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HomeMy WebLinkAbout2026-03-10 Policy & Services Committee Summary MinutesPOLICY & SERVICES COMMITTEE SUMMARY MINUTES Page 1 of 13 Regular Meeting March 10, 2026 The Policy & Services Committee of the City of Palo Alto met on this date in Council Chambers and by virtual teleconference at 6:00 p.m. Present In-Person: Lythcott-Haims (Chair), Reckdahl, Stone Absent: None Call to Order Chair Lythcott-Haims called the meeting to order. The clerk called the roll and all were present. Public Comment: 1. David Page expressed concerns about the City helping ICE by sharing traffic camera footage and requested data sharing with ICE be stopped as soon as possible. Action Items 1. Nonprofit Partnership Workplan: Follow-up Recommendation on Winter Lodge Tennis lease extension and Status of Phase I Grant Funding Process. CEQA Status: Not a Project. Lupita Alamos, Assistant to the City Manager, provided background on the Nonprofit Workplan Phase II, which stems from an audit report in 2022 that reviewed and recommended best practices on nonprofit management. Nonprofit guiding principles are 1) impact-oriented focus and accountability, 2) service alignment, 3) fairness, open access, equity, and inclusion, and 4) flexibility for special circumstances. Four major bodies of work make up the Nonprofit Partnership Workplan: NPW Phase I Funding Requests, Nonprofit Lease Agreements, Nonprofit Multi-year Service Agreements, and comprehensive review of all grant programs including Human Services Resource Allocation Process (HSRAP) and Community Development Block Grant (CDBG). The framework discussed by P&S in November 2025 addresses public benefit, financial relationship, and ensuring stability of the partnership. The Committee determined the framework is good but wanted more information about the public benefit of Winter Lodge and Lawn Bowl leases. Winter Lodge operates City leases for the ice rink and tennis courts, which expire in 2040 and 2026 respectively. The presentation included a table summarizing Winter Lodge Tennis public access and pricing compared to City rates for similar facilities. The lease SUMMARY MINUTES Page 2 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 terms allow pricing to be comparable to the market so funds can be accumulated for continued maintenance and capital improvements. For the Nonprofit Workplan Phase I process, which provides a structured approach to evaluate nonprofit funding requests that fall outside established processes, staff recommends a broader discussion with the Council on purpose and HSRAP alignment, tentatively scheduled for April 6, 2026. Staff is working on the materials to give Council a broader, big-picture look at all the nonprofit contracts, including grants and service agreements. A draft timeline from the packet was presented, which explores options to keep Phase I within the original plan for the budget adoption process in June. Public Comments: 1. Linda Jensen, Winter Lodge Executive Director, offered to answer any questions and highlighted the long and successful partnership with the City of Palo Alto for almost 40 years and Winter Lodge's record of providing award-winning facilities and programs. Their tennis programs are for all ages and abilities with a special focus on youth, whom Winter Lodge sees as an at-risk, underserved population in Palo Alto. Linda Jensen expressed support for recommending the tennis lease renewal to City Council so Winter Lodge can continue serving the people of Palo Alto. 2. David Siegel, 35-year Palo Alto resident and president of the Palo Alto Pickleball Club, shared concerns about the Kim Grant/Winter Lodge lease's rent, stating the lease calls for only $100 to be paid over a 10-year period while Tom Sarsfield pays the City $14K annually plus a 6-figure revenue share on City-sponsored classes. David Siegel also shared concerns about the facility's public access, noting that City athletic facilities and fields are open to the public at no charge when not in use while Winter Lodge charges $40/hour, though the lease describes intent for public use. David Siegel expressed concern about proposals to continue the Winter Lodge Lease for 14 more years. David Siegel recommended 1) Winter Lodge tennis courts be open to the public at no charge when not in use for instruction and 2) the lease be restructured with market-rate rent or a revenue-sharing arrangement. David Siegel asserted that a revised lease could provide meaningful financial benefit to the City, align Winter Lodge with standard practices for City-owned athletic facilities, expand public access, and offset reduction in tennis court availability if/when pickleball expands. It was suggested that the lease be extended a few months rather than rush into a long-term renewal. Councilmember Keith Reckdahl stated that Winter Lodge is an incredible community asset and noted that price differences are apples and oranges when comparing their pricing to the City because Winter Lodge pays for its own maintenance while City facilities are maintained using taxpayer funds. Councilmember Reckdahl expressed concerns about resident discounts adding pricing complexity because Winter Lodge would have to verify if someone is a resident, which the City take that on instead, perhaps via the Enjoy! catalog. Councilmember Reckdahl highlighted the expense of maintenance and wondered if the City's volume discount on tennis court resurfacing could be applied to Winter Lodge so they don't have to pay market price, SUMMARY MINUTES Page 3 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 which would be a value add and not cost the City anything. Councilmember Reckdahl expressed overall support for the Winter Lodge lease renewal. Vice Mayor Greer Stone agreed that Winter Lodge fits within the parameters of nonprofits that the City wants to support. They offer the third place for many members of the community, providing recreational opportunities for countless children and adults. Due to the unique nature of their lease agreement, they need to be fully self-funded, so allowing them to charge for their facilities makes sense but the idea that the courts are public but not accessible without a $40 fee is problematic. Vice Mayor Stone acknowledged a lack of information on how much Winter Lodge makes annually and wondered what removing the $40 fee would do to the Lodge's ability to fund their own upkeep. Real Estate Manager Sunny Tong confirmed a lack of financial information on Winter Lodge's operations but noted it can be added as a reporting requirement if needed. Vice Mayor Stone agreed more financial information would be useful. Vice Mayor Stone noted that different rates for residents and non-resident complicates things, so making it free is preferable and staff should have the freedom to pursue that in negotiation but also have the information to know when it is no longer feasible from Winter Lodge's perspective. Chair Lythcott-Haims shared about her own family's enjoyment of Winter Lodge and provided some insight into Winter Lodge's history. Their site was threatened by the owner who wanted to build condos there, so the citizens got a voter mandate and Winter Lodge land became City land at the insistence of the voters. The City is required to keep the land for recreation and programs are run on the site with no funding from the City, which creates the challenge of how they pay their operating and capital expenses. Chair Lythcott-Haims asked Linda Jensen to share annual operating expenses and respond to the idea of an alternate fee structure that would create more sense of benefit for Palo Alto residents. Linda Jensen responded that the fee comparison between the City's courts and Winter Lodge's are apples to oranges because taxpayers fund City court expenses but Winter Lodge funds itself. Linda Jensen suggested that when courts are not in use for classes and lessons, they could be scheduled at the City rate or less. Linda Jensen emphasized that anyone can walk in and sign up for classes. Linda Jensen stated the annual operating expenses for tennis are not separated out from the other expenses but agreed to get that number for staff. Winter Lodge is a 501(c)(3) operation, so profits can be held over year to year to cover major expenses like tennis court resurfacing every 5 to 7 years, which now costs $160K for a single resurfacing. Linda Jensen expressed interest in Councilmember Reckdahl's suggestion of working with the City to take advantage of their volume discount with resurfacers. Vice Mayor Stone clarified his earlier comments, stating that Winter Lodge's tennis school is the only public one in the region, the rates are wonderful, and the classes and clubs for youth should take precedent but when the courts are available and not being used, such as weekdays SUMMARY MINUTES Page 4 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 during school, that is when it makes sense to renegotiate pricing. Vice Mayor Stone asked staff if members of the public can reserve public courts and what it costs. Kristin O’Kane, Community Services Director, confirmed individuals cannot reserve City tennis courts for individual tennis play and they are free. Councilmember Reckdahl noted the USTA is allowed to reserve public courts when they have tournaments and some public facilities do have fees, such as Rinconada Pool and Foothills Park. Councilmember Reckdahl asked about the potential for the City to do Winter Lodge's maintenance and what the lease charge might be as a result. Lupita Alamos clarified that Winter Lodge has always fully maintained and operated the courts. Sunny Tong confirmed no analysis has been done on the possibility of the City doing maintenance. Linda Jensen shared that the 1985 voter mandate required the site to be operated for recreation but at no cost to the City. This is also listed in City Ordinance 3650, which requires the City to provide this site for community skating at no cost to the City. Councilmember Reckdahl wondered whether the City could roll maintenance costs into the lease. Linda Jensen said that would be great because resurfacing has become so expensive but the mandate of the citizens stated it be at no cost to the City and the programs should be able to maintain themselves. MOTION: Councilmember Reckdahl moved, seconded by Councilmember Lythcott-Haims, to recommend the City Council: 1. Approve the Winter Lodge tennis contract and align its term with the Winter Lodge skating lease, 2. Explore feasibility of mutually beneficial maintenance agreements, 3. Direct staff to engage Winter Lodge through the lease renewal negotiations to explore opportunities to provide free access to the tennis courts when not in use. MOTION PASSED: 3-0 Chair Lythcott-Haims called attention to the continued discussion on the Phase I process. Lupita Alamos reminded the Committee that Phase I information was presented as a status report and will be continued for discussion with the Council on April 6. Chair Lythcott-Haims expressed discomfort with the Phase I next steps implying a recommendation to Council and Lupita Alamos suggested it be presented to Council not as a recommendation but a discussion. Ed Shikada, City Manager, clarified that the discussion is meant to be done together with Council to acknowledge the crossover between P&S and Finance that occurred with the new year. It is an opportunity to make sure everyone is on the same page about the roles of the SUMMARY MINUTES Page 5 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 Finance and P&S Committees in the upcoming budget cycle. Staff are not prepared to answer questions or come to resolutions at this time. It was agreed that Councilmember Reckdahl's feedback on this item be sent to staff offline and brought to full discussion at the April 6 study session. 2. Consider Policy Options to Encourage Multi-Family Development in Mixed-Use Districts (2023-2031 Housing Element Program 3.9(A)) and Potential Recommendation for City Council on Next Steps. CEQA Status: The Addendum to the Comprehensive Plan Environmental Impact Report (EIR), approved by the City Council on April 15, 2024, analyzed potential environmental impacts of the 6th Cycle Housing Element including Program 3.9(A). Robert Cain, Principal Planner, shared a presentation on Housing Element Program 3.9(A), which aims to incentivize housing in areas currently dominated by office use. Robert Cain emphasized that this is 1 of about 100 Housing Element programs and subprograms and is not designed to be the primary way to encourage housing in the City but looks specifically at areas where office is the dominant desire of developers. Palo Alto's housing needs and jobs/housing imbalance are high and the City is focused on proactive solutions to better align housing needs and job growth. Four submarkets throughout the City were studied and findings were confirmed though developer interviews. Office sites outperformed housing at 3 of the 4 locations. This was used as the basis for the rest of the analysis. For policy options, City levers being considered for locations where office outperforms residential are 1) fees, 2) taxes, 3) building standards, 4) land use regulation. The Committee was asked to discuss policy options and provide direction on which, if any, they want pursued. Ed Shikada expressed amazement that there are 100 programs related to encouraging housing and opined this is a good illustration of the numerous ongoing efforts. Robert Cain highlighted that the number of housing initiatives in the last 8 years is unprecedented and includes area plans, incentives, fees, and other ways to incentivize housing. Councilmember Reckdahl thanked the team and noted townhouses are very popular but are an inefficient use of space. Councilmember Reckdahl noted that more density would allow more housing and asked what can be done to disincentivize townhouses or incentivize density. Jonathan Lait, Planning and Development Services Director, responded they did not study how to incentivize density but how office developments impact housing. Jonathan Lait shared that rental housing is very different from for-sale housing and plays out over decades as developers get their return through rents, which increase over time. Jonathan Lait noted that other policies, such as the San Antonio Area Plan, are looking at increasing density in many areas of the City. Jonathan Lait asserted that townhomes are more accessible entry-level homes and having a variety of housing types is important. SUMMARY MINUTES Page 6 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 Ben Sigman, Managing Principal at Economic & Planning Systems, Inc. confirmed that their focus was on disincentivizing office and how it relates to housing. This point in the building cycle favors lower-density and for-sale ownership housing and townhomes are very popular because they are much less expensive to build on a per-square-foot basis; they sell quickly and at a premium, so the economics are very strong. When switching to a rental product, the overall value per square foot is much less than condos or for-sale product, which influences the economy. The costs associated with building at multi-family densities, which often include things like structured parking, creates a less favorable revenue-to-cost ratio. Ben Sigman noted that the other 99 initiatives likely cover things like lowering the cost for multi-family developers, reducing policy burdens, and contributing directly to project costs. This project spoke with about 4 prominent developer firms active in Palo Alto who all said they can build more housing if they are allowed to build at lower densities. Multi-family is likely to come into favor again but today's economics are very challenging for dense housing. The Committee reviewed the 4 main lever options for incentivizing residential and agreed against the tax option. It was noted that the building standards option, which would increase standards and thereby building costs, seemed to be a punitive approach to disincentivizing office. Councilmember Reckdahl suggested that limiting office FAR and increasing it for residential is most effective but noted relaxing FAR for residential complicates urban planning by modifying already modified zoning. Councilmember Reckdahl expressed concern around grandfathering practices around existing offices and how that can affect developments and redevelopments. Jonathan Lait highlighted other initiatives the City has implemented to incentivize housing and reiterated that Housing Element 3.9(A) is focused on disincentivizing office. Jonathan Lait agreed that FAR is one of the best levers in this area and cautioned against standard reductions that freeze current office in place, never to be redeveloped. It was noted that 3,371 new housing units are currently in the pipeline. Vice Mayor Stone celebrated this number as evidence that policies and implementation over recent years are paying off. Vice Mayor Stone opined there is not much more to be gained from the land use regulations option but the building standards and fees options are interesting. Vice Mayor Stone asserted that the building standards should require Project Labor Agreements on any development, especially City projects. It is an opportunity to require labor contracts in construction projects, which is morally right, fits within City goals of livable wages and adequate working conditions, and has the added benefit of incorporating higher business and building standards to make housing more attractive to developers. Vice Mayor Stone acknowledged it could be challenging for the full Council and community to accept but this is a great opportunity to try it out. Vice Mayor Stone suggested that increasing fees on office development is a great way to disincentivize new office and encourage housing; current fees are $68.50 per square foot, far below the 2015 nexus study's determined maximum of $177 per square foot. Chair Lythcott-Haims offered that FAR is already being limited and there are square footage caps in place, so that is not something to tinker with right now. Chair Lythcott-Haims expressed SUMMARY MINUTES Page 7 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 concerns about using desirable design standards like skilled and unionized labor, TDM, and increased community benefits to disincentivize building. Chair Lythcott-Haims agreed that the City is not charging near what it could in fees per the 2015 nexus study. Public Comment: 1. Jeremy L. thanked the Committee and staff for their hard work and stated support for the City's efforts to implement the Housing Element. Jeremy L. stated that proposals to disincentivize office may have value on their own but are not clearly furthering the Housing Element goal to support housing in mixed use zones because there is not much office being proposed in mixed use zones. The picture of the pipeline is partly a picture of the City's real, meaningful progress and partly a picture of unplanned housing that came from things like the builder's remedy. Jeremy L. noted that studying and decreasing impact fees for housing and updating zoning in the downtown area and Cal Ave can make a big difference and streamlining permitting can go hand-in-hand with zoning. Jeremy L. asserted that the City should work on facilitating a zoning and fee regime that makes it quick and easy to build housing in the places the City wants housing. Jeremy L. acknowledged this is like preaching to the choir because much of this is already in progress. MOTION: Vice Mayor Stone moved, seconded by Councilmember Reckdahl, to forward for City Council’s consideration: 1. Require PLAs for new office development, 2. Additional building standards for new office development as appropriate, 3. Increase the commercial linkage fee for office development. MOTION PASSED: 3-0 3. Discussion of the Rental Registry Program First Year Report and Rent Stabilization Analysis, Including Recommendations to the City Council to Not Expand the Rental Registry Program to Properties with Two or Fewer Units and to Defer Further Consideration of a Possible Rent Stabilization Ordinance. CEQA: Exempt pursuant to CEQA Guidelines Section 15061(b)(3). Julia Knight, Senior Program Manager for Development Services, presented an outline of several renter protection policy options and stated the staff recommendation to indefinitely defer further discussion of expanding the Rental Registry Program (RRP) or establishing a local rent stabilization program at this time. The presentation included a timeline of key policy developments and an overview of further P&S discussions on the calendar. Julia Knight shared that the RRP's first year provides a clearer picture of the City's rental landscape and offers SUMMARY MINUTES Page 8 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 useful insights for policy discussion. The first year saw very high participation with a 97.9 percent unit registration rate. Several slides covered information collected from the program's first year, including rental housing and market data (Attachment A). Expansion considered for the program would include 1 and 2-unit properties, which would increase staff by 1 to 2 full- time employees and double the registry fee per unit to cover costs. A local rent stabilization program, if implemented, would need to remain within limits set by Costa-Hawkins Rental Housing Act of 1995 and the California Tenant Protection Act (TPA) of 2019. Staff examined programs in nearby peer cities and estimated a rent stabilization program in Palo Alto would require 6 full-time employees, an annual budget of $2M, and an increase in the Rental Registry Program fee to over $300 per unit. Staff recommended the P&S discuss findings from the first year of the Rental Registry Program and recommend the Council indefinitely defer expanding the program and further analyze or prepare a draft ordinance related to a possible future rental stabilization program. Public Comments: 1. Martha Stern is owner and manager of a 7-unit residential building in Palo Alto and has owned the building for close to 18 years. Martha Stern expressed doubt that the benefits of the Rental Registry outweigh the cost. While the information gathered is interesting, the cost ends up being paid by renters. Martha Stern noted the cost of living challenges in the Bay Area, including property insurance rising 140 percent from 2023 to 2025. Martha Stern emphasized the State already has a strict rent increase ceiling and implored the City to leave it to the State. Martha Stern currently raises rent 1 to 3 percent a year to cover cost and keeps increases low to avoid unit turnover. A cap of 1 to 2 percent increase would force some landlords to increase rent the maximum amount in order to bank for future cost increases. Martha Stern shared that an unintended consequence of the rental registry is the public listing opens exposure to charges for a myriad of reasons, all of which will be passed on to tenants. 2. Anil Babbar from the California Apartment Association spoke in support of the staff recommendation and thanked them for the work that went into this report. Anil Babbar noted the RRP data shows Palo Alto housing providers making rent decisions based on the market, which has led to nearly two-thirds of market-rate units receiving zero rent increases and a quarter of them receiving a rent increase below 5 percent, so the recommendation to indefinitely defer a rent stabilization program is a data-driven one. Anil Babbar pointed out a comparative study done by the Los Angeles Times that concluded San Diego has higher development and unit count than L.A. in part because L.A. has rent control and San Diego does not. Anil Babbar suggested that adoption of a Rent Control Ordinance would add to the policy burden and make it harder to incentivize multi-family housing. 3. Eileen Kim asserted that the registry creates a climate of surveillance and bureaucracy that deters mom-and-pop housing and is redundant because California already has robust statewide rent control under AB 1482. Eileen Kim noted that several peer cities SUMMARY MINUTES Page 9 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 have rejected registries because it was too heavy for a city of their size and an exercise in redundancy. Eileen Kim stated the City is spending public funds to build a shadow registry for information that already exists for free on platforms like Zillow, Trulia, and MLS, costing taxpayers $2M annually to research a problem that does not exist. Eileen Kim noted that builders will see this registry as a headache, expense, and invasion of privacy, which creates a barrier to the housing the City wants to create. Eileen Kim pointed out that the Registry exposes residents to data brokers and predatory marketing and urged the City to discontinue it. 4. Jennifer L., Palo Alto resident of 26 years, spoke in support of removing rent control from the City's agenda. Though it protects some people temporarily, rent control scares investors away, makes it hard to find housing, and is bad for the economy. The data from staff showed most landlords did not increase rent at all and those who did increased only moderately, so rent control is not necessary for Palo Alto. The cost of owning homes is increasing, with insurance more than doubling in the past year and maintenance and utilities also increasing. Jennifer L. emphasized the $2M expense and asked P&S not to implement it. 5. Hamilton H. expressed support for the staff's thoughtful recommendations, especially not expanding to 1-person units, which are individuals who are non-professional property managers and are busy with their kids, working overtime, and trying to hold their lives together. If they have to go through this bureaucracy, they are going to be pushed toward doing Airbnb, regardless of if it is legal. Hamilton H. emphasized the data that showed landlords not raising rent at all or very little, which shows there is no problem. Hamilton H. called attention to the City's budget problem and how this will contribute to that as well as creating a privacy issue for residents. Hamilton H. noted that the registry form is designed for multi-family professional properties and is out of touch with individual renters. Hamilton H. asked P&S to follow staff recommendation and realize City effort and funds can do much more valuable things. Councilmember Reckdahl stated the Rental Registry is good information from a policy perspective and while data on 1 and 2-bedroom units is desirable, the cost does not justify it. Councilmember Reckdahl stated there is no need for rent control or stabilization and highlighted the many unintended consequences that would go with it. Vice Mayor Stone expressed support for the staff recommendation but noted the importance of the Rental Registry Program in bringing important data that informs decision-making. The RRP surpassed expectations for data and registration rate, thanks to staff and property owners. Vice Mayor Stone stated there is no strong need to continue pursuing a Renter Stabilization Ordinance at the moment because the data does not show it is necessary and the significant cost is alarming. Vice Mayor Stone believed the Council may revisit the ordinance after the City comes out of its deficit if the data shows a need for it. On expanding the RRP to 1 and 2- bedroom units, Vice Mayor Stone agreed the data would be helpful but is not a top priority. SUMMARY MINUTES Page 10 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 Jonathan Lait noted the annual report will provide some insight into whether the issue needs revisiting at some point. Chair Lythcott-Haims agreed on not expanding the RRP to include 1 and 2-bedroom units, which are single-family homes. Chair Lythcott-Haims empathized with landlords about the challenges a new administrative requirement would pose and agreed with the staff report's statement that State protections aimed at keeping rent increases low are functioning as intended for the majority of Palo Alto's registered rental units. Chair Lythcott-Haims asked how the Fair Chance Ordinance is related to, different from, or enhancing to this. Julia Knight clarified that the Fair Chance Ordinance would provide additional anti- discrimination protections for renters. It does not regulate rent but creates opportunities for more people of diverse backgrounds and histories to access the rental market in Palo Alto. MOTION: Councilmember Reckdahl moved, seconded by Councilmember Stone, to recommend the City Council defer indefinitely: 1. An expansion of the rental registry program to properties with two and fewer units, 2. Further analysis or preparation of a draft ordinance related to possible implementation of a local rent stabilization policy. MOTION PASSED: 3-0 AA1. Recommend Approval of New Task Order 4.42 - Flock Safety Assessment for Inclusion in the City Auditor's FY 2026 Audit Plan and Amend FY 2026 Task Order budgets to Support this New Task Order with a Net Zero Financial Impact; CEQA – Not a project. City Auditor Kate Murdock shared that the City reviewing Flock as a vendor is important but Baker Tilly completed its conflict-of-interest check and recused itself from this assessment to avoid a conflict of interest. As the City and vendor coordinate to set the scope for the assessment, specific firms can be recommended to conduct this work. Baker Tilly will also commit previously identified funds for the proposed assessment from the City auditor's contracted budget. Ed Shikada confirmed Baker Tilly will not be able to proceed with the audit and this item is an opportunity for public input and recommendation from the Committee to the Council on next steps. Chantal Cotton Gaines, Deputy City Manager, clarified the Committee may recommend going forward with an audit or discuss the scope of that audit but a general discussion of the benefits of ALPR or whether or not to move forward with the Flock contract is beyond the scope of this agenda item. SUMMARY MINUTES Page 11 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 Public Comments: 1. Austin M. appreciated the update that Baker Tilly is not handling the audit but asserted that no audit can assuage concerns about Flock, ALPR in general, and the inherent risks. Austin M. acknowledged it is not on the agenda but encouraged the Committee to focus on canceling the Flock contract and cautioned them from relying on an audit to make future decisions. 2. David Page from Midtown suggested ICE will be getting ALPR data from Flock and using it to support their activities. David Page requested the Committee do the right thing by shutting off the cameras now and getting out of the Flock contract when it expires in June. 3. Cara Silver, long-term Midtown resident, stated it is unfortunate that the conflict of interest was not caught sooner, as the data related to it was in the staff report. Cara Silver stated the audit is unnecessary. California Sanctuary State Law SB 54 prohibits cities from sharing personal information about immigration status with ICE and the proposed audit fails to address this particular issue. Cara Silver stated Flock has submitted data to federal agencies, such as in recent breaches in Colorado. Peer cities have cancelled or delayed entering into contracts with Flock. Cara Silver noted there are no federal or state regulations of the ALPR system and the recent proposed state regulation was vetoed by Governor Newsom. Cara Silver stated that one of the cameras in Palo Alto is located on the corner where many protests take place and urged the Council to turn off the cameras. 4. Hamilton H. expressed strong support for the City to conduct a Flock Safety audit and stated that Baker Tilly recusing itself is a positive development. Hamilton H. suggested the audit should assess whether at least 2 PAPD staff are trained at the highest administration level so the system can be properly configured and monitored at all times. PAPD admin should review new software releases and notes promptly to ensure settings remain properly configured. Hamilton H. disagreed with fellow residents who want the system shut down because only 30 days of data is returned before it is purged on the Flock servers, no out-of-state agency searches resulted in data being shared, the data is only available to properly trained staff with legitimate enforcement needs, all queries are logged and subject to audit, and all out-of-state access was automatically disabled as of March 2025 across all Flock systems in California. Hamilton H. insisted that ALPR cameras make the community safer and should remain in operation. 5. Anne M. opposed the ALPR cameras and questioned the need for an audit, suggesting it is a backward-looking operation and evidence of uncertainty. Anne M. emphasized that many cities in the county have discovered leaks from Flock data despite the assertion of no public data sharing. Anne M. stated Baker Tilly recusing itself is proper and supported the City auditor and police department taking a look at what has been happening with Flock camera data. Anne M. asked the City to remove the inherent risk and danger SUMMARY MINUTES Page 12 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 presented by the cameras to residents' First Amendment rights and privacy by capping and turning off the cameras until the issues are resolved. 6. David preferred the Flock contract be cancelled, as Flock is a bad actor and lies repeatedly. David posed several questions: 1) How does Flock ensure future changes to their system will not lead to sharing outside of California or the City? 2) How can the City ensure that federal law enforcement cannot gain access to the system, including unauthorized credential sharing by in-state agencies? 3) What will the City's data be used for when there is a focus on machine learning and sales data in and after the contract terms? David noted that Flock retains data after cancellation and can do what they want with it, such as training AI models, so more clarity is needed on what will happen to the City data. David suggested that any audit done should be thorough. The Committee agreed that the entirety of the question around the Flock contract needs to come before the Council. Vice Mayor Stone expressed concern about the timeline for addressing this and whether the Council can make a full decision while an audit is pending or if the cameras can be turned off in the interim. Ed Shikada responded that if an alternative service provider is found at $30K, staff can proceed with the audit without Council approval. The Council agendas are packed through June, so the Committee needs to clarify their sense of urgency about this item to determine when to put it on the Council agenda. Ed Shikada also clarified that the Flock contract does not end in June but extends for another year or two and noted they would not suggest the cameras be shut off absent further direction from the Council. The Committee discussed the risks of ALPRs and their potential for good and bad and debated whether an audit is necessary to determine whether to continue with or terminate their contract with Flock. It was suggested that the Independent Police Auditor could be a good resource in auditing Flock in terms of City and Police Department policies and procedures. Chair Lythcott-Haims expressed a feeling of urgency for this larger question of the contract with Flock to come before the Council sooner than later. The Committee agreed this item should come before the Council before July recess. Vice Mayor Stone added that it should be an action item to give flexibility to make a decision. Ed Shikada agreed to set expectations for the timeline when setting up their report to Council and stated staff direction is to continue working with the IPA and independent auditor to bring as much factual data and information to a Council discussion no later than June. Councilmember Reckdahl suggested a study session where the Council can learn about the situation, what happened, why Palo Alto did not lose data while other cities did, and how City data is not going to ICE. Vice Mayor Stone agreed the community needs to be updated on the facts because there is a lot of troubling misinformation. Vice Mayor Stone asked if upcoming city manager comments SUMMARY MINUTES Page 13 of 13 Policy & Services Committee Meeting Summary Minutes: 3/10/2026 could concede time to the acting police chief to speak directly to the community about this and show that the City is on top of it and their data is safe. Chair Lythcott-Haims agreed that factual information and reassurances to the public are important and should not be delayed. NO ACTION Future Meetings and Agendas Chantal Cotton Gaines reported that the next meeting is set for Tuesday, April 14, and the tentative items include legislative updates; the Fair Chance Housing Ordinance, which may move to May; and 2 audit reports. Adjournment: The meeting was adjourned at 8:50 p.m.