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Home My WebLink AboutStaff Report 2606-6511CITY OF PALO ALTO CITY COUNCIL Special Meeting Wednesday, September 09, 2026 Council Chambers & Hybrid 5:00 PM Agenda Item B.2026 City Council Priorities Q2 Update Supplemental Report City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: City Manager Meeting Date: September 9, 2026 Report #:2606-6511 TITLE 2026 City Council Priorities Q2 Update RECOMMENDATION This is an informational report that provides progress updates on the 2026 Council Priorities and Objectives approved by the City Council on March 9, 2026. No action is needed. BACKGROUND On March 9,1 2026, the City Council discussed and approved the 2026 Priority Objectives, following its January 24, 2026,2 retreat in which the City Council adopted the following Priorities: Achieve Near-Term Housing Milestones Cubberley Acquisition and Renovation Funding Enhance Business Vibrancy Government Efficiency A total of 43 objectives within each priority were discussed, with several objectives being supported by the revised and adopted Council Values: 1. Vibrant Community 2. Fiscal Responsibility 3. Accountable Governance 4. Strategic Innovation 5. Shared Prosperity and Housing Leadership 1 March 9, 2026 City Council Meeting: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86901&dbid=0&repo=PaloAlto 2 January 24, 2026 City Council Retreat: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85283&dbid=0&repo=PaloAlto 6. Climate Leadership and Environmental Stewardship 7. Community Well-Being & Belonging This report provides a progress update on the Council Priorities and Objectives. ANALYSIS This report focuses on Group 1 objectives, which are categorized as mission-critical, and must be achieved to meet legal, operational, safety, or strategic requirements. Objectives in this group require City Council engagement. Progress on Council Priorities is measured by the accomplishments of its subset objectives and reported on a calendar quarterly basis. Calendar Q2 spans the months April through June 2026. A summary table of all 43 objectives is listed in Attachment A, including an estimated completion date, which is also measured in calendar quarters. A narrative on each objective update is found in Attachment B, it includes: Project Description- Describes overall project goals and outcomes. 2026 Milestone- Describes activities and outcomes planned for the calendar year as some projects are multi-year in length and are broken up into phases. Project Status- Completed - Project as described in the 2026 milestone is overall complete, though some minor/non-substantive follow-up may still be needed. On-Track- Project is expected to be completed as specified. Any changes in project scope or timing due to Council direction or action will remain labeled On Track with the new estimated timeframe. Behind - The project estimated completion date may be delayed due to operational issues, capacity constraints (such as vacancies in staffing), or project has not started by the estimated completion date. Hold/Dropped - Project is not actively in progress or will no longer move forward in the current year. Reasons may include the issue is no longer relevant, operational constraints, or is stalled/dropped due to City Council direction. Estimated Completion - The calendar quarter in which the objective is expected to be completed. Department Lead - Identifies the lead department and project manager responsible for coordinating progress. Quarterly Update - a brief progress update on the project describes work reflected in the respective calendar quarter. Any delays or project issues will be reflected in this section. To date, of the 43 Council objectives supporting Council priorities, in the second quarter, a total of 9 (21%) have been completed, 28(65%) are on track with new Council direction, 6 objectives are behind schedule (14%), and none are on hold. Council Priority Completed On Track Behind On Hold/ Dropped Total Achieve Near-Term Housing Milestones 15 Cubberley Acquisition and Renovation Funding 2 Enhance Business Vibrancy 5 Government Efficiency 9 Council Values 12 Total 9 28 6 0 43 FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Ed Shikada, City Manager ATTACHMENT A #AN P H M CA & R F EB V GE 1.1.1 x Adopt an updated Accessory Dwelling Unit (ADU) ordinance to comply with State law and implement additional policy alternatives, including increased allowable square footage and condominium conversions, consistent with City Council direction (05.15.23).x 1 1.1.2 x Develop and adopt Objective Development Standards for the South of Forest Area Coordinated Area Plan (SOFA), and present plan amendment options to replace subjective standards with objective standards for Planning and Transportation Commission and City Council consideration, consistent with Housing Element Program 3.7. Explore alignment opportunities with SB 79 work and Downtown Housing Plan. x 1 1.1.3 x Codify the R1/SB 9 interim ordinance by establishing objective development standards and increasing the maximum floor area for SB 9 units from 800 to 1,200 square feet, consistent with Housing Element Program 6.3A, and evaluate implications for R1 and SB 9 projects within the City’s Individual Review Program. x 1 1.1.4 x Conduct and complete a study of short‐term rentals and adopt housing and neighborhood preservation regulations that prioritize long‐term occupancy, consistent with Housing Element Programs 4.2D–E (anticipates ordinance adoption by July, 2027). x 1 1.1.5 x Adopt zoning incentives and development standards that support innovative housing typologies, including micro‐units, intergenerational housing, housing for aging adults, students, and lower‐income households, consistent with Housing Element Program 6.5B. x 1 1.2.1 x Select a preferred alternative for the San Antonio Road Area Plan land use and transportation alternatives based on community input and City Council direction. x 1 1.2.2 x Receive Council direction on optional SB 79 implementation strategies and, as appropriate, present scenario Downtown Housing Plan scenarios to Council and initiate environmental review. x 1 1.3.1 x Partner with Santa Clara County Housing Authority to achieve construction timeline milestones for the Palo Alto Homekey project (which will provide transitional housing and services for unhoused residents). x 1 1.3.2 x Issue Requests for Information or Requests for Proposals (RFI/P) to develop approximately 218 affordable or workforce housing units on City‐owned surface parking lots. (Housing Element Program 1.4A). x 1 Achieve Near‐Term Priority Housing Milestones (ANTPHM)‐ 15 Total 1.1 Housing Code and Zoning Updates 1.2 Area Plans and Long‐Range Housing Strategy 1.3 Affordable, Supportive, and Publicly Enabled Housing Delivery 2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES Priority CC Va l u e # OBJECTIVES (43 Total) Sorted by: Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4 Gr o u p # ATTACHMENT A #AN P H M CA & R F EB V GE 2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES Priority CC Va l u e # OBJECTIVES (43 Total) Sorted by: Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4 Gr o u p # 1.4.1 x Receive a Prohousing Designation from the California Department of Housing and Community Development in order to enhance the City's competitive advantage for qualifying grants. x 1 1.4.2 x Identify and designate additional Housing Element site capacity to maintain RHNA compliance and buffer by evaluating new opportunity sites to address anticipated capacity shortfalls in 2026, including impacts from development on faith‐based sites and downtown parking lots. x 1 1.5.1 x Update and adopt development impact fees for public safety, government facilities, housing, transportation, parks, and community services, including completion of nexus and feasibility studies and establishment of fee waivers for low‐income inclusionary units. (Housing Element Programs 2.1B; 3.1B & C). x 1 1.5.2 x Evaluate opportunities that make multi‐family housing an attractive alternative to commercial office development, consistent with Housing Element Program 3.9A. x 1 1.6.1 x Implement Oversized Vehicles (OSV) Phase 1 work, including options for RV buyback and storage, new recruiting safe parking and enforcement/signage relating to detached/inoperable vehicles prohibition. x 1 1.6.2 x Initiate and advance Oversized Vehicles Phase 2 work, including oversized vehicle permit pilot (e.g., collecting count data, designing permit process & terms, conducting informal RFI/Q to operate pilot). x 1 2.1.1 Continue to advance the Cubberley Project focusing on anticipated purchase of 7 acres from PAUSD and community polling for potential placement of a measure on the November 2026 ballot and other funding source(s). x 1 2.1.2 Continue to explore and develop partnership opportunities with community nonprofit organizations to advance certain elements of the master concept plan through a combination of city and private investments. x 1 1.5 Housing Incentives, Fees, and Market‐Activation Tools 3.1 Business Development and Vitality 1.6 Unhoused Resident and Oversized Vehicle Housing Response Cubberley Acquisition and Renovation Funding (CA&RF)‐ 2 Total 2.1 Strategies to Support Cubberley Acquisition and Renovation Enhance Business Vibrancy (EBV)‐ 5 Total 1.4 State Compliance, Housing Capacity, and Grant Competitiveness ATTACHMENT A #AN P H M CA & R F EB V GE 2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES Priority CC Va l u e # OBJECTIVES (43 Total) Sorted by: Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4 Gr o u p # 3.1.1 x Develop a formal business retention/expansion/attraction program focused on supporting existing Palo Alto businesses seeking to diversify the local economy, increase the tax base that pays for essential public services, job creation, support placemaking and special events, and enhance the Palo Alto brand in innovation and entrepreneurship globally. x 1 3.1.2 x Adopt an ordinance expanding retail opportunities and strengthening retail resiliency, including refining retail and retail‐like definitions and updating the retail preservation ordinance. X 1 3.2.1 x Implement the California Avenue near‐term signage plan replacing the El Camino Real (October 2026) and Oregon Expressway (August 2026) signs—by completing their procurement and installation. x 1 3.2.2 x Continue design work on new parking structure in Downtown core (Lot D). x 1 3.2.3 x Secure City Council approval for the California Avenue Outdoor Activation Guidelines. These guidelines will be finalized through continued stakeholder engagement that includes a representative mix of business owners and residents and a formal Architectural Review Board (ARB) review. x 1 4.1.1 x Develop and balance FY 2027 budget by June 30 prioritizing government efficiency, ongoing solutions and balancing fiscal impacts of policies and practices including consultant contracts, downtown parking and general fund subsidies, nonprofit partnerships and revenue enhancements.x 1 4.1.2 x Implement a standardized Citywide Consultant Stewardship Framework—covering the lifecycle from the decision to outsource and scope drafting to contract close‐ out—to develop and manage scope of services and enhanced reporting on use of professional services.x 1 4.1.3 x Improve City processes by streamlining approval of revised procurement thresholds and contract authority.x 1 4.1.4 x Council support position allocation as a short‐term pilot (6‐12 months) funded from the Council Contingency fund.x 1 4.2.1 x x Improve and streamline staff work on homelessness, housing and services for vulnerable residents. x 1 3.2 District Activation and Access Improvements Government Efficiency (GE)‐ 9 Total 4.1 Fiscal Stewardship and Operational Efficiency 4.2Process Modernization and Service Delivery ATTACHMENT A #AN P H M CA & R F EB V GE 2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES Priority CC Va l u e # OBJECTIVES (43 Total) Sorted by: Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4 Gr o u p # 4.2.2 x Leverage the Palo Alto 311 staff working group workplan, vendor support and City Auditor benchmarking advice to improve clarity and timing of constituent response and satisfaction, and enhance staff efficiencies by aligning report categories with constituent expectations, and implementing vendor‐proposed 2026 system upgrades—including integrating AI tools.x 1 4.2.3 x Modify the municipal code to remove the requirement for planning entitlement approval (such as architectural review) or compliance with zoning regulations and procedures for capital improvement or other city‐initiated projects on publicly owned right of way and land. x 1 4.2.4 x Streamline delivery of low‐cost, high‐value (aka quick build) traffic safety improvements including updating the City's Traffic Calming Policy in alignment with the City's Safety Action Plan, Bicycle/Pedestrian Transportation Plan (BPTP), Safe Routes to School and California's Daylighting Law (AB413). x 1 4.3.1 x Relocate City operations in Utilities and the Development Center back to City Hall in order to reduce rent expense to third party landlords, maximizing revenue to the General Fund, and consolidating property and facility management within City owned land.x 1 5.1.1 3,4 Open 429 Bryant Street Community Center. Complete construction and any necessary partnership agreements to begin La Comida Senior Lunch Program at the facility by end of July, 2026; plan further work for general community center operations concurrently. x 1 5.1.2 4 Pursue a natural grass athletic field pilot project to determine the best management practices to enhance playability and durability. x 1 5.2.1 2 Adopt ordinance updates establishing additional Green Building Standards and Energy Reach Codes. x 1 5.2.2 2 Complete 2026 Bicycle and Pedestrian Transportation Plan (BPTP) with City Council adoption of the plan. x 1 5.2.3 2 Advance recommendations for the Regional Water Quality Control Plant Biosolids Facility Plan. x 1 5.2.4 2 Implement the strategies contained in the 2026‐2027 Sustainability and Climate Action Plan Work Plan. x 1 Council Values‐ 12 Total 5.1 Vibrant Community 5.2 Climate Leadership and Environmental Stewardship 4.3 Organizational Alignment and Facilities Optimization ATTACHMENT A #AN P H M CA & R F EB V GE 2026 DRAFT CITY COUNCIL PRIORITIES AND OBJECTIVES Priority CC Va l u e # OBJECTIVES (43 Total) Sorted by: Council Priority, Group #, estimated completion date, and finally by additional resource needs.Q1 Q2 Q3 Q4 Gr o u p # 5.2.5 2 Develop and recommend for Council approval a multi‐year grid modernization capital improvement plan focused on improving reliability and facilitating city‐wide customer electrification by upgrading sub‐transmission, substation, and distribution infrastructure. Issue the first tranche of debt financing in 2026.x 1 5.3.1 3,4 Execute MOU with Santa Clara County for assignment of clinician to PD Psychiatric Emergency Response Team (PERT) in Jan 2026. x 1 5.3.2 2 Advance design of Grade Separation projects at Charleston Road, Meadow Drive and Churchill Avenue. x 1 5.3.3 4 Update the Safety Element and develop an Evacuation Plan pursuant to SB 99, AB 747, and AB 1409. x 1 5.3.4 3,4 Support Community Mental Health through provision of support for all ages through community partnerships, programs, and initiatives. x 1 5.3.5 4 Advance Quiet Zones at Palo Alto Avenue, Churchill Avenue, Meadow Drive, and Charleston Road Rail Crossings. x 1 5.3 Community Well‐Being & Belonging 1 0 6 2 8 City Council Supplemental Report From: Ed Shikada, City Manager Meeting Date: September 9, 2026 Item Number: B Report #:2609-6737 TITLE Supplemental Report: 2026 City Council Priorities Q2 Update BACKGROUND Due to an administrative error, updates for Objectives 1.6.1, 1.6.2, and 4.2.1 were inadvertently omitted from the staff report. The attached two pages provide the Q2 updates for these objectives and should replace the corresponding pages in Attachment B. ATTACHMENTS Supplemental Attachment A: Objectives 1.6.1, 1.6.2, and 4.2.1 Q2 Updates APPROVED BY: Ed Shikada, City Manager