Palo Alto's cramped but popular animal shelter would be preserved, renovated and turned into a "no kill" zone under a proposed partnership between the city and the nonprofit group Pets in Need, which would manage the facility.

The nonprofit, which was established in 1965 as the first no-kill shelter in Northern California, has emerged as a leading contender for taking over Palo Alto Animal Services, a program that has been in limbo since 2012, when Mountain View opted out of its partnership in the facility. The East Bayshore Road shelter continues to serve Palo Alto, Los Altos and Los Altos Hills.

The departure of Mountain View has proved costly. Since the move, Palo Alto has been spending about $900,000 annually to keep the services running. An April 2015 audit of animal services by City Auditor Harriet Richardson concluded that the facility's challenges are "unlikely to be resolved if it continues operating as solely a city-managed function without a significant increase in general fund subsidy, donations, and/or revenue-generating contracts." The audit also deemed the facility "outdated and inadequate to meet modern animal-care standards."

To address these deficiencies, Palo Alto began last fall to look for a nonprofit partner that would manage the facility and work with the city to improve it. The city's initial request for proposals received only one proposal, from Pets in Need. Seeking to get more proposals, Palo Alto issued another proposal in January. Pets in Need again submitted a proposal, while the County of Santa Clara sent in a letter expressing interest in submitting a bid. The Humane Society Silicon Valley, which worked with the city on developing the request for proposals, opted not to submit an offer because it did not want to collaborate on a new full-service animal shelter.

In a letter explaining the nonprofit's decision, Humane Society Silicon Valley President Carol Novello, wrote that moving ahead with a new facility "takes away from resources that could be garnered and deployed to save the lives of animal still at risk today in Santa Clara County."

Pets in Need, on the other hand, appears willing to move ahead with the new facility. The proposed term sheet between the nonprofit and the city calls for Pets in Need to engage an architect to assess repairs and improvements that the facility requires. While immediate improvements are being made, Pets in Need and the city will also confer about "more comprehensive facility improvements."

"It is the intent of the parties that, either through remodeling of the current building or construction of a new building the shelter will meet industry and community standards," the term sheet states.

The terms, which the City Council is scheduled to review and possibly approve on Sept. 9, also call for Pets in Need to meet with current animal-shelter employees, though it does not oblige the nonprofit to retain existing staff. The city's budget currently includes staffing for 10.66 full-time equivalent positions, four of which are dedicated to animal control. Two of these positions are currently vacated.

Under the agreement, the nonprofit would take care of the shelter's animals and provide veterinary care, spaying/neutering services and vaccinations. It would also be in charge of adoptions, foster care, marketing, community education and on-going work with local stakeholders' groups.

The city would remain responsible for animal-control services, which are currently a function of the Palo Alto Police Department and would likely remain so.

The cost of services, according to the term sheet, would be based on a fee structure built on the number and duration of animals brought into the shelter, according to the term sheet.

The potential partnership would also represent a philosophical shift for the shelter. Pets in Need operates its facilities as no-kill shelters, which reserve euthanasia only for animals that are terminally ill or dangerous to the public, according to a letter from the nonprofit's Executive Director Al Mollica.

In the March letter to the city, Mollica wrote that the nonprofit's staff is "excited about the opportunity to integrate our shelter management practices into the Palo Alto operation."

"Through aggressive adoption and spay/neuter programs, we can ultimately reduce costs, end the euthanizing of adoptable animals and transform the PAAS shelter into an important community asset," Mollica wrote.

He also predicted that operating the facility as a no-kill facility will "be well-received by residents, will enhance fundraising efforts, and will distinguish the City of Palo Alto as progressive and humane in its treatment of animals."

"We believe Palo Alto should join the ranks of other cities that successfully operate no kill shelters," Mollica wrote.

In recommending that Palo Alto partner with Pets in Need, staff from the office of City Manager James Keene pointed to the low number of responses and acknowledged that "there is not a robust marketplace of providers bidding for this service as defined."

Pets in Need, a report from Keene's office states, "was selected as providing the most advantageous proposal due to their commitment to retain the shelter in Palo Alto, to lead a fundraising campaign to remodel or build a new shelter, to work closely with the Friends of Animal Shelter and the Palo Alto Humane Society, and to provide the services in a cost effective manner."

If the council approves the terms, the partnership would represent a significant shift for the popular shelter, which was built in 1972 (an isolation building and a euthanasia room were added in 1985) and was facing the prospect of closure in 2012.

A staff proposal in 2012 to close the shelter and contract out animal services attracted significant resident opposition and was summarily rejected by the council, [Changes eyed for Palo Alto's animal shelter prompting a more recent search for an agency that would manage and potentially invest in the existing shelter.

Related content:

• Animal shelter is not closing, Palo Alto officials say

• Changes eyed for Palo Alto's animal shelter