____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting:
Disposition:
Agenda Item No: 2.b
Meeting Date: April 20, 2026
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Community and Economic Development
Prepared by: Kristina Estudillo, Principal Planner City Manager Approval: __________ TOPIC: KAISER HOSPITAL DEVELOPMENT PROJECT ENVIRONMENTAL CONSULTING
SERVICES
SUBJECT: RESOLUTION AUTHORIZING THE CITY MANAGER TO (1) AMEND A
PROFESSIONAL SERVICES AGREEMENT WITH ENVIRONMENTAL SCIENCE ASSOCIATES (ESA) IN AN AMOUNT NOT TO EXCEED $440,327 FOR A TOTAL CONTRACT AMOUNT OF $457,648 FOR ENVIRONMENTAL CONSULTING SERVICES FOR THE KAISER HOSPITAL DEVELOPMENT PROJECT (PLAN 25-196) LOCATED AT ASSESSOR’S PARCEL NUMBER (APN) 175-060-57 AND (2) APPROPRIATE SUPPLEMENTAL FISCAL YEAR (FY) 2025-2026 BUDGET APPROPRIATIONS TOTALING $457,648 WITHIN THE DEVELOPMENT SERVICES FUND (FUND 207).
RECOMMENDATION:
Staff recommends that the City Council adopt a resolution authorizing the City Manager to (1) amend the professional services agreement with Environmental Science Associates (ESA) for environmental consulting services in an amount not to exceed $440,327, for a total contract amount of $457,648 and (2) appropriate supplemental fiscal year (FY) 2025-2026 Budget Appropriations totaling $457,648 within the Development Services Fund (Fund 207).
BACKGROUND:
In December 2025, the City received an application for a development project on a 23.79-acre site located at 99 Montecillo (Kaiser Hospital Development Project). The applicant for the project is Kaiser Permanente who have owned and managed the existing hospital at the current location since the 1960s.
The application is currently undergoing completeness review, but staff have initiated the environmental review process to meet the requirements of the Hospital Facilities Seismic Safety Act (1994 California Senate Bill 1953), which requires acute care hospitals and urgent care facilities to be replaced or retrofitted by 2030.
The proposed hospital development includes replacement of the existing hospital building at 99 Montecillo Road in North San Rafael with a 6 story, 116 foot tall, 92 bed hospital. Construction of the new hospital building will occur in three phases, involving the following activities and components:
• Phase One: Demolition of the general services building.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
• Phase Two: Construction of the new hospital building and pedestrian connection corridor, reconfiguration of parking and access in Lot B, addition of emergency generators, relocation of underground utilities, and landscaping.
• Phase Three: (A) Demolition of the existing hospital building and (B) construction of the rotunda, cafeteria, reconfigured drop-off area, and service yard.
The project entitlements include a Planned Development (“PD”) amendment and approval of a development plan, an Exception for height, and a Major Environmental and Design Review Permit.
As part of the application review process, the staff have analyzed the project for compliance with California’s Environmental Quality Act (CEQA). Based on a preliminary review of the project, the staff have determined that a full-scope Environmental Impact Report (EIR) covering all the topical issues associated with the project must be prepared to comply with CEQA.
ANALYSIS:
As the City lacks the capacity and subject matter expertise to conduct the EIR, on February 10, 2026, staff published a Request for Proposals (RFP) to identify a firm to undertake the CEQA review for this project. In response, the city received proposals from four interested firms. Staff then held interviews in March 2026 to determine which firm is the most qualified to conduct the CEQA review for a project of this nature. Staff identified ESA as the most qualified firm for this project based on their CEQA expertise, track record, experience with hospital development projects, and familiarity with Office of Statewide Health Planning and Development (OSHPD) legislation.
In order to begin CEQA review, the City executed an initial contract with ESA totaling $17,321 which funded project kick off and initiation of the Notice of Preparation. Staff is requesting authorization to amend the contract to include the remaining portion of scope of work and increased contract amount of $440,327 for a total not to exceed amount of $457,648 and appropriate supplemental Fiscal Year 2025- 2026 Budget funds in the amount of $457,648.
Adopting the proposed resolution will authorize the City Manager to amend the professional services agreement with ESA to complete the required EIR for the Kaiser Hospital Development Project.
FISCAL IMPACT:
Approval of the staff recommendation would authorize amendment of the professional services agreement with ESA in an amount not to exceed $440,327, for a total amount not to exceed $457,648.
The project applicant is responsible for any costs incurred by the City in processing their application, including the cost of an environmental consultant conducting CEQA review for their development application. Thus, the attached resolution includes a supplemental FY 2025-2026 budget appropriation within the City’s Development Services Fund (207) in the amount of $457,648 to reflect funding provided by the project applicant to fund the proposed contract. In addition, the project applicant will be required to pay an additional administrative fee, as prescribed in the Master Fee Schedule, to cover staff time overseeing the accounting of this project.
OPTIONS:
The City Council has the following options to consider in this matter:
1. Authorize the City Manager to enter into the amended agreement.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
2. Authorize the City Manager to enter into the amended agreement with modifications.
3. Direct staff to return with more information.
4. Take no action.
RECOMMENDED ACTION:
Staff recommends that the City Council adopt a resolution authorizing the City Manager to (1) amend the professional services agreement with Environmental Science Associates (ESA) for environmental consulting services in an amount not to exceed $440,327, for a total contract amount of $457,648 and (2) appropriate supplemental fiscal year (FY) 2025-2026 Budget Appropriations totaling $457,648.
ATTACHMENTS:
1. Resolution
2. Amendment to Professional Services Agreement with ESA
RESOLUTION NO.
RESOLUTION AUTHORIZING THE CITY MANAGER TO (1) AMEND A PROFESSIONAL
SERVICES AGREEMENT WITH ENVIRONMENTAL SCIENCE ASSOCIATES (ESA) IN AN AMOUNT NOT TO EXCEED $440,327 FOR A TOTAL CONTRACT AMOUNT OF $457,648
FOR ENVIRONMENTAL CONSULTING SERVICES FOR THE KAISER HOSPITAL DEVELOPMENT PROJECT (PLAN 25-196) LOCATED AT ASSESSOR’S PARCEL NUMBER (APN) 175-060-57 AND (2) APPROPRIATE SUPPLEMENTAL FISCAL YEAR (FY) 2025-2026 BUDGET APPROPRIATIONS TOTALING $457,648 FROM THE DEVELOPMENT SERVICES FUND (FUND 207)
WHEREAS, the City of San Rafael’s Community and Economic Development (CED) Department is processing a Major Environmental Design Review application for the proposed Kaiser Hospital Development Project (PLAN25-196), located at Marin County Assessor’s Parcel Number (APN) 175-060- 57; and
WHEREAS, the project requires environmental review under the California Environmental Quality Act (CEQA); and
WHEREAS, staff published a Request for Proposals (RFP) for preparation of CEQA documentation for the proposed project on February 10, 2026, and subsequently received four proposals from interested firms; and
WHEREAS, staff reviewed the proposals and held a series of interviews in March 2026 to ascertain which was the most qualified firm to conduct the environmental review for a project of this nature; and WHEREAS, staff identified Environmental Science Associates (ESA) as the most qualified firm because of their experience with complex development projects and their proposed schedule and approach; and
WHEREAS, the project applicant is responsible for reimbursing the City for the costs incurred by the City in processing its development application, including preparation of CEQA documents; and WHEREAS, the cost of preparing the CEQA document for the Kaiser Hospital Development Project will be paid through a reimbursement agreement between the CED department and the project applicant.
WHEREAS, the City entered into an initial contract with ESA of $17,321 in order to start the CEQA process under the contract authority of the Community and Economic Development Director and is requesting authorization of the remaining contract amount from City Council at this time as well as the associated appropriate supplemental budget appropriations of $457,648 for the full cost of the CEQA review;
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael finds the foregoing recitals are true and correct, and authorizes the City Manager or their designee to execute an amendment to the professional services agreement with Environmental Science Associates (ESA) for an amount not to exceed $440,327, for a total contract amount of $457,648 ; and FURTHER RESOLVED, that the City Council authorizes supplemental budget appropriations of $457,648 within the Development Services Fund (207) to support these agreements, via increased planning fee revenues received from the Kaiser Hospital Development Project applicant.
I, LINDSAY LARA, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a special meeting of the City Council of said City held on Monday, the 20th day of April 2026, by the following vote, to wit:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
LINDSAY LARA, City Clerk