City Council - Regular Meeting

I'd like to call to order the regular meeting of the Campbell City Council for Tuesday, June 2nd, 2026. And we start with roll call. I'll ask the clerk to call roll, please.

Council Member Lopez. Here. Council Member Hines.

Present.

Council Member Scazzola.

Here.

Vice Mayor Bybee. Present. Mayor Furtado.

Present. I'd ask you to please rise and join me for the Pledge of Allegiance.

I pledge allegiance to the flag of the United States, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all.

Thank you. We do not have any special presentations and proclamations. I would like to take note of the fact at this time of the passing of National Football League quarterback Craig Morton. Craig and his family moved here when he was very young. He attended Rosemary School, Campbell Middle School, Campbell High School, and Cal Berkeley. He was an outstanding athlete, went on to a very well-known National Football League career, played for the Dallas Cowboys, the Denver Broncos, and the New York Jets. not the New York Giants, pardon me. And for a long time, he held the record as the only quarterback that actually took a team to the Super Bowl from the American Football Conference and the National Football Conference. That record finally was broken several years later by Tom Brady, who did the same thing. So Craig often talked about his growing up years here in Campbell. His family lived on Rosemary Lane for a long time, as well as his time at Cal. So I will adjourn the meeting this evening in his memory. Just wanted to call that to your attention at the present time. We have no communications and petitions, so therefore now we go to oral requests. And this would be the time in the agenda while anyone present in the audience or someone online might like to address the council on any item not on tonight's agenda. And if you care to do so, you would have two minutes to speak and request, I request you fill out a card, although you're not required to. And I have one request so far under oral requests, and that's from Kristen Constantino.

There we go. My name is Kristen Constantino. I'm a real estate broker here. And I have a listing that's at 715 Cambrian Drive in the Campbell Village neighborhood. You were set on your agenda to hear the ordinance of SB 450 for the irregular lot splits. So I was planning on being here. This evening, however, it has been postponed again to July. And so I was wondering if it's possible that I might be able to get this property on your radar because it does qualify for the urban lot split. It is a 715 Cambrian Drive. It is a 19,000 plus square foot parcel with an 80 foot frontage. And it would... ultimately fall within that irregular lot within the city. So I'm just asking if I might be able to leave this and show my support for the ordinance of SB 450 and have you take a look at this and keep it on your radar for when I see you in July. Is that possible?

Great.

Great, thank you very much for your time.

Appreciate it.

Would anyone else like to speak under oral requests?

Do we have anyone online?

We don't. Okay. So then I will assume there are no further requests to speak under oral requests. So now we'll go to council announcements. Okay, the announcements are as follows. The Campbell Community Center offers a convenient pay-as-you-go Flex Fitness classes designed to fit your schedule. With Flex Fitness, you can choose the classes and the days that work best for you, whether you want to attend a single class or multiple sessions each week. Popular offerings include small group personal training, yoga, Zumba, sound healing, Pilates, and more. For additional information and details for the classes, please visit campbellca.gov. The Campbell Museum is hosting an e-waste and e-recycling event on Saturday, June 20th in the Ainslie House gravel lot, just next to the new library there, from nine to one. The museum will also host a children's writing contest titled Stories from My City, which is open to ages four and up. Submissions are opened June through the end of July with a writer celebration this August. For more information on the writing contest and e-waste event, please visit the Campbell Museum website, which can be found at campbellmuseumsworld.com. The Campbell Adult Center offers a range of supportive services for older adults and their families, such as case management, health insurance advocacy, free legal service, caregiving consultants, and technology tutoring. Services are free of charge and do not require adult learning membership. There will be a senior transportation symposium on June 25 from 1230 to 230 in room at the Community Center. This is the Roosevelt Redwood room near the theater. The symposium is designed to support older adults in navigating local travel options with confidence and ease. The event will provide clear practical information on VTA transit services, VTA paratransit, RYDE curb to curb transportation and local trip planning assistance. Attendees will have the opportunity to speak directly with service representatives and ask questions and gather additional materials. To find out more about this symposium that are offered at the Adult Center, I'll give you the phone number, 408-866-2146. And finally, the Downtown Campbell Business Association will sponsor their annual car show this Saturday in Downtown Campbell from 9 to 1. So we have a bunch of things for people from, gosh, what did I start out with here? Ages four and above. And hopefully if you're interested, please consider participating or visiting some of these classes. So that includes the council announcements. Now we move on to the consent calendar. These are items 7.1 to 7.7 that the council will take as a single item of business, unless a member of the council, a member of the staff, or a member of the public would like us to pull an item for further discussion. Does any member of the council wish an item pulled for further discussion? Any member of the staff, any member of the public? Seeing none, we'll move ahead with the consent calendar. Vice Mayor Bybee.

I'd like to make a motion to approve the consent calendar items 7.1 through 7.7. I'm sorry, 7.6. No, I'm 7.7.

7.7, yes. Okay. I'll second. Motion by the Vice Mayor, second by Council Member Hines. Rocco, please.

Council Member Lopez.

Aye.

Council Member Hines.

Aye.

Council Member Scazzolo. Aye. Vice Mayor Bybee. Aye. Mayor Furtado.

Aye. Okay, moving right along here. We now move to item number eight, which are public hearings and introduction of ordinances. And we will start with item number 8.1. And the staff presentation this evening will be made by senior planner, Daniel Fama.

Good evening. Before you is a ordinance to extend the city's interim ordinance that implements locally the starter home revitalization act. As council may recall, you adopted a ordinance on April 21st that redopted the provisions of the ordinance adopted last year with a revision to when an application must be, a property must be deemed vacant. The change required vacancy to be established at the middle of the application rather than at a point later in time as a prior version of the ordinance had allowed. Now, that ordinance had a 45-day initial approval period. The council considered an extension at May 19th. Unfortunately, you do not have four affirmative votes to extend it. So that ordinance is set to expire on June 5th. And so for the record, this council's prior action did repeal the prior ordinance. So come June 5th, there will be no local implementation of state law. So state law is still in effect, but without any further local ordinance, there is a lot of ambiguity in how the law is effectuated on a day by day basis in a practical sense. So this item is being brought back to the council for further consideration or further direction. And in terms of an update with the demolition control ordinance. So at the April 21st meetings, council did direct staff to look at controlling how the city regulates demolition. The city council also did indicate that staff should consult with HCD regarding that potential ordinance. We did have a meeting with AACD staff earlier this week. They did indicate that they will be providing a technical assistance letter addressing a number of the questions that staff presented to them. And we are hoping to get that letter within the next four to six weeks. So we will have hopefully some more information to share with the council and the public then. And with that, staff does recommend that the council adopt an ordinance that would extend interim ordinance number 262347 for a period of 10 months and 15 days.

Thank you. Thank you, Daniel. First of all, I'll ask the council if there are any questions. No questions. Thank you. So at this point in time, I will open the public hearing and allow anyone to speak on this particular subject. Once again, I ask you consider filling out a card if you'd like to speak, and I do have on two requests so far. So first I'll call on Chris Lindsey, please.

It's not right. Hi, Chris Lindsey. I'm in District 1. I sent this letter, and I'm just kind of following up with some more thoughts. So I'm asking the city to pass a motion to reinstate Ordinance 2334 instead of passing the new ordinance of 262347. The three points I lay out is that I think the original definition of vacant was lawfully interpreted, so I don't think there was a reason to need to change it. Campbell's infrastructure is able to handle the growth. The housing element from 2023 looks at all the major utilities and plans that there's no real concern with the growth that we're able to handle the growth through 2031. And also there are capital residents who want to see starter homes built in Campbell. I'm one of them. And there was multiple people that spoke going back to April 21st and subsequent meetings that spoke in favor. I have, there was a couple projects within my, within a block of me once across the street. And that's something that my family Welcome, we like to see the growth in Campbell. I have to point out that a lot of the opposition to starter homes just came from one neighborhood, that's District 5, that's Vice Mayor Bybee's district. And so I just ask the rest of the council members take into account the wishes of their constituents. So with all that, I think that's the reason I'm asking for Ordinance 2334 to be reinstated. If the council desires to continue with the new ordinance, interim ordinance of 262347, I guess I have to ask, what is the rationale for doing so? This is something I'd like to hear in deliberation. The legal and infrastructure concerns have been addressed, and there is public support for starter homes in Campbell. Furthermore, I have to note that, recall that SB 1123 is an expansion of SB 684. And a major purpose of SB 1123 was to promote starter homes in single family home zones. And looking back to April 21st, this council responded to that by instead proposing a demolition ordinance with kind of the directly expressed intent of going against that. And there was a statement that if a single family home is torn down, there needs to be a single-family home that replaces it. And I think this goes directly against the intent of SB 1123, irrespective of how you define vacant. So again, I ask, what is the rationale with continuing the new ordinance of 26, 23, 47, especially given that Campbell is on track to only meet 26% of its housing target by 2031? I know there's like Barbano, Tech Park, Campbell Given Areas, but I don't think there was close a gap. Thank you.

Thank you. I'd now like to call on Alan Croner.

Everybody, Mr. Mayor, council members. I just wanted to report some good news and say thanks to a couple people. First of all, thanks to Mr. Eastwood. One thing Rob told me he could do is talk to the developers and see if they might be able to work with us. And I'm from 1197 Audrey Avenue, so there was a starter home project right behind me, 1170 Steinway. Well, on May 15th, my wife got a knock on the door And it was Alpha X. And to our surprise, they said, we've heard you, and we're going to scrap the starter home project at Steinway, and we're going to build something that harmonizes with the neighborhood. And we were just rejoicing. It was just an answer to prayer. It was awesome.

I have no other fards.

Would anyone else in the room like to speak? Good evening. Mayor Furtado and members of city council. The item before you is to consider the adoption of a new SB 79 interim ordinance. So just as a reminder, on March 24th of this year, the City Council adopted an ordinance excluding eligible sites from SB 79. It was initially effective for 45 days, but expired on May 8th, 2026, because the original ordinance has expired and new ordinance is required. The new ordinance reflects updated HCD guidance and incorporates latest MPC mapping, which results in really just nominal changes to the study area map, which we had previously prepared, mainly resulting in the removal of some sites, addition of some other sites, and a change of classification, I believe, of one. As previously stated, this does require a four-fifths vote of the City Council for adoption. And as it is largely comparable to the prior ordinance with the exception of those noted items, staff is recommending that the City Council adopt an interim ordinance as presented before you tonight. And that concludes staff's presentation.

Thank you. So first we'll go and ask if there are any questions amongst members of the City Council. Council Member Hines.

Can you show the map again that what would be excluded

I apologize for the size of it. This is not really reflected in the ordinance itself. It's just more of a material change due to the point, the dots of the exact transit stops. It does result in six parcels being added to our SB 79 map, which we'd previously studied. You're talking about a huge area of the city, six is not a lot. And then two parcels are being removed and reclassification of one site. This is that map. This is the affected areas. It's really sites within a half mile of these qualifying transit stops. So you have Bascom Station, Hamilton, downtown and Winchester.

Where did the the walking point come in.

So that kind of goes back to, we had two eligibility criteria which were relevant to Campbell. One is you could exclude sites on the basis that they're historic, and the second is walk distance. So the walk distance is, we were measuring from those points even though that those points did change based on the latest data from MPC, it didn't actually result in the additional removal of any sites from our prior walking distance analysis, because the changes are so nominal. So what you're so really what had been previously presented the sites which were previously identified for exclusion, the basis of walk distance, those are the same as before. Okay. All right. Thank you.

Any other questions? Thank you, Steven.

This is a public hearing. So I will open the public hearing in case anyone from the audience would like to speak on the measure.

Susan.

Sorry, there we go. Good evening, honorable counsel again. I know tonight under SB 79, we're only talking about the walking path and the exclusions, but I wanna bring up the fact that the map is drawn at how the crow flies for a half a mile for a reason, that's a comfortable walk. Now they're saying, okay, well, there's barriers in between like freeways and creeks and wide corridors. you got to now count to a mile. The whole premise of this is a half a mile, but now they're saying we're only going to exclude these if you're at a mile. If I'm two feet short of a mile, I'm still included in those parcels, that's a long way to walk. Also, SB 79 is the one that's going to do a lot of the rezoning and allow the increase in our population of something like 40,000 units. And I don't think the city is ready at all to handle that type of population growth, even if it takes 10 years or more. And I have asked in the past, I know Dan, you had signed on to a letter to the Speaker of the House in California about putting new legislations on hold. And I hadn't heard if there was any update on that effort. Thank you.

Thank you. I haven't heard a reply either. Would anyone else like to speak on the matter? Is there anyone online? Okay. If we have no other requests to speak, I will close the public hearing and what is the pleasure of the.

I'll just make the make the same comment as before that we. This is an implementation of that from implementing SB 79 into Campbell. And SB 79 is a housing directive from Sacramento and it's the law. So we need to implement it as effectively as we can within the city. So therefore, I would be in support of it.

Vice Mayor Biden.

I'm also going to support it. We need guidelines in place in order to effectively implement our state law.

Yeah, I mean, it's difficult, you know, when you hear the potential of 40,000 new units, it's like, that's absolute insanity. And obviously that's the worst case scenario. And I hope that we can continue being smart about, you know, working with developers and our neighborhoods and, And, you know, keep Campbell Campbell as much as possible. We all like we've been saying previously, and we've always been saying this, that we all want more housing, especially affordable housing. And so this will obviously help with that. But I mean, it's just like I feel like cross your fingers and hope. And then I hope that, you know, the people at the state level actually, you know, see the consequences. Maybe I hope that Campbell's not the city where they see the consequences. And I think that most of us here in council are in belief that we need affordable housing, but we need to do it in a much smarter way. And so I would reluctantly support this because, yeah, even affordable housing is something insane where, you know, a normal family of four, it's somewhere around, you have to have a combined income of over $200,000 to even qualify for an affordable housing. Anyways, I don't want to go too into it, but yes, I support this.

Who would like to make a motion?

I'll make a motion to accept the staff's recommendation for the ordinance identifying specific sites for exclusion from Senate Bill 79, applicability amending section 21.2.020.E, the Campbell Municipal Code to clarify the applicability of state and federal preemptions to the zoning code. including as related to the implementation of Senate Bill 79, amending the zoning map to add a reference to historical structures of merit and authorizing submittal of the California Department of Housing and Community Development, CD, for statutory review.

I'll second.

Motion by Council Member Hines, seconded by Vice Mayor Bybee. Roll call, please.

Council Member Hines.

Aye.

Council Member Skizola.

Aye.

Vice Mayor Bybee. Aye. Mayor Futado.

Aye. The ordinance, having achieved four positive votes, is adopted.

It's a big one. I'm going to do the ordinance.

I'm sorry?

She has to read the title.

Yes, please.

Being an interim ordinance of the City Council of the City of Campbell identifying specific sites for exclusion from Senate Bill 79 applicability amending section 21.02.020.E, conflicting requirements of the Campbell Municipal Code to clarify the applicability of state and federal preemptions to the zoning code, including as related to the implementation of Senate Bill 79, amending the zoning map to add a reference to historic structures of merit and authorizing submittal to the California Department of Housing and Community Development for statutory review file number PLN 2025-170.

I'll move to waive further reading.

I'll second. And I can vote on this part? Okay, but I'm allowed to be back here?

Okay. Get out of here. Okay. Motion by

Council Member Hines, seconded by Council Member... Oh, I made the motion. I apologize. The motion by the Vice Mayor, seconded by Council Member Hines. We'll call roll and start excluding Council Member Lopez.

Council Member Hines. Aye. Council Member Skizola. Aye. Vice Mayor Beebe. Aye. Mayor Furtado.

Aye. Thank you. Now we move on to item number three. This is also a public hearing to consider the adoption of an ordinance to extend interim ordinance number 2331, which established an urgency measure in response to the 2018 small cell order by the Federal Communications Commission. Steven Rose, Senior Planner, will also make this presentation.

Thank you again, Mayor Furtado and members of City Council. As stated, the item before you is to consider an ordinance which would serve to extend a previously adopted interim ordinance related to this 2018 small cell order. So just as a brief recap, the city's wireless ordinance was adopted in 2017, which was prior to a 2018 small cell order. On July 1st of last year, the city council adopted interim ordinance number 2331, which materially strengthens the city's ability to effectively regulate wireless facilities and protect community interests in light of the small cell order. That urgency ordinance will expire on June 19th of this year, unless it's extended before you tonight. Staff has recommended a one year extension to provide time to develop permanent regulations, which would be informed by stakeholder input. Just as a, again, as a reminder, this would require a four fifths vote of the city council as a urgency ordinance. And with that, staff is also recommending that the city council adopt the interim ordinance before you. And it's available for any questions.

Thank you. Any questions for Steven?

Yeah, Stephen, the same question I asked before. We had in Campbell Village District 1 a 75-foot tower that was being presented. And what would this affect a reintroduction of that sort of request?

So as the council previously established in its prior ordinance, it provides a distancing requirement from single-family residential, I believe, 200 feet. so in terms of the the ordinance it provides site preference and site location criteria and among them it will go from a carrier would have to demonstrate that a more preferred site in the city's criteria would not be available so they need to exhaust that first and sites which are located within 200 feet of a low density single family site like that union project had presented would not be a preferred site so they would be very far down the list they'd have to exhaust prior options before they could go there very good thank you any other questions

Is there anyone online? We apparently do not have any requests, so I will close the public hearing. What is the pleasure of the council?

I just make a comment further to my comment that the tower that had been presented in further talking with the neighbors around it, they're literally going to have to move. So this is a very important ordinance and I'm totally in favor of it. I'll defer to other discussion before I'll make a motion.

See no other requests. So did you want to speak? No. Okay, go ahead, please.

I want to make a motion for accepting staff recommendation for the public hearing to consider adoption of ordinance extending interim ordinance number 2331, which established urgency measures in response to the 2018 small cell order by the FCC.

I'll second. Okay, motion by Council Member Hines. Second by Council Member Lopez. Roll call, please.

Council Member Lopez. Aye. Council Member Hines.

Aye.

Council Member Skizola.

Aye.

Vice Mayor Bybee. Aye. Mayor Furtado.

Aye. Thank you. This brings us now to new business. Item 9.1 is the approval and the award of the city board. There's an ordinance. I'll remember one of these days. I apologize. Please go ahead.

Being an ordinance of the City Council of the City of Campbell extending urgency measures in response to the 2018 small cell order FCC 18-133 issued by the Federal Communications Commission file number PLN 2025-50.

Thank you.

I will move to waive further reading.

I'll second. Motion by the Vice Mayor, second by Council Member Hines. Roll call, please.

Council Member Lopez. Aye. Council Member Hines.

Aye.

Council Member Scazzola.

Aye.

Vice Mayor Bybee. Aye. Mayor Furtado. Aye.

Sorry, my microphone was off, but noting for the record, that was an aye.

Okay, so now we will move to item 9.1, and this is the approval of a new janitorial service contract for city-owned buildings. And the staff report will be presented by our Director of Public Works, Amy Olay.

Good evening, honorable mayor and members of the city council. Item 9.1 seeks city council approval and award of a new janitorial service contract for city-owned buildings. Janitorial services at the Campbell Community Center, Heritage Theater, and City Park Restrooms has a current contract that was executed by council, adopted by council in 2022. and can be extended for one additional year, so expires in 2027. But the contract that includes a janitorial services for City Hall, the Police Alex, Historical Firehouse Museum, Ainsley House, Carriage House, the Second Street Garage, and the City Service Center expires June 30th, 2026. So therefore, a new contract is needed to maintain services to these facilities and to incorporate the new police operations building. After a competitive request for proposal process, the impact group was, I'm sorry, the impact group was selected Staff therefore recommends the award of the janitorial service contract in the amount of 264,000 to the impact group for a one year term with an option to extend five additional one year extensions. And funding for these services is included in the building maintenance operational budget. So I'm happy to take any questions.

Questions for Amy, pardon me, the vice mayor.

So this question may be redundant. I know I discussed it with the city manager yesterday, but I'm not sure if I asked whether or not the current provider has submitted a proposal.

This is the current provider. We actually received two proposals and this impact is our current. Okay, thank you.

Is the proposed amount within budget? I know you said it's on the budget. Is it within the budgeted amount?

It's what we expected it to be, and we have it programmed in the budget.

Okay, thank you. Thank you. I'm curious if there's no further questions. Would anyone like to speak on this matter? I don't believe anyone's online. Seeing none, we'll bring the matter back to the council for a motion.

I'm happy to move this recommendation.

I'll second.

Thank you. Motion by Councilmember Lopez, second by Councilmember Hines. Roll call, please.

Council Member Lopez?

Aye.

Council Member Hines? Aye. Council Member Schvizola?

Aye.

Vice Mayor Bybee? Aye. Mayor Furtado?

Aye. Okay, so now we move to item 9.2. This is the fiscal year 2027 budget and the capital improvement plan introduction. And so the matter is just being brought to the council tonight, not for adoption, but for review and comment. And I'll ask the city manager to start, please.

Thank you, Mr. Mayor and members of the council. It's my pleasure here this evening to present the budget. I did want to take a moment before I start to thank our finance department staff, our finance director, our assistant finance director, and all of the executive team that worked hard to put this budget in a place where it is today. And I think it goes without saying that it's not easy work considering where we are with our measure K being tied up in litigation. So did want to thank them and recognize they're here this evening, even though I'm doing the bulk of the presentation, staff is present and available to answer any detailed questions you may have. This first slide just sort of highlights where we've been, and it has been a long road, starting with the priority setting. It happened on March 5th and adopted on March 24th. We then conducted a budget study session with the council on May 5th. All of those things led to the budget introduction that you're seeing this evening tonight. The objective tonight is not to take any formal action, but yet other than finalizing the budget and setting June 16th as the adoption date for that. And then I also wanted to note that we did provide some revisions in the service objectives based on feedback I got from individual council members that I agreed with and agreed to make those changes. They have been made and they're provided in attachment to if the council wants to recognize those. And just want to highlight changes since May 5th, and they aren't significant. But what we've done since then is completed the actual budget book, the digital budget book, which you can find online, has been completed, as well as the seven-year forecast. And there's a link that you see here where that is available. And then on top of that, last time when we talked about trying to balance this budget through strategic use of reserves, we've honed that amount and we are now recommending $2.79 million to be used from general fund reserves to close the remaining budget gap. I did wanna note that this was at 2.99 million at the budget study session, but as I said, we've honed that a little bit. And then, of course, the short-term corrective measures that we've detailed, that we do have more details on, but I do want to highlight that there was a lot of effort to bring that budget down. These are short-term corrective measures, don't get to the structural deficit that is in the budget because the strategy here is to use reserves with the expectation that Measure K funds will be available prior to next year's budget. This slide highlights what those corrective strategies are that I just referred to to bring this budget number down, including temporary hiring freezes with an estimated savings of $1.1 million, limited to no use of temporary staffing with an estimated savings of $300,000, and then, as I mentioned previously, use of the general fund reserves at $2.9 million. I'm sorry, $2.79 million. Here, I just wanted to highlight for you the actual numbers so we can see the context of what we're talking about when we're talking about use of reserves. Our revenues and expenditures for fiscal year 27 are proposed at $74,100,000. And you see they match here, which shows an increase of 5.6% from last year. I also wanna highlight the assumptions that go into this, and I'm just gonna read these quickly so council's clear what's being included and what's being assumed. This does not include any cost of living adjustments that are still being negotiated with labor groups. This does not include healthcare contribution rates that are still being negotiated with labor groups. It uses no permanent staffing additions or extensions except for several low-cost position reclassifications and upgrades. I think at May 5th in our study session, we went through those with the council. And probably more significantly, it does not rely upon use of Measure K sales revenues in this budget. As I alluded to, we're certainly expecting to have access to that money prior to next budget year. It does increase our annual unfunded liability payments to CalPERS of $630,000. It also increases our annual general liability and property insurance premiums of $115,000. And then contractually, our obligation to Santa Clara County Fire for the services they provide is an increase of $377,000 in this budget. These slides show in a pie chart format your revenues by type and your expenditures by type. And I've always said I like pie charts and the reason that I like them is because it gives you a visual representation really easy of what's important and what's less important. And the bigger the pie piece, the more important it is. So from a revenue side, you can see the top three revenue sources are property taxes at 34.5%, sales and use taxes at 21.7%, And then next is license and permits at 10.8% on the revenue side. On the expenditure side, salary and benefits for our employees is the largest expense at 52.3%. And supplies and services, which does include the aforementioned fire service contract, is at 36%. And then the expenditures go down from that. I was going to turn these over to our finance director to talk about the forecast, but I'll just cover them for the sake of being brief this evening. And this was developed after our May 5th study session, and it shows to you where we are. See the arrow in the middle of this chart? It shows budget, balanced budget in 2027. That's where we are now. And you can see that the green line, which is revenues, is going to dip below the red line in future years without the use of Measure K, which was intended to fix the structural deficit. You can also see that that structural deficit does start growing in 2028, estimated at 4.1 million and as large as 5.2 million in the out years. And this long-range forecast also shows our general fund reserves usage. And the big caveat to this is assuming that nothing changes with the structural deficit that we have in the budget also assumes that there's no Measure K usage, that if we keep relying upon reserves, you see that our reserve balance will quickly dip, looking at fiscal years 2028 and beyond. And I think it's reasonable to acknowledge that the reserve balance is not going to dip below zero because you can only have a zero savings. But it does show you that trend line that will continue at a steep decline at the burn rate that we would be anticipating without Measure K. then moving into the cip i want to recognize as i mentioned earlier our assistant finance director nort vong is here and was prepared to present this slide but i'm just going to present it to the council for a sense of brevity but if there's questions on the cip we'll invite staff up to answer those but it shows that we have the capital improvement plan of 75 million with new projects at 4.2 million and existing projects that have been previously approved at 71 million. And then projected expenditures for this fiscal year coming up at 7.1 million. And the only change really was since May 5th was the increase in the adult center renovation and relocation project by 200,000. And that is funded by park funds. parking in lieu fees and then lastly and then I'll be glad to take questions come to the recommendation that we get direction and feedback from the council if there is anything yet we have missed or any adjustments that the council deems appropriate this evening we will do so before the June 16th date And then we're asking the council by motion to establish June 16th as a date for a public hearing and adoption of the operating budget and the CIP, as well as the GAN appropriations limit. And so we would ask for that by motion. With that, either myself or our staff is available for questions.

I just want to refer briefly back to the slide that you showed indicating the loss of reserve funds and the deficit should Measure K not become available. But I assume, of course, the council would take action well before that if that trend appeared to start to fall because we have certain minimums of our reserves that we would not allow to fall below that. So I don't wanna say it's misleading. I'm just saying that the council I'm sure would take action before any of that would happen. And I realized that you were just showing it for, actually it's that one, yes. For illustrative purposes should measure K by some reason not be available and the council, if the council took no action whatsoever, which I think is practically impossible, but.

Right, thank you for that clarification. I probably should have been more clear to that point because that is the point that we won't sit idly and just watch our reserves dwindle away. We will have to make some tough decisions. Next year's budget should measure pay not be available, which would include structural fixes to the budget so that you won't see this yellow trend line. Thank you for that clarification.

Thank you, questions by members of the council? Council Member Vines.

Yeah, sorry staff, just bringing up a point that just is confusing to me, the balance sheet, the general fund balance sheet shows the, this is on the, the transmittal letter, or no, it's not on the transmittal letter, but it's the general fund balance sheet shows the general fund as the equal from 2026 to 2027. I don't, it's confusing to me that that doesn't show a change when that's used to the general fund.

Yeah. I found it under the... No, no. I do want to get to your high points up there. It's meant to show that income equals expenses. And FYI, FY26 and FY27, there is a draw on the hazard funds. But it's also dependent upon which general fund reserve accounts are in the a total show here. So let me go into the details to confirm and also to I'll clarify that with the board. And how do we come against for adoption? If this needs to be adjusted, it will be adjusted.

Yeah, because I would expect that if we, whatever amount we agree to draw from the reserves should reflect in that balance sheet. So I guess that's, I guess we're getting into feedback beyond my question into feedback that it's unclear that it's shown here, okay. I think you got the point. Thank you.

Thank you. I do have a request for public comment. So I'll call on Steve Saunders.

good evening steve saunders campbell resident mr mayor vice mayor council members um as you noted the general fund reserves graph it caught my attention now notwithstanding the obvious thing that you can't suddenly spend negative money that's fine too but This budget, by using reserves to paper over the missing Measure K funds, I don't know if anybody else would characterize it that way, that's me, I'm doing it. By doing that, when we get to next year, the 2028 budget, it looks like our reserve situation gets really precarious to apply the same strategy. And that concerns me because we have this legal action that's in appeal. I honestly don't know how long things take, but I can imagine it could take months. Well, if we don't have a definite answer about measure K by February, 2027, we're suddenly looking at the alternate scenario. And I mean, yes, we can wait till then to make cuts, but if we have any idea how long we might have to pursue this strategy, we certainly can't pursue it past 2028. And how long can this drag out? In other words, we've passed something, you know, it's that carrot at the end of the stick out there in front of us, but are we ever gonna catch it? Thanks. Thank you.

Okay, so in addition to what we promised on the rest,

Thank you.

Thank you again for letting me speak. So you have a five-year look ahead in the CIP. You also have a feasibility study or a maintenance study that said there's $42 million in maintenance upgrades needed at the community center. We have certain projects on the five-year look ahead, like fixing the bathrooms at the community center. The pool is on there, which is past failure and needs to be replaced. But I don't see anything in this five-year look ahead of what's gonna happen to this $42 million and maintenance and upgrades. I mean, City Hall, maybe not the same amount, but City Hall needs improvements. And I'm really just asking to start looking at this big chunk of money that's gonna be needed. And at some point, maintenance needs to be evaluated and said, you know, maybe really new is better than fixing or repairing. And if you do fix $42 million, what else fails in that process and that timeline? So I really would just like to see the community center and also City Hall in somewhere in these five-year projections, The pool came back, the pool was here, what, six years ago, eight years ago. We knew that it needed $12 million. We knew it was failing, kind of dropped by for the wayside, and now it is absolutely to the point of failure. I don't think you want to wait till the rest of the community center gets to that point. So I really just was asking for you to start looking at these big numbers of facility improvements and looking at the look ahead. You got sidewalks in here for the next five years and storm drains. but nothing about facilities. Thank you.

Thank you. Anyone else like to speak on this subject? Seeing none, I'll just ask, I know the council has studied a number of these things in some of our preliminary study sessions. So it's not, these matters are not sort of lost their focus on us in the future, but I'll ask the city manager if you'd like to comment briefly.

Yeah, just to the first speaker, I think that goes to the mayor's point about use of reserves. The strategy isn't to continue to use reserves on an ongoing basis. It's a one-time use this year with the strategy of either getting access to Measure K funds or making some serious cuts in the budget come next fiscal year so we wouldn't have to rely upon reserves. So I think, and I appreciate you bringing that question up, that trend line that we saw in that reserve balance is if we continued on the path and do nothing. And I think to your point, we don't intend to do nothing. The intent is that we either have access to those metric aid funds and the deficit will be resolved, or we're going to have to resolve it in other ways, which would be significant budget cuts. And then on the other point with the CIP, I did want to mention that the City Hall projects are listed in the CIP under the unfunded list, because we haven't identified the funding source. And with regard to the community center, the pool, and that is programmed out, but the other improvements are not. So I just wanted to clarify that.

Thank you. Okay. Discussion and comments by members of the council. Council Member Svoboda.

Yeah, thank you. I just want to take this as a moment to acknowledge not only us here on council, but our staff and everyone here at City Hall that I really appreciate that there wasn't an intention on cutting jobs. The economy's terrible. It's getting worse every day. The wealth divide is... growing and accelerating. So, you know, that's real people. And so, you know, a freeze makes sense. I'm just glad that we haven't had to cut any jobs. I hope we never have to because these are essential staff members. So I just want to acknowledge that. And thank you for that consideration that we're all generally in agreement about that. And hopefully, you know, we get through this, we get access to the Measure K funds, and then we start hiring and start giving people more hope in this, you know, drudgery of an economy. Thank you.

Yeah, I'm going to take a point that I've talked about before, that I think the draw of the reserves is way too high. I think that we have to cap that at $2 million. And it's $2 million reserves, including the labor COLA and the labor health care. It was going to make some... very hard decisions to move in that direction. But given the draw of the reserves, it sets us on a path that's unsustainable per the chart that we've been talking about without the Measure K funds. And we need to, we can't rely on, we need to be able to take action so that we're able to manage it and When Measure K funds become available, great. But until then, I think we really need to be much more conservative in the use of the reserves because it's unsustainable for the charts that's been presented there. And so I really strongly emphasize to request the $2 million max. In addition to that, my favorite line item is the 101.5540.7458, which is the 200K fee that we pay to San Jose for zero services. No services are being paid for that. And we're getting public works and public safety load from the buildings that are, you know, drive down Bascom Avenue and you'll see them. That's putting a real load on us and we really need to eliminate that. And so I would ask the council to consider both those points in there. Finally, looking at the CFD one, CFD one is the funds that are purchased and being drawn that's really today being used to fund the San Jose fee. So if that's still, you know, it is, I know it goes into the general fund, but realistically it's funding the San Jose fee. And I'd like to see the San Jose fee eliminated and the CFD fee CFD one fees, which is, I'm the only one on here that's paying property, paying into that. I'd like to see that put into public works for CFD, for CFD one. And then I didn't see the CIP for Santa Clara County Fire building upgrades. I think we should have a portion of that for CFD for Santa Clara County Fire, the buildings that we maintain and we manage. And then finally, we're gonna get a request from Campbell Veterans Memorial Foundation for a small contribution to help them and like to see us support that. Probably gonna come in at about 25K. One final comment on the actions that we're taking. One of the sections that we have is sustainability. where we don't have any action in there. And I think that's giving the wrong message because we've got the cap that we put in there. And I think we should at least put that in there to show that we've got a climate action plan that's a substantial amount of effort that's been put into that. So thank you. Thank you for your time.

Council Member Skisula. Thank you. One moment. Okay. I just wanted to respond to Council Member Hines. I mean, reserves are literally for emergencies, and we are in an emergency right now. And so I think this is a very appropriate time. I trust in staff that I know that they're, of course, trying to use the least amount possible. But I, from day one, personally, I've always wanted us to have the strongest reserves for a situation just like this. I saw the storm clouds approaching, and here it is, and it's only going to get worse, in my opinion. So hopefully Measure K comes through again. But We need to use every penny that staff is asking for in this, in my opinion. This is the perfect time to use our reserves. If we don't use them now, it's going to cut some level of essential services for the community. So I fully agree with this budget and it's a necessity and I would not reduce the reserve amount that we're using here, that we're forced to use here to keep those essential services going. Thank you.

I'll just comment that I support the staff budget here as presented. I appreciate all the work that's been done to get us to this point. I'm not going to get too hung up on this, but I do think it makes sense to add the climate action adaptation work to sustainability, just so it's clear, because that's the high level that members of the public see. And just to address the public comment that we heard earlier about the use of reserves, I agree we can't, in my view, this is not a strategy that we can continue beyond this year. So I, in terms of drawing down the reserves to cover the deficit, we have some slack in our reserves because previous councils have made, have budgeted wisely. And so we're a good percentage above what the GFOA, the Government Finance Officers Association recommends as a best practice. And we still will be after we draw down these reserves. But I don't personally believe we can continue to do this indefinitely. And so from my perspective, we are awaiting the resolution of the measure key lawsuit. And if that doesn't happen, which, as you rightly point out, is not something that's within our control, then we'll have to have some some tougher discussions. But I think this is appropriate action to take for this year.

So I would just comment that it's I just find it very unfortunate that our measure cave monies are we're are being held hostage by one individual when our community overwhelmingly supported the measure to help us with this deficit and to increase our revenues. So I look at this as a stopgap strategy for one year. I'm not really a big fan of drawing down our reserves, but I feel like we're in a very fortunate situation that we have healthy reserves that we're able to draw down on them to address it as a stopgap. And I want it to be clear that once Measure K settles, that there's a clear understanding that those reserves are going to be replenished and not overlooked. And for me, it's a status quo budget. I think the priority is on our labor negotiations so that we address our salary and benefits for our employees, which keep our city running and do the work here. I think that was the majority of my comments and I do support the staff recommendation to at the level to use the level of reserves that are being recommended. I don't see really a better strategy at this point without having to make severe cuts to our employees, but but also And I'm hopeful that the Measure K lawsuit will settle sooner than later, but we really do need to be mindful that come December and mid-year that we really start planning for severe, any major cuts to our employees and our services that we provide to the public.

I would just comment myself also that as other members of the council have noted, the strategy that we're proposing for this year is a one time strategy. And it's not something that we want to continue or can afford to continue. I agree that we only want to use reserves temporarily and for a short time special purpose use. I will say that all of this does enable us to continue a good quality level of services to the residents of the city. as we also continue to work very closely with our business community to support them as well and to improve our business community and listen to what they have to say. I think we have been, you know, working on this for quite some time. I will say with respect to Measure K, once again, you know, we had, I don't give myself credit for this, but there was the foresight of the staff at the time and council at the time to look forward and indicate the importance of proposing Measure K and the increase. And it was done and we followed all of the rules of the state in this manner very carefully, but we followed all the rules. And the voters, while they only had to approve this measure by 50%, approved it by more than two thirds percent, which was outstanding. So we want to be good stewards of those funds. The unfortunate thing is that the Taxpayers Association decided to sue us and We did take the matter, of course, to Superior Court and we won every element there. They decided to appeal it to the Appellate Court. For reasons that I don't understand, the certified transcript of the proceedings of the Superior Court were most recently accepted or presented to the appellate court. I don't know why it took so long, but that was the delay in this process. And we have asked for an expedited hearing at the appellate level. And the appellate level, as I understand it, has narrowed the scope of arguments which can be made by the person groups, the group suing us. So we're hoping for a successful resolution. But I agree with my colleagues that we are doing our best to maintain a high quality of service, keeping in mind the dedicated work of our employees. And I know we'll start to look at this very carefully over the next few months, and we're not gonna just wait and observe it. I will make one comment, Council Member Hines. I know you're very passionate about the the situation in our relationship with the city of San Jose. And the only comment I have to make is it's not something that we have discretion over. It would require several legal actions to do that because in order for us to annex the property that was within the city, not just within their scope, but within the city and for San Jose to give up property, which was very unusual, there were a number of, I don't believe I was on the council at the time, there were a number of agreements that had to be made, including votes by residents and so on. And that was part of the agreement. So to undo that would require some further legal action with the city. That is my understanding. So at this point, it's not a discretionary matter on our part, but it's something that we could continue to look at and see about the lifespan of this thing. And if Those are my comments.

Yeah, thank you. I appreciate that, Mayor. And just since I voted for it, I know exactly what the wording was. And the wording did not include 200K payment to San Jose. So, but I appreciate the consideration of future looking at it. Thank you. I do. That's the 200K.

Yes. Any other comments by the staff? I know your intent is to bring it back on the 16th of June, our second meeting in June. Do you want us to formalize a request to do that?

Yeah, a motion would be great. Just move staff recommendation would be appropriate.

Okay, I'll propose a motion to move to staff recommendation for a June 16th presentation of the budget.

I'll second.

Motion by Councilmember Hines, second by Vice Mayor Beebe. Roll call, please.

Councilmember Lopez? Aye. Councilmember Hines?

Aye.

Councilmember Scusola?

Aye.

Vice Mayor Beebe? Aye. Mayor Furtado?

Aye. Thank you. So that we have no unfinished business. And now we move to council committee reports. Who would like to give some committee reports?

I'd love to give committee reports because it's really been enjoyable to be able to get involved with these. We had an excellent Memorial Day celebration put on by the Campbell Veterans Memorial Foundation. Really superb presentation that was done. I attended the Santa Clara County D4 Town Hall by Supervisor Susan Ellenberg at the library. Very well attended and very good presentation. Hard topics about finances, but very good discussion. I participate in my new role as the Silicon Valley Clean Energy Finance and Admin Committee meeting. Good discussion there again on finances. uh and then attended a hazardous waste uh webinar put on by the uh the same consultant that manages our solid waste and recycling uh organization and the complexity of hazardous waste is pretty phenomenal uh so and then i'm gonna do a shout out to uh Elia, that's the new restaurant over downtown. I strongly encourage you just to look in and see inside. It's a upscale Greek restaurant. Elia actually means olive in Greek, I heard and understood. Great Saganaki, great Moussaka, and just a phenomenal ambiance. So thank you, Mary.

Thank you. Other reports? Vice Mayor Biden.

I also attended the Memorial Day celebration and also a museum board meeting.

Thank you. Yes, Council Member Lopez.

Just a brief one. I was also at the memorial, the Kimmel Memorial Day Foundation. Thank you to the foundation for the great work every year to put that on. My main other one was a meeting of the Deerdawn Station Steering Committee, which is a multi-agency group with different trans agencies in the city of San Jose. So I was participating in my VTA capacity, but it was particularly special because we heard from the widow of Rod Deardon Sr. Rod Deardon Sr. used to serve as a member of that very committee and in fact was at our previous meeting. And so we adjourned in his memory and all understood the charge, what it will mean to carry that work forward given all the challenges, but the vast importance of creating the transit network that we need and deserve.

Thank you. I attended the meeting of the West Valley mayors and managers. We do meet once a month. I will say that budget challenges for city budgets is not unique to Campbell. It extends to many cities, including our neighboring cities. And it extends really to a lot of local government and city councils or cities, I should say, throughout the state. I think we anticipated challenges and like I said, we had hoped that Measure K would be well on its way to sort of solve that for us, but we'll continue to work on that matter. I also, attended the meeting of the Silicon Valley Regional Interoperability Authority, which provides all of the communications, radio communications of all emergency services personnel in Santa Clara County. And of course, the thing that we're planning for right now are the FIFA games and making sure that the communications continue as they should, preventing such things as drones and jamming devices and other concerns. uh looking at the concern of potential human trafficking and there's uh volunteer groups that are also working in that area as well and um fortunately i've also been able to be a part of the national league of cities advisory council having served previously on their board and in public office i now serve on the advisory council And the Advisory Council is looking at municipal finance, no surprise. They're looking at the use of AI and how the National League of Cities might address AI as well as diversity, equity, and inclusion is also a subject matter of local government on the national level. So that concludes the reports. And as I mentioned earlier, I will adjourn on council meeting in memory of Craig Morton. Thank you all for attending. Thank you, colleagues on the city council and members of the city staff, likewise, for your hard work and your leadership within the city. Meeting is adjourned.