June 18, 2019 Newsletter

Before you hit the beach for a well deserved break from city politics, get up to speed on the latest drama and developments regarding wireless equipment installations, Cubberley, the Stanford GUP, and the city budget. Then tune in for council’s pre-recess wrap up.

Looking Ahead

As summer recess approaches, Council will wrap up its work on June 24 with a massive consent calendar to clear the docket until it returns on August 5; new rules for refuse collection; and rezoning and site and design review for new Mercedes and Audi dealerships near the Baylands.

The 30-item consent calendar includes over $12.6 million in contracts ranging from utilities and tree trimming to shuttle services, artificial turf replacement, pickle ball and tennis courts, grade separation consultants and a five year parking permit and citation management system. In addition, the consent calendar covers such things as second readings of new zero-waste ordinances and consolidation of individual Residential Permit Parking program funds into a single RPP program fund. Click here for the full list with links to related staff reports.

City just adopted new rules for disposable food ware and construction materials – Next up: refuse collection

Pursuant to Palo Alto’s Zero Waste Plan, City Council adopted new rules on June 10 to regulate the use of disposable food ware, including restricting the use of plastic straws, cutlery, beverage stirrers, etc., reducing printed receipts at food service establishments and limiting the retail use of plastic produce and meat bags, including at grocery stores and farmers markets. In addition, council approved new rules regarding management of deconstruction and construction materials to maximize the salvage for reuse, increase diversion of recyclable materials, and reduce the amount of landfilled waste.

On June 24 council will turn its attention to refuse disposal and collection with new rules related to the storage, sorting, collection and removal of refuse to make waste sorting more effective and facilitate monitoring. Some proposed changes include requiring commercial facilities to use clear bags for garbage, blue-tinted clear bags for recycling, and green-tinted clear, compostable bags for compost. All users (including residential) will be required to break down cardboard boxes, and containers may only stay in the public right-of-way for 24 hours before or after being serviced. 

Council to weigh in on Mercedes/Audi Dealership adjacent to Baylands

On June 24, City Council is set to change the underlying zoning district and authorize demolition of the former Ming’s Restaurant and current Audi Dealership (located at 1700 and 1730 Embarcadero Road) to allow construction of a new two-story 84,900 square foot combined Mercedes/Audi auto dealership. The proposed project offers potential to increase the city’s sales tax revenues, but has traveled a bumpy road through the city’s commission review process.

On March 27 after lengthy deliberations, the Planning and Transportation Commission narrowly recommended approval of the project on a 4-3 vote (Lauing, Summa, Templeton dissenting). Cited concerns included ecological and traffic impacts due to proximity to the Baylands and the badly congested intersection of Embarcadero and East Bayshore Roads. In addition, multiple commissioners found the project incompatible with other development in the area and objected to the extension of perceived “spot zoning” at the Ming’s site (to accommodate a hotel that never came to fruition) to the adjacent Audi parcel.

The Architectural Review Board, despite having held three hearings on the project, has not yet offered a recommendation for approval and as recently as June 6 was unable to make a number of required “Findings” that would be necessary for an affirmative recommendation. Staff asserts that the ARB’s outstanding concerns do not have a significant impact on the overall building mass or design. Therefore, in the interest of streamlined review, staff has opted to advance the project to City Council with a condition of approval that would require return to the ARB to resolve the outstanding issues after council takes action on the application.

Get Up To Speed

City’s Fiscal Year 2020 Budget features operating cuts and a slew of utilities rate hikes

On June 17, City Council voted 6-1 (Tanaka dissenting) to adopt the city’s Fiscal Year 2020 Budget Ordinance. The final budget recommended by the Council Finance Committee reflects a 2.8 percent increase ($19.4 million) over the proposed budget presented in April, primarily due to reappropriations to continue ongoing capital projects. However, the FY 2020 Budget also imposes a multi- million dollar reduction in the city’s operating budget, marking the second year of continued reductions in the General Fund necessitated in large part by council’s decision to proactively fund the City’s long-term pension obligations.

Other notable elements of the adopted FY 2020 Budget include:

  • Increased city investment of $270,000 in the Transportation Management Association (TMA) to shift commuters out of single occupancy vehicle modes ($180,000 derived from increasing parking fees by 7.5 percent and $90,000 from the University Avenue Fund), bringing the city’s 2020 investment to $750,000;
  • Addition of an Automated Parking Guidance System as part of the city’s priority Infrastructure Plan (replacing the sidelined Downtown Parking Garage);
  • Dedication of new hotel Transient Occupancy Tax (TOT) revenues and voter approved TOT rate increase revenues towards funding the Infrastructure Plan.

Click here for the staff report on the FY 2020 City Budget.

Also on June 17, the council approved the Fiscal Year 2020 Utility Financial Plans and adopted customer rate increases across the utilities system, including electric, gas, wastewater, water, and storm water and surface water drainage. Each of those rate changes received the recommendation of both the Utilities Advisory Commission and the Council Finance Committee and were included in the assumptions underlying the city’s FY 2020 Budget. Here’s how the rate increases break down:

  • Electric: Total increase of 8 percent across electric rates, including an approximate 4 percent increase for residential customers. Additional annual rate increases of 4 percent are projected through FY 2023.
  • Gas: Gas distribution-related rates will rise by an average of 8 percent (following 6 percent increase in July, 2018), including a 13.25 percent hike for residential customers. When combined with supply-related rates, the overall system rate increase for natural gas will be 5 percent, with 8.1 percent attributed to residential customers. Additional annual rate increases of four to eight percent are projected through 2024.
  • Wastewater: 7 percent increase in wastewater collection rates for 2020, with projected additional increases of 6 percent annually through FY 2024.
  • Water: Water costs are projected to rise by an average of 3 to 4 percent annually over next several years. Proposed overall rate increase of one percent in FY2020, followed by annual increases of 2 to 6 percent in later years. On average, residential customers will see an increase of 2 percent.
  • Storm Drain: Storm water and surface water drainage rates will rise by 4.5 percent, consistent with the annual Consumer Price Index adjustment approved by ballot measure in April 2017.

Click here for the staff report on utilities rate increases.

City requires 300-foot setback from public schools for wireless equipment installations

On June 17, City Council took a first step in responding to community concerns about the public impacts of wireless cell equipment installations in the public right of way. Under time pressure from the Federal Communications Commission, in April 2019 the city adopted objective standards to regulate the design and location of wireless cell equipment installations on light and utility poles throughout the city. Recognizing strong interest in the community for tighter controls, City Council directed staff to return within a year with an updated ordinance that could reduce perceived impacts on nearby homes and schools. Staff are in the process of analyzing additional standards to meet that timeline. Meanwhile, due to the urgency of public demands for setbacks from public schools, on June 17, staff proposed an interim standard that would require wireless equipment installations to be located at least 300 feet from any land parcel containing a public school.

Most public comments Monday night generally favored setback requirements but, citing standards in other communities, they sought a 1,500-foot setback from any school (not just public schools) as well as a 300-foot setback from residences. A motion by Councilmember Kou to require a 1,000-foot setback from any k-12 school and a 300-foot setback from residences failed for lack of a second and staff indicated that more research was necessary to determine the maximum setbacks that would be appropriate in Palo Alto. Ultimately council voted 6-1 (Kou dissenting) to adopt the staff-proposed 300-foot setback from public schools. Staff was encouraged to bring forward additional standards as they are identified rather than waiting for a complete package of new standards.

Housing options introduce new controversy into Cubberley Master Plan effort.

What had been widely lauded as a successful process to engage the community in planning for redevelopment of Cubberley took a turn toward controversy on May 9 with the introduction of new housing scenarios, including potential housing on public land and parcels zoned for Public Facilities. The housing concepts were perceived by many as a radical last minute change of direction that was inconsistent with the community priorities expressed throughout the process and threatened future service capacity. Others welcomed the housing concepts as a long overdue recognition of the benefits of housing near services. Approximately 75 percent of participants at the May 9 meeting rejected the housing concepts that might use city-owned land. Fewer objected to housing for PAUSD staff on school district-owned properties. Those willing to accommodate housing only on school-owned land heavily favored the 525 San Antonio Road location that is not already zoned for Public Facilities. Their comments generally argued that Public Facilities zoned land is needed for community use.

The Parks and Recreation Commission similarly did not take well to the prospect of committing limited city recreation land to housing use. On May 28, the Commission voted 5-1 (McDougall absent) to endorse a Colleagues’ Memo authored by Chair McDougall, Vice-Chair Greenfield, and Commissioner Moss, urging City Council not to include housing on city-owned land at Cubberley. The debate then moved to City Council on June 3, where dozens of residents wrote letters and turned out to speak.

Council was slated to identify how much new housing should be included in an upcoming environmental analysis and business plan for the Cubberley redevelopment. The lengthy debate kicked off with a motion by Councilmember DuBois to explore higher density housing at 525 San Antonio at 32, 64, and 112 units for the environmental analysis. That motion was quickly replaced with a substitute motion by Councilmember Alison Cormack to evaluate up to 164 housing units across the entire site. Cormack’s substitute initially passed on a 4-3 vote (DuBois, Kou, and Tanaka dissenting) only to fail by the same margin when Mayor Filseth called a revote and changed his position. Ultimately council settled on direction to study 112 housing units, with up to 100 units on City land and up to 112 units on PAUSD land at 525 San Antonio and Greendell School.

The 6-1 vote (Tanaka dissenting) on June 3 also requested a joint study session with the School Board in August. Although the school district is the majority landowner at Cubberley, the Board of Education has not taken a position either on the need for or desirability of PAUSD staff housing as part of the Cubberley redesign. Individual board members had called for inclusion of concepts for more housing in the Cubberley plan, but the district indicates no sense of urgency to take a position anytime soon.

Amid drama, county staff takes firm positions on housing needs and open space protections related to Stanford’s expansion

Despite recent drama and uncertainty over whether Stanford and Santa Clara County will return to negotiations for a development agreement to govern the university’s expansion project, the County Planning Commission continues to move forward through the traditional review process for Stanford’s General Use Permit application. On May 23, county staff released detailed conditions of approval proposing requirements Stanford would have to meet to proceed with its project, along with associated amendments to the Stanford University Community Plan that provides a policy framework to guide Stanford’s growth.

The most notable element of the proposed conditions of approval is a requirement that Stanford build a minimum of 2,172 units of housing (not counting student beds), including 933 affordable units – far exceeding the 550 units proposed in Stanford’s application. 70 percent of the units in each income category must be constructed on campus. At a May 30 County Planning Commission hearing held in Palo Alto, housing dominated discussion and over 250 people turned out, most of whom urged support for the recommended conditions of approval. Stanford, for its part, opposes the proposed housing requirements and is seeking amendments to get credit for housing already in the pipeline and to eliminate the on-campus requirement by allowing 70% of market rate units to be constructed within 6 miles of campus “or along transit corridors.”

Key among the staff-proposed Stanford Community Plan amendments, is a requirement that Stanford refrain from development outside of the academic growth boundary (AGB) for 99 years. Established as part of Stanford’s 2000 GUP, the AGB essentially preserves Stanford land west of Junipero Serra Boulevard as open space, with development outside the boundary only permissible with support from four out the county’s five supervisors. The original AGB requirement is set to expire in 2025. A 2018 study commissioned by the county concluded that Stanford could triple its density, accommodating up to 44 million square feet of campus development, without breaching the AGB and still maintain a floor area ratio at the low end of the range at comparable universities.

Stanford and others continue to urge return to a development agreement process that allows negotiation of community benefits that cannot be mandated through the traditional, environmental review process. Chief among such benefits could be school mitigations that are strictly limited by the state under the traditional process. Ironically, a separate agreement announced in April between Stanford and the Palo Alto Unified School District is precisely what triggered suspension of negotiations because the school mitigations were conditioned on approval of a development agreement, seemingly contrary to established ground rules between the county and the university.

That apparent Stanford/PAUSD deal spurred new drama last month when the Palo Alto Weekly reported on emails, obtained through a Public Records Act request, that suggested Stanford and PAUSD had “worked together to circumvent county ground rules” and raised questions about the transparency of their discussions. Contemporaneously with that reporting, Stanford called a halt to further action on the tentative agreement with PAUSD and asked the county to delay public hearings on the GUP and return to development agreement negotiations. On May 14, the school board voted to suspend consideration of the tentative Stanford agreement. With the agreement suspended, recused board members Ken Dauber and Todd Collins both returned to the dais to comment on the agreement. Dauber sharply criticized County Supervisor Joe Simitian for having “killed” the agreement due to his objections to its constraints on the broader county negotiations.

Whether the parties will return to development agreement negotiations and the fate of the Stanford/PAUSD school mitigation agreement remain uncertain. However Deputy County Executive Sylvia Gallegos indicated at the May 30 Planning Commission meeting that “there are communications occurring between the county and the university about the conditions under which negotiations may resume.” Meanwhile, the County Planning Commission will continue its work along the traditional path, possibly making a recommendation at the final public hearing scheduled for June 27 at 1:30 pm in the Issac Newton Senter Auditorium at the County Government Center at 70 W. Hedding St., San Jose.

Other News

  • Vehicle Dwelling: On a 5-1 vote (Tanaka dissenting, DuBois absent), City Council endorsed a Colleagues’ Memo by Councilmembers Kou and DuBois directing the Policy and Services Committee to develop a “safe parking” program for vehicle dwellers, including possible use of city-owned land.
  • Airplane Noise: Despite mounting frustration over the FAA’s neglect of local noise concerns and a newly proposed air traffic route that threatens to worsen impacts, City Council opted not to sue the Federal Aviation Administration over airplane noise.

Notable Upcoming Action

June 18, 2019

Revenue Generating Tax Alternatives: The Council Finance Committee will discuss preliminary revenue estimates for a range of potential taxes including a per-employee or per-commercial square foot business tax. Beginning at 5:30 pm (City Hall). Click here for staff report.

June 24, 2019

Downtown Business Improvement District: City Council will vote on confirming the Annual Report and fiscal year 2020 assessments to be levied in the Downtown Palo Alto Business Improvement District. Beginning at 6:00 pm (City Hall). Click here for staff report.

Refuse Collection: Pursuant to Palo Alto’s Zero Waste Plan, City Council will vote on new rules related to the storage, sorting, collection and removal of refuse to make waste sorting more effective and facilitate monitoring. Some proposed changes include requiring commercial facilities to use clear bags for garbage, blue-tinted clear bags for recycling, and green-tinted clear, compostable bags for compost. All users (including residential) will be required to break down cardboard boxes, and containers may only stay in the public right-of-way for 24 hours before or after being serviced. Beginning at 6:30 pm (City Hall). Click here for staff report.

Utilities Connection and Service Fee Increases: City Council will adopt a resolution amending Utilities Rate Schedules for service connections and service call charges related to electric, water, gas, sewer, and miscellaneous utilities, effective September 1, 2019. Beginning at 7:00 pm (City Hall). Click here for staff report.

Mercedes/Audi Dealership on Embarcadero Road: City Council will vote to change the underlying zoning district and authorize demolition of the former Ming’s Restaurant and current Audi Dealership at 1700 and 1730 Embarcadero Road to allow construction of a new two-story 84,900 square foot combined Mercedes/Audi auto dealership. Beginning at 7:30 pm (City Hall). Click here for staff report.

Fiber to the Node: City Council will vote on re-issuance of a Request for Proposals to begin a multi-phase Fiber Network Expansion and eliminate the Fiber and Wireless Citizen Advisory committee, assigning the Utilities Advisory Commission as the sole public input forum for Fiber and Wireless Expansion initiatives. Beginning at 9:00 pm (City Hall). Click here for staff report.

June 27, 2019

Stanford GUP: The Santa Clara County Planning Commission will hold its third and final public hearing on the Stanford GUP. Beginning at 1:30 pm in the Issac Newton Senter Auditorium at the County Government Center at 70 W. Hedding St., San Jose.