CITY COUNCIL
Special Meeting
Monday, October 26, 2026
Council Chambers & Hybrid
5:30 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 1-3 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 1-3 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 to [email protected] 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 email to [email protected] 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 October 26, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
CALL TO ORDER
BOARDS, COMMISSIONS, AND COMMITTEES APPOINTMENTS (5:30 - 5:45 PM)
1. Appointment of Candidates to the Public Art Commission (PAC) and Stormwater Management Oversight Committee (SWMOC); CEQA Status - Not a Project CLOSED SESSION (5:45 - 6:30 PM)
2. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Authority: Government Code Section 54956.8
Property: 1900 Embarcadero Road
Negotiating Parties: BioScience Property Investments
City Negotiators: Karin North, Brad Eggleston, Sunny Tong Subject of Potential Negotiations: Price and Terms of Payment
AGENDA CHANGES, ADDITIONS AND DELETIONS
IN-PERSON PUBLIC COMMENT (6:30 - 7:00 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 (7:00 - 7:10 PM) Members of the public may not speak to the item(s).
STUDY SESSION (7:10 - 8:10 PM)
3. Review of 2026-2027 Winter Storm Preparedness Activities CONSENT CALENDAR (8:10 - 8:15 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.
4. Approval of Minutes from October 13, 2026 Meeting
5. Approval of the FY 2028-2029 Human Services Resource Allocation Process (HSRAP) Program Expansion with Additional Annual Funding in the Amount of $428,000; CEQA2 October 26, 2026 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
Not a Project
6. Adoption of an Ordinance Amending Chapter 18.20 (Office, Research, and Manufacturing (MOR, ROLM, RP and GM) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code to Clarify that Multiple-Family Residential Uses in the ROLM(E) Zone District May Be Permitted Through a Use Permit; CEQA Status: Exempt pursuant to CEQA Guidelines Section 15061(b)(3).
7. Adoption of an Ordinance amending the FY 2027 Municipal Fee Schedule and Making Findings Regarding the Reasonable Cost to Issue Permits for Solar Energy Systems. CEQA Status: Not a project.
CITY MANAGER COMMENTS (8:15 - 8:25 PM)
BREAK (15 MINUTES)
ACTION ITEMS (Item 8: 8:40 - 10:10 PM; Item 9: 10:10 - 10:55 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.
8. Adoption of an Ordinance Amending the Palo Alto Municipal Code (PAMC) Section
18.40.140 (Stream Corridor Protection). CEQA Status: Exempt pursuant to CEQA Guidelines Section 15308 (Actions for Protection of the Environment).
9. Adoption of a Temporary Ordinance Imposing a Moratorium on the Establishment of New or Expanded Detention and Custodial Facilities within Palo Alto City Limits
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. Monthly Investment Report - September 2026 (Unaudited) 3 October 26, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.
B. City of Palo Alto's Energy Risk Management Report for the second half of Fiscal Year 2026 (January 1, 2026 – June 30, 2026) CEQA Status – Not a Project
OTHER INFORMATION
Standing Committee Meetings this week
Public Comment Letters
Schedule of Meetings
4 October 26, 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 Zoombased meeting. Please read the following instructions carefully. ◦ You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below.
◦ You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak.
◦ When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak.
◦ When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments.
4. Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council.
You will be advised how long you have to speak. 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 [email protected]. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service.
5 October 26, 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.
6 October 26, 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: BOARDS, COMMISSIONS, AND COMMITTEES
APPOINTMENTS
Lead Department: City Clerk
Meeting Date: October 26, 2026
Report #:2610-6866
TITLE
Appointment of Candidates to the Public Art Commission (PAC) and Stormwater Management Oversight Committee (SWMOC); CEQA Status - Not a Project
RECOMMENDATION
Staff recommends the City Council appoint up to two candidates to the PAC and up to two candidates to SWMOC and authorize staff to continue recruitment if any positions are not filled through this action.
BACKGROUND
Recruitment for Boards, Commissions, and Committees (BCCs) is split into fall and spring cycles.
The fall recruitment opened on July 28, 2026 and closed on September 2, 2026. This recruitment includes 12 vacancies across 5 meeting bodies. The fall cycle includes HRC, PRC, PAC, and SWMOC. Unscheduled vacancies on the HRC and PTC arose during the recruitment, and staff incorporated these positions into the fall recruitment for efficiency and cost savings. BCC applications were published as part of the September 14, 2026 agenda packet1 and are available online and in Attachment A.
The City Clerk will distribute electronic ballots to each Councilmember at the start of the item.
Each Councilmember has one vote per vacancy. Four votes are required to appoint a member, and additional rounds of voting will be conducted to break ties if necessary.
ANALYSIS
A summary of the applicants, vacancies, and eligibility requirements are included below. In addition to the eligibility requirements below, no commissioners may be Councilmembers, officers, or employees of the City.
1 September 14, 2026 City Council, Item #2; SR# 2606-6493 https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=bf3fdd2a-9958-4241-aeb3-e69d7f73c5f6 Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 1 Packet Pg. 7 of 103
Public Art Commission
Number of Vacancies and
Term Dates
2 Full Term Vacancies (11/1/2026 - 10/31/2029)
Seat Numbers 2, 6
Eligibility Requirements Members of the public art commission either shall be members of the architectural review board or shall be professional visual artists, professional visual arts educators, professional visual arts scholars, or visual arts collectors whose authorities and skills are known and respected in the community and, whenever feasible, who have demonstrated an interest in, and have participated in, the arts program of the city3.
Total Number of Applicants 10
Applicants Interviewed on
10/19
• Claude Ezran
• Harriet Stern
• Mette Huberman
• Marilyn Gottlieb-Roberts
• Eedit Bareket
Number of Votes per
Councilmember
2 Stormwater Management Oversight Committee
Number of Vacancies and
Term Dates
2 Full Term Vacancies (11/1/2026 – 10/31/2029)
Seat Numbers 2, 3
Eligibility Requirements Each Committee member shall be a resident of Palo Alto, an employee of a business located in Palo Alto or an owner of real property within the City4.
Total Number of Applicants 7
Applicants Interviewed on
10/19
• Susan Rosenberg
• Gregory Bennett
• Brian Hamachek
• Doug Burns
• Catherine Perman
• Lee Taubeneck
Number of Votes per
Councilmember
2 3
Palo Alto Municipal Code Section 2.18.020:
https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-61257 4 Resolution 10310:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=897189&dbid=0&repo=PaloAlto Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 2 Packet Pg. 8 of 103
FISCAL/RESOURCE IMPACT
None.
STAKEHOLDER ENGAGEMENT
City staff publicized the recruitment through the following methods:
• Electronic distribution via the City’s Uplift Local community newsletter, City Clerk’s Office newsletter, City’s website, and City’s social media channels; • Physical posting and flyer distribution at City facilities, including libraries, community centers, and City Hall;
• Print and online ads in the Palo Alto Daily Post and Palo Alto Weekly; and • Outreach to previous applicants, community-based organizations and groups related to the commissions’ subject matter jurisdiction.
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
Attachment A: PAC and SWMOC Applications
APPROVED BY:
Mahealani Ah Yun, City Clerk
Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 3 Packet Pg. 9 of 103
Meeting Date: October 26, 2026
Staff Report # 2610-6866
Boards, Commissions, and Committees Applications
Applications were published in full as part of the September 14, 2026 City Council agenda packet.
In order to reduce paper consumption, staff is providing links to the applications in lieu of reprinting them. • Public Art Commission
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=47ceb645-9ca4-430d86ce-3d99805126b5 • Stormwater Management Oversight Committee
https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=4d4e030c-1fdf-4a6c8074-77a56d596df5 Item 1
Attachment A - PAC and
SWMOC Applications
Item 1: Staff Report Pg. 4 Packet Pg. 10 of 103
City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: Public Works
Meeting Date: October 26, 2026
Report #:2610-6871
TITLE
Review of 2026-2027 Winter Storm Preparedness Activities
RECOMMENDATION
Staff has prepared the following report to inform the City Council of actions being taken in preparation for the upcoming 2026/2027 El Niño winter storm season; CEQA Status – Not a Project
EXECUTIVE SUMMARY
With a very strong El Niño climatic condition forecast for the upcoming winter, staff is taking a number of steps to prepare for winter storms and the potential for creek flooding. While minor nuisance flooding is possible in many locations, the largest risk is an overflow of San Francisquito Creek, as occurred most recently in 1998 and 2022. Capital improvement program projects completed by the San Francisquito Creek Joint Powers Authority and by the City of Palo Alto have increased the capacity of San Francisquito Creek and the ability of the City’s storm drain infrastructure to convey creek water that may overflow. However, flooding from the creek is still a significant concern and it is important for the City and community members to be prepared. This session provides an opportunity to increase public awareness of work by the City and partnering agencies as well as steps residents can take to prepare.
BACKGROUND
El Niño Winter Forecast
Over the past several months, the National Weather Service has identified a pattern of increasingly elevated sea surface temperatures in the Pacific Ocean, creating a climatic condition known as El Niño. Based on the dynamics of the pattern to date, the Weather Service has predicted a strong to very strong El Niño likely through January – March 2027. Typically, El Niño is characterized by ocean temperatures greater than or equal to +0.5°C above average while La Niña ocean temperatures are less than or equal to -0.5°C. A strong El Niño (defined as measured sea surface temperatures at least 1.5°C (2.7°F) above average typically results in Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 1 Packet Pg. 11 of 103
above-average rainfall for the Bay Area and the rest of California. Recent temperatures in the Niño region 3.4 were measured as 2.4°C above average.
This year’s El Niño conditions are the strongest since winter of 2015-16 and previously the winter of 1997-98, which produced widespread flooding throughout California and the flood of record for San Francisquito Creek. Although forecasters cannot reliably predict weather patterns beyond 7 to 10 days, the Weather Service’s Climate Prediction Center (CPC) issues probabilistic long-term forecasts based on multiple computer weather models. Two such forecasts are provided for reference as Attachment A, and are from September 17, 2026, the most recently released three-month outlook prediction. The first map depicts the CPC’s prediction that for the period of Oct-Nov-Dec 2026, there is an equal chance (33%) of aboveaverage precipitation, below-average precipitation, or average precipitation totals for the Bay Area. The second map depicts their prediction that for the period of Jan-Feb-Mar 2027, there is a 40-50% chance of above-average precipitation totals for the Bay Area.
Creek and Storm Drainage System Capacity Improvements Since 1998 Flooding The San Francisquito Creek Joint Powers Authority (SFCJPA) is a regional government agency formed in 1999 by the cities of East Palo Alto, Menlo Park, and Palo Alto, the San Mateo County Flood Control District (now OneShoreline), and the Santa Clara Valley Water District (Valley Water) formed after the flood of 1998, to implement flood control projects along San Francisquito Creek and the Bay. San Francisquito Creek forms the boundary between the Counties of San Mateo and Santa Clara, and the cities of Menlo Park and East Palo Alto to the north and the City of Palo Alto to the south. In coordination with Valley Water, the Reach 1 “Downstream Project” – San Francisco Bay to Highway 101 (Reach 1) was completed in 2019 which resulted in the widening of the creek. The effort included the construction of larger engineered levees and floodwalls in the cities of East Palo Alto and Palo Alto and resulted in more than 22 acres of improved marsh habitat. Reach 1 provides flood protection to 1,700 properties from the 100-year storm event and 3 feet of sea level rise.
Since the major floods of 1998, the City has funded and completed multiple capital improvement programs—financed through voter-approved storm drainage fee measures in 2005 and 2017—to upgrade its aging underground infrastructure, pump stations, and capacity.
An overall map of the 7 projects completed with the 2005 ballot and the 13 projects associated with the 2017 ballot is shown below.
Most impactful projects already completed:
▪ San Francisquito Creek Pump Station (SD-06102) – Completed in 2009, the project introduced a new pump station into the City’s storm drain system. At full capacity the station conveys approximately 375 cubic feet per second to San Francisquito Creek, downstream of Highway 101.
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 2 Packet Pg. 12 of 103
▪ Channing and Lincoln Avenues Capacity Upgrades (SD-06101)– Several sequenced projects along Channing and Lincoln Avenues. Phase I replaced 24-inch pipe between Newell Road and Lincoln Avenue with a 5-ft x 4-ft box culvert along Channing Avenue.
Phase II extended the culvert storm drain system on Channing through Alester Avenue and replaced the 12-inch storm drain system on Lincoln Avenue from Channing to Middlefield Road with a new 42-inch pipe. Phase III along Lincoln Avenue from Middlefield Road to Alma Avenue was completed in 2017. This network ultimately drains through a 96-inch pipe into the San Francisquito Creek Pump Station. ▪ Storm Drainage Rehabilitation (SD-06101) – The most recent project was completed in 2026; the project upsized old 12-inch to 36-inch storm drain pipes on Alester Avenue from Hamilton Avenue to Dana Avenue, and installed flap gates on Louisa Court and Newell Place. Several other pipe repairs and/or rehabilitation projects have been completed throughout Palo Alto since 2018, including new fiber network to the cameras and pump stations, pipe lining where a full replacement was not necessary, and replacement of rusted and collapsed pipes.
▪ Matadero Creek Pump Station Improvements – (SD-13003) Completed in 2018, the existing pump station was re-built at the same location. The project included new electrical and fiber optic services, a back-up generator and pumps discharging 375 cubic feet per second. The facility was also raised to be out of the special flood hazard area. ▪ Loma Verde Avenue (SD-19000)- Completed in 2020, the project upsized approximately 1,700 linear feet of an existing 36-inch storm drain system to 48-inch between Sterling Canal to Louis Road. Runoff flows drain into the Matadero Creek Pump Station and ultimately into the Palo Alto Flood Basin.
▪ East Meadow Drive and East Meadow Circle Capacity Upgrades (SD-22000 and SD26000) Completed in 2024, the project replaced 400 linear feet of 36-inch pipe between East Meadow Circle and Adobe Creek pump station with a 48-inch pipe and added 760 linear feet of pipe along East Meadow Circle. This eliminated the localized ponding that occurred on East Meadow Circle when flows in Barron Creek exceeded the height of the flap-gate.
Five projects currently under construction:
▪ Corporation Way System Upgrades and Pump Station (SD-21000) – This project includes installing a 25 cubic feet per second pump station at 3803 East Bayshore Road and approximately 800 feet of 36-inch storm pipes. The closed lane on East Bayshore is anticipated to be open by end of 2026, with the project completion in Spring 2027. ▪ West Bayshore Road Pump Station and West Bayshore Road Trunk Line Improvements (SD-20000 and SD-23000) – This project includes installing a 15 cubic feet per second Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 3 Packet Pg. 13 of 103
pump station at 3600 West Bayshore Road and approximately 1,500 feet of 18-inch storm pipes. Construction is anticipated to be completed in early 2027. ▪ Hamilton Avenue System Upgrades (SD-25000) – This project upsizes the smaller existing pipes to 48-in pipe and associated structures, along with the newly installed 36- inch storm pipe installed on Alester Avenue should reduce flooding that occurs during large storm events. To date, new pipe has been installed from Rhodes Drive to Newell Road. The second part of the project is being removed from the existing construction contract due to construction defects found in the first section and will be re-evaluated next year.
▪ Newell Road Bridge Replacement Project (PE-12011) – The project replaced the previous bridge with a new bridge in the same alignment. It removed the abutments that restricted the flows within the creek and widened the creek area as well as raised the bridge and approaches. The work inside the creek is complete and contractor is working on the scope of work outside of the creek banks including street resurfacing. Pending weather conditions, the project will be essentially completed by end of the year.
ANALYSIS
The following is a summary of winter preparedness activities undertaken to date and planned for the duration of the winter storm season:
1. Storm drain system and tree maintenance performed by the Public Works Public Services Division:
a. Ongoing Tasks
i. Hydroflushing of storm drain pipelines (on-schedule) ii. Catch Basins – inspection/cleaning
iii. Minor repairs to damaged pipelines and catch basins iv. Wet well cleaning (first full round completed)
v. Trash racks (first full round completed)
vi. Inspection and pruning of street trees (on schedule) vii. Inspection and clearing of tree branches around overhead electric lines (ahead of schedule)
b. Completed Tasks
i. Inspection of all storm drain outfalls and servicing of flap gates ii. Culverts – inspection/cleaning
iii. Pressurized storm drain manhole covers – inspect/retorque bolts iv. Inspection and cleaning of all trash capture devices v. Testing of all storm water pumps and motors
vi. SFC Pump Station – underwater pump maintenance/service vii. Pump Stations – generator maintenance/service
viii. Pump Stations – pump/instrumentation/electrical maintenance/service ix. Large Trash Capture Devices – inspection/cleaning/maintenance Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 4 Packet Pg. 14 of 103
x. Small Trash Capture Devices – inspection/cleaning
c. Upcoming Tasks
i. Inspection and cleaning of all storm water pump station wet wells (second round by 11/1)
ii. Inspection and cleaning of all storm drain catch basins (by 11/30) iii. Replace one broken portable water pump (by 11/30)
iv. Inspection and cleaning of Palo Alto Flood Basin tide gate hatch (by 11/30)
2. Equipment procurement and readiness
a. Two additional vacuum trailers rented
b. Excavator for advance placement at Pope/Chaucer bridge rented c. Discussions ongoing with SFCJPA partners about potential excavator for advance placement at West Bayshore bridge
d. Equipment readiness - small equipment service and replaced as needed e. Fleet readiness – critical vehicles & large equipment needed for storm response identified and serviced
3. Set-up and stocking of filled or self-service sandbag stations by November 1, 2026 (see sandbag station map – Attachment B)
a. Palo Alto Airport (stocked by Valley Water).
b. Mitchell Park, behind Little League field (stocked by CPA Public Works) c. Rinconada Park tennis court parking lot, Hopkins Ave. at Newell Road (stocked by CPA Public Works)
d. Pope/Chaucer Area – this will be a supplementary sandbag station to be located in the vicinity of the Pope/Chaucer Bridge this year (exact location to be determined; stocked by CPA Public Works)
e. City staff have already purchased the seasonal quantity of 5,000 filled sandbags and have purchased an additional 2,500 filled sandbags with the prediction of a strong El Nino this year. Empty sandbags and loose sand will also be available at the sandbag locations.
4. Creek clearing and vegetation management
a. Santa Clara Valley Water District (Valley Water)
i. Responsible for creek maintenance where they own right-of-way or hold flood control easements granted by City or private property owners ii. Maintains improved creek reaches (most of Matadero, Barron, and Adobe Creeks, and San Francisquito Creek downstream of Marlowe Street)
iii. Applied water-safe herbicide to manage vegetation in lined channels iv. Responds to downed trees and blockages during storm events b. San Francisquito Creek Annual Maintenance Walk with JPA and other Regional Partners/Agencies
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 5 Packet Pg. 15 of 103
i. The creek maintenance walk occurred on August 25 and 27. The purpose of the walk is to identify items such as downed trees and other large debris in the channel that could obstruct flows during large winter storm events. Items that need attention are tagged and assigned to the appropriate entity for removal or modification.
ii. 23 items were identified and assigned to the appropriate regional jurisdictions for removal, modification, or monitoring. Work included cutting and removing fallen trees blocking the channel, removing brush and vegetation, monitoring bank erosion, and removing trash and debris. iii. 7 items were assigned to Palo Alto. Staff also independently identified four additional areas requiring attention. All work was completed by September 30.
c. Private property owners
i. Responsible for maintenance of creek segments on their property if they have not granted a flood control easement to the Santa Clara Valley Water District
5. Baylands Nature Preserve Resilience
a. Community Services staff have been working with BCDC on a permit to raise the levee trail by Lucy Evans Nature Center 6-8” to prevent over topping with the goal to have the work completed before the November King tides. If the permit is not received by that time, staff will proactively place sandbags at this location. b. Open Space staff will also place sandbags around sensitive areas near Byxbee Park and the horizontal levee.
c. Staff are tracking higher water levels during high tides, about 0.5 - 0.75 feet higher than the tide charts, possibly due to Kelvin waves which is a phenomenon occurring with El Niño. As with past flooding incidents, if water levels go over Embarcadero Road, staff will close the Baylands Nature Preserve. d. Staff will share details with the community in advance of any closure, if there is time to do so. Staff traditionally adds signage, asks the public to avoid the area, and shares details via City websites.
6. Public Outreach and Engagement
a. The City distributed its annual “Emergency Preparedness” bill insert in September 2026 with storm preparedness resources. The City’s annual “Winter Storm Preparedness” bill insert to City of Palo Alto Utilities customers will be distributed this month. (Attachment C includes both bill inserts) b. In addition to this study session to inform the City Council and the public, staff is hosting a Storm Preparedness Open House at Fire Station 3 (699 Embarcadero Road) on October 29, 5:30-6:30 p.m.
c. The City issued a community update in early October sharing City storm readiness actions and resources for residents to take before storm season arrives. Find the update at www.paloalto.gov/stormreadiness Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 6 Packet Pg. 16 of 103
d. Public Information Officers from JPA member agencies develop an annual informational brochure with flood management projects updates and winter storm preparedness tips. The brochure will be mailed in November/December to all households and businesses in the San Francisquito Creek floodplain and within 1,500 feet of the creek.
e. The City established a unified web page portal for winter storm preparedness and real-time storm information: www.paloalto.gov/stormupdate
7. Contractor resources availability
a. Tree trimming contractors (Street Tree Maintenance contractor & Electrical Line Tree Clearing contractor)
b. Street sweeping contractor (for street debris and mud residue removal) c. Existing street, sidewalk, and storm drain contracts that can be repurposed or additional contingency authorized for emergency grading and paving or storm drain work
8. Inter-Agency Emergency Planning/Response Coordination a. City Emergency Operations Center (EOC) staff use monitoring tools to track creek flows, creek levels, and rainfall during storms, allowing comparison with established triggers for evacuation early warnings through the City’s emergency alert system, should flooding be imminent.
b. Continued implementation of a Multi-Agency Coordination (MAC) framework to coordinate emergency response actions amongst JPA member agency emergency managers and County Office of Emergency Services staff in both counties
c. Part of this framework includes having MAC PIOs meet regularly during storm events to share information and coordinate on messaging to respective communities. This is in coordination with the National Weather Service. d. Established protocol for reciprocal notifications when Emergency Operations Centers are activated
e. Developed protocols for mutual aid among public works departments
9. Emergency Manager/Responder Training
a. Palo Alto Emergency Services Volunteer Program prepared for the season. b. Regional winter preparedness briefing hosted by the Santa Clara Valley Water District
c. City Staff annual Winter Storm Preparedness workshop hosted by City of Palo Alto Office of Emergency Services on November 5, 2026
d. San Francisquito Creek Multi-Agency Coordination Regional Winter Storm/Flood Workshop & Tabletop Exercise to be held December 3, 2026. e. Public Works Public Services Pre-Incident Planning to coordinate with different departments and contractors for assistance during severe flooding. Create secondary operation centers and vehicle/equipment staging if MSC floods.
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 7 Packet Pg. 17 of 103
Overall, the City’s winter storm preparation activities are a robust body of work intended to minimize the risk of flooding, mitigate and respond to any flooding that does occur through infrastructure and staff protocols, and communicate with community members about the City’s activities and what they can do to prepare their homes.
FISCAL/RESOURCE IMPACT
Winter storm preparation activities described in this report are funded through the Fiscal Year 2027 Adopted Operating and Capital Budgets, and do not require additional appropriations at this time.
STAKEHOLDER ENGAGEMENT
Winter storm preparation involves engagement with multiple City departments involved in storm preparation and response, SFCJPA partner agencies, and community members through a variety of coordination meetings, trainings, and community engagement efforts described in this report. Find resources at www.paloalto.gov/stormupdate
ENVIRONMENTAL REVIEW
This update is for informational purposes with no action requested by the Council, and therefore it is not a project subject to review under the California Environmental Quality Act (CEQA).
ATTACHMENTS
Attachment A: Seasonal Precipitation Outlook
Attachment B: Sandbag Station Map
Attachment C: Utility Bill Inserts
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 8 Packet Pg. 18 of 103
Item 3: Staff Report Pg. 9 Packet Pg. 19 of 103
Item 3: Staff Report Pg. 10 Packet Pg. 20 of 103
Sandbag Locations
Open as of November 1, 2026
Pope/Chaucer location to be moved due to previous location flooding impacts.
Item 3
Attachment B - Sandbag
Station Map
Item 3: Staff Report Pg. 11 Packet Pg. 21 of 103
Persons with disabilities who require materials in an appropriate alternative format, auxiliary aids, or modifications to policies or procedures to access City meetings, programs, or services should contact the City’s ADA Coordinator George Hoyt at (650) 329-2550 or by emailing [email protected].
Printed on 100% post-consumer recycled paper, bleached without chlorine. 9/26
BE PREPARED
• Make a Plan, Build an Emergency Kit
• Identify an Evacuation Route
• Sandbag materials are available at three
Palo Alto locations beginning November 15.
• Build responsibly & follow construction
codes for all home projects
• Learn more at
www.paloalto.gov/BePrepared
HELP YOUR NEIGHBORS &
VOLUNTEER IN AN EMERGENCY
Be a good neighbor and offer assistance if you're able.
Volunteer to provide support during emergencies:
consider becoming an Emergency Services Volunteer.
Visit www.paloalto.gov/EmergencyVolunteers.
STAY SAFE
Turn around, don't drown. Standing water may be deeper
than you think and your car may stall.
STAY INFORMED
• Sign Up for Emergency Alerts at AlertSCC.org
• Sign Up for Police Department Alerts by
Texting Your Zip Code to 888777
• Follow the City on Social Media:
paloalto.gov/Connect
• Should evacuations due to storm emergencies/
flooding become necessary, find evacuation
resources at paloalto.gov/FloodAlert
• Download the Red Cross Preparedness App:
redcross.org/Prepare
BE STORM READY
• Know your Flood Hazard Area and Insure your
Property: paloalto.gov/floodzones
• www.paloalto.gov/Storms
• www.paloalto.gov/CreekMonitor
• www.paloalto.gov/OutageMap
IMPORTANT PHONE NUMBERS & WEBSITE RESOURCES
• Do not call 9-1-1 unless it’s an emergency
• Power Outage & Electrical Problems: Palo Alto Utilities Electric Operations (650) 496-6914 • Gas/Water Leaks and Sewer Spills: Palo Alto Utilities Water, Gas, Wastewater Dispatch (650) 329-2579 • Blocked Storm Drains, Mudslides, Hazardous Waste Spills & Illegal Dumping: Palo Alto Public Works (650) 496-6974 (weekdays 7am to 4pm) & (650) 329-2413 (after hours) • Report Road and Other Conditions to PaloAlto311 at www.paloalto.gov/311 • Fallen Trees: Palo Alto Public Works (650) 496-5953 (weekdays 7am to 4pm) & (650) 329-2413 (after hours) • Contact the City of Palo Alto Emergency Public Information Recorded Line (650) 329-2420 www.PaloAlto.gov/StayInformed
Tools to Prepare for an Emergency
Item 3
Attachment C - Utility Bill
Inserts
Item 3: Staff Report Pg. 12 Packet Pg. 22 of 103
Persons with disabilities who require materials in an appropriate alternative format, auxiliary aids, or modifications to policies or procedures to access City meetings, programs, or services should contact the City’s ADA Coordinator George Hoyt at (650) 329-2550 or by emailing [email protected].
Printed on 100% post-consumer recycled paper, bleached without chlorine. 10/26 Be Storm Ready, Visit www.PaloAlto.gov/Storms
During a time of emergency, please don’t call 9–1–1 unless there’s an imminent threat to life or other serious emergency.
Be Prepared for
Storm Season
Stay informed by signing up
for emergency alerts and
connect with the City at
www.paloalto.gov/Connect
Remove debris from storm
drains and move vehicles on
street sweeping days
Prepare an emergency plan
that is shared with family,
friends, and neighbors
Stay up to date at
www.paloalto.gov/
StormUpdate
Monitor creek water levels at
www.paloalto.gov/
CreekMonitor
Never drive or walk
through flood waters
ACT NOW TO BE READY DURING A RAIN STORM
Item 3
Attachment C - Utility Bill
Inserts
Item 3: Staff Report Pg. 13 Packet Pg. 23 of 103
City Council
Staff Report
Report Type: CONSENT CALENDAR
Lead Department: City Clerk
Meeting Date: October 26, 2026
Report #:2610-6875
TITLE
Approval of Minutes from October 13, 2026 Meeting
RECOMMENDATION
Staff recommends that the City Council review and approve the minutes.
ATTACHMENTS
Attachment A: October 13, 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. 24 of 103
CITY COUNCIL
DRAFT ACTION MINUTES
Special Meeting
October 13, 2026
The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:00 P.M.
Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely:
Absent:
Call to Order
Agenda Changes, Additions and Deletions
Action Items
1. Potential release of documents related to offer to purchase Cubberley Community Center property.
MOTION: Councilmember Lu moved, seconded by Mayor Veenker to release the August 29, 2024 and September 5, 2024 appraisals related to offer to purchase Cubberley Community Center property.
MOTION PASSED: 7-0
Adjournment: The meeting was adjourned at 5:41 P.M.
Item 4
Attachment A - October 13,
2026 Draft Action Minutes
Item 4: Staff Report Pg. 2 Packet Pg. 25 of 103
DRAFT ACTION MINUTES
Sp. City Council Meeting
Draft Action Minutes: 10/13/2026
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.
Item 4
Attachment A - October 13,
2026 Draft Action Minutes
Item 4: Staff Report Pg. 3 Packet Pg. 26 of 103
City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: City Manager
Meeting Date: October 26, 2026
Report #:2608-6606
TITLE
Approval of the FY 2028-2029 Human Services Resource Allocation Process (HSRAP) Program Expansion with Additional Annual Funding in the Amount of $428,000; CEQA- Not a Project
RECOMMENDATION
The Policy & Services Committee (P&S) and Human Relations Commission (HRC) recommend that the City Council:
1. Approve the Human Services Resource Allocation Process (HSRAP) grant program expansion for the FY 2028-2029 funding cycle with HSRAP expansion annual funding in the amount of $428,000.
2. Direct P&S to reevaluate the allocated amount after the two-year HSRAP cycle to ensure it is meeting community needs while balancing budgetary constraints.
EXECUTIVE SUMMARY
The proposed Human Services Resource Allocation Process (HSRAP) expansion would establish two funding lanes within one process and expand funding in the amount of $428,000 annually for the FY 2028-2029 HSRAP process. The first lane would retain the existing HSRAP process for proposals from organizations to provide professional services to meet human service needs established by the Priority of Needs and serve Palo Alto residents. The second lane, communitywide grants, would provide a funding path for nonprofit programs that demonstrate a broader Palo Alto community-wide need outside the formal Priority of Needs categories. Both lanes would use one application and a common evaluation process, with the distinction made during evaluation. Consistent with the Nonprofit Partnership Workplan, this approach supports clear and consistent funding decisions preferable to the previous need to respond to standalone funding requests through the annual budget process.
P&S and the HRC recommend an annual HSRAP expansion funding amount of $428,000 (i.e., $856,000 over the two-year span of the HSRAP grant). This amount is intended to preserve approximately the level of Nonprofit Partnership Workplan Phase I grant funding reflected in FY Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 1 Packet Pg. 27 of 103
2026. This amount does not include the $78,280 in funding that the City Council designated as ongoing departmental appropriations for three nonprofits. The $428,000 is not a separate community-wide grant allocation or a guarantee of funding to prior recipients, funding would be competitively allocated through the HSRAP process which is guided by the published criteria.
This work responds to a City Council referral to P&S to work with the Human Relations Commission (HRC) to consider refinements to HSRAP. This was to include consideration of whether the program should be expanded to accommodate nonprofit funding requests that may not fit within the existing HSRAP framework. At the September 8, 2026 joint P&S and HRC meeting, P&S and HRC discussed the proposed expansion, including the broad category of community-wide services, the evaluation criteria, funding approach, administrative considerations, and governance roles.
BACKGROUND
The Nonprofit Partnership Workplan (NPW) Phase I pilot was implemented in FY 2026 as part of the City’s broader effort to strengthen nonprofit partnership and contract management practices in response to the 2022 City Auditor’s report on nonprofit management. Phase I was designed to improve the City’s process for evaluating nonprofit funding requests that fall outside existing funding mechanisms during the annual budget process. Through the pilot, in FY 2026 the City awarded $506,646 to 16 nonprofit organizations serving the Palo Alto community.
At its April 6, 2026 study session,1 the City Council reviewed the purpose of the NPW Phase I pilot and discussed potential improvements for FY 2027. As part of that discussion, staff presented an inventory of nonprofit grants and service agreements over $10,000 to provide a broader overview of City funding relationships with nonprofit organizations beyond NPW Phase I grants.2 The inventory illustrated the range and complexity of those relationships, which total approximately $6.6 million in FY 2027 across multiple funding sources. The City Council discussion generally reflected interest in a transparent, equitable, and consistent framework for nonprofit funding, including clearer guidance regarding how different types of nonprofit requests should be reviewed, evaluated, and funded. Multi-year service agreements are a significant body of work that will be brought to the P&S Committee later this fiscal year.
During subsequent budget deliberations,3 City Council also recognized the City’s fiscal constraints, including projected FY 2027 budget pressures, and supported proceeding without 1 April 6, 2026 City Council Meeting:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87042&dbid=0&repo=PaloAlto 2 FY 2026 Nonprofit Services Agreements, Page 9:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87042&dbid=0&repo=PaloAlto 3 May 11, 2026 City Council Meeting:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=88043&dbid=0&repo=PaloAlto Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 2 Packet Pg. 28 of 103
the NPW Phase I grant process. City Council indicated that grant funding should, where appropriate, be considered through HSRAP.
The City Council referred to the P&S Committee, in partnership with (HRC), consideration of potential refinements to HSRAP. This includes consideration of whether the program should be expanded to address additional nonprofit requests that may not be clearly accommodated under the current HSRAP framework. City Council comments also concluded that the current fiscal year (FY 2027) should be used to further develop options for FY 2028 rather than advancing a more substantial Phase I funding program in FY 2027. The discussion for P&S and HRC focused on preparing this process for nonprofit grants in FY 2028 through the HSRAP process and aligning it with the existing HSRAP process timeline.
On August 11, 2026, P&S provided feedback on the proposed HSRAP expansion, including funding levels and scope.7 Based on that feedback, staff proposed a two-lane approach for the FY 2028-FY2029 funding cycle.
On September 8, 2026, P&S and HRC held a joint meeting to discuss the proposed expansion.
Members of both bodies supported a single application and review process while expanding eligibility to include qualifying community-wide programs. The discussion generally supported a single, transparent process with HRC retaining a central role in evaluating applications and recommending awards.
Members emphasized the importance of clearly defining Palo Alto benefit, maintaining a transparent and flexible evaluation process, preserving HRC’s role in reviewing and recommending awards, and ensuring the expansion remains responsive to the City’s fiscal condition and administrative capacity. Members of both bodies also discussed maintaining flexibility to allocate expansion funding between the community-wide or the Priority of Needs grants based on the applications received.
The following motion was unanimously approved:
1) Recommend the City Council approve the HSRAP grant program expansion at $428,000 annually and place this recommendation on the consent calendar; 2) Direct staff to return to P&S 2 years after implementation of the HSRAP grant program expansion to reevaluate the allocated amount to ensure it is meeting community needs while balancing budgetary constraints; and 3) Direct the HRC to evaluate the current HSRAP evaluation criteria to ensure that criteria is still meeting our community’s needs. (Note: this item was completed at the October 8 HRC meeting where the existing criteria was confirmed). 7 August 11, 2026 Policy & Services Committee Meeting:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=897064&dbid=0&repo=PaloAlto Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 3 Packet Pg. 29 of 103
ANALYSIS
HSRAP Expansion
The collaboration between P&S and the HRC recommends a HSRAP expansion that considers two funding lanes for the FY 2028-FY 2029 funding cycle that can be completed all within the same grant process.
• HSRAP would retain the City’s original process for direct human services proposals that meet established Priority of Needs and serve Palo Alto residents as one funding lane. • HSRAP expansion would provide a funding path for community-wide nonprofit programs previously not meeting the Priority of Needs under HSRAP.
Nonprofit applications under the HSRAP expansion would need to respond to a demonstrated Palo Alto community-wide need outside the formal Priority of Needs categories. The community-wide need does not need to focus on vulnerable populations. The purpose is to create one process, one application, and a consistent evaluation criterion. The distinction will be made during evaluation rather than at the application entry point.
The HSRAP evaluation considerations include demonstrated community need, Palo Alto resident benefit, non-duplication of City-funded services or another funding mechanism, clear public value, organizational readiness, realistic budget and timeline, and measurable outcomes.
P&S and HRC discussed the importance of maintaining a clear, transparent and consistent evaluation framework while recognizing that the expanded applicant pool may include organizations addressing substantially different types of community needs.9 Both bodies highlighted the need to clearly define Palo Alto resident benefit, including circumstances where the benefit may be indirect, and to ensure that applicants understand what information is needed to demonstrate community benefit and outcomes.
Discussion also addressed the role of numerical scoring, with staff noting that scores are intended to support transparency and consistency while allowing HRC to consider applicationspecific circumstances and document the rationale for recommendations that differ from the numerical ranking. HRC discussion further emphasized retaining the core HSRAP focus on community need, Palo Alto resident benefit, outcomes, equity, organizational capacity and fiscal responsibility, while maintaining an application process that is accessible to organizations of different sizes. As a follow-up, both bodies agreed that the HRC should evaluate the current HSRAP criteria to ensure it will meet the community’s needs. This discussion on the HSRAP 9 September 8, 2026 Policy & Services and HRC Joint Meeting:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=897269&dbid=0&repo=PaloAlto Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 4 Packet Pg. 30 of 103
criteria occurred at the October 8, 2026 HRC meeting and the HRC confirmed the current HSRAP criteria. 11
HSRAP Funding
HSRAP: Priority Needs Grants
Over the last five funding cycles, beginning with FY 2020-21, the City has funded approximately 78% of total HSRAP grant requests on average. During that period, HSRAP has received an average of approximately $1.2 million in annual application requests, with about $940,000 recommended for funding. These figures reflect HSRAP grant funding only and do not include other ways the City partners with nonprofit organizations to deliver services to the community, such as direct service agreements and co-sponsorship opportunities.
P&S and HRC both agreed that the ongoing level of investment for the Priority of Needs should be maintained, with annual CPI adjustments for the FY 2028-FY2029 funding cycle. Staff anticipates recommending City Council approval of $998,992 in FY 2028 and $1,027,620 in FY 2029. At its October 8 meeting, the HRC adopted the following Priority of Needs for the FY 2028-FY2029 funding cycle:
• Homelessness services
• Housing support services
• Services for individuals who are disabled
• Services for older adults and their caregivers
• Services for youth and their caregivers
• Food and nutrition services
• Physical and behavioral health services
The City also annually sets aside $50,000 through the Emerging Needs Fund to support nonprofit organizations serving Palo Alto residents with one-time human services-related funding needs. The Emerging Needs Fund is intended to address needs that arise outside the regular HSRAP grant cycle, including new applicants, pilot programs, emerging or adapted approaches to existing community needs, and special hardship cases.
P&S and HRC supported maintaining the existing Priority of Needs HSRAP process and keeping regular HSRAP funding distinct from the expansion. Members emphasized that the expansion should not diminish the City's existing commitment to Priority of Needs services.
HSRAP: Community-wide Grants [expansion]
11 October 8, 2026 Human Relations Commission Meeting:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=20430 Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 5 Packet Pg. 31 of 103
The HSRAP community-wide grants would provide a funding opportunity for nonprofit programs that demonstrate a broader Palo Alto community-wide need outside the established Priority of Needs categories.
P&S and HRC recommended an annual HSRAP expansion funding amount of $428,000. Funding would not represent a guaranteed allocation to specific organizations who previously received funding. Rather, it would be available for competitive awards through the expanded HSRAP process. HRC would review eligible applications using the published criteria and recommend how expansion funds should be allocated based on the applications received.
Both bodies sought to preserve an appropriate level of funding for nonprofit support while recognizing the City's fiscal constraints. P&S and HRC ultimately supported the $428,000 expansion funding recommendation amount as a means of carrying forward the FY 2026 funding level while bringing eligible requests into a more transparent and consistent HSRAP process.
Members also supported flexibility between the two grant categories rather than establishing a fixed allocation for the community-wide grants. If sufficient qualifying applications are not received in the community-wide grants category, available expansion funding could be recommended for qualifying applications in the Priority of Needs category.
HSRAP Timeline and Governance Roles
Consideration of the HSRAP expansion is well-timed, as the regular HSRAP cycle typically begins in September. The proposed schedule would incorporate the HSRAP expansion communitywide grants into the existing HSRAP timeline without delaying nonprofit awards. The table below shows the proposed HSRAP expansion timeline. Key milestones include the joint P&S/HRC meeting in September, City Council approval on the expansion and funding levels in October, and P&S award recommendations to City Council in May (after HRC’s process), as well as Finance Committee’s review of overall budget recommendations during the annual budget review process.
The proposed change reflects the fact that City Council’s initial referral was made to P&S, and the proposed expansion was developed as part of that Committee’s workplan and policy discussion. As a result, P&S has reviewed recommendations related to the structure, criteria, and implementation of the HSRAP expansion, including how the expanded applicant pool would be evaluated and incorporated into the City’s broader human services funding framework.
The Finance Committee will retain its role through the annual budget process, to review and recommend the total funding for HSRAP and HSRAP expansion funding.
Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 6 Packet Pg. 32 of 103
Governance Roles
Body Role
Human Relations
Commission (HRC)
Review applications and recommend awards using published criteria.
Policy & Services
Committee
Provide policy oversight; review HRC recommendations, including the expanded-grant awards and programmatic implications.
Finance
Committee
Consider total appropriations and fiscal tradeoffs through the annual budget process.
City Council Approve funding levels and final awards.
Staff Administer the RFP, verify eligibility, conduct technical review, and support applicants.
P&S and HRC supported clearly distinguishing policy oversight, application review, fiscal review, and final decision-making responsibilities. The joint discussion reinforced HRC’s role in evaluating applications and recommending awards, P&S’s role in policy oversight, Finance Committee’s role in the annual budget process, and full City Council’s authority over funding levels and final awards.
HSRAP Timeline Key Milestones
Month Proposed HSRAP Expansion Key Milestones
August • P&S to discuss HSRAP expansion opportunities
• Survey nonprofits & clients on human service needs
September • Joint P&S/HRC meeting on HSRAP expansion feedback • Nonprofit engagement on HSRAP expansion process
October • HRC sets Priority of Needs
• Council to approve HSRAP expansion to include community-wide grants and funding levels
November • Nonprofit engagement on HSRAP expansion process • Application period opens
January Application period closes
March Review committee evaluates applications
April HRC reviews and recommends awards
May • P&S reviews HRC award recommendations
• Finance Committee review overall budget allocations
June Council approves all HSRAP awards
Lastly, P&S recommended that the City Council referral for a return to P&S after the two-year HSRAP cycle to reevaluate the allocated amount to ensure it is meeting community needs while balancing budgetary constraints.
Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 7 Packet Pg. 33 of 103
FISCAL/RESOURCE IMPACT
The City Council’s action tonight will inform the FY 2028 budget development, and if approved, include the appropriation of $428,000 for the HSRAP expansion and $428,000 for FY 2029.
STAKEHOLDER ENGAGEMENT
Community members, nonprofit partners, and service recipients were surveyed regarding human service needs and notified of upcoming meetings, including information sessions on the HSRAP expansion. A nonprofit information session was held on September 16, 2026, to share the outcome of the joint Policy & Services Committee and Human Relations Commission meeting and provide information regarding the proposed HSRAP expansion. Additionally, the City’s website will be updated to clearly communicate program changes, key dates, and the overall timeline.
ENVIRONMENTAL REVIEW
Committee action on this item is not a project as defined by California Environmental Quality Act (CEQA) because the City’s HSRAP program is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2).
APPROVED BY:
Ed Shikada, City Manager
Item 5
Item 5 Staff Report
Item 5: Staff Report Pg. 8 Packet Pg. 34 of 103
CITY COUNCIL
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: October 26, 2026
Report #: 2608-6697
TITLE
Adoption of an Ordinance Amending Chapter 18.20 (Office, Research, and Manufacturing (MOR, ROLM, RP and GM) Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code to Clarify that Multiple-Family Residential Uses in the ROLM(E) Zone District May Be Permitted Through a Use Permit; CEQA Status: Exempt pursuant to CEQA Guidelines Section 15061(b)(3).
RECOMMENDATION
Staff recommends that the City Council (Council) take the following action:
1. Adopt the draft Ordinance (Attachment A) amending Palo Alto Municipal Code (PAMC) Section 18.20.030, Table 1, footnote (1), to clarify that Multiple-Family uses may be permitted in the ROLM(E) zone district, subject to an Administrative Use Permit (AUP)1, addressing a previous inadvertent change to the code.
BACKGROUND
In December 2023, Council adopted Ordinance No. 5608 to implement the 2023–2031 Housing Element, including changes to development standards within the GM/ROLM Housing Element Focus Area. Those amendments inadvertently restricted the existing allowance for multifamily housing with a use permit in ROLM(E). The proposed ordinance corrects that error.
Before the amendment, the land use table allowed multifamily housing in ROLM(E) with a use permit without a geographic restriction, consistent with Section 18.20.040(b)(5) and its RM-20 development standards. The amendment restricted the combined ROLM/ROLM(E) table entry to the Focus Area, which contains no ROLM(E) parcels, while Section 18.20.040(b)(5) retained 1 In accordance with Ordinance 5706, effective July 10, 2026 the City amended the municipal code to rename Conditional Use Permits (CUPs) as Administrative Use Permits (AUPS) and to replace “conditionally permitted” with “administratively permitted.” This is a terminology change only; it does not change the review process, applicable findings, review authority, applicable fees, or substantive standards that govern the permit.
Item 6
Item 6 Staff Report
Item 6: Staff Report Pg. 1 Packet Pg. 35 of 103
the residential allowance. The August 26, 2026, Planning and Transportation Commission (PTC) staff report provides additional history and analysis.3 PTC Review
On August 26, 2026, PTC recommended adoption by a 3–1 vote, (Chair Chang dissenting; Vice Chair Ji and Commissioner Templeton absent). PTC also raised concerns about housing near sensitive areas such as the Baylands, State housing laws limiting local discretion, and suggested that Council revisit housing as a potential use in areas such as the Baylands and foothills. Chair Chang acknowledged the rationale for bringing the Ordinance forward but dissented to avoid conveying unanimous support for the proposed change.
Staff recommends the PTC’s policy comments be addressed through the Comprehensive Plan update anticipated to begin in 2027, rather than as a separate work effort. Unless Council directs otherwise, staff will proceed accordingly.
ANALYSIS
The proposed ordinance amends Table 1, footnote (1), to distinguish ROLM(E) from the ROLM and GM districts. For ROLM and GM properties, multiple-family residential uses would remain permitted through a Use Permit only within the GM/ROLM Housing Element Focus Area. For ROLM(E) properties, multiple-family residential uses would be permitted through a Use Permit regardless of location to correct an inadvertent code change that created inconsistencies and effectively prohibited housing in areas where it had previously been allowed with a use permit.
Table 1
Industrial/Manufacturing District Land Uses
[P = Permitted Use AUP = Administrative Use Permit Required]
MOR ROLM
ROLM (E)
RP
RP (5)
GM Subject to
regulations in
Chapter:
RESIDENTIAL USES
Single-Family Not permitted
Two-Family Not permitted
18.20.040(b)
Multiple Family (Housing
Element Opportunity Site)
P P P 18.14.020
Multiple-Family AUP AUP (1) P (2) AUP (1) 18.14.020,
18.20.040(b)(5),
18.42.200
Residential Care Homes P AUP AUP AUP 18.42.200(B)
3 The staff report from the August 26, 2026, hearing is available online at:
https://www.paloalto.gov/Departments/City-Clerk/City-Meeting-Groups/Meeting-Agendas-and-Minutes Item 6
Item 6 Staff Report
Item 6: Staff Report Pg. 2 Packet Pg. 36 of 103
Notes:
(1) All ROLM(E) properties and those ROLM and GM properties that are located within the Housing Element Focus Area, Aadjacent to Bayshore Freeway and generally bounded by East Charleston Road and Loma Verde Avenue (see Figure 1), and otherwise prohibited to the extent permitted by law. For ROLM(E ) Zoned properties, conditionally permitted regardless of location.subject to AUP.
The amendment aligns the land use table with Section 18.20.040(b)(5) and retains the applicable RM-20 development standards. The ordinance does not rezone property, change base density or height limits, approve a development project, or establish housing by right.
Future proposals would be evaluated under applicable City requirements and State law, including project-specific eligibility for density bonuses, waivers, or streamlined review.
Attachment B identifies the ROLM(E) properties. The PTC staff report provides additional discussion of the Baylands and airport context and applicable site-specific requirements.
FISCAL/RESOURCE IMPACT
No significant fiscal impact is anticipated. Future applications would follow existing development review and cost-recovery processes. Staff plans to incorporate PTC’s policy comments into the Comprehensive Plan update work program. A separate effort would require additional work programming and resource consideration.
STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper. Notice of this hearing was published in the Daily Post on October 9, which is 10 days in advance of the meeting.
Public Comments
During the PTC hearing, one commenter expressed concern over the impact of housing in an area of concern such as the Baylands. As of the writing of this report, staff has not received any other project-related public comments.
ENVIRONMENTAL REVIEW
The proposed ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3). The ordinance clarifies the existing Use Permit pathway for multiple-family residential uses in ROLM(E) and does not approve a development project, change the zoning map, or alter the underlying development standards. It can be seen with certainty that there is no possibility that adoption of the ordinance itself may have a significant effect on the environment. Any future development proposal would be subject to environmental review and other regulatory requirements, as applicable.
Item 6
Item 6 Staff Report
Item 6: Staff Report Pg. 3 Packet Pg. 37 of 103
ATTACHMENTS
Attachment A: Draft Ordinance Amending PAMC Section 18.20.030 Attachment B: Map of ROLM(E) Zone Parcels
APPROVED BY:
Jonathan Lait, Planning and Development Services Director Item 6
Item 6 Staff Report
Item 6: Staff Report Pg. 4 Packet Pg. 38 of 103
1 ATTACHMENT A
*NOT YET APPROVED*
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapter 18.20 (Office, Research, and Manufacturing (MOR, ROLM, RP and GM) of Title 18 (Zoning) of the Palo Alto Municipal Code to Clarify the Administrative Use Permit Requirement for Multiple-Family Residential Uses in the ROLM Zone District and ROLM(E) Subdistrict The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Section 18.20.030 (Land Uses) of Chapter 18.20 (Office, Research, and Manufacturing Districts) of Title 18 (Zoning) of the Palo Alto Municipal Code is amended to read as follows, with deletions shown strikeout, additions underlined, and portions omitted but unchanged indicated by bracketed ellipses:
18.20.030 Land Uses
(a) Permitted and Conditionally Permitted Land Uses
Table 1 lists the land uses permitted or conditionally permitted in the industrial and manufacturing districts.
Table 1
Industrial/Manufacturing District Land Uses
[P = Permitted Use AUP = Administrative Use Permit Required] Notes:
(1) For ROLM and GM zoned properties, conditionally permitted only when located within the GM/ROLM Housing Element Focus Area, aAdjacent to Bayshore Freeway and generally bounded by MOR
ROLM
ROLM(E)
RP
RP(5)
GM
Subject to regulations
in Chapter:
[…] […] […] […] […] […]
Multiple-Family AUP AUP(1) P (2) AUP(1)
18.14.020,
18.20.040(b)(5),
18.42.200
[…] […] […] […] […] […]
Item 6
Attachment A - Draft
Ordinance Amending PAMC
Section 18.20.030
Item 6: Staff Report Pg. 5 Packet Pg. 39 of 103
*NOT YET APPROVED*
2 East Charleston Road and Loma Verde Avenue (see Figure 1), and otherwise prohibited to the extent permitted by law. For ROLM(E) zoned properties, conditionally permitted regardless of location subject to CUP.
SECTION 2. The Council finds that the adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because the Ordinance clarifies that multiple-family residential uses may be considered in the ROLM(E) district through the existing Conditional Use Permit process established in Section
18.20.040(b)(5). The Ordinance does not approve a specific development project, modify the applicable development standards, or eliminate discretionary review. 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 3. This ordinance shall be effective on the thirty-first date after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
NOT PARTICIPATING:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Assistant City Attorney City Manager
Director of Planning & Community
Environment
Item 6
Attachment A - Draft
Ordinance Amending PAMC
Section 18.20.030
Item 6: Staff Report Pg. 6 Packet Pg. 40 of 103
Item 6
Attachment B - Map of
ROLM(E) Zone Parcels
Item 6: Staff Report Pg. 7 Packet Pg. 41 of 103
CITY COUNCIL
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: October 26, 2026
Report #: 2608-6707
TITLE
Adoption of an Ordinance amending the FY 2027 Municipal Fee Schedule and Making Findings Regarding the Reasonable Cost to Issue Permits for Solar Energy Systems. CEQA Status: Not a project.
RECOMMENDATION
Staff and the Finance Committee recommend that the City Council adopt the attached ordinance amending the FY 2027 Municipal Fee Schedule to reduce fees for Electric Vehicle Charging Station permits and making findings, supported by substantial evidence, that the reasonable cost to issue permits for solar energy systems exceeds the limits set forth in Government Code section 66015.
EXECUTIVE SUMMARY
This action implements new streamlined review process for Electrical Vehicle Charging Stations permits (EVCS) and the corresponding Municipal Fee reductions and fixes an omission in the adopted budget ordinance, authorizing the City to exceed state caps on Photovoltaic (Solar)/Energy Storage System fees, as reflected in the published FY 2027 Municipal Fee Schedule. Finance Committee unanimously voted to reach full cost-recovery for fees related to Photovoltaic (Solar) and Energy Storage Systems as well as other fees related to electrification, and recommended that City Council direct staff to develop rebates for these fees using eligible non-rate revenue from utilities - the findings were not included.
BACKGROUND
On March 4, 2025 the Finance Committee discussed the Planning and Development Services fee study, conducted by Matrix Consulting.1 This study calculated fees for Development Services to ensure that it reached full cost-recovery and that development applications were not subsidized by the General Fund. Through this discussion, Finance Committee wanted to strongly recommend subsidies for electrification.
1https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=1367b 915-8c05-4f24-ae1c-ea6a6149e805
Item 7
Item 7 Staff Report
Item 7: Staff Report Pg. 1 Packet Pg. 42 of 103
Staff brought forward options for discussion with the Finance Committee for balancing policy goals related to fiscal sustainability and electrification. On April 7, 2026 the Finance Committee voted unanimously to adopt full cost-recovery for fees that would otherwise be subject to state caps (limits), specifically those related to Solar (Photovoltaic) systems and Energy Storage Systems (ESS).3 And, the Finance Committee also voted unanimously to establish a rebate program using eligible non-rate revenue from Utilities to offset the difference between state caps and the full cost-recovery rate for these fees. For an additional subset of fees related to electrification, Finance Committee voted unanimously to use eligible non-rate revenues from Utilities to establish a rebate program that would discount a portion of those fees (the ‘base’ fee). Staff also presented a streamlined process for permits associated with Electric Vehicle Charging Stations; this process that would lower the cost for these permits and Finance Committee endorsed the streamlined process.
ANALYSIS
This action includes a recommendation to amend the FY 2027 Municipal Fee Schedule charges for Electric Vehicle Charging Stations in alignment with a new more streamlined permit process, previously supported by the Finance Committee. In addition, on April 7, 2026 Finance Committee, recommended fee adjustments be incorporated into the FY 2027 Budget Adoption Ordinance for Solar (Photovoltaic) systems and Energy Storage Systems (ESS). The fees and financial assumptions were included, however the necessary findings and rebates were omitted in the ordinance language. The written finding and corresponding ordinance from the City Council is required to allow the City to exceed state caps for cost-recovery levels - this action fixes this omission.
Recognizing many cities charge the state cap for these fees, the rebate process that will be implemented effectively represents an ‘instant’ rebate, where the applicant will only pay the remaining balance of the fee after the subsidy is applied. This significantly streamlines an otherwise cumbersome process, and is anticipated to enhance applicant satisfaction with the process.
Electric Vehicle Charging Stations Streamlined Permits
Table 1 shows the cost / fee of Electrical Vehicle Charging Stations permits, inclusive of the base fee. Staff are implementing a streamlined process, significantly lowering the cost for each type of EVCS permit. The streamlined process reflects that the building inspectors will perform more of the inspection function for lower-level installations, reducing the cost and time, by reducing the time spent by fire inspectors. The current process involves a separate inspection by building and fire for each EVCS permit. Fire inspections will be conducted by exception, when a building inspector escalates, rather than by rule.
3https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=3f916 2f0-a2c5-4baf-942e-cf17727675e1
Item 7
Item 7 Staff Report
Item 7: Staff Report Pg. 2 Packet Pg. 43 of 103
Table 1. FY 2027 EVCS Charges Streamlined inclusive of Base Fee ($) Fee Name
Current
Cost/Permit Fee
FY 2027 Fee
Recommended Change
EVCS: Single-Family (Level 1 and 2) $1,705 $640 $1,065
EVCS: Single-Family (Level 3) 1,915 830 1,085
EVCS: Multi-Family / Commercial (Level 1 and 2):
1-6 Stations
4,842 3,810 1,032
EVCS: Multi-Family / Commercial (Level 1 and 2):
Each addl 6 stations 1,504 1,402 102
EVCS: Multi-Family / Commercial (Level 3 and 4):
1-6 Stations
5,796 4,299 1,497
EVCS: Multi-Family / Commercial (Level 3 and 4):
Each addl 6 stations 1,504 1,402 102
Solar (Photovoltaic) systems and Energy Storage Systems (ESS) As a reminder of what was previously approved and what the findings and ordinance enables, the tables below reflect the approved fee levels from the FY 2027 Adopted Budget and the rebates that will be applied in alignment with the April 2026 Finance Committee direction for Solar (Photovoltaic) systems and Energy Storage Systems (ESS) fees.
Table 2. State Capped Fees – FY 2027 Adopted Fees and Utilities Non-Rate Revenue Rebates ($) Fee Title
FY 2027 Fee
(Permit and Base Fee)
Rebate
(variance between
FY27 Fee & state cap)
Multi-Family / Commercial System (10kW or less) $2,344 $1,344 Multi-Family / Commercial System (11kW-49kW) 3,050 2,050 Multi-Family / Commercial System (50kW or greater) 3,948 2,948 Single-Family Systems (10kW or less) 1,866 1,416
Single-Family Systems (greater than 10kW) 2,271 1,821
Single-Family Systems (Reinstallation) 1,365 915
Single-Family System (ESS) 2,262 1,812
Multi-Family / Commercial System (ESS) 3,722 2,722
SolarAPP+PV and ESS 1,392 942
SolarAPP+PV 685 235
Solar Hot Water System 1,013 563
For additional electrification fees that are not subject to state caps, the Finance Committee expressed their unanimous support for rebating the ‘base’ fee amount using utilities non-rate revenues. These additional discretionary subsidies are listed below in Table 3. This effectively Item 7
Item 7 Staff Report
Item 7: Staff Report Pg. 3 Packet Pg. 44 of 103
represents a discount of $318 on each of the permits in this category. After the rebate is applied, permit fees range between $562 and $1,771 for these activities.
Table 3. Additional Discretionary Electrification Subsidies –Committee’s Recommended NonRate Revenue Rebates ($) Fee Name
FY 2027 Fee
(Permit and Base Fee) Rebate
Electrical Service - New or Replacement: Less than 400 amp $967 $318 HVAC Systems (i.e., Air Conditioners, Heat Pumps, Air Handling Unit):
Multi-Family / Commercial (Groups of 5): Direct replacements 1,355 318
HVAC Systems (i.e., Air Conditioners, Heat Pumps, Air Handling Unit):
Multi-Family / Commercial (Groups of 5): New - with curb 2,089 318
HVAC Systems (i.e., Air Conditioners, Heat Pumps, Air Handling Unit):
Multi-Family / Commercial (Groups of 5): New - without curb 1,737 318
HVAC Systems (i.e., Air Conditioners, Heat Pumps, Air Handling Unit):
Single-Family
880 318
FISCAL/RESOURCE IMPACT
The fiscal impacts of these fee levels and rebates were factored into the FY 2027 Adopted budget. This item enables implementation of those adopted levels. For fees listed in Tables 2 and 3 above, the effective difference between full cost-recovery and the state cap will be paid by non-rate revenues, such as Renewable Energy Certificate (REC) exchange program revenues, in the Utilities department enterprise funds. Administratively the Utilities enterprise funds will transfer the offsetting revenue to the Development Services department (general fund).
To develop a funding plan for FY 2028 and beyond, staff will return to the City Council within FY 2027 to review the Electric Supply Portfolio Carbon Neutral Plan and the potential use and regulatory requirements for revenues derived from the Renewable Energy Certificate Exchange program, Electric Public Benefit Fund, and the Electric Cap and Invest (C&I) program. This review will include a discussion on existing customer incentive levels for HVAC, EV charging, and other electrification related work, including consideration of financial offsets to lower the cost of related work such as panel upgrades, electric utility service upgrades, and building permit fees.
STAKEHOLDER ENGAGEMENT
Extensive stakeholder engagement was conducted as part of the March 4, 2025, conversation with the Finance Committee about the Planning and Development Services Fee Study. There were a number of meetings with internal stakeholders, including the Utilities Department and Planning and Development Services to align on approaches for incorporating Finance Committee’s Spring 2025 feedback. No additional external stakeholder engagement was conducted for this report since it aligns FY 2027 Municipal Fees with previous feedback and intent from Finance Committee.
Item 7
Item 7 Staff Report
Item 7: Staff Report Pg. 4 Packet Pg. 45 of 103
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by the California Environmental Quality Act (CEQA) because the proposed amendment to the 2027 Municipal Fee Schedule is a government funding mechanism which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).
ATTACHMENTS
Attachment A: Draft Ordinance
APPROVED BY:
Jonathan Lait, Planning and Development Services Director Item 7
Item 7 Staff Report
Item 7: Staff Report Pg. 5 Packet Pg. 46 of 103
***NOT YET APPROVED***
1 0160209_20260922_ay16
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Making Findings Regarding the Reasonable Cost to Issue Permits for Solar Energy Systems and Amending the Fiscal Year 2027 Municipal Fee Schedule to Update Fees for Service in the Planning and Development Services Department
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 June 15, 2026, the City Council adopted the Fiscal Year 2027 Municipal Fee Schedule, reflecting updated fees for the Planning and Development Services Department.
B. The Planning and Development Services Department has implemented a streamlined permitting process for Electric Vehicle Charging Stations, which will result in lower costs for permit applicants. in the Adopted FY 2027 Municipal Fee Schedule.
C. The City now desires to amend the FY 2027 Municipal Fee Schedule to reduce the fees for Electric Vehicle Charging Stations.
D. California Government Code Section 66015 sets forth a limit on the permit fees a city may charge for residential and commercial photovoltaic systems unless the city makes a written finding, as part of a resolution or ordinance, providing substantial evidence of the reasonable cost to issue the permit.
E. In 2025, the City conducted an extensive fee study that determined the time, effort, and resources necessary to issue various permits, including permits for residential and commercial solar energy systems.
F. The final fee study, titled Report on Development Cost of Services (User Fee) Study and dated February 2025, describes the methodology and calculations performed to determine fees for each permit type. The final fee study is available for review with the Planning and Development Services Department and is incorporated into these findings as if set forth fully herein.
G. Fees for residential and commercial solar energy systems, set forth in the adopted FY2026-2027 Municipal Fee Schedule, are based on the final fee study, but were not enforceable because the adopting ordinance inadvertently omitted supporting findings.
H. Depending on the nature of the project, multiple fees stated in the Municipal Fee Schedule may be applied to fully represent the reasonable cost of issuing a permit.
I. In addition to these permit fees, the City has adopted the California Building Codes, with local amendments, as well as local permitting procedures to streamline the submittal Item 7
Attachment A - Draft
Ordinance
Item 7: Staff Report Pg. 6 Packet Pg. 47 of 103
***NOT YET APPROVED***
2 0160209_20260922_ay16
and approval of permits for solar energy systems pursuant to the practices and policies in state guidelines, the checklists and standard plans in the California Solar Permitting Guidebook, and model ordinances.
J. The final fee study included only administrative approval procedures for solar energy systems, reducing costs in accordance with Government Code Section 65850.5.
K. The fee amounts supported by the final fee study are necessary to maintain appropriate staffing levels, which ensure a quick and streamlined approval process.
L. In accordance with the provisions of Chapter 8 of Division 1, of Title 7, commencing with Section 66016 of the Government Code, as applicable, the Council did on October 19, 2026, hold an open and public meeting on the proposed amendments to the Municipal Fee Schedule, after publication of notice and after availability of the data supporting the amendments was made available to the public at least 10 days prior to the hearing.
M. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. The amount of this fee does not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art.
XIII C, Section l(e)(2), such fees are not a tax.
N. The amount of new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer's burden on, or benefits received from, the governmental activity.
SECTION 2. The Council of the City of Palo Alto amends the Fiscal Year 2026-2027 Municipal Fee Schedule by adopting service fees for the Planning and Development Services Department as set forth in Exhibit “A” and incorporated here by reference to reflect its interest in encouraging electrification efforts and day care uses.
SECTION 3. The Council finds that this ordinance is not a “project” under CEQA because it has no potential for resulting in either a direct or reasonably foreseeable indirect change in the environment.
//
//
//
//
//
//
Item 7
Attachment A - Draft
Ordinance
Item 7: Staff Report Pg. 7 Packet Pg. 48 of 103
***NOT YET APPROVED***
3 0160209_20260922_ay16
SECTION 4. This ordinance shall be effective upon adoption as an amendment to the City’s Fiscal Year 2027 budget. Pursuant to Government Code Section 66017, all Planning and Development Services Department fees relating to a “development project,” as defined in Government Code Section 66000, shall become effective no sooner than sixty (60) days from the date of adoption.
INTRODUCED and PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Assistant City Attorney City Manager
____________________________
Director of Planning and
Development Services
Item 7
Attachment A - Draft
Ordinance
Item 7: Staff Report Pg. 8 Packet Pg. 49 of 103
***NOT YET APPROVED***
4 0160209_20260922_ay16
Exhibit A
Fee Category and Fee Title FY 2027 Cost
Electrical Permits - Electrical Vehicle Charging
Stations
Multi-Family/Commercial (Level 1 and 2)
$3,492 per permit for 1 - 6 stations
Multi-Family/Commercial (Level 1 and 2)
$1,084 per permit for each addl. 6 stations
Multi-Family/Commercial (Level 3 and 4)
$3,981 per permit for 1 - 6 stations
Multi-Family/Commercial (Level 3 and 4)
$1,084 per permit for each addl. 6 stations
Residential - Single-Family, Duplex, and Individual
Condiminium Units (Level 1 and 2)
$322 per station
Residential - Single-Family, Duplex, and Individual
Condiminium Units (Level 3)
$512 per station
Item 7
Attachment A - Draft
Ordinance
Item 7: Staff Report Pg. 9 Packet Pg. 50 of 103
CITY COUNCIL
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: October 26, 2026
Report #: 2605-6362
TITLE
Adoption of an Ordinance Amending the Palo Alto Municipal Code (PAMC) Section 18.40.140 (Stream Corridor Protection). CEQA Status: Exempt pursuant to CEQA Guidelines Section 15308 (Actions for Protection of the Environment).
RECOMMENDATION
Staff recommend the City Council adopt the Draft Ordinance updating Palo Alto Municipal Code (PAMC) Section 18.40.140 (Stream Corridor Protection) of Title 18 (Zoning).
EXECUTIVE SUMMARY
The proposed draft ordinance updates Palo Alto’s existing Stream Corridor Protection Ordinance to align local regulations with the 2030 Comprehensive Plan's creek protection policies. The updated ordinance expands the City’s regulatory intent beyond basic bank safety and stormwater pollution control to actively emphasize the preservation and strengthening of vital water and riparian resources. To balance these environmental goals with local property constraints, the ordinance establishes a new “Streamside Setback” across three distinct subareas of the City. While the environmentally sensitive Hillside and Baylands Areas carry an expanded 150-foot setback, properties zoned Real Estate (RE) within the Hillside Area, such as the Esther Clark Park and Palo Alto Hills neighborhoods, are permitted to utilize the shorter 25- foot Central Area setback to avoid severe, unbuildable development restrictions on smaller lots containing ephemeral streams.
The draft ordinance also restructures and expands the Slope Stability Protection Area regulations, increasing the standard protective buffer from 20 feet to 25 feet in the Hillside and Baylands Areas to secure shifting stream banks against erosion and landslides. Heavily influenced by community feedback regarding trespassing, theft, and fire hazards, the PTC recommended a partial exemption for the Edgewood Drive neighborhood to permit private fences and ornamental landscaping within the slope stability zone without a mandatory fivefoot setback or a costly administrative exception process. However, a key item for City Council consideration involves a policy divergence between staff and the PTC: staff recommends the Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 1 Packet Pg. 51 of 103
Council consider maintaining the standard Slope Stability Protection Area requirements for the Edgewood neighborhood without modification. Staff maintains that routing these proposals through the Public Works Director is important to ensure critical project coordination with regional water agencies, guarantee maintenance access, and preserve bank stability.
Extensive community engagement throughout this process revealed a divide between environmental organizations and some property owners advocating for robust riparian protections and other private property owners concerned about diminished property values, restrictions on use of their land and administrative burdens. Staff and the PTC actively responded to these concerns across multiple iterations of the ordinance by expanding the list of permitted exemptions to include State-mandated ADUs, properties directly abutting floodwalls, and properties separated from streams by existing concrete infrastructure like alleys or paved trails. Using objective land-use definitions and establishing a clear, simplified exception process, the final draft ordinance balances regional environmental stewardship with localized neighborhood safety, liability, and property rights.
BACKGROUND
City Council Priority
Since 2024, the City Council has included as a Council priority, direction to update the existing Stream Corridor Protection Ordinance consistent with the Comprehensive Plan policies related to creek protection.
Comprehensive Plan
The 2030 Comprehensive Plan (Comprehensive Plan), adopted in November 2017, includes several policies related to creek protection. The Comprehensive Plan recognizes the City’s creeks and riparian areas as “valuable resources for natural habitat, connectivity, community design, and flood control” that require protection and enhancement. As part of this recognition, the City’s Stream Corridor Protection Ordinance was identified for an update to reflect the importance of these resources.1
Policy N3.3 of the Comprehensive Plan calls for the protection of the City’s creeks from the impacts of future buildings, structures, impervious surfaces and ornamental landscaping and preservation of the City’s creeks’ function as habitat connectivity corridors by establishing a range of setback requirements that account for existing creek conditions, land use characteristics, property ownership and flood control potential. Policy N3.3 contains three programs that refer to the potential ordinance update:
1 The Comprehensive Plan uses the term “creek” rather than “stream,” except when discussing the update of the Stream Corridor Protection Ordinance. However, given that the update of the Stream Corridor Protection Ordinance is the subject of this undertaking, the term “stream” will be used within the context of this report and the ordinance.
Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 2 Packet Pg. 52 of 103
• Program N3.3.1 calls for the exploration of an ordinance update that expands setbacks along creeks to 150 feet for properties west of Foothill Expressway. The Program also references establishing design recommendations for development of sites within the setback, exemption opportunities for single-family properties, and appropriate setbacks and conservation measures for undeveloped parcels.
• Program N3.3.2 calls for consideration of appropriate setbacks east of Foothill Expressway, given the varied conditions in that area. A key consideration is opportunity for an enhanced riparian setback along urban creeks as properties are redeveloped. • Program N3.3.3 calls for the minimization of impacts in all creeks by limiting recreational trails to one side of natural riparian corridors, and by careful lighting design near riparian corridors.
Existing Stream Corridor Protection Ordinance
The existing Stream Corridor Protection Ordinance, Palo Alto Municipal Code (PAMC) Section
18.40.140 (Attachment C), requires streamside review for properties abutting a stream or within 50 feet of the top of a stream bank. This applies to development within all zoning districts, with the exception of ministerial projects in the R-1, R-2, and RMD districts (i.e.
Accessory Dwelling Units). In addition to the streamside review area, the existing ordinance includes requirements for the “slope stability protection area,” which is measured 20 feet landward of top of bank or to a point measured at a 1:2 (rise (vertical): run (horizontal)) ratio landward from the toe of bank, whichever is greater. Within the slope stability protection area, all structures are prohibited, including decks, swimming pools, spas, hot tubs, and parking lots.
The slope stability area is intended to maintain the structural integrity of the bank, and functions like a setback because it does not allow any structures. Upon adoption of the proposed ordinance, the existing Stream Corridor Protection provisions of PAMC Section
19.40.140 will be replaced.
Regulatory Framework
Numerous Federal, State, and regional regulations govern the protection of streams and their corridors. These include the Clean Water Act, which requires permits for work impacting U.S.
Waters, and the Porter-Cologne Act, regulating waste discharge. The California Department of Fish and Wildlife also regulates streambed alteration. These regulations provide a framework for the City of Palo Alto to manage stream-side property in accordance with community goals, while adhering to Federal and State guidelines. The City has also endorsed the Santa Clara Valley Water Resources Protection Collaborative Guidelines, which may inform updates to local stream protection ordinances. In some areas Santa Clara Valley Water District has easements over private property that is adjacent to or includes a stream within their jurisdiction. Valley Water’s permitting through the Water Resources Protection Ordinance does not supersede or override any other approvals/permitting that any other agency/entity may have over a property, including local, State, and Federal agencies.
Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 3 Packet Pg. 53 of 103
Planning and Transportation Commission Hearings
On May 13, 2026, the PTC unanimously recommended forwarding the draft ordinance for City Council consideration with several modifications intended to balance riparian protection with residents' security and property rights. Based on resident testimony regarding trespassing and fire hazards, the PTC prioritized immediate safety concerns perceived by Edgewood neighbors by recommending removal of the mandatory five-foot fence gap and slope stability requirements in that area. Additionally, to save homeowners in certain hillside neighborhoods the cost of hiring a biologist, they recommended utilizing the reduced Central Area setback of 25 feet for properties in the Residential Estate (RE) zoned hillside area. Finally, the PTC requested technical refinements, including replacing potentially confusing terminology (e.g. “urban” and “rural,” which have technical meanings under CEQA) with new, clearly-defined terms and clarifying flood wall specifications, while explicitly protecting homeowners’ rights to plant non-invasive ornamental landscaping within their fenced yards.
The motion made by the PTC at the end of their discussion, which is slightly reworded here for better organization and clarity, is:
Vice Chair Ji moved, seconded by Chair Chang, to forward staff recommendations with the following modifications (approved 6-0, Commissioner Hechtman absent):
• Rename subareas “Urbanized Area” and “Open Space and Rural Area” to avoid confusions with CEQA terms and other terms commonly used. • Revise the definitions section to:
o Update the “Floodwall” definition to include the phrase “extend above the top of bank”
o Update the “Floodwall” definition to replace “behind” with “directly abutting” o Remove definitions that are not used in the final draft ordinance (including but not limited to ephemeral streams, channelized streams)
• Implement Alternative 4 (defining the reduced setback area within the RE zone district) • Revise the exemption in Section 18.40.140 (d)(6) to apply to the Urbanized Area only • Allow the expanded exemption for the Edgewood neighborhood, which includes:
o Allowing ornamental landscaping in the slope stability protection area o Allowing fences within the slope stability protection area, without minimum distance or the exception process that requires Public Works Director’s approval In addition to the May 13, 2026, hearing, staff had numerous hearings with the PTC and also informed ARB about this effort. More details on the previous PTC hearings and summary of discussions are included in Attachment B.
ANALYSIS
This section describes the draft ordinance, highlights how it differs from existing regulations, and points out additional discussion items staff would like the City Council to consider before Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 4 Packet Pg. 54 of 103
adoption. The draft ordinance (Attachment A) reflects the motion made by the PTC on May 13, 2026:
• Purpose. The intent of the ordinance has been expanded beyond bank safety and stormwater pollution minimization to emphasize preserving and strengthening riparian resources. This aligns with Comprehensive Plan policies on creek protection. • Streamside Setback. Compared to existing regulations, the draft ordinance introduces a "Streamside Setback" to create a larger buffer between banks and buildings. It divides the City into three subareas divided by Foothill Expressway and Highway 101 (as shown in Attachment C), applying tailored setback distances appropriate for each area's conditions:
Subarea Streamside Setback
Central Area
Area between Foothill Expressway and
Highway 101
25 feet or 1:2 (rise:run) measured from
top of bank, whichever is greater
Hillside Area**
Area west of Foothill Expressway
150 feet or 1:2 (rise:run) measured from
top of bank, whichever is greater
Baylands Area
Area east of Highway 101
150 feet or 1:2 (rise:run) measured from
top of bank, whichever is greater
**Note: Within the Hillside Area, properties zoned Real Estate (RE) shall use the shorter setback from the Central Area.
The 150-foot setback is consistent with the buffer distance stated in the Comprehensive Plan. Both the Hillside and Baylands Areas are environmentally sensitive; the vast green spaces in the hills and the San Francisco Bay abutting the Baylands serve as critical grounds for natural resources, supporting water quality, vegetation, and wildlife.
Most Hillside Area properties are large parcels with base zoning of Public Facilities (PF) or Open Space (OS). However, two established residential neighborhoods in this area would be more impacted by a standard 150-foot setback. Some of these properties feature multiple smaller, ephemeral streams (which remain dry for several years until heavy rains arrive) that would severely restrict buildable area and turn existing buildings into legal, nonconforming structures. To ameliorate this potential burden, the draft ordinance allows Hillside Area properties zoned Real Estate (RE) to utilize the shorter Central Area setback. This exception captures the entire Esther Clark Park neighborhood and nearly all of the Palo Alto Hills neighborhood.
• Slope Stability Protection Area. Existing requirements under the current Stream Corridor Protection Ordinance carry over but have been reorganized to fit the format of Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 5 Packet Pg. 55 of 103
the draft ordinance. In general, no structures are allowed and only native vegetation may be planted. Any building encroaching into this area requires an exception and approval from the Public Works Director prior to installing any structures, including fences. An exception is only granted if the applicant provides a geotechnical slope stability analysis fulfilling the requirements of Section 18.40.140(h)(2) of the Draft Ordinance, including demonstration that the proposal doesn’t impede maintenance and repair of the stream. While this area is typically identified by measuring either 20 feet or a 1:2 (rise:run) ratio from the top of the bank, the flat measurement was expanded to 25 feet for the Hillside and Baylands Areas to provide additional protection where it is needed most. These requirements also apply to projects otherwise exempt from the draft ordinance, with the sole exception of fences within the single-family neighborhood along Edgewood Drive.
• Exemptions. The list of exemptions has expanded under the draft ordinance. While carrying over existing exemptions (interior construction, certain retaining walls, earthwork, and utility service laterals), it now includes:
o Accessory Dwelling Units (ADUs): ADUs and Junior ADUs are governed by PAMC Chapter 18.09 and directly implement State law.
o Properties Directly Abutting Floodwalls: Added because the PTC reasoned that once floodwall structures are installed, the riparian habitat value drops significantly, leaving little to protect or restore.
o Single-Family Homes Adjacent to San Francisquito Creek and Fronting on Edgewood Drive: Added in response to community feedback. Residents have asserted that the updated regulations would otherwise cause significant impacts and safety concerns due to neighborhood proximity to the creek. While all exempt projects remain subject to Slope Stability Protection Area requirements to ensure bank stability in the Draft Ordinance, the PTC recommended allowing a partial exemption for fences on the properties on Edgewood Drive to help residents manage reported concerns with encampments, theft, and trespassing occurring between the floodwalls and private property lines. The PTC also recommended that properties on Edgewood Drive be permitted to install new ornamental landscaping in the Slope Stability Protection Area. o Properties Separated from Streams by Streets, Alleys, Trails, or Service Roads:
The existing ordinance exempts properties separated from a stream by a public street. The draft ordinance clarifies and expands this to include private streets, alleys, paved public trails, and service roads, but limits the exemption to the Central Area. The PTC determined that once concrete infrastructure is introduced, it creates the same separating effect as a public street. This could be expanded to apply City-wide by removing “located in the Central Area” from this exemption, as some public comments have suggested.
Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 6 Packet Pg. 56 of 103
• Exceptions. Early feedback indicated the draft ordinance should provide flexibility, especially regarding the 150-foot setback requirement. This mechanism allows applicants to request an exception without going through the onerous and lengthy Variance process. When tied to a development application, the exception request can be integrated into the project description. However, applicants must meet specific findings based on review by a qualified biologist to ensure the exception will not exacerbate stream or riparian conditions and that appropriate, feasible mitigations are provided.
• Fences. The draft ordinance allows fences within the Streamside Setback area, provided they comply with existing requirements in PAMC Chapter 16.24. Within the Hillside Area, fences inside this setback are strictly limited to wildlife-friendly designs; however, standard fences complying with PAMC Chapter 16.24 may still be installed on the property outside of the Streamside Setback. Because fences are classified as structures, they are prohibited within the Slope Stability Protection Area unless an exception is granted by the Public Works Director, with the sole exception of properties within the Edgewood Drive neighborhood (as detailed in the Exemptions section above).
Additional Consideration: Slope Stability Protection Area On May 13, 2026, the PTC recommended exempting the Edgewood neighborhood from the Slope Stability Protection Area exception process, which would eliminate both review by the Public Works Director and the mandatory five-foot fence setback from the top of the bank.
Throughout the public process, neighborhood residents testified that the gap between existing property fences and floodwalls creates safety risks, including trespassing, theft, and unhoused encampments. While the draft ordinance reflects the PTC recommendation to exempt this neighborhood, staff recommends the City Council consider retaining the existing Streamside Setback requirements. With this approach, all properties, including properties fronting Edgewood Drive, would be required to obtain an exception from the ordinance to place a structure (i.e.; wall or fence) within the Slope Stability Protection Area and maintain the fivefoot setback from the top of bank.
To implement this policy direction, the City Council would need to remove the following language from the Draft Ordinance (Exemption 8):
“These properties shall be allowed to install fences and ornamental landscaping within the Slope Stability Protection Area without seeking an exception under Section
18.40.140(h)(2).”
Making this modification to the Draft Ordinance and retaining the Slope Stability Protection Area requirements for Edgewood Drive with the exception process as previously described, serves several critical safety and administrative functions. By routing development proposals Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 7 Packet Pg. 57 of 103
through the Public Works Director for review, the City ensures essential project coordination with key regional partners, specifically the Santa Clara Valley Water District and the San Francisquito Creek Joint Powers Authority and any other agency that may have jurisdictions over the property or easement within the property. This collaborative oversight guarantees that private improvements do not obstruct agency operations or conflict with upcoming environmental initiatives.
From a structural standpoint, preserving the Slope Stability Protection Area is vital to safeguard the natural stream bank from the load of new construction, reducing the risk of erosion, slope failure, and the subsequent need for intrusive concrete retaining walls. This setback also secures vital physical access for maintenance crews to service and repair the stream corridor.
Furthermore, these regulations align directly with the Santa Clara Valley Water Resources Protection Collaborative’s Guidelines and Standards, which treat the Slope Stability Protection Area as a critical safety factor against landslides, recognizing that banks naturally shift over time and require a buffer to prevent direct threats to private property.
Consequently, to protect both public infrastructure and private property, staff recommends retaining the existing Slope Stability Protection Area requirements and its current enforcement mechanisms in their entirety.
FISCAL/RESOURCE IMPACT
The implementation of the proposed ordinance is not anticipated to have any direct fiscal impact on the City budget.
STAKEHOLDER ENGAGEMENT
Two additional comment letters received since the last public hearing with PTC on May 13, 2026, are included in Attachment E. However, throughout the entire process, staff received approximately 50 public comment letters provided to PTC. Public feedback reveals a divide regarding the proposed stream setbacks, focusing primarily on environmental protection, property impacts, and regulatory justification. Environmental organizations like the Santa Clara Valley Audubon Society, the Midpeninsula Regional Open Space District, and the San Francisco Bay Regional Water Quality Control Board advocate for robust riparian protections to safeguard water quality, restore creeks, and protect wildlife habitat. Conversely, residents and property owners, particularly in the Esther Clark Park neighborhood, strongly opposed the original proposal to expand the setbacks to 40 or 150 feet, arguing that the local waterways are merely ephemeral, highly modified runoff channels, making the expansion scientifically unjustified and inconsistent with the City's urban planning. Homeowners express concerns that these expanded buffers will severely restrict backyard use, reduce buildable lot areas for garages and ADUs, lower property values by 15% to 25%, and conflict with State housing goals.
Furthermore, the community raised significant safety, liability, and fencing concerns, while criticizing the proposed exception process as a costly administrative burden on homeowners Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 8 Packet Pg. 58 of 103
and demanding that any new rules exempt existing structures and landscaping. Staff addressed these community concerns across multiple versions of the draft ordinance and provided clear justifications for any feedback that could not be incorporated.
In addition, staff have engaged the community and other stakeholders by holding community workshops and sessions, conducting a neighborhood meeting, walking and driving around the residential neighborhoods, driving around the Edgewood neighborhood, holding individual meetings when requested by residents, engaging stakeholders through public hearings, and collecting their feedback via email. Their feedback has been incorporated directly and indirectly throughout the update process and has solidified staff's recommendation. A comprehensive summary of the community engagement for this effort is included in Attachment D, it should be noted that while the individually requested meetings’ dates aren’t listed, they have continued to occur through most of 2026.
POLICY IMPLICATIONS
The updated Stream Corridor Protection Ordinance implements Comprehensive Plan Policy N-3.3 and its associated programs, as discussed above. Policy N-3.3 aims to mitigate development impacts on creeks by establishing setback requirements that account for varying creek conditions.
While the Stream Corridor Protection Ordinance Update does not directly mandate energy or emissions reductions, it strongly contributes to the Sustainability/Climate Action (S/CAP) Plan goal of restoring and enhancing the resilience and biodiversity of the natural environment throughout the City. By restricting synthetic ground covers like artificial turf, maximizing the retention of existing woody riparian vegetation, and requiring the replacement of removed trees, the ordinance preserves critical habitat for aquatic and nocturnal wildlife species. In addition, by restricting development in flood-prone stream corridors, the Ordinance enhances the community’s resilience against climate-induced flooding and severe storm events.
As part of the implementation of Program 3.2 (Monitor Constraints to Housing) of the Housing Element, the City needs to examine in staff reports for initiatives proposing new regulations.
This analysis should detail how the regulations may impact housing production, if at all, and recommend solutions to address any adverse impacts. The update to the Stream Corridor Protection Ordinance is not anticipated to have a significant impact on housing production. The proposed ordinance does not limit or restrict floor area, density, height or other development standards that would adversely impact housing development. While new housing projects may experience some cost increases and design restrictions due to the Ordinance, these are expected to be minimal.
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 CEQA Guidelines Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 9 Packet Pg. 59 of 103
Section 15308, which includes actions by regulatory agencies for the protection of the environment.
ATTACHMENTS
Attachment A: Draft Ordinance
Attachment B: PTC Discussion Summary
Attachment C: Map of Subareas
Attachment D: Community Engagement Summary
Attachment E: Public Comment
APPROVED BY: Jonathan Lait, Planning and Development Services Director Item 8
Item 8 Staff Report
Item 8: Staff Report Pg. 10 Packet Pg. 60 of 103
***Not Yet Adopted***
1 0160210_20260922_ay16
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Repealing and Replacing Section 18.40.140 (Stream Corridor Protection and Review) of the Palo Alto Municipal Code
SECTION 1. Findings and Declarations. The City Council of the City of Palo Alto finds and declares as follows:
A. On November 13, 2017, the City Council adopted the 2030 Comprehensive Plan, which recognizes the value of its creeks and riparian areas for habitat, connectivity, design, and flood control. Specifically, Policy N3.3 aims to mitigate development impacts on creeks by establishing setback requirements and preserving their function as habitat corridors.
B. On March 5, 2024, a virtual Community Information Session was conducted to inform residents about proposed updates to the stream protection ordinance and to receive feedback from the community.
C. On April 4, 2024, an informational report was prepared to inform the Architectural Review Board about the ordinance update effort.
D. On August 14, 2024, the Planning and TransportaƟon Commission conducted a study session and provided feedback and direcƟon in preparing for the draŌ ordinance.
E. On October 9, 2024, the Planning and TransportaƟon Commission reviewed a draŌ ordinance and provided comments.
F. On February 6, 2025, a hybrid Community Workshop was conducted to solicit community feedback on the draŌ ordinance.
G. On August 27, 2025, the Planning and TransportaƟon Commission reviewed a draŌ ordinance and provided feedback but conƟnued the discussion to a date uncertain.
H. On May 13, 2026, the Planning and TransportaƟon Commission recommended that the City Council adopt the draŌ ordinance.
I. The updated Stream Corridor ProtecƟon Ordinance intends to preserve and strengthen riparian resources, protect improvements from damage caused by potenƟal stream flooding and bank erosion, and minimize storm water polluƟon.
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 11 Packet Pg. 61 of 103
***Not Yet Adopted***
2 0160210_20260922_ay16
J. The updated Stream Corridor ProtecƟon Ordinance provides a balance between development and conservaƟon by establishing varying streamside setback distances for different areas of the City.
SECTION 2. Section 18.40.140 (Stream Corridor Protection and Review) of Chapter
18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the Palo Alto Municipal Code is repealed in its entirety and replaced as follows:
18.40.140 Stream Corridor Protection and Review
(a) Purpose. The purpose of the natural resources protection measures specified below is to preserve and strengthen water and riparian resources, protect improvements from damage caused by potential stream flooding and bank erosion, and minimize storm water pollution. (b) Definitions. Whenever the following terms are used in this chapter, they shall have the meaning established by this section:
(1) “Bank” means any embankment, dike, levee, wall or similar feature of natural or manmade origin which adjoins or parallels any watercourse, and which has as a function the confinement of the water of said watercourse.
(2) “Baylands Area” means the area within the City Limits that is east of Highway 101. (3) “Central Area” means the area within the City Limits that is between Foothill Expressway and Highway 101.
(4) “Fence” means an artificially constructed barrier or wall of any material or combination of materials erected to physically separate properties, provide privacy, or provide security or confinement.
(5) “Fence, Wildlife-Friendly” means a fence that allows for safe passage of wildlife over or under the fence and is visible especially to hooved animals and birds, meeting all of the following specifications:
(A) Distance from ground to top of fence shall not exceed 40 inches (total fence height);
(B) The distance from the ground to the bottom of the fence shall be at least 18 inches;
(C) Fence posts shall be spaced at intervals of no less than 8 feet; (D) Fences shall be constructed with a solid top rail (such as wooden or vinyl plank or metal bar) for visibility and to prevent entanglement; and (E) Fences shall have at least one gate which can be opened in the event an animal becomes trapped and needs to be released.
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 12 Packet Pg. 62 of 103
***Not Yet Adopted***
3 0160210_20260922_ay16
(6) “Floodwall” means an artificial barrier that extends above the top of bank, usually made of concrete, that is designed to increase the capacity of a creek to contain water during high flow events and prevent flooding.
(7) “Hillside Area” means “the area within the City Limits that is west of Foothill Expressway.
(8) “Qualified Biologist” means a professional who possesses at minimum a relevant college bachelor’s degree and the appropriate education, training, and at least two years of relevant work experience to expertly evaluate project impacts on living organisms and biological resources. This individual must have demonstrated regional expertise and the practical capacity to conduct biological surveys, monitor project activities, provide environmental education to construction personnel, and prepare regulatory compliance documents like CEQA reports.
(9) “Riparian Vegetation” means native plant life that occurs in and/or adjacent to watercourses, typically growing on or in the vicinity of the banks, in soils that exhibit wetness characteristics during part of the growing season. This vegetation is structurally or floristically distinct from nearby, non-streamside plant communities and relies on riparian water sources for soil moisture levels greater than what is available through local precipitation alone.
(10) “Riparian Vegetation, Woody” means vegetation that are distinguished from herbaceous vegetation by the presence of “tough, fibrous stems and branches covered with bark,” such as trees, shrubs, and vines.
(11) “Service Road” means roads that limit general public access, primarily designed and used to provide personnel and equipment from public agencies like Santa Clara Valley Water District with access to their facilities for operation, maintenance, and repair. (12) “Slope Stability Protection Area" means the area where development is generally prohibited, to preserve riparian vegetation, strengthen the streamside ecosystem, and protect against bank instability. The slope stability protection area shall extend to a point measured at the rise over run ratio of 1:2 landward from the toe of the bank, but no less than the following distance from the top of the bank:
(A) 20 feet for Central Area, or
(B) 25 feet for Baylands Area and Hillside Areas.
(13) “Stream” means any number of natural watercourses flowing from the hill areas to San Francisco Bay in which water flows at least periodically or intermittently through a bed or channel having banks; usually characterized by a distinct channel and a band of dense vegetation along the banks. This may include watercourses having a surface or subsurface flow that supports or has supported riparian vegetation, fish and/or aquatic life.
The presence of a stream is determined by one or more of the following criteria:
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 13 Packet Pg. 63 of 103
***Not Yet Adopted***
4 0160210_20260922_ay16
(A) As designated by the City of Palo Alto as shown on maps maintained by the City; (B) As designated by a solid line or dash and three dots symbol on the largest scale of the USGS maps most recently published or any replacement to that symbol; (C) As designated by the Santa Clara Valley Water District as shown on maps maintained by the District;
(D) As designated on the most recent maps maintained by Santa Clara County; (E) As determined by a survey of the property by a licensed land surveyor; or (F) On a site plan which may be required by a permitting agency using the Criteria to Verify or Identify a Watercourse as a Stream set forth in the Santa Clara Valley Water Resources Protection Collaborative User Manual Guidelines and Standards for Land Uses Near Streams, or criteria set forth by the permitting agencies. (14) “Stream, Channelized” means a stream or portion of a stream whose course has been intentionally altered, usually straightened or enlarged for the purposes of storm runoff control, flood control, or ease of navigation. Alterations may include widening, deepening, straightening, or lining the channel with materials like concrete. (15) “Streamside Setback” means the area measured from top of bank in which the siting of structures, impervious surfaces, outdoor activity areas, and landscaped areas is regulated by this Section.
(16) “Toe of Bank” (Figures 1 and 2) means the point in a channel where the slope of the bank meets the streambed.
(17) “Top of Bank” (Figures 1 and 2) means a stream channel boundary, which is determined as follows:
(A) "Stream with Defined Bank.” Top of bank is the line connecting all the points where there is substantial grade change between the stream bank and the adjacent land, as determined by a qualified biologist or otherwise determined by the Director. For channelized streams, where a fully engineered channel exists, the top of the bank is defined as the highest edge of that channel. (B) “Stream without Defined Bank.” Where there is no defined bank and the slope from the streambed is less than the rise over run ratio of 1:2, top of bank is considered the one-hundred-year water surface elevation calculated by a qualified hydrologist or hydraulics engineer.
//
//
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 14 Packet Pg. 64 of 103
***Not Yet Adopted***
5 0160210_20260922_ay16
FIGURE 1: TOP OF BANK, STREAM WITH DEFINED BANK
FIGURE 2: TOP OF BANK, STREAM WITHOUT DEFINED BANK
(18) “Wall, Retaining” means a structural wall designed to hold in place a mass of soil so that it can be retained at different levels on each side of the wall, and/or restrain a slope.
(c) Applicability. The following types of developments are subject to this Section:
(1) Development in all zoning districts except the R-1, R-2, and RMD districts. (2) Development in the R-1, R-2, or RMD zoning districts that:
(A) Requires discretionary planning approval (including, but not limited to Single Family Individual Review, Home Improvement Exceptions, and Conditional Use Permits); or (B) Proposes to locate closer to a stream than the existing condition.
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 15 Packet Pg. 65 of 103
***Not Yet Adopted***
6 0160210_20260922_ay16
(d) Exemptions. Notwithstanding subsection (b), the following projects are exempt from this Section, except that they shall remain subject to the slope stability protection area requirements in subsection (g):
(1) Interior construction or alterations;
(2) Retaining walls less than three feet in height that are located outside of the Slope Stability Protection Area;
(3) Less than 3 cubic yards of earthwork associated with: (i) landscaping with riparian vegetation that is native to the region or (ii) remedial stream bank stability work deemed necessary by the Director of Public Works;
(4) Replacement of utility service laterals where location outside the protected areas is not available;
(5) Accessory Dwelling Units (ADUs) or Junior Accessory Dwelling Units (JADUs) pursuant to Chapter 18.09. ADUs and JADUs may be constructed within the Slope Stability Protection Area without seeking an exception under Section 18.40.140(h)(2); (6) Projects located in the Central Area on properties separated from the stream by a public or private street, alley, paved public trail, or paved service road; (7) Any properties that are directly abutting floodwalls that were installed or maintained by regional agencies like the Santa Clara Valley Water District, or; (8) Any single-family properties adjacent to San Francisquito Creek and fronting on Edgewood Drive. These properties shall be allowed to install fences and ornamental Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 16 Packet Pg. 66 of 103
***Not Yet Adopted***
7 0160210_20260922_ay16
landscaping within the Slope Stability Protection Area without seeking an exception under Section 18.40.140(h)(2).
(e) Streamside Setback. The Streamside Setback distances are outlined in Table 1 as measured from top of bank.
Table 1: Streamside Setback
Central Area 25 feet(1)
Hillside Area(2) 150 feet(1)
Baylands Area 150 feet(1)
(1) Applicable properƟes must comply with both the streamside setback and the Slope Stability ProtecƟon Area requirements (see SecƟons 18.40.140(b) and (g)). Where the required Slope Stability ProtecƟon Area distance exceeds the streamside setback, the greater distance shall govern. (2) Within the Hillside Area, properƟes zoned RE (Real Estate) shall be allowed to apply the Streamside Setback of the Central Area.
(f) Streamside Setback Requirements. Unless otherwise required under Section 18.40.140(g), the following requirements shall be applicable within the Streamside Setback areas:
(1) Vegetation
(A) The following vegetation shall be allowed:
(i) Native riparian vegetation.
(ii) Non-riparian or non-native vegetation, provided that such species are:
(I) non-invasive;
(II) located on the structure side of any existing or future fencing (away from the stream); and
(III) irrigated in a manner that will not adversely affect mature oaks and other woody riparian vegetation within the setback area. (B) The following vegetation shall be prohibited:
(i) Invasive species
(ii) Prohibited plant material as listed in the Santa Clara Valley Water Resources Protection Collaborative's User Manual Guidelines and Standards for Land Uses Near Streams.
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 17 Packet Pg. 67 of 103
***Not Yet Adopted***
8 0160210_20260922_ay16
(iii) Other species that are deemed detrimental to the area by the City. (C) Existing Riparian Vegetation, including Woody Riparian Vegetation, shall be retained to the maximum extent possible. Replacement of Riparian Vegetation shall be required if removal was approved by the Director.
(D) For any trees removed, replacement with native riparian trees shall be required following the replacement ratio pursuant to Chapter 8.10. (E) The following requirements shall be applied to the soil area:
(i) No synthetic cover or fill shall be allowed and shall not be covered with synthetic cover or fill, including but not limited to plastic (nylon, polypropylene or polyethylene, rubber) and ground cover such as artificial turf or weed barriers.
(ii) Irrigation systems shall be designed to prevent soil erosion. (iii) For irrigation systems within outboard stream bank slope, it must be bubbler or drip-type systems and used for establishment purposes only. (2) Fences.
(A) New fences in the Streamside Setback shall conform to Chapter 16.24. (B) Within the Hillside Area and the Baylands Area, only Wildlife-Friendly Fences shall be permitted within the Streamside Setback area.
(3) Structures and improvements.
(A) No new Buildings, Structures, or similar improvements (excluding fences) shall be permitted in the Streamside Setback without an exception pursuant to Section
18.40.140(h)(1).
(B) No more than 25 percent of the Streamside Setback area or 2,500 square feet, whichever is less, of impermeable paving or surface shall be allowed. (C) Loading docks, trash enclosures, chemical storage areas, stationary noise-producing mechanical equipment, septic tanks, and leach fields shall be located a minimum of 50 feet from the top of bank.
(4) All permitted improvements shall be constructed in a manner consistent with the current version of the Santa Clara Valley Water Resources Protection Collaborative User Manual Guidelines and Standards for Land Uses Near Streams. (g) Slope Stability Protection Area Requirements. In addition to the requirements under
18.40.140(f), the following requirements shall be required within the Slope Stability Protection Area:
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 18 Packet Pg. 68 of 103
***Not Yet Adopted***
9 0160210_20260922_ay16
(1) Only native riparian vegetation shall be allowed.
(2) No new ornamental landscaping shall be permitted.
(3) No new Buildings or Structures, including but not limited to, fences; decks of any height; swimming pools, spas, sports courts, and hot tubs; and parking lots or impermeable paving, shall be allowed unless an exception is granted by the Director of Public Works pursuant to 18.40.140(h)(2).
(h) Exception Requests
(1) General Findings. Applicants requesting an exception from a required Streamside Setback must submit documentation supporting all of the following findings:
(A) A qualified biologist has prepared an environmental assessment that identifies any Riparian Vegetation, including Woody Riparian Vegetation, affected by the project, delineates habitat and work limits, and prescribes avoidance/minimization measures and, if necessary, compensatory mitigation; and
(B) There is no physically or legally feasible alternative for the proposed project configuration that completely avoids or minimizes the encroachment into the setback area.
(2) Slope Stability Protection Area Exceptions. No structures are permitted within the Slope Stability Protection area unless an exception is granted by the Director of Public Works. (A) The applicant must provide a geotechnical slope stability analysis demonstrating that maintenance and repair of the stream could be provided with the proposed development in place, and at least one of the following:
(i) The proposed development would not threaten the stability of the streambank slope; or
(ii) The proposed development includes the introduction of hardscape to maintain the streambank slope; or
(iii) The proposed development would not be at risk of damage from future bank instability or erosion.
(B) The exception shall be subject to compliance with the following requirements:
(i) New fences shall be constructed with a minimum of five feet landward from the top of bank.
(ii) Loading docks, trash enclosures, chemical storage areas, and stationary noiseproducing mechanical equipment shall be located a minimum of 50 feet from the top of bank of a stream, provided that the Director may allow equipment closer than 50 feet where site conditions or other setback requirements make strict compliance not possible; the Director shall not allow noise-producing (50 Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 19 Packet Pg. 69 of 103
***Not Yet Adopted***
10 0160210_20260922_ay16
dBA or greater) equipment closer than 50 feet unless located within an enclosure to reduce noise impacts.
(iii) All permitted improvements shall be constructed in a manner consistent with the current version of the Santa Clara Valley Water Resources Protection Collaborative User Manual Guidelines and Standards for Land Uses Near Streams.
(3) Exception Review Process. Notwithstanding Section 18.77.075(a), exception requests shall follow the review process set forth in 18.77.075. If the request is combined with another permit application that requires a greater level of review than the procedures described in Section 18.77.075, the exception request will be reviewed in accordance with the process for review of the other permit application(s). (i) Capital Improvement Programs or other Projects Performed by Public Agencies. (1) Capital Improvement Programs or any other projects performed by the City or other public agencies, including but not limited to Cities of Menlo Park or East Palo Alto, San Mateo County Flood and Sea Level Rise District, Santa Clara Valley Water District, Midpeninsula Regional Open Space District, Caltrain, and California Department of Transportation (Caltrans), shall comply with the requirements of this Section to the extent feasible. The Director may grant adjustments or exemption to any applicable requirements for such facilities if the adjustment is necessary for the efficient operation, maintenance, or safety of the facility, or to ensure public safety and security; and is consistent with the overall intent and purpose of this Section. A written request for an adjustment or exemption, including supporting documentation, shall be submitted and shall be reviewed according to the applicable review procedures in Chapter 18.77 associated with the proposed development.
(2) Routine maintenance in accordance with regulatory permits and done within the creek as part of repair or restoration in advance of or following storms events shall be exempted from the requirements of this Section.
(j) Non-complying Facilities. Any facilities, including fences, rendered legal and nonconforming or non-complying by this Section shall be subject to Chapter 18.70, which covers requirements for maintenance, repair, and replacement. (k) Lot Measurement Along Watercourses. No portion of a lot which is located within the easement lines, or top of the banks in the event such easement lines cannot be ascertained, of any natural watercourse, river, stream, creek, waterway, channel, or flood-control easement or drainage easement shall be included in the determination of lot area and lot dimensions. In the case of any such lot which is bounded, in whole or in part, by any such natural watercourse, river, stream, creek, waterway, channel, or flood-control easement or drainage easement, for those portions of the lot so bounded, all measurements and dimensions specified by this title and related to or determined from lot lines shall be measured from said easement line, or top of the bank, of such watercourse. Provided the Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 20 Packet Pg. 70 of 103
***Not Yet Adopted***
11 0160210_20260922_ay16
expansion of an existing easement over a lot adjacent to San Francisquito Creek and fronting on Edgewood Drive in favor of the Santa Clara Valley Water District (or its successor in interest) on or after January 1, 2002 shall not alter the calculation of lot area. Lot area, lot dimensions, and setbacks shall be calculated for such lots as if the post-January 1, 2002 easement had not been created. Lot area shall be defined per 18.04.030 (85). (l) Additional Provisions and Conflict Precedence. Other requirements applicable to development near streams by the Building Code, Fire Code, regulations of other regional agencies with purview, or state or federal law shall be applied in conjunction with the requirements of this section, unless these requirements necessarily conflict with the aforementioned Codes, regulations, and laws. In the event of a conflict, the standards in the applicable Codes, regulations, and laws shall prevail.
SECTION 3. 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 4. The Council finds that the Ordinance is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15308 because adoption of this ordinance is an action to protect the environment.
SECTION 5. This Ordinance shall be effective on the thirty-first date after the date of its adoption.
//
//
//
//
//
//
//
//
//
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 21 Packet Pg. 71 of 103
***Not Yet Adopted***
12 0160210_20260922_ay16
SECTION 6. This Ordinance shall not apply to any project application deemed complete prior to the effective date of this Ordinance. Any project completed pursuant to such application and rendered non-complying by this Ordinance shall be deemed a legal non-conforming structure and/or use, subject to the provisions of Palo Alto Municipal Code Chapter 18.70.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ Assistant City AƩorney City Manager
____________________________
Director of Planning and
Development Services
Item 8
Attachment A - Draft
Ordinance
Item 8: Staff Report Pg. 22 Packet Pg. 72 of 103
Stream Corridor Protection Ordinance Update Page 1 of 2 Public Hearing Summary
Board and
Commission
Hearing Type Date Feedback Summary
Planning and
Transportation
Commission
Public
Hearing
May 13,
2026
The PTC recommended forwarding the draft ordinance to the City Council for consideration with several key modifications aimed at balancing riparian protection with residents' security and property rights. Influenced heavily by resident testimony regarding trespassing and fire hazards, the Commission prioritized immediate safety by removing the mandatory five-foot fence gap and slope stability requirements for fences in the Edgewood neighborhood.
To avoid forcing homeowners to hire expensive biologists, they rejected the staff's proposed "ephemeral stream" definition in favor of Alternative 4, which uses clear Residential Estate (RE) zoning as an objective trigger for reduced setbacks in developed hillside areas. Finally, the PTC requested technical refinements, including replacing colloquial terminology with precise land-use definitions and clarifying flood wall specifications, while protecting homeowners’ rights to plant non-invasive ornamental landscaping within their fenced yards.
Planning and
Transportation
Commission
(Item #3, starting
on Page 24)
Public
Hearing
August 27,
2025
The PTC unanimously voted to continue the Stream Corridor Protection Ordinance update to an uncertain date, requesting that staff return with a revised draft and additional data. While staff presented a revised draft featuring a 30-foot setback for the Urbanized Area, a 150-foot setback for the other two subareas, and various exemptions, the PTC raised significant concerns regarding the burden of the 30-foot urban setback compared to smaller regional standards and the impact of fencing replacement regulations on property owners. Additionally, the Commission supported exempting the Edgewood neighborhood entirely from the regulations and debated how to fairly apply the rules to residential lots west of Foothill Expressway without overly burdening residents.
Item 8
Attachment B - PTC Discussion
Summary
Item 8: Staff Report Pg. 23 Packet Pg. 73 of 103
Stream Corridor Protection Ordinance Update Page 2 of 2 Public Hearing Summary
Board and
Commission
Hearing Type Date Feedback Summary
Planning and
Transportation
Commission
Public
Hearing
October 9,
2024
Following extensive deliberation on the updated draft Stream Corridor Protection Ordinance, which incorporated feedback from their August 2024 study session, the PTC directed staff to conduct further public outreach to solicit community feedback before implementing any revisions. The PTC requested a revised ordinance focused on addressing key concerns, including proposed setback distances for different areas and creek types, the potential impact on existing structures, and the feasibility of the proposed exception process.
Planning and
Transportation
Commission
Study Session August 14,
2024
Staff conducted a study session with the PTC reviewing regional comparative analysis and key findings from the July 2024 Existing Conditions Report. Staff presented recommendations across five core topics (applicability, exemptions, setback distances, stream conditions, and the exception process), which the PTC generally supported while offering specific refinements. Notable feedback included exploring broader exemptions for multi-family and nonresidential developments, questioning the necessity of a proposed 40-foot urban setback compared to smaller regional standards, and advocating for a tiered, non-variance exception process modeled after neighboring frameworks like San Jose’s.
Architectural
Review Board
Information
Report
April 4,
2024
Information report submitted to Architectural Review Board to inform them that staff has started the effort and provide background.
Item 8
Attachment B - PTC Discussion
Summary
Item 8: Staff Report Pg. 24 Packet Pg. 74 of 103
Item 8
Attachment C - Map of Subareas
Item 8: Staff Report Pg. 25 Packet Pg. 75 of 103
Stream Corridor Protection Ordinance Update Page 1 of 2 Community Engagement Summary
Engagement Type Date Summary
Community
Information
Session, Virtual
March 5, 2024 At a community information session, attendees expressed diverse opinions regarding the proposed stream corridor ordinance update. While the majority supported the update and increased setbacks, concerns were raised about balancing private property development with riparian improvements. Feedback included suggestions for varying setback distances, such as a favored 150-foot setback west of Foothill Expressway, alongside advocacy for flood risk mitigation, though community opinions remained divided on allowing dog parks within the setback areas.
Community
Meeting, Hybrid
February 6, 2025 staff conducted a hybrid community meeting attended by 63 community members (21 in person and 42 virtually) to gather feedback on the draft ordinance. Attendees generally expressed concerns regarding the practicality of obtaining minor and major exceptions, as well as the ability to install and maintain security fences to address issues with encampments. Additionally, feedback was divided into two distinct perspectives: some participants opposed the expanded 40-foot streamside setback due to safety and development restrictions, preferring existing requirements, while others advocated for even larger setbacks, citing a recent creekside development built under current regulations that they believed was too small.
Neighborhood
Meeting, Esther
Clark Park, In
person
December 18,
2025
Following the August 2025 PTC hearing, City staff met multiple times with Esther Clark Park and Palo Alto Hills residents to clarify past discussions, outline next steps, and address neighborhood concerns regarding the proposed 150-foot streamside setback, which some argued would render lots undevelopable. In response to residents' requests for varied regulations based on stream types, noting their area primarily features ephemeral streams, staff reiterated that the Commission supports shorter setbacks for established neighborhoods and confirmed that the next draft ordinance will include provisions and alternatives aligning with that direction.
Item 8
Attachment D - Community
Engagement Summary
Item 8: Staff Report Pg. 26 Packet Pg. 76 of 103
Stream Corridor Protection Ordinance Update Page 2 of 2 Community Engagement Summary
Engagement Type Date Summary
Individually
requested
meetings
Various Residents from the Edgewood neighborhood and the Esther Clark Park neighborhood have requested meetings with staff to ask neighborhood-specific questions, inform City staff about researched information that would assist their position with the proposed regulations, ask for clarification of the discussion from previous hearings, and get updates about the project schedule and next steps directly from staff. Staff also met with environmental groups who requested meetings at the beginning of this effort; they provided feedback on the latest draft ordinance and asked for clarification on previous discussions.
Field Visits Various Staff was invited by residents who wanted to show the creek conditions in their neighborhoods, and subsequently conducted field visits to Esther Clark Park and the Palo Alto Hills neighborhood. Staff also took a drive through the Edgewood neighborhood to see the condition of the interface between the creek and the properties.
Early engagement Various To launch the beginning of this effort, staff and consultants initiated early engagement with the community and partnering agencies to understand local concerns and regulatory standards. This initial outreach included consulting with Palo Alto neighborhood associations, where representatives expressed varying levels of interest, support for staying informed, and specific feedback regarding setbacks and flood control, and meeting with Valley Water. These early agency discussions clarified that regulatory authority for areas beyond the stream bank transitioned to the City in 2006, highlighting the need for clear guidelines to protect riparian corridors and address frequent resident inquiries regarding streamside property regulations. Coordination with Valley Water continued throughout the effort to receive feedback on the regulations.
Courtesy Mail
Notices
10 days prior to
October 9, 2024
In preparation for the PTC hearing on October 9, 2024, a courtesy notice was sent at least 10 days prior to the hearing to inform property owners and tenants of properties within 300 feet of any stream in Palo Alto.
Item 8
Attachment D - Community
Engagement Summary
Item 8: Staff Report Pg. 27 Packet Pg. 77 of 103
Item 8
Attachment E - Public
Comment
Item 8: Staff Report Pg. 28 Packet Pg. 78 of 103
Joan Weakland
428 Hawthorne Avenue
Ames, IA 50014
- - - - - - - - - - - - - - -
H:
C:
- - - - - - - - - - - - - - -
On May 13, 2026, at 6:56 PM, Cha, Kelly <[email protected]> wrote:
Hi Ms. Weakland,
We have the Planning and Transportation Commission hearing tonight, and we will be presenting the new draft ordinance to the Commission. If you haven't already, you can review the staff report packet, which includes the draft ordinance as well as other attachments along with the staff report, from the PTC hearing agenda here. If you have any specific questions, please do not hesitate to contact me.
Thanks,
Kelly Cha (she/her)
Senior Planner
Planning and Development Services
(650) 329-2155 | [email protected]
www.PaloAlto.gov
From: Joan Weakland
Sent: Wednesday, May 13, 2026 4:21 PM
Item 8
Attachment E - Public
Comment
Item 8: Staff Report Pg. 29 Packet Pg. 79 of 103
To: Allen Akin <[email protected]>
Cc: Lewis F. Weakland < >; Armer, Jennifer <[email protected]>; Cha, Kelly <[email protected]>; Jean-Philippe Emelie Marcos < >; Alan W. Weakland < >
Subject: Re: Proposed 150-Foot Stream Setback West of Foothill Expressway CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking on links.
Hi Mr. Akin,
Thank you very much for your prompt reply. Our rear property, 4243 Manuela Court, is one of two undeveloped lots among the 39 affected properties, such that the proposed ordinance would have an outsized impact, even on a one acre parcel, forcing any future use to be quite close to the street and the adjacent lot, 4245 Manuela Court.
A 150’ stream setback would enormously impact the value and buildability of #4243 — likely decreasing its value by at least 70%.
When you consider that "the stream” we are trying to protect is dry virtually all year, has been altered by the City for storm drainage, and is only briefly fluid after a heavy seasonal rain, it is clear that the proposed ordinance for the Esther Clark park neighborhood should be significantly altered to a setback similar to other non-rural neighborhoods of 20-25’.
Thank you —
Regards,
Joan Weakland
Joan Weakland
C:
- - - - - - - - - - - - - - -
On Feb 6, 2026, at 7:22 PM, Allen Akin <[email protected]> wrote:
On Fri, Feb 06, 2026 at 03:51:53PM -0600, Joan Weakland wrote:
| I read through the summary of the August 27, 2025 minutes that you kindly provided, but I do not understand option (2) that you mentioned; ie, if the Esther Clark Park area were to be re-classified as “urbanized” like the area ranging from Foothill Expressway toward the 101, what setback regulations would apply there? Hi, Ms. Weakland!
The proposed ordinance we reviewed last August called for a 30' setback in the urbanized area.
That's not as straightforward as it sounds, because certain projects were still allowed in the setback so long as they were outside the slope-stability protection area -- interior modifications, retaining walls, minor earthworks, and ADUs, among other things.
Ms. Cha (copied on this reply) can give you a more authoritative answer. The proposal might have changed since the last version the PTC reviewed, so my understanding may be out-of-date, and of course nothing has been approved yet.
Best,
Allen Akin
Item 8
Attachment E - Public
Comment
Item 8: Staff Report Pg. 30 Packet Pg. 80 of 103
Item 8
Attachment E - Public
Comment
Item 8: Staff Report Pg. 31 Packet Pg. 81 of 103
Corridor Protection Ordinance and its potential impact until later. When I became the PAN representative for Esther Clark Park in late 2025 I found only 2 residents besides myself. The small postcards that were sent out were not adequate and many residents don't remember receiving one.
6. The PTC voted unanimously to accept Alternative #4 on May 13th, 2026. SCPO has been examined and discussed several times. I strongly recommend that you follow their recommendation.
I'll be at the October 19th meeting and will encourage affected property owners to attend.
Thank you, Ellen Shay
Item 8
Attachment E - Public
Comment
Item 8: Staff Report Pg. 32 Packet Pg. 82 of 103
City Council
Staff Report
From: City Manager; City Attorney
Report Type: ACTION ITEMS
Lead Department: City Attorney
Meeting Date: October 26, 2026
Report #:2610-6855
TITLE
Adoption of a Temporary Ordinance Imposing a Moratorium on the Establishment of New or Expanded Detention and Custodial Facilities within Palo Alto City Limits
RECOMMENDATION
Staff recommends that the City Council adopt a temporary ordinance imposing a moratorium on the establishment of any new or expanded detention and custodial facilities within Palo Alto city limits.
BACKGROUND
On March 17, 2025, the City Council adopted Resolution 10221, reaffirming the Council’s commitment to the Palo Alto Values as embodied in its previously adopted values and adopted legislative guidelines, including policies that reflect:
• Support for transparent government and the rule of law, including respect for court decisions;
• Support for climate action and adaptation, environmental justice, natural environment protection, local authority to address climate change and collaboration regionally, nationally and internationally to accomplish these goals; • Support measures that protect immigrants from unlawful or inhumane deportation efforts; and
• Consistent with the Council priority to be a place of belonging for all, foster a diverse and inclusive community and support equity and racial justice [sic].
Item 9
Item 9 Staff Report
Item 9: Staff Report Pg. 1 Packet Pg. 83 of 103
In February 2026, the Department of Homeland Security (DHS) published its intention to develop more Immigration and Customs Enforcement (ICE) facilities.1 Since that pronouncement, ICE has taken steps to establish two immigration processing and detention facilities in the Bay Area—one in unincorporated Santa Clara County near Gilroy and another in a shuttered federal correctional facility in Dublin in Alameda County.
Santa Clara County and the State of California sued ICE and other federal government agencies and officials to block the proposed ICE detention facility near Gilroy. The City of Palo Alto was one of twenty-six Bay Area cities/counties that signed onto an amicus brief in support of Santa Clara County’s lawsuit. On September 11, 2026, the United States District Court granted a preliminary injunction pausing development activities of that facility.2 The City’s support of Santa Clara County’s lawsuit is consistent with the policies articulated in Council Resolution 10221.
The proposed ordinance furthers this policy by imposing a temporary moratorium on new or expanded detention facilities within Palo Alto city limits.
ANALYSIS
The City’s Current Zoning Ordinance
The City‘s zoning ordinance does not contain a land use classification for detention and custodial facilities. While this generally means that such a use would not be permitted in any of the City’s zoning districts, it is possible that the owner/occupant of privately-owned property could attempt to establish a detention or custodial facility through a use permit application.
Separately, the owner/occupant of property located in a public facilities zoning district (PF) could attempt to establish a detention or custodial facility as principally permitted use because the zoning ordinance allows “[a]ll facilities owned or leased, and operated or used, by the City of Palo Alto, the County of Santa Clara, the State of California, the government of the United States, the Palo Alto Unified School District, or any other governmental agency, or leased by any such agency to another party” in the PF zoning district. The vast majority of PF-zoned parcels are owned by either the City, Palo Alto Unified School District, the County of Santa Clara, and the Peninsula Corridor Joint Powers Board (Caltrain), and such a scenario is unlikely considering the size, location, or the existing uses of those parcels.
Proposed Ordinance
The proposed ordinance would remove any ambiguity in the above scenarios by imposing a one-year moratorium on the establishment or expansion of any detention and custodial facilities, as well as any change in land use that would result in a detention and custodial 1 ICE Detention Reengineering Initiative. “ICE plans to activate all facilities by November 30, 2026, ensuring the timely expansion of detention capacity,” February 13, 2026. 2 https://oag.ca.gov/system/files/attachments/press-docs/pi-order_0.pdf Item 9
Item 9 Staff Report
Item 9: Staff Report Pg. 2 Packet Pg. 84 of 103
facility.
The proposed ordinance defines “detention and custodial facility” as:
A temporary or permanent building, structure, set of buildings, or portions thereof operated by any entity to detain, confine, process, or house persons in custody under process of law, whether on a temporary, short-term, overnight, or longer-term basis. A detention or custodial facility includes, but is not limited to, a jail, prison, detention center, detention facility, holding facility, confinement facility, correctional facility, civil detention facility, immigration detention facility, juvenile detention facility, temporary holding facility, processing facility, or other substantially similar use, regardless of the name or terminology used to describe the facility.
This definition was formulated based on a review of similar moratoria adopted by the cities of San Jose, Los Altos, and Gilroy and by San Mateo and Monterey counties.
Since the moratorium is forward-looking, it would not apply to existing custodial facilities such as the holding areas in the Public Safety Building or the Superior Court building.
The moratorium expires on its own terms unless extended by the Council. In addition to the pending litigation between Santa Clara County and ICE, a number of new State laws addressing ICE operation have been recently enacted, or are pending, and may affect the need for additional City regulations. Staff will continue to monitor this issue and return to the Council with further recommendations before the moratorium expires.
FISCAL/RESOURCE IMPACT
The proposed ordinance would not result in any fiscal or resource impacts to the City.
STAKEHOLDER ENGAGEMENT
Staff from the City Attorney’s Office met with staff from Representative Sam Liccardo’s office as well as staff from the Immigrant Protection and Empowerment Network, which is part of the Amigos de Guadalupe Center for Justice and Empowerment, a nonprofit based in Santa Clara County.
ENVIRONMENTAL REVIEW
Council action on this item is exempt from the requirements of the California Environmental Quality Act (“CEQA”) under CEQA Guidelines Section 15061(b)(3), because this ordinance will not have a significant effect on the environment because the moratorium preserves the status quo while the City evaluates the potential land use and environmental impacts related to detention and custodial facility land uses. Nor does this ordinance authorize any development, approve any land-use entitlement, or result in any physical change to the environment.
Item 9
Item 9 Staff Report
Item 9: Staff Report Pg. 3 Packet Pg. 85 of 103
ATTACHMENTS
Attachment A: Ordinance Establishing a Temporary Moratorium on the Establishment of Detention and Custodial Facilities
APPROVED BY:
Christopher Jensen, City Attorney
Item 9
Item 9 Staff Report
Item 9: Staff Report Pg. 4 Packet Pg. 86 of 103
***NOT YET APPROVED***
1 Ordinance No. _____
An Ordinance of the City of Palo Alto Establishing a Temporary Moratorium on the Establishment of Detention and Custodial Facilities
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. The United States Department of Homeland Security (“DHS”) “ICE Detention Reengineering Initiative” directive dated February 13, 2026, outlined the acquisition and development of eight large-scale detention centers, sixteen processing sites, and the acquisition of ten turnkey facilities; the directive asserted that United States Immigration and Customs Enforcement (“ICE”) intended to have all facilities active by November 30, 2026; and
B. ICE has stated that California detention centers are “crucial to ICE’s detention network on the West Coast,” and the DHS recently acquired two private prison facilities in Otay Mesa and California City, California from CoreCivic, a private corporation that contracts with government agencies to operate correctional facilities; and C. ICE leased private property at 7240 Holsclaw Road in unincorporated Santa Clara County near Gilroy, California (“Holsclaw Property”) for the purpose of operating an immigrant detention facility; and
D. Santa Clara County and the State of California sued ICE and other federal government agencies and officials to block the proposed ICE detention facility on the Holsclaw Property; and
E. The City of Palo Alto was one of twenty-six Bay Area cities/counties that signed onto an amicus brief in support of Santa Clara County’s lawsuit; and F. On September 11, 2026, the United States District Court granted a preliminary injunction ordering ICE to pause construction, demolition, and development activities at the Holsclaw Property due to failing to engage in the preparation of an environmental impact review on the plans; and
G. Several other jurisdictions across the United States have filed lawsuits challenging the construction of detention and custodial facilities because the proposed facilities would deplete the water supply and strain public resources such as sewage and wastewater needs; and
H. Reports from the California Attorney General have found that detention and custodial facilities in California were overcrowded, failed to provide adequate medical care, and often failed to meet applicable federal detention standards which are a detriment to detainee’s health; and
Item 9
Attachment A - Ordinance
Establishing a Temporary
Moratorium on the
Establishment of Detention
and Custodial Facilities
Item 9: Staff Report Pg. 5 Packet Pg. 87 of 103
***NOT YET APPROVED***
2 I. Detention and custodial facilities can also impact local traffic including from visitors to detainees, and strain services responding to large demonstrations and public gatherings around these facilities which may require local traffic management, crowd management, or emergency response resources; and
J. Local government agencies have not been afforded the opportunity to evaluate issues surrounding detention and custodial facilities and provide input, forcing those agencies to turn to litigation after development activity was already underway; and K. On March 17, 2025, the City Council adopted Resolution No. 10221 affirming policies that reflect:
a. Support for transparent government and the rule of law, including respect for court decisions;
b. Support for climate action and adaptation, environmental justice, natural environment protection, local authority to address climate change and collaboration regionally, nationally and internationally to accomplish these goals; c. Support measures that protect immigrants from unlawful or inhumane deportation efforts; and
d. Consistent with the Council priority to be a place of belonging for all, foster a diverse and inclusive community and support equity and racial justice; and L. The City of Palo Alto’s zoning code does not specifically define “detention and custodial facility” as a land use, but a party seeking to develop a detention and custodial facility on privately-owned property could seek approval to operate a detention and custodial facility in the city; and
M. The City of Palo Alto’s zoning code permits all facilities owned or leased, and operated or used, by the government of the United States on properties zoned as “Public Facility”; and
N. Locating a detention and custodial facility on a Public Facilities zoned property or on any other zoning district within Palo Alto may result in land use and environmental impacts that are detrimental to the public health, safety, and general welfare, or inconsistent with the City’s Comprehensive Plan; and
O. A temporary moratorium on the establishment of detention and custodial facilities, as defined below, is necessary to provide the City of Palo Alto an opportunity to analyze and determine how best to update its regulations to address the impacts of detention and custodial facilities, and evaluate appropriate locations for such uses.
Item 9
Attachment A - Ordinance
Establishing a Temporary
Moratorium on the
Establishment of Detention
and Custodial Facilities
Item 9: Staff Report Pg. 6 Packet Pg. 88 of 103
***NOT YET APPROVED***
3 SECTION 2. Definitions. For the purposes of this Ordinance, a “detention and custodial facility” means a temporary or permanent building, structure, set of buildings, or portions thereof operated by any entity to detain, confine, process, or house persons in custody under process of law, whether on a temporary, short-term, overnight, or longer-term basis. A detention and custodial facility includes, but is not limited to, a jail, prison, detention center, detention facility, holding facility, confinement facility, correctional facility, civil detention facility, immigration detention facility, juvenile detention facility, temporary holding facility, processing facility, or other substantially similar use, regardless of the name or terminology used to describe the facility.
SECTION 3. Moratorium Imposed. A one-year temporary moratorium is hereby established and imposed on the filing, acceptance, processing, or approvals of applications for the establishment of any new or expanded detention and custodial facility on private and public property, or changes in use that would result in the same, to the extent permitted under state and federal law.
SECTION 4. Consistent with its authority under section 18.80.090 of the Palo Alto Municipal Code, the City Council hereby finds that the public health, safety, and welfare of the City of Palo Alto warrant the establishment of this temporary moratorium, to the extent permitted under state and federal law, based upon the following facts and circumstances:
A. The proliferation of detention and custodial facilities across the nation with limited notice to, or collaboration with, local municipalities.
B. The Department of Homeland Security’s express intention of establishing a network of detention facilities in California, including the recent construction of a detention facility in Santa Clara County.
C. The severe impact that detention and custodial facilities will have on surrounding communities and local resources including water supply and wastewater treatment.
D. The documented history of poor living conditions and substandard medical care at detention and custodial facilities in California.
E. Potential incompatibility of detention and custodial facilities in Public Facilities-zoned properties and other zoning districts within Palo Alto due to potentially inadequate City infrastructure capacity to support such a facility and other impacts on City resources.
A temporary moratorium prohibiting use of private and public property as a detention and custodial facility while these issues and concerns are being examined and appropriate Item 9
Attachment A - Ordinance
Establishing a Temporary
Moratorium on the
Establishment of Detention
and Custodial Facilities
Item 9: Staff Report Pg. 7 Packet Pg. 89 of 103
***NOT YET APPROVED***
4 regulations are being developed, is necessary for the public health, safety and welfare harms described herein.
SECTION 5. This ordinance shall be in effect from the date of adoption for a period of one year, unless it is extended by the City Council.
SECTION 6. If any section, subsection, subdivision, paragraph, sentence, clause, phrase, or word of this interim ordinance is for any reason held to be invalid or unenforceable by the decision of a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses, phrases, or words of this interim ordinance. //
//
//
//
//
//
//
//
//
//
//
//
//
//
//
//
//
Item 9
Attachment A - Ordinance
Establishing a Temporary
Moratorium on the
Establishment of Detention
and Custodial Facilities
Item 9: Staff Report Pg. 8 Packet Pg. 90 of 103
***NOT YET APPROVED***
5 SECTION 7. The Council finds that this ordinance is exempt from the requirements of the California Environmental Quality Act (“CEQA”) under CEQA Guidelines Section 15061(b)(3), because it can be seen with certainty that this ordinance has no possibility of having a significant effect on the environment because the moratorium preserves the status quo while the City evaluates the potential land use and environmental impacts related to detention and custodial facility land uses. Nor does this ordinance authorize any development, approve any land-use entitlement, or result in any physical change to the environment.
ADOPTED this _____ day of ___________, 2026, by the following vote:
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ City Attorney or designee City Manager
Item 9
Attachment A - Ordinance
Establishing a Temporary
Moratorium on the
Establishment of Detention
and Custodial Facilities
Item 9: Staff Report Pg. 9 Packet Pg. 91 of 103
City Council
Staff Report
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: October 26, 2026
Report #:2602-6005
TITLE
Monthly Investment Report - September 2026 (Unaudited)
RECOMMENDATION
This is an Information Report. No Council action is required.
EXECUTIVE SUMMARY
The City’s Investment Policy (Policy)1 and California Government Code Section 53607 requires that a report of transactions (investments, reinvestment, sold, and exchanged securities) be made available to the Council on a monthly basis. This reporting requirement is separate and distinct from the quarterly investment report submitted under California Government Code Section 53646 that includes portfolio composition, a detailed list of all securities, performance compared to the Policy, overall compliance with the Policy, and the City’s ability to meet expenditure requirements over the next six months.
ATTACHMENTS
Attachment A: Investment Portfolio Transaction Ledger – September 2026 APPROVED BY:
Lauren Lai, Administrative Services Director
1 Investment Policy Fiscal Year 2025-2026 (Adopted February 9, 2026); https://www.paloalto.gov/files/assets/public/v/1/administrative-services/investment-policies/1-39-asdinvestment-policy.pdf Item A
Item A Staff Report
Item A: Staff Report Pg. 1 Packet Pg. 92 of 103
Buy
MaturitySummary
CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount 91282CRK9 UNITED STATES
TREASURY 4.37508/31/2031
US GOV Buy 09/11/2026 5,000,000.00 98.426 4.734 -4,921,289.06 6,647.10 -4,927,936.16 912797UK1 UNITED STATES
TREASURY 10/15/2026
T-BILL Buy 09/24/2026 20,000,000.00 99.779 3.858 -19,955,701.67 0.00 -19,955,701.67 89240YAD0 TLOT 26B A3 5.07
10/22/2029
ABS Buy 09/22/2026 3,015,000.00 99.980 5.134 -3,014,385.24 0.00 -3,014,385.24 3137HB2L7 FHMS K-753 A2 4.4
10/25/2030
FHLMC Buy 09/29/2026 3,890,000.00 96.852 5.270 -3,767,525.78 13,312.44 -3,780,838.22 02582JKX7 AMXCA 261 A 4.99
09/17/2029
ABS Buy 09/22/2026 4,385,000.00 99.979 5.050 -4,384,076.52 0.00 -4,384,076.52 00287YEN5 ABBVIE INC. 4.875
09/15/2031
CORP Buy 09/24/2026 2,500,000.00 97.862 5.368 -2,446,550.00 12,187.50 -2,458,737.50 --- --- --- Buy 09/22/2026 38,790,000.00 --- 4.440 -38,489,528.27 32,147.04 -38,521,675.31 CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount 912797UG0 UNITED STATES
TREASURY 09/17/2026
T-BILL Maturity 09/17/2026 -15,000,000.00 100.000 3.690 15,000,000.00 0.00 15,000,000.00 912797UF2 UNITED STATES
TREASURY 09/10/2026
T-BILL Maturity 09/10/2026 -15,000,000.00 100.000 3.698 15,000,000.00 0.00 15,000,000.00 799017XW3 SAN MATEO CALIF UN
HIGH SCH DIST 0.92509/01/2026
MUNI Maturity 09/01/2026 -500,000.00 100.000 0.925 500,000.00 0.00 500,000.00 798135E96 SAN JOSE CALIF 2.5
09/01/2026
MUNI Maturity 09/01/2026 -350,000.00 100.000 1.710 350,000.00 0.00 350,000.00 79772EDA4 SAN FRANCISCO CALIF
CITY & CNTY CMNTYFACS DIST NO 2.23609/01/2026
MUNI Maturity 09/01/2026 -1,295,000.00 100.000 1.446 1,295,000.00 0.00 1,295,000.00 752147HK7 RANCHO SANTIAGO
CALIF CMNTY COLLEGEDIST 0.956 09/01/2026
MUNI Maturity 09/01/2026 -635,000.00 100.000 4.225 635,000.00 0.00 635,000.00 70962LAE2 Pentagon Federal Credit
Union 0.85 09/01/2026
CD Maturity 09/01/2026 -249,000.00 100.000 0.901 249,000.00 0.00 249,000.00 677521CT1 OHIO ST 5.262 09/01/2026 MUNI Maturity 09/01/2026 -500,000.00 100.000 1.733 500,000.00 0.00 500,000.0062451FJE1 MOUNTAIN VIEWWHISMAN CALIF SCH DIST 1.893 09/01/2026
MUNI Maturity 09/01/2026 -1,135,000.00 100.000 4.552 1,135,000.00 0.00 1,135,000.00 544351NP0 LOS ANGELES CALIF 3.3
09/01/2026
MUNI Maturity 09/01/2026 -295,000.00 100.000 3.579 295,000.00 0.00 295,000.00 544351MS5 LOS ANGELES CALIF 3.5
09/01/2026
MUNI Maturity 09/01/2026 -1,000,000.00 100.000 3.120 1,000,000.00 0.00 1,000,000.00 544351KV0 LOS ANGELES CALIF 3.15
09/01/2026
MUNI Maturity 09/01/2026 -1,000,000.00 100.000 1.540 1,000,000.00 0.00 1,000,000.00 --- --- --- Maturity 09/11/2026 -36,959,000.00 100.000 3.474 36,959,000.00 0.00 36,959,000.00 CUSIP Security Description Security Type Transaction
Type
Settlement Date Quantity Price Acq/Disp Yield Amount Purchased/Sold Interest Total Amount --- --- --- --- 09/17/2026 1,831,000.00 --- 3.967 -1,530,528.27 32,147.04 -1,562,675.31 Palo Alto Monthly Transactions09/01/2026 - 09/30/2026
1 ATTACHMENT
A
Item A: Staff Report Pg. 2 Packet Pg. 93 of 103
City Council
Staff Report
From: City Manager
Report Type: INFORMATION REPORTS
Lead Department: Administrative Services
Meeting Date: October 26, 2026
Report #:2512-5707
TITLE
City of Palo Alto's Energy Risk Management Report for the second half of Fiscal Year 2026 (January 1, 2026 – June 30, 2026) CEQA Status – Not a Project
RECOMMENDATION
This is an informational report, and no City Council action is required.
EXECUTIVE SUMMARY
From January through June 2026, the City maintained a diverse electricity portfolio that included hydroelectric generation, renewable contracts, fixed-price purchases, and market transactions. This approach supported reliable service and reduced dependence on any one resource or market condition. The portfolio stayed above minimum load-resource coverage levels, although excess supply in several spring and summer months required market sales.
Hydroelectric power from the Western and Calaveras projects remained a key source of carbon-free and flexible electricity. Changes in water conditions and operating assumptions affected expected supply and cost. Western hydro generation declined in April and May, increasing expected supply costs, but improved in June and reduced costs by $2.84 million. The City’s fixed-price hedge increased from 105% in January and February to 110% in May and June, providing strong protection from higher wholesale electricity prices and improving budget certainty. However, the hedge level also increased the risk of excess supply if demand is lower than forecast or hydro generation is higher than expected.
Staff continued to manage risk by monitoring load forecasts, hydro and renewable output, market prices, outages, and counterparty credit quality. Mark-to-market values for forward contracts remained negative, reflecting lower current market prices compared with existing contract prices; these values do not represent an immediate cash loss. Staff also used resource adequacy sales, forward purchases, transaction limits, collateral requirements, and ongoing credit review to manage financial and operational risks.
Item B
Item B Staff Report
Item B: Staff Report Pg. 1 Packet Pg. 94 of 103
BACKGROUND
The purpose of this report is to inform the Council about the status of the City’s energy portfolio and transactions executed with energy suppliers for January through June 2026. It describes major changes in supply forecasts, forward purchases, market prices, resource adequacy (RA) sales, and forward mark-to-market (MTM) values. The report focuses on how the City reduces risk, what risk remains, and how staff monitors the portfolio. The City’s Energy Risk Management function, which monitors and mitigates energy market risks, is part of the Administrative Services Department. This semi-annual report of FY 2026 Energy Risk Management contains information on the following:
Electricity Supplies
Hydroelectricity
Fixed-Price Forward – Hedging
Electric Fixed-Price Forward Purchase Mark-to-Market Values Gas Supplies
Counterparty Credit Risk
Exceptions to Energy Risk Management Policies, Guidelines, or Procedures
ANALYSIS
Electricity Supplies
The City utilizes a diversified portfolio of electric supply resources, including hydroelectric generation, renewable contracts, fixed-price purchases, and market transactions. This diversified procurement strategy supports reliable service and limits exposure to a single resource or market condition. During the second half of FY 2026, the City primarily used solar (40% of load) and hydroelectricity from the Western (federal hydropower) facility (37%) to balance the load, as shown in Table 1 and Figure 1 below. During January to June 2026, the projected portfolio remained above minimum coverage levels, but several spring and summer months showed excess supply that needed to be sold.
Item B
Item B Staff Report
Item B: Staff Report Pg. 2 Packet Pg. 95 of 103
Figure 1: Load Resource Balance and Palo Alto Load for January 2026 - June 2026 (in MWh) Hydroelectricity
The City of Palo Alto is a member of NCPA (Northern California Power Authority), which owns, operates, and maintains the Calaveras Hydroelectric project located in Calaveras County. NCPA also schedules the output of the Western project, which is a collection of hydroelectric facilities throughout northern California, on behalf of the City. These projects provide the City with longterm, carbon-free electricity that supports the City’s commitment to clean energy and reducing greenhouse gas (GHG) emissions by 80%, as outlined in the 2022 Sustainability and Climate Action Plan.1 Further, utilizing hydroelectricity offers flexibility in balancing load and supply fluctuations and reduces the City’s reliance on higher-cost market purchases. During the second half of FY 2026, increased hydroelectric supplies in February and June, led primarily by Western generation increases of 81,000 MWh and 64,500 MWh, with additional Calaveras increases of 1 2022 Sustainability and Climate Action Plan; June 5, 2023; \Clerk's Office\Staff Reports\City Council\2023\Staff Report 2303-1158 Table 1: Load Resource Balance for January 2026 - June 2026 (in mWh) Source Jan Feb Mar Apr May Jun Total % of Total
Spot Market (31,983) (21,228) 1,922 (23,647) (23,443) 1,185 (118,910) -0.13 Forward Market 36,200 33,120 11,738 669 (7,846) (10,400) 103,327 0.11 Solar 18,704 21,364 35,287 37,189 38,129 42,862 377,676 0.40 Wind 404 504 1,454 1,745 3,159 4,359 24,061 0.03
Calaveras 14,293 7,086 17,370 15,493 6,855 3,105 94,280 0.10 Western 36,508 22,634 4,369 32,030 49,833 26,642 348,924 0.37 Landfill 3,205 5,804 3,699 6,460 7,091 7,092 74,582 0.08 Geothermal 3,582 3,161 3,303 3,600 3,197 3,600 41,210 0.04 Total 80,913 72,445 79,142 73,539 76,975 78,445 945,151 1.00 Item B
Item B Staff Report
Item B: Staff Report Pg. 3 Packet Pg. 96 of 103
1,000 MWh and 12,000 MWh, coincided with cost savings of $3.98 million and $2.84 million, respectively, reflecting a reduced need for replacement energy purchases. Conversely, from Item B
Item B Staff Report
Item B: Staff Report Pg. 4 Packet Pg. 97 of 103
March through May, Western supply declined by 18,500 MWh, 26,900 MWh, and 20,300 MWh.
Overall, for the January through June period overall, the impacts of the generation increases in February and June, particularly from Western, more than offset the cost increases for the March through May period for a net savings of $7m relative to the budget for these months.
Staff will continue monitoring hydrologic conditions, generation forecasts, project-operational constraints, expected load, and forward market prices to identify emerging supply gaps and support timely procurement, hedging, or reserve actions.
Fixed-Price Forward -Hedging
Fixed-price forward purchases provide price certainty for expected customer load, known as hedging. The City hedges to mitigate market risk and insulate itself from price volatility. The FY 2026 fixed-price hedge level (as a percentage of customer load) increased from 105% in January and February to 110% in May and June. Table 3 shows the expected cost for the whole supply portfolio for over a 6-month period as of each report date, and how those compare to our budget projections for that period. The FY26 portfolio hedge remained within the 110% recommended limit, increasing from approximately 105% early in 2026 to 108% in March, 109% in April, and 110% in May and June. This high fixed-price coverage mitigated exposure to wholesale-market price increases, reduced reliance on potentially expensive spot-market purchases, and increased supply-cost budget certainty for the City. However, by reaching the 110% maximum, the City had little remaining capacity to execute additional fixed-price purchases or spot market purchases without updated load forecasts, offsetting sales, or an authorized exception.
During the second half of FY2026, the City secured fixed-priced electricity purchase contracts Table 2 : Hydroelectricity Supply Changes and Cost Impact (January - June 2026) Month Western Supply
Change (MWh)
Calaveras Supply
Change (MWh)
Cost Impact (Savings)/
Cost ($millions)
January 1,750 (9,000)
February 81,000 1,000 (4.0)
March (18,500) 4,000 1.0
April (26,900) 19,600 1.0
May (20,300) 490 2.0
June 64,500 12,000 (3.0)
Item B
Item B Staff Report
Item B: Staff Report Pg. 5 Packet Pg. 98 of 103
totaling 95,850 MWh for delivery over the next 20 months at an average price of $57.59 per MWh, as shown in Figure 2. The City contracted these purchases with four of its approved counterparties: DRW Energy Trading LLC (DRW), Shell Energy North America, NextEra Energy Resources, and NRG Business Marketing LLC (NRG). Shell Energy North America and NextEra Energy Resources are rated in adherence to PAMC Section 2.30.340.3 DRW and NRG were granted an exception to PAMC Section 2.30.340 in February 2026 as outlined in Resolution 10279.4
Electric Forward Purchase Mark-to-Market Values
Based on Mark-to-Market values (which estimate the current market value of forward electricity contracts compared with current market prices), the portfolio’s value in the second half of FY 2026 was approximately $5.54 million, resulting in a net mark-to-market exposure of negative $47,673, as shown in Table 4 and Figure 3. This small net favorable result means that, overall, market prices were slightly lower than the prices in the City’s contracts. Individual results varied by delivery month: the January 2028 NextEra purchase had the largest unfavorable change at $81,476, while the November 2027 and February 2028 NextEra 3 Palo Alto Municipal Code(PAMC) Section 2.30.340 – Contracts for Wholesale Utility Commodities and Services https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-61721 4https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87056&dbid=0&repo=PaloAlto&searchid=648f882 6-e69e-4375-9d18-a46222b31a82
Item B
Item B Staff Report
Item B: Staff Report Pg. 6 Packet Pg. 99 of 103
purchases had favorable changes of $66,017 and $51,077, respectively. The City also sold 12,000 MWh of Electricity to NextEra for delivery in June and August 2027.
All reported transactions were within the City’s approved counterparty transaction limits as of June 30, 2026. The portfolio includes transactions with DRW, SENA, NextEra, and NRG, which helps spread risk across several suppliers. Although NextEra represents several transactions, the City remained within established credit and concentration controls. Overall, these forward purchases are intended to reduce the City’s exposure to changing electricity prices and provide greater certainty for future energy costs. While mark-to-market values will change as market conditions change, the City’s total exposure remains limited relative to the total value of its energy commitments.
Table 4: Electric Transactions, Exposure and Limits as of June 30, 2026 Counterparty
Delivery
Month
Purchase/
Sale
Transaction
Date
Energy
(MWh/mo)
Deal Cost /
(Revenue) $
Current Cost /
(Revenue) $
Mark-to-Market
(MTM) Exposure ($)
Within
Counterparty
Transaction Limit
DRW Oct-26 Purchase 5/12/2026 6,480 298,080 281,993 (16,087) Yes DRW Nov-26 Purchase 5/12/2026 5,760 264,960 274,526 9,566 Yes SENA Dec-26 Purchase 5/12/2026 12,480 708,240 699,777 (8,463) Yes NextEra Nov-27 Purchase 5/26/2026 11,235 702,862 636,845 (66,017) Yes NextEra Dec-27 Purchase 5/26/2026 11,480 718,189 727,611 9,422 Yes NextEra Jan-28 Purchase 5/26/2026 12,040 753,222 834,698 81,476 Yes NextEra Feb-28 Purchase 5/26/2026 10,360 648,122 629,139 (18,983) Yes NRG Mar-28 Purchase 5/26/2026 7,775 305,013 317,652 12,638 Yes NextEra Dec-27 Purchase 5/26/2026 6,000 390,600 387,765 (2,835) Yes NextEra Jan-28 Purchase 5/26/2026 6,000 390,600 393,286 2,686 Yes NextEra Feb-28 Purchase 5/26/2026 6,240 406,224 355,147 (51,077) Yes Total 95,850 5,586,112 5,538,438 (47,673)
Item B
Item B Staff Report
Item B: Staff Report Pg. 7 Packet Pg. 100 of 103
Gas Supplies
The City purchases gas on the monthly and daily spot markets for the month ahead at a price based on the published monthly spot market index price for that month. The City’s gas operator buys and sells gas to match the City’s daily needs if the actual daily usage is different from the forecasted daily usage. The City makes these daily transactions at an average price based on the published daily spot market index. The monthly rate adjustment mechanism helps mitigate the City’s exposure to natural gas price volatility and minimizes the gas utility's counterparty risk exposure.
In the second half of FY 2026, the City purchased 283,372 MMBtu of Gas from the approved counterparty, EDF, at a purchase price of $1.81/MMBtu, for delivery over six months. The City made the purchases shown in Table 5, through an approved transacting trader, in accordance with the Energy Risk Management Guidelines. In May 2026, the City sold 283,372 MMBtu of gas to EDF for $0.40 more than the purchase price, as shown in Table 6. This sale generated a $0.11M gain for the City.
Counterparty Credit Risk
The City monitors the credit quality of energy counterparties using major credit rating agencies such as Moody's, Fitch, and S&P. The Energy Risk Management guideline uses Baa3 investment Table 5: Gas Supply Purchases - Redwood Pipeline Capacity from EDF (May 2026) Delivery Month Quantity
(MMBtu/day) Days
Monthly Quantity
(MMBtu)
Purchase Price @
$1.81/MMBtu ($)
May 2026 658 31 20,398 36,920
June 2026 1,458 30 43,740 79,169
July 2026 2,258 31 69,998 126,696
August 2026 2,258 31 69,998 126,696
September 2026 1,858 30 55,740 100,889
October 2026 758 31 23,498 42,531
Total — 184 283,372 512,903
Table 6: Gas Supply Sales - Redwood Pipeline Capacity from EDF (May 2026) Delivery Month Quantity
(MMBtu/day) Days
Monthly Quantity
(MMBtu)
Sale Price @
$2.21/MMBtu ($)
May-26 658 31 20,398 45,080
Jun-26 1,458 30 43,740 96,665
Jul-26 2,258 31 69,998 154,696
Aug-26 2,258 31 69,998 154,696
Sep-26 1,858 30 55,740 123,185
Oct-26 758 31 23,498 51,931
Total — 184 283,372 626,252
Item B
Item B Staff Report
Item B: Staff Report Pg. 8 Packet Pg. 101 of 103
grade, or equivalent, as the minimum recommended rating for all counterparties. The City also uses the 1-year Point-In-Time Probability of Default calculated by Moody’s Analytics to assess counterparties' financial stability and operational reliability. The Energy Risk Management Guidelines recommend a maximum Probability of Default threshold of 0.8%. Tables 7 and 8 indicate that the several of the City’s current Electric and Gas counterparties exceed the City's preferred threshold of 0.8%. However, as all Electric and Gas counterparties meet the investment grade threshold (or will be required to post cash collateral or a letter of credit in compliance with the waiver procedure), and as the City’s credit exposure to these counterparties is also low, this still represents a low-risk portfolio of counterparties.7 Staff continues to monitor these counterparties as needed and, at a minimum, evaluate changes in financial condition, market activity, and overall creditworthiness quarterly. Silicon Valley Clean Energy Authority has improved significantly since December 31, 2025, but staff continues to monitor them.
Gas counterparties generally have lower operational and financial exposures because they can store gas, access liquid replacement markets, and more readily secure alternative supply arrangements in the event of a counterparty default.
7 This counterparty credit risk can be quantified by multiplying each counterparty’s 1-year Point-in-Time Probability of Default by the City’s total credit exposure to that counterparty (i.e., the total Mark-to-Market of all outstanding transactions with that counterparty). The counterparty that the City currently has the greatest credit exposure to is NextEra, with a net exposure (MTM) of -$45,000 (see Table 4). However, because NextEra’s PiT PD is only 0.03%, the magnitude of this credit risk is only $14.
Table 7 : Electric Portfolio Counterparty Credit Ratings and 1-Year PiT PD (June 30 2026) Counterparty Counterparty
Credit Rating
Ratings Issuer 1-year PiT PD
Avangrid Renewables LLC Ba1 Moodys 1.04
BP Energy Company Ba1 Moodys 1.04
Cargill Power Markets, LLC Ba1 Moodys 0.01
Constellation Energy Generation, LLC Aa2 Moodys 0.03
DRW Energy Trading Waiver granted Low
Dynasty Power Waiver granted Low
NextEra Energy Power Marketing, LLC Aa2 Moodys 0.03
NRG Energy Waiver granted Moodys Low
Pacificorp Energy Baa2 Moodys 0.15
Powerex Ba1 Moodys 1.04
Shell Energy North America Ba1 Moodys 0.90
Silicon Valley Clean Energy Authority Ba3 Moodys 2.10
Turlock Irrigation District AA- Fitch
Item B
Item B Staff Report
Item B: Staff Report Pg. 9 Packet Pg. 102 of 103
Exceptions to Energy Risk Management Policies, Guidelines, or Procedures Staff requested approval of master electric trading agreements with NRG, DRW, and Dynasty.9 The agreements allowed the City to buy and sell electricity products with additional qualified suppliers. Staff also requested a waiver of the City’s investment-grade credit rating requirement for these counterparties. NRG had a below-investment-grade issuer rating, while DRW and Dynasty were privately held firms without public credit ratings.
The proposed agreements included standard limits to control financial and operational risk.
Each transaction was limited to a delivery term of no more than 36 months and could not extend beyond December 2027. Total transactions under each agreement could not exceed $25 million. All transactions were required to comply with the Palo Alto Municipal Code and the City’s Energy Risk Management Policies, Guidelines, and Procedures.
Utilities staff and ASD Risk Management reviewed each company’s financial condition. Moody’s Analytics assigned implied ratings of Aa3 for NRG and Dynasty and Ba1 for DRW based on available financial data. To reduce credit risk, each supplier was required to post cash collateral or a letter of credit of 10% of the transaction value from an A+-rated bank within five business days after a transaction was awarded.
ENVIRONMENTAL REVIEW
This report is for informational purposes only with no action required by the Council.
APPROVED BY:
Lauren Lai, Administrative Services Director
9 Staff Report 2508-5117: Adoption of a Resolution Approving Edison Electric Institute Master Power Purchase and Sale Agreements with NRG Business Marketing LLC, DRW Energy Trading LLC, and Dynasty Power Inc., (collectively the “Master Agreements”), Delegating Authority to the City Manager to Transact Under the Master Agreements for Electricity-Related Commodities and Services, and Updating the City’s Standard Form Edison Electric Institute Master Power Purchase and Sale Agreement; CEQA status: not a project under CEQA Guidelines sections 15378(a) https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86830&dbid=0&repo=PaloAlto&searchid=a9edc5c1 -2fbc-4941-85be-23b4d0b1a9d5
Table 8 : Gas Portfolio Counterparty Credit Ratings and 1-Year PiT PD (June 30 2026) Counterparty
Counterparty
Credit Rating Ratings Issuer 1-year PiT PD
BP Energy Ba1 Moodys 1.04%
City of Redding AA S&P
ConocoPhillips Aa1 Moodys 0.03
EDF Ba1 Moodys 1.04
Powerex Ba1 Moodys 1.04
Shell Energy North America Ba1 Moody 0.9
Item B
Item B Staff Report
Item B: Staff Report Pg. 10 Packet Pg. 103 of 103