Highlights

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The main item on the agenda is approving the FY 25-26 budget. Items often get blocked later in the year with the reason that they they weren't approved in the budget. So the budget document is critical.

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Other items include approval for the Locker Room and landscaping/facility improvements at Westwind Barn.

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NOTE: Depending on public interest and participation, the items below may be re-ordered.

   [ Items of special note are highlighted in red ]

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ITEM 2. PRESENTATIONS AND APPOINTMENTS

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ITEM 4. INFORMATIONAL REPORTS (ITEMS PROVIDED SOLELY FOR INFORMATIONAL PURPOSES)

A. Treasurer's Report (Staff: T. Leung)
B. Disbursement Report (Staff: T. Leung)

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ITEM 5. CONSENT CALENDAR​

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A. Approval of the City Council Regular Meeting Minutes April 17, 2025 (Staff: A. Miller)

B. Approval of the Regular City Council Meeting Minutes May 15, 2025 (Staff: A. Miller)

C. Resolution Awarding the Corporation Yard Locker Room Phase 1 Project to Argos Construction, the Lowest Responsible and Responsive Bidder, in the Amount of $175,000 and Authorizing the City Manager to Execute a Construction Contract; and Approving Project Contingency Funds of $35,000 and Authorizing the Public Works Director to Approve Potential Contract Change Orders Within the Said Funds (Staff: W. Kim)

Budgeted capital improvement project to add adequate locker room space with accessible shower/restroom facilities for the maintenance staff. On November 21, 2024, the City Council approved the conceptual design and on April 17, 2025,​ approved the final plans and authorized advertising for formal bids. On May 22, 2025, the Town received two bids, Argos Construction was the lowest responsible bidder at $175,000.

The bid is approximately 31% lower than the architect’s estimate of $255,000 and the staff recommends awarding Argos the contract.

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D. Resolution Rejecting Non-Responsive Bids from Skyline Landscapes, Jahn Plumbing, Inc., and Rodan Builders, Inc. for the Lower Arena Improvements at Westwind Community Barn Project; Awarding the Project to Nebo Construction, the Lowest Responsible and Responsive Bidder, in the Amount of $159,112 and
Authorizing the City Manager to Execute a Construction Contract; and Approving Project Contingency Funds of $30,000 and Authorizing the Public Works Director to Approve Potential Contract Change Orders Within the Said Funds (Staff: W. Kim)

Project replaces the failing perimeter fence and gates of the lower arena at Westwind Community Barn, repairs the sprinkler system and improves drainage. Additionally, installs drainage system in the picnic area to eliminate ponding. On May 15, 2025, the City Council approved the plans and authorized staff to advertise the project for formal bid. On June 12, 2025, the Town received seven bids ranging from $140,244 to $315,250. Staff recommends awarding the project to Nebo Construction for $159,112.

Staff recommends rejecting the lowest bidder, Skyline Landscape, because they don’t hold the required contractor’s license for this type of work. Sufficient funds are available from the Westwind barn capital fund to cover the work. Total Estimated Project Cost including contingency and administration is $ 209,112.

E. Opposition to Assembly Bill 306 (Staff: C. Einfalt)

​Letter to Honorable Nick Schultz, California State Assembly respectfully opposing AB 306 (Schultz) unless amended. This bill proposes a six-year moratorium on adopting state and local building standards, except under specific circumstances, to reduce rebuilding costs from recent Los Angeles wildfires.
While the Town supports the intent to make rebuilding more affordable, AB 306 would halt the adoption of new Building Standards statewide, affecting local governments outside the wildfire areas that are progressing on climate-resilient codes. This could be regressive and disincentivize cities working on advanced building designs. Additionally, the current exemptions do not allow for stricter home hardening standards beyond what is set by the State Fire Marshal. Town proposes four amendments to address these concerns.

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F. Resolution Directing that the Pride Flag be Raised for the month of June 2025

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G. Resolution Granting an Extension of the Expiration Dates for Building Permits for Various Residential Properties as listed in the Staff Report (Staff: J. Bradford)

Staff recommends granting one-year building period extensions on four projects that were issued between 2020 and 2023 whose permits expired between three and thirteen months ago, due to weather, material supply, and/or contractor related delays.
  Lands of Koo – 25251 La Rena Lane- new single-family residence with an attached ADU
  Lands of Pang – 13210 East Sunset Drive- new single-family residence
Lands of Hyder – 11778 Maria Lane- Construction of a major addition to a primary single-family residence
  Lands of Jackson – 13800 Barton Court- Construction of a new detached ADU

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ITEM 6. ONGOING BUSINESS

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None

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ITEM 7. PUBLIC HEARINGS

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City Council Ex Parte Contacts Policy Disclosure

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A. Receive and file the Annual Workforce Vacancy, Recruitment, and Retention Report as Required Under AB 2561 (Staff: T. Leung)

As of January 1, 2025, the state requires an annual public hearing of the status of vacancies, recruitment and retention efforts, which is designed to entitle the recognized employee organization to present if the number of job vacancies within a single bargaining unit meets or exceeds 20% of the total number of authorized full-time positions. The Town does not have a bargaining unit, and vacancies did not exceed 20%,
Vacancies: 1 of 27 positions
Recruitment: 7 positions filled in last 12 months, average time to fill 12 weeks
Retention Strategies: Stay interviews, Update Employee policies, Compensation Study Hiring Obstacles: Larger cities have higher pay, limited advancement, cost of housing, commute allowance.

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B. Consideration of a Resolution Adopting the Proposed FY 2025-26 Operating Budget and FY 2026-30 Five-Year Capital Improvement Plan Budget and Gann Limit for the Town of Los Altos Hills and Resolution Approving the FY 2025-26 Salary Schedule (Staff: T. Leung)

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​This item includes adopting the FY’25-26:
    Budget and Five-year Capital plan,
    Salary Schedule
    Reserve Policy and adjusted reserve balances.
    Gann Limit
The Town’s fiscal year commences on July 1 and ends on June 30. This is the final step in the multi-meeting approval process which began in early May.

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Budget Highlights

 

While the Town’s near-term financial position is sound, expenditure has been rising faster than revenue. The Town’s financial outlook remains partially dependent on continued growth in property tax revenues, which are tied to broader economic trends and housing market conditions. Planning and Building revenue is  similarly sensitive to economic conditions, as it is closely linked to local development activity, building permit
volume, and real estate market health. Due to current high interest rates, revenue income has been augmented by significant investment returns from the Town ‘s substantial cash reserves. Interest rates are anticipated to decline thereby reducing revenues.

The City Manager states, “Despite these risks, the Town’s strong reserves and sound financial practices provide a solid foundation to manage risk and maintain service levels in the year ahead…preserving  structural balance will require active budget management and continued discipline in both operating and capital spending.” Municipal accounting involves the use of multiple funds to collect revenue and expenditure. The General Fund is the principal operating account, and in addition there are Special Revenue Funds, Capital Project Funds, Sewer and Internal Service Funds. Below are the projected starting balances and budgeted revenue and expenditure for FY’25-26.

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General Fund expenditures–including allocations–are projected at $18.2 million in FY 2025-26, a 12.2% increase from final FY 2024-25 estimates. Excluding allocations, General Fund expenditures are estimated at $13.7 million.

- Personnel costs are increasing due to staffing changes, as well as rising health and pension obligations.

- Public safety remains the largest contractual service cost, with increased costs driven by adjustments to the Santa Clara County Sheriff’s Office contract and continued funding for private security and Automated License Plate Readers (ALPRs).

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- General Fund expenditures–including allocations–are projected at $18.2 million in FY 2025-26, a 12.2% increase from final FY 2024-25 estimates

- The Public Safety budget is $4.1 million, a 10.2% increase from the FY 2024-25 adopted budget.

- The Engineering budget decreased by $371,514, or 27%, primarily due to a reduction in billable professional and contract services now being handled by in-house staff.

- The Street Operations budget increased by $71,685, or 9% due to higher personnel costs from bringing inspection services in-house.

- The Pathway Operations budget increased by $261,331, or 32% due to higher personnel costs.

- The General Administration budget is made up of all the support departments which include City Council, City Manager, City Attorney, City Clerk, and Committees and Commissions. The General Administration budget for FY 2025-26 is $2.5 million, a 9.2% increase from the FY 2024-25 adopted budget.​​

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Capital Improvement Program

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- One of the most significant changes in this year’s CIP is the scaling back of the Civic Center Improvements project, which has been refocused on the renovation of the Parks and Recreation Building.

- The FY 2025–26 CIP introduces several new projects, including Road Safety and Traffic Calming, the Magdalena Avenue Pathway, and development of a Local Road Safety Plan—each of which supports community safety and mobility goals.

- The Annual Road Rehabilitation Project remains the cornerstone of the CIP and is funded at $1.4 million in FY 2025–26. Supported by SB1, Gas Tax, and Measure B revenues.

- The Sewer Fund also remains adequately funded, with $0.9 million allocated in FY 2025–26 for capital improvements to maintain the Town’s collection and distribution system

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The Sewer Fund is fully supported by sewer service charges to residential and non- residential customers and sewer connection fee assessments on new connections to the Town’s sewer system.

- Sewer service charge rates have annually increased since FY 2022-23 per the sewer rate study conducted in 2022, due in part to substantial increases to waste treatment costs from Palo Alto regional treatment facility which requires significant capital improvements and upgrades to adhere to regulatory requirements.

- Additionally, the capital needs for the Town’s infrastructure have increased. These additional charges underscore the need to consider a new rate study in the near future to ensure rates are able to meet the cost of providing these services

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Pension and Other Post Employment Benefits (OPEB)

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- As of the most recent actuarial report from CalPERS, with a valuation date as of June 30, 2023, the Town’s Unfunded Actuarial Liability (UAL) is approximately $3.8 million and the required UAL contribution is approximately $0.3 million for FY 2025-26,

- Classic Miscellaneous group is 81.1% funded, the Second Tier plan is 88.2% funded, and the PEPRA tier is 88

- Town has set aside approximately $2.1 million in a Section 115 Pension Trust and another $0.5 million in a General Fund Pension Reserve to mitigate this unfunded position.

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Reserves

 

As part of the FY 2025–26 budget process, the Town reviewed and updated its reserves to ensure alignment with adopted policy targets, actual funding needs, and best practices.  Reserves total $15 million.

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ITEM 8. NEW BUSINESS

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A. Council Discussion and Staff Direction on how to Disperse the Community Service Grant Fund (Staff: T. Leung)

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Council to decide which community organization to donate to in FY’25-26. In FY’24-25, $40,000 was provided: Los Altos Chamber of Commerce $5.000, Counselling and Support Services for Youth $10,000, Hidden Villa $10,000, Community Services Agency $10,000, Friends of Deer Hollow Farm $5,000.

For FY 2025–26, nonprofit organizations have requested a total of $81,000 in funding—more than

the $40,000 currently included in the budget  allocation.

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The staff report has details.

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ITEM 9. REPORTS FROM COMMITTEES, SUB-COMMITTEES, AND COUNCILMEMBERS ON OUTSIDE AGENCIES

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A. Status Report from All Council Members on Subcommittees and Outside Agencies
Activities​

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10. STAFF REPORTS

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11. COUNCIL INITIATED ITEMS

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