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Searchable packet 09-04-12 Table of Contents Agenda3 Presentation by Cupertino Toyokawa Sister City Committee and student delegates No written materials8 August 21 joint Council and Successor Agency minutes Draft Minutes9 August 21 City Council minutes Draft minutes11 Accounts Payable for period ending August 17, 2012 Draft Resolution17 Annual Report: Review of the City’s activities over the past fis year (FY12), from July 2011 through June of 2012 Staff Report26 FY 2011-12 Annual Report27 City's Response to the Civil Grand Jury report Staff Report60 City Response Letter61 Grand Jury Report65 Unscheduled vacancy Parks and Recreation Commission Staff report100 Resignation email101 Improvement Agreement for the Rosebowl Project, Cupertino Property Development I, LLC, 19800 Vallco Parkway, APN: 316 -20-037 Staff Report102 A - Draft Resolution103 B - Improvement Agreement105 C - Map116 Professional Services Agreement for the 2012 Pavement Maintenance Projects Staff Report117 A - Draft Agreement119 Don Burnett Pedestrian-Bicycle Bridge – Donation for Landscape Enhancements Staff Report134 First reading amending Chapter 16.58 of the Cupertino Municipal Code regarding Green Building standards and amendment to the City's fee schedule Staff Report136 A - Ordinance145 B- Draft Resolution160 C - Phase II Recommendations163 D - Public Process Summary165 E - CC Directives166 1 F - Public Emails167 G - Survey of Cities175 H - Draft GBO183 I - Staff Report, 5-3-11187 J - Staff Report, 2-1-11199 Modification to the Main Street Cupertino mixed-use development Staff Report209 A - Draft Resolution for M-2012-03225 B - Draft Resolution for ASA-2012-10247 C - Draft Resolution for TM-2012-04249 D - Second Addendum to the Final Certified 2009 EIR and 2012 Addendum252 E - Approved Development Plan A(1)-2291 F - Minutes to the May 15, 2012 City Council meeting292 G - Proposed Development Plan298 H - Applicant's Proposal Letter309 I - City's Architectural Advisor Comments311 J - Student Generation Analyses dated January 2012315 K - Proposed Tentative Map342 2 AGENDA CUPERTINO CITY COUNCIL ~SPECIALMEETING SUCCESSOR TO THEREDEVELOPMENT AGENCY ~ REGULAR MEETING 10350 Torre Avenue, Community Hall Council Chamber Tuesday, September 4, 2012 5:30PM CITY COUNCIL MEETING ROLL CALL –5:30 PM CLOSED SESSION 1.Subject:Conference with legal counsel –anticipated litigation; Significant exposure to litigation pursuant to Gov't Code 54956.9(b): (one case) 2.Subject:Conference with Labor Negotiator (Government Code 54957.6); Agency negotiators: Carol Atwood and Amy Chan; Employee organizations: OE3; CEA; City Attorney's Group; Unrepresented JOINT MEETING OF CUPERTINO CITY COUNCIL AND SUCCESSOR TO THE REDEVELOPMENT AGENCY PLEDGE OF ALLEGIANCE –6:45 PM ROLL CALL CEREMONIAL MATTERS ANDPRESENTATIONS 3.Subject:Presentation by Cupertino Toyokawa Sister City Committee and student delegates Recommended Action:Accept presentation No written materials Page:No written materials POSTPONEMENTS 3 Tuesday, September 4, 2012Cupertino City Council Successor to theRedevelopment Agency ORAL COMMUNICATIONS This portion of the meeting is reserved for persons wishing to address the council on any matter not on the agenda. Speakers are limited to three (3) minutes. In most cases, State law will prohibit the council from making any decisions with respect to a matter not listed on the agenda. CONSENT CALENDAR Unless there are separate discussions and/or actions requested by council, staff or a member of the public, it is requested that items under the Consent Calendar be acted on simultaneously. 4.Subject:August 21 joint Council and Successor Agency minutes Recommended Action:Approve minutes Draft Minutes Page:9 5.Subject:August 21 City Council minutes Recommended Action:Approve minutes Draft minutes Page:11 6.Subject:Accounts Payable for period ending August 17, 2012 Recommended Action:Adopt Resolution No. 12-095 Draft Resolution Page:17 7.Subject:Annual Report: Review of the City’s activities over the past fiscal year (FY12), from July 2011 through June of 2012 Recommended Action:Receive report Staff Report FY 2011-12 Annual Report Page:26 8.Subject:City's Response to the Civil Grand Jury report Recommended Action:Authorize City Manager to sign the City's response to the Civil Grand Jury report Staff Report City Response Letter Grand Jury Report Page:60 4 Tuesday, September 4, 2012Cupertino City Council Successor to theRedevelopment Agency 9.Subject:Unscheduled vacancy Parks and Recreation Commission Recommended Action:Accept resignation of Marcia St.Clair, set application deadline date of Friday September 21 and schedule interview date for October 2 beginning at 5:30 pm Staff report Resignation email Page:100 10.Subject:Improvement Agreement for the Rosebowl Project, Cupertino Property Development I, LLC, 19800 Vallco Parkway, APN: 316-20-037 Recommended Action:Adopt Resolution No. 12-096 Description:Through the improvement agreement with the City, the applicants for a building permit for a mixed use commercial and residential development will be obligated to bond and construct city-specified street improvements, including curb, gutter, sidewalk, driveway approaches, pavement rehabilitation and traffic signal improvements along the frontage of their building site Staff Report A-Draft Resolution B-Improvement Agreement C-Map Page:102 11.Subject:Professional Services Agreement for the 2012 Pavement Maintenance Projects Recommended Action:Authorize the Director of Public Works to execute an Agreement for Contract Administration, Inspection and Testing services for the 2012 Pavement Maintenance Projects Staff Report A-Draft Agreement Page:117 12.Subject:Don Burnett Pedestrian-Bicycle Bridge –Donation for Landscape Enhancements Recommended Action:Authorize staff to accept a donation from the Friends of Don Burnett and allocate it toward installation of landscaping enhancements at the south side of the bridge Staff Report Page:134 ADJOURNMENT SUCCESSOR TO THE REDEVELOPMENT AGENCY CITY COUNCIL MEETING CONTINUED SECOND READING OF ORDINANCES 5 Tuesday, September 4, 2012Cupertino City Council Successor to theRedevelopment Agency PUBLIC HEARINGS 13.Subject:First reading amending Chapter 16.58 of the Cupertino Municipal Code regarding Green Building standards and amendment to the City's fee schedule Recommended Action:a. Conduct the first reading of Ordinance No. 12-2099: "An Ordinance of the City Council of the City of Cupertino amending Chapter 16.58 of the Cupertino Municipal Code to amend the Green Building Standards Code to include local green building requirements"; b. Adopt Resolution No. 12-097 incorporating Green Building deposit fees Description:Application: MCA-2010-04; Applicant: City of Cupertino; Location: citywide; Municipal Code Amendmentto adopt a Green Building Ordinance Staff Report A-Ordinance B-Draft Resolution C-Phase II Recommendations D-Public Process Summary E-CC Directives F-Public Emails G-Survey of Cities H-Draft GBO I-Staff Report, 5-3-11 J-Staff Report, 2-1-11 Page:136 14.Subject:Modification to the Main Street Cupertino mixed-use development Recommended Action:Staff recommends approval of: 1. Adopt Resolution No 12-098 approving Modification (M-2012-03) to thepreviously- approved Master Use Permit (U-2008-01 and M-2011-09) and Architectural and Site Approval (ASA-2011-24) for a mixed-use project consisting of 130,500 square feet of retail, a 180-room hotel, 260,000 square feet of office and a 120-unit market-rate live/work rental loft residential development, including the modifications to the parking garage and retail 2. Adopt Resolution No. 12-099 approving Architectural and Site Approval (ASA-2012-10) for the conceptual approval of 120 market-rate rental residential live/work rental loft units and modifications to the parking garage and retail 3. Adopt Resolution No. 12-100 approving Modification to the previously-approved Tentative Map (TM-2012-04) to subdivide five (5) parcels into six (6) parcels includingone lot for the retail, park and town square; one lot for each of the two office buildings; one lot for the hotel; one lot for the market-rate rental residential units; and one common area parcel for the parking garage to serve the retail, hotel and office buildings 4. Second Addendum to the Final Certified 2009 Environmental Impact Report EA-2012-05 Description:Application: M-2012-03, ASA-2012-10, TM-2012-04 (EA-2012-05); Applicant: Kevin Dare (500 Forbes, LLC); Location: Main Street -3 lots on Stevens Creek Blvd between Tantau Ave and Wolfe Rd; Modification to the previously-approved Master Use Permit (U-2008-01 and M-2011-09), Architectural and Site approval (ASA-2011-24) and Tentative Map (TM-2011-04) for a mixed-use project consisting of retail, hotel, office and residential development, including consideration of removal of the age-restriction on the market-rate residential units and modifications to the parking garage, retail and the tentative 6 Tuesday, September 4, 2012Cupertino City Council Successor to theRedevelopment Agency map; Environmental Recommendation: Second Addendum ofthe Final Certified Environmental Impact Report Staff Report A-Draft Resolution for M-2012-03 B-Draft Resolution for ASA-2012-10 C-Draft Resolution for TM-2012-04 D-Second Addendum to the Final Certified 2009 EIR and 2012 Addendum E-Approved Development Plan A(1)-2 F-Minutes to the May 15, 2012 City Council meeting G-Proposed Development Plan H-Applicant's Proposal Letter I-City's Architectural Advisor Comments J-Student Generation Analyses dated January 2012 K-Proposed Tentative Map Page:209 ORDINANCESAND ACTION ITEMS REPORTSBY COUNCIL AND STAFF ADJOURNMENT The City of Cupertino has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a final decision of the City Council/Redevelopment Agency must be brought within 90 days after adecision is announced unless a shorter time is required by State or Federal law. Any interested person, including the applicant, prior to seeking judicial review of the city council’s decision with respect to quasi-judicial actions, must first file a petition for reconsideration with the city clerk within ten days after the council’s decision. Any petition so filed must comply with municipal ordinance code §2.08.096. In compliance with the Americans with Disabilities Act (ADA), the City of Cupertino willmake reasonable efforts to accommodate persons with qualified disabilities. If you require special assistance, please contact the city clerk’s office at 408-777-3223 at least 48 hours in advance of the meeting. Any writings or documents provided to a majority of the Cupertino City Council after publication of the packet will be made available for public inspection in the City Clerk’s Office located at City Hall, 10300 Torre Avenue, during normal business hours and in Council packet archives linked from the agenda/minutes page on the Cupertino web site. 7 CITY COUNCIL STAFF REPORT Meeting:September 4, 2012 Subject:Presentation by Cupertino Toyokawa Sister City Committee and student delegates NO WRITTEN MATERIALS IN PACKET 8 DRAFT MINUTES CUPERTINO CITY COUNCIL SUCCESSOR TO THE REDEVELOPMENT AGENCY Special Meeting Tuesday, August 21, 2012 JOINT MEETING OF CUPERTINO CITY COUNCIL AND SUCCESSOR TO REDEVELOPMENT AGENCY ROLL CALL At 6:40p.m. Mayor Mark Santorocalled the special joint meeting to order in the Council Chamber, 10350 Torre Avenue, Cupertino, California. Present: Mayor Mark Santoro, Vice-Mayor Orrin Mahoney, and Council members Barry Chang, Rod Sinks, and Gilbert Wong. Absent: none. Present: ChairmanMark Santoro, Vice-ChairOrrin Mahoney, and Agencymembers Barry Chang, Mark Santoro, and Rod Sinks. Absent: None. ORDINANCESAND ACTION ITEMS 1.Subject:Successor Agency approval ofAmended Successor Agency Enforceable Obligations Payment Schedule and related actions Recommended Action:Adopt Resolution No. 12-04 Written communications for this item included a staff report, a draft Resolution No. 12-04 rescinding Resolution No. 11-04 and a draft Resolution No. 12-05 approving the amended SuccessorAgency Enforceable Obligations Payment Schedule. Wongmoved and Mahoneyseconded to adopt Resolution No. 12-04 rescinding Resolution No. 11-04.The motion carried unanimously. Wongmoved and Mahoneyseconded to adopt Resolution No. 12-05 approving the amended Successor Agency Enforceable Obligations Payment Schedule.The motion carried unanimously. 9 Tuesday, August 21, 2012Cupertino City Council Cupertino Redevelopment Agency 2.Subject: City Council approval of Amended Successor Agency Enforceable Obligations Payment Schedule and related actions Recommended Action:Adopt Resolution No. 12-094 Wongmoved and Sinksseconded to table this item. The motion carried unanimously. ORAL COMMUNICATIONS -None ADJOURNMENT The meeting was adjourned at 6:44 p.m. ______________________________ Grace Schmidt, City Clerk/Secretary 10 DRAFT MINUTES CUPERTINO CITY COUNCIL SUCCESSOR TO THE REDEVELOPMENT AGENCY SpecialMeeting Tuesday, August 21, 2012 CITY COUNCIL MEETING ROLL CALL At 5:20p.m. Mayor Mark Santorocalled the special meeting to order in the Council Chamber, 10350 Torre Avenue, Cupertino, California. Present: Mayor Mark Santoro, Vice-Mayor Orrin Mahoney, and Council members Barry Chang, Rod Sinks, and Gilbert Wong. Absent: none. CLOSED SESSION 1.Subject: Conference with legal counsel –anticipated litigation; Significant exposure to litigation pursuant to Gov't Code 54956.9(b): (one case) 2.Subject: Conference with Labor Negotiator (Government Code 54957.6); Agency negotiators: Carol Atwood and Amy Chan; Employee organizations: OE3; CEA; City Attorney's Group; Unrepresented At 5:16p.m. Council recessed to a closed session, and reconvened in open session at 6:45 p.m. Mayor Santoro announced that for item number one, a briefing was obtainedand no action was taken, and for item number two, the City Council met with negotiators and the closed sessionwould becontinuedafter themeeting. PLEDGE OF ALLEGIANCE At 6:45p.m. Mayor Mark Santorocalled the special City Council meeting back to order and led the Pledge of Allegiance. ROLL CALL Present: Mayor Mark Santoro, Vice-Mayor Orrin Mahoney, and Council members Barry Chang, Rod Sinks, and Gilbert Wong. Absent: none. 11 Tuesday, August 21, 2012Cupertino City Council Successor to the Redevelopment Agency CEREMONIAL MATTERS AND PRESENTATIONS 3.Subject: Presentation from El Camino Hospital regarding its work in the community Recommended Action: Receive presentation John Zoglin,Chairman of El Camino Hospital District and El Camino Hospital and Barbara Avery, Director Community Benefits gave a presentation describing the efforts they are making to provide services that improve the health of residents in the communities they serve. 4.Subject: Recognition and acknowledgment of Leadership 95014 sponsors and class of 2012 Recommended Action: Recognize Leadership 95014 sponsors and students Director of Parks and Recreation Mark Linder said that this is the second graduatingclass and explained how the program works. He acknowledged the major sponsors including the City of Cupertino and the Wilfred Jarvis Institute, and the daytime program sponsors including PG&E(Going Green Day)and Recology(Planning for the Future Day).He acknowledged the members of the Leadership 95014 Planning Committee and the 2012 graduates who were present. POSTPONEMENTS –None ORAL COMMUNICATIONS Ned Britt talked abouta proposal to modify thetraffic around Barbara Avenueand Faria School. He showed a picture of a car parked nearthe intersection of the street and explained that the proposal is to get rid of parking and makeit a two-lane street. He said that the sidewalk hasno bufferwhich would be dangerous for studentsandnoted that his neighborhood is against the modification.He said that traffic jams upin that area due to a primary choke point developing congestion. He suggested addinga right turn only lane or to not allow traffic in that area.Interim City Manager Amy Chan said that staff wouldprovideinformation to Council in the weekly notes. CONSENT CALENDAR Wongmoved and Mahoneyseconded to approve the items on the Consent Calendar as recommended.Ayes: Chang, Mahoney, Santoro, Sinks, and Wong. Noes: None. Abstain: None. 5.Subject: August 7 City Council minutes Recommended Action: Approve minutes 6.Subject: Accounts Payable for period ending July 27, 2012 Recommended Action: Adopt Resolution No. 12-090 7.Subject: Accounts Payable for period ending August 3, 2012 Recommended Action: Adopt Resolution No. 12-091 12 Tuesday, August 21, 2012Cupertino City Council Successor to the Redevelopment Agency 8.Subject: Accounts Payable for period ending August 10, 2012 Recommended Action: Adopt Resolution No. 12-092 9.Subject: Passage of aresolution to authorize City’s legal counsel to represent the City before the State Board of Equalization (“BOE”) Recommended Action: Adopt Resolution No. 12-093 authorizing the City’s legal counsel to represent the City before the BOE 10.Subject:Municipal Improvements, 10292 Orange Avenue Recommended Action: Accept Municipal Improvements Description: The work included driveway approach, sidewalk and curb & gutter improvements in the City right-of-way SECOND READING OF ORDINANCES 11.Subject: Second reading amending Cupertino Municipal Code Section 19.104 (Signs) Recommended Action: Conduct second reading and enact Ordinance No. 12-2098: “An Ordinance of the City Council of the City of Cupertino Amending Chapter 19.104 (Signs) of the Cupertino Municipal Code regarding the placement of temporary political signs and related minor clarifications and language streamlining.” Description: Application: MCA-2012-01; Applicant: City of Cupertino; Location: Citywide; Municipal Code Amendment to Chapter 19.104 (Sign Ordinance) regarding the placement of temporary political signs and related minor clarifications and language streamlining Mahoneymoved and Changseconded to read the ordinance by title only and that the City Clerk’s reading would constitute the first reading thereof. Ayes: Chang, Mahoney, Santoro, Sinks and Wong. Noes: None. Mahoneymoved and Sinksseconded to enact Ordinance No. 12-2098. Ayes: Chang, Mahoney, Santoro, Sinks, and Wong. Noes: None. PUBLIC HEARINGS ORDINANCES AND ACTION ITEMS 12.Subject: Consideration of authorization to proceed with a General Plan Amendment Recommended Action: Authorize a General Plan Amendment Written communications for this item included aletter supporting authorization to proceed with a General Plan Amendment process from Mike Rohde Vallco Shopping Mall General Manager,John Vidovich De Anza Properties owner, and an amended letter from John Zirelli Cupertino Chamber of Commerce President; a letter from Ivor Samson SNR Denton partner on behalf of Sears Roebuck and Co. seeking continued information and opposing a development moratoriumas part of the General Plan Amendmentprocessin regards to the Sears property;a packet of information from Barry Watkins; a chart from staff noting allocation information; and a staff PowerPoint presentation. 13 Tuesday, August 21, 2012Cupertino City Council Successor to the Redevelopment Agency Director of Community Development Aarti Shrivastava reviewed the staff report via a PowerPoint presentation. Barry Watkins,managing member of Stevens Creek/Cupertino Target Center said he strongly supporteda General Plan Amendment. He noted that land is expensive, construction costs are high, and interest rates are currently low but will probably go up in the future. He also suggested that Council consider using Kosmont, a Los Angeles area firm that works with government agencies, to analyze the scope of the area, assess the market and community vision and strategy, undertake the initial project planning, issue any tax exempt bonds that may be needed, and provide financial and cost analysis financing. Mr. Watkins saidthat he thoughtKosmont could help bridge the gap for financial incentives to make the General Plan Amendment more productive. Ivor Samson, SNR Dentin representing Sears in Vallco Mall, saidthat he sent a letter to Council on August 20. Mr. Samson indicated that Sears does not know enough about the scope of the General Plan Amendment to take a positive or negative position at this time. He noted thathis concern was regarding a moratorium or policy for delaying a project that would otherwise be permissible undertheexisting rules. He also saidthat he doesn’tbelieve that moving developments in parallel will work because developers won’trisk investing in a proposal in a General Plan that is in the process of being developedthat will not be adopted until a later date. Mr. Samson saidthat he opposes any moratorium or policy that limits development during a process. Community Development Director Aarti Shrivastava clarified that there would not be a moratorium with the General Plan Amendment. City Attorney Carol Korade also explained that her understanding wasthat this meeting wasonly to provide direction to staff on whether to proceed or not and then there are months of research to bring back to Council before an amendment would be adopted. Barbara Perzigian, General Manager of Cupertino Inn, said she strongly supported moving forward with authorizing the General Plan Amendment. She notedthat the hotel has a project it wants to get started. Ms. Perzigian also suggested that Council consider using Transient Occupancy Tax revenue to get things going. Jerry LeapDirector of Sales atCupertino Inn, said he strongly supported beginning the General Plan Amendment process. Edward Chan, KCR Development, saidthat they own a triangular parcel by the JC Penney parking lot and 280 freewaywhere the Farmer’s Market was. Mr. Chan expressed concern regarding the deferral of building until the General Plan Amendment was done. He noted that they have plans for a hotel on this parcel and would like approval of the project without the adoption of the Vallco Master Plan and General Plan Amendmentbecause the hotel economy may be different by the time theplans are completed. Kevin McClelland, Chamber of Commerce, saidthat the Chamber has met with most of the developers whocurrently are developing projects or have in the past and received feedback from them. Heurged Council to approve initiating the process of the General Plan 14 Tuesday, August 21, 2012Cupertino City Council Successor to the Redevelopment Agency Amendment. He also notedthat the Chamber would not support any conditions related to deferral of projects until the General Plan Amendment is approved orrequiring payment of mitigation fees up front. Mr. McClelland saidthat once there is more information regarding the scope that there would be financial support from interested stakeholders to help with funding. Jennifer Griffin saidthat she wants Vallco to be successful and prefers that it remain a shopping center. She noted herconcern about the scope of the General Plan Amendment taking years while the City is still trying to complete theMain Streetproject. She also questioned ifthe Vallco Redevelopment Agency (RDA)could be revived. Chang moved and Mahoney seconded, and the motion carried unanimously,to authorize the initiation of aGeneral Plan Amendment process that will begin with staff returning back to the City Council in four to six weeks with the following: 1.Scope of work for the General Plan Amendment process including the timing of a Master Plan for the Vallco Shopping Centerin conjunction with the General Plan Amendment process. 2.Proposal to fund the General Plan Amendment including the City share and payment of fair share by property owners (to include apportionment based on payments made in advance and those that are deferred). 3.Projects that do not require a General Plan Amendment or any deviations would not be deferred during the General Plan Amendment process, however, projects in the Vallco Shopping Center would have to update the approved Vallco Master Development plan and the South Vallco Master plan as related to their project. 4.Provide a list of the BQ (Quasi-Public Building) properties where the CG (General Commercial) zoning is proposed to be added. REPORTS BY COUNCIL AND STAFF Council member Sinks said that he would like to agendize for the next meetingto have staff bring back alternatives for addressing the geese issue at Memorial Park.Mahoney concurred but with no set date.Interim City Manager Amy Chan said that staff wouldprovide information to Council in their weekly notes regarding the geese issue. Mayor Santoro said that he met with the superintendents and school board members from both Cupertino school districts to discuss collaborating on the issue of traffic around the schools. The groups agreed to hold a quarterly meeting with the members comprising of one member and alternate from each of the following: Fremont Union High School District Board; Cupertino Union School District Board; Cupertino City Council; and Citystaff. Mayor Santoro said that he would appoint a Council member once he hears interest from the otherCouncil members. Council members highlighted the activities of their committees and various community events. At 9:47 went back into closed session. ADJOURNMENT 15 Tuesday, August 21, 2012Cupertino City Council Successor to the Redevelopment Agency At 11:50 p.m.the meeting was adjourned. ______________________________ Grace Schmidt, City Clerk Staffreports, backup materials, and items distributed at the City Council meeting are available for review at the City Clerk’s Office, 777-3223, and also on the Internet at www.cupertino.org. Click on Agendas & Minutes, then click on the appropriate Packet. Most Council meetings are shown live on Comcast Channel 26 and AT&T U-verse Channel 99 and are available at your convenience atwww.cupertino.org. Click on Agendas & Minutes, then click Archived Webcast. Videotapes are available at the Cupertino Library, or may be purchased from the Cupertino City Channel, 777-2364. 16 17 18 19 20 21 22 23 24 25 OFFICE OF THE CITY MANAGER CITY HALL 10300 TORRE AVENUE •CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3212 • FAX: (408) 777-3366 CITY COUNCIL STAFF REPORT Meeting: September 4, 2012 Subject Annual Report: Review of the City’s activities over the past fiscal year (FY12), from July 2011 through June of 2012. Recommended Action Receive Report. Description The annual report is published each year and provided to members of the City Council. The report summarizes the City’s previous year operations, activities and accomplishments. _____________________________________ Prepared by: Rick Kitson, Public and Environmental Affairs Director & Erin Cooke, Sustainability Manager Approved for Submission by: Amy Chan, Interim City Manager Attachments:Fiscal Year 2011-2012 Annual Report 26 2011 ANNUAL REPORT 2012 27 Table of Contents Executive Summary ....................................................................................................................................3 Community Development Department ..................................................................................................2 Overview...................................................................................................................................................................2 Highlights for Last Fiscal Year....................................................................................................................................3 Major Projects/Programs/Accomplishments............................................................................................................4 Productivity and Efficiency Improvements...............................................................................................................5 Commissions.............................................................................................................................................................6 Parks and Recreation Department ...........................................................................................................7 Overview...................................................................................................................................................................7 Highlights for Last Fiscal Year....................................................................................................................................8 Major Projects/Programs/Accomplishments............................................................................................................8 Productivity and Efficiency Improvements...............................................................................................................9 Awards, Grants & Recognition..................................................................................................................................9 Commissions.............................................................................................................................................................9 Department of Public Works ..................................................................................................................10 Overview.................................................................................................................................................................10 Highlights for Last Fiscal Year..................................................................................................................................11 Major Accomplishments.........................................................................................................................................12 Productivity and Efficiency Improvements.............................................................................................................14 Grants, Awards & Recognition................................................................................................................................14 Commissions...........................................................................................................................................................15 Sheriffs Department ...............................................................................................................................16 Overview.................................................................................................................................................................16 Highlights for Last Fiscal Year..................................................................................................................................16 Major Accomplishments.........................................................................................................................................17 Productivity and Efficiency Improvements.............................................................................................................18 Commissions...........................................................................................................................................................18 City Managers Office ...............................................................................................................................19 Overview.................................................................................................................................................................19 Highlights for Last Fiscal Year..................................................................................................................................20 Major Accomplishments.........................................................................................................................................21 Productivity and Efficiency Improvements.............................................................................................................23 Grants, Awards & Recognition................................................................................................................................24 Commissions...........................................................................................................................................................24 Department of Administrative Services ................................................................................................25 Overview.................................................................................................................................................................25 Highlights for Last Fiscal Year..................................................................................................................................26 Major Projects/Programs/Accomplishments..........................................................................................................26 Productivity and Efficiency Improvements.............................................................................................................28 Grants, Awards & Recognition................................................................................................................................29 Commissions...........................................................................................................................................................29 City Attorney .............................................................................................................................................30 Overview.................................................................................................................................................................30 Highlights for Last Fiscal Year..................................................................................................................................30 Major Projects/Programs/Accomplishments..........................................................................................................30 Productivity and Efficiency Improvements.............................................................................................................31 28 Executive Summary The Annual Report provides a review of the City’s activities over the past fiscal (FY11), from July 2011 through June of 2012.This document summarizes the priorities, programs and services of the past year. Overarching goals for FY services while identifying savings, improving efficiency, and pr- being of the City. This year had the added uncertainty for #27 Best Places to Live both City Council and staff of working withthe departure of David Knapp,and finding a new city manager. “Located in the heart of Silicon Valley and home to Apple and other high-tech The strength of the local economy and of local companies companies, Cupertino attracts a diverse, continues to benefit the city and to garner positive educated crowd. How diverse? Only about 30% of residents are white (the national attention. CNN Money, a service of CNN, biggest ethnicities are Asian and Asian Fortune, and Money magazines, identified Cupertino as Indian). How educated? More than 60% the 27th best small cityin which to live. Irvine was the have a bachelor's degree or higher. And only city in California to be ranked higher. the city's primary and secondary schools rank among the highest performing in the Along with the notable activity of Apple, leases remained state. The downside to living near all these brains? Job competition is stiff.” strong with old retail space being revitalized and new restaurants opening their doors. TJMaxx and Home CNN Money August2012 Goods at the Crossroads Center have proven to be very successful. The Bay Club at Vallco Mall has opened to very positive reviews. Work continues on the Islands Restaurant at the Crossroads and improvements are already underway to revitalize the site formerly occupied by PW Super.The Main Street mixed- use project, including retail, hotel, office and residential was approved in May. Construction is expected to begin next year. Like all cities in the state, Cupertino faced challenges with the dissolution of the Redevelopment Agency(RDA)and the finalizationof the Successor Agency.The dissolutionof the RDA resulted in protractedand difficultnegotiations with the County Oversight Board. These negotiations wereconcluded earlier this summer with a very favorable result for the City. Service excellence and financial stability during change. The City Council successfully navigated a potentially tricky transition with city staff and Interim City Manager Amy Chan. The City Council adopted another balanced budget that continued the tradition of service excellence that is the hy. Staff continue to fiercely defend the General Fund and Reserves $3M in grants to move forward critical projects and advance dire City Manager, Public Works and Community Development Departments including regional grants leveraged by the City. Biennial survey results confirmed a community approval rating of 94% for the city and its work. The city comes into the current fiscal year with staff and resou of many neighboring jurisdictions. The continued leadership of the city Council and of its new city manager, David Brandt, Cupertino looks optimistically t 29 Community Development Department Overview There are four divisions within the Community Development Department. They include Building, Planning, Housing and Economic Development/Redevelopme Mission Community Development buildsa cohesive, safe, vibrant and economically strong City through comprehensive policy, planning, technology and public education. Rendering of approved retail/residential project on Wolfe Rd. Goals A Safe and Healthy Community through General Building Services, Construction Plan Checking and Building Code Enforcement Excellent Customer Service trough Planning Administration, Current Planning Services and Economic Development Efficiency and Fiscal Responsibility through Economic Development and Redevelopment, which strives to retain and increase retail estabts and businesses in the City. Preserving Community Values through Mid-and Long-Range Planning and Housing Services A Green Approach and Resource Conservation through diverse Planning Administration, Current/Mid/Long-Range Planning efforts to ensure that policies and projects incorporate environmental principles conserve finit resources. Divisions The department’s missionis depicted in the objectives of each of the Community Development Department’s divisions, which are as follows: Building Division The safeguards the public health, safety and general welfare of residents, workers and visitors to Cupertino by effective adm enforcement of building codes and ordinances adopted by the City Planning Division The ensures quality development within the community by planning for and implementing long-term policies and reviewing projects for conformance with development regulations and community expectati Housing Division The facilitates the development of affordable housingand administers community programs. Economic Development/Redevelopment Division The promotesCupertino’s economic health through a cooperative government atmosphere that businesses prosper and encourages them to become long-term partners in the 2| City of Cupertino FY11-12 Annual Report Page 30 community. Operating Budget & Employee Summary The department’s operating budget for Fiscal Year 2011–2012was$5,708,523with 23.42full-timestaff.Approximately 60% of the operating budget is recovered through fees and grants. Highlights for Last FiscalYear The Community Development Department, as a whole, supported the following-high profile projects in our Cityduring FY11-12: Apple: Campus 2 Project (image right) o —Environmental Review (ongoing) Apple Cafeteria o Various ~ 80 tenant o improvement projects city- wide Aloft Cupertino Hotel (construction ongoing) Biltmore Adjacency –7,000 sq. ft. commercial, ~92 units (ongoing) Main Street Cupertino –260,000 office, 180-room hotel, 143-unit senior housing, 138,700 sq. ft. commercial Bay Club —69,000 square feet of sport club located at the Vallco Shopping Mall (Inside Sears -construction near completion) Crossroads Shopping Center (construction ongoing): Architectural and site upgrades (formerly Mervyn’s) for TJ Maxx/ Two new pad buildings approximately 10,000 square feet (ongoing) Homestead Square —Phase 1 (Rite Aid –construction near completion) Sign Ordinance Update (political signs) Green Building Ordinance (ongoing) Housing Element Zoning Amendments Parking Ordinance Update Development Permit Process Update R1 Ordinance Update Divisions achieved the following milestones this fiscal year: Building Division: Building staff processed and plan checked 2,185 building permit FY 2011-2012, compared to 2,189 in FY 2010-2011. The Building Division conducted 17,473 building inspections in F-2012, compared to 18,063 in FY 2010-2011. Building Valuation was $156 million in FY 2011-2012, compared to $153 million in FY 2010-2011. Planning Division: 3| City of Cupertino FY11-12 Annual Report Page 31 The number of planning applications increased by approximately 6 applications in FY 2010–2011 to 268 applications in FY 2011–2012. HousingDivision: Implemented the 2011/2012 Community Development Block Grant Prog Awarded CDBG sub-recipient grants for the 2012–2013 program year ($310,729). Economic Development/RedevelopmentDivision: Retail leases remained strong in 2011–2012with numerous restaurants opening their doors, including Gyu-Kaku, Bitter + Sweet, Ike’s Lair, iSushi, Michelle’s Pancake House, Tong Dumpling, Shanghai Dim Sum. Several new leases will bring high profile tenants to Cupertino at the Homestead Square Center, Ranch 99 at the McClellan Center, and Starbucks at the Vallco Shopping Center in Bay Club. Boudin and have also signed a lease within a new pad building at Crossroads. Main St. artist rendering Major Projects/Programs/Accomplishments Building Division The worked extensively to refine Code Enforcement processes to clear outstanding cases that have been open for several years an Public Works to help verify storm water pollution protection measures at targeted facilities.In addition, the Division worked to both streamline and simplify construction application process by creating an all-new set of Construction Permit Applications. Planning Division The emphasized pre-constructionmeetings to mitigate applicant concerns and ensure compliance of conditions and standards durin project operation, alongside early development review to facilit-agency compliance of building, fire, etc. To facilitate access to planners and elevate customer service, amid increased development activities and large project continued counter hours through the lunch hour and increased int elevate accessibility and ease-of-use, the Division revised sections of the website and application forms, including the Business License Application. P its revision of the R1 Ordinance to reflect current community va development review process, as well as amendments to the Zoning Ordinance to simplify the development process. 4| City of Cupertino FY11-12 Annual Report Page 32 PLANNING DEPARTMENT HOURSCONTACT: 7:30 AM -5:30 PM Monday -Thursday Tel: (408) 777 3308 7:30 AM -4:30 PM Friday Fax: (408) 777 3333 *Now open from 12 -1 PM*Email: planning@cupertino.org Housing Division The continued to oversee distribution of CDBG funds to eliminate conditions of slum or blight and those considered detrimental to welfare (assistance after a natural disaster, etc.) with support Silicon Valley.This nonprofit assists low -income families in remaining in their homes by making health and safety improvements.Lastly, the CDBG reporting process has been made easier for applicants and eliminated postal costs and print- profits andthe City. Economic Development/Redevelopment Division The supported and advised Apple, Seagate, Homestead Square, Crossroads, McClellan, Target, and Ma numerous expansion and/or tenant build-out projects in the City. In addition to Division efforts to amplify involvement in the City’s new GreenBiz progra, supported by staff from the City Manager’s Office, also assisted the Mayor to host the City’s first Small Business Workshop, which received nearly ~70 RSVPs and hos attendees, as a means of gathering direct feedback on existing City and services and determine the best ways to build these programs to for the near and long term. One immediate deliverable agreed upo was the development of a Small Business Guide, which was quickly completed, distributed to all attendees, and also placed on the City and Ch.The document seeks to support new businesses in navigating the activ steps suggested for launching and operating a business in Cupertino.This information will also be distributed to all new businesses, in collaboration Office, electronically vs. the paper packet previously circulate Productivity and Efficiency Improvements Internal productivity and efficiency improvements included enhancements to the Building/Planning application forms and handouts (ongoing). The departmentalso implementeda new online permit system to connect Building, Planning, Public and Business Licenses and allow online search and applications for permi online in Spring (?) 2013). To that end, the Building department achieved technology- based efficiencies through implementation of new Permit Tracking Computer Software, Inc. (CSI), procurement of iPads for field inspectors and de scanners to log all over-the-counter permits and associated correspondence. Community-wide resource efficiency improvements includedThe California Buildings Standards Commission adopted the 2010 Green Building Standards Code (CalGreen) to set a minimum standard that prioritizes resource conservation environmental protection in the design and construction of new b.The new requirements include reduced water use by 20%, divert 50% of construction waste from 5| City of Cupertino FY11-12 Annual Report Page 33 landfills, and promote indoor air quality. The Building Division checklists to streamline mandatory CalGreen requirements and ens standards are incorporated into projects.Cupertino’s building inspectors have completed CalGreen training sponsored by the Association of Cali Officials (CALBO) andare in the process of becoming certified as a CalGreen Inspector by the International Code Council (ICC). Finally, all new affordable housing developments are built to Build It Gre, ensuring efficiencies are achieved both during construction and allowing for stabilized and reduced utility costs for tenants. Commissions The Community Development supports two Commissions, each consistingof five residents appointed to alternating four-year terms by the City Council.The Planning Commission is responsible for hearing and makingrecommendations on all advanced planning policy documents and current planning applications.The Cupertino Housing Commission assists in developing housing policies and strategies for implementation and monitoring of affordable housing projects, helps identify sources of funding for affordable housing and performs other advisory fu the City Council. 6| City of Cupertino FY11-12 Annual Report Page 34 Parks and Recreation Department Overview Mission The Cupertino Parks and Recreation Department aligns its program the department’s vision, mission, values, and outcomes. The depa Positive, Healthy, and ConnectedCommunity.” The mission is “Cupertino Parks and Recreation is committed to provide opportunities, resources, and servic community to enhance the quality of people’s lives through recre and cultural experiences.” Divisions Goals The department’score values are: community, quality, and trustworthiness.Our outcomes are: Healthy Community Creative and Playful Community Well Educated Community Connected and United Community Fiscally Responsible Community Examples of the department’s programs and services organized by outcomes are: Healthy Community -Includes Blackberry Farm Golf Course, Cupertino Sports Center, SpringChickens work-out at the Senior Center, lap swimming, soccer, softball, and adult basketball. Creative and Playful Community- Examples include summer camps, swimming at Blackberry Farm Park, noon-time recreation at schools, adult dance, music classes, and art classes at Quinlan and the Senior Center. Connected and United Community- Examples include community service camp, festival support, Senior Trips, and Senior Case Management. Well-Educated Community- Includes pre-school classes, ESL classes, After- school Enrichment programs, summer school, computer classes for speakers, and summer education enrichment camps. Fiscally Responsible Organization- All programs areoperated in a fiscally responsible manner.Parks and recreation hasan active volunteer program including Helping Hands, Senior Center Volunteers, and Leader in Training Divisions include Facilities/Events/Blackberry Farm Senior Center Sports and Fitness Youth and Teen\ Operating Budget & Employee Summary The department’s FY11-12operating budget was $8,450,820 with 29.78 full-time staff. 7| City of Cupertino FY11-12 Annual Report Page 35 Highlights for Last Fiscal Year 53,142 senior adults enhanced their healthy lifestyle by attending qualityprograms, important services, and meaningful volunteer opportunities at the Senior Center Successfully continued Leadership 95014 which is supported by Cu sponsors, Wilfred Jarvis Institute (major sponsor), Recology, and PG&E Increased percentage of resident picnic area reservations at Bla by 6.5% (from 46% residents to 49% residents) Increased percentage of resident drop in pool use at Blackberry Farm by 12.8% (from 47% to 53%) Continued to strengthen the collaboration with Fremont Union High School District and Cupertino Union School District addressing traffic issues around Monta Vista, Kennedy, and Lincoln and increasing the number of summer school noon- time offerings, and After-school Enrichment classes The Sports Center had 6,743 participants in table tennis, badmin lessons generating $1,441,464 in revenue Major Projects/Programs/Accomplishments Teen Commission successfully implemented a Santa Clara County Public Health grant funded teen leader conference with a focus on a tobacco fr developing five anti-tobacco public service announcements for local television. The conference was a regional event involving over 400 teens. Parks and Recreation Commission recommended and City Council approved the name change of McClellan Ranch Park to McClellan Ranch Preserve. Initiated planning for a major, high level, regional youth soccer tournament in Cupertino, July 19-21, 2013. Partners include De Anza Force Soccer Club, and Fremont Union High School District. The tournament is expected to attrac teams. The Senior Center offered the Cupertino senior adult community 1 courses, 28 special event luncheons, and 29 informative and instructive presentations given by community experts 350 people were served by the Senior Center Case Management prog these older adults remained independent and safe in their own ho them from being institutionalized 1664 senior adults remained active, continued to strive for pers furthered their education by participating in the 46 Share Disco program opportunities 8| City of Cupertino FY11-12 Annual Report Page 36 Productivity and Efficiency Improvements Helping Hands volunteers provided 521 service hours to help maintain McClellan Ranch Preserve and Blackberry Farm Park Math Olympiads revenue increased by 25% from $74,167 to $92,526. Pre-school brought in a profit of $123,442 After School Enrichment generated a profit of $45,879 an increase of $10, 491 from FY 2010-2011 or 29.6% Sports and Fitness youth contractual classes had 5050 participants and generated $556,013 in revenue. 1120 adults participated in sports and fitness classes producing $104,072 in revenue 206 senior volunteers contributed 16,300 services hours for administrative and programming support at the Senior C Senior Travel Program is very close to full cost recovery Senior Newsletter offered electronically with more than 50% of tbers receiving it electronically thereby saving over $5,000 annually The departmentalso implemented an indoor and outdoor “Green Event” Guide, to elevate resource conservation/recoveryand divert materials from the landfillat events held on/in City properties. Working with the City’s two environmental teams, Parks & Recreationhosted its first training for event coordinators to learn the ro. Awards, Grants & Recognition Cupertino Kiwanis Club received a 2012 Crest Award for its partn Cupertino Senior Center Linda Yelavich received a CPRS District Four Professional Merit Ruben Rodriguez received a CPRS District Four Professional Merit Lauren Neff was elected CPRS District Four Vice President of Com FY 2012-2013 Council on Aging Equipment Grant for purchasing equipment to enh Management Program California Parks and Recreation Society Award of Excellence for outstanding contributions to the community for the Hidden Treasuundraising Event Commissions The five-member Parks and Recreation Commission advises the City Council on park and recreation related issuesand the five-member Teen Commission advises City Council on youth and teen issues. 9| City of Cupertino FY11-12 Annual Report Page 37 Department of Public Works Overview Mission The Public Works Department provides responsive and high quality public works services and projects to the public and other City departments in the areas of engineering, construction, environmental, operations and maintenance. Goals The Public Works Department creates a foundation for a great com and providing services and projects that are the result of activ community’s residents, businesses and City Council.These services and projects are: •Supportive of an informed public •Compliant to regulatory requirements •Sustainable •Safe •Conducive to a high quality of life The departmentachieves itsgoals with the management and collaboration of conscientious professionals that prudently use resources, are in application of technology and are highly responsive. Specificall •Provide prompt response to our clients on requests for services and complaints. •Program/deliver Capital Improvement Projects in a timely and cost effici •Work collaboratively with other City departments for the deliver consistently high-quality services. •Represent the City on county and regional issues such as congestion management and storm water management. •Oversee and manage regulatory programs such as storm water pollu •Provide effective solid waste and recycling programs. Department Divisions The Public Works Department coordinates the diverse activities of eight distinct divisions including: Engineering Services- reviews plans and provides inspection services for all public and private developments to ensure conformance with City standards and policies. The Division also responds to citizen and other requests related to infrastructure and other public improvements. Environmental Programs- is responsible for the management of the City’s$7 million annual solid waste, recycling and composting contract; the Household Hazardous Waste program and compliance with the State-mandated Municipal Regional Storm Water Permit. Transportation -develops plans, specifications and estimates for the installation, operation and maintenance of traffic signals (55in total), traffic signal 10| City of Cupertino FY11-12 Annual Report Page 38 interconnects, traffic signs, pavement markings, and associated design standardsfor public and private projects. The Division represents the City at the VTA Technical Advisory Committee, Capital Improvement Committee, and Systems Operations & Management Working Group monthly meetings. Capital Improvements – provides direction and oversight of the design and construction of improvements ranging from street improvements, to new park and trail facilities, to City building modifications, to park master plans. For FY 2011– 12 this program included $3.8 million in new expenditures, with the two largest portions being $1.6 million allocated to parks projects and $1.7million for streets projects. Grounds - maintains all 19 park andopen space areas, which includes 140 acres of landscape, athletic field, and recreational turf areas. Through a joint use agreement, the Grounds Division also maintains eight Cupertino Union School District athletic fields, playgrounds and landscape areascomprising another 52 acres. Street and Fleet - maintains City streets, traffic signs and markings, concrete improvements, streetlights and all fleet equipment, including small power equipment. Fleet maintains 94 vehicles, 54 rolling stock, 18 trailers, 12 riding mowers, and 234 pieces of power equipment. The Division is also responsible for storm water pollution inspections and management of contractual services for sidewalk and curb and gutter repairs, street sweeping, storm drain maintenance and schoolcrossing guard services. Trees and Right of Way - maintains the safety, health and appearance of approximately 13,000 street trees and about 31.5 acres of developed median island hardscapes and softscapes. Facilities - provides building and systems maintenance to 13 City-owned buildings and 9 single standing restroom facilities including evaluation of replacement equipment regarding life cycle costs and utility conservation/consumption. The division also administers the janitorial contract for all City facilities. The department’s 2011 –2012operating budget was$16,896,461with 73.59full-time staff. Highlights for Last Fiscal Year The department has implemented a new Capital Improvement Program budget and status reporting format that is inclusive of all projects and includes prioritization criteria. Projects are also categorized based on: Public Safety, Regulatory Mandate, Grant Commitment, Preventative Maintenance, Cost Efficiency and Enhancement. 11| City of Cupertino FY11-12 Annual Report Page 39 Leveraging this framework, Public Work’s focusedon preventative maintenance of basic infrastructurethrough the following activities: •Annual pavement management program using standardized software, but validated and adjusted with extensive field observations. •Aggressive program for pavement repairs on arterials Various park path and parking lot repairs & resurfacing Operating budget that maintained established service levels with the same number of personnel despite the addition of several facilities (Mary Avenue Bridge (2009), Sterling / Barnhart Park (2010), Franco Park (2011). Major Accomplishments The City advanced its CapitalImprovement Programthrough the achievement of these milestones: Stevens Creek Corridor Phase 2: Three new grants were received since adoption of the 2011-12 CIP.CEQA documents were adopted by Council in September, 2011. Various technical investigation and analyses were completed and permit application packages submitted agencies including Army Corps, National Marine Fisheries Service, and Regional Water Quality Control Board. McClellan Ranch Master Plan Update 2012: Public Works and theParks & Recreation Department developedthe McClellan Ranch Master Plan 2012 Update. Community input was also taken at a workshop and meetings during the year. Council adopted the Master Plan Update on May 1, 2012 and many identified projects are now included in the current CIP. Scenic Circle Access: The project was substantially complete and opened to the public on June 17, 2011, in time for summer use.Special parking-related signage was installed in the adjacent neighborhood to discourage park-user parking in the neighborhood.The signs appear to be working well. Golf Course Irrigation and Ponds: Investigation and analysis of a well adjacent to the Blackberry Farm concession stand was completed. Results led to Council endorsement of implementing golf irrigation upgrades in the 2012-13 fiscal year. Blackberry Farm Infrastructure Upgrade(see images below): Construction completed in May 2012 and the facility was opened to the public on schedule for the summer season. The project consisted of accessibility improvements at the retreat center, pool house and restrooms, as well as new showers at the pool house. Civic Center Master Plan: Alternative scenarios were studied and a framework developed for potential improvements to the Civic Center, addressing current and future parking needs, facility additions, and seismic upgrades to the city hall, anticipated to be presented to Council December 2012. 12| City of Cupertino FY11-12 Annual Report Page 40 Beyond partnerships forged for the CIP, Environmentalstaff, bothfrom Public Works and the City Manager’s Office,launched a new partnershipwith the federal EPA to bring itsnationwide Food Recovery Challengeto grocery stores and markets in Cupertino. The City was one of thirteen local government agencies selected r the partnership, and the only City in California selected, to helplocal businesses reduce costs and conserve resourcesthrough elevated access to composting services, donation agency partnerships and inventory management. Another partnership forged in2012, affirmed through the direction from City Council, entered Cupertino into San Mateo County’s Regional Environmental (EIR) to give the City the legal authority to adopt a single-use bag ban in the future. Free participation in the EIR isvalued at ~ $25K to $30K. Beyond these partnerships, Environmental Services coordinated seven creek clean-up events at Stevens Creek and Calabazas Creek.Cleanup events attracted over 100 volunteer students, parents and environmental advocates. Cleanupbenefit downstream cities as well as the City of Cupertino.Lastly, theCity held its first World Monitoring educational event for Cupertino students at Blackberry Farm, where Cupertino’s Naturalist conducted creek walks while staff displayed an interave watershed model for the students. Additional accomplishments for Public WorksMaintenance Divisionsare shared below: Tree / Right of Way Divisions: Completed inventory of all 16,559 City owned trees o comprised of 13,317 street/right of way trees, 3,249 park/sports field trees and 33 parking lot trees. Met requirements to become a Tree City USA and o submitted application in May 2012. Worked with the City Manager’sOffice to coordinate o anArbor Day tree planting ceremonyin conjunction th with the 4Annual Earth Day Festival(seeright). Completed revision to municipal code, chapter 14.12 o Trees. Completed numerous softscape median o improvements on arterial streets. Renovated City entrance signs at four arterial street locations o Grounds Division: Renovated bridges at Memorial Park. o Completed energy efficiency motor replacements at Memorial Park. o Sealed pond bottoms and sides at Memorial Park ponds. o Completed installation of irrigation system at Stocklmeir orchar o Installed two backflow prevention devices at Monta Vista Community Center. o Assisted with numerous festivals and public events. o Facilities Division: Coordinated removal of Sports Center pool and pump house. o 13| City of Cupertino FY11-12 Annual Report Page 41 Re-keyed Sports Center. o Installed the necessary electrical o infrastructure to create two electricvehicle- charging stations near City Hall (see image right). Productivity and Efficiency Improvements A reorganization of the department, intended to flatten the engineering side of the organization, involved deleting a vacated Assistant Director position and converting the vacated City Architect position to a Capital Improvement Program.The Development Services, Traffic Engineering, and Environment Progr directly to the director. The Public Works Team successfully completed the Energy Efficiency and Conservation Block Grant streetlight retrofit and irrigation con leading to substantial utility and financial savings for the CitIn partnership with the City Manager’s Office, the first ever citywide upgrade of streetlights took place and 2,319 were retrofitted. These technology improvements captured a $45,000 rebate in addition to 2011 rate savings of $61,522. In addition, 93 Hydropointweather-based evapo-transpirative and moisture-sensor controllers were installed at 35 sites throughout the City (66 i Company service area, 27 in California Water Service Company serIn late February 2011,the City received a $37,100 rebate check from the Santa Clara Valley Water District.Total project savings are confirmed at 70,476,866 gallons.Savings are estimated to be approximately 25,500,000 gallons/year. These sav higher than originally predicted by Siemens (~3M gallons/year). Preliminary estimates indicate the avoided cost attributed to the project is approxima Grants, Awards & Recognition Grants •Stevens Creek Corridor Phase 2 California Natural Resources Agency —California River Parkways, $1,215,000, funding agreement executed November 2011. Caltrans/California State Parks joint program —Environmental Enhancement & Mitigation Program —$245,000, funding agreement executed May 2012. Metropolitan Transportation Commission —TDA Article 3 —$103,179 awarded July 2011. Santa Clara Valley Water District —Trail and Open Space —$285,000 awarded and funding agreement was executed January 2012. Santa Clara Valley Water District —Environment Enhancement Implementation —$565,000 awarded and funding agreement executed January 2012. •Valley Transportation Authority —Project Readiness —$17,000 allocated to McClellan Road Sidewalk Study 14| City of Cupertino FY11-12 Annual Report Page 42 •Metropolitan Transportation Commission –Program for Arterial System Synchronization (PASS) awarded June 2012, provides traffic signa timing plans for Stevens Creek Boulevard Awards •Stevens Creek Corridor Park and Restoration Phase 1 -2012 Engineering Excellence Merit Award from ACEC California (American Council of Engineering Companies) Commissions Public Works staff supportsthe five-member Bicycle Pedestrian Commission, which is currently working to update the City’s Pedestrian Transportation Guideline.The Commission also oversees the City’s two Energizer Stations on Bike 2 Work Day(see images from recenteventsbelow), with support from the City Manager’s Office to elevate City employee participation in the event and spread the civic media. An estimated 400+ participants visited/passed Cupertino’s stations this year. TheCity significantly increased its employee participant rate, with biked/walked a total of 141.4 miles and added another 113 alternative transit 15| City of Cupertino FY11-12 Annual Report Page 43 Sheriff’s Department Overview Mission The principal mission of the Sheriff’s Office West Valley Patrol is the protection of life and property. The Sheriff’s Office is the preservation of public safety by providing innovative and progressive services in partnership with the community. Operating Budget & Employee Summary The Sheriff’s Department hadan operating budget of $8,979,762millionfor fiscal year 2011 –2012. Highlights for Last Fiscal Year During Fiscal Year 2011 –2012, the City of Cupertino did not experience any murders. There was a overall increase of 16% in crimes against persons(as shown in the table below), though a 40% decrease in property crimes, when compared to the previous fiscal year. Percentage Crimes Against persons FY 10/11 FY 11/12 Change variance Homicide 10-1-100% Rape 151616% Assault 383800% Robbery 102111110% Totals 64751116% Percentage PropertyCrimes FY 10/11 FY 11/12 Change variance Burglary** 414356-58-14% Theft 515180-335-65% Auto Theft 24361250% Totals 953572-381-40% Throughout Fiscal Year 2011–2012, there were a total of 644 traffic collisions. This represents a decrease of 3% collisions (as shown in the table ab previous fiscal year. The West Valley Patrol Traffic Investigation Unit attributes tis slight decrease to fewer motorists traveling the roadways throug widely believed this statewide trend can also be attributed to a enhanced traffic enforcement, DUI checkpoints, and other factors report a continuation of a six-year decline in traffic collisions. Traffic Collisions FY 10/11 FY 11/12 Change Percentage variance Fatal 1100% Injury 1261462016% Property Damage 536497-39-7% Totals 663644-19-3% 16| City of Cupertino FY11-12 Annual Report Page 44 Pedestrian/Bicycle FY 10/11 FY 11/12 Change Percentage variance incidents Pedestrian Involved 89112.5% Accident Bicycle Involved Accident 4145410% Totals 4954510% As stated above, enhanced traffic enforcement efforts are believed to have contri to the decrease in vehicle collisions in Cupertino. During Fisca–2012, the deputies assigned to the West Valley Patrol Division issued a to (total represents speeding, moving and non-moving citations). Efforts to increase the safety of motorists within Cupertino include participation in gr programs sponsored by the Office of Traffic Safety (OTS) such as 13” DUI campaign. Traffic Citations Percentage FY 10/11FY 11/12 Change issued variance Speeding 15641537-27-2% Moving 73145494-1820-24% Non-Moving 73625441-1921-26% Totals 1624012472-3768-23% Major Accomplishments The Sheriff’s Office West Valley Patrol Division’s School Resour remain busy and active throughout our schools. During Fiscal Yea–2012, School Resource Officers provided presentations to students and parents topics. Stranger Danger Internet Safety Bullying / Cyber Bullying Drug and Alcohol Awareness Career Day School Attendance Review Board (SARB) Bicycle Safety Traffic Calming Tips (in and around school campuses) In addition, School Resource Officers conducted and participated in Code Red Drills andtraining exercises at several schools.Code Red Drills and Exercises are extremely useful to school staff and provide a better level of knowledge a event of an active shooter on the campus.The School Resource Officers provided training and presentation to an estimated 12,020 students during- 2012. Finally, the School Resource Officers facilitated their annual T approximately 18 participants during the school year, and 18 participants during the summer. This unique program provides a new perspective on law en participants and raises their awareness to issues that may impac 17| City of Cupertino FY11-12 Annual Report Page 45 This program calls upon several members of the Sheriff’s Office to facilitate instruction in the areas of basic crimes, criminal investigation, narcotics Productivity and Efficiency Improvements The Sheriff’s Office responded to a total of 8882 calls for serv 2011–2012. This number is down slightly from Fiscal Year 2010–2011 when Sheriff’s Office personnel responded to 9231 calls for service within the Call Average Response Volume of Average ResponseVolume of priority time FY 10/11 Calls time FY 11/12 Calls Priority 1 4.23 964.45 92 Priority 2 5.86 48166.88 4334 Priority 3 9.80 431910.95 4456 Totals 92318882 The table above contains a comparison of number of calls for service, the priori and our average response times to the various calls for service fiscal years. Response times are calculated based upon the time a County Co Operator’s phone rings a second time, till a deputy arrives on-scene. We are pleased to report that we continue to meet and exceed our stated response t minutes to a Priority 1 call, nine (9) minutes to a Priority 2 c to Priority 3 calls for service. Commissions The West Valley Patrol Division Commander, Captain Ken Binder, a liaison to the Cupertino Public Safety Commission. In this capac meetings, advises the committee on policyand direction (taking full advantage of his training and experience) and prepares meeting agendas. 18| City of Cupertino FY11-12 Annual Report Page 46 City Manager’s Office Overview The City of Cupertino has a council-manager form of government. As the City’s chief administrator, the City Manager is responsible for making City government run efficiently and effectively. The office works closely with the Mayor and City Council to ensure that City programs and operationsreflect the policy goals and objectives of the City Council. The City Manager serves and advises the City Council, appoints department directors andprepares a proposed annual budget for council consideration. The enforces municipal laws and ordinances and coordinates City oper The City Manager’s Officeprovides staff support services to the City Council and its committees,and coordinates the development and analysis of policy recommend presented to the CityCouncil. The City Manager interacts on a daily basis with the City’s Executive Team, consisting ofthe City Manager’s Office staff, and department directors including the Santa Clara County Sheriff’sOffice. Mission The mission of the City Manager’s Office is to make possible for provideexceptional service, to encourage all members of the community to take responsibility for oneanother, and to support the values of education, innovation and collaboration. Goals and Objectives The goals of the City Manager’s Office are three-fold: Financial management –Includes thepreparation of annual operating budget and associated efforts to assess the fiscal condition of the City. The Department also supports interdepartmental efforts to determine the cost-effectiveness of programs, and compare alternative strategies. Policy facilitation and implementation –develop and analyzepublic policy alternatives and theimplementation of policy once adopted by the City Council. Ensure elected community leaders and those r school districtsand other local governmental entitiesidentify, work toward, and achieve common goals and objectives. Service delivery -Fostereffective and efficient performance in the delivery of local government services by anticipating future needs, organizing wor facilitating an environment of civic engagement consistent with the m City. 19| City of Cupertino FY11-12 Annual Report Page 47 Department Divisions Several cross-departmental functions operate within the City Manager’s Office including: Image from 2011 Green Block Party Community Relations -conducts a variety of programs,most notably the City’s award-winning Block Leader Program, which works to improve communication, increase public safety and enhance cultural understanding among Cupertino’s neighborhoods. Block leaders, of which there are currently 350 volunteers, are essentialin delivering timely and pertinent information to their neighbors regarding citywide development activities and City services and programs. Public Affairs -workswith the City Counciland departments to increase civic engagement, establishes and maintainscustomer service standards, organizes council and community events, facilitates employee recognition, and leads special projects. Public Affairs also develops policiesand programstargeted toward organizational and operational improvement. Communication -initiates, coordinates and administers emergency and non- emergency communication with all community members and stakeholders through mediachannelsincluding,but not limited to,radio, television, social media, and print. Environmental Affairs & Sustainability -workswith departments, staff, businesses, regional non-governmental organizations, and residents to establish quantitative benchmarks(cost, utility consumption), realize resource conservation goals included in the City’s General Plan, achieve state-mandated greenhouse gas reductions, and providesecondary environmental research and technical assistance. Web Services -overseesbusiness process and technology integration, programming and inter-departmental web support, mobile, and e-services. Operating Budget & Employee Summary The department’s operating budget for Fiscal Year 2011–2012 was $2,199,836with 9 full-time staff. Highlights for Last Fiscal Year The most notable successes of the City Manager’s Office this pas staff’s efforts across departments and offer a myriad of support served to expand and amplify projects and programs not otherwise year. Examples are as follows: Public Works–The Web Team worked with the Public Works Department to transformthe Residential Parking Permitfrom a paper form to an online application. This effort streamlines the permitting process for community memrs, allowing for data capture and additional functionality including an 2-year renewal notice. The Environmental Affairs Division also supported Public Works to gr City’s composting/stormwater management programs through its inaof GreenBiz and EPA’s Food Recovery Challenge. 20| City of Cupertino FY11-12 Annual Report Page 48 Community/Economic Development–Absent an Economic Development Manager, staff from the City Manager’s Office expanded service to business through development of the Mayor’s Small Business Workshop and also through the creation of a new business service. Leveraging the City’s own certification through the Association of Bay Area Governments/Santa Clara County Green Business Program, staff grew local business participation in this state-wide sustainability framework through expanded services conceived of and offered by Cupertino’s newly launched GreenBiz program. GreenBiz Cupertino offers a portfolio of support services, not found anywhere else in the Bay Area, to assist businesses in implementing operational efficienciesthat conserve finite financial and environmental resources.Last year, Cupertino’s 21 newly certified Green Businesses, a net participant increase of nearly 150%,have taken steps to save 74,000 kWh of energyand 1,550,000 gallons of water. The program supports nearly 40 members across a variety of businesses sectors including printshops, bakeries, restaurants, cafés, and retail stores. Administrative Services–The Web and Communication Divisions paired with the Ready 95014Ready CERT Program to introduce its first iPhone and iPad App, . 95014 is a simple application that puts safety information directly into the hands of Cupertino residents. Steps to prepare for,and respond to,emergencies are outlined in an easy to understand and streamlined format. Library –The City contracts with Santa Clara County to provide library services but the City is responsible for the physical library. The City’s Public Works Facilities Division has implemented a series of projects working with Library Staff to reduce building energy and water costs. With the support of the City Manager’s Office, Library Staff and Library Commissioners teamed up to roll-out QR-code educational signage, called “Eco-Tags”, throughout the library that highlights the library’s extensive conservation efforts (see photo right). The group has also joined to expand the library catalog in the fall of 2012 to include a Do-It-Yourself (DIY) Green@Home Energy & Water Efficiency Toolkit, expected to accelerate participation in Acterra’s program in our City, brimming with engineers expected to support with this DIY model. Major Accomplishments The CommunicationDivision continues to providecoverage of Cupertino’s special events, including the Apple Campus 2 EIR Scoping Session, City Council Candidate Forums (League of Women Voters Candidate Forum, Rotary of Cupertino Candidate Forum, APAP Candidate Forum), Don Burnett’s Bridge Dedication Ceremony, American Veteran’s Traveling Tribute Welcoming Event, and more. The Communication Division 21| City of Cupertino FY11-12 Annual Report Page 49 has also worked to build camaraderie among employees by restructuringthe Intranet as the Connection, a long-absentpublication with employee updates andnews. Community engagement via social media continues to rise, with th System (CAS) representing the newest tool in the City’s broad ci Participation in AlertSCC increased following the City’s very acCitywide Community Emergency Response Drill, through which staff and volu at utilizing all social media platforms to engage active users t the Drill. CAS will replace AlertSCC as the primary subscriptionnotification services. 22| City of Cupertino FY11-12 Annual Report Page 50 Social media engagement continues among departments, with especi and recreation programs late last fiscal year. In addition to social media platforms, the Environmental Affairs program organized two distinctive energy efficiency events. Each event showcased rebates and free services available to residents in Cupertino interested in cutting utility costs through whole-home retrofits in partnership with Santa Clara County’s Energy Upgrade California (see image below) and another in Mandarin supported by Ecology Action (see presenters image right). Over 500 residents attended the two workshops. Popularity of these workshops was only th surpassed by the City’s 4Annual Earth Day Festival which welcomed over 8,500 community members, 100 tabling partners, 5 food trucks, 10 performers and more to Civic st Center Plaza on April, 21, 2012. Also of outreach and engagement note,block leaders took part in bus tours of the city to learn about current and future development projects and Cupertin also participated in a meeting with the Sheriff’s Office to findtheir efforts to preserve public safety during the Lehigh shootings. Staff also coordinated orientations for new block leaders and an annual recognition eve. Productivity and Efficiency Improvements The City Manager’s Office supports the productivity and efficien departments. In FY11-12, staff expanded capacity of its partner departments through a broad cross-section of initiatives listed throughout this document. 23| City of Cupertino FY11-12 Annual Report Page 51 Grants, Awards&Recognition Environmental Affairs recently completed reporting requirements American Recovery and Reinvestment Act Energy Efficiency and Conservation Block Grant that supported the retrofit/replacement of 92 irrigation c streetlights throughout the City. This fiscal year, the Environmental Affairs Divisionreceived two Silicon Valley Energy Watch Grants totaling $31,500 to expand its GreenBiz and Growing Programs beyond their respective pilot phases.The Division also received a $30,340 Healthy Communities Grant through the Santa Clara County Departm Health to integrate health, wellness, healthy/local foods, and alter-free transportation into its outreach events (Earth Day), policies (E Procurement Policy and Green Events Policy), and programs (GreenBiz). All aforementioned grants offset related program staff costs and enable the Div contract with Climate Corps Bay Area to host an Americorp Member term. Lastly, the team, supported by members of the Public Work Services Division, accessed a new technical assistance grant through the Environmental Protection Agency’s Local Government Partnership P Food Recovery Challenge among Cupertino’s grocery stores and mar. Environmental Affairs also worked to forge partnerships with adjacent jurisdictions and Counties to access grant dollars not available to single agencie services made available through these regional grant programs in Mateo County’s City/County Association of Government to develop and prepare a CEQA-Qualified Climate Action Plan template and tool. This partnersh City to access free consulting services (Kema) and utilize an en accounting/energy management software program (Hara) through PG&E funding (estimated at ~$15,000/year). A similar effort was initiated in draft municipal-level Energy Efficiency Climate Action Plans, through which Cupe will begin to engage community members in the evaluation of meashe City, its businesses and residents can implement to drive down utility con the City was recently notified that the Strategic Growth Council County a $1M grant to develop a regional climate adaptation and liency plan (to be titled Silicon Valley 2.0). Cupertino has been asked to join th committee and will be an active participant and advocate for our prioritization to mitigate and address future climate impacts, including those of physical/landscape change and those affecting public health. The CommunicationDivision received three national Communicator Awards for coverage of the Traveling Wall Memorial. An honorable mentionwas receivedin 2011 by the National Association of Telecommunications Officers and Advisors(NATOA) for coverage of City Council meetings. Commissions In addition to Councilresponsibilities,department staff serveas liaisons for the Technology, Information and Communications Commission and the Library Commis Development Committee. Department staff regularly support effort Recreation, Bike & Pedestrian and Public Safety Commissions. 24| City of Cupertino FY11-12 Annual Report Page 52 Department of Administrative Services Overview Department Mission The Administrative Services Department provides responsive and h supportservices to other City departments in the areas of Finance and B Treasury, HumanResources, Information Technology, City Clerk, Code Enforcement and community outreachservices through our Emergency Preparedness and Neighborhood Watch programs. In addition, department personnel a Managers’ office on special projects. Goals and Objectives The departmentstrives to provide internal and external customers with a servic that will: • Provide timely and accurate information to the public and to C • Ensure a financially sustainable organization; • Maintain a high level of professionalism in all division deliverable • Provide a desirable work environment; • Ensure compliance with laws and regulations; and • Deliver all service in a timely, accurate and respectful manne Department Divisions Sixdistinct divisions are housed within Administrative Services Departme unique mission and set of operational characteristicsthat are outlined below: Finance and Treasury- Oversees finance, budget, investments, payroll, accounts payable and business license functions. Prepares and monitors the budget and provides accurate and timely recording of $110.9 million in City million in expenditures. Manages the City’s investment portfolio obtain safety of funds, liquidity and a reasonable rate of return. City Clerk/Duplicating and Mail/Elections- Maintains compliance with State laws regarding elections, records, commission appointments,Brown Act public meeting requirements and legal notices. Conducts local elections including thetimely filing of required and voluntary documentation, and ensures election relat available to the media and the public. Emergency Preparedness and Neighborhood Watch- Ensures that the Cupertino community and City staff are reasonably protected and prepared for emergencies and disasters. Maintains the Emergency Operation Cen supports volunteergroups including the Cupertino Amateur Radio Emergency Service (CARES), Medical ReserveCorps (MRC), and Community Emergency Response Team (CERT) to ensure additional volunteeremergency communications and response capabilities. Enhances neighborhood policing througthe Neighborhood Watch program. Human Resources/Insurance and Risk Management- Responsible for the administration of a full range of human resource, employee benefits andlabor relations programs including hiring, labor negotiations, employe 25| City of Cupertino FY11-12 Annual Report Page 53 retirement.Administers the risk management and workers compensation program City-wide training and Wellness programs. Code Enforcement- Investigates and responds to citizen complaints related to the Cupertino Municipal Code andinitiates appropriate corrective action through education, verbal and written notice, citation or otherlegal proceedings. Provide assistance to the Sheriff’s Department on non-emergency calls andinterfaces with San Jose Animal control. Information Technology - Provides for all technology-related software and hardware needs for the citywide management ofinformation services. Maintains and upgrades the City’s wide area network between eight separatelocations and oversees the implementation of new technology systems, complianc best practices. Operating Budget & Employee Summary The departmenthas a staff of 25 and an operating budget of $9 million. Highlights for Last Fiscal Year The most successful outcomes of this last fiscal year were the cncial solvency of the City, excellent employee relations and the implementation of new technologiesto streamline and expand capabilities. Where other cities are ex cutbacks in service levels, employee layoffs, salary and benefitoor employee morale, Cupertino adopted a balanced budget for this ne four years thereafter and was able to fund additional pavement m the Capital Improvement reserve, the infrastructure reserve and ds to pre-pay its Other Post Employment Benefitobligation(OPEB). Partof that endeavor is made possible through the leadership of employeeswho have embraced new training, certification requirements and other reorganization of positions and programs. Finally, both the IT and City Clerk divisions have embraced technology wi of agenda manager, the iPad paperless agenda project; virtual serversand numerous other network related enhancements. Major Projects/Programs/Accomplishments Administration and Finance Prepared a balanced budget for fiscal years 2012/13 through 2016/17that strategically earmarks funds for reserves and pre-payment of our Other Post Employment Benefit obligation (OPEB). Proposed strategies to supplant the lost revenue associated with the Hewlett Packard sales tax office move to Palo Alto. Prepared an award-winning annual financial report for 2010/11with a clean audit opinion and an award-winning “Budget-At-A-Glance” brochure that gives key budget information in an easily understood format. Implemented our Transient Occupancy (hotel) taxmeasure that increased City revenue by approximately$450,000/yr. Processed over $67million in revenues and expenditures for the City. Renewed 3,300 business licenses and granted over 862new licenses. Refinanced the debt portfolio resulting in savings of $365,000 p 26| City of Cupertino FY11-12 Annual Report Page 54 Adopted a PARS retirement option in lieu of Social Security for -time employees to save approximately $50,000 to $70,000 per year. Dissolved our Redevelopment Agency and negotiated successfully w City Clerk Implemented a“paperless agenda” for City Council and Planning Commission usin an automated agenda management system and iPadsfor viewing council packets; iPads distributed to other departments—paper cost savings estimated at $22,000/yr. Amended the Conflict of Interest Code for the City and for the RDA Successor Agency and Oversight Board. Emergency Preparedness and Neighborhood Watch Provided 11 Personal Emergency Preparedness Workshops, one Kalei Public Safety Training for young adults sessions, fiveneighborhood watch meetings, one citywide emergency preparedness drill, three six-week sessions in Cupertino Emergency Response Training; trained 95% of our employees in CPR and First Aid; Secured and completed the Mobile Emergency Operations Center (Van);Local Hazard Mitigation Plan;Memorandum of Understanding for evacuation plan for Monta Vista High School;Stevens Creek Dam Failure Plan. Human Resources/Insurance and Risk Management Conducted recruitments for 58 part- time/temporary and 16full-time positions; Enhanced the City’s training programs including labor and supervision topics, workplace violence, bicycle safety (a pre-requisite for use of employee bike fleet), customer service and Preventing Workplace Harassment & Discrimination training; Implementedthe 457 Roth plan at no cost to the Employees walked to the Service Awards City;On-site visits from providers; this year, in observance of Bike 2 Work Day. Implemented and administered Phase 5 of the Employee Wellness Program whichincludesfree testing for high blood pressure, cholesterol and glucose,flu shots; “Brown bag” lunchtime presentations promoting wellnessand a safe house program; Addressed over twelvedisciplinary actionswith favorable resultsand resolved an outstanding employee lawsuit with favorable results. Code Enforcement Assisted the Sheriff’s Department on non-emergency calls to reduce our Public Safety contract costs, including the shooting incident at the Cupertino HP Campus following the shooting at Lehigh. Conducted and obtained compliance on over 1,451code enforcement cases; Issued 2,692parking citations during the yeartotaling $152,695and issued 21 administrative citations totaling $2,900; Integrated new State requirements with our local Massage Permit 27| City of Cupertino FY11-12 Annual Report Page 55 Abated 155 vehicles from public and private property and received $19,999 in State Abandoned Vehicle Abatement Service Authority (AVASA) reimbursement; Processed 91 permit applications/renewals for massage therapists, solicitors, and ha Achieved final certification by the California Association of Code Enforcement Officersfor all code enforcement officers. Information Technology Designed and implemented a Virtual Datacenter, replacing 12 phys new Nimble SAN (Storage Area Network) saving the City approximately $40,000 annually; Designed and implemented WAN and internet Services upgrades to p increased speeds at each facility and out to the internet; Completed 2,013 Helpdesk work orders; Completed City’s first comprehensive Security Incident Response Plan –tabletop exercise planned for 2012; Initiated Phase 1 Disaster Recovery update project; Completed upgrades to: Firewall and Management Appliance, Storag Reservation Systems, Adobe Suites, Server 2008; Completed Virtual Desktop Infrastructure analysis; Installed Password/Unlock self-service system to allow increased customer support; Upgraded Exchange email server to 2012 and virtualized; Completed upgrades of GIS systems, ArcGIS, Cityworks and IntraMaand completed Asset Management Phase III –medians; Productivity and Efficiency Improvements The departmenthas facilitated the following productivity and financial efficie improvements: Implemented the Virtual Datacenter Project which reduced our ser three,thus requiresless maintenance and leading to less downtime; Continued to cover the HR director vacancy resulting in a salary savings of over$190,000 per year; Refinanced our debt portfolio saving $365,000 annually; Adopted a PARS retirement plan for part-time employees saving $50,000 to $70,000 per year; Facilitated the Transient Occupancy Tax (hotel) Measure resulting in approximately $450,000/yr; Diligently fought an employee lawsuit resulting in the employee claim and saving the City litigation costs. The department, through large efforts and support of its IT & City Clerk Divis achieved the following resource efficiencies: 28| City of Cupertino FY11-12 Annual Report Page 56 Implemented the iPad paperless agenda project which resulted in n estimated savings ofapproximately$20,000 –$27,000 per year; IT led/supported a series of workstation energy efficiency measures incl installation of plug load controllers and deployment of PC Power Management Software paired with the KACE Appliance to decrease workstation energy use by ~50%. Prepared an RFP for new copiers for City departments; and purcha following the City’s Green Purchasing Policy, at an estimated sa $42,000/yr. Grants, Awards & Recognition The City, through efforts led by the Administrative Services Division, received th following honors: Awarded the Government Finance Officers’ Association (GFOA) Awar Excellence for the City’sannual financial report; Awarded the California Society of Municipal Finance Officers (CSMFO) Excellence Award for theCity’s annual budget; Awarded the California Society of Municipal Finance Officers (CS Budgeting Award for the Budget-At-A-Glance brochure. Awarded $40,000 from ABAG for Risk Management Best Practices. Commissions In addition to providing staff support for two five-member Commissions, including the Fine Arts Commission and the Library Commission, the Administrative Servic departmentalso liaises with the Audit Committee and Fiscal Strategic Plan Committee. 29| City of Cupertino FY11-12 Annual Report Page 57 City Attorney Overview Mission The City Attorney is appointed by the City Council to provide le Council, the City’s Successor Agency to the Redevelopment Agency committees, and staff.We strive to stay abreast of an ever changing legal landscape and provide the City with the highestquality legal advice possible with the goal of facilitating City leaders in their decision making process. In a counsel, we review and resolve claims filed against the City, prosecute code violations, review policies, resolutions and ordinances for legal sufficienc contracts are legally appropriate and provide legal analysis and issues and conflicts of interest. Operating Budget & Employee Summary The department’s operating budget for Fiscal Year 2012–2013 is $811,384, with 2.9 full- time positions. Highlights for Last Fiscal Year The office of the City Attorney is the sole legal counsel to the City Council.Staff provideslegal support to all city departments, review all contracts and documents, and advise on resolutions, ordinances, and the legal . In this capacity, the Attorney’s Office has supported, through l attainment of the following City FY11-12 milestones: Dissolution of the Redevelopment Agency and winding up of the Su Agency. Private development projects including Apple Campus 2, Islands, Home of the Church of Christ, Main Street, etc. Public projects including the Mary Avenue Dog Park, Stevens Creek Park and theGolf Course Relocation. Contract negotiations with CSI/Avolve. TOT Measure Multiple Ordinance Amendments –fences, trees, massage, zoning, recycling Major Projects/Programs/Accomplishments This year, in addition to regular legal services, the City Attoroversaw the dissolution of the Redevelopment Agency and the winding up of th. This dissolution resulted in protracted negotiations with the CoOversight Board and concluded with a very favorable result for the City.A great deal of stafftime has been and will continue to be expended on the Apple Campus 2 project.The City Attorney’s Office advised staff on the complete revision to the Zoning Code.Other projects of note include providing staff support on this last fiscal year include Main Street and C Crossroads.Lastly, Cupertino was subject to three lawsuits in the last year, all which were subsequently dismissed with no settlements paid by the City. 30| City of Cupertino FY11-12 Annual Report Page 58 Productivity and Efficiency Improvements Inaddition to serving as sole legal counsel to the City Council, the City Attorney’s Office providesongoing legal services to all departments and commissions.The City Attorney’s office has one staff member in addition to the City Attorney.While thework load has seen a dramatic uptick in the last year, staffcontinue to serve this large and diverse group by contracting forservices as needed, enabling staffto provide subject specific expert advice while keeping our overhead very low. Productivity improvements included a streamlined contract review introduction of standard form contracts. 31| City of Cupertino FY11-12 Annual Report Page 59 ADMINISTRATIVE SERVICESDEPARTMENT CITY HALL 1010300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3220www.cupertino.org CITY COUNCIL STAFF REPORT Meeting:September 4, 2012 Subject Authorize the City Manager to sign the City’s response to the Civil Grand Jury report. Recommended Action Authorize the City Manager to sign the City’s response to the Civil Grand Jury’s findings and recommendations regarding “An Analysis of Pension and Other Post Employment Benefits.” Discussion The Civil Grand Jury issued a report in June of this year on pensions and Other Post Employment Benefits. Under the Penal Code, cities are required to agree or disagree with each applicable finding and recommendation in the Civil Grand Jury reports. In summary, the findings and recommendations focus on long-term sustainability in regards to pension plans and Other Post Employment Benefit Obligations (OPEB). Recommendations include extending the employee retirement age, adopting two tier retirement plans, increasing employer contributions and adequately funding OPEB obligations. The City is currently in negotiations with our labor groups to address several of these issues. In addition, this year’s budget pre-funds our OPEB obligation. _____________________________________ Prepared by: Carol A. Atwood, Director of Administrative Services Reviewed by: Amy Chan, Interim City Manager Approved for Submission by:Amy Chan,InterimCity Manager Attachments: Staff Report A-City Response letter B-Grand Jury Report 60 ANALYSIS OF PENSION/OTHER POST EMPLOYMENT BENEFITS FINDINGS AND RECOMMENDATIONS CITY OF CUPERTINO September 4, 2012 FINDING 1 Public sector employees are eligible for retirement at least 10 iscommon for private sector employees. Recommendation 1: The Cities should adopt pension plans to extend the retirement a retirement plan ages. City Response1: The City concurs with this recommendation and is currently in ne 2% at 60 plan for all new employees with an effective date of January 1, 2013. FINDING 2 Campbell, Gilroy, Los Altos Hills, Los Gatos, Milpitas and Palo second tier plans that offer reduced Benefits, which help reduce furtherchanges are needed to address todays unfunded liability. Santa Clara County and thecities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mount Jose,Santa Clara, Saratoga and Sunnyvale have not adopted second tier Recommendation 2A Santa Clara County and the cities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mountain View, San Jose, Santa Clara, Saratoga and Sunnyvale sho implement second tier plans. City Response2A: The City concurs with this recommendation and is currently in netiations to provide a 2% at 60 Plan for all new employees with an effective date of January 1, 2 Recommendation 2B For Gilroy, Los Gatos, Milpitas and Palo Alto, which have not im plans for MISC and Public Safety second tier plans should be implemented for both plans. City Response2B:Not Applicable Recommendation 2C All Cities new tier of plans should close the unfunded liabilit to future generations. The new tier should include raising the rincreasing employee contributions, and adopting pension caps that ensure pe salary at retirement. City Response 2C: 61 Cupertino concurs with this recommendation and is currently nego-tier plan that will raise the retirement age and utilize a three-year averaging in calculating future payouts. We have not yet addressed increasing employee c adopting pension plan caps. FINDING 3 Retroactive Benefit enhancements were enacted by Cities using ov ROIand actuarial assumptions without adequate funding in place to p Recommendation 3 The Cities should adopt policies that do not permit Benefit enha sufficient monies are deposited, such as in an irrevocable trusth enacting the enhancement, to prevent an increase in unfunded lia City Response3: The City concurs with the recommendation and agrees that benefit policies should not be adopted unless sufficient monies are avai additional costs. The City has a Fiscal Strategic Plan Committee t benefit increases can be absorbed within the short term and long projections. FINDING 4 The Cities are making an overly generous contribution toward theroviding Benefits. Recommendation 4A The Cities should require all employees to pay the maximum emplo of a given plan. City Response 4A The City concurs with this recommendation and will consider incl negotiations. Recommendation 4B The Cities should require employees to pay some portion of the P associated with the unfunded liability, in proportion to the Ben City Response 4B: The City concurs with this recommendation and will consider including this in future negotiations. FINDING 5 The Cities are not fully funding OPEB benefits as evidenced by l and small funded ratios. Recommendation 5 The Cities, should immediately work toward implementing policy canges and adopting measures aimed at making full OPEB ARC payments as soon as poss City Response 5: 62 The City concurs with the recommendation and has prepaid our OPE past. In Fiscal Year 12/13, City Council authorized the City Maager to pre-fundour entire OPEB obligations as a long-term financial strategy. FINDING 6 The City of San Jose permits the transfer of pension trust fund exceeds expectations, to the SRBR, despite the fact that the pen underfunded. Recommendation 6 The City of San Jose should eliminate the SRBR program or amend to prevent withdrawal of pension trust money whenever the pensio-funded ratio is lessthan 100%. City Response 6: Not applicable FINDING 7 TheCities defined benefit pension plan costs are volatile. Defined costs are predictable and therefore more manageable by the Citie Recommendation 7 The Cities should transition from defined benefit plans to defins the new tier plans are implemented. City Response 7: The City concurs with the recommendation and will consider inclu negotiations. 63 64 2011-2012 SANTA CLARA COUNTY CIVIL GRAND JURY REPORT AN ANALYSIS OF PENSION AND OTHER POST EMPLOYMENT BENEFITS Issue After reviewing the Comprehensive Annual Financial Reports (CAFRs) of all cities, 1 towns and the County of Santa Clara (hereafter referred to as City or Cities), the Grand Jury was struck by the extent that the pensions and Other Post Employment Benefits (OPEB) (collectively “Benefits”) were underfunded. Subsequently, the Grand Jury sought to answer the following question: “Is the cost of providing pension and other post employment benefits interfering with the delivery of essential City services and is the ultimate cost to the taxpayers a bearable burden?” Introduction The Grand Jury developed a survey to gather information from the Cities and the County. The Survey and responses are important to this report and the Grand Jury encourages readers to read the Survey questionnaire provided in Appendix A before continuing. Due to the technical complexity of this report, the Grand Jury has provided a glossary of the terminology used throughout this report (Appendix B). Acronyms are also included in the glossary. 2 CalPERS requires Cities to contribute sufficient funds, held in trust, to pay for pension benefits as they are earned. This helps to ensure sufficient funding is in place to provide the promised pension benefits. This trust money is invested and expected to 3 return a long-range investment return as high as 7.50% (after expenses). It is these 4 investment earnings that are expected to pay for as much as 70% of the cost of pension benefits. 1 Cities as defined in this report include: Santa Clara County; the cities of Campbell, Cupertino, Gilroy, Los Altos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose, Santa Clara, Saratoga, Sunnyvale; and the towns of Los Altos Hills and Los Ga 2 The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that manages pension and health benefits for California public employees, retirees, and [ their families. 3 CalPERS recently reduced this rate from 7.75%. 4 Expected to decline as investment yield declines. 1 65 According to interviews, historically high investment earnings in the early 1990s spawned the belief that expensive pension enhancements could be granted and paid for by the excess investment earnings without compromising the Cities’ ability to afford other services. Once these pension enhancements are granted to an employee, they generally cannot be retracted unless a substantially comparable replacement is offered, a concept referred to as vested rights. Cities reported that they felt compelled to enhance benefits to attract and retain the best work force possible. In addition to pensions, employers provide OPEB consisting primarily of health care benefits. Unlike pension funding requirements, there is no requirement for Cities to pre- fund the cost of OPEB benefits. As a result, most Cities have not funded OPEB benefits and have accrued large OPEB debts. Escalating health care costs, the largest component of OPEB, compound this debt problem. As a result of an economic downturn, the average investment rate of return (investment earnings) for the last ten years is considerably below what experts and Cities agree is the still optimistic assumed rate of 7.5%. This return on investment (ROI) leads to an increase in the Cities’ annual payment into the pension fund to make up the difference. The rising costs of pension and OPEB (collectively hereinafter referred to as Benefits), combined with the downturn of the economy have resulted in very large budget shortfalls. These must be paid by current and future tax revenue, which is limited. Thus, according to interviews, paying for these rising costs will come at the expense of other City services. With this in mind, the Grand Jury assessed the viability and sustainability of Cities’ public employee Benefits. This assessment sought to answer the following questions: What are the costs of public employee Benefits and who pays for them? Will Cities’ projected revenues keep up with projected expense of Benefits? What is being done and what can be done to control Benefit costs? Why are public employee Benefits different from those in the private sector? Background Several cities have declared bankruptcy. While the reasons for bankruptcy vary from one municipality to another, and include lower tax revenues and decreased home values, one common reason cited is large unfunded liability associated with providing pension and healthcare benefits to its public employees. Locally, the City of Vallejo declared bankruptcy in 2009 after failing to negotiate pay cuts in the face of $195 million in unfunded pension obligations. Stockton is falling into bankruptcy with less than 70 2 66 5 cents set aside for every dollar of pension benefits its workers are owed. A recent Stanford University study regarding public pension funds statewide emphasizes this predicament: “public pension shortfalls of $379 billion or $30,500 per household” exist 6 statewide contributing to the downgrading of California’s bond rating. San Jose is proposing pension reform and considering higher taxes resulting from ten consecutive years of budget shortfalls. The full effect of these unsustainable costs is yet to come. Methodology The scope of the Grand Jury’s investigation was limited to the Cities. Special districts and other agencies were excluded from this investigation. The following resources were used to gather and evaluate the data contained in this report: City CAFRs; particularly notes to financial statements concerning Benefits (see Appendix A) Results obtained from a survey created by the Grand Jury and distributed to the Cities (see Appendix B for the complete survey) Interviews conducted with one or more of the following persons from the Cities: Financial Manager, Chief Finance Officer, City Manager, Retirements Service Director, and Human Resource Manager. All interviews were conducted following receipt and evaluation of a survey, affording the opportunity to seek clarification and elaboration on survey responses as necessary. Interviews with CalPERS actuaries and CalPERS consultants Other documents listed in Appendix A. Report Conventions The Grand Jury did not extrapolate, derivate or convert the data provided by the Cities in response to the survey. When the Grand Jury had questions, or found inconsistencies in the data provided, every effort was made to r through interviews, email and phone conversations. 7 All dollar figures are expressed in actuarial valuation units, not market value, unless otherwise stated. The glossary in Appendix C provides definitions of the terminology used throughout this report. Acronyms are also included in the glossary. 5 "Untouchable pensions may be tested in California," Mary Williams Walsh, New York Times, March 16, 2012. 6 http://siepr.stanford.edu/system/files/shared/Nation%20Statewide%20Report%20v081.pdf 7 See Appendix C Glossary for definition. 3 67 Discussion This discussion consists of three primary sections: Understanding CalPERS presents and discusses the basic concepts of CalPERS public pension benefits to lay a foundation for a more detailed look at City-provided Benefits. Key Survey Results discusses those survey results found to be most relevant to answering the Grand Jury questions. Jose’s Plan San is discussed separately because San Jose is the only city to not use CalPERS. Understanding CalPERS 8 Because all Cities except San Jose participate in CalPERS for pension and many use CalPERS for OPEB as well, it is vital to understand the following key concepts: Basic Pension Plan Formulas Annual Required Contribution (ARC) CalPERS Menu Options Assumed or expected Return on Investment (ROI) Unfunded Liability. Basic Pension Plan Formulas Employees belong to one of two different groups: Miscellaneous (MISC) or Public 910 Safety, each having defined plans. Table 1 lists all first tier CalPERS plans utilized by Cities. Note that the plan names include the pension earned per year and the retirement age at which full benefits are received. 8 Excluding the San Jose Mayor and Council Member plan. 9 Police and Fire personnel. 10 See Appendix C Glossary for definition. 4 68 Table 1: First Tier CalPERS Plans Used by the Cities s Plans Public Safety Plans Number of Cities Number of Cities Plan Name Plan Name ParticipatingParticipating 11 2.0%@55 4 3.0%@50 11 2.5%@55 5 3.0%@55 1 2.7%@55 7 For all plans the pension benefit formula contains the same three primary components multiplied together as shown here: Pension = Earned Benefit Rate x Years of Service x Salary Earned Benefit Rate : This is the percent of salary earned per year of service as indicated by the plan name. Retirement before age 55 for MISC employees and before age 50 for most Public Safety employees results in the Earned Benefit Rate being reduced (per CalPERS’ table). For example, a MISC employee in the 2.0%@55 plan 12 who retires at age 50 gets an earned benefit rate of 1.426 per year of service rather than 2.0. Similarly, participants of the 2.5%@55 plan as well as the 2.7%@55 plan receive an earned benefit rate of 2.0 at age 50. Interestingly, the earned benefit rate for members of the 2.0%@55 plan continue to rise until the age 63 where it plateaus at 13 2.418 percent per year of service. This contrasts with the other two MISC plans that plateau at age 55 at 2.5% and 2.7% respectively. (For a more detailed delineation of earned benefit rates, see www.calpers.ca.gov). Years of Service : This is self explanatory except to point out CalPERS supports reciprocity, which means that employees can transfer from one CalPERS-covered agency (City) or any other public agency that has established reciprocity with CalPERS, to another such agency without forfeiture of earned pension (as is usually the case in 14 the private sector). Thus, an employee may work 10 years each for three different cities and earn the same pension benefits as otherwise would have been earned if they had worked for 30 years at a single city. But because each of t its one-third share of the earned pension, statistically, this employee appears as three employees earning a more modest pension from each city. 11 Some Cities contract for police and fire. Gilroy police and fire belong to separate Public Safety plans. 12 From CalPERS Benefit FactorsTable, page 22, Local Miscellaneous Benefits 13 From CalPERS Benefit FactorsTable, page 22, Local Miscellaneous Benefits 14 Reciprocity agreements may also exist between other pension plan providers. 5 69 Salary : CalPERS has guidelines defining what wages and reimbursements qualify for the purposes of determining pension. For a detailed discussion, go to www.calpers.ca.gov. Generally, salary can either be the average highest salary over a three-year period, or a highest single 12-month salary can be used, depending on the plan adopted by the City. Using the highest 12-month salary (rather than highest 36- month average salary in the pension formula shown above) is an example of what is known as a “Class 1” benefit enhancement that is more expensive to provide. It is noted here that Public Safety plan participants have a 90% maximum salary cap that can be earned at onset of retirement. There is no corresponding limit placed on plan participants. In both cases however, the Grand Jury learned that large pensions (expressed as a percent of salary) serve as a deterrent to prolonging employment because one can retire at close to full pay. Subsequent discussions on Employer Paid Member Contribution (EPMC) and Cost-of-Living Allowances (COLA) will show how pensions can actually exceed salary, leading to the paradox of employees losing income if they continue to work as a public employee rather than retire. ARC: What is it and How is it Determined? The ARC is the annual actuarially determined amount that must be paid to ensure there will be enough money to pay for all promised Benefits. As shown ARC consists of three principle components added together: ARC = Employee Contribution + Normal Cost + Past Service Cost It should be noted that generally the Normal Cost and Past Service Cost, in accordance with labor contracts, are paid for by the Cities—through tax revenue—and sometimes are supplemented by an employee contribution. Employee Contribution : From the perspective of CalPERS, this is a fixed percent and, as the name would suggest, was intended to be paid by the employees in much the same way as most private workers pay a portion of their own Social Security benefits. For all City employees, the Employee Contribution is either 7%, 8% or 9% of an employee’s salary, depending in which plan the employee participates. It is important to note, however, that in practice, most Cities pay some portion of this cost on behalf of the employees. Normal Cost : Less the employee contribution, if made, this is the amount required to pay for the benefits that were earned in the prior year for the (expected) life of the employee in retirement. This is determined through rigorous actuarial valuations taking many variables into account, including retirement age, life expectancy, and probability of disability. Normal Cost tracks very closely with the degree of Benefits being offered. That is to say, discrete cost increases occur to this component of the ARC with each benefit enhancement proportional to the cost of the benefit. Without benefit enhancements, Normal Cost remains relatively flat over time. 6 70 Past Service Cost : Whenever the plan assets (all previously paid ARCs), including ROI, become insufficient to pay the actuarial accrued cost of benefits, an unfunded 15 liability exists. This deficit must be made up in the form of Past Service Cost. This component of the ARC is largely proportional to unfunded liability, increasing as the unfunded liability goes up to begin paying down the debt. For many Cities surveyed, Past Service Cost is approaching and in some cases already exceeds Normal Cost. Later, this report will discuss the three most often cited reasons for unfunded liability: market losses (ROI lower than the assumed rate), retroactive benefit enhancements, and other accumulated actuarial assumption changes (e.g., longer life expectancy, demographic changes). CalPERS Menu Options 16 Each CalPERS plan has numerous benefits that are inherent to the plan itself. In addition to these benefits, CalPERS offers a wide range of menu options that can be thought of as upgrades or enhancements to the base plan. They are too numerous to list but include the following: Annual cost-of-living allowance (COLA) increase Employer-paid member contribution (EMPC) Credit for unused sick leave Improved industrial and non-industrial disability Special death benefits Survivor benefits Various military and public service credits. Each enhancement selected results in quantifiably larger ARC payments. One cannot conclude from the plan name that it is necessarily more or less generous than another plan of a different name. For this reason, the Grand Jury’s investigation concerned itself not with the issue of what specific Benefits were being provided but rather what was the total cost of providing the Benefits expressed as a percent of payroll. Cities and CalPERS experts agreed this is a sound methodology for comparing cities of different sizes. 15 See Appendix C Glossary for definition. 16 For a more detailed discussion of menu options, go to www.calpers.ca.gov. 7 71 Sensitivity to Expected ROI All Cities and all CalPERS representatives interviewed consistently told us that somewhere between 65% and 70% of the money to pay for Benefits comes from the ROI of previously accumulated ARC payments. This cannot be emphasized enough. The Cities spoke to their burden in struggling to meet ARC obligations in light of budget constraints, but these ARC payments cover only about 30% of the amount necessary to cover the cost of providing these Benefits. A critical actuarial assumption is the expected ROI, which is currently assumed to be 7.50% after expenses for pension. The actual average ROI over the last ten years has been 6.1% as depicted in Figure 1. The result of this underperformance is higher unfunded liabilities, lower funded ratios, and larger ARC payments (in particular, the Past Service Cost component of the ARC as discussed above). Discussion of San Jose’s ROI included in this figure is deferred until later. 17 Figure 1: Actual Return on Investment Compared to Assumed and Dow Jones CalPERS lowered the assumed ROI from 7.75% to 7.5% at a March 14, 2012 meeting. Last year this same recommendation was rejected. This year, a 0.5% change was recommended and only a 0.25% change was approved. Table 2 below is excerpted from “Pension Math: How California’s Retirement Spending is Squeezing the State Budget” written by Joe Nation from Stanford Institute for Economic Policy Research. 17 DJIA is calendar year and other data are fiscal year 8 72 Table 2: CalPERS Return on Investment Analysis Probability of meeting CalPERS funded Investment rate 18 or exceeding rate ratio 9.5% 21.7% 95.1% 7.75% 42.1% 73.5% 7.1% 50.7% 66.7% 6.2% 62.6% 58.3% 4.5% 80.9% 45.1% Two key points in Table 2 are: According to this analysis, there is only a 42.1% chance of meeting or exceeding an assumed investment rate of 7.75% as highlighted in the table. It should be noted that the ROI assumption was recently reduced to 7.5%. Dropping down to a more conservative 6.2% investment rate (stil 6.1% average for the last ten years) is recommended by many leading economists and recognized financial experts. The corresponding funded ratio reduction would result in increases to unfunded liabilities and significantly higher ARC costs. Sunnyvale projects this modest CalPERS-approved reduction of 0.25% in assumed ROI will increase its ARC by 2.3% of payroll for MISC employees and 3.8% of payroll for Public Safety employees, totaling nearly a $3M increase per year in ARC payments. As shown in Table 3, Sunnyvale’s pension cost was just over $25M. So, a $3M increase represents a 12% increase. CalPERS and pension experts we spoke with asserted that the cost of each additional 0.25% reduction in assumed ROI is not linear and warned extrapolating this cost increase would result in underestimating the total cost impact. Unfunded Liability & Funded Ratio Unfunded Liability is the unfunded obligation for prior benefits, measured as the difference between the accrued liability and plan assets. When using the actuarial value of plan assets, it is also referred to as the Unfunded Actuarial Accrued Liability (UAAL). In everyday language, it is the difference between the cost of the benefits already earned and the amount currently paid; it is the amount due. 18 As of June 30, 2011 9 73 Table 3: Unfunded liability for pension and OPEB for all large cities shows the total for these nine cities is nearly $7B Debt per 19 FY 2010 Unfunded Liabilities (Not in Risk Pool) Resident PensionOPEBTotal City Santa Clara County $1,455,835,322$1,300,000,000$2,755,835,322 $1,547 Cupertino $18,581,728$18,069,366$36,651,094 $629 Gilroy $35,100,000$4,900,000$40,000,000 $819 Milpitas $70,166,975$31,230,798$101,397,773 $1,518 Mountain View $104,121,296$29,396,467$133,517,763 $1,803 Palo Alto $153,941,000$105,045,000$258,986,000 $4,021 20 San Jose $1,434,696,471$1,706,081,881$3,140,778,352 $3,320 Santa Clara $223,667,947$23,855,000$247,522,947 $2,125 Sunnyvale $149,300,000$92,800,000$242,100,000 $1,728 Total $3,645,410,739$3,311,378,512$6,956,789,251 The Funded ratio is the market value of assets at a specified date, over the accrued actuarial liability as of the same date. While technically accurate, these definitions provide no insight into the causes of what have become large unfunded liabilities and correspondingly low-funded ratios. The Grand Jury learned from CalPERS that the three primary reasons for unfunded liabilities are the following: 70% of the unfunded liabilities is attributable to market performance 15% of the unfunded liabilities is attributable to retroactive benefit enhancements 15% of the unfunded liabilities is attributable to other actuarial assumption changes. The percentages shown above are “rule of thumb” values according to the CalPERS representatives; individual City percentages will vary. Key Survey Results With the basic concepts of public pension benefits understood, the Grand Jury prepared a survey to gather information from the Cities. Survey responses and all supplemental data provided by the Cities were analyzed to answer the following questions: 19 Numbers reflect data provided in survey responses. 20 Excluding Mayor and Council Member Plan. 10 74 What is the total amount of unfunded liabilities? What is the total cost each year to provide Benefits and at what rate is the cost going up per year? Why are OPEB funded ratios so low? When were Benefit enhancements enacted and how do they impact u liability? What progress is being made to control escalating costs? Why are public Benefits so different from private sector Benefits? Do vacation, holiday and sick leave policies in the public sector differ from those that are commonly found in the private sector? Unfunded Liability (Large Debts) Table 3 tabulates the unfunded liability for both pension and OPEB for all large cities not belonging to a risk pool and shows the total unfunded liability for these nine cities is nearly $7B. Cities having fewer than 100 employees in a given pension plan (Campbell, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, and Saratoga) are not included because they belong either entirely or in part to a risk pool. CalPERS currently does not provide this information to the Cities in the risk pool. Los Gatos and Morgan Hill, for instance, do not know their portion of a $3,515,314,403 unfunded liability associated with the Public Safety risk pool to which they belong. While Monte Sereno and Los Altos Hills did offer an approximation of their portion of the risk pool liability, CalPERS representatives recommended against using the estimation and as a result are not included in Table 3. The Grand Jury has learned the Government Accounting Standard Board (GASB) is considering a policy change to require the Cities in the risk 21 pool to report individual unfunded liability. Many Cities surveyed focused primarily on minimizing the ARC payments, the short-term cost due, as opposed to addressing the larger, endemic problem of its unfunded liability. This is problematic because minimizing ARC payments today at the expense of addressing the growing unfunded liability means shifting the costs to the future, hoping market improvements will solve the problem. If the market does not improve, taxpayers may face increased taxes or reduced services in the future. Using 2010 census data obtained from http://www.sccgov.org together with the data in Table 3, it is possible to estimate the amount owed by each resident to pay down current Benefit debts in the Cities. For example, each resident of San Jose owes $3,320 to the city. As residents of the County, they also owe an additional $1,547 to the 21 See Appendix C Glossary for definition. 11 75 22 County. But while this would pay down the current debt and significantly reduce ARC payments, it does not guarantee staying out of debt going forward. High Cost of Benefits (ARC) . . . and Getting Higher The accumulated City cost of providing annual Benefits in FY2010 was $667,215,205 as shown in Table 4. While it is useful to know the annual cost of providing Benefits it is not possible to judge whether or not any City is paying a disproportionate cost due to the size variance of the Cites (large Cities are expected to pay more because they have more employees). For this reason, the Grand Jury chose to compare the Cities by expressing the ARC as a percent of payroll. Cities and pension experts agreed the Grand Jury’s method of making this calculation was correct. That said, the same values shown in Table 4 are also shown in Figure 2 expressed as percent of payroll separating pension, OPEB and Social Security as applicable. Table 4: Countywide total cost of providing annual Benefits in FY2010 is $667,215,205 Social Security 2324 City Pension CostOPEB CostTotal 25 Cost Santa Clara County $235,630,042$90,000,000$65,136,430 $390,766,472 Campbell $2,728,302$206,220 $2,934,522 Cupertino $1,841,350$7,616,760 $9,458,110 Gilroy $4,900,000$186,334 $5,086,334 Los Altos $1,842,949$19,505 $1,862,454 Los Altos Hills $190,021$203,000 $393,021 Los Gatos $2,958,209$949,845 $3,908,054 Milpitas $7,164,473$3,356,836 $10,521,309 Monte Sereno $125,713$0$37,863 $163,576 Morgan Hill $2,763,818$15,119 $2,778,937 Mountain View $8,929,685$4,376,387 $13,306,072 Palo Alto $19,964,080$9,019,000 $28,983,080 San Jose $106,881,000$34,147,000 $141,028,000 Santa Clara $20,257,754$2,115,643$3,494,639 $25,868,036 Saratoga $917,228NA $917,228 Sunnyvale $25,300,000$3,940,000 $29,240,000 Total $442,394,624$156,151,649$68,668,932 $667,215,205 22 Note these figures are per resident, not per household, and exclude an additional state pension liability all California residents bear, which is outside the scope of this report. 23 Many Cities, but not all, provided separable “sidefund” expenditures from ARC. 24 May include money spent over and above ARC payment. 25 Only MISC employees in Santa Clara County, Monte Sereno and Santa Clara participate in Social Security. 12 76 As shown in Figure 2, the cities of Campbell, Los Altos, Monte Sereno, Morgan Hill and Saratoga pay less than 20% of payroll towards Benefits while the remaining cities pay more than 20%. Cupertino, Palo Alto and Sunnyvale pay in excess of 30% of payroll towards Benefits. The survey results further indicated that Mountain View is noteworthy because it offers similar plans as Cupertino, Palo Alto and Sunnyvale but at lower cost to the city through cost sharing with employees who pay the entire employee contribution (8% for MISC and 9% for Public Safety) plus some negotiated portion of that city’s cost in the range of 1.5% to 6.8% depending on job type. Cupertino, Palo Alto and Sunnyvale in contrast to Mountain View, pay some portion of the employee contribution with Sunnyvale contributing the most (7% of the required 8% for MISC employees and 8% of the 9% for Public Safety employees). Figure 2: FY 2010 Benefit Ranking by Percent of Payroll 13 77 Comparing the Sunnyvale pension costs expressed in percent of payroll to Mountain View (same plans) demonstrates that employee contributions toward the cost of pensions is just as effective at keeping the cost under control as curtailing the level of pension benefits being offered. Mountain View actually compares favorably to other cities offering lower benefits. Table 5 summarizes the Cities’ plan(s) and the amount contributed by employees. For those Cities that elected to participate in Social Security (MISC employees in the City of Santa Clara, Santa Clara County and Monte Sereno), the cost to the city has been added to reflect the total amount the city is paying toward employee Benefits. The survey responses conveyed how much pension and OPEB were exp during the next five to ten years. Most Cities responded using projections from the latest actuarial valuations, which estimate contributions as a percentage of payroll rather than in dollars. In the case of pension, these valuations are performed by CalPERS and in the case of OPEB, the valuations are performed by an actuary firm under contract to the City. All Cities’ Benefits costs are trending up, in spite of optimistic assumptions regarding the ROI that has been shown to be of paramount importance. Projected San Jose cost increases are discussed separately in subsequent sections. Unfunded Retroactive Pension Benefit Enhancements When a City amends its contract with labor unions to increase the pension formula (e.g., 2% @ 55 to 2.5% @ 55) the increased benefits apply retroactively to all prior years of service. The retroactive application of the increase results in an increase in the unfunded liability and requires an increase in ARC payments by the City. The reason for the increase in ARC payments can be illustrated by this example: Assume an employee has worked for twenty-five years and has paid into the system all those years. The City leaders now approve a retroactive benefit enhancement without funding the retroactive period. Immediately the employee and employer have effectively underpaid for the enhanced unfunded benefits portion for the previous twenty-five years. The difference between what was actually paid and what should have been paid to provide the enhanced benefit adds to unfunded liability, which increases ARC payments. This is now a new liability to the taxpayer. In question three of the Grand Jury questionnaire (Appendix B), Cities were asked to list any significant pension benefit changes that have been made over the past ten years. Table 5 summarizes the responses received by the Grand Jury. As the table shows, most Cities have increased pension benefits within the last ten years. When asked how much these benefit increases changed Unfunded Liability, most cities provided the CalPERS provided answer of 15%. However, Cupertino stated that benefit changes are responsible for 26% of their Unfunded Liability and the City of Santa Clara cited 24.6%. 14 78 Table 5: Pension Benefit Plan Changes 1stTierPlan2ndTierPlan EmployeePaid Employee YearContribution NameofCity/County PlanYearPaid ofOriginalPlanBenefitIncreaseFY2011(Per NameAdoptedContributio increaSurvey n seResponses) CountyofSantaClara2007MISC2%@55MISCto2.5%@553.931to5%None PublicSafetyto CountyofSantaClara2001PublicSafety2%@503%@500.5to9%None MISC Campbell2002MISC2%@55MISCto2.5%@557%2%@6020117% Public PublicSafetytoSafety Campbell2001PublicSafety2%@503%@508%2%@5020109% Cupertino2007MISC2%@55MISCto2.7%@552%None Gilroy2006MISC2%@55MISCto2.5%@558%None Police Gilroy2002Police2%@50Policeto3%@509%2%@5020119% Fire Gilroy2007Fire2%@50Fireto3%@559%2%@5520117% LosAltos2004MISC2%@55MISCto2.7%@551%None PublicSafetyto LosAltos2003PublicSafety2%@503%@501%None MISC LosAltosHills*MISC2%@55None0%2%@6020117% LosGatos2008MISC2%@55MISCto2.5%@558%2%@6020127% PublicSafetyPublicSafetyto LosGatos20012.5%@553%@609%None Milpitas2002MISC2%@55MISCto2.7%@558%2%@6020119% PublicSafetyto Milpitas2000PublicSafety2%@503%@509%None Nopension MonteSereno*MISC2%@55benefitchanges0%None MorganHill2006MISC2%@55MISCto2.5%@5518%None PublicSafety increaseto MorganHill2002PublicSafety2%@503%@509%None MISCincreaseto MountainView2007MISC2%@552.7%@558%+None PublicSafety increaseto MountainView2001PublicSafety2%@503%@509%+None MISCincreaseto PaloAlto2007MISC2%@552.7%@552%5.7%2%@6020102% PublicSafety increaseto PaloAlto2002PublicSafety2%@503%@500%9%None SanJoseFederated2.5%@554.68%None SanJosePublicSafety3%@5010.50%None MISCincreaseto SantaClara2006MISC2%@552.7%@558%None PublicSafetyto SantaClara2000PublicSafety2%@503%@509%11.25%None Nopension Saratoga*2%@55benefitchanges7%None MISCincreaseto Sunnyvale2007MISC2%@552.7%@551%None PublicSafety increaseto Sunnyvale2001PublicSafety2%@503%@501%3%None «w;­;-z·z;­-š“·©-·šÒ·Eš©¦Ò,Œz-­E;·ä­;©Ýz-;­rݚz7z“m7z©;-·,;“;Ez·Œz,zŒz·äu 15 79 Cities told the Grand Jury that as recently as 2003, and in 2007 for Campbell and Los Altos Hills, their plans were over funded. Assuming this trend would continue, Cities thought they could enhance Benefits without significantly increasing their costs. Analysis was performed to prove the enhancements could be funded. In hindsight, this did not prove to be the case because the analysis assumed the optimistic ROI would be achieved. The County and a few of the cities attempted to recover some of the increased cost by increasing the employee paid contributions and by eliminating previously enhanced menu options. The Grand Jury learned that in some cases adequate funding was not in place to pay for the enhanced pension benefits at the time they were granted. Without solid plans to fund increases in pension benefit plans, Cities pushed the impact of these increases to future generations of taxpayers. Nearly every City demonstrated an historical pattern of granting unfunded benefit enhancements as discussed here. This practice is beginning to ch 26 adoption by a few cities of second tier plans that extend retirement age and reduce Benefit costs. Table 5 shows that eight cities have adopted second tier plans. Other Cities may be in the process of adopting second tier plans but cannot report this fact because of ongoing union negotiations. Note that all new second tier plans continue to be the defined benefit type; none have adopted any form of defined contribution elements. While the 27 creation of second tier plans will reduce the cost of providing pension benefits, these savings will not materialize for many years. All risks associated with market losses remain with the Cities, and ultimately the taxpayers. Increasing employee contribution rates, subject to labor agreements, is the most effective method of controlling cost in the shortest amount of time. Low OPEB Funded Ratios As shown in Table 6, OPEB-funded ratios are low. These OPEB low-funded ratios and corresponding high unfunded liabilities are of concern to the Grand Jury. Cities are 28 required to “pay forward” for pensions, but not for OPEB. As a result, many cities only pay the minimum required to cover the current annual OPEB cost; no extra is paid to defray the cost of all current employees when they retire. The Cities referred to this as the “pay-as-you-go” strategy and results in very low-funded ratios—even zero percent. This strategy has resulted in San Jose’s OPEB being $1,706,081,881 underfunded (refer back to Figure 2 for a comparison of San Jose’s underfunded status relative to other cities and the County) 26 See Appendix C Glossary for definition. 27 At the time of this report, the Grand Jury is not aware that Cities are considering OPEB changes in second tier plans. 28 See Appendix C Glossary for definition. 16 80 Table 6: OPEB Funded Ratio FY2010OPEB City Funded 29 Ratio SantaClaraCounty10.10% Campbell4.00% 30 Cupertino0% Gilroy0% LosAltos0% LosAltosHills23.40% LosGatos2.70% Milpitas24.13% MonteSereno0% MorganHill0% MountainView55.90% PaloAlto19.00% 31 SanJose12.00%/6.00% SantaClara22.80% SaratogaN/A 32 Sunnyvale0% Mountain View, Sunnyvale and Cupertino are commended for having begun to implement a “pay forward” strategy, which demonstrates fiscal responsibility. One San Jose public official interviewed stated that the reason San Jose was not fully funding OPEB is that it could not be done without significant curtailment of services, effectively shifting the burden of payment to future generations. Public Benefit Comparison to Private Sector Benefits To put pubic employee Benefits into perspective, consider the average pension for Public Safety employees in Palo Alto retiring between the ages of 51 and 54 with 30 years of service is $108,000. In Sunnyvale, the same employee receives almost $102,000 per year. The most common pension plans offered to public employees who spend their entire career in the public sector not only discourage employees from 29 Some 2010 data is derived from 2009 Actuarial Valuations 30 In 2010 and 2011 the city made payments of nearly $6.5M in excess of ARC to bring this up to 35.6% 31 San Jose has separate OPEB funds for its employees 32 In 2011 the city paid $32M in excess of ARC but impact on funded ratio has not yet been determined via actuarial evaluation 17 81 continuing to work beyond the age of 50 or 55, they penalize them for doing so. The CalPERS reported average pension of under $30,000 per year is misleading because it fails to recognize persons who receive multiple pensions. The Gr some employees actually earn more in retirement than they did while employed. 33 Further, the ratio of active employees to retirees was found to be three to two. With budget constraints leading to staffing reductions and as the baby boom generation approaches retirement age, this ratio is expected to continue downward, placing additional financial burdens on the Cities. Public benefits are overwhelmingly of the defined benefit type (refer to Appendix C for the differences between defined benefits and defined contributions). While some private sector companies continue to offer defined benefits, the clear trend in the private sector is to transition away from defined benefits in favor of defined contributions, thereby transferring the risks associated with market performance from the employer to the employee. An additional advantage of the defined contribution is that it leads to less volatile City budgets over time because the cost of providing benefits is constant, not varying over time to compensate for market performance. Determining in any meaningful way what might be considered “standard” private sector benefits for the purposes of comparing to public sector was clearly outside the scope of this investigation. That said, Bureau of Labor Statistics surveys show the majority of private pensions include participation in Social Security and a defined contribution plan such as a 401k. The employee and employer each contribute 6.2% of salary (currently up to $110,100 in salary) per year, to pay for Social Security benefits. While the particulars of 401k plans vary widely, the surveys show that the majority of employees receive some form of matched savings plan described as follows. For every dollar the employee contributes to their own 401k, the employer will contribute some amount: 50 cents or less for most employees. Employees may be limited to the amount they can contribute and employers limit the amount they contribute by specifying that employer contributions cannot exceed a set percent of salary: four percent or less for most employees. As described, the majority of private sector employees contribute more than 50% of the total cost toward their own pensions (exactly 50% in the case of Social Security and greater than 50% of the 401k since an employer only contributes a portion of every dollar the employee contributes). Using 65 as a traditional retirement age, the differences between public and private benefits are summarized in Table 7. The Grand Jury reviewed the survey results and observed the following for all first tier plan employees: 34 All Public Safety employees, except Gilroy fire, qualify for full retirement benefits no later than age fifty (assuming at least five years of service) 33 Half the Cities surveyed currently have more retirees than employees. 34 Gilroy fire receives the same at age fifty-five rather than age fifty. 18 82 35 All Public Safety employees, except Gilroy fire, with thirty years of service credit receive no less than 90% of their salary in retirement, not considering annual COLA increases All MISC employees qualify for retirement benefits no later than age fifty-five (assuming at least five years of service) 36 Table 7: Sample comparison of MISC Public versus Private Benefits 3738 Attributes PublicPrivate Percent of salary contributed by employee 7 - 8% 14 - 16% toward Benefits Age pension may be drawn without an age-55 65 related reduction in eligible amount 3940 Employee contribution for every dollar of 50¢ $1.40 employer contribution 41 87.5% 66% Retirement Income expressed as a percent of salary (assuming the retiree reaches full plan benefit age and works 35 or 45 years, respectively) Who bears the risk if market underperforms? Taxpayer Employee Is subsidized retiree healthcare available? Generally Yes Genera 42 The majority of MISC employees who work 35 years receive 87.5% of their salary in retirement before annual COLA increases. 35 Gilroy fire receives the same benefits at thirty-five years service rather than thirty years. 36 The table is intended for comparison; it is not representative of all situations. 37 Represented by participant in 2.5%@55. 38 Represented by participant in Social Security and 401k Savings plan where employee contributes 8% salary and employer matches 50 cents per dollar. 39 ¢¢ Based on CalPERS data for 2011. Actual varies by city; can be or as low as 5. 40 Based on the Bureau of Labor statistics. 41 This number assumes a $750K in retirement savings. 42 Los Altos Hills, Monte Sereno and Saratoga are exceptions receiving 70% of salary. 19 83 In consideration of these statistics, and as shown in Table 7, the Grand Jury concludes: Full pension is attained at an earlier age in the public sector than in the private sector – some by ten years or more Pension earned, expressed as a percentage of salary, is greater in the public sector than in the private sector even after adjustment to account for non- participation in Social Security Employees in the public sector contribute less towards their pension plans than their private-sector counterparts Taxpayers in the public sector bear the risk of ROI and actuarial assumptions associated with the pension plan, whereas employees in the private sector bear the risk of market performance. The Grand Jury acknowledges wages and salaries are a large portion of Cities’ budgets, and when salaries escalate this further exacerbates budget shortfalls. It may be asserted that public sector salaries are lower than their private sector counterparts, thus, justifying more generous public benefits. Readers can explore whether this assertion is true by accessing publically available salary data. Accrued Sick Leave Can Be Reimbursed In general, the survey revealed no significant differences between the Cities in regard to holiday, vacation and sick leave policies. However, it is noted that all Cities surveyed except Gilroy, Monte Sereno, and Sunnyvale either reimburse for accrued unused sick time or permit it to be converted into service time for purposes of determining pension. Often reimbursement is at discounted rates and other times the amount of sick time that can be accrued is capped. Gilroy, Monte Sereno and Sunnyvale responded “No” to the survey question asking if accrued sick time is paid upon retirement, without proffering whether or not it could be converted into service time. However, the Grand Jury learned that sick time conversion to service credit is a common CalPERS benefit for all members of risk pools. The survey revealed that the City of Santa Clara grants fire personnel on 24-hour shifts 288 hours of sick leave per year. Up to 96 hours per year can be accrued and paid (discounted to 75% of their hourly wage equivalent) for employees with 25 or more years of service. San Jose’s Plan San Jose is the only city that does not use CalPERS to provide pension benefits (with the exception of the Mayor and Council members who get benefits in accordance with CalPERS 2%@55 plan). San Jose public employees have two independent plans: Federated and Public Safety. Federated Plan members are equivalent to those in a CalPERS Miscellaneous Plan. Public Safety members (police and fire) in San Jose are 20 84 identical to Public Safety members in other Cities. The San Jose Federated and Public Safety plans share commonality with CalPERS 2.5%@55 and 3.0%@50 respectively with the following key differences: COLA is a guaranteed 3% compared to CalPERS’ not-to-exceed 2% Employee-to-employer contribution ratio of three to eight (3:8) Money is invested and managed by the two governing Boards (the Federated Plan Retirement Board and the Public Safety Retirement Board) rather than by CalPERS, and San Jose performs its actuarial valuations independent of CalPERS San Jose participates in a Supplemental Retiree Benefit Reserve (SRBR) program. Each of the major differences cited above is discussed in more detail below. 3% Guaranteed COLA San Jose provides a guaranteed 3% COLA increase every year compared to a 43 CalPERS base COLA which is “not to exceed an accumulated 2% per year”. The Grand Jury is unable to quantify the additional cost of increasing COLA. As mentioned previously, CalPERS does provide menu options for increased COLA (including 3%), but no other Cities have opted for this increase, citing cost as a reason. Three-to-Eight (3:8) Employee Contribution Ratio For every eight dollars San Jose spends on the Normal Cost of providing benefits 44 (excluding the Past Service Cost portion of benefits that the employer pays entirely) employees contribute $3-dollars. This differs substantially from CalPERS, which sets employee contribution as a percent of salary between 7% and 9% depending on the plan. As noted in Table 5, many Cities pay much of the employee contribution on behalf of the employees, further complicating any comparison. As noted in Methodology,the Grand Jury is reluctant to interpolate the data provided. The San Jose survey response shows that Federated employees pay 4.68% (of payroll) toward pension, which compares to CalPERS’ MISC plan at 8%. San Jose’s Public Safety employees pay approximately 10.5% (of payroll) toward pension, which compares to CalPERS’ Public Safety plan at 9%. 43 As a function of inflation, CalPERS COLA has a clause protecting retirees from losing more than 20% of their buying power in retirement which could result in increases greater than 2%. When CPI is less than the 2% promised, CalPERS COLA also entails “banking” of COLA as unneeded credits that can be applied when CPI is greater than 2%. This results in annual COLA increase in excess of 2% when the CPI exceeds 2%. 44 The ratio of Past Service Cost to Normal Cost (expressed in Percent Payroll) for Federated and Public Safety are: 15.58/12.76 and 22/27 respectively 21 85 From a cost perspective, there is insufficient data to determine if the 3:8 ratio results in net savings or increased cost to San Jose, compared to the CalPERS plan. However, excluding Past Service Cost from any form of employee cost sharing does result in San Jose paying a higher portion of the cost of providing Benefits. Self-Managed Investing The Federated and Public Safety Boards independently manage approximately $2B in assets each (approximately $4B total). Both currently assume a 7.5% ROI, similar to the recently adopted CalPERS ROI. As with CalPERS, these investment returns are expected to pay the majority of the costs for providing benefits. It is critical, therefore, to compare the actual investment performance to what is actuarially assumed, and it is useful to compare San Jose’s investment performance to CalPERS. As was shown in Figure 1, both Federated and Public Safety ROI for the last ten years has been below the actuarial assumptions but slightly better than what CalPERS did in the same time period. San Jose did not provide ROI data for 2011. The DJIA is shown in the figure for comparison purposes and is intended to show that both San Jose and CalPERS outperformed the general market (represented by DJIA) by a wide margin, yet still fell below the optimistic actuarial assumptions so critical to economic viability. The largest advantage of managing one’s own plans would seem to be the added flexibility it affords the city in tailoring retirement formulas to meet the needs and means of the city. Although there is little evidence the city is using this advantage in the current first tier plans (as noted, San Jose plans are both very similar to CalPERS plans offered), this advantage may be utilized if and when second tier plans are developed. Supplemental Retiree Benefit Reserve (SRBR) Recall from Table 3 that the combined pension unfunded liability for both the Federated Plan and the Public Safety Plan is $1,434,696,471. As has already been discussed and demonstrated, the largest single contributor to this is when the achieved ROI falls short of the actuarially assumed ROI. With this in mind, it is difficult to comprehend how responsible financial management would allow withdrawal of any portion of excess ROI whenever the market actually does out-perform the expected rate to be used to pay 45 dividends in the form of an additional “thirteenth check” to retirees. But this is exactly what the SRBR does. In the case of the Federated Plan, the market must only exceed the expected rate in a single year to permit withdrawal of a portion of the excess ROI for that year. For the same thing to happen in the Public Safety plan, the running five-year average must exceed the expected return rate to permit withdrawal. 45 Generally, a windfall dividend payment. 22 86 It should be noted that San Jose has temporarily suspended the SRBR payouts. Although San Jose has suspended payouts, the funds remain in the account and San Jose has not used the payout to pay down its underfunded liability. In fact, the suspension merely delays eventual payment to retirees in the form of even larger “thirteenth checks.” A better use for these excess funds might be to retain them to pay down the underfunded Benefits, as long as an underfunded liability exists. Why Such Variance with Estimated Future Benefit Costs? Much has been written regarding the predicted ARC cost for San Jose in FY 2015/2016. Published estimates vary in the range of $400M to as much as $650M. The latter figure represents a more than doubling of the current ARC of $245M per year—a rate of increase not seen in any of the other Cities. The Grand Jury interviewed several key personnel associated closely with these predictions to determine why there is so much variability in the estimates. In particular, the Grand Jury wanted to answer the following questions: Were these predictions based on sound, factual data? Does $650M represent a worst case number or could it be higher? The Grand Jury learned that a large set of assumptions factor into any actuarial valuation and many of these assumptions have complex interdependencies with one another. The actuarial valuation itself is a rigorous, precise mathematical calculation based upon these assumptions. The ARC value can vary, from 400M to $650M or higher, when assumptions are adjusted. Just two of those actuarial assumption changes, by themselves, account for $120M of the $250M difference between the high and low estimate. These two assumption changes are: 46 Longer life expectancy of Public Safety employees than previously assumed Lower ROI rate. Key personnel associated with making actuarial predictions gave an example where increasing the life expectancy of police and fire to be closer to the life expectancy of miscellaneous employees would increase the cost by approximately $40M. This is a reasonable assumption change to consider since it reflects demographic changes that CalPERS also has begun to reflect. In another assumption query, if the ROI were 46 CalPERS has been recognizing this trend and several Cities cited this as being a contributor to unfunded liability 23 87 lowered by a whole percentage point to 6.5%, more in line with actual ROI for the last ten years, this would contribute an additional $80M to the cost of ARC. Importantly, the rationale for exploring a lower ROI was not to bring it into agreement with recent earnings history, but to move San Jose’s portfolio from one of high risk and high volatility to a position of low risk and low volatility. The $650M per year cost estimate is not a worst case number. Pension experts the Grand Jury interviewed stated that other actuarial assumption changes, within reason and easily justified, would result in ARC costs even higher than $650M per year. The Grand Jury understands that exploring these actuarial assumptions is justified. They help bring attention to the severity of the Benefits crisis and abate the trend of pushing financial problems to future generations of taxpayers. Conclusions Very optimistic actuarial assumptions result in lower ARC costs, leading to insufficient funding and causing unfunded liabilities. The most critical of these is the ROI, which is 47 generally assumed to be 7.5%. The actual ROI for the last ten years has been 6.1%. This underperformance is the largest contributor to the Cities’ combined unfunded liability of over $7B. Future taxpayers are responsible for paying benefits that are being earned and collected today. Lowering the expected ROI—as recommended by leading economists and recognized financial experts—significantly increases ARC and further exacerbates attainment of balanced budgets. Public employee Benefits, especially after being enhanced retroactively, have been shown to be more generous than those found in the private sector and at an earlier retirement age. The amount a public employee contributes toward benefits is shown to generally be less than an employee in the private sector. As a result of lower public employee contribution rates toward their retirement, increasingly large ARC costs must be funded by taxpayer dollars. Ignoring this largesse will result in increased taxes combined with reduc Average pensions are often cited in the range of $30,000, but these statistics can be misleading. For instance, they include persons whose careers lasted five years or part- time employees with longer service periods. Likewise, it can include employees who work an entire career in the public sector but for different public entities over the course of their careers. Each city that the employee worked for pays only its pro-rated portion of the retirees pension. Thus, the employee’s actual pension is larger than the portion attributable to each public entity. Tier 2 plans that Cities are implementing offer a modest reduction to the future liabil but do not significantly impact the unfunded liability in the short term. To address the short-term cost of the public Benefit crisis, possible solutions may be found in two 47 Some OPEB ROI are at lower values. 24 88 elements of private sector benefits. The first is the need to reduce the level of benefits to be more comparable to those found in the private sector, inclusive of extending retirement age. Second, public employees must contribute a greater share towards their Benefits, particularly those employees who receive enhanced Benefits. Such solutions will reduce the burden the unfunded Benefits have placed upon current and future taxpayers. As to the question of defined benefits versus defined contributions, public Benefits continue to be based on a defined benefit model versus the defined contribution model that private industry has moved toward. The defined contribution model works well in the public sector. It offers a working solution to the public sector as a means of reducing the risk of high-cost defined benefit plans. Benefit plans are heavily subsidized by pubic sector employers compared to the contributions of private sector employers. The Grand Jury concludes that until significant modifications are enacted, there is no doubt that the escalating cost of providing Benefits at the current level is interfering with the delivery of essential City services and the ultimate cost to the taxpayers is an unbearable burden. These costs are already impacting delivery of essential services as demonstrated by San Jose reducing police and fire department staffing levels, closing libraries or not opening those newly built, curtailing hours of community centers, and not repairing pot-holed city streets. Other cities in the County are likely to face similar challenges as long as high cost benefit plans face an underfunding liability. Understanding how Cities created this problem through unfunded retroactive benefit enhancements, compounded by poor ROI, helps taxpayers understand that the problem will not go away on its own. 25 89 Findings and Recommendations When the term Cities is used below, it includes the following: Santa Clara County; the cities of Campbell, Cupertino, Gilroy, Los Altos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Palo Alto, San Jose , Santa Clara, Saratoga, Sunnyvale; and the towns of Los Altos Hills and Los Gatos. Finding 1 Public sector employees are eligible for retirement at least 10 years earlier than is common for private sector employees. Recommendation 1 The Cities should adopt pension plans to extend the retirement age beyond current retirement plan ages. Finding 2 Campbell, Gilroy, Los Altos Hills, Los Gatos, Milpitas and Palo Alto have adopted second tier plans that offer reduced Benefits, which help reduce future costs, but further changes are needed to address today’s unfunded liability. Santa Clara County and the cities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mountain View, San Jose, Santa Clara, Saratoga and Sunnyvale have not adopted second tier plans. Recommendation 2A Santa Clara County and the cities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mountain View, San Jose, Santa Clara, Saratoga and Sunnyvale should work to implement second tier plans. Recommendation 2B For Gilroy, Los Gatos, Milpitas and Palo Alto, which have not implemented second tier plans for MISC and Public Safety second tier plans should be implemented for both plans. Recommendation 2C All Cities’ new tier of plans should close the unfunded liability burden they have pushed to future generations. The new tier should include raising the retirement age, increasing employee contributions, and adopting pension plan caps that ensure pensions do not exceed salary at retirement. 26 90 Finding 3 Retroactive Benefit enhancements were enacted by Cities using overly optimistic ROI and actuarial assumptions without adequate funding in place to pay for them. Recommendation 3 The Cities should adopt policies that do not permit Benefit enhancements unless sufficient monies are deposited, such as in an irrevocable trust, concurrent with enacting the enhancement, to prevent an increase in unfunded liability. Finding 4 The Cities are making an overly generous contribution toward the cost of providing Benefits. Recommendation 4A The Cities should require all employees to pay the maximum employee contribution rate of a given plan. Recommendation 4B The Cities should require employees to pay some portion of the Past Service Cost associated with the unfunded liability, in proportion to the Benefits being offered. Finding 5 The Cities are not fully funding OPEB benefits as evidenced by large unfunded liabilities and small funded ratios. Recommendation 5 The Cities, should immediately work toward implementing policy changes and adopting measures aimed at making full OPEB ARC payments as soon as possible. Finding 6 The City of San Jose permits the transfer of pension trust fund money, when ROI exceeds expectations, to the SRBR, despite the fact that the pension trust funds are underfunded. 27 91 Recommendation 6 The City of San Jose should eliminate the SRBR program or amend the SRBR program to prevent withdrawal of pension trust money whenever the pension-funded ratio is less than 100%. Finding 7 The Cities’ defined benefit pension plan costs are volatile. Defined contribution plan costs are predictable and therefore more manageable by the Cities. Recommendation 7 The Cities should transition from defined benefit plans to defined contribution plans as the new tier plans are implemented. 28 92 Appendix A: Documents Reviewed Report ReportNameDateDocumentSource SantaClaraCountyComprehensiveAnnualFinancialReport(CAFR)30Jun10www.sccgov.org/ SantaClaraCountyComprehensiveAnnualFinancialReport(CAFR)30Jun11www.sccgov.org/ CityofCampbellCAFR30Jun10www.ci.campbell.ca.us/ CityofCampbellCAFR30Jun11www.ci.campbell.ca.us/ CityofCupertinoCAFR30Jun10www.cupertino.org/ CityofCupertinoCAFR30Jun11www.cupertino.org/ CityofGilroyCAFR30Jun10www.cityofgilroy.org/ CityofGilroyCAFR30Jun11www.cityofgilroy.org/ CityofLosAltosCAFR30Jun10www.ci.losaltos.ca.us/ CityofLosAltosCAFR30Jun11www.ci.losaltos.ca.us/ TownofLosAltosHillsCAFR30Jun10www.losaltoshills.ca.gov/ TownofLosGatosCAFR30Jun10www.town.losgatos.ca.us/ CityofMilpitasCAFR30Jun10www.ci.milpitas.ca.gov/ CityofMonteSerenoCAFR30Jun10MonteSerenocityhall CityofMorganHillCAFR30Jun10www.morganhill.ca.gov/ CityofMorganHillCAFR30Jun11www.morganhill.ca.gov/ CityofMountainViewCAFR30Jun10www.ci.mtnview.ca.us/ CityofMountainViewCAFR30Jun11www.ci.mtnview.ca.us/ CityofPaloAltoCAFR(RevisedDecember21,2010)30Jun10www.cityofpaloalto.org/ CityofSanJoseCAFR30Jun10www.sanjoseca.gov/ CityofSantaClaraCAFR30Jun10www.santaclaraca.gov/ CityofSaratogaCAFR30Jun10www.saratoga.ca.us/ CityofSunnyvaleCAFR30Jun10www.sunnyvale.ca.gov/ PensionSustainability:RisingPensionCostsThreatentheCity'sAbility toMaintainServiceLevelsAlternativesForASustainableFuture29Sep10www.sanjoseca.gov/auditor CitiesMustReininUnsustainableEmployeeCosts(SantaClarahttp://www.scscourt.org/court_divisions/civil/cgj/grand_jury. CountyGrandJuryReport)30Jun10shtml RunningonEmpty(SanMateoCountyGrandJuryReport)30Jun11www.sanmateocourt.org/court_divisions/grand_jury/ NationalCompensationSurvey:EmployeeBenefitsinPrivateIndustry intheUntitedStates,20051May07www.bls.gov/ncs/home.htm APreliminaryAnalysisofGovernorBrown'sTwelvePointPension ReformPlan(PreparedbyCalPERS)30Nov11www.calpers.ca.gov/eipdocs/preliminaryanalysis.pdf CalPersPensionBenefitPrimer1Oct09www.calpersresponds.com/downloads/Pension_Primer.pdf MorePensionMath:FundedStatus,Benefits,andSpendingTrends forCalifornia'sLargestIndependentPublicEmployeePension Systems21Feb12www.cacs.org/images/dynamic/articleAttachments/7.pdf StatementNo.45oftheGovernmentalAccountingStandardsBoard30Jun04SantaClaraCountyFinanceAgency 29 93 Appendix B: Grand Jury Survey Instructions: Please complete the questions below. The questionnaire consists of three sections: Section 1 covers questions regarding Pension Benefits, Section 2 covers questions regarding Other Post Employment Benefits and Section 3 covers questions regarding vacation and sick leave payout policy at time of retirement. Insert your responses directly into this file and return it in your email reply. Please respond by Dec 19th to this questionnaire for both the fiscal year ending 6-30-2010 and the fiscal year ending 6-30-2011. If you have questions or require additional time, please reply via email as quickly as possible to allow sufficient time to resolve issues. Thank you. Section 1: PENSION 1. How many defined pension plans do you have? Please identify them by name and answer all subsequent questions for each identified plan name. 2. Does CalPERS administer your pension fund? If not, please identify and describe the manner in which the pension plan is being administered. 3. Please provide a description of each defined pension plan that you provide to your employees. At what age is an employee eligible for a pension? How many years must an employee work to be vested for a pension? Are employees required to make contributions to their own accounts? If so, what percent of their salary is paid toward their pension? Is there any annual or lifetime employee contribution cap? Does the plan include cost-of-living allowance increases post retirement? 4. For each identified plan, what percent of an employee’s income is earned toward retirement each year of employment? For each identified plan, is there an identified maximum salary percent cap that can be earned in retirement? 5. Do plan participants contribute to Social Security? 6. For each identified plan, describe the formula for determining final compensation used in factoring a retiree’s pension. Include number of months that income is averaged, whether or not overtime is included or excluded from this calculation, and whether or not any other form of employee payments other than base salary are included in the formula (awards, bonuses, travel compensation, etc.). 7. How much money was contributed in each of the last two fiscal years toward pensions (not including employee contributions)? What percent was this of total payroll? 8. How much pension money was paid out in each of the last two fiscal years to retirees? How many retired employees are currently collecting benefits? How many active employees are there currently? How many employees are within five years of being eligible for retirement? 9. For each plan, please identify and quantify all significant actuarial assumptions used in evaluation of ARC to include: a) Amortization period b) Investment rate of return c) Projected salary increases d) Overall payroll growth e) Inflation factor f) Smoothing duration g) Other, if applicable 10. What is the unfunded liability of each identified plan for the fiscal years 2010 and 2011? 11. Please indicate the major reasons for the unfunded liability. For each reason provided, indicate the approximate percentage of contribution to total unfunded liability. 12. What is the funded ratio of each identified plan for the fiscal years 2010 and 2011? 13. When was the last time the funds have been funded at the level of 100% or higher? 14. Have pension contributions ever been reduced from calculated ARC payments? What year was the last time this happened? 15. Please summarize any significant changes to pension benefits over the last ten years for each plan. For each, indicate if this was a pension benefit enhancement or reduction. 16. Please provide any evidence that indicates how projected pension costs are expected to change in the next 5 to 10 years. (Page referencing within an included URL or separate attachment with appropriate material is an acceptable response.) 30 94 Appendix B: Grand Jury Survey - continued 17. Please provide any evidence of the strategies that are in work to reduce the rate of pension escalation. (Page referencing within an included URL or separate attachment with appropriate material is an acceptable response.) 18. For each plan, please provide evidence as to how pension fund past performance is doing relative to assumed performance for the last ten years. (Page referencing within an included URL or separate attachment with appropriate material is an acceptable response.) Section 2: OTHER POST EMPLOYMENT BENEFITS 1. How many defined benefit plans do you have? Please identify them by name and answer all subsequent questions for each identified plan name. 2. Does CalPERS administer your OPEB fund? If not, please identify and describe the nature of the OPEB benefit plan being used. 3. Please provide a description of the OPEB benefits to include: At what age is an employee eligible for a OPEB benefits? How many years must an employee work to be vested for a OPEB benefits? Are employees required to make contributions to their own OPEB benefits? If so, how much? Are OPEB benefits limited to employees only or do they include additional family members? Identify any additional family members qualifying for OPEB benefits. 4. Is OPEB generally offering health care benefits (defined benefit) or is it making contributions (defined contribution) toward health care? Are there caps in what is paid? Who is at risk for escalating health costs; the employee or the employer? 5. How much money was contributed in each of the last two fiscal years to OPEB (not including any employee contribution)? What percent of total payroll cost was this? 6. How much money was paid out in each of the last two fiscal years in OPEB benefits? How many retired employees are currently collecting OPEB benefits? How many current employees are there? (If the number of current employees is different here than provided above, please explain the difference.) 7. Please identify and quantify all significant actuarial assumptions used in evaluation of ARC to include: a) Amortization period b) Investment rate of return c) Projected health care increases d) Inflation factor e) Smoothing duration f) Other, if applicable 8. What is the OPEB unfunded liability of each identified plan for the fiscal years 2010 and 2011? 9. Please indicate the major reasons for the unfunded liability. For each reason provided, indicate the approximate percentage of contribution to total unfunded liability. 10. What is the funded ratio of each identified OPEB plan for the fiscal years 2010 and 2011? When was the last time the funds have been funded at the level of 100% or higher? 11. 12. Have OPEB contributions ever been reduced from calculated ARC payments? What year was the last time this happened? 13. Please summarize any significant changes to OPEB benefits over the last ten years. For each, indicate if this was a benefit enhancement or reduction. 14. Please provide any evidence that indicates how much OPEB benefit costs are expected to rise in the next 5 to 10 years. (Page referencing within an included URL or separate attachment with appropriate material is an acceptable response.) 15. Please provide any evidence of plans that are in work to reduce future OPEB costs? (Page referencing within an included URL or separate attachment with appropriate material is an acceptable response.) 16. Please provide any evidence as to how OPEB fund past performance is doing relative to assumed performance? (Page referencing within an included URL or separate attachment with appropriate material is an acceptable response.) 31 95 Appendix B: Grand Jury Survey - continued Section 3: VACATION AND SICK LEAVE ACCRUAL POLICIES 1. Please describe vacation policy to include: How many vacation days are granted at what seniority levels? Is there any limit to the amount of vacation time that can be accrued? Is unused vacation paid upon retirement? 2. Please describe sick leave policy to include: Is there any limit to the number of sick days allowed per year? Is there any limit to the amount of sick days that can be accrued? Are unused sick days paid upon retirement? 32 96 Appendix C: Glossary of Terms & Acronyms Actuarial Assumptions: Assumptions representing expectations about future events (e.g. expected investment returns on plan assets, member retirement and mortality rates, future salary increases, inflation) which are used by actuaries to calculate pension liabilities and contribution rates. Actuarial Valuation: Technical reports conducted by actuaries that measure retirement plansÔ assets and liabilities to determine funding progress. They also measure current costs and contribution requirements to determine how much employers and employees should contribute to maintain appropriate benefit funding progress. Actuary: Professionals who analyze the financial consequences of risk by using mathematics, statistics, and financial theory to study uncertain future events, particularly those of concern to insurance and pension programs. Pension actuaries analyze probabilities related to the demographics of the members in a pension plan (e.g., the likelihood of retirement, disability, and death) and economic factors that may affect the value of benefits or the value of assets held in a pension planÔs trust (e.g., investment return rate, inflation rate, rate of salary increases). Actuarial Accrued Liability (AAL): The value of benefits promised to employees and retirees for services already provided. This concept applies to both the pension liability and retiree health care liabilities. Annual Required Contribution (ARC): The amount of money that actuaries calculate the employer needs to contribute to the retirement plan during the current year for benefits to be fully funded over time. Generally CalPERS uses a 30 year period. CAFR: Acronym for Comprehensive Annual Financial Report CalPERS: Acronym for California Public EmployeesÔ Retirement System Defined Benefit: Promised fixed sum paid or service rendered. The assets in a defined benefit plan are held by the employer who incurs all investments risks. See also defined contribution. Defined Contribution: Contributions made by an employer to an individual employees investment account such as a 401k. All investment gains or losses are those of the employee, not the employer. See also defined benefit. Employer Paid Member Contribution (EPMC): A program whereby the city pays employee contribution in a manner in which the amount paid is considered income for the purposes of determining pension. As exemplified by one city, ÑFor example, an employee with a $100K income and a 7% EPMC retires using a salary of $107K per year rather than $100K per year.Ò Experience Gains/Losses: Gains or losses that arise from the difference between actuarial assumptions about the future and actual outcomes in an organizationÔs pension plan. First tier (1 tier) plans: Benefits promised to all employees prior to the implementation of a second st tier plan. First tier plans have generally been enhanced; contributing to the cost escalation. See also Ñsecond tierÒ in the Glossary. 33 97 Appendix C: Glossary of Terms & Acronyms - continued Funded Ratio: The market value of assets divided by the accrued liability. Funded ratio is a measure of the economic soundness of a fund. Market Gains/Losses: Gains or losses that arise from an increase or decrease in the market value of a planÔs assets, including stock, real property, and investments. Miscellaneous (MISC) employee/plan: Public employees who are not sworn police or fire. The term MISC generally is used to describe a pension plan. The city of San Jose refers to these employees as belonging to a Federated plan rather than a MISC plan. Normal Cost: That portion of the ARC (see above) which is based solely on the value of the benefits being offered. OPEB:Acronym for Other Post Employment Benefits. OPEB benefits are primarily health care benefits but can include other benefits such as life insurance. Opt In Plan: Term used to designate an employee elective benefit plan; employees choose between maintaining current benefits but at an increased employee contribution rate or elect to receive lower benefits and avoid increases to employee contribution rates. Risk Pool: In 2005 CalPERS created risk pools to aggregate small cities (generally defined as having less than 100 employees) into large pools to eliminate statistical anomalies associated with small sample sizes and gain reporting efficiencies. ROI:Acronym for Return on Investment. See also Market Gains/Losses. Public Safety Employees: Most police and fire personnel. Other public employees are gene referred to as miscellaneous employees (see above) and may include some members of police and fire departments. Second tier (2 tier) plans: Benefits promised to all employees hired after the date of implementing nd a plan with reduced benefits. Second tier plans generally have reduced benefits and lower costs. See also Ñfirst tierÒ in the Glossary. Sidefund:Generally the unfunded liability that existed prior to entering a risk pool. A city is responsible for their entire sidefund plus their portion of the risk pool. Sidefund repayment can be accelerated. Some cities did not separate sidefund monies from ARC while others did. Smoothing of Gains/Losses: Actuarial method of spreading, or smoothing, market gains and losses over a period of time. The purpose of smoothing is to minimize short-term, year-to-year contribution rate fluctuations which may result from market swings. The smoothed asset value is also known as the actuarial value of assets. Unfunded Liability: This is the unfunded obligation for prior benefit costs, measured as the difference between the accrued liability and plan assets. When using the actuarial value of plan assets, it is also referred to as the Unfunded Actuarial Accrued Liability (UAAL). 34 98 PASSEDADOPTED This report was and with a concurrence of at least 12 grand jurors th on this 17 day of May, 2012. Kathryn G. Janoff Foreperson Alfred P. Bicho Foreperson pro tem James T. Messano Secretary 35 99 OFFICE OF THE CITY CLERK CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3223 www.cupertino.org CITY COUNCIL STAFF REPORT Meeting:September 4, 2012 Subject Unscheduled vacancy Parks and Recreation Commission Recommended Action Accept resignation of Marcia St.Clair, set application deadline date of Friday September 21 and schedule interview date for October 2 beginning at 5:30 pm Discussion Cupertino Resolution No. 10-048states that unscheduled vacancies shall be handled in the following manner: The notice of unscheduled vacancy shall be posted no earlier than 20 days before nor later than 20 days after the vacancy occurs, and at least 10 working days before appointment. The notice of unscheduledvacancy wasposted on August 15 in the Office of the City Clerk, at the City Hall bulletin board, at the Cupertino Library, and in other places designated by the City Clerk. _____________________________________ Prepared by:Kirsten Squarcia, Acting Deputy City Clerk Reviewed by:Grace Schmidt,City Clerk Approved for Submission by:Amy Chan,Interim City Manager Attachments: Staff report A. Resignation email 100 101 PUBLIC WORKSDEPARTMENT CITY HALL 1010300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3354www.cupertino.org CITY COUNCIL STAFF REPORT Meeting:September 4, 2012 Subject Improvement Agreement for the Rosebowl Project,Cupertino Property Development I, LLC, 19800 Vallco Parkway, APN: 316-20-037. Recommended Action Adopt Resolution No. 12-_____. Discussion Through the improvement agreement with the City, the applicants for a building permit for a mixed use commercial andresidential development will be obligated to construct city-specified streetimprovements, including curb, gutter, sidewalk,driveway approaches, pavement rehabilitation and traffic signal improvementsalong the frontage of their building site.The Developer hasfileda labor and materials bondas well as a faithful performance bondwith the City, both in the amount of $559,801. The labor and materials bond is held for 6 months andthe faithfulperformance bond is heldfor one yearfrom the date of Council acceptance of the improvements. _____________________________________ Prepared by:Chad Mosley, Associate Civil Engineer Reviewed by:Timm Borden, Director of Public Works Approved for Submission by:Amy Chan,Interim City Manager Attachments: A-Draft Resolution B-Improvement Agreement C-Map 102 ATTACHMENT A RESOLUTION NO. 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AUTHORIZING EXECUTION OF ANIMPROVEMENTAGREEMENTBETWEEN THE CITY AND DEVELOPER,CUPERTINO PROPERTY DEVELOPMENT I, LLC, 19800 VALLCO PARKWAY, APN 316-20-037 WHEREAS, there has been presented to the City Council a proposed improvement agreement between the City of Cupertino and Developer,CupertinoProperty Development I, LLC,for the installation of certain municipal improvements at19800Vallco Parkway,and said agreement having been approved by the City Attorney, and Developer having paid the fees as outlined in the attached Exhibit A; NOW, THEREFORE, BE IT RESOLVED THAT the Mayor and the City Clerk are hereby authorized to sign the aforementioned agreement on behalf of the City of Cupertino. PASSED AND ADOPTED at a regularmeeting of the City Council of the City of Cupertino this 4thday of September,2012,by the following vote: VoteMembers of the City Council AYES: NOES: ABSENT: ABSTAIN: ATTEST:APPROVED: ________________________________ Grace Schmidt, City ClerkMark Santoro, Mayor 103 Resolution No. 12- Page 2 EXHIBIT “A” SCHEDULE OF BOND, FEES, AND DEPOSITS DEVELOPER: CUPERTINO PROPERTY DEVELOPMENT I, LLC LOCATION: 19800 VALLCO PARKWAY, APN 316-20-037 PART A.Faithful Performance Bond:$559,801.00 110-2211 PART B.Labor and Material Bond:$559,801.00 110-2211 PART C.Checking and Inspection Fee:$33,588.00 110-4538 PART D.Development Maintenance Deposit:$3,000.00 110-2211 PART E.Storm Drainage Fee –Basin 3$16,109.36 215-4073 PART F.Street Light –One-Year Power Cost:N/A 110-4537 PART G.Map Checking Fee:$8,052.00 110-4539 PART H.Park Fee: Zone III$1,652,400.00 280-4083 PART I.Reimbursement FeeN/A 104 105 106 107 108 109 110 111 112 113 114 115 ATTACHMENTC VALLCOPKWY 19800 . Subject:ImprovementAgreement,CupertinoPropertyDevelopmentI,LLC,19800VallcoParkway, APN:316-20-037. RecommendedAction:AdoptResolutionNo.12-_____. 116 PUBLIC WORKS DEPARTMENT CITY HALL 1010300 TORRE AVENUE •CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3354 www.cupertino.org CITY COUNCIL STAFF REPORT Meeting: September 4, 2012 Subject Professional Services Agreement for the 2012 Pavement Maintenance Projects. Recommended Action Authorize the Director of Public Worksto execute an Agreement for ContractAdministration, Inspection and Testing services for the 2012 Pavement Maintenance Projects. Discussion In 2012, the city will be completing two pavement maintenance projects: the 2012 Pavement Maintenance Project and the Federally funded 2012 Surface Transportation Program (STP) Overlay Project. The combined value of these two projects is estimated to be $3,400,000.Full- time construction inspection services are necessary to facilitate timely completion of the work with minimal impact to residents and businesses. In addition, Construction Administration and Testing Services are required to ensure work is completed to specification. On July 19, 2012,Public Works solicited Requestsfor Proposals from local and regional consulting firms to provide Contract Administration, Inspection and Testing Services for the 2012 Pavement Maintenance Projects. A total of fourfirms submitted proposals on August 13, 2012.In accordance with Federal regulations, proposals were evaluatedby a selection committeecomprised of threePublic Worksstaff membersand ranked,based upon qualifications,as follows: 1.Harris and Associates 2.Pavement Engineering, Inc. 3.CSG Consulting Services 4.APEX Testing Laboratories, Inc. The selection committee found both Harris and Associates and Pavement Engineering, Inc.to be well qualified and nearly equal in terms of project knowledge and experience; however,Harris and Associates did score slightly higher. Staff negotiatedwith Harris and Associates,but were unable to agree upon a contract cost that could be supported within the approved Pavement Maintenance budget. Staff then reviewed Pavement Engineering’s Cost Proposal and found it acceptable. 117 Fiscal Impact Award of this contract will result in a fiscal impactnot to exceed One Hundred Eighty-Five Thousand Two Hundred Forty Dollars and No Cents ($185,240.00) for Basic Services. An Additional Services allowance of TwentyThousand Dollars and No Cents ($20,000.00) is also included for potential Services that would exceed the basic scope. Total Fees shall not exceed Two Hundred Five Thousand Two Hundred Forty Dollars and No Cents ($205,240.00). _____________________________________ Prepared by:Jo Anne Johnson, Engineering Technician Reviewed by:Timm Borden, Director of Public Works Approved for Submission by:Amy Chan, Interim City Manager Attachments: A-Draft Agreement 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 PUBLIC WORKSDEPARTMENT CITY HALL 1010300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3354www.cupertino.org CITY COUNCIL STAFF REPORT Meeting:September 4, 2012 Subject Don Burnett Pedestrian-Bicycle Bridge–Donationfor Landscape Enhancements. Recommended Action Authorize staff to accept a donation from the Friends of Don Burnett and allocate it toward installation oflandscaping enhancements at the south side of the bridge. Discussion In July 2011, the California Legislature approved a resolution to rename the Mary Avenue Bridge in honor of former Cupertino Mayor and Councilmember Don Burnett. A dedication ceremony honoring the re-naming was held on October 8, 2011. The Friends of Don Burnett group raised funds to help pay for new signs and a plaque. In September 2011, the City Council authorized appropriating $4,000 of city funds to match adonationfrom Friends of Don Burnett to pay for the signs and plaque. In November 2011, the City Council approved text for the new bridge signs and authorized fabrication of the signs. TheFriends of Don Burnett recently contacted staffto offer an additional donation of approximately $2,400 toward adding landscape plantings on the south side of the bridge. They wish to sponsor the purchase and installation of additional container size plantings to enhance the bridge’s south entry area,including the vicinity of the new plaque. Staff has met with representatives ofthe Friendsto discuss their goals.Plantings are proposed to focus on California native species which are drought tolerant and provide seasonal interest. Authorization by theCity Council is needed to accept this donationand use it toward the noted enhancements. If the Council authorizes proceeding, it is expected that most or all of thenew plantings would be installed this autumn. Sustainability Impact Installing native planting enhancements at the bridge is compatible with the city’s sustainability goals.The selected plantings wouldemphasize low wateruse andlow maintenance needs. The plant palette would also support wildlife values by providingpollinator habitat. 134 Fiscal Impact: The donation will fund the purchase of the plant materials. Labor to install plantings of container-size plants would be supplied by city staff,which is estimated at approximately $3,000 in labor cost. Future responsibility for watering and maintaining the new plantingswould be incorporated into Public Works operations. _____________________________________ Preparedby:Gail Seeds, Park Restoration and Improvement Manager Reviewed by:Timm Borden, Director of Public Works Approved for Submission by:Amy Chan,Interim City Manager 135 COMMUNITY DEVELOPMENT DEPARTMENT CITY HALL 1010300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3308www.cupertino.org CITY COUNCIL STAFF REPORT Meeting: September 4, 2012 Subject Amend Cupertino Municipal Code to adopt a Green Building Ordinanceand amendment to the City's Fee schedule Recommended Action 1. Conduct first reading of Ordinance No. 11-2076 amending Chapter 16.58 of the Cupertino Municipal Code, Green Building Standards Code Adopted (Attachment A) 2. AdoptResolution amending the City's adopted Fee Schedule to incorporate Green Building deposit fees (Attachment B) Description Application: MCA-2010-04 Applicant: City of Cupertino Location: Citywide Application Summary: Municipal Code Amendment to adopt an ordinance amending Chapter 16.58 of the Cupertino Municipal Code, Green Building Standards Code Adopted (See Attachment A, Ordinance No. 11-2076) and adopt related fees and deposits (See Attachment B, Draft Resolution). BACKGROUND OnJanuary 19, 2010, the City Council authorized staff to proceed withdevelopingadraft Green Building Ordinance. The goal of developing a Green Building Ordinance (GBO) was initiated through the City’s participation and support of the Santa Clara County Cities Association’s Board of Director’s “Phase II recommendations” (See Attachment C, Phase II recommendations) adopted by the Board of Directors in June 2009 in partnership with the Silicon Valley Leadership Group. The Phase II recommendations are criteria and thresholds for development, including new construction and renovation/remodeling projects thataim to support and promote energy, water and resource efficiency and conservation by adherence to rating systems LEED (Leadership in Energy and Environmental Design) and GPR (Green Point Rated). After a comprehensive public processover a period of approximately oneyearwith public participation and Planning Commission review (See Attachment Dfor a summary of the public 136 process), on May 2, 2010 the City Council agreed on the parameters for the draft GBO and directed staff to bring the ordinance back for Council consideration after one year to facilitate additional public inputand consider any updates to the State's CALGreen Building Code.Please see Attachment Efor a summary of the previous Council parameters for the Draft GBO. DISCUSSION Proposed GBO After about 15 monthsof public outreach and review of the Draft GBO, staff is bringing a revised DraftGBO to the Council for final consideration. The revision proposed by staff is based on thefollowing objectives: Simplifyordinance requirements Incorporate changes as a result of learned experiences from other communities and changes to the State’s Green Building Code (CALGreen), which was updated in July 2012. Focus on larger projectsthat have the greatest potential to produce environmental benefits Staff’s recommended changes are summarized below.Specificdetails on the revisions are included in Table1below: 1.Reduce the Types of Review: The original draft included three types of review; CALGreen Building Code requirements, City review for minor projects, and LEED/GPR certification for larger projects. Staff proposes to revise the threshold to remove the second level of review (City review), where the applicant would have to pay a deposit for a consultant to verify that plans meet the intent of LEED or GPR.Projects would either be required to meet the CALGreen Building Code requirements or would require certification per GPR (Green Point Rated)or LEED (Leadership in Energy and Environmental Design). 2.Focus on Larger Projects: The revised Draft seeks tofocus on projects of a larger size, to get the most environmental benefits. In order to achieve this, the following changes are recommended: a. Increase threshold for “Minor”remodels from 10,000 square feet to 25,000 square feet (in addition to retaining other criteria including percentage of floor area and building systems). “Minor”projects would be required to meet CALGreen Building Code standards, while major projects would be required to get GPR or LEED certification. b. Increase threshold for new projects in the “Small” category to under 25,000 squarefeet. This would reduce requirements so thatsmall projectsunder 25,000 square feetwould have to meet CALGreen Building Code requirements, instead of projects under 10,000 square feet in size.Larger projects would be required to meet either LEED or GPR based on the building type. 3.Time Limitto Provide Certification: For projects that required certification from LEED, GPR or to an alternative standard, the original ordinance required certification within 18 months of final occupancy. This was expected to cover the timeframe that projects would need to monitor operation of the building systems and go through the certification process. Based on public comments that 137 have requested up to24 months for the process, staff is recommending revisedlanguage to allow the Building Official to grant a one-time 6-month extension tothe 18-month period. 4.Clarification: The revised draft also has amendments to clarify requirements for mixed uses and also to provide a reference to the alternate standard. TABLE 1 Type of ProjectMay 3, 2011 CC Draft Green Building Revised Green Building Ordinance Ordinance Residential –Single-Family &Multi-Family <9Single-Family & Multi-Family <9 New homes:homes: Construction ExemptExempt (Single Family & Multi-Family)___________________________________________________________________ SFSF R & MFR > 9 homes:R & MFR > 9 homes: Minimum: Minimum: GPR min. 50 pts or LEED GPR min. 50 pts or LEED Silver w/Third Party CertificationSilver w/Third Party Certification Alternate Reference Standard: Alternate Reference Standard: Third Third Party CertificationParty CertificationSee Section 101.10.2 Residential –Single-Family (renovation):Single-Family (renovation): Renovation/ ExemptExempt Addition (Single-Family & Multi-Family) Multiple-Family (minor renovation) Multiple-Family (minor renovation) ExemptExempt Multiple-Family (major renovation)Multiple-Family (major renovation) –– Renovations and/or additions with a Floor Renovations and/or additions with a Floor Area Ratio (FAR) increase >50% and at Area Ratio (FAR) increase >50% and at least 10,000 square feet, and replace or least 10,000 square feet25,000 square feet, alter the HVAC system and at least two and replace or alter the HVAC system and of the following: building envelope, hot at least two of the following: building water system and lighting system:envelope, hot water system and lighting system: Minimum: GPR min. 50 pts or LEED Certified (applicable only to the area of Minimum: renovation/addition) w/City Review or GPR min. 50 pts or LEED LEED EBOM w/Third Party Certified (applicable only to the area of Certification.renovation/addition) w/City Reviewor LEED EBOM w/Third Party Certification. Alternate Reference Standard: Third Alternate Reference Standard: Party CertificationThird Party CertificationSee Section 101.10.2 Non-Residential-Small, equal or less than 10,000sq. ft.:Small, equal or less than 10,00025,000 Newsq. ft.: Minimum: CALGreen Construction Minimum: Mandatory*w/City Review CALGreen Mandatory Building Code*w/City Review 138 Type of ProjectMay 3, 2011 CC Draft Green Building Revised Green Building Ordinance Ordinance Alternate Reference Standard: Third Alternate Reference Standard: Party CertificationThird Party CertificationSee Section 101.10.2 Mid-size, 10,001 sq.ft.-50,000 sq. ft .: Mid-size, equal or greater than10,001 sf25,000-to 50,000 sq. ft.: Minimum: Minimum: LEED Certified w/City LEED Certifiedw/ Third Party ReviewCertificationw/City Review Alternate Reference Standard:Alternate Reference Standard: Third Third Non-Residential- Party CertificationParty CertificationSee Section 101.10.2 New __________________________________ Construction Large, greater than50,00150,000or Large, 50,001 or more sq. ft.: more sq. ft.: Minimum: LEED Silver w/ Third Party Minimum: LEED Silver w/ Third Party Certification Certification Alternate Reference Standard: Third Alternate Reference Standard: Third Party CertificationSee Section 101.10.2 Party Certification Non-Residential-Minor Renovations/Additions:Minor Renovations/Additions: Renovations or Minimum: Minimum: CALGreen Mandatory* CALGreen Mandatory Additions w/City Review Building Code*w/City Review Alternate ReferenceStandard:Alternate Reference Standard: Third Third Party CertificationParty CertificationSee Section 101.10.2___________________________ _________________________________ Major RenovationMajor Renovation** –Renovations and/or –Renovations additions that comprise at least 10,000 and/or additions that comprise at least square feet, and replace or alter the 10,00025,000square feet, and replace or HVAC system and at least two of the alter the HVAC system and at least two of following: building envelope, hotwater the following: building envelope, hot water system and lighting system.system and lighting system. Minimum: Minimum: 10,000 -50,000 sq. ft. --10,000 –50,000 sq. ft. -- LEED Certified (applicable only to the LEED Certified (applicable only to the area of the renovation/addition) with City area of the renovation/addition) with City Review or LEED EBOM w/Third Party Review or LEED EBOM w/Third Party CertificationCertification Minimum: Minimum: 50,001 sq. ft. or more–LEED 50,001 sq. ft. or more – Certified (applicable only to the area of the LEED Certified (applicable only to the renovation/addition) w/Third Party area of the renovation/addition) w/Third Party Certification or LEED EBOM Certification or LEED EBOM w/Third w/Third Party CertificationParty Certification Alternate Reference Standard:Alternate Reference Standard: Third Third Party CertificationParty CertificationSee Section 101.10.2 Note: While CalGreen Building Code requirements would be triggered for projects valuation, the Draft Ordinance requires that CALGreen Building Code requirements be met by all minor non- residential renovations. 139 Type of ProjectMay 3, 2011 CC Draft Green Building Revised Green Building Ordinance Ordinance For new and renovation/addition projects For new and renovation/addition projects Mixed Use with residential and non-residential with residential and non-residential Projects components, the use shall comply by components, the use shall comply by either:either: 1.Meeting the applicable 3.Meeting the applicable requirements for each use; orrequirements for each use; or 2.Meeting the applicable 4.Meeting the applicable requirements for the use that requirements for the use that comprisesthe majority of the comprises the majority of the project’s square footage.project’s square footage/where uses are attached and/or combined in a building. *CALGreen MandatoryBuilding Coderequirements shall only be applied to elements included in the scope of a project, unless otherwise required by the California Green Building Standards Code. Interface between the Green Building Ordinance and CALGreen The proposed new GBO and the CALGreen Building Code are complementary to each other because the CALGreen Building Code essentially establishesabaseline standardfor buildings, whereas the GBO provides a higher level of standards that are more comprehensive (for example, the CALGreen Building Code does not include energy reduction as a strategy).For the most part, the GBO defaults to the CALGreen Building Code requirements for projects that are defined as minor.This means that even without the Green Building Ordinance, these projects wouldhave had to comply with the CALGreen Building Code.The only exception is in the following category: a. “Minor” non-residential renovations/additions-While CALGreen Building Code requirements would be triggered for projects equal to or greater than 2,000 sf or $500,000 valuation, the Draft Ordinance requires that CALGreen Building Code requirements be met by all minor non-residential renovations. Green Building Refundable Deposits/Fee Schedule Aresolutionto amend the Fee Scheduleto adopt the green building deposits has been provided for the Council’s consideration (SeeAttachment B). With the exception of deleting the deposit fees relating to city review, the recommended deposits for third party verification reflects what the Council recommended on May 3, 2011. The City Council directed that that the third party deposits should be half of the Planning Commission originally recommended levels. Staff is not recommending any additional changes.Please see Table 2 below for a summary. TABLE 2 Green Building Deposit –Planning Commission Revised Deposits per 2/1/11 Third Party Certification Recommendation Council discussion Project Type Single-Family $2/sq. ft., max. $2,000 $2/sq. ft., max $ 1,000 Multi-Family Residential $2/sq. ft., min. $40,000/ max. $2/sq. ft., min. $ 20,000/ $75,000max. $40,000 Non-Residential $2/sq. ft., min. $70,000/ max. $2/sq. ft., min. $35,000/ max. $150,000$75,000 140 The original Planning Commission recommendationswerebasedonTable3-typicalgreen buildingcertificationcostsprovided by the City’s green building consultant Global Green. TABLE3-TypicalGreenBuildingCertificationCosts ProjectTypeGreenPointRatedLEEDforHomesLEEDBD&C SingleFamily $40,380$54,700 Multi-Family Office(20,000sq.ft.) $71,650 $97,650 Office(50,000sq.ft.) Typicalcostsforconsultantreviewrangefrom$900forsingle- ProjectsRequiring familyandsmallprojectstoabout$1,500for Informal Consultant *BasedondatafromBuilditGreen,USGreenBuildingCouncil,DavisEnergyGroup, StopWaste.org,andGlobalGreen. Public Input On August 1, 2012, the City held the third green building focus groupmeeting.Approximately 15people attended the meeting.Participants of the meeting were provided a summary of the public process and prior Council direction. In addition, staff and the City’s green building consultant wereon board to provide updatesonthe latest CALGreen Building Codeas well as staff’s recommended changes to the draft GBO.The participants were given the opportunity to raise questionsandprovide their thoughtson the draft ordinance. In addition to holding the focus groupmeeting, staff provided updates to the Legislative Action Committee in July andAugust 2012. Also, since May 2011, the draft GBO and supporting information regarding the public process have been available on the City’s website for public review and input. To date, only fouremails with comments have been received (See Attachment F). The following is a summary of the key public comments received, including the comments from the August 1, 2012 focus group meeting (staff response in italics): The new green building thresholdsmay end up not capturingmuch of the medium to smaller developments thus losing its effectiveness and intent. The focus of the revised Draft GBO is to focus onlarger projects that have the greatest impact and most potential for energy savingsand reduce requirements on smaller projects. Thedeposits may createadditional burdenon applicants. Why not hold back certificates of occupancy for compliance instead? Refundable deposits arenecessary to incentivize and encourage GBO compliancebecause many of the building systems would need to be verified after thebuilding is allowed to be in operation. Thus having to submit a refundable deposit provides the City the ability to allow the project to move forward in advance of the final performance confirmation. Having a depositsystem will also create a less onerous and more practicalsituation for the applicants in the event an unforeseeable obstacle or setback occurs after the building is in operation, thereby allowing projects to get certificates of occupancy or forfeitthe deposit amount. 141 There should benexus between the green building deposits collected and the project.The purpose and use of the green building deposits should be clarified. Thegreen building deposits that are not returnedwill be used towards advancing the purpose ofthesustainabilityandgreen practices in the City. Examples of activities that may benefit from such funds include but not be limited to, increasing sustainability/energy efficiency in community buildings, environmental sustainability outreach and educational programs,etc. The sustainability programs will be reviewed and approved by the Councilat a later date. How does our draft GBO compare to our neighboring cities Attachment Gincludes a survey prepared in February 2011as well as an update of recent ordinances. A survey of neighboring cities indicates that cities have increased the threshold of GPR points (50 points is the minimum but 75 to 80 points are becoming the standard). In April 2012, the City of Sunnyvale revised their GBO to require formal certification (GPR for residential and LEED for commercial) similar to what Cupertino is proposing.Sunnyvale is also providing incentives (FAR and building heights) for projects that will achieve higher level of green performance. Palo Alto is expanding the types of projects required to meet Cal Green. Los Altos and Palo Alto are also requiring that new construction exceedTitle 24, Part 6 of the California energy code by15%. Additionally, Palo Alto is requiring some new planning applications to participate in a city pilot program utilizing LEED-ND (neighborhood development) prerequisites. The City of Mountain View adopted their GBO that amended Cal Green to include local green building standards and requirements. Project of various types are required to exceed the minimum building code energy standards and larger projects are required to be buildto the LEED certification standards.While the standards are similar to those in Cupertino, projects in Mountain View are not required to get LEED certification but are only required to be designed to the standard. The City should provide in house LEED/GPRcertified staff to verify green building ordinance compliance as oppose to requiring third party verification. The LEED/GPR verification and certification process requires professional expertise on a variety of disciplines (e.g., construction, environmental, electrical, mechanical, civil, planning, building, airquality, noise, solar, etc.). Theresources required to review a shifting volume of projects in a timely manner,and continuing certification requirements have led most cities to the conclusion that hiring consultants to do the work is the most time and cost- effective method of providing this service. The City should require third party verificationinstead of providing in-house staff because it would be extremely difficult and taxing to the City staff to be trained and to keep up with the various new certifications and the updates in regulations. See previous comments. Individual green building requirements inaddition to the State’s standardsadd to the cost of development. Overtime, projectswill save more money over time resultingfrom the energy and resource efficiencies of green projects. In drafting the GBO, much considerationhasbeen given to the 142 practicalityof the ordinance to make sure that it is not overly onerous on applicants and that the standards are on par with other communities. Property owners would like to have the option to meet the green building standards by evaluating their entire portfolio for existing buildings and prescribe guidelines that all future tenant improvements can follow. This way the timing for building renovations will not be hindered by the individual project-specific LEED requirements. The LEED EBOM (LEED for existing buildings: Operations and Maintenance) allows property owners to certify the green building approach and/or guidelines for one or several existing buildings. Once the certification process is complete, any future renovations/additions wouldnot have to go through another formal certification process as long as they follow the prescribed master green program.The program would be reviewed on a three to five year timeline on a continuing basis.This would ensure that buildings would not have to get certification on specific tenant improvements, but would instead follow the program. Allow City review for the alternative standard option. An alternate standard can be accepted if itis comparable to the requirements of the ordinance. Based on the experience of other cities and discussions with our Green Building consultant, it is difficult for a City or a consultant to ascertain thatthe alternative is comparable to the requirements of the ordinance.There are a number of organizations that do have alternate standards that can certify compliance with LEED or GPR such as, Living Building Challenge (US), Building Research Establishment Environmental Assessment Method (UK), and Comprehensive Assessment System for Building Environmental Efficiency (Japan). Applicants have the ability to use these standards as well as new ones that may be developed by organizations in the future. Utilize other alternative standards such as those by theNational Standards for Renewable Energy Labs All alternative standards that meet the criteria in the ordinance would be allowed.The alternative standards would have to meet sustainability standards similar to those in GPR and LEED, and the ability for Third Party review where an organization could certify the standard. The National Standards for Renewable Energy Labs only meets energy requirements but not the other sustainability requirements.Additionally, the standard does not have the ability for Third Party review since there is no organization that can certify that the standards have been met. Therefore, they cannot be used under the ordinance. NEXT STEPS Building Standards Commission and Effective Date of Ordinance Once the City Council adopts the Green Building Ordinance and the proposed fee schedule amendments, staff will bring the ordinance back to the CityCouncil for a second reading on September 18, 2012.Following that, the City will be required to file the ordinance amendments with the Building Standards Commission (BSC) to inform them about the local amendments to the building code.The City will also need to file a cost-effectiveness study related to any energy standards adopted that are higher than the Building Code with the California Energy 143 Commission (CEC).We expect to go through these filing processes with the help of the green building consultant.A number of cities have previously gone through these filing processes with standards similar to ours (including Santa Clara County and Palo Alto)and weexpect to use their experienceto help with the process. Given these filing requirements, staff recommends that the GBO and the fee schedule amendments be effective on April 1, 2013. Staff believes this would allow for sufficient time to submit and receive approval from the BSC and CECbefore the ordinance would take effect. _____________________________________ Prepared by:Gary Chao,City Planner Reviewed by:Aarti Shrivastava, Community Development Director Approved for Submission by:Amy Chan,Interim City Manager Attachments: A.Ordinance No. 11-2076 B.Draft resolution to amend the fee schedule C.Phase II recommendation D.Summary of public processto date E.Summary of council comments/directions, May 3, 2011 F.Emails received from the public G.Survey of neighboring cities, February 2011 & August 2012 H.Comparison table between May 3, 2011 GBO with the revised GBO with redlines I.City council staff report, May 3, 2011 J.City council staff report, February 1, 2011 144 ORDINANCE NO. 11-2076 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDING CHAPTER16.58 OF THE CUPERTINO MUNICIPAL CODE TO AMEND THE GREENBUILDING STANDARDS CODE TO INCLUDE LOCAL GREEN BUILDING REQUIREMENTS the City Council authorized staff on January 19, 2010 to proceed with the WHEREAS, development of a green building ordinance incorporating green bu measures; and green building is a whole systems approach to the design, cons WHEREAS, location, and operation of buildings and structures to help mitigate the environmental, economic and social impacts of construction, demo renovation of buildings and structures; and the Environmental Resources and Sustainability Element of the Ci WHEREAS, Cupertinos General Plan 2000-2020 recognizes that the communitys environmental resources are fragile, invaluable and interrelated and sustaining the Citys viable ecological communities and envi resources will result in the protection of both the human and natural environments; and the City of Cupertinos General Plan 2000-2020 sets forth policies WHEREAS, recognizing that the essential components of green building design and planning includeconsideration of location, site planning, energy efficiency, material efficiency and water efficiency; and the California Green Building Standards Code Section 101.7 provi WHEREAS, local government may establish more stringent building standards reasonably necessary due to local climactic, geologic, topographical or environmental conditions; and the City of Cupertino has already adopted ordinances to further WHEREAS, building measures, including the California Green Building Standthe Landscaping Ordinance to reduce waterwaste, Recycling and Diversion of Construction and Demolition Waste Ordinance, and Stormwater Poll Prevention and Watershed Protection; and the City of Cupertino intends to adopt local amendments to the C WHEREAS, Green Building Standards Code by establishing green building requirements exceeding the Mandatory Requirements of the 2010 California Gree Standards Code; and 99582.2 145 the Planning Commission adopted Resolution No. 6615 to recommend WHEREAS, adoption of green building measures in a green building ordinance as a result of conducting public hearings; and the City Council has determined that amending Chapter 16.58, Green WHEREAS, Building Standards Code, is necessary to incorporate local green requirements; and the City Council of the City of Cupertino conducted properly notic WHEREAS, public hearings; and adoption of the ordinance will improve the environment and is in the WHEREAS, public interest. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CUPERTINO HEREBY ORDAINSAS FOLLOWS: Title 16 of the Cupertino Municipal Code is hereby amended by the Section 1. adoptionofamendments to Chapter 16.58 as set forthin ExhibitA. The City Council adopts the findings for local amendments to the Section 2. California Green Building Standards Code, 2010 Edition, attached hereto as Exhibit Band incorporated herein by reference. Because this project will assure the maintenance, restoration, Section 3. enhancement, or protection of the environment and does not relaxn of construction activities or standards allowing environmental d project is exempt from CEQA pursuant to CEQA Guidelines section .Should any provision of this Ordinance, or its application to an Section 4 circumstance, be determined by a court of competent jurisdiction to be unla unenforceable or otherwise void, that determination shall have n other provision of this Ordinance or the application of this Ord other person or circumstanceand, to that end, the provisions hereof are severable. This Ordinance shall take effect and be in force on and after April 1, 2013 Section 5. as provided by Government Code Section 36937. The City Clerk shall certify to the passage and adoption of this Ordinance Section 6. and shall give notice of its adoption as required by law. Pursu Section 36933, a summary of this Ordinance may be published and publication and posting of the entire text. 99582.2 146 at a regular meeting ofthe Cupertino City Council the 4th day INTRODUCED of September 2012and at a regular meeting of the Cupertino City Council ENACTED on this 18of September 2012by the following vote: th AYES: NOES: ABSENT: ABSTAIN: ATTEST:APPROVED: Grace SchmidtMark Santoro City Clerk, City of CupertinoMayor, City of Cupertino 99582.2 147 Exhibit A City of Cupertino CHAPTER 16.58: GREEN BUILDINGSTANDARDS CODE ADOPTED 16.58.010 Code Adoption. The provisions of the 2010 California GreenBuilding Standards Code and each and all of the regulations, provisions, conditions and terms of the code is this chapter, and is by such reference adopted. One (1) copy of the code therefore is on file inthe office of the Building Official pursuant to Health and Safety Code Section 18942(d)(1) and ismade available for public inspection. 16.58.015Adoption of Appendix Chapters No Appendix Chapters from the 2010 California Green Building Stahave been adopted. 16.58.040 Local Amendments The following provisions of this Chapter shall constitute local - referenced provisions of the California Green Building Standards be deemed to amend thecross-referenced sections of said Code with the respective provisions set forth in this Chapter. 16.58.050 Section 101.1 Amended Amend Section 101.1 to read as follows: These regulations shall be known as the California Green Building 101.1 Title. Standards Code as amended by the City of Cupertino and may be ci referred to herein as this code. The California Green Building the City of Cupertino is an amendment to Part 11 of 12 parts of cial compilation and publication of the adoption, amendment and repeal of building re Code of Regulations, Title 24, also referred to as the Californi 16.58.070 Section 101.3 Amended Amend Section 101.3 to read as follows: The provisions of this code shall apply to the planning, design, 101.3 Scope. construction, use and occupancy of every newly constructed build otherwise indicated in this code for the City of Cupertino. 99582.2 148 The California Green Building Standards Code also is hereby amen renovations and tenant improvements of privately-owned buildings and structures in accordance with the provisions of this Chapter. It is not the intent that this code substitute or be identified as meeting the certifi requirements of any private, third party green building program. 16.58.100 Section 101.10 Amended. Amend Section 101.10 to read as follows: This code contains mandatory green building 101.10 Mandatory requirements. measures. In addition, this Chapter contains required minimum g amended by the City of Cupertino. All new buildings and structur and tenant improvements subject to requirements in Table101.10shall comply with the mandatory measures of the 2010 California GreenBuilding Standards Code as adopted by the state in addition to local amendments included in this code, reg stories, unless specifically exempted by this code. 16.58.110 Section 101.10.1 Added Add Section 101.10.1 to read as follows: as set forth inTable 101.10. 101.10.1 Project Types 16.58.120 Section 101.10.1.1 Added. Add Section 101.10.1.1 to read as follows: as set for in Table 101.10. 101.10.1.1 Residential projects 16.58.130 Section 101.10.1.1.1 Added Add Section 101.10.1.1.1 to read as follows: as 101.10.1.1.1Residential new construction Equal to or less than nine (9) homes set forth inTable 101.10. : 16.58.140 Section 101.10.1.1.2 --Added Add Section 101.10.1.1.2 to read as follows: 99582.2 149 as 101.10.1.1.2 Residential new construction Greater thannine (9) homes or more set forth in Table 101.10. 16.58.150 Section 101.10.1.1.3 --Added Add Section 101.10.1.1.3 to read as follows: as set forth in 101.10.1.1.3 Major multi-family residential renovations/additions Table 101.10. Requirements shall only apply to the area of renov 16.58.160 Section 101.10.1.1.4 -Added Add Section 101.10.1.1.4 to read as follows: as set forth in Table 101.10. 101.10.1.1.4 Non-residential new construction, small 16.58.170 Section 101.10.1.1.5 Added Add Section 101.10.1.1.5 to read as follows: --as set forth in Table 101.10. 101.10.1.1.5 Non-residential new construction, medium 16.58.180 Section 101.10.1.1.6 Added Add Section 101.10.1.1.6 to read as follows: --asset forth in Table 101.10. 101.10.1.1.6 Non-residential new construction, large 16.58.190 Section 101.10.1.1.7 Added Add Section 101.10.1.1.7 to read as follows: --as set forth in 101.10.1.1.7 Non-residential renovations/additions, minor Table 101.10.Requirements shall only apply to the scope of work of renovation 16.58.200 Section 101.10.1.1.8 Added Add Section 101.10.1.1.8 to read as follows: --as set forth in 101.10.1.1.8 Non-residential renovations/additions, major Table 101.10.Requirements shall only apply to the area of renovation/addition 99582.2 150 16.58.210 Section 101.10.1.1.9Added Add Section 101.10.1.1.9 to read as follows: --as set forth in Table 101.10. 101.10.1.1.9 Mixed-Use 16.58.220 Table 101.10 Added Add Table 101.10 to read as follows: Project TypeMinimum Green Building Required Verification Requirement A. NEW CONSTRUCTION Residential None Single Family and Multi- Exempt Family homes equal to or less than 9 homes: Minimum: Third Party. SingleFamily and Multi- GPR certified at Family homes greater than9 minimum 50 points or homes: LEED Silver Certified or Alternate Reference Alternate Reference Standard: Standard per Section Third Party. 101.10.2 Non-Residential Small, less than 25,000 SF: CALGreen Building Code *per Chapter 5 of the California Green Building Standards Code Minimum: Third Party. Mid-size, from 25,000 to LEED Certified or 50,000 SF: Alternate Reference Standard: Alternate Reference Third Party. Standard per Section 101.10.2 99582.2 151 Project TypeMinimum Green Building Required Verification Requirement Minimum: Third Party. Large, greater than 50,000SF: LEED Silver Certification or Alternate Reference Alternate Reference Standard: Standard per Section Third Party. 101.10.2 B. RENOVATIONS AND ADDITIONS a.Residential None i. Single-family Exempt None ii. Multi-family (minor): Exempt Minimum: Third Party. iii. Multi-family (major): GPR minimum 50 pts (applicable only to the Renovations and/or area of renovation/ additions with a Floor Area addition) or Ratio (FAR) increase and at least 25,000 square feet, Intent of LEED and replace or alter the Certified or HVAC system and at least LEED EBOM Certified two of the following: building or envelope, hot water system Alternate Reference Standard: and lighting system: Alternate Reference Third Party. Standard per Section 101.10.2 b.Non-Residential Renovations and/or i.Minor: CALGreen Building additions that do not meet the Code*per Chapter 5 of higher thresholds for major the California Green renovations and additions in Building Standards the cell below. Code Renovations and/or Minimum:Third Party. ii.Major. LEED Certified additions that comprise at (applicable only to the least 25,000 square feet, and area of renovation/ replace or alterthe HVAC addition) or system and two of the LEED EBOM Certified 99582.2 152 Project TypeMinimum Green Building Required Verification Requirement following: building envelope, or hot water system, and Alternate Reference Alternate Reference Standard: lighting system. Standard per Section Third Party. 101.10.2 Mixed-Use For new and renovation/addition projects with residential and no-residential components, the use shall comply by either: 1.Meeting the applicable requirements for each use; or 2.Meetingthe applicable requirements for the use that comprises the major projects square footage/where uses are attached and/or combined in a building. Notes: Majorrenovations and/or additions apply only to the area of the renonless the LEED EBOM Certified option is selected in which case the entire certification. shall *Chapter 5 of the California Green Building Standards Code (Cal Green Mandatory)requirements only be applied to elements included in the scope of a project, unless otherwise required by the California Green Building Standards Code. 16.58.230 Section 101.10.2 Added Add Section 101.10.2 to read as follows: The applicant may request to apply an 101.10.2 Alternate green building standards. alternate green building reference standard for a project in lieu of the minimum standards per Table 101.10. In making a determination in response to an applic Building Official may allow an alternate reference standard if he/she finds that the proposed alternative reference green building rating systemcomplies with all of the following: A.Addresses a comprehensive scope of green building issues includi water efficiency, resource efficient materials, and healthy building practices; B.Applies standards that are, when taken as a whole, as stringent standards; C.Includes a formalized certification process that incorporates th D.The project will advance the purposes of this Chapter. 16.58.240 Section 102.3 Amended Amend Section 102.3 to read as follows: 99582.2 153 Documentation of conformance for applicable green building 102.3 Verification. measures shall be provided to the City of Cupertino. Verification that the project meets the applicable environmental standards occurs through either the Thi requirements in Table 101.10. The following lists the verificat verification, and alternative methods: A.Third Party Certification.A project will be required to meet the Third Partycertification process if the Citydetermines that the project meets or exceeds the applicable thre listed in Table 101.10. The applicant shall submit all of the following to the City,in addition to other application requirements, to assist the Cityin determination compliance with the green building requirements: a.Planning Application. A green building checklist that includes cross-references to appropriate locations in the construction documents for all prerequisites and selected points or creditsthatdemonstrates that the proposed project meets the applicable minimum requirements. b.Building Permit. i.Proof of project registration with administrating body of the ap standard, and ii.A green building checklist that includes cross-references to appropriate locations in the construction documents for all prerequisites and selected points or credits; thatdemonstrate that the proposed project meets the applicable minim requirements, and c.Green Building Deposit.The green building deposit in an amount that may be set from time to time by resolution of the City Council. The applicant may provide th deposit in the form of cash or in any other form that the City fable to meet the purposes of this Section. The full amount of the deposit sha the certification document being provided per 102.3 (A)(c). If does not meet the requirements of this Chapter, as applied to ththen the City shall retain the full amount of the deposit, and shall use advance the purposes of this Chapter. d.Time Limit. Within 18 months of Final Occupancy Provide certification document for LEED, GPR or alternate rating standard in a form accepted by the City per Table 101.10.The Building Official may grant a one-time 6-month extension. 16.58.260 Section 102.3.1 Added Added Section 102.3.1 to read as follows: The Building Official shall determine the maximum feasible 102.3.1 Exemptions. threshold of compliance reasonably achievable for the project. the requirements of the California Green Building Standards Code as amended by the City of Cupertino shall meet the requirement in section Aand at least oneof the requirements in sections B-D: 99582.2 154 A.Projects that demonstrate that it is not feasible for the projec building requirements and that the purposes of this chapter will to the maximum extent possible shallbe exempted only for the specific rating system prerequisite that has been determined to be infeasible. B.Projects that demonstrate compliance with this code but which will conflict with the Cupertino General Plan and/or Municipal Code Ordinance, such as those requiring historic preservation as determined by the Director of Community Development;or C.Projects that demonstrate compliance with this code but which will conflict with the California Building Standards Code; or D.Projects with atypical energy-related design requirements and/or patterns of use that make compliance with the thresholds of this code infeasible. 16.58.280 Section 202 Amended Amend Section 202 to add or amend the following definitions: A.Building Envelope meansthe separation between the interior and the exterior environments of a building in order to provide structural integr temperature control, and air pressure control. The principal ph building envelope include the foundation, roof, walls, and windows. B.Decision maker means the person or entity with final approval underlying project. C.Green Building Checklist means a checklist, typically with prerequisites and credits and/or points that is developed by the administrators of green building certification systems and used to determine whether a development project can . D.Green Point Rated (GPR) means a residential green building rat Build It Green. Projects can use any of the adopted GPR checklists that most appropriately apply to the project type proposed. E.Leadership in Energy and Environmental Design (LEED) means a g system developed by the U.S. Green Building Council for resident-residential projects. Projects can use any of the adopted LEED checklists th to the project type proposed. F.MinimumGreen Building Requirement meansthe minimum green building requirement that applies to a particular project, as listed in column 2of Table 101.10. G.Required Verification means the standards that correspond to the requirem particular green building rating system and project type,aslisted in column3of Table 101.10,forwhich verification procedures are fully set forth in Section 102.3. H."Feasible" means capable of being accomplished in a successful m period of time, taking into account economic, environmental, soc factors. 16.58.290 Section 303.1.1 --Amended Amend Section 103.1.1 to read as follows: The provisions of this code shall apply to the applicable 303.1.1 Tenant improvements. tenant or occupant improvements to a project. 99582.2 155 16.58.300 Section 4.304.1.1 Added Add Section 4.304.1.1 to read as follows: Residential 4.304.1.1 Compliance with local water-efficient landscape ordinance. projects must comply with the City of Cupertinos Landscape Ordi 14.15 of the Cupertino Municipal Code. 16.58.310 Section 5.304.1.1 Added Add Section 5.304.1.1 to read as follows: Non-residential 5.304.1.1Compliance with local water-efficient landscape ordinance. projects must comply with the City of Cupertinos Landscape Ordi 14.15 of the Cupertino Municipal Code. 99582.2 156 ExhibitB Findings for Amendments to the California Green Building Standar In accordance with the Health and Safety Code Sections 17958, 17 City Council must make findings for each proposed local change ts of the California Building Standards Code, including green building its determination that each such local amendment is reasonably n climatic, topographical or geological conditions. In adopting the amendments to Chapter 16.58 of the Cupertino Municipal Code pertaining to the California Green Building Standards Code, the City of Cupertino finds as follows: A.General Findings Related to Green Building Requirements in Cuper 1.Green building is a whole systems approach to the design, construction, location, and operation of buildings and structures to help miti environmental, economic and social impacts of construction, demo renovation of buildings and structures. 2.The Environmental Resources and Sustainability Element of the City of Cupertinos General Plan 2000-2020 recognizes that the communitys environmental resources are fragile, invaluable and interrelated protecting and sustaining the Citys viable ecological communities and environmental resources will result in the protection of both th natural environments. 3.City of Cupertinos General Plan 2000-2020 sets forth policies recognizing that the essential components of green building design and planning i consideration of: a.Location b.Site planning c.Energy efficiency d.Material efficiency e.Water efficiency 99582.2 157 4.The City of Cupertino previously adopted ordinances to further g building measures, including the California Green Building Stand the LandscapingOrdinance to reduce water waste, Recycling and Diversion of Construction and Demolition Waste Ordinance, and Stormwater P and Prevention and Watershed Protection. B.Findings for Local Amendments to the 2010 California Green Build Code (16.58 of the Cupertino Municipal Code) 1.The City Council authorized staff on January 19, 2010 to proceed development of a green building ordinance incorporating green bu measures. 2.Green building is a whole systems approach to the design, construction, location, and operation of buildings and structures to help miti environmental, economic and social impacts of construction, demo renovation of buildings and structures. 3.The Environmental Resources and Sustainability Element of the City of Cupertinos General Plan 2000-2020 recognizes that the communitys environmental resources are fragile, invaluable and interrelated protecting and sustaining the Citys viable ecological communiti environmental resources will result in the protection of both the human and natural environments. 4.City of Cupertinos General Plan 2000-2020 sets forth policies recognizing that the essential components of green building design and planning i consideration of: a.Location b.Site planning c.Energy efficiency d.Material efficiency e.Water efficiency 5.California Assembly Bill 32 (Global Warming Solutions Act of 200 and Safety Code §38500 et seq.) requires actions on the part of local governments to significantly reduce greenhouse gas (GHG) emissions such that statewide GHG emissions in 2020 are lowered to 1990 le 6.Green building regulations further the Sustainability Principles Plan involving building and land development, disposal of constr 99582.2 158 demolition debris, storm water quality and floor protection, tree pr water conservation, landscaping and resource conservation. 7.Built It Green is acknowledged in promoting and defining residen building by development of its Green Point RatedRating System. 8.The Green Building Certification Institute (GBCI) administers the U. Building Councils LEED (Leadership in Energy and Environmental Rating System. 9.Green building techniques are widespread in residential and non-residential building construction, and such techniques can impact the Citys environment, greenhouse gas emissions, resource usage, energy ef water usage, waste management, and the health and productivity of residents, workers and visitors over the life of the building. 10.Requiring green building measures is necessary to achieve public welfare benefits to the community. 99582.2 159 CITY OF CUPERTINO 10300 Torre Avenue Cupertino, California 95014 DRAFT RESOLUTION NO: 12- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO ADOPTING USER FEES FOR THE GREEN BUILDING STANDARDS CODE ADOPTED(CHAPTER 16.58 OF THE CUPERTINO MUNICIPAL CODE). WHEREAS, the State of California requires fees charged for services rendered not to exceed the cost of delivering said services; and WHEREAS, a public hearing has been held to review user fees; and WHEREAS, the City Council of the City of Cupertino has established guidelines for setting user fees; and WHEREAS, the City of Cupertino has amended the Green Building Standards Code Adopted Ordinance(Chapter 16.58 of the Cupertino Municipal Code)for incorporation of green building requirements; and WHEREAS, user fees in the form of green building deposits are needed to be established to meet the requirements of the Green BuildingStandards Code AdoptedOrdinance and shall be used solely to advance the purposes of green building. NOW, THEREFORE, BE IT RESOLVED that: 1.Green Building Standards Code Adopted Ordinance user fees are established per amendment in Exhibit A. 2.User fee is effectiveApril 1,2013. PASSED AND APPROVEDat a regular meeting of the City Council ofthe City of Cupertino this 4th day of September, 2012by the following vote: VoteMembers of the City Council AYES: NOES: ABSTAIN: ABSENT: ATTEST:APPROVED: Grace SchmidtMark Santoro City Clerk, City of CupertinoMayor, City of Cupertino 160 CITY OF CUPERTINOExhibitA Resolution 12-033,12-xxx Fees Effective July 1, 2013,April 1, 2013 Schedule C--Planning Fence Exception$666.00 Variance $2,616.00 Director -Minor Modification$1,171.00 Conditional Use Permit -Administrative $3,469.00 Reasonable Accommodation $510.00 Tree Removal Permit First Tree$168.00 Each Additional Tree$85.00 Retroactive Tree Removal Permit$2,996.00 Tree Management Plan$1,171.00 Heritage Tree Designation $100.00 Temporary Use Permit $1,338.00 Temporary Sign Permit (See Definition G)$196.00 Sign Program $671.00 Appeals (See Definition E)$170.00 Zoning, Planning, Municipal Code (Building Permit Fees) Non-Residential/Multi-Family$0.27/sq. ft. Residential Single Family$0.13/sq. ft. General Plan Office Allocation Fee $0.25/sq. ft. Wireless Master Plan Fee: Equipment Mount on Existing Light Utility Pole$6.00 Wireless Master Plan Fee: Other Personal Wireless Facility$1,217.00 Housing Mitigation In-Lieu Fees (See Definition J) Residential$2.81/sq. ft. Office/Industrial/Hotel/Retail/R&D$5.33/sq. ft. P(MP)$2.67/sq. ft. Zoning Verification Letter$176.00 2 161 Public Convenience and Necessity Letter (Alcoholic Beverage License)$176.00 Green Building Deposit -Third Party Certification Process Single-Family Residential$2/sq. ft., max $1,000 Multi-Family Residential$2/sq. ft., min. $20,000/max. $40,000 Non-Residential$2/sq. ft., min. $35,000/max. $75,000 Applications may be subject to an hourly fee of $133.00, for applicable staff time, for cost recovery. This hourly rate applies to large projects that require a level of staff support greater than the scope of work included in the regular fee schedule and will be based on the time required to process the entire project. The applicant will be notified if this fee is applicable to their project. 162 163 164 Attachment D -Summary of the public process The following is summary account of the public events that have occurred up to this point: June 7, 2010: The City held its first Green Building Ordinance Focus Group meeting at De Anza College’s LEED Platinum Kirsch Center. The meeting was attended by over 60 participants, and included a tour of the Kirsch Center, a presentation on the purpose and concepts of green building and the Phase II recommendations, and small group discussion sessions to encourage participants to provide input on elements of the green building ordinance. July 13, 2010: In order to respond toparticipants’ comments to better understand the green rating systems under consideration, the Planning Commission held an educational workshop. The workshop included a presentation by Shiloh Ballard of Silicon Valley Leadership Group who provided an overview of the Phase II recommendations. Additionally, David Kaneda, Cupertino Planning Commissioner, provided an overview of the upcoming Cal Green building codes, the state’s new green building code requirements for new construction effective on January 1, 2011. July 29, 2010: The City held its second Green Building Focus Group meeting, a draft Green Building Ordinance was presented to participants and the core elements of the draft ordinance were discussed. , October 12, 2010October 16, 2010, November 9, 2010: The Planning Commission public hearings February 1, 2011, May 3, 2011: City Council public hearings. The council reviewed the GBO and recommended additional time (one-year) be given to facilitate more public review and input opportunities. August 1, 2012: In accordance with the Council direction, the GBO public process has been re- initiated after a year has passed from the previous Council consideration in May 2011. The City held its third Green Building Focus Group meeting. 165 Previous City Council Directions from May 2011: On May 3, 2011, after reviewing the draft Green Building Ordinance, the City Council requested that at least one year be given to ensure that the public has additional time to review and provide comments. After which the City Council will considered it for adoption with the following directions: 1.Exempt all residential (single-family and multi-family) new construction developments of less than 9 units. 2.Modify the mixed use language in Section 16.58.220 (Table101.10) of the Draft Ordinance to read: For new and renovation/addition projects with residential and non-residential components, the use shall comply by either: A.Meeting the applicable requirements for each use; or B.Meeting the applicable requirements for the use that comprises the majority of the project’s square footage. 3.Modify the Fee Schedule for Third Party Certification to reflect the following: Project TypeRequired Deposit Single Family$2/sq. ft., max $ 1,00 Multi-Family Residential$2/sq. ft., min. $ 2,000/max. $40,000 Non-Residential$2/sq. ft., min. $35,000/max. $75,000 4.Place the Draft Ordinance on the City’s website and conduct additional public education and outreach to allow the public to review and comment on the draft ordinance. 166 BERG & BERG DEVELOPERS, INC. 10050 Bandley Drive Cupertino, CA 95014-2188 Ph (408) 725-0700 Fax (408) 725-1626 mcrawford@missionwest.com 1/29/11 Mayor & Council Members City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Ph 408-777-3308 3251 Fax 408-777-3333 cityclerk@cupertino.org;manager@cupertino.org;planning@cupertino.org;building@cupertino.org; citycouncil@cupertino.org Aki Honda Snelling at 408.777.3313 or akis@cupertino.org. Dear Mayor & Council Members, Reference: Proposed Green Building Ordinance & Cal Green Buildi Subject: Objection To Imposition Of Muncipal Mandatory Green Bu In Excess Of The and Objections To California Green Building Standards Code Provisions in the Cal Green Building Code Objections To City Council Agenda September/October 2012 Aki Snelling & Council Members, We remain even more opposed to this proposed ordinance after rea report. Not only are you saddling us with the administration Lee you impose a $2/sf deposit on non residential buildings. Are you LEEDS consulting compliance fees are equal or greater than the a addition to that are the jobsite and administration costs, you a unnecessary cost burden. WE OBJECT STRENUOUSLY TO ANY AND ALL REQUIREMENTS IN EXCESS OF T CAL GREEN BUILDING CODE AND TO SOME PROVISIONS IN THE CAL GREEN The State of Californian Building Standards section explicitly s green building code WOULD NOT apply to any existing non resident would not apply to any TI in an existing non residential buildi any existing non residential shell building or to any initial o alteration in that building. You should not require anything bey requirements. You can contact the state representative listed b residential buildings: Enrique Rodriguez Associate Construction Analyst State of California Building Standards Commission 2525 Natomas Park Drive, Suite 130 167 Sacramento, CA 95833-2936 Ph (916) 236-0845 Fax (916) 263-0959 enrique.rodriguez@dgs.ca.gov Other objections we have to the Cal Green Building Code are: A number of Cal Green requirements amount to political pandering unnecessary additional costs. We have never seen a memo from the recommends reducing cost and expenses for citizens, why doesnÔt council approved bonus plan for employee suggestions that when reduce cost for the citizens. If you are going to save jobs, yo costs with everything you do. You should create an Economic Ombu committee that reviews proposed polices and ordinances for econo before they move forward. 1)Bicycle Parking We have definite objections to required bicycle parking. a.I was by the City of Santa Clara the other day and looked around City Hall office complex. They had 4 or 5 bicycle racks and ever was empty. They have 16 covered bike stalls that may have been o half empty. They have roughtly 538 stalls including 87 on the st their visitors use extensively as the streets are vehicle friend most they had 3% of their parking used by bicycles. They probabl hundred employees working there. They donÔt have any significant bicycle parking in the heart of a city with a stable employee ba baseless then to require the percentages of bicycle parking bei the proposed code. If a City Hall complex doesnÔt generate any s bicycle demand there certainly isnÔt going to be any significant industrial park in south San Jose or anywhere else where any sig residential is miles away. b.If the employers have a demand for bike racks from employees th in but no more than one temporary bike rake should be required. parking demand arises then you could require that bicycle parkin by converting required vehicle parking stalls as necessary. c.Where is it written that you have to provide covered parking for or a even $1500 bicycle but not a $20,000 $30,000 or $40,000 au $20,000 Harley Davidson. Covered parking should not be required this is a totally ridiculous requirement. d.Providing covered bicycle parking creates more impervious surfac runs counter to stated public policy of minimizing impervious su e.We donÔt oppose those that ride bicycles but, be reasonable and 2) Parking & Clean Air Vehicles Ï Marking Spaces For ÑClean Air V ludicrous for several reasons a.All electric vehicles are not clean air vehicles or zero emissio to 80% or more of the electricity used for a vehicle recharge co or hydrocarbon fueled power plants. All you have done using an e is just transfer the point of origin of the fossil fuel pollutio will be moving more towards plug inÔs which again merely transfe which pollution occurs. 168 b.The true zero emissions vehicle is one powered by pure hydrogen but there are currently only two economical ways to obtain hydr reforming from hydrocarbons and that has CO2 as a byproduct and Electrolysis is only economical when you have excess electrical nuclear power plants that can produce hydrogen in off hours as t France. The nuclear fuel cost is free for off hours electrical nuclear fuel rods decay at the same rate regardless of whether used or not. There is wear and tear on the mechanical equipment true in all electrical generation. If cities, states and environmentalist were truly concerned with curbing CO2 and fossil fuel use they would be promoting and sup nuclear power. c.A good majority of the hybrid vehicles are imported which have k significant number of your citizens out of jobs, decreased your caused you to lay off employees, caused needed infrastructure im maintenance to be deferred or totally canceled. While some forei vehicle manufacturers assemble here, they import the high value engines and transmissions. Assembly of a vehicle only requires 1 man hours. d.A good number of the imported vehicles come in from countries th barriers to US manufactured goods but benefit from easy US impor eliminating job creation here. e.Requiring striping and lettering for Ñclean air vehiclesÒ is u initial cost and requires ongoing extra maintenance costs. If you want to do something for clean air and the economy start put some effort to promoting nuclear fueled power production and impediments to it. Be honest with yourself. 3) Water Meters a.Requiring water meters for individual tenants is totally ridicul the cases you are dealing with individual office worker needs no Individuals need water, they are going to use water and just bec to see a water meter in the tenant space that does not guarantee or employees will look at it or even pay that much attention to demand for water is driven by personal needs not cost or consump employee not going to use the restroom because they just looked meter? b.We had one of the plumbing designer/contractors that has done a for the company take a look at what you are proposing based on a facility of 67,500 sf and looked at the water demand and costs b 1. The first floor of 33,750 sf would generate 169 employees u gallons per day for showers and roughly 3000 gallons per day for needs. Roughly 56 people or 11,290 sf generate 1000 gallons per of shower use. The new code requires a meter for every tenant sp consumption of 100 gallons per day. b 2. Each additional meter and piping would cost $1500 to $2000 b 3. There would be additional maintenance cost. b 4. There would be additional cost for meter reading and admini 169 The requirement for separate water meters is simply not justifie educate employees about conservation of water, then educate them property owners with extra meter costs. Your code provisions won conservation because you have more water meters in a building, y heaping more unnecessary costs on building owners for no valid r 4)Material resuse and recycling requirements Instead of going to the dumps and landfills and making them mee documentation and meet goals on diversion and recycling, the Ci every permitee post deposits, generate a demo diversion plan, r and then finally get a deposit back, all of which consumes a s administration and lost interest cost to the permitee. In addit significant amount of administration running the program. I woul City several hundred dollars to a thousand to write the refund c add all the program administrative cost in. It would be more eff the landfills and leave the permittess alone. When you impose re landfills they will in turn set their pricing in ways that will comply with diversion and recycling without all of the unnecess costs the City is now causing. PermitteeÔs may or may not compl City program but if the landfills are required to comply, the pe complying by proxy, and if the non permitteeÔs dump down some ca canÔt control that anyway. Our field superintendents already respond to the landfill prici costs them more for non segregated material or incentivizes them waste disposal or recycling credit. DonÔt make hundreds of thousand permitteeÔs and City employees h administrate and generate reports when you can accomplish the sa regulating a handful of land fills and waste facilities. 5)Requiring documentation for ongoing systems maintenance is simpl of overkill. 6)There should not be any incentives; expedidited plan checks or F any other incentive of any kind for projects that exceed Cal Gr disincentives of for any project that just meets Cal Green. Any methods or materials should be based strictly on market economic discretion of the developer or building owner. Any methods or ma require incentives; which amount to subsidies, are not economica should not be mandated nor incentivized. Just look at the Solyndra snafu in Fremont, CA where the US Gov $535 million underwriting a failed solar manufacturing project. viable it does not need a subsidy. 7)Politicians and local bureaucratics talk about Ñyou canÔt export that is something great. ThatÔs like saying we can keep everyon everyone taking turns selling each other hamburgers in fast food by the Chinese and Japanese that they bought with profits made f Americans, automobiles, machinery and electronics and electronic government officials should start helping business by scrapping building ordinance and start thinking about how you can reduce t 170 business in the USA. The Cal Green Code should be scrapped as we some very ridiculous requiements in it as well. 8)You need to do something that changes the tide so that the USA i automobiles, machinery and electronics and electronic parts to t Japanese and other countries not the other way around. Please keep in mind the following quotations, facts and comments 1.IntelsaysitcoststhemabillionmoretobuildasemiconductorplantintheUSAthanelsewhereintheworld 2.TJRodgersofCypressSemiconductorsaysitisnotthecostoflaborthatiskillingUSAindustryitisthe heapingonofgovernmentregulations. 3.SteveJobstoldPresidentObamathatAmericanregulationsmakeitmoredifficultforAppletobuildits productscheaplyintheUnitedStatescomparedtothecostofbuildingtheminChina.Chinesehealthand safetystandardsaremorelaxthantheUnitedStates 4.LuigiSciabarrasiofSymantec‘5š“x·putmaximumsonparkingweareputtingmoreemployeesintosmaller andsmallerareaseveryyear,weneedmoreparkingnotless 5.ThisSeptember2010N&OreportabouttheHollySprings,NCfurniturecompanyOFMshowswhysolarisso popularandwhyitissuchabaddealfortaxpayersandratepayers. Accordingtothenumbersinthestory,wecanmakearoughcalculationofwhopaysandwhobenefits.First, OFMgetsthetaxpayerstopayforhalfofthecostofthesolarequipment.(Halfof$1.4millionis$700,000.) ThenOFMreceivestaxpayerpaidtaxbreaksworth$170,000.ThenProgressEnergyratepayerspayOFM18 centsperkilowatthourforelectricityproducedbythesolarpanels,andOFMbuyspowerfromProgress Energyfor6centsperkilowatthourtorunitsfacilityforanetprofitof12centsperkilowatthour.Over20 years,thisisa$1.2million{¦©šEz·|fromProgressEnergyinflictedonratepayersbythelegislaturewhenit passedS.B.3. WemustrememberthatOFMmustpayforonehalfofthecostofthesolarpanels,butsubtractingthe $700,000costfromthetotalsubsidiesabove($2.070million),OFMgetsacool{¦©šEz·|afterthatexpenseof $1.37milliontoitsbottomlinecourtesyoftaxpayersandProgressEnergyratepayers. Andthatisnotall.OFMandotherbusinessesthatparticipateinthisfleecingoftaxpayersandratepayersget glowingmediareportslikethisAug.2reportindBusinessNews.com. 6.Californiagovernmentmandatesdesignedtostimulaterenewableenergymeanthatutilities"arecommitted tospendingandtheirratepayerstofinancingatleast$6billioninabovemarketpowercosts,withmore tocome,"accordingtocolumnistDanWalters.ElectricbillsforU.S.consumersskyrocketedinthepastfive years,adding$300ayeartohouseholdcosts,USATodayreported.Sowhenyoumandatesolarpoweryou arelikelyrequiringaratepayerthatcannotaffordasolarinstallationtohavepayfor;inhigherelectricrates, amoreaffluent©·;¦ä;©x­newsolarsystem. 7.Governmentactionscanhavesignificantimpactsontheeconomyandonthelivingstandardsofitscitizens. a.CalifornialegislatorsmandatedMTBEgasolineadditivesresultingreducedfueleconomy,tremendously expensiverefinerymodificationsbothtostartproducingMTBEgasolineandthentoceaseproducingit.On topofincreasingdirectfuelcostsforitcitizensMTBEalsoresultedinpoisonedwatersuppliesand tremendouscleanupcosts. b.ReganpreventedthesaleofUSACaterpillarequipment,andUSApipelineboosterplantequipmentforthe {wÒ­­z“Gastz¦;Œz“;|uThenetresultwastheRussianpipelinelinestillgotbuiltbutJapanandotherforeign countriespickedupthebusinessandinadditiontheAmericancompanieslikeCaterpillarandGeneral Electricthenhadmoreformidablecompetitorstodealwithafterthepipelinewascompleted.Welostjobs, futurereplacementequipmentsalesandwealthunnecessarily. 171 8.Governmentcan,willanddoesmakemistakesandverycostlyones. As you can see the Cal Green Code is adding additional and unnec as a result of political reasons and pandering to environmental add additional mandatory requirements. Please do look at these C requirements and start working on eliminating a number of these Green requirements. Thank you for your consideration, Myron Crawford 172 Submitter DB ID : 2039 Submitter's language : Default language IP address : 98.234.28.1 Time to take the survey : 10 min. , 32 sec. Submission recorded on : 6/4/2011 6:06:03 AM Survey answers ----------------------------------------- Your comments related to the Draft Ordinance: I would encourage the policy makers of Cupertino to place the two requiements on single family residential: 1. pre-plumb and pre-wire for future solar systems, with exemptions approved by building official when because of siting, size or other reasons a solar system would not be practical. A good example would be in the Municipal Code of Chula Vista, Ca. 2. size electrical panel and install a conduit in the garage or carport to accomodate a 240V-40amp breaker, dedicated ciruit and terminal box for the sole purpose of charging plug-in electric vehicles. (comment)...both of these measures add very little to the material and labor expense when building a new unit.However, waiting and modifying and permitting for these types of pro-active installations are very costly and time-consuming for future homeowners. Section Number(s) related to your comments: Not answered Your contact information: Name: James helmer Email address: albacreek@comcast.net Phone number: 831 336 5012 173 Submitter DB ID : 2252 Submitter's language : Default language IP address : 68.122.228.30 Time to take the survey : 5 min. , 52 sec. Submission recorded on : 12/1/2011 11:31:38 AM Survey answers ----------------------------------------- Your comments related to the Draft Ordinance: Referring to the Green Building Phased Table: Non-Residentail New Construction, it is mandated by Building Code to meet Calgreen Requirements Mandatory Requirements; can the City ask for a TIER 1 or TIER 2 instead of LEED for larger buildings? By requiring LEED, the owners/ architects would have to provide two documentations ( Calgreen for Building Department & LEED for Green Building) thereby significantly increasing cost to owner. Section Number(s) related to your comments: Green Bldg. Phased TOR Your contact information: Name: ANU SUMANTH Email address: asumanth@thehayesgroup.com Phone number: 650-365-0600 (x20) 174 175 176 177 178 179 180 181 182 Revised Green Building Requirements Summary Type of ProjectMay 3, 2011 CC DraftGreen Building Revised Green Building Requirements Requirementswith redlines Residential –New Single-Family & Multi-Family <9 homes:Single-Family & Multi-Family<9 homes: Construction ExemptExempt (Single Family & ________________________________________________________________________ Multi-Family) SF R & MFR > 9 homes:SF R & MFR > 9 homes: Minimum: Minimum: GPR min. 50 pts or LEED Silver GPR min. 50 pts or LEED Silver w/Third Party Certificationw/Third Party Certification Alternate Reference Standard: Alternate Reference Standard: Third Party Third Party CertificationCertificationSee Section 101.10.2 Residential – Single-Family (renovation):Single-Family (renovation): Renovation/ ExemptExempt Addition (Single-Family & Multiple-Family (minor renovation) Multiple-Family (minor renovation) Multi-Family) ExemptExempt 183 Type of ProjectMay 3, 2011 CC DraftGreen Building Revised Green Building Requirements Requirementswith redlines Multiple-Family (major renovation)Multiple-Family (major renovation) –– Renovations and/or additions with a Floor Area Renovationsand/or additions with a Floor Area Ratio (FAR) increase >50% and atleast 10,000 Ratio (FAR) increase >50% and at least 10,000 square feet, and replace or alter the HVAC square feet25,000 square feet, and replace or system and at least two of the following: alter the HVAC system and at least two of the building envelope, hot water system and following: building envelope, hot water system lighting system:and lighting system: Minimum: GPR min. 50 pts or LEED Minimum: Certified (applicable only to the area of GPR min. 50 pts or LEED renovation/addition) w/City Review or LEED Certified (applicable only to the area of EBOM w/Third Party Certification.renovation/addition) w/City Reviewor LEED EBOM w/Third Party Certification. Alternate Reference Standard: Third Party Alternate Reference Standard: CertificationThird Party CertificationSee Section 101.10.2 Non-Residential –New Small, equal or less than 10,000sq. ft.:Small, equal or less than 10,00025,000sq. ft.: Construction Minimum: CALGreen Mandatory*w/City Minimum: Review CALGreen MandatoryBuilding Code*w/City Review Alternate Reference Standard: Third Party Alternate Reference Standard: CertificationThird Party CertificationSee Section 101.10.2 Mid-size, 10,001 sq.ft.-50,000 sq. ft .:Mid-size, equal or greater than10,001 sf 25,000-to 50,000 sq. ft.: Minimum: Minimum: LEED Certified w/City ReviewLEED Certifiedw/ Third Party Certificationw/City Review Alternate Reference Standard:AlternateReference Standard: Third Party Third Party CertificationCertificationSee Section 101.10.2 __________________________________ Large, greater than50,00150,000or more Large, 50,001 or more sq. ft.: sq. ft.: Minimum: LEED Silver w/ Third Party Minimum: LEED Silver w/ Third Party Certification Certification 184 Type of ProjectMay 3, 2011 CC DraftGreen Building Revised Green Building Requirements Requirementswith redlines Alternate Reference Standard: Alternate Reference Standard: Third Party Third Party CertificationCertificationSee Section 101.10.2 Non-Residential -Minor Renovations/Additions:Minor Renovations/Additions: Renovations/Additions Minimum: Minimum: CALGreen Mandatory* w/City CALGreen MandatoryBuilding Review Code*w/City Review Alternate Reference Standard:Alternate Reference Standard: Third Party Third Party CertificationCertificationSee Section 101.10.2___________________________ _________________________________ Major RenovationMajor Renovation** –Renovations and/or –Renovations and/or additions that comprise at least 10,000 square additions that comprise at least 10,00025,000 feet, and replace or alter the HVAC system and square feet, and replace or alter the HVAC at least two of the following: building system and at least two of the following: envelope, hot water system and lighting building envelope, hot water system and system.lighting system. Minimum: Minimum: 10,000 -50,000 sq. ft. --LEED 10,000 –50,000 sq. ft. --LEED Certified (applicable only to the area of the Certified (applicable only to the area of the renovation/addition) with City Review or renovation/addition) with City Review or LEED EBOM w/Third Party CertificationLEED EBOM w/Third Party Certification Minimum: Minimum: 50,001 sq. ft. or more –LEED 50,001 sq. ft. or more–LEED Certified (applicable only to the area of the Certified (applicable only to the area of the renovation/addition) w/Third Party renovation/addition) w/Third Party Certification or LEED EBOMw/Third Party Certification or LEED EBOM w/Third Party CertificationCertification Alternate Reference Standard:Alternate Reference Standard: Third Party Third Party CertificationCertificationSee Section 101.10.2 Note: While CalGreen Building Code requirements would be triggered for valuation, the Draft Ordinance requires that CALGreen Building Code requirements be met by all minor non- residential renovations. 185 Type of ProjectMay 3, 2011 CC DraftGreen Building Revised Green Building Requirements Requirementswith redlines Mixed Use Projects For new and renovation/addition projects with For new and renovation/addition projects with residential and non-residential components, the residential and non-residential components, the use shall comply by either:use shall comply by either: 1.Meeting the applicable requirements 3.Meeting the applicable requirements for each use; orfor each use; or 2.Meeting the applicable requirements 4.Meeting the applicable requirements for the use that comprises the majority for the use that comprises the majority of the project’s square footage.of the project’s square footage/where uses are attached and/or combined in a building. Note: *CALalGreen Mandatory Building Coderequirements shall only be applied to elements included in the scope of a project, unless otherwise required by the California Green Building Standards Code. 186 COMMUNITY DEVELOPMENT DEPARTMENT CITY HALL 1010300 TORRE AVENUE •CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3308 www.cupertino.org CITY COUNCIL STAFF REPORT Meeting: May 3, 2011 Subject Green Building Ordinance, MCA-2010-04, andamendment to the City's Fee schedule Recommended Action 1.Conduct first reading of Ordinance No. 11-2076amending Chapter 16.58 of the Cupertino Municipal Code, Green Building Standards Code Adopted(Attachment A); and 2.Adopt draftResolution11-amending the City’s adopted Fee Schedule to incorporate Green Building deposit fees(Attachment B). Description Application: MCA-2010-04 Applicant: City of Cupertino Location: Citywide Application Summary: Municipal Code Amendment to adoptan ordinanceamending Chapter 16.58 of the Cupertino Municipal Code, Green Building Standards Code Adopted (See Attachment A, Ordinance No. 11-2076) and adopt related fees and deposits (See Attachment B, DraftResolution). BACKGROUND On February 1, 2011, the City Council reviewed the draft Green Building Ordinance and directed staff to: 1.Revisethe draft ordinanceto be consistent with the Santa Clara County Cities Associations’ Phase II Recommendations and the additional changes that Council discussed; and 2.Provide acost analysis of representative projects, including asingle-family, multi-family and office development, whichprovideestimates of the total cost of development, including the additional cost to comply with the proposed Green Building Ordinance requirements(Attachment D). Public comments received duringand subsequent tothe public hearing included: 187 Clarify when and what part of a remodeling project is subject to theordinance requirements; for renovations and additions, requirements should only apply to the scope of the work. The draftordinanceexceeds the Cal Green building code standards and can make the cost of a development project infeasible. Verification requirements could affect the tenancy of buildings if the requirement thresholds are so low that it will affect whether tenant improvements and upgrading can take place. Certification costs add significantly to the development costs for commercial developments, including the additional administration, architectural design and time costs to construct a project. Do not provide incentives that reduce parking requirements or increase floor area ratio allowances. Ordinance should not exceed the Cal Green building code standards, and should not apply to tenant improvements. Since the February 1, 2011 Council meeting, the City has becomeaware that some local cities, including the Cities of Mountain View and Palo Alto, have recently merged their green building ordinances with their locally adopted 2010 California Green Building Standards Code (Cal Green). This was essentially done as a result of thenew Cal Green building codes thattook effect on January 1 of this year. Merging these two codes essentially allowed them to integrate all of the green building measures into one ordinanceand preventshaving to subsequently amend the green building ordinance requirements every time the Cal Green building codes are amended. Additionally,the changemoves the green building measures into the local building codes. Merging of these two codes would basically entail amending Chapter 16.58 of the Cupertino Municipal Code, and makinglocal amendments to the Cal Green building codesto reflect the Green Building Ordinance requirements. DISCUSSION The combined draft ordinance (See Attachment A, Ordinance No. 11-2076)merges the Green Building Ordinancethatthe Council had reviewed at its February 1, 2011 meeting into Chapter 16.58 of the Cupertino Municipal Code. A copy of the current Chapter 16.58 is included (See Attachment C) with strikeouts showing the sections that have been deleted. However, the key components of the draft Green Building Ordinance, including all changesrecommended by the Council,have been incorporatedand are outlined below in this report. Section 16.58.220 Table 101.10 (Requirements) The following table illustrates the progression from and a comparison of the Phase II Recommendations, the Planning Commission recommended draft Green Building Ordinance requirements, and the Revised Draft Green Building requirements per the February 1, 2011 City Council meeting. The revised changesreflect Council’sdirection to be consistent with the Phase II Recommendations and to incorporate other items discussed by Council. 188 Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion Residential –SF Single-Family & Multi- Single-Family (R) & All Single-Family and Multi- New Family < 9 homes: Multi-Family (MFR) < Family: Construction 9 homes: Minimum: (Single GPR min. 50 pts or Minimum: GPR min. 85 pts or Family & LEED Certified w/Third Party GPR Rated (50 pts min.) LEED Certified w/Formal Multi-Certification or LEED Certified. Verification. Family) Alternate Reference Standard: Third Party Certification SF R & MFR SF R & MFR Minimum: GPR min. 50 pts or GPR Rated (50 pts min.) LEED Silver w/Third Party or LEED Silver Certification (Option: GPR min. 75 pts which is equivalent to LEED Silver) Alternate Reference Standard: Third Party Certification Residential –SF Single-Family Single-Family (renovation): R<$100K permit Renovation/existing floor area: valuation; or <500 sq.ft. AdditionExempt addition; or FAR Minimum: (Single-Cal Green increase <50%: Family & Mandatory (for new portions Multi-only) w/Informal Verification. BIG Elements checklist Family) or LEED checklist SF $100K-$200K permit valuation;or 500-1,000 sq.ft.add’n: BIG Elements 25-49 pts. or LEED Certified SF R $200K+ permit valuation; or 1,000 sq. ft.add’n; or FAR increase of 50%: GPR Rated (min. 50 pts.) or LEED Certified 189 Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion Small Multiple-Family Multiple-Family (minor Multiple-Family (minor Renovation (TBD):renovation):renovation): Minimum: GPR checklist or Cal Green Exempt applicable LEED Mandatory w/Informal checklistVerification. Multi-Family (major Multiple-Family (major Large MFR (TBD): renovation)renovation) –Renovations –Renovations and/or additions that comprise at and/or additions with a Floor GPR 50 pts. or applicable least 10,000 square feet, and Area Ratio (FAR) increase LEED Certified replace or alter the HVAC >50% and at least 10,000 system and at least two of the square feet, and replace or alter following: building envelope, the HVAC system and at least hot water system and lighting two of the following: building system.envelope, hot water system and lighting system: Minimum: Minimum: GPR min. 75 pts or GPR min. 50 pts or LEED Certified w/Informal LEED Certified (applicable Verification or LEED EBOM only to the area of Certified w/Formal Verification.renovation/addition) w/City Reviewor LEED EBOM w/Third Party Certification. Alternate Reference Standard: ThirdParty Certification Non-Small, <5,000 sq.ft.:Small, < 10,000 sq.ft.:Small, sq.ft.: Residential– Minimum: Minimum: New LEED checklistCal Green Cal Green ConstructionMandatory w/Informal Mandatory* w/City Review Verification. Alternate Reference Standard: Third Party Certification 190 Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion Mid-size, 5,000 –25,000 Mid-size, > 10,000 –25,000 sq. Mid-size, 10,001 sq.ft.– sq.ft.:ft.: 50,000sq.ft.: Minimum: LEED CertifiedLEED Certified Minimum: LEED Certified w/Informal Verification w/City Review Alternate Reference Standard: Third Party Certification Large, 50,001 or more sq.ft.: Large, >25,000 sq.ft.:Large, 25,001 or more sq.ft.: Minimum: LEED Silver w/ Minimum: LEED SilverLEED Silver w/ Third Party Certification Formal Verification. Alternate Reference Standard: Third Party Certification Non-Small projects:Minor Renovations/Additions:Minor Residential -Renovations/Additions: Renovations/LEED Checklist Minimum: Minimum: AdditionsCal Green Cal Green Mandatory w/Informal Mandatory* w/City Review Verification.(applicable only to the scope of work of the renovation/addition). Alternate Reference Standard: Third Party Certification Large w/o HVAC:Major RenovationMajor Renovation 2 of 4 –– systems are touched + > Renovations and/or additions Renovations and/or additions 10,000sq.ft.+ > permit that comprise at least 10,000 that comprise at least 10,000 valuation of $1 million square feet, and replace or alter square feet, and replace or alter permit valuation:the HVAC system and at least the HVAC system and at least two of the following: building two of the following: building LEED Certified w/o envelope, hot water system and envelope, hot water system and prerequisiteslighting system.lighting system. Large w/HVAC: 2 of 4 Minimum: Minimum: 10,000–25,000 sq.10,000–50,000 sq. systems are touched, one ft.--LEED Certified w/ ft.--LEED Certified being HVAC + > 10,000 Informal Verification or LEED (applicable only to the area of sq.ft.+ > $1 million EBOM w/Formal Verification.the renovation/addition) with permit valuation: 191 Type of Phase II Planning Commission Revised Draft Green Building ProjectRecommendationsRecommended Draft Green Requirement per the 2/1/11 Building OrdinanceCity Council Discussion City Reviewor LEED EBOM LEED Certifiedw/Third Party Certification Minimum: Minimum: 25,001sq.ft.or 50,001sq.ft.or more –LEED Certified more –LEED Certified w/Formal Verification or LEED (applicable only to the area of EBOM w/Formal Verification.the renovation/addition) w/Third Party Certification or LEED EBOM w/Third Party Certification Alternate Reference Standard: Third Party Certification Mixed Use Not AddressedFor projects with both residential Fornew and Projectsand non-residential components, renovation/addition projects each use shall comply with the with residential and non- minimum requirements stated residential components,each above.use shall comply with the mandatory measures to this code by the City of Cupertino, and with the requirements applicable to each use, and with the requirements applicable to the use that comprises the majority of the project’s permitted square footage. Note: * CalGreen Mandatory requirements shall only be applied to elements included in the scope of a project. Sections 16.58.130 and 16.58.140 Residential New Construction, Single-Family and Multi- Family Residential Tobe consistent with the Phase II Recommendation, threshold levels have been increased to differentiate between less than 9 homes (whether single-family or multi-family) and 9 homes or more. To be consistent with the Phase II Recommendation, the Minimum Requirement has been lowered from 85 Green Point Rated (GPR) points to 50 GPR points. However, the LEED requirements remain the same as the Planning Commission recommended for the two threshold levels of development. Option to New Construction, Single-Family and Multi-Family Residential As proposed, the minimum Phase II LEED requirement for 9 homes or more is either 50 GPR points or LEED Silver. However, given that 50 GPR points fall short of theLEED Silver certification level (75 GPR pointsequivalent),the Council couldconsider an option to raise the minimum GPR points to 75 pointsto make the GPR and LEED points comparable. 192 Sections 16.58.160 through 16.58.180 Non-Residential New Construction Modify the mid-size new construction threshold requirement from 10,001-25,000 square feet to 10,001–50,000square feet, and the large-size new construction threshold to 50,001 or more square feet. Section 16.58.150 Residential, Renovation/Addition Exempt all single-family and minor multiple-family renovations/additions from the ordinance requirements. Modify the requirements defining major multiple-family renovations/additionsas an increase to the floor area ratio (FAR) greater than or equal to 50%,and at least 10,000 square feet,and replacement or alteration of the HVAC system and at least two of the following: building envelope, hot water system and lighting system. Section 16.58.190 through 16.58.200 Non-residential, Renovation/Addition Modifythe threshold level requirements from 10,001-25,000 square feet to 10,001–50,000 sq.ft.square feetrequiring LEED Certified with City Review, and 50,001 or more square feet requiring LEED Certified with Third Party Certification. Section 16.58.210 Mixed-Use The City’s green building consultant, Global Green, recommends that we further clarify the requirements for mixed use projects by adding language that states the applicable requirement shall be the requirement for the use that comprises the majority ofthe project’s square footage. This would eliminate the need for applicants and staff to track two separate checklists, one for residential requirements and another for non-residential requirements, which could become cumbersome to manage. The wording would be amended to add the italicized wording as follows: “For new and renovation/addition projects with residential and non-residential components, each use shall comply with the mandatory measures of the California Green Building Standards Code and any amendments to this code by the City of Cupertino, and with the requirements applicable to the use that comprises the majority of the project’s permitted square footage.” Section 16.58.230 Alternate green building standards Alternate green building standards section has been incorporated based upon the previous draft Green Building Ordinance. Changes include moving the approval authority of alternate standards to the Building Official as other cities have done by moving these regulations to the building code;removing the reference of alternate standard examples since these may change over time and new standards may be developed; and removing the required finding that the “project will meet or exceed the applicable minimum and/or exemplary standards” since exemplary standards have been removed and it is difficult to equate one standard to another. Section 16.58.240 Verification This section has been revised to replace referencesto “Formal Verification” with “Third Party Certification” and “Informal Verification” with “City Review.These references have 193 also been replaced throughout the ordinance in Table 101.10. This clarification has been made to more accurately identify the process and requirements that a project will either require review by the City or certification through a third party rating system to meet the verification requirement. Green Building Refundable Deposits/Fee Schedule In the resolution (See Attachment B, Resolution to amend the Fee Schedule) to amend the Fee Schedule, the Council recommendedto: Halve the Planning Commission recommended deposits for Third Party Certificationand for Single-Family Residential City Review, resulting in: Green Building Deposit –Third Party Certification Project TypePlanning Commission Revised Deposits per 2/1/11 RecommendationCouncil discussion Single-Family$2/sq.ft., max. $2,000$2/sq. ft., max $ 1,000 Multi-Family $2/sq.ft., min. $40,000/ $2/sq. ft., min. $ 20,000/ Residentialmax. $75,000max. $40,000 Non-Residential$2/sq.ft., min. $70,000/ $2/sq. ft., min. $35,000/ max. $150,000max. $75,000 For projects requiring City Review, the fee schedule will note that the cost of review will reflect consultant costs to review the project.For initial deposits, staff proposes $500 for Single-Family homes, $1500 for Multi-family Residential and $1500 for Non-residential projects. Option for Fee Schedule The Council may consider the deposit amounts as recommended by the Planning Commission for City Reviewsince these deposit amounts are closely reflective of the actual certification costs. Voluntary Requirements to Obtain Incentives Section has been removed based on Council discussion to remove the proposed incentives in the draft ordinance.As a result, the “exemplary standards” in the table have been removed as well. Options for Incentives One incentive that the Council recommended for further discussion and consideration is to allow increased floor area ratio (FAR) of up to 10% over that allowed in the Municipal Code. Should Council wish to incorporate this incentive, a section regarding incentives and exemplary standards can be added back into the draft ordinance. Other incentives that the Council may consider include expedited building permit processing for projects that exceed Green Building Ordinance requirements and/orawarding a plaque/recognition to the applicant. Staff is reviewing an expedited fee for projects and 194 proposes to bring this back during the mid-year budget adjustment for FY2011-2012. If the Council wishes to offer incentives for projects that exceed the Green Building Ordinance requirements, exemplary standards can be added back into the draft ordinance and projects that met the requirements could be offered the expedited process at no cost or a reduced cost at that time. The Council may also choose to create a program to recognize projects that exceed the Green Building standards by awarding a plaque or other recognition. Section 16.58.260 Exemptions Staff has modified this section to allow for additional unforeseen exemptions, in addition to historical or atypical energy-related projects.Moving these requirements to the building code will allow exemptions to be granted by the Building Official.This is consistent with the codes for other cities such as Mountain View and Palo Alto. Cost Analysis of Reference Projects In response to the Council’s request, the City’s Green Building consultant, Global Green, prepared an analysis (See Attachment D) of how the proposed Green Building Ordinance requirements would impact development costs of projects in the City.An analysis was conducted of three development projects approved by the City within the past five years representing a single-family development, multi-family development and commercial development, to generate a rough estimate of the additional costs that would be incurred as a result of meeting the proposed Green Building Ordinance requirements. The estimate is based upon additional modifications that would be required for these projects to achieve LEED Certification, which include minor design modifications and modifications to meet the energy performance and ventilation prerequisite requirements of LEED.More specifically, the analysis considered that these projects needed: Upgraded mechanical system designs Modified landscape plans to reduce water use Environmentally preferable building materials, such as recycled-content, low-emission and locally manufactured materials Stormwater management systems Increased diversion requirements for construction and demolition waste from 50% to 75% Additional construction verification measures A summary of these representative projects and the estimated costs to meet the Green Building Ordinance requirements are illustrated below. The analysis essentiallydetermined that the percentage cost increase over meeting the Cal Green building standards was in the range of 1% - 2.2%, which is in line with incremental cost studies that have determined the incremental cost of achieving LEED Certification ranges from 0% to 5% of total construction costs, with most projects experiencing 3% or less of an increase in costs. The reason these are estimates is that LEED and GPR are performance-based, which allows flexibility in the type of green measures that can be incorporated into a project, leading to different choices regarding credit selection and the costs associated with achieving those credits. 195 Single-Family Multi-Family Commercial Office Residential Residential Building DevelopmentDevelopment 1 Registration$450$900$900 Design 1$2,500$4,000$10,000 Energy Systems 2$952$12,880$145,020 Materials 3$1,785$24,000$72,510 Construction $1,000$10,000$25,000 4 Verification (HERS)(HERS)(Commissioning, M&V) 5 Documentation$2,500$7,500$25,000 Preparation Certification/Provider $1,500$3,500$2,250 6 Fee Total Incremental $10,687$62,780$280,680 Cost Cost/Sq.Ft.7 $4.49$1.94$2.90 Percent Cost Increase 2.2%1.0%1.5% 1.From USGBC web site 2.Assumes 25, 40 and 100 hours at an average cost of $100/hr. 3.Based on Mountain View Energy Reach Code Cost-Effectiveness Study: $0.40/sq.ft.average for residential and $1.50/sq.ft.for non-res, 4.Assumes average incremental cost of $0.75/sq.ft. 5.Based on typical costs for current Global Green projects 6.Davis Energy Group LEED for Homes fee schedule, GBCI fee schedule 7.Assumes $200 per square foot average cost of construction Based on results for similar project types in the Mountain View Energy Reach Code Cost- Effectiveness Study, the estimated annual energy savings is $115/year for the single-family house, $1,600/yearfor the multi-family, and $18,000/yearfor the non-residential building. Additional savings would result from reduced water use and lower maintenance costs. The projects may also experience more rapid appreciation or higher assessed value at time of sale. Chamber of Commerce Legislative Action Committee On March 3, 2011, staff presented the comparison table of the Phase II Recommendations, Planning Commission recommended draft ordinance, and reviseddraft Green Building requirements per the February 1, 2011 Council meeting, to the Chamber of Commerce Legislative Action Committee. Staff presented the revised draft ordinance requirements as a result of Council’s direction to conduct outreach to the community to gauge the community’s feedback on the draft ordinance requirements. Staff received many constructive comments including: Revised draft ordinance is more palatable to the community LEED Silver is an industry standard for any commercial development over 25,000 sq.ft. 196 Communication to the public about the policies, implementation and enforcement is important Exemptions for economic hardship should be considered Consider incentivesfor exemplary standards Consider providing in-house certification, rather than a third-party certification. This saves time by providing more flexibility so applicant can work directly with staff to resolve issues rather than working with a third-party or outside consultants Define “minor” versus “major” renovation Explain the deposits/fees Provide a final draft ordinance for the Chamber to review before adoption Building Standards Commissionand Effective Date of Ordinance The combined Cal Green/Green Building Ordinance will require approval from the Building Standards Commission (BSC) prior to the date that the ordinance will take effect. The Building Standards Commission must approve the ordinance to allow for the local amendments to the California Green Building Standards Code (Cal Green), since the local amendments exceed the minimum Mandatory Requirement of the CalGreen. The City may tentatively approve of the combined ordinance during which time an application can be submitted to the Building Standards Commission. The Planning Commission suggested that a six month grace period be provided after adoption of the ordinance and before the ordinance takes effectto allow applicants adequate time to get information about the new regulations prior to preparation of project drawings and submitting building permits.Based on the City Attorney’s recommendation to provide a date certain that would be easier to remember, staff suggests January 1, 2012 as the effective date. Staffbelieves this would allow for sufficient time to submit and receive approval from theBuilding Standards Commission before the ordinance would take effect. Filing to the Building Standards Commission will require that the City make findings to exceed the Mandatory Requirements of the Cal Green building codes.These findings are included as Exhibit B of Ordinance No. 11-2076. Environmental Review The proposed ordinance is considered statutorily exempt from the California Environmental Quality Act (CEQA) guidelines pursuant to Section 15308 since this is an action by a regulatory agency for the protection of the environment and assures the maintenance, restoration, enhancements or protection of the environment where the regulatory process involves procedures for protection of the environment. _____________________________________ Prepared by:Aki Honda Snelling, Senior Planner Reviewed by:Gary Chao, City Planner and Aarti Shrivastava, Community Development Director Approved for Submission by:David W. Knapp, City Manager 197 Attachments: Attachment A: Ordinance No. 11-2076 Attachment B: Draft Resolution to amend the Fee Schedule Attachment C: Chapter 16.58 of the Cupertino Municipal Code with strikeouts Attachment D: Global Green Cost Analysis of Reference Projects Attachment E:February 1, 2011 City Council Minutes Attachment F:February 1, 2011 City Council Report Attachment G:Planning Commission Resolution No. 6615 Attachment H: Email of February 18, 2011 from Myron Crawford Attachment I:Email of March 5, 2011 from Myron Crawford 198 COMMUNITY DEVELOPMENT DEPARTMENT CITY HALL 1010300TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408)777-3308www.cupertino.org CITYCOUNCILSTAFFREPORT Meeting: February 1, 2011 Subject GreenBuildingOrdinance(continuedfromJanuary18) RecommendedAction Conductfirstreading ofOrdinanceNo. 11-2074and draftResolution Description Application:MCA-2010-04 Applicant:CityofCupertino Location:Citywide ApplicationSummary:MunicipalCodeAmendmenttoadoptaGreenBuildingOrdinance(See AttachmentA,OrdinanceNo. 11-2074)andrelatedfeesand deposits(SeeAttachmentB, Model Resolution). BACKGROUND Council Authorization ontheGreen BuildingOrdinance Process OnJanuary19,2010,theCityCouncilauthorizedstaff(SeeAttachmentQ,January19,2010 CityCouncilreport)to proceedwith developingadraftGreenBuildingOrdinance, perthePhase IIrecommendations bytheSantaClaraCountyCitiesAssociationinpartnershipwiththeSilicon ValleyLeadershipGroup(SeeAttachmentC,PhaseIIrecommendations).TheCouncil authorizedabudgetof$25,000tocompletetheprocess(includingonecity-widepostcard notice). ThePhaseIIrecommendationsarecriteriaandthresholdsfordevelopment,includingnew constructionandrenovation/remodelingprojects,thataimtosupporttheuseofhealthybuilding materialsandconstructionmethods,andpromoteenergy,waterandresourceefficiencyand conservationbyadherencetoratingsystemscalledLEED(LeadershipinEnergyand EnvironmentalDesign)andGPR(GreenPointRated)thatweredevelopedbytheU.S.Green BuildingCouncil(USGBC)andBuildItGreen(BIG)respectively. KeyCommunityOutreach Efforts May2010 :City-widenoticesweresentoutinvitingresidents,businessesandmembersofthe developmentcommunityinterestedinparticipatingintheGreenBuildingOrdinanceFocus 199 Groups.Anon-profitenvironmentalconsultinggroup,GlobalGreen,wasretainedtoassistthe Citythroughfacilitationofthefocusgroupmeetingsandtodevelopa draft ordinance. June7,2010 :TheCityhelditsfirstGreenBuildingOrdinanceFocusGroupmeetingatDe AnzaCollege’sLEEDPlatinumKirschCenter.Themeetingwasattendedbyover60 participants,andincludedatouroftheKirschCenter,apresentationonthepurposeandconcepts ofgreenbuildingandthePhaseIIrecommendations,andsmallgroupdiscussionsessionsto encourage participantsto provideinput on elements ofthe green buildingordinance. July13,2010 :Inresponsetothefocusgroupparticipants'comments,thePlanningCommission heldaneducationalworkshopinordertobetterunderstandthegreenratingsystemsunder consideration.TheworkshopincludedapresentationbyShilohBallardofSiliconValley LeadershipGroupwhoprovidedanoverviewofthePhaseIIrecommendations.Additionally, DavidKaneda,CupertinoPlanningCommissioner,providedanoverviewoftheCalGreen buildingcodes,thestate’snewgreenbuildingcoderequirementsfornewconstructionthat becameeffective on January 1, 2011. July29,2010 :TheCityhelditssecondandfinalGreenBuildingFocusGroupmeeting,at whichtimea draftGreenBuildingOrdinancewas presentedtoparticipantsandthecoreelements ofthe draftordinancewere discussed. StaffandGlobalGreenreceivedmanycommentsandsuggestionsatbothofthefocusgroup meetings(SeeAttachmentsDandE-focusgroupcomments)fromparticipantsthatrepresented theresidential,businessanddevelopmentcommunityinCupertino.AttachmentFprovides additionalcommentsreceived on theDraftGreenBuildingOrdinance. CitystaffalsoprovidedoutreachoftheordinanceprocessbyhostingaboothattheCity’s2010 EarthDayevent,meetingwithkeystakeholders(e.g.businessesandcommercialproperty owners,includingApple),addressingparticipantsattheMayor’sCommunityCongressandata ChamberofCommerceLegislativeActionCommitteemeeting,andpostinginformationinthe CupertinoCourier,CupertinoScene,andviaonlinethroughtheCity’sgreenbuildingwebpage, FacebookandTwitter. DISCUSSION PlanningCommission OnOctober12,2010,October26,2010andNovember9,2010,thePlanningCommission reviewedthedraftGreenBuildingOrdinance(SeeAttachmentsG,H&I,October12,October 26,andNovember9PlanningCommissionstaffreports,respectively).Thedraftordinancewas refinedtoincorporatethecommentsandsuggestionstheCityreceivedfromthefocusgroup meetingsandfrommeetingswith key stakeholdersinthecommunity. TheCommissionrecommendedapprovalofthedraftordinanceona3-2vote(ChairBrophyand CommissionerMillervotedno).AdetaileddiscussionofthePlanningCommission’s recommendationis providedlaterinthisreport. ChairBrophyandCommissionerMillerdidnotsupportthedraftgreenbuildingordinance, notingthattheCityshouldfocusonreducingenergyconsumption/utilityuseonexisting 200 buildingsandontransportation,ratherthanonnewconstructionandrenovations.Theyalso expressedconcernsthattheincreasesinconstructioncostresultingfromtheregulationscould make projectsinfeasibleand negativelyimpactlocaljobs. DraftGreen BuildingOrdinanceComponents The draftGreenBuildingOrdinanceasrecommendedbythePlanningCommissioninResolution No.6615(seeAttachmentJ)isbasedonthePhaseIIframeworkwithrefinementsresultingfrom thePlanningCommission’srecommendationandinputreceivedfromtheGreenBuilding Ordinancefocusgroupparticipants,variouscommunitystakeholders,andstaff.Key componentsofthedraftordinancerecommendedbythePlanningCommissionaresummarized below: EffectiveDateoftheOrdinance ThePlanningCommissionrecommendsthattheCityCouncilconsideraspecificdatesix(6)  monthsfromtheadoptionoftheordinance(tostartfromthefirstofthemonth).Thisallows foranadequategraceperiodforapplicantstogetinformationaboutthenewregulationsprior to preparation of projectdrawingsand submittingbuilding permits. AlternateReferenceStandards(Section 19.78.050) Thissectionstatesthatalternatereferencestandardsmaybeallowedbythedecisionmaker  fortheprojectifthealternatestandardsareequivalenttotheminimumstandardsor exemplarystandardsoftheordinancebaseduponprescribedfindings.Thealternatereference standardswererecommendedbasedoncommentsfrombusinessesstatingthattheordinance shouldbeflexibleovertimetoaccommodatenewreferencestandardsthatdidnotfitthose listedatthistime.Therecommendedfindingsensurethatthealternatereferencestandards wouldfitcriteriasimilartothereferencestandardssuchasLEEDandGPRthatarecurrently listedintheordinance.Projectsthatusealternatereferencestandardswillberequiredtogo throughaformalcertification process. StandardsforNewConstruction,RenovationsandAdditions(Section 19.78.060) Thissectionformsthemainportionoftheordinanceandlaysoutthresholds,minimum  GreenBuildingstandardsandverificationrequirementsfornewconstruction,renovations andadditions.ToassistincomparingthechangesbetweenthePhaseIIRecommendationand theDraftOrdinance,acomparisontable(Table1)isprovidedbelow.Additionaloptions providedtothePlanningCommissionarealsolistedforCouncilconsiderationinthelast columninthetable.AbriefdiscussionofthePlanningCommissionandoptional recommendationsisprovidedafterthetable.Adetaileddiscussionofrecommendationsis providedinthestaffreportstothePlanningCommission(SeeAttachmentsG,H&I)and minutes ofthePlanningCommissionmeetings(SeeAttachmentsK,L&M). 201 Table 1 Type ofPhaseIIRecommendationsCupertinoDraftGreenBuildingOtherOptionsConsidered bythe ProjectOrdinanceMinimumPlanningCommission Requirements Residential–Single-Family(SFR)&Multi-Single-Family<5 homes: (1) AllSingle-FamilyandMulti-Family: New Family(MFR)<9 homes: OR GPRmin.85ptsor Minimum: Construction LEEDCertifiedw/Formal GPRRated(50ptsmin.)or (Single Single-Family2,500 sf: Verification. Family& LEEDCertified. GPRmin.75ptsorLEED Multi- Certifiedw/FormalVerification. GPRmin.125ptsor Family)Exemplary: LEEDGoldw/FormalVerificationSingle-Family5 homes: SFR&MFR9homes: OR GPRRatedorLEEDSilver Single-Family>2,500sf: GPRmin.100ptsorLEED Certifiedw/FormalVerification. Multi-Family<5 homes: OR Multi-Family800 sf(unit size): GPRmin. 75ptsorLEED Certifiedw/FormalVerification. Multi-Family5 homes: OR Multi-Family>800 sf(unit size): GPRmin. 100ptsor LEEDSilver FormalCertification Residential–SFR<$100Kpermitvaluation;Single-Family50%totalexisting Renovation/ or<500sfaddition;orFARfloorarea: Addition increase<50%: CalGreenMandatory (Single-Minimum: Family& BIGElementschecklistor(for newportionsonly)w/Informal Multi- LEEDchecklistVerification. Family) SF$100K-$200Kpermit GPRmin.125ptsor Exemplary: valuation;or500-1,000 sf LEEDGoldw/FormalVerification add’n: BIGElements25-49pts.or LEEDCertified SFR$200K+permitvaluation; or1,000sfadd’n;orFAR increaseof50%: GPRRated(min.50pts.)or LEEDCertified 202 Type ofPhaseIIRecommendationsCupertinoDraftGreenBuildingOtherOptionsConsidered bythe ProjectOrdinanceMinimumPlanningCommission Requirements SmallMFR(TBD):Multiple-Family(minorrenovation): GPRchecklistorapplicable CalGreenMandatory Minimum: LEEDchecklist w/InformalVerification. GPRmin.100ptsor Exemplary: LEEDSilver w/FormalVerification Multi-Family(majorrenovation)– LargeMFR(TBD): Renovationsand/oradditionsthat GPR50pts.orapplicablecompriseatleast10,000squarefeet, LEEDCertifiedandreplaceoraltertheHVAC systemandatleasttwoofthe following:buildingenvelope,hot watersystemand lightingsystem. GPRmin.75ptsor Minimum: LEEDCertifiedw/Informal VerificationorLEEDEBOM Certifiedw/FormalVerification. GPRmin.125ptsor Exemplary: LEEDGoldw/FormalVerification Non-Small,<5,000 sf:<10,000 sf:RequireFormalVerificationfor (2) Residential– projectsover50,000 sf. LEEDchecklistCalGreenMandatory Minimum: New w/InformalVerification. Construction LEEDGoldw/Formal Exemplary: Verification Mid-size,5,000–25,000 sf:>10,000–25,000 sf: LEEDCertifiedLEEDCertified Minimum: w/InformalVerification LEEDGoldw/Formal Exemplary: Verification Large,>25,000sf:25,001ormore sf: LEEDSilverLEEDSilverw/Formal Minimum: Verification. LEEDGoldw/Formal Exemplary: Verification 203 Type ofPhaseIIRecommendationsCupertinoDraftGreenBuildingOtherOptionsConsidered bythe ProjectOrdinanceMinimumPlanningCommission Requirements Non-Smallprojects:MinorRenovations/Additions: Residential- LEEDChecklistCalGreenMandatory Minimum: Renovations/ w/InformalVerification. Additions LEEDGoldw/Formal Exemplary: Verification Largew/oHVAC:2of4 MajorRenovation–Renovations systemsaretouched+>10,000and/oradditionsthatcompriseat sf+>permitvaluationof$1least10,000squarefeet,andreplace millionpermitvaluation:oraltertheHVACsystemandat leasttwoofthefollowing:building LEEDCertifiedw/o envelope,hotwatersystemand prerequisites lighting system. Largew/HVAC:2of4 10,000–25,000sf-- Minimum: systemsaretouched,onebeing LEEDCertifiedw/Informal HVAC+>10,000 sf+>$1 VerificationorLEEDEBOM millionpermitvaluation: w/FormalVerification. LEEDCertified 25,001 sformore– LEED Minimum: Certifiedw/FormalVerificationor LEEDEBOMw/Formal Verification. LEEDGoldw/Formal Exemplary: Verification MixedUseNotAddressedForprojectswithbothresidential Projects andnon-residentialcomponents, eachuseshallcomplywiththe minimumrequirementsstated above. Note:Definitionsfor FormalandInformalVerificationareprovided laterinthis report. 1.OptionsforResidentialNewConstruction,Single-Familyand Multi-Family TheoptionregardingnumberofunitsdiffersfromthePhaseIIrecommendation(delineating betweenlessthan5unitsandgreaterthanorequaltofiveunits,ratherthan9unitsbecauseit differentiatessingle-familyandminorlotsubdivisions(e.g.parcelmapswithlessthan5lots) fromlargersubdivisionprojectsrequiringatractmap).Therecommendationtouseunitsize asathreshold(SeeOption(1)aboveincolumn3)isbasedonaninitialPlanning Commissiondiscussiontoencouragesmallerunits,whichuselessenergyandmaterials.The thresholdforthesquarefootageoptiondifferentiatingbetweensmallandlargeunitsizesis baseduponthetypicalsizeofasingle-familyhome(2,500squarefeet)andatwo-bedroom multi-familyapartment unit(800 squarefeet). 204 2.OptionforNon-ResidentialNewConstruction TheCouncilmayconsiderrequiringFormalVerificationfor non-residential newconstruction projectsabove50,000squarefeet,ratherthanrequiringFormalVerificationforalllargenon- residentialnewconstructionprojectsabove25,000squarefeet.Thisoptionwasinitially proposedbaseduponconcernsthatstakeholdershadraisedaboutrequirementsfor certification. FormalandInformalVerification(Section 19.78.070)andRelatedFees ThethresholdandverificationrequirementsrecommendedbythePlanningCommissionare  providedin Table 1. FormalVerificationrequirestheprojecttoobtaintherequiredcertificationlevelbyan approvedratingstandard(LEED,GPRoranalternateratingstandardapprovedbytheCity). FormalVerificationalsorequiresagreenbuildingdeposittobesubmittedtotheCityas suretythattheprojectwillfollowthroughwiththecertificationrequirement.Theintentofa depositthatiscomparabletothecertificationfeesservesasanincentivetoencourage applicantstofollowthroughwiththeircertificationrequirementandnotmakeforfeitingthe depositamountamoreattractivealternative.InthecaseofFormalVerification,theentire depositamountwillbereturnedaftertheapplicantprovidesproofofreceivingformal certificationfromtheratingagencywithin18monthsoffinaloccupancy;otherwisethe depositwouldbeforfeitedtotheCitytobeusedtoadvancethepurposeoftheordinance. InformalVerificationwouldrequireadeposittocoverthecostofagreenbuildingconsultant toverifythatthebuildingisdesignedtotheapplicablerequirement.InthecaseofInformal Verification,thebalanceofthedepositwillbereturnedtotheapplicant.Informal VerificationsforCalGreenrequirementswill notrequireanydeposits. ThePlanningCommissionrecommendsthefollowingdepositsforFormalandInformal  Verification(SeeTable2below).Aresolutiontoadopttherecommendedgreenbuilding depositfees(seeAttachmentB) hasbeen providedfortheCouncil’sconsideration. TABLE2–VerificationFeesandDepositsRecommended by thePlanningCommission RecommendedDepositforRecommendedDepositfor ProjectTypeFormalVerificationInformalVerification $2/sq.ft. $2,000$900 SingleFamily $2/sq.ft. min.$40,000/max.$75,000$1,500 Multi-Family $2/sq.ft. min.$70,000/max.$150,000$1,500 Non-residential Note: InformalVerificationforCalGreenwillnotrequireanydepositsandwillbedonein-house. Note:ThePlanningCommissionrecommendedaFormalCertificationdepositforsingle-familyresidential thatislowerthantheestimatedcertificationfeeforsingle-familyresidential. 205 TherecommendationsarebasedonTable3-typicalgreenbuildingcertificationcostsprovided byGlobalGreen. TABLE3 - TypicalGreenBuildingCertificationCosts ProjectTypeGreen PointRatedLEEDforHomesLEEDBD&C $3,800$5,000 SingleFamily $40,380$54,700 Multi-Family $71,650 Office (20,000sq.ft.) $97,650 Office (50,000sq.ft.) Typicalcosts forconsultant review range from$900 for ProjectsRequiring single-familyandsmallprojectstoabout$1,500 forlarger InformalConsultant projects Verification *Basedondatafrom BuilditGreen,USGreen BuildingCouncil,Davis EnergyGroup, StopWaste.org,andGlobalGreen. 19.78.080VoluntaryRequirementstoObtainIncentives Incentivesthatareincludedintheordinanceareonlyconsideredforprojectsthatmeetorexceed theexemplary standards,whichare higherthantheminimumrequirements. ThePlanningCommissionisrecommendingtwotypesofincentives,automaticand  discretionary. Automaticincentivesautomaticallyallowanapplicanttoobtainareductioninapplicable buildingpermitfeesbyanamountsetbytheCouncilformeetingorexceedingtheapplicable exemplarystandards.DiscretionaryincentivesaregrantedbytheCityaspartofadiscretionary reviewapproval.Projectsmustalsomeetspecificfindingstobeconsideredfordiscretionary incentives. Incentives: a.AutomaticIncentives: Recommendbuildingpermitfeereductions.ThereductionswillbebasedonannualCouncil reviewandadoptionofthefeeschedule.ThiswillallowtheCounciltotailorfeereduction incentivesannually based on availableCityfunds. b.DiscretionaryIncentives: i.10%reductioninrequired off-street parkingrequiredbythe MunicipalCode. ii.Additionaloption(notrecommendedbyPlanningCommission)-10%increaseinmax. floorarearatio(FAR). c.Considerthefollowingadditionalincentives: i.Anexpeditedplancheckprocessmovingexemplaryprojectsaheadoftheplancheck line. ii.LookatdisincentivessuchasreducedFARsforprojectsthatarenotexemplaryunderthe GreenBuildingOrdinance. iii.LookatincentivessuchasreducingBelowMarketRate(BMR)units/fees,grading bonds,andremoving storypolerequirementsforR1 projects. 206 Itemsc(ii)andc(iii)wouldrequireanamendmenttootherdocumentssuchastheGeneralPlan HousingElement,BMRMitigationManual,SubdivisionOrdinanceforgradingbondsand Single-Family(R1)zonerequirementsforstorypolesandwouldbeseparateprojectsin themselveswithextensivepublicparticipation,noticingand/orreviewforconsistencywithState laws. 19.78.090 ExemptionsforHistoric orAtypicalProjects Projectsthatareexemptfromtheordinanceincludepropertiesthathavesuccessfully  demonstratedtotheCityandmeetthestandards ofthissectionthattheyarehistoricinnature orincludeatypicalenergy-relateddesignrequirementsand/or patterns ofuse. ExemptionsforProjectsthat havealreadyreceivedPlanningPermits ThePlanningCommissionconsideredtheideatoexemptprojectsthathadalreadyreceived  planningapprovals/entitlementsfromtheordinance.TheCommissionrecommendsthat planningapprovals/entitlementsnotbeexemptfromtheordinancesincesuch approvals/entitlementswouldnotbeexemptfromthenewCalGreenbuildingcodesthat becameeffectiveonJanuary1,2011.Asameanstocreategreaterawareness,the CommissionalsorecommendedthatPlanningstaffnoticeallplanningprojectapplicantsof the newrequirements oncetheGreenBuildingOrdinanceisadopted. Additional ReferenceMaterial Additionalreferencematerialsthatwere providedtothePlanningCommissionin previous reports havebeenincludedfortheCityCouncil’sreviewandconsideration. _____________________________________ Preparedby:AkiHondaSnelling,SeniorPlanner Reviewedby:GaryChao,CityPlannerandAartiShrivastava,CommunityDevelopment Director ApprovedforSubmissionby:DavidW.Knapp,CityManager Attachments: A.GreenBuildingOrdinanceNo. 11-2074 B.ModelResolution ofAmendmentstotheFeeSchedule C.PhaseIIRecommendations D.June 7, 2010 FocusGroup MeetingComments E.July 29, 2010 FocusGroup MeetingComments F.EmailfromBerg&BergDevelopers,Inc.fromJanuary 15, 2011 G.October 12, 2010 PlanningCommission staffreport H.October 26, 2010 PlanningCommission staffreport I.November 9, 2010 PlanningCommissionconsentreport J.PlanningCommissionResolutionNo. 6615 K.Minutes oftheOctober12, 2010 PlanningCommissionmeeting L.Minutes oftheOctober26, 2010 PlanningCommissionmeeting M.Minutes oftheNovember 9, 2010 PlanningCommissionmeeting N.Comparison Table of standardsinSunnyvale, MorganHill&PaloAlto O.LEEDEBOM/LEEDCIcomparisonbyGlobalGreen P.% ofNewConstruction data 207 Q.% of TenantImprovement data R.January 19, 2010 CityCouncilreport S.CalGreenDescription T.Comparison ofCalGreen,LEEDandGPR preparedbyLynSimon& Associates 208 COMMUNITY DEVELOPMENT DEPARTMENT CITY HALL 1010300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3308www.cupertino.org CITY COUNCIL STAFF REPORT Meeting: September 4, 2012 Subject Modification to the Main Street Cupertino mixed-use development. Recommended Action Staff recommends that the City Council approvethe following: 1.Modification (M-2012-03) to the previously-approved Master Use Permit (U-2008-01 and M-2011-09) and Architectural and Site Approval (ASA-2011-24)for a mixed-use project consisting of 130,500 square feet of retail, a 180-room hotel, 260,000 square feet of office and a 120-unit market-rate live/work rental loft residential development, including the modifications to the parking garage and retail.(See Attachment A for the draft resolution). 2.Architectural and Site Approval (ASA-2012-10) for the conceptual approval of 120 market-rate rental residential live/work rental loft units and modifications to the parking garage and retail(See Attachment B for the draft resolution). 3.Modification to the previously-approved Tentative Map (TM-2012-04) to subdivide five (5)parcels into six (6) parcels including one lot for the retail, park and town square; one lot for each of the two office buildings; one lot for the hotel; one lot for the market-rate rental residential units; and one common area parcel for the parking garage to serve the retail, hotel and office buildings(See Attachment C for the draft resolution). 4.Second Addendum tothe Final Certified 2009Environmental Impact Report EA-2012-05 (See Attachment D) Staff also recommends additional conditions related to the phasing, parcel ownership, Architectural and Site Review of the site plan, retail buildings, parking garage and live/work rental loft building that are included in the conditions of approval. Description Applications:M-2012-03(EA-2012-05), ASA-2012-10, TM-2012-04 Applicant:Kevin Dare Property Owner:500 Forbes LLC Location:North side of Stevens Creek Boulevard (3 vacant lots) between Finch Avenue and N. Tantau Avenue (APN 316-20-085, 316-20-078 and 316- 20-079) 209 Project Data Summary: General Plan Designation: Heart of the City Specific Plan Area Specific Plan: Heart of the City Specific Plan Area Zoning Designation: P (CG, OP, ML, Res) Gross Lot Area: 758,104 sf (17.4 acres) excluding Finch Avenue Finch Avenue Abandonment: 46,500 sf (1.1 acres) Total Lot Area (3 parcels): 804,604 sf (18.5 acres) including Finch Avenue Total Building Area: 645,776 sf (exclusive of the parking garage) Total Parking: 1,984 spaces(staff recommends 2008spaces) Parking Garage 1: 1,370 spaces Parking Garage 2: 204 spaces(staff recommends 216 spaces) Surface: 325 spaces(staff recommends 337 spaces) Street: 85 spaces Setbacks Stevens Creek Blvd: 1.5:1 (1.5 foot setback for every 1 foot of building height); (Front/Corner Front) minimum 35 feet N. Tantau Avenue: 1.5:1 (1.5 foot setback for every 1 foot of building height): (Corner Front) minimum 35 feet Vallco Parkway: 15 feet from office; 20 feet from parking garage, 15 feet (Street Side Yard) from hotel, and 20 feet from retail or athletic club Side Yard Setback: One-half (1/2) the height of the building, or ten (10) feet, (next to Metropolitan whichever is greater and Rosebowl developments) Proposed Lots Areas: Lot 1: 11 acres (for the retail buildings, park, town square and internal roadways) Lot 2: 1.5 acres (for the corner office building) Lot 3: 1.5 acres (for the office building along Vallco Parkway) Lot 4: 1.5 acres (for the hotel) Lot 5: 1.6 acres (for the market-rate rental live/work loft apartment complex) Common Area Lot: 1.5 acres (for the parking garage for the benefit of parcels 1 through 4) Condominiums: A two-unit retail condominium parcel on Lot 5 consisting ofone condo for the 120-apartment block and a second condo for the ground floor retail block. 210 Development Allocation proposed (total available citywide): Retail Commercial:130,500 square feet, already allocated in 2009 approval (balance of 220,237 square feet available citywide) Office:260,000 square feet, 100,000 square feet of which was already allocated in 2009 approval (balance of 17,956 square feet available citywide, except for North Vallco, which has a balance of 87,746 square feet) Senior Housing:143 units, already allocated in 2009 approval (balance of 1,954) units available citywide) Hotel:180 rooms, already allocated in 2009 approval (balance of 339 rooms available citywide) Project Consistency with General Plan: Yes Project Consistency with Zoning: Yes Environmental Assessment: Second Addendum to the 2009 Final Environmental Impact Report Application Background and Summary: On May 15, 2012, the City Council approved a Modification (M-2011-09) to the Master Use Permit, Master Architecturaland Site Approval, and Tree Removal Permit that were originally granted in January of 2009; Architectural and Site approval (ASA-2011-24) for the conceptual site and design approval of the proposed buildings; a Tentative Map (TM-2011-04) for the 18- acre Main Street Cupertino mixed-use development; and an Addendum to the Final Certified 2009 Environmental Impact Report. The development plan that was approved is labeled Option A(1)-2 (See Attachment E) and includes approval of: 138,700 square feet of retail space, including a maximum allowance of 53,538 square feet (or 38.6% of the total retail space) to be used as restaurant space 180-room, five-story hotel (Marriott Residence Inn) 260,000 square feet of office space consisting of two office buildings each130,000 square feet 143-unit senior market-rate age-restricted apartment complex with underground parking Afive-level above-ground parking garage with two levels of underground parking with 1,414 parking spaces Total parking of 2,176 spaces, including the parking garage for the retail, office and hotel, and the parking garage for the senior housing complex, surface parking within the project site and street parking along the south side of Vallco Parkway A 0.80 acre town square with two retail pad shops Apark and a 20-foot wide buffer along the western perimeter of the site totaling 0.75 acres Tentative Map to subdivide the site into five (5) parcels consisting of one lot for the retail, parking garage, park and town square; one lot for the hotel; one lot for the senior 211 age-restricted housing; and one lot for each office building. No condominiums were approved as part of this approval. Requirements for separate Architectural and Site Approvals for the final review and approval of each of the buildings in accordance with the conditions of approval with all buildings requiring DRC approval, except for the hotel,which requires City Council approval. Approved Development Plan (May 15, 2012) At the May 15, 2012 City Council meeting (See Attachment F for Minutes to the meeting), Sand Hill Property Company indicated that although senior age-restricted housing was still being proposed as part of their Master Plan, they had neither yet been able to find a developer interested in developing the senior housing component of the project, nor a financier who would be willing to finance the development of senior housing at this time. During the discussion at the meeting, the applicant indicated he would be able to build a non-age-restricted market-rate project or a commercial office building with retail on the first floor in the same phase as the rest of the project. Staff had indicated that any additional office space proposed would, however, require a General Plan Amendment to increase the office allocation since there would not be enough office allocation to accommodate additional office building at this time. The City Council expressed concern about the ability of the applicant to complete development of the project if it appeared unlikely that the senior housing site could be constructed in a timely manner, particularly if this parcel were left undeveloped for years. The Council felt this would be detrimental to the function and operation of the project site as a mixed-use development, and more critically, as a pedestrian downtown area, without the critical mass of the maximum retail uses to surround the town square and without ensuring a finished development. 212 As a result, the City Council conditioned the project with a phased timeline, including limiting the approval of the modification application to three (3) years during which time building permits must be filed for Phase I identified as the retail buildings, parking garage, hotel and office buildings, and to four (4) years for Phase II identified as the park and the senior age-restricted housing complex. Additionally, the park is required to be completed within four (4) years of the modification approval. The Council also required the applicant to return to the City Council no later than six (6) months from modification approval to update the Council on the progress related to developing the senior housing complex and discuss alternatives for the senior housing parcel. Discussion Following thisapproval, onAugust 28, 2012, Kevin Dare on behalf of500 Forbes, LLC, submitted applications for a Modification (M-2012-03) to the recently-approvedMaster Use Permitto consider the removal of the age-restriction on the market-rate rental residential apartment complex;Architectural and Site Approval for the conceptualdesign of the market-rate rental residential live/work loft complexand modifications to the parking garage and retail building footprints;a modification to the Tentative Map; anda Second Addendum to the Final Certified 2009 Environmental Impact Report (EIR). Thesefulfill the requirement to provide a plan that can be built entirely in one phase. The applicant notes that they have reviewed the possibilities for senior, age-restricted housing and are still not able to find a developer or financier to back the development of this type of use. They are therefore, requesting to modify the Master Use Permit to propose removing the age-restriction on the market-apartment complex and allow for a substitution of 143 senior age-restricted units with 120 market-rate rental loft units, 19 of which have a live/work component. In addition to the above applications, the applicant is also asking to modify the parking garage and retail building footprints; and amodification to the Tentative Map (TM-2012-04) to subdivide the property into six parcels,includingtwo retail condominium units for ground floor retail uses on the residential parcel Proposed New Development Plan The proposed new development plan(Attachment G)includes: A five-story live/workrental loft apartment complex with 120 market-rate rental units and two retail condominiums on the ground floor of the apartment complex consisting of 9,146 square feet of retail spacefacing the town square (in lieu of the 143 senior housing units). 130,500 square feet of retail space, including a maximum allowance of 52,600 square feet of restaurant use (or approximately 40% of the retail space). (This entails an 8,200 square foot reduction in retail space, including aslight reduction of 938 square feet of restaurant th uses than in the recently-approved May 15development plan due to the required offset in traffic generation and parking to allow the substitution of 143 senior age-restricted units by120 non-age restricted market-rate rental loft-style units). Additionally, the applicant 213 has made minor adjustments to the size, location and building footprints of the retail buildings to more closely align with the marketing demands of potential tenants for the project site. 260,000 square feet of office consisting of two offices each at 130,000 square feet (no th changes from the May 15approved plan) th Five-story, 180 room hotel (no changes from the May 15approved plan) Total parking of 1,984 spaces, including a five-level above-ground parking garage with two levels of underground parking to serve the retail, hotel and office uses, an underground parking garage for the live/work rental loft units consisting of 204 spaces, 325 surface parking stalls within the development site, and 85 spaces of street parking along the south side of Vallco Parkway.(This is a reduction of parking from the previously-approved plan which provided a total of 2,176 spaces.) A reduction in the massing, size and footprint of the parking garage along Vallco Parkway. Tentative Map to subdivide the property into six (6) lots and a two-unit condominium(one for the 120-apartment block and one for the retail block). (The previous approval was for five (5) lots, with the parking garage part of the retail, park and town square lot) Architectural and Site Approval for the conceptual review and approval of the market-rate live/work rental loft building and modifications to the building sizes and footprints of the retail buildings and the parking garage.The applicant will be submitting separate Architectural and Site Approval applications for the final designs of the retail, office, hotel and live/work rental loft buildings, the parking garage, the park and the town square following approval of the new development plan. Reduction in the size of the useable area of the park from .75 acres to approximately .55 acres. The Council allowed the reduction in the useable area of the park to accommodate a 20-foot wide landscape buffer along the western perimeter of the site adjacent to the Metropolitan mixed-use complex. Addition of a7,067 square footretail building (retail shop 8) adjacent to the park across from the town square. Reduction in the square footage of “incubator” flex space along the southern perimeter of the parking garage45,000 square feet to 34,419 square feet. The reduction is due to the addition of the new retail building (shop 8) next to the park and additional square footage to the retail space in the live/work rental loft apartment complex. 214 Proposed New Development Plan Consistency with General Plan and Zoning The project site is located in the Heart of the City Specific Plan Area per the General Plan and Zoning map with a specific zoning and land use designation of P(CG, OP, ML, Res).The proposed project is consistent with the General Plan and Zoning Ordinance, as was previously the case with the last modification that was approved by the City Council on May 15, 2012. In accordance with the General Plan, building heights may not exceed 45 feet in the South Vallco area, unless there is a retail component to the building in which case the building height may be extended to a maximum height of 60 feet. The buildings exceeding 45 feet in height are the two office buildings, which will have ground floor retail uses within them; the live/work rental loft apartment building which will have a two-unit retail ground floor condominium facing town square; the hotel, which will have a restaurant on the ground floor facing the town square; and the parking garage serving the retail, hotel and offices, which will have the incubator and retail shops buildings attached to the south side of the parking garage building. The parking garage will be separated from the retail/incubator buildings by a parcel line in order to keep all the retail within one parcel, but will be physically attached with a walkway and function and appear as one building. 215 Architecture and Design Retail Buildings The proposed changes to the retail buildings include minor modifications to the building sizes and footprints to accommodate the marketing demands of the potential retail and restaurant tenants. The City’s Architectural Advisor has reviewed the revised development plan related to the retail buildings and has provided the following comments: Improvethe design of the retail padsin the town square, including the transparent feel of these buildings. Provide special design treatments between retail Shops 7 and 8 buildings to better connect pedestrians/customers between the park and the town square area. Site Plan and Surface Parking Lot Slight modifications have been made to the site plan and surface parking lot with this new development plans. The following are comments provided by the City’s Architectural Advisor: Provide angled parking along the north side of the plaza between the retail Shop 5 building and retail Pad 3 buildingrather than parallel parking to gain additional parking spaces, and to provide more easily accessible parking. A single-wide crosswalk is desirable between theincubator building and the retail Pad 3 building. Lane transitions seem awkward and sharp at the main driveway entrance from Stevens Creek Boulevard. Parking Garage and Attached Retail/Incubator Space Modifications to the parking garage include the reduction in the parking garage volume and additional setbacks along Vallco Parkway from the front elevations. This has reduced the massing along Vallco Parkway and is supported by staff. The garage façade has also beenmoved behind the retail/incubator spaceon the side facing Stevens Creek Boulevard, which is an improvement.However, staff will need to review the retail elevation and the rest of the parking garage elevation so that ithas the look and feel of an upscale Main Street location providing more of a building feel than a utilitarian feel.With the proposed changes, the parking garage, is still five-levels above ground and two-levels below ground at a height of 59 feet 11 inches, which is consistent with the approval of the parking garage granted in May by the City Council for a 60- foot high, five-level above ground garage with the two levels of below ground parking. Further, analley has been added to provide another north-south connection to the parcel, which is an improvement on the circulation since it takes the pressure off the town square loop, particularly where the office complex is concerned.The City’s Architectural Advisor has reviewed the plans and has provided the following additional comments: Left and right turn lanes from the eastern driveway entrance to the parking garage along Vallco Parkway should be required to avoid back-ups onto the street. Access to the parking garage for the hotel valet may not be convenient or speedy. 216 Live/Work Loft Rental Apartment Complex The applicant hassubmitted conceptual architectural elevations, floor plans and site plan for the proposed live/work loft rental apartment complex(See Attachment G). The building will be five- stories consisting of 120 units and 9,146 square feet of retail uses (retail shop 9) on the ground floor facing the town square, and two levels of underground parking. As indicated by the applicant(See Attachment Hfor the applicant’s letter of justification), the proposed live/work loft rental units will be marketed towards professionals with a need for office/work space and will notbe conducive for family living. Allof the units will be loft style studio or one bedroom apartments; however, the ground floor units will have the additional work space area consisting of floor to ceiling glass storefronts.Units which could be suitableand more conducivefor senior living are the studio and strictly one-bedroom units since they are on a single level. A total of 54 units (16 studio and 38 one-bedroom)are proposed in the complex. The other 66one-bedroom units with attached work/loft/den areas are two levels units. The units will range in size from 550 square feet to 1,900 square feet with an average unit size of 1,031 square feet. The unit mixand thepercentage of each unit type are indicated in the tables below: The conceptual architectural style of the building is shown on the elevations, which is proposed to have stucco exterior walls with differing siding materials, aluminum storefront windows along the ground floorfor the live/work units, and accents including painted metal canopies/awnings, translucent glass railings and stone tile. 217 The applicant will be required to submit a separate Architectural and Site Approval application for the finalapartment complex design to bereviewedand approvedby the Design Review Committee (DRC). A condition of approval has been added to this effect. City Architectural Advisor Comments The City’s Architectural Advisor has reviewed the plans and recommends (See AttachmentI)the following additional changes to thedesign of thelive/work rental loft apartment building including: Some examples include: 1.Adding distinctive details to the corners and end caps of the building to emphasize the building. 2.Provide additional design articulation on certain portions of the building so that the changes in surfaces do not appear flat. 3.Additional clarification to better understand the design specifics. 4.Adding transparent balcony features for some units along the Town Square to denote a residential feel. 5.Enhance the ground floor treatmenton the retail buildings. 6.Providing deep set windows to enhance the elevations. 7.Providing adequate and attractive screening for trash enclosures. These above comments have been incorporated into the conditions of approval for the project. Trafficand Parking A trip generation and parking analysis was prepared by Fehr and Peers (See Attachment Din Appendix Ain the Second Addendum to the Final Certified 2009 Environmental Impact Report which concluded the estimated trip generation for the new development plan would have similar trip generation compared to previous development plans reviewed in the Final Certified 2009 Environmental Impact Reportand the 2012 Addendum to the EIR(See table below). Additionally, the analyses indicated that the new development plan would not result in new or substantially more severe significant intersection and freewayimpacts than were identified in the Final Certified 2009 EIR and 2012 Addendum to the EIR, except that the new development plan would no longer result in a significant level of service impact to the intersection of Bollinger and Lawrence Expressway. 218 The following are the intersections and freeway segments analyzed in the Final Certified 2009 EIR and 2012 Addendum and resulted in significant impacts: Homestead Road/Lawrence Expressway (AM and PM peak hours); Wolfe Road/Vallco Parkway (PM peak hour only); Lawrence Expressway/I-280 SB Ramps (AM and PM peak hours); Bollinger Road/Lawrence Expressway (AM and/or PM peak hour); I-280 Eastbround, Lawrence Expressway to I-880 (three segments, PM peak hour only); I-280 Westbound, I-880 to Lawrence Expressway (three segments, AM and/or PM peak hour); Parking The project approved by the Council in May 2012 provided a total of 2,176 parking spaces. This exceeded the unshared requirement per the City Code (2,017 spaces) as well as the unshared ITE demand (1,890 spaces). Applicant’s Proposal The proposed total parking of 1,984 spaces is less than the 2,176 spaces providedin the development plan that was approved in May. However, the parking analyses indicates that proposed 1,984 parking spaces still exceeds the ITE, Institute of Transportation Engineers, (unshared parking demand (1,928 spaces) and the ULI (Urban Land Institute) shared parking demand(1,717 spaces)calculations, and is only slightly below, or 25 spaces short, ofthe City Code unshared parking calculation of 2,009 spaces.(See Parking Analysis Table below) Per the applicant’s proposal,the parking in the underground garage below the residential building will be reserved for residents of the live/work rental apartment complex and will not be shared with other uses on the development site. However, the retail portion will share the surface parking and parking in the main garage along with the rest of the retail spaces on the site. The applicant is 219 also proposing to reserve spaces in the underground garage for the exclusive use of the office complex. The balance of the spaces in the parking garage and the surface parking area are proposed to be shared by the hotel and retail uses. Parking Analysis Table Staff Recommendation Staff recommends adding 24spaces in the following locations for a total of 2,008 spaces. A condition of approval has been provided to require the additional spaces. Residential Garage The applicant is proposing a ratio of 1.7 spaces per unit for the residential complex or a total of 204 spaces in an underground garage below the residential building. Staff believes that the parking ratio should be increased to 1.8 spaces per unit, for a total of 216 spaces (similar to what is being recommendedfor other apartment complexes). This would require an addition of 12 spaces in the underground garage below the residential building. Additionally, in keeping with the parking ordinance, each apartment unit will be assigned at least one covered parking space. Surface parking area near Shop 5 and Pad 3 Buildings Staff believes that 12 additional parkingspacescan be incorporated by converting the parallel parking along the south side of the plaza near the retail Shop 5 building and Pad 3 buildings to angled parking. This would increase the total parking to approximately to 2,008 parking spaces which is comparable to the minimum parking per theCity Code unshared parking requirement of 2,009 spaces. The applicant feels that the parking would reduce the size of the plaza in front of the stores. However, staff believes that the angled parking would provide more of an amenity for shoppers and makeit more attractive to park as compared to the 220 parallel parking. Additionally, the plaza can be designed to be attractive even with the reduced format. The parking amount (2,008 spaces) recommended by staff is one (1)space short of the City’s unshared parking requirement and 80spaces more than the ITE unshared parking demand. The recommended level is relatively higher than that approved forthe original project in 2009 where the projectprovided 1,691 parking spaces which exceededthe estimated unsharedITE parking demand, but was 200 spaces short ofthe unshared parking demand according to the City Code (1,891spaces).Staff believes that the 2,008 spaces will allow adequate parking for each useand ensure the availability of convenient parkingfor retail customers. Student Generation Analyses During the initial review phase of therecent modification application to the Master Use Permit, the applicant at one point proposed to include 120 market-rate studio and one bedroom apartment units on the same site as this housing proposal in thenew development plan.Although the applicant removed the option for market-rate apartments during the Planning Commission meetingof the most recent modification application, a studentgeneration analyses(See AttachmentJ)had been preparedby Schoolhouse Services that estimateda market-rate apartment complex of 120 studio and one-bedroom apartments would generate a total of 32 students, including 18 elementary students, 7 middle school students and 7 high school students. Schoolhouse Services has reviewed (See Appendix B in Attachment D) this housing proposal for the 120 live/work rental loft style units and concludes that there is negligible difference in the expected student generation from the previous study and that further analyses is not needed, since the description of these live/work rental loft units has been further clarified to indicate some units will have a work space with floor to ceiling glass storefronts that would likely preclude its use as a bedroom, that half of the proposed units are lofts and therefore not increase the probability of families living in these units with children, and many of the units would have dens that would not be designed as bedrooms. Tentative Map The tentative map (See Attachment K) proposes to subdivide the property into six (6) lots. Lot 1 is 11 acres and encompasses the retail buildings, the park, the town square and all of the internal roadways and surface parking. Lot 2 includes the corner office building and is 1.5 acres. Lot 3 includes the other office building and is 1.5 acres. Lot 4 is for the hotel and is 1.5 acres. Lot 5 is for the market-rate live/work rental loft apartment complex and includes a two-unit condominium parcel; one for the apartments and the other forthe retail. Lot A, or the sixth lot, is the Common Area Parcel encompassing the parking garage for the benefit of Lots 1-4 (retail, hotel and office uses). The live/work rental loft complex will provide its own underground parking garage. The two-unit condominium parcel on Lot 5, the live/work rental loft apartment complex lot, is necessary because the owner and operator of the live/work apartment complex will be different than the owner and operator of the retail uses. The applicant has agreedthat his proposal is to have all retail on the entire site under singleownership. This means that all of the retail buildings including the retail under the residential component and that attached to the parking garage will be 221 under the same ownership as the retail on Lot 1. A condition of approval to this effect has been added. Regarding the request for an additional parcel for the parking garage, staff believes that the separation of the parking garage for the retail, office and hotel by a common area lot (Parcel A) from the incubator retail buildings on Lot 1 is necessaryas it simplifies the operations of the project. In addition, the common area designation and will prevent it from being sold as a separate parcel with development potential. The tentative map shows a common area easement over all internal roadways, the park and the town square. However, staff has conditioned the project to require the following clarifications be added to the tentative map as was clarified in the previously-approved tentative map in May: All of the internal roadways shall have a public driving and parking access easement over them. Additionally, public access areas may not be closed off without the consent and approval of the Public Works Department. There shall be a public access and use easement across and over the park and the town square. There shall also be a public access easement for vehicular and pedestrian travel to link Stevens Creek Boulevard with Vallco Parkway, the park and the town square. Phasing The applicanthas now indicated that the project can be built in one phase if the market-rate rental loft apartment complex is approved in lieu of the age-restricted apartments. Therefore, staff is recommending a three-year time frame for the entire project. Staff haschanged the original conditions to allow a three-year time frame for the permits. Additionally, in the conditions related to phasing, staff has added Condition D (shown in the underlined text below) to theoriginal set of conditions to ensure that the park and residential project are completed at the same time. A performance bond for the park construction (not less than $1.125 million) shall be required in Phase I. The applicant shall work with staff on the appropriate timing for acceptance of the performance bond and completion of the park. If the park is not completed to the satisfaction of the City within three (3) years from the date of approval of the permit, the City shall have the option of calling in the bond and constructing the park. A. Prior to granting a certificate of occupancy for the first of the hotel or office buildings, the Town Square, street and sidewalk improvements along Finch Avenue loop and the street and sidewalk improvements along the interior roadway connecting Finch Avenue loop to the office parcel shall be completed to the satisfaction of the City. B. Prior to granting a certificate of occupancy for the second of the hotel or office buildings, certificates of completion for shell, core, exterior facades and related landscaping and improvements shall be obtained for at least 50% of the retail approved for the project. C. Prior to granting a certificate of occupancy for the third of the hotel or office buildings, certificates of completion for shell, core, exterior facades and related 222 landscaping and improvements shall be obtained for all the retail buildings located east of Finch Avenue loop. D. Prior to granting a certificate of occupancy for the live/work loft and retail building, the park shall be completed to the satisfaction of the City. Environmental Review Committee Recommendation A Second Addendum to the Final Certified 2009 EIR has been prepared (dated August 2012) (See Attachment D) which studied the new development plan in comparison to the other development plans analyzed in the Final Certified 2009 EIR and 2012 Addendum. A traffic impact and parking analyses and student generation review were conducted and prepared with this Second Addendum. The results of the Second Addendum concluded that the new development plan that is being proposed would not result in new or more substantially significant environmental impacts than previously disclosed in the Final Certified 2009 EIR and 2012 Addendum. On August 16, 2012, the Environmental Review Committee(ERC)reviewed and unanimously recommended approval of the Second Addendum. The ERC, however, provided comments and asked questions for clarifications on the following. Staff responses to each have been provided in italics: 1.Why the proposed parking plan changed the parking layout on the internal street south of the parking garage and retail incubator buildings from angled parking to parallel parking. The ERC also asked if some spaces could be restored to angled parking to gain additional parking spaces.Staff has added a condition to convertthe parallel parking spaces in front of the Shop 5 building and the Pad 3 building to angled parking to gain12additional parking spaces. 2.What is the size of therectangular portion of the park not including the 20-foot buffer space?The reduced park size is approximately 0.55 acres.Including the buffer space brings the park size to 0.75 acres. 3.What is the time framefor the development with the loft housing?The developer indicates thatthe rental loft housing can be built as part of Phase I of the development. 4.Provide connections to Main Street from the Metropolitan housing and retail buildings, particularly emphasizing the sidewalk connections.The project will be required to provide a sidewalk along Stevens Creek Boulevard to ensure that there will be sidewalk connections between this site and the adjacent Metropolitan Cupertino retail. 5.What will the Stevens Creek Boulevard elevation look like and the architecture along the Vallco Parkway side of the proposed housing. It should have active areas.The elevations along Stevens Creek Boulevard and the elevation of the rental loft apartment building facing Vallco Parkway will be provided when the applicant submitsthe individual Architectural and Site Approval applications following approval of the modification to the Master Use Permit. 6.Consider providing a soccer field in the park.Regarding whether a soccer field could be accommodated on site, the Public Works Department determined that a standard full-size soccer field could not fit on the park site given that a minimum size of 100 yards (300 feet) x 70 yards (210 feet) would be needed. However, a small soccer field of 30 yards (90 feet) 223 x 20 yards (60 feet) could be accommodated, but this would essentially take up the entire park size with no margin area around it. 7.Consider a driveway connection to the Rosebowl sitealong the north side of the park.It does not appear that a driveway connection can be made between this site and the Rosebowl sitedue to a large grade difference. However,the plans include a pedestrian connection. 8.Are the residential units proposed as condominiums? Consider a mixed housing of some market-rate loft and some market-rate senior housing on the site.The applicant has indicated that the housing is proposed as rental, and not condominium. They have not explored the idea of mixed housing of some market-raterentalloft and market-raterental senior housing. 9.Did the applicant contact Fannie Mae/Freddie Mac to see if they can offer assistance for senior housing development?Theapplicant has been asked to provide an update at the Council meeting regarding a response to this question. Public Comments The City’s public hearing notices on the project for the September 4, 2012 City Council meeting include a half-page ad in the Cupertino Courier, a notice on the City’s website, and a notice in the Cupertino Scene. Signage has also been placed on site notifying the community of the meeting. At this time, no public comments have been received. The applicant will be conducting a community outreach meeting on August 29, 2012 at 7 p.m. to discuss the new development plans that they will be presenting at the September 4, 2012 City Council meeting. The City has also posted a notice of the applicant’s community outreach meeting on the City website. Staff will provide an update of public comments at the Council meeting. Prepared by Aki Honda Snelling, AICP, Senior Planner Reviewed by Gary Chao, City Planner; Aarti Shrivastava, Director of Community Development Approved for Submission by: Amy Chan, Interim City Manager Attachments: A:Draft Resolution for M-2012-03 B:Draft Resolution for ASA-2012-10 C:Draft Resolution for TM-2012-04 D:Second Addendum to the Final Certified 2009 EIR and 2012 Addendum E:Approved Development Plan Option A(1)-2 F: Minutes to the May 15, 2012 City Council meeting G: Proposed Development Plan H: Applicant’s Proposal Letter I: City’s Architectural Advisor comments J: Student General Analyses dated January 2012 K: Proposed Tentative Map 224 M-2012-03 CITY OF CUPERTINO 10300 Torre Avenue Cupertino, California 95014 DRAFT RESOLUTION OF THE CITY COUNCILOF THE CITY OF CUPERTINO RECOMMENDING APPROVAL OF A MODIFICATION(M-2012-03)TO A MASTER USE PERMIT(U-2008- 01AND M-2011-09), ARCHITECTURAL AND SITE APPROVAL (ASA-2011-24) AND TENTATIVE MAP (TM-2011-04) FOR A MIXEDUSE DEVELOPMENT TO ALLOWAHOTEL WITH 180 ROOMS; 130,500 SQUARE FEET OF RETAILSPACE; 260,000 SQUARE FEET OF OFFICE;A0.80-ACRE TOWN SQUARE;A 120-UNIT LIVE/WORK RENTAL LOFT APARTMENTHOUSING COMPLEX;A5-LEVEL PARKING GARAGE WITH TWO LEVELS OF UNDERGROUND PARKING;A .55 ACREPARK; AND A TOTAL OF 1,984 PARKING SPACES,ONAN18.5ACRE SITE LOCATEDON THE NORTH SIDE OF STEVENS CREEK BOULEVARD BETWEEN FINCH AVENUE (INCLUDING BOTH SIDES OF FINCH AVENUE) AND N. TANTAU AVENUEIDENTIFIED BY APNS 316-20-085, 316-20-078 AND 316-20-079 SECTION I: PROJECT DESCRIPTION Application No.:M-2012-03 Applicant:Kevin Dare Property Owner:500 Forbes, LLC Location:North of Stevens Creek Boulevard between Finch Avenue (including the both sides of Finch Avenue) and N. Tantau Avenue, south of Vallco Parkway (APNs 316-20-085, 316-20-078 AND 316-20-079) SECTION II: FINDINGS WHEREAS, the City Councilof the City of Cupertino received applications for a Modification to a Master Use Permit, Architectural and Site Approval and Tentative Map,as described in Section I of this Resolution; and WHEREAS, the necessary public notices have been given in accordance with the Procedural Ordinance of the City of Cupertino, and the City Councilhas held one or more public hearings on this matter; and WHEREAS, a Second Addendum to the FinalCertified 2009Environmental Impact Report was prepared to adequately address the environmental review of the proposed applications in accordance with the California Environmental Quality Act (CEQA); and WHEREAS, the applicant has met the burden of proof required to support said application; and has satisfied the following requirements: 1)The proposed project and use, at the proposed location, will not be detrimental or injurious to property or improvements in the vicinity, and will not be detrimental to the public health, safety, general welfare, or convenience; and 2)The proposed project and use will be located and conducted in a manner inaccord with the Cupertino Comprehensive General Plan,the purpose of the Conditional Use Permits Chapter of the Cupertino Municipal Code, and complies with the California Environmental Quality Act (CEQA); and 3)The proposed project and useis consistent with the zoning regulations and the South Vallco Special Center and South Vallco Master Plan; and 4)The proposed project and useis consistent with the Heart of the City Specific Plan. 225 DraftResolution M-2012-03 September 4, 2012 NOW, THEREFORE, BE IT RESOLVED: That after careful consideration of maps, facts, exhibits, testimony and other evidence submitted in this matter, the application for a Modification to the Master Use Permit, Architectural and Site Approval and Tentative Map,is hereby approved,subject to the conditions which are enumerated in this Resolution beginning on Page 2 thereof; and That the subconclusions upon which the findings and conditions specified in this resolution are based and contained in the public hearing record concerning Application No. M-2012-03as set forth in the Minutes of the City Council Meeting of September 4, 2012, and are incorporated by reference as though fully set forth herein. SECTION III: CONDITIONS ADMINISTERED BY THE COMMUNITY DEVELOPMENT DEPT. 1. APPROVED EXHIBITS The approval is based on Exhibits titled: “Main Street Cupertino, Sand Hill Property Company, Cupertino, California” site plan dated August 15, 2012and dated received August 28, 2012, Mixed Use Loft plans consisting ofpages A1.0, A2.1, A2.2, A2.3, A2.4, A2.5, A2.6, and A3.0, dated received August 28, 2012, and Tentative Map pages TM-1 through TM-8dated received August 28, 2012, except as may be amended by the conditions contained in this resolution. 2. PREVIOUS CONDITIONS OF APPROVAL All previous conditions of approval from Resolution Nos. 12-054,12-055 and 12-056, for applications M- 2011-09, ASA-2011-24, and TM-2011-04, shall remain in effect unless superseded by or in conflict with subsequent conditions of approval, including the conditions contained herein in this resolution. 3. ACCURACY OF THE PROJECT PLANS The applicant/property owner is responsible to verify all pertinent property data including but not limited to property boundary locations, building setbacks, property size, building square footage, any relevant easements and/or construction records. Any misrepresentation of any property data may invalidate this approval and may require additional review. 4. DEVELOPMENT APPROVALAND PERMIT EXPIRATION Approval of a Modification to the Master Use Permit is grantedbased upon the site plan identified dated received August 28, 2012to allow the construction of a hotel with 180 rooms;up to 130,500 square feet of retailspace; a 0.80acre town square;260,000 square feet of office space; a120-unit market-rate rental live/work loft apartment housing complex;a0.55 acre park, a5-level parking garagewith two levels of underground parking; and arequirement forthe ground floor of the office buildings and market-rate live/work loft apartmenthousing complex to accommodate retail components in each building. The Modification to the Master Use Permit shall expire within three (3) years from the date of this approval. With the exception of the residential units and office square feet, all other uses may besubject to further refinement based on the final approved tenanting and land use plan, provided that there are no additional environmental impacts, such as traffic and parking, as determined by the Community Development Director. 226 DraftResolution M-2012-03 September 4, 2012 UsesDevelopment Approval Housing120market-rate live/work housing complex Hotel180-room hotel Retail130,500square feet Office260,000square feet Parking2,008total parking including 1,370 spaces in a5-stories above ground parking garage with underground levels of parking, 216 parking spaces in an underground parking garage for the live/work housing complex, 337surface parking spaces, and 85 on-street parking spaces along Vallco Parkway Publicly Accessible 1.35 acres of town square and park areaand .20 acres of a 20-foot wide Open Space (Town landscape buffer along the western perimeter of the site (adjacent to the Square and Park) Metropolitan mixed-use development site) 5. OFFICE DEVELOPMENT ALLOCATION The applicant is permitted toretain the 100,000 square feet of unrestricted office allocation received in 2009 from the N. De Anza Boulevard area in conjunction with the approvalforU-2008-01,andshall additionally receive 160,000 square feet of office allocation from the unrestricted office allocation from other areas in the City, except from the Vallco Park Northarea, to provide the applicant with a total of 260,000 square feet of unrestricted office allocation. The applicant shall not draw office allocation from the Major Companies pool. 6. HOTEL OPERATIONS The hotel shall be permitted to operate as a 24-hour late night business operation and shall provide a minimum 6,500 square foot restaurant and meeting space area on the ground floor of the hotelalong the Town Square.Any additional or revised uses for the hotel will be reviewed at the time specific business operation information is provided about these uses to determine if they are permitted and will require a separate Use Permit application. (Note: This modifies the Condition No. 5 in the approval dated January 20, 2009) to replace the requirement for a 400-person banquet facility with a 6,500 square foot restaurant and meeting space.) 7. LIVE/WORK RENTAL LOFT APARTMENT REQUIREMENTS Prior to issuance of building permits, a covenant,approved by the City Attorney, shall be required to ensure that the live/work rental loft apartment complex shall not be converted to condominium units in the future, and shall adhere to the loft-style studio and one-bedroom units per the approved site and floor plans.The covenant shall contain a provision that it maynot be modified without the express written approval of the City. 8. RETAIL CONDOMINIUM OWNERSHIP REQUIREMENTS (PARCEL 5) The developer shall construct no more than one retail condominium adjacent to the rental market rate loft apartments.This retail condominium shall be owned by the same ownership as the rest of the retail on Retail Parcel 1 and not be sold separately. 9. MAXIMUM PERCENTAGE OF RESTAURANTS The maximum square footage of food service usespermitted within the retail space of the mixed-use development shall not be more than 40% of the total retail square footage of 130,500 square feet (or a maximum of 52,600 square feet of restaurant uses) based upon the approved development plan dated August 15, 2012 in accordance with the Main Street Cupertino–Revised Proposed Project Analysis report as Appendix A in the Second Addendum to the Final Certified 2009 EIR prepared by Fehr and Peers. Any future refinements to the restaurant percentage may be approved by the Director of Community Development if a subsequent parking and traffic analysis indicates that there is adequate parking for the various mixturesof uses and there are no additional and/or new significant traffic impacts compared to thresholds studied in the original 2009 Environmental Impact Reportand 2012 Addendum. 227 DraftResolution M-2012-03 September 4, 2012 10. TENTATIVE MAP Approval of a Tentative Map is granted to subdivide the property from three parcels into sixparcelsper Pages TM-1through TM-8as follows: a.Parcel 1 –11acres for the retail buildings, park and town square b.Parcel 2 –1.5 acresfor the office building on the corner c.Parcel 3 –1.5acres for theoffice building along Vallco Parkway d.Parcel 4 –1.5acres for the hotel e.Parcel 5 –1.5acres for the live/work loft apartment building with a 9,146 square foot two-unit retail condominium parcel f.Parcel 6 –Common Area Parcel for the benefit of Parcels 1 through 4. Restrictions and requirements for the shared use of the parking garage to accommodate the retail, hotel and office uses within the development site shall be included within the CC&Rs. 11. VACATION OF FINCH AVENUE The vacation of Finch Avenue is necessary to support this development.The vacation will be processed according to procedures set by the Streets and Highways Code and the Municipal Code.A bond will be required prior to issuance of permits for street modifications that will allow Finch Avenue to be reverted back to a standard City street in the case that the construction of the project is not completed.The Developer shall install and complete the street modifications within two (2) years of approval of the Final Map, or such longer period as may be specifically authorized in writing by the City Engineer.Public access easements, for both vehicular and pedestrian travel, will be provided across the improved site, to link Stevens Creek Boulevard with Vallco Parkway, as well as provide public access to the park and the “town center” plaza area.Failure to complete the improvements within the specified time will result in the reversion of Finch Avenue to a standard City street and the ownership of the former Finch Avenue right-of-way shall revert back to the City.The reversion of Finch Avenue back to a City street shall be subject to approval by the City Attorney and Director of Public Works. 12. COVENANT OF RECIPROCAL INGRESS/EGRESS EASEMENT The applicant shall record a deed restriction for necessary reciprocal ingress and egress easements between each lot created by the new development. The applicant shall also record appropriate deed restrictions for necessary reciprocal ingress and egress easements between the adjacent properties to the west, to be implemented at such time that the City can require the same of adjacent property owners. These reciprocal ingress and egress easements between each lot and between adjacent properties to the west shall also be recorded on the Final Map. The easement language shall be reviewed and approved by the City Attorney and the Director of Public Works. The covenant of easement shall be recorded prior to final map approval. The deed restrictions shall contain a provision that itmay not be modified without the prior express written approval of the City. 13. PUBLIC PEDESTRIAN EASEMENT Public access pedestrian easements through the interior sidewalks, pedestrian paths and plazas, the town square, and park area shall be required and recorded on the final map as noted in the tentative map plans C0.0 –C6.5. The easement language shall be reviewed and approved by the City Attorney and Director of Public Works prior to recordation of theeasement on the project site with the final map approval.The final map will include Public Pedestrian Easements, though the CC&R’s will include additional restrictions/guidelines on the usage of the Public Pedestrian Easements. 14. COVENANTS, CONDITIONS ANDRESTRICTIONS The project CC&Rs shall be reviewed and approved by the City Attorney prior to recordation with the final map approval. The CC&Rs shall incorporate requirements pertaining to the public access easements, reciprocal ingress/egress easements, public pedestrian easements, shared parking, maintenance and operation of common areas including but not limited to public access to the park and Town Square, and 228 DraftResolution M-2012-03 September 4, 2012 joint use agreements for the town square and park. The CC&Rs shall also incorporate the Maintenance Agreement addressing the maintenance of the park, town square, sidewalks, shared driveways by the property owners of each of the lots, and landscaped park strips along Vallco Parkway, N. Tantau Avenue and Stevens Creek Boulevard adjacent to the subject site. The conditions of approval for the project shall also be recorded on the properties and incorporated into the CC&Rs. No changes may be made to the CC&Rs without the City Attorney's review and approval.The deed restrictions shall contain a provision that itmay not be modified without the prior express written approval of the City. 15. JOINT USE AGREEMENT Prior to recordation of the final map, the applicant shall submit a joint use agreement between the City and the applicant to be reviewed by the City Attorney and the Director of Parks and Recreation, and approved by the City Council, which permits the City to use the town square and park area for public use for community events or other similar City-approved events or activities, such as, but not belimited to a farmers’ market, holiday activities, and summer events. The joint use agreement shall be recorded and incorporated by reference into the Covenants, Conditions and Restrictions (CC&Rs) of the project site. The Joint Use Agreement shall include provisions for maintenance of the park and town square. The joint use agreement shall govern the public use, programming, public access and percentage of time available for the allowable public activities and events for which the town square and park may be used. The agreement shall also require available publicly identifiable restroom facilities for public use during normal business hours. No structures will be constructed on the town square area without the prior approval of the City of Cupertino, other than the retail pad structure(s) approved in accordance with the Master Use Permit. The programming provisions of the joint use agreement shall be administered between the applicant and the Parks and Recreation Department and the document approved bythe City Attorney. The Joint Use Agreement shall contain a provision that itmay not be modified without the express written approval of the City. 16. MAINTENANCE AGREEMENT Applicant shall enter into a Maintenance Agreement that addresses the maintenance of the park, town square, sidewalks, shared driveways by the property owners of each of the lots, and landscaped park strips along Vallco Parkway, N. Tantau Avenue and Stevens Creek Boulevard directly adjacent to the subject project site. The Maintenance Agreement shall be part of the Covenants, Codes and Restrictions of the project and shall be reviewed and approved by the City Attorney prior to approval of the final map.The Maintenance Agreement shall contain a provision that they may not be modified without the express written approval of the City. 17. GROUND FLOOR RETAIL Prior to issuance of building permits, the applicant shall demonstrate the ground floor retail functionality for buildings proposed at heights over 45 feet in accordance with the City’s General Plan, to the satisfaction of the Director of Community Development. The ground floor retail shall be connected to the building and be of substantial and appropriate size to accommodate the functionality of retail uses. The building frontages of all buildings facing the town square, except for the hotel shall have ground floor retail. However, the hotel must provide active ground floor uses facing the town square. 18. PARKING GARAGE ON THE COMMON AREA PARCEL(OWNERSHIP AND RETAIL PORTION) The five-level above ground parking garage with two levels of below ground parking shall not be sold separately from the other parcels in the project. It shall be held as a common area parcel. The retail incubator buildings on the south side of the parking garage serving Parcels 1 though 4 shall be physically connected to the parking garage in order to satisfy the General Plan height requirement for buildings over 45 feet and under 60 feet. 229 DraftResolution M-2012-03 September 4, 2012 19. DISCLOSURE CLAUSE TO THE FUTURE PROPERTY OWNERS The applicant/developer shall inform the future owners through the Covenants, Conditions and Restrictions (CC&Rs)as well as other documentationof the surrounding projects and that the development site is under a Cupertino Planned Development zoning. Property purchaser shallcheck with the City to determine the specific restrictions under the Planned Development zone and related permits. The CC&R language incorporating this requirement shall be reviewed and approved by the City prior to issuance of building permits. 20. BELOW MARKET RATE HOUSING PROGRAM For residential units, the applicant shall comply with the requirements in the City’s Below Market Rate (BMR) Housing program. For alternatives to these requirements, the applicant may request the Housing Commission to recommend alternatives to the City Council to meet these requirements. For dedication of any housing units at below market rates, the applicant shall record a covenant, which shall be subject to review and approval by the City Attorney, to be recorded prior to issuance of building permits for the planned senior housing building. BMR fees shall be paid prior to issuance of building permits. 21. HOUSING MITIGATION FEES Prior to issuance of building permits, the applicant shall provide the required housing mitigation fees for the commercial, office and hotel development on the project site. 22. MAXIMUM LENGTH OF HOTEL STAYS Hotel stays shall be limited to a maximum of 30 days per reservation. 23. ADDENDUM TO THE PREVIOUSLY-APPROVED EIR AND THE MITIGATION MONITORING AND REPORTING PROGRAM The project shall implement all of the mitigation measures identified in the Mitigation Monitoring and Reporting Program (MMRP) dated March 2012 as identified in the 2009 Final EIR and as modified by the 2012 Addendum to the Final EIRas updated on May 4, 2012and the Second Addendum to the Final EIR dated August 2012. 24. DEVELOPMENT ALLOCATION Use2009 Master Use Approved Modification to the Approved 2012 Modified Master Permit Development PlanUse Permit Additional Allocations Allocations Needed GrantedOption A(1)-2 RetailUp to 150,000 sf Up to 130,500 squarefeet.No additional allocation is needed from the Vallco Park South retail commercial allocation Office100,000 sf from 260,000 sf160,000sf additional from the the N. De Anza unrestricted office allocation available Boulevard office per condition no.4. The applicant allocationmay not use any allocation from the Major Companies office allocation. HotelUp to 250 rooms 180 roomsNo additional allocation needed from the Citywide Hotel allocation Housing160 units from the 120 live/work loft apartment No additional allocation needed Vallco Park South housing units residential allocation 230 DraftResolution M-2012-03 September 4, 2012 The applicant shall receive an allocation of up to 130,500square feet of retail commercial square footage from the Vallco Park South retail commercial allocation area; 120 live/work loft apartment housing units from the Vallco Park South residential allocation; 180 hotel roomsfrom the Citywide Hotel allocation; and 260,000square feet from the unrestricted office allocation available citywide (except from the Vallco Park North office allocation area). 25. CONSTRUCTION PROJECT PHASINGAND PARK BOND Prior to issuance of grading and/or building permits, the applicant shall prepare a construction phasing schedule,and shall demonstratecompletion of the project based on the project expiration date.The construction phasing schedule shall detail critical milestones of the construction. Critical milestones of the construction shall include but not be limited to the following: A performance bondfor the park construction (not less than $1.125 million) shall be required in Phase I. The applicant shall work with staff on the appropriate timing for acceptance of the performance bond and completion of the park. If the park is not completed to the satisfaction of the City within three (3) years from the date of approval of the permit, the City shall have the option of calling in the bond and constructing the park. A. Prior to granting a certificate of occupancy for the first of the hotel or office buildings, the Town Square, street and sidewalk improvements along Finch Avenue loop and the street and sidewalk improvements along the interior roadway connecting Finch Avenue loop to the office parcel shall be completed to the satisfaction of the City. B. Prior to granting a certificate of occupancy for the second of the hotel or office buildings, certificates of completion for shell, core, exterior facades and related landscaping and improvements shall be obtained for at least 50%of the retail approved for the project. C. Prior to granting a certificate of occupancy for the third of the hotel or office buildings, certificates of completion for shell, core, exterior facades and related landscaping and improvements shall be obtained for all the retail buildings located east of Finch Avenue loop. D. Prior to granting a certificate of occupancy for the live/work loft and retail building, the park shall be completed to the satisfaction of the City. 26. GRADING AND CONSTRUCTION HOURS All grading activities shall be limited to the dry season (April 15 to October 15)unless otherwise approved by the Director of Public Works. Grading hours shall be limited to Monday through Friday, 7 a.m. to 8 p.m. Grading, street construction, demolition or underground utility work shall not occur on Saturdays, Sundays and holidays, and during the nighttime period as defined in Section 10.48.053(b) of the Municipal Code. Construction activities shall be limited to Monday through Friday, 7 a.m. to 8 p.m. and Saturday and Sunday, 9 a.m. to 6 p.m. Construction activities are not allowed on holidays. The developer shall be responsible for educating all contractors and subcontractors of said construction restrictions. Rules and regulation pertaining to all construction activities and limitations identified in this permit, along with the name and telephone number of a developer appointed disturbance coordinator, shall be posted in a prominent location at the entrance to the job site. The applicant shall comply withthe above grading and construction hour requirements unless otherwise indicated in the mitigation measures identified in the Mitigation Monitoring and Reporting Program (MMRP) dated March2012 as identified in the 2009 Final EIR and as modified by the 2012 Addendum to the Final EIR. 27. PARKING The applicant shall provide a minimum of 2,008parking spaces. This includes the 1,984spaces based uponthe development plan dated August 15, 2012(dated received on August 28, 2012), and the addition of 24parking spaces as follows: 231 DraftResolution M-2012-03 September 4, 2012 (i)12 additional parking spaces by providing angled parking along the south side of the plaza near the retail Shop 5 building and Pad 3 building,and (ii)12 additional underground parking spaces in the undergroundparking garage (increasing parking to 1.8 spaces per unit for a total of 216 parking spaces for the live/work rental loft apartment). Additionally, the applicant shall provide at leastone assigned and reserved parking spaceper unit at all times. The applicant shall also comply with the swales and permeable surfaces requirement of the City’s Parking Regulations. Adjustments to the parking plan may be permitted based on the final approved tenanting and land use program as long as there are no additional parking and traffic impactsas determined by the Director of Community Developmentand the parking analyses in the Second Addendum. A parking management plan that describes the parking system used by the retail, hotel and office uses shall be submitted for review and approval by the Community Development Director. The applicant shall provide an updated plan for any tenant changes that result in changes to the parking requirements. 28. BICYCLE PARKING The applicant shall provide bicycle parking and bike racks for the proposed projectin accordance with the City’s Parking Regulations under Chapter 19.124 of the Cupertino Municipal Code. 29. PARKING LOT LIGHTING Lighting in the parking lots shall be approved by the Director of Community Development for compliance with applicable regulations prior to issuance of building permits. 30. BUILDING PERMIT APPROVAL The Director of Community Development shall review the final building permits for full conformance with the Master Use Permit approval and the Architectural and Site Approval for each building prior to issuance of building permits for each building. 31. SIDEWALKS/CROSSWALKS A.The final sidewalk/street frontage plan shall be required to be reviewed and approved by the City prior to the final map, and shall match the guidelines of the South Vallco Master Plan and be consistent with the sidewalk/street frontage plan for the adjacent Rosebowl mixed use development. B.The applicant shall provide decorative crosswalks with colored and/or stamped asphalt pavement across Vallco Parkway, N. Tantau Avenue andStevens Creek Boulevard. The decorative pavement materials shall be reviewed and approved by the Director of Community Development and the Public Works Department, and shall be consistent with the recommendation of the traffic analysis prepared by Fehr and Peers in the Transportation Impact Analysis dated September 5, 2008 on p. 48. 32. SIGNAGE Signage is not approved with this application. Signage shall conform to the City’s Sign Ordinance, Heart of the City Specific Plan and South Vallco Master Plan. Prior to final occupancy and approval of any individual signs on site, a detailed master sign program shall be submitted for review and approval in accordance with the City’s Sign Ordinance. 33. ARCHITECTURAL AND SITE APPROVAL A. The buildings, site development andarchitecture shall substantially conform to the site plan, elevations and details as shown in the approved exhibits, unless otherwise noted below. Prior to issuance of building permits, the applicant shall be required to obtain approval of aseparate Architectural and Site Approval application for each of the buildingsby the Design Review Committee; each Architectural and Site Approval application shallprovide adetailed site plan, full elevations (all four sides), floor plans and any other detailsasrequired for Architectural and Site Approval applications.Building 232 DraftResolution M-2012-03 September 4, 2012 colors and materials shall be reviewed and approved in conjunction with the Architectural and Site Approval. Minor amendments to approved Architectural and Site Approvals for buildings and/or the site plan, including minorchanges to the layout of the site plan,building forms and building sizes,may be reviewed and approved by the Director of Community Development. B. The applicant shall provide the following additional modifications and enhancements to the plan prior to issuance of building permits(including recommendations referenced by the City’s Architectural Advisor on February 20, 2012 in Attachment 11 & 16 or as amended by the Planning Commission): 1.Town Square a.The town square area shall be designed as a “flexible” public space that may be expanded or shifted by the temporary closure of one or more of the surrounding publicly accessible streets. Provide additional landscaping in the square. b.In order to allow for a seamless expansionor shifting of the future pedestrian activities, the town square area will be developed to be flush with the grade of the surrounding street system. The Director of Community Development may approve other similar details deemed to be consistent with the intent of this condition. c.The applicant shall provide decorative semi-pervious pavements or similar treatments in the town square and plaza areas to the satisfaction of the Director of Community Development. d.Parking on the circular street system shall be delineated by decorative semi-pervious paving or other similar treatments as deemed to be appropriate by the Director of Community Development. e.Final design and landscape of the town square area shall be reviewed and approved by the Director of Community Development. f.Temporary closure of any portion of the private drive streets, including methods used to temporarily close the street(s), will require approval from the Director of Public Works. 2.Office Buildings Architectural enhancements to the building shall be incorporated including the following: a.Enhance tower entry features with details and design features (particularly the central tower entry facing Stevens Creek Boulevard) and project the towers out and upward from the main bulk of the building. b.Provide prominent architectural design enhancements to emphasize the importance of this corner as the eastern gateway entry to the City, including identifiable street frontage public entrances along Stevens Creek Boulevard and N. Tantau Avenue, glass storefronts and corner site features. c.Provide horizontal elements to the building design to reduce the verticality of the building frontages along Stevens Creek Boulevard and N. Tantau Avenue. d.Provide deep recessed windows. e.Unify the variety of building forms with more closely related and toned down color tones. f.Add ground floor space as an “arcade-like” element along Stevens Creek Boulevard and around the corners at the easterly Main Street drive entry and a N. Tantau. 3.Hotel a. The Architectural and Site Approval application for the design of the interior and exterior of the hotel must return back to the City Council for review and approval. b. The exterior architectural design of the hotel shall be of the same quality and design standard as the example provided by the applicant of the Marriott Residence Inn in the Gaslamp district of San Diego. c. Provide additional variation in height and wall articulations, such as larger roof eave overhangs with additional façade depth and architectural detail and variety in roof eave heights, to minimize the verticality, bulk and box-like shape of the building. d. Enhance architectural detailing on the building that is in scale with the building. e. Provide deep recessed windows to provide depth to the building façade. 233 DraftResolution M-2012-03 September 4, 2012 f. Increase the horizontal elements of the façade. g. Add patio space (seating) at the corner of Vallco Parkway and Finch Avenue to enliven the streetscape and entry to the site. h. Provide additional architectural pedestrian-scale detailing of the ground floor treatment of the building, including along town square, Vallco Parkway, and the pedestrian area leading to the garage. i. Tone down the contrast in exterior colors and provide colors that will complement the colors used within the development. j. Provide an outdoor dining terrace along the frontages of the restaurant facing town square. 4.Retail Buildings a. Revise the architectural design of the retail pad building(s) in town square from an agrarian look to a park pavilion/kiosk style architecture with greater storefront glazing and sophistication. b. Provide active storefront pedestrian entries on all retail shops facing Stevens Creek Boulevard. c. Provide special design treatments between retail Shops 7 and 8 buildings to lead pedestrians/customers between the park and the town square. d. Bring the Shops 4, 5 and 6 buildings closer to the southeast and southwest corners of the main entryway from Stevens Creek Boulevard. 5.Auto Court/Parking Garage The parking garage shall provide architectural details and provide features along the ground floor facing Vallco Parkway to promote pedestrian orientation along the street. 6.Street Furniture The applicant shall provide street furniture and pedestrian amenities along Stevens Creek Boulevard and Vallco Parkway. Prior to the issuance of building permits for Phase 1 of the project, the street furniture shall be reviewed and approved by the Design Review Committee. 7.Rental Live/Work Apartment Loft Building a.Add a distinctive five-story high corner feature that provide a distinctive edge and corner to the southeast corner of the building above the ground floor retail uses; otherwise, there will be an awkward four-story high gap at this corner. b.Provide design articulation on the wall on the southwest corner of the building above the trash enclosure. The ground floor trash enclosure on this corner facing the town square needs to be properly screened and provide architecturally enhanced. c.The hallways appear to be long and narrow and should be enhanced with widened similar to hotel corridors. d.Please clarify if the parking garage and the courtyard will be open or be secured. e.The upper level plans need to clarify if there will be open views to the interior courtyard. f.Plans should clarify where the windows or natural ventilation for the units will be provided on upper floor units. g.Please clarify if the upper floor corridors open or enclosed along the southern side of the building. h.Please provide end cap/corner features to the building. Without these corner end caps, the length and massing of the building is emphasized. i.Provide balcony openings for the units to bring residential presence to the street level. Balconies should be more transparent facing the town square. j.Enhance the ground floor treatment on the southwest corner (where the trash enclosure is proposed) to provide a focal point from the north-south walkway. k.Confirm the height of the building since it may not exceed 60 feet per the City’s General Plan. l.The top of the buildings need to be enhanced with stronger tops. m.Windows should be deep set to enhance the elevations. 234 DraftResolution M-2012-03 September 4, 2012 8.Site Plan and Surface Parking Lot a.Provide angled parking along the north side of the plaza between the retail Shop 5 building and retail Pad 3 building rather than parallel parking to gain additional parking spaces, and to provide more easily accessible parking. b.Modify the view to the rear of the parking cars from the loop driveway looking south towards the retail Shop 6 building. c. Modify the site plan to accurately identify the landscaped areas as green and a different color for the hardscaped/non-landscaped areas. d.Provide a single-wide crosswalk between the incubator retail buildings and the retail Pad 3 building in the private roadway. e.Modify the main driveway entrance to fix the awkward and sharp lane transition from Stevens Creek Boulevard. 9.Parking Garage and Attached Retail/Incubator Space a.Provide left and right turn lanes from the eastern driveway entrance to the parking garage along Vallco Parkway to avoid back-ups onto the street. b.Consider an alternate more convenient hotel valet access to the garage 34. GATEWAY ENTRY The applicant shall be required to construct and install a gateway entry feature on the northwest corner of Stevens Creek Boulevard and N. Tantau Avenue that will be consistent with the policies of the General Plan and SouthVallco Master Plan. The gateway entry feature shall be a prominent design that may fulfill the public art requirement and could include a decorative monument feature that spans over Stevens Creek Boulevard, or vertical structural elements on both sides of Stevens Creek Boulevard and on the median to announce entry. Also, this corner shall include a community banner and enhanced pedestrian crossings that may include crosswalk lighting, special paving materials and/or prominent art or architectural feature announcing the entry to the City, such as a wrought iron element, subject to review and approval by the City Council. 35. LANDSCAPE PLAN The applicant shall submit detailed landscape and irrigation plans to be reviewed and approved by the Director of Community Development prior to issuance of building permits for the building, portion of development, and/or phase of development for which building permit applications have been submitted. The landscape plan shall provide the following prior to issuance of building permits: A.Water conservation and pesticide reduction measures and requirements in conformance with Chapter 14.15, Landscape Ordinance, and the pesticide control measures referenced in Chapter 9.18, Stormwater Pollution Prevention and Watershed Protection, of the Cupertino Municipal Code. B.A full landscape project submittal per section 14.15.040 of the Landscaping Ordinance. The Water- Efficient Design Checklist (Appendix A of Chapter 14.15), Landscape and Irrigation Design Plans, and Water Budget Calculations shall be reviewed and approved to the satisfaction of the Director of Community Development prior to issuance of building permits. C.Landscaping along Stevens Creek Boulevard and N. Tantau Avenue in accordance with the streetscape design requirements ofthe Heart of the City Specific Plan. D.Planting of two specimen oak trees flanking the driveway entrances to the development along Stevens Creek Boulevard as replacements for the removal of the existing dead specimen oak tree. E.Existing and Ash treesalong Vallco Parkwayshall be retained to the maximum possible as determined by the City Arborist. 36. LANDSCAPE INSTALLATION REPORT The project is subject to all provisions delineated in the Landscape Ordinance (CMC, Chapter 14.15). A landscape installation audit shall be conducted by a certified landscape professional after the landscaping 235 DraftResolution M-2012-03 September 4, 2012 and irrigation system have been installed. The findings of the assessment shall be consolidated into a landscape installation report. The landscape installation report shall include, but is not limited to: inspection to confirm that the landscaping and irrigation system are installed as specified in the landscape and irrigation design plan, system tune-up, system test with distribution uniformity, reporting overspray or run-off that causes overland flow, and preparation of an irrigation schedule. The landscape installation report shall include the following statement: “The landscape and irrigation system have been installed as specified in the landscape and irrigation design plan and complies with the criteria of the ordinance and the permit.” 37. LANDSCAPE AND IRRIGATION MAINTENANCE Per the Landscape Ordinance (CMC, Chapter 14.15), a maintenance schedule shall be established and submitted to the Director of Community Development or his/her designee, either with the landscape application package, with the landscape installation report, or any time before the landscape installation report is submitted. a)Schedules should take into account water requirements for the plant establishment period and water requirements for established landscapes. b)Maintenance shall include, but not be limited to the following: routine inspection; pressure testing, adjustment and repair of the irrigation system; aerating and de-thatching turf areas; replenishing mulch; fertilizing; pruning; replanting of failed plants; weeding; pest control; and removing obstructions to emission devices. c)Failed plants shall be replaced with the same or functionally equivalent plants that may be size- adjusted as appropriate for the stage of growth of the overall installation. Failing plants shall either be replaced or be revived through appropriate adjustments in water, nutrients, pest control or other factors as recommended by a landscaping professional. 38. SOIL ANALYSIS REPORT A soils analysis report shall document the various characteristics of the soil (e.g. texture, infiltration rate, pH, soluble salt content, percent organic matter, etc) and provide recommendations for amendments as appropriate to optimize the productivity and water efficiency of the soil. The soil analysis report shall be made available to the professionals preparing the landscape and irrigation design plans in a timely manner either before or during the design process. A copy of the soils analysis report shall be submitted to the Director of Community Development as part of the landscape documentation package. 39. LANDSCAPE AND IRRIGATION MAINTENANCE AGREEMENT Prior to final inspections and final occupancy, the owner(s) of the property shall enter into a formalwritten landscape maintenance agreement with the City.The City shall record this agreement, against the property or properties involved, with the County of Santa Clara Recorder's Office and it shall be binding on all subsequent owners of land served by the proposed landscape. The landscape maintenance agreement shall require that modifications and maintenance activities not alter the level of water efficiency of the landscape from its original design, unless approved by the City prior to the commencementof the proposed modification or maintenance activity. 40. TREE REMOVAL A.The applicant is approved to remove a total of 61 trees and relocate 17 trees on site in accordance with the City Arborist’s report prepared by David Babby and dated April 30, 2008. Although the applicant is 236 DraftResolution M-2012-03 September 4, 2012 requesting approval to remove these trees in accordance with the City Arborist’s recommendation, the intent is to retain as many of the existing perimeter street trees for the remaining life of such trees where they are not considered dead or do not require immediate removal. B.The applicant shall be required to replace the Aleppo Pine tree (Tree No. 113) that was removed in accordance with the City’s Protected Trees Ordinance (Chapter 14.18 of the Cupertino Municipal Code). C.For any trees that are removed due to hazardous conditions, are considered dead, or die as a result of relocation, the applicant shall be required to obtain a tree removal permit and replace these trees in accordance with the City’s Protected Trees Ordinance. D.For any trees that require removal due to construction plan drawing changes and/or construction activity, the applicant shall obtain a tree removal permit in accordance with the Protected Trees Ordinance. E.The Director of Community Development may review and approve further refinements to the tree removal and planting plan based on the approved final land use program for the center provided that there are no significant environmental or visual impacts. 41. TREE REPLACEMENTS Final approval of the required tree replacements shall be reviewed and approved by the Director of Community Development in accordance with the City’s Protected Trees Ordinance. The applicant may be able to reduce the number of replacement trees on site, if larger size trees are proposed, in accordance with the tree replacement standards of the ordinance. For any additional trees that are removed due to hazardous conditions or are considered dead, the applicant shall be required to obtain a tree removal permit and replace these trees in accordance with the Protected Trees Ordinance. Species and size of replacement trees shall be reviewed and approved by the Community Development Director. 42. TREE PROTECTION As part of the building permit drawings, a tree protection plan shall be prepared by a certified arborist for the trees to be retained. The applicant shall be required to install tree protection measures before and during development in accordance with the City Arborist’s report dated April 30, 2008, and in accordance with requirements of the Public Works Department for the preservation of existing street trees. In addition, the following measures shall be added to the protection plan: A.For trees to be retained, chain link fencing and other root protection shall be installed around the dripline of the tree prior to any project site work. B.No parking or vehicle parking shall be allowed under root zones, unless using buffers approved by the project arborist. C.No trenching within the critical root zone area is allowed. If trenching is needed in the vicinity of trees to be retained, the City Arborist shall be consulted before any trenching or root cutting beneath the dripline of the tree. D.Tree protection conditions shall be posted on the tree protection barriers. E.Retained trees shall be watered to maintain them in good health. 43. TREE PROTECTION BOND The applicant shall provide a tree protection bond in an amount determined by the City Arborist to ensure protection of trees slated for preservation prior to issuance of grading, demolition or building permits. The bond shall be returned after completion of construction, subject to a letter from the City Arborist indicating that the trees are in good condition. 44. TREE REPLACEMENT IN-LIEU FEE The applicant shall pay an in-lieu fee in accordance with the City’s Protected Trees Ordinance for any trees that cannot be replaced on site. 237 DraftResolution M-2012-03 September 4, 2012 45. HEART OF THE CITY DESIGN GUIDELINES A.The project shall comply with the Heart of the City Specific Plan development standards and design guidelines in effect at the time of project approval. B.If any portions of the buildings on the Master Use Permit site plan do not meet the minimum setbacks per the Heart of the City Specific Plan, the applicant must either modify the building setback or obtain approval of an Exception application to the Heart of the City Specific Plan. 46. SOUTH VALLCO MASTER PLAN The project shall comply with the South Vallco Master Plan. Prior to release of building permits for Phase 1 of the project, the final boulevard plan along Vallco Parkway shall be reviewed and approved by the Director of Community Development. The applicant shall make reasonable efforts to contact adjacent property owners to show improvement plans including, but not limited to the specific lighting, sidewalk furniture, and landscaping treatments tobe consistent with the vision of the South Vallco Master Plan. 47. CREEK TRAIL IMPROVEMENTS The applicant shall contribute an amount not to exceed $65,000 to the improvements of a trail connection along Calabazas Creek from Vallco Parkway to I-280. This contribution shall be used by the City to administer a creek trail plan and necessary approvals and improvements. If this fund is not used within five years of the project completion, then it shall be returned to the applicant. 48. PARK AREA ALONG METROPOLITAN Aapproximately 0.55 acre park area shall be maintained along the western property line adjacent to the Metropolitan mixed-use development. A minimum 20-foot wide landscape buffer shall be provided along the western property line adjacent to the Metropolitan mixed-use development; the landscape buffer shall be included in the acreage of the park. The design of the park area shall include but not be limited to passive recreation apparatuses, such as a tot lot and sitting areas. The Parks and Recreation Commission shall review the park design and shall refer its recommendation to the City Council for review and approval. The linear green space park buffer parallel to the eastern property line of the Metropolitan mixed use development shall be installed priorto issuance of building occupancy of any building constructed adjacent to this property line. 49. SECURITY PLAN FOR PARKING GARAGE The applicant shall develop a comprehensive private security plan for the entire development encompassing patrol hours, manninglevels and frequency, closed circuit cameras in the parking garage, and adequate lighting levels. The plan shall be prepared by the applicant and approved by the Sheriff’s Department prior to final occupancy. 50. PARKING GARAGE NOISE MITIGATION The parking garage floors shall be treated/coated with materials as deemed appropriate by the City to lessen the noise impacts of vehicle movements. 51. RESTAURANT ODOR ABATEMENT All restaurants shall install odor abatement systems to be incorporated into the air handlingsystems to reduce the odor impact from the restaurants to the adjacent community. Detailed plans shall be reviewed and approved by the Community Development Department prior to issuance of building permits. 52. SCREENING All mechanical and other equipment on the buildings and site shall be screened so they are not visible from public street areas or adjoining developments. Screening materials/colors shall match building features and materials. The height of the screening shall be taller than the height of the mechanical equipment that it is designed to screen. The location of equipment and necessary screening shall be reviewed and approved by the Director of Community Development prior to issuance of building permits. 238 DraftResolution M-2012-03 September 4, 2012 53. TRASH AND DELIVERY ACTIVITIES C.A detailed refuge and truck delivery plan must be prepared by the applicant. The plan shall specify locations of trash facilities, refuge pick up schedules and truck delivery schedules and routes. All trash facilities must be screened and enclosed to the satisfaction of the Public Works Department. The final plan shall be submitted to the City for review and approval prior to issuance of building permits. D.All deliveries shall comply with the mitigation measures provided in the Mitigation Monitoring and ReportingProgram prepared by David J. Powers and Associates dated January 2009, except as may be modified by the 2012 Addendum to the Final Environmental Impact Report (EIR). 54. CONSTRUCTION MANAGEMENT MEETING Prior to commencement of construction activities, the applicant shall arrange for a pre-construction meeting with the pertinent departments (Building, Planning, and Public Works) to review the applicant-prepared construction management plan. 55. CONSTRUCTION MANAGEMENT PLAN A construction management plan shall be prepared by the applicant and approved by staff prior to issuance of building permits. During Phase 1 and 2 of the construction, staging of construction and equipment shall occur as far away from any residential property as possible. The applicant shall also provide a construction manager hotline phone number for residents of the adjacent Metropolitan condominium complex to call for construction related activities on the project site. The hotline number shall also be posted on the project site and at the Metropolitan condominium complex. Said construction management plan shall also provide the following: A. Construction Vehicle Access and Routing B. Construction Equipment Staging Area C. Dust Control (Best Management Practices) D. Hours of Operation E. Street Cleaning Schedule and Program 56. DUST CONTROL The following construction practices shall be implemented during all phases of construction for the proposed project to prevent visible dust emissions from leaving the site: a)Water all active construction areasat least twice daily and more often during windy periods to prevent visible dust from leaving the site; active areas adjacent to windy periods; active areas adjacent to existing land uses shall be kept damp at all times, or shall be treated with non-toxicstabilizers or dust palliatives. b)Cover all trucks hauling soil, sand and other loose materials or require all trucks to maintain at least 2 feet of freeboard; c)Pave, apply water at least three times daily, or apply (non-toxic) soil stabilizers on all unpaved access roads, parking areas and staging areas at construction site. d)Sweep streets daily, or more often if necessary (with water sweepers) if visible soil material is carried onto adjacent public streets. e)The applicant shall incorporate the City’s construction best management practices into the building permit plan set. f)The applicant shall comply with the above dust control requirements unless otherwise indicated in the mitigation measures identified in the Mitigation Monitoring and Reporting Program (MMRP) dated March2012 as identified in the 2009 Final EIR and as modified by the 2012 Addendum to the Final EIR. 57. NOISE MITIGATION The project and retail operations shall comply with the City’s Community Noise Control Ordinance (Chapter 10.48 of the CMC), unless otherwise indicated in the mitigation measures identified in the Mitigation Monitoring and Reporting Program (MMRP) dated March 2012 as identified in the 2009 Final 239 DraftResolution M-2012-03 September 4, 2012 EIR and as modified by the 2012 Addendum to the Final EIR. In addition, the following mitigation measures shall be taken in order to reduce noise event impacts to nearby receptor areas: a)Delivery trucks shall be turned off while unloading products at the loading dock. b)Construction equipment shall be have quiet design features, be well-maintained, and have a high quality muffler system. c)Temporary plywood enclosures shall be erected around stationary equipment that produces excessive noise at nearby receptors. d)Unnecessary idling of machines when not in use shall be prohibited. e)Good maintenance and lubrication procedures shall be used to reduce operating noise. 58. GREEN BUILDING The applicant shall obtain LEED certification designation for the hotel, office and loft residential rental housing buildings in accordance with the U.S. Green Building Council standards and the City’s Green Building policies. The applicant shall also design the athletic club (if developed) and retail buildings to LEED certification standards, but will not be required to certify these buildings as LEED certified. The applicant shall also provide solar hot water heating for any pools provided on the project site. 59. TRANSPORTATION DEMAND MANAGEMENT The applicant shall commit to implementing a transportation demand management (TDM) plan incorporating solutions as indicatedin the mitigation measures identified in the Mitigation Monitoring and Reporting Program (MMRP) dated March2012 as identified in the 2009 Final EIR and as modified by the 2012 Addendum to the Final EIR, that may include parking cash-out and eco passes for employees, valet for customers and off-site parking options. The TDM plan including the projected funding shall be reviewed and approved by the Director of Community Development Director prior to issuance of building permits. 60. UTILITY STRUCTURES All new utility structures shall be located underground or screened from public view to the satisfaction of the Director of Community Development and Public Works. 61. DEMOLITION REQUIREMENTS All demolished building and site materials shall be recycled to the maximumextent feasible subject to the Building Official and shall meet the mandatory requirements of the Cal Green Building Code. The applicant shall provide evidence that materials will be recycled prior to issuance of final demolition permits. 62. CONSULTATION WITH OTHER DEPARTMENTS The applicant is responsible to consult with other departments and/or agencies with regard to the proposed project for additional conditions and requirements. Any misrepresentation of any submitted data may invalidate an approval by the Community Development Department. 63. NOTICE OF FEES, DEDICATIONS, RESERVATIONS OR OTHER EXACTIONS The Conditions of Project Approval set forth herein may include certain fees, dedication requirements, reservation requirements, and other exactions. Pursuant to Government Code Section 66020(d) (1), these Conditions constitute written notice of a statement of the amount of such fees, and a description of the dedications, reservations, and other exactions. You are hereby further notified that the 90-day approval period in which you may protest these fees, dedications, reservations, and other exactions, pursuant to Government Code Section 66020(a), has begun. If you fail to file a protest within this 90-day period complying with all of the requirements of Section 66020, you will be legally barred from later challenging such exactions. 240 DraftResolution M-2012-03 September 4, 2012 64.PUBLIC ART The applicant shall provide public art in accordance with General Plan policy 2-66. Public art shall be installed on the project site prior to final occupancy of the last building completed in the first phase. The public art shall be valued at a minimum of one-quarter percent (1/4%) of the total project budget, not to exceed $100,000. The applicant shall submit a public art plan to be reviewed by the Fine Arts Commission prior to installation of the public art. SECTION IV: CONDITIONS ADMINISTERED BY THE PUBLIC WORKS DEPT. These conditions are not intended to be exhaustive. Additional conditions may need to be addressed, prior to issuance of a building permit, based on potential modifications to the site’s usage and/or layout. 65.STREET WIDENING Public street widening and dedications shall be provided in accordance with City Standards and specifications and as required by the City Engineer. 66.CURB AND GUTTER IMPROVEMENTS Curbs and gutters, sidewalks and related structures shall be installed in accordance with grades and standards as specified by the City Engineer. 67.STREET LIGHTING INSTALLATION Street lighting shall be installed and shall be as approved by the City Engineer. Lighting fixtures shall be positioned so as to preclude glare and other forms of visual interference to adjoining properties, and shall be no higher than the maximum height permitted by the zone in which the site is located. 68.FIRE HYDRANT Fire hydrants shall be located as required by the City and Santa Clara County Fire Department as needed. 69.GRADING Grading shall be as approved and required by the City Engineer in accordance with Chapter 16.08 of the Cupertino Municipal Code. 401 Certificationsand 404 permits maybe required. Please contact Army Corp of Engineers and/or Regional Water Quality Control Board as appropriate. 70.DRAINAGE Drainage shall be provided to the satisfaction of the City Engineer. Hydrology and pre-and post- development hydraulic calculations must be provided to indicate whether additional storm water control measures are to be constructed or renovated. The storm drain system may include, but is not limited to, subsurface storage of peak stormwater flows (as needed), low impact development facilities, or other approved means, to reduce the amount of runoff from the site and to improve storm water quality. The storm drain system shall be designed to detain water on-site (e.g., via buried pipes or storage structures) as necessary to avoid an increase of one percent flood water surface elevation of the culvert to the satisfaction of the City Engineer. Any storm water overflows or surface sheeting should be directed away from neighboring private properties and to the public right of way as much as reasonably possible. Hydro- modification measures may be required as directed by the Municipal Regional Permit. 71.UNDERGROUND UTILITIES The developer shall comply with the requirements of the Underground Utilities Ordinance No. 331 and other related Ordinances and regulations of the City of Cupertino, and shall coordinate with affected utility providers for installation of underground utility devices. The developer shall submit detailed plans showing utility underground provisions. Said plans shall be subject to prior approval of the affected Utility provider and the City Engineer. 72.IMPROVEMENT AGREEMENT 241 DraftResolution M-2012-03 September 4, 2012 The project developer shall enter into a development agreement with the City of Cupertino providing for payment of fees, including but not limited to checking and inspection fees, storm drain fees, park dedication fees and fees for under grounding of utilities. Said agreement shall be executed prior to issuance of construction permits Fees: a. Checking & Inspection Fees:6% of Off-Site Improvement Cost or $4,101.00 minimum b. Grading Permit: 6% of Site Improvement Cost or $2,387.00 minimum c. Development Maintenance Deposit:$ 3,000.00 d. Storm Drainage Fee:$ TBD e. Power Cost:** f. Map Checking Fees:$8,052.00 g. Park Fees:$ per Municipal Code (or an equivalent park land dedication) h. Street TreeBy Developer **Based on the latest effective PG&E rate schedule approved by the PUC Bonds: Faithful Performance Bond: 100% of Off-site and On-site Improvements Labor & Material Bond: 100% of Off-site and On-site Improvement On-site Grading Bond: 100% of site improvements. -The fees described above are imposed based upon the current fee schedule adopted by the City Council. However, the fees imposed herein may be modified at the time of recordation of a final map or issuance of a building permit in the event of said change or changes, the fees changed at that time will reflect the then current fee schedule. 73.TRANSFORMERS Electrical transformers, telephone vaults and similar above ground equipment enclosures shall be screened with fencing and landscaping or located underground such that said equipment is not visible from public street areas. The transformer shall not be located in the front or side building setback area. 74.BEST MANAGEMENT PRACTICES Utilize Best Management Practices (BMPs), as required by the State Water Resources Control Board, for construction activity, which disturbs soil. BMP plans shall be included in grading and street improvement plans. 75.DEDICATION OF WATERLINES The developer shall dedicate to the City all waterlines and appurtenances installed to City Standards and shall reach an agreement with California Water Services Company for water service to the subject development. 76.NPDES CONSTRUCTION GENERAL PERMIT The developer must obtain a Notice of Intent (NOI) from the State Water Resources Control Board, which encompasses preparation of a Storm Water Pollution Prevention Plan (SWPPP), use of construction Best Management Practices (BMPs) to control storm water runoff quality, and BMP inspection and maintenance. 242 DraftResolution M-2012-03 September 4, 2012 77.C.3 REQUIREMENTS The developer shall reserve a minimum of 4% of developable surface area for the placement of low impact development measures, for storm water treatment, on the tentative map, unless an alternative storm water treatment plan, that satisfies C.3 requirements, is approved by the City Engineer. The developer must include the use and maintenance of site design, source control and storm water treatment Best Management Practices (BMPs), which must be designed per approved numeric sizing criteria. A Storm Water Management Plan, Storm Water Facilities Easement Agreement, Storm Water Facilities Operation and Maintenance Agreement, and certification of ongoing operation and maintenance of treatment BMPs are each required. All storm water management plans are required to obtain certification from a City approved third party reviewer. 78.FULL TRASH CAPTURE SYSTEM The developer will be responsible for installing a full trash capture system/device to capture trash from the onsite storm drain before the storm water reaches the City owned storm drain system. A full capture system or device is a single device or series of devices that traps all particles retained by a 5 mm mesh screen and has a design treatment capacity of not less than the peak flow rate Q resulting from a one-year, one-hour storm in the sub-drainage area (see the Municipal Regional Permit section C.10 for further information/requirements). 79.EROSION CONTROL PLAN The developer must provide an approved erosion control plan by a Registered Civil Engineer. This plan should include all erosion control measures used to retain materials on site. Erosion control notes shall be stated on the plans. 80.WORK SCHEDULE Every 6 months, thedeveloper shall submit a work schedule to the City to show the timetable for all grading/erosion control work in conjunction with this project. 81.TRAFFIC SIGNAL IMPROVEMENTS The developer shall agree to fund up to $300,000 for the purpose of installing a traffic signal at Finch Avenue and Vallco Parkway as well as for making traffic signal improvements at the Stevens Creek Boulevard and Tantau Ave intersection. The developer shall also submit a bond for this purpose which will be released 5 years from the date of project occupancy. 82.TRAFFIC MITIGATION AT WOLFE ROAD AND VALLCO PARKWAY The developer shall mitigate for traffic impacts at Vallco Parkway and Wolfe Road by implementing one of the options stated in the Environmental Impact Report for Main Street Cupertino per the approval of the City Engineer. 83.TRAFFIC MITIGATION AT HOMESTEAD ROAD & LAWRENCE EXPRESSWAY The developer shall agree to submit their fair-share cost of up to $400,000 to improve Homestead Road at Lawrence Expressway according to the direction of the City Engineer.The fair-share contribution to the County will be dependent on the amount of traffic generated by the approved Plan.In the event that a Plan is approved that has reduced traffic impacts, the same formula would be used (calculating the percentage of traffic the project is adding to total growth between background and cumulative conditions). The cost shall be submitted to the County of Santa Clara in the form of a bond or cash deposit prior to the City issuing building permits, with the proviso that the funds be committed to this specific improvement in accordance of section 66000 et. seq. of the California Government Code. 84.PUBLIC ACCESS EASEMENT 243 DraftResolution M-2012-03 September 4, 2012 The Developer shall provide, to the satisfaction of the City Engineer, a public access easement across the site, over the park and over the town center. The easement, including for vehicular and pedestrian travel, shall link Stevens Creek Boulevard with Vallco Parkway, the park and the town center. Public access easements shall include access for both vehicular and pedestrian travel, and shall be shown and recorded on the Final Map. All of the internal roadways shall have a public driving and parking access easement over them. Public access areas may not be closed off without the consentand approval of the Public Works Department, and shall be governed by the Joint Use Agreement recorded within the project’s Covenants, Conditions and Restrictions (CC&R’s).The public access easement shall be subject to approval by the City Attorney. The public access easement shall contain a provision that they may not be modified without the express written approval of the City. 85.PEDESTRIAN IMPROVEMENTS The developer shall provide pedestrian improvements along the property frontage, including crosswalk improvements at adjoining intersections. Final crosswalk improvement plan shall be reviewed and approved by the City Engineer. 86.BUS STOP LOCATION The developer shall improve bus stops on Stevens Creek Boulevard along the project frontage and the immediatevicinity of the project site to the satisfaction of the City Engineer; this may include consistent shelters for the bus stops, but will not include duck outs or relocation of the bus stops. 87.TRAFFIC CONTROL PLAN The developer must submit a traffic controlplan by a Registered Traffic Engineer to be approved by the City. The plan shall include a temporary traffic control plan for work in the right of way as well as a routing plan for all vehicles used during construction. All traffic control signs must be reviewed and approved by the City prior to commencement of work. The City has adopted Manual on Uniform Traffic Control Devices (MUTCD) standards for all signage and striping work throughout the City. 88.TRAFFIC SIGNS Traffic control signs shall be placed at locations specified by the City. 89.TRAFFIC CALMING The developer shall agree to fund up to $100,000 for the purpose of mitigating traffic impacts in the adjacent neighborhoods resulting from the project for a period of 5 years following project occupancy. The developer shall submit a bond for this purpose which will be released 5 years from the date of project occupancy. 90.EMERGENCY VEHICLE PREEMPTION FUND The Developer is required to pay $15,000.00 to fund three Emergency Vehicle Preemption devices for traffic signals at the adjacent intersections. 91.BICYCLE PARKING The developer shall provide bicycle parking consistent with the City’s requirements to the satisfaction of the City Engineer. 92.OPERATIONS & MAINTENANCE AGREEMENT The developer shall enter into an Operations & Maintenance Agreement with the City prior to final occupancy. The Agreement shall include the operation and maintenance for non-standard appurtenances in the public road right-of-way that may include, but is not limited to, sidewalk, pavers, and street lights. 93.TRASH ENCLOSURES The trash enclosure plan must be designed to the satisfaction of the Environmental Programs Manager. Clearance by the Public Works Department is needed prior to obtaining a building permit. 244 DraftResolution M-2012-03 September 4, 2012 94.REFUSE TRUCK ACCESS Thedeveloper must obtain clearance from the Environmental Programs Manager in regards to refuse truck access for the proposed development. 95.STREET TREES Street trees shall be planted within the Public Right of Way and shall be of a type approved by the City in accordance with Ordinance No. 125. 96.FIRE PROTECTION Fire sprinklers shall be installed in any new construction to the approval of the City. 97.SANTA CLARA WATER DISTRICT CLEARANCE Provide Santa Clara water district approval before recordation of the final map. The developer shall pay for and obtain Water District permit for activities or modifications within the District easement or fee right of way or affecting District facilities. 98.STREAMSIDE PERMIT Prior to issuance of a building permit, the developershall provide plans and information that satisfies the requirements of the Stream Side Permit as set forth by the Santa Clara Valley Water Resources Protection Collaborative. These items include, but are not limited to, topographic survey, specific measures to protect streams and/or waterbodies from water quality impacts, coordination with all interested jurisdictional agencies, etc. 99.SANITARY DISTRICT A letter of clearance for the project shall be obtained from the Cupertino Sanitary District prior to issuance of building permits. 100.SANTA CLARA COUNTY FIRE DEPARTMENT A letter of clearance for the project shall be obtained from the Santa Clara County Fire Department prior to issuance of building permits. 101.UTILITY EASEMENTS Clearance approvals from the agencies with easements on the property (including PG&E, PacBell, and California Water Company, and/or equivalent agencies) will be required prior to issuance of building permits. 102.CALIFORNIA WATER SERVICE COMPANY CLEARANCE Provide California Water Service Company approval before recordation of the final map. 245 DraftResolution M-2012-03 September 4, 2012 th PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 4day ofSeptember2012, by the following vote: Vote Members of the City Council AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: ___________________________________________ Grace SchmidtMark Santoro City Clerk Mayor, City of Cupertino G:\Planning\PDREPORT\RES\2011\M-2012-03CC.doc 246 ASA-2012-10 CITY OF CUPERTINO 10300 Torre Avenue Cupertino, California 95014 DRAFTRESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO APPROVING ASITE AND ARCHITECTURAL APPROVAL FOR THE CONCEPTUAL MARKET-RATE RESIDENTIAL LIVE/WORK LOFT UNITS AND MODIFICATIONS TO THE PARKING GARAGE AND RETAIL BUIDLINGS ON AN 18-ACRE SITE LOCATED NORTH OF STEVENS CREEK BOULEVARD BETWEEN FINCH AVENUE (INCLUDING BOTHSIDES OF FINCH AVENUE)AND N. TANTAU AVENUE, SOUTH OF VALLCO PARKWAY IDENTIFIED BY APNS 316-20-085, 316-20-078 AND 316-20-079 SECTION I: PROJECT DESCRIPTION Application No.:ASA-2012-10 Applicant:Kevin Dare Property Owner:500 Forbes, LLC Location:North of Stevens Creek Boulevard between Finch Avenue (including Finch Avenue) and N. Tantau Avenue, south of Vallco Parkway (APNs 316-20-085, 316-20-078 AND 316-20-079) SECTION II: FINDINGS WHEREAS, the Planning Commission and City Council of the City of Cupertino received an applicationfor Architectural and Site Approval forthe conceptual siteplan, elevation and floor plans for a 120 unit market rate live/work loft apartment complex and modifications to the parkin,as described in Section I of this Resolution; and WHEREAS, the necessary public notices have been given in accordance with the Procedural Ordinance of Cupertino, and the City Councilhaveheld one or more public hearings on this matter; and WHEREAS, aSecondAddendum to the 2009 Final Environmental Impact Report was prepato adequately address the environmental review of the proposed application in Quality Act (CEQA); and WHEREAS, the applicant has met the burden of proof required to she following requirements: 1)The proposed project, at the proposed location, will not be detrimental or injurious improvements in the vicinity, and will not be detrimental to the convenience; and 2)Theproposed project will be located and conducted in a manner in accord with the C Comprehensive General Plan,the purpose of the Architectural and Site ReviewChapter of the Cupertino Municipal Code, and complies with the California Environmental Quality Act (CEQA); and 3)The proposed development is consistent with the zoning regulations and the South Vallco Special Center and South Vallco Master Plan; and 4)The proposed development is consistent with the Heart of the Cit 247 Draft ResolutionASA-2012-10September 4, 2012 NOW, THEREFORE, BE IT RESOLVED: That after careful consideration of maps, facts, exhibits, testis matter, the application for Architectural and Site Approval,is hereby approved,subject to the conditions which are enumerated in this Resolution beginning on Page 2 thereof; and That the subconclusions upon which the findings and conditions s contained in the public hearing record concerning Application NoASA-2012-10as set forth inthe Minutes of the City Council Meeting ofSeptember 4, 2012, and are incorporated by reference as though fully set forth he SECTION III: CONDITIONS ADMINISTERED BY THE COMMUNITY DEVELOPMEN 1. APPROVED EXHIBITS The approval is based on Exhibitstitled: Main Street Cupertino, Sand Hill Property Company, Cupertino, Californiasite plan dated August 15, 2012 and dated received August 28, 20 Mixed Use Loft plans consisting ofpages A1.0, A2.1, A2.2, A2.3, A2.4, A2.5, A2.6, and A3.0, dated received August 28, 2012, and Tentative Map pages TM-1 through TM-8 dated received August 28,2012,except as may be amended by the conditions contained in this res 2. CONCURRENT APPROVAL CONDITIONS The conditions of approval contained in file nos. M-2012-03and TM-2012-04 shall be applicable to this approval. 3. NOTICE OF FEES, DEDICATIONS, RESERVATIONS OR OTHER EXACTIONS The Conditions of Project Approval set forth herein may include reservation requirements, and other exactions. Pursuant to Government Code Section 66020(d) (1), Conditions constitute written notice of a statement of the amoun dedications, reservations, and other exactions. You are hereby that the 90-day approval period in which you may protest these fees, dedications, reserva Government Code Section 66020(a), has begun. If you fail to file-day period complying with all of the requirements of Section 66020, you will be legally barred from l such exactions. th PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 4day of September, by the following vote: Vote Members of the City Council AYES: NOES: ABSENT: ABSTAIN: ATTEST: APPROVED: ___________________________________________ Grace SchmidtMark Santoro City Clerk Mayor, City of Cupertino 248 TM-2012-04 CITY OF CUPERTINO 10300 Torre Avenue Cupertino, California 95014 DRAFT RESOLUTION OF THECITY COUNCIL OF THE CITY OF CUPERTINO APPROVINGATENTATIVE MAP TO SUBDIVIDE THREE PARCELS INTO SIXPARCELSWITH A TWO-UNIT RETAIL CONDOMINIUM UNIT ON LOT 5ON AN APPROXIMATELY 18ACRE SITE LOCATED NORTH OF STEVENS CREEK BOULEVARD BETWEEN FINCH AVENUE (INCLUDING BOTH SID AND N. TANTAU AVENUE, SOUTH OF VALLCO PARKWAY IDENTIFIED BY APNS-20-085, 316-20-078 AND 316-20-079 SECTION I: PROJECT DESCRIPTION Application No.:TM-2012-04 Applicant:Kevin Dare Property Owner:500 Forbes, LLC Location:North of Stevens Creek Boulevard between Finch Avenue (including Finch Avenue) and N. Tantau Avenue, south of Vallco Parkway (APNs 316-20-085, 316-20-078 AND 316-20-079) SECTION II: FINDINGS WHEREAS, the City Councilof the City of Cupertino received an applicationfor a Tentative Subdivision Map, as describedin Section I of this Resolution; and WHEREAS, the necessary public noticeshave been given in accordance with the Procedural Ordinance of t of Cupertino, and the City Council haveheld one or more public hearings on this matter; and WHEREAS, aSecondAddendum to the 2009 Final Environmental Impact Report was prepaadequately address the environmental review of the proposed application in Quality Act (CEQA); and WHEREAS, the applicant has met the burden of proof required to s following requirements: 1.That the proposed subdivision map is consistent with the City of Zoning Ordinance and Heart of the City Specific Plan; and 2.That the design and improvements of the proposed subdivision aret with the General Plan, Cupertino Zoning Ordinance and Heart of the City Specific Plan; 3.That the site is physically suitable for the type and intensity approved subdivision; and 4.That the design of the subdivision or the proposed improvements are not likely to cause substantial environmental damage nor substantially and avoidable injure fish 5.That the design of the subdivision or the type of improvements alikely to cause serious public health problems; and 6.That the design of the subdivision and its associated improvemen acquired by the public at large for access through or use of proand 249 Draft Resolution TM-2012-04September 4, 2012 NOW, THEREFORE, BE IT RESOLVED: That after careful consideration of maps, facts, exhibits, testis matter, the application for a Tentative Map,is hereby approved,subject to the conditions which are enumerated in this Resolution beginning on Page 2 thereof; and That the subconclusions upon which the findings and conditions s contained in the public hearing record concerning Application NoTM-2012-04as set forth in the Minutes of the City CouncilMeeting of September 4, 2012, and are incorporated by reference as though fully set forth he SECTION III: CONDITIONS ADMINISTERED BY THE COMMUNITY DEVELOPMEN 1. APPROVED EXHIBITS The approval is based on Exhibits titled: Main Street Cupertino, Sand Hill Property Company, Cupertino, Californiasite plan dated August 15, 2012 and dated received August 28, 20 Mixed Use Loft plans consisting ofpages A1.0, A2.1, A2.2, A2.3, A2.4, A2.5, A2.6, and A3.0, dated received August 28, 2012, and Tentative Map pages TM-1 through TM-8 dated received August 28,2012,except as may be amended by the conditions contained in this res The Tentative Map is specifically approved to create the followi a.Parcel 1 11acres for the retail buildings, park and town square b.Parcel 2 1.5 acres for the office building on the corner c.Parcel 3 1.5acres for theoffice building along Vallco Parkway d.Parcel 4 1.5acres for the hotel e.Parcel 5 1.5acres for the live/work loftapartment building with a 9,146 square foot two-unit retail condominium parcel Parcel 6 Common Area Parcel for the benefit of Parcels 1 through 4.Restrictions and requirements for the shared use of the parking garage to accommooffice uses within the development site shall be included within the CC. 2. CONCURRENT APPROVAL CONDITIONS The conditions of approval contained in file nos. M-2012-03and ASA-2012-10shall be applicable to this approval. 3. NOTICE OF FEES, DEDICATIONS, RESERVATIONS OR OTHER EXACTIONS The Conditions of Project Approval set forth herein may include reservation requirements, and other exactions. Pursuant to Gove Conditions constitute written notice of a statement of the amount of such fees, and dedications, reservations, and other exactions. You are hereby -day approval period in which you may protest these fees, dedications, reservaions, and other exactions, pursuant to Government Code Section 66020(a), has begun. If you fail to file-day period complying with all of the requirements of Section 66020, you wil such exactions. th PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 4day of September2012, by the following vote: Vote Members of the City Council AYES: NOES: 250 Draft Resolution TM-2012-04September 4, 2012 ABSENT: ABSTAIN: ATTEST: APPROVED: ___________________________________________ Grace SchmidtMark Santoro City Clerk Mayor, City of Cupertino 251 Second Addendum To the Final Environmental Impact Report For the Main Street Cupertino Project (SCH# 2008082058) Main Street Cupertino Housing and Retail Modifications File No. M-2012-03, ASA-2012-10 and TM-2012-04 Prepared by the City of Cupertino August 2012 252 TABLE OF CONTENTS Page SECTION 1.0INTRODUCTION AND PURPOSE ........................................................................ 1 SECTION 2.0PROJECT INFORMATION ..................................................................................... 2 2.1PROJECT TITLE ............................................................................................ 2 2.2PROJECT LOCATION .................................................................................. 2 2.3LEAD AGENCY CONTACT ........................................................................ 2 2.4PROPERTY OWNER/PROJECT PROPONENT .......................................... 2 2.5ASSESSOR’S PARCEL NUMBERS ............................................................. 2 2.6GENERAL PLAN DESIGNATION AND ZONING DISTRICT .................. 2 2.7CHANGES TO THE PROJECT DESCRIPTION .......................................... 3 SECTION 3.0DISCUSSION OF ENVIRONMENTAL IMPACTS ............................................... 9 3.1ENVIRONMENTAL IMPACTS ADEQUATELY ADDRESSED IN PREVIOUS ENVIRONMENTAL REVIEW ................................................. 9 3.2TRANSPORTATION IMPACTS OF THE REVISED PROJECT .............. 10 SECTION 4.0REFERENCES ....................................................................................................... 16 SECTION 5.0LEAD AGENCY AND CONSULTANTS ............................................................. 17 Figures Figure 1: Regional Map ........................................................................................................................ 4 Figure 2: Vicinity Map .......................................................................................................................... 5 Figure 3: Aerial Photograph .................................................................................................................. 6 Figure 4: Conceptual Site Plan ............................................................................................................. 7 Tables Table 1: Comparison of Project Schemes ............................................................................................. 8 Table 2: Summary of Project Trip Generation .................................................................................... 11 Table 3: Summary of Significantly Impacted Intersections Under Project Conditions ...................... 13 Table 4: Summary of Significantly Impacted Freeway Segments Operating at LOS F Under Project Conditions ............................................................................................................... 14 Appendix Appendix A: Main Street Cupertino – Revised Proposed Project Analysis Appendix B: Schoolhouse Services Memo 253 SECTION 1.0 INTRODUCTION AND PURPOSE This document is an Addendum to the Final Environmental Impact Report (Final EIR) for the Main Street Cupertino project, which was certified in 2009, and updated with an Addendum adopted on May 15, 2012 by the Cupertino City Council. The purpose of this Addendum is to disclose the environmental impacts of proposed revisions to the Main Street Cupertino project. Under Section 15164 of the California Environmental Quality Act (CEQA) Guidelines, an Addendum to a previously-certified EIR may be prepared by the Lead Agency when subsequent analysis concludes that there will not be a new significant effect or a significant effect being substantially more severe than shown in the previous EIR. If an analysis were to show a new significant effect or that a significant effect would be substantially more severe than shown in the previous EIR, then a Subsequent or Supplemental EIR would be required. This Second Addendum evaluates modifications to the Main Street Cupertino project since the Section 2.7 certification of the 2009 Final EIR and adoption of the May 2012 Addendum. of this Addendum summarizes prior environmental review and modifications to the Main Street Cupertino project that have been approved by the Cupertino City Council. City of Cupertino 1Second Addendum Main Street Cupertino ModificationsAugust2012 254 SECTION 2.0 PROJECT INFORMATION 2.1 PROJECT TITLE Main Street Cupertino Project 2.2 PROJECT LOCATION The 18.7-acre project site is located at the northwest quadrant of Stevens Creek Boulevard and Tantau Avenue in the City of Cupertino. The project site is bounded by Stevens Creek Boulevard to the south, Tantau Avenue to the east, Vallco Parkway to the north, and a parking lot, residences, and retail commercial uses to the west. Finch Avenue extends through the project site. Regional and vicinity maps of the project site are shown in Figures 1 and 2, respectively. An aerial photograph showing surrounding land uses is shown on Figure 3. 2.3 LEAD AGENCY CONTACT Aki Honda Snelling, AICP Senior Planner Community Development Department City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 (408) 777-3313 2.4 PROPERTY OWNER/PROJECT PROPONENT Sand Hill Property Company Kevin Dare, Project Manager 489 South El Camino Real San Mateo, CA 94402 (650) 344-1500 2.5 ASSESSOR’S PARCEL NUMBERS 316-20-078, 316-20-079, and 316-20-085 2.6 GENERAL PLAN DESIGNATION AND ZONING DISTRICT General Plan Designation : Heart of the City Specific Plan Area Zoning District:Planned Development (General Commercial, Professional Office, Light Industrial, and Residential), P(CG, OP, ML, Res) Heart of the City Specific Plan Area City of Cupertino 2Second Addendum Main Street Cupertino ModificationsAugust2012 255 Section 2.0 – Project Information 2.7 CHANGES TO THE PROJECT DESCRIPTION The Main Street Cupertino project consists of a mix of commercial, hotel, office, residential, and town square/park uses. The project applicant is proposing several modifications to the Main Street Cupertino project approved in May 2012 including a change in the housing type and number of units (from 143 senior housing units to 120 market-rate apartments) and a change in the square footage of retail uses (from 138,700 square feet to 130,500 square feet). The office and hotel uses, and the total town square/park area would remain the same. 2.7.1Comparison to Previously Analyzed Project Schemes Environmental review for the project approved in May 2012 consisted of the Main Street Cupertino Final EIR (SCH#2008082058) and an Addendum to the Final EIR. Both the 2009 Final EIR and the May 2012 Addendum adopted by the City Council analyzed the environmental effects of a range of mixed use schemes for the project site. The land uses proposed (retail, office, residential, hotel, and park) under the revised project are the same as the mix of land uses previously analyzed. The May 2012 Addendum evaluated a range of development schemes that would not result in new significant impacts, or substantially greater significant impacts, than those evaluated in the 2009 Final EIR. The proposed project revisions are similar to one of the analyzed schemes that included 120 market-rate apartments. The project schemes analyzed in the 2009 Final EIR and May 2012 Addendum are summarized in Table 1 below. Compared to Scheme 1 analyzed in the May 2012 Addendum, the project applicant is now proposing to increase the restaurant proportion within the retail component of the project (while decreasing the overall commercial square footage) and decrease the amount of office square footage on-site (refer to Table 1 and associated notes). The amount of commercial and office square footage are proposed to be reduced in order to accommodate the increase in restaurant uses on-site. Restaurant uses generate a greater number of vehicle trips compared to general commercial uses, therefore, the amount of commercial and office square footage is reduced to maintain a similar level of traffic generation from the project site as was analyzed in the 2009 Final EIR and May 2012 Addendum. The proposed revised project plazas and landscaping, green building features, roadway improvements, site access, amount of excavation and utility improvements are the same as was analyzed in the May 2012 Addendum (including Appendix E of the May 2012 Addendum). A conceptual site plan of the proposed revised project is shown in Figure 4. Building setbacks and allowed heights have not changed. City of Cupertino 3Second Addendum Main Street Cupertino ModificationsAugust2012 256 PALO ALTO SAN FRANCISCO BAY MILPITAS 101 SACRAMENTO SAN FRANCISCO CUPERTINO 680 MOUNTAIN 237 VIEW LOS 880 ANGELES LOS SAN ALTOS SAN DIEGO SUNNYVALE JOSE SANTA LOS ALTOS CLARA HILLS 82 280 HOMESTEADRD. CUPERTINO 87 101 CAMPBELL 85 SARATOGA 17 LOS GATOS 9 N 9 2 MILES PROJECT SITE REGIONAL MAP FIGURE 1 257 HANCOCKDRIVE JENNY STRAND PARK 280 STEVENSCREEKBLVD. Project Boundary Scale: 1" = ± 704' VICINITY MAP FIGURE 2 258 Commercial Office VALLCOPARKWAY Rosebowl Site: Office Mixed Commercial and Residential under construction () Metropolitan Site: Office Mixed Commercial and Residential Commercial Commercial Residential Project Boundary Residential Residential Scale: 1" = ± 335' Photo Date: June 2011 2.0- AERIAL PHOTOGRAPH WITH SURROUNDING LAND USES 259 Source: , 8.15.12 CONCEPTUAL SITE PLAN FOR REVISED PROJECTFIGURE 4 260 Section 2.0 – Project Information Table 1: Comparison of Project Schemes General Commercial Open Space OfficeResidentialHotelwith Public Athletic Club or Scheme Retail Easement (square feet)(units)(rooms) Additional Retail (square feet) (acres) (square feet) 2009 Final EIR 1. 150,000 145,000 100,000 160Senior 150 1.63 2. 146,500 ---205,000 160Senior 2501.63 1 May 2012 Addendum 143 Senior OR 1. 78,700 60,000 292,000 180 1.55 120 Market Rate Apartments 143 Senior AND 2. 92,200---292,000 180 1.55 105 Market-Rate Apartments 2 Approved Project138,700 ---260,000 143Senior 1801.55 2 Currently Proposed Revised Project 130,500 ---260,000 120Market-Rate Apartments 1801.55 Notes: 1 In the May 2012 Addendum, it was assumed that 10 percent of the commercial uses proposed would be occupied by high turnover restaurants with breakfast service. Note that analyses of increases in the restaurant proportion on-site were completed and included in Appendices E and F of the May 2012 Addendum. The City Council approved a project scheme variation that allowed development of 260,000 square feet of office uses, 138,700 square feet of commercial uses (including 53,538 square feet of restaurant uses), a 180-room hotel, and 143 senior housing units. 2 The project that was approved by the City Council in May 2012 and the currently proposed revised project assumes that 40.3 percent (or 52,592 square feet) of commercial uses would be occupied by restaurants. Of the assumed restaurant square footage, 44.4 percent is assumed to be low-turnover quality restaurants with no breakfast service, 44.4 percent is assumed to be high-turnover restaurants with no breakfast service, and 11.2 percent is assumed to be high-turnover restaurants with breakfast service. City of Cupertino 8Second Addendum Main Street Cupertino ModificationsAugust2012 261 SECTION 3.0 DISCUSSION OF ENVIRONMENTAL IMPACTS In accordance with CEQA Guidelines Section 15162 and 15164, this Second Addendum tiers from the Main Street Cupertino Final EIR prepared in 2008 and certified in January 2009 and the subsequent May 2012 Addendum. This Second Addendum evaluates the extent to which the impacts of the currently proposed revised project are the same or different than those addressed in the previous EIR and Addendum and whether a new significant environmental effect or a substantial increase in the severity of previously identified significant effects would occur. Compared to Scheme 1 analyzed in the adopted May 2012 Addendum, the revised project proposes to increase the restaurant proportion within the retail component of the project while decreasing the overall commercial and office square footage on-site. The existing environmental setting, including thresholds of significance, has not substantially changed since the certification of the 2009 Final EIR and adoption of the May 2012 Addendum. Please refer to these two environmental documents for a complete description of existing environmental conditions. 3.1 ENVIRONMENTAL IMPACTS ADEQUATELY ADDRESSED IN PREVIOUS ENVIRONMENTAL REVIEW The overall amount of development, building massing/height/footprints, area of disturbance, amount of soil excavation, and number of new residents and jobs under the currently proposed revised project would be the same or less as disclosed and analyzed in the certified 2009 Final EIR and subsequently adopted May 2012 Addendum. The revised project would have the same or reduced impacts as the approved project and/or 2012 Scheme 1 in regards to the following environmental issues: Aesthetics Agriculture and Forestry Resources 1 Air Quality Biological Resources Cultural Resources Geology and Soils 2 Greenhouse Gas Emissions 1 The revised project would generate fewer daily trips than analyzed previously (the revised project is estimated to generate approximately 11,972 average daily trips – refer to Table 2 – and the project analyzed in the certified 2009 Final EIR was estimated to generate approximately 13,751 average daily trips) and the amount of excavation required would be the same as analyzed in the adopted May 2012 Addendum. Therefore, the revised project would not result in substantially greater operational or construction air pollutant emissions than disclosed in the certified 2009 Final EIR and adopted May 2012 Addendum. 2 The revised project would result in fewer vehicle trips compared to the project analyzed in the certified 2009 Final EIR and less development than analyzed in the adopted May 2012 Addendum. Therefore, the revised project would not result in new or more substantial significant greenhouse gas emissions than disclosed in the certified 2009 Final EIR and adopted May 2012 Addendum. City of Cupertino 9Second Addendum Main Street Cupertino ModificationsAugust2012 262 Section 3.0 – Discussion of Environmental Impacts Hazards and Hazardous Materials Hydrology and Water Quality Land Use Mineral Resources Population and Housing 3 Public Services Recreation Utilities and Service Systems Cumulative Impacts The proposed modifications, however, would result in different trip generation and distribution and parking demand for this mixed use project than previously analyzed. Therefore, the transportation impacts of the revised project are analyzed below. 3.2 TRANSPORTATION IMPACTS OF THE REVISED PROJECT The existing transportation setting, including thresholds of significance and existing (and background) level of service for study intersections and freeway segments, has not substantially changed since the certification of the 2009 Final EIR and the adoption of the May 2012 Addendum. Please refer to these two previous environmental documents for a complete description of existing transportation conditions. The revised project proposes to increase the restaurant proportion in the retail component of the project up to approximately 40 percent while decreasing the overall commercial and office square footage on-site. These proposed modifications affect the project’s trip generation and distribution, as well as parking requirements. A trip generation, level of service, and parking study was completed by Fehr & Peers in August 2012 that evaluated the proposed modifications. A copy of this study is included in Appendix A of this Second Addendum. 3.2.1 Revised Project Trip Generation A summary of the trip generation for the revised project, as well as the project schemes analyzed in the certified 2009 Final EIR and adopted May 2012 Addendum, is provided in Table 2 below. As shown in Table 2, the estimated trip generation for the proposed project revisions (e.g., average daily trips and peak hour trips) are less than what was estimated for the project schemes analyzed in the certified 2009 Final EIR and/or adopted May 2012 Addendum, except for the outbound movement in the PM peak hour. 3 The adopted May 2012 Addendum evaluated the impacts of developing 120 market-rate apartments on-site. The revised project’s CEQA school impact and mitigation would be the same as disclosed in the May 2012 Addendum (see Appendix B of this Second Addendum); however, the school impact fee and property tax estimated in Appendix B of the May 2012 Addendum would be slightly different under the revised project given the proposed decrease in commercial and office square footage on-site. The change in amount of the school impact fee and property tax is a fiscal effect not an impact under CEQA. City of Cupertino 10Second Addendum Main Street Cupertino ModificationsAugust2012 263 Section 3.0 – Discussion of Environmental Impacts Table 2: Summary of Project Trip Generation AM Peak Hour PM Peak Hour Average Scheme Daily Trips InOutTotalInOutTotal 2009 Final EIR 1.13,751 423 199 622 591 673 1,264 2.10,692 450 133 583 408 628 1,036 1 May 2012 Addendum 1.10,938 527 203 730 476 686 1,162 2.9,821 501 171 672 389 623 1,012 Approved Project 12,117 496 159 655 546 692 1,238 Currently Proposed Revised Project 11,972 492 190 682 564 692 1,256 1 Note: Scheme 1 analyzed in the May 2012 Addendum allows for a 60,000 square foot athletic club or 60,000 square feet of additional retail and 143 senior units or 120 market-rate units. The trip generation for this scheme assumed the highest trip generating uses which are the athletic club and market-rate units. Scheme 2 analyzed in the May 2012 Addendum includes the development of 105 market-rate apartment units. The trip generation for this scheme assumes 120 (instead of 105) apartment units. Therefore, the trip generation for Scheme 2 is conservative. 3.2.2 Level of Service Impacts The project schemes analyzed in the certified 2009 Final EIR and adopted May 2012 Addendum resulted in significant impacts to the following intersections and freeway segments: Homestead Road/Lawrence Expressway (AM and PM peak hours); Wolfe Road/Vallco Parkway (PM peak hour only); Lawrence Expressway/I-280 SB Ramps (AM and PM peak hours); Bollinger Road/Lawrence Expressway (AM and/or PM peak hour); I-280 Eastbound, Lawrence Expressway to I-880 (three segments, PM peak hour only); I-280 Westbound, I-880 to Lawrence Expressway (three segments, AM and/or PM peak hour); A level of service analysis for the revised project was completed and the results show that the revised project would significantly impact the same intersections and freeway segments as the project schemes analyzed in the certified 2009 Final EIR and adopted May 2012 Addendum (refer to Appendix A for more detail), except the revised project would not result in a significant level of service impact to the intersection of Bollinger Road and Lawrence Expressway (as do the project schemes analyzed in the previous environmental documents). In order to assess whether there would be a substantial increase in severity to impacted intersections and freeway segments under the revised project compared to the previously analyzed project schemes, the delay of impacted intersections and the density of the impacted freeway segments were compared (refer to Tables 3 and 4). As shown in Tables 3 and 4, the currently proposed revised project’s delay and density at impacted intersections and freeway segments are not substantially City of Cupertino 11Second Addendum Main Street Cupertino ModificationsAugust2012 264 Section 3.0 – Discussion of Environmental Impacts different compared to the delay and density at impacted intersections and freeway segments of the previously analyzed project schemes. Mitigation for impacts to intersections would be the same as those disclosed in the certified 2009 Final EIR. The project includes the implementation of MM TRAN – 1.1 to reduce the project’s impact at the intersection of Wolfe Road/Vallco Parkway to a less than significant level. Mitigation measures found to be infeasible in the certified 2009 Final EIR remain infeasible. No new or different mitigation measures have been identified since the 2009 Final EIR that would reduce the project’s intersection impacts. Therefore, the project’s impact to the intersections of Homestead Road/Lawrence Expressway and Lawrence Expressway/I-280 SB Ramps would remain significant and unavoidable, as identified in the 2009 Final EIR. As identified in the 2009 Final EIR, the project includes the implementation mitigation measure MM TRAN – 5.1 to reduce the project’s impact to freeway segments but not to a less than significant level. No new or different mitigation measures have been identified since the 2009 Final EIR that would reduce the project’s impacts to freeway segments to a less than significant level. Therefore, the project’s impact to the six identified freeway segments in Table 4 would remain significant and unavoidable, as identified in the 2009 Final EIR. Based on the discussion above, the revised project would not result in new or more substantial (No New Impact) significant impacts to study intersections or freeway segments. 3.2.3 Vehicular Parking Supply Peak parking demand for the revised project based on the City’s Municipal Code, Institute of Transportation Engineers (ITE), and Urban Land Institute (ULI) methodologies are estimated to be 2,009, 1,928, and 1,717, respectively. The City’s Municipal Code and ITE parking requirements assume that the uses on-site do not share parking spaces. The ULI methodology assumes parking spaces would be shared among the uses on-site. As shown on Figure 4, the revised project proposes a total of 1,984 parking spaces. As identified in the certified 2009 Final EIR and the adopted May 2012 Addendum, the project proposes to implement MM TRAN – 8.1-8.3 to avoid a shortage of parking associated with operation of the proposed retail uses, avoid conflicts between office parkers and others on-site, and manage peak parking occasions (e.g., Christmas shopping season). The revised project would not result in new or more substantial significant vehicular parking impacts. (No New Impact) City of Cupertino 12Second Addendum Main Street Cupertino ModificationsAugust2012 265 Section 3.0 – Discussion of Environmental Impacts Table 3: Summary of Significantly Impacted Intersections Under Project Conditions 2009 Final EIR May 2012 Addendum Revised PeakBackgroundApproved Project IntersectionScheme 1 Scheme 2 Scheme 1 Scheme 2 1 HourConditionsProject 2 Delay/Level of Service 3. Homestead Road/ AM 86.4/F89.8/F89.1/F89.5/F89.0/F89.2/F89.2/F Lawrence Expressway* PM111.1/F118.6/F118.6/F118.6/F117.4/F118.8/F118.9/F 8. Wolfe Road/ PM53.1/D68.4/E65.6/E66.2/E63.5/E66.5/E66.6/E Vallco Parkway 21. Lawrence Expressway/ AM 53.7/D-61.1/E60.5/E61.5/E60.2/E60.6/E61.2/E I-280 SB Ramps* PM54.2/D-69.6/E69.6/E71.2/E68.8/E71.1/E71.1/E 26. Bollinger Road/ PM54.7/D-55.3/E+------55.2/E+------ Lawrence Expressway* Notes: * Designated CMP intersection. 1 AM = morning peak hour; PM = evening peak hour 2 Whole intersection weighted average control delay expressed in seconds per vehicle for signalized intersections using method described in the 2000 Highway Capacity Manual, with adjusted saturation flow rates to reflect Santa Clara County conditions. For two-way stop controlled unsignalized intersections, total control delay for the worst movement, expressed in seconds per vehicle, is presented. City of Cupertino 13Second Addendum Main Street Cupertino ModificationsAugust2012 266 Section 3.0 – Discussion of Environmental Impacts Table 4: Summary of Significantly Impacted Freeway Segments Operating at LOS F Under Project Conditions 2009 Final EIR May 2012 Addendum Revised PeakExistingApproved Project FromToScheme 1 Scheme 2 Scheme 1 Scheme 2 1 Hour ConditionsProject 2 Density Eastbound I-280 LawrenceSaratoga PM98101 101 101 100 101 101 Expressway Avenue SaratogaWinchester PM86888888878888 Avenue Boulevard Winchester I-880 PM104 106 106 107 106 107 107 Boulevard Westbound I-280 WinchesterAM 94--- 9596969696 I-880 BoulevardPM7374--- 75--- --- --- WinchesterSaratoga AM65666666---6666 BoulevardAvenue SaratogaLawrence AM74757576757676 Avenue Expressway Notes: 1 AM = morning peak hour; PM = evening peak hour 2 Measured in passenger cars per mile per lane. Density is calculated by using the travel speed from the adjacent segment as well as the volume (flow) from the adjacent segment adjusted by the volume entering/exiting the freeway at the interchange. City of Cupertino 14Second Addendum Main Street Cupertino ModificationsAugust2012 267 Section 3.0 – Discussion of Environmental Impacts 3.2.4 Other Transportation Impacts The revised project’s other transportation impacts, including those regarding roadway changes, pedestrian and bicycle facilities, transit facilities, bicycle parking, neighborhood traffic, and construction traffic are the same as disclosed in the certified 2009 Final EIR and subsequently (No New Impact) adopted May 2012 Addendum. CONCLUSION: The revised project would not result in new or more substantially significant environmental impacts than previously disclosed in the certified 2009 Final (No New Impacts) EIR and subsequently adopted May 2012 Addendum. City of Cupertino 15Second Addendum Main Street Cupertino ModificationsAugust2012 268 SECTION 4.0 REFERENCES City of Cupertino. Final Environmental Impact Report for the Main Street Cupertino Project (SCH# 2008082058). December 2008. Certified January 2009. City of Cupertino. Addendum to the Final Environmental Impact Report for the Main Street Cupertino Project (SCH# 2008082058). May 4, 2012. Adopted May 15, 2012. Fehr & Peers. Main Street Cupertino – Revised Proposed Project Analysis Memorandum. August 6, 2012. Schoolhouse Services. Memo. August 4, 2012. City of Cupertino 16Second Addendum Main Street Cupertino ModificationsAugust2012 269 SECTION 5.0 LEAD AGENCY AND CONSULTANTS Lead Agency City of Cupertino Community Development Department Aarti Shrivastava, Director Gary Chao, City Planner Aki Honda Snelling, Senior Planner Consultants David J. Powers & Associates Environmental Consultants and Planners Nora Monette, Principal Project Manager Kristy Weis, Project Manager Stephanie Francis, Graphic Artist Zach Dill, Graphic Artist Fehr & Peers Transportation Consultants Jane Bierstedt, Principal Todd Henry, Project Manager City of Cupertino 17Second Addendum Main Street Cupertino ModificationsAugust2012 270 Appendix A: Main Street Cupertino – Revised Proposed Project Analysis 271 272 273 274 275 ULI ITE 1 City Code 23 Unshared DemandShared DemandShared Demand (Weekday) Land Use % Demand @ % Demand @ RateSpaces RatesSpaces Spaces Spaces Peak Hour Peak Hour Retail86,500 sf 4.0 3463.7 31785% 270100% 312 45 Restaurant44,000 sf7.633314.4 63490% 57184% 508 Office260,000 sf 3.5 9102.6 679100% 67987% 713 7 Housing120 units 2.0 2401.3 16070% 11382% 183 Hotel 180 rooms 1.0 1800.8 13960% 8450% 112 8,99,10 Revised Proposed Project -- 2,009 -- 1,928 -- 1,71784% 1,828 Notes: (1) Based on City of Cupertino Municipal Parking Code. (2) Based on ITE Parking Generation, 2008. (3) Based on ITE Parking Demand, adjusted with time-of-day facto parking is reserved, the demand would be similar to unshared parking demand, since only hotel and retail uses would share a minimal number of spaces. (4) Assumes that Retail rate includes 10% of restaurant uses. Th (5) Extrapolated from City Code by seat compared to ITE demand rate. (6) Assumes a mix of fine/casual dining and family restaurants, as defined by ULI Shared Parking, per the project description for high and low turnover restaurants. (7) Includes one reserved space per unit. If spaces for residentaces. (8) Peak hour occurs between 11am on a typical non-December week (9) Conservatively assumes no reduction to account for internalized trips on the site (e.g., between office and retail uses). Accounting for internal reduce parking demand, since visitors would park once (e.g., at ) on-site. (10) Peak hour occurs at 1pm on a December weekday. Source: Fehr & Peers, 2012. 276 277 278 279 280 281 282 283 284 285 286 Appendix B: Schoolhouse Services Memo 287 August 4, 2012 Aki Snelling Planning Department City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Dear Aki, The City of Cupertino is considering a plan for the Main Street Cupertino project that would include 120 apartment units. Schoolhouse Services prepared an assessment of the enrollment effects of such units on the Cupertino Union (elementary) and Fremont Union (high) school districts about six months ago. The description of the units has changed somewhat and has become more detailed. You have asked whether the earlier study should now be extended to assess whether the units as now proposed would have effects different from those described in our earlier assessment. Three primary features of the units as now proposed were not included in the units as considered earlier. One is the presence of “work space” in 19 of the 120 units. Additional space in units, of course, raises the question of space that could be used as an additional bedroom and result in more children in the units. My understanding, however, is that the work spaces will all be on the first floor of the two story apartments, with a large window on the front side of the space. The space would be intended to be used for architectural, legal, accounting, etc. office space. The purpose is to have a more compatible façade in the primarily retail environment than would be usual with typical apartments on the first floor. It does not seem to me that tenants would be likely to use this space as a bedroom. Even so, it would seem that the City could choose to preclude such use. It may be that the designation of the space would make such a use impermissible. If not, a recorded covenant, mandated lease terms, or some other mechanism could be used to accomplish the purpose. A second feature is the presence of lofts in half of the units. If these were to be small lofts with a bedroom elsewhere in the unit, they would likely generate more students than typical one-bedroom units. It is my understanding, however, that the lofts are the bedrooms in one-bedroom units. The units are not large for one-bedroom units, except as discussed elsewhere in this letter, so it would not seem that having the bedroom in a loft would increase the probability of children in the unit. 288 The third feature is the inclusion of dens in 24 of the units. The dens would not be designed as bedrooms and they would be attractive as dens/offices. However, given the strong interest of families wanting to have their children enrolled in the local schools, I would expect some “dens” to be used as bedrooms. If this doubled the number of students generated by the 24 units, it would add five students at Cupertino Union schools and one high school student to the numbers of students projected in the earlier assessment. This would be to a large extent offset by another change in the plan. The earlier assessment assumed that all of the apartments would be one-bedroom units. Now 16 are planned to be small (550 square feet) studio apartments. These would not have the students projected earlier, offsetting the majority of the potential additional students resulting from dens. In summary, my review of the new information leads me to conclude that any expected differences in the number of students that should be expected from the 120 units would be negligible. I do not believe further study is appropriate, as I would not expect any significant difference in the findings. In fact, I think the new more detailed information give more confidence to the earlier conclusions. Please let me know if you have any questions. Dick 289 Main Street Lofts Sand Hill Property Company Mixed-Use Development 23-Jul-12Building Analysis Summary The DNA Partnership Type V Above Retail Podium Unit TypeSF*L1L2L3L4DescriptionUnitsParking Req. 1A5504444Studio 1629 1B-182061210101BR 3868 1B-2158061BR + Work 611 1C-1100310181BR + Loft/Town 2850 1C-2172381BR + Loft/Town/Work 814 1D-112056131BR + Den +Loft 1934 1D-2190051BR + Den +Loft/Work 59 Lobby1200 Leasing Office1500 Theater1275 Lounge / Community Area1500 Business Center415 Fitness2150 Clubhouse1700 Totals45164514 120216 * AREA DOES NOT INCLUDE HALLWAYS, LOAD, OR COMMON AREAS (ELEVATOR, TRASH, STAIRS ETC) Mix 1A: Studio13% 1B-1: 1BR32% 1B-2: 1BR + Work5% 1C: 1BR + Loft/Town23% 1C-2: 1BR + Loft/Town/Work7% 1D-1: 1BR + Loft16% 1D-2: 1BR + Den +Loft/Work4% Total100% Avg. Unit Size 1,031 290 291 292 293 294 295 296 297 298 MAIN STREET 2 A-3.0 CUPERTINO STEVENS CREEK @ FINCH CUPERTINO, CA 269'-8" SAND HILL PROPERTY COMPANY 203 REDWOOD SHORES PKWY, STE 200 REDWOOD CITY, CA 94O65 THEATER 1,275 SF WORK STUDIO WORK STUDIO 830 SF 713 SF CONSULTANT WORK STUDIO 713 SF WORK STUDIO 830 SF WORK STUDIO 713 SF WORK STUDIO 830 SF WORK STUDIO 713 SF COURTYARD KEYMAP WORK STUDIO 713 SF WORK STUDIO 713 SF WORK STUDIO REVISION 713 SF WORK STUDIO 713 SF 12_12207.30.12 PROJECT NO.DATE 1"=20' DRAWN BYSCALE CHECKED BY MIXED-USE LOFTS 193'-2" SITE PLAN A1.0 299 MAIN STREET CUPERTINO STEVENS CREEK @ FINCH CUPERTINO, CA 2 A-3.0 269'-8" SAND HILL PROPERTY COMPANY 203 REDWOOD SHORES PKWY, STE 200 REDWOOD CITY, CA 94O65 1C-11C-11C-11A1A 1B-1 1D-1 1D-1 1D-1 1B-1 1D-1 1B-1 1D-1 1C-2 1D-2 1D-1 CONSULTANT 1D-2 1C-2 1D-2 1C-2 1B-2 1D-2 1C-2 1B-2 1D-2 1C-2 KEYMAP 1C-2 1B-2 1B-2 1C-2 1B-2 1C-2 REVISION 1B-1 1C-2 1B-1 1B-2 1B-1 1A1A 1C-11C-11C-11C-11C-11C-1DECK 12_12207.30.12 PROJECT NO.DATE 1"=20' DRAWN BYSCALE CHECKED BY 193'-2" MIXED-USE LOFTS L2 PLAN 1 A-3.0 A2.1 300 MAIN STREET CUPERTINO STEVENS CREEK @ FINCH CUPERTINO, CA 2 A-3.0 269'-8" SAND HILL PROPERTY COMPANY 203 REDWOOD SHORES PKWY, STE 200 REDWOOD CITY, CA 94O65 1C-11C-11C-11A1A 1B-1 1D-1 1D-1 1D-1 1B-1 1D-2 1D-1 1B-1 1D-1 1D-2 1C-2 1D-2 1D-1 CONSULTANT 1C-2 1D-2 1C-2 1B-1 1D-2 1C-2 1B-1 1C-1 KEYMAP 1C-2 1B-1 1B-1 1C-2 1B-1 1C-2 REVISION 1B-1 1C-2 1B-1 1B-1 1C-11C-11C-11C-11C-11C-1 1B-1 1A1A 12_12207.30.12 PROJECT NO.DATE 1"=20' DRAWN BYSCALE CHECKED BY 193'-2" MIXED-USE LOFTS L3 PLAN 1 A-3.0 A2.2 301 MAIN STREET CUPERTINO STEVENS CREEK @ FINCH CUPERTINO, CA 2 A-3.0 269'-8" SAND HILL PROPERTY COMPANY 203 REDWOOD SHORES PKWY, STE 200 REDWOOD CITY, CA 94O65 1C-11C-11C-11A1A 1B-1 1D-1 1D-1 1D-1 1B-1 1D-1 1B-1 1D-1 1C-1 1D-1 1D-1 CONSULTANT 1D-1 1C-1 1D-1 1C-1 1B-1 1D-1 1C-1 1B-1 1D-1 1C-1 KEYMAP 1C-1 1B-1 1D-1 1C-1 1B-1 1C-1 REVISION 1D-1 1C-1 1D-1 1B-1 1B-1 1A1A 1C-11C-11C-11C-11C-11C-1 12_12207.30.12 PROJECT NO.DATE 1"=20' DRAWN BYSCALE CHECKED BY 193'-2" MIXED-USE LOFTS L4 PLAN 1 A-3.0 A2.3 302 MAIN STREET CUPERTINO STEVENS CREEK @ FINCH CUPERTINO, CA 2 A-3.0 269'-8" SAND HILL PROPERTY COMPANY 203 REDWOOD SHORES PKWY, STE 200 REDWOOD CITY, CA 94O65 1A1A 1B-1 1C-11C-11C-1 1B-1 1D-1 1B-1 1C-1 1D-1 1D-1 CONSULTANT 1C-1 1D-1 1C-1 1B-1 1C-1 1B-1 1C-1 KEYMAP 1C-1 1B-1 1C-1 1B-1 1C-1 REVISION 1C-1 1B-1 1B-1 1C-11C-11C-11C-11C-11C-1 1B-1 1A1A 12_12207.30.12 PROJECT NO.DATE 1"=20' DRAWN BYSCALE CHECKED BY 193'-2" MIXED-USE LOFTS L5 PLAN 1 A-3.0 A2.4 303 MAIN STREET CUPERTINO STEVENS CREEK @ FINCH CUPERTINO, CA 269'-8" 22'-0" SAND HILL PROPERTY COMPANY 203 REDWOOD SHORES PKWY, STE 200 REDWOOD CITY, CA 94O65 RAMP UP TO L1 LEVEL TRASH ROOM CONSULTANT MECHANICAL MECHANICAL KEYMAP 22'-0" REVISION 18'-0" RAMP DOWN TO B2 LEVEL 26'-0" 12_12207.30.12 PROJECT NO.DATE 1"=20' DRAWN BYSCALE CHECKED BY 176'-8" MIXED-USE LOFTS B1 PLAN A2.5 304 MAIN STREET CUPERTINO STEVENS CREEK @ FINCH CUPERTINO, CA 269'-8" SAND HILL PROPERTY COMPANY 203 REDWOOD SHORES PKWY, STE 200 REDWOOD CITY, CA 94O65 CONSULTANT RAMP UP TO B1 LEVELMECHANICAL 22'-0" MECHANICAL KEYMAP REVISION 18'-0" 26'-0" 12_12207.30.12 PROJECT NO.DATE 1"=20' DRAWN BYSCALE CHECKED BY 176'-8" MIXED-USE LOFTS B2 PLAN A2.6 305 306 307 308 MAIN STREET CUPERTINO –LETTER OF JUSTIFICATION SUBMITTED FOR MASTER USE PERMIT MODIFICATION SITE PLAN Loft Apartments The site plan that was approved in May 2012 includes 143 age restricted apartments. At the time of approval, the project sponsor stated that the age-restricted apartments would be built at a later phase of the project. In response, City Council requested that the project sponsor present a project that would be built in entirety under one phase. There are two projects types that couldreplace the age restricted apartments and be built during the same phase as the rest of the project. The first is medical or professional office. Even though Main Street is approved for 260,000 square feet of office, those buildings caterto larger tech users desiring large floorplates. An office building at the back of Town Square can provide a different tenant environment and therefore better accommodate different requirements. For example, medical office tenants want to be part of mixed-use downtown environments, but also need easily- accessible patient parking. This office building will have subterranean parking directly beneath the building and it will be surrounded by the retail, hotel, and Town Square. Whether the tenant is a medical user or atraditional office tenant, the building will be a Class A office building and will integrate well with the surrounding uses. We think we can accommodate about 100,000 square feet. The secondis loft apartments. Loft apartmentsrefer to compact, adaptable living space designed with young, child-free professionals in mind. These units will be studios and one bedroom with open kitchens, and open bedrooms usually on the mezzanine level accessible with stairs, not conducive to having children in the home. Incorporatinga non-age restricted residential use at Main Street will provide greater activity, security, and a sense of 24 hour environment like a real downtown. While we believe this product type will create vibrancy at Main Street and help the Citymeet its State-mandated housing requirements, we are acutely aware of the community sensitivity to any residential use that may impact the schools. However, the point is this type of residential use does not. We cannot guarantee the community will 309 be child-free, but one can go over to Santana Row and observe and see if there are school age children in the neighborhood of thousands of units, including lofts. The design, amenities, and overall experience will be oriented to the sophisticated, young tech population in Cupertino and it just would not make sense for families to move in. Furthermore, we will limit those units to 120 (the senior housing count is 143) and only rental. To show good faith, we are willing to pay 200% of the standard school fees applicable to housing projects, even though we expect this project will generate little impact. In discussions with City planning staff, we understand that because of the lack of office allocation in the General Plan, the medical/professional office concept cannot be contemplated at this time.Therefore, we are submitting a plan for 120 loft apartments. Park –The parkwas revised to include the landscape buffer along the west property line with The Metropolitan.We have also included this area within the retail parcel. Commercial Retail/2Floor Flex Office –There is 130,500 sf of commercial nd proposed in the revised site plan. This conforms to the traffic and parking analysis performed by Fehr and Peers. Garage Based on feedback from Council and the community, the massing and width of Garage 1 has been significantly reduced. In the approved plan, the parking stalls were over and under the Flex Office and Retail shops. Additionally, the garage structure covered the area that is now the street connecting Main Street with Vallco Parkway. The overall parking count in the garage has been reduced from 1414 stalls to 1370stalls. The reduction comes in part as a result of the decrease in proposed commercial square footage. This is consistentwith the approved parking study by Fehr & Peers. 310 Access to garage for hotel valet parking may not be very convenient or speedy Pad sizes are correct on notes Some left and right turn lanes for but are drawn garage may be required here to avoid larger backups on this street segment Special design treatment is needed here to bring th Park to the Town Square View to rear of parked cars not Retail on the approved desirable design has not yet been shown Breaking up this long line of parking Be conscious spaces would be More trees in a of pedestrian desirable view to the parking orchard service area Parking on entry drive may arrangement as create circulation conflicts shown on the and backups approved plan would be desirable Might be better to hold the corners here,Single wide crosswalkBuilding shapes and layout different but but will depend on the landscape designwould be desirableprobable better for the building designs Latest Site Plan August 6, 2012 Approve Site Plan Site Plan Comments MAIN STREET CUPERTINO CANNON DESIGN GROUP August 13, 2012 311 Will the Garage be secured? If yes, where and how? (Not enough room at bottom) Long and narrow hallways look like they will be unpleasant Break up with some wider areas like hotel corridors Will the Courtyard be secured? If yes, where and how? This 4-story gap seems like it will be a weak corner Positive corner like Some articulation Santana Row below would be welcome might be better and on this wall a stronger and more This will be an important view distinctive edge to Elevation, paving & landscaping the Town Square LEVEL 2 FLOOR PLAN need to be special LEVEL 1 FLOOR PLAN Loft Concept Comments MAIN STREET CUPERTINO CANNON DESIGN GROUP August 13, 2012 312 Don’t understand floor plans Is this a 3-story tall open space with no overview down from this third level? View out? Bedrooms have Are these no windows or open corridors? natural ventilation LEVEL 4 FLOOR PLAN LEVEL 3 FLOOR PLAN Loft Concept Comments MAIN STREET CUPERTINO CANNON DESIGN GROUP August 13, 2012 313 End bay seems weak Balcony size note very useful End bay seems weak NORTH ELEVATION Tops seem weak Consider some stronger tops End bay seems weak (See Valencia Town Center example below) Deep set windows would be very desirable Sign may be a bit large for adjacency to the Town Square entry Focal point from north-south walk Needs better treatment SOUTH ELEVATION More transparent balconies might Weak corner be better facing the Town Square See note on Level 2 Plan Loft Concept Comments MAIN STREET CUPERTINO CANNON DESIGN GROUP August 13, 2012 314 315 TABLE OF CONTENTS BRIEF SUMMARY¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼1 ENROLLMENT IMPACTS¼¼¼¼..¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼ ¼2 Background Student Generation Rate Analysis Enrollment Impacts Enrollment Capacity of Schools CAPITAL FACILITIES COST AND REVENUE IMPACTS¼¼¼¼¼¼¼¼¼¼¼¼.11 Facilities Costs Main Street Cupertino Project Development Impact Fee Revenue Comparison of Capital Facilities Costs and Development Impact Fe ¼¼¼¼¼¼¼¼¼¼¼¼¼¼ OPERATING REVENUE AND COST IMPACTS17 Operating Costs Operating Revenues Comparison of Operating Costs and Revenues SUMMARY¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼..21 SUPPLEMENT - PROJECT ALTERNATIVE¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼..23 ________________________________________________________________ Schoolhouse Services i January 2012 316 BRIEF SUMMARY The apartments in the Main Street Cupertino project might be exp students. (There would not be any students generated by the 143 senior units.) They genera relatively small number of students for the number of housing un schools are crowded, this number of students in itself is not a Cupertino Union and Fremont Union school districts. The problem is additional students coming both from all new development and due from existing housing. The Cupertino Union School District (elementary and middle schools) and the Fremont Union High School District will need additional facilities to house th The Main Street project will pay development fees to be utilized apartments are only a small part of the project and because their student generation rate is fa low, for both districts these one-time fees will exceed the share of the costs of additional schoo facilities attributable to the Main Street project. The state provides funds to the Cupertino District to supplement property tax revenues and, given additional students, will provide additional funds to main financial resources per student from property taxes and state fu sources, primarily the parcel tax, which are less than ten percent of the b significantly. The Fremont High District depends primarily on the property tax apartments are only a modest part of the total project, property tax revenues from the project will substantially exceed the share of the districtÈs annual operatin Street project. _____________________________________________________________________________________ Schoolhouse Services1 January 2012 317 ENROLLMENT IMPACTS Background The City of Cupertino has contracted with Schoolhouse Services tuct an analysis of the enrollment and fiscal impacts of the proposed Main Street Cupert districts. The land-owner and developer, 500 Forbes, LLC, has previously received ap a multi-use project on the site. It is now requesting that the project include 120 apartment units and some additional retail space, with the athletic club no long project site consists of 18.4 acres located on the north side of by Vallco Parkway on the north, Tantau Avenue on the east side, the west. The site has already been cleared and the developer i the project, including occupancy of the apartments, in 2014. The scope of this report is an analysis of the project revised as the land uses include 120 apartments, 143 units of senior housing, a feet of retail, 292,000 square feet of office space, and 1,963 ping stalls. More information about the sizes and character of the uses is included in a later The project is located within the school district service areas School District (CUSD or Cupertino District) and Fremont Union High School District (FUHSD or Fremont District). It is within the Eisenhower Elementary at with the Sedgwick Elementary attendance area. At the middle sch it is located in the Hyde Middle School attendance area. The project is in the School attendance area, located to the south only a couple of bl report considers the enrollment impacts on these schools and the on the two districts. Student Generation Rate Analysis A projection of new student enrollment resulting from the Main S identification of the potential impact of development on the imp generation rates (SGRs), the average number of students per new housing unit, ar for the projection of enrollment into the future. Multiplying t appropriate SGR results in a projection of students from the uni Different housing types generate different SGRs. Single family detached units, houses with a surrounding yard, usually generate the most students, typically the amount of students generated by most apartment units and conividually owned units in a multi-unit building, often referred to as single family attached). Ho located in a highly rated school district, relatively large grou condominiums (townhomes), especially if they are in a family-friendly setting and affordable, can generate almost as many students as single family detached u _____________________________________________________________________________________ Schoolhouse Services2 January 2012 318 Main Street CupertinoEnrollment and Fiscal Impact Analysis The majority of condominiums and apartments, however, are usuall families. Most of these units are smaller, ranging from studio loft units to predominantly one and two-bedroom units. They are usually in multi-story buildings and lack private yards. Within the range of apartments and condos, however, student gene with the sizes and the design and marketing of the units being major factors; this topic is addressed in more detail below. These student generation comparisons are present in Cupertino. that student generation in essentially every category is greaterit is in almost all other California districts. The high performance of Cupertino school schools make the city an extremely desirable place for families result, developments are more likely to design housing to be attractive to young families. The combination of the desire of young families to reside where the schools and the targeting of new housing to these young families It should be noted that, for both single family units and units in multi-family buildings, when the buildings are new, younger families tend to be over-represented and student generation is generally greater at the elementary school level. As the units , the students present begin to enter the higher grade levels and eventually high schoo and are replaced by younger families, other families become long number of years the average age increases. Eventually a more stabilized SGR evolves as the subdivision ages, with the spreading of students amongst the ele school being more equally apportioned than in the first decade a SGRs of Recent Residential Development In Cupertino Enrollment Projection Consultants (EPC) has been the demographer District (elementary and middle schools) and the Fremont Distric As part of its work the firm determines student generation (counts the number of students) for a large number of relatively new housing units of various housing rate (SGR) is the number of students counted divided by the numb multiplied by the number of projected new units of each housing type to enrollment from new housing. The most recent EPC studies available when the first draft of th completed 12 months ago. Since then the firm has updated its student generation survey and prepared forecasts based on the recently completed official enro school. The findings and forecasts in this yearÈs studies are f year, with the exception of some modest enrollment increases due to higher SGRs and to yearÈs higher than expected kindergarten enrollment. The EPC surveys are the logical place to start to estimate the S They cover 590 attached units, including both apartments and condominiums. One and two- ________________________________________________________________ Schoolhouse Services3 January 2012 319 Main Street CupertinoEnrollment and Fiscal Impact Analysis bedroom units dominate on the sample, though it includes some st Multi-family buildings with generally larger units and/or designed to not included in this sample; they are grouped in a 329 unit sample with single the SGR analysis. The survey by Enrollment Projection Consultants found an average (kindergarten through eighth grade) of 0.27 students per multi-family residential unit, a little more than one student in every four homes. The average SGR for of FUHSD, the high school grades, was 0.08 per unit in multi-family buildings. (This is about four times the 0.02 high school SGR in the remainder of the Fremont District.) Tables 1 and 2 summarize the SGR findings for both CUSD and FUHSD for the resid (The SGRs for single family units are included for comparison.) Table 1 Average SGRs by Housing Type Cupertino Union School District . Housing TypeAverage SGR Apartments and Most Condominiums 0.27 Single Family and Some Condominiums 0.64 Source: Enrollment Projection Consultants. Table 2 Average SGRs by Housing Type Fremont Union High School District Housing TypeAverage SGR Apartments and Most Condominiums 0.08 Single Family and Some Condominiums 0.21 Source: Enrollment Projection Consultants. ________________________________________________________________ Schoolhouse Services4 January 2012 320 Main Street CupertinoEnrollment and Fiscal Impact Analysis Main Street Cupertino SGRs The next step is to choose an appropriate SGR to use in the anal The developer has indicated that they plan to design and market the apartments for sophisticated adult living. We know from many studies that certain characteri adult oriented complexes (and hence few students). These includ The units generally are studios or have only one bedroom; The units are small, in particular lacking larger kitchen/family Though small, the apartments are expensive; families can usually money in alternative locations; They tend to be in taller buildings, with a minimal number of the units at ground level; They lack yards with limited access and play structures for pre-school children, and lack lawns in the complex for the play of elementary school-age children; There is only one assigned parking space per unit; They are marketed for their sophisticated adult life style; To make living at such a high density attractive, they include f fitness centers, party lounges, business centers, gated entrance preferences, but adding to the price. The developer has indicated its intention of designing for and m couples, rather than to family units. It does not plan on any a bedroom; there will probably be a limited number of studios. Much of the apartment building will be four stories tall and thus there will be a limited numbe number of parking spaces reserved for each unit is unknown. The amenity features in the complex, e.g. a fitness center, will be oriented to adults. And, given the high cost of land and of development in amenities, the rental rates will be high, often a problem for yo The name of the project, itself, offers the image of adult-oriented activities à shopping, offices, a hotel, etc. The only outdoor space oriented to the apartments is a small courtya accommodate childrenÈs outdoor play. There are a park and a town square, each less than one acre in size, nearby but separated from the apartments by retail from the survey would appear to be an upper end of the range of generation if the units are designed and marketed as adult one-bedroom units. However, if they have a den or other space that could be used as a bedroom and ha the SGRs could be at the upper end of the range or possibly even ________________________________________________________________ Schoolhouse Services5 January 2012 321 Main Street CupertinoEnrollment and Fiscal Impact Analysis It is almost certain that there will be some students residing in the apa may average as large as 1,200 square feet. That provides room f and is a size more typical for two-bedroom units. The size could easily accommodate a room which a working couple would value as a Åden/office,Æ but which or two children would value as a second bedroom. If there are t that would result in more families. And, of course, Main Street is located in very desirable school districts. The attraction of the schools is such that so choose to live there no matter how adult the orientation of the separated or divorced person will be living in an apartment and a son or with the parent, either because the parents desire to have the c because a son or daughter wants to live with Åthe other parent.Æ The Montebello development at the corner of Stevens Creek and De A example of units designed and marketed for adult living in a ver development was built in 2003 as apartments oriented to adults, rship market at that time led to the units being sold as condominiums, though a rented. The units are one and two bedrooms, with a relatively f modest size for condominiums, typically 850 square feet for one-bedroom units and 1,100 square feet for two-bedroom units. These unit sizes are below the tentative one-bedroom size of the Main Street units; that suggests the Main Street project could h Montebello units. The Montebello includes a pool, a spa, a fitness center, and an entertainment center. There is a Le Boulanger on the ground floor and a Starb out-door space oriented to the development is an interior courtyard s and shrubbery, thus providing no play space. The urban orientation the complex of which Montebello is a part, City Center. The 207 Montebello units are not sufficient to be a reliable stao serve as a useful indicator. A total of 43 students, 27 element six high school students, reside in the 207 units in the project there one year ago.) The SGRs are thus 0.18 and 0.03 for CSUD and FUHSD students respectively. These SGRs can be seen as reasonable estimates of reasonable SGRs for the Main Street units, with one adjustment. couple of blocks from Cupertino High School, a very high achieving school; it should be expected that that will result in a higher high school SGRs. In summary, our perspective is that the Main Street SGRs could b averages of apartments and condominiums units (omitting complexes with larger family oriented units), 0.27 and 0.08 students per unit, and as low as 0.18 and per unit for CUSD and FUHSD respectively. Given the similaritie Main Street settings, we are using SGRs closer to the elementary and middle school SGRs fo the Montebello units in the calculations in this report, knowing lower depending on factors not yet known. The high school SGR u ________________________________________________________________ Schoolhouse Services6 January 2012 322 Main Street CupertinoEnrollment and Fiscal Impact Analysis for units in the CUSD portion of the district. Table 3 below sh CUSD and FUHSD. Table 3 Main Street Development Projected SGRs Main Street Project 0.15 Elementary (K-5) SGR 0.06 Middle (6-8) SGR Total CUSD SGR 0.21 High School (FUHSD) SGR 0.06 Source: Scho Enrollment Impacts With appropriate SGRs we can proceed with the calculation of the 120 apartments. (No students will be generated by the 143 senior units.) We can also a impact of that development on the current enrollment at the impa expected to be Sedgwick Elementary, Lawson Middle, and Cupertino calculated student enrollment impact resulting from the project. Table 4 Estimated Enrollment Impact* ElementaryMiddleHighTotal 120120120 Apartments SGR 0.150.060.06 Students Subtotal 187732 * Three to ten years after construction of the units. Source: Schoolhouse Services. Given the assumptions described above, the Main Street developme approximately 32 students. They will impact the three schools t It is anticipated that 18 students will be assigned to Sedgwick Ele Lawson Middle School, and five will attend Cupertino High School It was pointed out earlier that the distribution skewed towards be reduced over time. After a decade a more even distribution is to be exp well be at approximately the same level or not too far below. I estimates are reasonable for the proposed units; however, many characteristics of the units are unknown and the actual enrollment generated could vary moderatel numbers. In any case, the number of students is modest given th overall size of the project. ________________________________________________________________ Schoolhouse Services7 January 2012 323 Main Street CupertinoEnrollment and Fiscal Impact Analysis Enrollment Capacity of Schools Elementary Schools A discussion of the capacity of the elementary schools needs to pattern of capacity versus enrollment of the district as a wholeCupertino Union is a rapidly growing school district. Enrollment has increased every year in the last decad 15,571 in the fall of 2001 to 18,645 this fall, an increase of 2 schools in the District. This increase is overcrowding many of Most of the schools are housing more students than their design capacity, pr classrooms. School classroom support facilities - cafeteria/general purpose spaces, administrative offices, support classrooms for music/art or for with targeted needs, playground space and facilities, etc. - are over-crowded or unavailable. The Enrollment Projection Consultants fall 2011 study projects a students district-wide by next fall. Then, assuming that the rapid addition of young families in the district begins to abate, enrollment will probably begin a s downward trend from a level of growth that EPC sees as unlikely However, and most important, the trends over the last few years and as projected to continue for the next few years are different in the three areas of the distr of I-280 are experiencing strong growth resulting in very serious cap the central tier lying below I-280 are crowded, though not to the extent of the northern school and are experiencing increases in enrollment for another year or southern portion of the district have already passed their peak ent and have a continued decline projected in the future. Main Street Cupertino is located in the Eisenhower School attend of I-280 and on the boundary of the Sedgwick School attendance area. north of the freeway and is one of the seriously overcrowded schools. I anticipated that students from Main Street would be assigned to case with enrollment from the condominium complex adjacent to an side of the Main Street project. There are advantages to this other than th is closer to the Main Street project and is on the same side of The State of California funds a class size reduction program thasubsidizes a portion of the cost of class size reduction in kindergarten through third grade and in this program. The standard built into the program is a maxim homeroom. Under this standard both Sedgwick and Eisenhower Schools would be impossibly overcrowded. Due to financial and classroom capacity constraint increased the maximum size in the kindergarten through third gra in this school year, raising class sizes in these grades up to a non-to-exceed maximum of 24 students. This increase was possible because the penalties buil waived. However, the waiver sunsets after the 2013-14 school year. This increase provided a ________________________________________________________________ Schoolhouse Services8 January 2012 324 Main Street CupertinoEnrollment and Fiscal Impact Analysis sufficient increase in capacity for Sedgwick, and Eisenhower, to students this year. However, the Cupertino community values edu district will make a strong effort to return to smaller classes in the lower grades if at all possible. Even with the increased capacity resulting from larger classes, accommodate their current enrollment only because many students areas are attend other schools. Sedgwick has 230 more students, a total of 752 stud its attendance area than the 522 that attend the school. Eisenh attendance area; its enrollment is 742 students. The relationship between a schoolÈs enrollment and the count of students residing in the s attendance area needs to be explained. The Cupertino District h located in schools with available capacity; CLIP, the Chinese La is an example. Many students participating in the program are draw northern/northeastern and central tiers of the district, lesseni overcrowded schools. Also, Special Day Class (SDC) programs areated in the southern schools, again drawing some students from the more crowded schoo numerous situations in which students are directed to a school i shifting enrollment south and lessening the pressure on the over-crowded schools. All of these practices have some inherent disadvantage, but it is a much more having the northern schools even more crowded or having students distant from where they live. Future enrollment at Sedgwick is projected to peak at slightly a students residing in its attendance area continue to attend othe adding the projected increase in students residing in the attendance area to current enrollment.) This enrollment is significantly in excess of current capacity, -3 class size reduction at the higher level. Possible options to p addressed in the section entitled ÅFacility CostsÆ below. Middle Schools The situation of growing enrollment overwhelming capacity in the the middle schools. Enrollment Projection Consultants is expect students between now and the fall of 2015. Main Street Cupertino is in the area, though close to the Lawson attendance area, with the two s equidistant from the project. Each of these schools already has students. They are also affected by the overload at Cupertino M enrollment of 1,293 students and would have an enrollment of wel students from its attendance area being assigned to other schoolabout 50 to Hyde Middle. Adding the projected increase in students residing in t areas, these schools are projected to have enrollments above 1,1 Cupertino Middle is projected to have almost 1,700 students. The current facilities at these ________________________________________________________________ Schoolhouse Services9 January 2012 325 Main Street CupertinoEnrollment and Fiscal Impact Analysis schools are overloaded at their current enrollment. They could projected enrollment. High Schools The Fremont Union High School District currently has an enrollme five comprehensive high schools. The enrollment capacity of these fi enrollment exceeds capacity by 619 students. Per EPCÈs latest r enrollment is expected to grow, moderately in the next two years and then at a faster rate. The projected increase over the next two years, 2011 to 2013, is abo the following two years is projected to be about 400 more studen projected over the remainder of the decade as the larger classes already in the element middle school grades enter in to the high school. Main Street Cupertino is located only a couple of blocks from Cu Cupertino High is calculated to have an enrollment capacity of 1,767 students. Its fall 2011 enrollment is 1,893 students , 126 above the capacity. The bigg forecast that in the fall of 2013 the attendance area will have attendance area and by 2015 an additional 200 plus students, bringing its enrollment t 500 students above the current capacity of its facilities. ________________________________________________________________ Schoolhouse Services10 January 2012 326 CAPITAL FACILITIES COST AND REVENUE IMPACTS A school district adding a significant number of students usuallto incur one-time upfront costsfor capital facilities to house the students. California law pr usually paid at the time a building permit is issued, as a sourc This section addresses the cost of accommodating students from Main Street and compares the cost with the development fees the project will generate. Facilities Costs Elementary School Costs The analysis of elementary school capacity above shows that neit whose attendance area the project is located, or Sedgwick Elemen students from the Main Street Cupertino project are likely to be severe shortage of capacity at Eisenhower, will have capacity ave in its present facilities in 2014 when enrollment from the project is first expected to atten the projected number of students generated by the project, is no students. If these were the only students CUSD needed to accommodate, the crowding effect would be minimal. The problem, however, is the total number of and, even more, the increased enrollment from already existing h The districtÈs preferred option for housing the increased enrollment would be a new school i northern portion of the district. However, there seems to be no primary reasons are the lack of a suitable site and, if one weremical cost. The assumption made here is therefore that the increased enrollm by construction of one or more classroom wings at one or more ov-crowded schools, along with improvements in the support facilities to allow the campus to function with a significantly larger enrollment than the design of the campus anticipated. It will be a challenge to add additional classrooms on the Eisen They were designed for smaller enrollments and the sites are only 9.8 and 8.8 acres in size respectively. The School Facilities Planning Division of the Ca makes available a ÅGuide to School Site Analysis and Development recommendations for size of campus for various enrollments. The guide recommends 13.1 acres for an elementary school of 750 students without a class size re with class size reduction. Accommodating about 750 students on a much smaller campus involvon areas the state guide plans for other uses, such as recreation (-7 acres recommended). The assumption used here is that the classroom wings would have two area required and that the enlargement of support facilities woud also be designed to minimize the compromise with recreational space. _____________________________________________________________________________________ Schoolhouse Services11 January 2012 327 Main Street CupertinoEnrollment and Fiscal Impact Analysis The State Allocation Board uses a cost of educational facilities new school facilities. The current grant amount for elementary student, based on a total cost of $18,224 (land costs not included). Cal Allocation Board to review school costs annually, with the next meeting in January 2012. The specific Class B cost of construction index that the Board uses to adjust for changes in cost is not available, but an Engineering index has increased 3.2% in the 12 months ending in September. SAB is likely to increase the grant amount about three percent in January, raising the cost to about $18,800, which is used here because the existing cost i-of-date. It can be noted that a two-story classroom building would be expected to cost about $300,000 per classroom. (An elevator would be required.) Assuming 24 studen cost is $12,500 per student, two-thirds of the State Allocation Board cost. This figure is likel be an understatement of the costs the Cupertino District would incur in making such improvements. The State Allocation Board cost is estimated assu story construction. Adding space to an existing campus is usual Additional students on the campus require enlarging of some of the support facilities as well, e.g., the cafeteria and multipurpose rooms. A rough rule of thu elementary school costs are for support facilities. In this rep student is used as the cost of adding capacity to the Sedgwick or Eisenhower campuses. Middle School Costs Main Street Cupertino is located in the Hyde Middle School atten reason to anticipate that its students will not attend that schoove, enrollment is already above capacity and is expected to grow in the next few y The other middle schools in the northern and northeastern part o Cupertino, are also projected to have enrollments substantially f the capacity of their current facilities. The Cupertino District has plans for expans Plans for the Cupertino campus include a two-story 22 room classroom building. Plans for Lawson include two two-story classroom buildings, one with 16 rooms and the other with eight rooms. Because of the other support and recreational space impr cost of the improvements for both campuses is $50 million. The single-story four unit classroom addition; the staff has recognized the need for it to on the same footprint. Again, these plans have not been formall All three schools have a problem with limited campus space due t being above the level for which they were designed. The ÅGuide to School Si published by the Department of Education has a standard of 20.9 students and 23.1 acres for a school of 1,200 students. Hyde has a current enrollment of 1,005 students and a site size of 14.0 acres; Cupertino has a current ________________________________________________________________ Schoolhouse Services12 January 2012 328 Main Street CupertinoEnrollment and Fiscal Impact Analysis the size of its campus is 20.4 acres; and LawsonÈs enrollment is acres in size. The picture is even more unsatisfactory, if projected future enrollments are considered. These size constraints are a factor contributing to planned improvements. (It should be noted that the CUSD Board o or adopted plans for construction of any of these improvements.) It seems appropriate to again use the state cost figures to calc from Main Street. The state 50% grant amount as of January 1, 2g this amount three percent for the expected January 2012 adjustment fo $9,926. The full cost rounded is thus $19,900. High School Costs Fremont District enrollment exceeds capacity district-wide and at the Cupertino campus, where Main Streets students would attend. The district has already ap capacity to Cupertino High School and has plans for two other, a unfunded, projects. The first project is construction of a new cafeteria/library/administration building; construction is planned to begin in January of 2013 an school in 2014. The cost of construction and all related costs project is the refurbishment of the vacated support buildings into 11 classrooms; construction planned to begin in July 2014 and be finished prior to the start cost is $3.1 million. One of the other projects is the construce classrooms near the existing science building. This project wou classrooms now located there; it is being planned because of the classrooms and would add, at most, the capacity for two classrooof students. The last project, still tentative and in the initial planning phase, is t The location identified as a possibility for the building would classrooms; it is possible that the 20 classrooms that could be accommodated on the site in a two-story building will be needed. At $300,000 per classroom, the c be $3.0 and $6.0 million for the 10 room and 20 room buildings r The total cost of the three projects that result in significant additional capacity, includ room alternative for the classroom wing, is $27.3 million. The capacity assuming 27 students per classroom. Thirty-one classrooms at 27 students per room is capacity for 837 students. The cost per student for these expen student. (The cost is perhaps $42,800 if the 10 room classroom based on the assumptions in the state grant program became $24,520 as of January 1, 2011; increasing this three percent for the coming January adjustment summary, FUHSD anticipates incurring per student costs for the a significantly above that assumed in the state grant program, reflecting the higher cost of adding capacity at an already developed (and crowded) campus. Given th cafeteria, library, administration building, however, the state here, as it is for the elementary and middle school improvements. ________________________________________________________________ Schoolhouse Services13 January 2012 329 Main Street CupertinoEnrollment and Fiscal Impact Analysis Table 5 lists the per student cost and the cost of facilities fo grade levels. Table 5 Per Student Cost of Additional Capacity Fremont Union High School District Grade LevelPer Student CostNumber of Grade Level Cost Students Elementary School $18,800 18$338,400 Middle School $19,900 7$139,300 High School $25,300 7$177,100 Source: Schoolhouse Services. The Main Street Cupertino Project The impact fee revenue, the source of school capital improvement nature of the buildings in the Main Street project. Other docum information about the buildings than is included in this report. However, the projection of development fee revenues and property tax revenues that will acc requires that some critical assumptions about the project be inc the various types of development in the project with the assumed squa The number of apartments, senior units and hotel rooms, the square footage of the retail and office space,and the number of parking stalls comes from the description of the application before the City of Cupertino. The developer and Schoolhouse sta the apartments, senior units and hotel rooms; they should be vie specifications of development, at this stage. Schoolhouse prepared the estimates of ÅOther SpaceÆ with input from knowledgeable Silicon Valley/Peninsula de considered to be simply reasonable scenarios, as the square foot decisions the developer will make whether or not to include certain types of space. Table 6 Square Feet of Development Number ofSquare Feet OtherTotal Unitsper UnitSquare FeetSpace*Square Feet 1201,200144,00020,000164,000 Apartments 143900128,70025,000153,700 Senior Units 180580104,40035,000139,400 Hotel Rooms 83,20083,200 Retail Space 292,000292,000 Office Space 1,963 Parking Stalls 377,100455,200 832,300 Total * Includes lobby, administration, fitness, storage, general purpos room,hallways, etc. Source: Schoolhouse Services. ________________________________________________________________ Schoolhouse Services14 January 2012 330 Main Street CupertinoEnrollment and Fiscal Impact Analysis As discussed above, the apartments are assumed to be targeted to areas would likely include rooms such as a fitness center. The dining facilities and common room space, but not assisted living facilities. Th quite large. This suggests either an upper end facility or an e space estimate includes some meeting rooms, but not extensive meence facilities. Development Impact Fee Revenues Both CUSD and FUHSD are eligible to levy Level 1 development imp development and the majority of commercial/industrial developmen maximum fee amounts; both districts have documents justifying their need to levy t amounts, as do most California school districts. The maximum Le CUSD and FUHSD together are currently allowed to levy is $2.97 p development. Fees can usually be levied on non-residential development because of the role of employment in causing a need for residences where employees and maximum fee for commercial/industrial (non-residential) development is $0.47 per square foot. The preceding section where the costs of additional capacity wer Allocation Board adjusts grant amounts annually in January for c construction. It does the same for development fee amounts, but only biennially. The Class B cost of construction index used by the state board rose 4.3% in for 2011 projects a seven percent increase in January 2012. Thi $3.18 and $0.50 per square foot for residential and commercial/industrial development respectively. Since the existing fees are almost two years out-of-date and will soon be adjusted, the increased fee amounts are used here. FUHSD and its elementary feeder districts have an agreement as to how fee revenues are to be shared. Per this agreement, CUSD will be allowed to collect up amount, projected to be $1.91 per square foot of residential dev collect 40% of the maximum, projected to be $1.27 per square foot of residential development. The maximum fees on commercial/industrial development are projec per square foot for CUSD and FUHSD respectively. The maximum fe adjusted again in January 2014. California Government Code section 65995.1(a) stipulates that re housing will be charged only the commercial/industrial rate; the be charged $0.50 per square foot, with the revenue being allocated between the districts according to the agreed upon shares. It can be noted that, sin involve few employees, that development fees levied on construct be small. ________________________________________________________________ Schoolhouse Services15 January 2012 331 Main Street CupertinoEnrollment and Fiscal Impact Analysis The information about the square footage of the various components Table 6 can be multiplied by the development impact fee amounts that would be generated by the Main Street project, as shown in Table 7 Development Impact Fee Revenue TotalCUSDCUSDFUHSDFUHSDTotal Square FeetFeeFee RevenueFeeFee RevenueRevenue 164,000$1.91$313,000$1.27$208,000$521,000 Apartments 153,700$0.30$46,000$0.20$31,000$77,000 Senior Units 139,400$0.30$42,000$0.20$28,000$70,000 Hotel Rooms 83,200$0.30$25,000$0.20$17,000$42,000 Retail Space 292,000$0.30$88,000$0.20$58,000$146,000 Office Space 832,300$856,000 $514,000$342,000 Total 257 Number of Students $21,000$49,000 Revenue per Student Source: Schoolhouse Services. Comparison of Capital Facilities Costs and Development Impact Fee Revenue Table 8 shows the calculation of the difference between the deve generated by the Main Street projects given the current project proposal and the Const Cost Index adjusted facilities costs per student for each of the modest positive capital cost impact for CUSD and a significantlypact for FUHSD. If the number of students used were from a decade or enrollment will be more balanced among the age levels, the cost among the districts. The positive impacts reflect the preponder-residential components in the Main Street Cupertino project. Table 8 Development Impact Fees Versus Facilities Costs* Fee RevenueFacilities CostPer StudentTotal Facilities Per StudentPer StudentCost DifferenceStudentsCost Impact $21,000 $18,80018$39,600 CUSD - elem $2,200 $21,000 $19,900 7$7,700 CUSD - middle $1,100 25 CUSD - total $47,840 $49,000 $25,300 7 FUHSD $23,700 $165,900 * Both fee revenue and facilities costs are one-time, rather than annual, estimates. Source: Schoolhouse Services. ________________________________________________________________ Schoolhouse Services16 January 2012 332 OPERATING REVENUE AND COST IMPACTS Operating Costs Almost all operating costs tend to increase with enrollment if e maintained. Operating costs are annual costs and are matched with revenues received annually. These costs include personnel costs like salaries and benefits f employees, which generally comprise a large majority of a distri per student estimate is simply a calculation of the operating expenditures divided by the of students, as shown in Table 9. Table 9 Operating Costs Operating Number of Per Student Budget Students Cost $136,474,00018,645 CUSD $7,320 $100,843,00010,346 FUHSD $9,747 Sources:CUSD and FUHSD 2011-12 budgets and Schoolhouse Services. Operating Revenues The Main Street Cupertino project will affect the revenues and c different ways.CUSD is a Årevenue limitÆ district. Like other revenue limited districts in the state, its property tax revenues are not sufficient to reach the under the State of California school funding program. Therefore funds necessary to fill the gap up to the guaranteed level. The result is that t property taxes plus the revenue limit program increases proporti Another reality for a revenue limit district is that the increas tax revenue from new homes is offset by a comparable reduction in the money from the taxes do not affect the total of property tax and state revenue The Årevenue limitÆ total in CUSDÈs 2010-2011 budget is $87.75 million or $4,706 per student. (The Årevenue limitÆ total five years ago was almost exactly the enrollment at that time, the amount per student was $5,300.) Th-2012 state budget is subject to a mid-year adjustment if revenues are lower than assumed in its budget and at least some of the adjustment will take place. However, CUSDÈs budget this magnitude would be necessary. Further reductions are sched The annual reduction is projected at $4.6 million, but only if the measu passed; if not, the reduction is projected to be $11.4 million. Governments also supply other funding, generally for categorical to increase as enrollment increases. The operating revenues from these million, or $1,727 per student for CUSD for the 2011-2012 fiscal year. Thus, the revenue impact _____________________________________________________________________________________ Schoolhouse Services17 January 2012 333 Main Street CupertinoEnrollment and Fiscal Impact Analysis coming from sources that will increase approximately proportiona addition of new students resulting from the Main Street project is $6,433 per st Local revenues to CUSD (other than the property taxes) constitut primarily parcel tax revenues, they total $9.34 million or $501 student. Parcel taxes flow from two measures approved by the voters. However, there will n in the project so its contribution to parcel tax revenue will be revenues are not likely to increase with additional enrollment or as a result of the project. FUHSDis one of the relatively few districts in the state that is not DistrictÈs per student property tax is moderately above the amouit funding guaranteed by the state. Because there is no state supp state revenue does not increase when additional students are enr development generates additional property taxes, increasing the tÈs revenues. The property tax revenues will be equal to the DistrictÈs share of t market value established by the Santa Clara County Assessor at t completed. Table 10 shows the calculation of the assumed assessed valuation for the Main Street project as proposed. The assessed values are calculated based on per unit estimated by Schoolhouse with input from experienced developers. Table 10 Assessed Value Number ofAssessed ValueAssessed UnitsSquare Feet per Unit/FootValue 120$400,000$48,000,000 Apartments 143$250,000$35,750,000 Senior Units 180$200,000$36,000,000 Hotel Rooms 83,200$450$37,440,000 Retail Space 292,000$400$116,800,000 Office Space $273,990,000 Total Assumes assessed value of parking facilities is included with t Source: Schoolhouse Services. The districtÈs share of the base one percent property in the 13-003 tax code area in which the project is located is 16.71% of the total one percent base tax r the total Main Street Cupertino complex is estimated to be $458, students reside in the 120 apartments, this amounts to $65,000 for per student. It should be understood that this large number reflects the fact that residen small part of the total Main street development. ________________________________________________________________ Schoolhouse Services18 January 2012 334 Main Street CupertinoEnrollment and Fiscal Impact Analysis Table 11 Property Tax Assessed Valuation $273,990,000 Estimated Assessed Valuation $2,740,000 Property Tax at 1.0% Tax Rate $458,000 FUHSD Share of Tax Rate (16.71%) $65,000 FUHSD Share of Tax Rate per FUHSD Student Sources: Santa Clara County Tax Collector, Controller, and Schoolhouse Services. The voters of both CUSD and FUHSD have approved bond issues for campus improvements. Debt service on the bond issues is spread among property tax pay value. The current tax rate for CUSD is 0.000290 per dollar of assessed value; the revenue thus paid by Main Street property owners for debt service on CUSD bon Similarly, the current tax rate for the Fremont District is 0.00 and the revenue paid for debt service on the districtÈs bonds is p should be understood, however, that these revenues do not increa districts. The bond issues and associated debt service are fixe amounts. The assessed value of new development increases the total assessed value, spreading th tax base; it does not increase the revenue to the districts. It annually the amount other tax-payers in the districts have to pay. Voters in the Fremont Union High School District, like voters in District, have approved a parcel tax. The tax is $98 per parcel per year, but again the small number of parcels involved will make parcel tax revenue from th project negligible. Other government support to the FUHSD totals $4.7 million, or $4 CUSD, local revenues (other than the property and parcel tax revstitute a far smaller source of funds and are not likely to increase with additional e revenue impact is calculated to be the $6,928 per student receiv $455 per student in other government support. Table 12 shows the calculation of the operational revenue anticipated for additional students as a result of the M Fremont District revenues reflect the substantial property taxes- residentialcomponents of the project. ________________________________________________________________ Schoolhouse Services19 January 2012 335 Main Street CupertinoEnrollment and Fiscal Impact Analysis Table 12 Operational Costs Versus Operational Revenues* CUSD FUHSD Projected Enrollment Students 257 Per Student Revenues State Revenue Limit Funding$4,706 Other State and Federal Funding$1,727 $455 FUHSD Share of Property Tax$65,000 Total per Student Revenues$6,433 $65,455 Total Operational Revenues $160,823 $458,186 Per Student Costs Average Cost per Student$7,320 $9,747 Total Operation Costs $183,000 $68,229 Net Fiscal Impact Per Student Impact ($887)$55,708 Total Impact ($22,177)$389,957 * All costs and revenues shown are annual costs and revenues. Source s: Revenues and costs from the CUSD and FUHSD 2011-2012 budgets, Schoolhouse Services. Comparison of Operating Costs and Revenues Table 12 also shows the operational costs anticipated for both d Street project, which allows for a comparison with the revenues resulting from the project. There is a net fiscal deficit of $887 per student for CUSD as a from the Main Street project. This reflects the assumption that increase along with the increased enrollment, but revenues from the parcel tax will cost side, the current operational cost assumption of $7,320 per pupil for all expenditures. The total deficit is estimated at $ At the estimated assessed valuation of the project, there is a net fiscal student for FUHSD. After providing services to an additional se Main Street project, the surplus is projected to be almost $400,bstantial amount. ________________________________________________________________ Schoolhouse Services20 January 2012 336 SUMMARY The projected enrollment and fiscal impacts resulting from the d housing units (Main Street Cupertino) have been analyzed. These current financial information for both districts and current enrollment information for the affected schools, specifically, Sedgwick Elementary, Hyde Middle All of the dollar amounts in the report should be considered app amounts. Below is a summary of the significant findings contained in this report. The demand for housing in the CUSD and in the Cupertino High att high, to a large extent because of the quality of the schools. apartments are likely to have total SGRs between 0.21 and 0.44 students per househol depending primarily on whether the size and design of the units two-bedroom units. SGRs used for the analysis here are 0.21 for CUS FUHSD, a total SGR of 0.27. Based on the SGRs, an enrollment impact of 32 total students is the Main Street project: 18 students at Sedgwick Elementary; sev Middle attendance area, and seven students in the Cupertino Highttendance area. The enrollment impacts analyzed in this report describe the expe to ten years of the Main Street housing completion. The number couple of decades is unlikely to be higher than the number projected in this report; they are likely to be distributed more equally across the grades. The number of students from the Main Street project is very smal in themselves. The problem is additional students from all new even more, an increasing number of students from existing homes. The principal problem at the elementary level is the distributio District, with schools increasingly overloaded with students in District and gradually emerging capacity in the southern portion. Hyde Midd and Cupertino High are already loaded beyond capacity and badly capacity to accommodate future enrollment. Improvements to prov been planned, but additional funding is needed. Some bond financing is designa improvements at Cupertino High, but some more will probably even funding has been designated for improvements at Sedgwick Element For both districts one-time development fee revenue from the Main Street Cupertino project is anticipated to exceed the share of facilities costs a _____________________________________________________________________________________ Schoolhouse Services21 January 2012 337 Main Street CupertinoEnrollment and Fiscal Impact Analysis Using costs based on the state grant program, the surplus at CUS $2,000 per student, while FUHSD has a projected surplus of over $20, The total CUSD surplus is projected at $47,800 while FUHSD enjoy surplus of $165,900. The share of CUSD annual operational costs attributable to the Mtreet project are anticipated to exceed operational revenue from the project by a student. In contrast, FUHSD operational revenues from the proje operational costs attributable to the project by a large amount,55,000 per student. Operational costs are projected to result a deficit of about $22 possibly a surplus of about $400,000 for FUHSD. ________________________________________________________________ Schoolhouse Services22 January 2012 338 SUPPLEMENT An alternative to the project as analyzed above is now under consideration in the plan process. Copies of Tables 7, 8, 11 and 12 reflecting the compon shown here with the table number followed by ÅaltÆ. The components of the alternative project are as follows: 120 market rate apartments (same as in the project as analyzed), no senior housing (compared with 143 units of senior housing as 292,000 square feet of office space (unchanged), a 180 room hotel (unchanged), 78,700 square feet of retail (a small decrease from 83,200 squar an athletic club (not included in the project as analyzed; or could instead be another 60,000 square feet of retail). Including the senior units rather than the apartments in the pro modification is not shown here. The athletic club is treated here as having the same floor area and assessed value as 60,000 square feet of retail. Table 7 - alt Development Impact Fee Revenue TotalCUSDCUSDFUHSDFUHSDTotal Square FeetFeeFee RevenueFeeFee RevenueRevenue 164,000$1.91$313,000$1.27$208,000$521,000 Apartments 0$0.30$0$0.20$0$0 Senior Units 139,400$0.30$42,000$0.20$28,000$70,000 Hotel Rooms 78,800$0.30$24,000$0.20$16,000$40,000 Retail Space 60,000$0.30$18,000$0.20$12,000$30,000 Additional Retail 292,000$0.30$88,000$0.20$58,000$146,000 Office Space 734,200$807,000 $485,000$322,000 Total 257 Number of Students $19,000$46,000 Revenue per Student Source: Schoolhouse Services. _____________________________________________________________________________________ Schoolhouse Services23 January 2012 339 Main Street CupertinoEnrollment and Fiscal Impact Analysis Table 8 - alt Development Impact Fees Versus Facilities Costs* Fee RevenueFacilities CostPer StudentTotal Facilities Per StudentPer StudentCost DifferenceStudentsCost Impact $19,000 $18,800 18$3,600 CUSD - elem $200 $19,000 $19,900 7($6,300) CUSD - middle ($900) 25 CUSD- total ($2,700) $46,000 $25,300 7 FUHSD $20,700 $144,900 * Both fee revenue and facilities costs are one-time, rather than annual, estimates. Source: Schoolhouse Services. Table 11 - alt Property Tax Assessed Valuation $263,260,000 Estimated Assessed Valuation $2,633,000 Property Tax at 1.0% Tax Rate $440,000 FUHSD Share of Tax Rate (16.71%) $63,000 FUHSD Share of Tax Rate per FUHSD Student Sources: Santa Clara County Tax Collector, Controller, and Schoolhouse Services. The apartments were the only component generating students; sinc alternative the enrollment impacts are unchanged. This means th-time facility costs and annual operating costs are unchanged for both districts. Because the net increase in retail space (including the athletic less than the square feet lost from not including the senior uni six percent, as shown in Table 7 - alt. This brings the impact on the elementary district to an insignificant level and lowers the surplus to the high school di $145,000; the calculations are in Table 8 - alt. The substitution of more retail for the senior units reduces theFUHSD by about three percent, lowering the districtÈs surplus about four , as shown in Tables 11 à alt and 12 - alt. CUSD is not impacted by changes in the property tax. ________________________________________________________________ Schoolhouse Services24 January 2012 340 Main Street CupertinoEnrollment and Fiscal Impact Analysis Table 12 - alt Operational Costs Versus Operational Revenues* CUSD FUHSD Projected Enrollment Students 257 Per Student Revenues State Revenue Limit Funding$4,706 Other State and Federal Funding$1,727 $455 FUHSD Share of Property Tax$63,000 Total per Student Revenues$6,433 $63,455 Total Operational Revenues $160,823 $444,186 Per Student Costs Average Cost per Student$7,320 $9,747 Total Operation Costs $183,000 $68,229 Net Fiscal Impact Per Student Impact ($887)$53,708 Total Impact ($22,177)$375,957 * All costs and revenues shown are annual costs and revenues. Source s: Revenues and costs from the CUSD and FUHSD 2011-2012 budgets, Schoolhouse Services. ________________________________________________________________ Schoolhouse Services25 January 2012 341 342 343 344 345 346 347 348 349