Town Council - Regular Meeting

Good evening everyone. This meeting of the Loscatoos Town Council is called to order. Um clerk, can we begin with a roll call, please? Council member, Council Member Hudis here. Council member Badami here. Vice Mayor Risto here. Mayor Moore

here. Thank you very much. Um, okay. So, to begin our meeting, very first thing we have is Kayn, who will be leading us in the pledge of allegiance. Kaylin, come on up. You can go all the way around here, and I'll give you the microphone. Um, while Kayn's walking up, I'll tell you all that, um, Kayn goes to Valley Christian High School. Uh, he is a public speaker, perfect for this evening. Um he's involved in graphic design, game design, visual arts, a real creative renaissance man. Also, um uh very into social studies. Um some of his community service includes youth development, tutoring, helping uh neurode divergent students um in our community. And when asked what his favorite thing about Loscatoos was or what he'd like to share with the community, Kayn said that he loves the friendly and clean atmosphere of the town and the fact that we are close to the Santa Cruz Mountains. Me too. Uh the public services such as parks and library are also amazing and the trees everywhere make it come together. Shouting out public services. Thank you to our town staff. That's uh uh perfect for this evening. Um okay, I will give it over to you to begin the pledge of allegiance. Please rise.

Please rise. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. You all right and Kaitlin, you can um shake all the council members hands. You'll start with council member Badami and make your way down. And then when you get to the clerks, they'll have a little gift for you. So, come this way. Thank you for being here.

Thank you, Kayla. Okay. Um, so we will now move on to our business of the month. Um, thank you. Um, and our business of the month is Ethos. Um, yes, please come on up. Um, Ethos is a relatively new business in Los. So, you've been here for maybe three years now. Okay. Um, and ethos, so the theme of of the business and the resident this month is Earth Month. Um, so two of our environmentally focused um, businesses and causes. And so Ethos is a refillery among many other things. Um, and I know ethos because I'm a I'm a regular there. I get my my shampoos and soaps and uh if you need wash or uh uh uh paper towels instead they have my favorite product is the unpaper towels um which are reusable paper towels that you put in the uh laundry. So, I'm I'm a big fan of Ethos and so I will um read a little bit about why you are the Loscatoos business of the month. Um so, congratulations to Meredith Keats and the entire Ethos team on being named Loscatos's business of the month. This April, as our community celebrates Earth Month, Ethos is helping Loscatans live out our environmental values by offering carefully curated refillable and reusable essentials. Ethos makes it easy and approachable for everyone in town to minimize our impact on the planet. What makes Ethos so special is the way they meet our community where it is, showing that conscious, low-waist living does not have to be complicated or out of reach. We are very fortunate to have this woman-owned, locally rooted small business as such a welcoming presence in Loscatos. Thank you, Ethos. Thank you, Meredith, uh, for helping all of us live in alignment with the values we share. Um, congratulations to Ethos. Um, yeah. Go ahead.

Okay. And then, do you want to say a few things about Ethos? I mean, you said it all right there. So, we're just really honored to be receiving this from you and the council. So, thank you very much. And um it's been amazing being in the Loscatoos community with this foreign concept to money and having people welcome it and explore it and come in and ask what is this all about? And it becomes a conversation and an education. And so to be here on Earth Month on the eve of Earth Day um is an honor. So thank you very much. Well,

thank you. If you have not checked out Ethos, it is in downtown Los Gatos. Um uh near the What are you near? Um

Athleta. Yeah. The the uh clothing store. So um check out Ethos. Okay. Um uh so another um uh individual that has helped um our businesses and our community become more clean and green is Christy Bosovich um who can come on up. And Christy was I have to give full credit to Vice Mayor Maria Risto for um recommending Christie um for this honor. So uh Christie is a St. Mary's parent um among many other things. And if you all are familiar with the St. Mary's Country Fair, it's a it's a wonderful event that happens every year in our town over a weekend. And it's an amazing event. Um but what Christie did is took an already incredible event and turned it into a sustainable, low to no waste um event and is continuing to to improve on that um in in future years. and she's joined here by her family, her four children um who are her her inspiration, which was very inspiring to me. Um so I'll uh uh read this for you. So congratulations on being named Loscatos's resident of the month. Your work to eliminate single-use plastics and improve sustainability at the St. Mary's Country Fair is truly remarkable. This recognition is especially fitting during Earth Month as it reflects the dedication, leadership, and forwardthinking spirit you have brought to our community. From ensuring all food and drink supplies are 100% compostable to upgrading the hydration hydration station with refillable stations. I was there um this past year. I refilled my water bottle at that station. Um uh you have reimagined what a community event can look like when sustainability is a priority. What makes your work even more meaningful is the purpose behind it. This work done for your children and the next generation inspires our whole town to strive for a cleaner, healthier world. Thank you,

Christie, for showing Loscatos what thoughtful choices big and small uh can do and and add up to something significant. So, thank you very much and congratulations. Do you want to say a few words?

Thank you so much, Mayor Moore, for this incredible honor. I just want to um say very briefly that I feel so honored to be a part of the Lascatos community, but also the St. Mary's community, which puts such a great emphasis on one of our core values, which is to be great stewards of God's green earth for future generations, like this little one right here in in the back. So, thank you to everyone in the St. Mary's community who helped us to make this happen, including Maria, who was also very influential. So, thank you to everyone. We are so grateful to be part of this town and we're excited for more sustainability to come and future country fairs.

Congratulations. Can we give Christie one more round of applause? Okay. Um the next item we have is a proclamation for National Poetry Month. Um unfortunately our poet laurate Laur la Laurate was not able to join us here this evening. Um we might ask him to come back and do another poem. Um but I decided to write a haik coup for this evening. I'm just kidding. I it's very short but I didn't I didn't think we love locatos. Loscatos is the best. Go locatos. That might add up to the correct syllables. Um uh so I uh will be just taking a picture with this proclamation. I think. And um but this month is National Poetry Month for those of you that are poets. It's an incredibly important art form and and I uh encourage you all to to participate in poetry however you can.

Perfect. Perfect. Thank you. Okay. Um uh we will now go to our final presentation of the evening um which is from our uh Loscatoos uh community center club. So, please come on up to the podium and they will be presenting um about the potential of a teen center uh and uh they are sponsored by Loscatoos Thrives. Hi there. Floor is yours. Yeah.

Okay. Thank you so much. Hi there. I'm No Raone from the Lascatos Community Center club and we are here to present about who we are as a high school club. So, this is a few more of our members. Uh our president Tanner Golden which uh has presented to a few of you before. Sally wasn't able to make it today. He's pretty sick, but we're presenting as well. Uh we are just a group of interested high schoolers that wanted a community center in Los Gatos uh as soon as we heard about the project. Uh we started from a teen focus group uh led by Kylie Clark who continued to help our club throughout uh and Erica Weinstein uh who just ran that focus group. They wanted to get some impact from or some some knowledge from the teens about what they could use on this project and get a positive impact. and we went back and created a club in the high school because we thought it was a really great opportunity. Uh some things we've done so far have been mainly more of the same as this. We've done some events at the high school, at the middle schools, um presented to youth commissions, um some informal events for students as well as uh high school parents, uh and all sorts of events that we've attended as well. And our main uh activity over the past year was creating this survey that went out to all sorts of high schoolers uh throughout Loscats, mainly Loss High School students. Um in which we surveyed high school students about how they spent time outside of school and what the effects of a community center could be for them. Uh and with that research, we were able to get a lot of information that ended up being quite a bit of use in our teen needs uh what is that called? Our teen needs assessment that has gone out to the town recently. And then to talk about the research, I'll hand it over to to Hi-rod.

Yeah. Hi, my name is Hirod and today I just want to highlight kind of some of the things that were common with what youth wanted to see in a community center. And it really speaks to me is just the amount of stuff up there that emphasizes kind of social connection, right? You have sport courts and ping pong room and billiard's room and all the fitness stuff kind of all centers around the idea that teens want a space where they can go and unlike that library where they have to be quiet where they can just exist and kind of interact with one another because especially in our age today dominated so much by social media. I think this tells me that stu students and teens especially really are looking to find a community center where they can just spend time with each other. And I think sports as shown up here to me present as a very indic indicative way that kids want to kind of achieve this. And kind of in that same vein, we found that adults and teens actually have a lot in common. Um, we had our similar meeting spaces like an outdoor patio and a large community room common between both adults and students. And adults also highly valued a performance space, small and medium meeting rooms, and a teen center room. And this also tells me that both adults and students alike want to see um a community where people can interact with each other. Whether that be toward in a sports setting or in a setting where presentations could happen, clubs like us could give presentations or even music performances could take place. This also shows that teens and adults really agree on fitness spaces and spaces just for socialization and to

kind of hang out. Um, and fitness classes also could be used as a resource for adults beyond LGre, what we have right now to extend exercise to more people without having to buy a gym membership. And the surveys also found that meeting rooms were not something that teens and adults really focused because a lot of people have the facilities to just do that at their own homes. Spaces for board games could also really kind of overlap with other game rooms or exercise or patio facilities. And spaces for elementary and preschool kids were similarly not as emphasized. And yeah, what the data means is that high schoolers really care about a third space, a space other than home, other than school that doesn't cost money, somewhere they can kind of just exist. So for me, the aim to bring teen um needs into the community center project is to kind of just show that the thirst for such a third space is not really limited to the adults which have a lot of existing representation but also to students who also want to have that space. And here we have our official teen needs assessment that I will be passing.

Uh we can pass this on now. Hi everybody. Uh my name is Otis Peak. Uh thank you Herod. Yeah, you guys can go around. Um another point I want to cover on what the data means is that the teen involvement and the teen feedback that we got really coincides with the more adult data that the town uh gathered and it shows that kind of everybody both younger people and older people want that inter intergenerational connection. Um it's not really a exclusive thing to one of the age groups. Um this is another event that we did. Uh we found it really important to connect with people younger than high school age. Um so we went to Fiser Middle School and we had kind of a hands-on workshop with some of their leadership students. Uh as you can see on that little slide there on the right there is we had them put little pictures on a slide uh to represent their needs and their wants in a community center. We also had a high school parent workshop. Um, I believe that was last year in 2025 in the winter. Um, so we hosted it in the school library and parents came in and talked about their needs and their wants and we found some really interesting things. Um, there was a lot of really unique concerns from individual people and we got great ideas that we really hadn't thought of. Um the the the main themes kind of rung true that uh even parents they want their kids to have a place to go after school. They often want them out of the house. Uh like I'm sure a lot of you have experienced. Um and I I think a lot of uh a lot of age groups feel very positively about a community center. Um being a place where not only adults can go and have fun, but teens can get out of the house. Um, this is a a workshop we did during lunch uh at the high school and we went

outside on the front steps and had kind of an informational meeting uh with any kids who wanted to come by and listen. We also gave them uh some some pizza and cookies. Um, and so this really spread the word. We got an extra 100 people added on to uh the about I think 350 that we surveyed. Um, so this was great turnout and uh we actually gained a couple new members from this. Um, and so people kind of went from just not knowing anything about a community center to showing some strong interest. Um, our continued commitment as a club um is kind of as follows. We're going to go talk to uh some elementary school students uh to get a even younger age group um and see what they have to say because they matter too. And uh we want to schedule more presentations throughout the community and just spread the word. All right, thanks guys. Uh just to end it off, another big shout out to Kylie Clark. She really kickstarted our inspiration to start this club. And thanks to Ryan, of course, he's our adviser. Um and he's doing a lot of work. All right, thanks everybody.

Thank you all. Yeah, round of applause. Are there Yes, please go ahead.

I just want to say something is that how rare this was. I I don't understand. I don't know if you guys know how this happened. There were no adults involved in the creation of this club. What happened was we ran a focus group and the next thing we knew there was this teen club. I still don't know how it exactly happened, right? But what else in town happens like that, right? where teens uh spontaneously form a club where it's it's going to be continuing next year. They survey hundreds of students. They hold events all to do something for a civic project. I think that's amazing. But I also think it speaks to one thing that I see, which is how much, you know, native interest there really is in this. It's not an easy project, but there is an interest in it. And I really appreciate these teens, but I also appreciate what they represent, which is, you know, the interest of our of our students in having a place to go. So, thank you. Oh, one other thing. The reason parents want their students to have somewhere to have to go after school is that they can't stay at the school. They're not allowed to be at the library at the school. They're not allowed to stay at the middle school. They're not they have to go somewhere. So, either they're going to go home, which is where the parents might like them to go, but the teens don't want to go there. Or they're going to go to the library where it's quiet, or they're going to they can't even go to Jamba Juice anymore, that closed. So, anyway, thank you guys for your time.

Thank you very much. Are there any questions from the council for the presenters? Yes, Council Member Hudis.

Well, first of all, thank you for the really thorough report and your highlights from it. Um, and I'm extremely impressed with the work uh that you're all doing. And um I was especially listening to the comments about the third space and I know that that's um very important because it represents really a social spa a social interaction. Um yes there might be some at school but uh there's not a lot at home expanding beyond your family. So I am very excited about that. And my question about that is um the middle school. So you're all from high school. Um you did a workshop there. Um did were the needs um different or the same or um how urgent is is the need for our middle school students?

Go ahead. Go to the mic. So yeah, the need that we saw from that middle school workshop was very similar. Uh it was again about that third space, that socialization space that they could have outside of home and school. Uh if anything, it was even more so about socialization because, you know, for a lot of these high schoolers, a lot of their time is spent on school, but in middle school, that's less of a worry in their minds. So they were all coming up with ideas like having a pool to go play in, having a basketball court, having a pickle ball court. uh and it was so clearly that they had that desire for a social space like all like we did and we knew that all of our high school peers did. So yeah, it was a very similar uh finding that we had with that middle school workshop. Great. Thank you and thank you for reaching out to the middle schoolers.

Thank you. Yeah, thank you.

Um thank you very much. And I just want to give you a big compliment. Um double down doubling down on the concept of the third space. I think it's it's incredibly important. Um and I appreciate you all raising that. Um, I I think you know the the importance of having somewhere outside of school to hang out, I think is very important. I also want to compliment you all. Uh, I attended one of your your meetings. Um, it's incredible how well you know the town. You all, I think, pointed out to me that there's not a full-size public basketball court in Los Gatos, and I was like, what? No, there's got to be. Nope. Um, uh, so I I appreciate you all raising those important issues, and um, it's impressive to see, and I know this is just the beginning. So um yeah uh thank you very much for being here tonight and well done. Thank you. Um okay um so we will now move on to our business of the evening. Um uh so we will begin with the consent calendar. Um so if there's anyone from the audience who would like to speak on an item um uh on the agenda or off of the agenda um please bring fill out a speaker card and bring it up to the the clerks. Um and we will get you up here. Um the consent calendar is considered uh items that are generally routine town business and be may be approved in one motion. Are there any council members wanting to pull an item from consent?

Yes, Council Member Hudis. I was just sort of waiting to see whether there was any public comment. So we have Sure. We have one we have one speaker card. Um Okay. I may reserve that sure until after we hear public comment. Thanks. Um, we have one speaker card from Gus who

Okay. I was hoping to uh have this pulled because it's a um something that's I think is Well, first I'm on the minutes. I want to talk about minutes. I submitted something in the supplemental, you know, just blah blah blah type of thing. But, uh, while I was doing that, I, uh, did notice, um, this, which I handed you, and there's a discrepancy, uh, with the estimates in the, you know, there's 12 biders, and there's quite a big range, but the first two was $12,9.19 was the closest to the next one. the uh you know I have a bunch of numbers here. 58,26,000 67,000 5,170 was the sixth one down there along uh 15,700 uh 12,700 4,000 41,000 you know in order well 149,000 161,000 for this uh bidding and you know there's quite you know I was in construction and um I did notice that uh um the when I was doing the minutes that the winning bid also did the um garden bed and so you know it just seems really you know I it just stands out like something's you know $129 compared to all these thousands of dollars and you know from from a million225 and the low bid is six you know that's you know like $578,000 difference from top to the bottom and the 120 you know just you know there I'd wish that you'd apprec you you'd really look at that because if there's some

sort of a you know it doesn't look good another thing is the consulting I I was wanted to just just set seven and eight the consulting 50,000 for consulting for three years I don't know I don't know enough about it but just all these consulting fees and the number eight is 450,000. You know, I know that somebody wrote in an uh I don't know if that's on this agenda for tonight or not, but I'd like to know what you know, I mean, have the the the public know why, you know, the the you're cons you're having these attorneys for $450,000 if if you know, if it's something that we're in, the town's in andor, you know, because it does affect all the consulting fees I think are a big deal on high record. Okay. Thank you.

Thank you. Um okay, so we um the other speaker that I just wanted to check with, we have a speaker who's checked for um a non-aggenda item. Um but the subject is private pickle ball court noise, which seems like it applies to an item on the consent calendar. Um so Klay Johnson and Jeremy Doy, did you mean to speak on consent or um or during verbal communications? verbal. Okay. Um Okay. Um then I'll uh get you then. Um Okay. Then are there any um speakers on Zoom?

There are no hands raised on Zoom. Thank you. Um so I'll go to the council. Yes. Vice Mayor Riston. Oh, wait. Actually, did council member Hudis have anything after public comment? Okay. Well, with that, I move to approve um the consent items one through eight on the agenda. Yes, Council Member Budami. Second. Great. Um we'll do a roll call vote because council member Renie is joining us remotely to the clerk. Council member Renie I. Council member His I. Council member Badami I. Vice Mayor Rista I. Mayor Moore

I passes unanimously. Um okay. So we will now move to uh public comment which is the time for folks to address the council on items that are not on the agenda um or verbal communications. Um I just want to preface really quickly. It's good to see that there are so many folks here tonight. I imagine many of you are here or at least some of you are here regarding the public hearings regarding the um developments on Loscatoos Boulevard. And so I just wanted to provide a little bit of clarification um that may or may not impact when you choose to speak. So um the we have a public hearing on the agenda tonight um regarding again two proposed developments on Los Gatos Boulevard. While the while this is a public hearing, the town council will not be voting tonight on whether to approve or deny these developments. Um, and I saw I I feel the need to share this because there's a lot of information out online that was was saying that the town council was trying to sneak something through and that, you know, there weren't um proper public hearings. We are not anywhere close to the approval or denial stage. Um, these hearings are legal and procedural. And so the item before the council this evening is regarding a potential um incompleteness or not determination for the development applications. And I just wanted to turn to the the town attorney and see if I covered uh the the gist of that well enough. Um and if you can provide a little bit of context on what um what people might want to speak to um during verbal or the item.

Uh that's correct. And I'll just shed a little bit more light on what the first public hearing item is. Um, so there's a statute that talks about when a planning application has to have been complete and retain its vesting under SB 330. Um, and it's a very highly technical question. Um, and so the town um received two appeals from two applicants that were subject to that statute. And so tonight's hearing is to hear the appeals um on of the meaning of government code section 65941.1. Um and the merits of either project will not be discussed and any land use impacts of either project will not be discussed. It's strictly a question of whether or not their vesting remains in place.

Okay. So, and I just wanted to clarify that because uh if you have a comment on applications or development in general, it's probably better to do that during the verbal communications part. If you have specific comments on the specific part of these two developments on Los Scatos Boulevard, you're more than welcome, of course, to share those with us. Um so, if if I call your name and you decide you want to move yours, all good. Um uh but just wanted to provide that clarification. Okay, we will now go to uh Clay and Jeremy. Um, good evening, Mr. Mayor and council members. Thanks for listening to us. My name is Klay Johnson. I've lived in Lasatus for 17 years. I'm here with my neighbor, Jeremy Doe, who's also lived in Lascatus for 19 years. We are here to speak to the issue. The town has already spent time, resources, and capital on recognized nuisance of pickle ball noise. Our request today, the town should prioritize and proactively take steps to establish new requirements for private pickle ball courts, public, but private. We want to be clear at the outset. We are not against pickle ball or suggesting banning of pickle ball. This is about recognizing the pickle ball when placed in a residential setting is fundamentally different from typical backyard activities and needs to be treated accordingly. From your own investigation, the council is aware pickle ball produces a repetitive highfrequency pop sound that carries. In a quiet neighbor neighborhood, which is where we live, this can increase noise levels significantly above ambient noise, creating a nuisance.

Industry studies show measured numbers are in the 70 to 80 decel range. This is not a subtle change. It's a meaningful shift in the character of the neighborhood. We do not want a shift in the character. We have already seen the impact of pickle ball noise in the La Rianata neighborhood. The Lasatus noise zone map clearly shows unmitigated pickle ball noise will be a violation of the current standards. The town has had to invest in noise mitigation, rule enforcement, resurfacing, sound mitigation at public pickle ball courts. and other cities have faced similar situations and had to address them in similar ways that Los Gat. This tells us the impact of pickle ball is real and against there's new research from national task force of pickleball noise and other reports like the Manchester by the sea analysis which conclude that over 200 communities have shown that pickle ball noise has a substantial impact on nearby residents. Residents describe both loss of enjoyment of home and property from chronic noise exposure and significant health concerns consistent with psychological and psychological noise induced struts response. Both reports also conclude that there is no reasonable way to mitigate ball noise without 12oot solid noise control fencing and significant distance to be impacted neighbors. There is an added complexity. Public courts and private courts cannot be addressed with the same policies. Public courts can have limited hours, low-noise equipment, and oversight. Private courts placed directly next to the neighboring homes do not have the same controls.

Thank you. Um if if you would like to uh I don't know who's who's Jeremy, who's Clay. Um this is Jeremy. I'm Clay. Okay. Thank you. Um Jeremy, if you want to continue the comments, you you can.

Oh, sure. I can carry on. Thank you very much. Uh where were we? Okay, so there's an added complexity. Uh public courts and private courts cannot be addressed with the same policies. Public courts can have limited hours, low-noise equipment, and oversight. Private courts can placed directly next to neighboring homes do not have the same controls. Once courts are installed, enforcement issues shift to neighbors and town compliance officers. Um, and with that sort of leads to a key point. Enforcement is not really, I think, a workable solution. If we allow courts without clear upfront standards, we're effectively turning this into a recurring code enforcement and policing issue, and we we really don't want to do that, right? We don't want to create a burden for for for the the city. So, this creates ongoing conflict between neighbors and consumes the town's resources. land use decisions and city law compliance should not depend on repeated complaints uh to function. And so that's essentially why we're here. At the end of the day, this is what we're asking for. uh Loscatos uh town uh should update its noise measurement methodology to account for impulsive sound which is this new kind of measuring uh mechanism uh for pickle ball and establish minimum setback requirements for any new courts. The current mechanisms don't work for pickle ball. Um, we request that you immediately suspend permitting and construction of courts that could be used for pickle ball pending the above standards being established. Over 200 other cities in the US have already done this and involve industry experts and the local community in the establishment of those standards. That that's why we're here today. So, thank you very much for your time and consideration.

Thank you very much. Thank you. Any yes, we have a question from council member Badami. Thank you for coming tonight. Um, just for context, can you identify the neighborhood that you live in? I take it it's not Lurinkata, correct? We live in East Loscatus, South Kennedy neighborhood. Okay. Thank you, Vice Mayor Sto.

Thank you. Yeah, I live in a neighborhood where you couldn't fit a pickle in the backyard. Never mind a pickle ball court. But, um, it sounds like I could be wrong. It sounds like what you're describing is the type of noise not necessarily like exceeding the way we measure noise during the daytime or are you saying it also exceeds um our noise requirements? It's both. It's the type of noise which is a high intensity short duration noise. So it has to be measured in a fast way, but it also that noise exceeds the town's recommendation for noise above ambient noise. So it's both of those items.

Okay. So it is falling under our noise ordinance. Yes, absolutely. The Lascatus noise zone map which has like three pages, it's within that it exceeds those ambient noise recommendations. Okay. Thank you. Yes, council member Hudis.

Yeah. Thank you. Um and to follow up on Vice Mayor Risto's question, um the uh first request seemed to be to update the uh noise ordinance um focusing on the methodology used for measurement. And um your answer was two things. One was the highintensity short duration noise. The second was that just exceeding the current noise level. So that would be more of an enforcement issue rather than an update. I'm just trying to understand what update you'd like to see to the

So we would like to see that the the measurement criteria is for the type of noise generated by pickle ball. And there's a way to measure that. It's called LAF max which is high. It's audible a fast measurement max. Okay? And there's a way to look that up and it has to do with pickle ball when it hits has this really intense spike and then dissipates. So you have to measure that intense spike. Okay? So that's one element. That's what we should measure. The other element is that that noise exceeds the noise levels that are established by the town today.

Okay. I got So if someone in your neighborhood put a pickle ball court in, you're going to hear your a noise nuisance above the recommended. And then the second thing you're asking for is to suspend permits for construction of pickle ball courts on private property. Yes. Yes. Okay. Thank you. You're welcome. Thank you very much. Appreciate being here. Thank you. Okay. Um we will now move on to Karen Yamamoto. And following Karen will be Nigel Chandler.

Hi, good evening town council. just that on Monday morning I attended a democracy tent meeting and the speaker a lovely lady was Sarah Murphy and she talked about the public restroom and it's a portable restroom and apparently it's not always as clean as our visitors our lovely visitors to Lasatis like. So they've been going into the restaurant restaurants, retail to go use the facility. Her she's striving to get Lasatus to actually put in a permanent outdoor facility for that's self-cleaning. Many many of the towns around us have already done it. So she said uh Saratoga, Campbell, uh Capola and a couple of others that she had mentioned. She also brought it to our attention that we spend $44,000 a year cleaning that little portable potty every year. And for the price of $100,000, we could have a permanent facility open to not only our visitors, but also to our homeless after hours when all the restaurants and all of the retail are actually closed. And our um visitor center is closed. And apparently our visitor center of Lascatus is closed on the weekends, which I find very weird because that's when our visitors actually are here. So you would think that our visitor center would be open for them to use, but that's a different

story. I'm asking for you to reach out and talk to her. She's been trying to communicate with a bunch of you and she would like to speak to you on this issue. For one, it's going to be good for our visitors, our homeless, and our retail and our restaurants. Would highly appreciate it. Think it's a good idea and I think it's well worth it. Thank you. Thank you. Yes, Council Member Hudis.

Yeah, thank you. Um I I'm Are you aware that the council considered this about two to three years ago and voted in favor of pursuing um a public restroom? Um and that the consideration of it would be part of our capital improvement project budget consideration process.

Yeah. And yet nothing's happened on that. So, I'm kind of bringing it up again to see where we are at it, what we can do to help that, facilitate that, and to get the public on board with it. And maybe the retail because there was a time during CO where uh funding for our retail was given so they could actually so other people could use their restroom. Thank you. Yes, Vice Mayor Sto.

Yes. Thank you. And um Miss Murphy has been in contact with the council and I think I can probably go back to our parks and public works director, but this has been on our capital improvement but uh budget and we need to come up with the money to install it. And I will say that when I was mayor in 2023, knowing that we didn't have the money to build it, I insisted that we at least have a portaotty. I had no idea it would last this long, but I know it's cleaned regularly. I've used it. I know not everyone likes a portaotti. Um but this is an ongoing discussion and in fact we're working on the location. Um but thank you. We've heard it, we know it and we're working on it. Okay. Thank you.

Thank you. We'll go to Nigel Chandler who will be followed by Suanne Laurig.

Uh hello council. Uh my name is Nigel Chandler. Uh today I'm here to speak in my personal capacity and not as a complete street and transportation commissioner. Um I wanted to say that I have noticed uh the town begin to take little steps to address the current crisis with ICE and immigration enforcement. Um for one, an updated link uh on the town's becoming an inclusive community page um uh was was updated. Um, now there's a link to the Santa Clara Countyy's know your rights information sheet, which I think is a step in the right direction. Um, however, I would like to say we all know that a simple link is not enough. Um, apparently we are willing to publish links to county info. My question would be, are we not willing to take the same stances as the county on this issue? Um, they passed ordinances so that ICE uh is not permitted to operate on county property. And I think that the town should stand by its commitment to become an inclusive community as per that web page and take meaningful action. Um I think that we need to catch up with the rest of the Bay Area. I have heard that the DI Commission uh has been actively working on this issue over the past couple of months and has now come up with a draft resolution uh that the council can pass that gives us a good start on these issues. I hope that the council has seen it uh and that they will act on it soon. Thank you. Thank you. We'll go to Suanne who will be followed by Jeff Suzuki.

Hi, I'm Suanne Laurig and I'm a resident of Lascatus. Thank you, council. And I echo what Nigel just said. And um I would like to say talk to the need and why we are concerned about ICE and uh we know that um other communities and cities across the United States have faced issues with ice coming in. they have uh and it's also happened in San Jose and San Francisco, Los Angeles, and they come in and it's not taking just criminals. They just sweep. Oh, that person looks like a dark-skinned person. Let's arrest them. They go to immigration hearings where people have shown up legally following the law and are arrested when they're leaving the meeting. They were the hearing. They were there legally. They're doing every following the steps. They have not done anything wrong. They are arrested. They're not read their rights. People are deported to horrid, horrid places where they don't have decent food. The water has things in it, swimming in it. Their their children are taken. They're not given medical care. This is documented. The majority of the people that have been arrested have no criminal um convictions. As of April 2026, roughly 29.2% about 17,500 of the 60,311 people held in ICE detention have

criminal convictions, meaning over 70% have no criminal record. the arrest types. Um, and the a small percentage of the total arrest involve violent crimes with for instance only 0.5% involving homicide, 1.4% sexual assault, and 0.7% robbery in early 2026 data. So, we're not talking about preventing crime. We're talking uh with ICE. We want to prevent crime by having not having our town cooperate with ICE. We want the constitutional rights of the people in this town to be observed and everyone respected. Thank you.

Thank you. We will go to Jeff Suzuki who will be followed by Nova. Good evening, council members. Uh, first I'd like to disclose that I am not speaking as a complete streets and transportation commissioner, but as a private resident and the president of the Los Gatos anti-racism coalition. Um, as the other speakers have uh so eloquently said, I mean, we're in a pretty questionable situation. And we have uh federal immigration agencies uh effectively able to kill people with impunity without really any sort of meaningful accountability. Like the agents haven't really been tried. Uh maybe they've been put on leave. Uh but we haven't really seen uh really anything. Um, and the question is, do we really want to provide an open door to allow these agencies to operate in our own town? Do we sincerely believe that it would make our town safer? Um, I think that what the DEI commission has put forward over a month ago is quite promising. Uh, and for everybody here, I'd like to read some of its texts and what exactly it is proposing. Uh the title of the local law that is being proposed is titled uh reaffirming the town of Los Scoutus' commitment to diverse, supportive, and inclusive community and to protecting the rights of its residents, workers, and visitors regardless of immigration status. And it starts with whereas the town of Loscatoos is home to a vibrant community that includes different races, ethnicities, nationalities, religions, languages, and other personal identities. And whereas the town of Los Gatos is committed to creating a sense

of belonging for its residents, workers and visitors, it proposes the following. It pro proposes that no town owned or town controlled property or resource shall be used as staging areas or operational basis for federal civil immigration enforcement activities. uh no town department, agency officer, or employee shall give consent for federal officers to use townowned or town controlled property. It also proposes that we actively work with county resources like the rapid response network to ensure that our residents are safe, residents, visitors, workers are safe. I think that this is at the very least worth a discussion. Why did this council vote to establish a DEI commission when why did we vote to establish a DEI commission? Um we we established this advisory committee so that it could give advice and I think that this policy is at the very least worth your time and our time. Thank you.

Thank you. Um, we'll go to Nova. We'll be followed by Siona.

Hi, nice to see you all again. Uh, my name is Nova Gerage. I'm a high schooler at Lascats High School. Um, I just want to clarify I'm not speaking here as a youth commissioner, but rather a resident of Loscatos. Um, so I'm here to urge you to adopt the DEI resolution and basically keep ice off of our public land. Um, and I kind of wanted to talk a bit about why that's something I'm pretty passionate about. So, um, I organized the walk out at Loscatus High School, which had close to 400 participants. Um, which I think adequately represents the kind of future the youth want to work towards, like one without ICE. Um, and sort of the reason why I organized that kind of started with the question about what do I want my town to look like when I grow up, um, when I have kids, etc. Um, and when I thought about what ICE was doing, um, like detaining, attacking, killing US citizens and non-citizens alike, um, often masked without identification, um, and I had seen a lot of horror stories of basically what was going on in these, um, detention centers. One that really resonated with me was um a detention center um containing like over 400 children and there was a measles outbreak and I just learned about um just how deathly measles can be if you're not vaccinated against it. Um and many of these kids did not have the opportunity for vaccination. um and knowing that their lives would get cut off pretty soon because of um the cruelty of what ICE was doing was something that really resonated with me and really urged me to take action and ultimately be here today. Um to be honest, I'm also scared. I think I don't necessarily look like what the average American looks like. Um what the American that a lot of these um ICE agents support. Um, so in a sense I'm scared for myself, but I'm also lucky to be a US citizen and have documentation. Um, although I am aware a lot of people have been detained whether or not they

had their papers with them. So, um, not the most comforting thing to say the least. And I also truly believe that having ICE here doesn't make Los Gatos safer at all. I think the only thing it does is invoke fear and make a statement about who we want to belong in our communities and who we don't um based on their race or um income rather than actually the town that we want Loscatoos to be. I think when I come to these meetings I often hear you guys talking you guys being the council members talking about u making loads a inclusive community, a community where everyone belongs. Um and I think adopting this resolution ultimately just continues um working towards a school. I think we should um truly consider keeping ice off of our public land um I think if I was at a park and I saw like a family detained or kids detained like I think that would absolutely ruin me and I don't think I want to wait to see that. I think we should focus on prevention instead of um having this horror come first and then dealing with it then. Thank you.

Thank you. now go to Siona who will be followed by Nancy Pearson. Good evening council members. Um I also want to speak on keeping ice out of Los Gatos and speaking from more of a personal standpoint. We moved to Los Gatos about 3 years ago and since then one of my favorite things about living in this town is how safe it is. I'm often at school until late hours, 8:00 PM, 900 PM, sometimes even, and I don't have a license yet. Um, so I bike home and never have I felt in danger, unsafe going home. Um, and that's something I really appreciate. Never have I felt unsafe going to downtown, taking my little cousins, my middle school little sister there. And I'm afraid if I starts populating our town, that feeling is going to go away. I've read horrible stories about innocent citizens going about their day and getting abducted. I learned from friends at a summer camp who live in different parts of California. The fear that they fear feel every day at school. They're scared to go to their local 7-Eleven because ICE likes to hang out in front of there. I was born in Minnesota. I have childhood friends there who live close to where a lot of violence has happened with ICE. And I reached out to my friend and I said, "Hey, how have you been coping with what's going on?" on. She said, "Our town has totally changed. There's just this vibe of fear the whole time. No one is comfortable. Everyone is constantly tense, and I don't want that for Loscatoos." Um, I never want to second guess hanging out in downtown with my friends, taking my family there, going out in the evening. And I truly believe that a community where people are scared to exist isn't a community at all. And I hope as council members and leaders, you all will speak up to protect our town and keep the welcoming and safe environment that we

currently have and that I love so much. Thank you. Thank you. We will now go to Peter Loccastro. Oh, I'm sorry. Nancy Nancy Pearson and then Peter. I skipped you, Nancy, and my apologies. Good evening everyone. Good to see everyone. Thank you for having me or everyone. Um my name is Nancy Pearson and I'm with the Lascatus Kuanas Club this a little bit. Um and for those of you that may not know, Kuanas International's motto is serving the children of the world. So, I'm here tonight to talk about a little different type of inclusivity. Um, I'm here today mostly because we thought now might be a great time to um kind of put out our ongoing desire, Kuanas ongoing desire to add an all all-inclusive element to the playground at Oak Meadow Park. With all of the chatter about the plane and the fire engine and all that good stuff and things happening at Oak Meadow, we thought this might be a good opportunity to kind of let you know or remind you that we have been talking about this for quite some time, but the pandemic and other things kind of just made it flat. But we would really like to commit to doing something. Um, to put it in a little bit of perspective, at the end of next week on May 1st is our Kana special games. um where we will have over 1,000 special needs and physically challenged students from all over Silicon Valley competing in games for a day of fun and camaraderie and recognition and they wait for that all

year and you're all welcome to attend by the way and some of you have um I mention this because there is such a need in our community um for something positive for these kids and a lot of us don't realize um really how big that need is, but it also is a need for their parents and their grandparents and their great-grandparents and their caregivers. Um, when you think of an all-inclusive element, I'm not talking about a whole big new park, just an element. So, a couple of playground items and the flooring has to change, right, in that section. Well, that impacts everyone. I mean, mobility issues. I know I have a mobility issue. You probably saw me walking up here. Anyway, and it's multigenerational is what I'm trying to get out. Oh, I'm talking too much. Lastly, adding this playground would make Loscatos even more of a destination than it already is. Oak Meadow is great, but you add in that all-inclusive part to Billy Jones Railroad having a a train specifically for um physically challenged individuals. I think it would be a win-win for everyone. Um to end, I'd like to read a message that was sent to me when we first started talking about this. This was through Next Door. I love what you are working towards. We have a typical child and a special needs child. It breaks our heart that we have to keep our special needs child at home whenever we need to take our typical child to Oak Meadow for a playd date or event. So, the need is there, the desire. We just need to know that there will be a positive outcome from you guys.

Thank you very much. Question from Council Member Hudis. Yeah, thank you uh for bringing this up again. Um the the specific ask is that for modification to Oak Meadow Park. Well, the Quanis Club would like to raise a hundred to $200,000 to donate for a modification to Oak Meadow Park. Yes. Playground. Okay, great. And thank you for coming forward with this and hope you'll update us as this progresses as well. We would just really like to have some kind of green light, I guess. Yes. Right. Thank you. Thank you. Thank you.

All right, Peter, you're up. First of all, I'm a former member of Lascatus High School and many many years ago I used to go to the Wildcat Los Wildcat Club which used to be right out over here. What a what a great thing. I I I hope we have the funds to uh you know facilitate the the de development of that project, but that's very questionable. Uh I was told that I should come here and speak on specifics about the uh um generalities about the um the the major bills that we're going to have in this area. Kind of hush hush. Okay. You know what I'm talking about, right? Okay. Well, anyway, so what I'm going to do is I'm going to I am going to speak in generalities even though I had intended to come here and give some gripe a little bit. Okay.

I'll just pause really quick. You're speaking during I'm sorry. I'll just pause really quickly. You're speaking during the part where you can speak in generalities or specifics. So, you can you you can speak to your your heart's content as long as it's about something the town can do.

Okay. Well, then here I go. I'm on the timer. Yep. This uh the information I'm about to discuss is old news for the town council. It has been uh struggling with new state mandates involving housing projects in California, similar to the one at 15300 Lasatus Boulevard. I live three blocks east of this pro this potential project. Okay. So, um as far as my house is concerned, I'm very concerned about property values and all the other, you know, um the privacy issues and all that stuff. I'll leave it there. Okay. This is this is the key issue that I'm coming here to uh to to to let everybody know about. Uh in 2026, January 2026, a Santa Clara County judge ruled that uh height requirements can no longer be used as a means of blocking certain building permits. This opens the door and you well know it for all of these projects which are and I have some here. One of them is 100 feet tall. Another one's 116 feet tall. Another one is 171 feet tall and then the tiny one is 92 feet tall. Think about it. The one that's 171t tall is higher than the Stansion power power poles from from Lascatus from the Highway 17. As you go by, that's all you'll see when you come through Lascatus. Somebody say, "Oh, how do you know when I'm in Lascatus?" Go look over there. There's a there's a a highrise that's 171t tall, probably with maybe 155 units or so in it. Okay, I'm gonna run out of time, so I got to keep going. Um, in my humble opinion, these changes, um,

all these projects, these changes will will not be good for Lasatus. Um, this will become a 24-hour a day city. Uh, here we come. That's going to come up. Okay. Uh, the the unknown mystery will be all of the infrastructure problems that will be created by so much new construction and and who will pay for it. It won't be the developers. I tell you right there. Okay. Can I go in conclusion? Uh, no. Your time is up. Thank you. I'm done. Yeah. Thank you very much for your comments. I can tell you about what my uncle Harry thought of this. Thank you. Thank you. You You can always email your comments into the town council as well. Thank you. Um, we will now go to Jonathan Hartnett.

Hello. Good evening, council. Um just just two quick announcements. Um I just for one um I'm a resident of Lascatus, small business owner and um was really happy to see the mayor came to the U LGCS Magic uh softball. We had an opening day a few weeks ago and so being a volunteer coach in that league, it's been an amazing experience um for my daughter the last few years. She goes to Fiser. Uh she's a pitcher in that um division there and hope to see it expand more. There's some plans at Fiser to be able to um put in a couple more fields. We're hoping that to happen there. And um just other announcement I want to say is um I've been here since 2015 and um my small business is brewing. I'm really excited about it. It's Cat's Tree Service and Fire Prevention LLC.

Thank you. Thank you.

All right. And our last uh verbal card is from Tim E. Hi guys again. Um 10day rule. Talked to Wendy about that, but you got to give everybody a 10day rule, especially uh with big ticket items. Um the what's coming up with all these highrises and stuff like that is everybody in town should be given you know advanced warning because um you know you're po posting a lot of this on Thursday evening you know the agenda items on Thursday evening at like 7:30 8:00 at night you know so it gives us the week just the weekend to look at what the agenda is try to read through all the the uh the the material material which is you just skim through it and that's what I've been doing mostly but uh like a LMO street issue that you brought up I I brought that up at the the finance commission meeting in in I talked to Matthew on it re please reconsider that should be a thing ICE agents uh the agenda that should people are kids are now speaking out this everybody's been speaking out about it put it on the agenda what part of that can't You guys understand the town, you know, a lot of people in the town want this on an agenda. At least you can put it out there. Get it get people talking and then figure out what you're going to do. Uh DEI, art commission, senior citizens are all planning a Fourth of July event. You you guys aren't really uh you given really little support verbally for the town council. I you get some, but you're it's just like blah blah blah. Um toilet cost the 44,000. I'd like to investigate that, but you know, if you're wasting money, you're wasting money. And that

that's a big that would be something that needs to be investigated. Financial commission, I was there this thing. Everybody on the financial commission said 6.8% of you're you're paying interest on and and you're you're 2%. You're you're being that's the malpractice I I put in that little uh thing. You're you're you're practicing malpractice. just take this the the 3.9 million and pay it off. Everybody, all the fire finance people are telling you this water bills. Um, and that's on the 3.9 million thing. Water bills. I I've been saying, you know, this is Santa Clara. I just got this out. $60 for charge um for six uh HCFs. You know, I grew up in Santa CL. They had their own things. You have to you have to look out start looking out for the the town. We're getting overcharges double the amount that we're paying. I know uh uh Valley Water, I know two of you were on Valley Water and they're looking for CFO. So, you know, those those types of things I'll probably go there and, you know, do my thing, too. So, I'm thank thanks for your time.

Thank you. Okay. Um do we have any speakers on Zoom for verbal communications? There are no hands raised on Zoom. Great. Thank you. Um okay. So we will move to our public hearing this evening which is item nine titled following a court order here the appeals submitted by applicants for one the Lux and two Arya projects um regarding uh government code section 65941.1. Um these are the two Loscatoos Boulevard uh development proposals. Um, and I will turn it over to the town attorney uh to kick us off.

Thank you, mayor. Uh, this is Gabrielle Wen, town attorney, and I'll be presenting this item tonight. Uh, the topic is to hear two appeals that were submitted regarding the statutory interpretation of government code section 65941.1. Next slide, please. I wanted to reiterate that this is not a hearing on the merits of either project. Um, it's strictly a procedural item to hear the two appeals and it relates to the applicants for the Lux and Arya projects on Lascatos Boulevard. Next slide, please. Um, the issue turns on the language of government code section 65941.1. um which authorizes housing project applicants to submit what's called a Senate Bill 330 preliminary application. And when an applicant has submitted an SB 330 preliminary application, that application is vested to the town regulations that were in effect at the time that the application was submitted. And the reason this is important is that the town has several SB 330 preliminary applications that were submitted um prior to the time that the state certified the town's housing element. And so those projects have vested to the town status of not having a certified housing element. Next slide, please. Uh, subsection E1 of the statute requires an applicant to submit a complete application um within 180 calendar days of submitting the preliminary application. Next slide, please. and subsection E2 further provides if once the agency reviews that formal application and

determines that it's not complete um the town is to notify the applicant and then the applicant needs to complete the application within 90 days. Um the statute provides that if the proponent does not submit this information within the 90-day period then the preliminary application shall expire and have no further force in effect. And if a preliminary application expires, um the vesting is lost. Um the statute can be read can be read to provide for a single 90-day period following the initial 180day period. Um and in fact, that's how um staff reads the statute. Next slide, please. Um however um the statute can also be read to say that there are successive 90day periods. Um, and so the town recognized that there was there were differing opinions on how the statute should be read. Um, and therefore the town uh took the proactive step of seeking a judicial determination on this issue to clarify the meaning of the statute. Next slide, please. Um and then before the town had the judicial determination, uh the applicants for the Arya and Lux projects appealed a staff statement regarding the effect of not having submitted a complete application within uh 270 days, which would be 180 days plus 90 days of the date of submittal of the preliminary application. Next slide. Um, subsequent to receiving those appeals, um, I contacted council for the applicants to let them know that, uh, the town would hear the appeals after it had obtained a judicial determination on this issue. Um, and that in the meantime, town staff would continue to

process both planning applications. And um in January of this year, the town did receive a judicial determination from the Santa Clara County Superior Court. And the court ruled that section 65941.1 provides for unlimited 90-day periods in which to render planning applications complete and retain the project besting. Next slide, please. Um so based on that uh judicial determination staff scheduled uh this appeal hearing to be heard by the town council. Um we had originally planned to have it heard on April 7th. However um council for the applicants was not available on that date and so um for that reason we've moved it to this evening which is April 21st. Next slide please. Um, and so I have uh resolutions for the town council's consideration that would act in accordance with the judicial determination. Um, and in the meantime, I did want to provide a brief update on where the town is with the processing of the two projects at issue. Um, with regard to the Lux project, uh, the town sequa consultant is preparing an initial study. Um and for completion of that initial study, uh the consultant is waiting for applicants resubmission of a traffic report based on peerreview comments. Um in addition, the applicant has been asked to provide items requested by the town's visual simulation consultant. And next slide, please. With regard to Arya, the town SQA consultant is preparing an environmental impact report. Um, the applicants team did notify staff that modifications to the project are forthcoming. Um, and staff is expecting a resubmitt and in the meantime, the town's traffic consultant

is reviewing the applicant's April 6th response to peer review comments on the traffic. Next slide, please. So, in accordance with the superior court's order, um it is my recommendation that the town council grant the appeals that were submitted by the applicants for the Lux and Arya projects. Um and we will continue to process both planning applications. Um we did receive public comment noting that there was a typographical error in the second resolution. Um both resolutions refer to the Lux project and the second resolution should um refer to the Arya project. And so there is a an addendum to the town council staff report with a correction to the Arya resolution. Next slide, please. And I'm available for any questions from the council.

Thank you. We'll go to Council Member Hudis. Uh thank you. Um, uh, town attorney, you've been referring to the Lux and Arya projects. Those are marketing names of the developer, correct? That's correct. Could you refer to those projects by how the town understands them? You mean by the address? Yes. Their address or their current use, something that people would recognize?

Certainly. Um, so the Lux project is located at 14849 Loscatoos Boulevard and the Arya project is located at 15300 and 15330 Lascatos Boulevard. And what's the current use of those? Um, the Arya project is currently an ACE hardware store and I believe that the Lux project is currently vacant, but I'll defer to the CDD director.

Thank you for the question. So, uh, the 14849 Loscatos Boulevard, um, I believe actually has a single family home on it currently. Okay. Thank you. I mean, I I frankly don't understand why we're referring to these things by the marketing names of the developer. Thanks. Okay. Are there other questions from the council? Okay. Seeing none at this time, um we will begin the public hearing with the applicant who will have five minutes um to present to council. Uh and then after that, we will open up public comment. Go ahead.

Hi, how are you? uh Travis Brooks Ladies Council for uh both applicants appealing uh their whose appeals are being heard here. Uh and and Gabrielle, I want to thank you for accommodating my uh my child's spring break and moving the hearing to tonight. So, I really appreciate that and I appreciate your presentation. Uh, as Gabrielle noted, uh, Judge Williams order, um, well, I I will note that Judge Williams January 29th order reiterated what the Department of Housing and Community Development, the state agency, the state attorney general's office, and the other courts that have considered this legal issue uh, have all consistently uh, repeated, and that is that upon the filing of an SB330 preliminary application, a qual qualifying housing housing development project that provides qualifying levels of affordable housing uh retains their vested rights through multiple resubmitts during the formal application completeness process. This vesting under SP330 remains intact so long as resubmitts are made within 90 days of each notice of incompleteness as the applicants diligently did here. Uh both applications that are uh the subject of this hearing or these hearings uh were deemed complete over a year ago. Uh the court's January order should definitively resolve the legal questions that were originally addressed in our appeals and that we tried to address. uh and in in in attending this uh these hearings or this hearing, we are in no way uh waving any of our rights uh in pending litigation with the town u including any and all of our claims under state housing law. Uh in my opinion, it would have been better to uh for this appeal to be heard uh a year ago when we uh first filed the appeal. Actually, it was over a year ago. Uh but that path was circumvented with the town's filing of a declaratory

relief action. Uh so anyway, just to conclude, and I'll be brief again because the last thing you want to hear is the lawyer drone on. Uh we continue to assert that the town violated state housing law when it communicated to the applicants uh the town's belief that our clients uh lost their vested rights uh as that position was in clear contravention of the the dictates and mandates of state housing law. So, thank you. And I'm I'm here if you have questions and I appreciate your time. Thank you. Yes, Council Member Bami. Thank you, Mayor. Um, per the town attorney's um introduction, sir. I think we have a question for you.

Per the town attorney's introduction, um, I understand that there's forthcoming modifications. Um, and I hear our residents very clearly pleading for height reductions. Can you give us a hint on what might be forthcoming with a modification that might respond to our community? I I'm going to have to defer to the architect and the applicant himself. Unfortunately, I'm the I'm the lawyer that deals with the the boring legal issues. U so I will I will uh I will convey your question to the applicant and the architect. The architect's actually out of the country right now. Uh and and we'd be happy to to uh provide correspondence at a later time.

Thank you. One more from uh Vice Misto.

Thank you. Um so my understanding is that while we were waiting for um you know judicial interpretation of this that our staff continued to process the applications. So um I just want to clarify because while we didn't hold the appeal a year ago um in the intervening time your projects were not held up by our staff. Correct. It is correct that the town continued to process the applications. Uh the the town's position and statements that it believed that we had lost our vesting vested rights contravened what we believe is the clear language in the statute uh 65941.1E uh and also in contravention with repeated guidance from HCD including a notice of violation to the town that was issued months before we received that statement. Uh so uh while the town did continue processing our applications, the uncertainty that arose based on that position forced our client to incur hundreds of thousands of dollars in legal legal fees and and to me that's to us that's problematic because we believe state law is pretty clear on that point.

Okay. Thank you. Well, I think we owe it to our public to get judicial clarity on this matter. Okay. Thank you. All right. We will now open up public comment. Um uh we will begin with Dan Brown. We'll be followed by Karen Yamamoto.

Evening. Uh it's been over a year since I last stood at this podium, so let me reintroduce myself. My name is Dan Brown and I live on Carlton Avenue. My home is approximately 85 yards from the Arya Builder Remedy Project. That's the Ace Hardware on Lascatus Boulevard. Um, regarding item nine on tonight's agenda. I understand the Arya project will continue to move forward following clarification from the Superior Court on the vesting period. While I wasn't able to attend last month's study session on objective standards, I did watch the recording afterwards and I was disappointing disappointed to learn that the standards being developed will not apply to the current builder's remedy projects. Looking at the Arya visual renderings posted on the town website. If this project is built as currently submitted, when I walk out of my front door, I will be facing a ninestory wall at the end of my street, less than the length of a football field away. In view two of the renderings, you can actually see my garage. Even with the incremental changes made since the project was first submitted, the building still presents as a large monolithic structure, more like a warehouse and then a residential building. In view five, it shows what's arguably the most thoughtful architectural treatment with something resembling a fourcourt. Unfortunately, that view will only ever be seen from the Rotten Robbie gas station across the street, not by the surrounding neighborhood. I have to ask, how can a structure of this size be built directly up to the edge of the sidewalk? And has sufficient consideration been given to the proximity of the building to existing power lines? Another serious concern is traffic. The

parking garage exit appears to feed directly into Carlton Avenue, which is a small residential street. I assume most morning traffic would be headed towards Lascatus Boulevard via gateway and it's difficult to imagine how that will not create significant backups and safety concerns for residents. You can call me an MBI if you like, but since this project is effectively in my front yard, you may need a new acronym. I don't believe residents should feel guilty for speaking up when a project so dramatically impacts their immediate surroundings. Wanting housing solutions does not require accepting a building that is fundamentally out of scale with its context. I want to acknowledge the work this council has already done to mitigate the size and mass of several SB330 projects around town. Projects that were initially submitted as oversized structures are now being reconsidered and refined to better fit the character of Lascatos. I am asking and hoping that the Arya development can follow a similar path. Thank you for your time and your consideration.

Thank you. Um, please, uh, we cannot clap or react to comments, but I appreciate the sentiment. Um, we'll go, uh, to Karen Yamamoto, who will be followed by Carlen Shamberg.

Okay. Hi, good evening. Um, just to let you know, uh, the Luxie is located, uh, northern part of the North 40. It's the northernmost part of the North 40 and this is the building. It is huge. The other one is ace where the ACE hardware is. Since the Supreme Court has ruled in favor of the applicant and the proposals will continue, I personally would like the town to appeal the ruling and to bring it to the Supreme Court. With that said, there must be a limit to the a proposal, a proposed project like this. If we don't have a limitation to on these proposals, it's just going to keep going. It's never going to end. This proposal will continue to be an ongoing proposal for five, six, seven, eight years. There's got to be a limit. There's got to be a deadline. It's just not not realistic as far as fighting the builds if we have to. I don't care about the Luxie or that great big one that I that's northern to the north 40 for several reasons, but I'm not focused on that. I want you guys to fight where the Ace Hardware is. First off, there are three very good reasons that I have submitted over and over and over and over again to you guys. This has to do with safety. Has nothing to do with wanting affordable

um homes or anything else. This is about safety. First off, this particular project is on a lif litification zoned area. Second, it's within a 50 foot, possibly within a 50 foot fault line, secondary fault line, which an 89 earthquake will make it a threat to our safety. The third one is this particular build is right next to a gas station in an earthquake in an emergency and it is on our emergency evacuation route. This is a safety concern. Out of all the builds, this one needs to be fought because it is disastrous to us. As far as the Luxie, one more com comment on that one. let them build it. They're gonna have one heck of a problem when it's a flood zone. Thank you.

Thank you. We will go to Please uh uh we do not uh react to comments um for fairness for all speakers. Um we will go to Carlen then Tom Johnson.

Can you hear me? Okay.

I'm glad some of the crowd left because I haven't spoken before a group since I taught 8th grade. Um I live basically behind New Town Shopping Center and we already have traffic cutting through our neighborhood from Lark to avoid the traffic on Losatus Boulevard. And I went down the street the other day and I tried to get a couple pictures. When our street homes were built, there were no we were in the county, so there are no sidewalks. Then when you put parked cars on both sides of the street, it becomes a very narrow street. And we have many residents with walkers and wheelchairs and small children and dogs. And we have all this PE traffic now that comes down the street. I can't even imagine what's all of this building is going to do to the safety of our street. And I I dearly love Lascatus. I'm a fourth generation Lascatan. My grandmother's uncle built the Lascatus Soda Works. So I I've been entrenched here a long time and it's it's starting to look like a big city and it's starting to not feel safe. With the opening of the Whole Foods on the corner, people were already parking on our street because the parking lot is inadequate. And I'm and we have several condominium projects that are coming up along the boulevard as well. So, I'm just very uncomfortable with the volume of people and the traffic safety that we're looking at. I don't I don't even know how much more I can express how scared I am to have this massive structure add all that extra traffic along with the North 40. So, I'd like to be able to still get into town. About all I have to say. You

Thank you. Um Thank you. Uh we will go to Tom Johnson. If it I I understand that you feel strongly about the issue. Tom, please hold on. Um if you continue clapping, we will have to ask you to leave the meeting. Um it's very important that all perspectives in the town feel welcome to share uh their beliefs and uh we do not accept reactions of any kind. If you want to show agreement or disagreement um you can if you want to agree with someone you can raise your hands or or stand up but please don't make um auditory uh comments like clapping. Um thank you

Tom please.

Thank you. I uh yeah, I'm what's left of Tom Johnson and I live two blocks behind Ace Hardware. Uh the prospect of a building uh 11tory or whatever it's going to be on that site looking down into my backyard means that the value of my home will be reduced. My home is uh paid I paid 60 years ago $35,000 for this home. I rented it for a number of years because we used to live up on Stacia Street on half an acre. But it's worth now 2,200,000 and whatever value and I'm in the process of having it valued revalued now and I will have it revalued with the idea that there'll be an 11story structure 12 city blocks to the mile, two city blocks away from me and come up with a reduced value. And that reduced value is going to be the process of a of a lawsuit against the town for taking that money away from my two children. I'll be 88 89 next year. So I'm on my way out. I gave up gave up cigarettes at 19 and alcohol at 33. So that's why I'm as old as I am. But it's it's a dangerous thing that we're doing in terms of sticking these huge towers right in the backyard of residential estates. Thank you, gentlemen.

Thank you. We will now move to Lee Quintana.

Good evening. Um, I should say I'm speaking as a private citizen, not as a member of the historic preservation committee. I'm also not going to comment on the projects themselves. I'm here to support the letter that was submitted by Jim Lion uh and ask the town and emphasize the need that this goes to an appellet court judge where there's a new denovo hearing to determine in fact whether there are limitless 90-day uh extensions or there is just the one 90-day extension. Um, I'm not a lawyer, but I read both the judges uh superior judges uh comments and the uh submitted by the town's attorney. And I honestly do not understand how the interpretation of the court could be made. And I really do think that that not just for Lascatos, but for all towns and cities that are dealing with the same thing, um either Lascato should continue this and and appeal it to an appellet judge or get the cooperation of all other towns and cities that are in the same uh situation to join a joint effort to do that. Thank you.

Thank you. We will go to Gus who who will be followed by Amy Despars.

Hello. Okay. Um I have a my dad was an engineer bridge civil engineer for in roads and stuff like that and and the town already is It was it it wasn't designed for big giant buildings. The roads are all small. I mean, there's too many small things. And I've already gave you notice on what people have said and saying that the you know that you're not you're not even given the 10day rules and and that they're you're not providing them that the people that are the closest. you should be mailing out uh things saying, "Hey, there's a there's a meeting on this." If you're within this, you know, they should uh this this block or five block radius. This is a big project. Um the height alone is is concerning for a small town and and people already said that I I I'm for building but reasonable. You know, I have a board developer, you know, general contractor. I knew I was in in in the developer I married into a developer family. So, but there were, you know, they kept it reasonable. Um, my thing is the the like what everybody else is saying, you the the state has to get involved and and do a study of if a ambulances can go to the hospital right down the street, especially during uh uh the beach traffic. If they can't do that, you guys get sued, the state gets sued. This this shouldn't even be appealed. This should be go don't even get in I don't even get involved with the state judges. the state judges are, you know, like Mickey Mouse. You go up to the the federal take it to the federal courts and put it and and say

the town wants and we'll put it on a ballot instead of having the states the state run this. They they caused the problem by allowing this stuff. That's their fault, not the the resident's fault. and and some of these people that are, hey, we can build this whatever height that we want and we can make billions on it and and then give give you guys the problems. You're you're negligent in just not sticking up for the town people. So you you know, if you don't stop this charade of okay, we you know, the the you know, you know what I'm saying? I I'm not a public speaker, but uh you know this guy I you know I don't know enough about all this. I just know it's too high and the safety for the roads are if anybody did study on it it wouldn't pass. Anybody. Thank you.

Thank you. Um we will go to Amy who will be followed by Susan Bernett.

Hi my name is Amy Despars. It's been a while since I've been here. Um, I just first want to thank the council members for taking the time. And yes, did it cost the owners of the Arya and the Lux, I don't even know how to refer to them. Um, hundreds of thousands of dollars, but it is also hundreds of thousands of dollars of towns people who are worried about safety, um, housing values, our schools, everything. So, I appreciate you taking that time to learn more and understand this process. Um, but I'm here to ask for more. I'm here to ask for more from each one of you here. Our town manager, our town attorney. I am asking you to work with these people. Um Travis Brooks, whoever he's working for, whatever their names are, work with them. Consult with Karen Yamaha and Rich Stevens who did an amazing amazing job saving New Town from being a huge entire high-rise. They worked with the developer and lucky for us, yes, Kay Swinsson is from here and he does have morals and values and loves this town. We've got to get to these developers the same way that Rich and Karen were able to work with Case Swenson and I'm here to ask you for that. I'm um it's a bigger developer. It's a harder it's going to be harder for our residents to fight this alone and we really need your help and your support. So, anything you can give us, whether it's correspondence, information, anything, we're going to need that. Um, on another note, um, I'm also asking that you really look at the design. Whole Foods is beautiful. Whole Foods design parking lot is poor. Sadly, it is unsafe. I've had so many people texting

me, calling me, asking me what happened here. And you really need to look at what this parking structure is going to look out. Cars pulling out onto Carlton Avenue. I love seeing everybody walking to Whole Foods, but where people are crossing the streets, and you can't control that. Where people are crossing the streets, how people are pulling out illegally. It is dangerous. We are right next to a park. we are right in a neighborhood. I'm really asking that you look at this. I'm asking that you work with Travis Brooks and his people and that they figure out safety and also to respect our community. He's sitting right here and I'm begging him over this microphone to please work with our town and work with these amazing people standing in front of me. Thank you.

Thank you. Um and our last speaker card I have is from Susan Bernett. Evening council mayor

Susan, can you make sure you're speaking to the mic?

I'm sorry. Thank you for letting me speak to tonight. My name is Susan Bernett. I am on the planning commission and I am on the historic preservation committee, but I am not representing them. I'm myself in my own interests. My comments are on item nine and they center around the attachment number 10 that you received from Mr. James Lions who used to be a really great planning commissioner and I hope he comes back at some point because he was very popular and very good. So hopefully the the town council did read that uh letter um thoroughly and the and we'll take the actions recommended by Mr. Lions. to adopt tonight's resolution under formal protest with rights reserved. The formal protest would not delay the projects moving forward. And as he states in his letter, these steps together would represent the most effective strategy available to the town, complying where it must, contesting where it can, and protecting the community's planning interests at every stage. And uh from my point of view, this action that you could take tonight um could soften the impact uh to our town brought on by a delayed housing element uh certification. So um I hope you do this with deliberation and thoughtfulness. It would not impact our town really in any way. It would not impact the projects. It would be um would we would actually be citing along with other cities that would be gaining would be addressing it in the same way. So thank you for listening to my words tonight and I hope

act. Thank you.

Thank you Susan. I have a quick question for you. So I I I did read the letter from James. Um my interpret my interpretation of it might be a little bit different, but my question is my my understanding of if we pursue that strategy is that we're going to end up in in a higher court um which would cost at least hundreds of thousands of dollars. Um, uh, so I wanted to just see, do you have a ballpark of, and I think this is an an earnest question just for folks in the community in general, of do you have a ballpark of how much you could tolerate the town spending on legal fees for something like that? I actually think the way the town has reacted to the many projects that are coming before us, I think if you took a poll of the population of Lascatus, they would actually side with any kind of uh legal fees, there would be because if you're looking at the impact that would be coming to Lasatus with these, I mean, there's so many on these SB 330s, the builder's remedies. I mean, they're coming down the pike. who are facing a lot of changes in Lascatus. I've lived in Lascatus all my life. I love the town. But I think if you put that question to the town's people, I think that they would definitely be on the side of do whatever we can and right now would not cost right now it would not cost anything. We're just filing a protest that we want to go to the next level. This this court, this uh judge, she made that decision. a single judge, it can go to the next next level. And all we're doing would be uh connecting with other cities that are doing the same thing and maybe for coalition to maybe help stop some of this tremendous change in our cities and towns.

Okay. Coming from Thank you. Okay. I appreciate that. Thank you.

Yes. Thank you. You did. Um Okay. Our uh last speaker potentially is Leafo. Good evening and I'm speaking just as a uh almost 30 year well now just more than 30-year resident of Los Gatus and um I just want to underscore all the very positive suggestions you've heard from uh community members this evening on this issue at yes an appeal to a higher court is going to be necessary and yes there's a cost but consider as was pointed out by Miss Barnett that this would probably a low be a lower cost than what it's going to impact the town if this thing gets through these buildings get through and the requirements for the town to pay for the infrastructure u and remedies is going to be significant. The town already has enough sites in our approved housing element to accommodate the 1993 new units that are required by u the uh the state. Um none uh of those are in uh unsafe sites unlike what these high-rise developments are along the boulevard and uh such sites as those. Um the the sites that were approved in the housing element are two and four stories depending on where the location is in the area. And uh also many of these new developments particularly Okchre Road um doesn't have a second way out and uh as Santa Clara County Fire has indicated that if there is an emergency their equipment is not going to go down Oka Road until people are able to evacuate. Same thing with College Avenue. They've

done an a study there and determined that because of the uh oneway in and out with any emergency up there, they have to wait until people are evacuated uh first. And this is going to be calamitous in terms of its impact on the town uh financially, socially and and it it has to be uh prevented. Please appeal to the to the higher court to provide a judgment to um not overrule local control of local housing. Um for example, the the 90-day extensions that should be one single extension and once that expires, that's it. Um that's just logic. Otherwise, with all these continuous extensions, there's no control. Um and uh the fault lines that were mentioned by an earlier speaker uh the watershed area u to build these highrises on such sites is is uh um I don't know I think my granddaughters could make some better decisions than that and she's the one is only eight years old. So propose logic, common sense and a sense of community. Thank you.

Thank you. Um, Lee, I'll ask you the same question I I asked the the previous speaker, but with a, you know, maybe a little bit more flavor. So, I think this would doing that would cost the town hundreds of thousands of dollars. Um, no question. and and you are aware of the town's current financial struggles and so doing so would likely lead to service cuts um or or cuts somewhere because we we are the town and staff are currently finalized actually I think the budget the finalized budget came out today

uh you know an extra half a million dollars of legal costs was not in that budget and so we would have to cut services somewhere. Is that a tradeoff that you're comfortable with? It is because the counterpoint to that is if we don't do it, what are the costs going to be to the town in the future to provide the types of services that these developments are going to require that they are going to require but are not going to be paying for because of the goofy legislation out of Sacramento. Okay, understood. Thank you. Yeah. Council member Hudis, then Vice Mayor Risto.

Yeah, thank you. Um uh you know in reading the letter from Mr. Lion, he has um five recommendations, one of which relates to an appeal. The others do not.

Um so to maybe clarify uh the comments from the mayor, um the potentially not all of these would even cost as much as the hundreds of thousands of dollars. Um, do you have you read the letter and do you have any opinion on the other four recommendations or the sense of those recommendations in terms of the stance that the town should take on on this development? I'm embarrassed to have to reply that I have not read the letter and therefore I I cannot and should not comment. No problem. Thank you, Vice Mayor Risto.

Thank you. Um, I hear what you're saying, Mr. ago and I've heard other people make comments. Um, you do understand that this question was first asked of HCD and they said that that the 90 days continue. Yes.

And then we did ask a court and they also said it continues. So you do understand the chances of an appeal succeeding do not look great. Um, and there are multiple other cities who have asked this question and gotten the same answer and are not pursuing. I understand that. However, unless there's resistance and unless there's a way of getting those elected officials who put that legislation in place so that they understand they're not correctly or fully representing the electorate. Hopefully in the future they'll be able to come up with some amendments to that legislation to not have such goofy laws in place, but things that are more practical, reasonable, and truly serving the communities that they represent.

Right. I understand. I'm just, you know, we're talking about what the potential could be for fees. There can also be us losing and even more costs and more consequences and getting the buildings on top of all of that. And what are the consequences if we don't do anything? We go through a process and find out how this plays out. Well, I I think to that point, one of the comments that was made by an earlier speaker is that yes indeed there have been uh ways of working with the developers to get them to modify their development so that it's less costly for them. I heard that part and we've been successful in some cases.

Yes. Okay. Thank you. Thank you. All right. Do we have any hands raised on Zoom? There's one hand raised on Zoom. Rich Stevenson.

Go ahead, Rich. Can you hear me? Yep. Can you hear me? We can hear you. Go ahead.

Okay. Good. Thank you so much. Um, thank you, Mr. Mayor and Council, for everything that you do. Uh, your work is tireless and it's very much appreciated. I was born in Lascata 60 years ago and have lived here most of my life. Uh, to see what's happening is very difficult. This delay may have cost a developer, as they mentioned, of the Ace Hardware site money, but keep in mind that this high-rise would cost neighbors, possibly many millions of dollars, uh, many hundreds of thousands of dollars in equity for multiple neighbors. So, it may sound like the developer has spent a lot of money, but it has it would be dwarfed in relation to what it would cost neighbors. I hope and ask the developer to work with the town and the neighbors to find a reasonable solution that won't destroy our town or this neighborhood. The building is adjacent to singlestory homes. And if you can imagine, as one person spoke earlier, walking out their door and looking up at nine stories, it would be just horrendous. Please, please work at changing this development to something like three-story town homes. I know that they are still tall, but they're a whole lot more attractive and a whole lot more useful uh than a ninestory building. I think they'd be a whole lot more acceptable to all in the town, the neighbors, and everyone else. So, please please open communication and find a better solution. Highrises do not fit in Lascatus. Thank you.

Thank you. All right, that concludes public comment. Um because this is a public hearing, the uh applicant or um applicant has uh three minutes to respond or provide any closing comments if you wish or you don't need to do so. You're okay. Okay. Are there any uh questions for the lawyer? No. Okay. Thank you. Um okay. Um we'll turn to the town council for any further clarifying questions or a motion. And we'll go to Council Member Renie.

Thank you, Mayor. Um, I'm speaking softly. Hopefully, you can hear me because there's others asleep in the apartment here. Is this an okay level for you? Loud and clear.

Okay, great. Um, you know, just continuing the conversation we just had. I think people need to understand better what our financial liability in this is. What I heard was only oh, you know, another couple hundred,000 of our costs. But then you need to realize that if we lose you, the person on the other side gets to come back and ask for their costs also paid. So that usually more than doubles the cost. Um there this started off as So this I'm leading up to a question here. Uh this this started off as um us saying, "Whoops, the way we read this um this application is has expired." And our advice from our legal counsel was we need to go to court to ask them this. And we thought I remember as council members thinking, well, this is an innocent. We want some legal clarification. Well, it turned into a a little more of a lot more of a combiveness with the applicant and people are asking us to work with the applicant. We've we're already in kind of a combative um posture with the applicant where they've filed counter suits against us claiming Housing Accountability Act violations which has a much larger uh financial implication to us if it if it were the case. Um one speaker or more mention well we should work with our legislators to come up with better laws for this. Well, we just had a new law that was a reaction to these these um law questions, lawsuit

questions that have occurred um which is not going in our favor. It's going the other way. It's and so that my first question is for the town attorney to explain the new law that was just just came active on January 1st of 2026 in relation to um this question. I read it something as if you effectively deny a project for this reason, it's a housing accountability act. So, could you um update us on that new law, meaning the legislators are not going in our direction, they're going further to try to punish us. And then the second question, if you can take two at once, is really if we get hit with a a housing accountability violation, what is the cost of that?

Sure. Um, so the I'll take the first question first. Um, the new piece of legislation is government code section 65914.2. Um, and it doesn't apply to the lawsuit that the town filed last year. Um, but it could apply to future litigation. And it provides that if a local agency has been advised in writing by either the attorney general or HCD in advance that its decision would represent a violation of a housing law. um and the city or town elects to go forward um is sued and loses um then the court can impose a fine of not less than $50,000 per violation. Um, and so basically it's saying if you don't follow direction that was provided by the attorney general or HCD, you'll be subject to penalties.

Um, and then the second part was about housing accountability. My understanding is it's 10,000 per unit.

Um, that's correct. And so then um under the Housing Accountability Act, there was a provision that provides um if you engage in a violation of the act um then there's a fine of $10,000 per unit. Um and let's see, what else did I want to say? Um, I wanted to say that the attorney general um has also provided guidance on this 90day issue. Um, and that came out earlier this year. So, it it came out after the town had filed its um action for declaratory relief, but it did come out earlier this year. and and we have currently still have a lawsuit pending against us um related to this that is a housing accountability claim. Correct.

Um that's correct. After the town filed its action for declaratory relief um the two defendants filed cross complaints against the town and those cross complaints allege Housing Accountability Act violations. Um, and the premise of those cross complaints is that the town is engaging in unreasonable delay.

And and then one follow-up question to your information. Um, so you said the new law doesn't apply to us because we asked the question beforehand. Um, part of my point in bringing this up was that the legislators are not going in our favor. They're going the other way. But related to us, if we did an appeal, would it then apply to us if we appealed since an appeal is new or is an appeal a continuation of the old question?

Um, I would need to research that before providing an answer. Um, but it definitely indicates um the legislaturator's thinking that it wants cities and towns to hue to the opinions of the attorney general and HCD.

Okay. Thank you. And and thank you, mayor. And so that my point was just to make us better understand what our financial liability question here really was and and a number of and that we do have still cross complaints filed by the applicants. People are asking us to work with the applicants to try to come up with a better um project. Well, do you do that when you're fighting in court? I don't think so. So, we need to get past the current fight in court so we can get back to working collaboratively with the this um applicant. Thank you.

Thank you. I'll go to Council Member Hudis, but first I just wanted to um while we're on the topic of cost, can you so I think just give us a a ballpark of scale. I know we've already spent a certain, you know, several hundred,000 on this. If we took this all the way, what is the and we were charged attorneys fees? You know, if we took this all the way lost and were charged attorneys fees, what is the ballpark, you know, orders of magnitude we could be looking at?

Um, certainly. So, to date, um, we've spent $24,000. Um, but that's not through the end of the litigation because the court still needs to hear the two cross complaints. Um and then if in the event of filing an appeal um the town's the cost of the town's council would be approximately um the same just for filing the appeal. Um but we do think this is such a heavy issue that um an appeal would invite amus briefs from a number of other interested parties and so we think the briefing would be more intense. Um, and so I think the legal costs, and this this is an estimate at this juncture, but I expect that the cost of an appeal would be probably double what has been spent to date. Um, and then if the court were to find um a Housing Accountability Act violation, the town would be responsible for the other parties attorney fees um and possibly penalties.

Okay. So without penalties, cuz I think we don't know how much those penalties would be, we're going to spend about a4 million on the part we're already committed to, right, to get through the end of our um our current litigation. Um and then to go forward with an appeal, you're saying we would about double that. Um uh so you know we're looking at half a million dollars and then if we lost we're paying all of that potentially plus more if we are held responsible for the attorney's fees of the other side which would be something like $1.5 million.

Um yes I expect that the attorney fees for the other side would be equivalent to what the town would spend. Okay. So, that that would be about $1.5 million. Okay. Thank you. Go to Council Member Hudis.

Yeah. Thank you. Um I realize we're having a discussion now, but I wanted to just maybe focus it back on a very specific question. Um are there other cases pending that could set precedents for this application? And are any of those at the appellet court level? Um so currently the county of Santa Clara and the city of Certino are engaged in um the same question in litigation at the superior court level. Um a decision hasn't been rendered in either of those cases yet. Um and neither I nor the law firm that has been assisting the town, which is Gold Farman Litman, is aware of any litigation at the appellet level. If I could just follow up. Um, are there other cases at the superior court level in the state? I, you know, beyond Santa Clara County.

Um, there is a case that was decided involving the city of Los Angeles. Um, and that was decided against the city of Los Angeles's interpretation, which was the same as the towns. Um, and that was at the superior court level. Um, and I'm not aware of any other cases at the superior court level. So, you're saying that there are no other cases in the state that you're aware of? Not that I'm aware of.

I see. Um, okay. I had another question. I may um if uh one of these cases did proceed to the appellet court and uh there was uh a determination that was different than what the superior court rendered in our case. Um what would that do to this situation um if we adopted the resolutions uh tonight? Uh so that would be looking forward and so that would definitely affect how the town interprets the statute going forward. Um I think tonight the town needs to hear the appeals based on the information that the town has in front of it tonight. Uh and so the town would be bound by a decision that it had made tonight. So basically even if um a an appeals court or the Supreme Court uh supported our initial position on this, we would not be able to assert that position if we had adopted these resolutions as they're written. Is that correct?

That's correct. With regard to these two applicants because the resolutions are specific to these two applicants. So, is it possible to put something into the resolution that covers that possibility? Um, it's certainly possible. Uh, outside council and I are recommending that the resolutions be adopted as they're proposed, but it it would certainly be possible to add language to the resolutions. Thank you.

Other questions of staff? Yes, Vice Mayor Risto,

I guess. Um, I mean, I thought about it a little, but I didn't really think it through. So to council member Heday's point, if something were put in the resolution that indicated that future legal perhaps overturning of this decision in another arena, if that took effect, would we then retroactively say that this project is not complete or I mean, you It might never happen or it might take years before it got to another court if another city went forward. Um, I don't know how we would even be able to use that information unless this project were continuing through multiple 90 days for another year or something.

Yeah. And it's important to remember that this both of these applications have been deemed complete. Um and so they're being processed right now because they're complete. Um the applicant appealed um a statement from town staff and so I'm recommending that the council hear the appeals this evening now that we have the judicial determination um and that that vote be based on the information that the council has in front of it this evening. Thank you. Yes, Council Member Hudis.

Yeah, thank you. I very much appreciate the letter um for Mr. Lion and um I wondered if we could maybe turn our attention to the five uh recommendations that he made um and get um uh staff's opinion about these. Um the uh and let me just say that the third one which was to file a notice of appeal I think we've talked that one through already so I'm not going to um address that one but I'll ask about the other four. So, the first one is to adopt the resolutions under formal protest with explicit language on the record stating the town's disagreement with the superior court's ruling. Um, its reservation of all appellet rights and intent to seek review upon entry of final uh judgment. Do you have a do you have any uh opinion about that recommendation? My recommendation um is that I believe the applicant is looking for certainty and that is an element of the cross complaints against the town. And so my recommendation would be not to include um the appellet information in the resolution. I think it would be fine for the council to make statements that aren't part of the resolution. Um and then I think those are my thoughts on the first bullet point.

Okay. Um is it okay if I move to it? Go ahead. Yeah. Yeah. Go through them. So the next one is to appro oppose approval on the merits throughout the entitlement process by applying all available objective design infrastructure sequence completeness standards to the maximum extent permitted by the law. Um right. And so the merits of the project aren't on the table tonight, but um the town is processing both applications and the town is reviewing all applications, you know, with the intent of preserving any discretionary review ability that remains under the Housing Accountability Act. Okay.

And I I can move through the rest of the bullet points if that would be helpful. Okay. Um, and so we did talk about the idea of filing an appeal. Um, and I've provided my thoughts on that. And then the fourth bullet point was to coordinate with the League of California Cities and similarly situated municipalities to build a coalition for coordinated briefs. Now, um, my thought on that is I I I agree with the fifth bullet point, which is to contact the state's legislators. Um, because I and also to contact the lobbyists who work with Cal Cities um because I think that, you know, the legislature needs to know the effect of these laws on local jurisdictions. So, if I could follow up on number four, um, which says, "Cocoordinate with the League of California cities and similarly situated municipalities, including Beverly Hills, which face the identical 90-day dispute to build coalition for coordinated appeal appellet briefs now before John uh final judgment is entered." Do you have um any perspective on that one? Um my my sense is that um the result would be similar and so my recommendation would be that the town preserve its resources for other efforts. Um, but I I do think it makes sense to, you know, touch base and coordinate with other cities um on how they're processing these applications in their cities.

Thank you. And just one last one, if I may. Um, I think you've referenced the H housing accountability act and another uh counter suit. Is it possible for the town council to have a close session with outside counsel on uh that topic? Yes. I would request that we do that. Thank you. I'd be happy to do that. Yes. Uh Council Member Bami.

Thank you. Um so for the town attorney the last one number five which is direct the town state legislative advocates to sponsor or co-sponsor a clarifying amendment to government code section 65941.1. How does that help us tonight? um it does not help with these two projects because these um and actually many of the SB330 projects have vested to all of the laws that um were in effect at the time that they vested. Um it would help with future SB 330 applications.

Thank you. Okay, I will look for a motion from the council on this item. Does someone want to move the staff recommendation with the understanding that we can modify it after we discuss this a little bit further?

Yes, Vice Mayor Risesto. Okay, I will move the staff recommendation and then we can look for um friendly amendments as we go along. And that would be the two resolutions that were updated today. Um do I need to read them or town attorney did does moving staff recommendations cover the motion? Um yes it does. Okay, thank you. Is there a second for It can be for discussion solely. Council member Renie, I'll second it. Okay.

Yeah, I'll I'll second it. As I said before, I think we need to move beyond this question. It's pretty clear where the courts are going on this and an appeal, in my opinion, is is just going to make this more combative. I think we need to move to the point where we're working with the applicant to try to come up with an um a more palatable project at this at these sites. Um and moving this forward helps us move to that. Okay, we have a motion and a second. Um okay, I can provide some comments. um because the town council is uncharacteristically quiet um uh uh at this juncture. So I I just want to start by saying I disagree strongly with the interpretation of the court um uh for the you know uh sake of the public. The statute in question we've talked about multiple times is government code section 65941.1. Um, and uh, I'll read the part that we're talking about this evening and what the the lawsuit was around. Um, it says, "If a public agency determines that the application for the for development is not complete, um, the development proponent shall submit the specific information needed to complete the application within 90 days of receiving the agency's written identification of the necessary information. If the development proponent does not submit this information within the the word the 90-day period, then the preliminary application shall expire and no further force um and have no further force or effect. That's what we're talking about tonight. Um I think I was a pretty decent English student in in high school. Um and I have always known the word the to be singular. Um and

therefore, uh developers, in my interpretation, should only have one single 90-day window in which uh to uh complete their application after the town identifies missing information. However, uh I think it is uh based on all of the information we have heard this evening, um I think it's very unlikely that the court will reverse its decision. the court's decision um from Superior Court Judge Helen Williams. Um she deemed that the word the was being used to reduce repetition and ensure coherence in the law without limiting the number of 90-day periods allowed. Um she felt that the law also suggests that quote multiple resubmissions in response to succeeding incompleteness determinations may be made without a preliminary application expiring. I feel that is very clear um in the court's you know in the court's interpretation that's very clear. I disagree with it vehemently. Um but but I think it was very clear and as the town attorney has said, the state attorney general has also made the exact same finding. And so I think that puts the town in a very difficult position and I do not think we have a strong argument for an appeal. However, to council member Renie's point, I will say two things. I'm, you know, from Council Member Hudis' line of questioning, I'm willing to entertain language that um would help the town be in a better position were a different outcome to occur in a different uh appellet court. I think that makes sense. But I also agree with Council Member Renie that we need to get in a position where we can start having good faith discussions about this project. I think there's a lot of leverage the town still has over these things. I think the

town is able to introduce uh certainty into the process if we can enter into negotiations which is very valuable to a developer who is looking at a potential significant lawsuit even if we're in a the town of Los Gatos um is in a bad position in a lawsuit. Lawsuits will take years and years which cost developers money and so I think the town does have leverage but I do not think we are currently in a good negotiating position with this hanging over our heads. So, that was long- winded. Um uh and so those are some of my thoughts, but I'm willing to entertain um some modification language if someone wants to suggest that. Yes, Council Member Badami.

Uh I don't have um wording at this point to to modify the resolution. I just wanted to add my comments.

Um you know, clearly uh this council is in a difficult position to disagree with the superior court's ruling and I acknowledge that an appellet court could rule differently. Appellet courts do overturn superior court decisions. Um again I have difficulty with their determination. Um common sense uh clearly it defies that a development application would not have a deadline and have an endless life. I mean I just I I have I have a lot of trouble with that. It's common sense. So, I have difficulty um in even adding wording to the resolution, but I'm open to hearing what that wording uh would be. And I would just want to add one other comment. I realize, you know, how expensive litigation can be, but when you listen to the other costs that could be involved, um, for example, there's a gentleman, and I forget his last name, but he talked about buying his home for 65,000, maybe 60 years ago, and uh, what is appraised for now and the loss of inheritance to his children and the property values. It's hundreds and hundreds of dollars. and not just one resident. And we're losing the fact that a development this high with the density that it would have is going to add cost to our infrastructure and public safety. So there are other costs involved uh in going forward. So I have a lot of difficulty tonight um with the superior court decision um with the um application a builder's remedy before us. It just it's very unfortunate. Um it just it's so controversial uh and quite offensive to our community, but we are in a position we are in uh

and we need to do something about it. Thank you, Council Member Hudis.

Uh yeah, I'm certainly not in a position to propose any language tonight. This should have come from the town attorney. Um the uh I did make the request ahead of this meeting um about whether we could preserve um our situation if there were an appellet court re uh ruling. Um and so uh I'm not going to shoot from the hip and make any suggestions about language to support that. Um, I will say that um I'm not in a position to support the motion at this point given the language that's in here. The situation uh that the um that there has not been an appellet court ruling on this matter um let alone a Supreme Court ruling on this matter. And so, um, I, uh, am am not in favor of the the motion as it's been proposed. Um, but and it doesn't appear that anything is forthcoming from the town attorney on potential modifications. Uh, so I'll ask a question of the town attorney. Um, I I believe that the town attorney's office did provide potential draft language to modify. Can you share that with us?

Yes. Um, if you take a break, I we can put it on a slide. Okay.

Um, but what I'll do is read it into the record. Um, and this we're recommending what was initially proposed, but if the council um feels strongly about adding language to the resolution, this is a possibility. And and so the language would say because the superior court has determined that multiple 90day resubmission periods are allowed to respond to successive incompleteness determinations. The town will act in compliance with that determination absent any contrary controlling legal authority applicable to the projects. Thus, based on the superior court determination, the vesting afforded by the SB 330 preliminary applications for the Arya and Lux applications has not expired.

Great. And so to to clarify that would cover us in the instance that a an appellet court somewhere in the state ruled with the town's position. That's correct. Okay. Yes, Vice Mayor Snow.

Thank you. Um maybe we can take a break so we can then get the wording up on a screen and then proceed because I think I want to make sure that we do this very carefully. This is a tough position for our community. It's I want to make sure we do this right. And you know, I as a council member, you know, I wanted to get the legal interpretation on this and the answer wasn't what we thought was coming. Um so I think we need to understand what the landscape is.

Okay. Um be sounds good to take a break. Before we do, um are there any other questions from the council um about more information that they would need to move forward potentially um before we take a break? Okay, seeing none, um we will take a 10-minute break. This will be our mid uh uh council meeting break um and return at 9:40.

Oh, All right. Um, we are going to reconvene this meeting of the town council um and see about looking at some of the potential modification language. Okay. So uh per the town attorney's uh language that she shared this language would ensure that if a appellet court ruled in the town's um in you know with the position of the town uh the town could uh potentially um go with that interpretation.

Yeah. um soon. There it is on the screen um so that everybody can see it. But um what's on the screen is an alternative to the resolution that's in the packet. Okay. And can you talk through what the you know any downside of of this would be? Um probably not in this setting. Okay. Thank you. Yes, Council Member Hudis.

Yeah. No, I appreciate having the language now available to the public um to see what the alternative language would be. Um it still raises a couple of questions in my mind. Um but I believe that those questions cannot be answered tonight. Um and so I would offer um an alternate motion and that is to continue this item uh for two weeks to allow the council uh to consider this language um or other proposals to deal with the issue uh that was raised tonight. And so that would be to a date certain when is the next council meeting?

It wouldn't be quite in two weeks. to be the first first meeting in May maybe. Okay. Um uh yes. Is there a second? Uh yes, second. Okay. Thoughts on the motion? Yes, Vice Mayor Risto.

Thank you. I have a question for our town attorney and our manager. I mean, what are the consequences of us continuing this? Are we under a deadline to hear this appeal? Um so right now um one of the issues in the litigation is whether or not the town has unduly delayed um these applicants. And so uh you know I imagine that issue will continue to be raised. Um in my view a twoe continuence um would not be unreasonable in that uh both applications have been deemed complete and are continuing to be processed. Okay. And I think it's a three-we delay, isn't it? If it's the next meeting,

um it the next meeting would be May 5th. Um and I Yeah. So that's two weeks. Okay. Thank you. Um, council member Renie, I cannot see you just yet. We cannot see you just yet. Um, the town manager has reminded me of one other downside, and that is, um, there's an argument to be made that these appeal hearings constitute one of the five public hearings that are authorized under SB 330 for SB 330 projects. And so it would potentially use up one of those five hearing dates which apply both to the planning commission and council. That's correct. And any appeals.

Yeah. Yes. Um so to clarify, is this meeting right now one of the five? Um that's debatable. Yeah. And so if we continue that could potentially use two meetings. That's correct. Okay. Thank you. Yes. Could someone do the math? How many are left? Are there none left? Is it adopted? Three left.

Um well, the town would take the position that this was not a hearing on the merits of the project and so the five hearing limit doesn't apply. Um but there's also an argument to be made that uh the five hearings includes all hearings related to a project. And again, how many have we used up on this project? Um, well, if a court were to decide with the argument that these hearings count toward the five hearing rule, there would only be um three remaining. Okay. Thank you, Council Member Renie. Um, first of all, is there a second to that motion?

Yes, there was. Council member Bami.

Okay. Um my first reaction is I certainly don't want to use up hearing dates talking about some small legal matter when you know there's a very large project to be spending our time um discussing and potentially asking that the applicant to to come back again with some changes or something. Um, I'd rather have more of those kinds of hearings than a hearing over whether, you know, some small legal matter. Um, I if based on that risk, I think maybe we should just modify our motion to uh include the wording that was just put up on the screen. Um, I I would generally tend to agree. I I think that we we being the town of Los Gatos asked a strong and valid and legitimate legal question on this. Um, we got an answer that was not in our favor. And I'm of the opinion that there's still a lot more work to do on these and that I think there's a lot of room to um work with attorneys and residents to to uh shape these developments. Um but I don't think that delaying uh is appropriate. I also think in two weeks we wouldn't change a whole lot. Um, so I'm more of the opinion that we should ensure we're covering ourselves on in in the legal with the the language that um the town attorney shared with

us. And then I would also be very much in favor of having staff connect with the developer of the Arya, the ACE hardware development, um, and discuss ways to meet in the middle. Yes, Council Member Hudis.

So, I'm um a little confused about the counting of the the hearings. This seems to me uh to be related to litigation matter that was also the subject of a hearing as well. Um, so I does I actually again town attorney maybe you could repeat your position on whether this um constitutes a hearing on the project.

I think there's a good argument to be made that uh this discussion counts toward one of the five hearings. I think there's also a counterargument to be made. Um the most conservative course of action would be to treat this as one of the five hearings that are allowed. Um so it you know given that situation um is it possible in this setting for the town attorney to explain how the proposed language um would work if there were an appellet court ruling that supported the position of the town. Uh the way it reads is that the town um will comply with the superior court uh order um until there's any contrary legal authority applicable to the projects and in that event the town could change its position. and what kind of uh timing and how would that fit with the process of reviewing these applications? Um I since there's no appellet case pending at the moment, I don't anticipate that there would be an appellet decision for and this is again an estimate um for at least 3 years. Um and in that time once an applicant has obtained an entitlement you know the town could not go back on the entitlement and it does seem unlikely that this uh these applications

will still be being processed in 3 years time.

Yes, Council Member Bami. Well, I would want to take the chance of potentially eating up two hearings. Um, none of our prior SB330 or builder remedy uh hearings uh extended uh past three hearings as much as some of us wanted to refine those projects.

I'm I'm sorry I didn't hear the beginning of your comment. Would you mind repeating that? I would be willing to take the chance that if we had a continuence that even if it potentially was eating up two hearings, if it was ruled that way, if even relevant, um that I look at our prior SB 330 and builder remedy hearings that we've had that we've approved or not approved, and as much as some of us may have wanted to refine those projects, they didn't exceed three hearings. Thank you. And

and can I ask for uh you know the maker of the motion, what are you looking for from staff in two weeks?

Um so really two questions. Um the first is uh how would this preserve the position in the face of a subsequent um appellet court ruling and uh how would that be implemented? Um and the second um is uh related to the um the other lawsuits that are pending and um how this would impact the town's position in those other lawsuits, which would be something that could only be discussed in close session um prior to um a council meeting to determine this. Okay. Thank you.

Uh, Council Member Anie,

I I'll just say that I'm I'm again not in favor of extending this and risking another um uh you it counting as one of our our public sessions. I realize there may be some council members that don't want to spend as much time refining this project. When I compare it to the projects we've had before, I find this one needs far more refinement than any of the ones that that I've seen so far that that we've discussed and made decisions on so far. So, I again don't want to give up um refinement meeting opportunities. Um, also we've discussed the legality of this a lot in in uh closed sessions already. Um, potentially we're going to discuss exact language. Um, but I I don't feel that it's worth trading for opportunities to try to work this into a better project.

Okay. Thank you. Yeah, I generally agree. Yeah, Vice Mayor,

thank you. Um I think council member Renie um covered a lot of what I was thinking. Um we may have passed some of the other projects in three meetings, but my concern is that a project of this size and scale is going to bring a lot of public comment. We could end up spending an entire evening hearing public comment. And I don't want to be in a situation where potentially the planning commission takes two nights and the council cannot have the time it needs to work collaboratively with this applicant. I also don't really see that I'm going to get information in a closed session and have different information in two weeks. I think I have all the information that is possible to have. There's a lot of uncertainty and I don't think there's going to be more certainty in two weeks. So, I really feel like um I'm not going to be able to support this motion.

Okay. Yeah. Uh Council Member Hudis, and then I think we should vote. Um clarification from the town attorney. Um do you believe this is a hearing on both of these uh projects? Yes, this is a a procedural appeal hearing for appeals that were submitted for both projects. Um, so we have a motion on the table which is to continue this item to uh the first meeting in May. We will take a roll call vote.

Council member Benny, no. Council member Hudis, I. Council member Badami, I. Vice Mayor Risto, no. Mayor Moore, no. Um, okay. The motion in front of us now is to approve staff recommendations. We've been talking about some language that we could potentially introduce to change that. Yes, Vice Mayor Risto.

Thank you. Um, I'd actually like to pull my motion. Um, I don't know if that has to be okay with the secondary. No, it doesn't. Right. I can just pull my motion. Um, so now we don't have a motion on the table and so I will propose I think we had it up on the board. What I've got in front of me isn't exactly what we had on the screen. I think there were two items on the screen and this is one item. It actually is the same. I just um redlinined the what it would look like in the resolution, but I'll put pull that up for you.

Thank you. And just to clarify, the red line language is the language that the attorney was added. So this is the black is the language that's already in the resolution and the red would be the additional language, right? And there's item two as part of it. Okay. So um and this is for specifically the lux resolution and it would also have to be added to the ARO resolution. Right. So these would be identical except one would say Lux and the other would say Arya. Correct. All right. And I can do this in one motion.

Yes. And then it it would be um as amended because I did make a correction to the um Arya resolution. Correct. Because that one said Lux and now it says Arya. Right.

Um and I really I don't want to belabor this and I don't want to create more legal drama. I think there should be places where we can work with this developer and come up with a project that gives them certainty, meets their needs, and meets the needs of our community. So, I'm hoping we can move forward with that. Um, but I move that we adopt the two resolutions. Um, as forwarded by staff, um, with it being resolved, the town council, town of Loscatoos hereby declares, determines an order as follows. One, because the superior court has determined that multiple 90-day resubmission periods are allowed to respond to successful incomplete successive incompleteness determinations. And then with the added words, the town will act in compliance with that determination absent any contrary controlling legal authority applicable to the projects. Thus, based on the superior court determination, the vesting afforded by the SB 330 preliminary application for the Lux application has not expired and the appeal submitted by the Lux applicant is granted. And then basically identical wording for the Arya project.

That works. Is there a second? Yeah, I'll second it. I already said I would interest it in this motion. Okay. Thank you. Um I'd like to make just a friendly amendment that I think is already kind of baked in um to this motion, but the friendly amendment would be to include that at the conclusion of the existing litigation on the 90-day issue, staff will engage with Arya Properties LLC to negotiate on the ACE hardware development. I will accept that amendment. Yes. From the seconder.

Is there other discussion on the motion? Yes. Council member Hudis.

Uh yeah, thank you. I will not be supporting the motion because I think it's uh I don't think this is a minor legal issue. This is a a very um important and substantive issue that relates to how uh this and other um uh projects um are processed. Um and I think uh adopting um this under one uh superior court ruling um is uh is not wise. is I think the town needs to preserve its ability um should a court rule differently. Um, and yes, there's language that's been proposed, but I've had uh no opportunity to discuss that um with our council. And I've had no opportunity to understand how um as our town attorney has represented, this could impact other complaints against the town. And so I um for me, this is consequential and important. And I think that um uh that our residents deserve the um careful consideration of this matter. So I'm not willing to rush into this tonight. Okay. Seeing no other comments, um we'll take a roll call vote on the motion.

Council member I. Council member Hudis. No. Council member Babdami. No. Vice Mayor Risto. I. Mayor Moore. I. Uh. Motion passes. 322. Um. 3 22. Um. Uh. We will now move to our next item um which is uh the financial condition analysis and fiscal impact analysis. um studies and this is the opportunity for the council to provide feedback on these topics. I will turn it over to our administrative services director Christina Alaro.

Uh thank you mayor and good evening council Christine Al Faro administrative services director and I would like to introduce uh Mark Northcross with NHA adviserss who will be starting the presentation. All of our consultants are available uh remotely this evening. Just one second. I need to promote them and pull up the presentation. There we go. Thank you, Christina. Can everyone hear me?

Yes. Thank you. Great. Okay. Uh, we've got the screen sharing of the slide deck going someplace. Not quite. Oh, you have it going. Give us one sec.

Okay. Thank you. Well, let me let me probably We're getting to the slide deck. Let me do some introductions. Uh we've been retained by the town to prepare a fiscal condition, long-term financial forecast, three components. Uh there's an indepth deep dive into the fiscal policies matters cash flows of the town. Uh that's being handled by a team from Rafelis. uh Willown has been assigned and has done the work on a fiscal impact with particular focus uh on the mandated housing, the arena housing in particular. And then the third part is the asset lab building management which is really about your CIP and about how you're going to respond to calipers section 115 or otherwise. And there's been a lot of work done in all three tasks. And let's go to the table of contents. Thank you and thank you for getting this up. And we're here. We've presented this last week to the finance commission. We had an outstanding discussion. I I think the key words here, this is a collaborative process. This is not a consultant talking down to staff or electives or the members of the public. Uh we are not claiming we're smarter than anybody else in the room. Uh we are working collaboratively. We got great feedback from the finance commission. Um we had what I would consider in a few cases some very healthy disagreements, different ways of approaching things which we can talk about tonight. Um but we're here tonight to give you a summary of what we've done and some preliminary conclusions. And so let's go to the next slide.

Work completed. uh our Rafelis team, Jonathan Ingram and Claire Pritchard will take you through what they have done so far and also I think talking a bit about what happened with the finance commission both in February and last week. Um they prepared a detailed memo on assumptions which are really really key and uh we are to a point where we are ready to start framing scenarios. We feel like we're really close to having a base case on the financial model and time to start looking at scenarios uh for the future of the town financially. Next slide please. So work in progress and I excuse me while I pull out a couple of notes here. Um just some of the issues that came up on the with the finance commission that Jonathan and Claire will talk about is what I call aligning with FTEES uh between the model and basically staffing levels at the town. Part and parcel to that is how we deal with I'll call it the long-term vacant positions uh that all city government and public agencies in California have that are you know positions that are bug budgeted but not fulfilled. How you you know deal with that in a long-term analysis. Uh public safety overtime is an issue in every city I work with in the state of California and no surprise is an issue here. uh the fiscal impact analysis the again the the thing that really came up I think with the finance commission is a good question and we've got some thoughts on that is uh do you want to

use the same long-term growth assumptions for the you know we'll call number one the fiscal condition and forecast model as you use for the fiscal impact analysis and the question on the table is that for good reasons that the town is concerned about in particular the impact of RENA mandated housing and you know so you can make the case maybe you want to be more aggressive on how many units you get so you can really see what the impact is on the town. So again I'll leave that for Mike who I believe is on the call uh to deal with that issue. Finally, the asset liability management. Um, what the kind of two key questions, how do you how can you best use your section 115 trust to reduce long-term expenses for the town? And there's some thoughts on that and we can talk about that tonight or another night as well. The other one is on your CIP. uh you you've got as you know three tiers of CIP uh funding Gar and the sales tax passroughs from VTA have been cut back or eliminated. And so how do you fill in the gap? How do you get more of your tiers? You basically got tier one funded now. Can you get two or two or tier three in there? What's that take? And again for me the biggest variable in this is the highway 17 highway 9 interchange without you know no spoiler alert but the question that comes up for me were I a resident of lost gas or on the council is how badly do we really want this interchange? I just leave you with that question. Having given kind of a a really brief overview here, I'm going to turn it over to Jonathan and Claire who

are going to take you deeper into the fiscal condition assessment. So, uh, unless there's questions right now, I'm ready to turn it over to Jonathan and Claire.

Please go ahead. They don't appear to be on Zoom. That would be a problem for having them present. Maybe ask them to raise their hand if they're logged in differently. Okay, there's one that we're promoting.

I'm the presenter from Raph Telus. I was talking for some time. Okay. We did not hear me. Okay, folks. Yes. Yeah. Go ahead and start again.

All right. No problem. Um well, my name is Jonathan Ingram with Raph Telus. I appreciate the the the introduction, Mark, and mayor and council. It's it's very good to be with you this evening. Um you know, my job at RAF Telles, I'm a vice president who leads our I lead our local government organizational assessment practice. So, you know, I do this kind of work. I've been doing it for about 23 years um in local governments across the United States. I pretty much work exclusively with with city and county governments, towns um like yourselves. Um I want to set some context a little bit uh and give you a sense of what I want to cover today. you know, Mark has has has given you some some some overview in terms of the work that we've done today, but but really starting in December, we've spent a considerable amount of time and energy working with both town staff as well as members of the finance commission through multiple iterations of understanding the town's historic uh revenue and expenditure patterns and being able to identify what those things that are predictable and identifiable in the future that will ultimately impact your revenue and expenditure trajectories are. um uh to be able to ultimately articulate over a 10-year horizon um what is the town's financial condition? Um in other words, um what is the pace of your revenue growth and what is the pace of your expenditure growth? Um and are there structural challenges um that you all as policy makers um need to be informed about and need to start working to address? Um the the primary focus of this conversation tonight is to give you an update on where we're at and to give you and to share what we we're calling the base case outlook. Um, it's really designed to really inform long-term decision-making. Um, and that's really important. Um, what I want to emphasize is, you know, the working model, the financial model, the projections, um, they can continually be updated as new information becomes available. So, um, we're at a good place right now, um, having having engaged pretty extensively with the finance commission and staff. Um but there will there will undoubtedly be adjustments as we move forward uh especially as you all start to evaluate um some of the some of the major critical policy decisions um which we will summ summarize for you here at the end of the conversation next

u so so just high level um uh a couple of things just in terms of assumptions that I want to highlight before we before we get into the financial model um you know so so the first is um sort of what this model is and what it isn't okay so um you know one of the things that's really important to distinguish and can be a challenge um for governing bodies um not necessarily for you all. I think you all have have have gone through the best practice of doing this kind of work um from the town um historically um so I don't know that it'll be a significant issue here but um it's really important to distinguish what the difference is between a financial model and an annual budget process. So the goal of a long-term financial model which is what we've developed for for staff is to really identify those long-term trends and impact and sort of reasonably predict the conditions across a multi-year land uh landscape. Um the goal here is to really frame the critical policy and investment decisions that that you both your executive leadership team and governing body um need to start to wrestle with. Now um in other words, it's a warning system um that can help u kind of forecast the weather and and then the budget process is really a different tool. It's the tool that you all use as a governing body that your staff uses annually to make those those those those near-term adjustments um to maintain fiscal balance in the near term and also to start to make um adjustments that can pay off long-term in the dividend long term with respect to the overall financial picture. Um so you know the budget process is really about those very difficult specific choices. the long-term financial battle uh model is really about all right what's our long-term trajectory and how do we what can we do um to start to bend that um so really so if the long-term financial model is the is the weather forecast the budget process is all right what do we need to do we need an umbrella we need a raincoat do we need to stay inside or do we need to build a storm shelter right so um that's really the way these two processes you know work together um what what I what I what I want to go to next is really to go through really two fundamental elements Um, you know, we could spend, you know, two or three hours going through the the nuance and

the detail associated with each of the assumptions, but I want to spend just a couple of slides talking through our core revenue assumptions in the model and sort of how we got there, what's included in the model, how we got there, uh, but also the expenditure assumptions and then talk through what the overall impact is both in the near-term and over that 10-year horizon. Next slide, please. So, you know, first and foremost, your revenue sources. So, as you all are well acquaint as you all are well acquainted um you really have about five primary re revenue sources in the county. Um and those revenue sources are really what sets the resourcing that is available um for you all to be able to provide town services. Um I'll start with property tax and BLF. So um our assumption is about um so property tax and BLF represents about 45% of your general fund revenue. So that is really the lion share of the revenue that you all receive as a municipality. Um property tax and VLF backfill together represent the single largest revenue source um for going forward. Um so the forward projection that we've built is fundamentally built on Santa Cl Santa Clara County assessment data um which provides for historical valuation trends disagregated into three primary components. So we look specifically at new construction. Uh we look at changes in ownership and we look at um other inflation adjusted growth across all property. Okay. So as you all are aware um under Proposition 13 assess values on existing properties that have not sold can only increase by 2% a year. So there's a constraint there um that you all in California have been you know that you all in your community have been dealing with um for many years. Um properties reassess to market value only upon sale or new construction. So we have to take that to account. Um the model fundamentally reflects those challenges. Um we use a blended average growth assumption of about 5.4% for per year. Okay. So so what is this based on? This is really weighted across each of those valuation components. So new construction is assumed to be flat

um given variability in year-to-year values. Um changes in ownership are assumed at about 4% and base valuation growth is assumed at 5 point 5.6%. Okay. the RAF, in other words, the contribution um that you are making toward the education system, the share of property tax that goes to the state's education revenue augmentation fund, um is modeled as about at about 16.6% which is kind of based on Santa Clara County data as well. There's an important distinction here. So, when we're talking about property tax and we're especially talking about new construction, this is relevant to the conversation you all just had. One of the things that you all will have to consider is how the housing element will ultimately influence both revenue um the development required in the housing element will both influence revenue as well as expenditures and potential expenditure ads. That's part of the sort of second phase and part of what um our colleague Mike and Willan will speak to. Um so property tax revenue has grown at about 6.7% per year since since 2019. Um the model that we've developed uses a more constructive forward or our conservative forward assumption of about 5.4% to reflect some softening in the real estate market um following the the kind of post-pandemic runup um and to avoid p kind of projecting a continuation um into that high growth area. So again um that's uh that really is the is one of the one of the biggest areas that you all have to wrestle with um in the biggest drivers of your revenue. Uh category two. So this is sales tax. So sales tax is the town's second largest revenue source representing about 15% of general fund revenue. Um so currently um the town receives really two streams. Uh a 1% allocation from the state's base sales tax rate and an addition an additional eighth of a cent from measure G which is the locally adopted um general sales tax. So um the forward projection is built using revenue history by industry. So food products, general retail, transportation, um county pool,

businessto business, etc. And there are different growth assumptions for each of those markets based on underlying economic drivers. So the approach allows the m the model to capture the fact that there that different industries are growing or declining at different rates. Um so um that's fundamentally what's what's reflected here. So um the data is drawn from a um the the the the data produced by MUN serve by HDL um which is a contracted company that that has access to proprietary sales tax data that the town um contracts with um to be able to de develop projections. So it's it's fundamentally integrated with the work that you all have already reviewed and looked at. Um historically sales tax revenue has averaged uh a negative 1.7% annually since 2019. that's non-measure G, but um that's really, you know, reflecting that steep drop in 2020. Um it has it has normalized even though there has been some softness. So the 2026 base year estimate is higher than the adopted budget. Um and that's driven kind of primarily by that data from HDL as well. Um so that's gives you an example of um really the fundamental data that we've drawn upon. We're assuming about 2% revenue growth per year um averaging trends by industry. So some industries higher, some industries lower. Um other taxes is the next um highest level of revenue, next highest category. Um representing about 8% of general fund revenue. Um so this is kind of a general um general term but um other taxes includes business license tax, transit occupancy tax um you know those kinds of things. So business license taxes is highly volatile. So you know revenue ranged from about 1.4 4 million in 2021 um to just about 3 million in 2025 with a lot with significant year-to-year swings. Um we have used um HDL's sort of moderate scenario forecast of 2.47 um and which applies a 1.5% annual growth rate for the business license tax. Um transient occupancy tax is also volatile having

having seen significant drops um during the pandem pandemic especially before recovering. um we have projected from the most re recent two years of establishment level data uh to apply a 3% annual growth rate um for that particular um particular area. So um two kind of two fundamental drivers here. Um and one of the things that's important to notice you you'll hear me mentioning pandemic. One of the things that we spent a lot of time working with your staff on was identifying and peeling back those one-time outliers and those those those oddities that we don't necessarily want to bake into our analysis. um and and and and reflect in any projections going forward. Your next category on the revenue side is licenses, fines, and fees. Um that represents about 13 uh% of your of your of your of your total of total general fund revenue. Um this includes building permits, planning fees, uh your solid waste, encroachment fees, police related permits, parks and public works revenues, those kinds of things. Okay. Um so this is uh really built department by department. So community development which really accounts for about 60% of the revenues in this category um is assumed to grow at about 0.5% annually um which reflects a downward trend when we looked at your building permit data um in terms of the frequency of building permits. Now of course your your housing element and the degree to which that may infl impact and change um needs to be reflected as a scenario. Again, what we want to identify is kind of what what can we predict um base case, no changes to service levels, a fundamental continuation of the observable trends. Um and then what are the adjustments, the policy adjustments that we can apply over that um to determine potential impacts. Okay. Um uh we see finding forefeer revenue growing at about8% annually. Um so this is kind of roughly in line with population growth um estimates, you know, based on based on census data. So um uh so the the the assumption here that that that fine frequency rises proportionally with the

number of residents. Um category five this is other revenue um kind of a kind of a catchall but represents about 19% of general fund revenue. Um you know this this primarily includes in intervestment income uh intergovernmental revenues, franchise fees, town services, those kinds of things. Um you know investment income is projected using a two-part uh model. So, um, we've assumed, uh, you know, a steady local agency investment fund balance of about $15 million, earning about 2% annually, and a declining balance of approximately $45 million in other investment accounts earning roughly 2.8 million annually. So, um, the larger balance, and this is kind of a spoiler alert, the larger balance is expected to decline over the model period, uh, because of the projected deficit. we would expect you to draw upon your fund balance um independent of any other policy invent interventions or management interventions that would negate the need to do so. Um franchise fees um excluding solid waste. Solid waste used to be um kind of captured in this category but was transferred um to another revenue category in 2025 um uh uh are projected at about 1.7% annual growth. Um and then charges for services for so these are things that you I hope I'm saying it correctly the the Montaserino policing services and building plan reviews are projected about three point 3% annual growth based on kind of department level trend analysis that we completed. So high level those are you know just again high level the underlying assumptions. Um we've detailed them very specifically. We've also presented these to the finance commission on on two separate occasions and their feedback has helped us sort of modify a number of areas. Um and there are some considerations particularly related to how you all use your pens and trust funds which we'll which we'll tee up a little bit later as a policy discussion. We have not assumed um utilization of your of your of your of your SEPT uh uh uh trust funds um uh within the base

case model. Next slide please. So next is expenditures. Um so um you know this is really the the the the other side of the coin. So you know high level expenditures are projected to grow at about 4.1% per year over the model period um compared to revenue growth of about 3.6%. So you uh you don't have to be a math genius to see that there's a discrepancy there. That's about you know half a percentage point difference uh in the base bottle now um compounded over a number of years that that ultimately will produce a structural deficit which I'll sort of summarize in a moment. But personnel costs, you know, salary, overtime benefits are are really the primary driver of expenses um within any local government, frankly. Um and um and that's really where we're going to start. Um so salary and overtime uh you know, personnel costs are are fundamentally modeled um from the bottom up in our in our long-term financial model with salary projections calculated separately for each of the town's five bargaining units. Um, so we're using um the contractual requirements um uh you know at the position level um for each of your bargaining units and we're using historical data past your bargaining unit expiration dates which are in 2027 um to estimate what the potential costs of those salaries are in the long term. Uh total authorized staffing in the model is held constant in 152.5 full-time equivalent positions. So so this is the base case assumption. This does not mean that the town should or will hold staffing flat over the 10-year period. Okay? Uh what it means is the base case isolates the cost of maintaining your current service levels so that council can evaluate the incremental cost of any changes, the service level impact um and make those adjustments compared um to that base case. Um actual salary expenditures sort of historically have grown at an average

of about 4.1% per year um since 2019. Um we have a we've assumed a 3.8% 8% average annual salary growth. Um it's a blended projection that's slightly lower than the historical average reflecting that kind of 2023 and 2024 saw some unusually high pay increases um that we wouldn't expect to repeat at the same magnitude going forward. Overtime is another um kind of important thing to focus on on the salary side. So our assumption you know high level is uh 1% annual growth in overtime. So fairly incremental. um it's modeled separately from base salary because it's driven by different factors. So in the base salary, our starting point is your or your actual salary cost. So it's not your budgeted salary cost, it's your historic actual salary cost as a starting point, which allows us um which is a is a way in which we don't necessarily have to account for position vacancy allowance, which is a budgeting tool um that is present and that you all have historically utilized. Um overtime has grown pretty significantly from about 707,000 in 2019 to about 1.33 million in 25. Um it's driven almost entirely by police vacancies. So you know we do work with police departments all over the country and it's rare for us to find a police department with a vacancy rate less than 10%. Um it is extremely difficult. It's it's a extremely difficult recruiting environment. Um and collective bargaining agreements often specify and and yours does um you know very specific requirements in terms of shift coverage. Right. So um so there are there are fundamental drivers that impact overtime and it's really the primary source. Um the base case assumes you know overtime continues at approximately the 2025 level which is a which is a leveling compared to budget. Um and grows at about 1% annually. So this is more conservative than that you know than the historical average. Um but again it reflects that there's been some stabilization kind of post pandemic uh and overtime hours per position are beginning to decline.

The next category which is significant is benefits. So as you can see just looking at you know 68% salary overtime and benefits um you know as significant drivers of expenditures. So um benefits include your Kalpers pension contributions your oped which is essentially retirey medical um u you know your pay as you go cost health insurance and other other employee benefits um as well as contributions to the pension trust. So you know together again 28% of expenditures. Um so for cowpers contributions we they are projected using your foster and foster actu actuarial report um as of June 30 uh 2024. So that provides a blended contribution rate by employee group uh which which we have applied. Um pension costs in that are are assumed to grow at an average of 4.9% a year. Um varying by year based on the actuary schedule but we've we've reflected that schedule um in the model. Um health and other benefits are projected at about 6.6%. 6% annual growth. Um this is based on industry benchmarks um from Price Waterhouse Coopers um which is an average of 7.5%. Um we looked also at the National Association of Insurance Commissioners um which is about 5.7% um and then balanced against the town's own experience. So you know benefit costs to some degree were suppressed during the pandemic years uh and they have rebounded significantly. So about a 15.8% increase in 2025. this is pretty consistent with what we're seeing in a lot of jurisdictions. Um, so, you know, there's a there's a catch-up uh base for 2026, but our assumption is that that growth and and and really the the insurance best practices that we reviewed would settle into a more consistent pattern of about 6.6% um going forward on the benefit side or on the on the on the healthcare side. Um, OPED costs are projected using actuary projections from the again the most recent foster and foster report available. So um uh so we're assuming u you know um uh from and that's a June 30 2023 um number. So um you know total on

the benefit side we're assuming you know a blended growth rate of about 5% per per year um you know based on all those factors. Uh internal service charges is your third category on expenditures represents about 11% um of your of your total budget. We've assumed an average of about 3.5% annual growth over the projection period. So internal service charges are those things that cover the general funds allocated share uh of costs from the town's internal service funds. So um you know general uh general liability self- insurance, your workers comp, facility maintenance, information technology, equipment replacement, you know, those fundamental internal services that are critical to service delivery uh within the community. Um each fund is modeled separately and we've um essentially um identified the specific needs and engage with departments responsible um for operating those internal service departments um to articulate the specific cost increases that will be required the specific cost levels that would be required uh to fund those operations over the projection period. Again in total that averages out to about 3.5% in annual growth. debt service. Um, this is fortunately a little bit more a little bit more straight straightforward. So, we've modeled debt service off of the town's existing debt debt schedules. Um, so payments on current obligations total about 2.1 million per year through 29. Uh, but then they step down significantly as the older debt layers retire. So, debt service drops off um in in 2030 um approximately $800,000. So, um you know, and reaches zero ultimately by 20 by 2033. um we have not assumed in the base case model that you would issue new debt. So if you're evaluating capital investments um whether it's in facilities, whether it's in um you know infrastructure, whatever it may be, um that's additional debt that you can build onto the model as a scenario essentially turn the flip the switch and

identify what the impact impact of you know specific capital projects would be um on the overall trajectory of both revenues and expenditures. Um category five uh operating as is other operating expenditures. Uh we've assumed and uh or other operating represents about 16% uh of expenditures. Uh it's about 2.2% average growth per year. Um this includes materials and supplies, utilities, purchase services, sort of other operating costs. Um we had some we had some sort of spirited conversation with the finance commission on utilities and you know did some additional digging, gathered some additional data and were able to develop more refined estimates on the utility side. Those are reflected in the model. Um you know combined total again about 16% of expenditures. Um materials and supplies are projected at about a weighted average of about 7.4% you know driven primarily by police cost parks and public works. Um library is relatively low but um these these reflect post-pandemic um trends adjusted to remove one-time purchases. So, we scoured those purchases and, you know, we have a kind of a detailed assumptions memo which highlights one of the the one-time costs and anomalies that we've pulled out of the model um to make sure that it doesn't skew the data. Um, purchase services projected at about 4.6% annually. So, um uh uh and and then other operating costs. So, these are things like licenses, subscription, travel are projected about 6.7 as well. Okay. And then finally, uh, uh, one more category, transfers out. Uh, that's about 2% of your total revenues. Um, so really what this is is, you know, transfers out of the general fund include the annual capital transfer. Um, we've assumed a million dollars and the annual pension trust contribution, which is about 390,000. Okay. Um, there's a small amount of other designated transfers, but this is really the bulk. Um the $1 million capital transfer that we've assumed is based on a smooth analysis of the gap uh between average

capital cost over the model period which is about five uh and average outside revenue sources available to fund capital. So the $1 million figure represents the general fund share of tier one capital projects. So these are capital needs not covered by the gas tax, VTA passroughs, you know, other other dedicated revenue. So this is kind of core um core maintenance continued under historical trends. This does not provide any provision for deferred maintenance beyond what the town's current CIP captures. Nor does it include any major new capital projects. Again, that's a scenario item um that you would layer on top of this base case to determine your ultimate impact and inform your policy decisions. So high level um you know those are it's a high level overview of the core analytical assumptions um built into the long-term model on the expenditure side. So what are the core findings? So the projections built from these assumptions really tell a clear story. So the town does face a structural deficit that is real um but it is manageable and it's not emergent. In other words, there are long-term trends based on, you know, your historic, you know, based on historical experience and known future impacts. Um, a structural deficit, you know, is not a one-year cash shortfall. It's not a persist, it is a sort of persistent and growing gap between the rate at which revenue grows um and the rate at which expenditures grow. Um so really what this does is it signals um the need to start to engage in active policy discussions and active inter interventions both in the near-term, midterm and long term um to adjust that trajectory. Next slide. So um I'll show this in a in a graph in a moment but I'll I'll hit this at a high level. I won't go through sort of every every one of these but um so the model demonstrates that you know based on the assumptions that I've discussed um total general fund revenues are projected at about 60.5 million um in in in fiscal year 26 growing to about 86.4

so that's an increase of about 26 million um revenue growth rates you know growth averages about 3.6 six per year. Um so the strongest growth driver is property tax and VLF. Um sales tax grows modestly from about 9.1 to 11.1. Um other taxes, you know, other revenue, um relatively modest increases. Again, you know, the bulk of your growth is going to occur on the property tax side, uh and the sales tax side. Next slide, please. On the expenditure side, again, um your salary and overtime, your benefits, expenses, those are really, you know, your primary drivers. um they're projected um you know total general fund expenditures are projected about 60.7 million in in 26 growing to about 90.9 in and 36. So this is an increase of about 30 30 million over the over the model. Um you know expenditure growth averages about about 5.1% uh per year in the near term but it moderates as the model period progresses. Again we talked about that debt service um you know uh so the 2030 figure shows a lower growth rate of about about 2.2%. Again, it's primarily related to the debt dropping off. Um, salary and overtime, again, not not quite. Thank you, though. Um, salary and overtime, again, uh, again, this is your primary driver. It's an increase of about 11 million over the over the period. Benefits grow from about 17 million to 27 million, which is an increase of of about 10.5 10.6 million um, going forward. Um, so what does this mean, you know, all told? So, the model, next slide, please. The model, you know, again, fundamentally projects a structural deficit that begins at approximately $200,000 in in FY26, grows to about $400,000 in fiscal year 27, and then grows uh to about 4.5 million um by 2036 by the projection year. Okay. Um the average annual deficit, if you take that 10-year horizon, is about 2.5 million. Um but again, there's not a near-term critical issue that can't be sort of

specifically managed against. Um the driver of the deficit is straightforward and I think you know you all have heard this story before. I don't think that it's new. Um you know the expenditure growth is averaging about 4.1% a year and it's outpacing revenue growth which is averaging about 3.6 3.6% a year. So you have about a half a percentage point um you know going forward. Um so compounded over a over a decade that's significant. Um but again this is a base case. This does this is projecting current trends going forward. We have not made assumptions on what policy decisions or management decisions you all will make to start to bend those trajectories, but we have focused on teeing up a few uh key areas um that are worth considering in this moment. And there are a number of which um are ideas that your your members of your finance commission have advanced for discussion as well. Next slide. So now I'd like to tee up really the core policy um u decisions and I'll I'll turn these over to both Mark and Mike our colleagues on the on this effort, but I I'll set the tone. So um you know the town um has you know about 34.9 million in general fund balance um which is which is so you're in a good position from a from a fund balance perspective. Um but there are three kind of policy areas that could have the the most significant impact on the town's long-term you know financial trajectory. So the first is, you know, how it manages how you all manage your pension and your OPED obligation. Um, you know, specifically how you manage your trust and and how you may be able to use um your trust to pay down unfunded actuarial liability and and drive down your annual cost, right? Um there are also um you all have a a lot of developments in the housing plan, right? So defining what the impact of those will look like um both on the revenue side, what your various funding options will look like, how it translates on the expenditure side, that's a scenario that you can develop um that could be beneficial or potentially present some challenges going forward. Um and then

more longer term, you know, that third policy decision is really about um you know, sort of the liabilities with respect to infrastructure. So particular uh capital needs that aren't fully reflected within your existing allocated capital plan. um you know, what are the what are the things that you all need to be able to to to to carve out resources for um in the near term and in the long term. Um so with that, I'll turn it over to my colleague Mark to to to talk through um uh the next next couple slides.

Mark, you're muted. Thank you, John. Okay. Piction OPUB trust funds. As we've mentioned before, I'm sure everybody in the room knows the town has a section 115 trust. U you've been putting money into the trust. You've got 3 million and change in it right now. U question is what's the best way of using it? Should you continue to put money into the trust? Um, how should you apply it to reduce your Kalpers's liabilities? You have a peak coming over the next few years. Your combined contributions for both what they call the normal cost and the paying off the debt, the unfunded actuarial liability are going to be going up significantly. Should you use it to really manage cash flow? Should you use it to reduce your UAL uh being and there's number of ways you can do that and your finance commission was had also had some good ideas on that. So that is really about framing scenarios. We can do a certain amount of the quant on that. we can approximate some of the other we are not actuaries approximating some of it but it really is about working with staff and the finance commission elected to frame scenarios about how do we address both the peak in cash annual cash flow required for caliber that's coming and how to reduce the long-term liability having said that let's go to the next slide and now we turn it over to Mike because Mike has been looking really hard at this and we also had a very good dialogue with the finance commission last week. Mike, your turn.

You're probably muted like I was.

No, I'm I'm not muted. I'm looking at these uh bullet points. Um so I guess uh yeah I I was expecting the slides that I had given. Um okay. So for the analysis that we uh prepared um we we had uh submitted um a draft analysis. The initial idea was to do so based on the uh housing element um document that uh um that the town put together a little while ago. And uh also part part of that housing element study involved um a target of about 30% um affordables. So our initial um our initial analysis came up with uh with a slight deficit per housing unit constructed um going out through 2040 which was the horizon of the uh of the housing element. Um uh which included about uh uh about 20 I think 2600 units about um what I did uh was to um meet with the uh um the planning folks at the town and uh develop better assumptions Um the one of the one of the changes that we made was to use a number that was um about halfway in between the uh

housing element um number and the uh and the general plan uh number. The what we put together was based on the construction through 2040 of 400 accessory dwelling units and 2,863 residential units. One of the big changes in our analysis was to cut the percentage affordables from 30% which was considered um more aspirational down to 15%. And um the uh the the results um changed the analysis pretty significantly. Um with uh property taxes um being the largest component um we're expecting an average positive fiscal impact from construction of about $665 million. and that comes out to about $413 per unit. I should mention that it can get better from there. the way that the um the way that the law works with new development, even if there's a net positive impact, um the uh the way the law is structured right now surrounding um special assessments and special taxes is that new development um can be asked to pay its own way um for any sort of additional burdens that it's adding to the town, regardless of of whether it's generating a whole lot of property tax revenue or sales tax revenue. You can't um you can't use a special revenue source to to pay for other um existing deficits, but you can use that special revenue source to pay for the new development. And then the general

revenues that come in from new development can be used to assist with um the the town's other needs. So um and can you go to the next slide? I'm I'm just wondering if do do I have another slide on this on this deck? Okay, seems like we're still kind of in Jonathan's realm. Yeah,

this is back to uh my end of it. Um Mike, before we go to this slide, I can talk about why don't you talk about impact fees because that was we had heard a lot of public commentary about arena housing mandate for the ACE hardware uh site and uh including infrastructure costs and all that. So I think it's time we take a little time tonight even though it's late to talk about impact fees.

Yes, absolutely. So I um the when we presented to the finance commission um the updated assumptions for our analysis uh they they were they were supportive of the new set of assumptions. Um I haven't received any any uh requests for changes since then. So that um so that means that the ongoing revenues the ongoing expenditures are uh either balanced or positive for new development. There there are other ways to raise more revenues for ongoing services and we can always talk about those as well. But one uh item that we were also tasked with doing I I would say in a more uh qualitative manner would be to examine the one-time uh fiscal impacts. This would be the creation of new infrastructure. Um the uh I know that the the freeway interchange is a big big item, but there are all sorts of other um uh items that would the town would need to perhaps expand, enhance or perhaps um build build a new and um one of the mechanisms for doing that is examining the town's impact fee structure. I I would say especially for the interchange um project. I know there's money coming in from other sources, but the uh you can't get the full amount of times for these big improvements, but new development um can be allocated a certain portion of the trips that would be uh that would be going on to the interchange or a certain amount of um uh acres of parks that are needed, for example. Um and or if you need a new fire station or new police station and they can uh be required to pay a fee at building permit and that

fee goes into your capital improvement um project accounts to to help pay for those. I'm sure the town already has impact fees, but um I know that it's it's uh generally um with these new units coming in, it's a really good time to examine your capital improvement plan, compare it with the new development coming in, and take a look at your impact fees. Um in a in a community like this where the uh the the values and the sales prices are quite high, um uh impact fees um t tend to be less uh uh less burdensome on on the on the builder um than they would be in in communities with um lower price points. So something to consider there for development impact fees.

Thank you, Mike. Let's go through the slide that's on the screen here very briefly. Um, as I mentioned earlier, you've been historically funding cure one to the tune of 4 million plus per year, but GFAR is gone. Uh, the sales tax passes are gone. You're down to gas tax, which I I'm going to use really rough numbers is down to about $2 million a year. So, you subtract two from 4.6, six. Um you're looking at a two to$ two.5 million annual shortfall in the long run uh in funding just tier one and that leaves your tier two out. Uh I did rough numbers on tier two. You know, you had about basically 20 million bucks in tier two. Assume it's done over a 10-year period, no inflation. There's another $2 million a year. And then let's let's go to the the freeway interchange. It's $175 million project. We had great dialogue with VTA staff really helpful and their advice was that you you know their VTA plan shows you guys in there in the local share at 10% okay at 17 and a half million that the town could have to come up with and they're hoping to bring this project out of the ground assuming a whole bunch of things that are to a certain extent beyond our control bill right uh but they said you guys need to go to 20% to have a shot at getting the grant from the federal government from the Department of Transportation, well that's 35 million. And if you just for the sake of discussion, if you did a parcel tax townwide or a bond issue and you found, you know, you're going to find the money from someplace in your general fund, it's in excess of $10 million a year to fund, you know, 35 million buff or a

local share of a freeway interchange. So the we have a I'll call it you know three twos here for playing poker with a great lowball hand. We've got 2 million shortfall for tier one probably another two million a year really rough back of the envelope numbers for tier two and if you want the local share of the interchange following VTA staff's latest recommendation you got another 2 million a year. So all of a sudden you're up to 6 million a year in counting. Where is that money going to come from? And on top of that, we go back to the don't change the slide, but I'm just saying figuratively go back to the earlier slide on Kalpers. What are you going to put into your section 115 trust to deal with the peak coming down the road? So, uh, lots of really good questions and I think what it's left with is for, you know, let the staff and the committee decide priorities in capital projects and in particular, how badly do you want the interchange and this is this is not any judgment of any kind on the interchange. It's important project, but it's going to be a heavy lift to get it. And do we have another slide here? key conclusions. All right, I'm going to turn this back over to Jonathan. Your turn. So, what we what we've tried to what we tried to summarize for you here is really, you know, what's your what's your high level fiscal outlook and then what are the general categories that we'll need to develop very specific policy decisions on and very specific scenarios for consideration um going forward. um you know so under the base case uh you know with again these are no policy changes there you know costs are projected to grow faster than revenues and I think this is something you all have known um uh we've really reviewed and validated that to some degree um you

know actual costs and revenues are going to vary uh you know the model you know the fin is a tool it's a tool that's not just a snapshot in time it's a tool that we've developed to hand over to your staff in other words it's not proprietary um that we can continue to modify as updated information comes I know we're expecting some additional actuarial reports in June um that will shed really significant light I think on the pension um and unfunded liability question right so so uh there's always going to be those adjustments those external factors those internal policy and man management decisions that are going to that are going to bend that trajectory that's what your budget process is for right um and then you know those key key policy decisions and assumptions impacting those projections you know service level and staffing changes those things are really important so as we talk through um where you're going to make additions or adjustments. really articulating what does it translate to from a service level impact perspective um will be an important focus um you know your pension trust what to do with it um how much do you hang on to in the event that um you know Kalpers has a few bad years um we're coming off of the heels of a couple really good years right so um you know you all are going to have to make a policy decision to what degree you want to use that pension trust um to pay down you know pay as you go to pay to pay down your U um and then you know assumptions around future growth and development you know building some very specific scenarios, building that in um in detail and framing that capital investment. So the base case is not a conclusion, it's a starting point. Um and that's really u that's really the key takeaway um that I want you all to walk away with tonight. Um so next slide, please. So, you know, we have a we have a few uh kind of follow-up items that we need to engage in both with the finance commission uh as well as you all, but we're really working to to kind of develop a report summarizing um the historical analysis, the assumptions as well as the projected base case. Um there are some additional data the finance commission has asked for which we will oblige. Um particularly around

historical FTEES um and really digging into budgeted FTEES versus actual um how many full-time equivalent folks you've actually had on hand um and really looking from our vantage point at what's the actual number of hours you've paid compared to the number of hours you've budgeted. That's going to that'll tell an interesting story. So being able to look at this financial model within the context of, you know, projecting your your staffing impact. Again, that's such a fundamental driver um to um to your cost. Um so we'll build in some some some uh some summary information there. Um and then really it's about finalizing the model, kind of fine-tuning it, updating it as data comes in, uh making sure your staff is trained on it. uh but also just as importantly starting to build out very specific models and and testing those scenarios and impacts with you all as a governing body so you can start to have those those informed discussions and make some decisions about um you know bending the trajectory uh in a positive way. Next slide.

This is the final slide. That's the that's the dog and pony show. happy to answer any questions

and I'll go ahead and summarize the the fiscal impact piece um which would be that uh new development um it it is a it is a huge positive for the um for the town. Um I noticed Jonathan demonstrating that there's a um there's a long-term deficit. I think uh because of the legal structure of California's um tax laws uh getting started early if you have a large uh contingent of new development coming in get it getting started early on new policies regarding that new development. How much are they going to pay towards supporting their own um service needs? How much are they going to pay towards supporting the infrastructure that they are going to create the demand for? getting those uh policies set early so that they can be in place when that new development comes in. I know there's some I know it's ongoing. I know that some new developments are are currently in the process of being uh approved and that that just makes even more of a case for the sooner the better. Um it's uh it's it's the nature of uh building in California that uh new development tends to shoulder um most of the burden and uh it's it's something it's a tool I think in the town's tool belt to help with um with deficit issues.

Great. Well, thank you very much um for the thorough presentation um and I will uh now look to my council colleagues um for questions. We have a question from council member Rob Renie.

Um thank you mayor and thank you um team for this this report. I been I'm this is my 12th year on council. So I've been looking at this stuff for a long time and this is by far the best refined um analysis and and model that I've seen. I appreciate your willingness to iterate it instead of just make a bunch of assumptions and throw it at us. Um that I I really appreciate the continued refinement of it. Um the staff reports seem to indicate that we could give some input on potential assumption updates. Um I have three areas that jump out at me and it's either assumptions could be updated or my understanding is not all the way there. Um I'll go kind of in reverse order. So the last thing you mentioned was what it was cost to pay for the highway. I also sat on the VTA board for a while, so I'm quite familiar with their funding mechanisms and and how they get to the towns and so forth. And I definitely understand that if you apply for a federal grant, they want like a 20% match, what they call local match. But usually the local jurisdiction, the town that might want this to occur doesn't have to come up with the 20%. We can get money through measure B. There's some measure B money that's meant for this section. There's other interchange money in measure B. Um that money can be used to match the federal 20% needed. Um and then we usually need to match that 20% with our own 20%, but we can also come up with other layered grants such as OEG grants um to help cover that. So I have a hard time believing we the town need from our taxpayer dollars to come up with 35 million. There should be other layered

grants we can get to much much reduce that number. So I want to challenge you a little bit and make sure where where you um what did VTA staff told you? They said you need a local match for but did they go through all these? Well, they they basically looked at the town. They were they implied, we can go back and double check with them, council member, but uh that the 20% they're talking about was not coming out of measure B or anything else. It was like truly local share. It was lost Gats's share. And I don't know the basis of that. And you've been on the BTA board. Um, and it sounds like so can I suggest

and I've watched us fund other projects in Lascatos doing exactly that where we required to come up with a 20% and our staff went and found another grant of a different type to apply towards our local match. So it didn't actually come out of our local taxpayers pockets. So I just challenging that a little bit. That's excellent. We'll we'll work on that. We'll take that ball, see how far we can carry it.

Okay. and talk talk to our staff about it. Um they have you know parks public works has um lots of practice doing it with with other other projects. The second place I wanted to question was um I I it's page 44 449 of our council packet. Um, and I can't find page numbers in your report, but it was table 30, which relates to um, uh, salary the, you know, salary increases. Uh, just above it, you're assuming an increase in salary costs of 3.9% and you say the following table is what informed your estimate. The following table says the average salary range over the last 3 years. Um, and there's no other information for me to really get is 3.9 the right number. And the thing that that worries me about that assumption is um we did our last right in the middle of a major inflation spike. So we were forced to dous that were 5% this year, 3% the next year, maybe two and a half the year after. It was something in that range and it differed by which bargaining group.

Um I don't expect that our next is going to be in the middle of a big inflation spike. So I and again I've been here for 12 years and negotiated that's the the largest we've ever negotiated. So, I'm worried that if you're using the last three years, which has been very unusual and doesn't seem like we're going to have an 8% in inflation spike going ahead. I realize it's not going to go back to where it was. Did we really make the right assumption based on table which says the last three years?

So, I I assume you're referring to the assumptions memo. So um let me let me I'll give you a little bit of context in terms of what our approach was. So what we did not do is assume so and I think I I mentioned it those those those years that were spikes we didn't want to normalize those right so you know 4% 5% there were some pretty significant jumps uh in several categories we have not assumed those going forward what we have assumed through 2027 are the specific inflationary target or factors that are defined in yourus um and then we we normalized based on the you know removing those kind of major outliers to estimate the 3.9% the 3.9% going forward, right? So now um here's the here's the rub u and you know this it that's really a placeholder u whatever your negotiation process um you know however that unfolds and wherever you land it could be below 3% which will fundamentally you know positively impact what the outcome um of your long-term you know projections are um it could be higher there could be other benefit kind of impacts so there's again that's partly why you know it's a snapshot in time there's going to be adjustments as we go forward but I am also happy to kind of go through and and follow up and give you some more specific information. Um, if that would be helpful to you.

And and maybe and one of the things that I've always been careful about is when we forecast salary increases, it sets a floor for the next negotiation. Yeah. Yeah. So, if we set a floor at 3.9, that's higher than we've ever had. In the past, we've done things like assumed a 2% salary increase and and we know it might be more than that, but we need to be careful about setting expectations.

That's that's an there. So, our our very first iteration of the model assume 2% going forward. Um, but that's really also not realistic. So, you know, partly what we have to be able to distingu distinguish is what I don't want to use the financial model for um is uh is a a tool in collective bargaining negotiations, right? Um even though it'll inevitably come up. I've been in plenty of negotiations myself. Um you know, it it felt better to if we're if we're kind of trying to demonstrate what your long-term trajectory is to look at what you've historically paid in the absence of having collective bargaining agreements to to tap into. and and that was a choice. Yeah.

Yeah. I agree. We want to try to get to a good refined model. I don't want us to because it will be potentially a tool. I don't want us to error on the wrong side for sure. Um I totally respect that mayor. If I could one the third um thing that stuck out to me in the report and I don't have the page right now. Um, I think you said somewhere staff told you to assume grants of 150,000 a year. Does that sound familiar?

Uh, without going in and looking at the specifics, I I can say I can give you some sense of our assumptions on grants. We've kept staff didn't tell us to assume, you know, there may be some specific grants that are spelled out. Um, the grant market or the grant experience for our local governments right now is is is an interesting one. It's the most interesting one I've I've seen in in 23 years. So, um we've assumed um essentially flat flat we've assumed that grants will continue to come in, but we have not made assumptions on significant increases and what those those intergovernmental revenues in the form of grants will look like and more conservative there.

Is this a grant for that might help operating or is it a grant that could go towards capital? And the reason I asked this is I I haven't looked at the numbers, but my recollection is much larger numbers, grant numbers that went towards capital projects. Yeah, that the these are grants relative to operating. Okay, that's then I I believe that number. Those those were my three big ones to start. Thank you, mayor, and and consultants. Thank you, Council Member Benny. We'll go to Council Member Hudis.

Yeah, thank you. And um I was able to attend the uh finance commission meeting and uh there was really terrific dialogue during that meeting and uh we're here we're kind of you know we've had the long presentation and now we have some questions. So uh there were a lot of questions that kind of came up along the way that I think have added to um this. But I wanted to just start with a couple of really uh fundamental questions. First of all, has this report the numbers changed since the finance commission meeting?

Since uh since the finance commission meeting last week, no. So between now and then, we have not made any fundamental adjustments in in those figures. Okay. And um there were there was some feedback though that asked you to look at some things in

there was so yeah so there's there's a there's a few sort of specific things which which I alluded to but one is um looking at really FTE experience and and pairing in a meaningful way what the FTE experiences with um the model and particularly looking at overtime um so that's that's one of the elements um and there was a lot of discussion around how to use pension trust funds and uh uh the pension trust funds as an active uh tool um to be able to pay down your unfunded uh actuarial liability. The the suggestion and request to some degree is that that be loaded within the base. We will not load that within the base case. That's something that we would articulate as a scenario. Completely agree. Um it is a it is a it is a scenario that you all should consider and there needs to be a rich policy discussion. We're just not going to assume um sort of specific management decisions and policy decisions on behalf of the governing body. So we you know we've documented those things. Those are those are important conversations. We've teed them up from a policy perspective. Um and those will be reflected as well. Um right.

There was also some some conversation around um uh around uh whether the the the units that are baked in that are assumed in the housing element, in other words, permits that are already underway, whether the anticipated property tax revenue from those should be fundamentally included. Uh again, our our our perspective here is we've assumed a consistent historic rate of growth with respect to your property tax revenue. Um you know, your normalized growth, um the new development that's coming from the the the numbers that's in your housing plan, we would want to model that as a scenario. So those things get captured. We just won't capture them in the base case. Um because the base case is the point of comparison that we want to we want to balance your scenarios against.

Okay. Thank you. And I I do want to come back to uh the property tax growth because I I don't think that what is in here is consistent with our historical growth even leaving off the potential growth. I'll come back to that in a minute. But just in terms of this model itself and there was I think very healthy discussion at the finance commission about this. Um would you agree that the base case model um uh serves to let us know that if the town continues to manage its finances prudently um honors its existing obligations and makes no new significant changes uh to services, staffing or revenue policy, um that that gives us the answer to the question of where does that leave our 10-year uh fiscal picture. I yeah I think it articulates that absent a significant decision um on the revenue side or on the expenditure side, it articulates that your expenditures are out are growing at a at a rate that outpaces your revenues.

Right? And so um the other part of the discussion at the finance commission was what is a base case and should it include things like um redirecting uh OPED trust funds? Should it include things like funding the Highway 179 project? And those in my mind are policy decisions that we can make along the way, but they then net get uh they need to get fed back into this model before we finish with this. And so, um, I'm really looking forward to the work on the fiscal impact analysis, um, and how that feeds in and also the, uh, you know, incorporating other policy decisions that we might want to incorporate. And I think there was maybe a tendency at the finance commission to want to jump to including some of those. Um but I I think it would be better to keep this base case uh as pure as we can with um the statement that I made earlier and then we can apply uh these policy decisions on top of that and that would include um you know a policy decision about uh whether it's a 3.9% or something else that we include for uh personnel benefits and um whether uh we start to put in a provision for this highway 179 which I I don't believe is a tier one project at this point. So those are just a couple of highle comments and then later I wanted to come back to the revenue uh assumptions.

Um okay. Um okay, I'll jump in with a a few quick comments. Um uh I think what's particularly useful about this is ensuring that this analysis captures the full life cycle costs of growth especially on infrastructure um uh and how we can you know sort of try to think about our our development uh in so far as have we how much control we have over it um is is fiscally sustainable. I think this is a very helpful process. I I should start by saying um I think this is you know I think we've heard this from our staff and consultants before um I think this is a very proactive effort um and I think it's a a very smart one. We're very fortunate that we are not in the you know depths of significant financial troubles. Um and so we're having this discussion before you know things get you know uh uh terrible. Um, so being that that we're making assumptions here, I I just want to sort of uh reiterate some of what I've heard from from both of my council colleagues who have spoken. Um, to I I agree with both of Council Member Renie's big points. Um uh I think you know one being that I think we have to be careful on the uh you know labor piece and two that I I do not think it's I am very much in involved in VTA now as well and I don't think it makes sense to assume that the council is going to be on the hook for a this you know extra this hugely extra RA or you know hugely um increased portion of the costs of the 17 congestion relief project. So I would that's not an assumption I would include

is that we're going to have that that big extra cost. Um I I think you know one thing I heard I I listened to a little bit of the finance commission's meeting and one thing that I heard um loud and clear is the need for a multi-year phased CIP which I completely agree with. I think ensuring that our priority projects have full funding by the time we're ready to construct them is critical. And I know I know that's something the town manager and public works director and um other staff have been working on. So I think that's that all makes sense. One thing I just did want to ask about. I, you know, I I read this in there and and heard a little bit about this in the presentation, but I just want to, you know, sort of confirm on a a couple of these things in terms of the, you know, getting into the um uh future planning and and growth considerations. Um the I is it is it correct that that you all believe that in general higher density equals more efficient land use but more concentr concentrated infrastructure costs. Um and and sort of two, um growth along some of our more, you know, uh commercial corridors like Los Gatos Boulevard is arguably more financially efficient um because we already have infrastructure there and that's the sort of uh development that we should be thinking about.

Take a crack at that one. Yeah, that's that's an interesting um discussion. I I would almost uh you know categorize that as as a a growth um you know in infrastructure and and growth kind of philosophy. Um what I I would say that in my experience and this is more of a qualitative judgment um that certain things about infill are much much cheaper. But if you're if you're trying to if if if you are if you are within a good range for the level of service and you have an infill project that falls within the parameters the service level parameters of the infrastructure, it can be a very cheap project to uh to deal with from both service costs and infrastructure costs. If you're increasing the population of the town by 20% which is our estimate um and through uh 2040 if you have any choke points in your infrastructure to the point where you're going to need to be uh it's a great example um redoing an interchange or um the type of improvements to a major thoroughare that would involve um you know major uh construction, acquiring easements, um uh really kind of redoing the the road in a major way. I do think that tends to be more expensive than building a brand new interchange or building a brand new road. Um because you're not just uh you're not just building something where there's nothing. You you have to tear something out or or modify something and

then add add more on top of that. So I I think this is one of those um you know one of those questions that doesn't have a hard and fast answer but I I think uh when you reach a certain level of density the uh amount of infrastructure you need per new unit or porn per new person does tend to get uh more more expensive. I think there's a um I I I think it's it's worth uh looking at it from the perspective of we're increasing the population by about 20% which means there's going to be about 20% more trips um 20% more um park acres needed assuming that you're at capacity uh 20% um more uh service calls for medical, paramedic, um fire, uh police generally. There's uh there's modifying factors to that of course, but we like to start from the assumption that yeah, more people are going to need more infrastructure and more services across the board. And for infrastructure, we will always rely on the engineers estimates. They're the ones who are getting in there into the details and saying, "Well, what do we need to actually do to the interchange? What do we actually need to do to Los Locatos Boulevard?" And they're going to tell us um how much it's going to cost, including everything. Um you know, the uh there there's there's a lot of uh expensive items involved with doing major improvements to to an arterial, and they'll they'll tally all those up. And then our role would be to uh to figure out how to how to pay for that.

Okay. Thank you. Yes, Vice Mayor Eristo.

Thank you. Um first of all, I I really appreciate I mean along the lines of what council member Renie was saying, this I've only been on the council for this is my sixth year, but I've watched the council since 20 years before that. And so this deep dive and the interaction with the council at the last meeting, but also the finance commission I think is producing a better and better way to analyze what we have to do. And I'm trying to figure out which screen to look at and um what factors we need to be examining um in terms of the housing that's coming. That is going to be a really tricky thing. And I do appreciate it was after one of the finance commission meetings when I went and talked to somebody about the initial assumption of 30% affordable and pointed out that we're never going to get anything that's more than 15% affordable. So I appreciate that adjustment because um you know that's just the reality of what's coming up. We also have some projects that have been approved that either may not get built or may take years to build. I think we've got two that have broken ground, but who knows what'll happen with the others. So, it's very hard to tell how and when these will move forward. I think the ADUs are easier to understand. In terms of the um infrastructure needs, um you make some good points. I think for the town, there's a lot of infrastructure that's not under our purview. So, the sanitation district has to deal with um the sewer. Um that's not the town. uh the water district has to deal with water distribution. That's not us. So I you know I think the developers have to pay their way along with those things. Um in terms of uh I don't know everybody's brought up a lot of good points. The other thing I was going to say is I've sat on the VTA policy

advisory committee for a few years and I absolutely know that there are a number of grants that we will be able to get. Um, and I have no doubt that the town's not going to pay anywhere we're not going to pay anywhere close to $35 million for this. Um it was a key project that was in part of measure B when it was approved by the voters and there will be a way that it'll get things done and it's kind of independent of whether we add residents or not. This is just a project that's needed for a lot of other reasons. Um so I guess one of the things this is probably a question for staff when we look at um impact fees. We have impact fees in place. If we were to change them or add to them, are any of the existing SB 330 projects going to be required to pay those or have they vested to old fees?

The SB 330 projects um have vested to the existing development impact fees. Okay. So except for cases where we have fees that like we have we have things that don't well we have projects that are defined in our bike and ped master plan or traffic improvements that are needed um where as a project is built when it touches those areas they have to pay for those improvements. Isn't that correct? Um yes the town can impose exactions through conditions of approval.

Okay. So, in terms of improving roads on infill, each project is going to have to take care of the sidewalk, bike lane, signal changes or whatever. Correct. It's um I don't know about the signal changes, but it's customary to require the frontage improvements.

Okay. Um and then, oh god, there's so many things here. The other thing I was thinking about is for me I don't know that it necessarily hurts our negotiating position to put in what appears to be a historic and potentially realistic number for salary increases because what we're also showing is that we have um we have a gap between our you know we've got a structural budget deficit. And so when it comes to negotiations, we can we've got to look at this and say if we give you the money that's in here and we can't afford it, the town is going to, you know, run into a big problem. So, uh, the base case, I think, makes a lot of sense to me. It's looking at how things are going and irrespective of any policy decisions and then we can make policy decisions along the way that will help get us into a better position. So, you know, I appreciate the discussion at the finance commission. And I appreciate particularly one um commissioner's comments wanting a different type of base case, but I also agree with council member Hudace that the base case is what we're doing and then we can make changes along the way.

Yeah, Council Member uh Hudis then Renie. Um yeah and I I think one of the things uh that we've talked about that still needs work that will come back around is what are the unfunded in infrastructure requirements of the substantial growth particularly since that growth is not occurring where it was uh designed in the in the general plan that did uh the SQA analysis. So the um and it's not even not even growing where the uh where the work was done in the housing element. So it's growing in different places. So I think it's going to be important to understand the unfunded infrastructure requirements. You know, it's great that a development will is required to pay for the sidewalks in front of their um or improvements in front of there, but uh but um when it it comes to a tipping point reached because you've got 20% more traffic on the boulevard as a whole, how do you fund that? I understand, you know, that SQA doesn't care about um, you know, looking at the traffic impacts, but certainly the residents of the town will demand that improvements get made and we need to take a realistic view of that as we start the next part of this project looking at the fiscal impact analysis. So, you know, between the traffic impacts, uh the other unfunded SQUA requirements such as pollution, um uh storm sewer, other things that we may have to um put in place. It's it's going to be u it's going to be challenging for us and we need to do

that work. Um if I could I wanted to come to one other point which is revenue from sales from uh property tax.

And so um I believe I looked at it and looked like our historic property tax increase was between 6.5 and 6.8%. And I think um so just pick a number 6.7%. The model is now using 5.4% 4% and um beyond that I also had a question about you know first of all why that is so much lower it's like 25% lower than what our historical has been um but also just in looking at the table that was presented um I didn't understand some of the numbers there so why don't we start with the historic answer And then I wanted to go back to um the the numbers that I saw in the table that I had a concern about.

Sure. So um so the forward projection for the property taxes in particular. So we look at historical data, you know, that's that's important. U but there's a blended sort of average growth assumption weighted across three valuation components. So using um Santa CL County assessment data. Um so um you know the first piece is you know new construction is assumed flat given some variability year-to-year. Um you know changes in ownership are assumed at 4%. Base valuation growth is assumed at 5.6% and then RAF right which the share of property tax that goes to the state's um you know education revenue augmentation fund. That's modeled at about 16.6. So again that's that's an increase based on revised Santa Clara County data as well. So um we also um so you know again you know your property tax revenue has grown at about 6.7% but we do use a more more conservative forward assumption to reflect some of the softening in the real estate activity. Now if there's kind of some clear indications that some adjustments are needed there based on some data you know we can certainly have those conversations but that was the that was the number we were comfortable with based on the data that we had available. Okay, just to add some clear to that.

Um, so I I think I think a lot of people are aware that there was a rush to um, you know, buy new homes. when the pandemic came around, the the structure of California's tax law um would uh reward people for staying in their homes a long time. The property turnover definitely experienced a surge from 2020 to up to a few years ago, which uh you know, if you're if you have a uh if you have someone with a housing tenure of 20 years who sells, that's a massive increase in assessed value because now it's not going up by 2% per year, it's going up to whatever the sales price is. those types of uh transactions um are are really what push you above that 2% baseline in terms of assessed value increases. So it's if if you look at the marginal effect of that, it's it's going to be much stronger in years of high property turnover, it's going to be quite a bit lower in years of lower property turnover. There's lots of reasons now, including um higher mortgage interest rates and people having refinanced at very very low rates being maybe more reluctant to um to change housing. Um, so I think when we're when we're talking about historical trends, it's it's probably better to look at the historical trends before 2020 to get a good idea of what of what the base case should be rather than between 2020 and the present. Well, just one other response to that is that our population has been aging and uh now over 30% of our population is over 55 and if you look at what you know

the population over 65 um I fundamentally believe a lot of those will be selling their homes and so particularly since there are virtually no aging in place services um uh as there are in in some other places. So, um I we can I think we're going to need to continue to have the discussion about that because it does add up to 7 or 800,000 a year in the difference between these. Um but I also wanted to ask a question. Um on the on the chart I see the 2026 base, this is on page 11 of your slides. um going from 27 million to 29.3. Uh that's a jump of uh like 8.6%. What What's happened there? Did I miss something there?

Uh I'll have to go back into the data back into the model and be specific. I don't have the answer at hand. I can get that. Could we put up slide 11? Is that possible? I we don't have to get an answer tonight, but I just want to make sure you're going after the same thing that I'm pointing out.

While you're looking for that, can we take a two to three minute break? Um we're approaching our the the midnight deadline, but I think we need a quick bio break. Uh, and then we'll come back and power through the last 10ish minutes and then um my my camera hasn't been working. I'm going to restart my computer so that and then sign back in to whoever is it. Great timing. Perfect. Thank you.

reconvene and I'm just going to uh level set real quick. We have 20 minutes till midnight. Uh and I think we what our consultants really need is our specific feedback on any changes that we would want them to make. I think we provided some of that at the beginning of this um and want to just hone in on that. Um hopefully for another 10 or so minutes to get us out of here by uh midnight. Um yeah, wrap up and then we'll go um to 27.0 to 29.3. If you if you could look into that please or Yeah, that would be great because that's a 8 8.6% increase.

Great. Um, council member, do you have any feedback or are you okay?

I'm okay, but um, we gave um, appreciation to the presenters, but I also want to thank staff um, the town manager, Miss Al Farro, for just even bringing in um, outside analysis. It's been really helpful. I think it's helpful to the community as as well because this is very objective without relying on staff's analysis. Um, I want to make sure that the base case reflects prudent fiscal management of our town's existing resources and we we've talked about it earlier in the conversation, but managing our overtime, controlling um our discretionary spending, and utilizing the town's 115 trust and OPED trust to the maximum extent possible.

Great. Thank you. Um, Council Member Renie,

two two really quick things I forgot to say. Yeah, I appreciate you changing the um assumption for the affordable number of units being built. Um it definitely that nobody builds at 30%. Um potentially the number of units is is overounted. Also um just if you look at what applications we have, it was a lot of um applications thrown in when there was a builder's remedy window. A lot of even those projects, a lot of developers tell me they don't pencil out. You know, somebody saw an opportunity to put a building that would never be approved in Loscatoos in as an application. Will, even if we approve them, will they get built? There's a big question mark there. We've, you know, we're 3 years in now to the to this um housing element session and we've only broken ground on one of the projects, big projects that was part of that. really we've only approved 30% or less or seen 30% or less and we're 3 years in. So it's that the even the timing is is going to be a lot further out. I think you may have been counting till 2040. So maybe we start getting there in 2040 but we will not I am quite confident build anywhere near our housing element by in the housing element period. Um so that that doesn't need a response. The one thing I did want to point out just for staff and council members is I noted in the report under table 26, it says um talks about gas fund transfers and that you actually are allowed to transfer for things such as trimming trees in the rightway. Um and since our our budget is coming up, something to think about based on that's a new piece of information I didn't realize. Um, we could keep talking about how we're behind in taking care of our

trees, but we've done a great job of getting our pavement index up into the mid80s. Perhaps this coming budget year, we might want to consider spending a little less there and a little more on trees since that seems to be allowable from the gas tax. Just wanted to point that out since it was in the report. Thanks.

Good calls. Um, and the one quick one that I wanted to to touch on that I think has already been touched on, um, but the and I think this kind of built into the, um, you know, the 17 congestion management project, but the 1 million in capital seems low. Um, uh, so that's, you know, I I don't think I I would be shocked if there was ever a year where we spent only a million dollars on capital. Um, so that feels that feels low to me. Um, do we have any other specific feedback? Do the consultants have any questions or areas of clarification? I think I heard something like a dozen pieces of feedback of things to look at and uh uh address.

No, I you know I think you know a number of questions. We'll we'll do some follow-up with staff and for those things that require followup and and communication, we'll make sure that um the entire uh council receives the responses. I assume that'll that'll work.

Thank you very much. Oh, and now we will open up public comment um uh for any members of the public wanting to address uh the council on item 10. Seeing none, mercifully, uh I will close public comment. Um and uh I think that wraps up for us. Um so we just need to receive and provide feedback and we have received and provided feedback. Um thank you very much. Uh thank you everyone for bearing with us on a later thanex expected evening. Um uh but I think uh this discussion and the previous discussion were both very fruitful and important. Um thank you to our consultants. Thank you very much to our town finance staff. Uh and thank you to the finance commission for helping us get here. I will now move over to council matters and I'll start with council member Renie so he can uh uh go back to bed um at this earliest convenience. Thank you to our consultants. Yeah, fair enough.

Thank you. Bye. Thank you. My Italian class starts in 15 minutes, but I may try to go to board first, but good luck.

Uh, just quickly, um, since the last council meeting, I attended the risk oversight committee and the board meeting for Silicon Valley clean energy. The board meeting, we big thing was we focused on our decarbonization programs and and what impacts they were having and potential um budgets going forward. it is a little bit more difficult um budgets now for us and it's it's funny the way it works as the p generation prices come down it squeezes us a little bit because of the PCIa and I won't get into that one other thing we just got news that we actually got an upgrade in our credit rating we were a decent credit rating but stable they've now moved it to um uh whatever the next thing over stable is um getting late here. Uh anyway, we moved up from stable to positive or something or other. So, uh that's it for me.

Thank you. We will go to Council Member Hudis. Thanks. Um real quick, I attended the Finance Commission meeting on the 13th. um participated in a uh West Valley Wildfire Advisory Council meeting on the 16th uh where we discussed not only you know what we had to do but how we might pay for that and to do that on a regional basis. I'm looking forward to f further discussions about that. Um and then a couple of uh Loscatoos Thrives meetings thrown in. Great. Thank you. Um we'll go to Vice Mayor Risto.

Thank you. On the 8th, I attended the Valley Water Commission as the alternate for Council Member Renie. Um we discussed the results of a study of water use projections and they also did a study on demand elasticity. And you know that kind of means as a price goes up people use less of something. But it turns out that water is not that elastic. And I think a lot of that is for people that are low users. There's not much you can squeeze out of there. You're if you're using the basic for health and hygiene and for folks that have large lawns and maybe large incomes, they'll just pay more. So, in terms of looking at how pricing impacted um use, there was not a lot of elasticity there. Um, in terms of projects that Valley Water is looking at, we've got Anderson Dam retrofit, upgrade of the water treatment plants and distribution, a dam safety program for Almadan, Callo, Coyote, and Guadalupe reservoirs. There's the pure water Silicon Valley demo facility plus the fullscale direct portable reuse. And the uh pure water is is basically recycled water. So taking the water that we've used, recycling it, and it's going to be probably our most important project to do to make us drought resistant. Um, we can expand reservoirs, but when there's not rain, keeping the water we've already got and being able to reuse it is going to be key. Uh, there's a cis cis dam raise and the site's reservoir participation. Um, we have a state water tax that shows up on our bill on your water bill and basically um that wa that pays for 100% of the state water projects that Valley Waters involved with. Um the goal was to

maintain it at $28 million. So the annual tax bill for the average uh um single family residents will be about $46. So when you see that on your bill, you know what you're paying for. Um looking at the cost of water, especially due to imported water, it looks like the cost is going to peak in about 2032 to 2033 and then go down again as these projects come into play. and the cost we're importing less water and we've got our own water. Um that's a lot but there's a lot going on. on the 9th um attended the VTA policy advisory committee and I've become the chair because of some reassignments with um other city um representatives and uh one of the things we did was approve the one Bay Area grant cycle 4 um criteria and we approved $4.15 million um of supplemental funds for congestion management plan and then we also approved we're reprogramming there's money we took 17.5 5 million from one fund and moved it to another to help with the Baskam complete streets project where there was a deadline where other funds would would expire. So essentially money was moved but everything will work out. Um and then went to a variety of other things but I'll leave it at that. It's a late night.

Thank you Council Member Vami. Thank you. On the 13th I attended a meeting of the finance commission. On April 15th, I attended the grand opening of Whole Foods. Uh, also along with the mayor and the vice mayor, Mayor Moore provided congratulatory comments during a bread break breading ceremony that clearly invigorated uh the crowd. Um, on the 20th, I attended a meeting of the DEI commission. uh discussion included the handwriting uh project of the constitution as a signature event at the fourth of July uh symphony in the park event.

Great. Thank you. Um so I first want to invite everyone all two of you in the room um to attend spring into green happening this Sunday from 10:00 a.m. to 2 p.m. Should be a lot of fun. Um, I participated in a cities association board meeting where I was elected to the executive committee. Um, and now serve as the second vice president and chair of the legislative action committee. Um, so I'll provide, you know, uh, continued updates from that organization uh, to the town. Um, I spoke at the Los Gatos Kowanas Club uh, meeting. Had a lot of fun with them. They're a great group. um attended the Whole Foods breadbreaking which was a ton of fun. That was where I got my dinner tonight. Um I stopped by Heroes Day at the JCC where I got to see our uh amazing police department and fire department um interacting with a lot of uh very excited Loscatoo students who um wanted to climb up the the very tall ladder and were uh luckily dissuaded from doing so. Um I had a very interesting meeting with Whimo representatives who expect to uh expand Whimo service to Los Gatos in the next 6 to 8 months. Um so that is coming. Um Whimo will begin uh driving driving I mean I guess they really do drive. Whimo cars will be in Campbell starting uh in about a week. Um uh so they are and that is I was you know sort of shocked to learn that local municipalities have absolutely no role in in all of that. Um it is the DMV and interestingly the the big regulating agency is the CPU which is not what I would expect. Um but uh Whimo cars with drivers will apparently start driving on Loscato streets in the coming months and they'll be driverless in about six months. So, it's a a

biggie. Um, attended the VTA um uh plus town cleanup along um Highway 9. Uh that was great. Lots of trash picked up. Um I uh spoke at the Los Gatos High School students interested in medical sciences club symposium, which was a lot of fun. Um they did a great job with that event. Um attended the Loscatos Youth Commission Multicultural Celebration, which was awesome. I hope this is the first annual. Um the uh police department did a really good job partnering with the students. The chief was out there. It was a ton of fun. There were uh maybe about a dozen booths. Um but after I posted about it on the internet, had lots of organizations, people say, "Oh, I want to be there next year." So, I think it'll it'll be a great um it's a great thing and I think uh more, you know, more to do on that. um attended the ribbon cutting for Melody, which is a um sort of high-end boutique in Los Gatos. One of the uh most well attended ribbon cutings I've been to. There were like a hundred people on a very small sidewalk in downtown Los Gatos. Um don't tell code compliance. And uh lastly, I uh today attended a community conversation with DHF Rosen with our town manager and chief of police, which was very informative. That's all I got. I'll kick it over to the manager and attorney.

No report due to the hour. Nothing to report. Thank you. All right. Um with five minutes to spare, this meeting is adjourned.