2026-10-13 - Policy & Services Committee Special Meeting

12:56a little louder. One second.

12:58>> Okay. Thank you.

13:02>> What's that, Wes?

13:03>> Just keep talking.

13:05>> Me or Nicole?

13:06>> You.

13:07>> Me?

13:07>> Yep.

13:08>> If you wish to address the city council

13:09or presiding board committee commission

13:11during this meeting, please complete

13:13this card.

13:20Nicole, could you mind speak? Uh, please

13:23speak again.

13:24>> Yeah. Testing testing one, two, three

13:27tonight. The policy.

13:28>> Okay, we're good.

13:30>> Thank you.

13:31>> Thank you. Just going to gather up my

13:32stuff and I'll be down.

47:08Good evening. This is the October 13,

47:112026 meeting of the Palto City Council's

47:14Policy and Services Committee. Madame

47:16Clerk, would you please call the role?

47:18>> Yes. Chair Lith,

47:20>> here.

47:21>> Council member Rectal

47:22>> here.

47:23>> Vice Mayor Stone

47:24>> here.

47:24>> For the record, all are present.

47:27>> Terrific. We'll begin with in-person

47:30public comment. Do we have any members

47:32of the public who wish to speak?

47:34>> Yes, we do have one request to speak.

47:38>> Our first speaker is Henry E.

47:49Thank you.

47:50I apologize for almost being late, but I

47:54had a rush over from my class at Palo

47:57Alto High School where I'm a student.

48:01I haven't yet run into Well, you are a

48:04teacher at Palo Alto High School. No,

48:07not anymore. Oh, I was misinformed. I

48:10thought you might be one of my teachers.

48:12I am there to take I am taking the

48:15course on Chinese.

48:17And that's why I'm a student there from

48:194:00 to 6 every Tuesday.

48:22Now I think this is one of the excellent

48:24services that Palo Alto provides to its

48:28residents. However, there are problems

48:31because the school system is

48:33disconnected from the city. That must be

48:37solved. This is the larger problem that

48:39you must address to integrate the school

48:42system and the city. Why? Because right

48:45now there is a proposal to have the city

48:49pay the school district a large amount

48:51of money. Why is that being done?

48:53Because the two are separated legally.

48:56If they were integrated, that would be

48:59non-issue. It wouldn't happen. It

49:01couldn't happen in places where these

49:03are integrated. So my suggestion for you

49:06is that there should be immediate

49:08resolution to integrate

49:10the school system, the district and the

49:12city of Palo Alto with the school

49:15district becoming a unit of the city as

49:17is common place in many uh cities in the

49:20United States. This would solve one of

49:23the great problems of our city of the

49:25lack of connection. This is not only

49:28with respect to uh the school district

49:31but also with respect to Stanford

49:33University.

49:34One of the reasons why there's a

49:36disconnect between Stanford and Palo

49:38Alto is that Stanford is not part of

49:41Palo Alto legally. It should be

49:44obviously it is socially historically

49:47there wouldn't be a Palo Alto without

49:49Stanford or a Stanford with Palo Alto

49:52but legally Stanford is an

49:54unincorporated territory and so we can't

49:57deal directly with it we must solve that

49:59there's a very simple solution Paulo

50:02Aldo can enex Stanford any city can enex

50:06an adjacent unincorporated territory

50:08then we wouldn't have to have this

50:11distance between The two would be part

50:14one of the same entity which in reality

50:16we are because Stanford is Palo Alto,

50:20Palo Alto is Stanford. The school

50:23district is Palo Alto. Palo Alto is the

50:26school district. We should bring them

50:28all together. Then we could have a more

50:31harmonious relationship between the

50:34different parts of Palo Alto and solve

50:37our problems

50:39more expeditiously. Thank you, Madam

50:42Chairman, chairperson, whatever you

50:45like.

50:48>> That concludes in person public comment

50:50for items not on the agenda.

50:53>> Thank you for that.

50:56Uh, all right. We're going to turn to

50:58action item one. This is a discussion

51:01and possible recommendation to the city

51:03council regarding implementation of

51:05housing element program 3.9A

51:08which is intended to identify incentives

51:10at strategic locations to shift the

51:12economic benefit of redevelopment from

51:14commercial toward home building.

51:17Director Lake.

51:19>> Uh good evening uh chair and committee

51:21members. Uh I'm going to ask Robert

51:23Kaine, principal planner with our office

51:25to present this item.

51:29Good evening, Chair Scott HS, Vice Mur

51:31Stone, Council Member Rectal. My name is

51:33Robert Kaine. I'm a principal planner

51:35with the Department of Planning and

51:36Development Services.

51:38Uh, next slide, please.

51:43We're here tonight to talk about uh

51:44housing element program 3.9A

51:47specifically. Um, we were here in March

51:49to talk about this previously. Um but

51:51just for a recap for uh those listening

51:54that might not have been part of that um

51:57H program 3.9 generally asks us to

51:59incentivize greater housing production

52:02um and temper strong market demand for

52:04commercial development in our city. 3.9A

52:08specifically calls for us amending the

52:10municipal code to reduce commercial

52:12floor area allowances or provide other

52:15incentives at strategic locations

52:17shifting the economic benefit of

52:19redevelopment towards housing.

52:22Um as I mentioned this was previously

52:24discussed at the March 10th policy and

52:26services committee. Next slide please.

52:31Um for a broader pol policy context um

52:34the reason why we have this program is

52:36because historically office values in

52:38PaloAlto um have been high in some

52:41locations although those are highly

52:44locationsp specific um and historically

52:48developers have preferred to um pursue

52:51commercial developments over housing in

52:53those locations. However, um over the

52:56past several years, uh the city has gone

52:59through a number of efforts, including

53:01the housing incentive program, a number

53:03two area plans, one downtown and one on

53:06San Antonio Road. Um and there have been

53:09various state laws that have made

53:10housing easier to develop. Um and the

53:13city is now seeing a shift towards more

53:15housing development applications in

53:18commercial areas. Uh due to the city's

53:20existing policies, there are really few

53:23avenues that exist for us to further

53:25restrict office development. We already

53:27have quite um uh quite high quite high

53:31restrictions in place. Um and we also

53:33believe that some office is desirable

53:36due to the economic benefits that it

53:37provides to the city and its residents.

53:40Next slide, please.

53:43At that March 10th meeting, um the

53:46committee provided the following

53:47direction to staff. Um, one was to

53:50require project labor agreements or

53:52PLA's for new office development. A

53:55second was to provide additional

53:57building standards for new office

53:59development as appropriate. And the

54:01third was to increase the commercial

54:03linkage fee for office development. Um,

54:06next slide, please.

54:10Um, oh, sorry, if you could go back. Uh

54:15staff would like to note that additional

54:16building standards are reviewed on a

54:19three-year cycle. Um the next one would

54:22be in 2028 that uh coincides with the

54:25California building code updates. The

54:27city also has a chance to then um

54:29provide uh additional um requirements um

54:32sometimes called breach codes uh at that

54:35time and staff would recommend that the

54:37city consider any additional building

54:39standards through that existing process.

54:42Uh we are also in the process of going

54:45through uh a development impact fee

54:47update in our department. Um and we

54:50would ask that instead of doing a

54:51separate commercial linkage fee update

54:54that we roll that into the existing

54:57update that is ongoing. Um next slide

55:00please.

55:01So that leaves us with project labor

55:03agreements. Um and after we had our

55:06meeting with you in March, uh staff went

55:09back and worked with our consultants to

55:11look at what that might mean for the

55:13city of PaloAlto. Um there are

55:16restrictions um in the law that on us

55:18requiring union labor for purely private

55:21development projects. Um however, we can

55:24establish some labor standards uh such

55:27as apprenticeships and requiring

55:29healthcare contributions. prevailing

55:31wage is something that we require

55:32currently for city projects. Um so there

55:37are some avenues put forward that we

55:38describe in the staff report. However,

55:41staff also feels that there's a limited

55:43impact that such um requirements would

55:47have uh as we're already rece we're

55:50already seeing an increase in

55:51residential development applications on

55:54previously commercial sites and applying

55:56labor requirements to small commercial

55:58projects might make them unviable

56:01whereas large commercial projects likely

56:03already use any standards that we might

56:06adopt anyways.

56:08um that there's also a challenge with

56:10administration. Um the city does not

56:12currently have the capacity or the fee

56:14structure in place to review and enforce

56:16labor standards. Um and we would

56:19recommend a civil enforcement structure

56:21should we proceed. And I'm going to talk

56:23about in our next slide a little bit

56:24more what the options are for

56:27enforcement um of these labor

56:29agreements. Next slide, please.

56:33So um if the committee would like us to

56:37continue pursuing um PLA's or something

56:40similar, we are going to request that

56:42you provide us with guidance on the

56:43geographic scope, size, threshold, and

56:45development types that should be

56:47considered in that ordinance and give us

56:49time to do proper outreach with local

56:52community stakeholders before coming

56:54back with an ordinance um for your

56:56consideration. Um, but one of the things

57:00that we need guidance on also is how to

57:02administer uh this ordinance should you

57:04direct us to do so. There's basically

57:07three main ways to do so. Um, the first

57:10is city administered. That has um high

57:12amount of oversight but also high cost.

57:15It's very labor intensive on the city

57:16side or we would have to hire a

57:18consultant to do that work. Um and there

57:21are potential delays in permitting as

57:24all of those document documents provided

57:26by the developer are reviewed um and

57:29audited throughout the project. Um a

57:32second option would be

57:33self-certification in which the city

57:35collects the data um but does not

57:37independently verify them. This has a

57:40low cost but also a very low level of

57:43oversight. Um and then the final version

57:45is civil enforcement which is the

57:48direction staff would recommend. um the

57:50city is removed entirely from oversight

57:53and dispute resolution and therefore

57:55there's no cost to the city. Um it would

57:57then fall upon affected workers or other

58:00um parties that have standing to bring

58:04uh lawsuits against anyone who is not

58:07meeting the requirements.

58:09Next slide please.

58:12So for next steps, um staff is

58:15requesting that the committee recommend

58:17that the city council find that the

58:19intent of the program 3.9A is being

58:22achieved through our other um measures

58:24as mentioned before and that no further

58:26amendments to reduce commercial

58:28development allowances are warranted

58:30under the program and that council a

58:32consider any changes to commercial

58:34linkage fees through the ongoing

58:36development impact fee update and b

58:39consider additional building standards

58:40for new office development if still

58:42appropriate as part of the 2028 building

58:45code update. Additionally, staff request

58:48that the committee provide direction on

58:50whether to continue developing a

58:51construction labor standards ordinance

58:54as a separate effort from 3.9A and if so

58:57provide feedback on the scope and

58:59implementation topics as identified in

59:01the staff report.

59:03That concludes my presentation is

59:06[clears throat]

59:07um I would like to now call upon the

59:08economic development manager Alex Andra

59:11through the chair if you permit um to

59:13provide some comments on this as well.

59:15>> Yes, thank you very much. Thank you Mr.

59:17Andrade. Go ahead.

59:18>> Good evening. Alex Andrade, assistant to

59:21the city manager and economic

59:22development manager. I am here before

59:24you under my economic development uh

59:27role. From an economic development

59:29perspective, there is agreement that the

59:31intent of the housing element program

59:333.9A

59:34is being accomplished and that no

59:36further amendments to reduce commercial

59:38development allowances are needed.

59:41Office and housing complement one

59:43another. Suppressing office development

59:45will not generate more housing units.

59:47It's important to share data about the

59:50Palo Alto office market. per co-star.

59:53And if you're familiar with Co-Star,

59:54this is a platform that real estate

59:57brokers use for um for data. So per

1:00:01co-star in 2020, quarter 1, the Palo

1:00:04Alto office vacancy rate was close to

1:00:0710%. It was 9.8%.

1:00:09Staff did not anticipate the economic

1:00:11shock of course that uh the pandemic

1:00:14introduced. Office use changed

1:00:16dramatically after 2020 Q1 and the real

1:00:20estate office product just has not

1:00:22really recovered. In 2021 Q2 the Palo

1:00:26Alto office vacancy rate increased to

1:00:2816%.

1:00:29The most recent data shows in 2026 Q2

1:00:33the office vacancy rate was 15.7%.

1:00:37I'm sharing this information because the

1:00:39office market is still taking a beating.

1:00:41There's no need to make office

1:00:43investment more difficult. This is my

1:00:45perspective from an office from the

1:00:47office of economic development. Um the

1:00:49office market I believe is still hurting

1:00:51and there's significant amount of vacant

1:00:53square footage in Palo Alto and really

1:00:56throughout Silicon Valley. So in order

1:00:58to

1:01:00have new development take place that

1:01:02vacant space would need to be occupied

1:01:05to regulate office development. The city

1:01:06of Palo Alto has an annual office cap of

1:01:0950,000

1:01:11net new square feet in the downtown

1:01:13area. Calav and the El Camino Rial

1:01:15corridor. Adding a project labor

1:01:18agreement to new office development will

1:01:19affect a project's proforma. That's what

1:01:22drives development. There are

1:01:24alternatives to a PA PLA. And this is

1:01:27from actual experience. I worked with a

1:01:29nearby jurisdiction and I project

1:01:32managed the negotiations team on behalf

1:01:34of the city through what is known as a

1:01:35DDA, a disposition development agreement

1:01:38on a site that was owned by the city and

1:01:40the adjacent parcel was owned by uh

1:01:43private property owner was a total of 10

1:01:45acres. Staff and the developer settled

1:01:48successfully on offering wage and health

1:01:50benefits to hotel employees without

1:01:53executing a formal PLA. The DDA or

1:01:56disposition development agreement

1:01:57included wage and benefits for employees

1:01:59of the hotel on the city site, wage

1:02:02levels, health care benefits, dental

1:02:05benefits, and retirement benefits. And

1:02:08then I would say before I depart here,

1:02:10while the EPS study references the city

1:02:12of Berkeley's hard hat policy, even the

1:02:14consultant recognizes and expects uh

1:02:18that it may not increase housing

1:02:20production. So to conclude here, I just

1:02:22want to uh say the economic development

1:02:25once again agrees with the

1:02:26recommendation that the intent of the

1:02:28housing element program 3.9A is being

1:02:31accomplished.

1:02:33Thank you.

1:02:35>> Thank you, Mr. Andrade. Thank you, Mr.

1:02:36Kaine. Um colleagues, any technical

1:02:40questions that you'd like addressed

1:02:41before we open it to public comment and

1:02:43then we'll return for a proper

1:02:45conversation.

1:02:53Vice Mayor,

1:02:55>> thank you. Um,

1:02:57I'm a little conf So, a slide five when

1:03:02it talks about

1:03:05restrictions on requiring union labor. I

1:03:08It makes a a pretty firm statement that

1:03:11the city is prohibited from requiring

1:03:13private developers from using union

1:03:15labor. But but then we go on in in slide

1:03:18six to say should the committee wish to

1:03:21pursue a a PLA ordinance. And so it kind

1:03:25of seems like

1:03:27like uh slide five is definitively

1:03:30saying we're not allowed to to use PLA's

1:03:34as it applies to private developers.

1:03:39I'm not sure that's quite my my

1:03:41understanding or if I'm just misreading

1:03:44that. So

1:03:46staff have some clarity around that.

1:03:50>> Sure. Through the chair, I would say

1:03:51that um we can require union labor in

1:03:54certain instances where it's a city le

1:03:57project, but when it's purely private,

1:03:59uh what I understand and and perhaps a

1:04:02city attorney can provide some legal

1:04:04context. uh we're not allowed to do that

1:04:07for a purely private development, but

1:04:10what we do have the opportunity to do is

1:04:12to to add additional labor standards

1:04:16that are that many people might use

1:04:19labor to meet those standards. So, it's

1:04:22it's not an actual requirement to use

1:04:23union labor, but it's saying you must do

1:04:26these following things with your labor

1:04:27force that are the types of things that

1:04:31a union would advocate for. Okay?

1:04:35So, so it doesn't preclude PLA's from a

1:04:40for a private developer,

1:04:43>> right? We just can't specifically say

1:04:45you must use union labor.

1:04:47>> Gotcha. Okay. And assume city attorney

1:04:50agrees with that advice.

1:04:51>> Yeah. I mean, there's sometimes called

1:04:53skilled and trained workforce programs,

1:04:55but so they can't require um you know,

1:04:58an agreement. you cannot compel the use

1:05:01of union labor but um in practice that

1:05:05might be the only way to meet them in

1:05:07many jurisdictions.

1:05:08>> Okay.

1:05:08>> Um so um yeah and and so the the the

1:05:13staff report cites the example of the

1:05:15hard hats ordinance in in Berkeley u

1:05:18which is is probably the most expensive

1:05:20one I'm aware of.

1:05:21>> Okay. I appreciate the clarity. That's

1:05:23my only question. I appreciate you're

1:05:25asking because I had the same question.

1:05:26Um, sort of. Uh, we saw on the slide the

1:05:29city is prohibited, but in the staff

1:05:31report it was softer language. PLA's are

1:05:33most commonly used on public

1:05:35construction projects and applying them

1:05:37as a requirement for private development

1:05:39is less common. So, it did seem like the

1:05:41door was was open. But I think what

1:05:44we're hearing is you don't you can't

1:05:46mandate that they use union labor, but

1:05:48you can have labor standards that

1:05:50effectively incentivize them to use uh

1:05:54union labor.

1:05:55>> That's correct.

1:05:56>> Okay. Um I think I had a second

1:05:59technical question. [sighs] Um [gasps]

1:06:02under administration and enforcement

1:06:05um

1:06:07slide six. Uh I understand what city

1:06:12administered is self-certification

1:06:14indicates the city collects the required

1:06:17certifications but does not

1:06:19independently verify them. And then

1:06:22civil enforcement says

1:06:24uh the city's role is limited to

1:06:26collecting certifications. City removed

1:06:28from oversight and dispute resolution.

1:06:30So I'm not it sounds like the city will

1:06:32collect certifications under either. So

1:06:36I'm not understanding what the

1:06:37distinction is.

1:06:40beyond that.

1:06:43>> Yeah, I think you're right. So, the um

1:06:46the idea is that under uh that number

1:06:48two and number three, the city would be

1:06:50receiving as a part of our plan review

1:06:53before we issue a building permit

1:06:54process, the certification paperwork

1:06:57that happens under either of those

1:06:59scenarios. And I I think you're right,

1:07:00that probably could have been rolled up

1:07:02into option one, option two.

1:07:07>> Okay.

1:07:08The point being under civil enforcement

1:07:10to the extent this goes arai someone has

1:07:12a concern they have to take it up

1:07:14themselves. Yeah. Okay. Um

1:07:19and for Mr. Ka uh Andrade

1:07:23if you wouldn't mind responding to this.

1:07:26You mentioned having worked with another

1:07:29municipality on a DDA disposition

1:07:31development agreement and you indicated

1:07:33it's a different mechanism for uh

1:07:38effectively requiring uh certain level

1:07:41of wages and benefits. I was wondering

1:07:43if you could just give us a little bit

1:07:44more detail on how the DDA differs from

1:07:48a PLA.

1:07:52for the DDA and I may need our uh city

1:07:55attorney's assistance on this from the

1:07:57PLA perspective, but the DDA is a

1:07:59disposition and development agreement

1:08:01that is specifically an agreement on

1:08:04city- owned property for development.

1:08:09And so that allows the city um a greater

1:08:13opportunity to negotiate. And so um for

1:08:18this particular example, there were

1:08:20union members that were interested in

1:08:21having an official PLA. Uh the developer

1:08:25at that point in time was not interested

1:08:27in pursuing a PLA, but was interested in

1:08:31um providing certain benefits of which I

1:08:34can provide a little bit more detail if

1:08:36you're interested in that.

1:08:39Sure. So for example, wage and benefits

1:08:42for employees again of the hotel which

1:08:44was um on the city site. And so what

1:08:48that means is the hotel operator would

1:08:50offer a competitive wage and benefits

1:08:52package to hourly employees wage levels.

1:08:56Now, this, mind you, was back in 2014,

1:08:58but

1:09:00there was a provision that indicated a

1:09:02an initial minimum wage rate of that

1:09:05point. It was $13.75,

1:09:08obviously, many years ago, but that was

1:09:09for all regular full-time and regular

1:09:12part-time hourly employees at the hotel.

1:09:16That included

1:09:18uh room cleaners, house people, uh bell

1:09:21persons, telephone operators, front desk

1:09:24folks, and uh laundry people working on

1:09:27on-site laundry. Also included

1:09:29healthcare benefits, so medical benefits

1:09:32package for regular full-time employees.

1:09:35And that included a voucher or

1:09:37equivalent of a voucher to cover

1:09:39payment. dental benefits as well through

1:09:42an initial voucher or equivalent. And

1:09:46then lastly, retirement benefits. So

1:09:48that included an initial retirement

1:09:50benefit package of a 401k

1:09:54um match or an equivalent for plan

1:09:56eligible employees for up to $2,000

1:09:59annually.

1:10:00>> So were you recommending this as a

1:10:02viable alternative to what we're

1:10:04considering tonight? What I'm indicating

1:10:06is that there is alternatives to an

1:10:08official and formal PLA and this is an

1:10:11official example that I participated in

1:10:13as a negotiation team member

1:10:15>> and Mr. Le also has some additional

1:10:18things to offer about some of the

1:10:20differences between a DDA being very

1:10:22individualized to one development as an

1:10:24agreement versus a PLA which would be

1:10:26looking at establishing something across

1:10:28the board and so Mr. Le you can add from

1:10:31there.

1:10:33>> Yeah. So, um I think in in many respects

1:10:36the example um that the um that Alex and

1:10:41Andrade had mentioned

1:10:44is akin to what we're recommending as a

1:10:47construction agreement. um I forget the

1:10:50exact term we use but we're making the

1:10:53distinction between a um a PLA which has

1:10:58this requirement that you use labor

1:11:01uh and as opposed to this construction

1:11:03oh we call the construction labor unit

1:11:05or what's the term we use

1:11:08anyways

1:11:10uh construction standards um ordinance

1:11:13which would set forth the appren

1:11:15apprentichip requirement and the

1:11:17healthcare requirement and That's

1:11:19similar to the example that was

1:11:21described a moment ago that was used in

1:11:22a development agreement. Development

1:11:24agreements are one-on-one deals. We

1:11:26can't um well, I suppose the city could

1:11:28require

1:11:31development agreements. It's been done

1:11:32in other jurisdictions. I don't

1:11:33recommend that we we do that, but um for

1:11:36every office project that goes forward.

1:11:38Um but anyways, that that's the

1:11:40distinction. One is a uh partnership

1:11:43that is engaged in the uh private

1:11:46developer and the jurisdiction to

1:11:47develop those standards. It's

1:11:49memorialized in a development agreement.

1:11:51The PLA we're saying we can't require a

1:11:53developer to do that uh as a a you know

1:11:57a process of ordinance a private

1:11:58developer. So we're saying as an

1:12:01alternative if you wanted to continue to

1:12:02pursue this, we have this construction

1:12:04standards concept that we've laid out in

1:12:07the staff report which says uh you know

1:12:10you know we would establish a standard

1:12:12for uh apprenticeships and uh healthcare

1:12:15coverage and a developer may decide well

1:12:18if I went the union route I can achieve

1:12:20that but I don't have to go the union

1:12:22route. I could still set these standards

1:12:23and this is what what the example that

1:12:25was described. you don't have to

1:12:27necessarily use union to get there. Uh

1:12:30you could develop that on your own uh

1:12:32through your own standards. Um so and

1:12:35and then if you do want to go forward on

1:12:37that path, we have a number of sort of

1:12:40policy directions that we're looking for

1:12:41that we can get into when you get in

1:12:43your deliberation. Thank you.

1:12:45>> Thank you, Council Member Recall. Any

1:12:46technical questions? Okay, why don't we

1:12:48go to members of the public, please?

1:12:50Madam Clerk, do we have any? We do have

1:12:52one request to speak.

1:12:56>> Terrific.

1:12:57>> Our first speaker is Henry E.

1:13:02>> So let's go from the particular to the

1:13:05general this time. So I think I'm

1:13:07hearing about the situation at the

1:13:10president hotel although that name was

1:13:12not mentioned where all the workers

1:13:15kitchen workers and everyone was fired

1:13:19and some good people from the seniors

1:13:21group at Avanitus where I'm a member

1:13:23which is not supposed to have a

1:13:24political tinge but does have a little

1:13:26bit. We went to pick it the union was

1:13:29there and the workers were there. The

1:13:32workers were so discouraged that they

1:13:35did not really believe that anything

1:13:36would happen from this picket line and

1:13:40uh but since some good citizens of Palo

1:13:42Alto had shown up on their behalf they

1:13:44felt obliged to come also. So what do we

1:13:48learn in general from this? Palo Alto is

1:13:51not a union town.

1:13:54the the rights for representation that

1:13:56we fought for in the 1930s in places

1:13:59like Detroit, the great industrial

1:14:02strikes where unions were required to be

1:14:05present and you had to vote for it and

1:14:08then you could be a member of a union

1:14:09and represent yourself. We apparently do

1:14:12not have that in Palo Alto.

1:14:15And should we? I think most Palo Alton

1:14:18would agree that the workers in Palo

1:14:19Alto have a right to representation to a

1:14:22fair wage whether they're working for

1:14:24the private sector or a public sector

1:14:26but we do not as a city mandate that how

1:14:28can that be where Palo Alto the liberal

1:14:32capital of the world we think so we must

1:14:35correct this your committee must

1:14:37recommend immediately that union

1:14:40elections be held forth with in all

1:14:44working places in Palo Alto

1:14:46And if you cannot do that, each one of

1:14:48you explain why you're not for that.

1:14:50Now, let's go to office development.

1:14:52Keith, you were on a committee looking

1:14:54into what should happen to the fries

1:14:56site.

1:14:58And you know, well, what did happen was

1:15:01office development on part of it,

1:15:03offices that we were just told are

1:15:05unnecessary because there are too many

1:15:07offices. Yet the the committee you were

1:15:10working with was shut down and a private

1:15:13developer was brought in who's doing

1:15:15offices and that was voted by the

1:15:18council. How could that be if we don't

1:15:21need officers? But that's how it is

1:15:24because when a particular developer who

1:15:26is wellplaced wants offices, the city

1:15:28council of PaloAlto will vote offices.

1:15:32So what can we do about this? We must

1:15:35have a way of stating our values as a

1:15:38city. This council does not represent

1:15:40the values of Palo Alto. We need a

1:15:43different form of government. We need a

1:15:46New England town meeting form of

1:15:48government where we all come together

1:15:50for a day or two virtually and in person

1:15:54to address the big issues like union

1:15:57representation, like should high school

1:15:59students at 16 have the right to vote?

1:16:02Should we prioritize housing for

1:16:05everyone who works in PaloAlto?

1:16:08>> Thank you.

1:16:10>> That concludes public comment on item

1:16:12number one.

1:16:13>> Thank you.

1:16:14All right, let's return to the deas and

1:16:17discuss the matter. Who'd like to go

1:16:19first?

1:16:22Council member Reto.

1:16:25>> I thought Vice Mayor's phone.

1:16:30>> Oh, well, thank you. You know what

1:16:31happened? You guys switched seats

1:16:33tonight. So,

1:16:34>> I thought I was calling on you, but I

1:16:36was looking at him. How fun.

1:16:37>> We do look

1:16:41>> um All right. Well, uh thanks S for

1:16:45bringing this this back. I mean o

1:16:47overall I don't have any issues with the

1:16:51staff recommendations related to

1:16:55um the commercial linkage fees going

1:16:58through the the impact fee update or the

1:17:01additional building standards holding

1:17:03that off until the 2028 building code

1:17:06update. I think that all I think that

1:17:08all makes sense to to me. Um, and

1:17:11appreciate just the additional data kind

1:17:14of kind of coming back that our original

1:17:17intent of trying to use these to

1:17:18encourage uh additional housing supply

1:17:21is not necessarily going to

1:17:23be any real material change and and

1:17:27mostly because the policies that we're

1:17:30already implementing are having such

1:17:32great success. So I think that's that's

1:17:34something to really celebrate. So I

1:17:37think the kind of my my focus is then on

1:17:41well what do we what do we do with this

1:17:43discussion around around PLA's

1:17:46I I agree it's not necessary to to

1:17:49continue to have that discussion related

1:17:52to housing element 3.9A. I I don't

1:17:57I don't think that's necessary at the at

1:17:59the moment and I don't want to distract

1:18:01from the work that staff is doing to

1:18:04implement housing element 3.9A and

1:18:06continue to to have the success that

1:18:08we're that we're having. That being

1:18:10said, I do think this is an item that I

1:18:13continue to have interest in and I think

1:18:16one where where the city can really lead

1:18:19on and I think there are some

1:18:20interesting opportunities there. I don't

1:18:23know based on what's been presented to

1:18:25us to tonight that any recommendation

1:18:29from us makes sense to probably go to to

1:18:32council. I think most likely a referral

1:18:35out of us tonight would probably be

1:18:36beneficial to reagendize this probably

1:18:39for for next year for staff to kind of

1:18:41come back and for us to to further vet

1:18:45the idea of of PLA's or what was the

1:18:49other one? the DDAS or another type of

1:18:53of labor standard, but overall

1:18:56I'm really interested in the in the PLA

1:18:59route. I think that tends to be more the

1:19:01gold standard of what we're trying to

1:19:04achieve here. And so I appreciate always

1:19:08when staff tries to focus us on what you

1:19:11need to be able to to be able to move

1:19:14this forward. So, kind of answering

1:19:17those questions,

1:19:19I I'd like to see something return back

1:19:22to to policy and services that um

1:19:26so going through your your questions on

1:19:29on the geographic scope. Personally, I

1:19:32think it should apply citywide. Most

1:19:34large scale development is happening

1:19:36within Stanford Research Park. So, you

1:19:39know, if we're going to do this, we're

1:19:40going to want this to to matter, not

1:19:43simply not kind of simply check a box or

1:19:46or do any virtue signaling here. And so,

1:19:48having it citywide, I think, makes the

1:19:50most sense, especially depending on what

1:19:53we do with the size of the project

1:19:56because I there there are certain ways

1:19:57that this could be crafted that it's

1:19:59really going to have zero impact. Uh,

1:20:01and that that's not that's not my

1:20:02intent. So, citywide makes the most

1:20:05sense to to me. Um, I would also imagine

1:20:08from a staff perspective that that makes

1:20:10administration more consistent and I

1:20:13know one of the feedback rather we've

1:20:14just received from developers over the

1:20:16years is the challenge of when there's

1:20:19different standards applying to

1:20:20different parts of the city. I think

1:20:21this further complicates that. So a

1:20:23citywide approach makes the most sense

1:20:25to me. I think [snorts] the size

1:20:27threshold is

1:20:30one that I don't think we'd be really

1:20:32prepared, at least myself, to be able to

1:20:35provide any strong direction there.

1:20:39And then again, wanted to make sure that

1:20:42this actually has an impact if what 61%

1:20:46of our office projects are below 25,000

1:20:50square feet at least in the last 5 years

1:20:52or or so, something like that.

1:20:54So I I think some sort of cut off or

1:20:57differentiation of project size makes

1:21:01sense. Maybe starting around 10,000

1:21:04square ft 15,000 square ft. I don't

1:21:07know. I think that's one that would be

1:21:08really beneficial to I appreciate the d

1:21:10the data was really helpful but I' I'd

1:21:13like to better understand that at that

1:21:15if if it comes back to us on

1:21:19types of of development.

1:21:22It should not apply to it shouldn't

1:21:24apply to new housing construction. Um

1:21:28we're trying to remove barriers to

1:21:29housing not create more. I I do think

1:21:34though I do think applying this to

1:21:37office

1:21:39to office development makes a makes a

1:21:42lot of sense. I I still think that yeah,

1:21:45even though it might not produce the

1:21:47type of housing that we might hope under

1:21:49a housing element 3.9A

1:21:51that still that moves the needle a

1:21:54little bit and encourages just even one

1:21:56housing project over office development

1:21:58that that helps. So I still think it's

1:22:00relevant there. just again not

1:22:02appropriated in housing element 3.9A.

1:22:05Um

1:22:07and be a pilot program for other

1:22:10potential PLA as well. Um I but I'd also

1:22:14like to see this extend to city-owned

1:22:18construction projects as well and better

1:22:20or understand because we didn't hear

1:22:22that from from staff tonight how this

1:22:24would impact city projects. I know we

1:22:27pay a living wage within our projects,

1:22:29but that still is far below what a PLA

1:22:33would be able to uh provide workers. So,

1:22:36I' I'd like to see us really explore

1:22:39that possibility as well if it comes

1:22:41back. And then on administration and uh

1:22:44enforcement, I mean, I understand

1:22:47staff's perspective of the of the civil

1:22:50enforcement. we want to make sure that

1:22:52this that this works and I don't like

1:22:55insisting that we do a particular

1:22:56approach. If ultimately the resources

1:22:58are not there, we're not going to be

1:22:59able to actually do it. Um, but I do

1:23:02have concerns about compliance if we if

1:23:05we do take that approach. So, I I'd like

1:23:08to see examples of of how that how that

1:23:13works in in other cities. I I I

1:23:17I um be curious to understand kind of

1:23:20cost impacts for a city administered

1:23:23approach. I I assume that was not done

1:23:25since it wasn't in the staff report. I

1:23:27don't know if staff knows what

1:23:29Berkeley's anticipated costs are um

1:23:32since they since they chose that

1:23:35approach. So I'd like to see more data

1:23:38before really being able to provide any

1:23:40clear direction on the on the

1:23:43enforcement mechanism. [clears throat]

1:23:44that appreciates staff raising the

1:23:46raising the concern, but I want to

1:23:48better understand costs. Um, what other

1:23:52cities are are doing? And has anyone

1:23:56considered a a hybrid type approach as

1:23:59as well that might be able to cut costs

1:24:01but um increase enforcement and actually

1:24:04make this thing um work. So, those are

1:24:08my thoughts on those on those questions.

1:24:10from staff's perspective. Is there any

1:24:13is there any follow-up to that that

1:24:17or I could also just wait until later if

1:24:20we get to a motion. I I don't need to

1:24:21continue speaking if this is ultimately

1:24:23not going to move forward.

1:24:25>> Yeah, chair, if I may just comment that

1:24:28that's exactly the kind of feedback and

1:24:29direction that we were looking for. Um

1:24:31and so appreciate that.

1:24:33>> All right. I've been doing this for a

1:24:34while now. So good.

1:24:36>> Thank you, Director Lake.

1:24:38>> Thank you, Vice Mayor. Uh very consist

1:24:41uh concise and yet thorough. Uh Council

1:24:44Member Rectal.

1:24:45>> Okay. Yeah, I'll cut to the chase. I

1:24:47support the staff recommendation. I I

1:24:50mean I think we don't have a need for

1:24:52any more penaliz penalizing of office or

1:24:56commercial I should say. I prefer the

1:24:58carrots over sticks and right now the

1:24:59carrots are winning. Uh that said, you

1:25:03know, we're finally making some progress

1:25:04on housing. I don't want us to say, "Oh,

1:25:06we can relax now." I think we really

1:25:08still have a you know our housing our

1:25:09jobs and balance is huge and we have to

1:25:12keep on working make that a priority. So

1:25:13I don't want to see this as a first step

1:25:15of moving into incentivizing office but

1:25:18I think we can simplify the whole life

1:25:20and and let's just uh keep on working

1:25:23prioritizing housing but not necessarily

1:25:25penalizing office. Um let's see. Uh yeah

1:25:31uh ELA's I have mixed feelings about

1:25:33that. I mean in theory they're great.

1:25:35Uh, I'm a little nervous about

1:25:37unintended consequences. So, I think

1:25:39we'd have to be very careful of that. If

1:25:40we do implement them, I I would prefer

1:25:43the self-certification.

1:25:45I don't like the private the civil

1:25:48approach. I we really don't want to be

1:25:50encouraging people to sue if there's a a

1:25:52better alternative. And

1:25:54self-certification does take some

1:25:56overhead, but not a lot. And as long as

1:25:58we have sufficient fines that if we find

1:26:00out that they're not following the

1:26:01rules, they have a big penalty, that

1:26:04should be enough to to keep them

1:26:06following the rules. Uh and then the

1:26:09last thing is um on pack page 10, we

1:26:12talk about economics of you know what is

1:26:15better, a square foot of office or a

1:26:18square foot of housing. And I've heard

1:26:21anecdotal stories that office is better,

1:26:24but I I'm skeptical, especially now. We

1:26:26have reduced business travel, which

1:26:29reduces the toot receipts that we get

1:26:30from office. We have reduced business

1:26:33lunches. If you look at, you know,

1:26:34Calab, we don't see the same. Compare

1:26:37that to 10 years ago. The the lunch

1:26:39business is not the same these places.

1:26:40And it's just not a vacancy issue. It's

1:26:44uh habits have changed during COVID. So

1:26:47that's less sales tax that office

1:26:48generates and also just the fact that

1:26:51office has low turnover. You have LLC's

1:26:53that hold these and you can sell the

1:26:56LLC's and so there's you don't get the

1:26:58same turnover that you have from

1:26:59individual

1:27:01um residences and so as a result I don't

1:27:03think you get the same property tax from

1:27:04office. So I really would like to see

1:27:06that economic study updated. I think

1:27:08fresh numbers would be a really good

1:27:10comparison. Uh my guess is that

1:27:13residents provide much more sales tax

1:27:16than businesses do and then much more

1:27:19property tax too. So I think that would

1:27:21really help us guide but any that's um

1:27:25it says that uh most likely would occur

1:27:27when the city updates its comp plan. So

1:27:30when would that be?

1:27:32Uh so that the current comp plan ends at

1:27:362030 and the idea is that we would start

1:27:39next year with a RFP and get underway in

1:27:432028 if not toward the end of 2027.

1:27:46>> Okay. And I hope this study would be the

1:27:48the first part. I assume you'd want to

1:27:51have the studies to set your table for

1:27:54the work that you'd be doing in the comp

1:27:55plan.

1:27:57Um well I think actually we're going to

1:27:59come back to this committee early next

1:28:00year for a discussion on how to update

1:28:03the comp plan. I think there's a number

1:28:04of ways that we could approach that. Um

1:28:07we're going to suggest uh just to sort

1:28:10of preview you or you all might not be

1:28:13on the committee next year but you can

1:28:14take this with you. Um there our last

1:28:17comp plan took um several years and a

1:28:21lot of dollars to um get through that

1:28:25effort. were going to suggest a more

1:28:27streamlined uh approach. Uh and uh

1:28:31>> and it was very grueling on the people

1:28:33who did it many hours in meeting.

1:28:35>> And so as part of that we can include

1:28:37some different studies um you know

1:28:39inevitably leading up to that effort

1:28:41we're going to hear a lot about some

1:28:42things that the council would like us to

1:28:44add or study. And so I suspect that this

1:28:47is probably the beginning of that list

1:28:49of you know have a um uh

1:28:54you know economic analysis to understand

1:28:55sort of those those consequences. Uh I I

1:28:58think the study found what you were

1:28:59saying is that the residents uh do uh

1:29:02generate more revenue to the city than

1:29:04it costs the city in terms of services.

1:29:06And the comment in the staff report is

1:29:08just we need to update that because we

1:29:10are um we just have a different housing

1:29:13profile going forward and um we it's

1:29:16good to just sort of refresh our

1:29:18analysis.

1:29:18>> Okay. Very good. Okay. Thank you.

1:29:21>> Thank you, Council Member Rectal. Um,

1:29:23I'll add I agree with my colleagues, um,

1:29:27with the staff recommendation on 3.9A,

1:29:31um, etc., etc., with the impact fee

1:29:33study and the building code update. Um,

1:29:37and regarding this concept of labor

1:29:39standards, um, like Vice Mayor Stone, I

1:29:42continue to have an interest in labor

1:29:44standards. um ensuring that our

1:29:46construction workforce has good wages

1:29:47and health insurance and other benefits

1:29:49not only helps those folks and their

1:29:51families but um it's good for the city

1:29:54in terms of getting high quality

1:29:55projects built with less turnover among

1:29:57the workers um it's also the right thing

1:30:00to do I think as a matter of

1:30:04humanitarian concerns and human rights.

1:30:06Um,

1:30:08so regarding that, I'm excited by the

1:30:11Berkeley hard hats ordinance. Um, and

1:30:14yet it's clear from the staff report

1:30:16that there's very little data on how

1:30:18that's going because none of the

1:30:20projects that have uh been permitted

1:30:23since it went into effect have utilized

1:30:26it. Uh, they've all snuck in under state

1:30:28density bonus law. They've gotten around

1:30:30it. Um, so I'm nervous. Um, I uh would

1:30:35love to um wait a while and see if we

1:30:39can really draw upon some uh good data

1:30:42out of Berkeley and any other

1:30:45jurisdiction that's doing something

1:30:46similar because this question here of

1:30:49its negative impact on

1:30:52uh well on the question of whether

1:30:56disincentivizes

1:30:58development is looming. Right? We've

1:31:00seen that costs are expected to increase

1:31:0318 to 25% over non-UN labor and um so

1:31:08we're at a classic crossroads where we

1:31:10we want to do the right thing on behalf

1:31:11of workers yet we don't want to make it

1:31:13impossible for people to build things

1:31:14here. So I um recommend that we hold and

1:31:19listen and learn and see um what happens

1:31:23in Berkeley and elsewhere. Um I do think

1:31:26it's important to do. I just uh want us

1:31:28to be really smart about how we do it.

1:31:31Um I do want to say that

1:31:34on the apprenticeship question. So I

1:31:37understand that that staff is proposing

1:31:39looking at apprenticeship and healthcare

1:31:40based on what this committee has said.

1:31:43Um I have learned more recently that

1:31:46there's even a precursor to

1:31:48apprenticeship which is something like

1:31:51um trying to make sure that there are

1:31:53pathways out of our local high schools

1:31:56um uh into apprenticeships. there's some

1:31:59language we can use and I'm not an

1:32:01expert on this but I would love for you

1:32:02to look at it um where effectively I

1:32:06think we try to guarantee or assure that

1:32:09a certain number of community members

1:32:11you know will be coming out of Palto

1:32:13schools and into these um um highay

1:32:19highskll trades uh I don't have the

1:32:22technical language on what this pathway

1:32:24is called but it's hopefully that's

1:32:26enough to go on I'd love to see that

1:32:28included included in when we do develop

1:32:30assuming we do develop an an

1:32:32apprenticeship commitment uh that we're

1:32:34aware of that component would be great.

1:32:37Um in terms of the scope um I appreciate

1:32:42that staff is telling us that most class

1:32:45A office and high-rise residential

1:32:47already use union labor. I do think

1:32:49there is benefit in requiring it

1:32:51nevertheless uh to make a statement that

1:32:54we are uh a union friendly city. Um

1:32:58I

1:33:00um think it is important to lower our uh

1:33:04to consider lowering the square footage

1:33:06threshold uh lower than that which

1:33:08Berkeley uses given the number of

1:33:10projects that we've uh approved lately

1:33:13that are much smaller than uh uh 50,000

1:33:18square ft. Um, I agree that the whole

1:33:21city should be looked at in terms of

1:33:23geographic scope

1:33:26and appreciate the notion that we should

1:33:28look at city-owned projects uh as well

1:33:32as

1:33:33uh privately owned

1:33:37and on the administration enforcement. I

1:33:39agree that the self-certification route

1:33:42where the remedy is civil enforcement is

1:33:45most feasible simply because we don't

1:33:47have the resources for city

1:33:48administered. I don't think we're

1:33:49anywhere near um able to you know create

1:33:53a whole new

1:33:55staff position or division of an office

1:33:58uh to focus on this. So in short, I

1:34:00guess I feel that we are having the

1:34:02conversations. We are starting to

1:34:03develop more of an understanding,

1:34:06putting a few more questions and details

1:34:08in place and then this will come back to

1:34:09the committee sometime next year um to

1:34:12start to get more specific hopefully

1:34:14with some more data from neighboring

1:34:17jurisdictions to guide us terms of the

1:34:19negative impacts on uh the very

1:34:22development we're trying to incentivize.

1:34:25Yeah. Okay. Anybody else?

1:34:28Got anything more?

1:34:33>> I'll move the staff recommendation

1:34:39and direct staff to return to the policy

1:34:42and services committee in 2027 with an

1:34:47with an item related to PLA's

1:34:50based on committee feedback.

1:34:56>> Yeah. And just so there's no confusion,

1:34:58maybe replace PLA with construction

1:35:00standards ordinance, which is this

1:35:02concept that we're talking about.

1:35:03>> How about with construction standards,

1:35:05which

1:35:07which could include PLA's.

1:35:10I don't want to lose that, but it could

1:35:12also include DDAS and other labor

1:35:15standards. So, if you want us, I can I

1:35:18can call that out in the motion, but I

1:35:20don't want to lose that

1:35:22that the motion is intended to make sure

1:35:24that staff is doing a a further review

1:35:28of PLA's as it related to office

1:35:32development, city- owned properties, and

1:35:35and kind of considering the feedback we

1:35:36provided tonight.

1:35:38>> Got it. Yeah, that's fine. Because some

1:35:42questions second.

1:35:45>> Thank you. Then, you know, when the

1:35:46clerk has the language on the on the

1:35:48board, I make sure that since I kind of

1:35:52was calling a bit of an audible there.

1:36:06Good. And then on PLA's just you can um

1:36:10do a lowercase S.

1:36:13Thank you. Please not. Okay,

1:36:16I think that matches my intent

1:36:29maybe um because also I think it's it's

1:36:32important so uh after labor standards

1:36:35ordinance with an item related to

1:36:37developing construction labor standards

1:36:38ordinance

1:36:40to apply to

1:36:44or to potentially apply to

1:36:49private office development and

1:36:51city-owned projects

1:36:54because I also want to make clear we're

1:36:56not considering it applying to to

1:36:58housing development

1:37:04if that's okay with the seconder.

1:37:06>> Yes. Great.

1:37:13Okay, perfect. That's

1:37:17that's it for me.

1:37:19>> Okay, I will go ahead and call the role.

1:37:22>> Council member Rectal,

1:37:23>> yes.

1:37:24>> Vice Mayor Stone,

1:37:25>> yes.

1:37:26>> Chair Lithcott Hayes,

1:37:27>> yes.

1:37:28>> Motion carries unanimously.

1:37:30>> Terrific. Thank you very much.

1:37:33Thank you, Mr. Kaine, Mr. Le, Mr.

1:37:35Andrade. Appreciate you.

1:37:38And on to our city auditor.

1:37:44She's here in person.

1:37:52Okay. So, we're turning to item number

1:37:54two, which is Office of the City Auditor

1:37:57presentation of the below market rate

1:37:59housing program audit report. And we

1:38:02will turn things over to our city

1:38:04auditor, Kate Murdoch.

1:38:18get my tech here to work.

1:38:29Okay. Good evening, committee members.

1:38:30Kate Murdoch, city auditor. Happy to be

1:38:33here in person. Um, I will be presenting

1:38:36the results of our below market rate

1:38:37housing program audit, also known as the

1:38:39BMR program. I would like to thank the

1:38:42planning and development services

1:38:43department and Alta Housing for their

1:38:45support and collaboration in conducting

1:38:47this audit.

1:38:49Next slide, please.

1:38:51The audit focused on three primary areas

1:38:54related to the VMR program's objectives

1:38:56and administration. retention of

1:38:58affordable housing, timely

1:39:00administration that meets community

1:39:02needs, and internal controls to

1:39:04safeguard against fraud, waste, and

1:39:06abuse. I'll briefly cover some important

1:39:09context and then walk through our three

1:39:11findings and key recommendations.

1:39:14Next slide, please.

1:39:19An important distinction for this audit

1:39:22is understanding that the BMR program

1:39:24administers affordable housing. it does

1:39:26not create it. Housing production is

1:39:29driven by broader city policies uh

1:39:32development requirements and development

1:39:34activity. Once qualifying ownership

1:39:37units are created and are ready for

1:39:39sale, the city contracts with Alta

1:39:41Housing to provide ongoing

1:39:43administration and oversight, managing

1:39:45the ownership qualification process over

1:39:47the long term. Rental units can follow

1:39:50different and less standardized

1:39:52pathways, but some units are also under

1:39:54Alta Housing's administration.

1:39:57The city currently has 247 active

1:40:00ownership BMR units, and production has

1:40:03varied considerably over time based on

1:40:05development activity. However, it's

1:40:08important to note that production trends

1:40:10should not be viewed as a measure of the

1:40:12BMR program itself or Alta Housing's

1:40:14administrative performance.

1:40:18Next slide, please.

1:40:21Our first finding focuses on preserving

1:40:24the affordable units that are already in

1:40:26the program. Regular homeowner

1:40:28association or HOA dues are considered

1:40:31when affordable sales prices are

1:40:32established. However, dues can increase

1:40:35over time and significant special

1:40:37assessments or major repairs can create

1:40:40unexpected costs for BMR homeowners. We

1:40:43also found that the city has limited

1:40:45consolidated information on these

1:40:47affordability pressures. This becomes

1:40:49increasingly important as the ownership

1:40:51portfolio ages and some units approach

1:40:54key points in their affordability life

1:40:56cycle.

1:40:58We recommend improving visibility into

1:41:00HOA maintenance, deed restriction, and

1:41:04other retention risks and evaluating

1:41:06practical options to help preserve these

1:41:08units over the long term.

1:41:11Next slide please.

1:41:14Our second finding is that program

1:41:16administration is generally consistent

1:41:18but performance monitoring can be

1:41:20strengthened. The city and Alta have a

1:41:23workable administrative structure and

1:41:25existing quarterly reports and invoices

1:41:27provide a solid oversight foundation. We

1:41:30did not identify any fraud, waste, abuse

1:41:32or conflict of interest concerns. The

1:41:35primary opportunity here is to formalize

1:41:37and build on existing practices. This

1:41:39includes clearer city alta coordination,

1:41:42documented follow-up, complaint

1:41:45tracking, and better summarized

1:41:47information about eligibility and and

1:41:49applicant experience. We also recommend

1:41:52establishing a core set of performance

1:41:54measures such as vacancy and turnover

1:41:56timelines, weight list activity,

1:41:59applicant demand, compliance, and

1:42:02portfolio risks so the city can more

1:42:04readily assess how the program is

1:42:06performing over time.

1:42:09Next slide, please. Our third finding

1:42:12focuses on participant support.

1:42:15PaloAlto's current support for program

1:42:17participants is generally consistent

1:42:19with peers and includes education, med

1:42:22uh mediation, access, um ownership

1:42:25related assistance. However, the program

1:42:27can improve support by making existing

1:42:30external resources easier for BMR

1:42:32households to identify and access. With

1:42:35the senior housing specialist position

1:42:37now filled, we recommend establishing a

1:42:39light touch referral process, connecting

1:42:42participants to resources such as legal

1:42:44aid, emergency rental assistance, tenant

1:42:47protections, foreclosure prevention,

1:42:50fair housing, and other housing

1:42:52stability services. This is not intended

1:42:54to create an intensive case management

1:42:56function, but rather to provide

1:42:58participants with a clear path to

1:43:00assistance when issues arise.

1:43:03management agreed with the

1:43:04recommendations and has already begun

1:43:06implementing several improvements

1:43:08including more regular coordination with

1:43:10Alta Housing. This concludes my

1:43:12presentation and I'm happy to answer any

1:43:14questions. Thank you, Miss Murdoch.

1:43:16Colleagues, um technical questions for

1:43:19our city auditor before we turn it over

1:43:21to public comment. Anybody?

1:43:25Um I'll ask um the report and the slides

1:43:29indicated we have 247 below market rate

1:43:33ownership units in the city. Do you have

1:43:36the numbers on how many BMR rental units

1:43:38we have?

1:43:39>> So it's approximately 300 a little over.

1:43:44>> And may I ask without seeming to

1:43:46criticize why that was are we not meant

1:43:47to focus on that? It wasn't in the

1:43:49report. So I'm wondering is that not

1:43:52>> So I believe on page six of the report

1:43:55there is the total and I and I believe

1:43:58it includes ownership and uh rental

1:44:00units.

1:44:02>> Okay. So but adding the 300 to the 247

1:44:06you're saying the total is about 547 or

1:44:09under 600.

1:44:10>> Yeah.

1:44:10>> Okay.

1:44:11>> Correct.

1:44:13>> Okay. That's my only technical question.

1:44:15Anybody else? All right. All right.

1:44:18Madam clerk, do we have any members of

1:44:20the public wishing to speak on this

1:44:21item?

1:44:22>> Yes, we do have two requests to speak.

1:44:24Our first speaker will be Michelle K.

1:44:27>> Terrific.

1:44:36>> Hi, I'm Michelle Crow. I'm chair of the

1:44:38HRC

1:44:40and we've had many sessions on

1:44:44affordable housing including BMR. In

1:44:48August, we heard from members of that

1:44:53community about the increasing HOA fees

1:44:59and their difficulty

1:45:02for affordability.

1:45:04So last Thursday we resolved unanimously

1:45:09to ask the council to work in this arena

1:45:14to potentially new pol develop new

1:45:19policies

1:45:21um maybe even subsidies because it is

1:45:25becoming an issue of retention. If you

1:45:29go to number one from the staff report,

1:45:33they recommend the city strengthen its

1:45:37approach to preserving BMR ownership

1:45:40units by improving visibility into HOA

1:45:46maintenance and other retention risks

1:45:49and evaluating practical options to help

1:45:53address HOA related costs. and I would

1:45:58include fees. Uh it was unanimous from

1:46:02the HRC. We are here to support the work

1:46:06the staff is doing and to urge policy

1:46:10and services to bring this forward. It

1:46:14has been 20 years since subsidies

1:46:18have been authored

1:46:21and we're in a tremendously difficult

1:46:25financial time right now. Thank you.

1:46:30>> Thank you, Commissioner and Chair

1:46:33Krauss.

1:46:35>> Our next speaker is Henry E.

1:46:49Well, one can only take off from the

1:46:52last phrase. We're in a difficult

1:46:56financial and economic time. But for

1:46:59some, it's the greatest time of all

1:47:02because they're making billions and even

1:47:03trillions and they're residents of Palo

1:47:06Alto.

1:47:07You can go to the Aquarius Theater and

1:47:10see a movie, Social Reckoning, about one

1:47:13of the members of our town and how he

1:47:16made money by jiggering the algorithms

1:47:20at Facebook now Meta.

1:47:24The the the demography is getting older.

1:47:27They need to increase usage. So they did

1:47:31and they created conflict. Conflict

1:47:32among people, conflict among nations.

1:47:36That's by a fellow resident of Palo Alto

1:47:39whom the movie is quoted as saying, "I

1:47:41would like to look good to my fellow

1:47:43residents."

1:47:45Well, if you watch that movie and you if

1:47:47you follow the original stories in the

1:47:48Wall Street Journal, you know that he's

1:47:52not a good person. He's not someone who

1:47:55should be welcomed in Palo Alto. But

1:47:57that's not my main point. I want to get

1:47:59to the point of housing and affordable

1:48:01housing that we're losing every day in

1:48:03Palo Alto. How are we losing it? I will

1:48:06give one example that I just found this

1:48:08afternoon. As you may already know, I

1:48:10live in Oak Creek Apartments. I found

1:48:13this afternoon when I tried to join. I'm

1:48:16studying Chinese. So, I thought, well,

1:48:18I'll join the Maang Club and I spoke to

1:48:22the ladies there. They weren't happy

1:48:23about they didn't look too happy about

1:48:24it being gender integrated. Anyway, uh I

1:48:27got on the list to be a substitute some

1:48:29point and one of them told me that a new

1:48:31neighbor is has arrived now allowed into

1:48:35Oak Creek which was reserved for

1:48:38post-doal fellows by Stanford when they

1:48:40acquired it. But this is a person paying

1:48:42market rate rents. What would that be?

1:48:46probably in the area of at least 4,500

1:48:49even 5,000 for a one-bedroom apartment

1:48:52in a in a development that was supposed

1:48:54to be below market reserved for for

1:49:00post-docctoral fellows. Of course, we

1:49:01know the larger political picture of why

1:49:03post-docctoral fellows aren't coming uh

1:49:05the visa changes and whatnot. So that's

1:49:07why there are more apartments available

1:49:09now in Oak Creek, which was supposed to

1:49:11be a shortage.

1:49:13But instead of inviting low lower income

1:49:18people or anyone, it's set as market

1:49:21rate housing, which should never be was

1:49:23never intended and should be disallowed

1:49:25immediately by our council. So Stanford

1:49:29needs to be regulated obviously. But how

1:49:32can we do that? Well, we must include

1:49:35Stanford in Palo Alto is the larger

1:49:38picture. But the smaller picture is that

1:49:41we must take control of the regulation

1:49:45of Oak Creek which is left of Stanford.

1:49:47It is now undergoing slumification.

1:49:51Oak Creek, the beautiful propert that

1:49:53was an extension of Stanford is now

1:49:55degrading.

1:49:59>> That concludes public comment on item

1:50:01number two. No, the timer is going. You

1:50:04went past zero, now it's going up. Look,

1:50:07>> no worries. Thank you, Mr. Escowitz.

1:50:09Okay. Uh, let's return to the deis. Uh,

1:50:12who'd like to go first?

1:50:14>> Jump in.

1:50:14>> Thank you, Council Member Rectal.

1:50:16>> Okay. Can you go to slide four, please?

1:50:23And we have the recommendations here

1:50:25particularly about the uh

1:50:29the affordability of the HOA. U

1:50:33so is a recommendation on the right side

1:50:36is that for

1:50:38the city or is that for Alta? Who would

1:50:41be responsible for this?

1:50:43>> That would be the city. So, Alta uh is

1:50:47as the administrator of the program is

1:50:49is

1:50:51um you know following the city policies

1:50:54and and procedures that have been

1:50:55established for those

1:50:57>> and would we be changing the policy and

1:50:59then giving them actions? I don't

1:51:00understand what improving visibility

1:51:02means.

1:51:04That is that just monitoring what it is

1:51:06or would be taking action to try and

1:51:08reduce the HOA fees. So, we're

1:51:10recommending that there be some analysis

1:51:13and and more reporting on some of these

1:51:15metrics. So, right now there's not a

1:51:17whole lot of visibility around these

1:51:19because there's not a lot of analysis.

1:51:20There's no um requirement in the Alta

1:51:23contract to provide these metrics. So,

1:51:26we're suggesting that in the next, you

1:51:28know, iteration of the contract that

1:51:30some of this reporting be included.

1:51:32>> Okay. I think that would be a good

1:51:33thing. Thank you. Uh can you move on to

1:51:35slide five here? It talks about Alta

1:51:38contract does not include outcomebased

1:51:40performance expectations.

1:51:42Uh is that standard? Do our other cities

1:51:46when ALTA has contracts with those

1:51:48cities, do they have the same type of

1:51:50outcomes?

1:51:51>> That's a a great question. I think in

1:51:54general we found that the city is

1:51:55commensurate with a lot of their peers.

1:51:57Um I think there are a few exceptions. I

1:52:01um I believe Sanonteo is is one of the

1:52:03ones that's that stood out as as having

1:52:05a little bit more of that reporting

1:52:07happening. Um, so it's it's not that

1:52:09PaloAlto is doing something very

1:52:11different than than other programs in

1:52:13the area, but as we talked to um

1:52:17administrators and and city staff of of

1:52:20other peer cities, we definitely found

1:52:22that this is an area of concern and

1:52:24growing concern and and so other cities

1:52:26are beginning to look at, you know, how

1:52:28to have a better understanding of

1:52:32how these units um age and whether they

1:52:35remain within the program to they, you

1:52:38know, expire. Um, so,

1:52:41>> and that sounds like a good thing. Is

1:52:44there a lot of labor associated with

1:52:46that or what's the downside

1:52:48>> with the monitoring?

1:52:49>> Yeah.

1:52:50>> Um, I mean, I think a lot of the

1:52:52information exists. We I mean, that's

1:52:54something that we did find is I think

1:52:56Alta is collecting a lot of that

1:52:58information. The city is also collecting

1:53:00a lot of that information. I think it's

1:53:02consolidating

1:53:03um that information and and having it in

1:53:06a usable format for decision makers.

1:53:08>> Okay. Thank you. Uh cler, could we go to

1:53:11packet page 48?

1:53:34Okay. You have to zoom in. And so what

1:53:37happened in the 2010s? You zoom in a

1:53:39little. We had no production at all. Was

1:53:43that just anomaly or is there some

1:53:45reason behind that?

1:53:48>> That is another great question. I'm

1:53:49going to see if management can help me

1:53:51answer that.

1:53:57The focus of this audit was not on the

1:53:59creation of of housing. So, we did do

1:54:02some work in this area, but um

1:54:04>> I saw the big zero there and it jumped

1:54:05out at the end.

1:54:06>> Um Mr. Le is on his way down. Uh one of

1:54:09our principal staff members is not here

1:54:11this evening. So, if this isn't

1:54:12something that we can answer today, we

1:54:13can get the information for the

1:54:15committee related to what happened in

1:54:16the 2010s, Mr. Le of the zero new um

1:54:21ownership units created in the BMR

1:54:23program. Yeah, [laughter]

1:54:26I'm doing this from memory, but I think

1:54:27the Palmer decision came down in 2009.

1:54:31Um, which um basically made it um at

1:54:36least in in the rental context unlawful

1:54:38to have inclus inclusive housing in

1:54:41California until the legis was uh

1:54:44overruled to legislation. Uh I don't

1:54:48quote me on that year, but

1:54:50>> yeah,

1:54:50>> that would make sense.

1:54:51>> Yeah.

1:54:52>> Director Le, do you have you have some

1:54:54wisdom to share?

1:54:55>> I don't have a better answer than that.

1:54:56>> Okay. Okay. Look into it. I'm I'm

1:54:59curious. It's not urgent, but it it it

1:55:01seems strange that it'd be zero. And

1:55:04Okay. So, then we after a while, we age

1:55:06out here. And so, at what age do BMR

1:55:10ownership units not become

1:55:13uh BMR ownership units?

1:55:17So each um each development has its own

1:55:23um restrictions in place and so it

1:55:25really varies. I believe um there's a

1:55:29table further in the report that kind of

1:55:30shows when each of them is set to

1:55:32expire.

1:55:34So

1:55:35>> and and then we have to negotiate with

1:55:38the how do we extend the life of the BMR

1:55:42unit?

1:55:42>> Sure. So, the city does have uh the

1:55:44first right of refusal on many of these

1:55:47properties. I don't think it's all of

1:55:48them, but on some of them, the city did

1:55:51in sub, you know, in subsequent years

1:55:53put a first right of refusal. So, the

1:55:55city, if if the homeowner does go to

1:55:57sell, um the city can buy it back if

1:56:00they want to. So, that is one option.

1:56:03Um, I think it's also a policy decision

1:56:05for the city to kind of balance, you

1:56:08know, homeowners being able to get

1:56:10equity out and and all of those sorts of

1:56:12things. So, um,

1:56:16>> yeah,

1:56:16>> thank you. Overall, very good report.

1:56:18Thank you. That's all I have.

1:56:20>> Thank you, Council Member Rectal. Vice

1:56:22Mayor

1:56:26>> on so going back to that slide five on

1:56:30kind of like the recommendations related

1:56:32to HOAs. Just one followup from

1:56:37uh council member Rectal's

1:56:40discussion.

1:56:46Sorry, is it which slide is it with the

1:56:49HOA?

1:56:52Try slide. So finding one one slide

1:56:55previous slide four.

1:56:59Thank you. Um

1:57:02so is is the recommendation here that

1:57:05this kind of evaluation of options to

1:57:08address significant HOA related costs.

1:57:11Does this only apply to to HOAs that

1:57:17cover BMR units within the city or only

1:57:21for Ulta housing? What's the scope of

1:57:24that?

1:57:26>> I think the recommendation is specific

1:57:28to the BMR program um since that was the

1:57:32scope of our audit. However, I think

1:57:33that's really a policy decision um for

1:57:36council and and management to to explore

1:57:39of what is the need in PaloAlto and

1:57:41would this need to expend extend beyond

1:57:45this specific program.

1:57:46>> Okay, perfect. Yeah, I wasn't sure

1:57:48exactly how it how you had intended it

1:57:51and how is that how how does staff and

1:57:55interpret that because I I do think I

1:57:58think overall a discuss a a broader

1:58:00discussion around HOA related costs,

1:58:05what authority does does a local

1:58:07municipality have to be able to regulate

1:58:10those? What are what are best best

1:58:12practices? is is a reasonable policy

1:58:15discussion for us to to have in the in

1:58:18the future. I mean clearly understanding

1:58:21its impact on on BMR units but also as

1:58:25we continue to expand multifamily

1:58:28housing and trying to address this

1:58:31missing middle issue that we have within

1:58:34the within the city. I would imagine

1:58:35most of the new housing that's coming

1:58:37online is likely to fall under some sort

1:58:41of HOA agreement. And I'm kind of

1:58:44constantly

1:58:46surprised and frustrated when I've, you

1:58:49know, probably like many people,

1:58:51occasionally pull up Zillow to see, ooh,

1:58:53what's what's possible? And then go, oh,

1:58:56nothing. Uh, but a lot of times

1:59:00I will see options, especially a multif

1:59:03family, where I kind of go, oh, I might

1:59:06be able to do that. And then I see kind

1:59:09of the hidden HOA cost associated with

1:59:12it. And I'm always just shocked at how.

1:59:14So I think for a lot of potential

1:59:17homeowners here in PaloAlto now and in

1:59:19the in the future where might be able to

1:59:23have access to to to housing. These HOA

1:59:27fees I think are are just kind of

1:59:30continuing to make that even more

1:59:32challenging. And of course we we have to

1:59:34find the appropriate balance because

1:59:36there is a purpose of of HOAs that that

1:59:39is important but um but what is what's

1:59:42appropriate to where is it appropriate

1:59:44to be able to act. So I do think that is

1:59:46an interesting policy discussion to to

1:59:49come to us and the HRC has weigh in on

1:59:52this and supported that that discussion.

1:59:54So that's another thing I'd like to see

1:59:55us discuss probably in 2027 is my my

1:59:59guess. sees by the city attorney. It

2:00:00looks like you've got your light on.

2:00:02>> Yeah, I I just I mean I wanted to

2:00:04acknowledge that uh comment but also

2:00:06just to note that you know common

2:00:08interest developments are an area that's

2:00:09heavily regulated by state law. So we

2:00:11would have to look you know very closely

2:00:14sort of what uh the scope of of city

2:00:17authority is in in that area.

2:00:22And just adding on to that as well as

2:00:24Miss Murdoch's comment of the focus

2:00:26being on the BMR program where we do

2:00:28have the benefit of having a provider of

2:00:30Alta Housing that gives us uh an entity

2:00:33that we can work with to try to collect

2:00:34some of this information which would be

2:00:36different for anything outside of the

2:00:38BMR program. So we have a easier way um

2:00:41not easy but easier way to implement the

2:00:43recommendation that's here versus the

2:00:45broader conversation.

2:00:50>> Thank you, Vice Mayor. Um, thank you,

2:00:52Miss Murdoch, and colleagues on staff

2:00:55and the public commenters. Um, to

2:00:58council member Rectal's question about

2:01:00what happened in the 2010s, I was

2:01:02recalling because it was my neighborhood

2:01:05that that was the era when council

2:01:08passed the um 60 unit affordable senior

2:01:12housing development on Maybell with 12

2:01:16market rate single family homes to help

2:01:18pay for it. uh council passed it 70 and

2:01:21then the voters uh put a referendum on

2:01:23the ballot 2013 November 2013 and it it

2:01:26passed and that wasn't BMR so to speak

2:01:29that was 100% affordable terms of the

2:01:32senior unit but it was an era when the

2:01:35city was um the city mindset mentality

2:01:39values system seemed to be um uh kind of

2:01:43swinging over you know the pendulum was

2:01:45swinging toward less development

2:01:48uh less let's not focus on building more

2:01:51housing. So, that's how I think of that

2:01:54era of the 2010s. Um, for what it's

2:01:56worth, um, I think what's I appreciate

2:02:01the report. I think what's missing for

2:02:03me is a bit more of a 35,000 foot

2:02:07context.

2:02:09Um, what is our BMR need?

2:02:13Are we remotely close to meeting our BMR

2:02:16need? And why is it that one of our

2:02:19recent 100% affordable housing projects

2:02:22231 grant is

2:02:26uh not fully utilized. Um it they've

2:02:31apparently had trouble attracting

2:02:33people. So we're in this sort of if you

2:02:36build it, will they come? And if they

2:02:38don't, what have we done wrong? What

2:02:40variables literally in the math are we

2:02:43missing such that I see your hand up,

2:02:45Mr. Esquitz. not allowed to call in a

2:02:47member of the public. Apologize.

2:02:50>> No, thank you. But thank you. I wanted

2:02:52to acknowledge you. Procedurally, I'm

2:02:54not allowed to even engage in this

2:02:56conversation with you. So, I'm going to

2:02:57stop. Okay. So, um what what are we

2:03:01missing mathematically because so much

2:03:03effort goes into building the 100%

2:03:05affordable? So much goes into building

2:03:07the market rate with the BMR included.

2:03:10And to learn that units are not uh being

2:03:15occupied is just so devastating. Um and

2:03:19none of us wants to see that happen. So

2:03:21um when I look at the 247 BMR ownership

2:03:26units and I asked you how many rental

2:03:28units you had we had and you said it was

2:03:29about 300. So that's a total of about

2:03:31547 or let's say 600 in a city with

2:03:3429,000 housing units more or less.

2:03:37Director Le can tell me whether I'm way

2:03:40off on that or close. That's 2%

2:03:43of our housing units are BMR. Um, so it

2:03:48makes me want to ask, is that a

2:03:51legitimate number? What should the

2:03:53number be? How do we know what the

2:03:55number should be? How do we know what

2:03:57people can afford to pay for those

2:03:59units? What target are we even trying to

2:04:02hit? And I don't know in this audit

2:04:05context whether that's a question the

2:04:07city has to answer or Alta Housing has

2:04:10to answer or somebody else. But in order

2:04:13to evaluate the efficacy of our BMR

2:04:16program, I feel like we've got to be

2:04:18asking those very big picture questions

2:04:21about supply and demand.

2:04:24Um, I do want to point out that there is

2:04:27a lot there are a lot more below market

2:04:29rate housing units in the city beyond

2:04:32what's included in this specific

2:04:35program. So, this program is just a very

2:04:37small percent of the overall landscape

2:04:40of below market rate housing. um

2:04:42management might, you know, have a um a

2:04:47broader perspective to offer in terms of

2:04:48the housing element and all the various

2:04:50things that the city does to to do that

2:04:53planning. Um you know, we we looked at

2:04:56this uh specific area as a way to kind

2:04:59of scope because looking at the entire

2:05:02landscape would have been, you know, a

2:05:04pretty large undertaking. But um this is

2:05:07an area, you know, that if council

2:05:08decides we want more work done, we can

2:05:11definitely be looking to that in the

2:05:13next the next audit plan.

2:05:14>> Well, I appreciate that. And I wonder if

2:05:16there's a bit of a disconnect in the use

2:05:19of the term BMR because I think some of

2:05:22us members of council, members of the

2:05:24city staff, members of the public, when

2:05:27we say BMR, we're speaking specifically

2:05:30about the programs you studied here. But

2:05:33others of us when we say BMR, we mean

2:05:36below market housing,

2:05:38regardless of who administers it or

2:05:40whether it comes through the this

2:05:41program or the that program or this

2:05:42incentive or that. We're talking about

2:05:45how many units do we have here that are

2:05:47not that are below market rate. And so

2:05:51as a council member reading this, I'm

2:05:52think I'm definitely interested in the

2:05:54latter. I'm interested in, you know, the

2:05:56all of it. And it sounds like the audit

2:05:59was more narrowly tailored to

2:06:03a set of things emanating from a certain

2:06:05set of decisions and programs and really

2:06:07looking at a much smaller number of

2:06:09units accordingly. Is that right?

2:06:11>> Correct. So we were we were looking at

2:06:12the specific program uh rather than

2:06:15looking at the entire housing element

2:06:16and the entire spectrum of housing that

2:06:19PaloAlto produces

2:06:20>> the entire spectrum of below market

2:06:23housing. Mhm.

2:06:24>> So maybe director Lake, can you come for

2:06:27my sake and for members of the public

2:06:28and anybody else sort of curious about

2:06:31this larger universe

2:06:33if we've got BMR housing having been

2:06:37audited lately to the tune of about 600

2:06:40units and the city has 29,000 units of

2:06:44housing roughly 28,000. What are what

2:06:47comprises the rest of the the the

2:06:50additional buckets that we would call

2:06:53affordable housing or housing that is

2:06:55below market?

2:06:57What was not looked at in this audit

2:07:00that is not market rate housing?

2:07:02>> Yeah, great. Thank you, chair. The

2:07:04number is actually closer to 2,300 units

2:07:07uh in in PaloAlto and the city is second

2:07:11in Santa Clara County uh for

2:07:14incorporated cities uh as having the

2:07:16highest number of affordable housing

2:07:18units as a uh production of total

2:07:20housing stock. So not 2% but actually

2:07:229%. Um this audit is actually very

2:07:28narrowly focused on very specific type

2:07:31of housing type uh housing typology

2:07:33dealing with um our inclusionary housing

2:07:37requirement for ownership units and um

2:07:41and those are that's the subset that was

2:07:44uh analyzed as a part of this audit. It

2:07:47does not take into consideration

2:07:50uh the vast majority of uh units that

2:07:53are generated through um uh partnerships

2:07:58uh with nonprofits. It doesn't take

2:08:01advantage of and those are rental

2:08:03typically rental units. it doesn't um

2:08:06factor in the revenue generated through

2:08:10inloo fees and how those fees are then

2:08:12used to generate more housing units um

2:08:16to get closer to this this 2300 uh

2:08:19units. So, you're you're right, and I

2:08:22think you're you're asking the right

2:08:24questions. Um, and

2:08:28you know, not not that I want to stand

2:08:30here and ask for uh another audit of my

2:08:33department, which I feel like I've had

2:08:34every year um for several years now. Um,

2:08:39but I would I would I think that's

2:08:41you're asking the right questions. Are

2:08:43we doing enough in terms of meeting the

2:08:46the uh population need? uh how are our

2:08:49development standards, our financing uh

2:08:52helping us achieve those goals? How is

2:08:54that um um you know, how are we moving

2:08:58forward to uh address the affordable

2:09:01housing um sort of expectations or needs

2:09:03in the community? Uh this ordinance

2:09:06really focused in or this um audit

2:09:08really focused in on this relationship

2:09:10that we have with Alta Housing

2:09:12overseeing these ownership units. Uh and

2:09:14again, it's a it's a small subset of the

2:09:16program.

2:09:17Thank you for clarifying that. Uh much

2:09:19appreciated. And um I know we're proud

2:09:22to have been, you know, for years the

2:09:25second in Santa Clara County in terms of

2:09:27affordable housing. Um

2:09:30sorry, director late. I'm sorry, I

2:09:32didn't even see you walk away. I was

2:09:34thinking about what to ask you, which is

2:09:36we have a lot recently uh a lot of units

2:09:40that have been approved by council and

2:09:42are headed toward uh entitlement and

2:09:45permitting. Um, so the 2,300 that you've

2:09:48mentioned are built.

2:09:50>> Yes.

2:09:50>> And so how many would you say are

2:09:53somewhere in this of affordable units

2:09:56broadly are in the PaloAlto pipeline

2:09:59currently?

2:10:00>> I don't have that off the top of my

2:10:02head. It would take me 10 seconds

2:10:04looking at our housing dashboard to get

2:10:05you an answer though. Okay.

2:10:06>> Thank you very much. Um,

2:10:08>> I'll try to get that and send it down.

2:10:10>> I appreciate it.

2:10:13Okay. So to the point of the audit, the

2:10:17recommendations that we work more

2:10:19closely with Alta, that we have, you

2:10:22know, performance metrics and

2:10:25um greater insight into what's going on.

2:10:30My perspective simply is that we take

2:10:34that 35,000 foot view and ask ourselves

2:10:38in furtherance of what. Um I'm reminded

2:10:41sitting up here of the uncomfortable

2:10:45position one feels when one advocates

2:10:48that people need housing, people need to

2:10:50get off the streets, people can't

2:10:52afford, projects get built, safe parking

2:10:54lots get opened, and then we seem to

2:10:57have vacancies.

2:10:59it

2:11:01suggests that something's off and um I I

2:11:07am clear based on what I read and what I

2:11:09studied that the need is there. So the

2:11:11question is you know how are we not

2:11:13matching those available units or spots

2:11:17in the case of safe parking with those

2:11:19who legitimately need them. And uh so I

2:11:23hope that that will be a part of the

2:11:25inquiry with Alta. Where's the

2:11:27disconnect? I think um 231 grant which I

2:11:31realize is a little orthogonal to this

2:11:33because it's not units that are owned

2:11:35nor is it managed by Alta you know is

2:11:38nevertheless a program that we are proud

2:11:40of and lawed and it was required a huge

2:11:42number of partnerships with other

2:11:44municipalities and school districts in

2:11:46an attempt to make it possible for

2:11:48teachers and other educators you know

2:11:50who who work in this city and and nearby

2:11:52cities to have a home here to know that

2:11:54there are vacancies or have been

2:11:55vacancies to know that they had trouble

2:11:57filling and just suggests that we

2:11:59haven't quite figured out how to match

2:12:01the people with these um units that

2:12:05we're painstakingly, you know, building

2:12:07at great cost.

2:12:09Um

2:12:12I think that's it for me.

2:12:16Anybody else?

2:12:18No.

2:12:21And chair, if I may, just a followup

2:12:22from director uh late that there are

2:12:26about uh 840 affordable units in the

2:12:30pipeline.

2:12:33>> That's significant.

2:12:33>> That's significant. 840. And that would

2:12:36be probably out of what do we have about

2:12:393,500 total in the pipeline? Yes. He's

2:12:41saying yes. 800 what?

2:12:45840.

2:12:49Thank you very much for that.

2:12:51>> I will move the staff recommendation.

2:12:55Second.

2:13:26Let me know when you're ready to take a

2:13:27vote, please.

2:13:28>> I'm ready. Yes. Thank you.

2:13:30>> Vice Mayor Stone,

2:13:31>> yes.

2:13:31>> Chair Lith,

2:13:32>> yes.

2:13:33>> Council member Rectal,

2:13:34>> yes.

2:13:34>> Motion carries unanimously.

2:13:37>> Terrific. Thank you. Thank you, Miss

2:13:39Murdoch. Great to see you in person. And

2:13:41thank you, Director Le as well.

2:13:44All right. Well,

2:13:47you're up again.

2:13:49And now this is the grand overview of

2:13:52the entirety of 2026 to date. Office of

2:13:55the city auditor presentation of the FY

2:13:572026 audit recommendation follow-up

2:14:00report. Back over to you, Miss Murdoch.

2:14:02>> Thank you, Chair. Uh, I'm pleased to

2:14:05share the results of the FY2026 audit

2:14:07recommendation follow-up. This review

2:14:10evaluates the city's progress in

2:14:12implementing corrective actions from

2:14:13previously issued audits and advisory

2:14:16assessments. Follow-up is an important

2:14:18part of the audit process because it

2:14:20promotes accountability and helps ensure

2:14:22that previously identified risks and

2:14:24improvement opportunities continue to be

2:14:26addressed. I want to thank all of the

2:14:29departments and especially the city

2:14:30manager's office in supporting our work

2:14:32and providing updates on their efforts

2:14:34to implement audit and assessment

2:14:36recommendations.

2:14:38Next slide, please.

2:14:43All right. So, for this follow-up audit,

2:14:45we reviewed recommendations from 14

2:14:47audit engagements and four advisory

2:14:50assessments representing 83 individual

2:14:52recommendations issued over

2:14:54approximately the last six years. Our

2:14:56work included obtaining status updates

2:14:59and supporting documentation from

2:15:01departments, evaluating the evidence

2:15:03provided, and assigning each

2:15:05recommendation a status of completed, in

2:15:08progress, not started, or no longer

2:15:10relevant. This follow-up is not a new

2:15:13audit of these areas. Rather, it

2:15:14provides city leadership with a snapshot

2:15:17of progress toward implementing

2:15:18previously agreed upon corrective

2:15:20actions.

2:15:22Next slide, please.

2:15:25Overall, the results show that the city

2:15:27has made substantial progress in

2:15:28addressing prior recommendations. Of the

2:15:3183 recommendations reviewed, 32 or 38.5%

2:15:35are complete and another 32 are in

2:15:38progress. Combined, that means that 77%

2:15:41are either completed or actively being

2:15:44implemented. I did want to note that

2:15:45since drafting the report, we are aware

2:15:47that at least one and perhaps other

2:15:49recommendations have been completed

2:15:51since management efforts um are clearly

2:15:54ongoing. Uh 15 recommendations or 18%

2:15:58have not yet started and four

2:16:00recommendations are no longer relevant.

2:16:03Next slide, please.

2:16:06Looking specifically at the 14 audit

2:16:08engagements, there were 66

2:16:10recommendations. Of those, 30 are

2:16:12complete. 23 are in progress and 10 have

2:16:16not started and three are no longer

2:16:18relevant. Several audits show

2:16:20substantial implementation progress. For

2:16:22example, all recommendations from the

2:16:24procurement process review and

2:16:26purchasing card program audit are

2:16:28complete, while most recommendations

2:16:30from the building permitting process

2:16:31audit have also been completed. The 10

2:16:34recommendations that have not started

2:16:36are concentrated in three areas. IT risk

2:16:39management, ADA compliance, and the

2:16:42public safety staffing and overtime

2:16:44audit. Next slide, please.

2:16:50There are a few important reasons why

2:16:51those audit recommendations are not

2:16:53started for IT risk management. Three

2:16:55recommendations remain not started

2:16:57because it has been addressing other

2:16:59priorities and plans to re-evaluate the

2:17:02scope with the city's risk manager as it

2:17:05develops a broader risk management

2:17:06framework. The current anticipated time

2:17:09frame is FY2027

2:17:12for ADA compliance. One recommendation

2:17:14has not started because of limited staff

2:17:16capacity and internal technical

2:17:18expertise. Management indicated that

2:17:20additional resources potentially

2:17:22including consultant assistance may be

2:17:25necessary to develop the centralized ADA

2:17:27request and grievance process. The

2:17:29remaining five are from the public

2:17:31safety staffing and overtime audit

2:17:33issued in June of 2026. These are newer

2:17:36recommendations with future

2:17:38implementation dates. Uh so dates that

2:17:40haven't yet metriculated. So generally

2:17:43ranging into calendar year 2027 and

2:17:46fiscal year 2028. Um and they include

2:17:49staffing analysis, overtime budgeting,

2:17:52workforce data, overtime tracking, and

2:17:55fire work force workforce planning. Uh

2:17:58we will assess the implementation during

2:18:00future follow-up cycles. Next slide,

2:18:03please.

2:18:05Finally, the four advisory assessments

2:18:07include uh 17 recommendations. Two are

2:18:10complete, nine are in progress, five

2:18:12have not started, and one is no longer

2:18:14relevant. All five recommendations that

2:18:17have uh the not started uh relate to the

2:18:20utility reserves advisory project which

2:18:23was issued in June of 2026. These

2:18:25recommendations address updating reserve

2:18:28policies, clarifying CIP reserve

2:18:30language and guideline levels,

2:18:32evaluating rate stabilization reserves,

2:18:34and formalizing reserve tracking. The

2:18:37city is still in the process of

2:18:38evaluating these recommendations and

2:18:40finalizing its response. Importantly,

2:18:43these are also recent recommendations

2:18:45with future target completion dates

2:18:47ranging from late 2026 through 2028. So

2:18:51they're not started status uh primarily

2:18:53reflects their planned implementation

2:18:55timelines rather than an indication that

2:18:58management has not acted.

2:19:02Next slide, please.

2:19:04Um so this concludes uh my presentation.

2:19:07The city auditor's office will continue

2:19:09to monitor open recommendations through

2:19:12future follow-up cycles and report on

2:19:14implementation progress. And I'm happy

2:19:15to answer any questions.

2:19:17>> Thank you, Miss Murdoch. Colleagues,

2:19:20technical questions before we go to

2:19:21public comment. No. Okay. Madame Clerk,

2:19:24do we have any members of the public

2:19:25who'd like to speak?

2:19:28>> We do have one request to speak. Our

2:19:30first speaker is Henry E.

2:19:34>> Thank you. Go ahead.

2:19:37>> So,

2:19:41I think I've noted my occupational

2:19:43background previously as a sociologist.

2:19:47Indeed, an urban sociologist, indeed one

2:19:51who has professionally studied Palo Alto

2:19:54and Silicon Valley. For example, the

2:19:57Triple His Institute in Menlo Park was

2:20:00contracted to do a study of Palo Alto

2:20:03and Silicon Valley back in the middle of

2:20:05OOS by Oxford Brooks University. Why did

2:20:09they ask us? They asked us because we

2:20:12knew the iconic person who wrote about

2:20:15Silicon Valley and they viewed her

2:20:19recommendation as essential to getting

2:20:20this grant and we talked to her. She's

2:20:24head of the information school at

2:20:25Berkeley and she duly on our

2:20:27recommendation wrote the recommendation

2:20:29and we got the grant and our methodology

2:20:32was to interview the elite observers of

2:20:37housing in PaloAlto during that time and

2:20:40what we were told it's all published by

2:20:43Dr. Stiger Styiver and myself. She's

2:20:46based in Menlo Park. Personally,

2:20:49>> I'm sorry. This is item.

2:20:50>> Am I out of time already? No. No.

2:20:52>> Please stop the clock. You're not out of

2:20:54time. You're out of order. This is not

2:20:56what we're here to talk about. We're

2:20:58here to talk about the city auditor's

2:21:00presentation on the FY 2026 audit

2:21:03recommendations. None of which has to do

2:21:05with what you're talking about right

2:21:07now.

2:21:07>> I'm I'm saying that the audit

2:21:08recommendations are irrelevant.

2:21:13Sorry, turn his clock.

2:21:15>> Do it. Is it not? If I'm questioning the

2:21:19data on which they are based, that's

2:21:21relevant that they do not have the real

2:21:23data. That's why they're giving you

2:21:26useless recommendations.

2:21:28Bad data, bad recommendations. That's a

2:21:31basic methodological point in the social

2:21:34sciences which you as a user of the

2:21:35social sciences in your professional

2:21:37work must be familiar with. May I

2:21:40continue?

2:21:41>> Please do. Thank you. Okay. So, let's go

2:21:45to the the basic issue is we have an

2:21:47imbalance between housing and people who

2:21:51live in PaloAlto and work in PaloAlto.

2:21:55During the last campaign, I did

2:21:58interviews around the shopping center. I

2:22:01would ask, "Do you

2:22:04live in Palo Alto?" And they say, "No,

2:22:06but do you work in Palo Alto?" Yes.

2:22:08There was one person I recall who said

2:22:10and when I first asked him did he live

2:22:13and work he said yes but then 30 seconds

2:22:15later he took it back and said I live in

2:22:17East Palo Alto. So who could afford to

2:22:19live in Palo Alto? It was the doctors

2:22:22who make 500,000 a year. This is what I

2:22:24was informed by informants at Lucil

2:22:26Packard. So that's who can afford to

2:22:28have houses in Palo Alto who work here.

2:22:32Now how do the rest of the people they

2:22:34have to be further and further away?

2:22:35Item two related to affordable housing.

2:22:38We're no longer on that item and you

2:22:39already spoke to that item and we

2:22:41appreciated it. If you have anything

2:22:42further to say on the various audit

2:22:45reports that have come forward for item

2:22:47three, please do.

2:22:47>> The audit the audit reports are

2:22:51misinforming you and you need different

2:22:54types of data which are available from

2:22:57sociologists at Stanford University but

2:23:00in particular more at Berkeley which has

2:23:02more relevant expertise on this because

2:23:04Stanford uh does not do this kind of

2:23:06sociology anymore. they become a social

2:23:08psychology department with actually a

2:23:11person in genetics who believes that

2:23:12genetics can give us the answer to

2:23:14social questions. So I would bring in

2:23:16Berkeley to give us the answer to these

2:23:18questions because they have the

2:23:20expertise and also I may say our

2:23:23institute of park

2:23:24>> may be of assistance as well institute.

2:23:27Thank you.

2:23:27>> Thank you very much. All right let's

2:23:30come back to the deis for comments on

2:23:32this item.

2:23:36Okay, clerk, can you bring up packet

2:23:39page 94?

2:23:48This is talking about the encryption of

2:23:50backup data for the local computers.

2:24:01Okay. And it says management accepts

2:24:03risk. This is so

2:24:06they have the S drive is encrypted. Is

2:24:09the laptop hard drive itself encrypted?

2:24:13>> Uh we have our director uh Numoto of our

2:24:17IT department. Darren, could you respond

2:24:20to the council member, please?

2:24:21>> Sure.

2:24:23>> Evening um committee. Um yes, on that we

2:24:27do not encrypt local hard drives. Um we

2:24:31do have um policies in place to help

2:24:35wipe them if they are lost or reported

2:24:37lost or stolen. Uh the challenge with

2:24:40encryption is just managing the PKI

2:24:42encryption and um again with our need to

2:24:47have um need for um

2:24:51PAS um you know encryption is become

2:24:54makes it a challenge for us. So, we do

2:24:57back up um all of our S drives and our

2:25:03one drive, our Office 365 stoages are

2:25:06all encrypted. Um and we do highly

2:25:09suggest that no relevant data is stored

2:25:12on local laptops.

2:25:15>> Okay. So, if someone has a file on their

2:25:16desktop that's unencrypted then?

2:25:19>> Yes. And not backed up.

2:25:22>> Okay. And so management accepts risk and

2:25:25that you because you have the ability to

2:25:27wipe the hard drive if it's lost, you

2:25:28feel this is a minimal risk.

2:25:30>> That is correct.

2:25:31>> Okay. And you encourage all important

2:25:34files to be not on the local drive.

2:25:37>> That is correct because they're not

2:25:38backed up nor protected.

2:25:40>> Okay. Thank you. Uh can we go to uh 95,

2:25:45the next page? Back at page 95. And this

2:25:49is talking about the ADA request. Can

2:25:52you talk more about that?

2:26:01Not sure if staff wants to talk about or

2:26:03the auditor wants to talk about that.

2:26:04This is the ADA request and saying

2:26:08>> uh that we have not started this 80day

2:26:12>> tracking request and

2:26:18>> I guess what's the question? Yeah. What?

2:26:23Why haven't we started this?

2:26:27>> So, uh we have two people. Uh we have

2:26:30Jonathan Lake, our um planning director

2:26:33who oversees the ADA coordinator. Uh who

2:26:36is our chief building official. Uh we

2:26:38also have our public works team online.

2:26:40Jonathan, you want to take the first?

2:26:42>> Yeah. So, I'll just speak to um

2:26:47the role. So there's u

2:26:53maybe big picture is this required by

2:26:56law or is this is this a big deal that

2:26:58we're not doing it?

2:27:00>> Well, so we're we're we're doing it. We

2:27:02are responding to uh ADA complaints that

2:27:05come in and we are responding to them

2:27:06within the timeline that is set forth.

2:27:08There's an initial response. So we are

2:27:10we are doing the um statutory or the

2:27:12legal responsibility.

2:27:14What this is asking for is a centralized

2:27:17way to process and log them. Right now,

2:27:19we utilize um our 311 system, which you

2:27:22may have heard we're going through some

2:27:24uh reboot of that system. And uh part of

2:27:28this effort is tied into that and

2:27:31creating that way to just have this

2:27:33centralized program to to track and

2:27:35monitor these requests. Right now, we're

2:27:37doing it. Um this would just be more

2:27:40efficient if we did.

2:27:40>> Yes. Okay.

2:27:42>> Okay. And so it says we disturb due to

2:27:46limited resources the

2:27:48uh do we know when it's going to start?

2:27:51>> You know um

2:27:57yeah I I don't know we can and that's

2:28:02not a satisfactory response. So we we

2:28:03can take a look at I mean there are

2:28:04things that we are doing now to address

2:28:07the um these complaints and in fact I

2:28:11know in my department um we track a lot

2:28:13of these because the building official

2:28:15reports to me these are ones that we are

2:28:17tracking internally it's just not this

2:28:19centralized system and so part of it is

2:28:22it'd be this is a nice to have

2:28:24>> uh as opposed to a need to have and so I

2:28:26think it's just using that and trying to

2:28:28balance it with the other you know um

2:28:31enhancements that we're trying to make.

2:28:33Okay, understood. Okay, can we slide to

2:28:36the next page? Then we talk about the

2:28:37grant writing and I want to understand

2:28:41what the So this is on packet page 96

2:28:46and down at the bottom line says upgrade

2:28:48grant policy define grant life cycle

2:28:52responsibilities. Is this to

2:28:56um improve the efficiency or is this to

2:28:58get more grants or what's the the

2:29:00outcome that we're trying to do by doing

2:29:02this?

2:29:03Hi, Christine Paras, assistant director

2:29:06of administrative services. I think the

2:29:08real purpose here is to get so that

2:29:11folks um city staff that are applying

2:29:14for grants have a really good

2:29:16understanding of the life cycle of them

2:29:19from identifying and matching them

2:29:21against your uh priority projects all

2:29:24the way through grant closure. And one

2:29:27of the things that we wanted to add to

2:29:29the policy was roles responsibilities

2:29:32for the grants and different lakes

2:29:34throughout the grant life cycle.

2:29:39>> Okay. And so this will allow us just to

2:29:41be more efficient or to not miss

2:29:44opportunities or

2:29:47>> um I would say it's also just having a

2:29:50good understanding of what um each

2:29:54person that is involved with a grant

2:29:57what their responsibilities are and to

2:30:00just have better compliance as far as

2:30:02grants. Now I know that generally us the

2:30:05city we are in compliance with our

2:30:07grants but it's to just to really define

2:30:11who is responsible for what as far as

2:30:14the whole life cycle of the grant.

2:30:17>> Okay. Thank you. And we move on to

2:30:20packet page 101.

2:30:25And this is talking about line clearing.

2:30:28And

2:30:32uh

2:30:34do we still clear lines? We're reducing

2:30:36a lot of our overhead wires up up in the

2:30:40foothills. Is this still an issue or are

2:30:43there PG& lines that we have to clear?

2:30:46Um, I will take some of this, but then I

2:30:49also utilities folks as well as I know

2:30:51our our burst Peter Collinger is online.

2:30:54So, a couple things. Um, we have a lot

2:30:56of overhead lines still uh within the

2:30:58city, but I think what you're talking

2:30:59about specifically is those that are in

2:31:01the WOOI area. what you were referencing

2:31:04as a project that's underway is a

2:31:06transmission corridor um that we are

2:31:10pulling underground to your point, but

2:31:12there are still distribution lines that

2:31:15are out there. Um and so hardening the

2:31:18poles that are in that area is one

2:31:20aspect, but then also maintaining

2:31:23clearance is another aspect of helping

2:31:25with wildfire protection.

2:31:27>> Okay. Oh, but this is this policy is for

2:31:29the whole city. It's just not the

2:31:31foothills. This was about as an audit

2:31:34the emergency preparedness. Um, so I

2:31:37would actually need to go back and or

2:31:39ask Kate. I think this was for within

2:31:42the WOOI, but I could be wrong.

2:31:47>> Yeah, this is under the

2:31:49under the uh category of preparedness

2:31:53wildfire,

2:31:55which makes me think that is the

2:31:56foothills. Yeah,

2:32:00>> I would need to go back and check as

2:32:03it's written. Um I think in general the

2:32:07line clearance pol we we were looking

2:32:08for clarification in the line clearance

2:32:10policy overall. Um because I don't think

2:32:13that that policy is is specific just to

2:32:16the WOOI. So we were kind of addressing

2:32:20the entire policy.

2:32:21>> Well, if we have distribution lines,

2:32:23then we still have line clearing

2:32:24policies. Okay. And the last question is

2:32:27the next page we're talking about

2:32:29CalFire

2:32:31and I'm not sure if the chief is online

2:32:34or

2:32:36uh can you talk more about how this

2:32:39project Calire's discussions with Calire

2:32:41about potential cost sharing approach

2:32:45can you just give more color to that?

2:32:50>> Yeah, good evening uh council member

2:32:52Rectal. As far as the uh clearing goes

2:32:55and the work with Calire, um we actually

2:32:58just had an update meeting with them

2:32:59today. And I think the way it's

2:33:01characterized in the audit, it

2:33:03specifically says uh something along the

2:33:05lines of um getting into a formal

2:33:08contract with Calire. And I don't think

2:33:11that is necessarily um what the

2:33:13intention of that finding is. It's more

2:33:15to uh find areas where we can enhance

2:33:18our work for hazardous fuel reduction

2:33:20along the shaded fuel brakes. um that

2:33:22are already identified in the CWPP. And

2:33:25so within the foothills area, we have

2:33:28the community wildfire protection plan

2:33:31and it actually prescribes areas where

2:33:33treatment needs to happen. And some of

2:33:35those areas back up next to what's

2:33:38called the state responsibility area or

2:33:40adjacent to state responsibility area

2:33:42which CalFire has a vested interest in

2:33:44protecting. And we usually call that the

2:33:47mutual threat zone. And so there's some

2:33:49areas back in 2022 and 2023 where we did

2:33:52this joint venture and we reduced uh a

2:33:55lot of the hazardous fuel along our

2:33:57evacuation route and um we need to

2:33:59revisit that again. And so um that's

2:34:02what I believe the audit is talking

2:34:03about is um revisiting um some of the

2:34:06fuel reduction work that's happening uh

2:34:08in areas that abut to the state

2:34:10responsibility area within the city of

2:34:12PaloAlto.

2:34:13>> Okay, that makes sense. So our areas we

2:34:16plan and we institute all the

2:34:18preparation. CalFire does their areas

2:34:21and when we those areas meet that's

2:34:23where we have to cooperate.

2:34:25>> Yes. And sometimes CalFire will help out

2:34:28a little bit more on the PaloAlto side

2:34:30just because um the fuel load is so

2:34:33significant that they want to make sure

2:34:35that um it doesn't necessarily create a

2:34:38a fire a fire that would go across into

2:34:40the state responsibility area. So areas

2:34:43where we have uh mutual interest in

2:34:45reducing the fuel load, they'll actually

2:34:47help out and that's there's been

2:34:48examples of that within our uh shaded

2:34:50fuel break uh between gates uh two and

2:34:53three specifically up in the Palat

2:34:54Foothills.

2:34:56>> Okay, very good. Thank you.

2:34:57>> Thank you.

2:34:58>> That's all I have,

2:34:59>> Vice Mayor.

2:35:03>> Okay, thank you. Um well, thank you

2:35:06again, Miss Murdoch. And I think my

2:35:08focus in looking at the report was on

2:35:11the items that uh were not started and

2:35:15then uh noting that there were a couple

2:35:19of departments where uh there seemed to

2:35:21be a you know a higher proportion of

2:35:23those non-starts.

2:35:25Um what caught my eye was the ADA item

2:35:31which I can't quite find right now.

2:35:34Um,

2:35:37what's what pages?

2:35:42>> Okay. Um,

2:35:49page 95. Um,

2:35:56packet page 95 or report page 20.

2:35:58>> Okay. Um, well, I may have been zoning

2:36:01when you talked about the ADA then. What

2:36:03did you ask about?

2:36:07>> Uh why wasn't it done? And the result

2:36:11was is that it's nice to have the ADA is

2:36:14being addressed right now, but this is

2:36:16just going to improve the efficiency of

2:36:17it.

2:36:19>> Thank you for that. Sorry about that. Um

2:36:21and then there was the uh public safety

2:36:23staffing and overtime and the utilities

2:36:25reserves advisory projects. Um, and uh,

2:36:29I just wonder if there's as you look at

2:36:32the entire report, as you look at what's

2:36:34in progress, what's completed, and what

2:36:37uh, hasn't been started. Is there any

2:36:40overarching takeaway for us on what gets

2:36:43prioritized and what doesn't, or what is

2:36:45more problematic than we realized and

2:36:47what doesn't, or is this just where the

2:36:50numbers happen to shake out this time

2:36:51around?

2:36:56Um I I think that you know we also

2:36:59noticed that there were a couple areas

2:37:01it risk management um was one of those

2:37:04areas that I think stood out. Uh but

2:37:08as as management noted they are working

2:37:10with a new risk manager to kind of

2:37:12create an overall framework of

2:37:14governance. Um so it does seem that

2:37:18efforts are underway there. Um, I think

2:37:20in terms of the the other two audits

2:37:22that you mentioned, the public safety

2:37:24staffing and overtime and the utility

2:37:26reserves advisory project, both of those

2:37:28were so recent that, you know, I think

2:37:32management needs, you know, time to to

2:37:35implement those. I think especially with

2:37:37the utility reserves advisory project

2:37:39that's still going through um the

2:37:42utility advisory commission um in

2:37:44November. So there's still, I think,

2:37:47work to be done in terms of determining

2:37:48the right path forward for the city.

2:37:52>> Thank you very much. Anything else,

2:37:55colleagues? If not,

2:37:57let's have a motion.

2:37:59>> I'll move the staff recommendation.

2:38:02>> Second.

2:38:19When you're ready,

2:38:22>> I will go ahead and take the vote now.

2:38:24Chair Lith,

2:38:26>> yes.

2:38:26>> Vice Mayor Stone,

2:38:28>> yes.

2:38:28>> Council member Rdall,

2:38:30>> yes.

2:38:30>> Motion carries unanimously.

2:38:32>> Thank you very much. And now to deputy

2:38:36city manager Miss Cotton Gaines future

2:38:39meetings and agendas.

2:38:43Thank you. Uh multi-creens here. Your

2:38:46next meeting is on November 10th. Uh we

2:38:49are finalizing the items, but we

2:38:51anticipate having an item related to the

2:38:53pedestrian and bicycle advisory

2:38:55committee in terms of their governance

2:38:57as well as a follow up on a council

2:38:59referral related to procedures for

2:39:02making referrals. So, those are the two

2:39:03items that are on track to make it and

2:39:06uh potentially one more if things move

2:39:08through.

2:39:09>> Thank you very much. Can you give us a

2:39:11heads up on the December meeting date?

2:39:14>> I believe it's December 10th. Let me

2:39:16just Okay.

2:39:19>> Thank you. All right. And with that, we

2:39:22are now ready for our last item, which

2:39:24is virtual public comment. This is for

2:39:27people who have something to say on an

2:39:30item not on the agenda and are here

2:39:33virtually. Do we have any members of the

2:39:35public?

2:39:36>> We have no virtual request to speak.

2:39:39>> Okay. Thank you very much. The meeting

2:39:42is adjourned.