City Council - Regular Meeting

Well, good evening everyone. I'm going to call to order the January 20th, 2026 meeting of the PaloAlto City Council. Madame Clerk, would you kindly call the role? Of course. Council member Lithods here. Mayor Vinker here. Council member Rectal here. Council member Bert here. Council member Lowing here. Vice Mayor Stone here. Council member Lou here for the record. All present.

Thank you. And now it is my sincere honor and pleasure to move to item one, special orders of the day. And tonight we will be reading a proclamation honoring Aaron Bunk Miller for 34 years of service to the PaloAlto Regional Water Quality Control Plant and its partner agencies. Welcome, Director Egleston. And good evening, Mayor Vinker and city council. Uh really my privilege to give just a brief introduction to this item. Uh so we're starting off tonight's uh meeting by celebrating the career and retirement of one of our longtime public works employees, uh Aaron Miller, who goes by uh the name Bunk. Uh Aaron began his service back in 1992. So by the time I arrived, he had already been there for six years. uh and before retiring at the end of last year, he was our second longest 10-year employee in the public works department. Uh spending his entire career in various functions at the regional water quality control plant. Uh so in the proclamation you'll hear about uh Bunk's various contributions which are many but uh I just wanted to say that in his 34 years of service uh he's been an indispensable leader at the plant uh always playing a critical role uh in mostly uh overseeing maintenance uh and in mentoring new staff and as you'll see uh always with a friendly friend friendly greeting and a smile. fell on his face. So, I know that everyone at the at the plant and in public works will miss Bunk a lot. We miss him, wish him many years of adventures u and new things in his retirement. And then I just wanted to acknowledge members of Bunk's family who are here tonight. So, Debbie Miller, his

wife, and uh Jaden Miller, his son, and Skyler Miller, his daughter. And with that, mayor, I will turn it back to you. Thank you. Well, thank you so much. Uh, you know, this is one of the sincere pleasures of council is these types of proclamations where we can express our gratitude. And to do that, I'm going to turn to council member Lowing who will read our proclamation. Thank you very much. I'm honored to do that. And here and and here we go. This is in appreciation to Aaron Bunk Miller upon his retirement. And this goes on your wall afterwards. [clears throat]

Um Aaron Miller began his career [clears throat] with the city of Palo Alto at the regional water quality control plant on January 6th of 1992 as an operator in training and whereas Bunk has enthusiastically served the cities of Paloal cities citizens of Palo Alto working entirely in the public works department environmental services divi division for more than three decades with his final position as assistant plant manager managing the maintenance department for his regional water quality control plant. And whereas Bunk received the state of California State Water Resources Control Board Wastewater Treatment Plant Operator grade 1 and two certificates and the California Water Environment Association grade 1, 2, and three certificates. And whereas Bunk was awarded plant mechanic of the year in 2016 from the C.WEA. WA and whereas Bank with a smile worked through many storms to make sure that the streets of Palo Alto did not flood with wastewater by keeping the headworks flowing especially during the 2022 New Year's storm where he and his crew worked round the clock for days to make sure that the flow from the six communities could be treated at the regional water quality control plant. And [clears throat] whereas Bunk improved himself with certifications above and beyond what was needed for his position in safety, equipment, process, leadership, and management and consistently had glowing reviews from his supervisor where he exceeded expectations throughout his entire tenure. And whereas Bunk has mentored and trained many new operators and mechanics during his career and is known to be a true leader by showing the new team members how to fix things and where

all the pipes, valves, and pumps are located at the RW [clears throat] QC plant. All staff are going to miss his wealth of knowledge of our facility. And whereas Bunk was known for being kind, helpful, friendly, honest, hardworking, having a team player mentality, and willing to work and compromise with all departments for the betterment of the regional water quality control plan, putting the needs of many above the needs of the few. And whereas Bunk has now completed 34 years of exemplary outstanding dedicated service to the city of Peloalto's regional water regional water quality control plant serving the city of Peloalto, Mountain View, Los Altos and East Peloto, the town of Los Altos Hills and Stanford University. Now therefore, our mayor Vicky Vinker, mayor of the city of Palo Alto, on behalf of the entire city council, hereby recognize Aaron Bump Miller for his dedication and excellent service rendered to the city dated 20 of January, 2026. Congratulations and really enjoy your retirement. [applause] We are so fortunate as a city to have employees like you that are exemplary role models. Just thank you for your service. If you want to say anything, you're free to no pressure. Or just come on up for a photo. So

totally up to you. We'd love that if you have Yeah, right there. Well, really, I just want to say I'm grateful for the experience and support that I've had over the years um to be successful and um I'm really grateful for all the um co-workers that I had and friendships that I've made and that I could contribute to the city. So, that's about it. Thank you so much. [applause]

Well, come on up here and we'll we'll take a photo. All right. So, West One of us right [laughter] in trouble. Okay. So, we'll move on to agenda changes, additions, and deletions. City manager, do we have any?

Thank you, mayor. We have no changes to your agenda this evening. Okay. Thank you. Then we'll move to public comment and hear from our partners, our residents out there. Uh, madame clerk, do we have public commenters? Yes, we do. We have five requests to speak.

Our first speaker is Fven T. Welcome. I just want to say thank you again for your time in being city council and not only listening to all of us but dealing with rail separation and Cberly and all of these other intractable problems that we have and solutions. So first of all, thank you. Okay. And I'm here to support that. So recently I was reviewing the city of public city of Palo Alto's public utilities mission statement and it hit me as a business owner that you guys should be made aware of this and it's up on the screen right now and I'll read it. It's to provide safe, reliable, environmentally sustainable and costeffective services. Now when you think about it, the electric and gas utility is actually providing energy in two different forms when what we as the public want to paraphrase one of the gods of energy efficiency Amry Loveven's cold beer cold beer and hot showers. We don't give in the vernacular a rat's assass if that comes in electrons or in the form of the CH4 molecule natural gas. So right now we've got two parallel systems of which we're maintaining both and they're both somewhat expensive to maintain. So if we're going to live up to this coste effective solution, we really need to pick one. And if it was April Fool's Day, I'd say we need to pick natural gas. Okay? But it's not. And as a chemical engineer, XPG X Peninsula Clean Energy, electricity is

much more reliable, much more convenient, much safer, and much more environmentally sustainable. So, it hits all of those things. So we're spending a lot of money maintaining two systems to do the same thing and the sooner we convert to the other one one just one the better. Okay. So that is that is the main point and I'm just going to pick a little bit on sustainable natural gas is not sustainable. safe. Natural gas is not safe. We know that the combustion of natural gas leads to carcinogens like benzene. We know that the combustion of natural gas leads to the criteria pollutants of oxides and nitrogen which cause asthma and little kids. And little kids are innocent. This is what pisses me off. We're impacting the health of kids. It's not fair to them. They have no choice. Thank you.

Our next speaker is Megan G. Hi, I'm Megan. I'm 19 years old and I'm a second year at Santa Barbara City College. Um, I support the city um, educating the public on the dangers of natural gas stove emissions. Likewise, the benefits of induction energy um of induction cooking and the recent community survey backs this up. Emissions from natural gas um stoves release harmful pollutants that affect children and the youth. And I believe that we deserve safe environments to learn, grow, and stay healthy. Um and by educating the public, we can protect our community for a safer future. So, thank you. Our next speaker is Mora O.

Good evening, Mayor Vinker, um, city council members, uh, city staff and community. My name is Mora Omen, and I am the I'm a resident of Palo Alto, and the executive director of youth community service. I wanted to start by expressing my gratitude to Councilman Lowing uh, for his service to our community as mayor last year. Uh, thank you for showing up for youth in multiple ways and listening and encouraging them to make a difference. Thank you. Um, congratulations to Mayor Vinker and to Vice Mayor Stone uh, for the leadership you will provide in our community, especially your keen support for youth mental health and the promising new initiatives such as the engagement with national leaders in youth suicide prevention, uh, the Jed Foundation. Um, I'm here tonight to express my gratitude to our community for coming together to celebrate the life and legacy of Dr. Martin Luther King Jr. yesterday on January 19th at Mitchell Park Community Center. We are grateful for the youth who shared their talent and deep thoughtfulness about ways we can continue to work towards fulfilling Dr. King's dream. Thank you to city staff, especially Adam Howard and his team and the Powalto Youth Council for helping organize the event with YCS. A huge thank you to Mayor Vinker and East Palto Mayor Lincoln for sharing their reflections during the community gathering at Mitchell Park and staying to connect with the youth service projects and performances. Thanks also to all the elected officials, especially council members uh Pat Bert and Edoing for joining us. We invite the community to save the date for our next communitywide event called the community impact exhibit on Sunday, April 19th afternoon at Mitchell Park Community Center to celebrate youth

service initiatives and leaderships through the year. Thank you.

Our next speaker is Star T. Good evening. Um, this may seem premature, but many residents of Von Park are worried the 366 El Camino development will get rubber stamped when it comes to you. Um, that development is currently bounded by Matadero and Kendall. streets with no sidewalks, street side parking, a nearby no red turn on red. Both are safe routes to schools for six schools in the neighborhood. And um I just want to encourage you to read my January 5 email if you haven't had a chance to do that. Um, basically I'm asking you if needed, if a variance isn't allowed, um, to amend the objective standard on site access so that this development could have a driveway on El Camino. Um, my main reason though for speaking tonight is to improve our tree protection process and to save an approximately 100-year-old ring of coastal redwoods on a lot that's approximately 6,000 square ft in Baron Park located at 530 Baron. If you have not already, you will be receiving letters from neighbors concerned about its removal and insufficiency of our protections. An applicant is citing the more than 25% reduced uh buildable area but has not yet provided the increased project cost estimate per the code requirement. With the current PaloAlto local ordinance, every large tree on a small property will meet this minimum requirement. Let me say that again. every small lot in PaloAlto that has a large tree has justification for cutting down the tree

the way the it's written now. Um they'd still have to meet that that um project expense I think as well. Um so I just want u to think about how could we improve or strengthen our policy. I have one minute. Um, maybe this sounds radical, but you could remove the buildable area reduction threshold and you could uh as well as the increased project cost as part of that decision. That would still leave the two points. One being if it's an unhealthy tree or a hazardous tree. The second would be if it's the wrong tree in the wrong place or the right, you know, not the right tree in the right place as we say. Um there are some other things we could do to assist people um such as building on the existing footprint. But before I my time runs out, I want to say that there is a um a product called Helical Piles which allow very deep spikes to be dug into the earth. They're currently used for big construction and that might be something to save some of our tree roots. Thank you.

Our next speaker is Ana R. Anya, that concludes public comment for items not on the agenda. All right. Thank you, madame clerk. So, moving on to council member questions, comments, and announcements. Colleagues, have you any of those? Council member Rectal. It's a legacy light or something. Yeah. [laughter] Okay. My knee wants to speak apparently. Okay. All right. Any nonne actual lights?

Council member Liths. Thank you, Madam Mayor. I just want to acknowledge that our Palo Alto uh child care, why can't I not remember the full name of PAC right now? Community.

Community childcare. Palo Alto Community Child Care, otherwise known as PAC, uh which has been in business supporting our community with child care since six uh women with a lot of foresight uh 50 years ago, came forward to the city and said, "We've got to figure out a child care solution for our families." Uh since they came forward 50 years ago, we now have um 18 different centers. Uh one of which just expanded uh to offer care for little ones as young as 2 weeks. uh so for infants through toddlers um at their downtown site on Waverly. And so the mayor and I were at the ribbon cutting this past Thursday. I happen to be the council liaison to PAC. Um uh so I got to say a few words of gratitude to PAC to its board to its executive director Lee Fab and to the entire PAC community for the tremendous uh support they're offering children and and their caregivers and parents uh in the form of really exceptional child care. So, we should all be very proud that we're a community that offers a fantastic array of um exceptional and affordable child care for those who need assistance. And uh so here's to pack and here's to what they will continue to do in our community.

Thank you, Council Member Bert.

Thank you. I just want to share that um Cal Train had its um semionthly local policy maker group uh meeting this last week and that's one representative from each city on the corridor as an advisory group to the Cal Train board and the focus of this meeting was actually a workshop around Cal Train's update to their corridor crossing strategy which is very important to us and Cal Train has come to recognize what we've faced and uh Mountain View and other cities have faced which is changes that have fundamentally occurred in the last half dozen years. uh on the upside to cities and the impacts on the need to grade separate. Uh there's the the projections are for lower increases in trains and lower increases in the number of cars uh compared to what was the previous model. As a result, um the urgency to grade separate what Calrra had thought was grade separate 40 crossings in the corridor is diminished. Um but on the flip side to that is the costs have gone through the roof and the funds available from state and federal levels have diminished. And so Cal Train is embracing uh a multiacet approach similar to what we've done. Uh and this corridor crossing strategy still supports all the cities that are moving forward with full vehicular and and pedestrian grade separations, but recognizing that far fewer of those separations are going to be able to occur in the coming decades. Um the elements are are continuing to support that looking for where uh closures may occur in the corridor and there are some cities that have very low traffic volume

and and uh prefer to have a great closure and then the final part is what they're calling this enhanced [clears throat] crossing strategy which I think most of you have heard about but it's this package of measures to make atgrade crossings first safer and more secure through automated technologies and and uh otherwise. Um and then the other parts to this are to have greater signal optimization which means to squeeze out a little bit better capacity for vehicles to cross uh particularly during those rush hours. Previously that wasn't going to get us to where we all thought we needed to go. But now with this diminished demand uh it will help in many cases. And then the last part uh so we had the reasons primary reasons the grade separations were occurring was safety and security capacity or mobility and then lastly environmental impacts and with quieter trains we now have uh us moving forward and others on quiet zones and by not where we don't do grade crossings we avoid 5 years of uh Carmageddon from uh construction. So that was all rolled out to all the cities and I think it was very wellreceived because it's a plan forward um uh recognizing our current realities and not clinging to what were good uh anticipations at the time they were made and they've now been superseded. Um and then connected with that is uh Cal Train is going forward with a quarter-wide safety and security which means fencing everywhere that there uh the high security fencing everywhere that there aren't backyard fences. Uh these enhanced crossing strategies at the crossings even making the stations

safer. Um and um and then uh so that that the cost of that is a uh like 20% the cost of doing that in the entire corridor is 20% the cost of a single grade separation and depending on who you ask does it address the problems by 80% of the problem or 70% or 90% um something in that range perhaps. So it's encouraging. And then um the final part is that our next meeting uh will include looking at station activation up and down the corridor which is something the cities have really cared about. Um and then finally Cal Train will be going to the cities up and down the corridor promoting their city partnership program which is how do you get transit passes in the hands of a high percentage of workers. and the city partnership program that's on their website has all these different tools. Most of those are modeled off of what PaloAlto has been doing over the last 25 years. And um and so for instance between Stanford and PaloAlto out of all the Calrine go passes 75% of them are Stanford and PaloAlto. So we are really a model in that which contributes to why we have such high train usage. Um it's the network getting to stations and it's people getting uh passes in their hands like the city now is getting um real notoriety for leading on what's now the Bay Pass that all city employees have uh all transit systems in the bay. So I just want to use this opportunity to update everybody. the these are significant in how they overlay with our uh critical grade crossing efforts, but it's also uh a real uh recognition of some of the things we've been doing as a

city and will continue to do that are really important their models. Thanks.

Thank you. Looks like no others. So, um I will comment. Um, I also want to add my thanks uh to my colleagues, council members uh Burton Lowing for joining the MLK Day celebration and the staff of our city and the staff of East PaloAlto and all of the amazing students who are there. But and and the YCS organization at large. But I also want to thank Mora Omen who thanks everybody else [laughter] and does Yman's work year after year to make that uh event a real success. It's an important event and it was really uh truly an honor to uh uh speak there. So, thank you Mora. Um, and then just secondly and lastly, I have to say that I never thought that I would live long enough to see the day that Big 10 football fans would serenade their quarterback with an ABBA song on the road, or that the Empire State Building would be lit up in cream and crimson, or that former United States presidents would be congratulating Indiana University for winning a national championship in football, but all of that happened last night. So, congratulations to our sibling city of Bloomington, Indiana, and my alma mater, Indiana University. It is the first time in school history that they have won the national championship. It is the first time they've gone, our team has gone 16-0 since 1896 when Yale did it. And they did it with zero five-star recruits, eight fourstar recruits when the average over the last I don't know how many years has been 58 four and fivestar recruits on teams that win the national championship. They were the losingest program in college football

just two years ago and they went undefeated this year. And the coach said it was because of hard work and teamwork and that the whole was greater than the sum of its parts. And that's how I see this council that with hard work and teamwork with each other, with our residents, with staff, we can do extraordinary things, too. So, congratulations to our sibling city. [laughter] [applause] All right. Thank you folks for indulging me on that one. It's been a long time coming. We were 0 and 11 my senior year there. [laughter] Okay. So, no more lights. Vice Mayor's looking at me. We need to move on. None of us could beat that, Madam Mayor. Congratulations to you and your team.

Thank you, Council Member Lith. Um, all right. [sighs] Next up is our study session. Uh, this is a presentation of the 2025 annual community survey results. And it looks like our assistant city manager, uh, Miss Nose, is here. Welcome.

Thank you, mayor. Thank you, council. Uh, as the mayor referenced, I'm Kylie Nose. I'm the assistant city manager and really I'm here to just kick this off and ultimately turn it over to our partners with PCO um and Sonia Whitnik uh who will be presenting. So this is the 2025 community survey that we hire Pocal to do. It provides us annually with data and benchmarks on basic uh city services as well as some specific questions. In the interest of time, I'll turn it over to Sonia. Next slide, please. Thank you. Um I I was just wondering could I share my mind or should I just say to move the slides forward? Okay. Thank you.

Perfect. [sighs] All right. I hope you are all looking at my presentation. Good evening mayor and council members. I'm Sonia Watink and exe I'm the executive vice president of data and insights at national research center at pulco. I'm very happy to enjoy to join you to share a quick review of your results of your survey of your community survey and to start I would like to thank Lupita Alamos who provided thoughtful feedback and throughout this survey process we couldn't have done it without her. This is the 21st iteration of your community survey. The methods used were the same as in past years, a random sample with mailed invitations. Similar to last year, 574 residents responded to the random sample invitation. You also implemented an open outreach so anyone in the city could participate. And those results are in the full report to show how you're in more engaged residents compared to the broader community. For this present presentation, we're going to focus on the random sample results. You continue to have a good response rate and your margin of error is plus or minus 4%. Which is better than the 5% standard for most community surveys. At PCO, we have a benchmarking database which includes more than 400 communities across the country. Throughout the presentation, I'm going to point out your results compared to those national benchmarks. an extensive report was included in your meeting packet and we'll not hit we won't hit on all of those details here. Um and also please note that there is a small error in that attachment. The wrong survey and outreach materials were included in appendix F, the last appendix. Um all other aspects of the report are correct and we're going to

send you an updated version tomorrow. So apologies for that but we will make sure we correct it quickly. And on to our high-level overview. Of the 88 survey items with evaluative ratings, 22 were higher than the national benchmark and four of those were much higher. 61 had similar ratings and five were lower. But note that one of the low items was a rating for the federal government. So only four were for PaloAlto. The lower items were related to housing and the cost of living. When compared to results from 2024, 14 ratings were statistically higher, 124 were similar to the prior year, and one received the lower rating, but that was also the rating for the federal government. So, PaloAlto scores are steady or improving. Moving now on to survey key findings. This is what stood out to us as survey researchers, but as mentioned, there's a lot of additional data in that full report. Start out people like living in PaloAlto. About nine and 10 residents rated their overall quality of life as excellent or good. Eight and 10 said they were likely to remain in PaloAlto for the next 5 years and they would recommend living in the city to others. All is consistent with prior years and close to national comparisons. Looking at aspects of quality of life, most of these were similar to the benchmark except for Palo Alto as a place to work, which was higher than the benchmark. Lowest on the list, but similar to benchmarks was Palo Alto as a place to retire. Moving on to city services. This chart shows the highest rated city services and you do shine in a lot of

places. Library, parks, and emergency services topped the list along with utilities and recreation. Among the lower rated services were building and planning, application processing, land use planning and zoning, and code enforcement, as well as affordable high-speed internet, but these were all similar to the benchmark. Um, compared to the national benchmarks, eight services oops were above the were rated above the nation. This these included open space and parks, natural areas, recreation centers and classes, drinking water, utility payment options, and street cleaning. 15 were services were on par and none were below national benchmarks. Compared to 2024, 33 services had similar ratings and two were improved. Affordable high-speed internet access was up 10 points from 2024 and electric utility services up eight points. Palo Alton had high marks for non-motorized transportation and also the quality of businesses in the community. The community features that received the highest marks from residents included ease of walking and travel by bicycle and the overall image of and reputation of PaloAlto which were all above the benchmark. The perceived quality of businesses business and service establishments increased by seven points from 2024 to 2025. Opportunities to attend cultural activities and shopping options were also higher than the national benchmark as noted by those stars. Uh affordability is a concern in PaloAlto. As in previous years, few residents gave excellent or good ratings to the co cost of living as well as the availability of

affordable quality housing in PaloAlto. Only about one in four residents gave positive ratings to the variety of housing options. These were similar to 2024 and lower than the national benchmark. An open-ended question invited respondents to describe in their own words one change the city could make to increase resident satisfaction. These were categorized by themes and the full comments are also shown in the report. The most common theme was housing and construction issues mentioned by 21% of respondents followed by traffic or transportation and traffic and affordability mentioned by about 1 in 10 each. Outdoor life is a strength in Palo Alto. Another open-ended question asked respondents to share in their own words one thing they believe the city does well and should maintain. Parks, open space, and the natural environment to top the list, accounting for 28% of all mentions, followed by activities and recreation and utilities and city services. Residents were provided a list of potential activities and asked if they had done them in the past 12 months. Visiting a neighborhood or city park ranked highest. Other frequent activities included talking with immediate neighbors, voting in the most recent election, which would have been the pre presidential, and using PaloAlto public libraries or their services. Watching a public meeting or contacting elected official was least common. Most residents were not familiar with with sustainability programs. About one in seven residents said they were extremely or very familiar with PaloAlto's programs to advance community goals such as home electrification. Only one in 20 were extremely or very familiar with the city's sustainability

and climate action plan and its goals to reduce greenhouse gas emissions by 80% by 2020 2030. Most were either not familiar or only slightly familiar. When asked what would most motivate them to replace major gas appliances with electric models, the top consideration was saving money through rebates with six in 10 residents choosing it, followed by improving health and safety and then improving or helping to stop climate change. About three and 10 residents said that they were not interested in upgrading to electric. Most residents had good things to say about the local government. Threearters of PaloAlto residents gave the local government high marks for treating residents with respect. While about six and 10 praised it for being honest, treating all residents fairly, acting in the best interest of the community, and being open and transparent with the public. Compared to 2024, both acting in the best interest in the community and being open and transparent increased by seven points. [snorts] All other aspects of government performance were positively rated by at least half of residents and they were all comparable to national benchmarks. Overall, 78% of residents praised the quality of services provided by the city of PaloAlto, consistent with previous years. In contrast, state government services received a favorable rating by 52% which was a little uptick while federal government services received a favorable rating by just 19%. 22 points lower than 2024. So a quick summary, PaloAlto residents have a high quality of life. A few services could be could use improvement, but most are very well on track. People love the quality of businesses and the

ease of walking and biking in the community. Highquality outdoor amenities are valued. Cost of living and housing is a national issue and especially in your area. [snorts] Residents were not very aware of state sustainability programs and the rating for governance were stable with a couple of upticks. That's my quick summary and now I'll turn it back to Leita. Actually, mayor, uh, we'll turn it back to the council for your discussion.

All right. Thank you very much. Uh, thank you for the report. Uh, much appreciated. Um, I'd like to start and see if council has any clarifying questions or things they might want to ask about the report. Then we'll go to public comment so that then we can also react to the public comment. This is a study session, so we won't be taking action tonight, but it would be uh I do look forward to this discussion. Does anyone have questions? We should start with council member rectal.

Yeah, this is me, not my knee. But uh can you bring up the the packet packet page 57 and there's the table 43 there at the top of packet page 57 and it talks about crime areas. And what stands out to me is the the bottom two rows of that table area um area five which is let me double check that that is um that's college terrace evergreen park uh they are much different in both their whether they were a victim of a crime or whether they reported a crime to the police. So this is again on page packet page 57 the bottom two rows of the top table and so area five is much different. Have we looked and see if is the crime rate any different there? Is this uh just a statistical fluke or is there some some reason for that?

Well I think that's a really a question for staff. We have not independently uh followed up on this statistic. I I will acknowledge I think that we found in prior surveys that this area uh has traditionally or or on an an ongoing basis had uh a feedback that tended more negative than other parts of town. And so I think it's something for us to look into, but I think it it's fair to acknowledge that. Okay.

Um and if I could just add a clarifying note. So um these little uh capital letters that you see under the 23% the C and D that means that area five was different than area three and four but statistically similar to area one two five or sorry one two and six. Um and then the same for below the reported a crime is statistically similar to areas one uh one four and six but different from areas two and three with columns B and C. So it's not entire it's not different from statistically different from the entire community but it is statistically in some areas

and similar. Can we go to pack page 80 80 and there we saw one area and that was um area four had worse uh utility reliability. So this we're looking at the very first row on packet page 80 and area four there is 88% which is pretty good but we compare that to the other areas uh it is uh it's lower. Have we looked at see has that had more outages or is it that they're just more reactive to the outage that they've had? Yeah,

once again I think there has not been a independent correlation here. So that's something that staff would need to look at. Okay. Thank you. [sighs and gasps] Council member Bert.

Um thank you. So, I'd just briefly like to um uh follow up on Council Member Rectal's questions and really requests because over the years we've seen different zones of the city have strikingly different um uh outlooks on things such as how safe is the downtown, what's the built environment downtown? Well, where they reside doesn't change how safe that downtown is or what it's built like. It's their perception. And for us to interpret this, well, we have to understand how much of it is perception based. And there may be root causes to that that we want to address and how much is reality based. Um and so I think hearing back um where those few places where we can actually look and compare the perception to objective data that will really inform us on how to interpret their concerns on a variety of things because zone 5 had negative uh responses on a whole series of um of elements of the survey. Now, it can also be as as you know, as we get a smaller sampling on each neighborhood, um do we get um a greater margin for error and and maybe some of that's uh that anomaly, but as the city manager said, if if it's part of a euro consecutive annual pattern, then it's probably not uh due to a sampling uh error. So understanding those few places where we can look at this more objectively um is really essential uh for us interpreting this very important document. Thanks.

Thank you, Council Member Lith. Thank you, Madame Mayor. Um I appreciate you're noting um uh I didn't catch your name. I'm sorry. from PCO.

Sonia, Miss Sonia, thank you for acknowledging that you attached the Denver Public Library survey uh results. I did get that far because I was looking for a a list of the comparable cities and I didn't find that, but I did find those Denver results. Um I'm wondering is there a list? You've you've given us a map of America with dots of the comparables, but if we wanted to know um with which municipalities are being compared, is there a way to access those lists and understand why we're comparables? Um they are. They're proprietary, but we do we do share them internally with the city with just the note on that.

Okay. Thank you. Um, I noticed that you said that mailers are the best uh mode for uh surveying people and yet our mailers only went out in English. People were given the opportunity to do an online survey in Spanish or simplified Chinese. Do I have that right?

Correct. So um can you tell me why if mailers are the best they were only in English given how diverse our city is and we have multiple languages spoken including the ones identified in the online options. Um what we find is that the the response rate to for people in a second language is pretty low and so the cost for mailing out to your entire sample in three languages would be quite high relative to the um to the response that you would get. So, we find that the better compromise is to put it online and make sure that all of the mailers have they do have in language um notes about how you can access the survey online. I agree it's not as optimal, but it's just given um budgets. It's it's just quite um I think impractical for the most part to mail to all mail all three languages to every each household. I think the report said that two responses came back to the Spanish-speaking online survey and two two came back in the simplified Chinese. So of the hundreds of responses we had two in simplified Chinese and two in Spanish. Yes. And I I have to say I haven't looked at um the proportion in your city who speak not as English or English as not English as a second language but um just prefer to speak in their original language. I I for the most part when I mean I I'll I'll first say that this is this is just a challenging part of survey research and we wish there were better outcomes. But we do find that a lot of people if they do speak or if

they if they speak both languages they may respond in English even if given the option to respond in another language. So we do feel like in terms of folks who are not comfortable in English, they're probably under reppresented in surveys and I can't say right now how many what proportion in your city is fall into that category by the census but that generally speaking if you really want to reach people who would not who could not respond in English and require the other language then we would probably we would suggest more promotions with those communities and community outreach through um your engagement teams.

Thank you. I certainly would be interested in what percentage of our city falls into the demographics you just named in terms of uh their language, the first language, their ability in other languages and so on. I just want to be sure that we're actually getting a representative sample and

uh and not conveying to people through the ways in which we're surveying them that we only care about English speakers. I think that may send a message we're not intending to send, but we are making a choice about budgets and and we if we are not making our um outreach efforts accessible to a significant proportion of our city, I think we would be concerned about that. So, I would just love to kind of explore that further.

I will say that um I don't I can't know how it's all received, but the research we've done is that most folks having at least that option of the online and seeing the invitation in their own language in all of the mailings is a [snorts] step in the right direction. And I don't I don't I can't I can't say to you whether or not the full step that it only resulted in four survey respondents in those languages. Uh makes me worry about

Yeah. And I guess I guess the other part I'll say is that I have um in limited in limited situations. So I can't say I have a ton of experience, but I I personally been involved in at least three surveys where we did mail. It was it was when it was just English and Spanish. Um we mailed Spanish lang we mailed two surveys in the same envelope you know so that you could do it on paper in English or Spanish and we had very low response in Spanish such that I my personal limited experience is that um printing in those languages is probably not the right option unless the uh unless the concern is more to make sure that people feel equally seen. But in terms of getting the data back, it it wasn't terribly su successful.

You said that's your personal experience or your experience at Palco? That's my experience at PCO. I've only done three surveys where we printed all of the mailers in both English and Spanish. And what jurisdiction was that? One was Fort Collins and I don't actually recall the other two. there a while ago. Okay. Thank you very much. I'm over time.

Thank you, Council Member Lithcott HS. And uh I want to follow up on each of your points and I'll start with the last. Um [gasps] so when you say it's more expensive, I would think that, you know, postage is a large part of the consideration. Um and you know, I guess I would be curious in getting some feedback before we do this again about the marginal cost of adding those two languages even side by side. They don't even necessarily need to be whole separate surveys all sent. I think it can be kind of like um some ballots are that way or other things. I would bet that it's not, you know, for three languages three times as expensive. I would guess that on the margin and it would be nice if we could at least know that so that we could see if we can more aly solicit that because I do think it's kind of suspiciously low um in terms of the response and we really want to be representative of our community when we're putting this much upfront investment in there. So I would love to just explore that a little more uh before the next year. Um I guess that's a comment not a question. So I apologize I'm breaking my own rule. [laughter] Um and uh so then with uh the next one actually is a question and it follows up on uh the question about the cities. I had had the same question when I read it which is wonder which ones they are. So I'll ask you a slightly different question about those which is um you know this is this is a fairly unusual city uh that for its size we do an awful lot of things that other cities don't and uh you know we kind of punch above our weight class in terms of people knowing us for our size and various other things. How confident are you in the comparability of the other cities? And to the extent there might be distinctions, is there anything we should be aware of in interpreting the data with respect to the comparable cities? Like how might how might you think it might skew things

if at all? Um well I would say that overall folks who are doing this kind of comparison or doing annual surveys are um doing this work are a bit of the higher performing cities. So in that sense I think you're being compared to some higher performing cities. Um overall there's certainly a variety of cities in term a wide variety in those 300 in those 400 of I think I think it might have been 350 comparisons but um it there's a wide variety in terms of size and where they are and and so it's truly like you're being compared to the nation and it's not meant to be like we do actually do custom benchmarks if you want to hone hone in on things like population size, median income, um, and and things like that. And so we can create a custom benchmark for you. But when you're looking at the nation, it truly is kind of like it's the nation. I would, as I say, I would say it's probably the higher performing cities in the nation because they're the ones that doing this kind of work. Um, but there are communities that are 15,000 and in the Midwest and there are communities that are larger than yours um in Texas. So, it's a true national

and council member if I might or mayor if I might add, we do benchmark with some custom communities as part of this when it's noted accordingly and those are specifically California communities and ones that staff has reviewed the list of those comparables. Um we still don't disclose that list obviously since as PCO noted it is proprietary information for them. Uh but we do review that list to ensure we are looking at to the best we can similar uh jurisdictions. Some are bigger, some are smaller but generally looking at that to your point of you know not all cities have an airport. So we want to make sure we have some comparables that do have that. Uh so no one's perfect. Uh but we do review that list.

That's great to know. Okay. Thank you both very much. Council member Lou,

thank you. Uh just one clarifying question and really this is folks about question 19 uh but generally generally relates to the free comment section. So for example in question 19 it says what is one change that the city would make that would make you happier and housing and construction was the top reply with the percent being 21%. Then in the free section uh free answer section there are a lot of comments saying build more housing a lot of comments saying don't build more housing. So I want to confirm that when we see 21% as housing construction as a change that would make you happier. We can't interpret that that is 21% who want more housing or less housing. Right? Uh it's just anything related to the topic. I just wanted to confirm how the surfing was set up and how the free response was configured. Um, so how should we interpret that?

That is correct. It's the the theme is housing or construction and we split out negative and positive. Yep, that's what I thought, but just want to double check. Thank you.

Great. All right. Thank you, colleagues. Let's move to public comment. our first speaker is Fen T.

Once again, thank you very much for your service, Mayor Ver. Um, congratulations on your team and I really really I think we all do like your coach. The whole is greater than its parts. That's what we are and we strive to be. I Well said. Thank you. Um, I really like in this survey two things. Ease of biking and the electric utility services. Ease of biking. Hey everybody go. Yay. Ellen Fletcher. If anybody remembers Ellen Fletcher, she drove that campaign coming out of London in the 40s into the 50s,60s and 70s, and that's how she got around. Amazing, amazing woman on the electric services uh side. Everybody go, "Yay, Bruce Hodgej and Carbon-free Palo Alto and his irrascable band of engineers and poets and dreamers and dancers." because they worked really hard to convince the utility that it actually made sense on the electric side to go essentially 100% renewable and we did and it made sense. So here we are. I really like that part that 5% of our community knows the SAP plan deeply and deeply cares. That's actually really good. one in 20 people are done a deep dive on our climate and that 59% want rebates to encourage them to electrify and that health and safety comes in at 37% and stopping climate change is 35 health and safety resonates and and you guys I'll give the people that are designing the survey for next year I will give you a shiny silver dollar and silver is very expensive now if you would ask this question. If you knew your gas stove was emitting chemicals that cause cancer and injure

your kid's lungs, would you switch to induction? I mean, here we are. We're feeding chemicals into people's homes and they don't know it that cause cancer and injure kids lungs. And all we need is to educate it that we're not doing anything wrong per se. We just need to educate the public who don't know this to let them have a choice and we want them to go to electric. We know that already. So, let's, you know, Mayor Veer, you also said, let's punch above our weight class. Let's be one of those first utilities to actually acknowledge, educate, and advise our residents that, hey, that stove in their house, it's not good for you. Let's get rid of it. Let's do it for our children. Thank you.

Our next speaker is Star T. I didn't expect to speak but I had a couple ideas about the survey which I really am motivated to go to go back and read more uh deeply u in terms of sustainability I think we could promote awareness of this area by accentuating the joint sustainable schools committee that we have uh joint program between of course our schools and our city it's a fabulous group um I love to attend those meetings um we could promote that in uplift or maybe Pelto weekly article. Um, in terms of survey effectiveness, there are so many things we could do that would be improved by having a rental registry. Um, I've tried a couple things in our neighborhood and it's very hard to reach renters. So if somehow we could encourage uh the land owners, the landlords, the property managers to connect our renters to the city, I think there are a lot of benefits to that, their inclusiveness, um advocacy for them, uh all sorts of things including some of the issues of the survey. Um, and then, um, the climate goals. I want to I didn't have time to talk about it, but when it comes to tree protection, there are some things that could grab people's interest. And again, that would be a voluntary registry of protected trees. And the city could offer a quarterly tree care newsletter. They could also offer one day per month during May through September during dry months a time rebate for deep soaking and watering because all trees should have that and people generally feel that people get fined uh or if they do anything to their protected trees but there's no benefit. So I think if we

could add more benefit we'd get more education and maybe more buyin with some of our climate.

Our next speaker is Hillary G. Good evening everyone. Um I am here to talk about the exciting statistic that a third of the city thought that improving health and safety was a good reason to switch from gas to electric. That is very exciting and I want to tell you a couple of things behind it that might help you going forward. Um, I also want to tell you some of my personal experiences in talking to people and how they've responded when we've told them that their gas stove could be harming their children. It's quite an interesting thing. So, I want to start with a quote. In the next 5 to 10 years, people will be thinking about burning fossil fuels in their home the way we now think about lead paint. That is a quote from former state rep. Tracy Bernett, a Democrat who was the prime sponsor of a clean heat law, recently signed into law in uh Colorado. So, lead paint, cigarettes, gas stoves, those are three things that parents need to think about not having in their homes. Um, so let's talk a little bit about why gas stoves have such an outsized impact. We all know that people are very attached to their stoves and they don't uh consume a lot of gas. So, we've kind of put them in the back, but unfortunately, until we get people to let go of their stoves, not only will they have health health issues, but we're going to have to keep the gas line running to their house. So, that's going to be hard. So, when you talk to people though about the health consequences of gas stoves on children, what I've typically seen people ha respond to is they've gotten really mad. They're not mad at me or to my other colleagues who've had this experience. And I think Council Member Bird has had the same experience. They're mad because they didn't know and they've just bought this massive expensive high-end gas stove and now they're going to have to rip it out or

they're mad because they didn't have that stove, but they're a renter and they're worried about their kids in that context. So, I think we have a a real opportunity to let people know that gas stoves are dangerous. They are not something that we should be having in our homes. We're hoping that you will be adding that to the next gas safety brochure, letting people know if you do want to cook with gas, please run that fan. And if you don't have a fan, open up all your windows and you have to keep that fan running or the windows open for like 15 to 20 minutes after you stop cooking cuz the bad stuff lurks. So, um really hoping that we can seize on this initiative and get more uh rallying around this this uh health and safety issue and make it less about climate because this is not about climate or climate change. It's about health. I'm done. Thanks.

Our next speaker is Ana R.

Um hello. Good evening, city council members. Um, my name is Anoras Musen. I am a junior at Pa High School. Um, so I wanted to comment on that community survey results that you just looked over. Um, how they really demonstrate that health and safety are key reasons residents should choose induction appliances over gas stoves. So, children are obviously much more vulnerable to indoor air pollution because their lungs are still developing. One of the most significant sources of indoor methane pollution in our homes is natural gas stoves. Yet, many residents are still unaware of the health impacts associated with everyday cooking. The city can play a role in improving awareness by including clear information about indoor air quality and any kind of stove related pollution in existing outreach. Um, a good example of this is the annual gas gas safety brochure. Um, this information could include ways to reduce risk through ventilation and also make residents much more aware of alternatives like induction cooking. Um, induction cookers are also becoming a lot more accessible and affordable and programs that support shared access can go a long way. For instance, every for every $1,000 we could create 10 loader induction kits that are circulating in our community. Families could also purchase induction cookers for under $100. So providing residents with straightforward information and practical options could really help protect public health, especially for children, while supporting our city's clean energy goals. Thank you.

Our next speaker is Winter.

Hi. Well, I have two thoughts about the survey. Um, one is, uh, if I had the magic fairy dust, we would be all electric. Everybody, businesses, homes, old homes, new homes, all the homes, everyone, uh, all electric right now. It's not news to you that one of the real impediments if you have uh uh an appliance that's working uh to just uh buy a new uh electric appliance. Uh I was really struck and I think it was at a city council meeting maybe about three months ago can't remember or PaloAlto online maybe uh the stat was thrown out that about 10% of the people in PaloAlto are on Medicaid known in California as medical um meaning uh really lowincome people um and it does strike me that uh you know the economic situation of converting is can be difficult and yes uh some things may be coming down in price but it is um still a uh bridge too far for so many uh folks. The other thing I want to talk about is uh something that the survey revealed as uh being underwater which is not surprising uh which is code enforcement just generic code enforcement in PaloAlto. Um we if we're a city of about 65 67,000 people we have presently right now two code enforcement officers. one of which is out on uh a temporary leave and somebody's uh the supervisor is filling in to some extent. Given the massive development that a um that we think is

uh seems to be coming our way with the housing element and the arena numbers, etc. Um we're really in denial about this. Uh we have to have more code enforcement officers. Uh, so as you're thinking about your budget, and I know that there seems to be some budget pressure, but this has been going on for a number of years. We have one code enforcement officer that only deals with um power uh uh gas powered leaf blowers or uh leaf blowers. So that leaves one person who's out on leave temporarily, another person filling in somewhat. Um, but anyway, having one officer full-time doing basic code enforcement, the zoning, the the this, the uh it it's we're fooling ourselves if we think that that's adequate. And G once again, given all the development coming our way, if we don't face up to this, we're just creating a problem that's going to take more is is going to create irritation, aggravation.

Your time is up. Anyone do it now enforcement officers. Our next speaker is Avo S.

Good evening, council. My name is Aro Sha and I'm a junior at Pto High School. I hope you're all doing well and thank you Sonia for that presentation. Um, a number that stood out to me and uh I hope I heard this correctly was that about 3 and 10 residents don't want to transition to electric appliances within their home. Uh and I found that number to be a little bit concerning given that uh the recent news around our likeliness that we're not going to meet the 80 by30 goals that our city has set and um just our messaging around electrification in general seems to not be resonating with residents enough to scoop up that 3 out of 10. uh which begs me to wonder how can we transition our effectiveness in terms of communicating uh to residents what we can do in order to get them to electrify uh which seems to be the big problem in Po Alto when it comes to climate um and I know that no matter what we do there's always going to be a small portion of people who are not going to want to electrify and generally we can't touch that um but to the three out of 10 who currently are not resonating with the environmental message. Uh I think we have to sadly accept that and think about what else we can do and uh from what I've seen as being effective in conversations as Hillary mentioned is talking about health. Um because the simple truth is that so many people do not know the health impacts of natural gas combusting within their homes. People don't know about the benzene. People don't know about the nitrous oxide. And if we want to have any hope of coming close to 80 by30 and I know the news is that we're not going to meet it and I'm fine with the that reality. Um but I think that we can be doing better because this is an easy avenue that we are not taking advantage of. We could be putting out information and bill inserts. We could be doing so much more um in regards to

this to do what we can to try to reach that three out of 10 politans who don't want to transition. And I just I think it's a little bit disappointing that we haven't done this in the past um when we've seen that residents aren't going gung-ho for the environmental messaging and the climate messaging. Um so I think we need to transition our focus to be centered more around health and affordability and I believe that affordability is also a big issue. Um I know a lot of people who say you know we want to but it's just it's a lot of strain on our budget. Um, and I've seen cities, I think Santa Clara has incentives for transitioning appliances like gas stoves, and I know it's a tough budget year for Paul Ulta, but if we can just look at in cognizance of the health impacts and the climate impacts and see what we can do to help make it a little bit more affordable and more accessible and help reach at least part of that three out of 10 politans who don't want to currently transition, then I think that's worth every penny we put there. Thank you. Our next speaker is Leaf T.

Hi. Um, my name is Leif and I'm from Palo Alto, although I'm zooming in right now from Maine where I'm at college because I think that this is a really important issue. As many have already discussed today, I want to advocate for educational outreach from the city to inform residences about the health reality of gas stoves. And given the adverse health effects of gases with the research that's come out recently, I mean, personally, one of many of my friends who grew up with gas stoves have asthma. And I I strongly support the city educating the public on the dangers of natural gas stoves because of the combustion. I count myself grateful that I grew up with an induction stove and so I I likewise support the city educating on the benefits of indu induction cooking. Thank you for your time. Our next speaker is Haley S.

Hello city council members. Um my name's Haley. I'm from um studying at Grenell College, but a lot of my peers are from Palo Alto and aren't aware of the dangers of natural gas stove emissions. I'll make this quick since public comments have already addressed many of my main concerns around safety. Bottom line, I support um the city educating the public on those risks of natural gas um and as a bonus explaining the benefits of induction cooking as a strategy for home electrification. Thank you. And that concludes public comment on study session item two.

All right. Well, thank you, Madame Clerk, and thank you to each of the public commenters that took the time to give us your thoughts on this survey. I think in this item in particular where we're surveying your thoughts, it's helpful to have your feedback and response to them as well. [sighs] Okay, colleagues, [clears throat] comments, thoughts, opinions, discussion. I know there's some [laughter] council member Lowing. I still haven't found my light over here, so takes me a while.

Yeah, I couldn't tell if it was you. [laughter] Uh yeah, I have a few. Uh one, I was delighted to see the jump just in one year on the items on [clears throat] folks thinking that cities being a little bit more outgoing and and transparent. I mean, that was that was a really big jump and I know the whole the whole city's worked on that uh in the last year, stepping up the game even more than than than we've done before. So, that was really quite uh encouraging. Um few comments the um I'm I'm also relieved to see that uh we beat uh the federal government 71 to 17. So that that's that that's a good score visa v the current federal government. [snorts] [clears throat] Um I don't know if the I don't know what your what the consultants interpretation is of this affordable highspeed internet. It jumped this year from 44 to 54 that say that they're happy. Uh, and I thought when you went through it, you said that they might not be happy. As you know, we're doing a pilot right now to see if they're going to be happy or not in the next year to to 50 years. Um, is your interpretation that there there's still an unhappiness level? Cuz to me, it looks like, well, if they're jumping, you know, 10% in a year and that's something we need to take take into account as we're looking at our pilots and potential rollouts.

Yeah, what I was saying is that it is on the lower end. if you just stack rank all of your services, it's on the lower part of that list. Um, that said, it is similar to the benchmark. So, it's what used to commonly see in communities. Um, and that it did increase from 40 44% saying it was excellent or good to 54% saying it was excellent or good in the past year. So, that's quite a good jump, but it is it is just um similar to a benchmark. So it's it's it's similar to what other communities are experiencing in sort of terms of people's perception of access to affordable highspeed in internet.

Okay. I'd be interested colleagues perception on that one. Uh on on packet page 83, you commented that the issue about reducing community greenhouse gas emissions, the 25 rating compared to 24 is similar. 25 being 20 2025 being 57 and 2024 being 60. Um, so I can see why you say that that's similar. That's within the margin of u of error. But I guess I'm I'm more concerned about the lack of any progress since the first date on here which is 2017. So um there hasn't been any increase since then and in fact there's been a decrease from higher years of 22 and 23. So I can't argue that your word similar there is correct for the column that it's in. But I'm just more concerned about what you're showing there in terms of community sort of interest awareness um thinking that these are important. It it looks like if you just take this raw data they they feel that it's less important now than they did back in um 22. consultant want to comment on that?

Um, can you tell me again which item you were looking at? I just I'm looking at packet page 83, the one that says rate how important if at all you think it is for the community to focus on these. Oh, so you're you're not speaking to a specific item, but to the all of the items. No, sorry. To reducing community greenhouse gas emissions.

Okay. So I I mean I guess you could say there's been there was an arc light arc up but they are not that dissimilar that like there was a high point in 2022 and 20 well I guess 2021 to 2023. 2018 is probably not statistically different than 2025 but it's a small arc up and then the down. But I think when you're thinking about importance, people are looking at all the things that are important to them. And so in a given year, that might be slightly less important. I don't think it's dropped dramatically in importance. I mean, I guess 68 to 57 if you were looking at

7 70 to 57 within uh 3 years. That's that's the one I'm looking at there. So I mean, the reason I br it up is because in a few days we're going to be talking about our overall priorities for the year. And one of them for the last about 10 or 15 years has been climate and climate action. And are we are we are we hearing that the residents are not as excited about it as a council is? Uh to sort of put it into a challenging question, but I guess you made your comment on that. Um, and then the issue regarding gas appliances, you know, I I think it's sort of stunning that with all the information that we are putting out and this in local news and even the federal news rated only at 17%. Um, that 30% of folks say that they're they're never giving up electricity, which isn't even overall the the direction of the city. and it's materially important um which that they need to figure out a way to finance as a way to to make a movement there. That is clearly the very tippy top of what would be an incentive and the city is quite aware of that. Um I'm not sure the public is aware of how big a number that is. So when we hear that we have to set a date in the next few days to shut off the gas. we just can't do that because we don't have all the the data figured out as to how we do that or how long it's going to take to finance this particularly in you know less less privileged uh neighborhoods in our in our town. So u just want to underscore that fact that the motivator for folks to really make this change here um is is in their pocketbook understandably because these things cost so much when you talk about furnace and hot water heater and uh stoves etc. [clears throat] Um uh then just for also for discussion purpose, I'll raise the question again as I did last year. Do we do we want

this every year? Um because we have a lot of this looks the same as last year almost identical. Uh and we're always kind of up in the same categories and our our our our marks relative to I won't say our peers, but the comparables that the staff put out there are usually the same as well. So every thing takes staff time and and money. So I just put that out there. Do we get enough in a given year to uh spend this much time on it? [clears throat] Thank you, Vice Mayor Stone.

Hey, Madame Mayor. Um, [clears throat] yeah, just while following up on Council Member Lowing's point there, I've I've always kind of felt that as well. Is it necessary that we do this every year? I'd be curious to learn more about the the cost and the burden on on staff. But my my question as far as just being able to because I do find the data helpful to be able to track changes just like council member Lowing just pointed out the the change over the last few years on um on the importance of I guess can't remember exactly the the wording greenhouse gas

thank you production. Um, and so I think that's that's fascinating, but if we were to be if we were to have this every other year, um, I guess are there other cities that that do that? I mean, how do you think that materially changes the way that we can use the data in that way or is by switching to every other year is that going to kind of give us the same um, or at least a similar lens to be able to kind of look at this? Um I would I would say that we do have uh we have communities who do both that do the survey every year and every two years and it's a lot about what you're feeding what data you're feeding into into your planning into your performance measurement um and how you're using it. And

vice mayor, just to add on to that, we as a city have at times gone to every other year and the council then asked us to move back to an annual survey. Um the cost of this is about 33,000. Um though that is the last year of our uh contract. So I'm not sure what the price increases would be uh subsequent to that completion. Well, just and just to put a little more context in and again many council members are familiar with this, but uh for those who might not be over time council has debated whether this is the right survey, other survey uh instruments might be used. It is a fairly long lengthy survey and as such uh vice mayor you led the effort to try to reduce it in in length which I think was a challenge. So uh ultimately we have what we have uh based on the uh discussion consensus of the council and I would be happy to modify that as you see fit.

Yeah. You didn't have to remind everybody of my efforts to reduce the length of the lengthy survey. Uh it was a challenging thing to to do. That's that's for sure. I' I'd be interested in the in in the conversation. $33,000 is not a huge cost if we're using the data in a way that's helpful. I mean, I always find this really helpful going into the retreat. So, I like the the timing of it. I try to use this data in informing me um of my kind of thoughts of of priorities moving forward. I And a couple things. I mean, I think on the sustain uh sustainability, this data is really helpful for me in saying just how we should be messaging it. I think we can need to continue to be leaders in leaders in this work and continuing to prioritize it in our in our annual plan. But I think clear if we're if we're kind of if we're messaging more on the kind of the the existential threat, the morality of of climate change, that might not be the most effective thing. I think we need to really kind of look at this more as a cost-saving tool, which it also is. Um, but then of course there's there's plenty too who are who are persuaded by um by just the doing what's right for the for the planet and future generations. But I think that can help in in that messaging. And then I was really concerned about the the data on what is it 55% think that PaloAlto is a good place to retire. I'd love to dive deeper into that to understand why that why that is and what we can do to make it a better place to retire whether that's mobility issues, services, cost of housing and the difficulty in in downsizing, etc. I think those are all things that would also better help inform as we move forward into the into

the retreat what type of housing policies we might be able to uh promote for for seniors and those who wish to um to retire in PaloAlto as well as other things. So I think that was helpful. Um I'd like to learn more about it in the in the future. So thank you council member Rectal.

Okay. Yeah, when council member Lowing mentioned every other year, would that be a savings of money? And I thought, oh, that makes sense. Saves it. It is kind of repetitive. But for for 33k, it's probably worth it because you can see trends quicker. If it's every other year and we saw something change, you say, oh, is that just a blip in the data whereas if you have three years in a row, you can see a trend. And I think that's probably worth the 33,000. It's not that much. Um, okay. Overall, uh, this is a really good survey. I think it's well done. A lot of work went into it. I appreciate the work. Thank you. Uh, my biggest complaint is that this is kind of a a core dump. A whole bunch of data and it it's not actionable. A lot of it is you don't know exactly why things are happening. And so, for example, uh, when they talked about low connections, citywide, we have a low connection. And that's one of the areas where we're not head and shoulders above people. And why is that? And there's two areas, you know, one of them being community center in Crescent Park, New has a higher and south pelto has hire. And is South Palto has both Iller and Green meadow pools there. That's acts as kind of a community focus. And is that why those areas are higher? I don't know. And so now if you're trying to make it actionable, say, well, these we have two areas that are high and four areas that are lower. What can we as council people do? And I think it's really difficult to figure that out. Uh Sony, [clears throat] do you have any insight into how we can tease out the reasons for some of these scores?

I mean, I would agree that it's a little harder to tease out the reasons from a broad survey where you're measuring the trends. I mean, it's it's much more your like highlighting areas to dig deeper into. I I think that sometimes in a community when you when people see a lower mark or a higher mark, they go, "Oh, I know why that happened." I mean, when you were talking about some of the trust scores you're like or the um informing your residents, you know, immediately you thought of there were things that we implemented, right, that moved the needle on that. So, what I would say is with most of our folks that if there's some specific areas you need to dig deeper into, um, you can use PCO to do that. It's included in that $33,000 that we um for anyone who's who has subscribed to your PCO profile, they can we can ask them additional questions. So that would be I think the thing and and again it's included in your um in your subscription to using to the annual survey. So that's something that we have a customer success manager that can work with you to do some like short kind of more topical surveys and those ones are not going to be probably like we're not going to spend that kind of money and time and all of that but we're going to do some outreach with the community with your through your channels. we're going to use whoever subscribed to PCO and we can get some context. Again, it won't be necessarily statistically representative, but when you're trying to deep dive on like you said you won't buy an electric appliance, why? You know, like those are the questions that that are just helpful to kind of have that sort of more robust not focus group, but like dig into the community, ask for like what are the reasons behind a yes or a no or a high mark or a low mark and and just get a little bit more information that way.

Um, I think to I know the other council members were speaking about there's some data that you could maybe just compare that you have some, you know, like we always say like sometimes some communities get really low marks for crime prevention when they're actually really safe and have low crime and then it's really just thinking about like what is that perception and where does that perception come from? Um, talking to the community further about what that might be.

Okay, thank you. Uh yeah, another case is health and wellness opportunities uh uniform over the whole city. We don't have good scores on that and health and wellness that's kind of a broad is that talking about you know they want it more bikable they want it more walkable is it they want a city gym uh you know what do they or you know we have good parks and recck scores I don't think it's that

but so more insight into why we have these lower health and wellness opportunity scores would be useful. Uh and then finally there's uh one area of town that uh or two areas of town that have overall quality of life their scores were lower and one of them was dissatisfied got very poor scores about making all residents feel welcome and attracting people from diverse backgrounds and what I don't know is are those people from diverse backgrounds and not feeling welcome or is what's the situation and so more poking into that I think would be very useful because when you see an concentrated low scores. That's that's just begging for help. So, okay. Thank you,

Council Member Bert.

Thank you. Um, so I want to follow up on some things some of my colleagues had raised. Um, one on the um, uh, the issue of the sustainability and electrification programs. Um, I I found it really interesting that health and safety scored. so high but um we really don't have and we didn't differentiate health versus safety. So out of those responses, what portion of the people are worried about gas explosions versus living uh and having their children live with methane? And I suspect that uh as of right now, the concern is still safety. Uh but the way the dial can be moved is once they're educated on the health. and Hillary Gans had Glance had um uh spoken about kind of these reasons that they've she's heard people be angry. The one that I've heard the most is from parents who are angry that they did not know they were exposing their children to a significant health risk particularly from asthma. And [clears throat] um so I think in addition to the others, that's it's a um uh it's a very significant way that I think that we we will be able to bring on a lot more members of the community who already say, "Look, I care about climate change. I want to do something, but am I going to move on that right away on replacing appliances?" And this, I think, will tip the scale. So, uh, reorienting our communications programs around really highlighting that I think is a, uh, maybe one of the most valuable outcomes of this survey this year. Um and then um I noted on um I think it's packet

page 43 they ask about public transportation and the numbers have climbed in recent years but they're way down from 2012 to 2014 which made me kind of ponder as to why that might be. Um I also saw that um the congestion was higher in that previous period and is lower now. And I think that's one of the factors that causes people to appreciate transit more. But then they had a question on have you used public transit in the last year and it was a surprisingly high excuse me around 50%. Um so um I I think that one of the things is to make the public again more aware of what's available in transit. And I I you know we have our VTA bus lines down El Camino and Middlefield and whatnot. We have the Cal Train electrification which most people have heard about and treated very favorably. What we lost was a public shuttle system a half dozen years ago that I think had more perception of value than wrership. What we have today is a public bus free public bus system far exceeding what we had from our PaloAlto uh shuttle and that is the Margarit system and VTA promotes that on their website and links it and overlays it. We don't we as a city have just continued to not embrace uh the Margarite roots and its availability to all members of the public for free. Uh virtually fully electrified, the most advanced electrification system in the in the uh country as well for a public bus system, but it is a public bus system. So, I

think that's one big opportunity that doesn't cost us a million dollars a year to provide those buses. It's just promoting it on their behalf and with our appreciation. Um, I also um saw under cost of living um you know, we're we we have the possibility of of having some marginal impacts there, but we're we're not going to become an inexpensive or even a moderately expensive housing community. We are striving to have more uh subsidized housing and more housing, but it's not going to make our market rate housing truly affordable. U but in terms of the community perception of the cost of living here, I've had friends who have moved from PaloAlto to Redwood City or other PG& locations and they finally are shocked at their electric bills and say, "I'm paying double." Yeah, that's what we tried to tell you. Um, and that is a true cost of living and it's also a cost of doing business and we don't really promote our exceptionally low electricity cost as a lower cost of living aspect in PaloAlto and it doesn't um counterbalance our housing cost but it's not insignificant. So I think we need to promote that more on the fiber. Um it is interesting that we are down uh compared to national averages that's one of our weaker areas. It's gotten a little better and it makes me wonder and I don't think I don't know if we know how how the um the uh incumbent providers the commercial providers have expanded services or reduced rates in the last year or two in part at least in response to us coming forward with our plan for fiber

to the premise. One of the things that struck me most of all 10 years or so ago when we looked at this was that at that time and it's changed a little bit since but if you had one provider you paid through the nose as a community. If there were two providers you paid a all our residents paid modestly less. If there were three providers the prices became really competitive. And that was the most powerful point for me for us doing fiber to the premise was in fact how much it would drive down the private providers prices. So I just want to make sure everybody's bearing that on mind. And um oh I I just one last thing on the housing. I saw that um 20% have it as the highest priority. I think that I actually construe that to be predominantly that they those are people who say more housing is their highest priority. Um interestingly that was 30% of the 18 to 34 year olds. And then fascinatingly and that's not surprising um but that same group had the highest prior desire or priority for public safety and that surprised me. Wouldn't we all assume it's elderly people who are most worried or whatever? So, I just want to note that um as we ponder the implications of these things.

Thank you, Council Member Liths.

Thank you, Madame Mayor. Um just a few further questions on sampling um because I ran out of time before. I don't know if this is a PCO question or a staff question. Are we the ones that have determined areas 1 through six, the geographical boundaries of those? Here's why I'm asking. Area six is a lot bigger than the others and they turn out to be under reppresented in the survey responses. So I'm curious about why area six is so big and um what we might be able to do to increase their response rate. We do. So, council member Laynes, uh we do

we did or we did we should say we did um do the area district boundary many years ago and uh for consistency they have remained the same for comparability between years. Correct.

Okay. Um, what I'm seeing is that 26% of the city lives there, but they only had a 13% response rate compared to the average of 16 and a high of 23 um, in area 1. And it just makes me worry that we're not getting that there's a whole lot of people there and they're not participating in the survey. Why is that? What's going on? And how can we better engage? I guess that's my that's my takeaway from that. Um, also I noted that people aged 55 and over, a group in which I count myself a member, um, are 42% of our population, but we're 69% of respondents. And so, as Council Member Bert said, we, you know, might expect that older people have certain opinions and concerns about this and that, and they do. And I think we ought to be just as concerned about those who are younger, those who are almost by definition newer, unless they grew up here. Um, so what what can we do to try to ensure that, you know, in the coming years that we don't have to wait the results because we're getting the kinds of response rates we would hope to get from each of these um slices of the population. It's about outreach, I guess, and awareness. Well, uh, I was going to ask if Sonia might want to, uh, give us her perspective on both those accounts in terms of geographic under representation and demographic under reppresentation. Any thoughts to share?

Um, yeah, I think that I I don't know the breakdowns of the demographics by those areas. I don't know that there are um we might be able to actually like work from block level um census data and and look at that to see if there is a strong difference um and then think through how to tackle that. Um so if understanding who's there and what the different um issues might be that are barriers to inclusion in the survey um or not inclusion but participation um in terms of older adults responding in larger quantities than younger that happens absolutely everywhere and certainly we want to build up the younger but um just to say that we're probably always going to be waiting because they are always going to be out of proportion. but improving that proportion I think is a realistic goal. Um, and it's really it's a it's a very challenging thing. Um, but it's really about outreach

and trying, you know, trying to have more channels that we communicate through. It's still, as I said, going to be lower on the younger folks. Yeah. Um we also over sample uh rent um multif family units that we feel are more likely to be rentals because we know those those folks respond in lower numbers. So we're trying to compensate for that. But um we can look at some sampling that is less random honestly. Um but then that does change the way that we've done things in the past and it does change could change some

you can change tone lines. Having said that, every once in a while it's good to consider what you've been doing particularly. I would say if those areas um are not making sense or could be modified then you know it does it does put a little extra on your trend line for sure. Yeah. But um in terms of representative of the whole city it's wouldn't because we would still be able to wait to

Thank you. Um I'll turn to staff now. I just have a few uh seconds left. I I had hoped to ask you what your insights are. We haven't really u heard that. Love to know what surprised you and what you were happy to see and what you were disappointed to see and what do you think uh you'd like to do about it.

Thank you, council member. That is a very broad question. Um I think ultimately each director takes this under advisement as they are looking at the performance of the different lines of service that they provide as they're looking at um both perception as well as the realities of what's going on uh and impacting also ultimately budget decisions and resource allocation um choices as they're moving through this. I think as a management team, we're looking at those macro trends. Um, so things like uh I think it was council member Lowing who noted that there's a positive trend when it comes to government transparency are things that we're looking at uh and are happy to see shall I say uh as we've been working towards greater accountability and um transparency with the community as we move through uh the government process. I would just say at the top line which is good news overall u much uh uh more positive to the extent that that's a right way to describe it uh it was certainly positive to start with but even more positive uh responses this year versus last and uh in our uh debriefing with Sonia asked if this was something they were seeing in other communities and the answer was no. So I think we should take great pride in uh that uh uh positive trend.

Thank you for that. I'll just close by saying I'm year over year have tried to approach this through a lens of belonging. Who are we hearing from and who are we not? Who is not participating in the survey when they receive it and why? Whose opinions are we, you know, underounting because they don't even know about this. Um, I know when I got a lot more involved in the city, I learned, you know, oodles and oodles more about this city than I had ever known before. And I thought I knew a lot. And it's given me, um, you know, a glimpse into the fact that we have our people who are highly engaged and who know about every event and every opportunity. And there are people who are barely engaged. And um, and then there's probably a huge swath in the middle. And as our demographics change and people start to come in response to the multif family housing we're building, it's going to be critical for us to figure out how do you inform somebody about the various ways in which your your city is going to be speaking to you and offering you information and seeking your input. Because if we don't figure that out, we're going to continue to hear from those we continue to hear from. and that is going to be, you know, increasingly be demographically skewed. So, I think it's going to take some creativity to figure out how to ensure that newcomers are getting information and are responding to our requests for information at the same um in higher levels. That's it for me. Thank you.

Thank you, colleagues. And I'll just try to bring this home. Um I think that was a great question, that last question you asked. um because I am super curious how staff reacts. Um so and I do appreciate the context of the good news uh and and increasingly good news. Um but I think uh assistant city manager you mentioned the department heads are looking at it and I don't know you know if and how and when's the best way but I would be fascinated if they had certain reactions to it that were would inform us even on some of our priority setting. um you know when we got the uh 2025 report recently if they had had a chance I don't know if the results were back to to to to bake in that that they thought that was surprising or I don't know at some point I would be just curious because you all live this dayto-day and um you know things that we might want to see change or or improve or you know it would it would just be interesting to me to also hear that if there were a mechanism

[gasps]

Um, so just just two points I want to address. The first is this. How often do we do this? And now that we know we can follow up, should we? Because that's that's really really interesting to me. Um because I when I looked at, for example, the um the lower responses about um PaloAlto being a place people want to retire, for example, I instantly thought why is it lack of senior housing? Is it cost of living on a fixed income? Is it grandkids or elsewhere? Like what what is it? And we don't know. So it's hard to address it if we don't know the why. So, you know, so I thought, well, maybe we should do it every other year to save money and spend some of that savings on increasing the number of languages in the survey, worrying about the underrepresented uh regions, zones, um, and saving a little back to, uh, drill down on follow-up questions. Um it's it's but then I I actually think uh council member React Doll had a good point about being able to see the trends because just any one year that snapshot is is sometimes hard to know you know if if it's aberant. Um so I wonder [laughter] channeling the vice mayor here if there's any way to to to shrink it further. I I have not put thought into that, but to what do we really care about and then follow up on the why because in so many instances I just wondered why. And I wonder if that would actually get us to have sort of increased bang for the buck in that we really understood the answers better and we could have more confidence in those answers and what are they telling us? Is it health or safety or both? You know, those are great questions. Um, so again, I don't know the right venue or forum to think about that, but perhaps staff could could

think about th those kinds of options going forward. Um, actually, let me ask you, are there ways to how might you think we uh think through that? we might um u want to test out the value in uh a few uh drill downs and your discussion this evening has given us some good leads. Uh I think our our concern may be that as uh Sonia pointed out wouldn't be the the why responses may not be statistically significant. So I think it it raises the question whether it's purely anecdotal and you know what we would do with that and also understanding the um the as she mentioned the uh the audience in this case would be those who registered uh or subscribed with Poco which is a fraction of the respondents uh that we have and so that uh for that reason I think we'd want to test out uh the um value of uh some drill downs Yeah, thank you. That makes good sense. I had not realized that, you know, it was just the fraction that we would have access to for the follow-up. So, yes, if it's not significant significantly, you know what I'm saying? Statistically significant, um, then we wouldn't have the increased confidence that I'm seeking. So, but if there were a way to get that, it'd be very interesting. So, testing it out is of interest to me. Um, I wanted to just speak briefly about the uh the questions about electric appliances. Um, for example, even the one on uh asking people about uh if they care about saving money through re rebates. I kind of wish it had just been saving money because we're exploring right now all kinds of different ways to help them save money and it may not be through rebates. It may be through other means. So, you know, there's one where

just maybe less specificity would be helpful. Um, and just quickly on the the health uh and uh climate issues that we've been discussing and hearing comment on. Um, you know, it looks like they're basically the same within the error rates. I think it was a roughly 2% error rate and one's 37 and one's 35. But it's good news um that those are both levers we can push. Some of them will be overlapping in some people and some will just respond to one or the other. And uh you know I think the good news for the community is that we agree with you that we ought to not ignore the health lever and we have been talking about that as Pat me sorry as council member Bert mentioned uh last time uh in our committee meetings. Um, and I will say, uh, I sat on a a health and climate panel at the Silicon Valley Youth Climate Action Summit in August, and I was the only non-f physician on that panel. And our thesis was the whole premise for the panel was what a strong motivator health issues are. Um, and so then we shared different ways of communicating that. And, um, you know, it's a challenge. you got to get people's attention, but you can talk about everything from um dollars of health savings um and lives saved. That's what we do with respect to our appliance rules at the air district and we're struggling for better ways there too. Um but I do think that you know instead of picking one that we ought to do both. Um but I also just one last point um I think we ought to include in that messaging that it's not just the fuel it's the food and we can take this up in in uh in committee more specifically but you know food and manner of cooking whether you're using oils or this or that. there's a lot more there's other emissions like particulate matter and things and so if we're going to educate we ought to educate about health on both and there's different things that will

attract people into thinking about this and so I think um we can we can pursue all of that uh this coming year um all right council member you're not going to let me bring it home huh all right last comment

okay thanks um I just want to underscore something that just came up at the dis um connected What I was also going to say, um, this is just a really well-designed survey. It's just rock solid scientifically and the idea of, you know, forcing the waiting is absolutely the right methodology to do to make it literally more accurate. Um, so I'm impressed with that upfront. So the comfort level coming out the back that we're going to get statistical significance is only critical. That's that's what we need is the data here. And a lot of folks when they see surveys say well you know political surveys or whatever there only four 400 574 people answered this thing. We have 65,000 people in our city. The statistical significance of the sampling is what's critical there. And how you manage that I think you know should give us you know a lot of a lot of comfort level. Um but that said you know there are 65,000 other people that didn't weigh in on this. Um and some of them that didn't answer the survey. So, I I think I have a high comfort level with what you're talking about. That said, of course, I' I'd rather have a 5,000 sample size and 4,000 people answer uh to let us know, you know, what they're really talking about, but that's not how surveys work. So, um thanks for the methodology and and I think that we've got, you know, solid scientific answers here.

Thank you for that. All right, seeing no further requests to speak, we will close this item with our thanks to our our survey giver and our staff uh for facilitating that and for the presentation tonight. Thank you. We will move on to the consent calendar items 3 through 10. Madame clerk, do we have any public comment on the consent calendar? No. No requests to speak and no hands are raised on Zoom. All right, so we'll close public comment on consent. Uh, colleagues, any uh any Well, we do have a light. Is that an old light? That's a new light. Okay. Council member Lith. Thank you, Madame Mayor. I'm registering a no vote on item 10.

Okay. Any other no votes or request to pull. Seeing none, we can move to a vote on the consent calendar. Right. I'll move the consent calendar. I got so ahead of myself. Who moved first? Was that council member Recall beat? Vice Mayor. Yeah, the vice mayor says he beat you by a hair. So motion by Vice Mayor Stone, second by Council Member Rectal. Thank you both.

I just eager. [laughter] Council member Lowing, yes. Council member Rectal, yes. Council member Lou, yes. Mayor Vinker, yes. Council member Bert, yes. Council member Lithmes, yes. Vice Mayor Stone, yes. Motion carries. Thank you, Madame Clerk. And yes, as the vice mayor just pointed out, we are right on time. So, we'll move uh to city manager comments. Oh, I'm so sorry. I

No worries. Um if I could just state why I voted no on item 10. This is for those who aren't familiar, our dark sky ordinance, uh the second reading of it. I voted no the first time around and feel compelled to continue to vote no. My concern here is that we in an attempt to darken the skies for the sake of birds and humans and other wildlife have worked really hard to come up with um a set of regulations we feel good about. And yet we've carved out an exception called the Edgewood exception for uh about 50 or 60 homes um whose backyards front on San Francisco Creek with their neighbor over the creek in East PaloAlto. The neighbors over the creek uh bordery are those in East Palo Alto. And I just don't understand why we allowed it. And I'm worried that we are codifying bias and stereotype. Not saying anyone's intending to do that, but I just feel that the exception uh that the request for an exception was not borne out by data from our own Palo Alto Police Department about relative safety of those neighborhoods versus others. Uh so that is why I'm voting no. Thank you.

Thank you, colleague. Now, city manager.

Yes. Thank you, mayor, members of the council. assistance from the city clerk with just a couple of slides or a few slides here. Next slide, please. Uh did want and primarily on calendar issues. Uh want to ensure that community members are aware that the city is putting together an open house on the topic of oversized vehicle parking uh throughout Palo Alto. This is certainly an issue of concern and interest for uh many members of the community and uh so we have put together this uh open house in order to have a variety of topics related topics uh open for discussion uh for information sharing as well as to obtain feedback from community members. So this would be on uh Tuesday, January 27th, next Tuesday, 6 p.m. at the Mitchell Park Community Center. uh and additional information on our website as noted here. Next slide please. Also uh for your calendars uh those who uh perhaps are either in the know or would like to get in the know of city business opportunity to volunteer for our boards, commissions, and committees is ongoing. The application period closes on Wednesday, February 18th. So you do have some time to uh consider and then put your application in. As the council is well aware, uh that will then be followed by uh review by the city council, interviews and selection. We have uh several of our commissions uh and committees that uh have openings and uh so certainly encourage community members to look at our website palto.gov/bccre. Next slide please. Then also coming up is the uh Lunar New Year uh celebrations. Uh two of note uh produced directly by the city or

co-sponsored. Here uh we've got the uh libraries uh uh annual event on Sunday, January 25th that is with the location not shown. I think it's at the Rinkanata Library. So uh check our city web uh site city calendar to confirm, but I believe that is at the Rinkanata Library on Sunday, January 25th. And then at the uh uh Mitchell Park Community Center on Sunday, February 22nd is the big annual event uh celebrating the year of the horse. Uh and uh more details to come. So save the date. More details to come. Next slide, please. And then finally, uh looking forward to the city council's uh calendar. This Saturday, you have your uh council retreat on setting priorities. There is no meeting next Monday. That's the 26th. And then the following meeting of the city council will then occur on February 2nd of number of items here. Study sessions on proposed development at Town and Country and 44 Incena as well as uh this uh review of the 2026 board and commission work plans. This is an item that was pulled from consent uh prior to the end of the last calendar year. and then uh an climate action related item on the uh reliability strategic plan and two-year work plan. Then February 9th uh we have action items related to weed abatement and the coverly project. Uh that is a change. I think we had previously shown that as February 2nd, but that is now scheduled for February 9th. And then as shown here, we have items uh planned on February 23rd and then uh the following meeting will be March 2nd and uh items noted for upcoming agendas from there. With that,

Meritt, that completes uh my report. Back to you. All right. Thank you, city manager. Um we will now take our break and we are 9 minutes ahead of schedule. So we will come back uh in 15 minutes which is 752 we'll give ourselves. So anyway so let's say 7:55 a little bit before 8:00 we'll be back folks. Thank you very much.

Okay, I'm going to call back to order our tonight's meeting. And we are now at our action items. Uh starting with item 11, the 2026 state and federal legislative guidelines and utility policy guidelines and an update on legislative advocacy. So with that, I will turn it over to the clerk, our our assistant clerk, um, Miss Prior.

Good evening. Thank you. Um so as you mentioned tonight we are reviewing the um annual legislative guidelines and also receiving an update from our um legislative consultants Thompson public affairs and um having an opportunity for the city council to provide um input on the guidelines and any uh legislative issues they'd like to. Next slide please. So, our recommendation is that the council approve the 2026 state and federal legislative guidelines and the 2026 utility legislative policy guidelines and then receive an update and provide feedback on recent and upcoming federal and state legislative and regulatory activities. And our goal for this presentation will be to keep it fairly high level and brief. So there will be lots of time um for the council to ask questions and provide some input. Next, please. So as background, the legislative guidelines are a framework that staff uses in consultation with uh Townsen, our consultants, the mayor, and the chair of the policy and services committee to respond to legislative issues. As you're all aware, the um legislative landscape moves very very quickly and is quite fluid and there is not always enough time to come to the city council um for feedback and approval on every little issue. And that is why um the city established legislative guidelines to guide the work that staff does. And then um if there are significant issues that um are maybe more controversial, staff does occasionally come to city council to get city council's uh feedback on those issues.

This item is your annual review. The policy and services committee reviewed the guidelines in November um and recommended a few changes this year. uh unlike last year and most previous years, we are bringing both the state and federal guidelines and the utilities legislative guidelines to you. So you can see the full portfolio of our legislative um policies. The legisl the utilities guidelines um generally are not reviewed annually by city council. They are reviewed every year by staff and if there are changes they go to the utilities advisory committee and then to city council. Next slide, please. So, in addition to the redlinined um guidelines that are included in the packet, we did want to raise out a few points that um have come up since policy and services reviewed the guidelines last fall. Just kind of to uh have an example of how quickly things change in the legislative landscape. These are issues that were identified by staff since the review. We wanted to flag them for the council's awareness. They are raising the cap for local sales tax increments, preserving publiclyowned utilities investments in hydro power beyond 2030, regulating the use of ebikes and emotives, streamlining the process for developing affordable housing on city-owned land, and preserving local permitting and zoning requirements for telecommunications infrastructure. And with that, I will turn it over to Carly Shelby and Alex Gibbs from Towns and Public Affairs for an update.

Great. Um, thank you and good evening, honorable mayor, vice mayor, members of the city council, Carllin Shelby with Towns and Public Affairs. I'm a deputy director. I'm joined here with um, Alex Gibbs who can answer all of your burning questions about funding advocacy. U, we can go to the next slide. So just as a brief overview of this presentation and we'll keep it very high level. We want to get into some key uh state legislative items for the 2026 legislative session which has just kicked off. We have a highle overview of where things stand on the state budget, a federal appropriations update and then an overview of grant funding efforts which Alex will cover. Uh next slide please. So getting into some key state legislative items for 2026. I do want to mention that um Christine just covered some of these, but ebike safety reforms are very hot topic this year. Um the city actually signed on to a coalition letter requesting that there be anformational hearing held at the state level um on a recently released report from the Manetta Institute of Transportation on policy and safety recommendations um both at the statutory and regul regulatory level um and kind of how the the state legislature can effectuate those. Um, so that is one of many proposals emanating from the legislature right now. I think there's probably five or six authors with varying proposals that hold recommendations from that report that are moving forward. Uh, but we're really eager to see this move forward given that there really are a lack of, you know, recommendations and direction in this policy sphere. Um, affordable housing delivery is another key component. Obviously, we'll have things like um a $10 billion statewide housing bond proposal, which we're hoping can include things that would benefit the city of Palo Alto, like the local housing trust fund dollars, which would directly benefit, um your guys' local housing trust. Um we have the

sales tax cap exemption legislation, um which approved by voters could deliver key, um services like the Coverly Project to the city. We know that that is a priority um and that is in the works. Um, in addition to that, we have SB79, which I know was a a hot topic last legislative session. Turns out that, you know, there are some drafting inconsistencies in terms of how this can actively be um implemented by local governments. So, we'll need to revisit that. Potentially implementation delays, uh, more clarity surrounding what HCD's role is in all of this, which counties it specifically applies to, etc. But that's very much in flux right now. Um and then we have state uh you know new leadership changes and um upcoming administrative changes too. Obviously um Governor Gavin Newsome only has one more year left and we'll have some major changes coming um following that along with a new Senate prom and new committee chairs. Um next slide please. So just getting into a highlevel overview of what we're anticipating from the state budget this year. Um, back in November, the legislative analyst office projected that we would have to cover an $18 billion projected deficit. Um, the governor's budget, as produced by the Department of Finance, estimates that that shortfall is only $2.9 billion, which is um a lot more rosier of a picture than we were anticipating, which is good. Um, as per usual with this administration, there's no new funding for housing or homelessness pro programs. Um this is usually utilized as kind of a bargaining uh standpoint as we enter into negotiations over the next couple of months. Um so we'll see how this plays out, but we're very actively working within local government um stakeholder coalitions to push for that funding to be included. Um in addition

to this, we have more Proposition 4 climate bond funding rolling out um within this budget cycle and you know through discretionary funds and also um making its way through agency channels with notices of funding um obligations coming through. Um we also have local exposure to federal cost shifts. We saw major changes to the continuum of care no foe um federal emergency housing vouchers and other things that may have been somewhat rectified in the recent TUD bill that was released a couple days ago but nonetheless um there are a number of cautious that that local governments are exposed to. Um we're anticipating early action budget items in the next couple of weeks. Um this is likely to include um some of the terms that in are incorporated in the Bay Area transit operations loan which we hope is figured out between the administration um and with some of our transit service providers. Um and then of course negotiations and budget committees are to follow over the next couple weeks. We had our first um budget committee hearing today and then our next major milestone will be during the May revision. So, we look forward to um meeting with your staff, finding um good projects to submit to our legislators if budget opportunities arise. Uh next slide, please. Getting into federal appropriations. I actually sent an email earlier today with some very positive news, and that is that our fire station for earark, which I think has been in the process now for about 3 years because we had some um layover with the last uh federal appropriations process, which was essentially wiped clean. and then we resubmitted. Um, but they just released the text of the transit and housing and urban development um, bill which includes our fire station number four project in the amount of $850,000 submitted by Representative Licardo. Um, that is awaiting final House and Senate approval which we anticipate within the next week or so. Um, so we're hopeful

that that money will be in your hands soon and then we can move on to new projects. Um but most of the remaining discretionary funding is included in those. So we'll see some movement um on those in the next couple weeks. So we're really excited about that. And then I'm going to turn it over to my colleague Alex to just discuss the um scope of grant funding efforts. We can go to the next slide.

Great. Thank you. Um mayor, vice mayor, members of the council. My name is Alex Gibbs. I'm the grants director at Towns and Public Affairs. I work closely with your staff on all grant funding efforts. Um in front of you, you'll see a slide that covers the grants submitted over the last calendar year. Once again, this is just a highle overview of a number of awards that were submitted on your behalf um including the $2.8 million award from the Metropolitan Transportation Commission uh for electric vehicle charging infrastructure in and around the city. um that was submitted at the beginning of 25 and it was funded um about halfway through the year. In addition to that, there's also a $4 million award that's currently listed as pending uh as we await FEMA's decision on upcoming safer awards. Um in addition to this, I've got some upcoming grant funding opportunities that your staff are already taking a look at and are planning to apply for awards. The police department is interested in the office of traffic safety as well as cannabis tax fund grant program for ongoing staff time and operations. Those will be submitted over the next month. Uh this is the year for the statewide parks program as funded through Prop 4. That's a rather large portion of park funding dollars that could be allocated in amounts up to 8.5 million with no matching funds required. We're currently working with your staff to identify potential park parcels that could be competitive for one of those grant applications. In addition to that, the state and local cyber security grant program is now open and accepting applications. This program uh would allow for additional uh safeguards to cyber attacks for municipalities, including things like uh firewalls, penetration testing, etc. Um, and then finally, one that's currently being considered is the Tennis Venue Services Grant through the US Tennis Association. Uh, this is the US Tennis Association attempting to beat back the scourge of pickle ball by offering incentives for

the resurfacing and/or lighting of pure tennis courts. Uh, my understanding is that there are some tennis courts in the city that um could use those dollars. So, that is something that we're currently uh working on and investigating in. Uh, not to upset any pickle ball players out there, there is also the US Pickle Ball Association grant that is on our radar. Don't worry, we're looking into that one as well. With that, uh, now that I've gotten myself in trouble, I will hand it back to Carly. [laughter] And that concludes our presentation. We can go to the next slide, but you know, looking forward to answering your questions and thank you for your time. [snorts]

Good evening, council members. Lisa Balier, assistant director of utilities resource management. And I'm going to briefly go over two slides on the utilities work on legislative and regulatory matters. I do have Dr. Lena Perkins and Riley Yalian [snorts]

uh joining via Zoom to um assist in the Q&A. So the first slide provides an overview of some highlights on the state and federal side. This is really a slide that's for your reference and I'm not going to go through each of these, but I will highlight that the new calculations for the cap and invest um from the California Air Resources Board are expected to be some of the most impactful to the utility and staff [snorts] are heavily engaged there. The next slide, please. The next slide uh lists the groups that we monitor [clears throat] or work with to jointly advocate for our positions. The city has unique policy positions within utilities that require careful engagement on bills and regulations. And Mayor Vinker together with utilities director Alan Curatori and staff has played an instrumental role in engaging state and federal lawmakers to advocate for affordable, reliable, and safe energy and water. And with that, I'm going to turn it over to Christine to conclude the presentation.

Thank you, Lisa. So just to um show you the recommendation again, it is to approve both sets of polic of legislative guidelines and then provide any uh feedback or ask any questions you have about the legislative program for 2026. And that concludes our presentation. Thank you. Mayor, if I might just uh exert one point of personal privilege here, which I had uh neglected to uh I think point out as I typically would in the presentation. You heard Miss Shelby note that she has a new title, deputy director with Townsen. Uh we also have Miss Belier who has a new title of assistant director in utilities. Uh taking the position previously held by Carla Daly, uh who many of you uh know well and have worked with over the years. So really pleased uh to see our uh upandcomers uh taking new positions uh of leadership uh with our organization. So with that, back to you, mayor.

Thank you and thank you for pointing that out and congratulations to both of you. And I think our city clerk was promoted not that long ago, too, our assistant city clerk. So we have everybody getting experience and moving up and we're grateful for that. So including me. [laughter] Yay. Yay us. Um so anyway, no thank you for the report. Um really appreciate it. Just uh since this came out of uh PNS and I used [clears throat] to chair that um I just want to mention um that you know when we think about the guidelines here uh this is also this is the second year that this same group of council members we seven have looked at the guidelines and it's also the second year of a two-year session so in the legislature. So, there are some two-year bills and things. So, that kind of continuity with this group and the uh the bills in the legislature, I think, is reflected in the degree that much of the document is the same and that we're really just updating it. Um, I'm very very grateful uh about to now include the utilities legislative update um because I do think it's really important to triangulate um the city's efforts and we do advocate we do legislative advocacy in both the state and federal level um you know both with the utilities and with the rest of the city. So I'm grateful that we can see it as sort of one whole. In fact, I'm going to Sacramento tomorrow with the Northern California Power Agency. And so, um, and then on Monday, they have a a capital day, uh, that our, uh, our utilities, uh, chair is going to attend. So, um, I did though preliminarily, just to clarify, I wanted to ask a couple of, uh, quick questions of staff before, uh, turning it to my colleagues for

questions. Um, so the the the the red um the red line, is that all of the changes since last year or what what exactly does that represent? The red line are the changes recommended by staff and the policy and services committee. Okay. So it's it's it's sort of the totality of them because I know some were brought in and then we had some comments and so this is updated after the PNS. Okay. Yes. Is what you saw in PNS updated to include PNS's recommendation?

Okay, that's helpful because I was a little confused by the and so my second question goes to I was a little confused by the slide three the additional legislative topics. It talks about as it did in the staff report issues identified after PNS, but um I know we talked about ebikes there. So, I don't know. I'm just trying to reconcile that.

Thank you. Good evening, Shantel Okotten Gaines, deputy city manager. Uh, we had subsequent conversations with our staff after the PNS agenda as they have heard about issues that may be coming up more. So, I know that we spoke about ebikes at PNS and that that was an interest area. Uh further discussion with staff showed that they may really want to have a more active deeper um interest in these particular topics that were listed. Ebikes being one of them. We don't think it's yet to the point of sponsoring legislation, but these are some of the topics where if there is a bill, we would maybe want to really uh affix the city's name to it in particular on those topics. So, uh, ebikes is one that sort of we talked about at the committee, but I think the staff also wanted to sort of emphasize that there's interest in digging a lot deeper on that one. And so, that probably is, uh, slightly aside from the other topics listed there.

I see. So, it's not a new topic necessarily. It's a more emphasized Yes. recommendation at this point. Okay. Great. Exactly. And um somewhat similarly, the second bullet, preserving publicly owned utilities investments in hydro power uh beyond 2030, I think that is AB34 that we worked on last year and are working on just now, but I want to confirm because that's something I think that's been in the I I don't think it's new. Unless there is something new I don't know about, I'd like to. So it looks like Dr. Perkins is here. Oh, there we go.

Yeah. Yeah, you're correct, mayor, that this is something we worked on last year and and it is referring to AB34. So, I understand that's a bit confusing the phrasing there. No, that's fine. It's just uh the Okay. Well, it sounded like these were new topics and so they both were ones that I thought I knew about. So, uh helpful. Okay.

And on that one, if I can offer one more thing is that was part of another bill last session and this time we're asking for it to be sponsored again. And so that is one where the city isn't officially the sponsor of that bill or the co-sponsor on it, but we are the reason the bill is going forward. So we really just wanted to elevate that knowing that the city council has an interest in making sure if our name is the primary sponsor of a bill or highly elevated in a piece of legislation that that's something the entire council is fully aware of.

Okay. So now I'm confused. So we have five bullets here and the first two I've asked when I saw additional I thought they were additional like new but these two are just ones that are there for emphasis. So are all five there for emphasis? I'm just trying to understand which we should really be asking for new information on. A very good question for clarification. Um I I think the other three items do not fall in the same bucket. Um so that that piece of legislation that um Lena just described has to do with the bill that we were asking for continue work on and so we wanted to elevate that because we didn't expressly uh have that as a sponsored bill.

Yeah.

So yes, clarification on that one and ebikes. The other topics we have staff that can further uh describe, but these are not ones that were discussed at the policy and services committee related to raising the cap for local sales tax increments, which is something that would be beneficial to us as we're looking at the November 2026 ballot. The other one, which is streamlining the process for developing affordable housing on city-owned land. Um we have some folks here from our attorney's office who can speak to that a little bit as well. And then the last one, preserving local permitting and zoning requirements for telecommunications infrastructure. Uh that relates to some of the regulations that are going through the federal FCC right now. And we have been very actively involved in that conversation. And so that's a little bit net new information since PNS. So three of five completely net new, but we did not want to lose the other two since there had been some movement on those two since PNS.

Yeah. Okay. That's great. that's just helpful in terms of my colleagues knowing what didn't and didn't didn't go through uh PNS discussion. So, thank you very much. Um, so those were my clarifying questions. Are there any other clarifying questions before we go to public comment? Seeing none, Madame Clerk, do we have any public com We've cleared the chambers pretty much. No request to speak. All right. Thank you. All right. Back to the deis uh for questions or comments. And the uh proposed action here is uh to adopt these guidelines um and obviously receive the update.

Council member Lowing.

Uh thank you. Uh, first I just want to call out [clears throat] all the good work so far just getting this all together and the sort of urgent emergency work of getting attachment C together which is illustrative to the whole point that this is going to change a lot and a lot and a lot. So we have to keep coming back and looking at these and that's all your jobs is alerting us to that and when we need to take a action. So I think all the ones that are listed in attachment C are quite pertinent for us to take a take a look at. [clears throat] Um I had just two questions on the actual kind of script there on the guidelines and one was you this may be redundant but I'm I'm glad to see that [clears throat] um even Senator Weiner is willing to go back and look at amendments or mistakes made or whatever you want to call that. Um, and there was [clears throat] a little bit of that in the last session, which I thought was good, although I didn't like any of the outcomes, at least. Uh, the willingness to actually take a look at him again and say, "Hey, maybe we didn't get it right." Um, I I would I'd like to encourage that. So, is that something that we want to put in here as um you know, we want to discuss or support amendments that are go amendments to already approved bills if they need fixes or is that so obvious that you don't need don't need to state it as a separate bill. But I think the encouraging folk encouraging our legislators to say, you know, you just didn't get that right and here's the ways. Um I [clears throat] I mean I' I'd love to be alerted on opportunities to to support those. Uh and the other one is just a wording change. Uh uh wording wording that you haven't changed at the bottom of packet page 451 uh under climate and environment supports an equitable and just transition towards GHG reduction. Um to me that just sounds a little bit redundant, both equitable and just transition. But I may be missing

something in the translation. Do do we mean more than equitable? Whoever wrote that I'm looking at it's out of order for me to answer that PS chair. [laughter] Uh that's that's sort of a term of art that's used uh just an equitable transition. So it's generally the way people speak of environmental justice issues. And I'm I'm told that in utilities that happens four times with that phraseology. So as you can see it's it's standard um term of art.

And council member Lowing on your first point about SB79. Um, I think generally we like to keep the guidelines a little broader than calling out specific bills by by number, but there are a number of bullet points under the housing section that I think do get to some of the um parts of SB79 that were problematic for the for the city. And so if there is any language you'd like to um change in that section, we're happy to look at that and take any red lines. I just used the SP79 um bill from last year as areas that we we tried to get some changes made and some were made, not necessarily the ones we made. So [clears throat] um and I I'm surprised that there's nothing so far on AI that's just everywhere and there's no pending or interesting legislation on that that we want to watch. But in general, I'm supportive of the recommendation. Thank you.

I'll ask um towns and if they know if any AI bill is coming up this next year. We do have one bullet point that um touches on AI under the governance, transparency, and human relations section, but I'm not aware of any bills in this upcoming session.

Yes. Um happy to answer a question on that. We're actually um there are quite a few bills on AI. Um as you've may have seen over the past few legislative sessions, Senator Weiner has proposed a number of various proposals related to AI regulation um which have not moved forward successfully. So we may see those crop up. Um, we also know that there are new bills in the local government sphere specifically related to automated decision systems, ADTS, is that the right acronym for that? Um, that we want to raise to your staff just given your guys' sophistication and kind of knowledge in that sphere. Um so more to come there but as of this moment um most of the AI conversations that are happening now are related to how much of a score it was for the budget and how it decreased our uh general deficit by you know tens of billion dollars at this time.

Vice Mayor Stone. Thank you Madame Mayor. Um, and I believe just following up on the on the AI discussion, there's been talks at the federal level to essentially of preempting states rights of being able to regulate. That's accurate. Yes. Um, Vice Mayor, that is a good question. I will have to consult um with our federal team for more specifics on that, but I can get back to you with more information.

Yeah, that that'd be helpful. And another one that I'd like to follow up. I was looking back at your your emails that are always very helpful. I always enjoy reading through them. Um, I know there's been a lot of movement. You already mentioned to what five or six different bills being proposed on on ebikes. Don't don't want to spend the time going into all of those to tonight, but that's an issue an area where myself and policy and services have talked quite a bit about. There's a lot of community interest in it. So being able to provide that update in particular to the you know the bills that look like they're mo most likely to to advance. Um, I guess one more specific question there uh on the I believe there are pilot kind of programs that the state did for Marin County and San Diego County or any of those bills trying to expand that state statewide because it seemed like those pilots I I believe were kind of more focused on providing additional local control for for cities or counties to be able to implement regulations. That's a great question. Um, in terms of expanding pilot programs, I don't know if the current transportation committee chairs are looking um to add more pilots to the statewide system. um rather the results that we've seen within the report specifically to Marin County have uncovered that about 88% of all um youth ebike users were utilizing illegally modified uh devices which transcend the definition of a 6 or 750 um wattage output device. Um, so part of what we're looking at is bifurcating, you know, or really defining um, what constitutes a legal ebike and that's not peak wattage. I mean, it is peak

wattage, it's not continuous wattage, um, being the 750 watt output. Um, so part of what the legislation is centering on right now is going after those um, illegal distributors, so Amazon and others, and then having some um, disclosure requirements for parents that are purchasing these uh, devices for their children just so they know exactly what the age restrictions are um, and some of the other requirements um, and liability concerns if if that if it comes to that. So, um, would love to expand that pilot program, but I don't know if there's appetite right now, but there could be better things coming.

Okay. For I was all excited about the five or six different bills, and I'm pretty disappointed in the the extent of those. I think something for the city to continue to to watch and and engage on and for policy and services to continue to monitor as as well. And I know other cities, and I I don't expect you to know it at at the city level, but I've heard other cities like Dublin have been kind of finding ways to prohibit ebike usage on on sidewalks that state law currently already allows. I don't know if if we already um prohibit that or or what, but a conversation for for another day. I think that's outside the scope of of tonight's item. So, those are my those are just the follow-up questions since I'm on policy and services. So appreciate as always towns and the work that you that you do. Congratulations on the promotion. Exciting. And um that's it for me. Thank you,

Council Member Lou. Thank you. And uh I'm also looking forward to moving this forward and congratulations as well. I had a couple of tactical questions and maybe just uh um a general comment that I'd appreciate some reactions to on SB79. I'm curious, what kind of inconsistencies are we trying to resolve and how might that actually affect the implementation timeline?

Um, yeah, council member, that's a great question. So, I think the inconsistencies, first of all, I want to kind of lay the groundwork. The bill was amended 13 times throughout the the scope of the last legislative session. Um, in each iteration it was kind of a scramble for a lot of stakeholders to really understand some of the implementation concerns. Um, as far as where the issues lie, there seems to be quite a few inconsistencies as to which transit agencies and which counties the bill applies to. The author's office, edge council, SEESAC, um, Cal Cities and other local government stakeholder organizations all seem to disagree. SESAC actually put out a brief within the last two weeks that indicated that it was only applicable to four counties statewide, which is very different than what the author's office has indicated. We've seen um communications come from agencies like the Orange County Transit Authority saying that they don't believe that it um impacts their county as of now until their street cars come online. So, there's a lot of inconsistencies as to where it applies. Um there's also inconsistencies within the um local alternative plan um adoption and who is responsible for reviewing it, whether it needs to be um adopted or reviewed by HCD within a certain timeline. We know that they need to review the ordinance standpoint, but the alternative plan, there really isn't clear language that speaks to that. Um, and so in order to really remedy these inconsistencies without having to pass a new bill really quickly with an urgency clause to remedy before it goes into effect, the thought process behind this is let's all bring together the NPOS's, HCD, local government stakeholders and really think about how to make this work. And maybe

that means a delayed implementation time frame, implementation time frame, um, to at least January of 2027, if not the beginning of the seventh Reena cycle. Okay, interesting. That could be a pretty significant timeline change. And uh uh I I mean I think we'll all be interested to stay tuned and uh understand what we can do uh potentially uh as a local to alternative plan. Um another sort of more process question, maybe this is better for city staff is that uh there is a connect Bay Area regional transit measure coming up in 2026. uh how do uh sort of coming off of or reacting to a public comment we got over email. So how do our timelines or processes for uh endorsing that work? Well, just in general terms, we would uh typically bring forward uh the um all measures on the ballot uh for council consideration typically about a month in advance of the election. Uh so the council can discuss and decide if you'd like to make any endorsements.

Right. I was trying to see where that one I I of course recall the one month from measure and I was trying to see where that came from. that's not or or maybe I missed it, but it's not in our uh handbook. It's just a general norm that we've practiced, right? Uh I'm not sure it's even that, but uh we use that timeline in order to have the council's action align with when or prior to when most people would actually be casting their votes.

Okay. Um, potentially this is a follow-up on policy and services or potentially something that we could look at doing sooner. I mean, people of course get their actually start voting a full month before. So, endorsing before uh or or not endorsing uh maybe another month or more before that uh would actually uh potentially be beneficial for voters. Um the last point that uh would appreciate any reactions to is that we do have a guideline around supporting measures that protect immigrants from unlawful or inhumane deportation efforts. I think it's really great that we have that. We also have uh some priorities around data privacy and um uh local control over data and data sharing and things like that. Uh but there's a large scope of uh bills that are reacting to federal action and ICE and overreach uh like with masking or potentially more related data privacy. Is there any ambiguity or any places where legislative guidelines could be more clear about how we feel about uh I mean this is a done bill but like masking for uh federal agents for example. It's not exactly uh you could interpret our uh legislative guidelines potentially to not include that, but is there any practical uh guidance or inconsistency that you would need from us?

Um that's a good question. I what we can do because we work with quite a few other local agencies is is you know kind of see what what they're doing within their legislative platform development processes around this this topic which I know has been um incorporated into quite a few of them um and provide some recommendations or thoughts around recrafting that language. I mean, I I don't want to over step your guys' boundaries, but um yeah, I I I hear what you're saying and I I note that this is this is a very, you know, um important topic for a number of other local agencies, but I do think that our guidelines, as written, cover a lot of those concerns.

Yeah, I think they're pretty good. I just wasn't sure if there was any corners. Deputy City Manager may have something. [clears throat]

Thanks. Um, I think that one of the judgment calls that we make when we're looking at pieces of legislation is also how far we want the guidelines to cover something versus bringing it to you as a city council. So, for something like that, that is um a larger issue. Uh, it has an impact here locally. It deals with another agency at the federal level. We would just want to make sure we're being very responsible and how we approach that. and that may be one that would make more sense to bring through the policy and services committee to get direction before we go forward. Um, so I think the guidance that we have, it will get us pretty far and then if there's something that we feel like is a slight stretch, we would want to bring that to you instead of trying to make that judgment call on our own.

Great. I appreciate that. Thank you,

Council Member Liths. Thank you, Madam Mayor. And I will plus one council member Lou's questions about um uh getting more detail or more involved in these uh bills that may have to do with um regulating ISIS behavior. Um my three questions are well first of all congratulations to everyone who's received a promotion lately. Um and uh thank you Miss Shelby and Mr. Gibbs uh for your presentation and Miss Cotton Gains and Miss Mullier. Um uh okay. In attachment A under housing, the red line showed the addition uh that we want to support government action that supports evidence-based approaches to addressing homelessness. And I'm wondering if staff or towns or my PNS colleagues can give us a greater sense of what animated this concern and give us some examples of what we want versus don't want to see happen um in this category. I need the mic. Oh, I think I have the mic. Sorry, I can't tell when it's on or not. I based it off the lights. Um, this is something that uh Miss Melissa Mcdana and I put together for the guidelines particularly because at the federal level right now there are shifts in the housing first um practice uh particularly with HUD. And so our interest is for the city's perspective, we want to still support the ways of addressing homelessness that have been proven over the past years of getting someone into housing is uh has been proven to be a better first step than some of the other programs that are focused on substance abuse or whatever other need an individual or a family may have. Uh the stability of housing is a starting place for that. So, this was our attempt to try to have language that show that things that have sort of proven to be more effective that we're supporting legislation that supports uh those programs. [clears throat]

Thank you, Madam Clerk. Could you reset the clock, please? I think it's still going from I I don't deserve all of this time, but I know that I wasn't 5 minutes over. Okay. Thank you, Miss Cotton Gains. Um, in attachment A under public safety, which was the next one down, we say we want to support government action that supports measures that allow peace officers to enforce traffic safety violations by autonomous vehicles, including failure to obey traffic lights and stop signs. We are getting all kinds of reports and we are I think personally witnessing um autonomous vehicles making moving violations in our city and our only recourse seems to be to email the help desk at Whimo and uh give them the date and time of the infraction and they put it into their vast database and so far I've never heard anything back. I've I've forwarded a number of concerns to them. Um, and my concern is when you take into account that one Whimo vehicle, their driver as they call it, you know, making a mistake at Alma and El Camino across from San Hill, every one of their vehicles is going to do the exact same thing because it's a system problem. So, it's not one bad driver, one car with a problem. It's a problem across the entire system. Which then makes me very curious about whether we can scale up penalties when we are able to identify um that you know there's there's an error that needs to be fixed and if the error is reported after you know if they do nothing after 30 days, 60 days, 90 days, there ought to be a way for us to um uh crack down at a level of scale. Um, and so anyway, I care about this and I'm just wondering, um, if you have any sense based on what other cities are doing, I know a lot of people are frustrated that, you know, I think it's the, uh, public utilities commission and the DMV that regulates them to start with. So, we feel here they are, they're in our city, we have no say. Yippa, Cay, here they are. It's the wild west. What can we do? Is anybody else making any

anybody making any headway here? Any insights you can offer? That's a really great question, council member. Um, there have been a couple of years of legislative attempts to further regulate autonomous vehicles specifically by empowering local jurisdictions with more control and autonomy over where and how they operate. Um, in terms of your idea surrounding some kind of like shock clock for penalties or some kind of response for remediation, I think that's a really fabulous idea. Um, what I need to do is poke around and see what's coming out and where the interest is, but I know that Palto along with a number of your Bay Area city colleagues are probably extremely interested in this. Um, so I'd be really curious to to hear about Palo Alto specific data or incidences that we can bring forward to our members um and highlight this as a concern moving forward. But I I would love to continue this conversation.

Great. I'd love to um share with you probably what I see as the most the most egregious example I've heard of um which is the cars are skipping a left turn lane, pulling up alongside it, and cutting off all the drivers in the left turn lane uh when the light turns. you know, they clear it's like they think those cars in the left turn lane are just parked on a curb and so they're pulling up alongside them and then making making the cut. Um anyway, so I'll follow by email and you know excited to talk about that further. My last question in the townsen report uh with respect to SB762 I believe which is the one on increasing the sales tax cap as you um rightfully alluded we are considering a sales tax increase as a mechanism for funding the uh the portion of the coverly improvements that we would ask the voters to um be responsible for and uh we've heard from our um consultants on that side of things that a number of cities are looking at increasing the sales tax cap, but I'm just wondering if you have any insight as to where that issue seems to be headed.

Yes, another great question. Um, so the bill vehicle that is moving forward currently is sponsored by Senator Aragen, um, from the Berkeley area. He is actually carrying a bill vehicle, Senate Bill 762, um, which has his city, Hercules, as kind of the anchor. And then the thought is that, and this happens pretty typically throughout many legislative cycles, um that a number of other jurisdictions that are seeking another sales tax cap exemption, um would kind of pile on to the bill, including the city of Palo Alto. I know that there are a number of other jurisdictions um in outside of your guys' county sphere that are also interested. I think that there may be 9 to 10 at this point with maybe some other counties potentially um jumping in, but um this is moving forward. Um we've, you know, been briefing your legislative delegation and and others kind of on this process. Um but this is a very typical process. I think that there's typically one or two bills that cover this issue every year that are signed by the governor. Um, so more to come on that, but I would envision if we do move forward with something like this, it would um be amended into that bill vehicle within the next month or two.

Great. That's it for me. Thank you, Council Member Bert.

Thank you. Um, first I I want to echo uh Council Member Lou's um uh issues on the ebikes. Uh I I think this is uh a really rapidly growing statewide issue and even though we've had these pilot bills, I I suspect that the momentum is going to shift and that we want to be advocating for that. Um and then on the issue of um that uh council member Liithkott Oh no uh maybe was uh council member Lou brought up on the uh endorsement of the connect bay area which is the SB63 transit tax. Um we really have two issues. one uh when we typically endorse what's on the ballot. But what's coming forward now is early support request from the citizens groups that are driving this and attempting to get um uh enough um signatures to actually get it on the ballot. And they're seeking early endorsement from cities and otherwise. And this is a real critical measure to us as uh a Cal Train Reliance City, but Cal Train, VTA, MTC, everyone. So, um I I would really like to see this come very promptly to the council uh so that we can make a um a decision on early endorsement to help support the signature gathering. That's the purpose at this point in time. and they're they're racing toward uh being able to get that support in time. So, we can't wait until uh it gets on the ballot or it may not get on the ballot. Um and then um

on page seven of the staff report um under transportation second bullet says uh reduce the likelihood of crash etc. and proven safety. I I don't follow the way it's written. Um removes barriers to use of proven safety measures and discontinues efforts that perpetuate safety risks. So we're saying that we're going to advocate removal of measures that perpetuate safety risk. That's what this saying. And this may be a question more for staff.

Council member Bert, I uh see your point. I think it might just be awkwardly worded that we can So I I suspect your um intent will be clear and we can just clean that up. Also down on that same page toward the bottom under climate and environment, it it um [sighs and gasps] whereas we we do have these multiple locations where we have inserted where we didn't have before. um um uh just and equitable, but we removed the reference to reducing GHG emissions. And why would we want to do that?

Our effort there was just to combine um the first and second bullet point to make it to make the guidelines a little less unwieldy. Um but if the council would prefer to leave in the language reduces GHG emissions, that is um definitely up to your discretion.

That's very much our priority and I think the remaining language isn't clear that that is a prioritized intent. Okay. Um and then I did want to note on the SB79 reform, whereas what I've read so far on the elements initial elements of that reform legislation really doesn't affect us. Um, but some of the things that uh Carly mentioned really could uh we're on a absolute sprint to try to figure out what and uh whether and what form would be our alternative plan. There's really not adequate time to do this thoroughly. And I will add that Senator Becker did not vote for the measure on the floor because he had certain amendments that uh the maker didn't accept. And I don't know that I was ever aware of specifically what his proposals were for to get his vote, but um I think that for us could be a starting point on what we're seeking in uh amendments and um and perhaps others. Um and oh, and the league is proposing amendments. Um and I I I I think also those weren't affecting us, but maybe we there's an avenue there. Um, [clears throat] we also had uh Senator Becker had what I I think was SP 457, the builder's remedy reform, which folded into a two-year bill, which may or may not have legs in this uh cycle, but um uh even though um like SB79, we don't typically reference specific legislation, I think we really want to be clear on both measures that we this is really what we're talking about. Last legislative cycle we had SB79 that we didn't take an early position on and it was Weiner's number

one thing. It was pretty clear that it was standing a very big big chance of getting through and it would have tremendous impacts. So I I just want to make sure that yeah, early in the legislative cycle there's a gazillion pieces of legislation and then there's a few that leap off the page as likelihood of passing and impacts and we want to make sure we're on them early uh and not wait till they filter through the cycle. Um and then um oh I'm over already. So I have some follow-ups. I'll wait for another go around if that's the better way to do it.

Yeah, let's let's do that because perhaps some other folks will address some of that. Uh, Council Member Rectal.

Yeah, I want to echo Council Members Bert's point about if we have, you know, uh, legislation takes a long time to form and the longer we wait, the less time we have to react. The earlier we get it, it may not be fully formed, but at least we can keep our eyes on it. Early is better. Uh I agree with the red lines. I agree with my uh colleagues here. Uh the only thing I would really add is the pardon me [clears throat] the ebikes. I mean ebikes is the wild west right now. There's no regulation and it really does need to be addressed because they're quite dangerous. But I don't want to overreach and you throw the baby out with the bath water because there's some people like seniors and people with health issues. Ebikes are life a godsend for them. It's really uh it's how they keep on biking and also from commuting. If you can encourage someone now to have a higher range because they have an ebike, they can now bike instead of driving. So that's good for everybody. But those are all low power ebikes. There's no need for as much power as they have. So but I would be really nervous about banning ebikes from bike lanes or from bike paths. I think we have to be really careful to not to overreach. But apart from that, yeah, I agree with the ebike uh legislation. Thank you. Um, so I have a couple of questions as well. Um, so, uh, Council Member Lithcott Hayes was asking about the city, city sales tax limit. Um, and if that went through and the city sales tax limit were increased, when do you expect would be the earliest that it would be effective?

That's a good question. So, if the um proposed tax increase is set to go on the November ballot, um CDTFA typically collects beginning April thereafter. Um, so, and correct me if I'm wrong, maybe from the city attorney's office, um, but there would have to be an ordinance passed previous to that and then it would be effective come the beginning of Q2 in 2027. Um, so I think that would be the timeline for that. I don't have any more specific information than that other than to note that we are coordinating uh across both the uh legislative front as well as with the the effort related to cuply itself.

Okay. I was just trying to discern what's the chicken and what's the egg here. Um do you you know ask for ex you know in the case that this passes? Yes. and and notable that it does not obligate the city to seek that um additional tax. It is is simply enabling.

Okay, that's great. Thank you. Um just want to plus one on the ebikes. I just am terrified that I'm going to, you know, run over an ebike because they ride around uh without uh you know, very very fast without lights sometimes without headlights, without tail lights. night they come up on your left side, not your right side. I'm ready to make a left turn and all a sudden there's a bite. I am really scared that you know [laughter] I mean I personally worry about it and I can't see them, I can't hear them. Um so I think that whatever kind of safety regulation and otherwise we can get just want to plus one on that. Um the um just just a general comment early is better. sometimes and sometimes not. And so like for example, there are some bills last year we sent letters on and then the bill changed and then there was pressure to send another letter and so sometimes we did, sometimes we didn't. Then the bill would change again and the question is are we going to send a letter every time and do they pay attention to them? So I think it's when is it the most impactful? Often it's early, sometimes it's not. And I think it's really situational and I know that we've we're in conversation with you constantly about that. Pick your moment. Is it going to get through anyway? is it not? We don't always get it right, but I think that it's a nuanced process that is hard to make a general hard rule on. So, I I do think though um you know, appreciating um you know, listening to your advice, uh and and some of these things council is going to be split on and we just need to to figure out which way. So, um I think it's just it's some of these are really tricky issues for us to deal with. Um and then finally on this SP63 um you know I'm looking at the legislative

guidelines and and noting um my colleagues comments about uh people seek uh entities and individuals seeking early endorsements. Um, it does I mean we do have a bullet point that I'm wondering if it would cover that or if this is something you would want some kind of straw vote on or do you feel like if you had a straw vote it could come back on consent. Are there various mechanisms for expediting that because I I think what I hear you saying is there's you know to our agendas are crowded to have it come back in full. We often don't do that even on some important bills but uh I don't know does staff have thoughts on how we could proceed on that consistent with the guidelines?

Sure. I think if you on if you feel at this point that the council has sufficient information about the measure to give us a a straw direction straw direction if that's a term uh then we could certainly bring it back on consent.

Yeah. and and and I don't know the answer to whether my colleagues feel like they have enough, but I just wanted to lift it up because I think that's a mechanism and we are here with it agendaized and it'll be a while until we are again. Um so I guess um I will end my comments and see if anybody wants to comment on that and pick it up. Um, otherwise there's I think and I think council member Bert, you had some additional comments as well, but council member Lowing, you beat them to the light, please. No, I I think it's a good idea to take this one earlier rather than later. Um, we can debate it and decide it's too early, but let's not not debate it. That's what I think.

Council member B.

Um, thank you. So, you already know my position on that. It's it's really being treated as a a vital measure by BTA, Cal Train, and MTC. Uh but it's in the hands of a um of a uh citizens group uh that needs uh strong support. Um couple other points on the ebikes. Um Carly was talking a lot about the wattage, which is really important, but the other question is throttled versus pedal assisted. And that's a real differentiation where basically throttlebased ebikes are lower powered electric motorcycles. Uh and as of now the state legislature took control of of being able to regulate these and hasn't done a very good job and hasn't caught up. They early on didn't want to snuff out the movement. Um but they they're they're overdue to uh take some some important action. Um I wanted to note on the cap and invest um this came up at Calr recently. Um when the negotiations were going on on that uh there was a concern that highspeed rail would was going to negotiate uh a disproportionate share they they negotiated a flat dollar amount rather than a percentage. and it's already come back that the revenue projections for capital of s are below what was expected, but they're locked in on their million dollars a year and everybody else is going to be diving up a lesser amount. And so there's a scramble for um where those dollars are going to go. Um, I did also want to bring up um under the grants that was a great list of things that we've got going um on the ones on the horizon. Um, and I I was uh I didn't

realize that you were engaged with MTC allocated grants. Um, there are two other categories that we may want to really pursue uh depending on the timing. One is our University Avenue train station and the um uh the efforts going on there in near and medium and long-term redevelopment of that um what MTC recognizes as one of the I think six key regional interotal hubs. It's not just our station. Um and then we have a new initiative for a bicycle and pedestrian underpass. Um and um grant funding for that would be very important. Um and then um I did want to comment on the uh the transit loan uh which you alluded to. So what this is is a bridge loan that BART and Cal Train and MTC um U SFMTA um all have to have because even if the regional tax uh is passed that revenue is not going to come in for two years and they need a bridge and the governor's been really uh negotiating kind of hard ball on that. Um, so that's a very important intra measure and I just want to make sure everybody knew of that. Um, on the I was really glad that we had the utilities uh guidelines here and I was asking myself, oh, they have their own and why didn't I ever know that before now? It's because they never came to us before now. Uh so I think it that should be a routine that's really important and what I realized is we really haven't uh merged our climate based um legislative priorities with the utilities department priorities and they don't incorporate some of the things that are utilities based that are in our climate stuff. So, I think we whether we

merge those as one or cross-pollinate, I don't know what's the better way to do it, but we definitely want to uh do something there. Uh on the affordable housing uh for uh public own uh um land, it said streamline and that's great, but I thought a lot of our issue was clarification in the current law. And so if that is the case then if we want to say streamline and clarify or whatever but I thought part of the problem is that the current law is ambiguous and that's why cities are facing legal challenges and to eliminate the ambiguity. Um so uh I encourage um looking at just how to um uh clarify that. And then on affordable housing, we really didn't Someone uh maybe Carly you were mentioning that the the funding has not been uh uh out of the gate a governor's priority. We don't have it down as our priority. We had one reference to funding, but it wasn't more broadly. So it was um uh for historic sites and vacant structures uh and adaptive reuse but not more broadly there is a drastic need for more funding. All the cities have reena allocations that require amounts of affordable housing that are severely greater than the funds available to do it. And we have the midpoint in the Rena cycle that's just coming up. And uh most cities are going to be in non-compliance unless the Rena legislation is also revised. And that was one thing that we didn't have down uh as at least I didn't catch it is reforms to the RENA legislation uh to really look at um how uh cities

should be held accountable if they've approved housing sites, if they've even um entitled projects, but developers say it's not penciling out. I need to put it on hold. Give me an extension. And my understanding is that would not meet the midpoint housing cycle and we're going to have massive numbers of cities who are going to risk once again a a cliff of losing local control. And this has been underaddressed and and we were all so focused on all us cities on getting our housing plans approved, reszoning all of our our areas and developing incentives. But now we're running up against this cliff that is getting pretty imminent and that has to be elevated. Um uh and there's real reforms needed at MTC. There is an emerging somewhat consensus about looking at that issue because that the market forces are not aligning with the housing elements and the incentives uh cities are providing. And um also um that the the allocations were based upon uh not only the deficits that we currently have in the region, but also uh the projections for population and job growth that have been thrown out the window basically by the Department of Transportation and the Department of Finance, which is what HCD uh uses. And so they're using prior um growth projections that said by60 we'd be 60 million people and they now project 39 million. And whether that can be induced to be uh some growth um is not going to be anywhere near the 60 million. It might get up to 45. But the allocations were based upon two things.

Our current deficit and our projected need. The deficit is there. the projected need has largely gone away but the mandates have not changed accordingly. So those are my concerns.

All right. Thank you. Um I think to kind of focus us and and see if we can move this along. Um, I'm actually going to make a motion um that we uh consistent with the staff recommendation adopt the 2026 state and federal legislative guidelines and 2026 utility legislative policy guidelines and um ask that next year and I'll explain why in a moment uh ask staff to review and to revise as appropriate uh the utility legislative guidelines and the climate guidelines to be consistent with each other and mutually supportive. Not to say that they're not, and I'll speak to that in a minute. Um, and so that we can solicit focused discussion, I would also include that we would adopt a support position for SB63 and direct staff to prepare a letter of support to the legislature. So those are three things um to you know to adopt these um and and let me let me so I guess I should see if there's a a second to those three things. So, we're talking about adopting these as presented. Um, asking staff to look at to integrate the climate and utility ledge guidelines and to to make them not to into one document to make sure they're mutually consistent and supportive and to support SB63. Looks like I think

may I just add that um Senate Bill 63 was passed last year. Um it is in the form of a ballot initiative. So my understanding is is that we would be submitting a support recommendation with CCR legislators for their awareness but submit it to the campaign in its entirety or Thank you both that. Yes, I'm I'm Yes, it's too late. Um, okay. Well, maybe I should just say adopt a support position and follow up accordingly and we'll figure out what that is. Um, so do I have a second for that? Second.

Thank you, Council Member Rectal. And just to speak to it quickly, um my understanding the um staff that supports the climate committee um is in good communication with the utilities department about these issues. But nevertheless, I think it would be interesting to uh and helpful to have them directly look at these. Um, and I'm so I'm grateful to the utilities department to for coming to PNS and coming here tonight because I'm in DC lobbying and not advocating uh for our the city's uh interests uh on behalf of the Northern California Power Agency which represents the the electric utility. I've seen this a lot and had to ask a lot of questions. And I've found that staff is in good communication and with Towns End and others, but um I think it's good for this council to know and also see how these two things interrelate. And so I think that uh I would love to see more sort of joint presentation on that front or at least to be aware that that happened. Um and the others I think are self-evident. So that's I don't know if I the seconder has any comments. No. Anybody else? Council member Lowing.

Yeah, I just had a sort of a structural question. It the third part doesn't seem to fit exactly right. Um because of what um our outside uh consulting firm talked about. Since it's not a bill, it's not using legislative guidelines. it to me it seems like it should be a separate motion that we should talk about um and just you know discuss what it is and what what happens if we don't do that what happens if it doesn't passes just a normal you know sort of a policy bill

I'm happy to separate them um and I not if we can do that for discussion or I'm happy to hold or set aside that what's the best mechanism for [snorts] that I mean I could just withdraw that part and then redo But is there a simpler way? Uh that that is one option. Uh you could also um the council could also separate the motion for the purposes of voting and then you could have separate discussion then on that third item.

Thank you. Let's I'm happy to separate it for discussion and voting. That's fine. So madame clerk, we're going to separate item three, but you can see on your screen um and so let's have a discussion then on items one and two. Council member Bert.

Yes. Um so first I think from a process standpoint um we we gave a lot of input tonight and I think council members really want to see some of these changes incorporated. Um rather than wait until next year to see them incorporated. uh perhaps there's an option of staff taking our direction and then incorporating them under consent so that we don't have to have an additional agendaized meeting. But I' I'd really prefer to see uh at least a number of these changes incorporated for this year as a lot of them are things that we think are impactful for this year.

[clears throat] I think if we do that, we need to kind of go through them one by one other than the one with the wording change that you wanted on the GHG. Were there others at that level? Yeah. So, we can go through them. I I I don't think we need to stipulate language to staff. We give them conceptual direction and then they incorporate it under um going back on consent calendar. If we have big heartburn over it, we could always pull it from consent, but I'm willing to trust that they would uh capture it um uh uh generally if even if we don't think perfectly, but that's all we really need is to get these additional themes in there.

I have no quarrel with the um deferring and and trusting on the wording. I guess what I would ask uh if it's uh is that you suggest friendly amendments that you would like to see if that's I intend to I just want to first go through from a process standpoint this alternative agree on that process and then I can offer the specifics

I think that's the general default process we have here is so I would encourage you to do that now and then the secondary and I can can respond. So first one is uh language that would really embrace SB79 reforms that we had discussed. Um second is to um uh add and clarify the language under affordable housing to address funding and and clarification on um city-owned properties. Um and then um on ebikes uh to clearly we

we didn't have anything there to um elevate and uh emphasize uh the ebike reforms even if we don't have to go into the what those reforms would specifically be. And um so maybe we should react to each one just unless anybody objects because I'm just thinking that's a list that I have several questions about. Okay.

Um thank you. Um on the let's take the last one first on the ebikes reform. Um so we have the regulates electric bicycles and similar modes of transportation to promote safety. I'm not clear on what else you want there. I think No, I think that actually captures it. So, we they they received additional input that I don't think has to be in the um in the guideline beyond that, but they've they've heard the input on priorities.

Okay. Thank you. And then, um I'd just like to I think you you the you said the clarification on city- owned properties, and I just can't seem to locate where it is now. Um, that was under housing on packet page uh 453. Is that right? Uh oh, no. Let's see. No. Um, Council Member Bert, I think that was one of our bullet points that's in the staff report.

Oh, yes, you're right. So, uh, it was bullet point number four on staff report page four, packet page 448 says, "Streamlining the process for developing affordable housing on city- owned land." And um, what I proposed is clarify and streamline the process. Yeah, I I would definitely accept that because I had meant to raise it and forgot and I'm glad you did. Council member Rectal is nodding

and then on affordable housing in general to add a bullet to advocate for additional state funding uh in support of affordable housing and they actually are looking at a state bond of $10 billion. So it's out there. They are and I would have assumed that was in our but but our legisl I'm fine with that. to to my understanding do not advocate for additional funding at this point in time. I'm trying to Yes. [laughter] Okay. That's that's that's thumbs up on that.

Uh actually, if I may, good evening. Um in the financial section of the legislative guidelines, this is on packer page 452 about halfway down the list. This says supports reforms to local revenue financing tools for the purpose of supporting the development of affordable housing and public infrastructure. So we can add financing tools but that's not funding. Cool. I just wanted to reference that as the next closest I've seen that under financial rather than housing but uh that also didn't address specifically advocating for more funding. Okay. Just just one second.

Um okay. So the the idea is to uh amend that bullet to add funding and additional financing tools. And council member rectal, I'm looking at you to nod. So we Yes. Okay. And council member Lee, you have a procedural question on that. Uh well, just uh note that on the housing legislative guidelines, we have the bullet provide flexible ongoing funding for affordable housing, homelessness, uh and infrastructure required to support the increased housing production and keep pace with local development goals. Um, so that uh it's longer. It's

that's close and and that's valuable and thanks for pointing it out. But it doesn't advocate increases in funding which is what we really need and that's that's what I want to focus on. But that's thank you for pointing that out. Just just one moment. Um second one

I see provides flexible. So the idea there would be uh increased and flexible. Okay, I'm I'm good with that. [sighs and gasps] Okay. Um so SB79 um you know the city has uh positions of record on um some letters that have been sent and I would think on that one we would I I'm curious what exactly you would want to say because I do think it matters because I do think there's a range of opinions on this as you pointed out Senator Becker as the the bill was amended um you know went from a yes to a he didn't vote on the second time around and who knows the exact reasons and what happened but um so could you restate what

well first when we did have letters on record it was opposed to SB79 is my recollection exactly

yeah um but SP79 has been passed so now we're talking about legislation that would reform it uh which is align with our prior position but not the same thing um and as to what those reforms would be. I think we would um uh we we tonight don't have those specifics. We're just kicking off our SB79 ad hoc committee, which I think will uh perhaps come back with with a better sense of what we would advocate. Um, so at this point in time, it would merely be to um, uh, endorse reforms to SB79 that meets the city's um, uh, subsequent recommendations, but we don't have what those are tonight.

Yeah, I think since we would have to make subsequent recommendations on that and I think that, you know, it is a moving target that I I don't want to accept that amendment. [sighs] Um, okay. I'll put that then as a separate uh, amendment. That's fine. Okay. Do you have additional

uh I think the only additional one was um advoc advocacy for reforms to the Reno Reena requirements uh for midcycle mandates on cities. Um, I'm struggling with the word reforms because I appreciate some of the the changes. I don't care.

Well, so I'm struggling with some of the um [sighs] the different viewpoints on it. I do think there are some legitimate analyses that could be done and then different recommendations might come forward. And if that's what you mean by reforms, but I think we need to uh I I would be more comfortable with um uh there was a review committee at some point on this remember and they they made some I don't know uh Michelle but if you can there were some um analyses I don't think they got approved by the state legislature but if we could encourage um that like re-review of it some some word wording like that. Do you remember when what I'm referencing?

There have been many discussions about rena reform. Um the most recent publication came from uh HCD which um it was called California's housing 2040. This was back in 2024 when it was released and it had a number of recommendations not all of which I would assume that we would agree with. Um and then in addition to that, we just had the state auditor's report released which had a couple of policy recommendations related to um staggering the submission of housing elements so that consultants are not overwhelmed and some timeline delays. Um those are the two that I can think of at the moment.

I I think what council member Bert's getting at is is there's kind of two I think there's there's two separate things. There's sort of the accuracy of the the you know the algorithm and calculation and then there's sort of the um policies behind it like uh presuming certain things uh would come to pass that may or may not have come to pass. Yeah. But that the I my understanding is that these guidelines we want to keep high enough level that we're not trying to stipulate specific language. And that's why I framed it the way I did. Uh was to not attempt tonight to stipulate what that would be, but to put it on the table and say we endorse reforms and then we'll work on what those are.

I I agree at keeping it at a higher level. And the reason I'm asking these questions, I'm struggling with reforms because I think there's a certain connotation there that I'm not sure. Like I said, changes if that's uh more um just general that just so we get on the table is all I care about. Yeah. And I'm happy to get it on the table. I think um adjustments. How about reevaluation because then we can evaluate it and people might come and say, "Yeah." Okay. I'm council member. Uh okay. Um, and we can split these out for voting if need be later. Um, okay. Any any others? Nope.

Okay. I think we ended up with um accepting two of those uh the clarification about the cityowned properties and uh Reena um reevaluation. Um okay. Now, [laughter] now that we have that, is there further discussion on any of the things? Well, first of all, I have not been tracking the language on the screen. So, I'll take a look at that. And any of you that want want to comment on on uh numbers, it was going to be re-evaluate as opposed to reform.

Thank you. So re-evaluation and Mayor Binker if we may ask for clarification on number two. Um is that this year or starting next year? I had suggested it being ne next year because um I just think we're far enough into this process and we we're sort of getting used to this seeing it the first time. So that mine my uh language was next year. For number four, do we want to say state and federal or is that too much of a dream? Doesn't hurt.

Sure. [laughter] Okay. Is there any discussion on the uh motion? Structural question. We're voting on the first five items in the original motion.

Yes. Okay. Um, no, I think we vote the amendment first. We need to go I think we go all the way to the bottom. And um because that's that so I think council member Bert was moving we sort of did it informally as we were talking through these was he was suggesting that he would move to amend the pending motion to add that line on the bottom and I don't believe there's been a second yet. So the question the first question is is there a second to that amendment? I believe unless anyone corrects me is where we are to to be added to the first five. Is that okay? What's confusing is SB63 is stuck in the middle of this. So

well I think we have to come back to that as a separate motion. Yeah, I'll second it. Madame Mayor.

Yes. So just looking at the language here on the screen, I believe uh item number three under the main motion should uh should just be the bullet point and not the um not the language following the number three. Well um So I had thought that it was a uh Oh, so each of these three, four, and five are amendments to the alleged guidelines, right? I mean, you want them written in there. So shouldn't it should it say you know uh actually under item one should those should three four and five be sub bullets I think that's what's going on. I think that see item two is is different not so it's not item two it's three okay and so then pull a out is item two.

Yes actually um so um Christine May if you can just hold on hold on that for a second. Yeah. So I think you want to say we want to say adopt these things and amend the state and federal ledge guidelines as follows and then item two is a separate item. Does that make sense madam clerk?

Yes. And then items three, four and five would be additions to the guidelines under housing. [clears throat] [sighs] I think that's pretty close. How city attorney? Yes. Uh I I would suggest just one change to item one where we say add the following amendments to the housing section of the guidelines.

That's fine. So so we just know for clarity where those belong, right? Okay. Okay. So I I think that where we are though procedurally is discussion on the amendment of council member Bert to that pending motion. And I think he probably wants to put that in as sub I think you're proposing adding that as D under item one. That's where it would go if it passes. Yeah. Yeah. Okay. All right. Any discussion on the amendment? Well, I second it. So, I just want to say a couple sentences. Oh, I'm sorry. Yes, of course.

Um, I think this is not unlike any of the other housing elements that are already housing items that are already in this new list is to say if things come along suggesting uh reforms or changes to SB79 that are appealing, we would want to support that. So, I think it's a pretty neutral statement. Council member Li cuts.

Yeah. Um my thoughts on this are um really animated by what the uli told us, the urban land institute people came and spent a lot of time here and they're not from here and they were sort of resoundingly saying how how in their view how fortunate we are as a state to have SP79. I realize that there's um there are a lot of opinions about uh that but I was quite um impressed that they were impressed. Um so I was not initially inclined to support something saying we were going to endorse reforms to SB79 without knowing what they were. But now that it's been amended to basically say once we figure out what we want to recommend, uh we will endorse reforms that are consistent. Uh with that being the amended language, uh I think I can support this. Okay. Um, so this I guess my initial reaction was if we're going to come back to us for subsequent recommendations from the ad hoc, why do we need this? Um but if we're talking about after the ad hoc does its work and comes back and we have a discussion and at that point um we would have subsequent recommendations and then I mean then fine. I don't know that it's it seems superflous to me but um I guess it's not a problem is I want to make sure that we're all understanding that what I just described is what this amendment means. If there's any disscent to that, just let me know.

I'm seeing no. Yeah. To me, it's kind of like the ebike thing. We're [clears throat] not giving them a blank check for ebikes. We're just saying, "Do what you think is reasonable and let keep us in the loop." And uh I think it's the same thing. Keep us in the loop. We're interested potentially in in SB79 changes. Let us keep us in the loop and we're interested in potentially voting for that. All right. So, you see the value in that of adding it to our alleged guidelines. so that these folks know. A lot of guidelines are just we have this kind of area that we're interested in.

All right. I I I I guess for me it's that I don't think they're going to miss this one. We have a whole ad hoc on it. So, we're not going to miss this one and it just seems unnecessary. Um, so I I just don't know why why we're calling out a specific one, but um anyway, uh, vice mayor.

Thank you, Madam Mayor. I mean, I I tend to agree with the mayor here, but with the with the with the clarification here, I mean, I'll I'll support it. I see it as no harm, no foul. I guess my my one concern process-wise is typically our legislative guidelines and Miss Cons, correct me if I'm wrong. I mean, this is usually what then staff uses to be able to be proactive when they see something come before them that they can just draft a letter of support or opposition, go to the mayor to be able to sign that letter and then forward it on without it having come back to to council for further discussion. And it seems like now we're almost adding additional elements to it where several of these will be expected to come back to to council. And I'm just I'm worried about now kind of the staff have to look at all of these and now start to are we kind of creating this process or precedent where you're going to be more unsure because you're getting so much of this feedback of well this better come back to to council.

Um thank you for the question. I think in general the legislative guidelines you described it very well. It's supposed to give us enough direction to be able to run with for 90ome% of the bills. If there are bills that you know right now you would have a strong interest in I I think it's fine to share that information with us and we can make sure those are the ones we bring to policy and services committee uh and maybe subsequently to the full city council after that discussion. I don't think you have to carve them out to that level of granularity, but if you know today that there's a topic that for sure you as a council will want to discuss, I think it's fine to elevate that to us. We would not put that in the guidelines though because naming a specific bill number and in 15 years that bill number is going to be an entirely new bill and it's confusing. But I think for clarification purposes for us as staff and knowing what to bring to PNS, it's fine if you want to include that in the motion. But to be clear, I wouldn't put that directly in the guidelines. It would just be to direction to us as staff.

And right now as as written, one would go into the guidelines. Yes. Can we see the whole thing again? Because we may just may need to do some friendly amendments on language if that's Yeah, because I think that is what it would would be. So, as long as it's rewritten to describe that process, then I'll then I support it.

Go ahead. Um so uh perhaps if we said um um uh uh support changes to the legislative guidelines uh align with reforms to SB79 uh subsequent uh [clears throat]

uh to the council's recommendation. So it's basically saying without necessarily spelling out the bill, although the bill that we're reforming that's in law. So the fact that x number of years from now um that's already the law. Whatever bill numbers may come subsequently, we don't know what those are. But actually we do have that point of reference that that important bill is law. But um support changes legis guidelines um uh that u that align with um uh subsequent council recommendations. Isn't it that align with council's recommendation on reforms to SP79?

Yes. Yeah, that's what I meant to retain there. Yeah.

While she's updating that, if I can ask for clarification, your intention is for this to go into the guidelines itself. um that it would be you could have language that if you don't want to put SP79 in there, have language that captures that intent, the nature of it. Thank you very much.

Yeah. Yeah. I I I think just a friendly amendment to that that um maybe to to so that so that that exact question doesn't get asked, you might want to say something like support changes to the legislative guidelines. um that allowing with council's recommended reforms to SB79, you know, if so made or just some sort of conditional language, some sort of if then because this sounds like we're going to do something and we no longer have the uh subsequent language in there. So, it makes it sound like perhaps we've made I mean, somebody looking at this, I would argue that's a little redundant, too, because we wouldn't do it unless we made those recommendations. But I'm fine with that if that

Yeah. Just to make sure we're not talking about any prior council's recommended reforms. I think that's everybody understands that. But well, clearly it wasn't the case because we were just asked that. So I I would just if we could do that, I would I would I would uh be supportive and we could do this unanimously.

Okay, I'm fine with that. So, if that's the case, if if you want to uh accept it into the main motion, we don't have to vote on it. Yeah. Well, first I want to ask the seconder. I got a good Okay, then. Yes. Then let's put it in the main motion and then we can can uh not do one vote. [laughter]

It'll reduce by our votes by one. So I think that actually logically uh madame clerk if you could make that item two and make item two number three. [clears throat] Are you okay with that city attorney? It's not exactly analogous or would you rather have it D seeparated out as item two? But it's kind of the same thing as C in both cases.

I Yeah, I I think I think that's right. If if the changes to the legislative guidelines that align with recommended reforms to SB79 would be slotted under that housing section, then including them as part D makes sense. Okay. Just wanted to confirm with you. Okay. Very good. Um all right. Is there any further discussion on the motion with uh that's labeled with items one and two? Seeing none, madam clerk, would you call the role?

Council member Liths, yes. Council member Rectal, yes. Council member Lowing, yes. Council member Bert, yes. Mayor Vinker, yes. Council member Lou, yes. Vice Mayor Stone, yes. Motion carries unanimously. Thank you. All right. So, let's move to the other motion that was separated. [clears throat] Madame Mayor, what would you think about continuing that item as it is now?

I'm fine with that because we do have a very large item after, but I know that uh my our colleague uh was concerned about timeliness and I'm not sure exactly when it could get back. Council member Bert, I know that this was something that you brought up as something [clears throat] uh that had a time sensitivity to it. Um yeah, but it's not immediate. Uh but uh I think that the advocacy committee is asking for the connect Bay Area committee is asking for cities to take action as soon as possible, which doesn't have to be tonight.

Okay. Then um why don't I I mean I don't know our agendas are pretty full is all I was thinking. They are but it is pretty. So again is this a topic where council feels on straw vote you could have on a consent agenda? Why don't we do a straw vote on that? Um uh and I don't know when one does a straw vote. I don't feel like the clerk should call. So can we all just ring in? Um I will say that I would vote yes. Uh, I'll just ask council member I'm getting uh thumbs up to my right by two by three, thumbs up to my left by one. I know council member Bert and do we have a thumb yet or is it midway? Well, [laughter] we have enough, right?

Well, I I I just like to hear more about it. I'm not saying I'm opposed to it, but you know, so the idea of putting it on a consent calendar with a short staff report would be more preferable, but if it's if it's that's I think that's what we're suggesting. I think you have your direction. You have straw vote. We'll have a see it's an action item. Absolutely. Excellent. Excellent. Good teamwork. See, teamwork. That's our theme tonight. [laughter] Okay. Well done. All right. And I think that with our sincere thanks to all who came to help make this happen tonight. I think this item is done. Concluded. Thank you. And thank you. And go Big 10 and IU.

Thank you. Uh go blue. [laughter] All right. So we'll move on to uh item 12, fiscal year 2027 to 2036 long range financial forecast and fiscal year 2027 budget development guidelines using the LRFF as the baseline. So welcome to our CFO is live. Good evening, mayor, council members, public. Lauren Lie, chief financial officer for the city. Thank you so much. And I know we're late in the evening on this item, so wanted to just tee it up and let you know that staff's presentation will be fairly brief. Um to my right are two new budget managers and so I'm very pleased to present them. We have Jonathan Rers and um Robert Valenton. And so they've been here three months and they've worked very hard on this project. Um also want to thank all the staff members especially uh Ed and the leadership team and especially the finance committee. Um you'll be pleased in receiving this report that um one of the reasons why we're going to keep it brief is that finance committee did a very robust deep dive on this subject. Um and we're very um impressed with their diligence. So with that um members of the audience and community members, the long range financial forecast is a 10-year forecast focused on the general fund spanning fiscal 27 through 36. Um we are in a changing landscape financially. Um while prior forecasts did show deficits in the general fund, this forecast does show a greater challenge. Um specifically driven by lower sales tax and property tax. Um we

will present to you in later slides um budget balancing strategies which will be incorporated in the development of the budget in 27 and we'll present to you um a variety of different options that we will be considering moving forward. Importantly though, tonight the item is to review and receive the long range financial forecasts that establishes the base budget for fiscal 27 and helps us move forward in developing the budget. Also, you are adopting the annual um budget guidelines. Um we put this before you every year to review and adopt. So, just keep that in mind. Next slide, please. Um this is the financial planning cycle and the conversations as you could see there. Um we have a very comprehensive uh process that begins with a variety of different topics that contribute towards the development of the budget. Annual pension reports, major conversations with finance committee on revenues, expenses, section 115 tonight on the long range financial forecasts. Um and also going into Saturday when council is looking at priorities and objectives understanding our financial position what the outlook like look like looks like is foundational and important as we are a datadriven community and policy and leadership body. Um then um in February we will be looking at the fiscal 26 current year midyear report. Um we will then continue to do other important work like rate setting and budget development. We will come back in um May to present the proposed budget for adoption in June. So that's the typical cycle. Next slide please. Um tonight we'll cover finance committee's review and recommendation,

talk high level about the economy, highlights for the long range financial forecasts, um touch upon the budget balancing strategy that we will be considering in balancing the budget, go over the budget stabilization reserve, um put on the screen the budget development guidelines, and present to you the recommendation tonight. Next slide, please. So on December 2nd, U finance committee reviewed and recommends to the council the approval of the long range financial forecast. They were extraordinary in their review, asked a lot of in-depth technical questions, really challenged us to look at our assumptions, and importantly are these items that we want to present to you tonight um that were highlighted in particular. One is that um given the financial position of the city um we would really need to reflect on our city services and programs and importantly any new council priority. Um are we at the junction where we need to review whether or not certain services and programs may need to be suspended for a while or rep prioritized? Property tax and sales tax projections. It was noted that um these are the two main drivers. Um the declines in these two areas really contribute in exacerbating our deficit. So we'll touch upon that a little bit. Um property tax is our number one revenue. Um it is stable. I want to give the public and the council that confidence that it is a stable revenue source. sales tax on the other hand we do have some um unfortunate information relative to just state allocations to us have declined and also their regulations have impacted us so that is affecting us in terms of

one-time revenue and also ongoing revenue declines as well toot um that's um uh one of our major tax revenue uh committee looked at that uh noting that the primary trends for those relates to to the fact that we had um three new hotels since 2021 that contributed 400 rooms um that also contributed to some great uh accommodations, interest, room rates and occupancy. That's leveling off a little bit. So, our long range financial forecast is more moderate in taking to effect that we are seeing some leveling of um of that growth. So committee looked at that and we provide in the agenda report to council additional information. Vacancy rate as you may recall our long range and also our budget assumes 5%. We are currently trending at about 6.3% in the general fund that excludes public safety vacancies. So we looked at that trend and looking to see how that's tracking with our assumption. So we are still maintaining 5% committee did not recommend that we change that assumption. Historical trends um the council and committee previously and continues to maintain that we need to look at 2019 as a baseline. And so tonight in the packet you'll see we have historical staffing information that goes back to 2019. And as we update our charts and any historical information we will start pulling into 2019 data. um as we move forward. Last but not least, um our beloved list of known unknowns, which is a list of uh priorities, projects that lack full funding, um committee wanted us to clarify that while the general fund does not have sufficient funding, they're all

alternative sources such as measure B and measure K. So those are the highlights of areas that finance committee spent a lot of time on importantly for the council to understand and be reassured that is that they did a deep dive and do unanimously approve the long range for you to consider and approve tonight. Next slide. So here I'll turn it over to Jonathan to go through the technical presentation and again given the late hour we will present this brief to allow time for any questions and uh look forward to your um approval tonight. Jonathan, thank you uh Director Le. Good evening Jonathan Rers um with the office of management and budget. Uh just quickly on the economy we are currently managing a disconnect between a strong national economy and a sluggish regional economy. While the national GDP growth is reaching around 4%, the Bay Area tech sector is experiencing some specific softness. We did look at the 2025 UCLA Anderson outlook and it suggests that there is a structural upturn for California, but it will not truly accelerate until late 2026 or 27. So, this regional lag is a primary driver for the cautious revenue revisions we have built into the forecast. Next slide, please. The base case forecast identifies a structural shortfall in fiscal year 27 of 14.9 million followed by gaps going through fiscal year 2032. This is driven again as director lie noted um based on expenditure costs that are structurally outpacing our revenue growth especially after we corrected for sales tax. However, as we look to the outy years, our model projects a return to surplus by fiscal year 2033 as expenditures stabilize. Our challenge today is building that strategic bridge to navigate these next several years. This presentation does not take into account

the budget strategies which will be presented later. So again, this assumes city services as they are today. Next slide, please. Moving on to our revenue outlook. I want to be very transparent about the recalibration we have performed following several month in-depth discussions with the finance committee for fiscal year 2027. and we're projecting total revenues at 305.1 million. This is a $1.9 million reduction from the current year's adopted levels. So that change in base is very important to remember. The primary driver of this shift is the significant headwind in sales tax. As we discussed with the committee on November 18th, we are anticipating an 8 to9 million decline in the current year fiscal year 26 due to the due to modified state regulations regarding how sales tax is aortioned from the auto leasing sector. For the 10-year forecast starting in fiscal year 27, we have built in a sustained annual decrease of 5.1 million to account for the structural change in our retail driven revenue. The finance committee did discuss this in depth as director Lee noted and staff continues to work with the state and business community on this matter. We also conducted a critical true up for property tax. Our previous forecast assumed growth in the low 6% range. However, based on actual fiscal year 26 tax roles, we have revised that outlook to a more conservative mid4% growth. While property tax remains our most stable pillar, reaching 74.9 million in fiscal year 27, we must be mindful of external pressures. Specifically, we are monitoring over 5600 property tax appeals countywide, representing 5.8 billion in value at risk. The PaloAlto mix of property tax remains focused on residential at 70% while 30% is non-residentidential. This forecast does not take into account new housing or drastic appeal outcomes. In all, this reinforces our decision to

model in fiscal year 27 a moderate 4.8% increase growth rate from the fiscical year 26 county tax role. Finally, as director li noted, we look closely at transient occupancy taxes, the toot. While our local hotels are seeing strong occupancy levels, reaching over 84% recently, average daily room rates have seen some decline. Also, since 2021, there was growth due to three new hotels and approximately 400 hotel rooms. As director Lee noted, bringing the city inventory to approximately 200 rooms, our forecast assumes a healthy but realistic 4 to 5% annual growth rate for toot, which aligns with long-term historical trends rather than the more volatile post-pandemic recovery spikes. These downward revisions in our two largest tax streams are the fundamental reason we're advancing the budget balancing strategies you will see later in this presentation. We believe this base case represents the most responsible status quo version of our future based on the current economic realities. Next slide, please. Uh, quickly, this visual highlights our primary revenue pillars over the next decade. Property tax continues to be our anchor, projected to reach 110 million by 2036. Sales tax reductions in fiscal year 26 due to the state regulation and reduced allocation assumes a 2% to 3% growth projection. While other taxes like toot and the utility user tax provide essential diversification, they remain sensitive to economic cycles and require consistent monitoring. Next slide, please. This slide provides you the revenue details uh with year-over-year data for all general fund uh revenues. Uh I'll just leave it at that because I don't want to go into too much detail on this particular slide. Next slide, please. Um on the expenditure side, we are projecting 4.3% growth in fiscal year 27 to 320 million. Uh just to give that 4.3

million uh percent figure some historical context, the standard long range model usually projects a 2 to 3% growth over the 10-year horizon. However, the 4.3% projection for fiscal year 27 is consistent with the actual growth we saw between fiscal year 25 and the fiscical year 26 adopted budget at 4.1%. It's also important to remember and I want to reinforce this that the growth was also based on a reduced base from the last cycle. So, we're growing off an overall leaner base. And just finally on headcount and positions, this forecast assumes zero new positions, flat headcount over the 10-year horizon. The expenditure growth you see is purely the rising cost of our existing workforce um due to approved labor contracts and pension liabilities, not an expansion of government or community services in any way. Next slide. Uh this slide goes into the details on our expenditures. While our personal costs are rising, we are actively managing them. The finance committee, as director lie noted, reviewed and concurred with our 5% factor assumption for vacancies. Um, while we have seen vacancy rates at a higher level, we still believe budgeting at 5% is the prudent way to capture savings while still allowing departments the capacity to hire for core service delivery. In our non-personnel categories, you'll see the contract services and supplies are projected to increase, largely driven by a standard 3% CPI adjustment to the operational costs associated with new capital projects coming online. We also have 33.6 million in infrastructure PR uh transfers planned for fiscal year 27. This is a policy priority to ensure our facility maintenance and infrastructure don't fall behind despite the current revenue headwinds. The committee emphasized uh that property and sales tax challenges have worsened our finances which we noted

making it essential to identify service efficiencies before moving to reduction. This detail reflects a baseline that maintains current council approved service levels but it serves as an anchor for the difficult trade-off discussions we will have during the budget um process. Next slide please. So for today, this is one of the most critical slides um to start our conversation um throughout the budget process to close the 14 million uh 14.9 million gap in fiscal year 27. We've modeled a variety of budget balancing strategies. Um one of those is ongoing reductions of 7 million. We're targeting 7 million in general fund reductions. To be clear, this magnitude of reduction will likely impact service delivery models. Achieving this level of saving means prioritizing essential services while slowing the administrative timing and pace of non-critical functions. Um, as noted by director lie, this would need to be taken into consideration for new council priorities as they come up. The ultimate level of budget reduction will be determined during the overall budget process. For the next several years, we'll need to also consider reductions um in our contributions to the capital improvement program. Uh this strategy recommends $1 million over the next two fiscal years. This may come either from fund balance or delaying lower priority non-urgent projects. Um with regard to pension strategy, we propose reducing our additional discretionary payments to the pension trust, funding only the actuarily determined contribution, very late in the evening, but I said it okay. The ADC and a smaller portion of the liability. This aligns with the strategy supported by the finance committee on November 18th. And then finally, we are proposing uh a $2 million um use of the BSR. The

$2 million um is based strictly on maintaining a surplus of 18.5% which is the the policy of the city council. Finally, I do want to add we did include um the ability to raise additional revenues in the amount of uh 800,000. So in total, if all of those things are put into place, the budget would be balanced. Next slide, please. So just to quickly demonstrate, we're not only dealing with this single fiscal year 27 problem, but if we were to implement many of these strategies, it also addresses our structural deficit through fiscal year 32. So by implementing these options, we project a return to surplus by fiscal year 33 without compromising our long-term fiscal health. Next slide. So, with regard to the budget stabilization reserve, um, a key recommendation tonight is rolling our $6 million uncertainty reserve into the budget stabilization reserve to simplify reporting and transparency. After using the 6 million to partially offset the fisc year 26 revenue decline and another 2 million for our fiscal year 27 gap, we project the BSR ending with a balance of 56.8 8 million and again at 18.5% of expenditures this keeps us firmly within the policy target directed by the city council. Next slide. So as director lie noted in addition we're asking you to approve this evening your budget development guidelines. We have made no changes from prior years because these are very good guidelines. Next slide please. In summary, staff and the finance committee recommend that the city council accept this long-range financial forecast and the associated fiscal year 27 development guidelines. We're further asking for your direction to use this forecast for the baseline for developing the fiscical year 27 budget. As we look ahead, tonight's action sets the stage for our next major milestones, the fiscal year 2026 mid-year budget review

next month and the transmitt of the proposed fiscal year 27 operating and capital budgets in May. This measured and peervetted approach ensures we remain good stewards of the city's resources while navigating current regional economic conditions. Thank you and we are happy to take any questions. All right. Well, thank you, Mr. Rers. Welcome, and we're we're very grateful for the work that preceded this report as well as the report tonight. Madam clerk, do we have any public comment? No, there are no requests to speak. Okay, great. All right, colleagues, uh, chair.

Oh, sir. Oh, yes. Thank you. I forgot. I do want the chair to to comment on that. Thank you for the reminder.

Thank you. Um, so uh we really did appreciate the st at the finance committee, the very thorough work on a a challenging uh project and our two new senior members. uh we just uh were pretty astounded by how quickly they've become uh immersed and up to speed in in this issue so that they could really um uh significantly help us through this process. Um, this shortfall projected for the coming years is not as severe as anywhere near as severe as what the city experienced the COVID crisis or the great recession, but it's the most significant outside of those historic uh macroeconomic events that really were massive in their impact on the city. So, it's significant, it's not catastrophic. Um but it we do certainly do have our challenges ahead of us. Uh and it's going to change kind of what we've been in for the last five years of recovery from COVID losses to now we've got to tighten our belts, become more efficient, um and figure out um what priorities we can meet. Uh and as staff said, uh it's a it's a current best estimate, but the further out you go, the more uh conjecture it is, and that's the nature of it. But we still need to uh really do the best we can based on what we know at this point in time or what we understand. Uh even if it's not certain knowledge. Um and I think that there are there there might be some silver lining to this. There are some of the revenue categories that we're moderately conservative on and and uh in the committee's mind, the property tax, we had an explanation, but if you

look at the um page 32 um and look at the property tax increases, we're not talking about um a modest increase in just 27, But we go to mid4%s for the next decade. Historically, we have been much higher increases and I'm not sure what is changing structurally that will really result in um those this pattern continuing of below historic average. If you look at packet uh staff report page 25, we have chart two and it looks like a pretty steady line increase, but that's a dollar-based increase, not a percentage. And if it were adjusted for percentages, you'd see from from this year onward a significantly lower rate of increase than we've historically had. Um so we don't know what's going to happen there, but we may see better property tax results than there. And then there was one question that I think we asked at committee but I didn't find in the report and I couldn't recall the answer. We have significant utility uh rate increases really because during the co years uh we uh held off on increases and we're having to really make up for it as a primary reason. But the utility users tax and for that matter I think it refers to uh I don't know if it's buried in the return on investment what we have the transfers to the general fund from utilities the UUT is looking at from FY28 forward from basically 2 to 4%

increase but our utility rates uh were going up much more however I think part of the answer was we were looking at residential rates on electricity and not all the utilities are subject to the UUT. But do you have a clarification on why there's such a disconnect between the projections on UUT increases versus the utility rate increases? All right, Council Member P. Uh it's my understanding that um we'll have to come back and uh further evaluate the rate increases that we provided to you at the finance committee meeting in terms of the relationship to the UT tax that we have here.

Okay. Thank you. And then also to note on page 32, if people look at the document transfer tax, for some reason that uh is um highly volatile in the projections from FY29 of dropping all the way down to 2.8%, which I don't believe we've ever dropped that far, to a very high 9.8% the next year. And whether that built in some recessionary assumption or whatever, I don't recall, but I I don't anticipate that that's how the numbers are going to work out. So, we have some, you know, significant that's that's not an insignificant revenue source doesn't solve our problem. Um, and because that's probably our most volatile uh year-toear, uh, we do tend to try to be a little more conservative on document transfer tax and hope that we're going to have an upside uh, improvement. Uh lastly, staff re referred to attachment B which uh is really important to look at and and it it's really looking at how many people are on not how many employees are authorized but actually how many are undermployment doing the day-to-day tasks that we have to do. And we compared finally 2019 which was uh the first the last full precoid year which was kind of a boom period to where we are uh today and we have 51 more employees today. 13 of them are in utilities and those uh had some very specific needs there. But even if we subtract that, then we're um at 38 more employees than we were previously. Uh really because we've reduced our vacancy rates significantly

even compared to precoid. So um as we struggle through the budget um this will be part of what we are looking at and you know what how are we able to meet our current needs with our current staffing um uh compared to um where we were at a prior time of as a point of reference. So hopefully those comments help somewhat um and we'll go forward. Thank you for that. Um, do other members of the budget committee want to add anything to that? Council member Lithu, sorry. Oh, that's fine.

Oh, I thought you No, no, it is late. I pressed my microphone instead of hitting my button. So, thank you for your grace. Um, the one thing that hasn't been explicitly mentioned here, thank you so much for your presentation. Wonderful to have you two new folks on board and um, Director Lie really hitting her stride, you know, in this role. Um what hasn't been shared with council yet is um the new partnership with Chandler Asset Management. Um and I just wonder if you I I know that in and of itself is not going to solve our problems, but we do expect our assets to yield um higher returns because we're outsourcing it to folks who do this all the time instead of trying to manage it in house. And it was alluded to in the report. It was mentioned a couple of times, but if you could just let our colleagues know um briefly what that was about and what we how we think it will contribute to the

[clears throat] uh a return to greater fiscal health.

Yes. Um, so as council may recall, um, council last year approved the contract with Channer Asset Management for our investment portfolio asset management. And in doing so, we have, uh, a firm that could, um, has more resources and is more sophisticated in being able to manage our half a billion dollars of cash. And in doing so, um, we're hoping we can increase the yield on the portfolio. Um in consultation with finance committee um we have been informed that shifting the portfolio will take some time and we are in a period of some declining um yields right and but with that we are hopeful that we will be able to gain perhaps another percentage point on our half a billion dollar portfolio. Um does staff want to briefly approximate the range of that impact tonight or are you ready? One person is shaking the head, the other person is turning on the mic. Let's see.

I would say that from the base that you're seeing tonight, there will probably be a positive move, but as Director Led and as we noted at the finance committee, it's going to be overtime and iterative. So, it it grows over time, but as part of that $800,000 that we're looking at in new revenue, that will likely be a component of it. But if it's a half a billion dollars that we've invested in cash and we're talking about, you said an increase potentially of one percentage point, isn't that $5 million?

Um, I think yes. And because we do have declining yields because of where the market is with the investments that we have the authority to invest in, I think tonight we can share that um based on current information, it looks like we're going to see about half a million dollar of improvement in the 27 budget assumptions. So, um that's current information that we just got last week. Thank you. Thank you. I like additions like that. [laughter] Council member Recall. Clerk, can you bring up slide uh five, please?

And if you guys recall, 12 months ago, we had a similar presentation and it's changed for the worse unfortunately. Uh oh, first I should thank staff. uh you've done a lot of really good work and there's this got to shoot the messenger situation when you bring bad news and so staff has worked very hard to minimize the effects. So I do appreciate that. Um so if you look at there's a lot of red there and if you add up and go back 12 months and look at what we had red there but the red turned into black into 2030 and now we don't go to black until 2033. So, it's extended out three years and it's also deeper. Right now, it's uh before it added up to the total deficits, if you added all the red was 32 million. Now, it's over 83 million. And so, it it's significantly more [clears throat] deficit to deal with. Uh part of that is due to initial u effects right now in our revenue today, but also staff has become much more conservative as council member Bert talked about going forward. They were extrapolating a somewhat hopeful rate and they've temp that down. Uh and I suspect that a year from now we'll come back and say it was a little better than we expected and that's a good surprise. So I I think we're we have some conservatism built in and let's hope that that makes this so it's not quite as bad. But still 83 million is is significant and we're going to have to work pretty hard to do that. Uh so the sales tax uh increase is now between 2 and 3%. Property tax is about 4 and a half. Uh so those are growing but not not bailing us out as quickly as we did. And so last year there was this graph of our surplus becoming a deficit and coming up and

we're being bailed out because these those high property tax was bailing us out and we're slowing that down. Um uh if if you look I won't bring it up here but on on packet page 479 it shows the expenses and the even though our revenues are growing our expenses are growing even faster and that's very difficult to overcome and so as council member Bert was saying is you if you compare apples to apples we have significantly more people on the payroll today and we really need to look at that and say has our scope changed or are we being less efficient. What is the reasons for that? And I really think uh you know going when we talked this Saturday about priorities I think one priority is a budgetary is to look and say we need to really take a look at uh what is our workforce and what's the optimal work force and can we either by automating things reduce the number of people we need or by uh being more efficient uh and how we deliver it or um perhaps even reducing services. How can we reduce the workforce back to where we were before? Because when you look at these this 82 million, you know, every dollar that we can shave off the workforce today helps us for the next seven years. So I I think that we have to really get serious about cutting the um cutting the workforce, but I don't think we need to be draconian because as council member Bertman said, this this is bad, but it's not as bad as it's been, right? We we we think we can handle this and so I think if we are fiscally prudent we can get through this but it is a a big hurdle to overcome.

Council member Louu

thank you and I appreciate the incredible depth of all the work that's gone into this and I really love that there are opportunities to outperform this forecast. Uh I did have one question uh maybe in a more pessimistic front though about the expenditure growth over time. And so I noticed that from 2033 or 2032 onwards our expenditure growth slows down um pretty significantly. And I think well well among the other drivers the big one is salary and benefits which from 2033 onwards increases only by 1.1% on average over that period. And so does that feel like an optimistic projection? And so if so, it seems likely that our structural deficit could last at least a few years longer. So that that's a good thing to note with regard to salary and benefits. The reason you see the growth in the near term is because the council approved a number of new labor contracts. So those are actualized. In the outer years, we tend to put in the forecast just CPI because we have no idea, you know, classification changes, salary agreements or adjustments beyond inflation. We also want to leave the city in a good position for those negotiations

on how those work. So, in those outer years, we just adjust by inflation and CPI typically, which is why you kind of see that that flattening out in the outer years. Okay. though it seems like we're not at I mean maybe the Fed's abandoning 2% but we're below the 2% inflation target here. I'll also add that um in your pocket you'll see in the expenditure section the cow purse projection rates as you may recall after 2031 the rates start to decline.

So you're seeing one of our primary drivers which is one of our major cost component is declining. So a lot of our pension planning is that 2031 timeline is to get to that point and we're going to see it starting to decline and that's also contributing to the slower expense growth in those out years. Okay, got it. So there might be potentially downward pressure on the budget if we give any raise more than CPI more than 2% or something but there is real downward pressure also just on the pension contributions. Correct.

Okay. Uh one more very basic question. When we talk about uh cutting additional discretionary payments on pensions, is that growing our unfunded pension liabilities or would it still be effectively stable given the amount we cut? Um, so our unfunded liability is driven by our actuarial report that determines it. The amount of money that we're setting aside was based on the city's policy. Um, the recommendation we have here is to moderately reduce the amount that we're going to contribute. So it would by virtue increase the remaining balance. Importantly is in looking at our policy. We have a goal that says we want to reach 90% funding within 15 years of this policy. Having studied that with the finance committee and triangulating it with two actuarial firms, one that's softwarebased and one that is a uh licensed actuary. We determined that the city could um utilize some of the funds in the section 115, meet the policy objectives, and still have manageable unfunded liability.

Got it. Okay. Um long answer, but I hope that's reassuring.

That is very reassuring. Um uh that we would still be on target and we aren't uh sort of uh borrowing against ourselves on that. Um, I really like that we are keeping our budget stabilization reserve at a healthy level through 2026. Uh, the the the economy could get so much worse. Um, so I'm glad that uh we are uh keeping that healthy. Uh my main comment would be that I think increased revenue should be a significantly larger part of our uh balancing strategy. Uh in addition to cost savings and all that uh we mention new and updated fees. I think there are opportunities in airport fees or uh some other uh potential fees but saying uh and other revenues uh on the back end of that is really underelling the point. Um there can be so many more opportunities that we'll explore in the uh priority setting meeting. uh and I think we should probably try to set some goal to uh for our economic development team and uh projects to really exceed this incremental revenue target that we have. Um so those are a couple questions and a comment for now.

Um thank you council member Lowing.

Thank you very much. Um yeah, I thought again another outstanding piece of work from our administrative services department. Um very very good and obviously the two new guys have come up to speed. So but you're preparing them for the year. Okay. Um I I I thought I would just focus I have a bunch of questions but I want to focus first on just your your critical slide. I think it was slide seven in your proposal in uh packet page uh 465. uh just kind of running through uh you know that that there's that deficit next year of 15 and then how we going to get there and so because it's in that order my first question echoes uh what uh council member Lou's question was um you got a plug-in number there for 08 which I didn't know what it is now part of that is going to be um investment income um but it stays pretty flat and pretty small so um again agreeing with his point I'd like to see, you know, some real work on the part of staff and then maybe even with the finance committee and say what can we do here? I know there are some things on the um back burner that's worked like the new ambulance situation. You know, over time that could be a revenue u but it's going to be overtime because in the beginning it's going to be expense driven more so than revenue. But I I think we should see what more we can monetize here that's that's fair to our to our residents and and to our visitors for that matter. Um [clears throat] and so then kind of going down here, you've got the um CIP this year. You picked um a very tiny number of a million dollars from I don't know what we usually spend without going back into this, but we spend a lot. So why wouldn't that be sort of particularly in the short term because this was sort of a surprise, why wouldn't that be sort of a convenient way early to make an impact

on this? Um because it's just, you know, delaying something going up. Um if I understand the comment, is it suggesting that we should be looking at reducing the transfer by amount greater than a million? Yes, it's a question

duly noted. I think um this is a menu of budget balancing strategy. It may not be the exact mix but it is a portfolio of different approaches and as over in the upcoming months we are looking at turning over every opportunity on the revenue side and it may it will not land at 800,000 and likely on the capital side. You know, depending on what we can squeeze in terms of general fund reduction, in terms of headcount, program suspension or impacts, it may fall on the capital side. Partly because in evaluating capital, we may actually see certain projects can be deferred without big impacts. So, we will be looking at that. The 1 million is a placeholder for now for context.

Yeah. I mean, if you do that for years at a big number, you're kidding yourself because then you've got massive gap to pick up and buildings are falling apart. So, um, but if it's an emergency situation, you know, that that's why I'm asking it. Uh, and the next the next question is why is the number that we have in the BSR from an analytical risk point of view the right number? Why is this the right number? Not from a policy point of view or what what council said in the past as a percentage, the 18.5 I think it is. Yeah. But why is 56.8 8 million the right one. After you've looked at everything, you're not recommending that you go higher or lower than the percentage, but I'm more interested in the dollars given the risk profile you have going forward for the next, you know, eight years. Why is that the right number? So, I'm giving you the answer. I mean, I'm not giving you the answer because you can go either way on that. You can say, I'd like to have more or I'd like to have less.

Um, it's a ratio, right? So, it's 18.5% of the budget. So to your point, as our budget grows over time, that absolute number will is dynamic. So that $58 million number will grow to 60 to 62 to 64. But the relationship is that our reserve should be or our target for that reserve is 18.5%. Right? So you're using the existing policy, but if we were having a discussion tonight about what should the BSR really be, right?

And it's not 18.5 because we threw that number away. you would do some sort of analysis to get us there or you would say I'm still actually comfortable that each dollar is a dollar and we ought to keep 18.5% of those in the BSR.

Um I would still stand behind 18.5% at this junction. I think historically the city has been between 15 to 20 given the volatility that we're in and the horizon that we're looking at. I would not recommend that we would go down and at the same time increasing 18.5% means that there's more reductions that we'd have to look at. So, um 18.5% right now seems to be a moderate reasonable approach to maintain.

Okay. Um and I think you one of you said that you're looking at flat head count going forward for for a number of years. So sort of what's in there now as the actual or as the uh targeted or um so just as a reminder the long range financial forecast is a forecast of current service level. Yeah.

And because of that we maintain the headcount through the next 10 years. Um as noted the budget balancing strategy which would entail reduction of headcount would impact that right. So in spring when we come back in May to transmit the proposed budget we will have a a lower headcount but the long range right now assumes flat because it assumes current service level projected for 10 years.

Okay. Um this is as you said the the critical slide that I think you know we have to be comfortable with on a policy basis but then finance committee has to come and work up and down and left and right. Uh the only other one is this this this fuzzy one called -f. Um but that it's hard to get your arms around what that is, right? So you you have reserves for that essentially is what you're saying. That's what the 7 million is.

Yes. So RAF is um the property tax excess that we get back as a city. Some of it is contingent because of um pending litigation that may have an impact on us. we conservatively do not appropriate that money. So, we set that aside. Um, the 7 million that you're referring to is the amount that we've accumulated since I believe it's 2019 or 2020. Um, and so, yes, we conservatively set that aside and we do not appropriate that money. We're hoping, fingers crossed, that in March the courts will listen to the case and render a a verdict. So, so you have certainty one way or the other. Correct.

Okay. Correct. And for transparency, it is a mixed bag in this county. Some agencies appropriate 100%. We conservatively still set it aside per county recommendation. So, um we we do have that funding and we are looking forward to a determination on that matter. Yeah. So, I I I think this study sets up um you know, an excellent platform uh to work on and there's some tough calls to make. Um but we're not talking about all those tonight. So, thank you. Thank you, Vice Mayor.

Thank you, Madam Mayor, and and thanks to to staff for working on this. It gets worse and worse every time it comes before us, but I'm always at least um I feel comforted knowing that we have such a strong team working on it. So I can always trust your advice. I appreciate it. Presentation was excellent. The questions as as well. So actually all my questions in various kind of versions have been have been answered. So I guess just one point of of concern overall. I I endorse the balancing strategy that was that's that's presented tonight. My concern just around budget reductions and strategy. I know we're talking about headcount and and I know finance committee is going to be looking at at reducing that. I I I don't know what is possible there with regards to uh attrition rates over the next over the next several years while we're still in deficits uh and removing vacant positions that might not be necessary moving forward. where I would get very concerned is if we start talking about layoffs because I think it's really easy when we're talking about budgets to think about things just in terms of numbers but then to keep in mind the the human side of of it as well and I I would imagine that is kind of generally our strategy that layoffs is really a a last resort but just kind of wanted to put that out there of that is my my my great but that's my big kind of concern as far as a budget reduction strategy I don't know if staff has any any thoughts at the moment about kind of what it looks like we might be able to do as far as attrition and and vacancies or is that for another day?

I just want to reflect and echo your concerns and also give the council and community and the organization the confidence that we are approaching it exactly as you're saying. What are some vacant positions that we have currently? Um and if we defund those, how does that impact services and programs? Could they still operate effectively? Right? Because we need to look at that dynamics as well. But first and foremost looking at those opportunities and then looking across the organization and determining um you know and really re-evaluating and prioritizing services and programs um with a with a focus on minimizing impact to the community and to the extent possible to our organization as well. Um but yes, wanted to reassure you that we are being very thoughtful in this approach and very iterative with our department heads and the the specific operations that they lead as we go through our budget development process.

Thank you. And and I hope those reassuring messages are also trickle down through the organization as well because I would imagine we have a lot of employees who are going to be very nervous in the in the coming months to see what that budget looks like and to to say at least that is that's what we're striving to be able to to do. So thank you. I know we're we're in for a a a tough road and a and a challenging few months of working through this budget, but appreciate all the work that you do. I know it's it coming up to your your busy time. So, good luck and appreciate you,

Council Member Liths. Thank you. Yes, I just wanted to clarify going back to something council member Lou asked. I was trying to pantomime to director live, but let me just say it directly on the mic. His important questions about um our section 115 trust, our unfunded pension liability, I felt could be well answered by a chart you brought to the finance committee where you kind of showed there's sort of a magic. there's a year we arrive at, I think it's 2030 or something where um we begin to um uh see the payoff. we we get to that 90% or whatever it is where we're we feel that we've we've reached the target that we aimed for when we set this thing up and that means um in the subsequent years we put fewer dollars into that effort or or we stop putting dollars into that I can't remember but the point is you have a chart and I think it's a for those who are visual learners and thinkers it might be very reassuring to kind of see that projection of what that very prudent um invest ment decision made years ago has really yielded and um how it's going to um impact the overall budget going forward.

Great. Um I will share with the council that that item will be in the midyear report coming next month. The section 115 recommendation for council approval will be brought before you. Um and we will include that chart um and explain um the recommendation and give you an abbreviated presentation on what finance committee studied extensively. So that'll come before you next month as a part of fiscal 26 because we will be t making uh financial transactions on that this fiscal year in order to en enact some of the savings for 27. So we will bring back that and that feedback about like what's the best presentation is duly noted for staff tonight though it is being considered as a part of the strategies that we'll implement um as a part of developing the proposed budget but in February when we come back at midyear that's when the council will actually take the action on section 115. So stay tuned.

I can hardly stand the suspense. No seriously. Um, I I want to, you know, commend you again on the work that's gone into this. And I appreciate the the thought and the balancing strategy, uh, both short and long term, and appreciate that the finance committee spent a lot of time with you and seen charts like that. I would love to see that chart. So, if I can wait a month, sure. But, um, because my questions also followed most of what my colleagues have asked. But um you know when you look at the short-term balancing strategy, it was the pension costs that jumped out at me as a part of that because it makes me very nervous because I know we had this carefully crafted strategy. Um we were executing it well and you know marching along to achieve this goal. So um I will trust that my colleagues have seen it and that I will see it. Um but I that is of of significant concern. Um can you just for my edification quickly um these two pieces the ADC and the ADP well actuarial determined contribution is I think for retirey healthcare what are the two pieces and and why are we taking a lot more from one than the other just at a high level can you just explain to me the thought process there

sure they're both related to retirey pension one relates to reducing the liability that's the ADP the ADC is reducing the current year cost. Ah, I think director law uses different terminology than we were accustomed to prior to your arrival. I say this as a relative newcomer myself, but I hadn't heard ADP and AC whatever. Yeah. Yeah. I had not either. We spoke of normal cost and unfunded pension liability and true cost and

Yes. So, um, if we really want to geek out, which we may not to tonight because we have February But the discussion previously for normal costs and UAL relates to the amount that's in the budget. When we actually talk about transactions related to section 115, we're really talking about two different things, ADC and ADP. So until this community council and this body really started talking about like cash flows in and out of section 15, we haven't had to use those terminologies. So this is this is so the section 115 uh payments reflected in the ADC and ADP are separate from the normal costs.

Yes. Okay. And we will go into that next month.

Former council member Philith will be glad to know that. Um [laughter] okay. And then um my I I also have to say when I looked at the long-term strategies, uh I had kind of the same questions as uh council member Lowing about the the CIP reductions. That series of zeros just kind of jumps off the page when you don't have the full background there. So, um you know, I I I heard the the explanation there, but um you know, one just looks at it and thinks, okay, we we we want certain projects, we want maintenance, we want all these things, but um the zeros seem like there's if need be an opportunity. Um I did want to just uh follow up. Um, Council Member Bert when he was introducing um in the introductory remarks um talked about the property tax percent change and um I I I am just curious if you have any uh remarks or thoughts on if there is something changing structurally for that percent change to be lower than the historical

change. Two steps. One is we needed to align current year revenues with the actual tax role. So the actual tax role was published by the county and so we had to align current budget to that and so that was a downward revision. In addition, previously the long range assumption was over 6% growth year-over-year, and several council members last year really

question whether or not that was too optimistic. Um, and so looking at um the trends, we were really calibrating back to about mid 4%. and HDL who does our um property tax um work um they are actually much more comfortable with that as well and so it just moderates the assumption um cuz 6% plus is a little bit too optimistic for the long term.

Okay. Um thank you. That's helpful. Um just plus one to the other comments about um employees and uh just you know really checking in probably department by department. How are we doing with these vacancies? You know which ones really are still essential to fill and which ones perhaps not. I appreciate hearing that you're looking at that. Uh it's it's always a tough conversation, but I think um you know we we need to at this point and that's easier obviously than um you know trying to eliminate any current positions. Um so just finally um uh like council member Lou uh I am also pleased that we're maintaining the BSR where it is because while you know you started by talking about a strong national economy but some softenings softening here but perhaps not if things evolve. Anyway, you know we're just I feel like we're in a relatively uncertain time. Um, I don't think a year ago we would have predicted all the unusual things that happened this year and it makes markets nervous and you know it makes businesses nervous. We don't know what exactly is going to happen. Um, the grant the federal grant dollar situation makes me nervous. Um, so all of those so you know we have all of those things going on at a time where that our structural deficit is creating charts like we've seen tonight with the red on them. And so I think that having that sort of economic unpredictability together with the structural deficit makes me feel even more resolved than we all of us have shared in the past to have that BSR protected protection. So you know thank you for leaving that at that 18.5%. Um that's all I have. Council member Rectal.

Yeah. the vice mayor uh expressed some concern about layoffs and we had the same concern last year and staff had the same concern. Uh and so last year when we did the budget cuts we all went after vacant positions and so that will be a high high prior priority is to remove vacant positions not remove workers. Uh I think we can make the cuts that we have to do without laying off people. So,

okay. Uh, seeing no further lights, I think the action here is what to we did the review and we need the uh adoption uh of the development the budget development guidelines. Is that what we need? Can I have a motion on that? Anyone? So, move. Is there a second? Second. Further discussion. Madame clerk, would you call the role? Oh, sorry. Sorry. I just want to make sure we have the motion correct because it's it's actually not just to review, but it's the council accept the long range financial forecast. Okay. I was just going by the title. So, we need to accept. Is that correct, Steph?

Okay. It's in the recommendation paragraph. Okay. Can I just confirm what the secondary was? Lou, I thought that you did it. I thought you edged me out. I I was going to Oh, okay. [laughter] Then I guess I did. I ed Let's go with Rectal Doll. So, this was moved by Council Member Lowing, seconded by Council Member Rectal. All right, taking the vote. Council member Lowing. Yes. Council member Lou, yes. Council member Bert, yes. Council member Rectal, yes. Vice Mayor Stone, yes. Mayor Vinker, yes. Council member Lith Haynes,

yes. Motion carries unanimously. All right. Congratulations, folks. Thank you to staff for this presentation and we're adjourned. Good night.