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.
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
As part of the amendment process, Human Resources, Administrative Services, the City Attorney's Office, and Municipal Resources Group, LLC collaborated to ensure uninterrupted organizational development services. Human Resources identified service needs, while 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