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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
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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, 9 9
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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. 9 9
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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 9 9
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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. 9 9
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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.
19 Government Code Section 8698.4 authorizes local agencies, under specified conditions, to allow designated parking areas for overnight shelter by persons and families who are homeless 9 9
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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 9 9
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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
10. https://cityofpaloalto.primegov.com/meetings/pre-meeting/2169