Agenda, study session, second session — Hillsborough City Council, February 9, 2026

TOWN OF HILLSBOROUGH
San Mateo County
Sophie Cole, Mayor Town Hall
Leslie Marden Ragsdale, Vice Mayor 1600 Floribunda Avenue Laurie Davies Adams, Councilmember Hillsborough, CA 94010 Marie Chuang, Councilmember www.hillsborough.net
Christine Krolik, Councilmember 650-375-7400

A G E N D A
MONDAY, FEBRUARY 9, 2026
3:30 PM STUDY SESSION
4:45 PM CLOSED SESSION
6:00 PM CITY COUNCIL MEETING
Council Chambers
Meetings of the City Council are held in-person in Council Chambers. As a courtesy and technology permitting, the meeting will also be held virtually via Zoom Video Conference. However, the Town cannot guarantee that the public’s access to the Zoom virtual platform will be uninterrupted, and technical difficulties may occur from time to time. In those instances, so long as the public may still attend the meeting in person, the meeting will continue.

In the event a Councilmember is participating remotely under the alternative teleconferencing provisions in the Brown Act (Government Code Section 54953.8), the Town will stop the meeting if there is any technology disruption consistent with the Brown Act’s requirements.

To attend the meeting in person:1600 Floribunda Avenue, Hillsborough, CA 94010 To provide Public Comment in person: Members of the public wishing to speak on the agenda item are requested to complete a yellow speaker card and submit it to the City Clerk. Speakers may speak for up to three minutes.

To participate in the meeting via Zoom Video Conference:
• Log in to the meeting at https://us06web.zoom.us/j/84510576696?pwd=oof8z8rjJfwkhfZDClfOuoJS9fvzRE.1 • Dial-in via phone:
+1 669 444 9171 US
Meeting ID: 845 1057 6696
Passcode: 228834
To provide Public Comment via Zoom Video Conference: Live verbal public comments may be made by requesting to speak using the “raise hand” feature in Zoom or, if calling in by phone, by pressing *9 on the telephone keypad prior to the close of the public comment period for the item. In response, the Town will unmute the speaker and allow them to speak for up to three minutes.

STUDY SESSION (3:30 pm)

CALL TO ORDER

ROLL CALL
A. Study Session - Water Rate Cost-of-Service Study
B. Study Session - Sewer Rate Cost-of-Service Study
Agenda – Hillsborough City Council
Monday, February 9, 2026

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ADJOURN STUDY SESSION
CLOSED SESSION (4:45 p.m.)

CALL TO ORDER

ROLL CALL

ANNOUNCEMENT OF CONFLICT OF INTEREST ON CLOSED SESSION ITEM(S) This portion of the agenda is for Councilmembers to disclose any conflict of interest related to the item(s) on the Closed Session agenda. Any Councilmember who has confirmed a conflict of interest or has reason to believe they have a conflict of interest should disclose the conflict for the record and abide by the disqualification requirements contained in FPPC regulations.

PUBLIC ANNOUNCEMENT OF CLOSED SESSION ITEMS
A. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Pursuant to Government Code Section 54956.9(d)(1)
Town of Hillsborough v. All Persons Interested in the Matter of the Proceedings for Resolution No. 22-83 Adopting Maximum Rates for Water Service Charges San Mateo Superior Court Case No. 23CIV01028
B. CONFERENCE WITH LEGAL COUNSEL – INITIATION OF LITIGATION Pursuant to Government Code Section 54956.9(d)(4)
One Potential Case – Consideration of Appeal in Existing Litigation Noted Above C. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Pursuant to Government Code Section 54957(b)(1)
Title: City Manager
D. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Pursuant to Government Code Section 54956.9(d)(2)
One or More Potential Cases

PUBLIC COMMENT ON CLOSED SESSION ITEM(S)
Members of the public may provide public comments on the item(s) on the Closed Session agenda. Members of the public participating in person are requested to complete a yellow speaker card and submit it to the City Clerk before addressing the City Council. Members of the public participating via the Zoom platform may use the “raise hand” feature or, if calling in by phone, press *9 on the telephone keypad. Speakers are limited to one comment per Closed Session item.

ADJOURN CLOSED SESSION
REGULAR CITY COUNCIL MEETING (6:00 p.m.)
I. CALL TO ORDER
II. ROLL CALL
III. PLEDGE OF ALLEGIANCE
Agenda – Hillsborough City Council
Monday, February 9, 2026

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IV. REPORT FROM CLOSED SESSION
V. PROCLAMATIONS
• Black History Month – February 2026
• National Slavery and Human Trafficking Awareness Month – January 2026 VI. TOWN UPDATE
VII. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA
This portion of the meeting is reserved for persons wishing to address the City Council on any matter not on the agenda.

Members of the public participating in person are requested to complete a yellow speaker card and submit it to the City Clerk before addressing the City Council. Members of the public may provide comments via the Zoom platform by using the “raise hand” feature or, if calling in by phone, by pressing *9 on the telephone keypad. In response, the Town will unmute the speaker and allow them to speak on any topic for up to three minutes. If there appears to be a large number of speakers, speaking time may be reduced to no less than 2 minutes, at the discretion of the Mayor. Members of the public are limited to one comment at this time. State law prohibits the Council from discussing or acting on non-agenda items, and generally limits the ability of the Council to respond to any public comments made regarding non-agenda items.

VIII. ANNOUNCEMENT OF CONFLICT OF INTEREST
This portion of the agenda is for Councilmembers to disclose any conflict of interest related to any item on the agenda. Any Councilmember who has confirmed a conflict of interest or has reason to believe they have a conflict of interest should disclose the conflict for the record and abide by the disqualification requirements contained in FPPC regulations.

IX. CONSENT CALENDAR
The Consent Calendar includes routine items which generally do not require discussion. A Councilmember may remove an item for discussion, and any member of the public may request a Councilmember to remove an item for discussion. The items are approved in one motion.

1. Approve City Council Meeting Minutes of January 12, 2026

2. Monthly Claims: January 1 through January 31, 2026

3. Approval of an Application for Sign Advertising for the Hillsborough Schools Foundation Dinner Dance Gala Fundraising Event Under CEQA Guideline 15301

4. Receive January 2026 Legislative Update

5. Resolution Supporting the Match Commitment for the Federal Emergency Management Hazard Mitigation Grant Program for the Highline Safety Pipeline Project Under CEQA Guideline 15378

6. Resolution Adopting Policies 601-608 to Establish Operational Technology Procedures and Guidelines

7. Resolution Accepting as Complete the Contract with LVI Engineering for the Macadamia Access Road Repair Project – Phase 1 (East) Project in the Amount of $1,033,516.00 Under CEQA Guideline 15301
Agenda – Hillsborough City Council
Monday, February 9, 2026

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8. Resolution Approving and Authorizing the City Manager to Execute an Amendment to the Existing Design-Build Agreement with Power Engineering Construction Company for the Tartan Trail Road Bridge Emergency Repair Project – Phase 2 in the Amount of $3,311,124.00, for a Total Agreement Amount of $3,900,514.00, and Approve a FY 2025-26 Budget Amendment in the Capital Fund (CIP #415) in an Amount up to $3,900,000.00, Under CEQA Guideline 15301
X. PUBLIC HEARING

9. Resolution Accepting a Five-Foot-Wide Public Utility Easement on Three Parcels at 1200 Jackling Drive (APNs 027-330-490, 027-330-500, and 027-341-070) and Contingently Summarily Vacating an Existing Public Utility Easement on Two Parcels at 1200 Jackling Drive (APNs 027-330-490 and 027-330-500) Pending Relocation, Under CEQA Guidelines Section 15305
XI. DISCUSSION

10. E-bikes Informational Update
XII. CITY COUNCIL ITEMS
This section of the agenda provides the City Council an opportunity to report their participation in activities related to any intergovernmental committee assignments.

XIII. ADJOURNMENT
SPECIAL ACCOMMODATIONS:

If you need a disability-related modification or accommodation, including auxiliary aids or services, to participate in the City Council meeting, or if you need an agenda in an alternate form, please contact the City Clerk’s Office at 375-7412 at least 24 hours before the scheduled City Council meeting.

ADDRESSING THE CITY COUNCIL:

Members of the public may provide written comments to the City Council regarding any item on the agenda up to two hours before the meeting to [email protected] or by mail/in person at 1600 Floribunda Avenue, Hillsborough, CA 94010. Any writings or documents provided to a majority of the City Council regarding any item on this agenda prior to the deadline, except as exempt from public disclosure under applicable law, will be available for public inspection on the Town website, and in the City Clerk’s Office at 1600 Floribunda Avenue, Hillsborough, CA 94010, during regular business hours. All oral comments made at public meetings, including a speaker’s name, are recorded and included as part of the public record in the meeting minutes. Meeting minutes are publicly accessible via the Town website and via various internet search engines. Written comments, including a commenter’s name, are a public record and subject to disclosure on the Town website and/or upon request under the California Public Records Act (with personal contact information including personal email addresses and personal phone numbers redacted).

AUDIO / VISUAL ADVISORY:

Those persons who wish to use PowerPoint or other mediums when presenting to the City Council will be required to submit media items to the City Clerk by 12:00 p.m. on the day of the meeting. Media items can be emailed to [email protected].

AUDIO OR VIDEO RECORDINGS:

Please be advised that under the Brown Act, any person has the right to record the City Council meeting, including the audience in attendance, using an audio or video recording device subject to certain exceptions. Please be aware that by attending a City Council meeting, you may be audio or video recorded.

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
A

STUDY SESSION

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Study Session - Water Rate Cost-of-Service Study SUMMARY: This study session is to discuss the preliminary draft Water Rate Cost of Service Study analysis. No action is required. Staff request any feedback in preparation for the final review of the proposed water rates, as appropriate.

Background
The Town of Hillsborough (“Town”) operates and maintains a potable water distribution system to serve its residents and water users. It is a complex system with varying topography and 19 separate but interconnected pressure zones. The infrastructure network includes 108 miles of water mains, 18 water tanks, 14 water pump stations and over 7,500 various assets, such as water meters, fire hydrants, and valves. The San Francisco Public Utilities Commission (SFPUC) delivers treated wholesale water to the Town from its Hetch Hetchy system. This water is delivered through ten master meter locations from the SFPUC’s 42-inch and 60-inch transmission pipelines. The Town purchases treated water from the San Francisco Water Department’s (SFWD) Hetch-Hetchy system under a long-term supply contract last renewed on July 1, 2009, and Amended December 1, 2018, with a 25-year term through June 30, 2034. From these connections, the Town pumps and delivers water to approximately 4,014 accounts, of which nearly all are single-family residential. The system’s customer base is comprised primarily of single-family residential units. Several public and private schools and three private clubs represent the balance of the customer base. The Town operates and maintains its own water distribution facilities. Most the Town’s water customers are billed on a bi-monthly basis.

The current water rate series was implemented and took effect on November 14, 2022, with annual reviews conducted each year to determine if the rate increase was necessary for that year. Rates from the adopted rate series were implemented effective July 1, 2023, and were increased in accordance with the pre-approved schedule on January 1, 2024 and January 1, 2025. The new cost of service study is prepared using the latest legal, legislative and financial projections.

Approach
Rate Study Projection
The Town sent a Request for Proposal (RFP) for consulting services for a water cost of service rate study. After a competitive selection process, HF&H Consultants, LLC. (HF&H) were determined to be the most qualified consultants based on their relevant experience in rate studies.

HF&H was awarded the contract and has prepared a presentation for City Council feedback that formulates projected rates for a five-year planning period (2026-2031). -1-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

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A five-year financial projection was prepared to analyze and establish a rate plan that supports the projected revenue requirement. The Town’s water rate revenues are used to fund provision of potable water to the customers of the Town’s water system.

Analysis

1. Revenue Requirement: The revenue requirement projection outlines the revenue needed to cover the costs of the operations, capital improvements, debt service and reserves.

2. Purchased Water Cost: A major component of the operations and maintenance cost (“O&M”), the purchased water cost per unit is increasing between 3.0% and 8.6% annually over the next five years, as communicated by the SFPUC in January 2026. The SFPUC rates can vary within the five-year period from what was recently communicated to the water agencies. To maintain user rates, should the SFPUC rates vary from what is assumed in the rate study assumptions, a “pass through adjustment” can be implemented for the difference in the per unit charge.

3. Capital Improvements: The Town’s capital improvement plans include an average annual expense of $2.9 million over the projection period, demonstrating the Town’s priority to continue to invest in its water system, which must be sized and maintained to meet the Town’s highest levels of water demand. Improvements include ageing infrastructure that has exceeded its useful life, including water mains, storage and pumping systems, and seismic protection valves, and software improvements to the Town’s system which monitors, controls and protects infrastructure operations from natural and cybersecurity threats.

4. Revenue Volatility and Reserves: The Water Fund projection reflects the use of reserves within the five-year rate period and remains compliant with reserve policies and debt covenants.

Should water usage be restricted by a water emergency or state mandate, Revenue Stabilization Factors can be used and applied to the corresponding volume charge rates so that the Town can maintain revenue neutrality during any stage of a water revenue shortfall.

5. Rate Structure Adjustments: The study session outlines rate structure analysis to account for the Town’s cost of service in connection with the latest legislative. legal and rate making practices.

Next Steps
The draft rate study timeline assumes rate adjustments and increases for a five-year planning period, with the first set of rates effective July 1, 2026. Staff and consultants will incorporate any feedback from City Council study session into the final proposed rate study and prepare a final report and draft Proposition 218 notice for City Council review.

Proposition 218 requires the Town to hold a public hearing on the proposed rates for the charges and to mail notice of the public hearing to property owners who are directly liable for the payment of water charges not less than 45 days before the public hearing to adopt the rates for the service fees or charges. They are subject to the protest proceeding wherein the adoption of any new or increase in any existing charge cannot be adopted if the Town receives written protests to the proposed fees and charges from a majority (50% + 1) of the -2-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

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record owners of parcels upon which the charges are proposed for imposition who are directly liable for the payment of the proposed water charges.

The recommendation is for the City Council to provide any feedback on the presentation at the study session.

FISCAL IMPACT: There is no fiscal impact to the Town with this agenda item.

ENVIRONMENTAL ISSUES: There are no environmental issues associated with this agenda item.

ATTACHMENT(S): HF&H Water Rate Cost-of-Service Study PowerPoint Presentation PREPARED BY: Jan Cooke, Finance Director
RECOMMENDATION: No action required; City Council provide feedback to staff, as needed. -3-
2026 WATER RATE STUDY

CITY COUNCIL WORKSHOP PRESENTATION
FEBRUARY 9, 2026
-4-
Overview
Purpose
Discuss preliminary water rate cost-of-service study analysis to set rates beginning July 1, 2026.

Results
• Projections indicate revenue increases of 6%, 6%, 5%, 5%, and 5% needed over next five years.
• Two rate structure options have been analyzed.
2 -5-
3 What is driving the need for an increase in water rates? • No Rate Increases since January 1, 2025
• Wholesale Water Cost - SFPUC communicated new wholesale water rates for FY 2026-27. Projection of 23% increase from 7/1/26 through 7/1/30
• Capital Expenditures – Average expenses of $2.9 M annually • Debt Coverage – $1.2 M annual debt service through FY 2029-30, $0.8M annual debt service in FY 2030-31.

Executive Summary
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4 SFPUC Wholesale Cost of Water Increasing
Analysis
23%
Increase%
-7-
5 Water Demand Has Declined from the Previous Rates Study Analysis
Historical
peak
-8-
6 Analysis
Capital Expenditures Projections
Capital Improvement Projects FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 5-Year Total Water Main Replacement Program $1,000,000 $1,000,000 $1,000,000 $1,000,000 $0 $4,000,000 Demolish Forrestview Tanks #1 and #2 $250,000 $0 $400,000 $0 $0 $650,000 Water Tank Coating Improvements $400,000 $0 $0 $0 $0 $400,000 Clark Concar Pump Station Generator $0 $200,000 $200,000 $1,200,000 $0 $1,600,000 Marlborough Pump Station & Generator $700,000 $0 $0 $0 $0 $700,000 Earthquake Protection Valves $0 $100,000 $100,000 $100,000 $0 $300,000 SCADA Improvements $0 $0 $200,000 $200,000 $0 $400,000
Darrell Pump Line Rehab and Replacement $0 $300,000 $1,150,000 $800,000 $0 $2,250,000 Demolish Major Hayes Tank and Piping $65,000 $300,000 $0 $0 $0 $365,000 Future Capital Projections $0 $0 $0 $0 $2,533,000 $2,533,000 Subtotal $2,415,000 $1,900,000 $3,050,000 $3,300,000 $2,533,000 $13,198,000 Construction Cost Index 1.033 1.066 1.101 1.137 1.174
Escalated Total CIP $2,493,686 $2,025,830 $3,357,947 $3,751,566 $2,973,435 $14,602,464 -9-
7 Analysis
Revenues Are Not Meeting Projected Expenses
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$2.0
$4.0
$6.0
$8.0
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Effective Date 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 Proposed
Revenue
Increases

6.0% 6.0% 5.0% 5.0% 5.0%
Ending Fund Balances (in Millions)
Fund Balance without Rate Adjustments Fund Balance with Proposed Rates (July 2026) Operating Minimum
Target Reserve
8 Water Rates Analysis
Debt Coverage Ratio 2.15 2.53 3.20 3.75 4.15 7.41
-11-
Cost of Service Overview
9 Components of Rate Structure
Volume Charges
Residential $12,584,088 $11,833,726 ($750,363) -6.0%
Non-Residential $471,813 $641,666 $169,853 36.0%
$13,055,902 71% $12,475,392 64% ($580,510) -4.4%
Service/Meter Charge $5,283,792 29% $6,964,683 36% $1,680,891 31.8% Total $18,339,693 100% $19,440,075 100% $1,100,382 6.0% Current Revenue Cost Difference
(FY 2025-26 rates) of Service COS Minus Current
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10 FY 2026-27 Water Rates Scenarios
Service Charges Scenario 1: Two-Tiered Volumetric Charges, One Customer Class Scenario 2: Uniform Volumetric Charges, One Customer Class &
Meter Current Proposed
Size Rates FY 2026-27
Bi-Monthly
3/4" $161.18 $237.95
1" $190.70 $259.53
1 1/2" $257.12 $308.08
2" $345.68 $372.82
3" $581.83 $545.45
6" $1,585.49 $1,279.13
8" $2,471.07 $1,926.49
Monthly
3/4" $80.59 $118.98
1" $95.35 $129.77
1 1/2" $128.56 $154.04
2" $172.84 $186.41
3" $290.92 $272.73
6" $792.75 $639.56
8" $1,235.54 $963.25
Customer Current Current Revised Proposed Proposed
Category Tiers Rates Customer Category Tiers FY 2026-27 (HCF) ($/HCF) (HCF) ($/HCF)
Bi-Monthly Residential Bi-Monthly Residential
Tier 1 0 to 22 $7.59 Tier 1 0 to 42 $9.32
Tier 2 23 to 44 $9.91 Tier 2 42+ $14.75
Tier 3 45 to 78 $15.63
Tier 4 79+ $20.96 Monthly Res./Commercial
Tier 1 0 to 21 $9.32
Non-Residential $10.49 Tier 2 21+ $14.75
Customer Current Current Revised Proposed
Category Tiers Rates Customer Category FY 2026-27
(HCF) ($/HCF) ($/HCF)
Bi-Monthly Residential All Customers
Tier 1 0 to 22 $7.59 All Use $11.50
Tier 2 23 to 44 $9.91
Tier 3 45 to 78 $15.63
Tier 4 79+ $20.96
Non-Residential $10.49
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11 Customer Bill Impacts – Monthly Residential
Red indicates minimum increase/maximum decrease for proposed rates scenario.

Green indicates maximum increase for proposed rates scenario.

Comparison for residents billed monthly
Analysis of annual bills using FY 2024-25 billed water usage Monthly Current Proposed 2-Tiered Rates Proposed Uniform Rates Residential 4-Tiered
Customer Annual Bill Annual Bill $ Difference Annual Bill $ Difference A $8,083 $7,329 ($754) $6,835 ($1,247)
B $5,120 $5,205 $86 $5,329 $210
C $34,039 $27,658 ($6,381) $23,990 ($10,049)
D $4,589 $5,384 $795 $5,506 $917
E $2,577 $2,852 $275 $2,996 $418
F $102,366 $74,567 ($27,798) $59,925 ($42,440)
G $26,166 $21,355 ($4,811) $18,569 ($7,597)
H $24,290 $18,980 ($5,311) $15,989 ($8,301)
I $23,327 $18,563 ($4,764) $15,941 ($7,386)
J $8,024 $8,946 $922 $9,437 $1,413
K $2,507 $2,768 $261 $2,892 $386
L $25,722 $21,190 ($4,532) $18,585 ($7,137)
Total $266,810 $214,796 ($52,014) $185,995 ($80,815)
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12 Customer Bill Impacts - Commercial
Red indicates minimum increase/maximum decrease for proposed rates scenario.

Green indicates maximum increase for proposed rates scenario.

Analysis of annual bills using FY 2024-25 billed water usage Current Proposed 2-Tiered Rates Proposed Uniform Rates
Commercial
Customer
Uniform
Annual Bill Annual Bill $ Difference Annual Bill $ Difference A $249,920 $332,073 $82,153 $274,759 $24,839
B $15,596 $19,885 $4,290 $17,056 $1,460
C $7,862 $8,684 $822 $9,456 $1,594
D $13,068 $16,329 $3,262 $14,285 $1,217
E $35,644 $42,905 $7,261 $38,919 $3,275
F $3,200 $3,443 $243 $3,811 $610
G $48,134 $62,645 $14,512 $52,982 $4,849
H $47,434 $59,642 $12,207 $49,234 $1,800
I $2,319 $2,666 $347 $2,845 $526
J $68,360 $94,100 $25,739 $74,882 $6,522
K $146,069 $182,353 $36,284 $181,478 $35,409
L $39,513 $53,574 $14,061 $43,267 $3,754
M $41,936 $56,933 $14,997 $45,923 $3,987
Total $719,054 $935,233 $216,179 $808,896 $89,842
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13 Customer Bill Impacts – Bi-monthly Residential
Sample comparison of annual water bills for customers billed bi-monthly:

Note: Bills based on FY 2024-25 water use patterns. All customers compared have a 1” meter.

Annual Water Current Proposed 2-Tiers Rates Proposed Uniform Rate Water Use Use (HCF) Annual Bill Total Annual Bill Total Annual Change Annual Bill Total Annual Change Very Low 78 $1,736 $2,284 $548 $2,454 $718
Low Use 120 $2,092 $2,675 $583 $2,937 $845
Average Use 240 $3,447 $4,016 $570 $4,316 $870
High Use 480 $7,593 $7,405 ($188) $7,075 ($518)
Change in Annual
Bill ($/Year) >(20,000)
(20,000)
to
(10,000)
(9,999)
to
(5,000)
(4,999)
to
(2,500)
(2,499)
to
(1,000)
(999)
to
<0
1 to
500
501
to
1,000 >1,000 Total
Two Tiered Rates 1 3 21 42 114 398 1,128 2,249 32 3,988 Uniform Rates 3 8 36 69 192 391 535 2,605 149 3,988
Number of accounts with annual bill decrease Number of accounts with annual bill increase
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14 Water Rates Sensitivity Analysis
$2.0
$4.0
$6.0
$8.0
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Effective Date: 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 Proposed Revenue
Increases

6.0% 6.0% 5.0% 5.0% 5.0%
Debt Coverage 2.15 2.53 3.20 3.75 4.15 7.41
Ending Fund Balances (in Millions)
Fund Balance w/ 5% Water Reduction FY 2026-27, 2027-28 Fund Balance w/ 10% Water Increase FYE 2027 Fund Balance w/ 5% Water Increase FY 2026-27 Fund Balance w/ 10% Water Reduction FY 2026-27 Fund Balance With Rate Changes (Baseline)
Operating Minimum
Target Reserve
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15 Timeline for 7/1 Rate Adoption
• 2/9/2026 | Council Study Session
• 3/2/2026| FAC Meeting
• 3/9/2026 or 4/13/2026| Council Meeting – Approve 218 Process • 5/11/2026 or 6/8/2026| Council Meeting – Public Hearing Rate Adoption • 7/1/2026| Rates Implemented
Water Rates Adoption Timelines
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Conclusion
Summary
• New rate study conducted to set rates for July 1, 2026 and to address rising costs.
• Two rate scenarios for consideration.

Request of City Council
• Council discussion and feedback regarding the two water rate scenario options presented.
16 -19-
17 FY 2026-27 Water Rates Scenarios
Service Charges Scenario 1: Two-Tiered Volumetric Charges, One Customer Class Scenario 2: Uniform Volumetric Charges, One Customer Class &
Meter Current Proposed
Size Rates FY 2026-27
Bi-Monthly
3/4" $161.18 $237.95
1" $190.70 $259.53
1 1/2" $257.12 $308.08
2" $345.68 $372.82
3" $581.83 $545.45
6" $1,585.49 $1,279.13
8" $2,471.07 $1,926.49
Monthly
3/4" $80.59 $118.98
1" $95.35 $129.77
1 1/2" $128.56 $154.04
2" $172.84 $186.41
3" $290.92 $272.73
6" $792.75 $639.56
8" $1,235.54 $963.25
Customer Current Current Revised Proposed Proposed
Category Tiers Rates Customer Category Tiers FY 2026-27 (HCF) ($/HCF) (HCF) ($/HCF)
Bi-Monthly Residential Bi-Monthly Residential
Tier 1 0 to 22 $7.59 Tier 1 0 to 42 $9.32
Tier 2 23 to 44 $9.91 Tier 2 42+ $14.75
Tier 3 45 to 78 $15.63
Tier 4 79+ $20.96 Monthly Res./Commercial
Tier 1 0 to 21 $9.32
Non-Residential $10.49 Tier 2 21+ $14.75
Customer Current Current Revised Proposed
Category Tiers Rates Customer Category FY 2026-27
(HCF) ($/HCF) ($/HCF)
Bi-Monthly Residential All Customers
Tier 1 0 to 22 $7.59 All Use $11.50
Tier 2 23 to 44 $9.91
Tier 3 45 to 78 $15.63
Tier 4 79+ $20.96
Non-Residential $10.49
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
B

STUDY SESSION

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Study Session - Sewer Rate Cost-of-Service Study SUMMARY: This study session is to discuss the preliminary draft Sewer Rate Cost of Service Study analysis and proposed sewer rates. The cost-of-service study will help determine the rates necessary for the sewer fund for the next five years, beginning July 1, 2026.

Background
The Town of Hillsborough’s ("Town") sewer infrastructure consists of 98 miles of wastewater main lines, 2,477 manholes, 247 cleanouts and 4 sewer lift stations. The system serves a Hillsborough population of approximately 11,699 people and covers over 6.21 square miles.

The Town awarded a Request for Proposal (RFP) contract to HF&H Consultants for rate consulting services for the sewer rate study. They have prepared the Sewer Rate Power Point presentation, reflecting a five-year projection to analyze and establish a rate plan that supports the projected revenue requirement over the five-year period. The Town’s sewer rate revenues are used to fund sewer operations, maintenance, capital improvements, and debt service for the Town’s sewer system.

Capital Plan
A key component in the development of the Town’s sewer revenue requirement was properly funding capital improvement needs. Master Plans were developed for the sewer system and the five-year capital improvement projects were prioritized by Public Works to determine the highest priority needs using a risk-based approach. The Town’s Sewer Five Year CIP plan outlines approximately $26.5 million in capital projects over the five-year period. The plan is dominated by projects that are being monitored and audited by other agencies (Regional Water Quality Control Board, EPA, State Water Boards, Baykeeper). The Priority Basin I&I Rehabilitation Program is the major CIP cost for the five-year period and focuses on replacing the sewer drainage basin main lines and manholes. The CIP projects are necessary to provide system reliability and reduce system-wide sanitary sewer overflows. Older clay pipes are prone to cracking and root intrusion and will be replaced with PVC and HDPE pipes which will improve durability and longevity. The CIP projects also address infiltration and inflow (I&I) which will reduce the amount of water entering the sewer pipes from groundwater and stormwater. By addressing I&I, the collection system and treatment costs are reduced as the amount of flow coming through the system is reduced.

Wastewater Treatment
The Town pays for treatment plant services in Burlingame and San Mateo under the disposal contracts, and the San Mateo treatment plant is undergoing major improvements with the Clean Water Program. The Town and the City of San Mateo finalized an amended agreement for the Town’s participation in the program, costing $47.6 million (excluding interest) over thirty years. The -21-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

Page 2 ends

objectives of the Clean Water Program are: 1) Replace aging infrastructure and facilities, 2) Build wet weather sewer system capacity assurance to prevent overflows, 3) Meet current and future regulatory requirements, 4) Achieve sustainability goals.

Analysis
The proposed rates:
• Provide Adequate Capital Improvement Plan (CIP) Funding - Invest in the system to minimize risk of failure and material financial impact and to mitigate costly deferred maintenance.
• Maintain Prudent Reserve Levels - Ensure adequate reserves for cash flow timing to fund operations, and to cover capital project timing and contingencies. • Meet Debt Service Coverage Ratios - Allow the Town to maintain a compliant debt service coverage ratio.
• Keep Revenues Aligned with Costs - Ensure adequate revenue aligns with costs of the system so that the enterprise operation remains financially independent and sustainable and does not rely on the General Fund.

The proposed rate adjustments and increases outlined in the draft HF&H Sewer Rate Study Power Point presentation are effective starting July 1, 2026. These adjustments and increases cover the revenue requirements for the next five years as outlined in the HF&H Draft Sewer Rate Study Power Point presentation.

Next Steps
The draft rate study timeline assumes rate adjustments and increases for a five-year planning period, with the first set of rates effective July 1, 2026. Staff and consultants will incorporate any feedback from city council study session into the final proposed rate study and prepare a final report and draft Proposition 218 notice for city council review.

Proposition 218 requires the Town to hold a public hearing on the proposed rates for the charges and to mail notice of the public hearing to property owners who are directly liable for the payment of water charges not less than 45 days before the public hearing to adopt the rates for the service fees or charges. They are subject to the protest proceeding wherein the adoption of any new or increase in any existing charge cannot be adopted if the Town receives written protests to the proposed fees and charges from a majority (50% + 1) of the record owners of parcels upon which the charges are proposed for imposition who are directly liable for the payment of the proposed water charges.

The recommendation is for the City Council to provide any feedback on the presentation at the study session.

FISCAL IMPACT: There is no fiscal impact to the Town with this agenda item.

ENVIRONMENTAL ISSUES: There are no environmental issues associated with this agenda item.

ATTACHMENT(S): HF&H Sewer Rate Cost-of-Service Study PowerPoint Presentation -22-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

Page 3 ends

PREPARED BY: Rich Santiago, Assistant Finance Director
RECOMMENDATION: No action required; City Council provide feedback to staff, as needed. -23-
2026 SEWER RATE STUDY

CITY COUNCIL WORKSHOP PRESENTATION
FEBRUARY 9, 2026
-24-
Overview
Purpose
Discuss preliminary sewer rate cost-of-service study analysis to set rates beginning July 1, 2026.

Results
• Projections indicate revenue increases of 3%, 3%, 2%, 2%, and 2% needed over next five years.
• Residential indoor water use has declined, which shifts costs from residential to commercial class.
2 -25-
3 Where Have We Been?
• Sewer rates last studied in 2021
• Resulted in annual rate increases of 4% for five years • Current sewer rate study covers FY 2026-27 through FY 2030-31 Where Are We Going?
• Planned Capital improvements of $5.1M per year
• Public Works Department continues to follow Sanitary Sewer Master Plan to reduce I&I through pipe replacement and address homeowner’s deficient laterals
Background
-26-
4 What is driving the need for an increase in sewer rates? • Annual operating costs are increasing at 3%; no additional headcount is anticipated
• San Mateo, Burlingame treatment costs –increases of 5% annually • Capital Expenditures – $5.1M average annual capital investment in collection system
• Debt Coverage – $3.8 M annual debt service through FY 2029-30.

FY 2030-31 debt service reduced $0.5M due to 2023 refunding bond payments
Executive Summary
-27-
5 Analysis
Capital Expenditures Projections
Capital Improvement Projects FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 5-Year Total Smoke Testing & Video Inspections Priority Basins $185,000 $185,000 $185,000 $185,000 $0 $740,000 Priority Basins Inflow & Infiltration Rehabilitation Program $3,500,000 $3,500,000 $3,500,000 $3,500,000 $0 $14,000,000 Flow Metering/Modeling $180,000 $0 $180,000 $0 $0 $360,000 Miscellaneous Sewer System Repairs $170,000 $170,000 $170,000 $170,000 $0 $680,000 Sewer Lift Station Improvements $1,000,000 $1,300,000 $0 $0 $0 $2,300,000 CCTV Inspection/Root Removal $0 $285,000 $0 $285,000 $0 $570,000 Future Capital Projections $0 $0 $0 $0 $4,662,500 $4,662,500 Subtotal $5,035,000 $5,440,000 $4,035,000 $4,140,000 $4,662,500 $23,312,500 Construction Cost Index 1.033 1.068 1.104 1.140 1.179
Escalated Total CIP $5,203,179 $5,809,483 $4,452,987 $4,721,473 $5,494,969 $25,682,091 -28-
6 Future Revenues Are Not Meeting Projected Expenses
Analysis
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 $ (Millions)
Fiscal Year Revenue Requirement Projections
O&M Expenses - Collection Treatment Costs
Debt Service Capital Improvements - Collection
Revenue at Current Rates
-29-
7 Sewer Rates Analysis
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Revenue Increase 3.0% 3.0% 2.0% 2.0% 2.0%
Debt Coverage 2.38 2.18 2.22 2.23 2.22 2.58
Total Reserve Balance ($ Millions)
Balance w/o Rate Increases Debt Reserve + Operating Target Operating + Capital + Debt Reserve Balance with Rate Increases Target Reserve
Minimum Reserve
-30-
8 Sewer Rates Analysis
Calculated rate revised Single Family indoor water use assumptions used to calculate Commercial bills
• Indoor water use calculated dropped from 144 hcf/year to 78 hcf/yr Proposed Rates
Current Rates 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 All Customers ($/EDU) $4,311.00 $4,393.47 $4,525.28 $4,615.78 $4,708.10 $4,802.26 $ Increase $82.47 $131.80 $90.51 $92.32 $94.16
% Increase 1.9% 3.0% 2.0% 2.0% 2.0%
Revenue at Cost of Service
Customer Class Current Rates FY 2026-27 $ Difference % Difference Residential $16,830,144 $17,125,763 $295,619 2%
Commercial $209,515 $425,086 $215,571 103%
Total $17,039,659 $17,550,848 $511,190 3%
-31-
9 Sewer Rates Analysis
Calculated rate revised Single Family indoor water use assumptions used to calculate Commercial bills
• Indoor water use calculated dropped from 144 hcf/year to 78 hcf/yr Revised Water Use/EDU Current Water Use/EDU
Commercial FY 2025-26 Calculated Calculated
Customer Current Charge FY 2026-27 $ Difference FY 2026-27 $ Difference A $4,311 $4,393 $82 $4,488 $177
B $25,435 $43,056 $17,621 $23,786 ($1,648)
C $18,106 $33,390 $15,284 $18,401 $295
D $72,425 $139,712 $67,288 $77,194 $4,769
E $28,453 $56,676 $28,223 $31,416 $2,963
F $13,795 $45,692 $31,897 $25,582 $11,786
G $6,197 $11,660 $5,463 $6,452 $254
H $16,640 $30,754 $14,114 $16,920 $279
I $10,691 $19,331 $8,640 $10,637 ($55)
J $1,768 $3,515 $1,747 $2,020 $252
K $8,148 $16,695 $8,547 $9,245 $1,098
L $9,743 $20,210 $10,467 $11,310 $1,567
-32-
10 Timeline for 7/1 Rate Adoption
• 2/9/2026 | Council Study Session
• 3/9/2026| Council Meeting – Approve 218 Process
• 5/11/2026| Council Meeting – Public Hearing Rate Adoption • 7/1/2026| Rates Implemented
Sewer Rates Adoption Timelines
-33-
11 Conclusion
Summary
• New rate study conducted to set rates for July 1, 2026 and to address rising costs
Request of City Council
• Council discussion and feedback regarding the preliminary rates and rate increases presented.
-34-
Proposed Schedule of Rates
12 Proposed Rates
Current Rates 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 All Customers ($/EDU) $4,311.00 $4,393.47 $4,525.28 $4,615.78 $4,708.10 $4,802.26 $ Increase $82.47 $131.80 $90.51 $92.32 $94.16
% Increase 1.9% 3.0% 2.0% 2.0% 2.0%
-35-
-36-
'Town of
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PROCLAMATION
Black History Month
February 2026
WHEREAS, Black History Month was first acknowledged 100 years ago in 1926, as part of an initiative by writer and educator Dr. Carter G. Woodson to recognize the heritage and achievements of BlackAmen·cans and to enhanceknowledge about BlackAmen·can history; and WHEREAS, the 2026 Black HistoryMonth theme, ':4. Century of Black History Commemorations, " honors the 100th anniversary of the celebration initiated by Dr. Woodson. The milestone theme examines the impact of marking Black history, culture, and life on the status of Black people today; and
WHEREAS, work is at the very center of much of Black history and culture; be it debates among Black educators on the importance of vocational training, self-help strategies and entrepreneurship in Black communities, or organized labor's role in fighting both economic and social injustice; and WHEREAS, Black history is American history, and understanding and appreciating the experiences of Black individuals is crucial to understanding the full story of our town and our country; and WHEREAS, today, Black Americans lead industries and movements for change, serve our town and ournationat every level, and advance everyfield across the board, includingart and sciences, business and Jaw, health and education, and many more; and
WHEREAS, the Town of Hillsborough believes every person has the freedom to feel valued and respected and condemns racism in rhetoric or action.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby proclaims the month of February 2026 as "Black History Month." February 9, 2026
Date
-37-
'Town of
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PROCLAMATION
National Slavery and Human Trafficking Prevention Month January 2026
WHEREAS, since 2010, the month of January has been proclaimed as National Slavery and Hwnan Trafficking Prevention Month; and
WHEREAS, hwnan trafficking is a hwnan rights violation, and a violation of both federal and Califomia law, it also promotes the breakdown of families and communities, fuels organized crime, deprives countries of hwnan capital, undennines public health, and imposes large economic costs; and
WHEREAS, the crime of hwnan trafficking is present in every country and every U.S. state; and WHEREAS, San Mateo County is considered a high-risk corridor for trafficking because of its proximity to international airports and location along major north-south transit routes; and WHEREAS, although hwnan trafficking is illegal, victims often do not recognize their victimization, do not know that help is available, or where to seek assistance; and WHEREAS, public awareness about hwnan trafficking stJJl needs to reach broader communities and communicate more info17Ilation about the nuances of this crime; and WHEREAS, the Town is committed to increasing public awareness of the injustice of force, fraud and coercion that is used to exploit the victims of this heinous crime, and to provide resources and support to victims through the County of San Mateo Hwnan Trafficking Prevention and Enforcement Initiative.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby proclaims the month of January 2026 as National Slavery and Hwnan Trafficking Prevention Month. -1-1---+--11--Sophie ----"""'------�ebruary 9, 2026
Cole, Mayor Date
-38-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
1 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Approve City Council Meeting Minutes of January 12, 2026 -39-

UNAPPROVED MINUTES
MONDAY, JANUARY 12, 2026
4:30 PM CLOSED SESSION
6:00 PM CITY COUNCIL MEETING
Council Chambers
Meetings of the City Council are held in-person at Town Hall. As a courtesy, and in compliance with applicable state law, staff and members of the public participated in the meeting in person at Town Hall or virtually via Zoom Video Conference.

CLOSED SESSION

CALL TO ORDER
Mayor Cole called the meeting to order at 4:30 p.m.

ROLL CALL

Present: Adams, Chuang, Krolik, Ragsdale, Cole

ANNOUNCEMENT OF CONFLICT OF INTEREST ON CLOSED SESSION ITEM(S) There were no announcements of conflict of interest

CLOSED SESSION ITEMS
Mayor Cole announced the Closed Session items.

A. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Pursuant to Government Code Section 54956.9(d)(1)
Town of Hillsborough v. All Persons Interested in the Matter of the Proceedings for Resolution No. 22-83 Adopting Maximum Rates for Water Service Charges San Mateo Superior Court Case No. 23CIV01028
B. CONFERENCE WITH LEGAL COUNSEL – INITIATION OF LITIGATION Pursuant to Government Code Section 54956.9(d)(4)
One Potential Case – Consideration of Appeal in Existing Litigation Noted Above C. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Unrepresented employee: City Manager
Agency Designated Negotiator: Mayor Sophie Cole

PUBLIC COMMENT ON CLOSED SESSION ITEM(S)
There were no speakers.

ADJOURN CLOSED SESSION
The Closed Session adjourned at 5:57 p.m.

REGULAR CITY COUNCIL MEETING
I. CALL TO ORDER
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Unapproved Minutes – Hillsborough City Council
Monday, January 12, 2026

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Mayor Cole called the meeting to order at 6:06 p.m.

II. ROLL CALL

Present: Adams, Chuang, Krolik, Ragsdale, Cole
III. PLEDGE OF ALLEGIANCE
Mayor Cole led the Pledge of Allegiance.

Mayor Cole announced that the public hearing item for 1200 Jackling which was noticed for this meeting is no longer on this agenda; it will be rescheduled for a future meeting, and notices will be re-sent.

IV. REPORT FROM CLOSED SESSION
City Attorney Christopher Diaz stated that the City Council convened in Closed Session to consider three items and there was no reportable action, but direction was given to staff (to file a motion for reconsideration to modify or vacate the judgment in the water validation action).

City Attorney Diaz announced that the City Council will reconvene in Closed Session after the regular meeting to consider Closed Session Item C.

V. PRESENTATION
• Presentation of 2026 HIP Housing Calendar and Recognition of Hillsborough Student Calendar Contest Winner
Laura Fanucchi, Director of Programs, HIP Housing, provided information regarding the HIP Housing calendar contest. Ms. Fanucchi introduced calendar contest cover winner Madeleine, a Hillsborough student, and reported that Madeleine was honored at their calendar contest party in December. Madeleine read a quote from the calendar about what her home means to her. Ms. Fanucchi provided an update regarding the programs offered by HIP Housing and responded to City Council questions.

VI. TOWN UPDATE
City Manager Doug Davis provided an update on events and activities in the town.

Councilmember Chuang provided information to highlight the Hillsborough CA Mobile App.

VII. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA
A member of the public inquired about the project occurring at the bottom of Tartan Trail Road.

City Manager Doug Davis provided information regarding the project.

VIII. ANNOUNCEMENT OF CONFLICT OF INTEREST
There were no announcements of conflict of interest.

IX. CONSENT CALENDAR
Mayor Cole announced regarding Item 4, Resolution Authorizing Compensation and Benefits Adjustments for Unrepresented Employees, that the Brown Act requires a verbal report of the recommendations for final action on the salary or compensation paid in the form of fringe benefits of a local agency executive during the open meeting in which the final action is to take place, which includes the Department Head positions in the Unrepresented group. Mayor Cole stated that the salary adjustments include a 4.0% cost of living increase for the Assistant City Manager, Chief of Police, Director of Finance, Director of Building and Planning and Director of Public Works, and reported the new salaries:

Assistant City Manager: $242,247.80
Chief of Police: $273,292.47
Director of Building and Planning: $266,042.87
-41-
Unapproved Minutes – Hillsborough City Council
Monday, January 12, 2026

Page 3 ends

Director of Finance: $266,042.87
Director of Public Works: $284,313.04

Mayor Cole stated the City Manager’s salary would be evaluated in the upcoming months in conjunction with his performance appraisal.

Councilmember Krolik requested to provide a comment on Item 7.

Councilmember Adams requested to remove Item 6 and stated she had a question on Item 8.

Regarding Item 7, Councilmember Krolik introduced Architecture and Design Review Board Alternate Member Matt Ken in the audience, proposed for appointment to the regular seat previously held by long-serving Kathleen Egan.

Assistant City Manager Mandy Brown and Bryan Godbe, President, Godbe Research, responded to City Council questions regarding Item 8.

On motion by Councilmember Adams, seconded by Councilmember Chuang and unanimous on roll call vote, Consent Calendar Items 1, 2, 3, 4, 5, 7, 8, 9 and 10 were approved.

1. Approve City Council Meeting Minutes of November 17, 2025, December 8, 2025 and December 18, 2025
The City Council meeting minutes of November 17, 2025, December 8, 2025 and December 18, 2025 were approved as submitted.

2. Monthly Claims: December 1 through December 31, 2025 The monthly claims for December 2025 were approved as submitted.

3. Quarterly Treasurer's Report for the Quarter Ending December 31, 2025 The Treasurer's Report for the quarter ending December 31, 2025 was approved.

4. Resolution Authorizing Compensation and Benefits Adjustments for Unrepresented Employees
The resolution authorizing compensation and benefits adjustments for Unrepresented employees was adopted.

5. Resolution Adopting the 2026 Salary Schedule for the Town of Hillsborough The resolution adopting the 2026 Salary Schedule for the Town of Hillsborough was adopted.

6. Resolution Adopting the Town of Hillsborough 2026 Legislative Platform Councilmember Adams suggested an amendment to the Legislative Platform on page 3 (page 52 of the agenda packet) under “Environment,” item “e” to change the language from: “Support legislation that requires or facilitates polluters to pay for the consequences of environmental damage” to: “Support legislation and policies that provide incentives to and disincentive against protecting the environment from pollution, including holding polluters accountable for environmental damage they may cause.” Mayor Cole opened public comment. There were no speakers. Mayor Cole closed public comment.

On motion by Councilmember Adams, seconded by Councilmember Krolik and unanimous on voice vote, the resolution adopting the Town of Hillsborough 2026 Legislative Platform was adopted with an amendment to page 3, under “Environment,” item “e” to modify the language to: “Support legislation and policies that provide incentives to and disincentive against protecting the environment from pollution, -42-
Unapproved Minutes – Hillsborough City Council
Monday, January 12, 2026

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including holding polluters accountable for environmental damage they may cause” and to correct a typo under “Environment,” item “c.”

7. Resolution Appointing a Member to a Regular Seat on the Architecture and Design Review Board for a Partial Term through December 31, 2027 The resolution appointing a member to a regular seat on the Architecture and Design Review Board for a partial term through December 31, 2027 was adopted.

8. Resolution Approving and Authorizing the City Manager to Execute Agreements with Two Vendors in Partnership for Ballot Measure Consulting Services: TeamCivX for a Total not-to-exceed Amount of $90,500.00 and Godbe Research for a Total not-toexceed Amount of $32,400.00, for a Total not-to-exceed Project Cost of $122,900.00 The resolution approving and authorizing the City Manager to execute agreements with two vendors in partnership for Ballot Measure Consulting Services: TeamCivX for a total not-to-exceed amount of $90,500.00 and Godbe Research for a total not-to-exceed amount of $32,400.00, for a total not-to-exceed project cost of $122,900.00 was adopted.

9. Resolution Approving and Authorizing the City Manager to Execute a Memorandum of Understanding (MOU) with the County of San Mateo for the Implementation of a Senate Bill (SB) 1383 Compliant Procurement Program
The resolution approving and authorizing the City Manager to execute a Memorandum of Understanding with the County of San Mateo for the implementation of a SB 1383 Compliant Procurement Program was adopted.

10. Resolution Approving and Authorizing the City Manager to Execute an Amendment to the Agreement for Professional Engineering Services with Schaaf & Wheeler for the 2024 Sanitary Sewer Lift Station Upgrade – Corporation Yard Project in the Amount of $44,790.00, for a Total not-to-exceed Agreement Amount of $215,580.00, Under CEQA Guidelines Section 15301
The resolution approving and authorizing the City Manager to execute an amendment to the agreement for professional engineering services with Schaaf & Wheeler for the 2024 Sanitary Sewer Lift Station Upgrade – Corporation Yard Project in the amount of $44,790.00, for a total not-to-exceed agreement amount of $215,580.00, under CEQA Guidelines Section 15301 was adopted.

X. OLD BUSINESS

11. Telecommunications Update – Discuss and Provide Direction on Scope of Projects, Based on Community Feedback
Assistant City Manager Mandy Brown provided the staff report. Gail Karish, Telecommunications Partner, Best Best & Krieger, and City Attorney Christopher Diaz provided additional information.

Mayor Cole opened public comment.

Patrick Shannon provided comments regarding the cost benefits, reliability and resilience of satellite technology as a potential solution to add to the list of considerations.

Paul Friedman provided comments regarding the challenging topography in the town and in support of adding about a dozen cell towers to cover a majority of the town to support better phone coverage.

John Lavrich provided comments regarding balancing the town’s needs and aesthetics including exploring partnering with the SFPUC and PG&E for potential cellular infrastructure between Highway 280 and Black Mountain Road and updating the town’s wireless ordinance. Mr. Lavrich suggested looking at the Town of Los Altos Hills ordinance including the regulations regarding distance from homes. -43-
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Monday, January 12, 2026

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Josh, Marlborough Road, requested a focus on adding more resources for homeowners such as lists of providers specific to the town, best practices for improving coverage in your home, lists of providers who can come to your home to assist, discounts for specific hardware such as battery backups, and in support of locating towers away from homes as a main priority and updating the town’s wireless ordinance to protect the town’s character.

Mayor Cole closed public comment.

Without objection, Assistant City Manager Brown summarized the City Council direction and feedback on next steps: support for the areas of need outlined in the staff report:

Fiber Connectivity, Deficiencies in Cellular Service in Town, Power Backup Solutions, Balance Town Aesthetics with Wireless Communication Facility Installation, and Alternative Technologies to Improve Connectivity, and noted that as the analysis for undergrounding utilities is underway, it will be carved out but will inform the study, rather than be part of the study; in addition, staff will include best practices, look at regulations in other jurisdictions and solutions they have found; prepare a resource library and public information to connect residents with solutions, a specific action plan for what the town can do as a part of that deliverable, and more information about microgrids.

Mayor Cole reopened public comment at 7:39 p.m.

A member of the public provided comments regarding the unavailability of cell towers during natural disasters and the potential for undergrounding utilities.

Mayor Cole closed public comment at 7:42 p.m.

XI. CITY COUNCIL ITEMS
Councilmember Adams provided a presentation and reported her attendance at a meeting of the Ad Hoc Subcommittee for the Tobin Clark Site and a meeting with Public Works in her role as Public Works Commissioner. Councilmember Adams expressed appreciation to the Hillsborough Beautification Foundation for the Light Up the Town event, reported her attendance at the San Mateo County Council of Cities meeting hosted by the Town of Colma, a Recology truck visit at South Elementary School featuring RethinkWaste art contest winner Madeleine’s artwork, a Leadership Council San Mateo County CORPS program session and the Police Department and Swearing-In and Badge Pinning.

Councilmember Chuang encouraged use of public transportation for the upcoming Superbowl and FIFA events and announced that SamTrans will be celebrating its 50th anniversary this year.

Councilmember Krolik congratulated Chief of Police Colla and the members of the Hillsborough Police Department who were recently sworn in, reported that alarm monitoring ended in December, expressed appreciation to the Central County Fire Department for their successful holiday toy drive, reported her attendance at a meeting of the Architecture and Design Review Board, and expressed appreciation to outgoing member Kathleen Egan.

Vice Mayor Ragsdale provided a presentation and announced an upcoming forum on e-bikes hosted by Assemblymember Diane Papan, reported her attendance at a Samaritan House gift distribution event, and a retirement event for South Elementary School Facilities employee Ariel who retired after 27 years. Vice Mayor Ragsdale announced Councilmember Chuang was appointed as Chair of the SamTrans Board of Directors.

Mayor Cole reported her attendance at a meeting of the City/County Association of Governments (C/CAG) of San Mateo County Board of Directors in which a presentation by 21 Elements was heard and Councilmember Chuang was reappointed to the OneShoreline Board of Directors.

Councilmember Chuang provided comments regarding the traffic impacts of the El Camino Real Roadway Renewal project over the next three years and encouraged staff to assist with traffic advisories.
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Monday, January 12, 2026

Page 6 ends

XII. ADJOURNMENT
At 7:56 p.m., Mayor Cole adjourned the regular meeting to reconvene in Closed Session for consideration of Closed Session Item C.

Mayor Cole reconvened the open meeting at 8:29 p.m.

City Clerk Natusch announced that all Councilmembers were present.

City Attorney Diaz stated that the City Council reconvened in Closed Session for consideration of Closed Session Item C and reported that direction was given to staff and there was no reportable action per the Brown Act.

Mayor Cole adjourned the meeting at 8:29 p.m.
-45-
-46-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
2 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Monthly Claims: January 1 through January 31, 2026 SUMMARY: The monthly claims for the month of January 2026 in the amount of $6,456,923.02 are submitted for approval.

FISCAL IMPACT: Claims have been expended pursuant to the approved budget.

ATTACHMENT(S): Monthly Claims Listing
PREPARED BY: Rich Santiago, Assistant Finance Director
RECOMMENDATION: Approve the monthly claims for January 2026 as submitted. -47-
Docusign Envelope ID: BD99E1 FC-9770-4164-AF37-2C22658F9A5E

TOWN OF HILLSBOROUGH

REPORT OF GOODS & SERVICES PURCHASED
DURING THE MONTH OF JANUARY 2026
PREPARED BY:

Alan Singh
-48-
Docusign Envelope ID: BD99E1FC-9770-4164-AF37-2C22658F9A5E

TOWN OF HILLSBOROUGH

SUMMARY OF PURCHASES
DURING THE MONTH OF JANUARY 2026

GOODS & SERVICES PURCHASED

NET SALARIES & TAXES PAID

HEAL TH BENEFIT PREMIUMS

CCFD FUNDING

SAN FRANCISCO WATER PAYMENTS

TOTAL COST OF GOODS & SERVICES TO BE APPROVED
2/3/2026
DATE
2/4/2026
DATE
$3,508,287.96
1,687,320.57
209,925.27
773,946.00
277,443.22
$6,456,923.02
-49-
Docusign Envelope ID: BD99E1 FC-9770-4164-AF37-2C22658F9A5E Goods & Services Purchased:

Operations
Capital
Net Salaries & Taxes Paid
Health Benefit Premiums
CCFD Funding
San Francisco Water Payments
Total
NOTES:

COMPARATIVE SUMMARY
For the Month of January 2026
Jan-26
2,703,020.50
805,267.46
1,687,320.57
209,925.27
773,946.00
277,443.22
$6,456,923.02
Jan-25
2,655,179.54
529,562.24
1,679,809.27
201,703.51
804,376.35
222,336.68
$6,092,967.59
Operations - FY 25/26 spending is consistent with FY 24/25 spending.

Jan-24
1,666,056.49
1,570,517.26
1,059,616.58
186,841.16
703,368.00
219,113.09
$5,405,512.58
Capital - Capital project spending in January 2026 is primarily for Macadamia Winter Storm Project, Priority Basin Project, Street Resurfacing Project, and the Highline Connection Project.

CCFD - FY 25/26 contribution is based on budget/contract.

Water - There was an SFPUC wholesale water rate increase on July 1, 2025 to $5.80 (from $5.67, a 2.3 % increase). The slight increase in FY 25/26 as compared to FY 24/25 is attributed to higher units purchased and the SFPUC rate increase. -50-
Docusign Envelope ID: BD99E1FC-9770-4164-AF37-2C22658F9A5E CK#
18819
18820
18821
18822
18823
18824
18825
18826
18827
18828
18829
18830
18831
18832
18833
18834
18835
18836
18837
18838
18839
18840
18841
18842
18843
18844
18845
18846
18847
18848
18849
18850
18851
18852
18853
18854
18855
18856
18857
18858
18859
18860
18861
18862
18863
18864
18865
18866
18867
18868
18869
18870
18871
18872
18873
18874
18875
18876
18877
18878
18879
18880
18881
18882
18883
18884
18885
18886
18887

TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JANUARY 2026

VENDOR DESCRIPTION

ACACIA FINANCIAL GROUP, INC EMMA FILING DISSEMINATION AGENT SERVICE FN AT&T 10/24/25-11/23/25 MULTIPLE ACCOUNTS PD
AT&T 10/19/25-11/18/25
AT&T 12/7/25 PD

AT&T TOWER DUMP PD
AUTO PRIDE CAR WASH, INC NOV'25 CAR WASHES PD
BEST BEST & KRIEGER LLP EEE - NOV '25 LEGAL SERVICES
BKF ENGINEERS A2 PHASE 2 DESIGN PRJ PW

BOSCO OIL COMPANY GAS/DIESEL PW/PD
CALIFORNIA ELECTRIC CO. INSTALL - JUCTION BOX/ LED FIXTURE PD CINTAS CORPORATION NO 3 UNIFORM CLEANING SERVICE PW
CINTAS CORPORATION NO 3 SUPPLIES- FIRST AID KIT ALL DEPARTMENTS PW

CLARK PEST CONTROL PEST CONTROL - PD
COUNTY OF SAN MATEO INFORMATION SERVICES DEPT. NOV'25 MICRO CHANNEL LINES PD CRITICAL REACH 2026 ABPNET FEE PD
CSG CONSULTANTS, INC. PUBLIC WORKS ADMIN 8/30/25-9/26/25NARIOUS PRJ PW DAILY JOURNAL CORPORATION LEGAL NOTICE 12/2/25 PREADOPT CODE UPDATE CL DARRYL PANG NOV'25 POLYGRAPH SERVICES PD

DEGREE HVAC, INC MAINT- HVAC TOWN HALL PW
DEPARTMENT OF JUSTICE NOV'25 FINGERPRINT SERVICE PD

ERLER & KALINOWSKI, INC ESDC KENILWORTH/MARLBOROUGH SEWER PRJ PW

FEHR & PEERS CONSULT - EIR ASSESSMENT BP
FORWARD LATERAL SOFTWARE - 2026 ARC GIS/STORAGE PW

GRAINGER PARTS- SUMP PUMP FLOATSWITCH PD

GRAY'S PAINT & WALLPAPER OF THE PENINSULA, INC SUPPLIES - PAINTNARIOUS ITEMS PW

HALEY & ALDRICH, INC MACADAMIA ACCESS ROAD DESIGN PRJ PW INFINITY TECHNOLOGIES DEC '25 GIS SERVICE PW
INTERSTATE TRAFFIC CONTROL PRODUCTS, INC. PARTS - CUSTOM SIGNS PW IRVINE & JACHENS, INC. UNIFORM - BADGES STAFF PD
JV LUCAS PAVING, INC 2025 STREET RESURFACING PRJ PW

KARIN SIDWELL HISTORICAL DESIGN REVIEW BP
LVI ENGINEERING, INC REPAIR- MACADAMIA ACCESS ROAD PRJ P1 PW MAMME INC CATERING - CITY COUNCIL MEETING 12/8/25 CO
METROPOLITAN PLANNING GROUP INC CONSULT - NOV '25 PLANNER SERVICES BP MOORE, IACOFANO GOL TSMAN, INC CONSULT - El R ASSESSMENT BP

MINUTEMAN PRESS-SAN MATEO PRINT - CARDS, LETTERHEAD & ENVELOPES PD MUNICIPAL MAINTENANCE EQUIP MAINT -A4 STORM SWEEPER PW
MUNICIPAL RESOURCE GROUP LLC NOV '25 HR SERVICES CM

NINYO & MOORE GEOTECHNICAL & ENVIRONMENTAL SCIENCE MACADAMIA MATERIALS TESTING/SHADY LANE PRJ PW

CHS CONSTRUCTION GROUP REFUND - BUILD DEPOSIT BP

DR GROUP LP REFUND - PERMIT FEE VOID BP

JOHN PARK REFUND - BUILD DEPOSIT BP

RAVI & GAYATHRI GOUTAM REFUND - BUILD DEPOSIT BP

PACIFIC OFFICE AUTOMATION, INC MAINT- PLOTTER PRINTER PW PG&E 10/7/25-11/5/25
PRIORITY 1 REPAIR - MULTIPLE VEHICLES PD
QUADIENT LEASING USA, INC POSTAGE METER LEASE 9/30/25 - 12/29/25 FN

QUADIENT LEASING USA, INC SUPPLIES - POSTAGE METER INK CARTRIDGE FN QUENCH USA, INC EQUIP - WATER STATION 11/28/25-12/27/25 PD RECOLOGY SAN MATEO COUNTY SMCO GARBAGE FEES FY 25-26 1ST PERIOD 50% FN ROMEL 400 LLC RENT - JAN'26 RADIO BASE STATION RECEIVER PD SHAWN KIRBY OCT '25 POOL SVC PW 1640 RENTAL
STANDARD INSURANCE COMPANY OCT '25/NOV '25 GROUP LIFE/ADD/LTD ASSESSMENT

STAPLES ADVANTAGE OFFICE SUPPLIES - ALL DEPARTMENTS
T-MOBILE USA INC. 10/21/25-11/20/25 PD
TELECOMMUNICATIONS ENGINEERING ASSOCIATES DEC'25 COMM CENTER/BASE PD

THE ARTINA GROUP, INC PRINT - TYLER CHECK BLANK STOCK FN THOMSON WEST NOV'25 INVESTIGATIVE WEBSITE PD
TIMBERLINE TREE SERVICE, INC. MAINT-TREE REMOVAL WOODLAND/CHATEAU PW TURBO DATA SYSTEMS, INC. DEC'25 CITATION PROCESSING & SCANNER PD TYLER TECHNOLOGIES, INC. TRAIN- ERP FINANCIAL SYSTEM 11/26/25 FN VERIZON WIRELESS 11/7/25-12/6/25 MULTIPLE ACCOUNTS PW/PD VIKING SHRED LLC NOV '25 DESTRUCTION SERVICES PD

WRA, INC MACADAMIA ACCESS ROAD BIOLOGICAL REVIEW PW
4LEAF, INC. NOV '25 BUILDING PERMIT TECH SERVICES BP
ACCESS UNIFORMS, INC. UNIFORMS - EMBROIDERING POLOS PW
ADP, LLC DEC '25 MASTERTAX SOFTWARE SUPPORT FN

ARCHAEOLOGICAL/HISTORICAL CONSULTANTS LLC HISTORICAL DESIGN REVIEW BP AT&T 11/10/25-12/9/25 PD
AMOUNT
1,500.00
682.84
155.40
541.03
195.00

62.99 30,478.70
1,040.00
8,426.72
5,992.27
1,058.27
1,818.63
111.00

82.25 640.00
14,192.56
677.65
375.00
8,490.00
137,00
114.50
3,415.13
25,005.00
489.16
166.99
35,215.90
1,113.75
221.48
2,291.41
60,062.09
5,200.00
277,540.62
225.83
12,420.00
1,653.75
3,001.73
741.62
1,755.00
28,820.00
30,467.50
3,779.86
22,500.00
11,956.00
545,78
18,052.53
13,324.92
532.59
192,23
190.93
742,072.32
343.20
200,00
6,141.18
684.41
163.60
3,334.00
492.24
1, 170,90
8,400.00
1,583.64
880.00
2,521.61

92.99 15,507.51
10,880.00
137.04

90.60 2,923.02
1 759.71
-51-
Docusign Envelope ID: BD99E1FC-9770-4164-AF37-2C22658F9A5E 18888
18889
18890
18891
18892
18893
18894
18895
18896
18897
18898
18899
18900
18901
18902
18903
18904
18905
18906
18907
18908
18909
18910
18911
18912
18913
18914
18915
18916
18917
18918
18919
18920
18921
18922
18923
18924
18925
18926
18927
18928
18929
18930
18931
18932
18933
18934
18935
18936
18937
18938
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18941
18942
18943
18944
18945
18946
18947
18948
18949
18950
18951
18952
18953
18954
18955
18956
18957

TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JANUARY 2026
AT&T 12/7/25 PD
BAY AREA WATER SUPPLY & CONSERVATION AGENCY SOFTWARE - JUL-SEP '25 DROPLET TECH LICENSE FEE BAY PRO JAN '26 LANDSCAPE MAINT VARIOUS SITES HBF

BAYSIDE BUILDING MATERIALS INC MATERIALS- SAND PW
BEST BEST & KRIEGER LLP FEE - NOV '25 LEGAL SERVICES

BOSCO OIL COMPANY GAS PD
BURNETT LANDSCAPE DEVELOPMENT INC MAINT - DEC '25 TOWN LANDSCAPE VARIOUS SITES PW CALIFORNIA PUBLIC POLICY GROUP, INC LEGAL RETAINER DEC '25 CM CALIFORNIA ELECTRIC CO. INSTALL- MONITORS/CABLE & ELECTRICAL REPAIRS PW CENTRAL COUNTY FIRE DEPARTMENT JAN'26 FISCAL CONTRIBUTION CINTAS CORPORATION NO 3 UNIFORM CLEANING SERVICE PW
CINTAS CORPORATION NO 3 SUPPLIES- FIRST AID KIT PW
CITY OF SAN MATEO WWTP/CWP O&M QTR 1 FY 25-26 PW
CIVIC PLUS SOFTWARE - ARCHIVESOCIAL ECON 12/6/25-12/5/26 PD

CLARK PEST CONTROL PEST CONTROL - PD/PW
COMCAST DEC '25 PW

CORE & MAIN LP SUPPLIES - CHLORINE TABLETS PW
CORODATA RECORDS MANAGEMENT INC DEC '25 RECORDS STORAGE CL CSG CONSULTANTS, INC. CIP ADM SEWERNARIOUS PRJ 8/30/25-9/26/25 PW CYNTHIA RICHARDSON CONSULT - DEC '25 PLANNER SERVICES BP DEPARTMENT OF JUSTICE NOV'25 FINGERPRINT SERVICE HR
DEPARTMENT OF MOTOR VEHICLE RENEWAL 2026 REG - TRAILER PD

DEPT OF FISH AND WILDLIFE FEE - APPLICATION TARTAN TRAIL RD BRIDGE PW DU-ALL SAFETY, LLC NOV '25/DEC '25 SAFETY CONSULT PW
EVERBRIDGE, INC SOFTWARE - NIXLE360 2/10/26-2/9/27 PD
FEHR &PEERS CONSULT - El R ASSESSMENT BP

FERGUSON US HOLDINGS, INC PARTS - COUPLERS PW
FLOWATER EQUIP - NOV '25/DEC '25 WATER STATION BP/PW
FOLGER GRAPHICS, INC PRINT - QUARTERLY NEWSLETTER Q4 2025 CM

FREYER & LAURETA, INC HIGH LINE WATER PRJ DESIGN PW

GO NATIVE, INC MAINT - VEGETATION MANAGE VARIOUS SIGHTS PW

GRAINGER SUPPLIES - VARIOUS ITEMS PW

HALEY & ALDRICH, INC MACADAMIA ACCESS ROAD DESIGN PRJ PW HARMONIE PARK DEVELOPMENT GROUP, LLC DEC '25 TOBIN CLARK DEVELOPMENT PRJ CM HOME DEPOT CREDIT SERVICES AUG '25 VARIOUS PARTS & SUPPLIES PW INTERWEST CONSUL TING GROUP DEC'25 BUILDING INSPECTOR SERVICES BP

JUDY ANN PARDINI FEE - FINGERPRINT SERVICES PD

KEVIN KASHIWAHARA BACKGROUND INVESTIGATION NEW HIRE PD

NINYO & MOORE GEOTECHNICAL & ENVIRONMENTAL SCIENCE WOODRIDGE/CRYSTAL SPRINGS RETAIN WALL DESIGN 695 LLC REFUND - GRADE DEPOSIT BP

JOSEPH & MABLE HSU REFUND - PERMIT FEE VOID PARTIAL BP

NEIL H SHAEFER REFUND - BUILD DEPOSIT BP

CHRIS BONDANZA AMMO DISPOSAL FEE PD

MARTAALABAU MARQUES REFUND - SUBDIVISION DEPOSIT PW

PENINSULA UNIFORMS & EQUIPMENT, INC UNIFORMS - VARIOUS ITEMS PD PG & E 11/6/25-12/8/25 MULTIPLE ACCOUNTS
QUENCH USA, INC EQUIP - WATER STATION 12/28/25-1/27/26 PD

RED WING SHOE STORE WORK BOOTS - STAFF PW

SCOTT BUSCHMAN PHOTOGRAPHY - STAFF PROMOTION EVENT PD

SPOTLIGHT IMPRESSIONS, INC PRINT - EMPLOYEE NAME BADGES AD

STAPLES ADVANTAGE OFFICE SUPPLIES - BP
STATE WATER RESOURCES CONTROL BOARD - DWOCP FEE - WATER OPERATOR CERTIFICATE D1 STAFF PW STATE WATER RESOURCES CONTROL BOARD ANNUAL PERMIT FEE 7/1/25-6/30/26 MULTIPLE SITES PW

TEAGLACH LLC UNIFORM - CARRIER VESTS STAFF PD
SAMUEL OAKLEY CONSULT - NOV '25 ARBORIST SERVICES BP
TOOLAND TOOLS - RATCHETS TRUCK #580 PW

UNDERGROUND REPUBLIC WATER WORKS, INC PARTS - VARIOUS ITEMS PW

UNITED RENTALS NORTH AMERICA INC RENTAL - BOOM LIFT PW
VERIZON WIRELESS 11/11/25-12/10/25 PD

WECO INDUSTRIES, LLC PURCHASE - US HYDRO-JETTER PW
4LEAF, INC. DEC '25 BUILDING PERMIT TECH SERVICES BP
ACCO ENGINEERED SYSTEMS, INC. REPAIR - HVAC 1640 RENTAUPD/CORP YARD PW ACTION TOWING AND ROAD SERVICE TOW - TRUCK #570 PW
ADP, LLC JAN '26 MASTERTAX SOFTWARE SUPPORT FN

AGUILAR & SONS REPAIR - INSTALL ASHPALT ASTER/ENDFIELD PW AIXTEK DEC '25 MANAGEMENT SERVICE/MICROSOFT UC IT
ALEXANDER & ASSOCIATES, INC. LAND SURVEY DRAYTON RD PW
ALL FENCE COMPANY, INC. INSTALL - FENCE TOWN HALL PW

ALL GUARD ALARM SYSTEMS, INC REPAIR - ALARM CORP YARD PW AMAZON WEB SERVICES, INC DEC '25 - BACKUP STORAGE IT
541.03
225.00
3,282.61
230.21
9,306.50
1,312.71
8,259.04
4,000.00
10,804.63
773,946.00
764.14
140,92
271,437.58
4,617.27
840.00
278.42
16,017.66
230.24
235,159.16
8,060.00
181.00

32.00 0.00
3,410.00
5,724.00
8,297.64
1,712.31
436.40
3,365.00
133,888.62
15,170.00
565.47
5,421.75
33,265.16
8,553.36
1,000.00

35.00 1,500.00
2,850.00
7,500.00
582.00
9,080.00
224.55
3,455.50
5,229.42
54,580.32
197.27
1,492.53
2,078.13
256.22
245.78

70.00 5,547.00
2,328.70
1,150.00
251.56
21,362.25
772.06
973.57
211,278.30
12,240.00
4,617.60
269.50

90.60 14,561.25
41,786.44
700.00
5,815.00
290.00
16,781.05
-52-
Docuslgn Envelope ID: BD99E1 FC-9770-4164-AF37-2C22658F9A5E 18958
18959
18960
18961
18962
18963
18964
18965
18966
18967
18968
18969
18970
18971
18972
18973
18974
18975
18976
18977
18978
18979
18980
18981
18982
18983
18984
18985
18986
18987
18988
18989
18990
18991
18992
18993
18994
18995
18996
18997
18998
18999
19000
19001
19002
19003
19004
19005
19006
19007
19008
19009
19010
19011
19012
19013
19014
19015
19016
19017
19018
19019
19020
19021
19022
19023
19024
19025
19026
19027
19028
19029

TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JANUARY 2026
AT&T 11/17/25-12/16/25 PD
AT&T 11/19/25-12/18/25
AT&T 11/19/25-12/18/25
AT&T 11 /24/25-12/23/25 PD
AT&T 12/10/25-1/9/26 PD
AT&T 1/7/26 PD
AT&T 1/7/26 PD

AT&T TOWER DUMP PD
AUTO PRIDE CAR WASH, INC DEC '25 CAR WASHES PD
BAY AREA AIR QUALITY MGMT. DIS PERMIT RENEWAL FEE - MULTIPLE SITES PW BAY PRO MAINT- DEC '25 EUCALYPTUS PATH/HAYNE ISLAND PW

BAYSIDE BUILDING MATERIALS INC MATERIALS- VARIOUS ITEMS PW

BELLECCI & ASSOCIATES, INC UTILITY UNDERGROUNDING STUDY CM

BIG STATE INDUSTRIAL SUPPLY, INC SUPPLIES - PAINT/COVERALLS PW

BOSCO OIL COMPANY GAS/DIESEL PW/PD
CASEY CONSTRUCTION, INC. REPAIR - TOBIN CLARK STORM DRAIN PW CENTRAL COUNTY FIRE DEPARTMENT REMIT - Q2 FY 25/26 FIRE REVIEW FEE FN CINTAS CORPORATION NO 3 UNIFORM CLEANING SERVICE PW
CINTAS CORPORATION NO 3 SUPPLIES- FIRST AID KIT ALL DEPARTMENTS PW CITY OF SAN MATEO JAN '26 LIBRARY SERVICES CM/SWAT TRAIN FEE PD CITY OF SOUTH SAN FRANCISCO COUNCIL OF CITIES MEETING 10/24/25 CO CITY OF SOUTH SAN FRANCISCO FEE - RANGE USE NCR SWAT SEPT-DEC 2025 PD CIVICPLUS WEBSITE ANNUAL MAINTENANCE '26 IT
COUNTY OF SAN MATEO INFORMATION SERVICES DEPT. DEC'25 MICRO CHANNEL LINES PD COMCAST NOV '25 CALNET NONCGEN LINE IT
CSG CONSULTANTS, INC. MACADAMIA RD INSPECT9/27/25-10/31/25NARIOUS PRJ

DAN OKANO EQUIP - CHAINSAW PW

DASH MEDICAL GLOVES SUPPLIES - NITRILE GLOVES PD
DEPARTMENT OF JUSTICE SEP'25/DEC '25 FINGERPRINT SERVICE PD ESHERICK HOMSEY DODGE AND DAVIS, ARCHITECS, PC CONSULT - DEC' 25 TOWN VISION/HOUSING ELEMENT BP

FASTENAL COMPANY SUPPLIES - PERSONNEL PROTECTIVE EQUIP PW FLOWATER EQUIP -AUG '25-JAN '25 WATER STATION PW/FN/CM/BP GLENN BERKHEIMER JAN '26 LABOR RELATIONS HR
GOOD CITY COMPANY CONSULT - DEC '25 PLANNER SERVICES BP

GRAINGER SUPPLIES - SCREWS PW

GRANITE ROCK COMPANY MATERIALS - ASPHALT PW

HACH COMPANY WATER QUALITY SUPPLIES PW
HF&H CONSULTANTS, LLC DEC'25 2026 SEWER/WATER RATE STUDY FN HIP HOUSING 2025-2026 HOME SHARE GRANT CM
INFOSEND, INC. OCT '25-DEC '25 UTILITY BILLING FN

INTERSTATE BATTERY SYSTEM OF SAN FRANCISCO PARTS- BATTERIES FIRE ALARM PW INTERSTATE TRAFFIC CONTROL PRODUCTS, INC. PARTS - CUSTOM SIGNS PW LEAGUE OF CALIFORNIA CITIES 2026 MEMBERSHIP DUES CM
MAGNET FORENSICS USA, INC SOFTWARE - GRAYKEY LICENSE 4/1/26-3/31/27 PD MARKO HUDAK LEGAL SERVICES - DEC 2025 CM
METROPOLITAN PLANNING GROUP INC CONSULT - DEC '25 PLANNER SERVICES BP

MOORE, IACOFANO GOL TSMAN, INC CONSULT - EIR ASSESSMENT BP

MUNICIPAL MAINTENANCE EQUIP MAINT - PIPEHUNTER MINIJETTER P NATIONAL TESTING NETWORK 2025-26 MEMBERSHIP TESTING & RECRUITMENT HR

NINYO & MOORE GEOTECHNICAL & ENVIRONMENTAL SCIENCE CHATEAU SEWER REPLACE PRJ PW

OCCUPATIONAL HEALTH CENTERS OF CALIFORNIA, A EMPLOYEE PHYSICAL PW

ODYSSEY POWER CORPORATION MAINT- GENERATOR CHERRY CREEK PW

HANOA DEVELOPERS GROUP REFUND - PARTIAL INVOICE BP

LOUIS PTAK CONSTRUCTION INC REFUND - BUILD DEPOSIT BP
ALAN SINGH REIMB-1099 ENVELOPES/MILEAGE FN

CHARLIE COCKER REIMB - FINGERPRINT SERVICE FEE CM

JAN COOKE REIMB - GFOA AWARD APPLICATION FEE FN
MELISSA COLLA REIMB -TRAVEL EXP LEADERSHIP CLASS 1/5-8/26 PD SOPHIE COLE REIMB -TRAVEL EXP LEAGUE OF CA CONF 10/8-10/25 CO VIKKI GRUNDMANN BEIMB -TRAVEL EXP LEADERSHP CLASS 12/5/25 BP VIKKI GRUNDMANN REIMB -TRAVEL EXP LEADERSHP CLASS 10/3/25 BP VIKKI GRUNDMANN REIMB-TRAVEL EXP LEADERSHP CLASS 11/7/25 BP

DESI & JINAH BANATAO REFUND- WATER ACCOUNT BALANCE FN

HEATHER BURNS REFUND- WATER ACCOUNT BALANCE FN

JJ BIENAIME REFUND- WATER ACCOUNT BALANCE FN

JOHN LOCKTON REFUND- WATER ACCOUNT BALANCE FN

KEVIN BUSQUE REFUND- WATER ACCOUNT BALANCE FN

MARVIN GOUW REFUND - WATER ACCOUNT BALANCE FN

SONIA & SANJAY SAINI REFUND - WATER ACCOUNT BALANCE FN

SUSAN K LAZARUS REFUND - WATER ACCOUNT BALANCE FN

VOLODYMYR PANCHENKO REFUND - WATER ACCOUNT BALANCE FN

YONGQI WANG REFUND - WATER ACCOUNT BALANCE FN

62.46 155.40
273.62
548.32
1,759.71
541.03
541.03
145.00

73.99 1,690.00
885.00
489.01
7,014.00
5,182.45
4,761.81
9,960.00
7,532.00
765.02
209.66
27,372.06
195.00
5,720.00
21,466.29

82.25 4,944.82
74,571.25
3,946.33
156.42

98.00 18,605.00
522.49
967.96
1,700.00
4,387.50

94.03 326.11
1,012.62
9,902.50
15,000.00
3,954.04
203.86

71.09 7,153.00
37,370.00
4,275.00
10,710.00
3,648.75
3,692.12
750.00
3,281.25
146.00
6,257.55
2,923.02
14,042.00

57.60 55.00
1,170.00
273.00
1,132.80

15.49 5.81

5.25 515.63
404.65
397.06
1,544.46
195.45
248.58
275.62
123.96

56.51 374.29
-53-
Docusign Envelope ID: BD99E1 FC-9770-4164-AF37-2C22658F9A5E 19030
19031
19032
19033
19034
19035
19036
19037
19038
19039
19040
19041
19042
19043
19044
19045
19046
19047
19048
19049
19050
19051
19052
19053
19054
19055
19056
19057
19058
19059
19060
19061

TOWN OF HILLSBOROUGH
PURCHASES MADE DURING JANUARY 2026
PG&E 12/2/25-12/30/25 MULTIPLE ACCOUNTS
PLAN JPA DEC '25 DEDUCTIBLE CLAIMS VARIOUS ITEMS
PREFERRED ALLIANCE, INC. FEE - 2026 DRUG TESTING PROGRAM HR PRIORITY 1 MAINT - DEC'25 MULTIPLE VEHICLES PD
PUBLIC RISK, INNOVATION, SOLUTIONS, AND MANAGEMENT JAN - MAR '26 EMPLOYEE ASSISTANCE PRG HR A&A REDWOOD GENERAL TIRE CO. MAINT-TIRES TRUCK#301 PW

REDWOOD TRADING POST UNIFORM - RAIN BOOTS STAFF PW

RICE TRUCKING-SOIL FARM SUPPLIES - BASE ROCK PW
ROMEL 400 LLC RENT - FEB'26 RADIO BASE STATION RECEIVER PD SAN MATEO COUNTY FORENSIC LAB DEC'25 CRIME LAB SERVICES PD SAN MATEO LOCK WORKS, INC. KEYS PW
SAN MATEO LUMBER CO., INC SUPPLIES - VARIOUS ITEMS PW
SFPUC FINANCIAL SERVICES OCT '25/NOV '25 - WATER QUALITY ANALYSIS PW SHAWN KIRBY NOV '25 POOL SERVICE 1640 RENTAL PW
SMCPCSA 2026 MEMBERSHIP DUES PD

STAPLES ADVANTAGE OFFICE SUPPLIES - ALL DEPARTMENTS
STATE WATER RESOURCES CONTROL BOARD ANNUAL PERMIT FEE 7/1/25-6/30/26 MULTIPLE SITES PW T-MOBILE USA INC. 11/21/25-12/20/25 PD
TELECOMMUNICATIONS ENGINEERING ASSOCIATES JAN'25 COMM CENTER/BASE/RIMS CAD PD

TELSTARINSTRUMENTS MAINT - SMARTCOVER SERVICE VARIOUS LOCATION PW

TETRA TECH INC MAINT - SCADA SUPPORT SERVICES PW
THE ADAM-HILL COMPANY PARTS - REPLACEMENT HOSE TRUCK #580 PW THOMSON WEST DEC'25 INVESTIGATIVE WEBSITE PD
TIMBERLINE TREE SERVICE, INC. MAINT-TREE TRIMMING EUCALYPTUS PW TURBO DATA SYSTEMS, INC. JAN'26 CITATION PROCESSING & SCANNER PD ULINE, INC. OFFICE SUPPLIES - PW
THE CODE GROUP BUILDING PLAN SERVICES DEC '25 BP
VELOCITY TRIPLE AUTOMOTIVE INC PURCHASE - 2026 CHEVROLET TAHOE PD VERIZON CONNECT NWF INC NOV '25 - GPS MONTHLY SERVICES PW VERIZON WIRELESS 12/11/25-1/10/26 PD

VERIZON WIRELESS PRESERVATION/ WARRANT FOR PHONE NUMBER PD VIKING SHRED LLC DEC '25/JAN '26 DESTRUCTION SERVICES PD

TOTAL GOODS & SERVICES FOR THE MONTH PAID BY CHECK

CALPERS RETIREMENT CONTRIBUTIONS

VISA PAYMENTS

RETIREE HEAL TH REIMBURSEMENTS

OTHER ELECTRONIC PAYMENTS

TOTAL GOODS & SERVICES FOR THE MONTH
3,192.44
6,676.50
1,470.00
3,000.00
2,081.76
1,363.12
459.76
2,083.70
343.20
2,550.00

27.41 201.07
3,045.00
200.00
1,250.00
5,286.77
4,508.00
163.60
4,699.00
1,313.00
1,042.50
1,752.68
1,170.90
16,000.00
1,566.45
377.98
2,501.64
73,527.34
1,549.77
1,201.43

75.00 190.98
$3,921,558.99
232,762.05
22,864.58
105,048.34

0.00 $ 4 282 233.96
-54-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
3 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Approval of an Application for Sign Advertising for the Hillsborough Schools Foundation Dinner Dance Gala Fundraising Event Under CEQA Guideline 15301 SUMMARY: On January 20, 2026, the Hillsborough Schools Foundation (HSF) submitted an application for sign advertising for their annual dinner dance gala fundraiser which will be held in Burlingame on March 7, 2026. Hillsborough Municipal Code Section 5.16.040 requires that new signs for fundraising events be approved by the City Council. Hillsborough Municipal Code Section 5.16.020 defines a fundraising event as an event within the Town of Hillsborough; however, in the past, the Town has approved the hanging of signs in Hillsborough for fundraising events such as the Hillsborough Concours d'Elegance car show and fundraising events held at the Crystal Springs Golf Course outside of Hillsborough. Fundraising events for the Hillsborough Schools Foundation provide a public purpose to the broader Town of Hillsborough community through increased funding for the town’s schools, the town’s school children, and the entire town by creating a more educated and enlightened resident base.

Under Hillsborough Municipal Code Section 5.16.040(F)5, the City Council may approve, reject or modify the applicant's request based on the effect on the public safety and welfare. The artwork for the sign is included as Attachment 1.

The proposed three-foot by six-foot sign is requested to be posted at the Golf Course Drive/Black Mountain Road banner location and digitally on the Walnut Avenue/Floribunda Avenue digital sign. The Town's sign requirements specify that fundraising event signs may be put up no sooner than three weeks before the event begins and shall be taken down no later than one week after the event ends.

FISCAL IMPACT: There is no fiscal impact associated with this agenda item.

ATTACHMENT(S): Sign Artwork
PREPARED BY: Lisa Natusch, City Clerk
RECOMMENDATION: Approve the application for sign advertising for the Hillsborough Schools Foundation dinner dance gala fundraising event.
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Auction no
March 7, 2026
Hyatt Regency, Burlingame
Auction | Dinner Dance | Casino
March 7, 2026
Hyatt Regency, Burlingame
Register by February 27 at HSF.org
Presented by the Hillsborough Schools Foundation | Proceeds benefit Hillsborough public schools Presented by the Hillsborough Schools Foundation | Proceeds benefit Hillsborough public sch n
M h 7 2026
nn
MMarchh 77 22002266
tion | Proceeds benefit Hillsborough public schools
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
4 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Receive January 2026 Legislative Update
SUMMARY: The Town’s legislative consultant, California Public Policy Group (CPPG), has provided a Legislative Summary for January 2026 (Attachment 1).

FISCAL IMPACT: There is no fiscal impact associated with this agenda item.

ATTACHMENT(S): January 2026 CPPG Legislative Summary
PREPARED BY: Lisa Natusch, City Clerk
RECOMMENDATION: Receive the January 2026 Legislative Update. -57-
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 1 Date: February 5, 2026
To: Doug Davis, City Manager
Town of Hillsborough
From: Dane Hutchings
Founder + CEO
California Public Policy Group
Re: CPPG Legislative Summary: January 2026

LEGISLATIVE UPDATE
The Legislature Returns
On January 5, the California State Legislature reconvened for the second year of the 2025-26 legislative session. By mid-January, both houses finalized committee assignments, providing a clearer picture of how committees may approach legislation in 2026. Assemblymember Robert Rivas (D-Hollister) continues to serve as Speaker of the Assembly, and Senator Monique Limón (DSanta Barbara) has assumed the role of Senate President pro Tempore.

Committee hearings began during the second week of January, with legislators moving quickly to advance dozens of two-year bills before the January 31 deadline to clear their house of origin. Bills that met this deadline are now subject to the standard legislative deadlines for the remainder of the session, which concludes on August 31. Two-year bills are measures introduced in the first year of the session that did not reach the Governor’s desk before the end of that year.

As of February 4, the Legislature had introduced 300 bills in the 2026 session—out of roughly 2,500 expected by the February 20 bill introduction deadline—with hundreds more anticipated in the coming weeks. Many of the measures introduced to date are nonsubstantive “spot” bills that do not yet contain full bill language, leaving their intent unclear. Most are expected to be amended with substantive provisions by mid-March. In January, the Legislature also convened several informational hearings. Although no votes are taken, the hearings are intended to inform legislative discussion on policy issues under consideration.

Bills of Interest
Bills of interest introduced or expected to be introduced in 2026 include:
• AB 35 (Alvarez) Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024: Administrative Procedure Act: exemption: program guidelines and selection criteria.
o Current Text: 01/14/2026 - Amended
o Location: Senate Rules
o Summary: This bill would exempt Proposition 4 (2024) funds from the Administrative Procedure Act.
• AB 1421 (Wilson) Vehicles: Road Usage Charge Technical Advisory Committee. o Current Text: 01/05/2026 - Amended
o Location: Senate Rules
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1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 2 o Summary: This bill would require the California Transportation Commission to prepare a report on a road user charge or a mileage-based fee system. • AB 1439 (Garcia) Public retirement systems: development projects: labor standards. o Current Text: 01/22/2026 - Amended
o Location: Senate Rules
o Summary: This bill would require the Public Employees’ Retirement System and the State Teachers’ Retirement System to prepare a report on the impacts on public employee retirement funds of prohibiting the board of a public pension or retirement system from investing in development projects in California that do not provide labor standards protections for workers.
• AB 1680 (Calderon) California FAIR Plan Association.
o Current Text: 02/02/2026 - Introduced
o Location: Assembly Print
o Summary: This bill would make various changes to the California FAIR Plan Association.
• SB 677 (Wiener) Housing development: transit-oriented development. o Current Text: 01/08/2026 - Amended
o Location: Assembly Desk
o Summary: This bill would make various changes to SB 79 (Wiener) [Chapter 512, Statutes of 2025].
• SB 722 (Wahab) Transit-oriented housing development: excluded parcels and sites. o Current Text: 01/15/2026 - Amended
o Location: Assembly Desk
o Summary: This bill would make various changes to SB 79 (Wiener) [Chapter 512, Statutes of 2025].
• SB 908 (Wiener) Housing development: transit-oriented development. o Current Text: 01/22/2026 - Introduced
o Location: Senate Rules
o Summary: This bill would make to-be-determined changes to SB 79 (Wiener) [Chapter 512, Statutes of 2025].
• SB 423 (Gonzalez, 2025). Although the bill was held late last year, it is expected to be reintroduced. In its unofficial form, the measure eliminated all real estate and documentary transfer taxes for all local governments.
• SB 707 (Durazo) [Chapter 327, Statutes of 2025]. A clean up bill addressing “language access concerns” is expected to be introduced this year.
• Several e-bike bills have been introduced, with more expected. To date, most are spot bills and do not yet include substantive provisions.

Budget Update
On January 9, following Governor Gavin Newsom’s State of the State address, Department of Finance Director Joe Stephenshaw presented the Governor’s proposed 2026-27 budget. The Administration described it as a “workload” budget that largely maintains existing programs, advances prior investments, and addresses a $2.9 billion deficit, with total spending of $348 billion including $248 billion from the General Fund. The proposal includes few new initiatives, deferring major policy and funding decisions to the May Revision. -59-
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 3 The budget projects $42.3 billion in additional revenues over the three most recent fiscal years, driven largely by stock market gains. These revenues would support repayment of prior deferrals, continued funding for education, childcare, universal transitional kindergarten, climate and safetynet programs, restoration of reserves, and $2.1 billion in Proposition 4 funding.

In its initial response to the Governor’s budget proposal, the Legislative Analyst’s Office (LAO) noted that recent revenue growth may not be sustainable and continued to project multiyear deficits. The LAO recommended that the Legislature consider more conservative revenue assumptions, identify ongoing budget solutions, and strengthen reserves ahead of the May Revision.

During the Assembly and Senate budget committees’ initial hearings in January, members discussed the significant difference between the Governor’s projected $2.9 billion deficit and the LAO estimate of $18 billion. According to the Department of Finance, the difference reflects the LAO’s inclusion of potential economic risks, including an artificial intelligence-related slowdown, while the Governor’s budget assumes more stable conditions.

Housing Informational Hearings
In January, the Assembly Select Committee on Housing Construction Innovation—chaired by Assemblymember Buffy Wicks (D-Oakland)—held its first two informational hearings to “determine how the State can play a role in reducing housing costs by facilitating innovation in housing construction.” No local government representatives provided testimony at either hearing.

The first hearing addressed construction approaches intended to reduce housing costs without increasing taxpayer expenditures. Testimony described factors affecting housing production in California, including construction costs, workforce availability, and long-term trends in construction productivity. Witnesses discussed factory-based construction methods—such as modular, manufactured, mass timber, and 3D-printed housing—and their potential effects on construction timelines and costs. Speakers also noted that a significant share of housing development costs remain associated with on-site work. Financing structures, labor considerations, and local building code requirements were cited as factors influencing the use of these methods.

The second hearing examined issues related to the implementation and scaling of construction innovations. Testimony addressed the role of local permitting practices, building code enforcement, factory labor, coordination across jurisdictions, and financing mechanisms as they relate to factorybuilt housing. State agencies explained that while factory-built housing is regulated at the state level, local governments retain authority over permitting, inspections, and site-related requirements.

Overall, the discussion focused on how local processes and coordination may affect the feasibility and timing of deploying innovative construction approaches more broadly. 2026 Ballot Update
Looking ahead to the November 2026 election, three statewide initiatives have already qualified for the ballot. ACA 13 would change how voting thresholds are raised by requiring that any initiative seeking to increase vote-approval requirements for future measures must itself pass by the same higher threshold. SCA 1 proposes changes to California’s recall process by eliminating the automatic successor election when a statewide official is recalled; instead, a separate special election would be held to fill the vacancy, and the recalled official would be allowed to run. SB 42, -60-
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 4 known as the Fair Elections Act, would permit candidates to voluntarily accept and use public campaign funds under defined conditions.

In addition, seven initiatives have gathered enough signatures to qualify for the ballot but remain subject to legislative action. The Legislature has until June 25 to enact legislation addressing the issues raised in these measures, at which point proponents may choose to withdraw them. If no legislative solution is reached, the initiatives will appear on the November ballot. Among these proposals is a measure sponsored by the Howard Jarvis Taxpayers Association that would limit voters’ ability to approve voter-initiated local special taxes by raising the approval threshold from a simple majority to two-thirds, while also imposing additional voter identification requirements.

More than a dozen additional proposals are still in the signature-gathering phase and must submit signatures by mid-April to qualify. Of particular note is the Building an Affordable California Act, sponsored by the California Chamber of Commerce, which would streamline the California Environmental Quality Act (CEQA) for designated “essential projects” by limiting delays and litigation. Another high-profile proposal is the 2026 Billionaire Tax Act, sponsored by Service Employees International Union (SEIU), which would impose a one-time 5 percent tax on California’s wealthiest residents to fund Medi-Cal and other health programs.

Taken together, these measures suggest the 2026 ballot is likely to be crowded and consequential, with significant implications for election law, taxation, housing and infrastructure development, and healthcare funding. Several proposals remain fluid and could be resolved legislatively before reaching voters, while others appear poised to generate substantial campaign activity and stakeholder engagement statewide.

State Auditor Report
On January 15, the State Auditor issued a report on the housing element process administered by the Department of Housing and Community Development (HCD). The report’s summary states:
“We found that HCD’s findings letters generally provide valuable feedback to local jurisdictions; however, jurisdictions that are struggling to develop compliant housing elements also require individualized assistance. The complexity of new legal requirements, increased housing allocations, and community resistance to new development, mean that most local jurisdictions required multiple submissions and significant time to achieve compliance during the sixth housing element cycle.

HCD met legal deadlines for reviewing submissions for 10 selected local jurisdictions, but those jurisdictions told us that individualized assistance from HCD was important to help them understand and address the department’s findings. Although HCD offers detailed online guidance to help jurisdictions, it did not always release this guidance in a timely manner. “Staff availability during its peak workload constrained HCD’s ability to provide important individualized assistance to local jurisdictions. Even with HCD’s comprehensive training program for new reviewers and reliance on experienced secondary reviewers to ensure consistency, turnover and overlapping submission deadlines have strained its capacity. To improve the housing element review process, we recommended that HCD conduct a workforce analysis and implement more consistent communication practices, and the Legislature could consider staggering submission deadlines to reduce HCD’s workload surges.”
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1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 5 The report can be viewed here.

LOOKING FORWARD
• February 20: Last day for the Legislature to introduce bills • March 25: Spring Recess begins upon adjournment
• April 6: Legislature reconvenes from Spring Recess
• Mid-May: Governor releases the May revision of the state budget • May 29: Last day for the Legislature to pass bills out of their house of origin • June 15: Legislature must pass the primary budget bill • June 30: Governor must sign the primary budget bill
• July 2: Summer Recess begins upon adjournment
• August 3: Legislature reconvenes from Summer Recess
• August 31: Last day for the Legislature to pass bills; end of the session • September 30: Last day for the Governor to sign or veto bills -62-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
5 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Supporting the Match Commitment for the Federal Emergency Management Hazard Mitigation Grant Program for the Highline Safety Pipeline Project Under CEQA Guideline 15378
SUMMARY: In May 2025, the Town of Hillsborough (“Town”) submitted a Notice of Interest (NOI) to the California Governor’s Office of Emergency Services (Cal OES). The NOI was reviewed by Cal OES staff to determine the eligibility of the Highline Pipeline Project. Cal OES staff determined this project to represent an eligible Hazard Mitigation Grant Program (HMGP) activity and the Town, acting as the project sponsor, was invited to submit a subapplication to Cal OES. As part of that subapplication, a resolution authorizing the require matching funds has been prepared for Council consideration.

Previously, the Town has applied for the Federal Emergency Management (FEMA) Building Resilient Infrastructure and Communities (BRIC) grant program for the Highline Safety Pipeline Project. At the time the total project costs were $22,639,400.00 with a non-federal match commitment of $9,702,600.00. The project had moved to the final stages of the grant approval process with the intent to award. In April 2025, the Town was informed that the BRIC program was being discontinued and that the Town’s subapplication would not be funded as it was still in the “selected for further review” status in the FEMA system.

The Town quickly identified other grant opportunities and applied for the NOI in May 2025 and began work on the new grant application process. Much of the design work has continued, making the project a more probable candidate for grant funding. It is the intention that the cost sharing agreement reached between Hillsborough, Burlingame, and Millbrae would be utilized should the HMGP grant funding be awarded in lieu of the BRIC grant funding. Should the BRIC funding become available again, the Town would only pursue either the HMGP grant or the BRIC funding, but is not eligible to receive both.

The estimated project costs are $45 million. The grant application requests $34,011.943.76 in federal funding with a non-federal match commitment of $11,337,314.59. The grant application requires a resolution documenting its match commitment. The local match funds can come from partner agencies, a portion of the water rates allocated for capital costs, general fund revenue, bonds, or other funding sources.

FISCAL IMPACT: The Town is seeking to receive $34,011,943.76 from the Federal Emergency Management Hazard Mitigation Grant Program towards completion of the Highline Pipeline Project. Local matching funds of $11,337,314.59 are required to be committed from the capital funding of the water fund and contributions from partner agencies, as needed. -63-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

Page 2 ends

ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review under California Environmental Quality Act (CEQA) Guidelines sections 15378(b)(2) and 15378(b)(5) as ongoing administrative or organizational activities that will not result in direct or indirect physical changes in the environment. Further, environmental review will be conducted on the pipeline project once it has been designed and scoped and any need to conduct environmental review at this juncture would be speculative until such time that the project has been designed and is more finite. This environmental analysis will be available to all decision-makers prior to any approval of the project.

ATTACHMENT(S): Resolution
PREPARED BY: Mandy Brown, Assistant City Manager
RECOMMENDATION: Adopt the resolution supporting the match commitment in the amount of $11,337,314.59 for the Federal Emergency Management Hazard Mitigation Grant Program for the Highline Safety Pipeline Project under CEQA Guideline 15378. -64-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

SUPPORTING THE MATCH COMMITMENT FOR THE FEDERAL EMERGENCY

MANAGEMENT HAZARD MITIGATION GRANT PROGRAM FOR THE HIGHLINE SAFETY PIPELINE PROJECT UNDER CEQA GUIDELINE 15378
WHEREAS, the Hazard Mitigation Grant Program (HMGP) is aimed at reducing or eliminating future damages; and
WHEREAS, the Town of Hillsborough (“Town”) has developed the Highline Potable Water Resilience via Highline Safety Pipeline Project to safeguard access to water; and
WHEREAS, it will cost approximately $45.3 million to implement the Project scope; and WHEREAS, the local match required is $11,337,314.59; and WHEREAS, the HMGP grant application procedures require, among other things, a match commitment demonstrating the Town’s commitment to meet the non-federal cost share requirement of the program.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby supports the match commitment of $11,337,314.59 for the Federal Emergency Management Hazard Mitigation Grant Program for the Highline Safety Pipeline Project Under CEQA Guideline 15378.

Mayor of the Town of Hillsborough

Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 9th day of February 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
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-66-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
6 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Adopting Policies 601-608 to Establish Operational Technology Procedures and Guidelines
SUMMARY: The Town of Hillsborough (“Town”) maintains a comprehensive Information Technology (IT) environment that aims to ensure continuity of essential services for the community. These services include maintaining a robust technological infrastructure, implementing business enterprise and software applications, and establishing a reliable and secure network mainframe in accordance with the Town’s IT Strategic Plan.

The Town’s potable water system is a complex system with varying components and topography.

The system has 19 separate but interconnected pressure zones with 10 water storage sites, 18 water tanks, and 14 water pump stations. The potable water system is managed and controlled by a Supervisory Control and Data Acquisition (SCADA) System. The SCADA system also allows the Town to monitor and control its three sanitary sewer pump stations. The SCADA system facilitates automated controls of the Town's most important infrastructure components and it allows for quick adjustments during crucial times such as weather events, unplanned emergencies, and planned events such as PG&E's Power Safety Power Shutoff (PSPS) outages.

The Town has previously contracted with Tesco Controls, Inc. for as-needed SCADA system support services. The Scope of Work included the development of several Operational Technology (OT) policies related to SCADA operations. Adopting formal OT policies is critical for the Town to ensure the safe, reliable, and secure operation of its SCADA system, establishing consistent standards for access control, system changes, monitoring, and incident response. Formal OT policies demonstrate due diligence and governance that positions the Town to better meet regulatory and audit requirements. The proposed OT policies include:

Policy 601 – OT – Acceptable Use Policy
Permitted and prohibited uses of the Town’s OT systems to ensure use is limited to authorized operation, monitoring, and maintenance purposes.

Policy 602 – OT – Security Policy
Comprehensive security requirements for the Town’s OT systems, including access control, network segmentation, system monitoring, and incident response.

Policy 603 – OT – Password Construction Guidelines
Recommended practices for creating strong, secure passwords for OT systems, including minimum length and passphrase guidance.
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Agenda Staff Report - Hillsborough City Council
February 9, 2026

Page 2 ends

Policy 604 – OT – Password Protection Policy
Requirements for the secure creation, storage, use, and safeguarding of passwords used to access OT systems.

Policy 605 – OT – Remote Access Policy
Requirements governing secure remote access to the Town’s OT networks, including encryption, authentication, and approved device controls.

Policy 606 – OT – Wireless Communication Policy
Requirements for wireless infrastructure devices connecting to OT networks to ensure secure configuration and controlled access.

Policy 607 – OT – Wireless Communication Standard
Technical requirements for wireless authentication, encryption, and configuration within OT networks.

Policy 608 – OT – Acceptable Encryption Policy
Approved encryption algorithms and standards used to protect data transmitted or stored within the Town’s OT systems using industry-recognized and federally compliant methods.

The proposed policies are in response to the Town’s Water System Risk and Resiliency Assessment, conducted with the assistance of Tesco and Eaton and Associates, who provides Town IT Managed Services, as a part of the Federal Environmental Protection Agency’s American Water Infrastructure Act (AWIA) guidelines, as required for all water agencies. The policies were also forwarded to the Public Works Clerical and Supervisor union groups that represent Town employees who may use the SCADA system. Feedback received has been discussed and incorporated into the proposed policies.

FISCAL IMPACT: There is no fiscal impact associated with this agenda item.

ATTACHMENT(S):

1. Resolution

2. Policy 601 – OT – Acceptable Use Policy

3. Policy 602 – OT – Security Policy

4. Policy 603 – OT – Password Construction Guidelines

5. Policy 604 – OT – Password Protection Policy

6. Policy 605 – OT – Remote Access Policy

7. Policy 606 – OT – Wireless Communication Policy

8. Policy 607 – OT – Wireless Communication Standard

9. Policy 608 – OT – Acceptable Encryption Policy
-68-
Agenda Staff Report - Hillsborough City Council
February 9, 2026

Page 3 ends

PREPARED BY: William Li, Administrative Services Manager RECOMMENDATION: Adopt the resolution adopting Operational Technology Policies 601-608 to establish operational technology procedures and guidelines. -69-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH ADOPTING POLICIES 601-608 TO ESTABLISH OPERATIONAL TECHNOLOGY

PROCEDURES AND GUIDELINES
WHEREAS, the Town of Hillsborough (“Town”) does not have formal Operational Technology (OT) policies that enforces the safe, reliable, and secure operation of its Supervisory Control and Data Acquisition (SCADA) system; and
WHEREAS, Policy 601 – OT – Acceptable Use Policy establishes permitted and prohibited uses of the Town’s OT systems to ensure use is limited to authorized operation, monitoring, and maintenance purposes; and WHEREAS, Policy 602 – OT – Security Policy outlines comprehensive security requirements for the Town’s OT systems, including access control, network segmentation, system monitoring, and incident response; and WHEREAS, Policy 603 – OT – Password Construction Guidelines, includes recommended practices for creating strong, secure passwords for OT systems, including minimum length and passphrase guidance; and WHEREAS, Policy 604 – OT – Password Protection Policy details requirements for the secure creation, storage, use, and safeguarding of passwords used to access OT systems; and
WHEREAS, Policy 605 – OT – Remote Access Policy establishes requirements governing secure remote access to the Town’s OT networks, including encryption, authentication, and approved device controls; and WHEREAS, Policy 606 – OT – Wireless Communication Policy includes requirements for wireless infrastructure devices connecting to OT networks to ensure secure configuration and controlled access; and
WHEREAS, Policy 607 – OT – Wireless Communication Standard details technical requirements for wireless authentication, encryption, and configuration within OT networks; and
WHEREAS, Policy 608 – OT – Acceptable Encryption Policy outlines approved encryption algorithms and standards used to protect data transmitted or stored within the Town’s OT systems using industry-recognized and federally compliant methods; and
WHEREAS, adopting OT policies ensures that the Town establishes consistent SCADA standards for access control, system changes, monitoring, and incident response; and
ATTACHMENT 1
-70-
Resolution No. 26-
February 9, 2026
2 WHEREAS, it is now appropriate to adopt OT policies 601-608, attached hereto as Exhibits A-H.

NOW THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby adopts Policies 601-608 to establish Operational Technology procedures and guidelines.

Mayor of the Town of Hillsborough

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-71-
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1 POLICY 601 - OT - ACCEPTABLE USE POLICY

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

ACCEPTABLE USE POLICY
POLICY 601 CREATED
OVERVIEW:

The intentions for publishing an Acceptable Use Policy are not to impose restrictions that are contrary to the Town of Hillsborough (Town)’s established culture of openness, trust, and integrity. The Town is committed to protecting its employees, partners, and the organization from illegal or damaging actions by individuals, either knowingly or unknowingly.

The Operational Technology (OT)-related systems, including but not limited to computer equipment, software, operating systems, programmable logic controllers, instrumentation, communications equipment storage media, and accounts providing access to systems and equipment, are the property of the Town. These systems are to be used for operation, monitoring, and maintenance of the Water and Wastewater System (Water System).

Effective security is a team effort involving the participation and support of every Town employee and affiliate who deals with the Water System and related systems.

It is the responsibility of every user to know these guidelines, and to conduct their activities accordingly
PURPOSE:

The purpose of this policy is to outline the acceptable use of Water System computer equipment and other electronic devices at the Town. These rules are in place to protect the employee and the Town. Inappropriate use exposes the Town to risks including virus attacks, compromise of network systems and services, data breach, and legal issues.

SCOPE:

This policy applies to the use of information, electronic and computing devices, and network resources to operate and support the Water System or interact with internal networks and business systems, whether owned or leased by the Town, the ATTACHMENT 2
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2 POLICY 601 - OT - ACCEPTABLE USE POLICY
employee, or a third party. All employees, contractors, consultants, temporary, and other workers at the Town and its subsidiaries are responsible for exercising good judgment regarding appropriate use of information, electronic devices, and network resources in accordance with Town policies and standards, and local laws and regulation. Exceptions to this policy are documented in section 5.2 This policy applies to employees, contractors, consultants, temporaries, and other workers at the Town, including all personnel affiliated with third parties. This policy applies to all equipment that is owned or leased by the Town.

DEFINITIONS:
●“Blogging” Writing about an event, situation, topic, etc. in a regularly updated website or web page.
●“Honeynet” A vulnerable and simulated computer network using a decoy server designed to test network security.
●“Honeypot” Programs that simulate one or more network services that you designate on your computer’s ports.
●“Proprietary Information” Proprietary information is that information unique to a company and its ability to compete, such as customer lists, technical data, product costs, and trade secrets.
●“Spam” Electronic junk mail or junk newsgroup postings.

POLICY:

General Use and Ownership

1. The Water System configurations, programs, and documentation stored on electronic and computing devices, whether owned or leased by the Town, the employee or a third party, remains the sole property of the Town.

2. You have a responsibility to promptly report the theft, loss or unauthorized disclosure of information related to the Town’s Water System to the Operations Superintendent.

3. You may access, use, or share the Town’s Water System and related information only to the extent it is authorized and necessary to fulfill your assigned job duties.

4. For security and network maintenance purposes, authorized individuals within the Town may monitor equipment, systems, and network traffic at any time.

5. The Town reserves the right to audit networks and systems on a periodic basis to ensure compliance with this policy.

Security and Proprietary Information
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3 POLICY 601 - OT - ACCEPTABLE USE POLICY

1. All mobile and computing devices that connect to OT networks must comply with the Electronic Communication Usage Policy.

2. System level and user level passwords must comply with the Password Construction Guidelines. Providing access to another individual, either deliberately or through failure to secure its access, is prohibited.

3. Postings by employees from a Town email address to newsgroups should contain a disclaimer stating that the opinions expressed are strictly their own and not necessarily those of the Town, unless posting is in the course of business duties.

4. Employees must use extreme caution when opening e-mail attachments received from unknown senders, which may contain malware.

Unacceptable Use
The following activities are, in general, prohibited. Employees may be exempted from these restrictions during the course of their legitimate job responsibilities (e.g., systems administration staff may have a need to disable the network access of a host if that host is disrupting production services).

Under no circumstances is an employee of the Town authorized to engage in any activity that is illegal under local, state, federal or international law while utilizing Town-owned resources.

The lists below are by no means exhaustive but attempt to provide a framework for activities which fall into the category of unacceptable use.

1. System and Network Activities
The following activities are strictly prohibited, with no exceptions:
a. Violations of the rights of any person or organization protected by copyright, trade secret, patent or other intellectual property, or similar laws or regulations, including, but not limited to, the installation or distribution of "pirated" or other software products that are not appropriately licensed for use by the Town.
b. Unauthorized copying of copyrighted material including, but not limited to, digitization and distribution of photographs from magazines, books or other copyrighted sources, copyrighted music, and the installation of any copyrighted software for which Town or the end user does not have an active license is strictly prohibited.
c. Accessing data, a server, or an account for any purpose other than conducting Town business, even if you have authorized access, is prohibited.
d. Exporting software, technical information, encryption software or technology, in violation of international or regional export control laws, -75-
4 POLICY 601 - OT - ACCEPTABLE USE POLICY
is illegal. The appropriate management should be consulted prior to export of any material that is in question.
e. Introduction of malicious programs into a network or system component (e.g., viruses, worms, Trojan horses, e-mail bombs, etc.). f. Revealing your account password/passphrase to others or allowing use of your account by others. This includes family and other household members when work is being done at home.
g. Using a Town computing asset to actively engage in procuring or transmitting material that is in violation of sexual harassment or hostile workplace laws in the user's local jurisdiction.
h. Making fraudulent offers of products, items, or services originating from any Town account.
i. Making statements about warranty, expressly or implied, unless it is a part of normal job duties.
j. Effecting security breaches or disruptions of network communication.

Security breaches include, but are not limited to, accessing data of which the employee is not an intended recipient or logging into a server or account that the employee is not expressly authorized to access, unless these duties are within the scope of regular duties. For purposes of this section, "disruption" includes, but is not limited to, network sniffing, pinged floods, packet spoofing, denial of service, and forged routing information for malicious purposes.
k. Port scanning or security scanning is expressly prohibited unless prior notification to the Operations Superintendent is made.
l. Circumventing user authentication or security of any host, network or account.
m. Introducing honeypots, honeynets, or similar technology on the Town network.
n. Interfering with or denying service to any user or system component (for example, denial of service attack) unless prior notification to the Operations Superintendent is made.
o. Using any program/script/command, or sending messages of any kind, with the intent to interfere with, or disable, a user's terminal session, via any means, locally or via a network link.
p. Providing information about, or lists of, Town employees to parties outside of the Town.

2. Email and Communication Activities
a. When using organization resources to access and use the Internet, users must realize they represent the organization. Whenever employees state an affiliation to the organization, they must also clearly indicate that "The postings on this site are my own and don’t -76-
5 POLICY 601 - OT - ACCEPTABLE USE POLICY
necessarily represent the Town of Hillsborough’s positions, strategies, or opinions.", in accordance with the Social Media Policy. Sending unsolicited email messages, including the sending of "junk mail" or other advertising material to individuals who did not specifically request such material (email spam).
a. Any form of harassment via email, telephone, or paging, whether through language, frequency, or size of messages.
b. Unauthorized use, or forging, of email header information. c. Solicitation of email for any other email address, other than that of the poster's account, with the intent to harass or to collect replies. d. Creating or forwarding "chain letters", "Ponzi" or other "pyramid" schemes of any type.
e. Use of unsolicited email originating from within the Town's networks of other Internet/Intranet/Extranet service providers on behalf of, or to advertise, any service hosted by the Town or connected via the Town's network.
f. Posting the same or similar non-business-related messages to large numbers of newsgroups (newsgroup spam).

3. Blogging and Social Media
a. Blogging or posting to social media platforms by employees, whether using the Town’s property and systems or personal computer systems, is also subject to the terms and restrictions set forth in this Policy. The use of the Town’s OT networks to engage in blogging, social media, or other online posting is not acceptable under any situation.

COMPLIANCE:

Compliance Measurement
The Town will verify compliance to this policy through various methods, including but not limited to, periodic walk-throughs, video monitoring, system monitoring and logging, internal and external audits, regular system and cybersecurity training (at least annually), and feedback to the policy owner. This policy shall be included with the system’s standard operating procedures and processes.

Exceptions
Any exception to this policy must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:
● OT - Password Protection Policy
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6 POLICY 601 - OT - ACCEPTABLE USE POLICY
● OT - Password Construction Guidelines
● Electronic Communication Usage Policy
● Social Media Policy
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1 POLICY 602 – OT – SECURITY POLICY

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

SE C U R IT Y P O LI C Y
POLICY 602 CREATED
PURPOSE:

This policy establishes the information security requirements to help manage and safeguard the Town of Hillsborough (Town) Operational Technology (OT) resources by minimizing the exposure of critical infrastructure and information assets to threats that may result from unprotected hosts and unauthorized access.

SCOPE:

This policy applies to the Town’s Water and Wastewater System (Water System), including remote sites. All employees, contractors, consultants, temporary labor, and other workers at the Town must adhere to this policy.

DEFINITIONS:
●“DMZ” In computer security, in general a demilitarized zone (DMZ) or perimeter network is a network area (a subnetwork) that sits between an organization’s internal network and an external network, usually the Internet. ●“Firewall” A logical or physical discontinuity in a network to prevent unauthorized access to data or resources.
●“OT Network” A network with Operational Technology (OT) System assets connected to it.

POLICY:

General Requirements

1. The Town is responsible for assigning a Supervisor for the Water System, a point of contact (POC), and a back-up POC. The Water System Supervisor must maintain up-to-date POC information with the Town and Water System Management Team. The Water System Supervisor or their backup must be available around-the-clock for emergencies, otherwise actions will be taken without their involvement.

2. The Water System Supervisor is responsible for the security of their OT System and the OT System’s impact on the corporate network and any other networks. The Water System Supervisor is responsible for adherence to this policy and associated processes. Where policies and procedures are ATTACHMENT 3
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2 POLICY 602 – OT – SECURITY POLICY
undefined, the Water System Supervisor must do their best to safeguard the Town from security vulnerabilities.

3. The Water System Supervisor is responsible for the OT System 's compliance with all Town security policies.

4. The Water System Supervisor is responsible for controlling OT System access. Access to any given OT System will only be granted by the assigned Water System Supervisor or designee, to those individuals with a legitimate need within the OT System, either short-term or as defined by their ongoing job function. This includes continually monitoring the access list and records to ensure that those who no longer require access to the OT System have their access terminated.

5. All passwords must comply with the Town's OT - Password Construction Guidelines. In addition, the passwords to all default accounts must be changed.

6. The OT System usernames for individual user accounts must be different from the usernames assigned for Information Technology (IT) accounts.

7. Individual user accounts on any OT System device must be deleted when no longer authorized within three (3) days. Individual accounts for users with remote access must be deleted or disabled prior to termination.

8. PC-based OT System workstations must have the Town's standard, supported anti-virus software installed and scheduled to run at regular intervals. In addition, the anti-virus software and the virus pattern files must be kept up-todate. Virus-infected computers must be removed from the network until they are verified as virus-free. The Water System Supervisor/Water System Administrators are responsible for creating procedures that ensure anti-virus software is run at regular intervals, and computers are verified as virus-free.

9. Any activities with the intention to create and/or distribute malicious programs into the Town's networks (e.g., viruses, worms, Trojan horses, e-mail bombs, etc.) are prohibited, in accordance with the Town’s OT - Acceptable Use Policy.

10.Immediate access to equipment and system logs must be granted to the Water System Supervisor and Water System Administrators upon request, in accordance with the Electronic Communication Usage Policy.

11.The Town will address non-compliance waiver requests on a case-by-case basis and approve waivers if justified.

OT System Security Requirements

1. The OT System servers and core infrastructure must be in a physically separate room or secured lockable rack with limited access. In addition, the -80-
3 POLICY 602 – OT – SECURITY POLICY
Water System Supervisor must maintain a list of who has access to the equipment.

2. The Water System Supervisor is responsible for ensuring a firewall device is maintained between OT networks and any enterprise or external networks.

3. Cross-connections that bypass the firewall device are strictly prohibited.

4. No direct communication is allowed between the OT System and enterprise or external systems. All required communication will pass through an intermediate DMZ.

5. The Town reserves the right to interrupt connections that impact the OT networks negatively or pose a security risk.

6. The Water System Supervisor or Water System Administrators must record all OT component IP addresses, which are routed within Town networks, in the Water System Address Management database along with current contact information for that system.

7. Additions to the OT System require a functional justification and approval from the Town. Changes to the connectivity or purpose of an existing OT System component must be reviewed and approved by the Town.

8. Any user or group that wants to add an external connection must provide a diagram and documentation to the Water System Supervisor with justification, the equipment, and the IP address space information. The Town will review for security concerns and must approve before such connections are implemented.

9. All traffic between the enterprise networks and the OT networks must go through a Town maintained firewall. OT network devices (including wireless) must not cross-connect the OT networks and enterprise networks.

10.Original firewall configurations and any changes thereto must be reviewed and approved by the Town. The Town may require security improvements as needed.

11.All users and groups are prohibited from engaging in port scanning, network auto-discovery, traffic spamming/flooding, and other similar activities that negatively impact the enterprise networks and/or non-Town networks without prior authorization.

12.Any user or group that intends to perform port scanning, network autodiscovery, traffic flooding, and/or other similar activities that may negatively impact the OT networks, must provide a diagram and documentation to the Water System Supervisor with justification, the equipment, and the IP address space information. The Town will review for security concerns and must approve before such activities are performed.
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4 POLICY 602 – OT – SECURITY POLICY

13.Traffic between enterprise networks and OT DMZ networks, as well as traffic between separate OT System networks, is permitted based on process and business requirements.

14.The Town reserves the right to audit all OT-related data and administration processes at any time, including but not limited to, inbound and outbound packets, firewalls, and network peripherals.

15.Administrative credentials for all OT network infrastructure equipment must be different from all other credentials. The passwords must be created in accordance with the Town's OT - Password Construction Guidelines and managed in compliance with the Town’s OT - Password Protection Policy.

Credentials will only be provided to those who are authorized to administer the OT networks
COMPLIANCE:

Exceptions
Any exception to this policy must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:
● OT - Acceptable Use Policy
● OT - Password Protection Policy
● OT - Password Construction Guidelines
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1 POLICY 603 – PASSWORD CONSTRUCTION GUIDELINES

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

P A S SWO R D C O N ST R U C TI O N GU I D ELI N ES
POLICY 603 CREATED
OVERVIEW:

Passwords are a critical component of information security. Passwords serve to protect user accounts, data, and systems; however, a poorly constructed or easily guessed password can compromise the strongest defenses. These guidelines provide best practices for creating secure passwords.

PURPOSE:

The purpose of these guidelines is to provide best practices for the creation of strong passwords.

SCOPE:

These guidelines apply to employees, contractors, consultants, temporary and other workers, including all personnel affiliated with third parties, involved with the Town of Hillsborough (Town)’s Water and Wastewater System (Water System). The guidelines apply to all passwords associated with the Town’s Water System including but not limited to user-level accounts, system-level accounts, infrastructure component accounts, process control equipment accounts, and instrumentation accounts.

DEFINITIONS:
●“Password Manager” A computer software program that allows users to store, generate, and manage their passwords for local applications and online services.

POLICY:

General Guidelines
Strong passwords are long, the more characters a password has the stronger it is.

We recommend a minimum of 16 characters in all OT related passwords. In addition, we encourage the use of passphrases, passwords made up of multiple words.

Examples include “It’s time for vacation” or “block-curious-sunny-leaves”.

Passphrases are both easy to remember and type yet meet the strength requirements.

ATTACHMENT 4
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2 POLICY 603 – PASSWORD CONSTRUCTION GUIDELINES
Password cracking or guessing may be performed on a periodic or random basis by the Town or its delegates. If a password is guessed or cracked during one of these scans, the user will be required to change it
COMPLIANCE:

Exceptions
Legacy process control equipment which does not support the recommended number of characters is a known exception. Any other exception to the guidelines must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:
 OT - Password Protection Policy
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1 POLICY 604 – OT – PASSWORD PROTECTION POLICY

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

P A S SWO R D P R O TE C TI O N P O LI C Y
POLICY 604 CREATED
OVERVIEW:

Passwords are a critical aspect of computer security. A weak or compromised password can result in unauthorized access to our most sensitive data and/or exploitation of our resources. All staff, including contractors and vendors with access to the Town of Hillsborough (Town) Water and Wastewater System (Water System), are responsible for taking the appropriate steps, as outlined below, to select and secure their passwords
PURPOSE:

The purpose of this policy is to establish a standard for the secure use and protection of all OT-related passwords.

SCOPE:

The scope of this policy includes all personnel who have or are responsible for an account (or any form of access that supports or requires a password) on any system that resides at any Town Water System facility, has access to a Town Operational Technology (OT) network, or stores any non-public Town Water System information.

DEFINITIONS:
●“Multi-Factor Authentication” (MFA) – An authentication system that requires more than one distinct authentication factor for successful authentication. Multifactor authentication can be performed using a multifactor authenticator or by a combination of authenticators that provide different factors. The three authentication factors are something you know, something you have, and something you are. [Source: NIST SP 800-63-3]. ●“Password Manager” A computer software program that allows users to store, generate, and manage their passwords for local applications and online services.
●“Privileged Account” A user account that has more privileges than ordinary users and can include administrator level access.

POLICY:

Password Creation and Use
ATTACHMENT 5
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2 POLICY 604 – OT – PASSWORD PROTECTION POLICY

1. All user-level and system-level passwords must conform to the OT - Password Construction Guidelines.

2. Users must use a separate, unique password for each of their OT-related accounts. Users may not use any OT-related passwords for their own, personal accounts.

3. Staff are allowed to use authorized, approved password managers to securely store and manage all their OT-related passwords.

4. Any passwords for privilege escalation must be unique. User accounts that have administrative group memberships must have a unique password from all other accounts. In addition, it is highly recommended that some form of multi-factor authentication is used for any privileged accounts.

Password Change

1. Passwords should be changed only when there is reason to believe a password has been compromised or fails to meet the Password Creation and Use requirements above. The use or setting of regular password expiration is not recommended.

2. Password cracking or guessing may be performed on a periodic or random basis by the Town or its delegates. If a password is guessed or cracked during one of these scans, the user will be required to change it to a new password that is in compliance with the OT - Password Construction Guidelines.

Password Protection

1. Passwords must not be shared with anyone, including supervisors and coworkers. All passwords are to be treated as sensitive, Confidential Town information.

2. Passwords must not be inserted into email messages or other forms of electronic communication, nor revealed over the phone to anyone.

3. Passwords may be stored only in “password managers” authorized by the organization.

4. Do not use the "Remember Password" feature of applications (for example, web browsers).

5. Any individual suspecting their password may have been compromised must report the incident and change all relevant passwords.

Application Development
Application developers must ensure that their programs contain the following security precautions:
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3 POLICY 604 – OT – PASSWORD PROTECTION POLICY

1. Applications must support authentication of individual users, not groups.

2. Applications must not store passwords in clear text or in any easily reversible form.

3. Applications must not transmit passwords in clear text over the network.

4. Applications must provide for some sort of role management, such that one user can take over the functions of another without having to know the other's password.

Multi-Factor Authentication

1. Multi-factor authentication is highly encouraged and should be used whenever possible, not only for work related accounts but also personal accounts.

COMPLIANCE:

Exceptions
Any exception to this policy must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:
 OT - Password Construction Guidelines
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1 POLICY 605 – OT – REMOTE ACCESS POLICY

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

REMO TE AC C ES S P O LI C Y
POLICY 605 CREATED
OVERVIEW:

Remote access to the Town of Hillsborough (Town) Water and Wastewater System (Water System) is essential to provide the ability to respond to alarm conditions, monitor, and manage operations. In many cases this remote access originates from networks that may already be compromised or are at a significantly lower security posture than the Town's Water System. While these remote networks are beyond the control of a Town policy, we must mitigate these external risks to the best of our ability.

PURPOSE:

The purpose of this policy is to define rules and requirements for connecting to the Town's Water System from any host. These rules and requirements are designed to minimize the potential exposure to the Town from damages which may result from unauthorized use of Town resources. Damages include interruptions in service, damage to equipment, damage or destruction of property, the loss of sensitive or organization confidential data, the loss of intellectual property, damage to public image, damage to critical Town internal systems, and fines or other financial liabilities incurred as a result of those losses.

SCOPE:

This policy applies to all Town employees, contractors, vendors and agents with a Town owned, or externally owned, device used to connect to the Town network. This policy applies to remote access connections used to do work on behalf of the Town, including accessing the Water System, viewing and acknowledging alarms, viewing and modifying control parameters, manual control of equipment, and maintenance of components. This policy covers any and all technical implementations of remote access used to connect to the Town’s Operational Technology (OT) networks.

DEFINITIONS:
●“Encryption” Cryptographic transformation of data (called "plaintext") into a form (called "cipher text") that conceals the data's original meaning to prevent it from being known or used.
●“Passphrase” A passphrase is a memorized secret consisting of a sequence of words or other text that a claimant uses to authenticate their identity. A passphrase is similar to a password in usage, but is generally longer for added security.[Source: NIST SP 800-63-3]
ATTACHMENT 6
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2 POLICY 605 – OT – REMOTE ACCESS POLICY
●“Virtual Private Network (VPN)” A restricted-use, logical (i.e., artificial or simulated) computer network that is constructed from the system resources of a relatively public, physical (i.e., real) network (such as the Internet), often by using encryption (located at hosts or gateways), and often by tunneling links of the virtual network across the real network. For example, if a corporation has LANs at several different sites, each connected to the Internet by a firewall, the corporation could create a VPN by (a) using encrypted tunnels to connect from firewall to firewall across the Internet and (b) not allowing any other traffic through the firewalls. A VPN is generally less expensive to build and operate than a dedicated real network, because the virtual network shares the cost of system resources with other users of the real network.

POLICY:

General Requirements
It is the responsibility of Town employees, contractors, vendors and agents with remote access privileges to the Town’s OT networks to ensure that their remote access connection is given the same consideration as the user’s on-site connection to the Town.

General access to the Internet through an OT network is prohibited to Town employees, contractors, vendors, and agents (hereafter referred to as “Authorized Users”). When accessing an OT network from an external computer, Authorized Users are responsible for preventing access to any Town resources or data by nonAuthorized Users. Performance of illegal activities through an OT network by any user (Authorized or otherwise) is prohibited. The Authorized User bears responsibility for and consequences of misuse of the Authorized User’s access. For further information and definitions, see the OT - Acceptable Use Policy.

Authorized Users will not use OT networks for purposes outside of operation, monitoring, and maintenance of the Water System.

For additional information regarding the Town's remote access connection options, including how to obtain a remote access login, free anti-virus software, troubleshooting, etc., coordinate with the Town’s Water System Administrators.

Requirements

1. Secure remote access must be strictly controlled with encryption (i.e., Virtual Private Networks (VPNs)) and strong passphrases. For further information see the OT - Acceptable Encryption Policy, the OT - Password Construction Guidelines, and the OT - Password Protection Policy.

2. Authorized Users shall protect their login and password, even from family members.
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3 POLICY 605 – OT – REMOTE ACCESS POLICY

3. While using a Town-owned computer to remotely connect to the Town's OT networks, Authorized Users shall ensure the remote host is not connected to any other network at the same time, with the exception of private networks that are under their complete control or under the complete control of an Authorized User or Third Party.

4. Use of external resources to operate, maintain, repair, or replace components in Town’s Water System must be approved in advance by the appropriate manager.

5. All hosts that are connected to OT networks via remote access technologies must use the most up-to-date anti-virus software. Third party connections must comply with requirements as stated in any Third Party Agreements with the Town.

6. Personal equipment will not be used to connect to the Town's OT networks.

COMPLIANCE:

Exceptions
Any exception to the policy must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:

Please review the following policies for details of protecting information when accessing the corporate network via remote access methods, and acceptable use of Town’s network:
● OT - Acceptable Use Policy
● OT - Acceptable Encryption Policy
● OT - Password Protection Policy
● OT - Password Construction Guidelines
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1 POLICY 606 – OT – WIRELESS COMMUNICATION POLICY

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

WI R ELES S C OMMU N I C A TION P O LI C Y
POLICY 606 CREATED
OVERVIEW:

With the mass explosion of Smart Phones and Tablets, pervasive wireless connectivity is almost a given at any organization. Insecure wireless configuration can provide an easy open door for malicious threat actors.

PURPOSE:

The purpose of this policy is to secure and protect the Town of Hillsborough (Town) Water and Wastewater System (Water System). The Town provides computer devices, networks, and other electronic information systems to meet missions, goals, and initiatives. The Town grants access to these resources as a privilege and must manage them responsibly to maintain the integrity, and availability of the Water System, and confidentiality of information related to its configuration, operation, and management.

This policy specifies the conditions that wireless infrastructure devices must satisfy to connect to Town Operational Technology (OT) networks. Only wireless infrastructure devices that meet the standards specified in this policy or are granted an exception by the Town are approved for connectivity to an OT network.

SCOPE:

All employees, contractors, consultants, temporary and other workers at the Town, including all personnel affiliated with third parties that maintain a wireless infrastructure device on behalf of the Town must adhere to this policy. This policy applies to all wireless infrastructure devices that connect to a Town OT network or reside on a Town site that provide wireless connectivity to OT endpoint devices including, but not limited to, laptops, desktops, cellular phones, and tablets. This includes any form of wireless communication device capable of transmitting packet data.

DEFINITIONS:
●“Encryption” Cryptographic transformation of data (called “plaintext”) into a form (called “cipher text”) that conceals the data’s original meaning to prevent it from being known or used.
●“MAC Address” A physical address; a numeric value that uniquely identifies that network device from every other device on the planet. ●“Packet Data” A piece of a message transmitted over a (packet-switching) network.

ATTACHMENT 7
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2 POLICY 606 – OT – WIRELESS COMMUNICATION POLICY
●“Protocol” A formal specification for communicating.

POLICY:

General Requirements
All wireless infrastructure devices that reside at a Town Water System site or connect to a Town OT network must:

1. Abide by the standards specified in the OT - Wireless Communication Standard.

2. Be installed, supported, and maintained by an approved support team.

3. Use Town approved authentication protocols and infrastructure.

4. Use Town approved encryption protocols.

5. Maintain a hardware address (MAC address) that can be registered and tracked.

6. Not interfere with wireless access deployments maintained by other support organizations.

OT and Isolated Wireless Device Requirements
All OT wireless infrastructure devices that provide access to the Town OT networks must adhere to section 4.1 above. Isolated wireless devices that do not provide general network connectivity to the Town OT networks must:

1. Be isolated from the OT networks (that is it must not provide any connectivity to OT networks) and comply with the OT – Operational Technology Systems Security Policy.

2. Not interfere with wireless access deployments maintained by other support organizations.

Enterprise Wireless Device Requirements

1. Enterprise wireless infrastructure devices that access the Town OT networks must conform to the Remote Wireless Device Requirements as detailed in the OT - Wireless Communication Standard.

2. Access to the Town OT networks through the enterprise wireless infrastructure must use remote access authentication.

COMPLIANCE:

Compliance Measurement
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3 POLICY 606 – OT – WIRELESS COMMUNICATION POLICY
The Town will verify compliance to this policy through various methods, including but not limited to, periodic walk-throughs, video monitoring, system monitoring and logging, internal and external audits, regular system and cybersecurity training (at least annually), and feedback to the policy owner. This policy shall be included with the system’s standard operating procedures and processes.

Exceptions
Any exception to this policy must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:
● OT - Wireless Communication Standard
● OT - Acceptable Encryption Policy
● OT - Operational Technology Systems Security Policy
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1 POLICY 607 – OT – WIRELESS COMMUNICATION STANDARD

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

WI R ELES S C OMMU N I C A TION ST A N D A R D
POLICY 607 CREATED
PURPOSE:

This standard specifies the technical requirements that wireless infrastructure devices must satisfy to connect to a Town of Hillsborough (Town) Water and Wastewater System (Water System) network. Only those wireless infrastructure devices that meet the requirements specified in this standard, or devices granted an exception by the Town, are approved for connectivity to a Town OT network.

Network devices including, but not limited to, switches, wireless access points, routers, firewalls, remote access devices, or modems must be installed, supported, and maintained by a Town approved support organization. OT network devices must comply with the OT – Operational Technology Systems Security Policy.

SCOPE:

All employees, contractors, consultants, temporary and other workers at the Town and its subsidiaries, including all personnel that maintain a wireless infrastructure device on behalf of the Town, must comply with this standard. This standard applies to wireless devices that make a connection to an OT network and all wireless infrastructure devices that provide wireless connectivity to OT networks.

The Town must approve exceptions to this standard in advance.

DEFINITIONS:
 “AES” Advanced Encryption Standard - A cryptographic algorithm for encrypting and decrypting information, which is defined in FIPS PUB 197.  “CCMP” Counter Mode with Cipher Block Chaining Message Authentication Protocol is a block-cipher protocol that uses AES for encryption of 128-bit blocks.
 “EAP” Extensible Authentication Protocol is a framework that supports multiple, optional authentication mechanisms for PPP, including clear-text passwords, challenge-response, and arbitrary dialog sequences.  “EAP-FAST” EAP Flexible Authentication via Secure Tunneling  “EAP-TLS” EAP Transport Layer Security
 “EAP-TTLS” Extensible Authentication Protocol-Tunneled Transport Layer Security
 “GCMP” Galois Counter Mode Protocol is a mode of operation for symmetrickey cryptographic block ciphers which is widely adopted for its performance.

ATTACHMENT 8
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2 POLICY 607 – OT – WIRELESS COMMUNICATION STANDARD
 “ICS” Industrial Control System
 “OT” Operational Technology
 “PEAP” Protected Extensible Authentication Protocol
 “SSID” Service Set Identifier
POLICY:

General Requirements
All wireless infrastructure devices that connect or provide access to a Town OT network must:

1. Use Extensible Authentication Protocol-Fast Authentication via Secure Tunneling (EAP-FAST), Protected Extensible Authentication Protocol (PEAP), Extensible Authentication Protocol-Transport Layer Security (EAP-TLS), or Extensible Authentication Protocol-Tunneled Transport Layer Security (EAPTTLS) as the authentication protocol.

2. Use CCMP or GCMP, with minimum of a 128-bit encryption key.

3. All Bluetooth devices must use Secure Simple Pairing with encryption enabled.

OT Network and Isolated Wireless Device Requirements

1. OT network device Service Set Identifiers (SSIDs) must be different from Town enterprise device SSIDs.

COMPLIANCE:

Exceptions
Any exception to the policy must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:
● OT - Operational Technology Systems Security Policy
● OT - Password Protection Policy
● OT - Password Construction Guidelines
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1 POLICY 608 – OT – ACCEPTABLE ENCRYPTION POLICY

T O W N O F H I L L S B O R O U G H

OPE R A TION A L TE C H N O L O G Y

AC C EPT A BLE E N C R Y PTION P O LI C Y
POLICY 608 CREATED
PURPOSE:

The purpose of this policy is to provide guidance that limits the use of encryption to those algorithms that have received substantial public review and have been proven to work effectively. Additionally, this policy provides direction to ensure that Federal regulations are followed, and legal authority is granted for the dissemination and use of encryption technologies outside of the United States.

SCOPE:

This policy applies to all Town of Hillsborough (Town) employees and affiliates involved in the Water and Wastewater System (Water System).

DEFINITIONS:
 “AES” Advanced Encryption Standard - A cryptographic algorithm for encrypting and decrypting information, which is defined in FIPS PUB 197.  “Asymmetric Encryption” A type of encryption where a pair of related keys (a public key and a private key) are used to both encrypt and decrypt electronic data.
 “Algorithm” A finite set of step-by-step instructions for a problem-solving or computation procedure, especially one that can be implemented by a computer.
 “Cipher” A cryptographic algorithm for encryption and decryption.  “Cryptography” The science of encrypting and decrypting information is called cryptography.
 “Decryption” Decryption is the process of transforming an encrypted message into its original plaintext.
 “Encryption” Cryptographic transformation of data (called "plaintext") into a form (called "cipher text") that conceals the data's original meaning to prevent it from being known or used.
 “Hash Function” (cryptographic) hash functions are used to generate a one way "check sum" for a larger text, which is not trivially reversed. The result of this hash function can be used to validate if a larger file has been altered, without having to compare the larger files to each other.  “Key” A key in cryptography is a string of numbers or letters that, when processed through a cryptographic algorithm, can encode or decode cryptographic data.

ATTACHMENT 9
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2 POLICY 608 – OT – ACCEPTABLE ENCRYPTION POLICY
 “Proprietary Encryption” An algorithm that has not been made public and/or has not withstood public scrutiny. The developer of the algorithm could be a vendor, an individual, or the government
 “Signature Algorithm” An asymmetric cryptographic algorithm that produces a digital signature in the form of a pair of large numbers. The signature is computed using rules and parameters such that the identity of the signer and the integrity of the signed data can be verified.
 “Symmetric Encryption” A type of encryption where only one key (a secret key) is used to both encrypt and decrypt electronic data.

POLICY:

Algorithm Requirements

1. Ciphers in use must meet or exceed the set defined as “AES-compatible” or “partially AES-compatible” according to the IETF/IRTF Cipher Catalog, or the set defined for use in the United States National Institute of Standards and Technology (NIST) publication FIPS 140-2, or any superseding documents according to the date of implementation. The use of the Advanced Encryption Standard (AES) is strongly recommended for symmetric encryption.

2. Algorithms in use must meet the standards defined for use in NIST publication FIPS 140-2 or any superseding document, according to date of implementation. The use of the RSA and Elliptic Curve Cryptography (ECC) algorithms is strongly recommended for asymmetric encryption.

3. Signature Algorithms
Algorithm Key
Length
(min)
Additional Comment
ECDSA P-256 Consider RFC6090 to avoid patent infringement.

RSA 2048 Must use a secure padding scheme. PKCS#7
padding scheme is recommended. Message
hashing required.

LMS SHA256 Refer to RFC 8554 – Leighton-Micali HashBased Signatures.

Hash Function Requirements

1. The Town adheres to the NIST Policy on Hash Functions.

Key Agreement and Authentication

1. Key exchanges must use one of the following cryptographic protocols: DiffieHellman, IKE, or Elliptic curve Diffie-Hellman (ECDH). -97-
3 POLICY 608 – OT – ACCEPTABLE ENCRYPTION POLICY

2. End points must be authenticated prior to the exchange or derivation of session keys.

3. Public keys used to establish trust must be authenticated prior to use.

Examples of authentication include transmission via cryptographically signed message or manual verification of the public key hash.

4. All servers used for authentication (for example, RADIUS or TACACS) must have installed a valid certificate signed by a known trusted provider.

5. All servers and applications using SSL or TLS must have the certificates signed by a known, trusted provider.

Key Generation

1. Cryptographic keys must be generated and stored in a secure manner that prevents loss, theft, or compromise.

2. Key generation must be seeded from an industry standard random number generator (RNG). For examples, see NIST Annex C: Approved Random Number Generators for FIPS PUB 140-2.

COMPLIANCE:

Exceptions
Any exception to the policy must be approved by the Town in advance.

Non-Compliance
An employee found to have violated this policy may be subject to disciplinary action in accordance with applicable Town policies, procedures, and current MOUs.

RELATED STANDARDS, POLICIES AND PROCESSES:
● National Institute of Standards and Technology (NIST) publication FIPS 140-2 ● National Institute of Standards and Technology (NIST) publication FIPS 140-3 ● National Institute of Standards and Technology (NIST) publication SP 800- 131A Rev. 2
● NIST Policy on Hash Functions
-98-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
7 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Accepting as Complete the Contract with LVI Engineering for the Macadamia Access Road Repair Project – Phase 1 (East) in the Amount of $1,033,516.00 Under CEQA Guideline 15301
SUMMARY: This project included the repair of six out of nine observed slip-outs along the Macadamia access roads within the Macadamia and Crocker open space areas. The remaining three slip-out locations are currently awaiting regulatory environmental permitting but should be designed and advertised for construction in the Summer of 2026. The scope of this project included the installation of new soldier pile retaining walls, repairing an existing retaining wall, excavation, and associated drainage. Repair of these access roads was necessary to maintain access to the Town’s public sewer main located within the easement and to maintain sanitary sewer services to Town residents.

FISCAL IMPACT: The project was awarded on August 11, 2025 in the amount of $982,425.00, with a 10% contingency of $98,242.50 for a total project budget of $1,080,667.50. The project was successfully completed on schedule in the amount of $1,033,516.00, which is below the authorized budget.

ENVIRONMENTAL ISSUES: This project is categorically exempt from the California Environmental Quality Act (CEQA) according to Section 15301 of the California Code of Regulations.

ATTACHMENT(S): Resolution
PREPARED BY: Paul Willis, Director of Public Works
RECOMMENDATION: Adopt the resolution accepting as complete the contract with LVI Engineering for the Macadamia Access Road Repair Project – Phase 1 (East), the final amount of which is $1,033,516.00 and authorizing staff to file a Notice of Completion for the project and release withheld retention in accordance with state prompt payment laws. -99-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

ACCEPTING AS COMPLETE THE CONTRACT WITH LVI ENGINEERING FOR THE MACADAMIA ACCESS ROAD REPAIR PROJECT – PHASE 1 (EAST) PROJECT IN THE AMOUNT OF $1,033,516.00 UNDER CEQA GUIDELINE 15301
WHEREAS, Town of Hillsborough (“Town”) maintains the Town’s sanitary sewer system; and
WHEREAS, the 2022-2023 winter storms caused several slip-outs along the Macadamia access roads open space areas; and
WHEREAS, plans and specifications were developed for improvements to restore the access road and protect the sanitary sewer system; and
WHEREAS, the Macadamia Access Road Repair Project – Phase 1 (East) (“Project”) restored six of the nine slip-out locations, including installation of new soldier pile retaining walls, repairing an existing retaining wall, excavation, and associated drainage; and
WHEREAS, the Project was publicly bid and advertised according to the State Public Contract Code and the Town’s Purchasing Policy, and the Town received six bids for the Project; and
WHEREAS, staff reviewed the bids and determined LVI Engineering was the lowest responsible bidder submitting a responsive Base Bid in the amount of $980,425.00; and
WHEREAS, the project was awarded to LVI Engineering on August 11, 2025 in the amount of $980,425.00; and
WHEREAS, the Town established a 10% contingency for a total Project budget of $1,080,667.50; and
WHEREAS, funding was allocated from the Capital Fund to the Sewer Fund for the Macadamia Access Roads Repairs (CIP #719); and
WHEREAS, a notice to proceed was issued to LVI Engineering and the project progressed until completed in the amount of $1,033,516.00.

NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby accept as complete the contract with LVI Engineering for the Macadamia Access Road Repair Project – Phase 1 (East), the final amount of which is $1,033,516.00, and authorizes staff to file a Notice of Completion for the project and directs staff to release withheld retention in accordance with state prompt payment laws. -100-
Resolution No. 26-
February 9, 2026
Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 9th day of February 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-101-
-102-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
8 CONSENT CALENDAR

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Approving and Authorizing the City Manager to Execute an Amendment to the Existing Design-Build Agreement with Power Engineering Construction Company for the Tartan Trail Bridge Emergency Repair Project - Phase 2 in the Amount of $3,311,124.00, for a Total Agreement Amount of $3,900,514.00, and Approve a FY 2025-26 Budget Amendment in the Capital Fund (CIP #415) in an Amount up to $3,900,000.00, Under CEQA Guideline 15301
SUMMARY: The Town of Hillsborough (“Town”) sought emergency design-build services from qualified contractors for the emergency repairs of the Tartan Trail Road Bridge over San Mateo Creek (“Project”). The goal of this Project is to restore safe public access while ensuring long-term structural performance and environmental compliance as time is of the essence as the bridge deck and structure continue to erode. The Project will include the design, permitting support, fabrication, delivery, and construction necessary to repair or replace the existing concrete arch culvert to properly convey San Mateo Creek flows beneath Tartan Trail Road and restore the roadway.

Further project background may be referenced in the November 10, 2025 City Council agenda packet.

The Town issued a Design-Build Request for Proposal (RFP) on September 25, 2025 and recommended Power Engineering Construction Company (Power) as the preferred Design-Builder due to their experience, technical approach, accelerated project schedule, and familiarity with similar projects.

As this is a design-build project, their proposal includes all design, engineering, construction, environmental, and testing as follows:

Design & Engineering $271,139.00
Environmental Protection & Compliance $280,904.00
Quality Control and Testing $37,148.00
Construction $3,311,124.00
Guaranteed Maximum Price of Emergency Work $3,900,315.00 Staff recommended a phased approach to allow design, permitting, and environmental compliance work to move forward immediately, ensuring the Project maintained an aggressive schedule to ensure construction can begin in the spring.

On November 10, 2025, the City Council approved an agreement with Power for Phase 1 of the Project to cover Design & Engineering, Environmental Protection & Compliance, and Quality Control and Testing. It was noted at this meeting that staff would return to the City Council for approval and a budget amendment prior to commencing the construction phase. -103-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

Page 2 ends

Since November, Power has successfully submitted applications to the regulatory agencies, including completing work for biological surveys, dewatering plans, and environmental memorandums. Over the next few months, Power will continue Phase 1 tasks, including civil design, geotechnical investigation, and environmental work. However, beginning in February, Power anticipates starting activities under the Construction line item in their fee proposal, such as shoring design, site surveying, and utility potholing. Therefore, staff recommends the City Council authorize Phase 2 of this Design Build agreement for Construction.

FISCAL IMPACT: After careful review of the cost proposal, staff and Power negotiated Guaranteed Maximum Price for all project costs in the amount of $3,900,315.00. On November 10, 2025, the City Council authorized Phase 1 for the Design & Engineering, Environmental Protection & Compliance, and Quality Control and Testing, for a total cost of $589,191.00. Staff recommends that the City Council authorize Phase 2 for Construction in the amount of $3,311,124.00, for a total agreement amount of $3,900,315.00. There will be no additional contingencies for this project as the proposal is all inclusive of services, labor and materials. To meet budget compliance in FY 2025-26, it is recommended that City Council approve a budget amendment for the cost of the project with a transfer from the General Fund to the Capital Fund for up to $3,900,000.00. Any recovery of costs for this project will be paid back to the General Fund. The Town will continue pursuing cost recovery from responsible parties and coordinate with its insurance provider for potential reimbursement.

ENVIRONMENTAL ISSUES: This project is categorically exempt from CEQA under Section 15301 (Existing Facilities).

ATTACHMENT(S): Resolution
PREPARED BY: Natalie Gribben, Deputy Director of Public Works RECOMMENDATION: Adopt the resolution approving and authorizing the City Manager to execute an amendment to the Design-Build agreement with Power Engineering Construction Company for the Tartan Trail Road Bridge Emergency Repair Project – Phase 2 in the amount of $3,311,124.00, for a total agreement amount of $3,900,514.00, with authority to include any minor provisions in the amendment deemed legally necessary by the City Attorney, and approve a FY 2025-26 budget amendment in the Capital Fund (CIP #415) in an amount up to $3,900,000.00, under CEQA Guideline 15301.
-104-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE AN

AMENDMENT TO THE EXISTING DESIGN-BUILD AGREEMENT WITH POWER

ENGINEERING CONSTRUCTION COMPANY FOR THE TARTAN TRAIL ROAD BRIDGE EMERGENCY REPAIR PROJECT – PHASE 2 IN THE AMOUNT OF $3,311,124.00, FOR A TOTAL AGREEMENT AMOUNT OF $3,900,514.00, AND APPROVE A FY 2025-26 BUDGET AMENDMENT IN THE CAPITAL FUND (CIP #415) IN AN AMOUNT UP TO $3,900,000.00, UNDER CEQA GUIDELINE 15301 WHEREAS, Town of Hillsborough (“Town”) maintains the Town’s system of roadways; and
WHEREAS, the Tartan Trail Road Bridge over San Mateo Creek provides critical public access to the Town of Hillsborough and has experienced significant damage to the bridge and supporting elements; and
WHEREAS, the Town determined that immediate action is necessary and initiated the Tartan Trail Road Bridge Emergency Repair Project (“Project”) to restore safe public access, ensure long-term structural performance, and maintain environmental compliance; and
WHEREAS, the Town issued a Design-Build Request for Proposals (RFP) and after evaluation of qualifications, technical approach, schedule, and experience, Town staff determined that Power Engineering Construction Company (Power) was the most qualified and responsive proposer for the emergency design-build work; and
WHEREAS, the Guaranteed Maximum Price (GMP) for the Project, as negotiated between Town staff and Power, is $3,900,315.00, inclusive of all design, engineering, environmental compliance, testing, and construction; and WHEREAS, on November 10, 2025, City Council authorized an agreement for Design & Engineering, Environmental Protection & Compliance, and Quality Control and Testing (Phase 1) in the amount of $589,191.00 to allow permitting and environmental compliance work to proceed immediately; and
WHEREAS, the next anticipated activities, such as shoring design, site surveying, and utility potholing, are within Power’s Construction budget line item; and WHEREAS, staff recommends authorizing Phase 2 of the agreement for Construction in the amount of $3,311,124.00, for a total agreement amount of $3,900,315.00; and
WHEREAS, funding will require approval of a budget amendment for FY 2025-26 in the Capital Fund (CIP #415) in an amount up to $3,900,000.00; and -105-
Resolution No. 26-
February 9, 2026
2 WHEREAS, the Project qualifies for a categorical exemption from the California Environmental Quality Act (CEQA) under Section 15301 of the CEQA Guidelines, as the work involves repair and maintenance of existing public infrastructure with no expansion of use; and
WHEREAS, the Town will continue to pursue cost recovery from other potentially responsible parties, including PG&E, as applicable.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby:

1. Finds the Project to be categorically exempt from CEQA under Section 15301 (Existing Facilities).

2. Approves amending the Design-Build Agreement with Power Engineering Construction Company for the Tartan Trail Road Bridge Emergency Repair Project – Phase 2 (“Project”) in the amount of $3,311,124.00, for a total agreement amount of $3,900,315.00; and

3. Authorizes the City Manager, or their designee, to execute an amendment to the Design-Build Agreement and all related documents necessary to carry out the intent of this resolution, with authority to include any minor provisions in the amendment deemed legally necessary by the City Attorney; and

4. Approve a FY 2025-26 budget amendment in the Capital Fund (CIP #415) in an amount up to $3,900,000.00.

Mayor of the Town of Hillsborough
Attest: City Clerk
This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 9th day of February 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-106-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
9 PUBLIC HEARING

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Accepting a Five-Foot-Wide Public Utility Easement on Three Parcels at 1200 Jackling Drive (APNs 027-330-490, 027-330-500, and 027-341-070) and Contingently Summarily Vacating an Existing Public Utility Easement on Two Parcels at 1200 Jackling Drive (APNs 027-330-490 and 027-330-500) Pending Relocation, Under CEQA Guidelines Section 15305
SUMMARY: The owner of the property located at 1200 Jackling Drive submitted a lot line adjustment application pursuant to Hillsborough Municipal Code (HMC) Chapter 16.36. The property consists of three existing parcels: one lot developed with a single-family residence (APN 027-341-070) and two adjacent vacant lots (APNs 027-330-490 and 027-330-500). The proposed lot line adjustment is intended to increase the size and buildability of the existing vacant lots and to formalize easement dedications in accordance with current Town standards.

As part of the lot line adjustment, the property owner is proposing to vacate existing and dedicate new five-foot-wide public utility easements along the interior property lines of the three lots. The proposed easements are intended to provide adequate space for the installation and maintenance of present or future public utilities, consistent with the Town’s subdivision standards. No physical development or construction is proposed as part of this agenda item.

The Town may choose to vacate and relocate a public utility easement pursuant to the Street Vacation Act, California Streets and Highway Code, Section 8333(c). 8333(c) The legislative body of a local agency may summarily vacate a public service easement that has been superseded by relocation.

In accordance with HMC Section 16.36.050, the City Engineer may not approve a lot line adjustment involving the dedication of public easements until such easements are formally accepted by the City Council at a public hearing. Accordingly, staff has noticed this public hearing in compliance with HMC Sections 16.36.050 and 16.20.040, which require a Type A public notice to property owners within 500 feet of the subject site. Should the City Council accept the proposed easement dedications, the easements will be shown on the parcel map associated with the lot line adjustment, which is within the authority of the City Engineer to approve.

The City Engineer has reviewed the proposed lot line adjustment and is processing it as a parcel map as authorized by the lot line adjustment provisions in the Hillsborough Municipal Code contained at Section 16.36.040. Approval of the parcel map is anticipated, contingent upon City Council acceptance of the proposed public utility easements. -107-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

Page 2 ends

Public Works staff received questions from six neighbors related to the lot line adjustment and future development potential. No public comments were submitted to the City Clerk’s Office related to the easement dedications before 5:00 p.m. on Wednesday, February 4, 2026. Any written public comments received after 5:00 p.m. on Wednesday, February 4, 2026 and prior to 4:00 p.m. on Monday, February 9, 2026 will be emailed to the City Council and posted on the Town website.

FISCAL IMPACT: There is no fiscal impact associated with this agenda item.

ENVIRONMENTAL ISSUES: The project has been determined to be exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15305 that acknowledges minor property line adjustments are authorized by this exemption.

ATTACHMENT(S): Resolution and Exhibit A Parcel Map
PREPARED BY: Paul Willis, Director of Public Works
RECOMMENDATION: Adopt the resolution accepting a five-foot-wide public utility easement on three parcels at 1200 Jackling Drive (APNs 027-330-490, 027-330-500, and 027-341-070) and contingently summarily vacating an existing public utility easement on two parcels at 1200 Jackling Drive (APNs 027-330-490 and 027-330-500) pending relocation, under CEQA Guidelines Section 15305.
-108-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

ACCEPTING A FIVE-FOOT-WIDE PUBLIC UTILITY EASEMENT ON THREE PARCELS AT 1200 JACKLING DRIVE (APNS 027-330-490, 027-330-500, AND 027- 341-070) AND CONTINGENTLY SUMMARILY VACATING AN EXISTING PUBLIC UTILITY EASEMENT ON TWO PARCELS AT 1200 JACKLING DRIVE (APNS 027- 330-490 AND 027-330-500) PENDING RELOCATION, UNDER CEQA GUIDELINES SECTION 15305
WHEREAS, the owner of 1200 Jackling Drive submitted a lot line adjustment application to reconfigure the three existing parcels and increase the size and buildability of the two vacant parcels; and
WHEREAS, per Hillsborough Municipal Code (HMC) section 16.36.050 regarding lot line adjustments, the City Engineer cannot approve a lot line adjustment until the City Council accepts any easement dedication at a public hearing; and
WHEREAS, the owner is proposing to dedicate a new five-foot-wide public utility easement along the interior property lines of all three lots; and WHEREAS, Town of Hillsborough (“Town”) staff recommends that the City Council accept the new five-foot-wide public utility easement as the new easements would provide adequate space for the installation and maintenance of present or future public utilities, if needed; and WHEREAS, if the City Council accepts the new five-foot-wide public utility easement, the existing easement would be relocated into the new dedicated easement area; and
WHEREAS, the Town may choose to vacate and relocate a public utility easement under the Street Vacation Act, California Streets and Highway Code, Section 8333(c) where the easement has been superseded by relocation; and
WHEREAS, Town staff is recommending that the City Council contingently summarily vacate the existing utility easement contingent on the parcel map being approved that will include the new five-foot-wide public utility easement that will allow for utility relocation.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby:

1. Accepts the new five-foot-wide public utility easements on three parcels located at 1200 Jackling Drive (APNs 027-330-490, 027-330-500, and 027-341-070) as shown in the attached parcel map (Exhibit A); and
-109-
Resolution No. 26-
February 9, 2026
2 2. Contingently summarily vacates the Town’s existing public utility easement, contingent on the parcel map being approved that will include the new five-footwide public utility easement noted above that will allow for utility relocation.

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-110-

EXHIBIT A
-111-
±
±
±
±
±
±
-112-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
10 DISCUSSION

CITY COUNCIL MEETING
FEBRUARY 9, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: E-bikes Informational Update
SUMMARY: There is community interest regarding the operation of electric bicycles (“e-bikes”) within the town. This agenda item provides an opportunity for the community and City Council to identify and discuss those concerns.

DEFINITIONS
An e-bike is defined as a bicycle that includes a motor that does not exceed 750 watts of power, has fully operable pedals, and is generally subject to the Vehicle Code’s regulations applicable to bicycles, rather than motor vehicles. Of the many styles of e-bikes available, California specifies three types which are described below and summarized in Attachment 1. (1) Class 1 e-bike: Pedal-assisted; assisted speed maxes out at 20 mph; allowed wherever regular bicycles are allowed; no minimum age; no driver’s license required; helmet required for 17 and under
(2) Class 2 e-bike: Pedal or throttle-assisted; assisted speed maxes out at 20 mph; allowed wherever regular bicycles are allowed; no minimum age; no driver’s license required; helmet required for 17 and under.
(3) Class 3 e-bike: Pedal or throttle-assisted; assisted speed maxes out at 28 mph; prohibited from bike paths and separated bikeways; minimum age is 16; no driver’s license required; helmet required for all ages.

Any e-bike that assists the rider over 28 mph is not street legal and must stay off roads, sidewalks, and multi-use trails and paths. E-bikes with motors of more than 750 watts, and bicycles with gas motors are technically motorcycles according to the law and require Class M licenses/helmets, registration, and insurance.

EDUCATION
On September 5, 2025, November 18, 2025, and January 29, 2026, Hillsborough Police Department (HPD) hosted e-bike safety assemblies at Crocker Middle School, facilitated by School Resources Officer Bianchi and Motor Officer Cobar. The event was well attended and publicized via HPD’s social media. The presentation is available as Attachment 2.

The Town has also published a website with a summary of existing regulations and resources on its website at www.hillsborough.net/ebikes. Resources linked include:
• HPD e-Bike Safety 101
• E-Bike Toolkit (San Mateo County office of Education) o E-Bike Handbook (English, Spanish, Chinese)
o E-Bike Flyer for Parents
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Agenda Staff Report – Hillsborough City Council
February 9, 2026

Page 2 ends

o E-Bike Presentation Slides for Students
o E-Mobility Poster
o Spanish Parent E-Bike Flyer
o Webinar Link: A Parent’s Guide to E-Bike Safety for Youth

LEGISLATION
Recently there have been several legislative proposals at the State level regarding the regulation and safety of e-bikes, summarized below:

New California E-Bike Laws - Laws taking effect in 2026 AB 965 (Dixon) (Chapter 65, Statutes of 2025)
• Purpose: Prohibits selling a Class 3 e-bike to anyone under 16. • Penalty: Violation is an infraction, punishable by a fine up to $250. • Local impact: Creates a state-mandated local program. No state reimbursement required.

AB 544 (Davies) (Chapter 36, Statutes of 2025)
• Purpose: Requires e-bikes to carry a red rear reflector or solid/flashing red light with built-in reflector, visible from 500 feet.
• For minors who get infractions for helmet noncompliance while riding e-bikes, the citation won't be transmitted nor fees imposed if the parent/guardian provides proof of a compliant helmet and completion of a specialized e-bike safety course (e.g., CHP’s). • Violation is an infraction and creates a state-mandated local program. No reimbursement required.

AB 545 (Davies) (Chapter 37, Statutes of 2025)
• Purpose: Prohibits the sale of applications (in addition to devices) that modify an e-bike’s speed capability beyond class limits.
• Reinforces existing law that prohibits physical tampering or device modifications to exceed limits (20 mph for Class 1/2; 28 mph for Class 3).
• Violation = infraction; local enforcement required, with no reimbursement.

New Legislation
AB 1557 (Papan) Vehicles: electric bicycles. (Introduced - 1/8/2026) • Clarifies the definition of an electric bicycle by specifying that the motor may not be capable of exceeding 750 watts of peak power, rather than simply “not exceeding” 750 watts. • Does not change the existing Class 1, 2, and 3 e-bike framework, speed limits, or pedal-assist requirements already in statute.
• Retains current enforcement and operational rules, including applicability of standard bicycle rules of the road and labeling requirements.
• Explicitly excludes high-powered or modifiable vehicles from being classified or marketed as electric bicycles.

The shift to “not capable of exceeding 750 watts of peak power” gives local law enforcement clearer authority to address high-powered or easily modifiable e-bikes that may otherwise appear compliant on paper but function more like motor vehicles. Because cities and counties may face -114-
Agenda Staff Report – Hillsborough City Council
February 9, 2026

Page 3 ends

challenges distinguishing legal e-bikes from electric mopeds or modified devices, this clarification may reduce enforcement disputes and support more defensible citations and administrative actions.

Overall, AB 1557 is a narrow technical clarification rather than a substantive policy shift; its main effect for local governments is improving statutory precision rather than expanding authority or responsibility.

The bill has no state-mandated local program and no fiscal committee referral, indicating no direct reimbursable mandate on local governments. The bill is eligible to be heard on February 8.

AB 1557 has no sponsor, so the author is seeking a broad coalition of local government support to move the bill. Limited opposition is expected from manufacturers.

AB 1569 (Davies) Pupil safety: electric bicycle parking: safety program • Electric bicycle safety requirement at schools
o Beginning in the 2027–28 school year, any school that allows students (K–12) to park Class 1, 2, or 3 electric bicycles on campus during school hours must require completion of an approved electric bicycle safety and training program as a condition of parking.
• Approved training options
o Training must be either:
 The program developed by the California Highway Patrol (CHP), or  A related safety course prescribed by the local law enforcement agency with jurisdiction over the school.
• Proof of completion
o Students must submit proof of course completion to the school before being allowed to park an electric bicycle on campus.
• Local flexibility / exemption
o Schools that adopted an electric bicycle safety policy on or before January 1, 2027 are exempt from the bill’s requirements.
• No state-mandated local program
o The bill explicitly states no state mandate and no reimbursement to local agencies.

AB 1569 fits within growing concerns over youth e-bike use, positioning local governments as partners in education and prevention rather than enforcement alone. Cities and counties—through police or sheriff departments—may be asked to develop, approve, or prescribe local e-bike safety courses, increasing coordination demands with school districts. Local governments may want to ensure that any locally prescribed courses are consistent with CHP standards to reduce liability and ensure defensibility.

The exemption incentivizes early local action, allowing school districts (often in partnership with cities/counties) to adopt tailored e-bike safety policies that reflect local traffic conditions and enforcement priorities.
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February 9, 2026

Page 4 ends

While not a state mandate, local agencies could face unfunded workload impacts if schools rely on locally prescribed courses or enforcement guidance.

INTEGRATION WITH BICYCLE AND PEDESTRIAN MASTER PLAN
The Bicycle Pedestrian Master Plan contained e-bike policies for consideration, including:
• Prohibit all bicycle riders (not just e-bikes) from riding at unsafe speeds, disobeying traffic laws, or riding in an unpredictable or unsafe manner.
• Encourage e-bike riders to take safety courses.
• Require all e-bike riders to wear helmets and have a bike light for night riding.

OTHER COMMUNITIES
Marin County
AB 1778, the Marin Electric Bicycle Safety Pilot Program, allows local jurisdictions in Marin County to adopt additional safety regulations for Class 2 e-bikes. In July 2025, the County of Marin began enforcing its new e-bike regulations. The regulations include an age restriction of 16+ to ride a Class 2 e-bike and helmets required for all ages. You may ride a Class 1 or Class 2 e-bike on multi-use paved pathways maintained by the County of Marin. The speed limit for all bicycles on County-maintained pathways is 15 mph. You cannot ride a Class 3 e-bike on a bike path and must be ridden in a bike lane while staying on public roadways and in parking lots within parks facilities.

This pilot program runs through January 1, 2029. The restrictions apply to unincorporated Marin County, with Tiburon, Mill Valley, and Novato implementing similar measures.

San Diego County
AB 2234, the San Diego Electric Bicycle Safety Pilot Program, allows local jurisdictions in San Diego County to adopt additional safety regulations to restrict e-bike (any class) usage for children under 12 years of age. The pilot program runs through January 1, 2029 and applies to unincorporated San Diego County. As of December 2025, six cities in the County (Carlsbad, Santee, Coronado, Chula Vista, Poway, and San Marcos) have opted in to the program, with more considering joining.

Burlingame
In October 2024, the City of Burlingame adopted an ordinance prohibiting the operation of “electric micromobility devices” in public areas where bicycles are prohibited by its Municipal Code and in any park or recreation area. Micromobility devices are defined by the Federal Highway Administration (FHWA) as “[a]ny small, low-speed, human or electric-powered transportation device, including bicycles, scooters, electric-assist bicycles (e-bikes), electric scooters (escooters), and other small, lightweight, wheeled conveyances.” These devices can be powered manually, by electric motor, or through a combination of both.

Millbrae
In April 2025, the City of Millbrae rescinded its Municipal Code chapter relating to bicycles and replaced it with a chapter relating to regulated mobility devices. The Millbrae City Council voted to prohibit bicyclists from riding on sidewalks. There is no statewide law in California that prohibits bicyclists from riding on sidewalks, but local governments can set their own regulations. -116-
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Half Moon Bay
The City of Half Moon Bay discussed potential regulations related to the use of e-bikes and escooters on its paved multi-use trails. The City Council directed staff to prepare an ordinance, but that ordinance has not yet been considered for adoption: https://www.half-moon-bay.ca.us/877/EBike-Ordinance.

Foster City
In Foster City, the Police Department has a webpage with information on e-bike and e-scooter safety but has not adopted specific regulations: https://www.fostercity.org/police/page/foster-city-ebike-and-e-scooter-safety.

East Palo Alto
East Palo Alto completed a Bicycle Master Plan update in 2017, which includes a map of the City’s bike network that is made up of both on-street bike lanes and off-street bike pathways (https://www.cityofepa.org/planning/page/bicycle-master-plan-update). East Palo Alto also maintains a biking and scootering page that provides the public with links to resources related to bicycling and e-bikes. https://www.ci.east-palo-alto.ca.us/publicworks/page/biking-scootering.

NEXT STEPS
Staff has prepared the summary of steps to implement the new legislation related to e-bikes and other activities to support education and outreach.

1. Awareness & Legal Outreach (City Attorney’s Office/HPD) • Share summary briefs with law enforcement, permit offices, and legal/compliance teams. • Offer internal training sessions highlighting the new infractions and penalties.

2. Ordinance Updates & Administrative Rules (City Attorney’s Office/City Manager/City Clerk/HPD)
• Update municipal codes to reflect:
o Minimum purchasing age of 16 for Class 3 e-bikes.
o Reflector/light requirements.
o Prohibition on selling modifying apps or devices.
• Ensure e-bike citations allow remediation via e-bike–specific safety course (AB 544 provision).

3. Enforcement Strategy (HPD)
• Equip enforcement officers with quick reference materials for the three new infractions:
o Selling Class 3 to under-16 (AB 965).
o Missing rear lighting/reflector or helmet course proof (AB 544). o Selling speed-tampering apps/devices (AB 545).
• Clarify that infractions (not misdemeanors) apply, with fine structures compliant and updated.

4. Public Communication & Education (City Manager’s Office/HPD) • Launch public awareness campaigns through:
o Social media, community bulletins, local news outlets. -117-
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o Target groups: bike shops, schools, families, e-bike retailers. • Highlight:
o Class 3 purchase age restriction.
o Required lighting and safe-ride education.
o Consequences of selling modifying tools or apps.
• Encourage use of CHP-approved e-bike safety trainings. • Coordinate with Hillsborough Youth Commission on outreach efforts.

5. Partnerships (City Manager’s Office/HPD)
• Collaborate with local bike retailers to ensure they understand and comply (e.g., age checks, lighting standards, sales policies).
• Work with CHP or certified trainers to offer local e-bike safety courses or host events.

6. Reporting & Monitoring (HPD)
• Collect data on:
o Number of citations issued under each new infraction. o Compliance trends among retailers and riders.
o Safety outcomes, if available (accident or injury rates involving e-bikes). • Use data to adjust enforcement/resources and evaluate effectiveness.

7. Budget & Resource Planning (City Manager’s Office/HPD) • Since state reimbursement isn’t required, factor enforcement and education into local budgets.
• Possibly shift resources from existing bike-safety programs to support e-bike-specific initiatives or seek grant funds for safety outreach.

8. Review & Community Feedback (City Manager’s Office/HPD) • After ~6–12 months, hold reviews:
o Engage community, retailers, enforcement agencies to gather feedback. o Identify challenges (e.g., retailer compliance, course availability). o Adjust policies, training, or awareness strategies accordingly.

FISCAL IMPACT: There is no fiscal impact associated with this agenda item at this time.

ATTACHMENT(S):

1. E-Bike Types – Summary Handout

2. HPD eBike Safety Presentation

3. PowerPoint Presentation
PREPARED BY: Mandy Brown, Assistant City Manager
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RECOMMENDATION: Receive and review this staff report, take public comment, and provide direction to staff in response to the questions presented within the staff report. -119-
ATTACHMENT 1
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e-Bike Safety 101
The Town of Hillsborough
ATTACHMENT 2
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Why is e-Bike Safety Important?
E-bike collisions are on the rise, and youth are being hit the hardest. In 2022,more than 3,000 kids and teens in the U.S. ended up in the emergency room due to e-bike-related injuries. In California, reported e-bike collisions jumped from just 184 in 2018 to over 3,400 in 2023.What’s more concerning is that injuries from e-bike crashes are often more serious than those from regular bikes. In Marin County, researchers found that 10–15-year-olds were five times more likely to be involved in an e-bike collision than any other age group. -122-
Purpose
e-Bikes, in General
Safety First
Rules of the Road
Riding Etiquette
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What is an e-Bike???
Per California Vehicle Code 312.5, an “electric bicycle” aka e-Bike, is a bicycle equipped with fully operable pedals and an electric motor of less than 750 watts. [Add a graphic that provides
evidence of what you learned]
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Class I Class II
• Like Class I, but
with an added throttle feature that helps riders get moving without pedaling. These also max out at 20 mph.

Class III
• This model goes up
to 28 mph and is pedal-assist only(no throttle) and is equipped with a speedometer. • These e-bikes use
pedal-assist only (no throttle) and can reach speeds up to 20 mph. -125-
Class I Class II
• No age restrictions
Class III
• Must be 16 years
or older.
• No age restrictions
A Legal E-Bike Has:

1.A motor with 750 watts or less2.Safety features that prevent speeds over 20 mph (even with throttle use)3.Working pedals If it’s missing any of these, it’s considered an e-motorcycle—which means it must be registered, have motorcycle lighting and mirrors, and the rider needs a driver’s license. -126-
Safety First - Helmets
Riders under the age of 18 are required to wear a helmet by law (Section 21212 CVC), and all riders are required to wear a helmet on a class 3 E-Bike (Section 21213 CVC).• Nationwide research shows cyclists who wear helmets reduce their risk of head and brain trauma by up to 88%. -127-
Safety First – ABC-E Quick Check
There’s an easy way to make sure your bike is in good working order before hitting the road, dirt path or wherever you travel — it’s called an ABC-E Quick Check.AirBrakesChain, cranks, and cassette -ElectricQUICK ReleaseCHECK -128-
Rules of the Road – Which Roads?
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Rules of the Road – It is the Law!
• CVC 21200 – Obey all rules of the road!• CVC 21950/21952 – Yield to Pedestrians.• CVC 21202 – Right Side of Road• CVC 21204 - No passengers, unless specifically designed to do so.• CVC 21201 – Required equipment.Common Muni-Code Violations:• Shall not operate on the sidewalks in a business district or residential district. • Must yield to pedestrians in public parks and playgrounds and obey all posted park rules and speed limits
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Riding Etiquette
• Be Alert• Be Predictable• Be Courteous• Do Not Block the Path• Keep Right -131-
Riding Etiquette – Hand and Verbal Signals
Be Heard with Kindness:“Passing on your left.”“Slowing down.”“Stopping.”“Turning” Etc.
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Riding Etiquette - Example
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Conclusion
Q and A!
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E-Bikes Informational Update
February 9, 2026
1 ATTACHMENT 3
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2 Types of E-Bikes
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3 E-Bikes – Benefits and Risks (Sample)
Risks
• Injury – modification of
equipment, not wearing helmets, high speeds
• Lack of education/training
on how to ride safely
• Enforcement of regulations
Benefits
• Improves “last mile”
connectivity
• Improves accessibility,
especially in hilly terrain like Hillsborough
• Alternative to vehicular
traffic
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4 Overview of Current Activities
What is Being Done• State• Other Counties• San Mateo County• Town What You Can Do• Tools• Resources
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5 What is Being Done – State Level
New California E-Bike Laws• AB 965 – prohibits selling a Class 3 e-bike to anyone under 16
• AB 544 – Requires e-bikes to carry a red rear reflector• AB 545 – Prohibits the sale of applications to modify an ebike’s speed capability beyond class limitsNew Proposed Legislation• AB 1557 (Papan) – gives local law enforcement clearer authority to address high-powered or easily modifiable ebikes • AB 1569 (Davies) – E-Bike safety requirement at schools -139-
6 What is Being Done – Other Counties
Marin County• AB 1778 – Marin Electric Bicycle Safety Pilot Program • Allows local jurisdictions in Marin County to adopt additional safety regulations for Class 2 e-Bikes
• Runs through January 1, 2029• Applies to unincorporated Marin County with Tiburon, Mill Valley, and Novato implementing similar measures
San Diego County• AB 2234 – San Diego Electric Bicycle Safety Pilot Program • Allows local jurisdictions in San Diego County to adopt additional safety regulations to restrict e-bike (any class) usage for children under 12 years of age • Runs through January 1, 2029• As of December 2025, six cities in the County have opted in to the program, with more considering joining
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7 What is Being Done – San Mateo County
• County-provided e-bike safety resources through the
San Mateo County Office of Education
• E-Bike Toolkit and Trainings
• Other cities in the County have passed regulations
limiting e-bike usage (e.g., Burlingame, Millbrae)
• Ordinances prohibit the operation of e-bikes in public areas and in any park or recreation area or sidewalks – does not prohibit the use on roads • Educational resources provided via informational
websites (Foster City, East Palo Alto)
• Additional Town Halls and listening sessions
occurring to solicit input and ideas
• Town Hall on February 10th at 2:00 pm
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8 What is Being Done – Town of Hillsborough
• Tracking Legislation with Legislative Consultant
• Legislative Platform includes language to support legislation that limits the ability for users to alter E-bikes, enhances safety requirements, prohibits manufacturers and sellers from aiding speed alterations, and adds age limits -142-
9 What is Being Done – Town of Hillsborough
• Tracking Legislation with Legislative Consultant
• Legislative Platform includes language to support legislation that limits the ability for users to alter E-bikes, enhances safety requirements, prohibits manufacturers and sellers from aiding speed alterations, and adds age limits • Bicycle and Pedestrian Master Plan
• Contained policies for consideration – including prohibiting riders from riding at unsafe speeds, encouraging safety courses, and requiring helmets and bike lights for night riding -143-
10 What is Being Done – Town of Hillsborough
• Tracking Legislation with Legislative Consultant
• Legislative Platform includes language to support legislation that limits the ability for users to alter E-bikes, enhances safety requirements, prohibits manufacturers and sellers from aiding speed alterations, and adds age limits • Bicycle and Pedestrian Master Plan
• Contained policies for consideration – including prohibiting riders from riding at unsafe speeds, encouraging safety courses, and requiring helmets and bike lights for night riding • HPD Trainings Coordinated with HCSD
• September 5, 2025• November 18, 2025• January 29, 2026• Held e-bike safety assemblies at Crocker Midde School• Presentation included as Attachment 2 to the staff report -144-
11 What is Being Done – Town of Hillsborough
• Tracking Legislation with Legislative Consultant
• Legislative Platform includes language to support legislation that limits the ability for users to alter E-bikes, enhances safety requirements, prohibits manufacturers and sellers from aiding speed alterations, and adds age limits • Bicycle and Pedestrian Master Plan
• Contained policies for consideration – including prohibiting riders from riding at unsafe speeds, encouraging safety courses, and requiring helmets and bike lights for night riding • HPD Trainings Coordinated with HCSD
• September 5, 2025• November 18, 2025• January 29, 2026• Held e-bike safety assemblies at Crocker Midde School• Presentation included as Attachment 2 to the staff report • Public Education and Outreach
• Published website with resources and information
www.Hillsborough.net/ebikes
• Includes e-bike Safety toolkit, flyer for parents, and link to webinars• Working with Youth Commission -145-
12 What You Can Do – Safe Routes to School
Wear a Helmet and Wear it ProperlyYou’re more likely to have a crash resulting in a brain injury when you ride a faster e-bike compared to a regular bike. Make sure your helmet fits and that it’s properly adjusted and attached before you ride. Helmets designed for increased speeds are ideal.Practice Passenger SafetyE-bikes are heavier and harder to control with or without a passenger. Carrying a passenger is legal only if your e-bike has a seat for another person; regardless, the extra weight can make it difficult to maneuver, slow down, and stop. Passengers must also wear a helmet if they are under 18. -146-
13 What You Can Do – Safe Routes to School
Be Responsible, Predictable, and VisibleE-bike crashes are more likely to lead to severe injury and hospitalization compared to crashes involving regular bikes.Be responsible: follow laws and stop at stop signs.Be predictable: ride in the same direction as traffic.Be visible: wear bright clothing and use lights.SLOW Your SpeedThe higher the speed, the higher the risk of severe injury. At 20 MPH, it could take you almost four school bus lengths to fully stop to avoid an obstacle. Take your time when riding and don’t exceed the manufacturer’s top speeds. -147-
14 What You Can Do – Resources for Parents
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Review rules and resources
Visit www.Hillsborough.net/EBikes to review some basic information:• Rules of Riding an E-Bike• E-Bike and Bike Safety Tips• How to report illegal or concerning bike behavior
• Access tools and resources
15 What You Can Do – Resources Available
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Questions/Discussion
16 -150-

Hillsborough City CouncilFebruary 9, 2026

Hillsborough City Council
February 9, 2026