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HomeMy WebLinkAbout2025-05-05 City Council Summary MinutesCITY COUNCIL SUMMARY MINUTES Page 1 of 20 Regular Meeting May 5, 2025 The City Council of the City of Palo Alto met on this date in the Council Chambers and by virtual teleconference at 5:30 p.m. Present In Person: Burt, Lauing, Lu, Lythcott-Haims, Reckdahl, Stone, Veenker Present Remotely: None Absent: None Call to Order Mayor Lauing called the meeting to order. The clerk called roll and declared all are present. Special Orders of the Day 1. City Employee Years of Service Awards and Proclamation acknowledging Public Service Recognition Week: May 4-10, 2025 NO ACTION City Manager Ed Shikada voiced that the resolution will be read, the attending employees with 20, 25, 30, or 35 years of service will be recognized, and a photo will be taken with Council. Mayor Lauing commented that there had been a pre-reception with many attendees. The proclamation was read. May 4-10, 2025 was declared Public Service Recognition week. He thanked the employees for all they had done and will continue to do. Councilmember Lythcott-Haims was honored to serve alongside the recognized employees. She offered her gratitude and appreciation. Vice Mayor Veenker thanked and acknowledged the loyalty of the recognized employees. City Manager Shikada read the 44 names of those receiving years-of-service awards, and a photo of those attending was taken with Council. SUMMARY MINUTES Page 2 of 20 City Council Meeting Summary Minutes: 05/05/2025 2. Proclamation Honoring Russ Reich for his Service to the City of Palo Alto NO ACTION Councilmember Reckdahl read the proclamation and thanked him for a job well done. Russ Reich spoke of his amazing career. It was an honor to serve the community, and he will miss Palo Alto and the people. 3. Proclamation of May 2025 as Affordable Housing Month NO ACTION Councilmember Stone read the proclamation. SV@Home Representative Emily Ramos spoke of the work of SV@Home. She thanked Council and the City for the invitation to participate in the Affordable Housing Month Proclamation and for the commitment to advance affordable housing in Palo Alto. Many are burdened with the cost of housing. She commended the City for their leadership and partnership. Many events will occur in May. Mayor Lauing thanked SV@Home for helping the City identify the ongoing need and appreciated that SV@Home Representative Emily Ramos attended. Closed Session 4. CONFERENCE WITH CITY ATTORNEY - EXISTING LITIGATION Subject: McGavock v. City of Palo Alto, et al. Santa Clara County Superior Court Case No.23-CV-413813 Authority: Government Code Section 54956.9(d)(1) One Case, as Defendant 5. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: 2470 Embarcadero Way, Assessor’s Parcel Number 008-03-072 Negotiating Parties: Bioscience Properties, Inc. City Negotiators: Karin North, Sunny Tong, Caio Arellano Subject of Potential Negotiations: Lease Price and Terms of Payment SUMMARY MINUTES Page 3 of 20 City Council Meeting Summary Minutes: 05/05/2025 Public Comment: 1. Herb B (Item 5) discussed why he does not support Item 5 going into closed session. He recommended that Item 5 for 2470 Embarcadero Way not go into closed session. MOTION: Councilmember Lythcott-Haims moved, seconded by Councilmember Reckdahl to go into Closed Session. MOTION PASSED: 7-0 Council went into Closed Session at 6:00 p.m. Council returned from Closed Session at 7:10 p.m. Mayor Lauing announced no reportable action. Agenda Changes, Additions and Deletions City Manager Ed Shikada announced there are no changes to the printed agenda. He suggested that City Manager comments be taken after Council comments. Mayor Lauing declared that can be done and public comment postponed for 5 minutes. Council Member Questions, Comments and Announcements Councilmember Lu reported on a trip he and Vice Mayor Veenker had taken to the Cal Cities City Leader Summit in Sacramento 2 weeks ago. He had spoken with Marc Berman and his office and Ash Kalra’s office. Vice Mayor Veenker added that she had met with Senator Becker and Assemblymembers Pellerin, Ahrens, and Stefani. The need for resources for the Climate Bond and housing was underscored. She and Palo Alto Utilities COO Alan Kurotori attended NCPA’s 21st Annual Federal Policy Conference last week. There were briefings from legislative staff focused on wildfire policy, energy permitting reform, infrastructure incentives, and the changes in leadership at the FERC. The CEO of NERC had addressed management of cyber and security issues facing the grid. A senior person from the US Trade Representative’s office had discussed tariff policies and the implications on public power and the supply chain. There had been meetings with the congressional delegation, key committee staff, and federal agency officials, and protecting federal power resources and preserving the direct pay tax incentives were key focus areas. There had been a direct meeting with Senator Alex Padilla and meetings with the offices of Senator Schiff, Leader Jeffries, and Representatives Khanna, Carbajal, Liccardo, and Simon, all SUMMARY MINUTES Page 4 of 20 City Council Meeting Summary Minutes: 05/05/2025 commissioners, the Federal Regulatory Commission, and incoming officials at the Department of Energy and the Department of the Interior. Councilmember Burt stated that Caltrain and VTA are looking at the prospect of a regional tax to support the transit agencies facing a fiscal cliff. SB 63 will come forward, which will enable a regional sales tax, and Caltrain endorsed the measure. At the VTA Board meeting there had been polling looking at county support for the regional measure and county support for renewing Measure A with an increase in the amount, and both were similar in support. The Board was not prepared to take a position as the results were received the day of the meeting. There is a potential State bond going through the legislature, which will fill the gap before receiving funds from the regional measure. SB 79 passed the Senate Housing Committee, but Palo Alto had not taken a position, and he urged taking a position. Mayor Lauing thanked the Community Services Department for managing the 101st parade this week. City Manager Comments City Manager Ed Shikada displayed slides. A Nonprofit Partnership Work Plan is being implemented, and there is a Friday deadline for nonprofits seeking funding through the City’s budget to turn in applications. Volunteers are being sought to participate in the Community Advisory Group for the San Antonio Road Area Plan, and the deadline is May 30. Upcoming community events include the Park-to-Park Ride and the Cubberley Artists Open Studies on May 10 and Bike to Work and Bike to Wherever days on May 15 through 17. There will be upcoming open events, including Family Movie Nights, Twilight Concert Series, Magical Bridge Summer Concert Series, and Chili Cookoff. Applications for the Chili Cookoff are open. The MSC open house will be on July 26. Upcoming Council agendas will include the initial readout from the Finance Committee on the budget study sessions, housing element programs, and ADU Ordinance adjustments on May 12; pre-screenings for developments on San Antonio, a potential construction contract award for the Advanced Water Purification System, and wireless communications on May 19; and the El Camino Real Focus Area and Downtown Housing Plan on May 27. A number of items are scheduled for June. Public Comment 1. Carol G., Producer of Third Thursday California Avenue Music festival, voiced that the 2nd anniversary will be celebrated on May 15. She thanked Palo Alto, Stanford Research Park, the Chamber of Commerce, and others for their support. The 2nd Annual Wine Walk will be held on June 19. SUMMARY MINUTES Page 5 of 20 City Council Meeting Summary Minutes: 05/05/2025 2. Hamilton H. opposed the proposed rate increase for residents and the largest customers receiving a gas rate cut. He believed the changes can remanded for a more equitable and climate-friendly revision. 3. Liz G. commended the proclamation on Affordable Housing Month. She suggested defining the word affordable in affordable housing. 4. Mark T. stated that he disagrees with the numbers put out for COVID deaths. He supports ICE. Study Session 6. City Manager Transmittal of the Fiscal Year 2026 Proposed Operating and Capital Budgets NO ACTION City Manager Ed Shikada in accordance with the City Charter presented the FY2026 proposed Operating and Capital budgets and the 5-year Capital Improvement Plan. The proposed budget represents the continuation of a number of investments made by Council last year. Macroeconomic trends that could impact the City are being watched closely. The proposed budget uses economic uncertainty reserves and other measures set aside to provide stability in services. The fiscal strategy uses 1-time funding and balances/increases in rates and fees. The General Fund budget invests in services for the community, such as developing plans to acquire and renovate the Cubberley Community Center, the opening of the new Public Safety building, completion of Palo Alto Homekey, advancing elements of the City’s Sustainability and Climate Action Plan, continuing capital upgrades at the Regional Water Quality Control Plant, Fire Station 4 replacement, and modernization of the City’s electrical gid. It is expected that contingency planning will need to continue into the new fiscal year. Staff will continue the discussion with the Finance Committee over the next few days to develop recommendations for Council’s consideration. Chief Financial Officer Lauren Lai furnished slides. An overview of the agenda was provided. Staff requested that Council discuss guidance for the Finance Committee colleagues. On May 6 and 7, the Finance Committee will have workshops to review the proposed budget and recommend amendments, which will be returned to Council on May 12. It will then return to the Finance Committee for a budget wrap-up. Then the information from Council will be synthesized, and amendments will be presented to Council for adoption on June 15. Nonprofit proposals are due May 9. On June 10, P&S will review and recommend awards. On June 16, Council will adopt the budget, which will include funding appropriations for grantees as recommended by P&S. There may be gaps in the numbers in the budget related to nonprofit, which will be explained later. The budget is grounded around the City’s vision and Council’s 4 priority areas. As for the economic outlook, times are uncertain as it relates to tariffs, supply chain, etc. The situation is monitored very closely. The approach to the Operating and Capital budget is conservative. A balanced SUMMARY MINUTES Page 6 of 20 City Council Meeting Summary Minutes: 05/05/2025 budget is being presented, which uses some 1-time funding to balance it. There is a focus on preserving services, initiatives, and investments made to date. Cost control and raising revenues are important. The Finance Committee had reviewed several sets of fees, which will be continued on May 7. Staff is putting together strategic plans to be prepared for a range of economic conditions. The proposed budget is $1B, which includes all funds. The general fund is $312.5M. The Operating Budget at $1B is an 8.5 percent reduction from prior years. The Capital Budget for FY2026 is proposed at $316.2M. The 5-year plan is $1.1B over 5 years. The Uncertainty Reserve is being utilized to maintain service levels. There are limited investments in areas focused on priorities, public safety, and utilities. The 4 major principles of the budget strategy were highlighted – use of 1-time funding, labor agreements, capital investments, and City pension and OPEB. Labor agreements will expire in 2025, and negotiations are underway. It is important to resume investing in capital. The Pension Trust and the Retiree Benefit Trust are prefunded at accelerated levels. Revenue assumptions are cautious. Pie charts were presented showing the sources and expenses of all funds. Staff recommends 12 FTEs. A slide was provided showing multiyear General Fund balancing. Contingency plans are being worked on should action need to be taken quickly. A slide was shared showing General Fund revenues, which the Finance Committee will go through in detail over the next 2 days. Staff is monitoring sales tax and TOT closely. Investments by service areas (Public Safety; Community and Library Services; Planning, Transportation, and Infrastructure; and Internal Support and Administration) were outlined. As for gaps in the numbers as it relates to nonprofits, the proposed budget has $235K for the Nonprofit Work Plan, but there is no appropriation for the Community Events CSD grants, and Council may wish to appropriate up to $346K, which she broke down, although the Finance Committee will deliberate on it over the next couple days. The process allows for amendments from the proposed budget to the adopted budget. If that is desired, the amendment would be for $111K, which will be addressed at the Finance Committee meeting on May 6. Regarding Measure K, extensive information has been created in the Budget Book on pages 67 and 68, and the transparency is on the City’s website. A pie chart detailing the CIP 5-year plan was supplied. She highlighted a few capital projects that have been completed. The Parking Fund needs financial support from the General Fund, although strides have been made to reduce the support. Information on other funds was provided. Should the Finance Committee approve reducing the gas rate increase with a climate credit, it will be presented to Council on June 16. The budget conversation will continue until June 16. Staff asked the councilmembers not on the Finance Committee to provide guidance and feedback to the Finance Committee. Public Comment: 1. Liz G. discussed OES and nonprofits being important to the budget. 2. Mora O. (Zoom), Executive Director of YCS, expressed her gratitude to Council for the commitment to youth mental health. She did not find mental health funding visible in the budget, which is a concern. She requested that designated specific funds with clear deliverables be invested in. SUMMARY MINUTES Page 7 of 20 City Council Meeting Summary Minutes: 05/05/2025 3. Shashank J. (Zoom) spoke on behalf of the HEARD Alliance and expressed strong support for the priorities of the Mental Health Taskforce. He suggested prioritizing funding for YCS and Project Safety Net. Vice Mayor Veenker asked staff to speak to the strategic preparation for a range of economic conditions that was displayed on a slide. Chief Financial Officer Lai voiced that revenues are tracked on a monthly basis, and she is still having conversations to ensure that the assumptions will run accord with what is known. City Manager Shikada replied that there is not an immediate and clear need to make further expenditure reductions to what is included in the proposal. Recognizing the volatility, there may be interest in contingency plans, though they may generate concerns. The next steps are to get a handle on the range of contingencies that might be prudent to prepare for and to then discuss how to address it, which will likely extend beyond this budget season and potentially into the fall. Chief Financial Officer Lai added that they want to shore up as much fund balance as possible in FY2025. Details of how that is being done were provided. Real cost control measures are being instituted. Vice Mayor Veenker stated that she supports robust contingency plans and requested that the Finance Committee address it. She inquired why YCI was zeroed out in the 2026 budget. Chief Financial Officer Lai replied that that YCI contract ended. If desired, the budget can be amended in the budget development process to appropriate those funds, and the contract can be reinstituted. Vice Mayor Veenker hoped the Finance Committee will address reinstating that contract. Councilmember Stone queried where in the budget there is funding for youth mental health programs. It is disappointing that the budget does not reflect the stated values of and the need to further expand services around youth mental health. YCI funding needs to continue. He wants the final budget to better reflect wellness and belonging values. Chief Financial Officer Lai did not believe mental health is summarized programatically across all the different departments, which there seems to be a need for. There are mental health programs within CSD and the library, and the details can be presented to the Finance Committee in the upcoming workshops. Community Services Director Kristine O’Kane answered that funding for mental health is imbedded in CSD’s operating budget, and the detail can be presented to the Finance Committee on May 6 or 7. Councilmember Stone thought presenting that detail to the Finance Committee would be helpful. He questioned if there should be a placeholder for the potential partnership with Jed Foundation. SUMMARY MINUTES Page 8 of 20 City Council Meeting Summary Minutes: 05/05/2025 He wanted funds to be earmarked for that. He asked if is anticipated that the teen center in North Palo Alto will open in FY2026 and if funding for programming, etc., is incorporated in the budget. City Manager Shikada noted that the City/School Liaison Committee has recommended engaging with the Jed Foundation, although it has not been presented to Council. He did not believe funds for that have been earmarked. There is a line in the CSD budget for perspective uses for mental health funding for Finance Committee discussion. It is anticipated that the teen center in North Palo Alto will open in FY2026, so there may be questions related to the level of operating expense and there may be additional capital improvements to open the facility, which are not part of the initial improvements. Director O’Kane added that the expenses needed for opening 445 Bryant Street for programming are built into CSD’s operating budget. Councilmember Stone asked if there is specificity regarding that in the budget. Budget Manager Paul Harper noted that last year a proportional amount of funding had been added to the Public Works and the CSD departments’ budgets for 445 Bryant. Additional funding was added for those departments this year. It is being brought up to essentially a full year of funding, although it is not thought that it will be open for the full year. Councilmember Lu thought the community services nonprofit partnerships should be looked at more explicitly. It is useful to let the nonprofits know if they will or will not receive funding. He inquired if there are nonprofit partnerships in other departments or budgets that should be unrolled and brought to the Finance Committee and what bucket Project Safety Net had been in and will be in. City Manager Shikada stated that the issue with YCS is the only one that appears to have been missed in terms of the connection between what had been annual funding and what has been discussed in going through the Partnership Work Plan that P&S will review. Project Safety Net had been a multiyear agreement with the City, and it is assumed that it will continue for another year. It has not been envisioned to be part of the overall Nonprofit Grants Program that P&S will review. Councilmember Lu felt it will be useful to provide certainty to Project Safety Net. He queried how inflation is considered as it relates to the assumptions built into the budget and potential contingency plans. He queried what happens to projects that cost more than expected. He did not see plans for developing housing on the City-owned parking lots and queried when that will be decided. City Manager Shikada stated, if project bids should come in higher than anticipated, staff would bring it to Council to consider modifying the scope or increasing the budget. It is done on an ongoing basis and may return to Council over the course of the year. Regarding developing housing on the City-owned parking lots, significant expenditure is not anticipated for the SUMMARY MINUTES Page 9 of 20 City Council Meeting Summary Minutes: 05/05/2025 upcoming fiscal year, as an exclusive negotiation is being entered into with Alta Housing and any significant expenditure will come in the following year. Councilmember Lythcott-Haims was eager to discuss YCS, Project Safety Net, and 445 Bryant on the Finance Committee. The briefing document references funding La Comida at 445 Bryant, not the teen center, and mental health is not in the conversation. The commitment to mental health and specifically youth mental health should not be rolled back. She referenced PERT and queried if the chances of hiring a partner for the police officer has improved. Police Chief Andrew Binder remarked that the PERT Program has been in place for a couple budget cycles, although they do not have a clinician as part of the team. It is hoped that there will be a partnership with County Behavioral Health Services and that a PERT officer will join the team. If that does not happen, the Police Department is looking at other options to acquire a clinician. Councilmember Lythcott-Haims questioned if the money could go to mental health in another side of the house if no one is hired. She referenced Page 62 of Operating, and it is alarming that assumptions are not included in the long-range forecast. She is having trouble squaring the information. Chief Financial Officer Lai answered that funding for the PERT officer is SUMC funding, so there are restrictions. Assumptions not included in the long-range forecast are important priorities and the pursuit is to find funding for the priorities or reallocating funding. The long-range financial forecast is a forecast of current service level, and these projects and initiatives are a higher service level. The call to action is for Council and the community to find funding for the list of desired outcomes. The budget includes short-term funding for specific things and long-funding for bigger dollar costs for grade separations, etc., are not in the base budget. There are capital improvements for safety around the transportation corridors, but there is not funding for much more than that or federal funding is being sought. City Manager Shikada added that the PERT officer funding does not have to be used by the Police Department, but the proposal is to do so as a means of meeting the need with the parameters of the restricted funds. The long-range financial forecast is the base case, the known expenditures that have been committed to. Staff will move into the balancing exercise of meeting goals with the available resources. Mayor Lauing stated that the Finance Committee recommended removing $2M. Some items are multiyear financing and some depend on grants. Things have to be prioritized as everything cannot be done. He wanted to know what will be done on contingency cuts and when it will be done. He asked what the 2025 vacancy rate is. He questioned if the Finance Committee will receive strategic presentations and if funds should be reserved for the unknown. There should be a plug number. Chief Financial Officer Lai planned on a vacancy rate of 5 in the budget. They pull out the public safety component, so the General Fund without public safety is around 7 percent. Sometimes SUMMARY MINUTES Page 10 of 20 City Council Meeting Summary Minutes: 05/05/2025 overtime is used instead of the actual vacancy, which is spending money. The Finance Committee has been working diligently on a policy related to fees, and they will deliberate on fire and ambulance service. On May 7, the Finance Committee will address the gas rate and COSA. The nonprofit funding level and partnerships will also be discussed. She was sure the Finance Committee would identify others as well. City Manager Shikada stated that he will ensure that staff will engage and respond on the specifics of each service area. Mayor Lauing felt that some of the unknowns should be knowns and be action items in the next 6-12 months. If every dollar up to the current balanced budget is spent, some of the new initiatives will not be done, so he suggested plug numbers for some areas. He encouraged the Finance Committee to include this as one of those areas. He questioned if the topic concerning of amount of dollars spent on consultants will return to the Finance Committee and Council. Chief Financial Officer Lai answered that in the Supplemental/At-Places Memo, which will be published on May 6, will summarize all contracts and vendors that were paid over $1M in the last 4 years, and from there, staff can drill down further. City Manager Shikada added that there is a continuum of types of contracts from construction to studies, so where that line is drawn can be debatable. The large consulting contracts are a part of the published list. In addition to what is being presented to the Finance Committee, there is an ongoing project on consultant management that will be brought to P&S for the first review of the work underway. Mayor Lauing noted the number of Utilities Reserves had been discussed, and he asked if the total amount of dollars for those are too high or too low. He discussed reserves and the slight possibility of all utilities being in an emergency situation and needing to be brought up. City Manager Shikada commented that the reserve policy will not be revisited as a part of this budget cycle. Assistant City Manager/Interim Utilities Director Kiely Nose stated that reviewing the reserve policies for the utilities is part of the work plan for the upcoming fiscal year. The rates brought forward will not immediately return the reserves to the target or max reserve levels. They are phases. Doing that study will help inform the next fiscal year’s rate-setting sessions. Councilmember Reckdahl addressed Slide 12. The budget is not really balanced because $12M of Uncertainty Reserve is being used and the BSR is underfunded by $3M. There is a projected deficit of $9.6M in 2027. In a normal environment, he would move $6M of the Uncertainty Reserve from 2026 to 2027 and cut 2026 expenditures. He was nervous about entering 2027 without any Uncertainty Reserve and an underfunded BSR. Councilmember Burt echoed Councilmember Reckdahl’s comments. He asked if there should be a sensitivity analysis or an alternative budget addressing the deficit more deeply. There should SUMMARY MINUTES Page 11 of 20 City Council Meeting Summary Minutes: 05/05/2025 be adequate funding for youth mental health and the community nonprofits. He asked how much funding there is for Project Safety Net and where he can find it in the budget. Director O’Kane replied that there is $100K annually for Project Safety Net within CSD’s Operating Budget. City Manager Shikada added that it is not a line item. Councilmember Burt referenced page 224 and he wanted the partnerships to be broken out and listed in the Human Service category. He discussed YCS being zeroed out. There is a concern that nonprofit partnerships are being pitted against each other and that funding is being reduced. P&S decides how to distribute funding, but there is a different give and take, which is to indicate the services that should be funded and room found in the budget to do so. The approach being used is concerning. Manager Harper mentioned that Project Safety Net is not listed as a line item in the budget, but there is $100K set aside in the CSD budget. Councilmember Burt did not understand how that differs from the general Human Services contracts, like Avenidas, etc. Thought should be given community partnerships that belong under general Human Services contracts on an ongoing basis and then funding should be addressed. Vice Mayor Veenker referenced Slide 12. She wanted contingency plans to be developed. She would support the BSR being 18.5. With respect to community partnerships, it is confusing how things are grouped and who gets what money where and at what point. The effort was to standardize that so there would be similar information on a similar timeline from organizations, so folks would not present piecemeal with different expectations. P&S dealt with the process brought to them, and she would be happy to widen the lens to say what the long-term partnerships are and how to look at it all cohesively. She asked what the budget anticipated for the PERT officer. Chief Binder responded that the PERT officer is listed in the org chart. It was recently learned that the County may be reallocating PERT officers toward MCRT. Stanford money will be used to pay for a PERT officer until a clinician is found. If things do not work out with the County, there is a plan to potentially find another entity to acquire the clinician. Vice Mayor Veenker noted that the Stanford money is to fund the sworn officer. She queried where the funds for the clinician would come from. City Manager Shikada thought the question is should there be a separate plug number/an estimate of funds that will need to be reserved should a clinician become available. Chief Binder believed there is enough money in the SUMC funds to cover a clinician and an officer if that point should be reached. SUMMARY MINUTES Page 12 of 20 City Council Meeting Summary Minutes: 05/05/2025 Councilmember Lu stated that the Implementation Plan for the Bike and Pedestrian Plan allocates $500K a year, which is not enough to do most of what is desired. The transportation and parking improvements is a separate item with a ballpark of $500K for traffic calming. He queried if there is a separate traffic calming roadmap or if the traffic calming money can be aligned to the Bike and Ped Plan. City Manager Shikada expressed that the Bike and Ped Transportation Plan will return to Council the first week of June. Upon completion of the Transportation Plan and the SS4A Action Plan, staff will pursue grants as a primary means for funding larger capital beyond what is in the ongoing CIP. Councilmember Lu stated there is a desire to do a long list of other quick-build projects. He asked if there is about $5M of outside money to be received in the next several years to investigate the standalone Railroad Grade Separation and Safety Improvements Project for Palo Alto Avenue, which is on hold. If so, thought may be given to that money going to grade separations that are more likely to happen or to other investments in the Bike and Ped Plan. Regarding the Churchill grade separation, thought could be given to those funds going into Transportation funds and to clarifying how much is meant for other safety improvements, quiet zones, etc., versus what is intended for rail separations. Councilmember Stone queried if the new investments in the Fire Department will help the department meet the goal for an 8-minute response time 90 percent of the time and if the Finance Committee directed staff to develop a budget that will include a fully staffed Engine 64 and a peak-hours ambulance. Potentially moving to a 12-hour overtime ambulance staffed by firefighters is concerning, which he hoped will be discussed at the Finance Committee budget hearings. Fire Chief Geo Blackshire responded that 3 components weigh in on response times – call processing, turnout time, and travel time. The funds will provide more resources to respond to calls, which will minimize time. Chief Financial Officer Lai responded that on May 6 the Finance Committee will discuss alternatives related to fully staffing Engine 64 and a peak-hours ambulance. The implementation timeline and the potential cost for the additional investments will be presented. It will come to Council on May 12. Mayor Lauing stated there is not a balanced budget because reserves are being spent. If there is to be a stable of folks getting annual grants, there may be 5-year grant to be reviewed in 3 years, for example. He did not want to allocate funds annually just because an organization is still in existence. In terms of reserves, bracketing utilities needs to be looked at again. He wanted more reserves and some contingencies now so that reactions will occur quickly. Councilmember Burt remarked that cutting services is not the only option when doing sensitivity analyses and potentially reducing this year’s deficit. It may be that more Measure B funds will be SUMMARY MINUTES Page 13 of 20 City Council Meeting Summary Minutes: 05/05/2025 utilized. Bonding capital projects and bond refinancing are possibilities. He questioned if is necessary to fill all the unfilled positions. Technology-based innovations may be used. Mayor Lauing expressed that there are long lead times for some of the alternatives Councilmember Burt mentioned. There is cushion in the budget as it relates to the vacancy rate. Consent Calendar 7. Approval of Minutes from April 14, 2025 and April 21, 2025 Meetings 8. 2025 City Council Priority Objectives, and Committee Objectives and Workplans 9. Approval of Contract Change Order No. 1 in the Amount of $1,500,000 to Contract C23186274 with Monterey Mechanical Company, for On-Call Emergency and Critical Construction Services at the Regional Water Quality Control Plant, for a Total Compensation Not-to-Exceed Amount of $3,000,000, funded by Wastewater Treatment Fund Capital Improvement Plant Repair, Retrofit, and Equipment Replacement Capital Project (WQ-19002); CEQA Status – Not a Project 10. Approval of Amendment and Extension of Supplement Agreement No.1 to the Master Funding Agreement Between the City of Palo Alto and the Metropolitan Transportation Commission, to Prepare a Downtown Housing Plan for the City of Palo Alto. CEQA Status: Exempt Under CEQA Guidelines Sections 15061(b)(3) and 15262. 11. Approval of Boards, Commissions, and Committees Interview Process as recommended by Policy and Services Committee 12. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending PAMC Sections 2.04.190 and 2.04.200 to Set the Regular Meeting Time of the Finance Committee and the Policy and Services Committee by Resolution or Ordinance 13. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending Section 18.08.040 of the Palo Alto Municipal Code (The Zoning Map) to Change the Classification of Property Located at 70 Encina Avenue from Service Commercial (CS) Zone to Planned Community Zone (PC) Public Comment: 1. Herb B. (Item 11) did not believe there should be a limit on how many applicants each councilmember could interview nor a limit on the total number of applicants interviewed. It should be enough if 2 councilmembers want to interview an applicant. Interviewing fewer applicants may not lead to the best results. Mayor Lauing declared that Item 9 required a 2/3 vote. SUMMARY MINUTES Page 14 of 20 City Council Meeting Summary Minutes: 05/05/2025 Councilmember Burt requested to pull Agenda Item Number 11. Councilmember Burt registered a no vote on Agenda Item Number 11. Councilmember Burt remarked that Item 11 warranted returning to Council for discussion. On Finance Committee and Retail Committee, there had been times when there had been unanimous votes, and it was assumed that Council would discuss the items, but they went on consent, and they should have been called out for Council discussion. Such should be considered by committees and in setting the agenda. Sometimes a 3-0 vote did does necessarily deal with the circumstances. MOTION: Councilmember Lythcott-Haims moved, seconded by Councilmember Reckdahl to approve Agenda Item Numbers 7-13. MOTION PASSED ITEMS 7-10, 12-13: 7-0 MOTION PASSED ITEM 11: 6-1, Burt no [Council took a 10-minute break] Action Items 14. PUBLIC HEARING / QUASI-JUDICIAL. 4075 El Camino Way [23PLN-00202]: Adoption of an Amendment to a Planned Community Ordinance (PC-5116) to Allow for Modifications to an Existing 121-Unit Assisted Living and Memory Care Facility. Environmental Assessment: Exempt from the Provisions of the California Environmental Quality Act (CEQA) in Accordance with CEQA Guidelines Section 15301 (Modifications to Existing Facilities). This agenda item has been continued to a date uncertain. Planner Emily Kallas provided an overview of the project. A slide was displayed showing the project location. She spoke of the project background and process. The ARB had recommended approval noting that the scale and privacy measures for the addition are appropriated. The PTC issued a recommendation of approval for only 7 units not facing Wilkie Way, which would exclude 9 of the proposed units. At the time, Councilmembers Lu and Councilmember Reckdahl, previous PTC members, had recused themselves, so they are hearing it tonight. The PTC recommended conditions of approval, which are to return the TDM Plan to the PTC for approval and to remove discussion of the past public benefits from the existing PC in the new ordinance, which staff does not support as public benefits need to continue forward. A map was furnished showing the project site plan. Some Planning commissioners and neighbors prefer the more restrictive daylight plane. Regarding privacy for units facing Wilkie Way, new windows will meet the objective design standards for windows facing single-family uses, which is not required but is an SUMMARY MINUTES Page 15 of 20 City Council Meeting Summary Minutes: 05/05/2025 appropriate standard to apply. Some balconies will be removed, and new landscaping is proposed in existing treeline gaps. A slide was presented showing 1 of many building angles. A TDM plan was prepared and is required by the existing PC-3775 Ordinance. An additional Parking Memo was prepared by Hexagon Transportation Consultants. Existing parking meets the zoning minimum requirements for the existing and the proposed addition. Parking spaces have been designated for visitors, staff, and residents, and staff has access to the garage. The project complies with the special requirements of 1834150. A slide was provided showing the public benefits, and staff does not recommend making changes to that as a part of the amendment. In October 2024, 16 neighbors signed a petition related to concerns about privacy, reduced sunlight, parking in the neighborhood, WellQuest being a for-profit company, and potential lower property value and quality of life for Wilkie Way residents. Neighbors desire that the addition not request any exceptions from the zoning code. In addition to that petition, 30-plus emails have been received, which include letters of support, letters reiterating the aforementioned concerns, and concerns about existing PC-3775 and 5116 conditions of approval not being enforced over the last many years. In terms of CEQA, a Section 15301 categorical exemption for existing facilities has been prepared. Staff recommends that Council find the project exempt from CEQA in accordance with the prepared categorical exemption, adopt the ordinance amending planned community Ordinance 5116, and approve the record of land use based on the findings and subject to conditions of approval. Architect Applicant Daniel Bowman shared slides and requested that the existing PC be amended with an additional 16 units, a 2-foot encroachment into the setback on the Goodwill side, and a change in the exterior color. Changes in the daylight plane, setback, height, and parking are not being requested. A slide was supplied outlining the parking. There is signage detailing where folks should park. Council and committees spelled out parking guidelines. Landscaping will be added adjacent to the Wilkie Way side. Slides were displayed showing what the building will look like versus the old. For neighbor privacy, some balconies will be removed. Developer Applicant requested the approval of 16 additional senior housing units at Palo Alto Commons of which there will be few impacts. They are better managing the parking garages; however, it cannot be guaranteed that visitors will not park offsite. CEO of WellQuest Living Steven Sandholtz commented that residents of Palo Alto and Santa Clara County are being served. They have not been doing the reporting mandated in the original approval, but reporting will be done if direction is given. Regarding parking, a valet has been hired, and there are incentives for employees to carpool. Concerning landscaping, they are happy to plant trees the neighbors agree with. WellQuest is a for-profit company, but employees care about seniors. The owners are a long-time Palo Alto family committed to serving seniors in the community. It is believed that the expansion is needed. Public Comment: 1. Kevin J. (Presentation) speaking on behalf of (5): Adrian L., Jetta C., Freda H., and Yichen Z., a PTC member who was not on the PTC at the time the project was reviewed, spoke SUMMARY MINUTES Page 16 of 20 City Council Meeting Summary Minutes: 05/05/2025 on behalf of the public and stated that in 1987 residents had concerns about third-floor impacts and parking, which are similar to current concerns. He voiced that the ordinance from the original compromise from the PC in 1987 has not been followed and that. Palo Alto residents have not been a priority. He commented that the daylight plane should be 3:6 and that the 45-degree angle creates a vertical wall, which goes against design and compatibility code sections. He noted it should be at a 10-foot 3:6 angle given that the facility is commercial. The outdated 10-foot, 45-degree daylight plane should not be used as it is not what the current zoning code indicates. The current standard is a 3:6 angle. He opposed applying grandfathering to new projects. He recommended there be 7 additional units as proposed by the PTC. Visitor and staff parking is a concern. He suggested that parking be evaluated more than every 3 years. 2. Ellen H. speaking on behalf of (5): Paul D., Jonathan V., Jen O., and Peter C., spoke of the Commons originally being privately owned, affordable senior housing, which has since been revised to a luxury version owned by a for-profit, out-of-state corporation. The original project was approved for increased density and building height, which ensured neighbors of the extent of the building envelope and massing. She discussed parking problems. She stated that a complete EIR should be done and that the infill expansion along the rear of the property violates existing conditions of approval and the 3:6 daylight plane zoning standards. She voiced that the design will remove all privacy, night sky, and light from adjacent single-family homes along the entire length of Wilkie Way. PTC approved 7 interior units, which she agrees with. She requested that a proportional number of units be for low-income seniors. 3. Susan H. admired the Commons for proposing a thoughtful addition. She urged Council to support the project. 4. Patty I. requested that Council approve the request to add 16 housing units. She opined that increased traffic will be minor. She stated that the Commons is a locally owned LLC that has tried to meet the neighbors’ concerns. 5. Susan K. urged Council to deny Palo Alto Commons’ application. She stated it assaults the Wilkie Way neighbors. She discussed encroachment on the daylight plane and privacy, property values being negatively affected, and insufficient parking. She did not consider the Commons a good neighbor. 6. Shashank D. voiced that he supports neighbors’ concerns regarding the expansion as it relates to privacy, traffic, property values, etc. He supports senior housing but believes there are better solutions. Building 7 internal units or building on the front side would not affect Wilkie Way properties. He requested that consideration be given to neighbors’ rights and assets. 7. Mona H. expressed her strong opposition for the Palo Alto Commons expansion, especially toward Wilkie Way. She discussed parking and landscaping impacts. She SUMMARY MINUTES Page 17 of 20 City Council Meeting Summary Minutes: 05/05/2025 supports senior housing but not if it should be a burden on residents. She suggested that building occur in the front and that new daylight plane requirements be followed. PTC recommended building only the 7 internal units. 8. Joanne S. stated that she supports Wilkie Way neighbors. She voiced that the 1978 agreement is being ignored and the expansion will encroach on the neighbors’ privacy and daylight plane and affect property values. She requested that Council stand with the residents and reject the proposal. 9. Yanfeng W. discussed issues with parking and daylight plane. She considered the Commons to be commercial, not residential. 10. Michael J. remarked that he strongly opposed the expansion of Palo Alto Commons. Negative impacts related to daylight plane, privacy, property values, and parking were discussed. He requested that Council reject the expansion. 11. Jenny C. commented that she strongly opposes the proposed project expansion. Her realtor had promised that the Commons would not add units along their back fence. She opined that the developers have disregarded the impacts on Wilkie Way residents. She has concerns related to daylight plane, privacy, and parking, which affect quality of life. 12. Huibin T. requested that noise pollution generated by the Commons be reviewed to see if they are in violation of City Code and California law. Audio of unacceptable noise extending to his property was shared. He supports senior housing. 13. Maegan C. read a letter on behalf of an anonymous person, which addressed negative impacts on parking, there being no handicapped parking spaces in the Commons’ visitor lot, and the problems with calling for parking assistance. It was requested that Palo Alto Commons’ visitor parking be expanded to meet present needs. 14. James P. expressed that he supports senior services. He opposed the proposed expansion of Palo Alto Commons and urged Council to vote against it in its current form. If the project focused on the 7 interior units, he would be more supportive. He voiced that the current configuration of the Commons results in significant shading, cooling, and loss of privacy in most backyards along Wilkie. He thanked councilmembers who had visited backyards on Wilkie. The expansion could result in loss of property value, privacy, light, and view of the sky. 15. Nia P. voiced that she does not support the expansion as proposed. She discussed issues related to parking, privacy, daylight plane, and view of the sky. She supports senior housing and prefers that the additional units be in the interior or at the front. She thanked councilmembers who visited Wilkie Way backyards. She voiced that the annual cost to an occupant of one of the new units will be $200K-$300K, which will benefit a very specific group. SUMMARY MINUTES Page 18 of 20 City Council Meeting Summary Minutes: 05/05/2025 16. Aaron S. discussed visitors experiencing parking problems. 17. J. Pamnani voiced support for senior housing and will support the expansion if built in the front. He spoke of parking issues. He requested that the expansion be in the front and that there be more parking. 18. Jennie C. commented that she supports PTC’s December decision, to build units in the front, not against Wilkie Way backyards, and she urged Council to make the same decision. She voiced that the current tier structure was a compromise reached 38 years ago, and she does not think the commitment should be broken. She does not find it to be ethical or acceptable, and she does not know if it is legal, as the commitment is documented in the City’s file. She spoke of the Commons being in violation for 38 years and asked how they can be trusted to continue with their parking remediation program. Allowing the Commons to build against Wilkie backyards will set a poor example. 19. Janis I. expressed her support for senior housing in the community, but she is against Palo Alto Commons and the broader organization they represent. She stated that they failed to abide by PC rules over the years, that they are not operating in good faith, and that there are other development options. 20. Tom H. remarked that he supports the Commons and asked those in support of it to raise their hands. He voiced that it sounds like the Commons has followed the Palo Alto process but that they need to do a better job working with the neighborhood. He asked Council to support the expansion. 21. James C. expressed there is a disconnect between residents and Palo Alto Commons. He disagrees with how parking is being addressed. He finds the Commons to be untrustworthy. He favors a compromise. 22. Natalie C. stated she supports senior housing. She discussed the lack of parking. She supports 7 additional interior units. She asked where the parking valet parks vehicles. 23. Ruth C. spoke of the Commons being a place of competency, compassion, and care, which serves a community need. 24. Andie R. commented that infilling will negate the previous agreement. She discussed parking issues and Palo Alto Commons being noncompliant with the original TDM and conditions of approval. She questioned how likely the outcome will be that offsite parking will be discouraged. She hopes the PTC alternative will be considered. 25. Roger S. encouraged Council to approve the project as the owners are filling a need. 26. Becky S. (Zoom) voiced that Wilkie Way residents have provided ample evidence to deny the proposal. She opined that the Commons have a history of bad faith. She requested SUMMARY MINUTES Page 19 of 20 City Council Meeting Summary Minutes: 05/05/2025 that flawed logic not be used to burn pages of the Municipal Code and that neighbors be considered. She asked Council to deny the application. 27. Natacha T. (Zoom) voiced that she supports senior housing and the 8 proposed units. She remarked that the parking photo the applicant presented is not accurate. She invited Council to visit the neighborhood between 12 and 2 p.m. She considered the parking situation to be a hazard. She encouraged Council to not support the 16-unit expansion. 28. Penny B. (Zoom) urged Council to vote no on the expansion, which would further encroach the backyards and homes of Wilkie Way residents. She voiced that currently the Commons blocks natural sunlight, intrudes on privacy, and is an ongoing source of noise and nighttime light pollution, which the expansion will exacerbate. She opined that there is a parking crisis on Wilkie Way due to the Commons, which the Commons has not addressed. 29. Greyson A. (Zoom) voiced strong opposition to the proposed expansion, which violates a 1987 agreement. He stated that over the past 40 years, the Commons has not followed through on commitments made, including reporting of the parking numbers. He asked that the Commons be held accountable for the promises made. He urged Council to consider the long-term impact of the expansion and reject the proposal. 30. Kai (Zoom) commented that he supports senior housing and the PTC’s suggestion of 8 interior units while omitting the exterior units and 2 offices. He stated that Palo Alto Commons has shown bad faith. He does not feel that statements made by the Commons adequately addresses the added burden. 31. 1650****169 (Zoom) stated that he finds parking to be a major issue and does not support adding units without parking. He suggested that Council be given more options to vote on, such as 7 versus 16 units, planting trees, etc. 32. Scott O. (Zoom) aligned with Tom H. and requested approval of the expansion. 33. Daniel P. (Zoom) stated that he supports senior housing but opposes the expansion as presented. He does not find the Commons to have a spirit of care toward the neighbors. He wants the proposal to respect privacy, light, and the voice of those impacted. He hopes the proposal will return to the developers and that the Commons will work with the neighbors. Mayor Lauing sincerely thanked the speakers. Planning and Development Director Jonathan Lait declared that the applicant is allowed a 3- minute rebuttal. The Applicant did not wish to speak. SUMMARY MINUTES Page 20 of 20 City Council Meeting Summary Minutes: 05/05/2025 Mayor Lauing suggested continuing the item, though he did not know at what meeting that would occur. Council concurred with continuing the item. Adjournment: The meeting was adjourned at 11:23 p.m.