash flow model that matches receipts and expenditures for BSVII would enable VTA decision- makers to fully evaluate the alternative approaches being studied. However, VTA officials have advised the Civil Grand Jury that such a model has not yet been developed. A cash flow model is necessary to avoid unplanned delays from cash shortfalls.
Oversight Concerns
VTA Board Recognizes That Oversight Must be Improved
Independent reports and audits have identified problems with project management and VTA Board oversight, including those identified by a prior Civil Grand Jury, the California State Auditor, and the PMOC (AtkinsRéalis USA Holdings LLC, 2026). VTA’s cost-estimation practices, along with its lack of transparency around changes to project scope and cost, were identified as significant deficiencies. VTA’s oversight and management of the BSVII project have also been heavily criticized by the media, in public comments presented at Board meetings, and in letters to the editor of multiple local publications.
VTA Board Outsources Guidance and Oversight of the BSVII Project Following a workshop on the project’s direction in October 2023, the VTA Board Chairman announced the creation of an Ad Hoc BART Silicon Valley Phase II Oversight Committee (VTA, 2023).
However, only the Board can make binding decisions on the project’s scope, funding, risks, schedule, and contracting approach. While ultimately accountable itself, the Board nonetheless effectively delegated oversight to a committee without providing clear direction. By abdicating its responsibility to set its expectations of how the Oversight Committee can best support the Board, the committee has been left to set its own course. That course does not keep the Board fully informed of issues raised by independent experts or the PMOC, hampering its ability to make the best decisions about the project's funding and schedule.
At its meeting on January 15, 2026, the Oversight Committee adopted what it called a revised charter intended to clarify the lines of communication and relationships among the auditor general, SME, VTA staff, and Oversight Committee (VTA, January 15, 2026). Members of the Oversight Committee had expressed concern about a perceived lack of coordination between VTA staff and the SME. Nonetheless, the question remains: Is the role of an SME to provide the Board with an independent review of VTA staff recommendations as originally intended, or is it to help VTA staff improve their recommendations? Notably, in the following excerpt, the Charter requires the Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II auditor general to document issues raised by the SME and the VTA staff but does not require that the full Board be advised of the critical issues:
To ensure transparency and balanced oversight, selected advisory input from SME will be documented in Oversight Committee materials. Where consensus exists between the SME and the Project Team, it will be noted. Where minority or dissenting views are expressed, the AG [auditor general] will explicitly record final input received alongside the majority view (VTA Oversight Committee Charter, 2026).
During Oversight Committee meetings, there are few deliberations or actions to provide collective guidance or oversight, leaving individual members to raise questions and propose guidance for VTA staff to consider. VTA staff also receives input from individual members in private pre- meeting briefings. As a result, the full Board does not benefit from Oversight Committee analysis, and the public is not fully informed about individual Board member perspectives.
The Committee Has Two Purposes: Guidance and Oversight
“Guidance” suggests that the committee helps the Board establish a strategic direction and recommend actions to keep the project on track. “Oversight,” on the other hand, is a separate function that ensures VTA staff is accountable for following the Board’s direction in an efficient and effective manner. “Guidance” looks forward. “Oversight” monitors implementation as it happens.
Better at Oversight than Guidance
The Oversight Committee requires VTA staff to produce a comprehensive monthly report detailing the financing and construction progress of the BSVII project. The auditor general provides insightful periodic reports on his independent review of the project’s costs, risks, and schedule.
The VTA staff’s monthly reports address the information gap identified in the auditor general’s January 2024 report. As a result, the Oversight Committee can effectively monitor compliance with the Board’s direction.
However, the Oversight Committee often fails to provide guidance on issues critical to future strategic direction.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Strategic Guidance on Critical Issues is Informal, Intermittent, and Often Late VTA staff routinely provide private briefings to Oversight Committee members prior to meetings.
Those briefings allow VTA staff to explain and advocate for their recommendations and to receive input and questions from individual members. Occasionally, some agenda materials for an Oversight Committee meeting are not published with the rest of the agenda because VTA staff members will modify presentations up to the last minute based on what they have heard in private briefings.
The Oversight Committee has established an informal standard of limiting its once-monthly meetings to no more than two hours, and meetings often do not begin on time. At the meetings, VTA staff often deliver lengthy presentations on issues for which it will subsequently seek Board approval, leaving little time for committee deliberations.
During these presentations, only a few members ask questions, and rarely does a committee member propose a policy recommendation that the Oversight Committee might take action on.
Individual Oversight Committee members are given the opportunity to express support or concern about a proposed VTA staff position, providing VTA staff with some insight into how to frame their recommendations to the Board.
The Oversight Committee receives independent analyses from the VTA auditor general, its contracted SME, and the PMOC. The committee often receives lengthy written comments from the public but limits oral comments to one minute. Members of the committee rarely comment on materials received from the public, many of which are extensive critiques of the VTA staff recommendations. Following each meeting, the Oversight Committee chair submits a short report summarizing discussion topics, which is placed on the VTA Board’s consent calendar.
Following presentation to the Oversight Committee, formal VTA staff recommendations are made to the VTA Board, but without the benefit of a summary or synthesis of the alternative perspectives from the auditor general, SME, PMOC, or informed public comment.
The Civil Grand Jury identified three examples of policy issues for which guidance was needed but delivered inadequately. One of the examples, the single-bore versus twin-bore issue, illustrates both the failure of the committee to make recommendations and the VTA staff’s failure to follow through on committee requests in a timely manner.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Example of Inadequate Guidance: The KST Contract Decision The Oversight Committee endorsed a major contract change without providing independent analysis, articulating its rationale, or conveying identified risks to the Board.
VTA had issued a contract to a construction consortium, Kiewit Shea Traylor (KST), using a “progressive/design/build” approach, under which KST would design the tunnel project and, after reviews by VTA and its construction management consultant, KST would build it. By the spring of 2025, VTA believed that KST’s proposed design could significantly increase the project’s estimated cost by up to $1 billion and that it would be preferable to engage in a competitive bidding process for the remaining tunnel work. In a more traditional contract approach, VTA would prepare the design specifications and contract conditions. To accomplish this, it was necessary to limit the contract with KST to only the work required to prepare for the TBM, which VTA would own but make available to the tunneling contractor to operate and maintain.
At its June 12, 2025, meeting, VTA staff presented its proposal to modify the KST contract to the Oversight Committee, which unanimously endorsed it. Two weeks later, the VTA Board met and approved VTA staff recommendations. Although the VTA staff agenda report did include a reference to the Committee’s recommendation, it did not include the risk analysis that had been reviewed by the Committee. The Oversight Committee’s regular report to the VTA Board was placed on the consent calendar and simply reported the committee’s concurrence with the VTA staff recommendation. There was no report or analysis laying out the reasons for the Oversight Committee’s concurrence or the SME’s risk assessment. Therefore, the Board made its decision without a complete understanding of the risks.
Example of Inadequate Guidance: The Twin-Bore versus Single-Bore Decision The Oversight Committee retroactively requested a side-by-side analysis of tunnel options through Downtown San José.
A preliminary design controversy was whether to tunnel two smaller bores for the downtown San José underground tracks or to tunnel a single larger bore at greater depth. Downtown businesses had raised concerns that the twin-bore approach would require additional work and disrupt their operations during construction.
BART initially opposed the single-bore tunnel approach because it differed from its existing, smaller twin-bore tunnels. However, the BART inspector general reported that in the spirit of Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II cooperation, BART officials consented to the single-bore approach after being assured that operational and safety concerns would be met (BART, December 19, 2025).
In December 2022, VTA approved the fabrication and purchase of a large TBM for $76 million, effectively locking in the single-bore approach. In a news article dated November 7, 2023, in the Mountain View Voice, San José Mayor Matt Mahan was quoted as saying: “There is no turning back now” (Hicks, 2023).
Nonetheless, individual Board members and informed public commenters continued to raise questions about whether a twin-bore approach might be cheaper, faster, and safer for BART operations. In response, members of the Oversight Committee commissioned an analysis of the two options for costs, risks, and impact on schedules.
In September 2025, more than 18 months after the request, VTA and its engineering consultants presented their analysis to the Oversight Committee, confirming the single-bore approach.
Although it had requested the analysis, the Oversight Committee did not make a recommendation to the Board. In October 2025, the Board was presented with the VTA staff and consultants’ analysis and confirmed the single-bore approach by declining to take steps to amend the environmental documents or modify the tunneling contracts.
Example of Inadequate Guidance: Scenario 1 versus 1a Decision In October 2025, VTA decided on an approach to the construction of the tunnel without the benefit of the SME’s analysis that the Oversight Committee had requested.
Before design work could progress to a more advanced level, the VTA Board needed to decide between two alternatives for staging the actual tunneling work. The SME had suggested that concurrent tunneling from both ends could reduce costs and accelerate the schedule (VTA, June 12, 2025). The two options were labeled “Scenario 1” (a straight-through tunneling using the larger TBM from west-to-east) and “Scenario 1a” (an option of concurrent tunneling starting at both the east and west portals using two TBMs).
Although this would require two TBMs, the east-to-west work could be done simultaneously with a smaller-bore tunneling machine. Further, the SME reported that a smaller-bore TBM was readily available and would require less lead time than the TBM being fabricated in Germany.
Because the Oversight Committee considered the potential benefits significant, the committee asked both VTA staff and the SME to analyze the options and prepare a recommendation. On Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II August 4, 2025, the Oversight Committee authorized an expenditure of $110,000 and directed the auditor general to contract with GZ for the requested work. GZ presented interim reports on September 11, 2025, and October 9, 2025, and promised to deliver its completed report at the November 2025 meeting of the Oversight Committee.
VTA staff subsequently presented its analysis and recommendations to the Oversight Committee on October 9, 2025. Although the Project Manager stated that the VTA staff was aware of some of GZ’s preliminary analysis (especially differing assumptions about the rate at which each of the two TBMs can move forward when digging a tunnel), VTA staff requested a Board meeting to decide between the two alternatives. In prior presentations to the Oversight Committee, VTA staff said that the analysis would be presented at a Board “workshop” (at which no formal action could be taken). However, a special meeting of the Board was called for October 17, 2025, and VTA staff made its recommendations to the Board, neglecting to advise the Board that the Oversight Committee was still awaiting the GZ analysis that the Committee had authorized.
The Oversight Committee failed to present any report or recommendation at the special meeting.
As a result, the Board adopted ‘Scenario 1’ without the benefit of an independent analysis of the risks.
On February 12, 2026, four months after the Board made its decision, the SME presented his written report analyzing the options and raising concerns that should have been considered before the decision.
VTA Staff Accountability for Responding to Oversight Committee Member Requests The auditor general maintains two types of monitoring reports: a tracking report that lists the requests of individual committee members for information or analysis, and a work plan that lists the schedule for upcoming formal reports, including risk assessments such as financing and procurement risks. Both monitoring reports establish a due date, but the deadlines are often not met.
During public meetings, Oversight Committee members rarely discuss the tracking report or the work plan and do not publicly comment on changes to the expected date in subsequent reports.
More importantly, neither the auditor general nor the Oversight Committee holds VTA staff accountable for late responses to issues raised in the tracking report. Below, the Civil Grand Jury presents two examples:
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Example of Lack of Accountability: Prolonged Delay in Analysis of Single-Bore versus Twin-Bore The side-by-side analysis of two design options was not provided until more than 18 months after it was first requested.
At the Oversight Committee’s first meeting in November 2023, a member of the public requested that the committee order a cost and risk analysis of the single-bore versus twin-bore options, which remained controversial following the VTA Board’s selection of the single-bore option in 2018. In 2023, the Chair of the Oversight Committee responded that such an “apples-to-apples” (side-by- side) analysis would be one of the committee’s first tasks. Here are some of the subsequent activities:
• At the committee’s meeting on January 19, 2023, two committee members formally requested the “apples-to-apples” analysis and placed it on the committee’s tracking list. (VTA, March 2025). At its meeting on June 13, 2024, the Project Manager reported that the scope of the twin-bore analysis would be worked on and reported to the Board “over the course of the summer.”
• At its meeting on August 8, 2024, a member of the public asked about the status of the “apples-to-apples” analysis.
• At the September 12, 2024, Oversight Committee, the auditor general announced that VTA staff had asked engineering design contractor Mott Macdonald to conduct the “apples-to- apples” review.
• The March 2025 tracking report included a comment regarding the “apples-to-apples” comparison: “These items are being evaluated as part of cost savings task force efforts with participation from GZ” (VTA, April 2024).
• One year later, on September 11, 2025, Mott Macdonald presented its analysis of the twin- bore versus single-bore options – nearly 22 months after the request was first discussed at an Oversight Committee meeting – concluding that the single-bore option was preferred (VTA, September 11, 2025).
Example of Lack of Accountability: An Alternative Strategy Some Call “Plan B” Despite multiple requests for an alternative strategy to address risks associated with the federal funding decision, VTA staff advised the Oversight Committee that it would wait until after the federal decision.
Since the Oversight Committee meeting on October 9, 2025, committee members have stressed the need for an alternative strategy in the event the federal government delays or denies the FFGA Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II for the promised $5.1 billion. Some committee members asked whether a “Plan B” might include reducing the number of planned stations or revising the funding strategy. VTA staff reported to the Civil Grand Jury that there was reluctance to discuss a “Plan B” out of concern that the discussion itself might jeopardize the FFGA. At public meetings, VTA staff dismissed requests for an alternative funding strategy, instead reporting that an alternative plan should not be prepared until the FTA made its decision in 2027. This is an example of the VTA staff’s dismissal of the Oversight Committee direction.
Expediency of Decisions versus Rigorous Analysis
The Civil Grand Jury identified tension between VTA Board members’ competing goals: avoiding delays in decision-making and requiring rigorous, independent analysis of costs, risks, and schedule. In public meetings, the Project Manager has often stated that each month of delay adds $20 to $30 million to the overall project cost (Dorsey, 2025).
There is a strong financial incentive to keep the project moving by advancing decisions incrementally—approving one component at a time to show visible progress—without fully evaluating how each step alters the project’s overall cost, scope, and risk. For a project of this size, complexity, and cost, this piecemeal approach masks cumulative effects, increasing the likelihood of cost escalation and delays. These should be identified and addressed through rigorous, front- end analysis.
With two-year terms and constituencies limited to portions of the County, Board members may understandably focus on immediate actions rather than the long-term, systemwide implications that demand a coherent strategic plan.
The Role Assigned to the Auditor General
The Oversight Committee benefits from periodic risk assessments and audits performed by the VTA auditor general on the BSVII project. However, by assigning the auditor general the responsibility to also provide staff support to the Oversight Committee, VTA has created a situation in which the auditor general is asked to provide an independent audit of prior decisions while also assisting the committee in evaluating future policy and management decisions.
At the June 2025 public Board meeting, the auditor general stated that he sometimes feels like a referee among the analyses provided by VTA staff, the SME, the public, and the PMOC. However, the VTA Board is the final arbiter, not the auditor general.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II The Board is best served when it hears all relevant views on an upcoming decision and is presented with options and a recommendation. The auditor general’s participation and input are critical, but he should not be placed in the position of having to synthesize all the competing views, including his own.
The auditor general is better placed to assist the Oversight Committee in its role of “oversight” and less so in commenting on the Oversight Committee's “guidance” functions. Accordingly, the Oversight Committee and the VTA Board would be better served if a VTA staff person were assigned responsibility for staffing the committee. This person could be part of the General Manager’s Office and should not report to the Project Manager. The position would be like that of the chief of staff, which was recently assigned to support the chair of the Board.
Coordination with BART
Because the County of Santa Clara is not part of the BART District, the extension of rail service to San José required a contract that established both VTA’s and BART’s commitment to cooperate.
Under the 2001 Cooperative Agreement, VTA is financially responsible for paying for the design, construction, and operation of the segment in Santa Clara County (BART and VTA, Comprehensive Agreement, 2001). BART retained approval authority over design elements that affect operations, maintenance, and safety. To date, this has been accomplished through the joint preparation of a Design Criteria Manual.
As recently as December 2025, BART’s Independent Office of the Inspector General (OIG) issued a report titled: “Transparency & Communication Gaps in the BSVII Project.” The report summarizes years of controversy over the single-bore versus twin-bore approach but acknowledges that BART eventually agreed to the single-bore concept evaluated in the final environmental impact statement. However, the BART OIG remained critical of the extent of cooperation between the two agencies:
We also determined that the length of time since the project began, extensive media coverage of the project, conflicting subject-matter opinions, and some public displeasure with the single-bore design have created uncertainty about the project’s direction. We concluded that gaps in transparency and communication, including limited public discussions in recent years, have resulted in mixed messaging on a project that has evolved over multiple decades (BART Independent Office of the Inspector General, 2025).
In August 2025, the lack of communication and cooperation was publicly exposed when a BART official wrote a letter to VTA (Appendix A) specifically objecting to the consideration of reducing Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II the size of the Newhall Yard and Maintenance Facility as a capital cost-saving measure. The VTA Project Manager publicly acknowledged a failure to keep BART informed of design issues that might impact BART’s operational efficiency and pledged to develop recommendations to the administrative heads of both agencies on a more formal process to identify and resolve those issues (VTA Oversight Committee, 2025).
Board Experience and Continuity
Since 2019, five audits and reports have critiqued VTA’s governance structure and recommended a series of revisions to improve VTA’s capability to provide Board direction and oversight of the BART extension. Those audits have included the 2018-19 Santa Clara County Civil Grand Jury in 2019; the Auditor of the State of California, in 2024; the BART Independent Office of the Inspector General in 2025; RSM US LLC, a VTA subcontractor, in 2019; and the VTA Auditor General in 2024. VTA has accepted and acted on most of the recommendations for governance reform, except those relating to the terms and required experience level of Board members.
During the investigation of the BSVII project, sources repeatedly raised concerns about the level of knowledge and decision-making ability of the full VTA Board, which is responsible for the project’s success. Decisions made today will have a direct impact on its ultimate success. Diligent oversight of its schedule, cost, progress, and scope is required.
According to the California Public Utilities Code, which established the VTA Board, “to the extent possible, the appointing powers shall appoint individuals who have expertise, experience, or knowledge relative to transportation issues” (Pub. Util. Code 10000 et seq).
VTA Board members are appointed to two-year terms by appointing agencies, organized into six groups as detailed in Table 3. Appointing agency groups are established and defined by VTA Administrative Code, which states “Appointing Authorities are strongly encouraged, where possible, to: (1) appoint individuals with appropriate experience and qualifications in transportation; (2) ensure that there is sufficient remaining time in the elected official’s term of office to allow full completion of their term as a Director; and (3) reappoint representatives to consecutive terms” (VTA Administrative Code § 2-13).
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Table 3: Appointing Authorities Composition of the VTA Board Appointing
Agency
Group
Jurisdiction Represented Number of
Board Members
Method of
Appointment
Group 1 San José 5 members
1 alternate
Appointed by city
council from city
council members/mayor
Group 2 Los Altos, Los Altos Hills,
Mountain View, Palo Alto
1 member
1 alternate
Determined by
Group 2 members
Group 3
Campbell, Cupertino,
Los Gatos, Monte Sereno,
Saratoga
1 member
1 alternate
Determined by
Group 3 members
Group 4 Gilroy, Morgan Hill 1 member
1 alternate
Determined by
Group 4 members
Group 5 Milpitas, Santa Clara,
Sunnyvale
2 members
1 alternate
Determined by
Group 5 members
Group 6 County of Santa Clara 2 members
1 alternate
Appointed by County
Board of Supervisors
Source: California Pub. Util. Code section 100060.
While VTA continues to insist that two-year terms are suitable for its governance (as specified in PUC § 100060.2), peer agencies in the state appoint their Board members to four-year terms, leading to much longer average lengths of service and potentially greater experience and transportation-related knowledge (see Figure 2).
Multiple reports and audits have suggested weaknesses introduced by VTA’s approach to the appointment of Board members. For example, the 2019 Board Governance Assessment concluded, in part, that some processes and policies (e.g., committee structure, term limits, and Board member selection guidelines) might not reflect best practices or support long-term Board stability (VTA, 2019). Additionally, a report by the 2018-19 Santa Clara County Civil Grand Jury found that the VTA Board suffers from:
• A lack of experience and limited continuity by many Board members; • Inadequate time for the directors to devote to the Board’s oversight and policy-making functions;
• A lack of engagement by some of the directors, fostered in part by the committee system, resulted in VTA functioning largely as a staff-driven organization.
More recently, a critical 2024 report from the State Auditor regarding VTA’s project management and financial oversight noted the following weaknesses:
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II • The process for selecting directors for the Board is not always transparent enough to ensure the appointment of directors experienced in transportation issues. • Some groups of cities appoint VTA directors without public deliberation, limiting transparency and sometimes bypassing the statutory recommendation for transportation expertise.
• VTA directors have shorter tenures, on average, than their peers, meaning that VTA’s Board has less experience overseeing the agency’s operations than the Boards of peer agencies.
Figure 2: Average Directors’ Tenure among VTA and Peer Agencies Source: Auditor of the State of California, “Santa Clara Valley Transportation Authority, Improvements Are Necessary to Strengthen Its Project Management and Financial Oversight,” June 2024.
Note: LA Metro stands for Los Angeles County Metropolitan Transportation Authority; OCTA stands for Orange County Transportation Authority; SacRT stands for Sacramento Regional Transit District.
During interviews and in reviewing existing reports and audits about VTA, the Civil Grand Jury learned that Board members and elected officials broadly support a four-year term for directors.
Lengthening terms would require a change to VTA’s enabling legislation. The findings of the State and VTA’s own auditors’ governance reform recommendations remain unchanged.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Public Communication
Following the VTA auditor general’s report in January 2024, public communication and community outreach regarding the BSVII project have improved. The Civil Grand Jury noted improvements to the VTA BSVII project website, including efforts to deliver timely updates to residents about the impact of construction activities, and a section for frequently asked questions (FAQ) (VTA, BART Silicon Valley Phase II Project, n.d.). In addition, many interviewees told the Civil Grand Jury that VTA has made efforts to better inform the public and officials since the auditor general's report highlighted communication breakdowns in 2023.
However, there are areas where the public would benefit from VTA focusing more on improving communication.
The VTA’s BSVII project website does not offer a simple, clear dashboard outlining the costs, timeline, and progress of the BSVII project. Although it includes technical reports from the federally sponsored PMOC, it does not include the independent analyses by the SME or the VTA auditor general.
A high-level dashboard would consolidate information from multiple sources, present project metrics to the public, and provide access to source materials. Today, information on funding, expenditures, and schedule status is available on the website, but is buried in layers of reports that are nonintuitive to find or navigate.
In addition, the Civil Grand Jury found the site’s search function inadequate for locating specific details or addressing questions not covered in the FAQ, and it often returned results for irrelevant materials. The website would be more user-friendly if VTA incorporated a more robust search engine.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
CONCLUSION
The VTA Board has failed in its responsibility to provide effective management, oversight, and financial control of the BSVII Project.
Based on its investigation, the Civil Grand Jury concludes:
• There is no realistic plan to deal with foreseeable financial risks, including significant uncertainty about BSVII’s construction and operating costs, reliance on expiring voter- approved sales tax measures, uncertain federal government support, cash flow, and declining ridership.
• When considering major scope and design decisions, the Oversight Committee and the VTA Board do not take into account the ongoing operations and maintenance costs that will be borne by VTA and will require voter approval of subsequent sales tax measures. • The Oversight Committee exercises its oversight responsibility by requiring monthly progress reports and by questioning VTA project staff, but when it declines to make recommendations to the VTA Board, it fails in its responsibility to provide guidance on critical policy issues.
• The Oversight Committee receives valuable input from multiple sources but does not share this information with the VTA Board in the form of helpful reports that synthesize the different perspectives of VTA staff, the Subject Matter Expert, the auditor general, the Project Management Oversight Consultant, and the public. • The VTA Board and the Oversight Committee have failed to hold VTA staff accountable for missing deadlines to provide analysis and information requested by members of the Oversight Committee.
• There is a lack of meaningful communication and cooperation between BART and VTA officials, which undermines public confidence.
• VTA’s failure to adopt governance reform recommendations from prior Civil Grand Jury reports and independent audits has led to a lack of Board member continuity and expertise, weakening the Board’s ability to successfully oversee the BSVII project.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
FINDINGS AND RECOMMENDATIONS
Finding 1
The BSVII project currently requires voter approval of additional sales tax measures to address gaps in construction and operations funding.
Recommendation 1
VTA should adopt and publish a strategy for the completion and operation of the project that reduces dependency on new sales tax measures.
This should be implemented by December 31, 2026.
Finding 2
VTA does not maintain a cash-flow model for the BSVII project.
Recommendation 2
The VTA Board should direct the General Manager to prepare a cash-flow model for the BSVII project and present it quarterly to the Oversight Committee and the Board.
This should be implemented by December 31, 2026.
Finding 3
VTA has not developed an alternative funding strategy for the project in the event that planned funding sources are unavailable or insufficient.
Recommendation 3
The VTA Board should direct the General Manager to prepare an alternative funding strategy to meet the project’s estimated total capital costs and VTA’s responsibility for operating and maintenance costs and present it to the Oversight Committee and Board for approval.
This should be implemented by December 31, 2026.
Finding 4
Project management does not consistently report the operating and maintenance cost implications of design and construction decisions to the Oversight Committee or the Board.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Recommendation 4
VTA should adopt a policy requiring staff to present an analysis of operating and maintenance costs when considering design and construction alternatives for BSVII.
This should be implemented by December 31, 2026.
Finding 5
The VTA Board would benefit from longer terms of office to improve continuity and institutional knowledge.
Recommendation 5
VTA should reconsider its prior rejections of audit recommendations calling for the establishment of four-year terms and direct its legislative advocates to seek a legislative author to amend VTA’s enabling statute to require four-year terms.
This should be implemented by December 31, 2026
Finding 6
VTA Board Appointing Authority Groups 2 through 5 often do not follow VTA Administrative Code (Section 2-14) admonitions to “appoint individuals with appropriate experience and qualifications in transportation” and to “reappoint representatives to consecutive terms.” Recommendation 6
VTA Board Appointing Authority Groups 2 through 5 should certify to the VTA Board that they will adhere to VTA Administrative Code (Section 2-14) admonitions, regarding Board member expertise and appointment to consecutive terms.
This should be implemented by December 31, 2026.
Finding 7
VTA Board Appointing Authority Groups 2 through 5 have different processes for making Board appointments.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Recommendation 7
The cities represented in Appointing Authority Groups 2 through 5 should agree on a uniform process for making Board appointments.
This should be implemented by December 31, 2026.
Finding 8
The role assigned to the auditor general is outside the traditional scope of an auditor’s responsibilities and has introduced conflict and uncertainty among VTA staff and the Oversight Committee. Being involved in the management and policy-making process threatens the auditor general’s independence.
Recommendation 8
The Board should implement an alternative model for supporting the Oversight Committee that does not rely on the auditor general to provide services such as agenda preparation, monitoring of VTA staff assignments, or preparation of a synthesis of multiple independent inputs to the Committee’s deliberations.
This should be implemented by December 31, 2026
Finding 9
The Board of Directors has not approved the bylaws, nor the charter of the Oversight Committee.
Recommendation 9
VTA should formally adopt a revised Charter for the Oversight Committee, setting the Board’s expectations on the following issues:
• Defining the role of the auditor general to no longer require him to supervise the presentations by VTA staff to the Oversight Committee;
• The responsibility of the Oversight Committee to report regularly to the Board on the independent analyses of costs, risks, and schedule by the PMOC and any SMEs; and to provide the Oversight Committee’s synthesis of those analyses with recommendations to resolve conflicts when necessary;
• The responsibility of the Oversight Committee to consider and present its recommendations before the Board considers major decisions such as scope of the project, contracting, risk management, budgeting, and funding strategy; Item 5
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II • The responsibility of the Oversight Committee to hold subject matter experts accountable for timely analysis of costs, risk, and schedule;
• The responsibility of the Oversight Committee to report to the Board on the implications of design and construction issues that impact future ongoing operations and maintenance costs to be borne by VTA.
This should be implemented by December 31, 2026.
Finding 10
VTA’s vtabart.org website is poorly organized and not always intuitive to navigate, making it hard to find information about the status, cost, and schedule of the BSVII project.
Recommendation 10
The VTA Board should direct the General Manager to implement and maintain a project dashboard on its vtabart.org website that includes status, cost, and schedule information.
This should be implemented by October 31, 2026.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
REQUIRED RESPONSES
Pursuant to California Penal Code section 933(a) et seq. and California Penal Code section 933.05, the 2025-26 Santa Clara County Civil Grand Jury requests responses from the following governing bodies:
Responding Agency Findings Recommendations
VTA Board of Directors 1, 2, 3, 4, 5, 8, 9, 10 1, 2, 3, 4, 5, 8, 9, 10 County of Santa Clara, Board of Supervisors 6 6
The City of Campbell, City Council 6, 7 6, 7
The City of Cupertino, City Council 6, 7 6, 7
The City of Gilroy, City Council 6, 7 6, 7
The City of Los Altos, City Council 6, 7 6, 7
The Town of Los Altos Hills, Town Council 6, 7 6, 7
The Town of Los Gatos, Town Council 6, 7 6, 7
The City of Milpitas, City Council 6, 7 6, 7
The City of Monte Sereno, City Council 6, 7 6, 7
The City of Morgan Hill, City Council 6, 7 6, 7
The City of Mountain View, City Council 6, 7 6, 7
The City of Palo Alto, City Council 6, 7 6, 7
The City of San José, City Council 6, 7 6, 7
The City of Santa Clara, City Council 6, 7 6, 7
The City of Saratoga, City Council 6, 7 6, 7
The City of Sunnyvale, City Council 6, 7 6, 7
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II APPENDIX A: BART Management Letter
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
VTA'S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II kai
BART SILICON VALLEY
PHASE II (BSV I)
BART remai ns fully committed to the successful del ivery of this critical regional investment.
However, that commitment d ep ends on VTA's immedi ate corrective action to restore transparency and accountability.
Sincerely,
Shane Edwards
BART Assistant General Manager, 0perations
BART Project Director
Ce: VTA's BART S i licon Valley Phase II 0versight Committee Members Greg R i chardson, VTA Deputy General Manager
Robert Powers, BART General Manager
Michael Jones, BART D ep uty General Manager
Ni Lee, BART Deputy Proj ect Di rector
Mon i ca Born, VTA Program Director
Tom Maguire, VTA Chief Del i very Officer of Mega Projects BSVII: Co ll aborati o n , I n n ovat i on, Safety, R e l i ability 2
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II
CONFLICTS
Members of the Civil Grand Jury are conflicted from a Civil Grand Jury investigation if, as a result of prior or current employment or associations, investment in public or private enterprise, financial interest, bias, or personal relationship, they are subject to recusal from participating in a matter before the Civil Grand Jury. One juror was recused from this matter.
REFERENCES
Bibliography
2018-19 Santa Clara County Civil Grand Jury. “Inquiry Into Governance of the Valley Transportation Authority.” June 18, 2019.
(https://santaclara.courts.ca.gov/system/files/cgj-vta-final-report-061819_0.pdf).
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Aragon, Greg, “Single-Bore Tunnel Method Chosen for BART Silicon Valley Phase II.” ENRWest. November 4, 2025. (https://www.enr.com/articles/61798-single-bore-tunnel- method-chosen-for-bart-silicon-valley-phase-ii). Accessed April 29, 2026.
AtkinsRéalis USA Holdings LLC. “Project Monitoring Report.” March 9, 2026. (https://vtabart.org/transparency-commitment/#docaccess- 8dd20a14312d4f35dd29658c7e4d5f55). Accessed May 1, 2026.
Auditor General, Santa Clara Valley Transportation Authority. “Auditor General’s Risk Assessment Report on VTA’s BSVII Finance Risks.” May 1, 2025. (https://santaclaravta.iqm2.com/Citizens/Detail_LegiFile.aspx?MeetingID=4412&ID= 9358). Accessed April 5, 2026.
Auditor of the State of California. “Santa Clara Valley Transportation Authority, Improvements Are Necessary to Strengthen Its Project Management and Financial Oversight.” June 2024. (https://www.auditor.ca.gov/wp-content/uploads/2024/06/2023-101-Report.pdf).
Accessed April 5, 2026.
California State Transportation Agency. “Transit and Intercity Rail Capital Program.” n.d. (https://calsta.ca.gov/subject-areas/transit-intercity-rail-capital-prog). Accessed May 12, 2026.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Cal. Pub. Util. Code section 10000 et seq.
Cal. Pub. Util. Code section 100060 et seq.
Dorsey, Dustin. “Silicon Valley BART Extension construction remains on time, budget.” ABC Eyewitness News. December 8, 2025. (https://abc7news.com/post/silicon-valley-bart- extension-construction-remains-time-budget-west-portal-site/18265543/). Accessed April 29, 2026.
Federal Transit Administration. “FY 2025 New Starts Financial Assessment.” June 2024. (https://www.transit.dot.gov/funding/grants/grant-programs/capital-investments/bart- silicon-valley-phase-ii-project-profile-fy-0).
Federal Transit Administration. “BART Silicon Valley Phase II Extension Project San Jose, California. June 2024. (https://www.transit.dot.gov/sites/fta.dot.gov/files/2024-08/CA- BART-Silicon-Valley-Phase-II-Eng-Profile-20240705.pdf). Accessed March 30, 2026.
Geha, Joseph. “Feds Commit $5.1 Billion to South Bay BART Extension.” KQED.org. August 2, 2024. (https://www.kqed.org/news/11998646/feds-commit-5-1-billion-to-south-bay- bart-extension#:~:text=Joseph%20Geha,increases%20to%20the%20current%20figure).
Accessed April 22, 2026.
Hicks, Tony. “VTA Board approves purchase of machine to bore BART line.” Mountain View Voice. November 7, 2023. (https://www.mv-voice.com/news/2023/11/07/vta-board- approves-purchase-of-machine-to-bore-bart-line/). Accessed April 5, 2026.
Metropolitan Transportation Commission. “Agreement Reached on Loan for Bay Area Transit Agencies.” January 30, 2026. (https://mtc.ca.gov/news/agreement-reached-loan-bay-area- transit-
agencies#:~:text=Because%20many%20transit%20capital%20projects,funds%20remaine d%20in%20state%20accounts.). Accessed April 28, 2026
Office of the County Counsel, County of Santa Clara. “County Counsel’s Impartial Analysis of Measure B.” 2016. (https://www.vta.org/sites/default/files/2025- 08/2016%20Measure%20B%20Ballot.pdf). Accessed April 29, 2026.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II San Francisco Bay Area Rapid Transit District Independent Office of the Inspector General. “Transparency & Communication Gaps in BSVII Project.” December 19, 2025. (https://www.bartoig.org/investigation-reports-2025#docaccess-98152ed2acf38 cd4da53e1efbb737c86cc96ef6c2e1f439edf6ec6f51905271f). Accessed April 5, 2026.
San Francisco Bay Area Rapid Transit District and Santa Clara Valley Transportation Authority, Comprehensive Agreement, November 22, 2001.
(www.bart.gov/sites/default/files/docs/O%26M%20Agreement_Silicon%20Valley%20B ART%20Extn.pdf). Accessed May 12, 2026.
San Francisco Bay Area Rapid Transit District. “BART Board initially approves Alternative Service Plan outlining budget balancing details.” February 26, 2026. (https://www.bart.gov/news/articles/2026/news20260226-0). Accessed April 29, 2026.
San Francisco Bay Area Rapid Transit District. "January 2026 Monthly Ridership Snapshot." February 2026. (https://www.bart.gov/sites/default/files/2026- 02/202601%20Monthly%20Ridership%20Snapshot.pdf). Accessed April 29, 2026.
San Francisco Bay Area Rapid Transit District. " 2019 Monthly Ridership Reports." 2019. (https://www.bart.gov/sites/default/files/docs/ridership_2019.zip). Accessed April 29, 2026.
Santa Clara Valley Transportation Authority, BART Silicon Valley Phase II Project. n.d. (https://www.vtabart.org). Accessed May 12, 2026.
Santa Clara Valley Transportation Authority, “VTA Board of Directors Workshop Reviews BART Phase II Timeline, Costs, And Next Steps.” October 23, 2023. (https://www.vta.org/blog/vta-board-directors-workshop-reviews-bart-phase-ii-timeline- costs-and-next-steps). Accessed April 29, 2026.
Santa Clara Valley Transportation Authority Auditor General. “Auditor General’s Initial Monitoring Report on VTA’s BART Silicon Valley Phase II Extension Project.” VTA’s BART Silicon Valley Phase II Extension Oversight Committee Agenda. Item 8a. January 19, 2024. (https://santaclaravta.iqm2.com/Citizens/Detail_Meeting.aspx?ID=4233).
Accessed April 5, 2026.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Santa Clara Valley Transportation Authority/RSM US LLC. “Board Governance Assessment – Santa Clara Valley Transportation Authority.” December 20, 2019. (https://www.vta.gov/ sites/default/files/2020-01/VTA%20Board%20Governance%20Assessment%20 %281%29.pdf). Accessed April 5, 2026.
Santa Clara Valley Transportation Agency. “BART Silicon Valley Extension Project Implements Major Cost Reductions.” November 13, 2024. (https://www.vta.org/blog/bart-silicon- valley-extension-project-implements-major-cost-reductions). Accessed April 23, 2026.
Santa Clara Valley Transportation Authority/HayGroup. “Santa Clara Valley Transportation Authority Organizational and Financial Assessment Executive Report.” March 2007. (https://ti.org/pdfs/HayGrouponVTA.pdf). Accessed April 5, 2026.
Santa Clara Valley Transportation Authority. “Operations and Maintenance Agreement By and Between the Santa Clara Valley Transportation Authority and The San Francisco Bay Area Rapid Transit District.” May 22, 2020. (https://www.vta.org/sites/default/files/2020- 12/VTA%20BART%20Operations%20and%20Maintenance%20Agreement_0.pdf).
Accessed April 23, 2026.
Santa Clara Valley Transportation Authority. “Santa Clara Valley Transit Authority Administrative Code (With Amendments through March 6, 2025).” March 2025. (https://www.vta.org/sites/default/files/2025-04/VTA_Administrative_Code_2025-3-
6.pdf). Accessed April 5, 2026.
Santa Clara Valley Transportation Authority. “Bylaws for VTA’s BART Silicon Valley Phase II Oversight Committee.” April 4, 2024. (https://www.vta.gov/sites/default/files/2024-04/ vta-bsv-oversight-committee-bylaws_0.pdf). Accessed April 8, 2026.
Santa Clara Valley Transportation Authority. Special Board Meeting. October 17, 2025. (https:// santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=14&ID=4297&Inline=True) Accessed April 9, 2026.
Santa Clara Valley Transportation Authority. “VTA's BART Silicon Valley Phase II Oversight Committee Regular Meeting”, Agenda Item 9.a, Item #25. April 17, 2024. (https://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=3940&Inline=True ). Accessed May 1, 2026.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Santa Clara Valley Transportation Authority. “VTA's BART Silicon Valley Phase II Oversight Committee Regular Meeting.” Agenda Item 4, Item #4. March 13, 2025. (https://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=4138&Inline=True ). Accessed May 1, 2026.
Santa Clara Valley Transportation Authority. “VTA's BART Silicon Valley Phase II Oversight Committee Regular Meeting.” Item 11a. June 12, 2025.
(https://santaclaravta.iqm2.com/Citizens/Detail_Meeting.aspx?ID=4430). Accessed April 29, 2026.
Santa Clara Valley Transportation Authority. “BSVII Project Update.” Summer, 2025. (https://vtabart.org/vtas-bart-silicon-valley-phase-ii-extension-project-summer-2025/).
Accessed May 13, 2026.
Santa Clara Valley Transportation Authority. “VTA's BART Silicon Valley Phase II Oversight Committee Regular Meeting.” Item 8. January 15, 2026.
(https://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=4354&Inline=True ). Accessed April 22, 2026.
Santa Clara Valley Transportation Authority. “2000 Measure A.” n.d. (https://www.vta.org/projects/funding/2000-measure-a). Accessed April 29, 2026.
Santa Clara Valley Transportation Authority. “About 2016 Measure B.” n.d. (https://2016measureb.vta.org/about). Accessed April 29, 2026.
Santa Clara Valley Transportation Authority. “VTA's BART Silicon Valley Phase II Oversight Committee Regular Meeting.” Item 10b. Slide 21. September 11, 2025. (https://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=1&ID=4273&Inline=True ). Accessed April 13, 2026.
Santa Clara Valley Transportation Authority. “Fact Sheet: VTA's Bart Silicon Valley Phase 2 Extension Project.” March 2024. (https://www.vta.org/sites/default/files/2024- 07/VTABSV_FactSheet_2024_OverviewBenefits%201.pdf). Accessed April 13, 2026.
Shalby, Colleen. “Trump administration pulls billions in funding for high-speed rail project; state leaders call decision ‘illegal.’” Los Angeles Times. July 16, 2025. (https://www.latimes.com/california/story/2025-07-16/trump-administration-cancels- funding-for-high-speed-rail-project). Accessed April 29, 2026.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II Shalby, Colleen. “Multibillion-dollar transit project to tunnel through the Santa Monica Mountains is approved by L.A. Metro.” LA Times. January 22, 2026. (https://www.latimes.com/california/story/2026-01-22/this-multibillion-dollar-transit- project-could-improve-traffic-across-la-it-goes-to-vote-today - :~:text=This is read by an,transit projects in the country). Accessed April 13, 2026.
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VTA’S MANAGEMENT AND OVERSIGHT OF BART SILICON VALLEY PHASE II This report was ADOPTED by the 2025-2026 Santa Clara County Civil Grand Jury on this 17 th day of June, 2026.
______________________________
Dinesh Ramde
Foreperson
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Attachment B
September __, 2026
The Honorable Julie A. Emede
Presiding Judge
Santa Clara County Superior Court
191 North First Street
San Jose, CA 95113
RE: City of Palo Alto Response to 2026 Santa Clara County Civil Grand Jury Report:
VTA’s Management and Oversight of BART Silicon Valley Phase II
Dear Judge Emede:
The following is the City of Palo Alto’s response to the above-mentioned Grand Jury Report pursuant to California Penal Code §§ 933 and 933.05.
Civil Grand Jury Finding 6:
VTA Board Appointing Authority Groups 2 through 5 often do not follow VTA Administrative Code (Section 2-14) admonitions to “appoint individuals with appropriate experience and qualifications in transportation” and to “reappoint representatives to consecutive terms.”
City of Palo Alto Response to Finding 6:
The City of Palo Alto disagrees with Finding 6, to the extent this finding applies to the City of Palo Alto and VTA Board Group 2. Group 2 Cities Working Group Resolution No. 2022-01 (enclosed herewith) governs the appointment of the Group 2 representative to the VTA Board.
The Resolution incorporates the requirements of VTA Administrative Code section 2-14 into the appointment process, including (1) requirements for transportation-related experience and (2) a requirement that any eligible sitting Board Member or alternate be appointed to a second term after serving their first term. The Resolution also requires that appointment of the Board Member and alternate shall take place at a noticed meeting open to the public.
The last two Group 2 representatives (a Palo Alto Councilmember and Los Altos Councilmember) have both had relevant transportation experience, including local and regional experience with transportation issues and/or service on the VTA Policy Advisory Committee.
The Palo Alto Councilmember continues to serve as an ex officio member of the VTA Board by virtue of his role as the Cities Association of Santa Clara County City Selection Committee representative to the Metropolitan Transportation Commission. In addition, both recent Group 2 appointees either served two terms on the VTA Board or are expected to do so, consistent with Resolution No. 2022-01.
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Civil Grand Jury Recommendation 6:
VTA Board Appointing Authority Groups 2 through 5 should certify to the VTA Board that they will adhere to VTA Administrative Code (Section 2-14) admonitions, regarding Board member expertise and appointment to consecutive terms.
City of Palo Alto Response to Recommendation 6:
The City of Palo Alto has already implemented this recommendation to the extent it applies to the City and other Group 2 cities. Group 2 Cities Working Group Resolution No. 2022-01 complies with VTA Administrative Code section 2-14. Information regarding the two most recent Group 2 appointees to the VTA Board is provided in the City’s response to Finding No. 6.
No further report to the VTA Board is required.
Civil Grand Jury Finding 7:
VTA Board Appointing Authority Groups 2 through 5 have different processes for making Board Appointments.
City of Palo Alto Response to Finding 7:
The City of Palo Alto agrees with this finding. The VTA Administrative Code allows members of VTA Board Groups 2 through 5 to determine the process for appointing their respective Board members. The Administrative Code allows each group to have a different process. While Palo Alto lacks first-hand knowledge of the appointment processes for Groups 3 through 5, publicly available sources indicate that not all of the groups use the same process that Palo Alto and other Group 2 cities use to appoint their VTA Board members.
Civil Grand Jury Recommendation 7:
The cities represented in Appointing Authority Groups 2 through 5 should agree on a uniform process for making Board appointments.
City of Palo Alto Response to Recommendation 7:
This recommendation will not be implemented by the City of Palo Alto, because Palo Alto does not have authority over the VTA or other VTA members. However, Palo Alto and other Group 2 cities currently comply with VTA Administrative Code section 2-14. The City of Palo Alto remains open to discussing a uniform process for making Board appointments, consistent with the VTA Administrative Code.
Sincerely,
______________________________
Vicki Veenker
Mayor
Enclosure
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Police
Meeting Date: September 9, 2026
Report #:2607-6570
TITLE
Approval of Five-year Memorandum of Agreement with Stanford University to Provide and be Reimbursed for Traffic Control Services during Stanford Stadium Events; CEQA status – not a project.
RECOMMENDATION
Staff recommends the City Council approve and authorize the City Manager or designee to execute the Memorandum of Agreement (MOA) with Board of Trustees of the Leland Stanford Junior University (Stanford) to provide and be reimbursed for traffic control for events at the Stanford Stadium for five years (Attachment A).
BACKGROUND
During each year, Stanford hosts a number of large events at Stanford Stadium, including home football games, concerts, and professional athletic events. These events require the movement of large numbers of vehicles and pedestrians into and out of the university in a short period of time. Stanford and the City of Palo Alto (City) share a goal of moving traffic as safely and efficiently as possible to and from the stadium area while minimizing impacts to nearby vehicles, pedestrians, businesses and residents.
To accomplish this shared goal, Stanford and the City have partnered for decades to share the costs of supplemental traffic control services needed to facilitate safe and efficient traffic and pedestrian movements. Under the most recent MOA executed in 2021, the City agrees to provide services from uniformed peace officers to control traffic around Stanford stadium during athletic events where Stanford requests such services. Under this agreement, Stanford Item 6
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reimburses the City for 50% of the costs of uniformed officers providing services during these events. This MOA expired August 31, 20261.
ANALYSIS
During the term of the 2021 MOA, the number of commercial events requiring City support at the stadium has increased (from 1 in Fiscal Year 2023 to 4 in Fiscal Year 2025). The MOA for review in this action seeks to address this increase in several ways. First, it formalizes the City’s support for events beyond regular season Stanford football games, to include concerts, commercial professional athletic events, and other special events. Second, it amends the cost recovery framework so that Stanford will reimburse the City for 100% of the City’s traffic control costs for these additional events. Third, it addresses the possibility of outsourcing some of the City’s work. While the Police Department balances priorities to public safety, a strategy to consider is balancing staffing with officers from other police agencies or contracting professional traffic control services from a third-party vendor(s). For regular season Stanford football games, Stanford will continue to reimburse the City for 50% of City staff costs, and 100% of costs for contractors, temporary or limited-term personnel, and outside agency staff.
FISCAL/RESOURCE IMPACT
The primary cost to the City for events at Stanford Stadium is payroll in the Police Department.
Most payroll costs are overtime, with the exception of Reserve Police Officers, which are straight time. The Department currently budgets traffic control revenue and expense within its operating budget. In Fiscal Year 2026 the City received approximately $92,000 (averaging $9,200 per event) for traffic control services provided to Stanford, including approximately $45,000 for commercial events. The Department will assess the fiscal impact of changes to this MOA and may request adjustments in the FY 2027 Mid-Year Budget if needed, depending on the number of events anticipated during the fiscal year. Funding for subsequent years will be subject to the annual budget development process.
STAKEHOLDER ENGAGEMENT
City staff engaged with Stanford University to develop this Agreement.
ENVIRONMENTAL REVIEW
This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378, because it has no potential for resulting in 1 City Council Meeting November 1, 2021, Item #6, SR #13657 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=81622&dbid=0&repo=PaloAlto&searchid=d23e37dc -92cc-4855-b70b-1b59ef128dfd)
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either a direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS
Attachment A: Stanford - Palo Alto Traffic Control MOA
APPROVED BY:
James Reifschneider, Police Chief
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DRAFT MEMORANDUM OF AGREEMENT
BETWEEN THE CITY OF PALO ALTO AND
THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY
FOR STADIUM EVENT TRAFFIC CONTROL STAFFING AND EQUIPMENT This Memorandum of Agreement (“Agreement”) is entered into effective September 1, 2026 (“Effective Date”), by and between the City of Palo Alto, a California chartered municipal corporation (“CITY”), and the Board of Trustees of the Leland Stanford Junior University (“STANFORD”). CITY and STANFORD may be referred to individually as a “PARTY” and collectively as the “PARTIES”.
RECITALS
During each academic year, STANFORD hosts several large events at or associated with STANFORD Stadium, including college football games, concerts, commercial professional athletic events, and other special events; These events require the movement of large numbers of vehicles into and out of STANFORD campus and stadium parking areas and surrounding roadways in a short period of time; STANFORD and CITY share a goal of moving traffic as safely and efficiently as possible to and from the stadium area while minimizing impacts to nearby vehicles, pedestrians, businesses, residents, and public safety operations;
The PARTIES have partnered for decades to provide and fund supplemental traffic control services and related resources needed to facilitate safe and efficient vehicle movements; This Agreement confirms STANFORD’s reimbursement obligations for CITY traffic control staffing, equipment, planning, coordination, contractors, outside agency personnel, and other direct event support resources, in compliance with Section 53069.8 of the California Government Code; The Parties recognize that effective implementation of this Agreement may require coordination regarding staffing availability, scheduling, operational needs, and other constraints, and desire to work cooperatively to address such matters consistent with the terms of this Agreement.
NOW, THEREFORE, the Parties agree as follows:
SECTION 1. CITY SERVICES
CITY shall make every reasonable effort to perform the Services described in Exhibit A in accordance with the terms and conditions contained in this Agreement.
SECTION 2. TERM
The term of this Agreement shall begin on September 1, 2026 and shall remain in effect for until August 31, 2031, unless terminated earlier in accordance with this Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE
STANFORD Associate Athletics Director, Operations & Events, or designee, shall communicate with the designated employee in the Police Department regarding upcoming events no later than four weeks in advance of the event date(s) in a manner mutually agreeable to the PARTIES. CITY shall perform Services in a reasonably prompt and timely manner based upon mutual expectations of the PARTIES.
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SECTION 4. COMPENSATION
The compensation to be paid to CITY for performance of the Services shall be based on the compensation structure detailed in Exhibit B, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the hourly schedule of rates, is set out in Exhibit C, entitled “SCHEDULE OF RATES.” SECTION 5. ANNUAL COST ESTIMATE
By a date mutually acceptable to both PARTIES, CITY will provide STANFORD with an estimated cost for Events every year, for planning and budgeting purposes. The estimate may be based on the day-of-event staffing assumptions described in this Agreement, together with anticipated equipment and other direct support costs. The estimate is non-binding and intended only to inform STANFORD’s budgeting. Final invoicing will be based on actual resources used, including planning or coordination time where applicable.
SECTION 6. INVOICING AND PAYMENT
CITY will issue invoices within ten (10) business days after each operational event day, and STANFORD will make payment within twenty (20) business days after receipt. STANFORD shall not be liable for interest or late charges for late payments unless expressly required by a written amendment signed by both Parties.
SECTION 7. LIMITATION OF LIABILITY AND INDEMNIFICATION
STANFORD’s payment obligations under this Agreement shall be limited to the payments provided for in this Agreement. STANFORD shall not be liable for any special, consequential, indirect, or incidental damages in connection with this Agreement. CITY shall not be liable to STANFORD for any special, consequential, indirect, or incidental damages, including but not limited to lost profits, in connection with this Agreement.
Each party shall indemnify, defend and hold harmless the other party, its Board Members, Council Members, officers, employees, and agents from any and all demands, claims or liability of any nature, including wrongful death, caused by or arising out of the other party, its officers’, directors’, employees’ or agents’ negligent acts, errors, or omissions, or willful misconduct.
SECTION 8.TERMINATION
This Agreement may be terminated at any time in writing by agreement of both Parties. In the alternative, this Agreement may be terminated upon thirty (30) days’ written notice by either Party. Within thirty (30) days after the specified termination date, CITY shall submit to STANFORD an itemized invoice detailing unpaid costs incurred for services rendered up to the date of termination. STANFORD’s payment obligation under this Section shall survive termination of this Agreement.
SECTION 9. ENTIRE AGREEMENT; AMENDMENTS
This Agreement constitutes the entire agreement and understanding between the Parties with respect to the s
ubject matter hereof, supersedes any prior or contemporaneous written or oral understanding or agreement, and may be amended only by written amendment executed by the Parties.
SECTION 10. SEVERABILITY
If any term or provision of this Agreement is found illegal or unenforceable, this Agreement shall remain in full force and effect and such term or provision shall be deemed stricken.
SECTION 11. NOTICE TO PARTIES
All notices to be given by the Parties shall be in writing and served by depositing the same in the United States mail, or by other mutually agreed written delivery method, as follows:
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NOTICE TO STANFORD: NOTICE TO THE CITY OF PALO ALTO:
Associate Athletics Director, Events Chief of Police
Stanford University Athletics CITY of Palo Alto
Arrillaga Family Sports Center 250 Sherman Ave
641 E. Campus Dr. Palo Alto, CA 94306
Stanford, CA 94305 650-329-2406
650-723-6771 [email protected]
NOTICE ALSO TO STANFORD ATTORNEY: NOTICE ALSO TO THE OFFICE OF THE CITY CLERK:
Office of the General Counsel Office of the City Clerk
Stanford University City of Palo Alto
Building 170, 3rd Floor, Main Quad 250 Hamilton Avenue
P.O. Box 20386 Palo Alto, CA 94301
Stanford, CA 94305-2038 [email protected]
650-723-9611
SEC
TION 12. NO EMPLOYMENT
Nothing in this Agreement shall be construed as creating an employment or agency relationship between CITY and STANFORD or any agent or employee of CITY or STANFORD.
SECTION 13. EXHIBITS.
Each of the following exhibits, is hereby attached and incorporated into this Agreement by reference as though fully set forth herein:
EXHIBIT A: SCOPE OF SERVICES
EXHIBIT B: COMPENSATION
EXHIBIT C: SCHEDULE OF RATES
(C
ontinued on next page.)
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.
FOR CITY OF PALO ALTO
AP
PROVED:
BY: _______________________________
Ed Shikada
CITY Manager
REVIEWED:
BY: _______________________________
Chief of Police
APPROVED AS TO FORM:
BY: _______________________________
CITY Attorney or designee
FOR BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY
APPROVED:
BY: _______________________________
Stanford University Director of Athletics or designee
APPROVED AS TO FORM:
BY: _______________________________
Senior University Counsel
Electronically signed by: Jennifer
Zimbroff
Reason: I have reviewed this document.
Date: Aug 25, 2026 22:04:38 PDT
John Donahoe
Electronically signed by: John Donahoe
Reason: I have reviewed and am
approving this document.
Date: Aug 27, 2026 09:30:05 PDT
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Exhibit A
SCOPE OF WORK
CITY shall make every reasonable effort to provide event-related traffic control support, within the CITY boundaries, for events held at or associated with STANFORD Stadium for which STANFORD requests support and CITY determines support is operationally appropriate (“Athletic Events” or “Events”). Support may include, as needed: (a) police or other CITY staff assigned to event-related traffic control; (b) traffic control equipment; (c) c
ontractors retained for traffic control or related support; (d) outside agency personnel when needed to fill roles CITY cannot fill internally; (e) other direct event support resources reasonably necessary for safe traffic operations; and (f) event-related planning, coordination, operational preparation, command preparation, post - event follow-up, and other administrative or operational work.
STAFFING APPROACH AND OPERATIONAL CONTROL
CITY will determine staffing based on operational, safety, and traffic management needs. STANFORD may request support for an Event, but STANFORD will not determine the exact number of positions to be staffed or the specific deployment locations. Final decisions regarding staffing levels, assignments, deployment, and all activity within CITY’s jurisdiction remain with CITY and under CITY’s operational control and direction.
STANFORD may provide its own personnel to assist CITY operations at no additional cost to CITY, subject to CITY direction and operational compatibility. STANFORD personnel shall not direct CITY public safety operations. City will make every reasonable effort to ensure enough staff are available for traffic control operations within the CITY jurisdiction.
DAY-OF-EVENT STAFFING EXPECTATIONS
For planning and budgeting purposes only, the Parties acknowledge that concert events are expected generally to require a maximum of twenty-two (22) personnel; non-concert events are expected generally to require fewer than twenty-two (22) personnel; minimum staffing is expected generally to be no fewer than sixteen (16) personnel; and day-of-event staffing is expected to average approximately eight (8) hours per assigned traffic control staff member, except traffic control equipment operators, who are expected to be assigned eleven (11) hours, including setup and breakdown. These expectations reflect both sworn and non- sworn staffing, apply only to day-of-event staffing, do not include planning or coordination work outside the event shift, and do not limit CITY’s authority to determine actual staffing levels needed for public safety and traffic operations.
NO GUARANTEE OF PERSONNEL AVAILABILITY
CITY will make reasonable efforts to support STANFORD Events. Staffing is subject to operational needs, emergency response demands, employee availability, and public safety priorities. CITY does not guarantee that all requested support can be provided using CITY personnel alone.
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Exhibit B
COMPENSATION
COST RECOVERY FRAMEWORK
1. For regular season STANFORD Football home games, STANFORD will reimburse CITY as follows:
(a) CITY full-time hourly staff and part-time Palo Alto Reserve Police Officers: fifty percent (50%) of actual cost, calculated pursuant Exhibit C;
(b) contractors: one hundred percent (100%) of actual cost; (c) per-diem, temporary, or limited-term personnel: one hundred percent (100%) of actual cost; (d) outside agency staff required because CITY cannot fill roles internally: one hundred percent (100%) of actual cost; and
(e) equipment and other direct event costs: the fixed equipment reimbursement described below.
2. For all other events, including concerts and commercial athletic events (including playoff/post-season football bowl games), STANFORD will reimburse CITY for one hundred percent (100%) of CITY’s traffic control costs for the Event, including planning and coordination.
CITY EQUIPMENT
STANFORD will reimburse CITY a fixed cost of one thousand dollars ($1,000) per operational event day to reimburse a portion of CITY’s acquisition, installation, fabrication, maintenance, and replacement costs for equipment associated with Event operations. Examples include vehicles, trailers, fuel, traffic signs, traffic cones, barricades, electronic signs, and temporary lighting.
OUTSIDE AGENCY FILL-IN STAFFING
If CITY is unable to fill required assignments with its own full-time personnel for any reason, including insufficient availability of employees for overtime assignments, STANFORD will reimburse one hundred percent (100%) of actual cost for required outside agency staff, per-diem personnel, contractors, or other non-CITY resources used to fill those assignments. This provision does not apply to STANFORD personnel provided by STANFORD to assist CITY operations at no cost.
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Exhibit C
Schedule of Rates
CITY employee costs will be billed as detailed below for each bargaining unit, including employees in the Palo Alto Police Officer Association (PAPOA) and Service Employee International Union (SEIU) bargaining unit.
CITY employees perform services on an overtime basis and shall be compensated (and billed to Stanford) at the applicable overtime rate in accordance with the relevant collective bargaining agreement, the Fair Labor Standards Act (FLSA), and all other applicable federal, state, and local labor laws and regulations .
Regular Police Staff (those employees under PAPOA bargaining unit): The hourly rate billed will be based on the highest published base salary schedule rate for the “Advanced” step of each applicable classification, plus bilingual specialty pay, regardless of whether the assigned employee receives bilingual pay. Applicable job classifications (and job code) include Police Officer (624), Police Agent (616), and Police Sergeant (628).
Nighttime differential of five percent (5%) will apply to work performed on the event day, by full -time sworn staff, billed under these classifications between 6:00 p.m. and 5:00 am. Except for the nighttime differential and overtime, pay modifiers not listed in the salary schedule but written into the Memorandum of Understanding between CITY and PAPOA, including K-9, detective, motorcycle, and similar modifiers, will not be included in this billing.
Reserve Police Officers (Hourly bargaining unit) will be billed on the maximum published hourly classification rate for Police Reserve I plus overtime if applicable.
Non-sworn classifications (SEIU bargaining unit) will be based on a blended rate for SEIU classifications of $65 per hour and will be adjusted by the percentage of change listed in the heading of the SEIU salary schedule for each event day plus overtime if applicable.
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: September 9, 2026
Report #:2607-6557
TITLE
Approval of Amendment No. 1 to Contract No. S25186778 with Municipal Resources Group, LLC to increase the Contract Amount by $85,000 to a Total Not-to-Exceed of $340,000 for Organizational Development Services and Extend the Contract Term by One Year through September 4, 2027; CEQA Status – Not a Project.
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute Amendment No 1. to Contract No. S25186778 (Attachment A) with Municipal Resources Group, LLC, to increase the contract amount by $85,000 and to extend the contract term from September 4, 2026, to September 4, 2027, to provide organizational development services as needed. The revised contract not-to-exceed amount is $340,000 for a revised contract term of 4 years.
EXECUTIVE SUMMARY
Staff proposes an extension to the existing contract with Municipal Resources Group, LLC (MRG) for organizational development services. The City provides employee leadership coaching, professional development, and career advancement training for employees, advancing the City's commitment to a positive work environment and its organizational values through this contract. MRG delivers these services through a team of experienced organizational development professionals.
The proposed amendment increases the contract's not-to-exceed amount from $255,000 to $340,000. This increase covers continuation of services provided in prior fiscal years and ensures the City can continue providing coaching and training services through September 4, 2027. The Council Appointed Officer performance evaluation process is outside the scope of this proposed amendment and is under separate contract.
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BACKGROUND
The City uses organizational development services to strengthen leadership, improve employee performance, and support a positive workplace culture. These services include one-on-one coaching, leadership development, department-specific training, organizational structure assessments, and consulting to address department and Citywide priorities and needs.
The City partners with highly experienced organizational development professionals to supplement internal resources and provide specialized expertise, support organizational change, strengthen leadership capacity, and deliver customized training. Continuing this contract will ensure the City can provide high-quality organizational development services that advance staff growth and effectiveness and it will support Citywide and departmental goals.
ANALYSIS
In January 2023, the Human Resources Department issued a formal Request for Proposals (RFP) and selected three vendors, including Municipal Resources Group, LLC (MRG), to provide organizational development services under three separate contracts. MRG's contract expires on September 4, 2026.
MRG is actively providing coaching, training, and assessment services to the City. These services support department strategic plans and workforce development initiative, as well as the City’s Government Efficiency initiative. Interrupting these services would disrupt established coaching relationships and delay implementation of City initiatives. The department plans to conduct a formal solicitation process (RFP) to establish new organizational development contracts and will start this process fall of 2026. To ensure continuity of services during this transition, the City Manager approved an exemption from competitive solicitation pursuant to Palo Alto Municipal Code section 2.30.360(b). The amendment also provides additional funding to ensure the City can continue providing organizational development services without interruption until the new contracts take effect.
FISCAL/RESOURCE IMPACT
The recommendation in this report does not require additional resources. Funds for as-needed organizational development services come from remaining professional development funds and departments’ budgets. The cost of the 12-month extension to the existing contract is up to $85,000. Sufficient professional development funding is estimated to be available in FY 2027 to absorb the cost of this contract extension. Departments also contribute to covering costs associated with department-specific tasks and programming.
STAKEHOLDER ENGAGEMENT
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Administrative Services managed the contract amendment process and supporting documentation. Human Resources will continue working with these stakeholders to complete the amendment process.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because adopting an amendment to this contract is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).
ATTACHMENTS
Attachment A: Amendment No. 1 to Contract no. S25186778 APPROVED BY:
Sandra Blanch, Human Resources Director
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Vers.: Aug. 5, 2019
AMENDMENT NO. 1 TO CONTRACT NO. S25186778
BETWEEN THE CITY OF PALO ALTO AND
MUNICIPAL RESOURCE GROUP, LLC
This Amendment No. 1 (this “Amendment”) to Contract No. S25186778 (the “Contract” as defined below) is entered into as of September 9, 2026, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MUNICIPAL RESOURCE GROUP, LLC, a California limited liability company, located at 1622 D Street, Sacramento, CA 95814 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment.
R E C I T A L S
A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of planning and implementing organization transformation, providing leadership training, and developing a performance management system, as detailed therein.
B. The Parties now wish to amend the Contract in order to extend the contract term for one year through September 4, 2027 and increase compensation by Eighty-Five Thousand Dollars ($85,000), from a total not-to-exceed compensation of Two Hundred Fifty-Five Thousand Dollars ($255,000) to a new not-to-exceed total compensation of Three Hundred Forty Thousand Dollars ($340,000), as detailed herein.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean Contract No. S25186778 between CONSULTANT and CITY, dated September 5, 2023.
b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.
SECTION 2. Section 2 “TERM’’ of the Contract is hereby amended to read as follows:
“The term of this Agreement shall be effective as of September 5, 2023 through September 4, 2027 unless terminated earlier pursuant to Section 19 (Termination) of this Agreement.”
SECTION 3. Section 4 “NOT TO EXCEED COMPENSATION” of the Contract is hereby amended to read as follows:
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Vers.: Aug. 5, 2019
“The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Eighty-Five Thousand Dollars ($85,000) per year for Four Years, Not to Exceed Three Hundred Forty Thousand Dollars ($340,000.00). The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.
Optional Additional Services Provision (This provision applies only if checked and a not- to-exceed compensation amount for Additional Services is allocated below under this Section 4.)
In addition to the not-to-exceed compensation specified above, CITY has set aside the not- to-exceed compensation amount of Dollars ($ ) for the performance of Additional Services (as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall not exceed Dollars ($ ), as detailed in Exhibit C.
“Additional Services” means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A. CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section. Additional Services, if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, ent itled “PROFESSIONAL SERVICES TASK ORDER”. Eac h Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.
To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the a m o u n t o f c o m p e n s a t i o n s e t f o r t h f o r A d d i t i o n a l S e r v i c e s i n t h i s S e c t i o n 4 .
CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4. Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement.”
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SECTION 4. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference:
SECTION 5. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 6. Incorporation of Recitals . The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference.
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SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.
CITY OF PALO ALTO
__________________________
City Manager
APPROVED AS TO FORM:
__________________________
City Attorney or designee
MUNICIPAL RESOURCE GROUP, LLC
Officer 1
By:_________________________
Name:______________________
Title:_______________________
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: September 9, 2026
Report #:2604-6316
TITLE
Approval of Amendment No. 1 to the Cost-Sharing Agreement with the County of Santa Clara for Continued Operation of the Safe Parking Program at 2000 Geng Road to Extend the Term Through June 30, 2027 and Not-to-Exceed $196,032; Approval of Amendment No. 3 to Contract No. 1557819, the Lease Agreement with the County of Santa Clara, Extending the County’s Temporary Use of the Site Through June 30, 2027; Approval of FY 2027 Budget Amendment in the Permanent Local Housing Allocation (PLHA) Fund; and Authorization to Use PLHA Activity 6 Funds Accordingly; CEQA status – statutorily exempt.
RECOMMENDATION
Staff recommends that the City Council approve and authorize the City Manager or their designee to:
1) Execute Amendment No. 1 (Attachment A) to the cost-sharing Agreement Between the County of Santa Clara and the City of Palo Alto at the 2000 Geng Road Safe Parking expanded site, extending the agreement term through June 30, 2027 and authorizing reimbursement of Permanent Local Housing Allocation (PHLA)-eligible documented costs for the period September 16, 2026 through June 30, 2027, in an amount not to exceed $196,032, including $63,068 for PLHA-eligible documented program costs subject to any required review or approval by the California Department of Housing and Community Development of the City’s proposed use of PHLA funds, provided that any resulting changes are non-substantive and do not increase the City’s costs or reduce the County’s maximum reimbursement amount;
2) Execute Amendment No. 3 to Contract No. 1557819, the Lease Agreement between the City of Palo Alto and the County of Santa Clara, extending the County’s temporary use of a portion of 2000 Geng Road for the Safe Parking Program through June 30, 2027; and 3) Amend the Fiscal Year 2027 Budget Appropriation Ordinance in the PLHA Fund, requiring a 2/3 vote, by:
a) Increasing revenue from Other Agencies in the amount of $63,068; and Item 8
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b) Increasing the City Manager Other Contract Services budget for eligible documented Safe Parking Program costs in the amount of $63,068
EXECUTIVE SUMMARY
The City of Palo Alto and the County of Santa Clara have partnered on the operation of the Safe Parking Program at 2000 Geng Road as part of a coordinated regional response to homelessness. The program provides a safe parking location for households residing in vehicles and connects participants with case management and supportive services. Based on high program utilization and continued use of the site by Palo Alto-connected households, staff recommends approval of amendments to the City-County cost-sharing and lease agreements to allow the existing Geng Road Safe Parking Program to continue through June 30, 2027.
Approval of Amendment No. 1 to the cost-sharing agreement would extend City funding participation through June 30, 2027 and authorize reimbursement of eligible documented costs incurred between September 16, 2026 and June 30, 2027, in an amount not to exceed $196,032, including $63,068 for PLHA-eligible documented program costs. Approval of Amendment No. 3 to Contract No. 1557819, the Lease Agreement, would extend the County’s temporary use of a portion of the City-owned property at 2000 Geng Road for Safe Parking Program purposes through June 30, 2027. The proposed actions would not establish a new safe parking site, expand the leased premises beyond the existing approved site configuration, or modify citywide parking regulations.
The proposed funding plan includes $63,068 in PLHA funds, subject to applicable funding restrictions and review or approval by the California Department of Housing and Community Development, with the remaining $132,964 funded within existing FY 2027 General Fund appropriations approved by Council during the budget process. The proposed amendment preserves the City’s ability to review invoices and supporting documentation, request clarification, and deny reimbursement for costs that are inadequately documented, ineligible, inconsistent with the agreement, or above the approved not-to-exceed amount.
BACKGROUND
Safe parking programs provide safe, legal locations where households sheltering in vehicles can park and access services. The County of Santa Clara, through its Office of Supportive Housing, serves as the lead agency for the Santa Clara County Continuum of Care and coordinates supportive housing policies, shelter, outreach, and related homeless services countywide.1 On September 14, 2020, City Council approved an interim Safe Parking ordinance and a three- year lease with the County of Santa Clara for use of City property at 2000 Geng Road for Safe 1 The Santa Clara County Continuum of Care coordinates regional homelessness response activities, including coordinated assessment and referral processes used to connect eligible households with housing and supportive services.
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Parking Program purposes.3 Under the lease, the County contracted with a local nonprofit operator to operate a Safe Parking Program at the site.
On September 18, 2023, City Council approved Amendment No. 1 to Contract No. 1557819, the Lease Agreement, extending the lease term for three years, prioritizing local populations, and clarifying the City’s landscaping responsibilities.4
On August 19, 2024, City Council approved Amendment No. 2 to Contract No. 1557819, expanding the leased premises at 2000 Geng Road and increasing the number of permitted Safe Parking spaces by 10, from 12 to 22.5
The proposed Amendment No. 3 to Contract No. 1557819 would extend the County’s temporary use of the site through June 30, 2027.
The City and County also entered into a cost-sharing agreement effective February 1, 2025, under which the City contributed funding toward County operation of only the expanded portion of the Geng Road Safe Parking site. The County continues to fund operation of the original Safe Parking site area and original permitted spaces. The proposed Amendment No. 1 to the cost-sharing agreement would extend the term of that agreement through June 30, 2027 and authorize City reimbursement of eligible documented costs associated with the expanded portion of the site for the period September 16, 2026 through June 30, 2027. The County agrees to operate the program consistent with the City’s Safe Parking Ordinance.6
ANALYSIS
Program Operations and Agreement Oversight
For purposes of this report, references to the Geng Road Safe Parking Program refer to the County-operated Safe Parking Program located at 2000 Geng Road, including the expanded site area covered by the proposed cost-sharing and lease amendments.
The proposed amendments continue the current City-County partnership model for the Geng Road Safe Parking Program. Under this model, the County provides or subcontracts program 3 City Council, September 14, 2020, Item #9, https://www.cityofpaloalto.org/files/assets/public/v/1/agendas- minutes-reports/reports/city-manager-reports-cmrs/year-archive/2020-2/id-11513.pdf?t=58031.91 4 City Council, September 18, 2023
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=3115&meetingTemplateType=2 5City Council Staff Report, August 19, 2024,
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=14361 https://cityofpaloalto.primegov.com/meetings/pre-meeting/2169 Note, while the agreement allows for expansion of up to 22 total RV spaces, site conditions can accommodate 21 RVs and two passenger vehicles.
6 See Cost-Sharing Agreement Between the County of Santa Clara and the City of Palo Alto for the 2000 Geng Road Safe Parking Program, Exhibit A, Program Specifics
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services and manages referrals consistent with the Santa Clara County Continuum of Care’s Coordinated Assessment System. The County is also responsible for maintaining financial records and providing backup documentation to support City payment of eligible documented costs.
The City’s cost-sharing obligation is limited to the expanded portion of the Geng Road Safe Parking Program approved through prior Council action. The County continues to fund operation of the original Safe Parking site area and original permitted spaces. The proposed cost-sharing amendment does not shift responsibility for the original site operations to the City.
Amendment No. 1 to the cost-sharing agreement would extend the term of that agreement through June 30, 2027 and authorize City reimbursement of eligible documented costs for the period September 16, 2026 through June 30, 2027. The amendment also shifts the City’s payment structure from remittance to reimbursement to better align payment with documented eligible costs and to support accounting, audit, and grant compliance requirements, including requirements associated with the potential use of PLHA funds.
The City-designated Program Manager will continue to coordinate with the County and relevant City departments and participate in ongoing coordination and oversight. Going forward, rather than reviewing documentation after payment remittance, the Program Manager will review reimbursement requests for eligible documented costs prior to authorizing payment. This approach is intended to reduce the administrative burden and improve efficiency by aligning the process with the City’s and County’s customary reimbursement practices, which have proven more streamlined than post-payment documentation review. The City will reimburse eligible costs only after receipt and review of sufficient supporting documentation, subject to the terms of the agreement and availability of eligible funding.
The cost-sharing amendment requires the County to provide financial documentation sufficient for accounting, audit, reimbursement review, and grant compliance purposes, including documentation supporting eligibility of PLHA funds or other restricted funding sources where applicable. The amendment also requires the County to notify the City of material staffing changes, vacancies, staffing shortages, or other limitations that may affect program operations, service delivery, reporting, contract compliance, or achievement of program goals.
During the Fiscal Year 2027 budget process, City Council approved funding to support continued operation of the Geng Road Safe Parking Program and directed staff to explore additional grant funding opportunities to offset City costs where feasible. In response, staff evaluated available funding sources, including the City’s PLHA Program funds. Based on this evaluation, staff identified $63,068 in PLHA funds that may be drawn down this year and used for eligible documented Safe Parking Program costs, subject to review and approval by the California Department of Housing and Community Development. Staff will submit the proposed use of PLHA funds to HCD for review. Use of those funds remains subject to HCD review and approval, Item 8
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applicable eligibility requirements, and sufficient documentation of eligible costs. Staff will continue to explore additional grant, partnership, and other eligible funding opportunities to offset City costs in future fiscal years, as appropriate.
Program Scope and Site Use
The proposed cost-sharing amendment relates only to City cost-sharing for the expanded portion of the Geng Road Safe Parking Program at 2000 Geng Road. The County continues to fund the original portion of the site. The proposed lease amendment separately extends the County’s temporary use of the 2000 Geng Road property for Safe Parking Program purposes through June 30, 2027.
Together, the amendments allow the County to continue operating the Geng Road Safe Parking Program at 2000 Geng Road while establishing the City’s reimbursement process for eligible documented costs during the amendment period.
Program Utilization and Outcomes
Program utilization has remained high since expansion. Prior reporting indicated that the Geng Road Safe Parking Program has consistently operated at or near full utilization. High utilization suggests that the program continues to meet an identified need; however, it also means that the site has limited ability to absorb additional citywide RV activity without turnover, additional capacity, or other program options.
The program maintains an 1112 when spaces are unavailable. The waitlist functions as a pipeline for future enrollment but does not represent all households residing in vehicles in Palo Alto, because some households may not apply, may not meet eligibility requirements, may decline services, or may seek alternatives outside the Geng Road program.
The County’s quarterly outcome summaries indicate that the Geng Road Safe Parking Program continued to serve Palo Alto-connected households from FY 2026 Q1 through FY 2026 Q313.
Measure FY 2026 Q1 FY 2026 Q2 FY 2026 Q3
Total households enrolled 30 29 27
Total individuals enrolled 43 44 38
Palo Alto-affiliated households 24 21 20
Palo Alto-affiliated individuals 37 36 30
For FY 2026 Q3, Palo Alto-affiliated households represented approximately 74% of enrolled households. Q3 outcomes also showed average and median lengths of enrollment of 398 days 11 Interest list refers to those who have expressed an interest in the Safe Parking Program but may not have produced documents to prove eligibility
12 Waitlist refers to those who have been vetted and have all documents approved by the program 13 Based on County-provided quarterly program materials and invoice documentation for FY 2026 Q1 through FY 2026 Q3. FY 2026 Q4 program utilization and outcome data was not available in time for inclusion in this report.
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and 463 days, respectively, for currently enrolled households, and 316 days and 389 days, respectively, for exiting households. Exit destinations for 11 household exits in Q3 included temporary stays with family or friends, places not meant for habitation, and permanent housing or permanent stays with family.
Safe Parking is intended to be an interim, housing-focused intervention, not a permanent housing solution. Lengths of stay have been significant for some households, reflecting both individual household circumstances and broader regional constraints, including limited affordable housing inventory, documentation barriers, income limitations, and eligibility requirements for permanent housing programs. Staff will continue to monitor length of stay, exit destinations, and returns to homelessness based on available County reporting.
Continued funding allows the City and County to maintain service engagement with participants. Staff will continue to monitor the program through the reporting and oversight mechanisms included in the agreement and will coordinate with the County on implementation issues as they arise.
The County and its operator are responsible for day-to-day program operations at the site, including participant compliance with program rules, case management coordination, and site management. The City retains its role as property owner and coordinates with the County on operational issues that may affect surrounding properties, utilities, access, or public safety.
Staff will continue to monitor site conditions and coordinate with the County regarding trash, sanitation, utility usage, access, parking management, and any operational concerns that may arise. Continuation of the lease and cost-sharing agreement does not limit the City’s ability to address health, safety, access, or property management issues in coordination with the County.
Staff participate in monthly contract management meetings and monthly leadership meetings with the County Office of Supportive Housing, and will continue to use those meetings, along with other coordination channels as needed, to raise operational issues, review implementation concerns, and support ongoing agreement oversight.
Staff will also continue to evaluate the appropriate mix of homelessness response investments, including safe parking, outreach, housing navigation, affordable housing, and parking management strategies, as part of the City’s broader budget and policy discussions.
Financial Review and Reimbursement Controls
Based on County backup documentation reviewed for FY 2026 Q1 through FY 2026 Q3, quarterly Palo Alto Safe Parking Program invoice totals were $155,799.85 for FY 2026 Q1, $166,541.56 for FY 2026 Q2, and $157,196.56 for FY 2026 Q3. These quarters correspond to July 2025 through March 2026. The City’s share of these invoices is limited to the expanded portion of operations, equivalent to $202,715.84, or roughly 42 percent of the total FY 2026 Q1 Item 8
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through FY 2026 Q3 invoice amounts reviewed. The County remains responsible for the costs associated with the original Safe Parking site area and original permitted spaces.
The proposed cost-sharing amendment would allow the City to reimburse the County for eligible documented costs incurred from September 16, 2026 through June 30, 2027, in an amount not to exceed $196,031.67, including $63,068.34 for PLHA-.17 The proposed amendment provides that invoices may be submitted no more frequently than monthly and no less frequently than quarterly, unless otherwise agreed in writing. Each invoice must include adequate cost detail and supporting documentation. The City may request clarification before approving payment, and the City is not required to reimburse costs that are inadequately documented, ineligible under the applicable funding source, inconsistent with the agreement, or above the approved not-to-exceed amount. Final invoices must be submitted within 60 days after expiration or termination of the agreement unless the City agrees otherwise in writing.
Staff will review invoices and supporting documentation before authorizing reimbursement.
Reimbursement will be limited to eligible documented costs that are consistent with the cost- sharing agreement, applicable funding requirements, and the approved not-to-exceed amount.
Utility charges may be paid directly by the City through an interdepartmental transfer or reimbursed to the County, as applicable; however, total City payment or reimbursement for utility charges under Amendment No. 1 shall not exceed $40,000.00 during the amendment period unless authorized through a written amendment and any required Council budget action. Costs that are inadequately documented, ineligible under the applicable funding source, inconsistent with the agreement, or above the approved not-to-exceed amount will not be reimbursed unless authorized through a written amendment and any required Council budget action.
The amendment also provides that City funding may come from PLHA funds, existing Council- approved appropriations, and/or other legally available funds, subject to Council appropriation, applicable funding restrictions, and any required review or approval by the California Department of Housing and Community Development.
Proposed Lease Amendment
Amendment No. 3 to Contract No. 1557819, the Lease Agreement, would extend the County’s temporary use of the designated portion of the City-owned property at 2000 Geng Road for 17 This not-to-exceed amount is covering an approximately 10-month period.
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Safe Parking Program purposes through June 30, 2027. This action would align site control with the proposed cost-sharing term and allow uninterrupted program operation.
The lease amendment would continue the existing temporary site-use arrangement and would not establish a new Safe Parking site or expand the leased premises beyond the existing approved site configuration. The amendment also preserves existing language stating that the County’s use is temporary and that the term shall expire no later than the date Government Code Section 8698.4, or any statutory replacement, is repealed.19
FISCAL/RESOURCE IMPACT
Approval of Amendment No. 1 to the cost-sharing agreement would authorize reimbursement of eligible documented costs in an amount not to exceed $196,032 for the period September 16, 2026 through June 30, 2027, including $63,068 for PLHA-eligible documented program costs.
The proposed funding plan for the amendment is summarized below. With Council approval of this item, staff would use $63,068 in PLHA Program funds for eligible documented program costs during the amendment period, subject to review and approval by the California Department of Housing and Community Development. The remaining $132,964 would be funded from existing Fiscal Year 2027 General Fund appropriations approved by Council during the budget process.
The proposed budget amendment would increase the PLHA Fund revenue and expenditure authority by $63,068 for eligible documented Safe Parking Program costs. The remaining $132,964 would be funded within existing FY 2027 General Fund appropriations. No additional General Fund budget amendment is requested as part of this action.
Staff conducted a historical invoice review to evaluate cost categories, documentation requirements, and potential PLHA eligibility. The proposed $63,068 PLHA allocation for the amendment period is prospective and remains subject to HCD review and approval of PLHA use.
Staff will continue to identify and pursue additional eligible funding sources, including grant and partnership opportunities, to offset City costs where feasible. Any use of additional restricted funding sources would be subject to applicable eligibility requirements, documentation standards, Council appropriation authority, and any required external review or approval. If additional eligible funding is identified, staff may return to Council for any required budget action or agreement amendment.
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The lease amendment itself does not authorize separate reimbursement beyond the proposed cost-sharing amendment. However, Amendment No. 3 to Contract No. 1557819, the Lease Agreement, is required to continue the County’s temporary use of the designated portion of 2000 Geng Road for Safe Parking Program purposes during the same period.
The proposed use of PLHA funds is currently under review by the California Department of Housing and Community Development. Staff recommends Council authorization at this time to allow timely execution, subject to HCD review of PLHA use and any non-substantive modifications approved by the City Attorney. If HCD determines that certain costs are not eligible for PLHA reimbursement, staff will use existing General Fund appropriations or other legally available non-PLHA funding for those costs, subject to available appropriation authority.
If HCD’s review requires material changes to the City’s funding plan or agreement terms, staff will return to Council for further direction, authorization, or budget action, as appropriate.
Staff will review invoices and supporting documentation before authorizing reimbursement.
Reimbursement will be limited to eligible documented costs that are consistent with the cost- sharing agreement, applicable funding requirements, and the approved not-to-exceed amount.
Costs that are inadequately documented, ineligible under the applicable funding source, inconsistent with the agreement, or above the approved not-to-exceed amount will not be reimbursed unless authorized through a written amendment and any required Council budget action.
STAKEHOLDER ENGAGEMENT
This item was coordinated with the City Manager’s Office, City Attorney’s Office, Administrative Services/Finance, Utilities, relevant operating departments, and the County of Santa Clara Office of Supportive Housing. Staff participate in regular coordination with the County Office of Supportive Housing, including monthly contract management meetings and monthly leadership meetings, to discuss program operations, contract administration, reimbursement documentation, service coordination, and implementation issues.
The City also receives quarterly program reports from the County, which staff use to support ongoing monitoring, agreement oversight, and future reporting to Council, as appropriate.
ENVIRONMENTAL REVIEW
Approval of the lease amendment would continue the County’s existing temporary use of a portion of the City-owned property at 2000 Geng Road for Safe Parking. In connection with prior Council approvals for Safe Parking use at this location, including the original 2020 lease approval, the 2023 approval of Amendment No. 1 extending the lease term, and the 2024 Item 8
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approval of Amendment No. 2 expanding the leased premises, the City considered environmental review for the temporary Safe Parking use of the site.21 The proposed actions before Council do not establish a new Safe Parking site, expand the leased premises beyond the existing approved site configuration, modify citywide parking regulations, or authorize physical changes to the property. The actions would continue the existing temporary use and related cost-sharing arrangement. The proposed actions are not a project under the California Environmental Quality Act because they constitute administrative, fiscal, and organizational activities that will not result in direct or reasonably foreseeable indirect physical changes in the environment. In the alternative, the actions are statutorily exempt under PRC section 21080.10(c) as contracts providing services for people experiencing homelessness.
ATTACHMENTS
Attachment A: Amendment No. 1 to the Agreement Between the County of Santa Clara and the City of Palo Alto for Cost Sharing at 2000 Geng Road Safe Parking Expanded Site Attachment B: Amendment No. 3 to Contract No. 1557819, the Lease Agreement Between the City of Palo Alto and the County of Santa Clara for Use of 2000 Geng Road APPROVED BY:
Ed Shikada, City Manager
21 See City Council Staff Report ID #11513, dated September 14, 2020, regarding adoption of an interim Safe Parking ordinance and approval of a three-year lease with the County of Santa Clara for City property located at 2000 Geng Road for Safe Parking Program purposes.
See City Council Staff Report #2308-1886, dated September 18, 2023, regarding approval of Amendment No. 1 to the Lease Agreement between the City of Palo Alto and the County of Santa Clara, Contract No. 1557819, at 2000 Geng Road for Safe Parking to extend the lease term for three years, prioritize local populations, and clarify the City’s landscaping duties. https://cityofpaloalto.primegov.com/meetings/pre-meeting/1966 See City Council Staff Report #2407-3274, dated August 19, 2024, regarding approval of Amendment No. 2 to the Lease Agreement between the City of Palo Alto and the County of Santa Clara, Contract No. 1557819, at 2000 Geng Road for Safe Parking to expand the leased premises and increase the number of permitted Safe Parking spaces by
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AMENDMENT NO. 3 TO CONTRACT NO. 1557819
BETWEEN THE CITY OF PALO ALTO AND
THE COUNTY OF SANTA CLARA
This Amendment No. 3 (this “Amendment”) to Contract No. 1557819 (the “Contract” as defined below) is entered into as of September 12, 2026 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and the COUNTY OF SANTA CLARA, a political subdivision of the State of California (“COUNTY”). CITY and COUNTY are referred to collectively as the “Parties” in this Amendment.
R E C I T A L S
A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of the use of a portion of 2000 Geng Road for the County’s 24-hour safe parking program for recreational and other vehicles and persons residing in such vehicles on a temporary basis (“Safe Parking”), as detailed therein.
B. The Parties now wish to amend the Contract to extend the term.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean Contract No. 1557819 between COUNTY and CITY, dated September 17, 2020, as amended by:
• Amendment 1, dated September 12, 2023, and
• Amendment 2, dated August 26, 2024
b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.
SECTION 2. Section 2 of the Contract is hereby amended to read as follows:
2. Term. The term of this Agreement shall commence upon the Effective Date and end on June 30, 2027 (“Term”). Notwithstanding anything to the contrary this Agreement, the Term shall expire no later than the date Government Code Section 8698.4 (or any statutory replacement thereof) is repealed. It is understood that this Agreement is intended to give County a temporary use of the Premises and that County shall not be entitled to relocation benefits, assistance, damages (liquidated or otherwise) , costs, Item 8
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No. 1 to the Agreement
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Palo Alto for Cost Sharing at
2000 Geng Road Safe
Parking Expanded Site
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claims or fees from City upon expiration, termination, or cancellation of this Agreement.
SECTION 3. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 4. Incorporation of Recitals . The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference.
SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.
CITY OF PALO ALTO
______________________________
City Manager
APPROVED AS TO FORM:
______________________________
City Attorney or designee
COUNTY OF SANTA CLARA
______________________________
Name:
Title:
APPROVED AS TO FORM AND LEGALITY:
______________________________
Name:
Title:
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AMENDMENT NO. 1 TO AGREEMENT
BETWEEN THE CITY OF PALO ALTO AND THE COUNTY OF SANTA CLARA FOR COST SHARING AT 2000 GENG ROAD SAFE PARKING EXPANDED SITE
This Amendment No. 1 (this “Amendment”) to the Agreement Between the County of Santa Clara and the City of Palo Alto (the “Contract” as defined below) is entered into as of September 12, 2026 by and between the CITY OF PALO ALTO, a California chartered mun icipal corporation (“CITY”), and the COUNTY OF SANTA CLARA, a political subdivision of the State of California (“COUNTY”). CITY and COUNTY are referred to collectively as the “Parties” in this Amendment.
R E C I T A L S
A. The Contract (as defined below) was entered into by and between the Parties hereto for the City to contribute funds to the County’s operation of the Expanded Site at 2000 Geng Road for Safe Parking (“Safe Parking”), as detailed therein.
B. The Parties now wish to amend the Contract in order to extend the term of the Contract and amend other terms.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Contract. The term “Contract” shall mean the “Agreement Between the County of Santa Clara and the City of Palo Alto” between COUNTY and CITY, effective February 1, 2025.
b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract.
SECTION 2. Section 1 of the Contract is hereby amended to read as follows:
1) TERM
This Agreement is effective on February 1, 2025 and will continue thereafter through June 30, 2027 unless extended by mutual consent or terminated as provided below in Sections 4 and 13.
SECTION 3. Section 2 of the Contract is hereby amended to read as follows:
2) ROLES AND RESPONSIBILITIES
a) The Parties shall jointly develop, implement, and monitor the programs described in Exhibit A: Program Specifics (“Programs”).
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No. 3 to Contract No.
1557819, the Lease
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b) City’s Responsibilities
i) The City shall designate a Program Manager to: (1) Serve as the County’s liaison to the City’s departments and City Council; (2) Participate in management meetings for the Programs, which will be held as needed; and (3) Actively assist in the developmen t and improvement of the Programs to ensure that the Programs meet their goals.
ii) The City shall reimburse the County for eligible expenses incurred in connection with this Agreement, up to the maximum amounts specified below in Table 1, following receipt, review, and approval of the County’s invoice or payment request. The County’s invoice or payment request will consist of a summary of eligible costs in accordance with this agreement.
Table 1: City’s Not-to-Exceed Contribution
Time Period
Total Maximum Financial
Obligation
February 1, 2025 - June 30, 2025 $98,507
July 1, 2025 – June 30, 2026 $235,238
July 1, 2026 – September 15, 2026 $59,104
Utility Charges (as defined below) for
February 1, 2025 – September 15, 2026
$55,000
September 16, 2026 – June 30, 2027 $295,004
Utility Charges (as defined below) for
September 16, 2026 – June 30, 2027
$30,000
TOTAL $772,853
The County shall submit its final invoice no later than sixty (60) days after expiration or termination of this Agreement, unless the City agrees in writing to a later date. The City shall have no obligation to reimburse invoices submitted after that date.
Notwithstanding anything to the contrary in the Geng Road Lease, the City shall pay for electricity, gas, refuse, sewer, and water for the Geng Road site (“Utility Charges”) during the time periods above up to the specified amounts in Table 1 above. Utility Charges may be paid directly from the City to itself as the utility provider, through interdepartmental transfer or other City accounting mechanism, or the City may reimburse the County for actual eligible utility costs paid, as applicable.
Item 8
Attachment B - Amendment
No. 3 to Contract No.
1557819, the Lease
Agreement Between the
City of Palo Alto and the
County of Santa Clara for
Use of 2000 Geng Road
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iii) The City’s contribution under this Agreement may be funded from a combination of Permanent Local Housing Allocation (“PLHA”) funds, General Fund appropriations, and/or other legally available funds, subject to applicable restrictions on the use of suc h funds, City Council appropriations, and all applicable federal, state, and local laws and requirements.
c) County’s Responsibilities
i) The County shall designate one or more Program Managers to: (1) Serve as the City’s liaison to County departments; (2) Plan and lead management and coordination meetings, which will be held as needed; (3) Lead in development, management, and refinement of the Programs to ensure that the Programs meet their goals; and (4) Lead coordination meetings with appropriate stakeholders to ensure the Programs’ success.
ii) The County shall provide or subcontract Programs’ services. To the maximum extent practicable, the County shall leverage other resources to offset, improve, or expand the Programs’ services.
iii) The County or its contractors shall implement referral criteria and procedures consistent with the Santa Clara County Continuum of Care’s Coordinated Assessment System.
iv) The County shall maintain complete and accurate financial records supporting all costs for which reimbursement is sought under this Agreement and reasonably requested by the City for audit purposes.
v) To the extent the City uses PLHA or other restricted funds under this Agreement, the County shall cooperate with the City in providing documentation required by the State or funder to support cost eligibility, reporting, monitoring, and audit compliance. The City shall communicate any known funding -source-specific documentation requirements to the County reasonably in advance.
d) The Parties shall work collaboratively to: i) Establish the Programs’ success and outcome measures consistent with the Santa Clara County Continuum of Care’s System Performance Measures; ii) Identify resources that would enable the Programs to more effectively use City and County funds and improve Programs, incorporating lessons learned from similar Programs; iii) Meet regularly to discuss the performance and progress of the Programs. When appropriate, the Parties shall jointly develop corrective actions to be implemented by the Programs’ contractors; iv) Jointly monitor the Programs’ expenses and outcomes. Based on the availability of the City’s Item 8
Attachment B - Amendment
No. 3 to Contract No.
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County of Santa Clara for
Use of 2000 Geng Road
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funds in future years and the Programs’ outcomes, the Parties will determine whether to continue, expand, contract, or terminate the Programs at the end of the Term;
e) Funding under this Agreement is contingent on appropriations approved by the City Council and, where applicable, on the continued availability and lawful use of PLHA or other restricted funding sources. Nothing herein, however, shall prevent the obligation of the City Council to reimburse costs eligible under this Agreement where any non -compliance with PLHA or other restricted funding sources was due to conditions not communicated to the County in advance.
SECTION 4. The following exhibit to the Contract is hereby amended to read as set forth in the attachment to this Amendment, which is hereby incorporated in full into this Amendment and into the Contract by this reference:
a. Exhibit “A” entitled “PROGRAM SPECIFICS”, AMENDED, REPLACES PREVIOUS.
SECTION 3. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 4. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference.
SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.
CITY OF PALO ALTO
______________________________
City Manager
APPROVED AS TO FORM:
______________________________
City Attorney or designee
COUNTY OF SANTA CLARA
______________________________
Name:
Title:
APPROVED AS TO FORM AND LEGALITY:
______________________________
Name:
Title:
Attachment: Exhibit “A” “PROGRAM SPECIFICS”
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Attachment B - Amendment
No. 3 to Contract No.
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Agreement Between the
City of Palo Alto and the
County of Santa Clara for
Use of 2000 Geng Road
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EXHIBIT A: PROGRAM SPECIFICS
This Exhibit describes the Programs that will be implemented under this Agreement, either directly by the County or by a County subcontractor.
A. Safe Parking (SP)
1. Program Description
SP programs provide homeless households with a temporary, overnight, safe location to park, as along with case management and related supportive services.
2. Ordinance
The County agrees to comply with all of the terms and conditions set forth in the City’s Safe Parking Ordinance.
3. Target Population
The Program shall serve homeless households who are unsheltered and sleeping in their vehicle with priority for households with students enrolled in a school district within Palo Alto as outlined in the Safe Parking Ordinance.
4. Number of Households
The County or its contractors shall serve up to 10 households at a given point in time.
5. Program Funding Amount
The City shall reimburse the County for eligible documented Program costs in accordance with Section 2(b)(ii) of this Agreement, up to the maximum amounts authorized under this Agreement.
6. Reporting Requirements
a) The County shall provide quarterly reports to the City no later than thirty (30) days following the end of each calendar quarter, unless otherwise agreed in writing by the Parties. Quarterly reports shall include, at a minimum:
b) Number of unduplicated clients served:
a. All clients served.
b. Clients served that are connected to the City.
c) Exit destinations:
a. Number of unduplicated clients exits per period by exit categories. b. Number of unduplicated clients exits per period by exit categories for those connected to the City.
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No. 3 to Contract No.
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d) Enrollments of Palo Alto connected clients for the time period as well as enrollments that are new in that time period.
e) Average length of time that individuals and families remain in program. f) Returns to homelessness within 12 months of individuals and families served, as data becomes available.
g) Returns to homelessness within 2 years of individuals and families served, as data becomes available.
h) A summary budget -to-actual report of operation and maintenance costs funded by the City during the reporting period, in categories and a format agreed upon by the Parties.
Item 8
Attachment B - Amendment
No. 3 to Contract No.
1557819, the Lease
Agreement Between the
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County of Santa Clara for
Use of 2000 Geng Road
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: September 9, 2026
Report #:2606-6439
TITLE
Approval of Amendment No. 2 to Contract C23187298C with Hinderliter, de Llamas & Associates (HdL) to Add Sales Tax and Transactions Tax Analysis, Reporting, Forecasting, and Audit Recovery Services and Increase Compensation by $165,000 for a New Total Not-to-Exceed Amount of $3,035,000 over Two Years and Adoption of a Resolution Authorizing HdL and Designated City Staff to Examine Sales or Transactions and Use Taxes from the California Department of Tax and Fee Administration (CDTFA); CEQA Status - Not a Project
RECOMMENDATION
Staff recommends that the City Council:
1. Approve and authorize the City Manager of their designee to execute Amendment No. 2 to Contract C23187298C with Hinderliter, de Llamas, and Associates (HdL) to add sales tax and transactions tax analysis, reporting, forecasting, and audit recovery services and increase compensation by $165,000 for a revised not-to-exceed amount of $3,035,000 (Attachment A); and
2. Adopt a Resolution Authorizing HdL and Designated City Staff to Examine Sales or Transactions and Use Taxes from the California Department of Tax and Fee Administration (CDTFA) (Attachment B).
EXECUTIVE SUMMARY
This item recommends approval of Amendment No. 2 to the City’s existing agreement with Hinderliter, de Llamas, and Associates (HdL) to add sales tax and transactions tax analysis, forecasting, reporting, and audit recovery support services through June 30, 2028. The amendment increases the contract authority by $165,000 over the remaining two years of the contract term, for a revised not-to-exceed amount of $3,035,000. The City Council previously approved $2,870,000 for Business Tax and Business Registry administration, compliance, and related services over the full five-year agreement term.
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monitoring, and related financial analysis. The proposed amendment reassigns the City’s existing sales tax analysis and reporting services from the City’s current consultant, MuniServices LLC, to HdL. The amendment would also add similar services for local transactions and use tax measure, if approved by voters at the November 2026 election. Under the proposed service structure, these activities would be more closely aligned with the City’s financial planning and revenue monitoring processes and timelines and provide staff with greater information and flexibility to evaluate changing economic conditions and revenue assumptions.
The accompanying resolution is required by the CDTFA and updates the City’s authorization for HdL and designated City staff to examine confidential tax information necessary to perform these services.
BACKGROUND
In Spring 2023, the City completed a Request for Proposals (RFP) for tax and fee consulting services, including sales tax, Business Tax, Business Registry, Business Improvement District (BID), Transient Occupancy Tax (TOT), Utility Users Tax (UUT), and property tax services1. The RFP was structured to award services across multiple firms based on qualifications, experience, and operational needs associated with each service area. Since that time, the City has continued to evaluate and adjust service assignments among selected consultants in response to changing operational needs, evolving financial planning priorities, and external economic and regulatory changes.
Under this approach, HdL currently provides Business Tax, Business Registry, and property tax reporting and analytics, while MuniServices provides sales tax, TOT, and UUT services. The proposed amendment would reassign sales tax services from MuniServices to HdL. No other service assignments are proposed to change.
ANALYSIS
Sales tax is one of the City’s major revenue sources, accounting for approximately 10-15% of annual General Fund revenues. Recent changes to CDTFA sales tax allocation methodologies, along with broader economic and consumer spending uncertainty, have increased the complexity and variability associated with sales tax forecasting and revenue monitoring. As a result, timely analysis and the ability to respond to changing conditions have become increasingly important to the City’s financial planning efforts.
The proposed amendment would reassign the City’s sales tax analysis, reporting, forecasting, and audit recovery services from MuniServices to HdL. These services are critical to the City’s 1 City Council, June 19, 2023, Report #2304-1337
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ability to accurately project revenues, monitor economic trends, and ensure the timely recovery of sales tax revenue. Under the proposed service structure, these activities would be more closely coordinated with the City’s financial planning and revenue monitoring processes and timelines. Although the proposed amendment reflects a price increase relative to the City’s current agreement, staff recommends this transition, this structure would also provide staff with greater information and flexibility to evaluate changing economic conditions, refine revenue assumptions, and incorporate updated information throughout the budget and financial planning process.
The amendment also includes similar services for local transactions and use tax revenues. This would include the proposed 0.5% transactions and use tax measure, if approved by voters at the November 2026 election.
In accordance with California Revenue and Taxation Code 7056, Resolution 102223 authorizes MuniServices, HdL, and designated City staff to examine confidential sales and use tax information. The proposed resolution would replace Resolution No. 10222 to reflect the City’s current service providers and expand the authorization to include transactions tax information.
MuniServices would remain authorized to access confidential tax information only as necessary to complete any outstanding petitions under its previous agreement with the City.
This amendment does not change any underlying tax programs, tax rates, or City policies.
FISCAL/RESOURCE IMPACT
No additional funding is requested as part of this amendment. The amendment would increase contract authority by $165,000 through June 30, 2028, for fixed-fee analysis and reporting services, contingent audit recovery fees, reimbursable expenses, and optional services that the City may request. Pricing for the sales tax analysis and reporting services increased from $352 per month to $1,300 per month (or $11,376 annually). This price increase includes reporting on the City’s ½ cent (0.50%) transactions (sales) tax measure that is on November 2026 ballot.
Contingent fees are incurred only when additional tax revenues are successfully recovered.
Contingent fees for recovered sales and use tax revenue increased by three percentage points compared to the prior contract, from 15% to 18%. The fee applies to historical reallocations from audits and the subsequent eight reporting quarters following CDTFA confirmation of the correction. The amendment also includes a 25% contingent fee on revenue recovered for the ½ cent (0.50%) transactions (sales) tax.
3 Resolution 10222, passed by City Council on March 24, 2025:
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Staff expects to manage these costs within existing appropriations. Actual costs will vary based on audit recovery activity levels and any optional services requested by the City. Staff will monitor costs throughout the remaining agreement term. Any additional funding needs will be brought forward for City Council consideration through a future budget process. This contract and pricing is recommended to meet the service delivery and expectations critical to the city’s second largest revenue stream.
STAKEHOLDER ENGAGEMENT
The consultant was selected through the City’s Spring 2023 Request for Proposal (RFP) for tax and fee consulting services.
ENVIRONMENTAL REVIEW
This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA Guidelines, section 15378(b)(4) (government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment).
ATTACHMENTS
Attachment A: Amendment No. 2 to Contract No. C23187298C with HdL Attachment B: Resolution Authorizing Examination of Sales or Transactions and Use Tax Records
APPROVED BY:
Lauren Lai, Administrative Services Director
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AMENDMENT NO. 2 TO CONTRACT NO. C23187298C
BETWEEN THE CITY OF PALO ALTO AND
HINDERLITER DE LLAMAS & ASSOCIATES (HDL)
This Amendment No. 2 (this “Amendment”) to Contract No. C23187298C (the “Contract” as defined below) is entered into as of September 9, 2026, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and HINDERLITER DE LLAMAS & ASSOCIATES (HDL), a California corporation, located at 120 S. State College Blvd. Suite 200, Brea, California 92821 (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment.
R E C I T A L S
A.
The Contract (as defined below) was entered into by and between the Parties hereto for the provision of administration, collection, enforcement, compliance, and audit activities for the City’s business tax and business registry certificate program, as detailed therein.
B. The Parties entered into Amendment No. 1 to extend the term for an additional two (2) years, changing expiration date from June 30, 2026 to June 30, 2028 and increasing the compensation value by Two Million Nine Thousand Four Hundred Forty Five Dollars ($2,009,445); changing total not to exceed compensation value from Eight Hundred Sixty Thousand Five Hundred Fifty Five Dollars ( $860,555) to Two Million Eight Hundred Seventy Thousand Dollars ($2,870,000), as detailed therein.
C. The Parties now wish to amend the Contract in order to (1) increase the compensation value by One Hundred Sixty-Five Thousand Dollars ($165,000); changing total not to exceed compensation value from Two Million Eight Hundred Seventy Thousand Dollars ($2,870,000) to Three Million Thirty-Five Thousand Dollars ($3,035,000); and (2) add to the Scope of Services, as detailed herein.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree:
SECTION 1. Definitions. The following definitions shall apply to this Amendment:
a. Co
ntract. The term “Contract” shall mean Contract No. C23187298C between CONSULTANT and CITY, dated October 1, 2023, as amended by:
Amendment No. 1 dated September 29, 2025
b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. $)'
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SECTION 2. Section 4. “COMPENSATION” of the Contract is hereby amended to read as follows:
“The compensation to be paid to CONSULTANT for performance of the Services shall be based on the compensation structure detailed in Exhibit C, entitled “COMPENSATION,” including any reimbursable expenses specified therein, and the maximum total compensation shall not exceed Two Million Nine Hundred Eleven Thousand ($2,911,000) . The hourly schedule of rates, if applicable, is set out in Exhibit C-1, entitled “SCHEDULE OF RATES.” Any work performed or expenses incurred for which payment would result in a total exceeding the maximum compensation set forth in this Section 4 shall be at no cost to the CITY.
Optional Additional Services Provision (This provision applies only if checked and a not-to- exceed compensation amount for Additional Services is allocated below under this Section 4.)
In addition to the not-to-exceed compensation specified above, CITY has set aside the not-to- exceed compensation amount of One Hundred Twenty-Four Thousand Dollars ($124,000) for the performance of Additional Services (as defined below). The total compensation for performance of the Services, Additional Services and any reimbursable expenses specified in Exhibit C, shall be Three Million Thirty-Five Thousand Dollars ($3,035,000), as detailed in Exhibit C.
“Additional Services” means any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit A. CITY may elect to, but is not required to, authorize Additional Services up to the maximum amount of compensation set forth for Additional Services in this Section 4.
CONSULTANT shall provide Additional Services only by advanced, written authorization from CITY as detailed in this Section. Additional Services, if any, shall be authorized by CITY with a Task Order assigned and authorized by CITY’s Project Manager, as identified in Section 13 (Project Management). Each Task Order shall be in substantially the same form as Exhibit A-1, entitled “PROFESSIONAL SERVICES TASK ORDER”. Each Task Order shall contain a specific scope of services, schedule of performance and maximum compensation amount, in accordance with the provisions of this Agreement. Compensation for Additional Services shall be specified by CITY in the Task Order, based on whichever is lowest: the compensation structure set forth in Exhibit C, the hourly rates set forth in Exhibit C-1, or a negotiated lump sum.
To accept a Task Order, CONSULTANT shall sign the Task Order and return it to CITY’s Project Manager within the time specified by the Project Manager, and upon authorization by CITY (defined as counter-signature by the CITY Project Manager), the fully executed Task Order shall become part of this Agreement. The cumulative total compensation to CONSULTANT for all Task Orders authorized under this Agreement shall not exceed the amount of compensation set forth for Additional Services in this Section 4. CONSULTANT shall only be compensated for Additional Services performed under an authorized Task Order and only up to the maximum amount of compensation set forth for Additional Services in this Section 4. Performance of and payment for any Additional Services are subject to all requirements and restrictions in this Agreement.” $)'
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SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference:
a. Exhibit “A-1” entitled “SCOPE OF SERVICES, AMENDMENT NO. 2”, ADDED.
b. Exhibit “B” entitled “SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2”, AMENDED, REPLACES PREVIOUS.
c. Exhibit “C” entitled “COMPENSATION, AMENDMENT NO. 2”, AMENDED, REPLACES PREVIOUS.
SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect.
SECTION 5. Incorporation of Recitals . The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference.
(SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.)
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SIGNATURES OF THE PARTIES
IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written.
CITY OF PALO ALTO
_________________________
City Manager
APPROVED AS TO FORM:
_________________________
City Attorney or Designee
HINDERLITER DE LLAMAS &
ASSOCIATES (HDL)
Officer 1
By:__________________________
Name:_______________________
Title:________________________
Officer 2
By:__________________________
Name:_______________________
Title:________________________
Attachments:
- EXHIBIT A – SCOPE OF SERVICES, AMENDMENT NO. 1
- EXHIBIT A-1 – SCOPE OF SERVICES, AMENDMENT NO. 2 (ADDED) - EXHIBIT B – SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2 (AMENDED, REPLACES
PREVIOUS)
- EXHIBIT C – COMPENSATION, AMENDMENT NO. 2 (AMENDED, REPLACES PREVIOUS) - EXHIBIT C-1 – SCHEDULE OF RATES, AMENDMENT NO. 1
- EXHIBIT D – INSURANCE REQUIREMENTS
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EXHIBIT A
SCOPE OF SERVICES, AMENDMENT NO.1
CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. CONSULTANT shall provide the Services detailed in this Exhibit A, entitled “SCOPE OF SERVICES”. Notwithstanding any provision herein to the contrary, CONSULTANT’s duties and services described in this Scope of Services shall not include preparing or assisting CITY with any portion of CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Scope of Services
CONSULTANT (HdL) will provide the following monthly recurring services relative to the administration, collection, enforcement, compliance, and audit activities for the City’s business tax and business registry certificate program:
Task 1:
1. Operations Management Services
1.1. Establish and maintain database of businesses for the business registry certificate program and business tax.
1.2. Receive and process, in a timely fashion:
1.2.1. Business registry applications, renewals and payments, and.
1.2.2. Business tax filings, amended returns, and payments.
1.3. Renewal and payment notices:
1.3.1. Business registry renewal notices will be sent renewal notices to active businesses within 30 days of the renewal period end date or at another interval specified by CITY.
1.3.2. Business tax payment reminder notices will be sent within 30 days of the tax payment due date or at another interval specified by CITY.
1.4. Provide businesses multiple options for submitting applications, renewals, tax filing, payments, or support requests (including via website, email, mail, phone, and fax).
1.4.1. Have experience and capabilities to process business payments, renewals, delinquent payments and ongoing monitoring and administration of CITY’s business registry certificate program and business tax, as described in the CITY’s municipal code, ordinances, policies and program procedure manuals.
1.4.2. Consultant specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).
1.4.3. Respond to business correspondence via return phone call or written correspondence within 24 hours.
1.5. Remit revenue to CITY no less than monthly, along with detail of business registry $)'
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applications, business tax filings, and any additional documentation.
1.6. Provide CITY staff access to website portal offering business registry inquiry, reporting, and electronic department approval capabilities.
Task 2:
2. Compliance Services: 1) Identify and register businesses which are subject to business registry certificate program and/or business tax, 2) collect known debt as pertains to business registry certificate and/or business tax, and 3) identify under-reported registration fee and/or tax liability.
2.1. Discovery Services
2.1.1. Develop a list of businesses subject to CITY business registry certificate or taxation.
2.1.2. Notify non-compliant businesses of their options to comply or dispute their non- compliant status. Notification and support to businesses will be facilitated through the website, mail, email, phone and/or fax.
2.1.3. Review information and forms submitted by the business for completion and accuracy, inclusive of any additional required documentation (i.e. home occupation permit). All submissions are filed and stored electronically and made available to CITY upon request.
2.1.4. Provide businesses with detailed invoicing and options to pay via website, mail, and phone.
2.1.5. Remit revenue to CITY no less than monthly, along with detail of business registry applications, business tax filings, and any additional documentation.
1.5. Collection Services
1.5.1. Identify businesses subject to CITY business registry certificate or taxation which have known debt to CITY and have failed to pay within an appropriate time frame.
1.5.2. Notify businesses of their options to comply or dispute their non-compliant status.
1.5.3. Provide businesses with detailed invoicing and options to pay via website, mail and phone.
1.5.4. Remit revenue to CITY no less than monthly, along with detail of business registry applications, business tax filings, and any additional documentation.
2.3. Audit Services
2.3.1. Identify potential under-reporting and/or misclassified businesses.
2.3.2. Audit businesses mutually agreed to by CITY and CONSULTANT that are identified as potential under-reporting businesses.
2.3.3. Submit audit summaries to CITY and discuss further actions.
2.3.4. Educate businesses on proper reporting practices.
2.3.5. Invoice and collect identified delinquencies.
3. Payment Processing – services include PCI compliant payment processing services powered by FIS Global, which supports both credit card (taxpayer funded) and eCheck (CITY funded) transactions.
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Task 3:
3.1. CITY Responsibilities
3.1.1. As a condition to its receipt of the Service, CITY shall execute and deliver any and all applications, agreements, certifications or other documents required by FIS Global, Networks or other third parties whose consent or approval is necessary for the processing of Transactions by FIS Global. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.
3.1.2. CITY hereby grants CONSULTANT the full right, power and authority to request, receive and review any Data or records reflected in a Transaction report. CITY represents and warrants that it has the full right and authority to grant these rights.
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EXHIBIT A-1
SCOPE OF SERVICES, AMENDMENT NO.2
(ADDED)
Sales and Use Tax
4. Task 4: Sales and Use Tax and Economic Analysis, Reporting, and Forecasting
4.1. Establish a special database with California Department of Tax and Fee Administration (“CDTFA”) registration data for businesses within applicable district boundaries holding seller’s permit accounts.
4.2. CONSULTANT shall make available to CITY the HdL proprietary software program and database containing all applicable registration and quarterly allocation information for CITY business outlets registered with the Department of Tax and Fee Administration. The database will be updated quarterly. Access shall be made available through downloadable standard file formats, including Excel or comma-delimited formats, and/or through a web-based application that allows CITY staff to view, query, and download data.
4.3. CONSULTANT shall provide reasonable customization of reports, queries, and data extracts to support CITY operational, financial, and economic analysis needs, including reporting by geographic or organizational areas identified by CITY, such as shopping centers, business districts, commercial districts, redevelopment areas, governmental areas, residential areas, and other defined reporting segments.
4.4. CONSULTANT shall make reasonable efforts to provide requested custom reports, queries, and supporting information within mutually agreed upon timelines based on the complexity of the request.
4.5. CONSULTANT shall provide updated reports each quarter identifying changes in allocation totals by individual businesses, business groups and by categories. Quarterly aberrations due to State audits, fund transfers, and receivables, along with late or double payments, will also be identified.
4.6. Following each calendar quarter, CONSULTANT shall provide both (i) a detailed quarterly review and analysis report for CITY staff use, and (ii) a non-confidential summary report for the CITY to include in presentations with Council Members, Chamber of Commerce, other economic development interest groups and the public. The public-facing report shall summarize sales tax trends, economic activity, and major business group performance without disclosing confidential individual tax records.
4.7. Provide periodic updated reports endeavoring to identify and assist with budget forecasting including annual and multi-year revenue forecast and the assumptions supporting those forecasts, as well as (i) changes in allocation totals by individual businesses, business groups and categories, and (ii) aberrations due to State audits, fund transfers, and receivables, along with late or double payments.
4.8. CONSULTANT shall provide a presentation led by an HdL Sales Tax Principal discussing latest sales tax results, emerging retail trends, business retention needs, leveraging of economic clusters and reviewing successes in client jurisdictions with similar characteristics. This presentation will occur following each calendar quarter.
5. Task 5: Sales Tax Allocation and Audit Recovery Services
5.1. Conduct (when mutually agreed with CITY) initial and on-going sales and use tax audits of businesses to help identify and correct allocation errors, and to proactively affect favorable registration, reporting or formula changes thereby generating previously unrealized sales and use tax income for the CITY and/or recovering misallocated tax from registered taxpayers. Common $)'
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
12 Packet Pg. 115 of 284
Vers.: Aug. 5, 2019
errors that will be monitored and corrected include but are not limited to: transposition errors resulting in misallocations; erroneous consolidation of multiple outlets; misreporting of “point of sale” to the wrong location; delays in reporting new outlets; misallocating use tax payments to the allocation pools or wrong jurisdiction; and erroneous fund transfers and adjustments.
5.2. Initiate contacts with sales, management and accounting officials in companies that have businesses where a probability of error exists to endeavor to help verify whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted in a professional and courteous manner.
5.3. Prepare and submit to the CDTFA information for the purpose of correcting any identified allocation errors, and follow-up with individual businesses and the CDTFA to promote recovery by the CITY of back or prospective quarterly payments that may be owing.
5.4. If, during the course of its audit, CONSULTANT finds businesses located in the CITY’s jurisdiction that are properly reporting sales and use tax but have the potential for modifying their operation to provide an even greater share to CITY, CONSULTANT may so advise CITY and collaborate with those businesses and CITY to encourage such changes.
Transactions and Use Tax
The City has placed a transactions and use tax measure on the November 2026 ballot. Upon passage by Palo Alto voters, the following services will apply:
6. Task 6: Transactions Tax and Economic Analysis, Reporting, and Forecasting
6.1. Establish a database containing all applicable Department of Tax and Fee Administration (CDTFA) registration data for each business within the District boundaries holding a seller’s permit account. Said database shall also identify the quarterly transactions and use tax allocations under each account for the most current and previous quarters where available.
6.2. CONSULTANT shall make available to CITY the HdL proprietary software program and database containing all applicable registration and quarterly allocation information for CITY business outlets registered with the Department of Tax and Fee Administration. The database will be updated quarterly.
6.3. CONSULTANT shall provide updated reports each quarter identifying changes in allocation totals by individual businesses, business groups and by categories. Quarterly aberrations due to State audits, fund transfers, and receivables, along with late or double payments, will also be identified.
6.4. Following each calendar quarter shall provide a summary analysis for CITY to share with Council Members, Chamber of Commerce, other economic development interest groups and the public that analyze CITY’s sales tax trends by major groups without disclosing confidential individual tax records.
6.5. Provide periodic updated reports endeavoring to identify and assist with budget forecasting including annual and multi-year revenue forecast and the assumptions supporting those forecasts, as well as (i) changes in allocation totals by individual businesses, business groups and categories, and (ii) aberrations due to State audits, fund transfers, and receivables, along with late or double payments.
6.6. CONSULTANT shall provide a presentation led by an HdL Sales Tax Principal discussing latest sales tax results, emerging retail trends, business retention needs, leveraging of economic clusters and reviewing successes in client jurisdictions with similar characteristics. This presentation will occur following each calendar quarter.
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
13 Packet Pg. 116 of 284
Vers.: Aug. 5, 2019
7. Task 7: Transactions Tax Allocation and Audit Recovery
7.1. CONSULTANT shall conduct on-going reviews to identify and correct unreported transactions and tax payments and distribution errors thereby generating previously unrealized revenue for the CITY. Reviews shall include:
7.1.1. (a) Comparison of county-wide local tax allocations to transactions tax for brick-and-mortar stores and other cash register-based businesses, where clearly all transactions are conducted on-site within the CITY boundaries, and therefore subject to transactions tax.
7.1.2. (b) Review of any significant one-time use tax allocations to ensure that there is corresponding transaction tax payments for taxpayers with nexus within the CITY boundaries.
7.1.3. (c) Review of state-wide transactions tax allocations and patterns to identify any obvious errors and omissions.
7.1.4. Identification and follow-up with any potentially large purchasers of supplies and equipment (e.g. hospitals, universities, manufacturing plants, agricultural operations, refineries) to ensure that their major vendors are properly reporting corresponding transactions tax payments to the Transactions Tax District.
7.2. CONSULTANT will initiate, where the probability of an error exists, contacts with the appropriate taxpayer management and accounting officials to verify whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted in a professional and courteous manner so as to enhance CITY’s relations with the business community.
7.3. CONSULTANT shall prepare and submit to the Department of Tax and Fee Administration all information necessary to correct any allocation errors and deficiencies that are identified and shall follow-up with the individual businesses and the California Department of Tax and Fee Administration to ensure that all back quarter payments due the CITY are recovered.
8. Consulting and Other Optional Services
CONSULTANT may from time to time in its sole discretion, consult with CITY’s staff, including without limitation, regarding (i) technical questions and other issues related to sales, use and transactions tax, (ii) utilization of reports to enhance business tax and business registry collection efforts, (iii) sales tax projections for proposed annexations, economic development projects and budget planning, (iv) negotiating/review of tax sharing agreements, (v) establishing purchasing corporations, (vi) meeting with taxpayers to encourage self-assessment of tax obligations, and (vii) other sales, use or transactions tax revenue-related matters.
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
14 Packet Pg. 117 of 284
Vers.: Aug. 5, 2019
ADDITIONAL TERMS – Sales, Use and Transactions Tax Services
9. Consulting and Other Optional Services
9.1. Fees for performing other optional services are described below:
9.1.1. Fees for performing CITY Staff training, public representation, or technical seminars for elected officials shall be $3,000 for one-time service and $2,000 for recurring service.
9.1.2. Fees for performing transactional tax ballot measure estimates shall be $2,600 per report.
Incremental non-core packet reporting shall be $2,600 for a one-time report and $700 for recurring reporting service.
1. Confidentiality Information Section 7056 of the State of California Revenue and Taxation Code (“R&T Code”) specifically limits the disclosure of confidential taxpayer information contained in the records of the CDTFA. Section 7056 specifies the conditions under which a CITY, county or district may authorize persons other than such CITY, county or district’s officers and employees to examine state sales and use tax records. The following conditions specified in Section 7056-(b)(1) of the State of California R&T Code are hereby made part of this Agreement:
1.1. CONSULTANT is authorized by this Agreement to examine sales, use or transactions and use tax records of the CDTFA provided to CITY pursuant to contract under the Bradley-Burns Uniform Local Sales and Use Tax Law R&T Code Section 7200 et.seq.
1.2. CONSULTANT is required to disclose information contained in, or derived from, those sales or transactions and use tax records only to an officer or employee of CITY who is authorized by CITY resolution provided to the CDTFA to examine the information.
1.3. CONSULTANT is prohibited from performing consulting services for a retailer (as defined in R&T Code Section 6015), during the term of this agreement.
1.4. CONSULTANT is prohibited from retaining the information contained in or derived from those sales, use or transactions and use tax records after this agreement has expired. Information obtained by examination of the CDTFA records shall be used only for purposes related to collection of local sales and use tax or for other governmental functions of the CITY as set forth by resolution adopted pursuant to Section 7056 (b) of the Revenue and Taxation Code. The resolution shall designate the CONSULTANT as a person authorized to examine sales and use tax records and certify that this agreement meets the requirements set forth above and in Section 7056 (b), (1) of the Revenue and Taxation Code.
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
15 Packet Pg. 118 of 284
Vers.: Aug. 5, 2019
EXHIBIT B
SCHEDULE OF PERFORMANCE, AMENDMENT NO. 2
(AMENDED, REPLACES PREVIOUS)
CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the Project Managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed (“NTP”) from the CITY.
Milestones
Completion
Number of Days/Weeks (as specified below)
from NTP
Business Tax and Business Registry
1. Task 1: BT and BRC Operations
Management Services
Recurring monthly service within term of
Agreement, with first collection cycle
beginning October 2023; filing and collection
occurring quarter beginning January 2024.
2. Task 2: BT and BRC Compliance Services
a. Discovery
b. Collection
c. Audit
Recurring monthly service within term of
Agreement.
3. Task 3: BT and BRC Payment Processing Recurring monthly service within term of Agreement.
Sales Tax and Transactions Tax Audit and Information Services
4. Task 4: Sales and Use Tax Economic
Analysis and Reporting
Quarterly and as needed throughout the term of
the agreement
5. Task 5: Sales and Use Tax Allocation and
Audit Recovery Services
Ongoing throughout the term of the agreement
6. Task 6: Transactions Tax Economic
Analysis and Reporting
Quarterly and as needed throughout the term of
the agreement
7. Task 7: Transactions Tax Allocation and
Audit Recovery Services
Ongoing throughout the term of the agreement
Optional Schedule of Performance Provision for On-Call or Additional Services Agreements. (This provision only applies if checked and only applies to on-call agreements per Section 1 or agreements with Additional Services per Section 4.)
The schedule of performance shall be as provided in the approved Task Order, as detailed in Section 1 (Scope of Services) in the case of on-call Services, or as detailed in Section 4 in the case of Additional Services, provided in all cases that the schedule of performance shall fall within the term as provided in Section 2 (Term) of this Agreement. $)'
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
16 Packet Pg. 119 of 284
Vers.: Aug. 5, 2019
EXHIBIT C
COMPENSATION, AMENDMENT NO.2
(AMENDED, REPLACES PREVIOUS)
BUDGET SCHEDULE RATE EST. UNIT
NOT TO
EXCEED
AMOUNT (5
YEARS)
YEAR 1
FY 2024
(10/1/2023-
6/30/2024)
YEAR 2
FY 2025
YEAR 3
FY 2026
YEAR 4
FY 2027
YEAR 5
FY 2028
Includes all sub-tasks under Task 1 of Scope of Services. Fees are increase as of July 1 of each year based on the 12-month Bay Area Consumer Price Index (Urban Wage Earners and
Clerical Workers, San Francisco-Oakland-San Jose) as of March 31, not to exceed 5%
Max. Annual
CPI Adj
Per processed account fee - any account for which an
application or renewal/return was processed, or active account which was sent a renewal notice
$17.00 8,000 $640,000 $85,000 $85,000 $130,000 $170,000 $170,000
2.1: Discovery Services
Contingency percentage applies to all monies received for the curent tax/license period and any other period collected (including monies received for taxes, penalties, interest, and fees).
In the event that CITY discovers a non-compliant business and report to CONSULTANT, activity will be categorized as a collection service effort rather than discover effort.
35% 170,000 $260,000 $60,000 $60,000 $60,000 $40,000 $40,000
2.2: Collection Services
Contingency percentage applies to revenues received as a result of compliance services.
25% 1,600,000 $1,700,000 $200,000 $450,000 $400,000 $350,000 $300,000
2.3: Audit Services
Contingency percentage applies to revenues received as a result of audit services.
35% 115,000 $160,000 N/A N/A $40,000 $60,000 $60,000 Sub-Total Compliance Services $2,120,000 $260,000 $510,000 $500,000 $450,000 $400,000 Taxpayer Funded:
Credit and debit card processing CITY authorizes CONSULTANT to collect convenience fee from taxpayer at the time of payment.
2.90% N/A N/A N/A N/A N/A N/A N/A
Taxpayer Funded:
Returned payment/NSF fee, each occurance.
25% N/A N/A N/A N/A N/A N/A N/A
City Funded:
ACH/eCheck processing per transaction fee.
$0.50 2,000 $5,000 $1,000 $1,000 $1,000 $1,000 $1,000 REIMBURSEABLE EXPENSES $5,000 $1,000 $1,000 $1,000 $1,000 $1,000 ADDITIONAL SERVICES OR CONTINGENCY $100,000 $20,000 $20,000 $20,000 $20,000 $20,000 TOTAL (TASK 1-3) - BT & BRC OPERATIONS AND COMPLIANCE $2,870,000 $367,000 $617,000 $652,000 $642,000 $592,000
BUSINESS TAX (BT) AND BUSINESS REGISTRY CERTIFICATE (BRC) OPERATIONS MANAGEMENT AND COMPLIANCE SERVICES TASK 1: Operations Management Services
TASK 2: Compliance Services
TASK 3: Payment Processing
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
17 Packet Pg. 120 of 284
Vers.: Aug. 5, 2019
BUDGET SCHEDULE RATE EST. UNIT
NOT TO
EXCEED
AMOUNT (5
YEARS)
YEAR 1
FY 2024
(10/1/2023-
6/30/2024)
YEAR 2
FY 2025
YEAR 3
FY 2026
YEAR 4
FY 2027
YEAR 5
FY 2028
$1,000 per month, updated annually based on the 12-month change in the annual Consumer Price Index for All Urban Consumers (CPI-U)
Includes the quarterly detailed review and analysis report and quarterly non-confidential summary report described in the Scope of Services (Task 4.4.6). Additional optional reports requested by the City will be billed separately in accordance with the Additional Terms for Consulting and Other Optional Services.
$1,000 $24,480 N/A N/A N/A $12,000 $12,480
Contingency percentage applies to all monies received for all new, increased and recovered sales and use tax revenue
received by the City as a result, in whole or in part, of the allocation audit and recovery services
Fee applies to both historical reallocations resulting from the audit and the subsequent eight (8) reporting quarters
following CDTFA confirmation of the correction.
18% $60,000 N/A N/A N/A $30,000 $30,000
$300 per month, updated annually based on the 12-month
change in the annual Consumer Price Index for All Urban Consumers (CPI-U)
$300 $5,520 N/A N/A N/A $1,800 $3,720
Contingency percentage applies to all monies received for all new, increased and recovered transactions and use tax
revenue received by the City as a result, in whole or in part, of the allocation audit and recovery services
Fee applies only to historical recoveries identified through the audit and does not apply to future reporting periods.
25% $45,000 N/A N/A N/A $15,000 $30,000
REIMBURSEABLE EXPENSES $6,000 N/A N/A N/A $3,000 $3,000 ADDITIONAL SERVICES OR CONTINGENCY $24,000 N/A N/A N/A $12,000 $12,000 TOTAL (TASK 4-7) - SALES TAX AND TRANSACTIONS TAX AUDIT AND INFORMATION SERVICES $165,000 $0 $0 $0 $73,800 $91,200 TOTAL NOT-TO-EXCEED (NTE) $3,035,000 $367,000 $617,000 $652,000 $715,800 $683,200 TASK 6: Transactions Tax Economic Analysis and Reporting TASK 7: Transactions Tax Allocation and Audit Recovery Services TASK 4: Sales and Use Tax Economic Analysis and Reporting TASK 5: Sales and Use Tax Allocation and Audit Recovery Services
SALES TAX AND TRANSACTIONS TAX AUDIT AND INFORMATION SERVICES $)'
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
18 Packet Pg. 121 of 284
Vers.: Aug. 5, 2019
EXHIBIT C-1
COMPENSATION, AMENDMENT NO.1
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Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
19 Packet Pg. 122 of 284
Vers.: Aug. 5, 2019
EXHIBIT D
INSURANCE REQUIREMENTS
CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE
CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS AS SPECIFIED HEREIN.
REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS
EACH
OCCURRENCE
AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY STATUTORY STATUTORY
YES GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY
DAMAGE
BODILY INJURY & PROPERTY
DAMAGE COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
BODILY INJURY $1,000,000 $1,000,000
- EACH PERSON $1,000,000 $1,000,000
YES AUTOMOBILE LIABILITY, - EACH OCCURRENCE $1,000,000 $1,000,000
INCLUDING ALL OWNED, HIRED,
NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000
BODILY INJURY AND PROPERTY $1,000,000 $1,000,000
DAMAGE, COMBINED
YES PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES
$1,000,000
YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED : CONSULTANT, AT ITS SOLE
COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE
ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED,
INSURING NOT ONLY CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY.
II. THE CONSULTANT MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: [email protected]
III. ENDORSEMENT PROVISIONS WITH RESPECT TO THE INSURANCE AFFORDED TO ADDITIONAL INSUREDS:
A. PRIMARY COVERAGE
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Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
20 Packet Pg. 123 of 284
Vers.: Aug. 5, 2019
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED,
INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR
CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.
B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER
THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE
INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE
INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON
OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
EVIDENCE OF INSURANCE AND OTHER RELATED NOTICES ARE REQUIRED TO BE FILED WITH THE CITY OF PALO ALTO SENT TO THE FOLLOWING EMAIL:
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ATTACHMENT A
Item 9
Attachment A - Amendment
No. 2 to Contract No.
C23187298C with HdL
Item 9: Staff Report
Pg.
21 Packet Pg. 124 of 284
RESOLUTION NO._______________
A Re
solution of the City Council of the City of Palo Alto Authorizing Examination of Sales or Transactions and Use Tax Records WHEREAS, pursuant to Ordinance Number 2756, the City of Palo Alto (City) entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of sales and use taxes; and W
HEREAS, pursuant to Revenue and Taxation Code section 7270, the City entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of transactions and use taxes; and W
HEREAS, the City Council of the City of Palo Alto deems it desirable and necessary for authorized officers, employees and representatives of the City to examine confidential sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected by the Department for the City pursuant to that contract; and
W
HEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department records, and Section 7056.5 of the California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales or transactions and use tax records of the Department;
NO
W, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALO ALTO HEREBY RESOLVES AS FOLLOWS:
Se
ction 1. That the following listed employee titles, or other officer or employee of the City designated in writing by the City Manager to the California Department of Tax and Fee Administration is hereby appointed to represent the City with authority to examine sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department pursuant to the contract between the City and the Department. • City Manager
• Assistant City Manager
• Assistant to the City Manager
• Deputy City Manager
• Administrative Assistant, City Manager’s Office
• Administrative Services Director
• Assistant Director, Administrative Services Department • Treasury Manager, Administrative Services Department
• Budget Manager, Administrative Services Department
• Principal Management Analyst, Administrative Services Department • Senior Management Analyst, Administrative Services Department • Management Analyst, Administrative Services Department • Administrative Assistant, Administrative Services Department • Administrative Associate II/III, Administrative Services Department
ATTACHMENT B
Item 9
Attachment B - Resolution
Authorizing Examination of
Sales or Transactions and
Use Tax Records
Item 9: Staff Report
Pg.
22 Packet Pg. 125 of 284
Section 2. The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to that contract, and for purposes related to the following governmental functions of the City:
(a) Budget revenue forecasting;
(b) Administration of the City’s tax programs; and
(c) Economic development activities
The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above.
Section 3. That Hinderliter de Llamas & Associates (HdL) is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the Hinderliter de Llamas & Associates (HdL):
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 of this resolution to examine the information.
c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
BE IT FURTHER RESOLVED that the information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to the contract between the City and the Department and for those purposes relating to the governmental functions of the City listed in section 2 of this resolution.
Section 4. That MuniServices, LLC is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to any petition or appeal for the reallocation/redistribution of sales or transactions and use taxes that was filed by MuniServices, LLC on behalf of the City pursuant to the contract between the MuniServices, LLC and City. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the MuniServices, LLC:
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 of this resolution to examine the information.
ATTACHMENT B
Item 9
Attachment B - Resolution
Authorizing Examination of
Sales or Transactions and
Use Tax Records
Item 9: Staff Report
Pg.
23 Packet Pg. 126 of 284
c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
Section 5. That this resolution supercedes all prior resolutions of the City Council of the City of Palo Alto adopted pursuant to subdivision (b) of Revenue and Taxation Code section 7056.
Introduced, approved and adopted this__________day of___________________ 20___.
ATTEST: (s) ___________________________ (s) ____________________________ City Clerk Mayor
I, ____________________, City Clerk of the City of _______________________, California , DO HEREBY CERTIFY that the foregoing resolution was duly introduced, approved and adopted by the City Council of the City of _______________________, at a regular meeting of said Council held on the ________ day of ________________, 20___, by the following roll call vote:
Ayes: (Names of Councilmembers)
Noes: (Names of Councilmembers)
Absent: (Names of Councilmembers)
(s) _______________________________
City Clerk
ATTACHMENT B
Item 9
Attachment B - Resolution
Authorizing Examination of
Sales or Transactions and
Use Tax Records
Item 9: Staff Report
Pg.
24 Packet Pg. 127 of 284
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Human Resources
Meeting Date: September 9, 2026
Report #:2608-6620
TITLE
Adoption of Side Letter Between the City of Palo Alto and Utilities Management and Professional Association of Palo Alto for a Hiring Incentive; CEQA Status - Not a Project.
RECOMMENDATION
Staff recommends that Council adopt the side letter of agreement (Attachment A) between the City of Palo Alto and Utilities Management and Professional Association of Palo Alto (UMPAPA) which authorizes Council Appointed Officers to authorize a hiring incentive for critical personnel vacancies.
BACKGROUND
The City's recruitment and labor strategies emphasize the successful recruitment of top-quality employees and maintaining competitive salaries to continue being an Employer of Choice.
Effective recruiting involves understanding the job market, industry trends, and adapting to current conditions by implementing strategic initiatives to successfully hire for specialized positions. These strategies also result in continuing to improve employee retention and decrease in turnover.
Utilities Department leadership and Human Resources (HR) recruitment reviewed classifications represented by UMPAPA that are difficult to fill. In such recruitments, a hiring incentive may be needed to finalize an employment offer. The proposed incentive structure authorizes the City Manager to provide a hiring incentive for critical personnel vacancies. This recruitment strategy aligns with the hiring incentive in the Management and Professional Compensation Plan approved in June 2025 and similar to the hiring incentive approved by City Council in June 2026 for the Palo Alto Police Officers Association.
ANALYSIS
The City has experienced recruitment challenges in filling certain critical positions within the Utilities Management group. Currently, the primary financial incentive available to attract qualified candidates is placement at a higher point within the established salary range.
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A one-time hiring incentive would provide the City with an additional recruitment tool and greater flexibility in structuring a competitive total compensation package for selected candidates. The availability of a one-time incentive at the time of hire may also reduce the need to place candidates near the top of the salary range, thereby potentially slowing the growth of the City’s ongoing salary and related benefit costs. The proposed hiring incentive program is intended to address recruitment challenges associated with difficult-to-fill positions while maintaining a financially sustainable approach to employee compensation. Similar to the other incentive programs, the hiring incentive is not to exceed 5% of the authorized position, eligible recruitments are to be determined by the Human Resources and Utilities Departments, with approval of award to be authorized of the City Manager.
The City’s labor relations staff completed the meet and confer process required to initiate a hiring incentive program for Utilities management. The attached side letter authorizes the City Manager to provide a hiring incentive.
FISCAL/RESOURCE IMPACT
All expenses related to this incentive program for hard-to-fill positions must be funded through Utilities Department salary savings. This additional cost is offset by lost productivity due to prolonged vacancies and will be managed to ensure funds remain within existing budget appropriations.
STAKEHOLDER ENGAGEMENT
City staff engaged with internal stakeholders throughout the development of the side letter to ensure accurate alignment with organizational needs. The HR Department consulted with department leadership and labor representatives to review the proposed hiring incentive, assess operational impacts, and verify fiscal consistency with the FY 2027 Proposed Budget. All required meet and confer obligations were satisfied, and no outstanding labor issues remain related to the proposed Memorandum of Agreement revision. This side letter will be posted on the HR website for public viewing.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because adopting side letters is a continuing administrative activity. CEQA Guidelines section 15378(b)(2).
ATTACHMENTS
Attachment A: UMPAPA Hiring Incentive Side Letter 2026
APPROVED BY:
Sandra Blanch, Human Resources Director
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Attachment A - UMPAPA
Hiring Incentive Side Letter
2026
Item 10: Staff Report
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Attachment A - UMPAPA
Hiring Incentive Side Letter
2026
Item 10: Staff Report
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City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: September 9, 2026
Report #:2608-6695
TITLE
SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations), Title 18 (Zoning), and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units (FIRST READING: August 17, 2026; PASSED: 4-3, Stone, Veenker, Lythcott-Haims no)
BACKGROUND
The City Council heard this item on August 17, 2026 for a first reading and approved it on a 4-3 vote. Staff removed the reference in the adopting ordinance for Section 1, Item F as the Separate Sale ordinance will come back to Council at a later time on the Consent Calendar. Staff also reintroduced Footnote 7 under Table 1, which codifies staff’s interpretation of how square footage applies under Table 1. This footnote was provided in the draft ordinance the PTC reviewed and recommended but was inadvertently omitted in the version of the ordinance provided during the first reading.
ATTACHMENTS
Attachment A: Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations), Title 18 (Zoning), and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units APPROVED BY:
Mahealani Ah Yun, City Clerk
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Item 11 Staff Report
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Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Title 16 (Building Regulations), Title 18 (Zoning), and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Amend Requirements Relating to Accessory Dwelling Units and Junior Accessory Dwelling Units
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations.
A. In 2025, the City of Palo Alto adopted Ordinance 5656, amending the City’s requirements for ADUs and JADUs to reflect changes in State law and guidance from the California Department of Housing and Community Development (HCD).
B. On May 12, 2025, the City Council directed staff to evaluate modifying the City’s ordinance to increase the maximum size for ADUs to 1,200 square feet and allowing ADU condominiums as allowed under AB 1033 (2024).
C. On September 30, 2025, the Governor signed Assembly Bills (AB) 130, 462, 1154 and Senate Bills (SB) 9 and 543, effective between June 30, 2025 and January 1, 2026. These various bills affect the processing time and requirements for ADU/JADU permits as well as the number of permissible ADU/JADUs on one lot.
D. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to amend its ADU/JADU ordinance to implementing SB 1211 and to make additional clerical amendments and minor amendments to conform with State law.
E. Section 4 of this Ordinance amends Chapter 16.58 (Development Impact Fee) of Title 16 (Building Regulations) of the Palo Alto Municipal Code. This is an administrative amendment to align how impact fees for ADUs must be calculated based on interior livable space rather than gross square footage as defined in Chapter 18.04.030 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code.
F. This ordinance is adopted to incorporate changes in state law that have occurred since the adoption of Ordinance 5656 and to respond to direction from the City Council.
SECTION 2. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through):
18.09.010 Purpose
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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The intent of this Chapter is to provide regulations to accommodate accessory and junior accessory dwelling units (ADU/JADU), in order to provide for variety to the city's housing stock and additional affordable housing opportunities. These units shall be separate, self- contained living units, with separate entrances from the main residence, whether attached or detached. The standards below are provided to minimize the impacts of units on nearby residents and throughout the city, and to assure that the size and location of such dwellings is compatible with the existing or proposed residence(s) on the site and with other structures in the area.
18.09.020 Applicable Zoning Districts
The establishment of an ADUaccessory dwelling unit is permitted in zoning districts when single-family or multi-family residential is a permitted land use. The development of a single-family home with multiple ADU/JADUs, ADU, and/or a JADU on a lot that allows for single-family development shall not be considered a multifamily development pursuant to PAMC Section 18.04.030, nor shall they require Architectural Review pursuant to other sections of Title Chapter 18.
18.09.030 Units Exempt from Generally Applicable Local Regulations
(a) Government Code sections 66323 provides that certain units shall be approved notwithstanding State or local regulations that may otherwise apply. The following types of units shall be governed by the standards in this section. In the event of a conflict between this section and Government Code section 66323, the Government Code shall prevail.
i. An ADU and JADU within the existing space of a single-family dwelling or an ADU within the existing space of an accessory structure (i.e. conversion without substantial addition).
ii. An ADU and JADU within the proposed space of a single-family dwelling.
iii. A detached, new construction ADU on a lot with a proposed or existing single-family dwelling, provided the ADU does not exceed 800 square feet, four-foot side and rear (i.e. interior) setbacks, or the maximum height described in subparagraph (A), (B), or (C) of paragraph (4) of subdivision (b) of Government Code Section 66321, as applicable.
iv. ADUs created by conversion of portions of existing multi-family dwellings not used as livable space.
v. Up to eight detached ADUs on a lot with an existing multi-family dwelling, provided that the number of ADUs does not exceed the number of existing units on the lot.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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vi. Up to two detached ADUs on a lot with a proposed multi-family dwelling.
(b) The Development Standards for units governed by this section are summarized in Table
1. Regulations set forth in section 18.09.040 do not apply to units created under
18.09.030. The minimum and maximum sizes indicated in Table 1 do not prohibit units that are greater than 800 square feet. These sizes simply serve to distinguish when a unit transitions from regulations set forth in Table 1 and section 18.09.030 to regulations set forth in Table 2 and section 18.09.040.
Table 1: Development Standards for Units Described in Government Code Section 66323 Single-Family Multi-Family
Conversion of
Space Within
the Existing
Space of a
Single-Family
Home or
Accessory
Structure
Construction of
Attached ADU
and/or JADU
Within the
Proposed Space
of a Single-
Family Home
New
Construction
of Detached
ADU
Conversion of
Non-Habitable
Space Within
Existing Multi-
family Dwelling
Structure
Conversion or
Construction of
Detached(4)
ADU on a site
with Existing
Multi-family
Structure
Conversion or
Construction of
Detached(4) ADU
on a site with
Proposed Multi-
family Structure
Number of
Units
Allowed
1 Attached ADU, 1 Detached ADU, and 1 JADU
25% of the
existing units
(at least one)
Up to 8 (not to
exceed the
number of
existing units on
the lot)
2 Minimum
size(1) 150 sf
Maximum
size(1) N/A2 800 sf N/A
Setbacks
N/A, if
condition is
sufficient for
fire and safety
Underlying zone
standard for
Single Family
Home
(ADU must be
within
allowable space
of Single-Family
Home)
4 feet from
side and rear
lot lines;
N/A
4 feet from side
and rear lot
lines; underlying
zoning for front
setback
Daylight
Plane N/A N/A
Maximum
Height(3) N/A 16 (5) N/A 16 (5)(6)
Parking None
State Law
Reference 66323(a)(1) 66323(a)(1) 66323(a)(2) 66323(a)(3) 66323(a)(4)
(1) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area.
(2) The maximum size of a JADU is 500 square feet. See PAMC 18.09.030(h) for additional information. (3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Units must be detached from primary dwellings but may be attached to each other.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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(5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling.
(7) Square footage of a detached ADU under this section shall not reduce the allowable square footage of a proposed single-family home.
(c) Development standards stated elsewhere in this Section or Title 18, including standards related to FAR, lot coverage, and privacy, are not applicable to ADUs or JADUs that qualify for approval under this section. When there is an ADU or JADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section 18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C).
(d) For ADUs and JADUs only, the allowable square footages noted in Table 1 and this section for these units shall be based on the interior livable space for the purposes of FAR, lot coverage, and maximum house size. The exterior walls not counted towards interior livable space for these units will not count against the property’s FAR, lot coverage, or maximum house size requirements.
(e) The establishment of ADUsaccessory dwelling units and JADUsjunior accessory dwelling units pursuant to this section shall not be conditioned on the correction of non- conforming zoning conditions; provided, however, that nothing in this section shall limit the authority of the Chief Building Official to require correction of building standards relating to health and safety. Upon request of the owner for a delay in enforcement, the Chief Building Official shall delay enforcement of a building standard, subject to compliance with Section 17980.12 of the Health and Safety Code.
(f) The installation of fire sprinklers shall not be required in an ADUaccessory dwelling unit if sprinklers are not required for the primary residence. The construction of an ADUaccessory dwelling unit shall not trigger a requirement for fire sprinklers to be installed in the existing multifamily dwelling. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements.
(g) Rental of any unit created pursuant to this section shall be for a term of 30 days or more.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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(h) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Except for JADUs, attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance). If a permitted JADU does not include a separate bathroom, the permitted JADU shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area.
(i) Conversion of existing living area or an existing accessory structure pursuant to Government Code section 66314(d)(7) may include reconstruction in-place of a non- conforming structure, so long as the renovation or reconstruction does not increase the degree of non-compliance, such as increased height, envelope, or further intrusion into required setbacks. An expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure may be provided to accommodate ingress and egress. Any addition to the existing accessory structure that is not limited to providing for ingress and egress to the unit, and that exceeds the envelope of the existing accessory structure shall be subject to Section 18.09.040.
(j) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response.
(k) The unit shall not be sold separately from the primary residence, except as allowed under Government Code Section 66341.
(l) Replacement parking is not required when an off-street parking space is converted to, or demolished in conjunction with the construction of, an ADU or JADU.
(m) JADUs shall comply with the requirements of Section 18.09.050.
(n) An applicant that seeks to appeal the City’s determination of completeness or denial of a permit for an ADU must submit their appeal in writing to the City identifying the reasons for their appeal and pay the accompanied appeal fee, as set forth in the adopted municipal fee schedule. Appeals for these applications shall follow the procedures for appeal under PAMC 18.77.075 except that the appeal shall be placed on Council’s Consent Agenda within 45 days of filing a timely appeal. Any decision from the Council, either on consent or through an agendized item, is final.
18.09.040 Units Subject to Local Standards
(a) This section shall govern applications for ADUs that do not qualify for approval under section 18.09.030 and for which the City may impose local standards pursuant to Government Code section 66314. Nothing in this section shall be interpreted to prohibit an ADU of up to 800 square feet, at the heights stated in Table 2, with a four foot side and rear setbacks.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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(b) The Development Standards for units governed by this section are provided in Table 2.
These regulations do not limit the height of existing structures converted into ADU unless the envelope of the building is proposed to be modified beyond any existing legal, non-conforming condition.
Table 2: All other Units
Attached Detached
Number of Units Allowed1 1
Minimum size 150 sf
Maximum size 1,200900 sf (1,000 sf for
two or more bedrooms
required to exceed
1,000 sf);
no more than 50% of
the size of the single-
family home
1,200900 sf (1,000 sf
for two or more
bedrooms required to
exceed 1,000 sf)
Setbacks 4 feet from side and rear lot lines;
Daylight Plane Underlying zone
standard per
footnote (7)
N/A
Maximum Height3
Res. Estate (RE) 30 feet
Open Space (OS) 25 feet
All other eligible zones 16 feet(5)(6)(7)
Parking None
Square Footage Exemption when in
conjunction with a single family
home(4)
Up to 800 sf
(1) An attached andor detached ADU may be built in conjunction with the allowable units prescribed under Table 1 and PAMC 18.09.050(f)a JADU on a lot with an existing or proposed single family home. One attached or detached ADU may be built in conjunction with the allowable units prescribed under Table 1 on an existing or proposed multifamily building. (2) Lofts where the height from the floor level to the underside of the rafter or finished roof surface is 5' or greater shall count towards the unit’s floor area.
(3) Units built in a flood zone are not entitled to any height extensions granted to the primary dwelling. (4) Lots with both an attached and detached ADU may exempt a maximum combined total of 800 square feet of both ADUs from FAR, Lot Coverage, and Maximum House Size calculations. Any square footage that exceeds this exemption shall contribute to the FAR, Lot Coverage, and (if attached) Maximum House Size calculations for the subject property. This exemption is not afforded to lots with existing or proposed multifamily dwellings. (5) A height of 18 feet for a detached ADU on a lot with an existing or proposed single family or multifamily dwelling unit that is within one-half of one mile walking distance of a major transit stop Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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or a high-quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. An additional two feet in height shall be provided to accommodate a roof pitch on an ADU that is aligned with the roof pitch of the primary dwelling unit. (6) A height of 18 feet for a detached ADU on a lot with an existing or proposed multifamily, multistory dwelling.
(7) A height of 25 feet or the height limitation in the underlying zone district that applies to the primary dwelling, whichever is lower, for an ADU that is attached to a primary dwelling. These ADUs shall not exceed two stories in height.
(c) A single-family or multifamily dwelling shall exist on the lot or shall be constructed on the lot in conjunction with the construction of an ADU.
(d) Interior livable space for ADU square footage shall not be included in FAR, Lot Coverage, and Maximum House Size calculations for a lot with an existing or proposed single family home, up to the amounts stated in Table 2. ADU sSquare footage in excess of the exemptions provided in Table 2 shall be included in FAR, Lot Coverage, and Maximum House Size calculations for the lot.
(e) When there is an ADU attached to an existing or proposed primary dwelling, the shared wall between these units shall contribute to the maximum allowable Floor Area, Lot Coverage, and Maximum House Size of the primary unit. For a single-family home, this measurement shall be taken to the outside stud wall in accordance with Section
18.04.030(a)(65)(D). For a multi-family dwelling, this measurement shall be taken to the outside surface of exterior walls in accordance with Section 18.04.030(a)(65)(B) and (C).
(f) Attached units shall have independent exterior access from a proposed or existing single-family dwelling. Attached units shall not have an interior access point to the primary dwelling (e.g. hotel door or other similar feature/appurtenance).
(g) For ADUs only, the allowable square footages noted in Table 2 and this section for these units shall be based on the interior livable space for the purposes of FAR, lot coverage, and maximum house size. The exterior walls not counted towards interior livable space for these units will not count against the property’s FAR, lot coverage, or maximum house size requirements.Reserved
(h) For properties listed in the California Register of Historical Resources compliance with the appropriate Secretary of Interior’s Standards for the Treatment of Historic Properties shall be required.
(i) Noise-producing equipment such as air conditioners, water heaters, and similar service equipment that exclusively serves an ADU may be located anywhere on the site, provided they maintain the underlying front yard setback requirements of the property and, if the property is a corner lot, a 10-foot street-side setback. All such equipment shall be insulated and housed, except that the Director may permit installation without Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
Item 11: Staff Report
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housing and insulation, provided that a combination of technical noise specifications, location of equipment, and/or other screening or buffering will assure compliance with the city’s Noise Ordinance at the nearest property line. All service equipment must meet the city’s Noise Ordinance in Chapter 9.10 of the Municipal Code.
(j) Setbacks
(1) Detached units shall maintain a minimum three-foot distance from the primary unit, measured from the exterior walls of structures.
(2) A basement or other subterranean portion that serves an ADU may encroach into a setback required for the primary dwelling provided the following conditions are met:
(A) Newly constructed basement walls are no closer than four feet to an adjacent interior side or rear property line.
(B) A new lightwell associated with a basement shall not be placed closer than four feet to an adjacent interior property line. When visible from the right of way, these facilities shall be screened from view with vegetation. (C) Habitable ADU basements shall contribute toward the unit’s total allowable floor area. Any floor area in excess of the exemptions provided in this Section shall contribute to the total allowable limits for the site.
(3) Projections, including but not limited to windows, doors, mechanical equipment, venting or exhaust systems, are not permitted to encroach into the required setbacks, with the exception of a roof eave of up to 2 feet.
(4) For corner lots developed as a single-family home, when an existing or proposed primary dwelling unit is expanded or constructed simultaneously with the construction of a new ADU, the homeowner may elect to build all structures to a 10- foot street-side setback and a 16-foot front yard setback, regardless of the presence of a more restrictive special setback, unless a fire or life-safety regulation requires a greater setback. Pursuant Government Code section 66321(b)(3), a street-side setback may not preclude the development of an 800 square foot unit.
(5) When an existing, legal, nonconforming structure is converted or reconstructed to create an ADU, any portion of the ADU that is in the same location and falls within the building envelope of the original structure shall not be subject to the development standards stated in this Section. Any portion of the ADU that is in a different location or exceeds the envelope of the original structure shall comply with the development standards stated in this Section.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
Item 11: Staff Report
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(6) Notwithstanding the development standards stated in Table 2 and paragraph (5) above, when an existing, legal, non-conforming structure is converted in-place to an ADU, the envelope of the structure may be modified to encroach further into a setback or daylight plane as follows:
(A) The height of the existing structure may be increased by no more than one linear foot in height commensurate to the existing roofline of the structure provided the height of the addition does not exceed 12 feet from grade. The roofline shall not be changed to a style other than what currently exists on the structure. (B) Each non-conforming wall may be expanded by no more than six inches in thickness based on its existing location and configuration, as measured to exterior surface of the material, to provide for greater insulation and energy requirements provided that a minimum of one foot is maintained between the addition and an adjacent interior property line. An existing wall of a structure that does not currently have a separation of one foot from a parallel property line shall not be expanded outward.
(C) All other additions not specified here shall follow the standard setbacks for the ADU identified in Table 2.
(k) Design
(1) Except on corner lots, where feasible, ADUsthe unit shall not have an entranceway facing the same lot line (property line) as the entranceway to the main dwelling unit unless the entranceway to the ADUaccessory unit is located in the rear half of the lot. Exterior staircases to second floor units shall be located toward the interior side or rear yard of the property.
(2) Privacy
(A) Second story doors and decks shall not face a neighboring property line. Second story decks and balconies shall utilize screening barriers to prevent views towards an adjacent interior property line. These barriers shall be a minimum five-foot, six-inch height from the floor level of the deck or balcony and shall not include perforations of any kind that would allow visibility between properties. (B) Windows on a second floor, loft, or equivalent elevated space, excluding those required for egress, shall have a five-foot sill height as measured from the second-finished floor level, or utilize obscuredopaque glazing on the entirety any window that faces an adjacent interior property line.
(C) Windows on a second finished floor, loft, or equivalent elevated space, shall be offset from neighbor’s windows to maximize privacy.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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(D) Where feasible, egress windows on the first and second finished floor of an ADU shall not face towards an adjacent interior property line. If this is not feasible, then these windows shall utilize obscuredopaque glazing on the whole window. (E) If the first finished floor of an ADU is two feet or more above grade, then first floor windows shall include the following:
i. Non-egress, operable windows facing an adjacent interior property line shall have a windowsill(s) that start five feet above the first finished floor for the unit;
ii. Non-egress, non-operable windows facing an adjacent interior property line shall have the lower half of window(s) (minimum of five feet above the first finished floor) utilize obscured opaque glazing.
(F) Where feasible, the use of skylights (whether operable or not) shall be used in lieu of operable windows that face adjacent interior properties. (G) No exterior lighting shall be mounted above seven feet. All lighting mounted on walls shall be directed downwards and shall not direct light towards adjacent interior property lines. Any ground lighting shall not direct light upwards to the building or sky.
(l) Parking
(1) Replacement parking is not required when a garage, carport, covered parking structure, or uncovered parking space is converted to, or demolished in conjunction with the construction of, an ADU.
(2) When parking is provided, the unit shall have street access from a driveway in common with the main residence in order to prevent new curb cuts, excessive paving, and elimination of street trees, unless separate driveway access will result in fewer environmental impacts such as paving, grading or tree removal.
(3) When a single-family dwelling unit is permitted simultaneously with the construction of new ADU, the primary unit’s covered parking requirements identified in Chapter
18.10 and 18.12 do not need to be provided. Two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property.
(4) If covered parking for a unit is provided in any district, the maximum size of the covered parking area for the ADUaccessory dwelling unit is 220 square feet. This space shall count towards the total floor area for the site but does not contribute to the maximum size of the unit. Any attached garage shall not have an interior access point to the ADU (e.g. hotel door or other similar feature/appurtenance).
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
Item 11: Staff Report
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(m) Landscape
(1) For the purposes of this subsection (m), “protected tree” means:
(A) Any locally native tree of the species Acer macrophyllum (Bigleaf Maple), Calocedrus decurrens (California Incense Cedar), Quercus agrifolia (Coast Live Oak), Quercus douglasii (Blue Oak), Quercus kelloggii (California Black Oak), or Quercus lobata (Valley Oak) which is eleven and one-half inches in diameter (thirty-six inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade.
(B) Any Coast Redwood tree (species Sequoia sempervirens) that is eighteen inches in diameter (fifty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. (C) Any tree of any species, other than a Coast Redwood Tree, fifteen inches in diameter (forty-seven inches in circumference) or more when measured four and one-half feet (fifty-four inches) above natural grade. A “protected tree” does not include a tree of any species on the Exempt Species List put forth by the Department of Urban Forestry and available on the City’s website. (D) Any tree designated for protection during review and approval of a current or previously completed development project.
(E) Any tree designated for carbon sequestration and storage and/or environmental mitigation purposes as identified in an agreement between the property owner and a responsible government agency or recorded as a deed restriction. (F) Any heritage tree previously designated by the city council. (G) Any tree previously planted as a replacement mitigation tree. (2) Except as provided in subsection (3) below, the construction of an ADU shall not impact any protected tree, on the subject property or any adjacent lot by requiring:
(A) Removal of more than twenty-five percent of the functioning leaf, stem, or root area of a tree in any twenty-four-month period; or
(B) Removal of more than fifteen percent of the functioning root area of any Quercus (oak) species in any thirty-six-month period; or (C) Trenching, excavating, altering the grade, or paving within the tree protection zone of a tree in a way that foreseeably leads to the death of the tree. For the purposes of this subsection (m), "tree protection zone" means the area defined Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
Item 11: Staff Report
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by a circle with a radius ten times the diameter of the trunk when measured four and one-half feet (fifty-four inches) above natural grade. (3) If an action prohibited by section 18.09.040(m)(2) is necessary to allow the construction of an ADU that meets the minimum standards set forth in state law, the tree shall be replaced according to the objective requirements identified in the Tree Canopy Replacement Table of the Palo Alto Tree and Landscape Technical Manual. (4) The construction of an ADU must comply with applicable objective standards and specifications in the Tree and Landscape Technical Manual for the protection of trees during construction. Compliance with this subsection (4) shall not delay or cause the denial of an ADU or JADU building permit or use permit.
(n) Miscellaneous requirements
(1) Street addresses shall be assigned to all units prior to building permit final to assist in emergency response.
(2) The unit shall not be sold separately from the primary residence except as allowed under Government Code Section 66341 and PAMC 21.09.
(3) Rental of any unit created pursuant to this section shall be for a term of 30 days or more.
(4) The installation of fire sprinklers shall not be required in an accessory dwelling unit if sprinklers are not required for the primary residence. Nothing in this section shall preclude the Fire Marshal from accepting fire sprinklers as an alternative means of compliance with generally applicable fire protection requirements.
(5) An applicant that seeks to appeal the City’s determination of completeness or denial of a permit for an ADU must submit their appeal in writing to the City identifying the reasons for their appeal and pay the accompanied appeal fee, as set forth in the adopted municipal fee schedule. Appeals for these applications shall follow the procedures for appeal under PAMC 18.77.075 except that the appeal shall be placed on Council’s Consent Agenda within 45 days of filing a timely appeal. Any decision from the Council, either on consent or through an agendized item, is final.
18.09.050 Additional Requirements for JADUs
(a) A JADU may be created on a lot in a single-family residential zone with an existing or proposed single family residence. A JADU shall be attached to or created within the walls of an existing or proposed primary dwelling, including enclosed uses within the residence, such as an attached garage.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
Item 11: Staff Report
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(b) The JADU shall include an efficiency kitchen, requiring the following components: A cooking facility with appliances, and; food preparation counter and storage cabinets that are of reasonable size in relation to the size of the JADUjunior accessory dwelling unit. i. JADUs may share sanitation facilities (bathrooms, laundry facilities, etc.) with the primary unit. If a permitted JADU does not include a separate bathroom, the permitted junior accessory dwelling unit shall include a separate entrance from the main entrance to the structure, with an interior entry to the main living area. In this instance, the floor area and lot coverage associated with shared space shall count towards the primary unit’s maximum allowances only. The combined sanitation facilities between the units shall include shower, toilet, and sink fixtures at a minimum and shall conform to the minimum requirements specified in the Building Code.
(c) For the purposes of any fire or life protection ordinance or regulation or for the purposes of providing service for water, sewer, or power, a JADU shall not be considered a separate or new unit.
(d) The owner of a parcel proposed for a JADU shall occupy as a primary residence either the primary dwelling or the JADU. Owner-occupancy is not required if the owner is a governmental agency, land trust, or housing organization or if the required bathroom for the JADU is provided in the unit, rather than inside the primary home.
(e) Prior to the issuance of a building permit for a JADU, the owner shall record a deed restriction in a form approved by the city that includes a prohibition on the sale of the junior accessory dwelling unit separate from the sale of the single-family residence, identifies that if the unit is rented it shall be rented for no shorter term than 30 days, isrequires owner-occupancy consistent with subsection (d) above, and restricts the size and attributes of the JADU to those that conform with this section.
(f) JADU incentive. The existing or proposed primary dwelling unit shall be afforded bonus square footage equal to the square footage of a proposed JADU when a JADU is constructed on site, provided the JADU meets the following requirements:
1) The JADU must conform to the underlying zoning district’s development standards for single family homes.
2) The maximum number of units on site shall not exceed fivefour (threetwo ADUs, one JADU, and one primary home).
3) The maximum size of the JADU shall not exceed 500 square feet. 4) The total maximum bonus/exempt floor area provided for the site under Section
18.09.040 and 18.09.050 may not exceed 800 square feet.
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
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5) The exterior entryway to the JADU shall not face the same direction as the entrance to the primary home.
6) All egress windows which face an adjacent residential property must utilize obscureopaque glazing on the whole window.
7) All non-egress windows which face an adjacent residential property must have a windowsill(s) that start five feet above the first finished floor for the unit. 8) All noise producing equipment associated with the JADU must comply with the noise regulations in PAMC 9.10.
9) When a single-family dwelling unit is permitted simultaneously with the construction of new JADU using these provisions, the primary unit’s covered parking requirements do not need to be provided. Instead, two uncovered parking spaces shall be provided in any configuration on the lot including within the front or street-side setback for the property.
SECTION 3. Subsection (g) of Section 16.58.030 (Exemptions) of Chapter 16.58 (Development Impact Fees) of Title 16 (Building) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through):
(g) Accessory dwelling units (ADU) less than 750 square feet in size of interior livable space. Any impact fees to be charged for an accessory dwelling unit of 750 square feet of interior livable space or more shall be proportional to the square footage of the primary dwelling unit;
SECTION 4. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of 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 adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17 and CEQA Guidelines sections 15061(b)(3), because it constitutes amendments to the City’s zoning ordinance to conform with preemptive State law, including Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
Item 11: Staff Report
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Article 2 (commencing with Section 66314) and Article 3 (commencing with Section 66333) of Chapter 13 of Division 1 of Title 7 of, the Government Code, as well as other minor and non- substantive amendments. As such, it can be seen with certainty that the proposed action will not have the potential for causing a significant effect on the environment.
SECTION 7. This ordinance shall be effective on the thirty-first date after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ City Attorney or Designee City Manager
____________________________
Director of Planning and
Development Services
Item 11
Attachment A - Ordinance
of the Council of the City of
Palo Alto Amending Title 16
(Building Regulations), Title
18 (Zoning), and Title 21
(Subdivisions) of the Palo
Alto Municipal Code to
Amend Requirements
Relating to Accessory
Dwelling Units and Junior
Accessory Dwelling Units
Item 11: Staff Report
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CITY COUNCIL
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: September 9, 2026
Report #: 2607-6531
TITLE
PUBLIC HEARING / QUASI-JUDICIAL. 470 Olive Avenue [25PLN-00228]: Recommend City Council Adopt an Ordinance Amending the Zoning Map to Change the Zoning District for 470 Olive Avenue from NV-R1 (Single-Family Residential) to NV-MXM (Medium Density Mixed Use) and Adopt a Resolution Changing the North Ventura Coordinated Area Plan (NVCAP) Land Use Designation from Low Density Residential to Medium Density Mixed Use to Align it With the NVMXM Zoning of the Adjacent and Connected Parcel at 2951 El Camino Real. This Action Supports a Staff Determination to Add 470 Olive Avenue as a Housing Inventory Site to Address No Net Loss Requirements. CEQA Status: Statutorily Exempt per Public Resources Code Section 21080.085.
RECOMMENDATION
Staff recommend the Council:
1. Adopt the Resolution in Attachment B amending the Comprehensive Plan Land Use Designation from NVCAP Low Density Residential to NVCAP Medium Density Mixed Use; and
2. Adopt the Ordinance in Attachment C amending the Zoning Map to rezone the subject parcel from NV-R1 to NV-MXM consistent with previous City Council direction.
EXECUTIVE SUMMARY
The Draft Resolution (Attachment B) amends the Comprehensive Plan Land Use Designation Map to change the land use designation of the subject property from NVCAP Low Density Residential to NVCAP Medium Density Mixed Use. The Draft Ordinance (Attachment C) amends the zoning map to change the zoning designation of the site from North Ventura Single- Family Residential District (NV-R1) to North Ventura Medium Density Mixed Use (NV-MXM).
These actions are consistent with the City Council motion on May 27, 2025, “Direct staff to return to Council with a proposal for Rezoning the property behind 2999 [El Camino Real] from R1 to an appropriate transition for housing.” The NV-MXM development standards include Item 12
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provisions to facilitate a transition between medium density mixed use and abutting single- family. These actions also support a staff determination to add 470 Olive Avenue (APN 132-37- 029) as a Housing Inventory Site to Address No Net Loss Requirements, as detailed further in this report.
BACKGROUND
Property Information
The 5,983-square-foot property is located near the corner of Olive Avenue and El Camino Real.
It is zoned NV-R1 and has a Comprehensive Plan land use designation of NVCAP Low Density Residential. The existing improvements include a one-story commercial building that is contiguous with the adjacent parcel, 2195 El Camino Real. The property is adjacent to single- family houses on two sides, and across Olive Avenue from the 3001 El Camino Real 100% affordable housing project.
Prior City Reviews & Action
The owners of both 470 Olive Avenue and 2951 El Camino Real have expressed interest in development of 470 Olive Avenue, and 2905, 2951, and 2999 El Camino Real for several years.
The City Council has considered prescreenings for rezoning from R-1 to CS (prior to approval of the NVCAP), and for a non-conforming use exception for the existing commercial property on the R-1 zoned lot. These applications did not move forward, particularly as the NVCAP continued to be developed. In 2020 and 2021 the City Council was presented with two prescreenings, one for a Planned Community project and one for a Planned Home Zoning (PHZ) project after Council had provided guidance on PHZs. No formal application was submitted following the prescreenings.
On May 27, 2025, Council approved expansion of the El Camino Real Focus Area to additional parcels, including the adjacent 2951 El Camino Real. Although the subject property was not included in the El Camino Real Focus Area, because of the existing zoning and concerns with how the Focus Area daylight plane would affect adjacent single-family residential use, Council’s motion included direction to staff to bring forth a proposal to rezone 470 Olive Avenue from NV-R1 to an appropriate transition for housing.1
Hearings for previous applications as well as the current application have included:
City Council: May 27, 20252: Discussion on El Camino Real Focus Area 1 City Council Action Minutes from May 27, 2025 (Item 7, on Page 4):
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=43272&dbid=0&repo=PaloAlto 2 Link to the May 27, 2026 City Council Staff Report:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83418&dbid=0&repo=PaloAlto.
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January 19, 20215: Prescreening for Planned Home Zoning project October 5, 20206: Prescreening for Planned Community project October 2, 20177: Prescreening for Zone Change from R-1 to CS PTC: July 8, 20268,9: Recommendation on Zone Change from NV-R1 to NV-MXM December 17, 202410: Discussion on El Camino Real Focus Area October 30, 201911: Consideration of non-conforming use exception HRB: None
ARB: December 19, 202412: Discussion on El Camino Real Focus Area July 8, 2026 PTC Hearing
On July 8th, the PTC made a motion to move the project forward for Council consideration with a split recommendation after the commission was unable to reach a majority recommendation to approve or deny the rezoning request. Two of the Commissioners who voted against the rezoning specified they would be willing to reconsider the proposal if it was concurrent with a proposal for a housing project. A majority of the Commissioners agreed that they were concerned about how the NV-MXM development standards could be exceeded utilizing State laws such as State Density Bonus Law. For example, it was discussed that the property would be subject to the R-1 daylight plane as it is adjacent to NV-R1 zoned properties, but a proposed development utilizing State Density Bonus could request a waiver from the daylight plane requirement. One Commissioner also noted this rezoning should have been requested at the time the NVCAP was being drafted.
5 Link to the January 19, 2021 Council Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=3577&compileOutputType= 1 6 Link to the October 5, 2020 Council Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=2947&compileOutputType= 1 7 Link to the October 2, 2017 Council Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=1939&compileOutputType= 1 8 Link to the July 8, 2026 PTC Staff Report and Supplemental Report:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=20326 9 Link to the July 8, 2026 PTC Summary Minutes (Item 2, on Page 1):
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=20330&compileOutputType =1
10 Link to the December 17, 2024 PTC Staff Report:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16861 11 Link to the October 30, 2019 PTC Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=5776&compileOutputType= 1 12 Link to the December 19, 2024 ARB Staff Report:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13947 Item 12
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Commissioners who did support the rezoning cited this as a good location for a potential housing project, that Council supported a rezoning, that a new building would have a greater setback from the adjacent single-family homes than the existing building, and expressed concern that if redevelopment along El Camino Real did not include this parcel it may be forgotten and left between housing developments.
The property owners have expressed interest in applying for a new application for a code- compliant housing development project for the site after the rezoning is complete, noting that potential development partners are waiting for the outcome of this process. This rezoning effort gives more certainty to the owners and potential investors compared to applying to rezone the property concurrent with a housing application. In particular, it allows for the potential to submit a Streamlined Housing Application, which cannot be granted to projects which are inconsistent with the property’s zoning designation.
Since the application was first filed, and since the PTC hearing was held, SB 79 has gone into effect, as well as the City’s local implementing ordinance. The City’s ordinance applied the Transit Oriented Development (TOD) overlay to the site, slightly reducing setbacks and daylight plane, and increasing allowable FAR to 1.75. This is reflected in Attachment D.
PROJECT DESCRIPTION
The property owner filed an application for the subject property at 470 Olive Avenue on September 15, 2025, to change the zoning district designation at 470 Olive Avenue from NV-R1 to NV-MXM, consistent with the City Council’s direction on May 27, 2025.9 The property owner further detailed the request in a letter (Attachment E). It was determined in staff’s review that a Comprehensive Plan land use map amendment is also required to align the proposed zoning with the underlying Comprehensive Plan land use designations. No formal development application has been submitted at this time, however this rezoning facilitates opportunities for future development at this and the adjacent parcel under same ownership.
Requested Entitlements, Findings, and Purview:
The following discretionary applications are being requested:
Comprehensive Plan Land Use Map Amendment: The steps for processing a request for a Comprehensive Plan amendment are set forth in Palo Alto Municipal Code (PAMC) Chapter 19.04. The PTC considers the amendment and forwards its recommendation to the City Council for final action. This may be done in in parallel with the Zoning Map Amendment. The Draft Resolution Amending the Comprehensive Plan Land Use Map is included in Attachment B.
Zoning Map Amendment: The process for evaluating this type of application is set forth in PAMC Chapter 18.80. The application will be considered by the PTC, who will make a recommendation to City Council for adoption of an Ordinance to modify the Zoning Map Item 12
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and must find that the proposed zoning is appropriate for the site. The Draft Ordinance Amending the Zoning Map is included in Attachment C.
Staff also intends to add the site to the Housing Element Site Inventory as a site suitable for moderate income housing units, if rezoned. The City‘s Housing Element Site Inventory currently faces a deficit in sites for moderate income units as a result of approvals at 2100-2400 Geng Road and 3606 El Camino Real, both of which were proposed and entitled with fewer moderate-income units than had been projected in the Site Inventory. Under Housing Element no-net-loss law (Government Code section 65863), the City must, within 180 days, identify and make available additional adequate sites to accommodate the remaining RHNA at the moderate-income level. If this property does not get rezoned, it will not be added to the inventory.
ANALYSIS
The proposal has been analyzed in accordance with relevant State and local regulations and found to comply with all applicable requirements, as detailed further in this analysis.
Comprehensive Plan Consistency
The existing land use designation of the parcel is NVCAP low-density residential, defined as follows: “The low-density residential designation is calibrated to both facilitate new housing development while also being sensitive to the existing single-family neighborhood fabric located along Pepper Avenue and Olive Avenue. This area of existing single-family homes has been designated as an area of stability and will not experience a significant degree of change.” In order to align the underlying land use of the site with the proposed zoning, a Comprehensive Plan Amendment would be required. The project therefore includes a proposed resolution amending the NVCAP Land Use Map to NVCAP Medium-Density Mixed Use, which is intended to support four- to five-story mid-rise apartment buildings. This designation requires active uses for ground floor frontages with retail requirements at specific nodes along El Camino Real, to support its role as a regional commercial corridor. The designation requires that upper stories be residential. With adoption of the Resolution (Attachment B), the proposed ordinance for the rezoning would be consistent with the Comprehensive Plan land use designation.
Zoning Compliance
The existing zoning of the parcel is North Ventura Single Family Residential (NV-R1). This zoning allows for primarily single-family and two-family uses. The draft ordinance in Attachment C would amend the zoning map, changing the zoning designation of the site to North Ventura Mixed Use Residential (NV-MXM). Council directed staff to bring forth a proposal to rezone the property from R1 to zoning with an appropriate transition for housing. Staff believes that the proposed zoning designation of NV-MXM is the most appropriate zoning designation. It addresses an existing non-conformance by aligning the zoning with the existing use, it is the Item 12
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same zoning as the abutting properties fronting El Camino Real, and it will facilitate the desired future redevelopment of the site with housing.
Development Standards
As noted previously in the report, Council had previously not included the site in the El Camino Real Focus Area for several reasons, one of which included concerns about how the daylight plane under those development standards would affect single-family residential uses.
Attachment D compares development standards for the NV-R1 zoning district, including the currently applicable SB 79 (TOD) Overlay, the proposed NV-MXM zoning district with the SB 79 (TOD), and the El Camino Real Focus Area. As modified by the (TOD) Overlay, the NV-R1(TOD) daylight plane is measured from 16 feet and 45 degrees at the property line. The base NV-R1 daylight plane is measured from 10 feet and 45 degrees measured at the property line for the interior side(s), and 16 feet and 60 degrees measured at the rear setback for the rear. The (TOD) Overlay also allows for multi-family development. The NV-MXM, however, still permits a slightly higher FAR of 2.0, compared to the 1.75 permitted in the NV-R1(TOD). Therefore, the proposed zoning remains an appropriate transition between the neighboring multi-family properties in the El Camino Real Focus area (with NV-MXM as an underlying zoning) and neighboring NV-R1 properties.
However, as it was discussed at the PTC hearing, the exact daylight plane used by a project will be subject to a number of factors including State laws and/or use of waivers, incentives, and concessions. It may also depend on the combination of additional sites and whether those lots are merged, which may affect whether a property line is considered a side or rear for the purpose of setbacks, stepbacks, and/or daylight planes.
FISCAL/RESOURCE IMPACT
The implementation of the proposed change in zoning map is not anticipated to have any direct fiscal impact on the City budget. Any future development proposal will require payment of both development impact fees and other necessary entitlement and permit fees.
STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires the publication of a notice of this public hearing in a local paper at least ten days in advance of the meeting. Notice of the Council public hearing was published in the Daily Post on August 29, 2026, which is 12 days prior to the meeting. Public comments received at the time of publication of this staff report are included in Attachment F.
In summary, neighbors are concerned about the combined impacts of a potential development at this site, with other nearby entitled and under construction projects such as at 3001 El Camino Real (former Mike’s Bikes location), 3150 El Camino Real (former Fish Market), and the former Fry’s site, particularly as it relates to traffic at the intersections of El Camino Real and Olive Avenue, and El Camino Real and Page Mill Road.
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ENVIRONMENTAL REVIEW
The City has reviewed the proposed ordinance in accordance with that authority and criteria set forth in the California Environmental Quality Act (CEQA). The City, as the lead agency, anticipates that this ordinance will be exempt from CEQA in accordance with Public Resources Code Section 21080.085. This exemption applies to rezoning of sites to address No Net Loss Law (Gov Code Section 65863). The City, in approving the 2100-2300 Geng Road project on March 16, 2026, as well as in approving the 3606 El Camino Real Project on April 13, 2026 made findings identifying the need to add sites to the housing inventory in order to provide an adequate number of sites planned for moderate income units (RLUA 2026-01) to address No Net Loss Law. If Council supports the rezoning of this property, staff intends to place 470 Olive Avenue on the City’s housing inventory along with adjacent sites along El Camino Real, to address the shortfall of moderate income units within 180 days. Rezoning of this site is necessary for the site to accommodate moderate income units.
The City sent notification letters in accordance with SB 18 (California Government Code § 65352.3), inviting California Native American tribes to participate in consultation regarding the project. The City received one request for consultation from the Tamien Nation. Following consultation, the Tribe agreed that the existing tribal cultural resource mitigation measures adopted for future development on this site as part of the NVCAP environmental review were sufficient. Tribal consultation was completed on April 2, 2026.
ATTACHMENTS
Attachment A: Location Map
Attachment B: Draft Resolution Amending the Comprehensive Plan Land Use Designation of 470 Olive Avenue
Attachment C: Draft Ordinance Amending the Zoning District for 470 Olive Avenue Attachment D: Zoning Comparison Table
Attachment E: Letter from the Applicant
Attachment F: Public Comments
Attachment G: COI Map 470 Olive – No Conflict
APPROVED BY:
Jonathan Lait, Planning and Development Services Director Item 12
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Resolution No. ____
Resolution of the Council of the City of Palo Alto Amending the Comprehensive Plan Land Use Map Changing the Land Use Designation of 470 Olive Avenue from “North Ventura Coordinated Area Plan (NVCAP) Low Density Residential” to “NVCAP Medium-Density Mixed-Use.”
R E C I T A L S
A. 470 Olive Avenue, (the “subject property”, as further described in Exhibit A) B. On September 15, 2025, Jessica Agramonte, on behalf of Agramonte Property LLC (“Applicant”) submitted an application for a Zone Change for 470 Olive Avenue from NV-R1 to NV-MXM (the “Project”) at 470 Olive Avenue (the “Subject Property”, as further described in Exhibit A).
C. To align the planned rezoning with the underlying Comprehensive Plan land use designation, the project requires an amendment to the Land Use Map.
D. Whereas the Planning and Transportation Commission, after a duly noticed public hearing on July 8, 2026, recommended that the City Council amend the Land Use Map of the City of Palo Alto Comprehensive Plan as set forth below.
E. Whereas the City Council considered said recommendation after a duly noticed public hearing held on________ and now desires to amend the Comprehensive Plan Land Use Map as set forth below.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The City Council finds that the public interest, health, safety and welfare of Palo Alto and the surrounding region would be furthered by an Amendment to the Land Use and Community Design Element Land Use Map.
SECTION 2. The proposed Land Use Map Amendment is consistent with the following goals and policies of the Comprehensive Plan:
Policy L-1.3: Infill development in the
urban service area should be compatible
with its surroundings and the overall
scale and character of the city to ensure a
compact, efficient development pattern.
The proposed land use designation better
facilitates opportunity for infill development,
particularly in combination with the adjacent
properties on El Camino Real.
Policy L-1.6: Encourage land uses that
address the needs of the community and
The proposed amendment takes into
consideration the existing non-residential use,
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manage change and development to
benefit the community.
and shared ownership with 2951 El Camino Real,
and aligns 470 Olive with 2951 El Camino Real.
Policy L-2.6: Create opportunities for new
mixed-use development consisting of
housing and retail.
The comprehensive plan amendment would
allow for a mix of uses on a site where currently
only residential uses are allowed.
SECTION 3. The City Council hereby amends the Land Use Map in the City of Palo Alto Comprehensive Plan Land Use and Community Design Element as follows:
Change the land use designation of 470 Olive from NVCAP Low Density Residential to NVCAP Medium-Density Mixed-Use.
SECTION 4. In conformance with the California Environmental Quality Act (CEQA), the environmental impacts of this Resolution were evaluated and found to be statutorily exempt per CEQA Guideline 21080.085.
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
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Resolution Amending the
Comprehensive Plan Land
Use Designation of 470
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EXHIBIT A
(Legal Description)
Item 12
Attachment B - Draft
Resolution Amending the
Comprehensive Plan Land
Use Designation of 470
Olive Avenue
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Resolution Amending the
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Use Designation of 470
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1 Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Zoning District Boundaries of 470 Olive Avenue from NV-R1 to NV-MXM
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 May 27, 2025, the City Council directed staff to rezone 470 Olive Avenue from NV-R1 to a more appropriate zoning for housing transition.
B. On September 15, 2025, Jessica Agramonte, on behalf of Agramonte Property LLC submitted an application to rezone the property located at 470 Olive Avenue (“Property”, more particularly described in Exhibit A) from NV-R1 to NV-MXM (“Project”).
C. To align the Comprehensive Plan Land Use Map with the proposed zoning designation, the planning commission recommended, and Council adopted, Resolution _____amending the land use designation of the site from NVCAP Low Density Residential to NVCAP Medium Density Mixed-Use.
D. Following Staff Review, the Planning and Transportation Commission (“PTC”) held a duly noticed public hearing on July 8, 2026, and recommended ________ of the Project to the City Council.
E. On _______, following a duly noticed public hearing, Council determined that the rezoning is appropriate because it aligns with the adjacent NV-MXM zoned properties along El Camino Real, but provides a transition from those neighboring parcels, which are within the El Camino Real Focus area, to the adjacent lower density residential neighborhood northeast of the subject property.
F. The rezoning supports placement of the subject property on the housing inventory site to address no net loss requirements for the Regional Housing Needs Assessment, as required pursuant to state law.
SECTION 2. Amendment of Zoning Map.
Section 18.08.040 of the Palo Alto Municipal Code, the “Zoning Map,” is hereby amended by changing the zoning of the Property from North Ventura Single-Family Residential NV-R1 to North Ventura Medium-Density Mixed-Use NV-MXM, as shown in Exhibit B.
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Ordinance Amending the
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2 SECTION 4. Environmental Review.
The Council finds that the Ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 21080.085. This exemption applies to rezoning of sites to address No Net Loss Law (Gov Code Section 65863). Staff intends to place 470 Olive on the City’s housing inventory along with adjacent sites along El Camino Real, to address the shortfall of moderate-income units. Rezoning of this site is necessary for the site to accommodate moderate income units.
SECTION 5. Effective Date.
This ordinance shall be effective on the thirty-first day after the date of its adoption (second reading).
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
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Attachment C - Draft
Ordinance Amending the
Zoning District for 470 Olive
Avenue
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3 EXHIBIT A
Legal Description
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Attachment C - Draft
Ordinance Amending the
Zoning District for 470 Olive
Avenue
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Ordinance Amending the
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ATTACHMENT D
ZONING COMPARISON TABLE
470 Olive Avenue, 25PLN-00228
Table 1: Comparison of Select Development Standards
Select standards reflect portions of 470 Olive which abut a NV-R1 low density residential zoning district. With the SB 79 (TOD) Overlay, the more permissive of the base zoning or overlay standards apply.
Development
Standard
Current NV-R1 Zoning
18.29.060 Table 1 with
SB 79 (TOD) Overlay
18.14.070
Proposed NV-MXM
Zoning
18.29.060 Table 3
with SB 79 (TOD)
Overlay 18.14.070
El Camino Real Focus
Area
18.14.020 Table 3
Maximum Height 35 feet 55 feet 50-85 feet depending on
proposed use
Maximum Site
Coverage
SB 79 (TOD): 70% 100% Lot size => 10,000 sq. ft.:
80%
Lot size < 10,000 sq. ft.:
70%
Maximum Total
FAR
SB 79 (TOD): 1.5:1 2.0:1 Lot size => 10,000 sq. ft.:
4.0 Lot size < 10,000 sq. ft.:
3.0 Minimum
Setbacks
SB 79 (TOD): 4 ft side,
10 ft front and rear
SB 79 (TOD): 4 ft side, 0
front, 10 ft rear
20 feet for rear and
interior sides
Minimum
Density
SB 79 (TOD): greater of
30 du/ac or 5 units
31 du/ac None
Daylight Plane -
Side
SB 79 (TOD):
Initial height: 16 feet,
measured at the
property line
Slope: 45 degrees
SB 79 (TOD):
Initial height: 16 feet,
measured at the
property line
Slope: 45 degrees
Initial height: 16 feet,
measured at the
property line
Slope: 45 degrees
Other Upper floor stepbacks
apply
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Comparison Table
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August 10, 2026
Thomas G. Agramonte
[email protected]
Jessica Rose Agramonte
[email protected]
Palo Alto City Council
250 Hamilton Avenue
Palo Alto, CA 94301
Via email: [email protected]
Re: 470 Olive Avenue [25PLN-00228]:
Dear Mayor Veenker, Vice Mayor Stone, and City Councilmembers:
On behalf of the Agramonte Family, a four-generation Palo Alto family and landowners of 2951 El Camino Real (ECR) and 470 Olive Avenue, we are writing to respectfully request that the City Council adopt the Planning staff recommendation regarding 470 Olive Avenue to change the Zoning District from NV-R-1 to NV-MXM and the land use designation from NVCAP Low Density Residential to NVCAP Medium Density Mixed, and the site be added to the City’s Housing Element to allow for the appropriate development of high quality housing in Palo Alto.
The City Council’s May 27, 2027 hearing action was “to direct staff to return to Council with a proposal for Rezoning the property behind 2999 [El Camino Real] (470 Olive) from R1 to an appropriate transition for housing.” Consistent with staff’s analysis, we would like to provide additional contextual information supporting staff’s recommendation and address concerns expressed by some of the Planning Commissioners regarding daylight plane and respecting existing single-family homes per the NVCAP, and those expressed by the owner of 471 Pepper Avenue.
Existing Neighborhood & Zoning/LU Context
• 470 Olive is directly across from the 3001-3017 El Camino Real (Mike’s Bikes) 129-unit project which is zoned NV-MXM and designated NVCAP Medium Density and property lines align. See Attachment 1.
• There is an existing single-family home located east of the 3001 ECR project, similar context with the redevelopment of 470 Olive and adjacent ECR parcels. See Attachment 2. • 470 Olive’s approximately 19’ high building walls are located on the property lines abutting 471 Pepper Avenue and 456 Olive Avenue R-1 lots impacting the current daylight onto those single-family properties. See Attachment 3 showing the existing walls. • 456 Olive Avenue is currently under construction with a new 30’ high 2-story home including a 2320 SF house, attached 747 SF ADU, and a 224 SF garage. The owner was disclosed that a rezoning and multifamily development was proposed via the posted signage onsite. • The 471 Pepper Avenue home was completed and sold after the NVCAP process was well underway and the Auto Collision Repair at 2905 ECR was still in operation. • 470 Olive Avenue is located in a mixed-use area with multiple commercial businesses, consistent with the original commercial development of and CS zone designation of the property. • 470 Olive is within ½ mile of the California Avenue CalTrain Station.
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SB 79 Transit Oriented Development Combining District Zoning • Since the July 8th Planning Commission hearing, the 470 Olive Avenue property has become eligible to use the City’s SB79 Alternative Transit Oriented Development Combining District Zoning and associated development standards. These standards are more generous (or less restrictive) than those under MXM and require a minimum 5-unit project.
• The 470 Olive Avenue property is 50 feet wide by 119.7 feet deep. Any subsequent development under TOD CD will be required to have a minimum 4-foot setback and adhere to a 45-degree daylight plane starting at 16 feet up along the northern and western sides of the property. Please see Attachment 4 depicting the overlapping impact of the daylight plane and setbacks on the 470 Olive parcel relative to the adjacent 471 Pepper and 456 Olive properties.
In summary, together with staff’s report and the physical and statutory context above, we believe that the proposed recommendation of MXM is the appropriate response to the City Council’s direction on May 27, 2025.
In addition, in response to Planning and Transportation Commission meeting on this rezoning application and certain comments, we would also like to document the timeline and details of the zoning history and our family’s now nine years of working collaboratively with the City of Palo Alto to create housing on this ideal location and support of staff’s recommendation to change the site’s zoning and land use designation.
Zoning History – Summary
This building on 2951 ECR and 470 Olive Avenue is a single building that spans both parcels that was originally zoned and operated as CS, but was rezoned, likely inadvertently, into two different zone designations in 1978 that changed 470 Olive Avenue to R1. A prior owner applied for an Exception from the Non-conforming Use Termination requirement, which was unanimously approved, however, they did not follow up on landscaping required for the approval and sold it as CS zoning without disclosing the zoning issues. It was built as a commercial building and always used as commercial, and office through multiple generations of owners, prior to it being sold to my family in 1993. My father ran his Veterinary practice there. Once we discovered the undisclosed zoning issue, we alerted the City Planning of it and have been working earnestly with the City of Palo Alto since 2017 to accommodate the city’s housing priorities in this ideal location, walking distance from transit. On the prescreening on October 2, 2017, some of the Council members posited that the 1978 rezoning of 470 Olive Avenue from CS to R-1 was likely done mistakenly. Approval of this application for rezoning of 470 Olive Avenue to realign it with 2951 ECR, both corrects this zoning while directly addressing the urgent need of providing viable multifamily housing development on this ideally located site, walking distance to Caltrans and Cal Ave.
470 Olive Avenue Zoning History:
• Based on City of Palo Alto documents, a review of historical aerials and permit history, 470 Olive Avenue is part of a two-parcel, single commercial building in Palo Alto, built and permitted for commercial use in 1968, the building spans both parcels: 2951 El Camino Real (APN# 132-37- 052) and 470 Olive Ave (APN# 132-37-029). 470 Olive Avenue has always been structurally and operationally linked to 2951 El Camino Real, sharing a single building built with a connecting doorway, and a single drive-through parking lot. As described above, the building is zero-lot line along the western and northern property lines with the building connection between the two parcels following the offset lot lines and accommodating parking and circulation.
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• 470 Olive Avenue was originally built and zoned CS. The first occupants were Carnes Piano in 1968, where customers walked through the entire building spanning 2951 El Camino and 470 Olive. However, the section of the building located on 470 Olive Avenue was re-zoned in 1978 to R-1, during a City of Palo Alto Comprehensive Plan. As noted by the City Council on October 2, 2017, this splitting of a single building into two different zones may have been done inadvertently, in error. The parcels located directly across from on Olive Avenue and two parcels adjacent to 470 Olive on ECR are zoned CS. We believe that the original CS zone designation of 470 Olive Avenue was appropriate and the subsequent rezoning to R1 was not. The rezoning to R1 created a noncompliant building on 470 Olive; it was designed to meet CS requirements, not R1 requirements. The entire building has always operated as commercial use.
• In 1987, a prior owner applied for an Exception from the Non-conforming Use Termination requirement, which was unanimously approved by the City Council. On July 16, 1992, the City of Palo Alto confirmed in a letter to the owner that this action allowed the existing non-conforming use to continue indefinitely, subject to site improvement. The letter suggested an option of applying for a zone change to change zoning of 470 Olive from R-1, back to CS, Service Commercial’. Unfortunately, the prior owner did not follow up or disclose this when we purchased the building in 1993. We were never notified by the City of Palo Alto regarding this issue. However, since becoming aware of this situation, we immediately brought it to the attention of the city, and we have taken proactive steps to resolve it and to accommodate priorities of the City of Palo Alto.
• In 1993 Superfund ground water quality test wells were installed in the parking lot of 470 Olive Avenue. Access to these wells could be provided within a multifamily residential development, located in the parking garage. The cost to comply with both R1 zone and the Superfund water quality well access, if at all possible, would be financially and space prohibitive.
• On October 2, 2017, the Palo Alto City Council conducted a rezoning prescreening and suggested the Code Amendment Application as a solution. We were advised by the City Council during the prescreening on October 2, 2017 to request an Exception to the Non-conforming Use Amortization Code section 18.70.070 to match Commercial use of the structurally and functionally linked parcel, 2951 El Camino (zoned CS) and the single building that spans both parcels. On October 30, 2019, the Planning and Transportation Commission reviewed the request for a 5-year Exception favorably, and the concept of a Multifamily Residential Development was discussed and initiated. We appreciated the prescreening with City Council in 2020 and 2021.
Development was pursued; however a formal application was not submitted as the project was unfortunately deemed financially infeasible at the time.
Our family’s collaboration with the City of Palo Alto to provide housing on this ideal location:
• Nearly a decade ago, in 2017 we brought this zoning issue to the attention of the City. Through working with staff, they recommended pursuing multifamily development on this location to address the zoning issue, as it presented a “win, win” in terms of providing housing and addressed the zoning. Since then, we have continued to follow the requests and guidance from the City.
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• When the City required us to stop renting out 470 Olive Avenue in 2017 until the zoning was resolved and recommended that we pursue multifamily development to resolve both the housing need and the zoning, we agreed and have been consistently working towards this goal since. • We attended the NVCAP working group meetings and listened to the neighborhood priorities. When we requested for our rezoning to be addressed through NVCAP, Jonathan Lait requested that we pursue zoning through a development application instead as the NVCAP was on a short deadline and they didn’t want to risk missing the deadline. For the benefit of the City, we agreed and immediately continued to work toward this goal of multifamily housing on this site. • This brings us to where we are today, nine years later still doing our best, working earnestly and diligently with the City to get much needed housing on this site. We care about this community and the people in it. We feel we have demonstrated this through our interactions with the City. Rezoning this site is a necessary step to get housing on the site that can integrate and benefit the community.
Thank you for taking time to review our application and we request that the 470 Olive Avenue rezoning be approved and added as a Housing Element Site, allowing for the appropriate provision of housing in an ideal location in Palo Alto. Please feel free to contact us: [email protected] and [email protected].
Sincerely,
Thomas G. Agramonte
Jessica Rose Agramonte
Attachments
Cc: Jonathan Lait, City of Palo Alto
Jennifer Armer, City of Palo Alto
Emily Kalla, City of Palo Alto
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Attachment 1 – 470 Olive Avenue across from 3001-3017 (Mike’s Bikes) NV-MXM MIKE’S BIKES
470 OLIVE
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Attachment 2 – 3001-3017 El Camino Real (Mike’s Bikes)
NV-MXM next to existing single-family home
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471 Pepper Avenue 456 Olive Avenue
Attachment 3 – 470 Olive Avenue Building Wall on 471 Pepper and 456 Olive Property Lines Item 12
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Attachment 4 – SB 79 TOD CD Daylight
Plane & Setback Required
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From: Velasquez, Ingrid
To: Lait, Jonathan; Tran, Vickie; Kallas, Emily
Cc: Nose, Kiely; Gaines, Chantal; City Mgr
Subject: FW: 2951
Date: Tuesday, July 7, 2026 9:36:53 AM
Attachments: image001.png
image002.png
image003.png
Hello,
Forwarding the thread below for awareness.
Thanks,
Ingrid
Ingrid Velásquez
Administrative Assistant
Office of the City Manager
(650) 329-2354| [email protected]
www.PaloAlto.gov
From: Matthew Bryant <[email protected]>
Sent: Monday, July 6, 2026 10:17 AM
To: Jason Robinson <[email protected]>; Council, City <[email protected]> Cc: David Adams <[email protected]>; Jeff Levinsky <[email protected]>; peplive- [email protected]; Rebecca Sanders <[email protected]>; David Adams <[email protected]>; Anupa Bajwa <[email protected]>; Marvin Jing Woo <[email protected]>; Candy Tsourounis <[email protected]>; Shirley Yeh <[email protected]>; jieming lin <[email protected]> Subject: Re: 2951
CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking on links.
Hi Jason and everyone included on this note, Thank you for your input. I plan to submit a version of this letter to the City Council ([email protected] ) and Emily Kallas ([email protected]) on the PTC. Also, it would be great to get everyone to show up or call into the PTC meeting o i
This message needs your attention
This is a personal email address.
This is their first mail to some recipients.
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Mark Safe Report
CGBANNERINDICATOR
Hi Jason and everyone included on this note,
Thank you for your input. I plan to submit a version of this letter to the City Council ([email protected]
) and Emily Kallas ([email protected]) on the PTC.
Also, it would be great to get everyone to show up or call into the PTC meeting on Wednesday, 8Jul26 at 6pm to reject this rezoning of 470 Olive Ave.
As a reminder, the newly adopted NVCAP continues to include 470 Pepper Ave as part of the R-1 zoning (https://www.paloalto.gov/files/assets/public/v/2/planning-amp- development-services/north-ventura-cap/nvcap-reports/adopted_nvcap_8_26_24.pdf).
Best regards,
Matt
On Jul 1, 2026, at 12:18 AM, Jason Robinson <[email protected] >
wrote:
Matt, David,
Thanks for your notes.
I'll send an email shortly. See below. My argument is to consider it holistically. These projects typically involve piecemeal considerations and multiple variances. The impact may be larger. More housing is fine, but planning is paramount.
Matt -- In the past, some noted that operating a commercial business in earnest on residentially-zoned property allegedly violates Palo Alto code and incurs a $1,000 daily fine. $365k/year. That may not be covered by the plans.
SUBJECT: PUBLIC COMMENT Re: Piecemeal Rezoning (470 Olive Ave / 2951 El Camino Real Corridor) -- Cumulative Infrastructure Impact Concerns Powered by Mimecast
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BODY:
Dear Mayor, Council Members, and Commissioners,
We are writing to express clear and pressing concerns regarding the proposed rezoning of 470 Olive Ave and 2951 El Camino Real from R-1 to a higher-density mixed-use designation.
We also note that this topic has come up before, and it didn't proceed for reasons: [e.g., https://www.paloalto.gov/files/assets/public/v/1/agendas- minutes-reports/agendas-minutes/planning-and-transportation- commission/2019-agendas-minutes-and-staff-reports/ptc-12.11.19-470- olive.pdf ].
While everyone understands the state-mandated pressure to fulfill the Regional Housing Needs Allocation (RHNA), approving this rezoning without a holistic, corridor-wide cumulative impact analysis introduces massive safety and infrastructure liabilities to Ventura and
surrounding neighborhoods.
The current planning approach evaluates this block entirely in a piecemeal fashion (i.e., each project's study typically concludes that their specific project alone won't significantly degrade the surrounding intersection to a point of total failure), creating a dangerous blind spot regarding localized gridlock:
Compounding Localized Density: This specific stretch of El Camino Real (SR 82) will bear the weight of multiple massive redevelopments, including the 368-unit project at the former Fish Market/McDonald’s site, the 5-story 129-unit housing development at the former Mike’s Bikes site, and another 113 units at 2951 El Camino / 470 Olive. And what happens when the Fry's site blossoms? This combination obviously risks overwhelming this single micro-corridor, therefore, development must proceed with care to prevent expensive mistakes.
The Page Mill Bottleneck: The intersection of Page Mill Road and El Camino Real is currently being reconfigured after the permanent redesign to remove street parking and accommodate bike
lanes. Backups at that intersection are commonplace. Combined with eliminating the right-on-red option, this actively reduces vehicular lane Item 12
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capacity and impacts business and neighborhood parking. Traffic spills into the arteries. The Page Mill crosswalk in front of Ash is more dangerous with increased traffic. Time will tell whether the new reconfiguration mitigates these issues.
Gridlock of Neighborhood Side-Streets: Because 470 Olive Ave connects to El Camino Real via an un-signaled stop sign on the side street, the compounding traffic from these projects can effectively trap neighborhood residents. When El Camino backs up due to the restricted Page Mill intersection, turning left into or out of Olive Avenue becomes physically impossible and creates a severe hazard for emergency vehicle access.
Our Request to the Council and Commission:
We urge you to conduct a sober, realistic Cumulative Traffic and Safety Infrastructure Study that explicitly evaluates the combined impact of the Fish Market/McDonald's site, the Mike’s Bikes site, 2951 El Camino/470 Olive, the old Fry's site, and other projects within a reasonable (e.g., 0.75-mi) radius working in tandem against the reduced road capacity from the new El Camino/Page Mill configuration including the wholesale removal of street parking.
The study may not be free, but it would likely be much cheaper than fixing the resulting mistakes later.
Palo Alto plays a dangerous game by continuing to approve massive, isolated density increases block-by-block while actively dismantling the very road infrastructure meant to support them.
Thank you for your time and consideration of Palo Alto's neighborhoods' long-term safety and efficient transportation.
Regards,
...
cc: Becky
Jason
On Tue, Jun 30, 2026 at 7:11 PM David Adams <[email protected] >
wrote:
+ Pepper/Olive residents some of whom live at that end.
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Does anyone have a good case against this rezoning? With what's been going on around here it would seem the forces are against us.
Regards
David
On Tuesday, June 30, 2026 at 06:22:46 PM PDT, Matthew Bryant <[email protected] >
wrote:
Need your help again to stop 470 Olive Ave rezoning . We have mixed use on both ends of our blocks. Help preserve the few R1 single family homes we have left.
Best regards,
Matt
Sent from Outer Space
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On May 6, 2023, at 19:08, Matthew Bryant <[email protected]> wrote:
Turns out that the Acclaim Property did buy 2951. They are going to renovate it and turn into commercial. It’s up for soft sale if anyone is interested (not listed but shopping it around).
The fish house project is a Stanford collaboration includes McDonald’s.
The vet (now bmnt) pulled out of the old 2951 plan, and it is done.
I talked with Lydia Kou at the May fête parade today. I thanked her for promoting bikes and asked her to help out the NVCAP. I said the building heights are too tall and she agreed. She said she is looking out for Venturans!
Cheers,
Matt
Sent from Outer Space
On May 6, 2023, at 17:04, Jeff Levinsky <[email protected] > wrote:
There's no new project submitted for that address. See https://www.cityofpaloalto.org/Departments/Planning-Development-Services/Current- Planning/Projects/2951-El-Camino-Real, but what's there is the 2020 project that didn't go forward. We were told the developer and the four different owners back then couldn't agree on things. That developer opted instead to work on the Fish Market project on the other side of El Camino.
2951 El Camino's last transfer date was in 2017 per the County. See attached assessment.
Of course, the various owners can always launch a new effort to build something there and it could be much bigger than the prior plans, thanks to state laws. ----- Original Message -----
From: Matthew Bryant
To: Rebecca Sanders
Cc: David Adams ; Anupa Bajwa ; Marvin & Jing Woo ; Candy Tsourounis ; Shirley Yeh ; Jeff Levinsky ; [email protected]
Sent: Friday, May 5, 2023 10:20 AM
Subject: 2951
On another note, the Akins auto body is moving out of 2951 El Camino Real (at Pepper Ave).
I think the property was sold in 2022 and the new owner raised the rent on Akins. Akins has decided to move out by May 20.
Today, I noticed three well-dressed individuals walking around the 2951 property and looking longingly at its future. I wonder if these are real estate developers looking to build another high- rise commercial/residential like Acclaim Properties proposed a few years ago.
Does Jeff Levinsky or anybody know anything about 2951 ECR? I tried to find information Item 12
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about a property sale online.
Best regards,
Matt
471 Pepper Ave
On May 1, 2023, at 7:13 PM, Rebecca Sanders <[email protected] >
wrote:
Dear David and Matt:
I am cc'ing Anupa, since she is right there. Is there anyone else that should be on this thread? I emailed Jeff Levinsky about this massive building being grossly under-parked. He was aware of it. You guys know him, right. He's PAN's land use guru and super helpful when it comes to reading zoning laws.
Jeff Levinsky says it would really help if neighbors wrote letters or better yet spoke at the ARB meeting Thursday. Neighbors rarely show up and when they do, ARB tends to listen.
Here's some other stuff he said to me. I hope this helps:
"The overview suggests the project is using its full count of four exemptions under SB 330. I think that leaves them still subject to our other rules that protect sight-lines into neighboring properties and require screening, plantings, and things like that. I'd recommend the neighbors go to the ARB and ask for every bit of that -- and the project should have to provide it as it has no exemptions left. That might give some relief.
'A more sophisticated argument is that the state parking exemptions don't apply if a city can show it would create safety problems. Normally the City had to be prepared to make such an argument, but neighbors might hire a lawyer to help pursue that. At a minimum, they could certainly mock the developer's attempt to take over the street for its own parking."
I also asked Jeff about whether it will automatically go to Council. He's not sure.
Various rules generally require PTC and Council meetings for large projects, even if using SB 330. But if it doesn't go to Council, it can be appealed to the Council, although the SB 330 limit on five meetings may create problems and the Council may not be able to overturn anything unless it relates to compliance with objective standards. This Thursday's meeting is the third hearing for this project.
Jeff's see one can explicitly appeal per 18.15.090(d) for the density bonus aspects. (I haven't look it up.) More direct quotes from Jeff:
"The ARB staff report claims the project is subject neither to the new objective standards protecting neighbors nor the older ones if they're not objective. I can't see it hurting the neighbors to ask for anything they feel would help...The City could have objected to the massive parking reduction, but opted not to. The City definitely does not have to grant any special rights to the building for street parking, of course."
By the way,Charities Housing is run by a 501(c)3 non-profit, so it could well stay low income forever. If they eventually sell, the funds they raise would have Item 12
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to be used for something else consistent with their non-profit charter.
Anyway, does anyone over there have a plan to go to the ARB? I'm happy to lend my voice to yours. Is there any one else we can muster?
Best to all,
Becky
<2951 El Camino Assessment.pdf>
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From: Matthew Bryant
To: Planning Commission; Council, City; Kallas, Emily
Cc: Matt Bryant; Candy Tsourounis
Subject: 470 Olive Ave rezoning opposition
Date: Monday, July 6, 2026 12:09:45 PM
CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking on links.
i
Dear distinguished Palo Alto City Council, PTC members, and project planner Emily Kallas, I am writing this letter to express my opposition with the rezoning request by 470 Olive Ave, which is an existing R-1 zoning that is shown to be part of the R-1 zoning per the existing and updated 2024 NVCAP
(https://www.paloalto.gov/files/assets/public/v/2/planning-amp-development-services/north- ventura-cap/nvcap-reports/adopted_nvcap_8_26_24.pdf). Per the existing NVCAP zoning ordinances the 470 Olive Ave parcel is R-1 and should not be permitted to become a medium density mixed use for a multitude of reasons.
It should be noted that 470 Olive Ave is currently non conforming and has previously attempted to rezone in 2019 and it was not allowed to proceed for reasons: [e.g., https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2019-agendas-minutes-and-staff-reports/ptc-
12.11.19-470-olive.pdf ]. In 2019, 470 Olive Ave had been noted to be non conforming and operating a commercial business in earnest on residentially-zoned property which allegedly violates Palo Alto code and incurs a $1,000 daily fine or $365,000/year. It is unknown whether the fines been paid to the City of Palo Alto.
It should further be noted that there is a new R-1 single family residential currently under construction next door at 450 Olive Ave which is conforming and will help to enhance the NVCAP R-1 zoning as designed and agreed to in the updated 2024 NVCAP. Also, recent ADU have been built on R-1 zones at 461 Pepper Ave, 295 Olive Ave, and 305 Olive Ave which helps fulfill further housing needs in Palo Alto.
We and our Pepper and Olive Street neighbors are writing to express clear and pressing opposition and concerns regarding the proposed rezoning of 470 Olive Ave from R-1 to a medium-density mixed-use designation.
While everyone understands the state-mandated pressure to fulfill the Regional Housing Needs Allocation (RHNA), approving this rezoning without a holistic, corridor-wide cumulative impact analysis introduces massive safety and infrastructure liabilities to Ventura and surrounding neighborhoods.
This message needs your attention
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The current planning approach evaluates this block entirely in a piecemeal fashion (i.e., each project's study typically concludes that their specific project alone won't significantly degrade the surrounding intersection to a point of total failure), creating a dangerous blind spot regarding localized gridlock:
Compounding Localized Density: This specific stretch of El Camino Real (SR 82) of South Palo Alto will bear the weight of multiple massive redevelopments, including the 368-unit project at the former Fish Market/McDonald’s site, the 5-story 129-unit housing development at the former Mike’s Bikes site, and other nearby construction such as the 80-plus condos at former Fry's Cannery site. This combination obviously risks overwhelming this single micro-corridor, therefore, development must proceed with care to prevent expensive mistakes.
The Page Mill Bottleneck: The intersection of Page Mill Road and El Camino Real is currently being reconfigured after the permanent redesign to remove street parking and accommodate bike lanes. Backups at that intersection are commonplace. Combined with eliminating the right-on-red option, this actively reduces vehicular lane capacity and impacts business and neighborhood parking. Traffic spills into the arteries. The Page Mill crosswalk in front of Ash is more dangerous with increased traffic. Time will tell whether the new reconfiguration mitigates these issues.
Gridlock of Neighborhood Side-Streets: Because 470 Olive Ave connects to El Camino Real via an un-signaled stop sign on the side street, the compounding traffic from these projects can effectively trap neighborhood residents. When El Camino backs up due to the restricted Page Mill intersection, turning left into or out of Olive Avenue becomes physically impossible and creates a severe hazard for emergency vehicle access.
Our Request to the Council and Commission:
We urge you to oppose the 470 Olive Ave rezoning request and furthermore conduct a sober, realistic Cumulative Traffic and Safety Infrastructure Study that explicitly evaluates the combined impact of the Fish Market/McDonald's site, the Mike’s Bikes site, the Fry's Cannery site, and other projects within a reasonable (e.g., 0.75-mi) radius working in tandem against the reduced road capacity from the new El Camino/Page Mill configuration including the wholesale removal of street parking.
The study may not be free, but it would likely be much cheaper than fixing the resulting mistakes later.
Palo Alto plays a dangerous game by continuing to approve massive, isolated density increases block-by-block while actively dismantling the very road infrastructure meant to support them.
Thank you for your time and consideration of Palo Alto's neighborhoods' long-term safety and efficient transportation.
Sincerely,
Matthew Bryant, PharmD
471 Pepper Ave, Palo Alto, CA 94306
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From: Pepper Person
To: Kallas, Emily
Cc: Rebecca Sanders
Subject: Fwd: PUBLIC COMMENT Re: Piecemeal Rezoning (470 Olive Ave / 2951 El Camino Real Corridor) -- Cumulative Infrastructure Impact Concerns
Date: Tuesday, July 7, 2026 8:35:03 PM
CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking on links.
i
Dear Ms. Kallas,
We're forwarding our note ahead of tomorrow's PTC meeting, given its relevance.
Warm regards,
Jason Robinson, PhD, MBA
Jieming Robinson, MS, Economics
cc:
Rebecca Sanders, Ventura Neighborhood Association
---------- Forwarded message ---------
From: Pepper Person <[email protected]
>
Date: Wed, Jul 1, 2026 at 12:18 AM
Subject: PUBLIC COMMENT Re: Piecemeal Rezoning (470 Olive Ave / 2951 El Camino Real Corridor) -- Cumulative Infrastructure Impact Concerns To: <[email protected]
>, Rebecca Sanders <[email protected]>
Dear Mayor, Council Members, and Commissioners,
We are writing to express clear and pressing concerns regarding the proposed rezoning of 470 Olive Ave and 2951 El Camino Real from R-1 to a higher-density mixed-use designation.
We also note that this topic has come up before, and it didn't proceed for reasons:
[e.g., https://www.paloalto.gov/files/assets/public/v/1/agendas-minutes-reports/agendas- minutes/planning-and-transportation-commission/2019-agendas-minutes-and-staff-reports/ptc-
12.11.19-470-olive.pdf ].
While everyone understands the state-mandated pressure to fulfill the Regional Housing Needs Allocation (RHNA), approving this rezoning without a holistic, corridor-wide cumulative impact analysis introduces massive safety and infrastructure liabilities to This message needs your attention
This is a personal email address.
This is their first mail to some recipients.
Mark Safe Report
Powered by Mimecast
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Ventura and surrounding neighborhoods.
The current planning approach evaluates this block entirely in a piecemeal fashion (i.e., each project's study typically concludes that their specific project alone won't significantly degrade the surrounding intersection to a point of total failure), creating a dangerous blind spot regarding localized gridlock:
Compounding Localized Density: This specific stretch of El Camino Real (SR 82) will bear the weight of multiple massive redevelopments, including the 368-unit project at the former Fish Market/McDonald’s site, the 5-story 129-unit housing development at the former Mike’s Bikes site, and another 113 units at 2951 El Camino / 470 Olive. And what happens when the Fry's site blossoms? This combination obviously risks overwhelming this single micro-corridor, therefore, development must proceed with care to prevent expensive mistakes.
The Page Mill Bottleneck: The intersection of Page Mill Road and El Camino Real is currently being reconfigured after the permanent redesign to remove street parking and accommodate bike lanes. Backups at that intersection are commonplace. Combined with eliminating the right-on-red option, this actively reduces vehicular lane capacity and impacts business and neighborhood parking. Traffic spills into the arteries. The Page Mill crosswalk in front of Ash is more dangerous with increased traffic. Time will tell whether the new reconfiguration mitigates these issues.
Gridlock of Neighborhood Side-Streets: Because 470 Olive Ave connects to El Camino Real via an un-signaled stop sign on the side street, the compounding traffic from these projects can effectively trap neighborhood residents. When El Camino backs up due to the restricted Page Mill intersection, turning left into or out of Olive Avenue becomes physically impossible and creates a severe hazard for emergency vehicle access.
Our Request to the Council and Commission:
We urge you to conduct a sober, realistic Cumulative Traffic and Safety Infrastructure Study that explicitly evaluates the combined impact of the Fish Market/McDonald's site, the Mike’s Bikes site, 2951 El Camino/470 Olive, the old Fry's site, and other projects within a reasonable (e.g., 0.75-mi) radius working in tandem against the reduced road capacity from the new El Camino/Page Mill configuration including the wholesale removal of street parking.
The study may not be free, but it would likely be much cheaper than fixing the resulting mistakes later.
Palo Alto plays a dangerous game by continuing to approve massive, isolated density increases block-by-block while actively dismantling the very road infrastructure meant to support them.
Thank you for your time and consideration of Palo Alto's neighborhoods' long-term safety and efficient transportation.
Regards,
Jason Robinson, PhD, MBA
Jieming Robinson, MS, Economics
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cc:
Rebecca Sanders, Ventura Neighborhood Association
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El Camino Real
Ramos Way (Private)
Hanse
n Way
Gra
nt Avenue
Sh
erida
n Ave
nue
aca
El Ca
mino Real
Sherman
Ash Street
Page Mill Road
Port
Pepper Avenue
Olive Avenue
Aca
cia Ave
nue
Page Mill Road
Ash Street
Birch Street
2501
2904
2650
408
425
444
455
469
200
425
755
2675
2701
2805
2825
3000
260
345
360
398
410
435
399
407
425
445
630
2700
Bldg A
2700
Bldg B
2865
303- 315
309- 315
3111-
3159
446- 464
31703160
3150
3128
3200
420
412
461
451
431
421
411
405
399
42 435
395
375
365
385
395
3017
441
411 3
345
430
420
440
450
460
470
461
2875
411
421
431
471
470
456
450
440
441
451
461
430
2999
775
250
4 250
6250
2 250
8 405
409
53 466
10 2951
2905
2755
450
3001
402
406
408
412
400
370
2700
2473
306
310
322
320
318
6 314
312
334
336338340
342
344
261
362360358356
354352
350348346
332
330
328
326
24 04
845
835
600
620
2650
404
404
431A
BLDG 1
BLDG 2
BLDG 3
422424426428430
101
103
100
101
102
103
104
105
108
107109
456A
473
George Lu
PTC
This map is a product of the
City of Palo Alto GIS
This document is a graphic representation only of best available sources.
Legend
City Jurisdictional Limits
Conflict-Of-Interest, Architectural Review Board
Conflict-Of-Interest, City Attorney
Conflict-Of-Interest, City Council Main Residence
Conflict-Of-Interest, City Council Other Property Interest Conflict-Of-Interest, City Manager
Conflict-Of-Interest, Historic Resources Board
Conflict-Of-Interest, PCE Staff
Conflict-Of-Interest, Public Art Program Director
Conflict-Of-Interest, Planning and Transportation Commission Assessment Parcel
Current Features
0' 168'
COI Map
470 Olive
CITY OF PALO ALTO
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4 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto ekallas, 2026-07-28 15:34:23
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CITY COUNCIL
Staff Report
Report Type: ACTION ITEMS
From: City Clerk
Meeting Date: September 9, 2026
Report #:2608-6634
TITLE
Designation of Voting Delegate and Alternate for the League of California Cities 2026 Annual Conference, to be held September 23-25, 2026 in Anaheim, California; CEQA Status – Not a Project
RECOMMENDATION
Staff recommends the City Council consider attendees Mayor Veenker and Councilmember Lu and designate a voting delegate and an alternate voting delegate for the League of California Cities (Cal Cities) 2026 Annual Conference.
BACKGROUND
Cal Cities’ 2026 Annual Conference is scheduled for September 23-25, 2026 in Anaheim, California. Cal Cities will convene its member-driven General Assembly on September 25th as part of the conference. The General Assembly is an opportunity for city officials to participate directly in the development of Cal Cities policies. During the General Assembly, voting delegates debate and consider general and petitioned resolutions forwarded by the Resolutions Committee.
To cast a vote during the General Assembly, the City Council must designate a voting delegate and up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to. Voting delegates may be either an elected or appointed official. Voting delegates and alternates must be registered to attend the conference.
At this time, Mayor Veenker and Councilmember Lu are registered to attend the 2026 Annual Conference.
Additional information on Cal Cities’ voting designation and process and the 2026 proposed resolution are included as Attachments A and B, respectively. Council action on the voting delegate designation is advised by September 1; however, the City Clerk has confirmed with Cal Cities that action taken and submitted after September 1 will still be accepted.
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Staff anticipates the designated voting delegate(s) to use the Council-approved Federal and State Legislative Guidelines1 to help inform the City’s position on item to be voted on at the General Assembly.
FISCAL/RESOURCE IMPACT
There is no fiscal impact associated with this item.
ENVIRONMENTAL REVIEW
This action is not a project under section 15378(b)(5) of the California Environmental Quality Act Guidelines (administrative activities that will not result in direct or indirect physical changes in the environment).
ATTACHMENTS
Attachment A: Cal Cities 2026 Voting Delegate Information Memo Attachment B: Cal Cities 2026 Resolution Packet
APPROVED BY:
Mahealani Ah Yun, City Clerk
1 City of Palo Alto’s 2026 Federal and State Legislative Guidelines:
https://www.paloalto.gov/files/assets/public/v/2/city-manager/legislation/2026-legislative-guidelines.pdf Item 13
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1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org DATE: Wednesday, May 13, 2026
T
O: Mayors, Council Members, City Clerks, and City Managers RE
: DESIGNATION OF VOTING DELEGATES AND ALTERNATES
League of California Cities Annual Conference and Expo, Sept. 23-25, 2026 Anaheim Convention Center
E
very year, the League of California Cities convenes a member-driven General Assembly at the Cal Cities Annual Conference and Expo. The General Assembly is an important opportunity where city officials can directly participate in the development of Cal Cities policy.
Ta
king place on Friday, Sept. 25, 2026 the General Assembly is comprised of voting delegates appointed by each member city; every city has one voting delegate. Your appointed voting delegate plays an important role during the General Assembly by representing your city and voting on resolutions.
To c
ast a vote during the General Assembly, your city must designate a voting delegate and up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to serve in that capacity. Voting delegates may either be an elected or appointed official.
A
ction by Council Required. Consistent with Cal Cities bylaws, a city’s voting delegate and up to two alternates must be designated by the city council. Please note that designating the voting delegate and alternates must be done by city council action and cannot be accomplished by individual action of the mayor or city manager alone.
F
ollowing council action, please submit your city’s delegates through the online submission portal by Tuesday, Sept. 1, 2026. When completing the Voting Delegate submission form, you will be asked to attest that council action was taken. You will need to be signed in to your My Cal Cities account when submitting the form.
S
ubmitting your voting delegate form by the deadline will allow us time to establish voting delegate/alternate records prior to the conference and provide pre-conference communications with voting delegates.
C
onference Registration Required. The voting delegate and alternates must be registered to attend the conference. They need not register for the entire conference; they may register for Friday only. Conference registration opens June 2.
F
or a city to cast a vote, one voter must be present at the General Assembly and in possession of the voting delegate card and voting tool. Voting delegates and Council Action Advised by September 1, 2026
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alternates need to pick up their conference badges before signing in and picking up the voting delegate card at the voting delegate desk. This will enable them to receive the special sticker on their name badges that will admit the voting delegate into the voting area during the General Assembly.
Please view Cal Cities’ event and meeting policy in advance of the conference.
Transferring Voting Card to Non-Designated Individuals Not Allowed. The voting delegate card may be transferred freely between the voting delegate and alternates, but only between the voting delegate and alternates. If the voting delegate and alternates find themselves unable to attend the General Assembly, they may not transfer the voting card to another city official.
Seating Protocol during General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.
The voting delegate desk, located in the conference registration area of the Anaheim Convention Center, will be open at the following times: Wednesday, Sept. 23, 8:00 a.m.-6:00 p.m. and Thursday, Sept. 24, 7:30 a.m.-4:00 p.m. On Friday, Sept. 25, the voting delegate desk will be open at the General Assembly, starting at 7:30 a.m., but will be closed during roll calls and voting.
The voting procedures that will be used at the conference are attached to this memo.
Please share these procedures and this memo with your council and especially with the individuals that your council designates as your city’s voting delegate and alternates.
Once again, thank you for submitting your voting delegate and alternates by Tuesday, Sept. 1. If you have questions, please contact Zach Seals at [email protected].
Attachments:
• G
eneral Assembly Voting Guidelines
• Information Sheet: Cal Cities Resolutions and the General Assembly Item 13
Attachment A - Cal Cities
2026 Voting Delegate
Information Memo
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1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org
General Assembly Voting Guidelines
1. One City One Vote. Each member city has a right to cast one vote on matters pertaining to Cal Cities policy.
2. Designating a City Voting Representative. Prior to the Cal Cities Annual Conference and Expo, each city council may designate a voting delegate and up to two alternates; these individuals are identified on the voting delegate form provided to the Cal Cities Credentials Committee.
3. Registering with the Credentials Committee. The voting delegate, or alternates, may pick up the city's voting card at the voting delegate desk in the conference registration area. Voting delegates and alternates must sign in at the voting delegate desk. Here they will receive a special sticker on their name badge and thus be admitted to the voting area at the General Assembly.
4. Signing Initiated Resolution Petitions. Only those individuals who are voting delegates (or alternates), and who have picked up their city’s voting card by providing a signature to the credentials committee at the voting delegate desk, may sign petitions to initiate a resolution.
5. Voting. To cast the city's vote, a city official must have in their possession the city's voting card and voting tool; and be registered with the credentials committee. The voting card may be transferred freely between the voting delegate and alternates but may not be transferred to another city official who is neither a voting delegate nor alternate.
6. Voting Area at General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.
7. Resolving Disputes. In case of dispute, the credentials committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the General Assembly.
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Sixty days before the
Annual Conference
and Expo, Cal Cities
members may submit
policy proposals on
issues of importance
to cities. The resolution must
have the concurrence of at least
five additional member cities or
individual members.
How it works: Cal Cities
Resolutions and the General Assembly
General Assembly
General Resolutions Policy Committees
Developing League of California Cities policy is a dynamic process that engages a wide range of members to ensure Cal Cities represents cities with one voice. These policies directly guide Cal Cities’ advocacy to promote local decision-making, and lobby against statewide policies that erode local control.
The resolutions process and General Assembly is one way that city officials can directly participate in the development of Cal Cities policy. If a resolution is approved at the General Assembly, it becomes official Cal Cities policy. Here’s how resolutions and the General Assembly work.
The petitioned
resolution is an
alternate method
to introduce policy
proposals during
the annual conference. The
petition must be signed by
voting delegates from 10% of
member cities, and submitted to
the Cal Cities President at least
24 hours before the beginning
of the General Assembly.
Petitioned Resolutions
The Cal Cities
President assigns
general resolutions
to policy committees
where members
review, debate, and recommend
positions for each policy proposal.
Recommendations are forwarded
to the Resolutions Committee.
Who’s who
The Resolutions Committee
includes representatives
from each Cal Cities
diversity caucus, regional
division, municipal
department, and policy
committee, as well as
individuals appointed by
the Cal Cities president.
Voting delegates
are appointed by each
member city; every city
has one voting delegate.
The General Assembly is a
meeting of the collective
body of all voting
delegates —one from
every member city.
Seven policy committees
meet throughout the year
to review and recommend
positions to take on bills
and regulatory proposals.
Policy committees include
members from each Cal
Cities diversity caucus,
regional division, and
municipal department,
as well as individuals
appointed by the Cal
Cities president.
During the General Assembly, voting delegates
debate and consider general and petitioned
resolutions forwarded by the Resolutions
Committee. Potential Cal Cities bylaws
amendments are also considered at this meeting.
Cal Cities policy
development is a member-
informed process,
grounded in the voices and
experiences of city officials
throughout the state.
For more information visit www.calcities.org/general-assembly Prior to the Annual Conference and Expo
Resolutions Committee
The Resolutions
Committee considers
all resolutions. General
Resolutions approved1 by
either a policy committee
or the Resolutions Committee are next
considered by the General Assembly.
General resolutions not approved, or
referred for further study by both a
policy committee and the Resolutions
Committee do not go to the General
Assembly. All Petitioned Resolutions
are considered by the General
Assembly, unless disqualified.2
During the Annual Conference and Expo
1 The Resolution Committee can amend a general resolution prior to sending it to the General Assembly. 2 Petitioned Resolutions may be disqualified by the Resolutions Committee according to Cal Cities Bylaws Article VI. Sec. 5(f).
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2025-2026
CAL CITIES OFFICERS
President
Gabe Quinto
Mayor
El Cerrito
First Vice President
Teresa Acosta
Council Member
Carlsbad
Second Vice President
David Cohen
Council Member
San Jose
Immediate Past President
Lynne B. Kennedy
Mayor Pro Tem,
Rancho Cucamonga
Executive Director
and CEO
Carolyn M. Coleman
1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org
August 10, 2026
TO: Cal Cities Members
RE: Cal Cities 2026 Resolution Packet
Sixty days before the Cal Cities Annual Conference and Expo, Cal Cities members may submit resolutions on issues of importance to cities. This year, Cal Cities received one resolution by the July 25 deadline.
The attached packet contains the proposed resolution, background information, supporting letters from cities and city officials, and an analysis of the resolution by Cal Cities. The packet includes detailed information on the resolution process and the next steps for the resolution.
We encourage each city council to consider the resolution and determine a position so your voting delegate can represent your city’s position on the resolution.
Voting Delegates: City councils must appoint a voting delegate to vote during the General Assembly. Each city may also appoint up to two alternate delegates. If your city has not already done so, please appoint your voting delegate by Tuesday, Sept. 1, 2026. The voting delegate packet contains more information.
The 2026 General Assembly will be held Friday, Sept. 25, at 8:30 a.m. in the Anaheim Convention Center during the Annual Conference and Expo.
For questions about resolutions, voting delegates, or the General Assembly, please contact Zach Seals.
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2026
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2026 Resolution Packet
Information on 2026 Resolutions Process
Consideration by Policy Committee (pre-conference)
Per the Cal Cities bylaws, Cal Cities President Gabe Quinto has referred the submitted resolution to the Housing, Community, and Economic Development Committee. The committee will meet on Thursday, Sept. 17, at 10 a.m. via Zoom to review the resolution and make a recommendation that will be sent to the Resolutions Committee. A public comment period will be held during the meeting. Register for the meeting here.
A list of recommendations the policy committee may make during its meeting is on page two of this packet.
Consideration by Resolutions Committee (during conference) On Thursday, Sept. 24, at 1:00 p.m. the Resolutions Committee will meet to review the resolution and the recommendation of the policy committee.
The Resolutions Committee consist of one representative from each of Cal Cities caucuses, departments, divisions, and policy committees, as well as up to ten additional appointments made by the Cal Cities President. A public comment period will be held during the meeting. Refer to the onsite conference program for the location.
A list of recommendations the Resolutions Committee may make during its meeting is on page two of this packet.
Consideration by the General Assembly (during conference) The General Assembly will convene on Friday, Sept. 25, at 8:30 a.m. to consider any resolutions the Resolutions Committee has forwarded. To vote during the General Assembly, voting delegates must have checked in at the voting delegate booth.
Conference attendees will receive materials for the General Assembly on the evening of Thursday, Sept. 24. For more information on voting and discussion procedures during the General Assembly, see page three of this packet.
Petitioned Resolutions (during conference)
The petitioned resolution is an alternate method to introduce policy proposals during the annual conference. To initiate a petitioned resolution, voting delegates from 10% of member cities must sign the petition. The resolution and signatures are due at least 24 hours before the beginning of the General Assembly. Voting delegates who have checked in at the voting delegate booth can receive more information on petitioned resolutions at the booth onsite. 1 Item 13
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Policy Committee and Resolutions Committee Actions
The submitted resolution will be heard by the policy committee to which it was assigned, and the Resolutions Committee. The table below shows what recommendations these bodies may make on the resolution.
Policy Committee Actions Resolutions Committee Actions
Approve Approve
Disapprove* Disapprove*
No Action No Action
Amend and approve
Amend and approve
Refer to appropriate policy committee
for further study*
Approve as amended
Refer as amended to appropriate
policy committee for further study*
Refer to appropriate policy committee
for further study*
Refer as amended to appropriate
policy committee for further study*
Approve with additional
amendment(s)
Additional amendments and refer to
appropriate policy committee for
further study*
*If a resolution is disapproved or referred for further study by all policy committees to which it is assigned and the Resolutions Committee, it will not proceed to the General Assembly.
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General Assembly Voting and Discussion Procedures
Discussion Procedures:
Discussion procedures during the General Assembly are guided by two calendars:
the Consent Calendar and the Regular Calendar. As seen below, resolutions are calendared by the recommendations they receive from policy committees and the Resolutions Committee.
For General Resolutions:
Policy Committee
Recommendation
Resolutions Committee
Recommendation Calendar
Approve Approve Consent Calendar
Approve Disapprove or refer Regular Calendar
Disapprove or refer Approve Regular Calendar
Disapprove or refer Disapprove or refer Does not proceed to General Assembly
For Petitioned Resolutions:
Policy Committee
Recommendation Resolutions Committee Action Calendar
N/A
Approve Regular Calendar
Disapprove or Refer Regular Calendar
Disqualified Does not proceed to General
Assembly
Items on the Consent Calendar will be presented as one motion during the General Assembly from the Resolutions Committee chair. Unless an item on the Consent Calendar is set aside by the majority of the General Assembly, a vote will be taken on the whole calendar. If an item is set aside, it will be opened for discussion, followed by a vote.
Items on the Regular Calendar will be presented individually by the Resolutions Committee chair. After a recommendation is presented by the Resolutions Committee chair, the resolution will be opened for discussion by the General Assembly. A vote will take place following discussion.
Voting Procedures:
Per Cal Cities Bylaws Article XII, Sec. 2, all votes will be conducted by voice vote first. If the presiding official cannot determine the outcome, a vote will be taken by an alternative method, typically a raise of voting cards by voting delegates. A roll call vote may be called for by delegates of ten percent or more of the General Assembly.
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2026 Resolution Packet
2026 Resolution
1. Resolution No. 1 submitted by City of Murrieta
• Letters of concurrence submitted by:
i. City of Banning;
ii. City of Calimesa;
iii. City of Canyon Lake;
iv. City of Moreno Valley;
v. City of Norco;
vi. City of Torrance;
vii. Crystal Ruiz, Mayor, City of San Jacinto;
viii. Jessica Alexander, Mayor, City of Temecula
• Referred to Housing, Community, and Economic Development Committee
• Policy Committee Recommendation:
• Resolutions Committee Recommendation:
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2026 Resolution Packet
Resolution No. 1
Submitted by City of Murietta
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1. A RESOLUTION OF THE GENERAL ASSEMBLY OF THE LEAGUE OF CALIFORNIA CITIES
CALLING FOR A WORKING GROUP TO CONSIDER A STATE CONSTITUTIONAL
AMENDMENT OR OTHER FORM OF INITIATIVE TO ENSURE FINAL LOCAL AUTHORITY OVER
HOUSING AND LAND USE DECISIONS
Source: City of Murrieta
Concurrence of five or more cities/city officials
Cities/city officials: City of Banning; City of Calimesa; City of Canyon Lake; City of Moreno Valley; City of Norco; City of Torrance; Crystal Ruiz, Mayor, City of San Jacinto; Jessica Alexander, Mayor, City of Temecula
Referred to: Housing, Community, and Economic Development Policy Committee WHEREAS, California cities have historically been responsible for adopting general plans and zoning regulations, reviewing housing development proposals, and providing or coordinating the streets, water, wastewater, public safety, parks, transportation, and other infrastructure and services necessary to support responsible, environmentally sound, and well-planned residential growth; and
WHEREAS, the League of California Cities is dedicated to protecting and expanding local control for municipalities across the state to ensure their orderly growth and development; and
WHEREAS, the League of California Cities recognizes that local zoning is a primary function of cities and an essential component of home rule, and that a city’s general plan should guide its land use planning and strategic decision-making free from pre-emption by the state; and
WHEREAS, increasingly prescriptive statewide housing mandates and development approval requirements can override locally adopted plans, zoning standards, and public review procedures without adequately accounting for differences that exist in each unique jurisdict ion in infrastructure capacity, water availability, wildfire and evacuation risks, environmental constraints, fiscal impacts, public service needs, and community priorities; and
WHEREAS, California’s housing goals can be more effectively advanced through state funding, streamlined environmental requirements, and voluntary partnerships that support housing production while preserving the authority of locally elected officials to determine how and where housing is best planned and approved; NOW, THEREFORE, BE IT RESOLVED , by the General Assembly of the League of California Cities, assembled during the Annual Conference in Anaheim, California, on September 25, 2026, that the League of California Cities support the development and advancement of a state constitutional amend ment or other legislative, policy, or ballot- based strategies that restore and strengthen local authority over housing and land use matters within municipal boundaries, including general plans, housing elements, zoning, density, design and development standards, project siting, and the approval or denial of housing development applications; and
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BE IT FURTHER RESOLVED, that any constitutional amendment or alternative strategy should preserve the State’s authority to establish broad statewide housing goals and enforce constitutional and civil rights, fair housing requirements, building and life -safety standards, and gen erally applicable environmental protections, while protecting cities from state actions that compel, through funding conditions or state law, the approval of housing developments that are inconsistent with locally adopted requirements; override local zonin g or density standards; or invalidate locally adopted housing or land use decisions when a city has planned in good faith to accommodate its regional housing needs allocation and maintains adequate capacity for housing at all income levels; and
BE IT FURTHER RESOLVED, that the League of California Cities consider establishing a statewide working group or other appropriate committee(s) to evaluate and develop a proposed constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use matters including but limited to: conducting appropriate legal, fiscal, and policy analyses; engaging cities and other stakeholders; and building a statewide coalition of proponent supporters in preparation for; the November 2030 General Election, or within another reasonable time frame as determined by the working group.
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Resolution No. 1: Background
Information
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Background Information for Resolution
Source: City of Murrieta
Background:
California cities are responsible for planning residential growth, adopting general plans and zoning regulations, reviewing development proposals, and providing or coordinating the infrastructure and public services necessary to support new housing. Since 2010, the State has enacted more than 500 housing-related laws that have increasingly shifted housing and land use authority away from local governments. These laws have expanded by-right development, limited locally adopted standards and review processes, and established enforcement mechanisms, including the builder’s remedy, that may override local plans and zoning. Although these measures are frequently presented as solutions to housing affordability, many increase development capacity or restrict local review without delivering the meaningful production of housing needed to address the housing crisis.
At the same time, the State has continued to prioritize increased development capacity without adequately accounting for the infrastructure, public services, economic realities, and safety measures necessary to support housing growth.
State mandates often fail to reflect local conditions, including roadway and utility capacity, water availability, wildfire exposure, environmental limitations, fiscal impacts, and the availability of essential services. Cities are consequently required to accommodate additional housing while receiving no funding or assistance to address the resulting infrastructure and service demands.
Local elected officials are directly accountable to the residents who experience the effects of development decisions and are responsible for balancing housing production with infrastructure capacity, public safety, environmental protection, fiscal sustainability, and community needs. Cities of all types in California have been grappling with this dynamic, ranging from urban to rural, coastal to inland, small to large, northern to southern, voicing concerns to legislative representatives with minimal responsiveness. This is an issue of statewide concern that needs the strength and diversity of the League of California Cities to pursue a long-term solution.
The proposed resolution directs the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use decisions. The working group would be tasked with developing a more balanced framework that preserves the State’s role in establishing broad housing goals and enforcing constitutional, civil rights, fair housing, building, life-safety, and environmental requirements, while restoring meaningful local authority to allow cities to determine how statewide housing 9 Item 13
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objectives should be implemented in a manner that reflects local conditions and community priorities while continuing to support responsible housing production.
As the primary statewide organization representing California cities, the League is uniquely positioned to lead this effort. Its established policy, legal, legislative, communications, and advocacy networks enable it to convene municipalities, evaluate potential strategies, conduct legal and fiscal analyses, build consensus, engage stakeholders, and coordinate with statewide decision-makers. League leadership would help ensure that any recommendation reflects the collective interests of California municipalities and would provide the credibility, organizational capacity, and statewide reach necessary to advance a viable strategy.
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Resolution No. 1: Letters of
Concurrence
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July 23, 2026
President Gabe Quinto
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814
Subject: Support for a Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority
Dear President Quinto,
The City of Murrieta is sponsoring a resolution for consideration by the General Assembly of the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot -based strategies to restore and strengthen local authority over housing and land use decisions.
The proposed resolution, together with the required background materials, will be submitted to Cal Cities for consideration at the 2026 Annual Conference in Orange County on September 24 and
25. The resolution would direct the League to convene a working group to evaluate potential approaches for addressing the increasingly broad and prescriptive state mandates affecting local housing, zoning, development standards, and project approval authority.
On behalf of the City of Can yon Lake, this letter confirms our support for the City of Murrieta’s submission of the proposed resolution and its consideration by the League of California Cities General Assembly at the 2026 Annual Conference.
Sincerely,
Arron Brown
City Manager
City of Canyon Lake
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July 23, 2026
President Gabe Quinto
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814
Subject: Support for a Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority
Dear President Quinto,
The City of Murrieta is sponsoring a resolution for consideration by the General Assembly of the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use decisions.
The proposed resolution, together with the required background materials, will be submitted to Cal Cities for consideration at the 2026 Annual Conference in Orange County on September 24 and 25. The resolution would direct the League to convene a working group to evaluate potential approaches to address increasingly broad and prescriptive state mandates affecting local housing, zoning, development standards, and project approval authority.
On behalf of the City of Moreno Valley, this letter confirms our support for the City of Murrieta’s submission of the proposed resolution and its consideration by the League of California Cities General Assembly at the 2026 Annual Conference.
Sincerely,
Brian Mohan
City Manager
City of Moreno Valley
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July 22, 2026
President Gabe Quinto
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814
Subject: Support for a Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority
Dear President Quinto,
The City of Murrieta is sponsoring a resolution for consideration by the General Assembly of the League of California Cities to establish a statewide working group to evaluate a constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use decisions.
The proposed resolution, together with the required background materials, will be submitted to Cal Cities for consideration at the 2026 Annual Conference in Orange County on September 24 and 25. The resolution would direct the League to convene a working group to evaluate potential approaches for addressing the increasingly broad and prescriptive state mandates affecting local housing, zoning, development standards, and project approval authority.
On behalf of the City of the Norco, this letter confirms our support for the City of Murrieta’s submission of the proposed resolution and its consideration by the League of California Cities General Assembly at the 2026 Annual Conference.
Sincerely,
Kevin Bash
City Council Member
(951) 768-8981
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July 23, 2026
Mr. Gabe Quinto, President
League of California Cities
1400 K Street, Suite 400
Sacramento, CA 95814
Subject: Support for the City of Murrieta's Resolution Establishing a Working Group to Evaluate a State Constitutional Amendment or Other Initiative to Restore Local Housing and Land Use Authority
Dear President Quinto:
I am writing in my individual capacity as Mayor of the City of Temecula to express my strong support for the City of Murrieta's proposed resolution for consideration by the General Assembly of the League of California Cities at the 2026 Annual Conference.
The proposed resolution presents an important opportunity to thoughtfully evaluate the appropriate balance between California's statewide housing objectives and the constitutional principle of local governance. Establishing a statewide working group to examine a potential constitutional amendment, legislative reforms, or other policy initiatives will provide a meaningful forum to assess how local authority over housing and land use decisions can be strengthened while continuing to address the State's housing challenges.
Cities are uniquely positioned to understand the needs, opportunities, and constraints of their communities. Local elected officials are accountable to the residents they serve and are best equipped to make land use decisions that reflect a community's character, infrastructure capacity, economic development goals, environmental stewardship, and long-term vision. Equally important, local governments bear the primary responsibility for protecting public safety. Decisions regarding housing density, transportation, emergency access, wildfire preparedness, evacuation routes, police and fire service capacity, water availability, and critical infrastructure are inherently local matters that require the knowledge and judgment of those who serve their communities every day.
While the State has an important role in addressing California's housing needs, a collaborative approach that respects local expertise and preserves meaningful local discretion will produce stronger, safer, and more sustainable communities. The proposed working group offers an opportunity to evaluate policies that achieve these shared objectives while restoring an appropriate balance between state direction and local authority.
21 Item 13
Attachment B - Cal Cities
2026 Resolution Packet
Item 13: Staff Report
Pg.
29 Packet Pg. 215 of 284
Mr. Gabe Quinto, President
League of California Cities
July 23, 2026