Hillsborough City Council
May 11, 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, MAY 11, 2026
3:00 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/87928023287?pwd=uYCRRz42dihWZIRDZAJyWAQZbQawTl.1 • Dial-in via phone:
+1 669 444 9171 US
Meeting ID: 879 2802 3287
Passcode: 588209
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 (3:00 pm)

CALL TO ORDER

ROLL CALL
A. Study Session: Proposed FY 2026-27 Budget, Schedule of Fees and Charges, and Proposed Revisions to General Fund Reserve Policy
Agenda – Hillsborough City Council
Monday, May 11, 2026

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 ITEM(S)
A. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Pursuant to Government Code Section 54957(b)(1)
Title: City Manager
B. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Unrepresented employee: City Manager

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 TO CLOSED SESSION IN ADMINISTRATIVE CONFERENCE ROOM REGULAR CITY COUNCIL MEETING (6:00 p.m.)
I. CALL TO ORDER
II. ROLL CALL
III. PLEDGE OF ALLEGIANCE
IV. REPORT FROM CLOSED SESSION
V. RECOGNITION
• Hillsborough “I Voted” Sticker Contest Winner
VI. PROCLAMATIONS
• Mental Health Month
Agenda – Hillsborough City Council
Monday, May 11, 2026

• Asian American, Native Hawaiian and Pacific Islander Heritage Month • National Public Works Week – May 17-23, 2026
VII. PRESENTATION
• Automated License Plate Reader Update
VIII. TOWN UPDATE
IX. 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.

X. 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.

XI. 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 April 13, 2026

2. Monthly Claims: April 1 through April 30, 2026

3. Resolution Setting the Amount of the Special Tax for Police Protection and Fire Protection and Prevention for Fiscal Year 2026-27

4. Receive April 2026 Legislative Update

5. Resolution Approving and Authorizing the City Manager to Execute a Third Amendment to the Existing Agreement with Tetra Tech, Inc. for As-Needed Supervisory Control and Data Acquisition (SCADA) System Professional Services in the Amount of $135,000.00, for a Total Not-to-Exceed Budget of $490,000.00, Under CEQA Guideline 15301 XII. PUBLIC HEARING

6. Resolution Authorizing the Five-Year Rate Series for Sewer Service Charges for a FiveYear Period Effective July 1, 2026

7. Resolution Setting and Confirming the Fees and Charges for FY 2026-27 and Resolution Authorizing Water and Sewer Connection Fees for FY 2026-27, Effective July 1, 2026 Agenda – Hillsborough City Council
Monday, May 11, 2026

8. Receive a Report on Town Vacancies, Recruitment and Retention Efforts in Compliance with Assembly Bill 2561 and Government Code Section 3502.3 XIII. NEW BUSINESS

9. Resolution Adopting Two Policies: (1) Policy 421: Disruption of Telephonic or Internet Service During Meetings, in Accordance with Senate Bill 707; and (2) Policy 422: Public Comment Regulations
XIV. 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.

XV. 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 650-375-7412 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
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Study Session: Proposed FY 2026-27 Budget, Schedule of Fees and Charges, and Proposed Revisions to General Fund Reserve Policy SUMMARY: Town staff will conduct a study session to review the FY 2026-27 Proposed Budget, Fees and Charges, and Revision to General Fund Reserve Policy. his is a study session, and no action is required.

FY 2026-27 PROPOSED BUDGET
The Town’s proposed operating and Capital Budget for Fiscal Year (FY) 2026-27 is $82.3 million for all funds, representing an 8% decrease from the FY 2025-26 projection. The decrease is primarily due to prior year capital spending, offset by increases in operating expenditure.

The Proposed Budget complies with the Town’s policies and guidelines. Additionally, the General Fund, Water and Sewer Enterprise Funds, and the Asset Replacement Fund reserves comply with the Town's reserve policies and debt covenants.

Overview
A key factor in setting the FY 2026-27 budget is the stability of the property tax assessment roll.

Property tax, the Town’s largest General Fund revenue source, is projected to grow 5% based on the FY 2026-27 tax assessment roll and other sources. In-lieu Vehicle License Fees (VLF) revenue presents a risk to FY 2026-27 revenues and is budgeted using the latest estimates.

General Fund revenue also increases significantly because of the comprehensive Building and Planning Fee study that was reviewed by the City Council with a target date of July 1 for implementation. The fees are set to recover costs of the Building and Planning Department services, not to make a profit.

The City Council's goal-setting session identified and prioritized the goals for the coming year, and resources to accomplish these goals are included in the FY 2026-27 budget. Many of the goals are long-term projects that will continue in future years.

The Water and Sewer Fund fees and charges and cost/capital projections reflect the recent rate studies that are under way for review and adoption by the City Council in the coming months, to be implemented effective July 1, 2026.

The Town conducted a Long-Range Financial Funding Plan review as set out in the FY 2025-26 City Council goals. The study indicated a need for additional revenue and other operational enhancements. As mentioned above, a comprehensive fee study was conducted for building and planning services, and for the FY 2026-27 goals, the Town is reviewing the feasibility of a tax measure.
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Agenda Staff Report – Hillsborough City Council
May 11, 2026

The FY 2025-26 mid-year projection indicates a draw on reserves, driven by one-time impacts primarily to repair capital infrastructure caused winter storm damage and other causes, as well as dissolution cost of the Cities Group JPA for workers compensation liability coverage, and the next phase of long-term projects for Tobin Clark development and Town Hall complex.

General Fund
The General Fund is the primary fund, accounting for the direct services that the Town provides to its citizens. The General Fund budget includes funding for key services, such as public safety and recreation through the Hillsborough City School District (HRec), building and planning services, general government, and contributions to the Burlingame and San Mateo libraries for Hillsborough residents to use.

The FY 2026-27 General Fund expenditures, net of transfers, are $40.2 million, an increase of $2.5 million (7%) over the FY 2025-26 projection. The increase is primarily due to salary and CalPERS cost increases, the annual contribution to the Central County Fire Department JPA, and project funding. FY 2026-27 General Fund revenues are projected to be $42.8 million, a $3.6 million (9%) increase, primarily from property taxes and an increase in permitting and services charges for a fuller cost recovery.

The FY 2026-27 General Fund proposed budget reflects a net draw of $0.4 million on General Fund reserves.

General Fund Reserve
The FY 2026-27 Proposed Budget reflects a $26.5 million General Fund reserve, with approximately 75% maintained for contingencies by policy and the remainder held in restricted reserves for pension-related costs (held in an I.R.S Section 115 pension trust).

Water and Sewer Enterprise Funds
User rates and reserves primarily fund the Water and Sewer Enterprise Funds.

Water Fund
The FY 2026-27 Water Fund revenue is projected at $19.7 million, a $0.9 million (4.7%) increase over FY 2025-26 projection. This increase is primarily attributable to a projected rate increase effective July 1, 2026.

The Water Fund expenses are $19.9 million, representing a $1.0 million (5.3%) increase from the FY 2025-26 projection, primarily driven by increased purchased water and operating costs to account for cost-of-living adjustments in salaries and benefits. The budget reflects water usage at a similar level as FY 2025-26 and a San Francisco Public Utilities Commission (SFPUC) wholesale water rate increase of 7.4% for FY 2026-27 ($6.23 v. $5.80 per ccf.). The proposed Water Fund budget shows a draw on reserves of $0.2 million. The drawing is consistent with the rate study, and reserves are replenished over the five-year rate period.

Sewer Fund
The FY 2026-27 Sewer Fund revenue, excluding transfers and grants, is projected at $18.1 million, a $1.5 million (7.6%) decrease over the FY 2025-26 projection, due to a FY 2025-26 projected -2-
Agenda Staff Report – Hillsborough City Council
May 11, 2026

reimbursement from FEMA for the Macadamia Access project, somewhat offset by a proposed 3% rate increase effective July 1, 2026.A $1.3 million transfer in from the General Fund funds storm drain capital improvements.

The FY 2026-27 Sewer Fund expense is $20.1 million, a $3.5 million (14.8%) decrease over the FY 2025-26 projection, primarily due to higher capital spending in FY 2025-26 on the Macadamia Access project. The proposed Sewer Fund budget reflects a net deficit revenue of $0.7 million and draws on reserves and is consistent with the rate study.

FY 2026-27 Capital Plan
The FY 2026-27 Proposed Budget allocates $11.6 million for capital improvement projects (CIP) and asset replacements, enhancing infrastructure and maintaining the Town’s assets. • Storm Drains - Storm drain replacements will improve system dependability in wet weather conditions.
• Water Main Replacement - Aging water pipes will be replaced to enhance longevity, improve water quality, and increase water pressure to meet fire flow requirements and ensure earthquake resistance.
• Highline Water Project – This system will provide a reliable, cost-effective water line tied to the Harry Tracy plant a at a higher elevation. It will protect health and safety during a natural disaster and provide operations cost savings by eliminating the need to pump water uphill with the current system. The FY 2026-27 goal for this project is to secure grant funding and complete the design phase of the project.
• Sewer Priority Basins - Sewer system improvements will reduce overflows and improve the longevity of the pipes. Priority Basin replacement is also essential for the sewer system to mitigate sewer system
• Facilities - The budget funds upgrades to the fire stations. • Vehicles/Equipment—Vehicles and equipment are replaced when they have exceeded their useful.

The Financial Advisory Committee (FAC) reviewed the proposed FY 2026-27 Budget at its meeting on April 28, 2026 and recommended City Council adoption. During the budget presentation, the FAC requested additional analyses be conducted on the evaluation of Town-owned property to understand the potential for disposition to fund capital needs. Staff will prepare an overview for City Council discussion and potential direction to staff on further analysis and FAC review.

PROPOSED FY 2026-27 FEES AND CHARGES
The Town of Hillsborough provides the community with a wide variety of municipal services, including, but not limited to, police and fire protection, water delivery, wastewater collection, street maintenance, storm drainage, planning and development services, and building inspection services. General-purpose revenues, such as property taxes, fund community services like police protection. User fees cover the cost of providing services that have special benefits to an individual or group, such as a planning application, building permit, or encroachment permit associated with personal projects/property.
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Agenda Staff Report – Hillsborough City Council
May 11, 2026

The proposed fees are intended to provide full cost recovery for the services rendered. However, the City Council may waive fees to subsidize and/or provide incentives to promote certain activities, provided those subsidies or incentives are funded with unrestricted revenue. Examples include the waiving or lowering of fees for accessory dwelling units, solar panels, and hazardous tree removal.

The Town updates the fees every year to account for labor rate changes, which is presented in the proposed FY 2026-27 Master Fee Schedule. For the Building and Planning Department (BP), a new fee study was conducted for their specific fees to align the recovery to the cost of providing the services rendered. This fee study has contributed to the revenue increase for the proposed FY 2026-27 budget, improving the overall health of the General Fund.

New Fees
There are no new proposed fees for Police, Engineering and Public Works special services for FY 2026-27.

Deleted Fees
There are no fees proposed to be deleted for Police, Engineering and Public Works special services FY 2026-27.

Changes to Existing Fees
Fees and charges for Police, Engineering, and Public Works special services are updated every fiscal year for staffing labor rates. This will help ensure that the Town is achieving cost recovery.

Also, on certain years the Town will revise the scope of work for certain fees when a change for that service occurs. These could be changes of staff position(s) conducting the work, consulting changes, and other costs associated to cover the fee.

Building and Planning- Cost of Services Study
As stated, BP conducted a new fee study, which adds to changes in existing fees for the Town in FY 2026-27 proposed budget. The study found that current BP fees recover approximately 56% of actual service costs, resulting in a significant General Fund subsidy of private property development oversight. Furthermore, an updated Fee Schedule is presented to better align fees with the actual cost of service delivery. Through this process, BP determined new fees to be added, some to be deleted, and overall changes to all of the other existing fees.

Sewer and Water Rates
Sewer and water rates are presented on the Schedule of fees at the maximum allowable rates as adopted for the five-year sewer and water rate series. Each year, these rates are separately reviewed and adopted by resolution for implementation on July 1 for sewer rates and water rates.

At the time of the FAC meeting, the rates on the Master Fee schedule reflect the current adopted rate series, however, these will likely be updated for the final review and adoption of the Master Fee schedule in June to account for the current water and sewer rate cost of service studies that are under way.
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Agenda Staff Report – Hillsborough City Council
May 11, 2026

Water and sewer connection fees are annually adjusted based on the Engineering News Record Construction Cost 20-City Average Index (ENR-CCI), which was a (0.5%) increase. Proposed connection fees on July 1, 2026, are $17,816.00 for water and $17,337.00 for sewer.

Fire Fees- Central County Fire Department
The Town’s Master Fee Schedule includes fees administered by the Central County Fire Department (CCFD) to Town customers so they can see all costs for their project. CCFD fees include care facility inspections, re-inspections, construction, sprinkler systems, permitting, and standby fire services. All fees are paid by the customer directly to CCFD and are not imposed by the Town. The FY 2026-27 CCFD fee schedule was approved by the CCFD Board on April 8, 2026.

San Mateo County Animal Control Fees & Charges
The Town’s Master Fee Schedule includes fees administered by San Mateo County for Animal Control. The county has updated those Fees for FY 2026-27.

The Financial Advisory Committee reviewed the proposed FY 2026-27 Fees and Charges at its meeting on April 28, 2026 and recommended City Council adoption.

PROPOSED REVISIONS TO GENERAL FUND RESERVE POLICY
Staff seeks City Council feedback on the concepts that would formulate proposed revisions to the General Fund policy.

A general fund reserve, or “rainy day fund” ensures a government’s ability to maintain vital services to the community during times of economic uncertainty and to help with negative impacts of extraordinary risk such as natural disasters. The proposed elements in the revised policy could include:
1) A Budget Stabilization Reserve is used to maintain against loss of service delivery and financial risk associated with unexpected revenue shortall during a single fiscal year or during a prolonged recessionary period. The purpose of the Stability Reserve is to provide fiscal stability in response to unexpected downturns or revenue shortfall and does not serve as funding source for new programs or projects.
2) A Contingency Reserve is used to maintain for the purpose of sustaining General Fund operation in the case of a public emergency such as a natural disaster. This reserve would not be accessed to meet operational shortfalls or to fund new programs or projects. 3) A Capital Reserve is used to maintain for the purpose of emergency capital needs in case of a significant impact or failure of an infrastructure or facility. This reserve would not serve as a funding source for new programs or projects.

The Target Reserve Level in the proposed revisions was evaluated using a risk-based approach and is in line with Government Finance Officers’ Association best practices and is comparable with the approach in other cities. Each city is unique in its profile, and the Town’s was evaluated based on its revenue and risk profile. In addition, the total Reserve Level under the proposed revisions are about equivalent to the current reserve target level at its top end. The revisions provide more clarity regarding the intended purpose and use of each type of reserve. Any General Fund balance -5-
Agenda Staff Report – Hillsborough City Council
May 11, 2026

above the Target Reserve Level can be classified as Unassigned (i.e. unrestricted and available for any purpose). The policy will address the uses and replenishment of reserves to policy level, should monies go below target level. The proposed policy will provide greater clarity on how the Town operates with the reserves based on risk. The next steps are to incorporate feedback from the City Council, and if applicable, write a draft revision of the policy for review and approval.

The FAC reviewed the proposed revisions to the General Fund Reserve Policy at its meeting on April 28, 2026 and provided feedback to staff to implement the principles of the policy at a staff level, with no formal change to the policy to maintain flexibility in the event of a need to draw on reserves. Staff has included this feedback, along with alternatives, for City Council consideration of a proposed policy change.

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

ENVIRONMENTAL ISSUES: The consideration of this item is exempt from environmental review pursuant to the California Environmental Quality Act (CEQA) Guideline 15378(b) as a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact, or as an administrative activity that will not result in direct or indirect physical changes in the environment. Any items or projects funded through the budget are not a commitment to any project, but instead, any such projects will undergo their own analysis and potential approval in the future.

ATTACHMENT(S):

1. FY 2026-27 Proposed Budget document on Town website:
https://www.hillsborough.net/ArchiveCenter/ViewFile/Item/2858

2. FY 2026-27 Proposed Fee Schedule:
https://www.hillsborough.net/ArchiveCenter/ViewFile/Item/2858#page=213

3. Study Session PowerPoint Presentation
PREPARED BY: Jan Cooke, Finance Director
RECOMMENDATION: This is an informational agenda item only. The City Council should provide feedback to staff in preparation for the public hearing on the FY 2026-27 Proposed Budget and Schedule of Fees and Charges and provide any feedback to staff on the proposed revisions to the General Fund Reserve Policy.
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TOWN OF HILLSBOROUGH
City Council Study Session
May 11, 2026
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ATTACHMENT 3

CITY COUNCIL STUDY SESSION
2 1.

2. 3.

R E V I E W A N D P R OV I D E F E E D B AC K F O R T H E P U B L I C H E A R I N G O N T H E F Y 2026 - 2 7 P R O P O S E D O P E R AT I N G A N D C A P I TA L B U D G E T.

R E V I E W A N D P R OV I D E F E E D B AC K F O R T H E F Y 2 0 2 6 - 2 7 S C H E D U L E O F P R O P O S E D F E E S A N D C H A R G E S A N D T H E F Y 2 0 2 6 - 2 7 P R O P O S E D WAT E R A N D S E W E R A N D C O N N E C T I O N F E E S .

R E V I E W A N D P R OV I D E F E E D B AC K TO S TA F F F O R R E V I S I O N TO G E N E R A L F U N D R E S E RV E P O L I C Y. Feedback to Staff for Revision to General Fund Reserve Policy
-8-
FY 2026-27

PROPOSED
BUDGET
-9-

EXECUTIVE

SUMMARY
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FY 2026-27 ANNUAL GOAL SETTING AND

BUDGET REVIEW PROCESS
February 23, 2026: City Council Goal Setting Meeting
April 28, 2026: Financial Advisory Committee Review
May 11, 2026: City Council Budget Study Session
June 8, 2026: City Council Budget Public Hearing and Adoption -11-
6 Town-wide
Goals
2026-27 City Council Priorities
(A) Improve Community Safety,
Emergency Preparedness
and Resiliency Efforts
(B) Implement Housing Element and
maintain compliance with State
requirements
(C) Enhance Quality of Life (D) Ensure Long-term Financial Security
(E) Improve Transparency,
Efficiency, and Customer Service
1) Improve access to
telecommunications service
throughout Town
1) Develop Master Plan for Tobin Clark
Multi-Family Housing Site
1) Bolster code enforcement
program to address key
issues in Town (e.g., vacant
lots, signs, delayed
construction)
1) Implement water and sewer
rates
1) Implement programs and
software to improve internal
efficiencies
2) Prepare Wildfire Preparedness
Building Code Amendments for
Council Consideration
2) Develop Master Plan for Town Hall
Campus
2) Execute 40 Baywood
Agreement and Work
Towards Operations
2) Implement Recommendations
from Long-Term Financial
Funding Analysis
2) Review City Council Handbook
3) Complete Design for Highline
Water Project and Secure Grant
Funding
3) Comprehensive General Plan Updat
e: Safety Element & Long-Term
Town Planning
3) Formalize Town’s role in
Annual Memorial Day
Parade
3) Implement systems,
processes, and training
3) Evaluate feasibility of paid
family leave pilot program
4) Advance technology to
improve public safety and
transparency
4) Implement Housing Element
Programs and Fees
4) Update Climate Action
Plan
4) Evaluate feasibility of
internship program
5) E-Bike Education and
Enforcement
5) Pesticide Use Education
Efforts
6) Update Commercial and
Special Event Regulations
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Financial Position and Context For
Next Year ’s Budget
7 Opportunities
Assessed valuation growth is projected at 5%
Building Planning Department Permit and
Services Revenue lift from cost-of-service
study
FEMA re-opened BRIC (Building
Infrastructure for Resilient Communities)
Grant for Highline Water Project
Risks
In-Lieu Vehicle License Fee (VLF) revenue
state takeaway
Uncertainty of the market and economy
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Policy & Debt
Compliance
In
Compliance?
Balanced Budget – Use of Reserves
Only for One-Time Capital or
Projects
✓
General Fund Reserve At Policy
Level
✓
Enterprise Reserve At or Above
Policy Level
✓
Debt Service Coverage Ratio ✓
Asset Replacement Reserve At
Policy Level
✓
Budget At A Glance
8 EXECUTIVE SUMMARY
• Total Budget of $82.3 million (-8% decrease vs PY due to timing of capital improvements). General Fund Ending
Reserve of $26.5 Million
• Funds operations and City Council 2026 priorities
• $11.6 million in Capital Spending
• No Headcount Increase
• No Additional Pre-Funding of 115 Pension Trustcovers one year of Annual Required Contribution • Water and Sewer Fund based on new cost of service
projections/rates
• Complies with budget and financial policies and debt
covenants
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General Fund Reserve Current Policy
Contingency Minimum, 30% $12.9M
Contingency Goal, 50% $6.7M
Total Per Current Policy $19.7M
Restricted 115 Pension Trust $6.0M
Assigned $0.8M
Unassigned $0.0M
Total GF Fund Balance $26.5M
General Fund Reserve Proposed Policy
Contingency Reserve, 25% $10.3M
Budget Stabilization Reserve, 15% $6.2M
Infrastructure Reserve $3.0M
Total Per Proposed Policy $19.4M
Restricted 115 Pension Trust $6.0M
Assigned $0.8M
Unassigned $0.3M
Total GF Fund Balance $26.5M

GENERAL FUND RESERVE
Proposed revised policy will be discussed in a separate agenda item. This is for information only.
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26/27 CITY COUNCIL GOAL:

IMPLEMENT LONG RANGE FINANCIAL FUNDING PLAN
Goals/Needs - Long Range Financial Funding Plan

1. Address Operational Budget Gaps

2. Safeguard Against Revenue Volatility

3. Address Public Safety Funding Needs for Fire Service

4. Fund Existing Capital Projects

5. Fund New Capital Projects
Implementation

1. Building Planning Fee Study for Cost Recovery – CC study session completed and will consider for adoption in May

2. Analyze CCFD contribution for Finance services – CCFD 26/27 adopted budget includes additional charge for services

3. Consider changing conditions with CCFD that warrants a change in cost share formula – CCFD board study session in May

4. Conduct polling of the community for revenue via a new tax – in process -16-

PROPOSED
BUDGET

DETAILS
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TOTAL BUDGET RESOURCES
$83.9m
USE OF ASSETS (5%)
ALL OTHERS/GOVT. (3%)

INTERGOVERNMENTAL
(4%)
PERMITS (5%)
TAXES (38%)
ENTERPRISE (44%)
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0
$ Millions
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TOTAL BUDGET REQUIREMENT
$82.3m
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Library, Recreation, Community Services (2%)
General Government (4%)
Building and Planning (6%)
Street (5%)
Public Safety (35%)
Water and Sewer (48%)
$ Millions
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BUDGET APPROPRIATIONS BY FUND
FUND
FY 2026-27
BUDGET
$ Increase/
-$Decrease % Increase
General Fund $40.2 $2.5 7%
Capital Project $1.4 -$6.9 -84%
Asset Replacement $0.4 -$0.9 -71%
Water $19.7 $1.1 6%
Sewer $19.7 -$3.5 -15%
All Others $0.9 $0..4 76%
TOTAL BUDGET $82.3 -$7.3 -8%
98 TOTAL PERSONNEL
Table is reflected net of transfers
-20-

GENERAL FUND SUMMARY
FY 2026-27
BUDGET
FY 2025-26
BUDGET
$ Increase/
Decrease
Revenue $42.8 $39.1 +$3.7
Expenditures $41.0 $38.0 +$3.0
Net Operating Excess
(Deficit) before Capital $1.8 $1.0 +$0.7
Capital Transfers $2.2 $7.9 -$5.7

RESOURCES

OVER/(UNDER)

REQUIREMENTS
-$0.4 -$6.8 +$6.4
$0.4M of
General Fund
Reserve is
needed to
balance budget
-21-

GENERAL FUND REVENUE
$42.8m
$1.5
$1.6
$3.7
$2.2
$3.5
$4.9
$25.4
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0
Service Charges (4%)
In-Lieu Vehicle License Fees (4%)
Permits (9%)
Public Safety Tax (5%)
Excess ERAF (8%)
All Others (11%)
Property Taxes (59%)
$ Millions
-22-

GENERAL FUND EXPENDITURES
$43.2m
$2.2
$3.5
$12.4
$25.1
$0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0
Capital Transfers (5%)
Materials and Services and Service Charges (8%)
Contribution to Central County Fire Department (29%)
Personnel Services (58%)
$ Millions
-23-
Community &
Customer
Service
• Improve access to
telecommunication
$150k
• Update Climate
Action Plan $75k
• Establish budget for
Parade $5k
• Establish
foundation for
fundraising $10k
• Advance technology
to improve public
safety and
transparency $59k
• IT systems and
infrastructure
$102k
Financial
Stability
• Long-Term Funding
Study Implementation
$82k
• Financial systems and
processes $40k
Land Use
Planning
• Safety Element $225k
• Town Hall Campus
$40k
• Implement programs
and fees related to
housing elements
$60k
Community
Partnerships
• Chipping Program
$25k
Regional
Partnerships
• No items requiring
budget allocation

LINK OF BUDGET ITEMS TO GOALS
18 ✓ $0.9 million in a one-time budget to deliver City Council Goals -24-
5/23/2023 FY 2023-24 Budget Introduction 19
5-YEAR CAPITAL IMPROVEMENT PLAN

OVERVIEW
-25-
FY 2026-27 CAPITAL BUDGET $11.6M
20 $2.5M Water
Water Mains
Highline
Marlborough Pump Station
Water Tank Coating
$5.2M Sewer
Priority Basins
Smoke Testing
Sewer Lift Stations
$1.3 M Storm Drain
Storm Drains
Green Infrastructure
$2.6 M Facilities & Equipment
Town Hall Complex
General Plan Safety Element
Fire Station Improvements
Safety Equipment
-26-
Questions and Discussion
Recommendation:

Provide any feedback to staff for the June Public Hearing for FY 2026-27 Proposed Budget.
21 -27-
FY 2026-27 PROPOSED

FEES AND CHARGES &

WATER AND SEWER

CONNECTION FEES
-28-
FY 2026-27 PROPOSED SCHEDULE OF FEES AND CHARGES
23 Water Rates, Sewer Rates, and
Connection Fees are adopted on
resolutions separate from the
Master Fee Schedule
Water and Sewer Residential Connection Fee
Adopted fiscal year
2025-26
Proposed fiscal year
2026-27
Sewer Capital Construction Development Fee $17,251 $17,251 Water Capital Construction Development Fee $17,727 $17,727 -29-
Department Description
No New Fees Added
No Fees Deleted Fees
There are no new proposed fees or deleted fees for Police, Engineering and Public Works special services for FY 2026-27.

Changes to Existing Fees Fees and charges for Police, Planning, Building, Engineering, and Public Works special services are updated every fiscal year for staffing labor rates.

This will help ensure that the Town is achieving cost recovery. Also, on certain years the Town will revise the scope of work for certain fees when a change for that service occurs. This could be changes of staff position(s) conducting the work, consulting changes, and other costs associated to cover the fee.

Building and PlanningCost of Services Study
Building and Planning conducted a fee study that found current BP fees recover approximately 56% of actual service costs, resulting in a significant General Fund subsidy of private property development oversight.

The proposed Fee Schedule better aligns fees with the actual cost of service delivery. Through this process, BP determined new fees to be added, some to be deleted, and overall changes to all of the other existing fees.
24 FY 2026-27 PROPOSED SCHEDULE OF

FEES AND CHARGES
-30-
Questions and Discussion
Recommended Action:

Provide any feedback on the FY 2026-27 Proposed Fees and Charges and FY 2026-27 Water and Sewer Connection Fees for the resolution on tonight’s agenda.
25 -31-
General Fund
Reserves Analysis
May 2026
-32-
Agenda
Background and general context
Reserve policy considerations
Risk assessment
Reserve policy recommendations
-33-
Background and General Context
-34-
Background
• Reserves are a key component of the Town’s financial stability, allowing it to mitigate risk and maintain services during emergencies or economic downturn
• Current reserve policy could benefit from some additional definition
• Opportunity to align with best practices while reflecting needs and priorities of the Town
-35-
Budget and Fiscal Policies No. 409
Fund Balance Designations and Reserves
A. The Town will strive to maintain fund or working capital balances of at least 30% of operating expenditures in the General Fund.

This is considered the minimum level necessary to maintain the Town’s credit worthiness and to adequately provide for:

1. Economic uncertainties, local disasters, and other financial hardships or downturns in the local or national economy.

2. Contingencies for unseen operating or capital needs.

3. Cash flow requirements.

Annual Comprehensive Financial Report indicates goal of 50% for the General Fund.
-36-
2024-25 Year-End Fund Balance
General Fund Year-End
Balance
Total Fund Balance (in millions) $33.7
Pension Trust (5.7)
Assigned/Nonspendable Fund Balance (2.7)
Fund Balance for Reserve Calculation $25.3
30% of Operating Expenditures (Minimum) 11.9
Remaining Fund Balance 13.4
50% of Operating Expenditures (Goal) 19.9
Remaining Fund Balance 5.4
-37-
GFOA Best Practice
Establish formal reserve policy(-ies) for maintaining
unrestricted fund balance in General Fund
Recommends at least two months (15% - 20%) of
recurring revenues or expenditures
Define utilization and replenishment conditions
Maintain strategy for funds in excess of policy
requirements
-38-
Peer City Comparison
Agency Reserve Levels
Woodside • Minimum 30% of operating revenues
Atherton • Unassigned fund balance shall be no less than 15% of actual annual operating expenditures
• 15% of actual operating expenditures committed for emergency contingencies Los Altos Hills • 25% of operating expenditures for economic downturns or unexpected expenditures
• $1.25M for disaster contingencies
• Facilities replacement equivalent to accumulated depreciation • Pension, vehicle, and technology reserves
Piedmont • No explicit policy identified
Portola Valley • Minimum 20% of budgeted operating expenditures • No policy requirement but Portola Valley keeps assigned fund balances for pension/OPEB, equipment replacement, capital/emergencies, and legal contingencies
-39-
Reserve Policy Considerations
-40-
Practical Considerations
Reserve policies should be a function of risk
Reserves for specific purposes can create clarity and drive policy decisions, but they don’t prohibit flexibility
Types of reserves and funded amounts should be tailored to unique needs of individual agencies
Opportunity cost of reserve levels a consideration, as is impact to credit rating -41-
Credit Rating Considerations
• Strong credit rating is an indicator of good financial management and contributes to lower costs for public financing
• Rating agencies take into account many factors for credit rating • Local economic conditions
• Diversity and volatility of revenue sources
• Existing debt and other long-term liabilities
• Level of fund balances
• Liquidity
-42-
Credit Rating Considerations – Moody’s
Moody’s Ratings – Rating Methodology U.S. Cities and Counties – July 24, 2024 -43-
Competing Interests
Funding Reserves Addressing the operating
deficit
Maintaining and
rehabilitating infrastructure
Financing new capital
needs
Finite financial
resources
-44-
Risk Assessment
-45-
Risk Assessment
• Meeting cash flow needs
• Revenue loss
• Operating expenditure spikes
Operating
risks
• Natural disasters
• Infrastructure emergency
• Public health crisis
Nonoperating
risks
-46-
Risk Assessment – Cash Flow
• Low overall cash flow risk due to strong cash management and liquidity access
• Pooled cash investment strategy
• General Fund unrestricted cash and investments: $34.5 million • Town-wide unrestricted cash and investments: $87.6 million • Ability to interfund borrow during catastrophic event -47-
Risk Assessment – Revenue Loss
Revenue Source FY 2025-26
Budget
Percent of
General Fund
Risk of
Significant Loss
Property Taxes $24.1 62% Low
VLF in Lieu 1.8 5% High
Excess ERAF 3.1 8% Medium
Public Safety Tax 2.2 6% Low
Business License 1.0 2% Low
Construction Permits 1.5 4% Medium
Franchise Fees 0.9 2% Low
Service Charges 1.2 3% Medium
Measure A 0.3 1% Low
All Others 2.6 7% Medium
Total $38.7 100%
-48-
What If Scenario
$38.7 million in budgeted revenue becomes $32.1 million $6.6 million revenue loss
Major recession resulting in local economic impact and State actions 5% reduction in
property taxes – ($1.2
million)
100% loss of VLF in
lieu – ($1.8 million)
50% loss of Excess
ERAF – ($1.6 million)
50% loss of
construction permits
– ($0.8 million)
50% loss of service
charges – ($0.6
million)
25% loss of all other
revenues – ($0.6
million)
-49-
Historical Context
General Fund Revenue Impact – Great Recession
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Revenue $18.1 $18.7 $19.5 $20.0 $19.4 $19.3
% Change 8% 3% 4% 3% -3% 0%
General Fund Revenue Impact – COVID-19 Pandemic
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
Revenue $26.9 $26.8 $28.8 $31.4 $34.1 $35.0
% Change 26% -1% 7% 9% 9% 3%
-50-
Risk Assessment – Operating Expenditures
• Risk exists for expenditure spikes
• Personnel (pension and medical)
• CCFD contributions
• Inflation
• Liability claims
• Generally expected and able to
be planned into budget
• Much less uncertain than revenue
loss risk
General Fund Expenditures 2025-26 Budget
Personnel $23.6
Central County Fire 11.0
Materials/Supplies 14.0
Charges to Other Funds (11.0)
Internal Services 0.5
Capital Transfers 1.7
Total $39.8
-51-
Risk Assessment – Non-Operating
Natural disaster impacting
infrastructure or other infrastructure
emergency
Elevated risk due to geography and aging
infrastructure
Risk mitigated through insurance policies
Risk of public health crisis creating significant financial impact to Town is relatively low based on COVID-19 experience
-52-
Reserve Policy Recommendations
-53-

1. Contingency Reserve
• Definition: Contingency Reserve will be utilized only for extraordinary one-time events, including but not limited to, natural disasters, public health crises, major infrastructure failures, or other unforeseen emergencies or disasters as determined by Council.
• Reserve Target: 25% of General Fund budgeted operating expenditures. • Reserve Priority: Highest priority for unassigned fund balance. -54-

2. Budget Stabilization Reserve
• Definition: Budget Stabilization Reserve will be utilized to maintain services during economic downturns or other adverse financial circumstances, such as the loss of a major revenue source. • Reserve Target: 15% of General Fund budgeted operating expenditures. When this reserve is below the target level, the budget will articulate an operational plan to return the reserve to the target level within three years.
• Reserve Priority: Second priority for unassigned fund balance. -55-

3. Infrastructure Reserve
• Definition: Infrastructure Reserve will be utilized to fund infrastructure needs that arise during the fiscal year that were not budgeted or planned for in the near term.
• Reserve Target: $3 million
• Reserve Priority: Third priority for unassigned fund balance. -56-

4. Undesignated Fund Balance
• Definition: These are the funds available after all three defined reserves are funded. These funds are available for appropriation at the discretion of Council. These should be considered onetime funds and thus prioritized for one-time expenditures; however, they are not limited to this purpose.
• Reserve Target: Not applicable
• Reserve Priority: Fourth priority for unassigned fund balance. -57-
Final Policy Considerations
• Defining specific reserves for unassigned fund balance does not restrict that funding – these funds remain at Council’s discretion • Proposed reserves create definition for intended use that allows for an earlier discussion of tradeoffs and priorities when reserves are considered for utilization
• Serves to guide decision making as opposed to restrict it, and policy can be written accordingly
-58-
Current Versus Proposed Comparison –
Based on 2026-27 Baseline Budget
Current
Operating Reserve (at 30% goal) $12.3
Remaining Fund Balance $7.4
Total Fund Balance $19.7
Operating Reserve (at 50% goal) $20.5
Remaining Fund Balance ($0.8)
Total Fund Balance $19.7
Proposed
Contingency Reserve (25%) $10.3
Budget Stabilization Reserve (15%) $6.1
Infrastructure Reserve $3.0
Undesignated Fund Balance $0.3
Total Fund Balance $19.7
-59-
Questions and Discussion
-60-
-61-
-62-
-63-

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

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Approve City Council Meeting Minutes of April 13, 2026 -64-

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

UNAPPROVED MINUTES
MONDAY, APRIL 13, 2026
4:30 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 special meeting was held virtually via Zoom Video Conference.

This meeting included remote participation by Councilmember Marie Chuang under Government Code Section 54953.8.3(c)(4).

CLOSED SESSION

CALL TO ORDER
Mayor Cole called the meeting to order at 4:31 p.m.

ROLL CALL

Present: Adams, Chuang (via remote participation), Krolik, Ragsdale, Cole Councilmember Chuang participated in the meeting remotely under Government Code Section 54953.8.3(c)(4) for travel while on official business of the legislative body of another state or local agency. Councilmember Chuang confirmed there were no individuals 18 or older present in the room at her remote location.

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

PUBLIC ANNOUNCEMENT OF CLOSED SESSION ITEM(S)
Mayor Cole announced the items for Closed Session:

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 – ANTICIPATED LITIGATION Pursuant to Government Code Section 54956.9(d)(2)
Town as Defendant – One Potential Case
John Lockton’s and David Marquardt’s March 5, 2026 email suggesting that the Town will be sued on a new potential two-tiered rate water structure (email available upon request to the City Clerk)
C. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Pursuant to Government Code Section 54957(b)(1)
Title: City Manager

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

ADJOURN TO CLOSED SESSION IN ADMINISTRATIVE CONFERENCE ROOM -65-
Unapproved Minutes – Hillsborough City Council
Monday, April 13, 2026

The City Council adjourned to Closed Session in the Administrative Conference Room at 4:33 p.m.

The Closed Session adjourned at 5:56 p.m.

REGULAR CITY COUNCIL MEETING
I. CALL TO ORDER
Mayor Cole called the meeting to order at 6:06 p.m.

II. ROLL CALL

Present: Adams, Chuang (via remote participation), Krolik, Ragsdale, Cole Councilmember Chuang participated in the meeting remotely under Government Code Section 54953.8.3(c)(4) for travel while on official business of the legislative body of another state or local agency. Councilmember Chuang confirmed there were no individuals 18 or older present in the room at her remote location.

III. PLEDGE OF ALLEGIANCE
Mayor Cole led the Pledge of Allegiance.

IV. REPORT FROM CLOSED SESSION
City Attorney Diaz reported the City Council convened in Closed Session to consider three items and there was no reportable action under the Brown Act.

V. PRESENTATIONS
• Peninsula Clean Energy Update
Marc Hershman, Director of Government Affairs, Peninsula Clean Energy, provided an update and responded to City Council questions.
• Connect Bay Area Local Investment Plan
Ana Vasudeo, Government & Community Affairs Manager, SamTrans, provided a presentation, distributed copies of the Local Transit Funding community survey and responded to City Council questions. Mayor Cole encouraged residents to complete the survey.

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

VII. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA
David Weinberg expressed appreciation to the City Council for their many hours of volunteering.

Marjory Ruiz Hidalgo, Local Government Affairs Representative, PG&E, announced the new “Report It” App which allows customers to report potential safety issues with a photo and location details and track the issue to resolution.

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

IX. CONSENT CALENDAR
Councilmember Krolik requested to remove Item 7 and Item 9 from the Consent Calendar. -66-
Unapproved Minutes – Hillsborough City Council
Monday, April 13, 2026

Councilmember Krolik expressed appreciation to the Hillsborough Beautification Foundation for Items 13 and 14.

There were no requests from the public to remove an item from the Consent Calendar.

Following discussion of Items 7 and 9, on motion by Councilmember Krolik, seconded by Vice Mayor Ragsdale and unanimous on roll call vote, the Consent Calendar was approved.

1. Approve City Council Meeting Minutes of September 8, 2025, February 9, 2026, February 23, 2026 and March 9, 2026
The City Council meeting minutes of September 8, 2025, February 9, 2026, February 23, 2026 and March 9, 2026 were approved.

2. Monthly Claims: March 1 through March 31, 2026
The monthly claims for March 2026 were approved as submitted.

3. Quarterly Treasurer's Report for the Quarter Ending March 31, 2026 The Treasurer's Report for the quarter ending March 31, 2026 was approved as submitted.

4. Resolution Approving and Authorizing the City Manager to Execute an Administrative Amendment to Paragraph 2.2 of the Peninsula Clean Energy Joint Powers Agreement Reflecting the Name Change of Peninsula Clean Energy Authority to WestLight Energy The resolution approving and authorizing the City Manager to execute an administrative amendment to Paragraph 2.2 of the Peninsula Clean Energy Joint Powers Agreement reflecting the name change of Peninsula Clean Energy Authority to WestLight Energy was adopted.

5. Receive March 2026 Legislative Update
The March 2026 Legislative Update was received.

6. Approve Fundraising Event Permit Application 26-05 for the Partners & Advocates for Remarkable Children & Adults (PARCA) Fundraiser Luncheon and Fashion Show Under CEQA Guidelines 15378 and 15301
The Fundraising Event Permit Application 26-05 for the PARCA fundraiser luncheon and fashion show subject to the conditions recommended by staff was approved.

7. Resolution Approving and Authorizing the City Manager to Execute an Agreement with EN Engineering, LLC d.b.a. ENTRUST Solutions Group for a Telecommunications Needs Assessment in a Not-to-Exceed Amount of $148,708.00 Assistant City Manager Mandy Brown responded to City Council questions.

Following discussion, this item was approved as part of the vote on the full Consent Calendar.

The resolution approving and authorizing the City Manager to execute an agreement with EN Engineering, LLC d.b.a. ENTRUST Solutions Group for a telecommunications needs assessment in a not-to-exceed amount of $148,708.00 contingent on the City Manager and City Attorney finalizing negotiations and approving any revised agreement terms requested by EN Engineering, LLC d.b.a. ENTRUST Solutions Group was adopted.

8. Resolution Approving and Authorizing the City Manager to Execute an Amendment to the Agreement between the County of San Mateo and 20 Cities of the County for Continued Provision of Animal Control Services for a Three-Year Term Beginning July 1, 2026
-67-
Unapproved Minutes – Hillsborough City Council
Monday, April 13, 2026

The resolution approving and authorizing the City Manager to execute an amendment to the agreement between the County of San Mateo and 20 Cities of the County for continued provision of Animal Control Services for a three-year term beginning July 1, 2026 was adopted.

9. Approve and Authorize the Mayor to Sign a Letter in Support for SB 968 (Becker):

Making San Mateo County Community College District Free College Permanent Councilmembers provided comments.

Following discussion, this item was approved as part of the vote on the full Consent Calendar.

The Mayor was approved and authorized to sign a letter in support for SB 968 (Becker):

Making San Mateo County Community College District Free College Permanent.

10. Approve the Annual “Military Equipment” Report and Renew Ordinance No. 785 Regarding a Military Equipment Policy
The Military Equipment Annual Report and renew Ordinance No.785 regarding a Military Equipment Policy was approved.

11. Resolution Approving and Authorizing the City Manager to Execute a Two-Year Agreement with Bay Area Tree Specialists, Inc. for Vegetation Management Services in the Amount of $173,438.00, with an Option for the City Manager to Renew for a Third Year in the Amount of $93,819.00, for a Three Year Total of $267,256.00, with a 10% Contingency in the Amount of $26,726.00 if Needed, for a Total Three-Year Not-toExceed Amount of $293,982.00, Contingent on the City Manager Finalizing Contract Negotiations to the Satisfaction of the City Manager and City Attorney, Based on a Previously Adopted Mitigated Negative Declaration
The resolution approving and authorizing the City Manager to execute a two-year agreement with Bay Area Tree Specialists, Inc. for vegetation management services in the amount of $173,438.00, with an option for the City Manager to renew for a third year in the amount of $93,819.00, for a three year total of $267,256.00, with a 10% contingency in the amount of $26,726.00 if needed, for a total three-year not-to-exceed amount of $293,982.00, contingent on the City Manager finalizing contract negotiations to the satisfaction of the City Manager and City Attorney, based on a previously adopted Mitigated Negative Declaration was adopted.

12. Resolution Approving and Authorizing the City Manager to Execute a Two-Year Agreement with Go Native, Inc. for Vegetation Management Services in the Amount of $320,756.00, with an Option for the City Manager to Renew for a Third Year in the Amount of $160,544.00, for a Three Year Total of $481,300.00, with a 10% Contingency in the Amount of $48,130.00 if Needed, for a Total Three-Year Not-to-Exceed Amount of $529,430.00, Contingent on the City Manager finalizing Contract Negotiations to the Satisfaction of the City Manager and City Attorney, Based on a Previously Adopted Mitigated Negative Declaration
The resolution approving and authorizing the City Manager to execute a two-year agreement with Go Native, Inc. for vegetation management services in the amount of $320,756.00, with an option for the City Manager to renew for a third year in the amount of $160,544.00, for a three year total of $481,300.00, with a 10% contingency in the amount of $48,130.00 if needed, for a total three-year not-to-exceed amount of $529,430.00, contingent on the City Manager finalizing contract negotiations to the satisfaction of the City Manager and City Attorney, based on a previously adopted Mitigated Negative Declaration was adopted.

13. Resolution Approving and Authorizing the City Manager to Execute a Two-Year Agreement with Gachina Landscape Management, Inc. for Landscape Services for a Two Year Not-to-Exceed Amount of $153,799.00, with an Option for the City Manager to Renew for a Third Year in the Amount of $80,377.00, for a Three Year Not-to-Exceed Amount of $234,176.00, Including a 10% Contingency in the Amount of $23,418.00 if -68-
Unapproved Minutes – Hillsborough City Council
Monday, April 13, 2026

Needed, for a Total Three-Year Not-to-Exceed Amount of $257,594.00, Contingent on the City Manager Finalizing Contract Negotiations to the Satisfaction of the City Manager and City Attorney, Under CEQA Guideline 15301
The resolution approving and authorizing the City Manager to execute a two-year agreement with Gachina Landscape Management, Inc. for landscape services for a two year not-to-exceed amount of $153,798.00, with an option for the City Manager to renew for a third year in the amount of $80,377.00, for a three year not-to-exceed amount of $234,175.00, including a 10% contingency in the amount of $23,418.00 if needed, for a total three-year not-to-exceed amount of $257,593.00, contingent on the City Manager finalizing contract negotiations to the satisfaction of the City Manager and City Attorney, under CEQA Guideline 15301 was adopted.

14. Resolution Approving and Authorizing the City Manager to Execute a Two-Year Agreement with Bay Pro Landscape Maintenance, Inc. for Landscape Services for a Two Year Not-to-Exceed Amount of $126,589.00, with an Option for the City Manager to Renew for a Third Year in the Amount of $66,157.00, for a Three Year Amount of $192,746.00, Including a 10% Contingency in the Amount of $19,274.00 if Needed, for a Total Three-Year Not-to-Exceed Amount of $212,020.00, Contingent on the City Manager Finalizing Contract Negotiations to the Satisfaction of the City Manager and City Attorney, Under CEQA Guideline 15301
The resolution approving and authorizing the City Manager to enter into a two-year agreement with Bay Pro Landscape Maintenance, Inc. for landscape services for a two-year not-to-exceed amount of $126,589.00, with an option for the City Manager to renew for a third year in the amount of $66,157.00, for a three year amount of $192,746.00, including a 10% contingency in the amount of $19,274.00 if needed, for a total three-year not-to-exceed amount of $212,020.00, contingent on the City Manager finalizing contract negotiations to the satisfaction of the City Manager and City Attorney, under CEQA Guideline 15301 was adopted.

15. Adoption of an Ordinance Amending Chapter 17.52 of the Hillsborough Municipal Code Relating to Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs) and Finding the Action to be Statutorily Exempt from CEQA Under Public Resources Code Section 21080.17
The ordinance entitled, “An Ordinance Amending Chapter 17.52 of the Hillsborough Municipal Code Relating to Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs) and Finding the Action to be Statutorily Exempt from CEQA Under Public Resources Code Section 21080.17” was adopted.

X. OLD BUSINESS

16. Accept Water Rate Study and Authorize Implementation of the Recommendation Director of Finance Jan Cooke introduced the item. Rick Simonsen, Senior Vice President, and Gabe Sasser, Project Manager, HF&H Consultants, provided the presentation. Public Works Director Paul Willis and Lutfi Karuf, Partner, Best Best & Krieger, provided additional information.

Mayor Cole opened public comment. There were no speakers. Mayor Cole closed public comment.

Mayor Cole moved and Councilmember Adams seconded the motion to direct staff to mail the Notice of Public Hearing on Proposed Adjustment and increase to Town of Hillsborough 2026-2030 Water Rates using a uniform rate structure and to set the public hearing at no less than 45 days after the notice is mailed.

The motion carried by the following roll call vote:

Yes (4): Councilmember Adams, Councilmember Chuang, Vice Mayor Ragsdale, Mayor Cole
No (1): Councilmember Krolik
-69-
Unapproved Minutes – Hillsborough City Council
Monday, April 13, 2026

17. Wildfire Preparedness: Receive Work Plan for Town-wide Home Hardening Program Management Assistant Nicole De Lancie provided the staff report. Director of Building & Planning Tim Anderson and Fire Marshal Patricia Koch provided additional information.

Mayor Cole opened public comment. There were no speakers. Mayor Cole closed public comment.

On motion by Councilmember Chuang, seconded by Vice Mayor Ragsdale and unanimous on roll call vote, the City Council received the work plan for the town-wide home hardening program.

The City Council recessed at 9:36 p.m.

The City Council reconvened at 9:43 p.m. with all Councilmembers present.

XI. DISCUSSION

18. Building and Planning Department User Fee Study and Proposed Fee Schedule Management Assistant Nicole De Lancie provided the staff report. Khushboo Ingle, Vice President, Matrix Consulting Group, provided additional information.

Mayor Cole opened public comment. There were no speakers. Mayor Cole closed public comment.

Councilmembers provided comments regarding proposed ADU fee subsidies and potential consideration of not increasing the tree removal fee.

XII. CITY COUNCIL ITEMS
Councilmember Adams presented slides and announced the upcoming Earth Day event at Shoreway Environmental Center, recognized the approval of the Telecommunications Needs Assessment agreement, reported on the Underground Utilities Community Meeting, announced the upcoming HBF Celebrate May! event, reported her attendance at a Leadership Council San Mateo County Leadership program session, a meeting of the Ad Hoc Public Education and Outreach Committee on the refresh for outdoor area, a meeting of the SFO Airport/Community Roundtable on behalf of Councilmember Krolik in which Millbrae Vice Mayor Stephen Rainaldi was selected as Chair Woodside Mayor Pro Tem Paul Gould was selected as Vice, Chair, and the County of San Mateo Board of Supervisors meeting regarding the exploration of an alternate site for the Horizon facility.

Councilmember Krolik reported her attendance at a meeting of the Architecture and Design Review Board and a meeting with Hillsborough School District Board Member An Chen and Larry Raffo regarding the Crocker Middle School construction.

Vice Mayor Ragsdale reported her attendance at a California Association of Youth Commissions e-Bike Panel, announced Peninsula Clean Energy’s recognition as Best Place to Work by the San Francisco Business Journal and the Silicon Valley Business Journal, and reported her attendance at a meeting of the BAWSCA Board of Directors, the Sustainable San Mateo County Sustainability Awards and a California Association of Youth Commissions drunk driving education panel.

Mayor Cole reported her attendance at the County of San Mateo Board of Supervisors meeting regarding the Horizon facility that was proposed on El Camino in which she provided comments in her individual capacity as a physician, and encouraged residents who may have questions about the project to review the video and listen to the comments that were provided.

XIII. ADJOURNMENT
Mayor Cole adjourned the meeting at 10:31 p.m.
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
2 CONSENT CALENDAR

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Monthly Claims: April 1 through April 30, 2026 SUMMARY: The monthly claims for the month of April 2026 in the amount of $8,088,353.58 are submitted for approval.

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

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.

ATTACHMENT(S): Monthly Claims Listing
PREPARED BY: Rich Santiago, Assistant Finance Director
RECOMMENDATION: Approve the monthly claims for April 2026 as submitted. -71-
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
3 CONSENT CALENDAR

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Setting the Amount of the Special Tax for Police Protection and Fire Protection and Prevention for Fiscal Year 2026-27
SUMMARY: The special tax was approved by the residents of the Town of Hillsborough in 1998 providing a maximum charge of $570.00 for each improved parcel and $218.00 for each unimproved parcel. The maximum charge allowed by the original authorization had been assessed since fiscal year (FY) 2005-06. Annual revenues are $2,246,910.00. The proposed rates impose the maximum charges for the upcoming FY 2026-27.

FISCAL IMPACT: Annual revenues in the amount of $2,246,910.00 are included in the proposed FY 2026-27 budget (5% of General Fund revenue).

ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the 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.

ATTACHMENT(S): Resolution
PREPARED BY: Rich Santiago, Assistant Finance Director
RECOMMENDATION: Adopt the resolution setting the amount of special tax for police protection and fire protection and prevention for Fiscal Year 2026-27. -78-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

SETTING THE AMOUNT OF THE SPECIAL TAX FOR POLICE PROTECTION AND FIRE PROTECTION AND PREVENTION FOR FISCAL YEAR 2026-27
WHEREAS, Chapter 3.30 of the Hillsborough Municipal Code, Special Tax for Police Protection and Fire Protection and Prevention (“Public Safety Tax”), was approved by the voters on June 2, 1998; and

WHEREAS, Section 3.30.040 of the Hillsborough Municipal Code provides for a two percent (2%) increase each year but a not-to-exceed total annual tax of one hundred fifteen percent (115%) of the initial maximum tax.

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

1. Hereby finds that the full amount of the fiscal year (FY) 2026-27 Public Safety Tax ($570.00 for each improved parcel and $218.00 for each unimproved parcel – the maximum amounts allowed) is required to meet the projected expenditures of the Town for police protection and fire protection and prevention services for FY 2026-

27. 2. Hereby determines that the Public Safety Tax applicable for FY 2026-27 shall be as follows:

For each improved parcel: $570.00
For each unimproved parcel: $218.00

3. This resolution shall be printed and posted upon the three official bulletin boards of the Town of Hillsborough.

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 11th day of May 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
4 CONSENT CALENDAR

CITY COUNCIL MEETING
MAY 11, 2026

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

Attachment 2 includes advocacy letters submitted by the Town since the April 13, 2026 City Council meeting.

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

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.

ATTACHMENT(S):

1. April 2026 CPPG Legislative Summary

2. Advocacy Letters Submitted Since April 13, 2026 City Council Meeting PREPARED BY: Lisa Natusch, City Clerk
RECOMMENDATION: Receive the April 2026 Legislative Update. -80-
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 1 Date: May 5, 2026
To: Doug Davis, City Manager
Town of Hillsborough
From: Dane Hutchings
Founder + CEO
California Public Policy Group
Re: CPPG Legislative Summary: April 2026

LEGISLATIVE UPDATE
Policy Committees Accelerate After Spring Break
April has been an especially active month at the Legislature, with packed agendas, lengthy hearings, and a steady flow of amendments as nearly 1,800 bills introduced between early January and late February move through the process. April 24 marked the deadline for all bills designated as fiscal— those identified as potentially having a state fiscal impact—to be heard in policy committees. Once fiscal bills clear policy committees, they are referred to their respective Appropriations Committees for fiscal review. Measures determined to have minimal fiscal impact may be released, while those with more significant costs are placed on the Suspense File.

Both Appropriations Committees will take up Suspense File bills in mid-May, where measures may be held (ending their advancement), approved without changes, or approved with technical or substantive amendments. If a bill is approved by its fiscal committee, it then moves to the Floor of its house of origin, where it must pass by May 29 in order to advance to the second house.

As of May 5, approximately 1,780 bills—including two-year measures carried over from 2025— remain active in the Legislature.

Board of Forestry Holds Meeting and Releases Latest Draft of Regulations for Zone 0 The California Board of Forestry and Fire Protection held a Zone 0 Advisory Committee meeting on April 23, releasing the latest draft of its long-awaited defensible space regulations. The Board’s proposal establishes a stricter “Safety Zone” within one foot of a home, requiring the removal of all combustible vegetation, while allowing some low-growing plants in the remainder of the five-foot “Zone 0” area. The draft prioritizes education and outreach over enforcement and reflects a phased, flexible approach for local implementation. The requirements would apply only to properties located in high fire-risk zones. If adopted, homeowners would have three years to comply with landscaping requirements and up to five years to complete more substantial changes, such as removing combustible fencing. New construction would be required to comply immediately upon completion.

The Board is continuing to solicit public input before advancing a recommendation to the full Board for final consideration, with the goal of adopting the regulations by the end of the year.

Budget Update
In mid-April, Governor Gavin Newsom told Assembly Democrats in a closed-door caucus meeting that additional budget cuts are likely to be included in the 2026-27 May Revision, set for release on May 14. Despite stronger-than-expected revenues, the Governor indicated he still intends to reduce ATTACHMENT 1
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1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 2 spending to place California’s finances on more stable footing for the next administration and Legislature. Some lawmakers, however, have suggested the impact of cuts could be mitigated by closing tax loopholes—an approach supported by some Democrats. These discussions come as the Legislative Analyst’s Office (LAO) projects in a report that the state’s structural deficit could reach $35 billion annually beginning in 2027-28.

High Speed Rail Authority Tax Increment Financing Proposal The California High-Speed Rail Authority continues to advocate for inclusion of a proposal in this year’s budget that would allow it to cap and capture property and sales tax revenues and exercise land-use authority within a half-mile of high-speed rail stations. These revenues would support rail construction and operations through state-administered Tax Increment Financing districts. Local government associations are coordinating in opposition to the proposal.

A local government opposition letter can be found here.

More information on the proposal can be found here and here.

CARB Cap-and-Invest Regulation Proposal
The California Air Resources Board (CARB) extended the public comment deadline for the Proposed Amendments to the Regulation for the California Cap on Greenhouse Gas Emissions and MarketBased Compliance Mechanism (known as the Cap-and-Invest Regulation) to May 4, 2026. This extension responds to a joint request from the Chairs of the Senate Environmental Quality Committee and Senate Budget Subcommittee No. 2 on Resources, Environmental Protection, and Energy. CARB has also extended the comment period to the same date for proposed amendments to the Mandatory Reporting of Greenhouse Gas Emissions (MRR) regulation, given its close connection to the Cap-and-Invest program. Both sets of proposed amendments, originally released on January 20, 2026, are scheduled to be considered by the Board on May 28, 2026. 2026 ELECTIONS UPDATE
Governor’s Race
On April 20, former State Controller Betty Yee withdrew from the 2026 gubernatorial race, narrowing an already competitive field. The race remains fluid, with several candidates participating in early debates that have begun to draw clearer contrasts on policy and leadership priorities. Former U.S.

Secretary of Health and Human Services Xavier Becerra appears to be gaining momentum, benefiting from increased visibility and growing support among key constituencies. Despite these developments, the race remains wide open, with no clear frontrunner and significant opportunity for shifts as fundraising, endorsements, and voter engagement continue to evolve.

Measures Placed on the Ballot by the Legislature
There are currently three statewide measures on the 2026 ballot that were placed there by the Legislature. ACA 13 (Ward, 2023) would change how voter approval thresholds are increased by requiring that any initiative seeking to raise those thresholds be approved by voters at the same higher level. SCA 1 (Newman, 2024) would modify California’s recall process by eliminating the automatic successor election for statewide offices, instead requiring a separate special election to fill the vacancy and allowing the recalled official to run. SB 42 (Umberg, 2025) would permit candidates to voluntarily participate in a public campaign financing system under specified conditions.
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1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 3 Measures Placed on the Ballot by the Signature-Gathering Process Two statewide measures have qualified for the 2026 ballot through the signature-gathering process.

Although they are slated to appear on the November ballot, proponents may withdraw them by June 25 if the Legislature takes action that satisfies their concerns. After that deadline, the Secretary of State begins preparing official election materials.

Howard Jarvis Measure: On April 16, the Secretary of State announced that a measure sponsored by the Howard Jarvis Taxpayers Association qualified has qualified for the 2026 November ballot. If approved by voters, this measure would retroactively repeal certain local tax increases, eliminate real estate transfer taxes, and make it more difficult for cities and counties to pass new tax measures. The Legislative Analyst’s Office (LAO) estimates that local governments could lose up to several billion dollars annually, with the greatest impact on certain charter cities. The measure could also constrain future local revenues by raising voter approval thresholds for some taxes and restricting the types of taxes local governments are allowed to enact.

Loan Program for Homebuyers Bond Measure: On April 21, the Secretary of State announced that an initiative authorizing up to $25 billion in bonds to provide eligible homebuyers with fixed-rate mortgages—covering up to 17% of the purchase price of a qualifying new home—has qualified for the November 2026 ballot. Eligible properties would include newly constructed homes or the first sale of converted nonresidential buildings, with price caps generally ranging from about $1 million to $1.5 million depending on the county and adjusted annually. To qualify, borrowers would need to have lived in California for at least one year, intend to occupy the home, earn no more than 200% of the area median income, and provide a minimum down payment of 3%.

Voter ID Measure: On April 24, the Secretary of State announced that a measure to establish additional voter identification and citizenship verification requirements has qualified for the November 2026 ballot. If approved by voters, the measure would require individuals to present a government-issued ID in order to vote. Under current law, voters are required to provide an ID and Social Security number when registering to vote. The primary proponent of the measure is Assemblymember Carl DeMaio (R-San Diego).

Measures Not Yet Officially Qualified for the Ballot
California Billionaire Tax Act: This proposed initiative would impose a one-time 5% tax on the net worth of individuals and trusts exceeding $1 billion, with the goal of raising roughly $100 billion for health care, education, and food assistance programs.

Tax on High Earners: This measure would extend existing high-income tax rates beyond their current 2031 expiration date. It would apply to individuals earning more than $250,000 annually and is projected to generate between $5 billion and $15 billion per year, with about 40% of the revenue dedicated to schools and community colleges.

Building an Affordable California Act: Backed by the California Chamber of Commerce, this initiative would reform the California Environmental Quality Act (CEQA) to accelerate housing, water, and energy projects by streamlining environmental review processes and limiting litigationrelated delays. -83-
1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 4 The Transparency Act: This proposal would revise how California adopts new taxes and manages state spending. Widely seen as a countermeasure to the billionaire wealth tax, it would increase audit and oversight requirements and mandate that excess tax revenues be returned to taxpayers.

ACTIVE POSITIONED BILLS
• AB 1337 (Ward) Information Practices Act of 1977.
o Location: Senate Rules
o Position: Oppose
• AB 1557 (Papan) Vehicles: electric bicycles.
o Location: Assembly Appropriations
o Position: Support
• AB 1569 (Davies) Pupil safety: electric bicycle: safety and training program. o Location: Assembly Appropriations
o Position: Support
• AB 1614 (Dixon) Vehicles: bicycles.
o Location: Assembly Third Reading
o Position: Support
• AB 1621 (Wilson) Planning and Zoning Law: postentitlement phase permits: Housing Accountability Act.
o Location: Senate Rules
o Position: Watch
• AB 1761 (Rogers) Electricity: calculation methodology: data disclosure. o Location: Assembly Appr. Suspense File
o Position: Support
• AB 1903 (Wicks) Construction defects.
o Location: Assembly Appropriations
o Position: Watch
• AB 1942 (Bauer-Kahan) Electric bicycles: registration and special license plates. o Location: Assembly Appropriations
o Position: Support
• AB 2111 (Papan) Electricity: transmission planning and transmission facilities. o Location: Assembly Appropriations
o Position: Support
• AB 2180 (Ward) Local government: Proposition 218 Omnibus Implementation Act:
proportional cost of service.
o Location: Senate Rules
o Position: Support
• AB 2296 (Papan) Planning and zoning: housing element: regional housing needs allocation. o Location: Assembly Appropriations
o Position: Support
• AB 2433 (Alvarez) Housing development: density bonus. o Location: Assembly Appropriations
o Position: Watch
• AB 2595 (Papan) Vehicles: electric bicycles.
o Location: Assembly Third Reading
o Position: Support
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1127 11TH STREET, SUITE 300, SACRAMENTO, CA 95814 • 916.974.9270 • PUBLICPOLICYGROUP.COM PAGE 5 • SB 968 (Becker) Community colleges: San Mateo County Community College District. o Location: Assembly Higher Education
o Position: Support
• SB 1138 (Padilla) Load-serving entities: resource adequacy requirements. o Location: Senate Appr. Suspense File
o Position: Support

LOOKING FORWARD
• 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 -85-

TOWN OF HILLSBOROUGH
California
Town Hall
Phone: 650-375-7400 | Fax: 650-375-7475 | 1600 Floribunda Avenue, Hillsborough, CA 94010 | www.hillsborough.net April 17, 2026
The Honorable Christopher Ward
California State Assembly
1021 O Street, Room 6350
Sacramento, CA 95814
Re: Assembly Bill 2180—Local government: Proposition 218 Omnibus Implementation Act:
proportional cost of service—SUPPORT (As Amended March 11, 2026) Dear Assemblymember Ward:

On behalf of the Town of Hillsborough, I am writing in support of Assembly Bill (AB) 2180, which would provide essential statutory clarity regarding the standard local agencies must meet to demonstrate that fees and charges for water and sewer service satisfy the proportional cost of service requirement imposed by Article XIII D of the California Constitution, commonly known as Proposition 218. The Town believes this bill is critically important to the fiscal stability and operational effectiveness of local water and sewer agencies throughout the state, and directly advances the Town's interest in preserving local control over utility rate setting.

The Town has a direct and significant interest in the ability of local agencies to set utility rates in a transparent, legally defensible, and operationally practical manner. For many years, water and sewer agencies in California have operated under substantial legal uncertainty regarding precisely what Proposition 218 requires them to demonstrate when establishing rates. That uncertainty has generated a wave of litigation against local agencies, with plaintiffs arguing that the constitutional standard demands a level of cost-measurement precision at the individual parcel level that is technically infeasible and administratively unworkable. The costs of defending these lawsuits, and of restructuring rate systems in response to adverse judgments, have fallen ultimately on ratepayers and have diverted agency resources from infrastructure investment, maintenance, and long-term planning. AB 2180 would resolve this uncertainty by affirming in statute that an agency may demonstrate proportional cost of service through any method that reasonably allocates the ascertainable cost of providing service to all parcels, substantiated by existing, estimated, or projected data that reasonably captures the cost of the service to be provided. This is a workable, principled standard that reflects the realities of how water and sewer systems actually operate.

Of particular importance to the Town is the bill's treatment of tiered water rates. The Town operates a municipal water system, where it provides water service to a primarily single-family residential customer base.

Customer usage patterns vary significantly amongst customers, and the Town must build, operate, and maintain its water system in order to ensure it can meet the demand placed by its highest water users. Tiered rate structures are an effective way of allocating costs for infrastructure based on relative demands on the system, in line with Proposition 218’s core purposes. These structures have been widely adopted across California. However, they have also been the subject of legal challenges, where plaintiffs have argued that public agencies must allocate costs with absolute precision in order to support tiered rates - a standard that is -86-
ATTACHMENT 2
April 17, 2026
Town of Hillsborough – Support for AB 2180

difficult to meet and that does not correspond to the way water system costs are actually incurred and allocated.

AB 2180 would affirm that agencies are not required to provide an exact measure of cost at each individual parcel, and that tiered rates may be applied to customer classes defined by common characteristics indicative of likely use, including the nature and size of improvements to a parcel, land use, meter size, and peak use characteristics. The bill further enumerates a range of legitimate cost factors that may be used to substantiate the proportional cost of service within each tier, including the cost of water from various sources, facilities operation and construction costs, contribution to systemwide peak demand, and incremental costs associated with conservation or demand management measures.

Equally important is the bill's provision granting agencies discretion to determine the service costs allocated to each tier, with the requirement that the rate for each tier not exceed the proportional cost of service reasonably allocated to parcels subject to that tier. This standard is faithful to the constitutional requirement while acknowledging that rate design necessarily involves policy judgments and reasonable allocations, not mathematical precision. It provides a defensible legal framework within which agencies can design rates that are fair, transparent, and supportive of proportionate cost allocation without exposing themselves to litigation based on impossibly exacting cost-accounting demands.

For these reasons, we are pleased to support AB 2180 and thank you for your leadership on this most important issue. Should you have any questions, please contact our legislative advocate Dane Hutchings with California Public Policy Group at 916-974-9270.

Sincerely,
Dr. Sophie Cole
Mayor

CC: Members and Staff of the Senate Rules Committee
The Honorable Josh Becker, Senate District 13
The Honorable Diane Papan, Assembly District 21
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TOWN OF HILLSBOROUGH
California
Town Hall
Phone: 650-375-7400 | Fax: 650-375-7475 | 1600 Floribunda Avenue, Hillsborough, CA 94010 | www.hillsborough.net April 21, 2026
The Honorable Diane Papan
California State Assembly
1021 O Street, Room 4220
Sacramento, CA 95814
Re: Assembly Bill 1557—Vehicles: electric bicycles—SUPPORT (As amended April 16, 2026) Dear Assemblymember Papan:

On behalf of The Town of Hillsborough, I am writing in support of Assembly Bill (AB) 1557. The Town has experienced a noticeable increase in electric bicycles being operated on local streets at dangerous speeds, creating serious safety concerns for pedestrians, motorists, and riders, particularly in areas where families, children, and older adults walk and travel. The April 16 amendments substantially strengthen the bill and directly address the safety concerns the Town identified in its prior support.

The original bill provided an important fix by clarifying that the 750-watt restriction applies to a motor's maximum peak power output, closing the loophole exploited by manufacturers and online sellers who market high-powered devices as compliant e-bikes. The April 16 amendments build meaningfully on that foundation in three important ways.

First, the bill now lowers the assisted speed threshold for Class 1 and Class 2 electric bicycles from 20 to 16 miles per hour. This change better reflects how these devices are used in residential communities like Hillsborough, where shared streets are used by walkers, children, and cyclists of all ages. Lower assisted speed thresholds for the most common classes of e-bikes will reduce the frequency and severity of speed-related incidents in neighborhood settings.

Second, the bill establishes enforceable manufacturer and retailer standards, prohibiting manufacturers from equipping and retailers from selling or advertising Class 1 or Class 2 electric bicycles with motors capable of exceeding 250 watts of continuous power or providing assistance to speeds above 16 miles per hour. Civil penalties of up to $15,000 for a first violation and up to $50,000 for subsequent violations, enforceable by the Attorney General, city attorneys, county counsel, or district attorneys, create real accountability in the supply chain. The Town strongly supports legislation that strengthens local law enforcement's practical ability to address the root causes of unsafe e-bike use, and these upstream manufacturer and retailer obligations are a meaningful complement to local enforcement tools.

Third, the bill expands age restrictions by prohibiting any person under 16 from operating an electric bicycle with a motor capable of exceeding 250 watts of continuous power and authorizes peace officers to remove such bicycles when operated in violation. Agencies may condition release on proof that the violator has completed an approved electric bicycle safety and training program. These provisions reflect a practical, graduated approach to protecting younger riders while preserving access to appropriately powered devices. -88-
April 21, 2026
Town of Hillsborough – Support for AB 1557

The Town also appreciates the bill's provisions addressing cargo electric bicycles and the grandfathering of ebikes manufactured prior to January 1, 2027, both of which reflect pragmatic recognition of current market conditions.

For these reasons, we are pleased to support AB 1557 and thank you for your continued leadership on this important public safety issue. Should you have any questions, please contact our legislative advocate Dane Hutchings with California Public Policy Group at (916) 230-6935.

Sincerely,
Dr. Sophie Cole
Mayor

CC: Members and Staff of the Assembly Transportation Committee The Honorable Josh Becker, Senate District 13
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TOWN OF HILLSBOROUGH
California
Town Hall
Phone: 650-375-7400 | Fax: 650-375-7475 | 1600 Floribunda Avenue, Hillsborough, CA 94010 | www.hillsborough.net April 21, 2026
The Honorable Diane Papan
California State Assembly
1021 O Street, Room 4220
Sacramento, CA 95814
Re: Assembly Bill 2296—Planning and zoning: housing element: regional housing needs allocation—SUPPORT (As Amended April 16, 2026)
Dear Assemblymember Papan:

On behalf of the Town of Hillsborough, I am writing in support of Assembly Bill (AB) 2296, which makes meaningful procedural improvements to the Regional Housing Needs Allocation process and strengthens the accountability and transparency of the Department of Housing and Community Development's (“HCD”) housing element review. These reforms will benefit local governments across California that are working in good faith to comply with housing element law while managing the practical constraints of local planning capacity.

The Town continues to strongly support the bill's extension of key planning timelines. AB 2296 extends the window for forming subregional entities from 28 to 34 months prior to a scheduled housing element update, and the deadline for councils of governments to determine each subregion's share of regional housing need from 25 to 31 months. The April 16 amendments also extend the methodology development timeline to at least two and a half years before a scheduled revision, and the draft allocation distribution deadline to at least two years before the scheduled revision.

For a town like Hillsborough with limited planning staff, these extended timelines are not merely procedural adjustments – they are critical to producing accurate, implementable housing elements. Housing element planning is among the most complex and resource-intensive obligations placed on local governments by state law, requiring extensive data analysis, meaningful community engagement, detailed site evaluation, and coordination with regional agencies. More time to complete this work results in more thorough and effective housing elements, while compressed timelines can contribute to extended review processes and delays in certification. Providing additional time upfront improves the quality of initial submittals, reduces iterative revisions, and allows jurisdictions to move more quickly into implementation of housing programs. The Town also appreciates the continued exemption for councils of governments with housing element revision due dates during the 2027 calendar year.

The Town strongly supports the bill's reforms to HCD's review and feedback obligations. Requiring the department to identify specific deficiencies, reference the applicable subdivisions of Government Code Section 65583, and provide the specific analysis or text needed to bring a draft element into compliance is a critical improvement. The April 16 amendments clarify that when a local government responds to HCD's findings by making changes to a draft element, HCD must review those changes and report its written findings within 30 -90-
April 21, 2026
Town of Hillsborough – Support for AB 2296

days. Together, these changes create a clearer, more predictable feedback loop and provide local governments with actionable direction, reducing the need for multiple rounds of revision and helping to avoid delays in certification. In the absence of this level of specificity, jurisdictions have historically received findings of noncompliance that identify issues in general terms without providing clear, actionable direction on how to resolve them, leaving planning agencies uncertain about how to achieve compliance and resulting in prolonged review cycles and inefficient use of staff resources on both sides. These reforms directly address that dynamic and reflect the collaborative, transparent process the Town supports.

The Town supports measures that meet the state's planning goals while maintaining local control and ensuring that communities evolve in a manner that reflects the will of residents and protects public health, safety, and welfare. AB 2296 embodies that collaborative approach and represents a meaningful step toward a housing element process that works better for local governments and the state alike.

For these reasons, we are pleased to support AB 2296 and thank you for your leadership on this most important issue. Should you have any questions, please contact our legislative advocate Dane Hutchings with California Public Policy Group at 916-974-9270.

Sincerely,
Dr. Sophie Cole
Mayor

CC: Members and Staff of the Senate Rules Committee
The Honorable Josh Becker, Senate District 13
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TOWN OF HILLSBOROUGH
California
Town Hall
Phone: 650-375-7400 | Fax: 650-375-7475 | 1600 Floribunda Avenue, Hillsborough, CA 94010 | www.hillsborough.net April 22, 2026
The Honorable Assemblymember Davies
California State Assembly
1021 O Street, Room 4720
Sacramento, CA 95814
Re: Assembly Bill 1569— Pupil safety: electric bicycle parking: safety program—SUPPORT (As Amended April 13, 2026)
Dear Assemblymember Davies:

On behalf of the Town of Hillsborough, I am writing to express our strong support for Assembly Bill (AB) 1569. This bill would require the State Department of Education (“Department”), in consultation with the California Highway Patrol (“CHP”), to develop a standardized electric bicycle safety and training program for pupils in grades 7 through 12. Hillsborough, like many communities throughout California, is experiencing an increase in electric bicycle use, including among school-aged riders. While e-bikes can provide a valuable transportation option, the Town is increasingly concerned about unsafe operation and particularly high speeds and risky riding behaviors that put students, pedestrians, and other roadway users in danger.

As amended, AB 1569 directs the State Department of Education, in consultation with the California Highway Patrol, to develop by March 1, 2028, a standardized electric bicycle safety and training program for pupils in grades 7 through 12. The program would include an online component with instructional videos and a comprehensive knowledge assessment covering the rules of the road, differences between e-bike classes, required safety equipment, and the civil and criminal implications of operating noncompliant e-bikes that exceed legal speed limits. In developing the program, the Department and CHP may collaborate with local law enforcement agencies and local governments that have already implemented e-bike training programs to ensure the curriculum reflects proven best practices. Local educational agencies and parent organizations are also encouraged to partner with local law enforcement or local governments to offer hands-on training demonstrations to students and parents covering safe mounting, braking, signaling, yielding, and riding protocols.

The Town of Hillsborough supports AB 1569 because it advances a consistent, statewide foundation for e-bike safety education that local efforts can build upon. By establishing a standardized curriculum developed in consultation with the CHP and informed by programs already working at the local level, the bill helps ensure that young riders across California have access to quality safety instruction. This education-first approach complements local enforcement efforts and reflects the kind of upstream intervention that can prevent collisions and injuries before they occur.

For these reasons, we are pleased to support AB 1569 and thank you for your leadership on this most important issue. Should you have any questions, please contact our legislative advocate Dane Hutchings with California Public Policy Group at (916) 230-6935.
-92-
April 22, 2026
Town of Hillsborough – Support for AB 1569

Sincerely,
Dr. Sophie Cole
Mayor

CC: Members and Staff of the Assembly Transportation Committee The Honorable Josh Becker, Senate District 13
The Honorable Diane Papan, Assembly District 21
-93-

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

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Approving and Authorizing the City Manager to Execute a Third Amendment to the Existing Agreement with Tetra Tech, Inc. for As-Needed Supervisory Control and Data Acquisition (SCADA) System Professional Services in the Amount of $135,000.00, for a Total Not-to-Exceed Budget of $490,000.00, Under CEQA Guideline 15301 SUMMARY: The Town of Hillsborough’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 four sanitary sewer pump stations.

The City Council previously authorized an agreement with Tesco Controls, Inc. (“Tesco”) to make necessary SCADA system improvements. Due to internal staffing issues, Tesco was only able to complete approximately half of the approved scope before the contract expired.

The Town sought a new SCADA support services agreement through the Request for Proposals process. On June 10, 2024, City Council authorized an agreement with Tetra Tech, Inc. (“Tetra Tech”) in the amount of $120,000. The Town worked closely with Tetra Tech to complete some of the originally identified improvements not completed under the Tesco contract.

On November 12, 2024, the City Council authorized an amendment to complete the remaining necessary improvements in the amount of $135,000.

On August 14, 2025, the City Council authorized a second amendment to Tetra Tech’s agreement in the amount of $100,000.00 to support both capital improvement program, operations and regular maintenance support.

Tetra Tech has successfully provided SCADA support services for the existing two-year contract term, which expires June 30, 2026. Staff recommends extending the contract for an additional year through June 30, 2027 for continued capital improvement program and operations and maintenance support in the amount of $135,000.

FISCAL IMPACT: These as needed SCADA support services would support the ongoing maintenance and functionality of the Town’s SCADA System and Capital Improvement Program.

No funding is allocated as part of this agenda item. This agenda item authorizes the City Manager to approve and allocate up to $135,000 for SCADA support services to Tetra Tech through task orders, for a total not-to-exceed budget of $490,000. Upon authorization, funding would be allocated from the Water and Sewer Divisions Operations budget and Capital Improvement budget.
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Agenda Staff Report – Hillsborough City Council
May 11, 2026

ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review under the California Environmental Quality Act (CEQA) Guidelines Section 15301 (Existing Facilities), as it involves the continued operation, maintenance, and minor alteration of existing public facilities with no expansion of use beyond that previously existing.

ATTACHMENT(S):

1. Resolution

2. Professional Services Agreement Amendment No. 3
PREPARED BY: Natalie Gribben, Deputy Director of Public Works RECOMMENDATION: Adopt the Resolution Approving and Authorizing the City Manager to Execute a Third Amendment to the Existing Agreement with Tetra Tech, Inc. for As-Needed Supervisory Control and Data Acquisition (SCADA) System Professional Services in the Amount of $135,000.00, for a total Not-To-Exceed Budget of $490,000.00, under CEQA Guideline 15301. -95-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE A THIRD AMENDMENT TO THE EXISTING AGREEMENT WITH TETRA TECH, INC. FOR ASNEEDED SUPERVISORY CONTROL AND DATA ACQUISITION (SCADA) SYSTEM PROFESSIONAL SERVICES IN THE AMOUNT OF $135,000.00, FOR A TOTAL NOTTO-EXCEED BUDGET OF $490,000.00, UNDER CEQA GUIDELINE 15301 WHEREAS, the Town of Hillsborough (“Town”) owns and operates a Supervisory Control and Data Acquisition (SCADA) System; and
WHEREAS, the SCADA system allows the Town to monitor and control its water tank facilities and pump stations; and
WHEREAS, the SCADA system also allows the Town to monitor and control its sanitary sewer lift stations; and
WHEREAS, in 2020 as part of a Townwide SCADA system assessment, certain necessary SCADA system improvements were identified; and WHEREAS, on June 10, 2024, the City Council authorized an agreement for asneeded SCADA professional services to Tetra Tech, Inc. (“Tetra Tech”) in the amount of $120,000.00 to complete some of the improvements; and WHEREAS, on November 12, 2024, the City Council authorized an amendment to complete the remaining necessary improvements in the amount of $135,000; and
WHEREAS, on August 14, 2025, the City Council amended the agreement a second time to support the Town’s Capital Improvement Program’s future SCADA needs in the amount of $100,000; and
WHEREAS, Tetra Tech has successfully supported the Town in its SCADA needs for two years, and its contract is expiring on June 30, 2026; and WHEREAS, the Town desires to amend the agreement a third time to provide continued capital improvement and operations and maintenance SCADA support services in the amount of $135,000 and to extend the contract another year through June 30, 2027; and
WHEREAS, funding will be allocated from the approved Capital Improvement Program budget and Water and Sewer Division Operations budgets.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby approves and authorizes the City Manager to execute a third amendment to the existing agreement with Tetra Tech, Inc. for as-needed Supervisory Control and Data Acquisition (SCADA) system professional services in the amount of -96-
ATTACHMENT 1
Resolution No. 26-
May 11, 2026
2 $135,000.00, for a total not-to-exceed budget of $490,000.00 under CEQA Guideline 15301.

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 11th day of May 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
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AMENDMENT NO. 3 TO THE PROFESSIONAL SERVICES AGREEMENT WITH TETRA TECH INC.

This Third Amendment (“Amendment No. 3”) is made and entered into as of ______________, 2026, (“Effective Date”) by and between the Town of Hillsborough (“Town”), and Tetra Tech, Inc., a Corporation, with its principal place of business at 3475 E. Foothill Boulevard, Pasadena, CA 91107 (hereinafter referred to as “Consultant”). Town and Consultant are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.

RECITALS
A. The Town and the Consultant previously entered into an Agreement for “SUPERVISORY

CONTROL AND DATA ACQUISITION (SCADA) SYSTEM PROFESSIONAL SUPPORT SERVICES” dated July 1, 2024 (the “Agreement”); and
B. The Town and the Consultant amended said Agreement on June 5, 2025 to modify the compensation for a total not to exceed project amount of $255,000.

C. The Town and the Consultant amended said Agreement a second time on June 19, 2025 to modify the compensation for a total not to exceed project amount of $355,000.

D. The Town and the Consultant desire to amend said Agreement a third time to modify the compensation and term for the project.

NOW, THEREFORE, for and in consideration of the mutual covenants and conditions set forth herein , and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree to amend the Agreement as follows:

1. Recitals. The above referenced recital paragraphs are incorporated into this Amendment No. 3 as if fully set forth herein.

2. Section 2.b. (Compensation), is hereby amended in its entirety to read as follows:
“b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum of Four Hundred Ninety Thousand Dollars and Zero Cents ($490,000.00). Periodic payments shall be made within 30 days of receipt of an invoice which includes a -98-
ATTACHMENT 2

detailed description of the work performed. Payments to Consultant for work performed will be made on a monthly billing basis.”

3. Section 5. (Term), is hereby amended in its entirety to read as follows:

5. Term. The term of this Agreement shall be from July 1, 2024 to June 30, 2027 unless earlier terminated as provided herein. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Project. Consultant shall perform its services in a prompt and timely manner within the term of this Agreement and shall commence performance upon receipt of written notice from the Town to proceed (“Notice to Proceed”). The Notice to Proceed shall set forth the date of commencement of work.

4. Continuing Effect of Agreement. Except as amended by this Amendment No. 3, all other provisions of the Agreement not amended by this Amendment No. 3 shall remain in full force and effect.

From and after the Effective Date of this Amendment No. 3, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by Amendment No. 1, Amendment No. 2, and this Amendment No. 3.

5. Severability. If any portion of this Amendment No. 3 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

6. Integration. This Amendment No. 3 represents the entirety of the Parties’ understanding to the subject of this Amendment, including written or verbal communications between the Parties, which shall have no relevance unless expressly incorporated herein. This is an integrated amendment. -99-

SIGNATURE PAGE FOR AMENDMENT NO. 3 TO THE PROFESSIONAL SERVICES

AGREEMENT BETWEEN THE TOWN OF HILLSBOROUGH
AND TETRA TECH, INC.

IN WITNESS WHEREOF, the Parties have executed this as of the date first written above.

TOWN OF HILLSBOROUGH
By: Doug Davis
___________________________
City Manager
Approved as to form:
___________________________
City Attorney
TETRA TECH, INC.

By: ___________________________
Title: ___________________________
By: ___________________________
Title: ___________________________
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TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
6 PUBLIC HEARING

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Authorizing the Five-Year Rate Series for Sewer Service Charges for a Five-Year Period Effective July 1, 2026
SUMMARY: The Town of Hillsborough (Town) undertook a sewer rate study to determine the rates necessary to fund the revenue requirement for the sewer fund for the next five years, beginning July 1, 2026. The Sewer Rate Cost of Service analysis and proposed rates were reviewed and presented to City Council at a public study session on February 9, 2026. At the March 9, 2026 City Council meeting, the City Council accepted the Sewer Rate Study report and authorized implementation of the recommendations.

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.

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 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. -101-
Agenda Staff Report – Hillsborough City Council
May 11, 2026

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.

Cost of Service Study
HF&H performed a cost of service and rate study (the “Study”) for the Town of Hillsborough with projections for the cost of service and revenue requirements for the rate years effective July 2026 through 2030. The study indicates an overall revenue requirement increase ranging from 2% to 3% over the five-year period. The prior five-year sewer rate series had annual increases of 4%.

The Study develops the cost and rate to collect and treat wastewater on a per Single Dwelling Equivalent. Residential indoor water use has declined, which shifts costs from residential to the commercial class. Based on recent data collected, the Single-Family Dwelling Equivalent (SFDE) is 78 hundred cubic feet (HCF) per year, whereas in the previous study, the amount was 144 HCF per year. Commercial uses this SFDE for the sewer calculation, and the calculated property wastewater discharge varies by commercial property. As such, commercial charges reflect each customer’s calculated discharge compared to the SFDE.

Process for Implementation
The adoption of any new or increases in any existing sewer charges are subject to the public hearing, notice and majority protest requirements of Proposition 218. At the March 9, 2026 meeting, City Council accepted the Proposition 218 process which outlines the procedures the City Council will follow for providing the notice and receiving and tabulating written protest to any property-related fees and charges it is proposing to consider adopting. In accordance with Proposition 218, the Town mailed a notice of a public hearing to be held on May 11, 2026, to consider the adoption of the proposed increase to its sewer charges. The notice was mailed to property owners and account holders directly responsible for the payment of sewer charges. The information on the number of written protests to the proposed rates received by the Town will be presented by the City Clerk at the conclusion of the public hearing.

FISCAL IMPACT: Sewer service costs in Hillsborough are covered by the sewer rate paid by residential and commercial accounts. The costs of these services are not paid for by the Town’s General Fund budget.

ENVIRONMENTAL ISSUES: In accordance with the California Environmental Quality Act (CEQA) and the CEQA Guidelines, the increases in the solid waste service charges are exempt from CEQA pursuant to Section 15378 and Section 15273 of the CEQA Guidelines and Public Resources Code Section 21080(b0(8) because (a) the increase charges are for the purpose of -102-
Agenda Staff Report – Hillsborough City Council
May 11, 2026

meeting operational and maintenance expenses of the aforementioned services and (ii) the charges constitute the creation of a funding mechanism/other governmental fiscal activity which does not involve any commitment to any specific project that may result in potential significant physical impact on the environment.

ATTACHMENT(S):

1. Resolution

2. HF&H Sewer Rate Study Report
PREPARED BY: Rich Santiago, Assistant Finance Director
RECOMMENDATION:

1. Open the public hearing and receive comments;

2. Close the public hearing;

3. Acknowledge information on protests received and presented by the City Clerk at the conclusion of the public hearing;

4. If a majority protest does not exist, adopt the resolution authorizing the five-year rate series for sewer service charges for a five-year period effective July 1, 2026. -103-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

AUTHORIZING THE FIVE-YEAR RATE SERIES FOR SEWER SERVICE CHARGES FOR A FIVE-YEAR PERIOD EFFECTIVE JULY 1, 2026
WHEREAS, the Town of Hillsborough (“Town”) provides wastewater service to properties within the Town’s service area, and is authorized under Health and Safety Code section 5471 et seq. as well as other applicable law to impose fees and charges for such service; and
WHEREAS, the Town retained an independent consultant to conduct a cost of service analysis and rate study for the Town’s sewer service, and based on such analysis and study, the Town has determined that it is necessary to increase the rates for sewer service charges within the Town, effective July 1, 2026; and
WHEREAS, the Town’s sewer service charges consist of an annual flat charge, which is uniform amongst all customers and measured in Equivalent Dwelling Units (“EDUs”), with each residential customer equaling one EDU and each commercial customer charged based on annualized indoor water use, with 78 hundred cubic feet (“HCF”) equal to one EDU; and WHEREAS, the revenues derived from the sewer service charges will not exceed the funds required to provide the services and shall be used exclusively for the operation and maintenance of the wastewater system; and WHEREAS, the sewer service are equitable to all customer classes; and WHEREAS, the amount of the sewer service charges will not exceed the proportional cost of the service attributable to each parcel upon which they are proposed for imposition; and
WHEREAS, the sewer service charges will not be imposed on a parcel unless the service is actually used by, or immediately available to, the owner of the parcel; and
WHEREAS, article XIII D, section 6 of the California Constitution (“Article XIII D”) requires that prior to imposing any increase to the sewer service charges, the Town shall provide written notice (the “Notice”) by mail of the new or increased sewer service charges to the record owner of each parcel upon which the sewer service charges are proposed for imposition and any tenant directly liable for payment of the sewer service charges, the amount of the sewer service charges proposed to be imposed on each parcel, the basis upon which the sewer service charges were calculated, the reason for the sewer service charges, and the date, time, and location of a public hearing (the “Hearing”) on the proposed sewer service charges; and -104-
ATTACHMENT 1
Resolution No. 26-
May 11, 2026
2 WHEREAS, pursuant to Article XIII D such Notice is required to be provided to the affected property owners and any tenant directly liable for the payment of the sewer service charges not less than forty-five days prior to the Hearing on the proposed sewer service charges; and
WHEREAS, the Town did provide such Notice to the affected property owners and tenants in compliance with Article XIII D; and
WHEREAS, on May 11, 2026, the City Council conducted a public hearing in accordance with Proposition 218 and determined that a majority protest did not exist, and that the proposed five-year sewer rate series could be implemented; and
WHEREAS, the City Council wishes to adopt the maximum rates for the sewer service charges for the next five years.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby authorizes approval of the five-year rate series as outlined in Table One. The City Manager is hereby authorized and directed to take all action necessary to implement and collect the sewer service charges as set forth herein.

Table One. Annual Sewer Charge Per Equivalent Dwelling Unit. 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030
$4,386.89 $4,518.49 $4,654.05 $4,793.67 $4,937.48
BE IT FURTHER RESOLVED that to the extent any sewer service charges established by this resolution are inconsistent with any sewer service charges previously adopted, it is the explicit intention of the City Council that the rates set forth in this resolution shall prevail.

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 11th day of May 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-105-

THE TOWN OF

HILLSBOROUGH
Sewer Rate Study
March 12, 2026
ATTACHMENT 2
-106-
HF&H Consultants
590 Ygnacio Valley Rd. Suite 105
Walnut Creek, CA 94596
Phone: (925) 977-6950
Web: hfh-consultants.com
March 12, 2026
Jan Cooke
Finance Manager
The Town of Hillsborough
1600 Floribunda Avenue
Hillsborough, CA 94010
Sent via email: [email protected]
Subject: Sewer Rate Study
Dear Jan Cooke,
HF&H Consultants (HF&H) is pleased to submit this draft report for updating the Town of Hillsborough’s (Town’s) sewer rates for Fiscal Years (FYs) 2026-27 through 2030-31.

Beginning FY 2026-27, we recommend five annual 3.0% revenue increases, effective July 1 each year, from 2026 through 2030. The increase in revenue will allow the Town to:
 Fund inflationary increases in existing staff and sewer collection system operating and maintenance costs;
 Fund $5.1 million in annual collection system capital projects to continue the trend of reducing sewer overflows, assisting residents with private lateral repairs, sewer lift station improvements, and preventing excess stormwater from entering the sewer system which leads to unnecessary treatment costs of rainwater;  By FY 2030-31, reach the targeted levels of the Town’s operating, capital, and debt service reserve balances.

A copy of the rate model is included in the appendix.

Sincerely,
Rick Simonson
Senior Vice President
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Sewer Rate Study
Table of Contents
The Town of Hillsborough | March 12, 2026 | Page i
Table of Contents
I. EXECUTIVE SUMMARY ................................................... 1 Findings and Recommendations ............................................ 1 II. INTRODUCTION........................................................... 3 Background ........................................................................ 3 Rate Study Purpose ............................................................. 3 Rate study Process .............................................................. 3 Five-Year Financial Plan ........................................................ 4 Sewer Customer Classes and Current Annual Rates ................. 4 III. REVENUE REQUIREMENT PROJECTIONS .................... 6 O&M Expenses – Collection ................................................... 7 Capital Improvements – Collection ........................................ 8 Current Treatment Costs ...................................................... 8 Existing Debt Service ........................................................... 9 Sewer Fund Reserves.......................................................... 10 Fund Balance Without Revenue Increases .............................. 11 IV. PROPOSED SEWER SERVICE CHARGES ..................... 13 Revenue Increases ............................................................. 13 Fund Balance with Revenue Increases ................................... 13 Proposed Rates .................................................................. 14 -108-
Sewer Rate Study
Figures
The Town of Hillsborough | March 12, 2026 | Page ii
Figures
Figure 1-1. Current and Proposed Annual Sewer Rates ($/EDU) ................... 2 Figure 1-2. Projected Year-End Sewer Enterprise Fund Balance .................... 2 Figure 2-1. Current Annual Sewer Rate ..................................................... 5 Figure 3-1. Budgeted Projection Assumptions by Fiscal Year ........................ 6 Figure 3-2. Total Projected Revenue Requirements ..................................... 7 Figure 3-3. Net Revenue Requirement Needed from Rates ........................... 7 Figure 3-4. Projected O&M Expenses ........................................................ 8 Figure 3-5. Capital Improvement Projects by Fiscal Year ............................. 8 Figure 3-6. Projected Treatment Costs ...................................................... 9 Figure 3-7. Annual Debt Service ............................................................. 10 Figure 3-8. Projected Year-End Sewer Enterprise Fund Balance .................. 12 Figure 3-9. Projected Year-End Sewer Enterprise Fund Balance Targets ....... 12 Figure 4-1. Annual Revenue Increases .................................................... 13 Figure 4-2. Projected Year-End Sewer Enterprise Fund Balance .................. 14 Figure 4-3. Change in Commercial EDUs ................................................. 15 Figure 4-4. Proposed Annual Sewer Rates ($/EDU) ................................... 15 Appendices
A. Sewer Rate Model
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Sewer Rate Study
Glossary
The Town of Hillsborough | March 12, 2026 | Page iii
Glossary
BOD – Biological Oxygen Demand; a component of wastewater strength CIP – Capital Improvement Program
COSA – Cost of Service Analysis
EDU – Equivalent Dwelling Unit; A standard unit measure of wastewater utility service, based on the volume and strength of wastewater flow.

FY – Fiscal year
HCF – Hundred cubic feet of metered water or 748.052 gallons I&I – Inflow & infiltration
NPDES – National Pollutant Discharge Elimination System O&M – Operation and Maintenance
PAYGo – Pay-As-You-Go, in reference to funding capital improvements with cash rather than from borrowed sources such as loans or bonds
SRF – State Revolving Fund, a type of loan issued by the State to public Agencies SS or TSS – Suspended Solids or Total Suspended Solids; a component of wastewater strength
Town – Town of Hillsborough
WEF – Water Environment Federation
WWTP – Wastewater Treatment Plant
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Sewer Rate Study
Acknowledgements
The Town of Hillsborough | March 12, 2026 | Page iv
Acknowledgements
City Council
Sophie Cole, Mayor
Leslie Marden Ragsdale, Vice Mayor
Laurie Davies Adams, Councilmember
Marie Chuang, Councilmember
Christine Krolik, Councilmember
Town Staff
Jan Cooke, Finance Director
Richard Santiago, Assistant Finance Director
Paul Willis, Director of Public Works / City Engineer
Doug Davis, City Manager
Mandy Brown, Assistant City Manager
Best Best & Krieger LLP
Lutfi Kharuf
HF&H Consultants, LLC
Rick Simonson, Senior Vice President
Gabe Sasser, PE, Project Manager
Alex Santos, Senior Associate
La Velda Peterson, Assistant Analyst
Limitations
This document was prepared solely for the Town of Hillsborough in accordance with the contract between the Town and HF&H and is not intended for use by any other party for any other purpose.

In preparing this study, we relied on information from the Town, which we consider accurate and reliable. Our analysis is based on the best available information at the time of the study.

Rounding differences caused by stored values in electronic models may exist.

This document represents our understanding of relevant laws, regulations, and court decisions but should not be relied upon as legal advice. Questions concerning the interpretation of legal authorities referenced in this document should be referred to a qualified attorney. -111-
Sewer Rate Study
I. Executive Summary
The Town of Hillsborough | March 12, 2026 | Page 1
I. Executive Summary

FINDINGS AND RECOMMENDATIONS
This section summarizes our findings and recommendations related to the rate increases for the sewer fund.

The Town of Hillsborough (Town’s) sewer enterprise serves all commercial and residential developments within its Town limits, approximately 3,900 connections. The Town owns and operates its sewer collection system facilities; however, wastewater collected through the Town’s sewer system is treated at wastewater treatment plants through contractual relationships with San Mateo and Burlingame, the cost for which is billed to the Town and included in the Town’s sewer service charges. The Town shares the costs of any capital improvements to the treatment plants borne by the cities of San Mateo and Burlingame. Like the other benefactors of the treatment system, the Town reimburses the cities based on the Town’s proportionate share of sewer flows conveyed. The collection and treatment costs are proposed to be billed to the Town customers on the tax roll as one combined charge under the authority of Health and Safety Code section 5471 et seq.

Sewer rates have been proposed to meet the following objectives:

1. Operating Expenses. Rates must generate sufficient revenue to fund the collection system’s operation and maintenance expenses, and the Town’s portion of wastewater treatment expense at the San Mateo and Burlingame treatment plants.

2. Capital Expenses. Capital funding over the next five years is primarily related to replacement projects that will continue the trend of reducing sewer overflows, assisting residents with private lateral repairs, and preventing excess stormwater from entering the sewer system which leads to unnecessary treatment costs of rainwater. The Town plans to fund $5.1 million per year of future sewer capital projects on a pay-as-yougo basis.

3. Reserves. Maintain adequate operating, capital, and debt service reserves for shortterm working capital, for monthly operating expenses and large capital projects, to compensate for a nine-month lag in receipt of revenues from the tax rolls. By FY 2030- 31, proposed rates reach the targeted levels of the Town’s operating, capital, and debt service reserve balances.

4. Proposed Rates. The Town’s sewer customers are billed an annual charge for sewer services (which is proposed to be billed on the tax roll for residential customers and on the water bill for commercial customers). All residential customers are equal to one Equivalent Dwelling Unit (EDU); Commercial customers are charged based on their respective indoor water use, whereas 1 EDU is equal to 78 hundred cubic feet (HCF), which is equivalent to the average indoor water use of a single-family residence.

Historically, Figure 1-1 summarizes the proposed sewer rates that are needed to cover the projected operating and capital expenses, and to maintain a reasonable reserve.
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Sewer Rate Study
I. Executive Summary
The Town of Hillsborough | March 12, 2026 | Page 2
Figure 1-1. Current and Proposed Annual Sewer Rates ($/EDU) After increasing rates for FY 2026-27, effective July 1, 2026, the Town should monitor the fund balance before adopting subsequent rate increases. The proposed rates are the maximum amount that rates can be set.

1. Reserve Fund Balance. The Town’s Sewer Enterprise reserve fund balance is projected to end the year (June 30, 2026) at approximately $13,000,000, above the target balance. Figure 1-2 shows the projected year-end fund balances with and without the proposed rate increases. With the proposed increases and the drawing down of reserves in FY 2026-27 and FY 2027-28, the fund balance will achieve the target reserves of operating, capital, and debt service expenses (blue line).

Figure 1-2. Projected Year-End Sewer Enterprise Fund Balance Current FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Rates eff. 7/1/2026 eff. 7/1/2027 eff. 7/1/2028 eff. 7/1/2029 eff. 7/1/2030 rate increases: 3.0% 3.0% 3.0% 3.0% 3.0%
All Customers ($/EDU) $4,311.00 $4,386.89 $4,518.49 $4,654.05 $4,793.67 $4,937.48 $ Increase $75.89 $131.60 $135.56 $139.62 $143.81
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Sewer Rate Study
II. Introduction
The Town of Hillsborough | March 12, 2026 | Page 3
II. Introduction

BACKGROUND
The Town’s sewer enterprise serves all commercial and residential developments within its Town limits, approximately 3,912 connections. The Town owns and operates its sewer collection system facilities. Wastewater from the Town’s sewer system is treated at treatment plants located in San Mateo and Burlingame. Like the other benefactors of each treatment plant, the Town reimburses the cities based on the Town’s proportionate share of sewer flows conveyed.

RATE STUDY PURPOSE
The Town conducted its most-recent sewer rate study in 2021. The study set annual rates through FY 2025-26. The purpose of this study is to reassess existing rates to ensure rate revenues generated meet the Town’s projected operating, capital, and debt service expenses for the next five-year planning period of FY 2026-27 through FY 2030-31.

RATE STUDY PROCESS
Proposition 218 requires that sewer rates and charges should be recovered from parcels in proportion to the cost of serving those customers. It also requires that the sewer rate-setting methodology must be sound and that there must be a nexus between the costs and the rates charged. We follow industry standard rate setting methodologies set forth by the Water Environment Federation (WEF) Manual of Practice No. 27, Financing and Charges for Wastewater Systems, fourth edition, 2018 to ensure this study meets Proposition 218 requirements.

To develop sewer rates that comply with Proposition 218 and industry standards while meeting other emerging goals and objectives of the Town, there are four major steps we followed:
1) Calculate Revenue Requirement
The rate-making process starts by deriving annual revenue requirements over the five-year planning period. The revenue requirements represent the costs that must be covered by revenue from annual sewer charges and other sources. The revenue requirement should sufficiently fund the Sewer Enterprise’s operations and maintenance (O&M), debt service, capital expenses, and reserve funding.
2) Cost of Service
Cost of service ratemaking proportionately apportions the cost of providing sewer service to each parcel based on their proportionate demand on the system. Previously, the Town established wastewater flow and strength characteristics to define a basic level of service each customer receives. An Equivalent Dwelling Unit (EDU) represents the basic level of sewer service. Given more than 99% of The Town’s accounts are single-family home parcels, the EDU reflects wastewater flow and strength characteristics of a typical single-family parcel.

Commercial customers are charged based on their respective annualized indoor water use, -114-
Sewer Rate Study
II. Introduction
The Town of Hillsborough | March 12, 2026 | Page 4
whereas 1 EDU is equal to 78 hundred cubic feet (HCF)1, which is equivalent to the average annual indoor water use of a single-family residence.
3) Rate Implementation
Rate implementation is the last step of the rate-making process to comply with Proposition 218. We have documented the rate study results in this report to serve as the Town’s administrative record and to help educate the public about the proposed changes, the rationale, and justifications behind the changes, and their anticipated financial impacts in lay terms. Our proposed rates will be documented in a notice to be mailed to each customer required under Proposition 218. The City Council may approve the proposed rates after holding a protest hearing no sooner than 45 days after mailing the notices.

FIVE-YEAR FINANCIAL PLAN
This report presents a financial plan for the Town’s sewer enterprise fund that incorporates capital improvements identified in the Town’s Master Plan, adopted by City Council, as well as the latest available operations and maintenance budgeted projections. The Town’s sewer enterprise five-year financial plan comprises:
 Projected sewer operating and capital expenses to maintain the collection system.  Projected operating and capital expenses of the Town’s proportionate share to operate and maintain the Burlingame and San Mateo wastewater treatment plants.  Projected debt service for outstanding bonds/SRF loans.  Projected reserve balances and targets; and,
 Projected revenues from the Town’s current and proposed sewer service charges.

The results of the financial plan indicate the annual increases in sewer service charges that are projected to fund the Town’s expenses and maintain adequate reserves. Detailed spreadsheets comprising the five-year financial plan are included in Appendix A.

SEWER CUSTOMER CLASSES AND CURRENT ANNUAL RATES
The Town provides sewer service to approximately 3,900 residential and 7 commercial customers. The Town is responsible for setting rates that cover the cost of providing collection and treatment services.

The Town’s sewer customers are billed an annual charge for sewer service (which is billed on the tax roll for residential customers and on the water bill for commercial customers).

Currently, all customers pay a fixed annual charge per EDU of $4,311. Each residential single1 As studied by California Data Collaborative (CaDC) which studied the water use patterns of single-family residences in Hillsborough from FY 2022-23 through FY 2024-25. -115-
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family home is equivalent to one EDU. In accordance with the Town’s Municipal Code2 each commercial customer’s number of EDUs are calculated annually based on their actual average indoor water use over the previous three years, as follows: # of EDUs = average annual indoor water use divided by 144 HCF x (70% + 15% x BOD concentration in mg/l divided by 200 mg/l + 15% x SS concentration in mg/l divided by 200 mg/l). The flow and strength characteristics of an EDU are equivalent to an average single-family residence based on prior sewer rate studies conducted by the Town and the 1998 State Revenue Program Guidelines.

Figure 2-1. Current Annual Sewer Rate
2 Hillsborough Municipal Code Section 13.34.030 states: A Sewer Equivalent Dwelling Unit (EDU) represents the wastewater discharge from a typical customer and is defined as 144 hundred cubic feet (HCF) of annual wastewater flow with 200 mg/l concentration of Suspended Solids (SS) and 200 mg/l concentration of Biological Oxygen Demand (BOD).

FY 2025-26
All Customers ($/EDU) $4,311
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III. Revenue Requirement Projections
A spreadsheet model was developed to derive revenue requirements for FY 2026-27 through FY 2030-31. The revenue requirements represent the costs that must be covered by revenue from rates and other sources. For this study, we have relied on the Town’s O&M and capital budgets, prepared by the Finance Department covering four years (FY 2026-27 through FY 2029-30) of the five-year planning period of this study. We worked with Town staff to project expenses for FY 2030-31. The escalation factors in Figure 3-1 summarize effective annual percentage increases in various cost categories. Factors driving these annual increases are discussed in more detail following Figure 3-3.

Figure 3-1. Budgeted Projection Assumptions by Fiscal Year The application of these assumptions to the O&M and capital expenses summarized graphically in Figure 3-2, listed in Figure 3-3, and are described in more detail below. -117-
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Figure 3-2. Total Projected Revenue Requirements
Figure 3-3. Net Revenue Requirement Needed from Rates
O&M EXPENSES – COLLECTION
As shown in Figure 3-4, the Town’s Operation and Maintenance (O&M) expenses are projected to increase by an average of 3.8% per year from approximately $6.5 million to $7.7 million over the five-year planning period. Salaries and benefit costs are increasing by approximately 6.6% per year, with wages increasing an average of 4.4% and benefits increasing by an average of 5.9%, primarily due to a significant increase in workers compensation costs. No additional headcount is contemplated in the projections. The Town’s administrative and other overhead allocation costs (e.g., legal, human resources, finance, city manager’s office) are increasing at an average of 2.9% annually.

Fiscal Years FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 O&M Expenses - Collection $6,855,183 $7,060,908 $7,275,256 $7,494,094 $7,733,758 Treatment Costs $2,883,999 $3,027,199 $3,177,559 $3,335,437 $3,501,209 Debt Service $3,808,268 $3,832,606 $3,798,093 $3,820,231 $3,280,153 Transfer to/(from) Capital Reserves $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 Total Revenue Requirement $18,685,268 $19,058,531 $19,388,726 $19,787,579 $19,652,938 Transfer to/(from) Op Reserves ($1,134,420) ($981,157) ($769,031) ($609,293) $100,697 Net Revenue Requirement from Rates $17,550,848 $18,077,374 $18,619,695 $19,178,286 $19,753,634 -118-
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Figure 3-4. Projected O&M Expenses
CAPITAL IMPROVEMENTS – COLLECTION
The Town’s adopted Capital Improvement Program (CIP) expenses are summarized in Figure 3-5. Annual costs range from a low of $4.4 Million in FY 2028-29 to a high of $5.8 million in FY 2027-28 during the five-year financial planning period. On average, the Town expects to spend approximately $5.1 million annually on these projects.

Figure 3-5. Capital Improvement Projects by Fiscal Year The CIP is primarily related to projects that reduce inflow and infiltration and improve sewer lift stations. The Town plans to fund these capital improvements, as well as other projects that benefit the system, on a pay-as-you-go (PAYGo) basis. The Town’s rates do not directly fund each year’s capital improvements. Instead, the funding for the Town’s capital expenses takes the form of smooth annual contributions of rate revenue to the Capital Reserve equal to the average projected annual PAYGo expenditures. Capital projects are funded in varying amounts each year from the Capital Reserve. In this way, rates can be modulated smoothly using the Capital Reserve. The annual capital contribution to reserves, included in the annual revenue requirement, is $5,137,818 per year ($25,689,089 ÷ 5 years).

CURRENT TREATMENT COSTS
Current and projected treatment costs for operations and capital improvements previously listed in Figure 3-3 are separated according to each plant location in Figure 3-6.

Budgeted Projected
Fiscal Years FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Salaries & Benefits $1,297,020 $1,462,399 $1,526,383 $1,594,962 $1,663,890 $1,722,301 Materials & Services $1,812,189 $1,853,453 $1,898,539 $1,944,753 $1,992,121 $2,058,233 Administrative & Other Costs $3,445,492 $3,539,331 $3,635,986 $3,735,541 $3,838,082 $3,953,224 Total $6,554,700 $6,855,183 $7,060,908 $7,275,256 $7,494,094 $7,733,758 % Change 4.6% 3.0% 3.0% 3.0% 3.2%
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 1.141 1.179
Escalated Total CIP $5,203,655 $5,810,545 $4,454,208 $4,723,199 $5,497,481 $25,689,089 -119-
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Figure 3-6. Projected Treatment Costs
The Town operates an integrated wastewater system. While the Town does not have its own treatment plant for treatment of wastewater, the Town has entered into contracts with the cities of Burlingame and San Mateo for treatment. San Mateo treatment costs are projected to increase from the current sum of $1.2 Million to $1.5 Million by FY 2030-31. Burlingame treatment costs are projected to increase from the current sum of $1.6 Million to $2.0 Million by FY 2030-31. The increases are based on an average annual increase of 5% based on historical increases.

EXISTING DEBT SERVICE
The Town has an outstanding bond obligation totaling $17.1 million as of June 30, 2025, of which a portion was used for sewer improvements. Of the annual debt service of approximately $2.6 million during the planning period, the Sewer Fund’s share is approximately $1.4 million (55%). The Town also has a State Revolving Fund loan for previous sewer improvements with a principal outstanding of $7.9 million on June 30, 2025. Annual debt service is $0.4 million.

Lastly, the Town is responsible for $1.9 million in annual payments to the City of San Mateo for their share of minor upgrades at the wastewater treatment facility owned and operated by the City of San Mateo, in accordance with the cost-share agreement to treat wastewater from the Town. The treatment plant was replaced and upgraded, to meet current and future regulatory requirements, and reduce incidents of sewer overflow. The Town’s residents benefit from the upgraded wastewater treatment plant which is designed to fully treat excess flows occurring during heavy rains thereby preventing sanitary sewer overflows that leak diluted raw sewage and pollutants into local creeks and the San Francisco Bay. The treatment plant enables the communities to meet current and future regulatory discharge permit requirements and address significant health concerns that ensure wastewater is treated in a way that does not negatively impact the community. The new treatment plant also ensures that the Town complies with the Regional Water Quality Board’s Cease and Desist Order (CDO) and the National Pollutant Discharge Elimination System (NPDES) permit requirements.

Failure to comply with these requirements could result in large fines that would be passed on to ratepayers and would result in continued public health and environmental concerns. The compliance at the treatment plants, coupled with the Town’s robust collection system capital improvements to address infiltration and inflow, will ensure that the Town’s sewer system is dependable thereby improving the ability to provide reliable sewer service to the Town’s residents on an ongoing basis.

Fiscal Years FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 San Mateo O&M $1,157,909 $1,215,805 $1,276,595 $1,340,425 $1,407,446 $1,477,819 Burlingame O&M $1,569,709 $1,648,194 $1,730,604 $1,817,134 $1,907,991 $2,003,390 Subtotal Current Treatment Costs $2,727,618 $2,863,999 $3,007,199 $3,157,559 $3,315,437 $3,481,209 San Mateo Capital $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Burlingame Capital $0 $0 $0 $0 $0 $0
Subtotal Treatment Plant Upgrades $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Total Treatment Costs $2,747,618 $2,883,999 $3,027,199 $3,177,559 $3,335,437 $3,501,209 -120-
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The Town does not have any current plans to issue additional debt to fund sewer capital improvements during the five-year planning period. As discussed above, planned capital improvements through FY 2030-31 will be funded on a PAYGo basis using the Town’s Capital Reserve to avoid rate spikes. Figure 3-7 reports the annual debt service obligations to paid by the Town’s Sewer Enterprise.

Figure 3-7. Annual Debt Service

SEWER FUND RESERVES
In addition to covering annual expenses, sewer service charges need to generate revenue to maintain adequate operations and capital reserves. To determine what constitutes adequate reserve amounts, the Town’s sewer enterprise fund balance is divided into Operating, Capital, and Debt Service Reserves. Recommended target balances are set to fund each reserve.

Operating Reserve Target
Operating reserves serve multiple purposes ranging from monthly to annual cash flow management. On a monthly basis, the Operating Reserve provides working capital to cover the lag between when the Town incurs operating expenses and when it receives revenue from sewer service charges. Providing adequate funding for Operating Reserves is the highest priority.

The Town’s current policy is to maintain an Operating Reserve equal to 20% of its combined annual operating expenses and a debt reserve based on bond and loan covenants. Reserving 20% would be a reasonable target if the Town’s revenue stream from sewer service charges was relatively consistent throughout the year. However, because the Town intends to bill customers on the County tax roll, there is a nine-month lag between when sewer service charges are billed and payment is received from the County Tax Assessor. For rate-setting purposes, we recommend an Operating Reserve target equal to 50% of annual operating expenses. Meeting this target will provide six months of operating expenses in reserves during the nine months between payments from the County Tax Assessor. In turn, this will provide a greater financial buffer to the Sewer Enterprise Fund, decreasing the likelihood that temporary funding from the General Fund will be required to meet operating cash flow needs.

Over the five-year planning period, the Operating Reserve target ranges from $4.9 million to $5.6 million.

Debt Reserve Target
The debt reserve accounts for the debt service requirement the Town is obligated to meet in the bond covenants. The Town is required to hold $431,801 in reserve to meet the requirements of the existing loans. The Town has sufficient reserves to meet this target balance in FY 2026-27 and during the five-year financial planning period.

FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 2023 A Revenue Refunding Bond $1,415,288 $1,437,700 $1,462,038 $1,427,525 $1,449,663 $909,585 State Revolving Fund Loan $431,801 $431,801 $431,801 $431,801 $431,801 $431,801 San Mateo Clean Water $1,938,767 $1,938,767 $1,938,767 $1,938,767 $1,938,767 $1,938,767 Total Debt Service $3,785,856 $3,808,268 $3,832,606 $3,798,093 $3,820,231 $3,280,153 -121-
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Capital Reserve Target
The Capital Reserve provides liquidity to fund construction for projects that are funded on a PAYGo basis (as opposed to those that are funded from debt). With adequate capital reserves, the Town is able to pay contractors without encroaching on the Operating Reserves. A target reserve balance of $5.1 million was used ($25,689,089 million in total CIP over the five-year planning period ÷ 5 years = $5.1 million per year).

Maintaining the target balance for the Capital Reserve is recommended after meeting the minimum balance for the Debt Service and Operating Reserves.

FUND BALANCE WITHOUT REVENUE INCREASES
Figure 3-8 shows the projected annual fund balance without the revenue increases (dashed green line). The historic year-end fund balance for FY 2024-25 is shown as a reference and is well above the recommended fund balance target, which is the combination of the Debt Service Reserve target, Operating Reserve target, and Capital Reserve target (Target Reserve; blue line).

As indicated by the green-dashed line in Figure 3-8, based on the projected operating and capital expenses discussed above, without a revenue increase over the next five years, the Town’s Sewer Enterprise Fund Balance will drop below the minimum target (red line, which is equal to the Minimum Reserve target) sometime in FY 2029-30.

Section VI of this report provides our proposed rate increases to generate revenue that will be sufficient to avoid dropping below the minimum target and reach the target balance by FY 2030-31
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Figure 3-8. Projected Year-End Sewer Enterprise Fund Balance Figure 3-9. summarizes the reserve target components for each fiscal year.

Figure 3-9. Projected Year-End Sewer Enterprise Fund Balance Targets FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Recommended Operating Reserve Target¹ $4,651,159 $4,651,159 $4,869,591 $5,044,053 $5,226,407 $5,414,765 $5,617,483 Debt Reserve Target² $431,801 $431,801 $431,801 $431,801 $431,801 $431,801 $431,801 Total Minimum Reserve $5,082,960 $5,082,960 $5,301,392 $5,475,854 $5,658,208 $5,846,566 $6,049,284 Capital Reserve Target³ $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 Total Target Reserve $9,472,960 $9,472,960 $10,439,210 $10,613,672 $10,796,026 $10,984,384 $11,187,102 ¹ 50% of Operating Expenses, excluding debt service and PAYGo ² The Town is required to hold $431,801 in reserve to meet the requirements of the existing debt service. ³ Average annual CIP over 5-year planning period (FY 2026-27 to FY 2030-31; $23.6 Million ÷ 5 years) -123-
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IV. Proposed Sewer Service Charges

REVENUE INCREASES
In order to meet the O&M expense, capital expense, debt payment, and reserve level obligations of the sewer, it is recommended that the Town increase sewer revenues by the following amounts:

Figure 4-1. Annual Revenue Increases
The proposed revenue increases will generate $510,000-$575,000 in additional revenue with each 3.0% increase, as shown in Table 3 of the attached model. Revenue increases were derived to fund the revenue requirements assuming the Town’s current customer base of 4,000.75 EDUs (3,904 residential EDUs from 3,904 residential parcels and 96.75 commercial EDUs from eight commercial customers). No growth in accounts has been assumed due to the built-out nature of the Town. If significant growth in accounts does occur, the additional revenue will increase the reserve balance, which may allow future increases to be less than projected.

Projected rates include allocating 2.65 EDUs to Town facilities for purposes of charging the Town for sewer service, based on the Town’s most recent three-year indoor water use data analyzed by the California Data Collaborative.

FUND BALANCE WITH REVENUE INCREASES
Figure 4-2 shows the projected year-end sewer fund balance with the rate revenue increases recommended in Figure 4-1 (solid green line) and without the rate increases (dashed green line).

Although the projections show straight lines between years, the fund balance will be drawn down substantially during each year. In other words, the reserves are actively drawn on at all times during the year but only periodically added to when payments are received from the County. The reserves are not simply accumulated without being used.

Fiscal Revenue
Year Increase
FY 2026-27 3.0%
FY 2027-28 3.0%
FY 2028-29 3.0%
FY 2029-30 3.0%
FY 2030-31 3.0%
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Figure 4-2. Projected Year-End Sewer Enterprise Fund Balance The recommended revenue increases will maintain a fund balance at or above the target during the five-year planning period.

PROPOSED RATES
The primary objective of a rate structure for each customer class is proportional allocation of the cost of wastewater service. To achieve proportionality with its commercial customers, whose flows and wastewater strengths vary widely, the Town bills these commercial customers based on their estimated wastewater discharge, which is a common industry practice.

Because the residential class is comparatively homogeneous in the strength of wastewater discharged, the Town bills its residential customers a uniform annual charge, regardless of flow, which is also a common industry practice. We recommend continuing this practice.

Commercial customers are currently charged based on their indoor water use as it compares to water use by a single-family customer, which is the basis for the per EDU rate. One rate per EDU is calculated for all customers. While single-family customers are charged 1 EDU per year, which represents 78 HCF of wastewater discharged, commercial customers are charged multiple EDUs in proportion to their respective wastewater discharge to the 78 HCF. For example, a commercial customer that is determined to have 93.6 HCF3 of indoor water use is charged 1.2 EDUs. Historically, single-family indoor water use was projected to be 144 HCF 3 Which is calculated annually by Town using the average indoor water use from the previous three-year period.
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per year. Based on updated information, including through working with the California Data Collaborative who was able to analyze water use data for all single-family customers over the past three-year period, it was determined that the current indoor water use for single-family customers is 78 HCF per year. This reflects changes in water consumption patterns resulting from periodic drought conditions over the past 20 years and changes in plumbing codes require more water efficient appliances (i.e., low-flow toilets, showerheads, etc.). As such, commercial EDUs used to determine the per EDU rate have increased from 50.48 to 96.75, as shown in Figure 4-3, which will result in higher charges to commercial customers beyond the 3% increase in the revenue requirement.

Figure 4-3. Change in Commercial EDUs
Figure 4-4 presents the proposed per EDU Sewer rates, using the revised commercial EDUs, for FY 2026-27 through FY 2030-31, that will generate the necessary revenue to meet the net revenue requirement (as summarized in Figure 3-1).

Figure 4-4. Proposed Annual Sewer Rates ($/EDU)
All residential customers are equal to one Equivalent Dwelling Unit (EDU); Commercial customers are charged based on their respective winter water use, whereas 1 EDU is equal to 78 hundred cubic feet (HCF), which is equivalent to the average indoor water use of all single-family residences.

Customer Type Current FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Single-Family Residential 3,904.00 3,904.00 3,904.00 3,904.00 3,904.00 3,904.00 Commercial
Hillsborough Racquet Club 1.00 1.00 1.00 1.00 1.00 1.00 Cal Trans Rest Stop 5.90 9.80 9.80 9.80 9.80 9.80
Crystal Springs Upland School 4.20 7.60 7.60 7.60 7.60 7.60 Burlingame Country Club 16.80 31.80 31.80 31.80 31.80 31.80 Crystal Springs Golf Club 6.60 12.90 12.90 12.90 12.90 12.90 Hillsborough School District 10.90 20.60 20.60 20.60 20.60 20.60 Nueva School 3.20 10.40 10.40 10.40 10.40 10.40
Town of Hillsborough 1.88 2.65 2.65 2.65 2.65 2.65
Subtotal - Commercial 50.48 96.75 96.75 96.75 96.75 96.75 Total EDUS 3,954.48 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75 Charge per EDU FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Net Revenue Requirement1$17,550,848 $18,077,374 $18,619,695 $19,178,286 $19,753,634 EDUs2 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75
Charge per EDU $4,386.89 $4,518.49 $4,654.05 $4,793.67 $4,937.48 1 Figure 3-1
2 Figure 4-3
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APPENDIX A

SEWER RATE MODEL
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10111213141516171819202122232425262728293031323334353637

A B DE FGH I
Town of HillsboroughWastewater AnalysisTable 1A. Summary FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 eff. date 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030
Approved Projected Projected Projected Projected Projected Revenue Adjustments 4.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Annual Increase ($) $76 $132 $136 $160 $144
Annual Charge per EDU $4,311.00 $4,386.89 $4,518.49 $4,654.05 $4,793.67 $4,937.48 $0.0$2.0$4.0$6.0$8.0
$10.0$12.0$14.0
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% 3.0% 3.0% 3.0%
Debt
Coverage 2.18 2.12 2.14 2.21 2.24 2.66
Total Reserve Balance ($ Millions)
Balance w/o Rate Increases Debt Reserve + Operating TargetOperating + Capital + Debt Reserve Balance with Rate Increases HF&H Consultants, LLC3/3/2026 1:22 PM 1 of 10
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Table 1A. Summary
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A B CDE FGH I
Town of HillsboroughWastewater AnalysisTable 1B. General FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Notes Assumptions
a General Inflation Budget Budget Budget Budget Budget 3.0% To Table 2 b Salaries Budget Budget Budget Budget Budget 3.0% To Table 2 c Medical Benefits Budget Budget Budget Budget Budget 5.0% To Table 2 d Retirement Costs (CalPERS) Budget Budget Budget Budget Budget 5.0% To Table 2 e O&M due to CWP Budget Budget Budget Budget Budget 5.0% To Table 2 f Burlingame WWTP O&M Inflation Budget 5.0% 5.0% 5.0% 5.0% 5.0% To Table 2 g Interest on Earnings 4.0% 2.0% 2.0% 2.0% 2.0% 2.0% To Table 4h Non-rate Revenues Budget 0.0% 0.0% 0.0% 0.0% 0.0% To Table 2 i % Change in Demand Budget 0.0% 0.0% 0.0% 0.0% 0.0% To Table 2, 3 j Construction Cost Inflation 0.0% 3.3% 3.3% 3.3% 3.3% 3.3% Town estimate; to Table 5 k San Mateo WWTP O&M Inflation Budget 5.0% 5.0% 5.0% 5.0% 5.0% Town estimate; To Table 2 l Growth EDUs 000000
Fund Balance Policies
Minimum balance
Purpose For O&M cash flow during the year Minimum balance Cannot go negativeTarget balance (Recommended) 50% of Annual Operationg Expenses (excludes debt service) Bond/SRF Reserve
Purpose Meet requirements of the existing Certificates of Participation and the SRF LoanMinimum balance $431,801Target balance $431,801 Capital Reserve
Purpose SRF Loan Covenant RequirementMinimum balance Cannot go negativeTarget balance (Current policy) NoneTarget balance (Recommended) Average annual PAYGo CIP over 5-year period.

HF&H Consultants, LLC3/3/2026 1:22 PM 2 of 10
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Table 1B. General
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A B CD E F G H I J
Town of HillsboroughWastewater AnalysisTable 2. Total Rev Req Budgeted Projections
Tbl 1B FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Notes Salaries & Benefits
Salary b $746,195 $794,627 $835,367 $873,731 $899,943 $926,941 Overtime b $36,845 $37,950 $39,089 $40,262 $41,469 $42,713 Salary- Part Time b $27,500 $28,325 $29,175 $30,050 $30,951 $31,880 Leave at Retirement b $0$0$0$0$0$0
Vac/Sick Leave Payout b $3,900 $4,095 $4,299 $4,514 $4,740 $4,882 Vacation Cash out b $0 $0 $0 $0 $0 $0
Uniform Allowance b $5,472 $5,636 $5,805 $5,979 $6,159 $6,344 Medicare/FICA b $61,864 $63,720 $65,632 $67,600 $69,628 $71,717 PERS d $165,874 $173,603 $180,360 $193,488 $218,488 $229,413 Deferred Comp (ER) Expense b $7,200 $7,200 $7,200 $7,200 $7,200 $7,416 Health Benefits Insurance c $98,666 $103,599 $108,779 $114,218 $119,929 $125,926 Life Insurance c $894 $939 $986 $1,035 $1,087 $1,141
Dental/Vision c $9,598 $10,078 $10,582 $11,111 $11,667 $12,250 Long Term Disability c $1,094 $1,149 $1,206 $1,266 $1,330 $1,396 Retired Employee Benefit d $47,702 $48,766 $49,854 $50,965 $52,102 $54,707 Retirement Health Savings Plan d $18,398 $18,808 $19,227 $19,656 $20,094 $21,099 Safety/ Compliance Prog Assessment b $850 $876 $902 $929 $957 $985 Workers Comp Insurance b $64,968 $163,029 $167,920 $172,957 $178,146 $183,490 Salaries & Benefits subtotal $1,297,020 $1,462,399 $1,526,383 $1,594,962 $1,663,890 $1,722,301 Materials & Services
Office Supplies a $6,740 $6,909 $7,082 $7,259 $7,440 $7,663 Parts/Supplies a $126,500 $129,663 $132,904 $136,227 $139,632 $143,821 Tools/Equipment a $27,500 $28,188 $28,892 $29,614 $30,355 $31,266 Miscellaneous a $4,656 $4,772 $4,892 $5,014 $5,139 $5,293 Bank Fees a $4,043 $4,144 $4,247 $4,353 $4,462 $4,596
Signs/Barricades/Cones a $16,570 $16,984 $17,409 $17,844 $18,290 $18,839 Contractual - Project Management a $103,214 $105,794 $108,439 $111,150 $113,929 $117,347 Contractual - Professional Svcs a $73,863 $75,710 $77,602 $79,542 $81,531 $83,977 Contractual - General e $146,603 $150,268 $154,025 $157,875 $161,822 $169,913 Professional Services e $25,000 $25,625 $26,266 $26,922 $27,595 $28,975 Single Auditing Services a $0$0$0$0$0$0
Rental Expense a $35,535 $36,423 $37,334 $38,267 $39,224 $40,400 Pump Maintenance a $58,887 $30,000 $30,750 $31,519 $32,307 $33,276 Equipment Repair a $8,328 $8,536 $8,749 $8,968 $9,192 $9,468 Training a $18,196 $18,651 $19,117 $19,595 $20,085 $20,687 Personnel a $17,250 $14,500 $14,863 $15,234 $15,615 $16,083 Professional Development a $33,000 $33,825 $34,671 $35,537 $36,426 $37,519 Dues & Subscriptions a $0 $0 $0 $0 $0 $0
Allocated Costs a $783,323 $802,906 $822,979 $843,553 $864,642 $890,581 Utilities e $18,932 $19,405 $19,890 $20,387 $20,897 $21,942 Telephone/Pagers/Radios/GPS a $8,250 $8,456 $8,668 $8,884 $9,106 $9,380 Gas & Oil e $34,309 $35,167 $36,046 $36,947 $37,871 $39,764 Vehicle Repair & Maintenance a $123,050 $126,126 $129,279 $132,511 $135,824 $139,899 Printing a $4,718 $4,835 $4,956 $5,080 $5,207 $5,363
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Table 2. Total Rev Req
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Town of HillsboroughWastewater AnalysisTable 2. Total Rev Req Budgeted Projections
Tbl 1B FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Notes 53545556575859606162636465666768697071727374757677787980818283848586878889909899 Postage a $4,718 $4,835 $4,956 $5,080 $5,207 $5,363
Corp Yard Maintenance e $62,700 $64,268 $65,874 $67,521 $69,209 $72,670 County Tax Collection Fee a $8,746 $8,965 $9,189 $9,419 $9,654 $9,944 Dam Inspection/State Svcsa $0$0$0$0$0$0 Generator Maintenance a $24,060 $24,662 $25,278 $25,910 $26,558 $27,354 Emergency Project a $13,500 $13,838 $14,183 $14,538 $14,901 $15,349 Claims Expense a $20,000 $50,000 $50,000 $50,000 $50,000 $51,500 Materials and Services subtotal $1,812,189 $1,853,453 $1,898,539 $1,944,753 $1,992,121 $2,058,233 Treatment Costs
Sewage Disposal - San Mateo k $1,157,909 $1,215,805 $1,276,595 $1,340,425 $1,407,446 $1,477,819 Current Town estimates Sewage Disposal CIP-San Mateo $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Current Town estimates Sewage Disposal - Burlingame f $1,569,709 $1,648,194 $1,730,604 $1,817,134 $1,907,991 $2,003,390 Current Town estimates Sewage Disposal CIP-Burlingame $0 $0 $0 $0 $0 $0 Current Town estimates San Mateo Clean Water k $0 $0 $0 $0 $0 $0 Current Town estimates Treatment subtotal $2,747,618 $2,883,999 $3,027,199 $3,177,559 $3,335,437 $3,501,209 Administrative & Other Costs
Computer a $7,500 $7,500 $7,500 $7,500 $7,500 $7,725
Vehicle a $300,000 $300,000 $300,000 $300,000 $300,000 $309,000 Furniture & Fixtures a $0$0$0$0$0$0 Equipment Replacement a $10,000 $10,000 $10,000 $10,000 $10,000 $10,300 Overhead Allocation a $3,127,992 $3,221,831 $3,318,486 $3,418,041 $3,520,582 $3,626,199 $3,445,492 $3,539,331 $3,635,986 $3,735,541 $3,838,082 $3,953,224 Subtotal, Operating Expenses $9,302,318 $9,739,182 $10,088,107 $10,452,815 $10,829,531 $11,234,967 Debt Service and Capital Expenditures
Existing Debt Service $3,785,856 $3,808,268 $3,832,606 $3,798,093 $3,820,231 $3,280,153 From Table 6 Macadamia Project Costs $0$0$0$0$0$0 Town analysis
Macadamia Bridge Loan $0 $0 $0 $0 $0 $0 From Table 6
To/From Capital Reserves (PAYGo Capital) $4,390,000 $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 From Table 4 Subtotal $8,175,856 $8,946,086 $8,970,424 $8,935,911 $8,958,049 $8,417,971 Transfer
Transfer to/(from) Operating Reserves ($438,515) ($1,134,420) ($981,157) ($769,031) ($609,293) $100,697 NET Revenue Requirement $17,039,659 $17,550,848 $18,077,374 $18,619,695 $19,178,286 $19,753,634 To Table 3 Annual Change 3.0% 3.0% 3.0% 3.0% 3.0%
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Table 2. Total Rev Req
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AB CDE FGH
Town of HillsboroughWastewater AnalysisTable 3A. Rev Increase FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Rate Revenue @ Current Rates
Revenue from Current Rates $17,039,659 $17,039,659 $17,039,659 $17,039,659 $17,039,659 $17,039,659 Revenue Requirement $17,039,659 $17,550,848 $18,077,374 $18,619,695 $19,178,286 $19,753,634 Surplus/(Deficit) $0 ($511,190) ($1,037,715) ($1,580,036) ($2,138,627) ($2,713,976) Increase in Revenue from Rates 0.0% 3.0% 3.0% 3.0% 3.0% 3.0% Revenue from Current Rates $17,039,659 $17,039,659 $17,039,659 $17,039,659 $17,039,659 $17,039,659 Revenue from Rate Increases
FY 2026-27 (eff. July 1, 2026) 12 $511,190 $511,190 $511,190 $511,190 $511,190 FY 2027-28 (eff. July 1, 2027) 12 $526,525 $526,525 $526,525 $526,525 FY 2028-29 (eff. July 1, 2028) 12 $542,321 $542,321 $542,321FY 2029-30 (eff. July 1, 2029) 12 $558,591 $558,591FY 2030-31 (eff. July 1, 2030) 12 $575,349 Subtotal - Revenue from Rate Increases $0 $511,190 $1,037,715 $1,580,036 $2,138,627 $2,713,976 Total Rate Revenue $17,039,659 $17,550,848 $18,077,374 $18,619,695 $19,178,286 $19,753,634 Net Revenue Requirements ($17,039,659) ($17,550,848) ($18,077,374) ($18,619,695) ($19,178,286) ($19,753,634) Surplus/(Deficit) after Rate Increase $0 $0 $0 $0 $0 $0 HF&H Consultants, LLC3/3/2026 1:22 PM 5 of 10
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Table 3A. Rev Increase
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AC D E F G H I
Town of HillsboroughWastewater AnalysisTable 3B. Current Rev FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Notes Number of EDUs
Residential 3,904.00 3,904.00 3,904.00 3,904.00 3,904.00 3,904.00Hillsborough Racquet Club 1.00 1.00 1.00 1.00 1.00 1.00Cal Trans Rest Stop 5.90 5.90 5.90 5.90 5.90 5.90Crystal Springs Upland School 4.20 4.20 4.20 4.20 4.20 4.20Burlingame Country Club 16.80 16.80 16.80 16.80 16.80 16.80Crystal Springs Golf Club 6.60 6.60 6.60 6.60 6.60 6.60Hillsborough School District 10.90 10.90 10.90 10.90 10.90 10.90Nueva School 3.20 3.20 3.20 3.20 3.20 3.20 Subtotal 3,952.60 3,952.60 3,952.60 3,952.60 3,952.60 3,952.60 Growth EDUs 000000 From Table 1B
Total EDUS 3,952.60 3,952.60 3,952.60 3,952.60 3,952.60 3,952.60 Current Annual Rate $4,311.00 $4,311.00 $4,311.00 $4,311.00 $4,311.00 $4,311.00 Total Annual Rate Revenue $17,039,659 $17,039,659 $17,039,659 $17,039,659 $17,039,659 $17,039,659 HF&H Consultants, LLC3/3/2026 1:22 PM 6 of 10
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Table 3B. Current Rev
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Town of HillsboroughWastewater AnalysisTable 4. Reserves Estimated
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Notes Operating FundWith Rate Increases
Increase in Rate Revenue: 3.0% 3.0% 3.0% 3.0% 3.0% From Table 1 Beginning Balance $8,378,646 $8,266,506 $7,286,073 $6,440,826 $5,792,921 $5,293,393 Transfer to/(from) Operating Fund $0 $0 $0 $0 $0 $0 From Table 3Transfers (to)/from:

Revenue Requirements ($438,515) ($1,134,420) ($981,157) ($769,031) ($609,293) $100,697 To Row 55 Bond/SRF Reserve $0 $0 $0 $0 $0 $0 To Rows 41 and 56 Capital Reserve $0 $0 $0 $0 $0 $0 To Rows 30 and 57 Fund Subtotal $7,940,131 $7,132,087 $6,304,916 $5,671,795 $5,183,628 $5,394,090 Estimated Interest Earnings $326,376 $153,986 $135,910 $121,126 $109,765 $106,875 Avg. Bal. * Table 1B assumption g.

Ending Balance with Rate Increase $8,378,646 $8,266,506 $7,286,073 $6,440,826 $5,792,921 $5,293,393 $5,500,965 Minimum Balance - HFH Method $4,651,159 $4,651,159 $4,869,591 $5,044,053 $5,226,407 $5,414,765 $5,617,483 6 mos. Operating Expenses; (Table 2a, Row 70) * 50% Minimum Balance - Town Method $2,617,635 $2,617,635 $2,709,490 $2,784,143 $2,850,182 $2,929,952 $2,903,024 (Total Expenditures - PAYGo Capital) * 20% Fund Balance Compared to Minimum 316% 269% 231% 203% 181% 189% Capital Replacement Reserve
Beginning Balance $4,300,000 $4,472,000 $4,494,945 $3,905,389 $4,673,943 $5,186,186 FY 2025-26 Beginning balance per TownCapital Projects Expenditures ($4,390,000) ($5,203,655) ($5,810,545) ($4,454,208) ($4,723,199) ($5,497,481) From Table 5 Transfers (to)/from:

Revenue Requirements $4,390,000 $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 To Table 2Operating Fund $0 $0 $0 $0 $0 $0 From above Fund Subtotal $4,300,000 $4,406,163 $3,822,217 $4,588,999 $5,088,561 $4,826,522 Estimated interest earnings $172,000 $88,782 $83,172 $84,944 $97,625 $100,127 Avg. Bal. * Table 1B assumption g.

Ending Balance $4,300,000 $4,472,000 $4,494,945 $3,905,389 $4,673,943 $5,186,186 $4,926,649 Target Balance $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 $5,137,818 From Table 5 - Avg annual cash-funded CIP Fund Balance Compared to Target 84% 87% 76% 91% 101% 96% Bond/SRF Reserve
Beginning Balance $431,801 $449,073 $458,055 $467,216 $476,560 $486,091 FY 2020-21 Beginning balance per Town Transfers (to)/from:

Revenue Requirements $0 $0 $0 $0 $0 $0Operating Fund $0 $0 $0 $0 $0 $0 From above Fund Subtotal $431,801 $449,073 $458,055 $467,216 $476,560 $486,091 Estimated interest earnings $17,272 $8,981 $9,161 $9,344 $9,531 $9,722 Avg. Bal. * Table 1B assumption g.

Ending Balance $431,801 $449,073 $458,055 $467,216 $476,560 $486,091 $495,813 Target Balance $431,801 $431,801 $431,801 $431,801 $431,801 $431,801 $431,801 Fund Balance Compared to Target 104% 106% 108% 110% 113% 115% Projected
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Table 4. Reserves
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AB C D E F G H I
Town of HillsboroughWastewater AnalysisTable 5. Capital Projects Fiscal Year: FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Notes Project # Sewer Collection System Capital Expenditures Source: Sewer Enterprise Budget 702 Smoke Testing & Video Inspections Priority Basins $185,000 $185,000 $185,000 $185,000 $185,000701 Priority Basins Inflow & Infiltration Rehabilitation Program $3,500,000 $3,500,000 $3,500,000 $3,500,000 $3,500,000 704 Flow Metering/Modeling $180,000 $180,000707 Miscellaneous Sewer System Repairs $170,000 $170,000 $170,000 $170,000 $170,000708 Sewer Lift Station Improvements $250,000 $1,000,000 $1,300,000715 CCTV Inspection/Root Removal $285,000 $285,000 $285,000 Future Capital Projections $4,662,500
Total Project Costs $4,390,000 $5,035,000 $5,440,000 $4,035,000 $4,140,000 $4,662,500 Construction Cost Inflator 1.000 1.033 1.068 1.104 1.141 1.179 Source: Sewer Enterprise Budget Total Project Costs (with inflation) $4,390,000 $5,203,655 $5,810,545 $4,454,208 $4,723,199 $5,497,481 Average Annual PAYGo $5,137,818
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Table 5. Capital Projects
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AB C D E F G H
Town of HillsboroughWastewater AnalysisTable 6. Debt Coverage Estimated Projected
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Notes

DEBT COVERAGE RATIO
SEWER
Gross Revenue
Sewer Service Charge $17,039,659 $17,550,848 $18,077,374 $18,619,695 $19,178,286 $19,753,634 From Table 3 Non-Operating Revenues $0 $0 $0 $0 $0 $0 From Table 2Interest $515,648 $251,749 $228,243 $215,414 $216,922 $216,724 From Table 4 Total Gross Revenue $17,555,306 $17,802,597 $18,305,616 $18,835,109 $19,395,208 $19,970,358 Operating Expenses
Salaries & Benefits $1,297,020 $1,462,399 $1,526,383 $1,594,962 $1,663,890 $1,722,301 From Table 2 Materials & Service $1,812,189 $1,853,453 $1,898,539 $1,944,753 $1,992,121 $2,058,233 From Table 2Treatment Costs $2,747,618 $2,883,999 $3,027,199 $3,177,559 $3,335,437 $3,501,209 From Table 2 Admin & Other Costs $3,445,492 $3,539,331 $3,635,986 $3,735,541 $3,838,082 $3,953,224 From Table 2 Total Operating Expenses $9,302,318 $9,739,182 $10,088,107 $10,452,815 $10,829,531 $11,234,967 Net Available Revenues $8,252,988 $8,063,415 $8,217,509 $8,382,295 $8,565,677 $8,735,391 Debt Service PaymentsRevenue Refunding Bonds, Series 2023 A Principal $1,785,000 $1,915,000 $2,055,000 $2,095,000 $2,240,000 $1,370,000 Interest $788,250 $699,000 $603,250 $500,500 $395,750 $283,790 Total $2,573,250 $2,614,000 $2,658,250 $2,595,500 $2,635,750 $1,653,790 55% 55% 55% 55% 55% 55% 55% attributed to
Total Portion attributable to Sewer $1,415,288 $1,437,700 $1,462,038 $1,427,525 $1,449,663 $909,585 the Sewer System State Revolving Fund Loan
Total $431,801 $431,801 $431,801 $431,801 $431,801 $431,801 San Mateo Clean Water $1,938,767 $1,938,767 $1,938,767 $1,938,767 $1,938,767 $1,938,767 Total
Bridge Loan Macadamia Project
Total $0$0$0$0$0$0
Total Debt Service $3,785,856 $3,808,268 $3,832,606 $3,798,093 $3,820,231 $3,280,153 To Table 2 Debt Coverage Ratio 2.18 2.12 2.14 2.21 2.24 2.66 To Table 1 HF&H Consultants, LLC3/3/2026 1:22 PM 9 of 10
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Table 6. Debt Coverage
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Town of HillsboroughWastewater AnalysisTable 7. COS
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Total Rate Revenue $17,039,659 $17,550,848 $18,077,374 $18,619,695 $19,178,286 $19,753,634 from Table 3AEDUs 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75 from below Charge per EDU $4,259.11 $4,386.89 $4,518.49 $4,654.05 $4,793.67 $4,937.48 Current COS COS
FY 2025-26 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 Number of EDUs
Single-Family Residential 3,904.00 3,904.00 3,904.00 3,904.00 3,904.00 3,904.00 3,904.00 From Supporting Detail Single Family Winter Water UseHillsborough Racquet Club 1.00 1.00 1.00 1.00 1.00 1.00 1.00 From Supporting Detail Commercial EDUs Cal Trans Rest Stop 5.90 9.80 9.80 9.80 9.80 9.80 9.80
Crystal Springs Upland School 4.20 7.60 7.60 7.60 7.60 7.60 7.60 Burlingame Country Club 16.80 31.80 31.80 31.80 31.80 31.80 31.80Crystal Springs Golf Club 6.60 12.90 12.90 12.90 12.90 12.90 12.90Hillsborough School District 10.90 20.60 20.60 20.60 20.60 20.60 20.60 Nueva School 3.20 10.40 10.40 10.40 10.40 10.40 10.40Town of Hillsborough 1.88 2.65 2.65 2.65 2.65 2.65 2.65 Subtotal - Commercial 3,954.48 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75 Growth EDUs 000000 No growth assumed
Total EDUS 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75 4,000.75 HF&H Consultants, LLC3/3/2026 1:22 PM Page 10 of 10
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Table 7. COS

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

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Setting and Confirming the Fees and Charges for FY 2026-27 and Resolution Authorizing Water and Sewer Connection Fees for FY 2026-27, Effective July 1, 2026
SUMMARY: The Town of Hillsborough provides the community with a wide variety of municipal services, including, but not limited to, police and fire protection, water delivery, wastewater collection, street maintenance, storm drainage, planning and development services, and building inspection services. General-purpose revenues, such as property taxes, fund community services like police protection. User fees cover the cost of providing services that have special benefits to an individual or group, such as a planning application, building permit, or encroachment permit associated with personal projects/property.

The proposed fees are intended to provide full cost recovery for the services rendered. However, the City Council may waive fees to subsidize and/or provide incentives to promote certain activities, provided those subsidies or incentives are funded with unrestricted revenue. Examples include the waiving or lowering of fees for accessory dwelling units, solar panels, and hazardous tree removal.

The Town updates the fees every year to account for labor rate changes, which is presented in the proposed FY 2026-27 Master Fee Schedule. For the Building and Planning Department (BP), a new fee study was conducted for their specific fees to align the recovery to the cost of providing the services rendered. This fee study has contributed to the revenue increase for the proposed FY 2026-27 budget, improving the overall health of the General Fund.

New Fees
There are no new proposed fees for Police, Engineering and Public Works special services for FY 2026-27.

Deleted Fees
There are no fees proposed to be deleted for Police, Engineering and Public Works special services FY 2026-27.

Changes to Existing Fees
Fees and charges for Police, Engineering, and Public Works special services are updated every fiscal year for staffing labor rates. This will help ensure that the Town is achieving cost recovery.

Also, on certain years the Town will revise the scope of work for certain fees when a change for that service occurs. These could be changes of staff position(s) conducting the work, consulting changes, and other costs associated to cover the fee.
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Agenda Staff Report – Hillsborough City Council
May 11, 2026

Building and Planning- Cost of Services Study
As stated, BP conducted a new fee study, which adds to changes in existing fees for the Town in FY 2026-27 proposed budget. The study found that current BP fees recover approximately 56% of actual service costs, resulting in a significant General Fund subsidy of private property development oversight. Furthermore, an updated Fee Schedule is presented to better align fees with the actual cost of service delivery. Through this process, BP determined new fees to be added, some to be deleted, and overall changes to all of the other existing fees.

Sewer and Water Rates
Sewer and water rates are presented on the Schedule of fees at the maximum allowable rates as adopted for the five-year sewer and water rate series. Each year, these rates are separately reviewed and adopted by resolution for implementation on July 1 for sewer rates and water rates.

At the time of the FAC meeting, the rates on the Master Fee schedule reflect the current adopted rate series, however, these will likely be updated for the final review and adoption of the Master Fee schedule in June to account for the current water and sewer rate cost of service studies that are under way.

Water and sewer connection fees are annually adjusted based on the Engineering News Record Construction Cost 20-City Average Index (ENR-CCI), which was a (0.5%) increase. Proposed connection fees on July 1, 2026, are $17,816.00 for water and $17,337.00 for sewer.

Fire Fees - Central County Fire Department
The Town’s Master Fee Schedule includes fees administered by the Central County Fire Department (CCFD) to Town customers so they can see all costs for their project. CCFD fees include care facility inspections, re-inspections, construction, sprinkler systems, permitting, and standby fire services. All fees are paid by the customer directly to CCFD and are not imposed by the Town. The FY 2026-27 CCFD fee schedule was approved by the CCFD Board on April 8, 2026.

San Mateo County Animal Control Fees & Charges
The Town’s Master Fee Schedule includes fees administered by San Mateo County for Animal Control. The County has updated those Fees for FY 2026-27.

FISCAL IMPACT: Fees fully recover the Town’s cost to perform the services and are reported as revenues in the various funds.

ENVIRONMENTAL ISSUES: The proposed action is exempt from environmental review pursuant to the 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.

ATTACHMENT(S):

1. Resolution and Exhibit A Schedule of Fees and Charges

2. Resolution - Water and Sewer Connection Fees
PREPARED BY: Rich Santiago, Assistant Finance Director
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Agenda Staff Report – Hillsborough City Council
May 11, 2026

RECOMMENDATION:

1. Open the public hearing and receive public comments;

2. Close the public hearing; and

3. Adopt the resolution setting and confirming the fees and charges for FY 2026-27; and

4. Adopt the resolution authorizing water and sewer connection fees for FY 2026-27 effective July 1, 2026.
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RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH

SETTING AND CONFIRMING THE FEES AND CHARGES FOR
FISCAL YEAR 2026-2027
WHEREAS, the Town of Hillsborough (“Town”) provides the community with a wide variety of municipal services, including, but not limited to, police and fire protection, water delivery, wastewater collection, street maintenance, storm drainage, planning, building, and related development review and oversight services; garbage flat fee and San Mateo County Animal Control fee and charges; and
WHEREAS, annually, the Town sets the fees and charges necessary to provide services; and
WHEREAS, the Town develops a Cost Allocation Plan that reflects the full cost of providing the services; and
WHEREAS, Government Code Sections 65104 and 66014 specifically authorize the Town to recover the reasonable cost of planning, building, and related development review and oversight services, including maintaining statutorily required Town General Plans and related Elements and policies, and the 2026 Building and Planning User Fee Study resulted in modifications to Building and Planning Department fees consistent with applicable law and Town Fiscal Policy 409; and
WHEREAS, the 2026 Building and Planning User Fee Study supports the proposed fee for “Solar Energy System Permit – with or without Battery Energy Storage System” and provides substantial evidence, as required by Government Code Section 66015, that a fee exceeding the statutory cap reflects the Town’s reasonable administration and oversight cost for the permit; and WHEREAS, the proposed action has been properly noticed as required by various provisions of the Mitigation Fee Act as applicable, including but not limited to Government Code Section 66018 following publication requirements set forth in Government Code Section 6062a; and
WHEREAS, included in the Town of Hillsborough Schedule of Fees and Charges is the Central County Fire Department (CCFD) master fee schedule. All CCFD fees presented are collected or remitted to CCFD and are not retained by the Town; and
WHEREAS, the Financial Advisory Committee, the City Council and the public have been presented in an open and noticed public meeting, all of the details of the proposed changes in the fees and charges schedule and the related Cost Allocation Plan; and
-141-
ATTACHMENT 1
Resolution No. 26-
May 11, 2026
2 NOW, THEREFORE, be it resolved, determined and ordered by the City Council of the Town of Hillsborough, California, that:

SECTION 1. The above Recitals are true and correct and by this reference incorporated herein.

SECTION 2. The City Council called a public hearing for May 11, 2026, at City Council Chambers, for the purpose of receiving public comments on the proposed Fees and Charges. Notice of the public hearing was given by publication in a newspaper of general circulation within the Town once a week for two weeks commencing at least ten (10) days prior to the public hearing, with at least 5 days intervening between the first and last publication, and posted the notice on the Town’s three official bulletin boards. On May 11, 2026, at the time and place set for the public hearing, the City Council heard and considered all oral and written presentations and comments made regarding the proposed Fees and Charges.

SECTION 3. The City Council finds and determines that:

(a) The Fees and Charges established by this resolution:
(1) are imposed for a specific government service provided directly to the payor, or for reasonable regulatory costs of the Town for issuing licenses and permits, performing investigations, inspections, and administrative enforcements of the Town’s Municipal Code or other rules or ordinances;
(2) are no more than necessary to cover the reasonable costs of the governmental activity for which the Fee or Charge is imposed; and
(3) the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity for which the Fee or Charge is imposed.
(b) The Fees and Charges are not taxes within the meaning of California Constitution article XIII C, section 1(e).
(c) Based on substantial evidence contained in the 2026 Building and Planning User Fee Study and the administrative record, the proposed fee for “Solar Energy System Permit – with or without Battery Energy Storage System” reflects the Town’s reasonable cost for review, approval, issuance, inspection, and related oversight and administration of such a permit and is therefore authorized under Government Code Section 66015 notwithstanding the statutory fee cap.
-142-
Resolution No. 26-
May 11, 2026
3 SECTION 4. The City Council hereby adopts the Fiscal Year 2026-27 Town of Hillsborough Schedule of Fees and Charges outlined in Exhibit “A” hereto attached and the related Cost Allocation Plan. The Fees and Charges imposed by this resolution shall supersede any prior fees or charges imposed by resolution or otherwise by the City Council, to the extent such prior fees or charges conflict herewith.

SECTION 5. If any section, subsection, clause or phrase in this resolution or the application thereof to any person or circumstances is for any reason held invalid, the validity of the remainder of this resolution or the application of such provision to other persons or circumstances shall not be affected thereby. The City Council hereby declares that it would have passed this resolution and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any person or circumstance be held invalid.

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 11th day of May 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-143-

SCHEDULE OF

FEES AND

CHARGES

EXHIBIT A
-144-

SCHEDULE OF FEES AND CHARGES

SPECIAL TAX, SERVICE CHARGES & OTHER CITYWIDE FEES
Fee Description Task/Project Description Adopted FY 25-26 Proposed FY 26-27 Business License Tax
Category 1 - Permit Business (i.e.,
businesses that must obtain permits for
specific work projects) Tax assessed and
collected with building permit fees by
the Building Division (T-1)
.75% of permit
value with $30
minimum
.75% of permit
value with $30
minimum
Category 2 - Non-Permit Business (those
businesses not in Category 1 or
Category 3) (T-2)
.75% of Gross
Receipts with $150
minimum
.75% of Gross
Receipts with $150
minimum
Category 3 – Title Insurance Companies
(based on policy amount) $.30 per $1,000 $.30 per $1,000 Administrative fee $100 $100
Additional fee for each sales associate
in brokerage firms $25 $25
Additional fee for home occupation
business to reimburse for the Fire
Inspection
to be assessed by
the Central County
Fire Department
to be assessed by
the Central
County Fire
Department
Penalty for failing to obtain the business
license (5.04.230B)
$200 + 20% + 1 ½%
per month
$200 + 20% + 1 ½%
per month
Penalty for failing to renew the business
license (5.04.230A)
$200 + 50% + 1 ½%
per month
$200 + 50% + 1 ½%
per month
Business Vehicle Sticker $20 each $20 each
Public Safety Special
Tax Voter approved on June 1998
Improved Property $570 $570
Unimproved Property $218 $218
-145-

SCHEDULE OF FEES AND CHARGES

SPECIAL TAX, SERVICE CHARGES & OTHER CITYWIDE FEES
Fee Description Task/Project Description Adopted FY 25-26 Proposed FY 26-27 Sewer Rates 1 https://www.hillsborough.net/188/WaterSewer-Rates Sewer Capital
Construction
Development Fee
Residential connection $17,251 $17,337
Residential with 2nd unit, including guest
unit Actual Cost Actual Cost
Commercial connection rate based on
flow, with a minimum amount to be
determined by PW
Actual Cost Actual Cost
Water Rates 2 https://www.hillsborough.net/188/WaterSewer-Rates Water Penalty For each unit above allotment (see
Note) $10 $10
Water Deposit Assessed all new accounts $500 $500
Additional penalty (after delinquency
notice) .5% per month .5% per month
Water Capital
Construction
Development Fee
1 inch $17,727 $17,358
1 ½ inch Actual Cost Actual Cost
2 inch Actual Cost Actual Cost
3 inch (rate based on delivery capacity) Actual Cost Actual Cost 6 inch (rate based on delivery capacity) Actual Cost Actual Cost Solid Waste Rates 3 https://www.hillsborough.net/195/SolidWaste-Rates Storm Drainage
Assessment
Ordinance 541 6/27/94 (Collected by
County) $7.34 $7.34

1 Sewer rates can be found on the Town website: https://www.hillsborough.net/188/Water-Sewer-Rates 2 Water rates can be found on the Town website: https://www.hillsborough.net/188/Water-Sewer-Rates 3 Solid Waste rates can be found on the Town website: https://www.hillsborough.net/195/Solid-Waste-Rates -146-

SCHEDULE OF FEES AND CHARGES

SPECIAL TAX, SERVICE CHARGES & OTHER CITYWIDE FEES
Fee Description Task/Project Description Adopted FY 25-26 Proposed FY 26-27 Miscellaneous Events Accounts referred to collection
agencies
+ 47% of amount
owed
+ 47% of amount
owed
Annual Report or Budget Document $50 $50
Invoicing fee $25 $25
Photocopies $1 + $.20 each $1 + $.20 each
Fundraising Events Application fee (includes Fire Dept fee of $200) $500 $500
Public notification fee (Fundraising
Applications) $80 $80
Sign fee $175 $175
Police or Fire Additional Resources Actual Cost Actual Cost All Other Personnel Actual Actual
Staff Time Refer to FY 2026-27 Budget Appendix C Actual Cost Actual Cost City Attorney Actual cost + 20%
Administration fee
Actual cost + 20%
Administration fee
Town Consulting
Arborist Actual Cost Actual Cost
Other Contractual
Services
Actual cost + 20%
Administration fee
Actual cost + 20%
Administration fee
Non-Sufficient Funds Actual Charge by
the Bank
Actual Charge by
the Bank
-147-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

PLANNING DIVISION
Project/Review Type Fee/Task Description Adopted FY 25-26 Proposed FY 26-27

GENERAL PLANNING FEES
Conceptual
Development Feasibility
Review
Actual cost with
$5,000 minimum
deposit
Actual cost with
$5,000 minimum
deposit
Deed Restriction (Simple)
/ Covenant Recordation
& Filing
$902 $868
Restrictive Covenant
(Complex) -
Actual cost with
$2,500 minimum
deposit
General Plan
Amendment Actual cost
Actual cost with
$5,000 minimum
deposit
Annexation: Required Pre-Submittal
Consultation $1,396 $3,426
Annexation Project Review
Actual cost with
$10,000 minimum
deposit
Actual cost with
$10,000 minimum
deposit
Private School Use Permit
to Operate
Actual cost with
$7,500 minimum
deposit
Actual cost with
$7,500 minimum
deposit
Private School Use Permit
Annual Certification: Under 25 Students $431 $770
Over 25 Students $900 $1,206
Ministerial/Zoning Review - $752
Fire Plan Check/Review Refer to CCFD
Fee Schedule
Refer to CCFD
Fee Schedule

ACCESSORY DWELLING UNIT (ADU) REVIEW FEES
Ministerial ADU Review: Class 1 - Zoning Clearance –
State Allowed By-Right $685 $663
Class 2 – Objective Design &
Zoning Clearance – Locally
Regulated
$685 $1,141
Discretionary ADU
Exception Review Type B Project Design Review $905 $1,723

TYPE A & B DESIGN REVIEW PROJECT FEES
Preapplication Meeting
Required prior to application
submittal. A formal discussion of
proposed project scope and
preparation of project specific
submittal checklist.
- $1,003
Public Notification: Type B (when required) $224 $285
Type A $374 Included in
Project fee
Administrative/Staff-Level
- Type B Project:

Architectural Style/Exterior
Material Changes $1,214 $1,003
-148-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

PLANNING DIVISION
Project/Review Type Fee/Task Description Adopted FY 25-26 Proposed FY 26-27 Addition/Accessory Structure: <
500 sq ft (not including Second
Story Additions visible from the
Right of Way – Type A)
$1,214 $2,029
Substantial Alterations (not
triggering a "Tear Down" – Type A) $1,214 $2,733
Landscaping: > 10,000 sq ft or >
50 cy of Earth Movement (not
associated with a New House or
“Tear Down” – Type A)
$1,060 $1,982
Street Adjacent Fence, Gate, or
Columns $641 $1,109
Tree Removal:

Nonhazardous/Voluntary
(Hazardous Tree Removal, refer to
Building Division Fee Schedule)
$386 $1,076
Architecture & Design
Review Board (ADRB) -
Type A Project:

Preliminary ADRB Review (when
required) $2,476 $2,395
Type B Project referred for ADRB
Review - $3,172

Second Story Addition visible from
Right of Way < 500 sq ft /
Accessory Structures > 500 sq ft
$2,787 $3,643
Addition to Dwelling > 500 sq ft $2,381 $3,862
Substantial Alterations and "Tear
Down" $3,820 $5,739
New Dwelling: Full Demo of
Existing or New on Vacant Lot $4,403 $4,986
Landscaping required for
New Dwelling / "Tear Down"
(submitted with project)
$1,625 $1,998
Tennis Court and/or Landscaping
required for New Dwelling / "Tear
Down" (deferred submittal)
$1,869 $4,134
Continuance of ADRB Review $1,294 $1,351
Appeal of a Staff-Level Decision $2,556 $4,652
Approved Plan Revision: Requiring Staff Review, assessed at an hourly rate $217 $219
Requiring ADRB Review $2,219 $1,610

-149-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

PLANNING DIVISION
Project/Review Type Fee/Task Description Adopted FY 25-26 Proposed FY 26-27 Approval Extension: Requiring Staff Review $677 $668
Requiring ADRB Review $1,148 $1,304

CEQA AND RELATED RESOURCE EVALUATION FEES
Historic Resource
Evaluation: Staff Administration - $1,524
Consultant Analysis Actual Cost Actual Cost
Biological /
Archaeological / Tribal
Resource Evaluation
Consultant Analysis & Staff
Administration Actual Cost Actual Cost + 20%
Administration fee
Categorical Exemption /
Negative Declaration /
Mitigated Neg Dec /
Environmental Impact
Report
Consultant Analysis & Staff
Administration Actual Cost Actual Cost + 20% Administration fee

CITY COUNCIL REVIEW FEES
Dwelling > 8,000 sq ft FAR Staff preparation of item, in addition to Project fee $4,668 $3,300
Appeal of ADRB Decision Staff preparation of item $5,488 $5,793 Variance Staff preparation of item, in
addition to project fee $6,598 $6,389
MINISTERIAL SB 9 PROJECT REVIEW FEES
Optional Pre-Submittal
Consultation - $2,828
SB 9 Lot Split Review
Actual cost with
$20,000 minimum
deposit
Actual cost with
$20,000 minimum
deposit
SB 9 Two-Unit Review
(Building, Grading, and
Encroachment permit
fees applied separately)
Actual cost with
$20,000 minimum
deposit
Actual cost with
$20,000 minimum
deposit

COMMERCIAL FILM USE PERMIT FEES
Application - $1,368
Daily Permit: Private Property $500 $500
Public Property $1,000 $1,000

WIRELESS COMMUNICATION FACILITIES REVIEW FEES
Pre-Application Meeting
Two are recommended for Major.

First at earliest stage of site
location research; second after
site selection and design.
- $1,152
Wireless Project Review: Major
Actual cost with
$20,000 minimum
deposit
Actual cost with
$20,000 minimum
deposit
-150-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

PLANNING DIVISION
Project/Review Type Fee/Task Description Adopted FY 25-26 Proposed FY 26-27 Minor
Actual cost with
$10,000 minimum
deposit
Actual cost with
$10,000 minimum
deposit
Appeal of Wireless
Facility Decision
Actual cost with
$5,000 minimum
deposit
Actual cost with
$5,000 minimum
deposit
-151-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

BUILDING DIVISION
The Town of Hillsborough has adopted the 2025 California Building Standards Code, which encompasses all twelve parts under Title 24 of the California Code of Regulations, including Building, Residential, Electrical, Mechanical, Plumbing, Energy, Fire, Wildland-Urban Interface, Historical, Existing, and CALGreen Codes. In addition, The Town of Hillsborough Municipal Code further regulates the health, life, and safety standards for construction and site development under its authority.

Under State Law, local jurisdictions have the duty and authority to regulate all construction within its boundaries, to require permits for such construction, and to collect fees for such permits as to reasonably defray costs associated with the administration and enforcement of the applicable codes and standards.

A description of fees for permits is found below, followed by an itemized fee schedule. Additional mandated fees and taxes are assessed in accordance with current legislation and ordinances.

In instances where the strict application of a fee from this Schedule would constitute a substantial inequity to an applicant or the Town, the Building Official shall be authorized to adjust such fees on a case-by-case basis. If services not included in the fee schedule are required, the Building Official may assess and collect special fees necessary to defray the cost of the service and its administration as allowed by statute.

DEFINITIONS OF FEES
Building Permit by Valuation Fees Building Permit by Valuation are all inclusive permitting fees and follow two methods to determine valuation based on
project scope. Where a project is not tied to structural square footage, staff review the applicant’s submitted valuation compared to fair market value. For structures with measurable floor area, the Town uses a valuation calculation model taking a project’s square footage multiplied by an assigned price of construction value. The Town’s fee per valuation bracket is based on staff time required to review and oversight projects scalable to size and complexity. Title 24 further authorizes the Building Official to set final building permit valuations.

Single Trade & Scope Specific Flat
Rate Permit Fees
When a project generally requires only one construction trade or is generally accepted to entail very standardized levels of review and oversight, a flat rate permit fee is assessed based on typical number of staff hours spent on that particular project scope.

Plan Check Fee The fee is assessed when plans are required for the issuance of the building permit and includes review of resubmitted plans in response to plan check comments.

Revision Plan Check Fee This fee is based on the actual time spent reviewing revisions to approved plans.

Building Reinspection Fee When the work for a called inspection is not ready, inaccessible to the inspector, or not on the approved plans, a fee will be assessed and must be paid prior to the next inspection.

Construction Site Compliance
Inspection
When the Town receives multiple complaints about the
management of a construction site and needs to investigate, an hourly fee will be assessed for the time spent by the Town’s Code Compliance Coordinator to evaluate the complaint.
-152-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

DEFINITIONS OF FEES
Construction Completion Deposit A Building Completion Deposit may be assessed on permits to assure reasonable time limits for completion and prevent the creation of public nuisances. The deposit is assessed in accordance with Hillsborough Municipal Code § 15.30.

Business License Tax A Business License Tax will be applied to each permit based on the Category 1 classification and calculation. For further information, please refer to the Special Tax Fees and
Hillsborough Municipal Code § 5.04.

Technology Fee The Technology Fee is charged on all permits and helps defray costs associated with the Town’s permitting software
procurement and maintenance required for administration of Title 24.

Construction Vehicle Impact Fee The Town collects the fee to offset the costs associated with street repaving and maintenance projects.

General Plan Maintenance Fee The Town collects the fee to cover reasonable costs associated with maintaining the Town’s General Plan and land use policies, as mandated by the State. It is levied on permits that result in a change to the community's density and footprint, including New and Replacement Dwellings, ADUs, JADUs, Additions, Major Remodels, Creation of New
Bedrooms, and other Major Site Development permits.

BSASRF Fee The Building Standards Administration Special Revolving Fund (BSASRF) Fee is a state fee collected on all permits and remitted to the State for the adoption, publication, and educational efforts associated with green building standards.

SMIP Fee The Strong Motion Instrumentation Program (SMIP) fee is a state fee collected on permits for structures intended to support, shelter, or enclosure persons, animals, chattels, or property of any kind. It is remitted to the State to develop recommended changes to seismic provisions of building
codes, to assist local governments in their general plan process, and to aid emergency response personnel in the event of a disaster.

Expired Permit Reinstatement Fee A renewal fee will be assessed for an expired permit based on the value of the remaining work of the original permit.

Stop Work Fee A Stop Work Notice is issued for any violation of the California Building Standards Code or Hillsborough Municipal Code, including work without or beyond the scope of the permit. All work on the site must cease until an investigation and
inspection are carried out. Fees will be assessed and must be paid before permits are reactivated or issued.
-153-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

BUILDING DIVISION
Type of Fee Charged Adopted FY 25-26 Proposed FY 26-27

MANDATED FEES & TAXES
Business License Tax
Category 1
Per
Permit Refer to Special Tax Fees Refer to Special Tax Fees Technology Fee Per
Permit
5% (.05) of the permit fee
(7/1/03)
1% (.01) of the permit fee
(7/1/26)
SMIP Per
Permit
.01% (0.0001) of permit
valuation
.01% (0.0001) of permit
valuation
BSASRF Per
Permit
$1 per $25,000 of permit
valuation
$1 per $25,000 of permit
valuation
General Plan Maintenance Per
Permit
.51% (0.0051) of permit
valuation (8/8/22)
.61% (0.0061) of permit
valuation (7/1/26)
Construction Vehicle Impact Per
Permit
.83% (0.0083) of the job
value (7/1/06)
.83% (0.0083) of the job
value (7/1/06)

BUILDING & COMBINATION OF TRADE SCOPE VALUATION BASED PERMIT FEES Plan Check:

Valuation below $1,000,000 Per
Permit 65% of Building Permit Fee 25% of Building Permit Fee Valuation above $1,000,000 Per
Permit 65% of Building Permit Fee 75% of Building Permit Fee Revision Plan Check Hourly Actual Cost $235
Fire Plan Check/Review Refer to CCFD Fee
Schedule
Refer to CCFD Fee
Schedule
Ministerial Zoning Review Per
Permit - $752
Building Permit by Valuation ($):
$1-$4,000 Valuation Per
Permit $233 $478
$4,001-$25,000 Valuation
First 4,001
Each additional 1,000
Per
Permit $233
$14.30
$478
$23.70
$25,001-$50,000 Valuation
First 25,001
Each additional 1,000
Per
Permit $543.51
$10.21
$976.18
$52.06
$50,001-$100,000 Valuation
First 50,001
Each additional 1,000
Per
Permit $795.90
$7.35
$2,277.77
$30.60
$100,001-$500,000 Valuation
First 100,001
Each additional 1,000
Per
Permit $1,161.95
$5.90
$3,807.96
$11.27
$500,001-$1,000,000 Valuation
First 500,001
Each additional 1,000
Per
Permit $3,521.05
$5.00
$8,314.03
$9.00
$1,000,001-$5,000,000 Valuation
First 1,000,001
Each additional 1,000
Per
Permit $6,019.80
$3.75
$11,026.10
$1.81
-154-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

BUILDING DIVISION
Type of Fee Charged Adopted FY 25-26 Proposed FY 26-27
$5,000,001 and up Valuation
First 5,000,001
Each additional 1,000
Per
Permit $21,019.80
$3.75
$18,253.88
$0.90
Construction Completion Deposit
Pursuant to HMC § 15.30.070
Per
permit w/
value
>50K
2% (0.02) of Valuation 2% (0.02) of Valuation

SINGLE TRADE & SCOPE SPECIFIC FLAT RATE PERMIT FEES
ADU Building Permit – New
Structure/Construction
Per
Permit Valuation Based $5,352
ADU/JADU Building Permit –
Conversion of Existing Space
Per
Permit Valuation Based $3,739
Kitchen / Bathroom Permit
Like for Like - No Wall Changes
Each Additional
Per
Permit
Each
Valuation Based
$382
$1,326
$261
Reroof Permit:

No Architectural Review

Requires Architectural Review
Per
Permit
$244.40, $440.51, $542.61
-
$823
$1,545
Tree Removal Permits:

Visibly Dead Per
Permit Valuation Based $287
Hazardous with Arborist
Report
Review by Town Consulting
Arborist (as needed)
Per
Permit
At cost
Valuation Based
$682
Hourly rate
Nonhazardous Approved by
Planning
Per
Permit Valuation Based $218
Demolition Permit:

Dwelling/Structure Removal
Exploratory
Swimming Pool / Spa
Per
Permit Valuation Based $1,208
$982
$727
Solar Energy Storage Permit – w/
or w/o BESS
Per
Permit $233 $905
Electrical Vehicle Charger Permit Per
Permit $233 $588
Battery Energy Storage System
(BESS) Permit
Per
Permit $233 $789
Electrical Service Permit Per
Permit $539 $942
Temporary Power Permit Per
Permit $355 $433
Generator Permit Per
Permit $714 $800
-155-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

BUILDING DIVISION
Type of Fee Charged Adopted FY 25-26 Proposed FY 26-27
Water Heater Permit Per
Permit $352 $421
HVAC System Permits:

Furnace Replacement - Like
for Like Location
Per
Permit $454 $421
HVAC Replacement - Like for
Like Location
Per
Permit $454 $566
HVAC System Upgrade /
Reconfiguration
Per
Permit $651 $834
New or New Location of
Exterior Units Each - $159
Additional M/E/P Appliance/Unit
(in addition to above flat rate
permit fee)
Each $76 + BASE PERMIT FEE $64 + BASE PERMIT FEE
Gas Line Permit Per
Permit $250 $577
Sewer Alterations and Swr/Wtr
Transfer of Title Testing Permits:

Voluntary Sewer Lateral
Alterations Permit (includes
Cleanout or Backwater
device)
Per
Permit $396 $468
Transfer of Title Sewer &
Water Line Testing Permit
Per
Permit $716 $545
With Sewer Lateral
Alterations (includes
Cleanout or Backwater
device)
Each $146 + BASE PERMIT FEE $306 + BASE PERMIT FEE
With Water Line Pressure
Reducing Valve or
Backflow Preventer
Each $37 + BASE PERMIT FEE $35 + BASE PERMIT FEE
Transfer of Title – Water Line
Testing Only Permit
Per
Permit $250 $382
Plumbing Repair Permit Per
Permit $250 $468

ADMINISTRATIVE FEES & PENALTIES
Building Reinspection Each $206 $248
After Hour Inspection
(3-hour minimum) Each
Rate: $210
3 hr min x 1.5 hourly rate
Add’l hours at 1.5 x rate
Sunday = 3 hr min hourly
rate x 2
Rate: $235.58
3 hr min x 1.5 hourly rate
Add’l hours at 1.5 x rate
Sunday = 3 hr min hourly
rate x 2
Construction Site Compliance
Inspection (complaint based) Per Hour - $214
-156-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

BUILDING DIVISION
Type of Fee Charged Adopted FY 25-26 Proposed FY 26-27
Expired Permit Reinstatement Per
Permit
Staff time + Activation
fees based on a valuation
of the remaining work
$544 + Activation fees
based on a valuation of
the remaining work
Construction Completion
Penalties
Pursuant to HMC §

15.30.060
Pursuant to HMC §

15.30.060
Stop Work Issued Pursuant to HMC §

15.04.070
Pursuant to HMC §

15.04.070
Stop Work Penalties Pursuant to HMC §

15.04.070
Pursuant to HMC §

15.04.070
Code Enforcement Penalties Pursuant to HMC § 8.16 Pursuant to HMC § 8.16 Recycle Monitoring Cost Pursuant to HMC §

15.18.040
Pursuant to HMC §

15.18.040
Recycle Fines Pursuant to HMC §

15.18.050
Pursuant to HMC §

15.18.050
-157-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

ENGINEERING DIVISION
Fee Description Task/Project Description Adopted FY 25-26 Proposed FY 26-27 Address Change Quarterly approval where the
house currently exists $1,476 $1,532
Accelerated process, in addition to
the above $521 $534
Appeal fee $916 $943
Construction
Vehicle Impact
Refer to the Building Division Fee
Schedule
Roadway Slurry Seal in-lieu fee $4/square yard $4/square yard Encroachment
Permits
With Engineering Review
Administration Fee
$1,533
-
$1,483
$274
With Engineering Utility Review
Administration Fee
$2,124
-
2093
$335
Over the Counter
Administration Fee
$952
-
$896
$544
Additional service added to the
base encroachment permit:

1. Utility Trench $279 $286

2. Curb & Gutter $279 $286

3. Parking Strip $279 $286

4. Driveway Apron $279 $286

5. Curb Drains $279 $286

6. Bell Holes $279 $286

7. Sewer Tie-in $279 $286

8. Storm Drains $279 $286

9. ROW fixtures $279 $286

10. Planting in ROW $279 $286
Inspection Staff time cost Staff time cost
Reinspection/Extra inspection $254 $263
Revocable Encroachment Permit
(REP) $4,086 $4,224
Erosion Control
Inspection (in
addition to
grading fees for
erosion control
during wet
season)
Level 1 $1,951 $1,951
Level 2 Additional $3,415 Additional $3,415
Level 3 $5,291+ actual cost
in excess of 10 hours
$5,303 + actual cost
in excess of 10 hours
Re-issue $1,951 $1,951
Exceptions Grading $944 $959
Right-of-Way $944 $959
C.3 Review Fee SFR create and replace
>10,000 SF of Impervious Area $1,723 $1,779

-158-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

ENGINEERING DIVISION
Fee Description Task/Project Description Adopted FY 25-26 Proposed FY 26-27 Grading Permit Application fee $168 $166
Grading Permit Base Fee $1,633 $1,642
< 500 cubic yards to be moved $2,295 $2,308
500 – 1,499 cubic yards to be
moved $4,316 $4,339

> 1,500 cubic yards to be moved
and transport to and from site >=
1,500 cubic yards
$9,830 $9,926

> 1,500 cubic yards to be moved
and transport to and from site is <
1,500 cubic yards
$7,738 $7,783
Land Divisions Abandonment
Actual Cost with
$5,000 minimum
deposit
Actual Cost with
$5,000 minimum
deposit
Tentative Map
Actual Cost with
$20,000 minimum
deposit
Actual Cost with
$20,000 minimum
deposit
Parcel/Final Map
Actual Cost with
$23,972 minimum
deposit + $365/lot
Actual Cost with
$28,983 minimum
deposit + $365/lot
Lot Line Adjustment
Actual Cost with
$5,000 minimum
deposit
Actual Cost with
$5,000 minimum
deposit
Park Permit $916 $980
Stop Work Permit Reactivation fee (per occurrence) $2,956 $3,046 -159-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

PUBLIC WORKS DIVISION – SPECIAL SERVICES
Fee
Description Task/Project Description Adopted FY 25-26 Proposed FY 26-27 Sewer Video
Review
Review and process private
sewer lateral videos $736 $747
General
Service
Request
Sewer – Regular work hours Actual Cost Actual Cost
Streets – Regular work hours Actual Cost Actual Cost
Water – Regular work hours Actual Cost Actual Cost
Sewer – After work hours Actual cost
(3hrs/$739 minimum)
Actual cost
(3hrs/$769 minimum)
Streets – After work hours Actual cost
(3hrs/$883 minimum)
Actual cost
(3hrs/$925 minimum)
Water – After work hours Actual cost
(3hrs/$748 minimum)
Actual cost
(3hrs/$781 minimum)
Fire Flow Test Flow Hydrant $660 $697
Non-flow $412 $440
Water Meter
Upgrade and
Service Tap
Short Service – upgrade to 1
inch $9,578 $9,860
Short Service – 1 inch to 1.5 inch $10,686 $10,968
Short Service – 1 inch or 1.5 inch
to 2 inch $10,895 $11,177
Long Service (more than 5 feet
into roadway) Upgrade to 1
inch
$21,743 $22,595
Long Service (more than 5 feet
into roadway) 1 inch to 1.5 inch $22,851 $23,703

Long Service (more than 5 feet
into roadway) 1 inch or 1.5 inch
to 2 inches
$23,060 $23,912
Stand Alone Meter
Replacement Charge $2,596 $2,596
Resetting pavers/flagstone with
meter upgrade
Contractor’s Actual
Cost with $1,000
minimum deposit
Contractor’s Actual
Cost with $1,000
minimum deposit
Water Reconnection Charge (regular
work hours) $218 $227
Reconnection Charge (after
hours) $748 $781
*regular hours
Reconnection Charge (Qualify for
Low Income) $50 $50
*after hours
Reconnection Charge (Qualify for
Low Income) $150 $150
Manual Water Meter Read $199 $208
-160-

SCHEDULE OF FEES AND CHARGES
Deposit accounts: Full payment is required before permits issued. Failure to pay additional monies owed under deposit account constitutes an infraction, regardless of permit issuance.

POLICE DEPARTMENT
Fee Description Task/Project Description Adopted FY 25-26 Proposed FY 26-27 Abatement cost Per lot or nuisance
declared
Actual + 100% admin fee
with $250 minimum
Actual + 100% admin fee
with $250 minimum
Alarm Permit $60 $60
False Alarm (1st and 2nd) Free of Charge Free of Charge Monitoring Fee $24/month -
Character Letter $32 $36
Copies Police Report $30 $36
Fingerprints (per card) $35 $35
Repossession fee
(GC 41612) $15 $15
Vehicle Release $51 $54
All Other Services Police Officer $238 $245
Police Corporal $260 $289
Police Sergeant $303 $317
Communications Officer $205 $217
Support Service
Manager $203 $239
-161-

SCHEDULE OF FEES AND CHARGES

CENTRAL COUNTY FIRE DEPARTMENT
Service Reference
Adopted
FY 2025-26
Adopted
FY 2026-27
Apartments, Hotels, and Motels
Apartments, Hotels, and Motels – 10 or less units $178 $181 Apartments, Hotels, and Motels – 11 to 25 units $201 $207 Apartments, Hotels, and Motels – 26 to 100 units $225 $234 Apartments, Hotels, and Motels – 101 to 300 units $376 $407 Apartments, Hotels, and Motels – 301 or more units $469 $514 Highrise H&S
§13214(b) $656 $741
Care Facilities Inspections
Pre-inspection of licensed community care (per
hour)
H&S Code
§13235 $168 $184
Residential Care Facility for Elderly serving 6 or
fewer persons – fire inspection enforcement
H&S Code
§1569.84 Fee set by State Fee set by State
Residential Care Facility $324 $333
Large Family Day Care $127 $136
Skilled Nursing Facilities $614 $637
Hospital/Institution $2,934 $3,069
Re-Inspections
Second re-inspection (fee per inspection) $139 $148
Third and subsequent re-inspection (fee per
inspection)
$170 $181
Construction Fees
General Fire & Life Safety Services
 Consultation & Research
 Pre-application meetings & Design Review
 Property Survey
 General Construction Inspections
 Processing, Scheduling, and Record
Keeping
12% of Building
Permit fees for
Commercial,
Non-Residential
and Multi-Family
Residential
12% of Building
Permit fees for
Commercial,
Non-Residential
and Multi-Family
Residential
Building or Planning Plan Check Fees (per hour) $263 $265 Expedite Building or Planning Check Fees
(2 hours minimum) $439 $465
Consultation and Planning (per hour) $325 $358
Alternate Means of Protection Review (per hour) $448 $466 Additional Construction Inspection (all permits)
(per hour) $204 $220
Fire Alarm/Fire Protection Systems
Permit for Sprinkler Monitoring System | New Panel
or Communicator
$217 $220
Permit for Manual System $217 $220
Permit for Automatic System | core & shell build
out TI
$362 $368
Permit for Combination System | core & shell build
out TI
$507 $520
Permit for Combination | Automatic System |
core & shell build
out TI > 6 stories or Highrise
$1,262 $1,370
Fixed Fire Extinguishing System Permit $238 $254
-162-

SCHEDULE OF FEES AND CHARGES

CENTRAL COUNTY FIRE DEPARTMENT
Service Reference
Adopted
FY 2025-26
Adopted
FY 2026-27
Standpipe System Permit $362 $368
Storage Tank (above or below ground) Permit $217 $220
Multi-Residential or Commercial Fire Alarm system
remodel or extension $217 $234
Multi-residential or commercial minor fire alarm
remodel or repair (device relocation/adjustment) $205 $216 Emergency Responder Radio Coverage System
Permit
§510, CFC
Title 24
Part 9
$433 $446
Fire Sprinkler Systems
One-or two-Family Dwelling Fire Sprinkler System
(NFPA 13D) - flat fee including 2 inspections
(additional inspections will be charged at the
hourly rate of the staff who perform each
inspection)
$507 $515
Fire Pump Permit $244 $258
New Multi-Residential or Commercial Fire sprinkler
System (NFPA 13 or 13R) Permit – flat fee including
2 inspections (additional inspections will be
charged at the hourly rate of the staff who
perform each inspection)
$797 $824
Multi-Residential or Commercial Fire Sprinkler
system remodel or extension $253 $266
Fire Sprinkler minor remodel or repair (sprinkler
head relocation/adjustment) $205 $216
Underground Fire Service Line Permit $362 $363
Fire Flow Information Admin Fee
(Please refer to the fee schedule for each city for
the respective fire flow fees for each city)
$43 $46
Miscellaneous Fees and Permits
Community CPR / AED Class $40 Resident
$50 Non-Resident
$40 Resident
$50 Non-Resident
Labor Rate for Mechanic Shop $125 $125
Photographs from investigations Cost of
Reproduction
Cost of
Reproduction
Photocopies .25 cents/page .25 cents/page
Fire Incident Reports (not including photographs) $15 $15 Non-Sufficient Funds | Returned Check Fee As charged by Bank
As charged by
Bank
Work without a construction permit
(fees to be determined at Fire Marshal’s discretion)
Up to 10 times the
permit fees
Up to 10 times the
permit fees
Emergency Response Costs for Driving under the
influence.
(Billing upon conviction)
Govt.

Code
§53150-58
Costs according
to Personnel
Schedule below
plus Apparatus
cost of $173.47/
hr. as set by State
Costs according
to Personnel
Schedule below
plus Apparatus
cost of $173.47/
hr. as set by State
-163-

SCHEDULE OF FEES AND CHARGES

CENTRAL COUNTY FIRE DEPARTMENT
Service Reference
Adopted
FY 2025-26
Adopted
FY 2026-27
False Alarms
$690 for 3 to 5
and $1,380 for 6
or more
$780 for 3 to 5
and $1,560 for 6
or more
Vegetation Management Inspection (WUI) | AB38
Point of Sale Inspection $337 $347
Change of Use inspection | Business License
Inspection
(usually triggered by new business license)
$162 $191
Hazardous Materials Clean-up/Response
Costs according
to Personnel
Schedule below
plus Apparatus
cost of $173.47/hr.
as set by State
Costs according
to Personnel
Schedule below
plus Apparatus
cost of $173.47/hr.
as set by State
Community CPR / AED Class $40 Resident
$50 Non-Resident
$40 Resident
$50 Non-Resident
Standby Service
Firefighter (per hour – minimum of 3 hours) $153 $169
Fire Captain (per hour – minimum of 3 hours) $177 $195
Battalion Chief (per hour – minimum of 3 hours) $210 $225 Engine Company (per hour – minimum of 3 hours
plus apparatus costs – per day as set by the State)
$540 per hour +
$173.47/hr. for
apparatus
$589 per hour +
$173.47/hr. for
apparatus
Personnel Costs (per hour)
Administration $81 $104
Firefighter $153 $169
Fire Captain $177 $195
Fire Prevention Specialist $93 $107
Fire Inspector $145 $152
Deputy Fire Marshal $227 $249
Battalion Chief $210 $225
Fire Marshal $258 $313
Deputy Fire Chief $325 $363
Fire Chief $353 $394
General Permits
Aerosol Products $182 $188
Amusement Buildings $291 $302
Aviation Facilities $520 $530
Battery System $520 $530
Carnivals, Fairs, and Festivals $494 $535
Christmas Tree Lot $291 $302
Combustible Fiber Storage $291 $302
Combustible Material Storage $291 $302
Commercial Rubbish-Handling Operation $291 $302
Compressed Gases $291 $302
Cryogens $291 $302
Dry Cleaning Plants $291 $302
Dust-Producing Operations $291 $302
-164-

SCHEDULE OF FEES AND CHARGES

CENTRAL COUNTY FIRE DEPARTMENT
Service Reference
Adopted
FY 2025-26
Adopted
FY 2026-27
Exhibits & Trade Shows – Display Booth $291 $302
Exhibits & Trade Shows – With Open Flame * $291 $302
Exhibits & Trade Shows – Display Fuel Powered
Equipment $291 $302
Explosives or Blasting Agents $508 $530
Fire Hydrants and Water Control Valves $285 $293
Fireworks $508 $530
Flammable or Combustible Liquids $508 $530
Hazardous Materials $508 $530
High-Piled Combustible Storage – 20,000 square
feet or less $519 $542
High-Piled Combustible Storage – more than
20,000 square feet $592 $618
Hot-Work Operations $291 $302
Liquefied Petroleum Gasses $508 $530
Liquid-or gas-fueled Vehicles or Equipment in
Assembly Buildings $508 $530
Live Audiences $508 $530
Lumber Yards storing in excess of 100,000 board
feet $291 $302
Magnesium Working $291 $302
Motor Vehicle Fuel-Dispensing Stations $291 $302
Open Burning * $291 $302
Organic Coating $291 $302
Ovens, Industrial Baking and Drying $291 $302
Parade Floats $291 $302
Places of Assembly $472 $492
Production Facilities $472 $492
Pyrotechnical and Special Effects Material $288 $495
Radioactive Materials $291 $302
Refrigeration Equipment $399 $416
Repair Garage $291 $302
Spraying and Dipping $291 $302
Tents, Canopies, and Temporary Membrane
Structures $287 $297
Tire Storage $291 $302
Wood Products $291 $302
Aerosol Products $182 $188
Amusement Buildings $291 $302
Aviation Facilities $520 $530
Battery System $520 $530
Carnivals, Fairs, and Festivals $494 $535
Christmas Tree Lot $291 $302
* Fees not required for religious ceremonies when approved by the Fire Department -165-

SCHEDULE OF FEES AND CHARGES
.

Animal Control and Licensing Fees and Charges
(a) License Fees
Dogs
Unaltered dog
1-year license $ 55.00
3-year license $ 160.00
Unaltered dog Senior Pet Owner (over 60 yrs.)
1-year license $ 23.00
3-year license $ 64.00
Altered dog
1-year license $ 25.00
3-year license $ 70.00
Altered dog Senior Pet Owner (over 60 yrs.)
1-year license $ 10.00
3-year license $ 25.00
Misc. dog fees
Late fee $ 20.00
Duplicate tag $ 10.00
Cats
Unaltered cat
1-year license $ 20.00
3-year license $ 55.00
Unaltered cat Senior Pet Owner (over 60 yrs.)
1-year license $ 12.00
3-year license $ 31.00
Altered cat
1-year license $ 8.00
3-year license $ 19.00
Altered cat/ Senior Pet Owner (over 60 yrs.)
1-year license $ 5.00
3-year license $ 12.00
Misc. cat fees
Late fee $ 7.00
Duplicate tag $ 5.00
(b) Redemption Charges
Type A & B (large or medium size animals — horses, cows, hogs, sheep, etc.)
Impound cost $ 100.00
Board cost per day $ 30.00
Trailering cost (per use) $ 100.00
Type C (dogs, and cats)
Impound Costs — First Impound
Altered — licensed, wearing tag $ 40.00
Unaltered — licensed, wearing tag $ 65.00
Altered — unlicensed, no tag $ 55.00
Unaltered — unlicensed, no tag $ 85.00
Impound Costs — Second Impound
Altered — licensed, wearing tag $ 90.00
Unaltered — licensed, wearing tag $ 125.00
Altered — unlicensed, no tag $ 105.00
Unaltered — unlicensed, no tag $ 140.00
-166-

SCHEDULE OF FEES AND CHARGES
.

Animal Control and Licensing Fees and Charges
Impound Costs — Third Impound
Altered — licensed, wearing tag $ 135.00
Unaltered — licensed, wearing tag $ 155.00
Altered — unlicensed, no tag $ 155.00
Unaltered — unlicensed, no tag $ 180.00
Impound Costs — Fourth Impound
Altered — licensed, wearing tag $ 180.00
Unaltered — licensed, wearing tag $ 215.00
Altered — unlicensed, no tag $ 200.00
Unaltered — unlicensed, no tag $ 240.00
Impound Costs — Fifth Impound and up
Altered — licensed, wearing tag $ 225.00
Unaltered — licensed, wearing tag $ 260.00
Altered — unlicensed, no tag $ 245.00
Unaltered — unlicensed, no tag $ 285.00
Board charges (per day)
Altered — dogs $ 25.00
Unaltered — dogs $ 35.00
Altered — cats $ 16.00
Unaltered — cats $ 22.00
Type D (small size animals, e.g., birds, hamsters, or other) Impound cost $ 20.00
Board cost $ 10.00
(c) Surrender, Euthanasia and DOA (Dead on Arrival) Disposal Fees Dog — Licensed or unlicensed
Surrender $ 60.00
Euthanasia $ 50.00
DOA Disposal $ 30.00
Cat — Licensed or unlicensed
Surrender $ 60.00
Euthanasia $ 50.00
DOA Disposal $ 30.00
Rabbit/Small Animal
Surrender $ 40.00
Euthanasia $ 30.00
DOA Disposal $ 15.00
Litter of Three or more
Surrender $ 50.00
Euthanasia $ 40.00
DOA Disposal $ 20.00
Bird/Fowl
Surrender $ 20.00
Euthanasia $ 15.00
DOA Disposal $ 20.00
All Other Companion Animals (Reptiles, Amphibians, etc.) Surrender $ 25.00
Euthanasia $ 25.00
DOA Disposal $ 20.00
-167-

SCHEDULE OF FEES AND CHARGES
.

Animal Control and Licensing Fees and Charges
Farm Animals
Surrender $ 60.00
Euthanasia: Under 100 pounds $ 60.00
Over 100 pounds $ 125.00
DOA Disposal: Under 100 Pounds $ 30.00
Over 100 pounds $ 100.00
(d) Other Animal Control Fees
Quarantine Fee $ 60.00
Dangerous Animal Permit (DAP) Fee $ 300.00
DAP Inspection Fee $ 100.00
DAP Signage $ 15.00
Field Retrieval/Return Fee $ 40.00
Breeding Permit Fee $ 150.00
Fancier Permit and/or Exotic Pet Fee $ 100.00
Return Check Fee $ 25.00
Service Dog Application Processing Fee $ 50.00
The Town’s latest ordinance 6.12.070 adopts the San Mateo County Fee Schedule for animal control services. The above fees reflect the County’s fee schedule. Any updates to the County Fee Schedule that are not reflected on this schedule supersede the fees on this schedule.
**These fees are charged by the County of San Mateo and are remitted to the Town based on contractual formula. -168-
RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH AUTHORIZING WATER AND SEWER CONNECTION FEES EFFECTIVE JULY 1, 2026
WHEREAS, on February 12, 2007, the City Council adopted an ordinance amending Sections 13.20.030 and 13.32.105 of the Hillsborough Municipal Code whereby water and sewer connection fees respectively are annually adjusted based on the Engineering News Record Construction Cost (ENR-CCI) 20-City Average Index; and
WHEREAS, the ENR-CCI 20-City Average Index used for 2026-2027 is 0.5%; and WHEREAS, the proposed fees and charges for the fiscal year (FY) 2026-27, if adopted, would be effective July 1, 2026, until amended; and WHEREAS, the actions taken pursuant to this Resolution do not constitute an “increase” to any fee or charge subject to article XIII D, section 6 of the California Constitution, and do not constitute the imposition of new connection fees under Government Code section 66013, because they are being adjusted in accordance with a pre-approved formula; and WHEREAS, fees and charges adjusted pursuant hereto do not exceed the cost of the service for which they are imposed; and
WHEREAS, the Financial Advisory Committee, the City Council and the public have been presented in an open and noticed public meeting, all of the details of the proposed changes to the water and sewer connection fees.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby authorizes sewer service charges and sewer and water connection fees for the FY 2026-27, effective July 1, 2026, as follows:

Water and Sewer Residential Connection Fee Adopted FY
2025-26
Proposed FY
2026-27
Sewer Capital Construction Development Fee $17,251.00 $17,337.00 Water Capital Construction Development Fee $17,727.00 $17,816.00 This resolution shall be printed and posted upon the authorized official bulletin boards of the Town of Hillsborough.

Mayor of the Town of Hillsborough
Attest: City Clerk
-169-
ATTACHMENT 2
Resolution No. 26-
May 11, 2026
2 This resolution was adopted by the City Council of the Town of Hillsborough at its regular meeting held on the 11th day of May 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
-170-

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

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Receive a Report on Town Vacancies, Recruitment and Retention Efforts in Compliance with Assembly Bill 2561 and Government Code Section 3502.3 SUMMARY: Assembly Bill (AB) 2561, which became effective January 1, 2025, codifies Section 3502.3 in the State’s Government Code. The law requires public agencies to hold at least one public hearing per fiscal year, prior to budget adoption, to discuss vacancies, and current recruitment and retention efforts.

If vacancies within a single bargaining unit meet or exceed 20% of the total number of authorized full-time equivalent (FTE) positions, the Town, upon the request of the recognized employee organization for that bargaining unit, must provide additional information during the public hearing:
• The total number of job vacancies within the bargaining unit; • The total number of applicants for vacant positions within the bargaining unit; • The average number of days to complete the hiring process from when a position is posted; and
• Opportunities to improve compensation and other working conditions.

As of April 30, 2026, the Town has 98 FTEs and 9 vacancies:

Bargaining Unit Vacancies Total FTEs Rate
Hillsborough Police Officers Association 5 31 16.13%
Public Works Clerical – Teamsters Union Local 856 3 32 9.38% Public Works Supervisors – Teamsters Union Local
350
0 4 0.0%
Unrepresented 1 31 9.4%
TOTAL 9 98 9.1%
FISCAL IMPACT: There is no fiscal impact associated with this agenda item.

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.

ATTACHMENT(S): None
PREPARED BY: William Li, Administrative Services Manager -171-
Agenda Staff Report – Hillsborough City Council
May 11, 2026

RECOMMENDATION:

1. Open the Public Hearing;

2. Take public comments; and

3. Close the Public Hearing.
-172-

TOWN OF HILLSBOROUGH
San Mateo County
1600 Floribunda Avenue
Hillsborough, CA 94010
9 NEW BUSINESS

CITY COUNCIL MEETING
MAY 11, 2026

AGENDA STAFF REPORT
ITEM SUBJECT: Resolution Adopting Two Policies: (1) Policy 421: Disruption of Telephonic or Internet Service During Meetings, in Accordance with Senate Bill 707; and (2) Policy 422:

Public Comment Regulations
SUMMARY: The Ralph M. Brown Act (Government Code section 54950 et seq.) imposes open meeting requirements on local legislative bodies. In 2025, the Legislature adopted Senate Bill 707 (“SB 707”), which reorganizes, clarifies, and updates various Brown Act provisions, including those governing teleconferencing, remote public participation, and meeting procedures.

SB 707 applies to all legislative bodies as defined by the Brown Act, but certain special provisions apply only to what is now defined in the Brown Act as “eligible legislative bodies.” The Hillsborough City Council (but not other boards or committees of the Town) qualifies as an “eligible legislative body” because the City Council governs a Town located in San Mateo County, a County with a population of more than 600,000 people. See, Cal. Gov. Code 54953.4(e)(2)(C) (defining “eligible legislative body” to include a city council of a city located in a county with a population of 600,000 or more).

Among other things, starting July 1, 2026, SB 707 requires Brown Act meetings for “eligible legislative bodies” (in this case, only the City Council) to follow specific requirements for providing remote access to public participants in Council meetings via two-way audiovisual platforms or twoway telephonic services; captioning when using audiovisual platforms; and expanded accessibility and translation for notices and websites. In short, state law now requires that the Town continue to allow the public to attend Council meetings via Zoom. The Town has allowed the public to attend Council meetings via Zoom since the pandemic so this change should maintain status quo with some minor changes as necessitated by SB 707 and further detailed in this staff report.

ANALYSIS:

Requirement to Adopt a Policy for Service Disruptions for Remote Meeting Participants A key aspect of SB 707 is that eligible legislative bodies are required, on or before July 1, 2026, to adopt a policy governing disruption of telephonic and internet service for remote participants. Such a policy must be adopted by a separate majority vote (i.e. not on the consent calendar) of the eligible legislative body in an open session.

SB 707 sets specific requirements that must be contained within that policy. It must contain procedures for recessing and reconvening a meeting in the event of disruption. It must also specify the efforts that the eligible legislative body shall make to attempt to restore the service for persons participating remotely in the meeting.
-173-
Agenda Staff Report – Hillsborough City Council
May 11, 2026

These requirements include recessing the open session and making a good faith attempt to restore the service if a disruption of telephonic or internet services occurs that prevents the public from attending or observing the meeting. The policy must also prohibit the legislative body from reconvening the open session of the meeting until at least one hour following the disruption, or until telephonic or internet service is restored, whichever is earlier.

Additionally, if telephonic or internet service cannot be restored, the eligible legislative body may reconvene the open session provided it adopts a finding by rollcall vote that good faith efforts to restore the telephonic or internet service have been made in accordance with its SB 707 policy and the public interest in continuing the meeting outweighs the public interest in remote public access.

These requirements do not apply to certain specified types of meetings, including meetings held offsite or for inspection purposes, or in emergency situations. The attached policy lists those exemptions.

Disruptions Caused by Participants
While not required under SB 707, the attached Policy on Disruption of Telephonic or Internet Services also includes a section with guidance to the City Council and Staff in the event of an intentional disruption to a meeting caused by a remote public participant or group of participants.

While the Town can respond when in-person or remote participants actually disrupt a public meeting, the First Amendment and Brown Act rights of public participants must also be respected, even if that speech is offensive. Therefore, it is beneficial for local legislative bodies to have written guidance about how and when to respond. Written guidance can empower the Mayor, Councilmembers and Staff to address such disruptions in an effective and lawful manner.

Recognizing the core First Amendment right to petition the government, City Council meetings are considered “limited public forums.”1 In these situations, the government can only impose reasonable time, place and manner regulations that are (i) content neutral; (ii) narrowly tailored to serve a significant government interest; and (iii) leave open alternative channels of communication.

Examples of permissible regulations would be (1) requirements that public comment be within the subject matter jurisdiction of the City Council (i.e., not criticizing federal foreign policy) or (2) time limitations on speakers. However, other restrictions on the content of speech are not permitted.

This would include prohibiting profane or even slanderous comments. (Norse v. City of Santa Cruz (9th Cir. 2010) 629 F.3d 966 [city cannot prohibit Nazi salute at public meeting]; see also Gov.

Code, § 54594.3(c) [Board cannot “prohibit public criticism of the policies, procedures, programs, or services” of the Town or City Council].)
These broad free speech protections do have limits. Speakers cannot use public comment to actually disrupt the meeting or otherwise interfere with the conduct of Town business. Based on this, the key to regulating speech at public meetings is to regulate disruptive behavior rather than the content of the speech.
1 White v. City of Norwalk (9th Cir. 1990) 900 F.2d 1421, 1425 -174-
Agenda Staff Report – Hillsborough City Council
May 11, 2026

The attached policy provides that in the event of an actual disruption, after a first verbal warning from the Presiding Officer or the City Clerk, a disruptive remote public participant may have their microphone muted, have their video switched off, or be removed entirely from the meeting either as a last resort or because stopping the video or muting the participant is not available on the service being used. The policy also defines an actual disruption in accordance with relevant laws, so that the Presiding Officer and Staff can distinguish between protected First Amendment speech and a disruption.

General Public Comment Regulations
In addition to the requirement that the City Council adopt a disruption policy to comply with SB 707, staff is also recommending that Council adopt a policy to manage and regulate public comment, whether via Zoom, or in person. The Brown Act generally indicates that the legislative body of a local agency may adopt reasonable regulations for managing public comment including imposing time limits on speakers, limiting the total time allocated for a particular topic, and/or adopting requirements that limit public comments to those topics within the subject matter jurisdiction of the City Council.

To that end, staff has prepared a basic policy for the Council to manage and regulate public comment both online and in person. The policy generally acknowledges that public comment shall be limited to three minutes or less with authority for the Mayor to reduce that time down to two minutes or one minute in the Mayor’s discretion depending on the number of speakers and volume of business on the agenda. The policy further limits public comment on non-agenda items to only those topics that are within the subject matter jurisdiction of the City Council as outlined in the Brown Act. It also limits public comment on agenda items to the topic of the agenda item.

FISCAL IMPACT: The adoption of these policies is anticipated to have a minimal financial impact on the Town, mostly related to staff’s time in preparing and implementing the policies.

ENVIRONMENTAL ISSUES: The adoption of these policies is not anticipated to have any environmental effect under the California Environmental Quality Act (CEQA) under CEQA Guideline 15378 as this is more akin to an administrative activity involving the adoption of Town policies and procedures and is not anticipated to cause any change in the environment.

ATTACHMENT(S): Resolution and Exhibit A, Policy 421: Disruption of Telephonic or Internet Service During Meetings, in Accordance with Senate Bill 707, and Exhibit B, Policy 422: Public Comment Regulations
PREPARED BY: Christopher Diaz, City Attorney
RECOMMENDATION: Resolution Adopting Two Policies: (1) Policy 421: Disruption of Telephonic or Internet Service During Meetings, in Accordance with Senate Bill 707; and (2) Policy 422:

Public Comment Regulations.
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RESOLUTION NO. 26-

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF HILLSBOROUGH ADOPTING TWO POLICIES: (1) POLICY 421: DISRUPTION OF TELEPHONIC OR

INTERNET SERVICE DURING MEETINGS, IN ACCORDANCE WITH SENATE BILL 707; AND (2) POLICY 422: PUBLIC COMMENT REGULATIONS
WHEREAS, the Ralph M. Brown Act (California Government Code section 54950 et seq.) ensures that meetings of legislative bodies are conducted openly and that the public has the opportunity to participate in those meetings; and
WHEREAS, Senate Bill 707 (2025) amended the Brown Act to require eligible legislative bodies to adopt, on or before July 1, 2026, a policy addressing how the agency will respond to disruptions in telephonic or internet service that prevent members of the public from participating remotely; and WHEREAS, the City Council desires to establish clear procedures for responding to technological disruptions during meetings as outlined in Exhibit A to this resolution; and
WHEREAS, the City Council also desires to adopt a general policy on managing and regulating general public comment, both online and in person, as outlined in Exhibit B to this resolution.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Hillsborough hereby adopts Exhibit A, Policy 421, “Disruption of Telephonic or Internet Service During Meetings,” and Exhibit B, Policy 422, “Public Comment Regulations.” 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 11th day of May 2026, by the following vote of the members thereof:

AYES: Councilmembers
NOES: Councilmembers
ABSENT: Councilmembers
ABSTAIN: Councilmembers
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POLICY 421 DISRUPTION OF TELEPHONIC OR INTERNET SERVICE DURING MEETINGS

T OWN OF H ILLSBOROUGH

DISRUPTION OF TELEPHONIC OR INTERNET

SERVICE DURING MEETINGS
POLICY 421 CREATED 5/11/2026
BACKGROUND: Senate Bill 707 (2025) amended the Brown Act to require eligible legislative bodies to adopt, on or before July 1, 2026, a policy addressing how the agency will respond to disruptions in telephonic or internet service that prevent members of the public from participating remotely.

PURPOSE: This policy establishes procedures for responding to a disruption in the telephonic or internet services that provide two-way remote public access to meetings of the City Council of the Town of Hillsborough, as required by the Brown Act (Government Code section 54953.4). The policy ensures transparency, public participation, and the continuation of meetings during technological disruptions.

1. Definitions
“Service Disruption” means any failure, outage, or other interruption to the agency’s remote access services that prevents members of the public from participating in a City Council meeting through the remote access service. “Disrupting” means engaging in behavior during a meeting of the City Council that actually disrupts, disturbs, impedes, or renders infeasible the orderly conduct of the meeting and includes, but is not limited to one of the following:
a. A failure to comply with reasonable and lawful regulations adopted by the City Council of the Town of Hillsborough
b. Engaging in behavior that constitutes use of force or a true threat of force. “Remote access services” means the two-way telephonic service and/or two-way audiovisual platform used to provide real-time remote public attendance and observation of meetings.
“Two-way audiovisual platform” means an online platform that provides participants with the ability to participate in a meeting via both an interactive video conference and a two-way telephonic service.
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EXHIBIT A
POLICY 421 DISRUPTION OF TELEPHONIC OR INTERNET SERVICE DURING MEETINGS “Two-way telephonic service” means a telephone service that does not require internet access and allows participants to dial a telephone number to listen and verbally participate.
“True threat of force” means a threat that has sufficient indicia of intent and seriousness, that a reasonable observer would perceive it to be an actual threat to use force by the person making the threat.

2. Applicability
This policy applies to all open and public meetings of the City Council at which remote public participation is required under the Brown Act. Consistent with the Brown Act, this policy shall not apply to the following meetings:
a. Meetings held to attend a judicial or administrative proceeding to which the Town is a party.
b. Meetings held to inspect real or personal property provided that the topic of the meeting is limited to items directly related to the real or personal property. c. Meetings held to meet with elected or appointed officials of the United States or the State of California, solely to discuss a legislative or regulatory issue affecting the Town and over which the federal or state officials have jurisdiction.
d. Meetings held to meet in or nearby a facility owned by the Town, provided that the topic of the meeting is limited to items directly related to the facility. e. Meetings held in an emergency situation pursuant to Government Code section 54956.5.

3. Remote Public Access Generally
When remote public access is required under the Brown Act, the City Council shall provide members of the public with an opportunity to attend and participate in the meeting using a two-way audiovisual platform or a two-way telephonic service, provided that adequate telephonic or internet service is operational at the meeting location.

If adequate telephonic or internet service is not operational at the meeting location, the City Council shall not be required to provide remote access. If adequate telephonic or internet service is operational for only a portion of the meeting, the City Council shall provide remote access during that portion of the meeting.

If a two-way audiovisual platform is used, the City Council shall:
a. Publicly post and provide a call-in option as well; and -178-
POLICY 421 DISRUPTION OF TELEPHONIC OR INTERNET SERVICE DURING MEETINGS b. Activate any automatic captioning function that is available in the audiovisual platform.

If a two-way audiovisual platform is not provided, the City Council shall provide a twoway telephonic service.

Members of the public participating remotely shall be provided the same opportunity to provide public comment as members of the public attending in person, including the same time allotment.

4. Response to Service Disruption
If the Mayor or City Clerk becomes aware of a service disruption:
a. The Mayor or City Clerk shall immediately announce the service disruption to the public.
b. The Mayor shall call for a recess of the open session and may convene the legislative body in an authorized closed session, consistent with the Brown Act. The recess shall last for one hour or until service is restored, whichever is earlier.
c. During the recess, Town staff shall make a good faith effort to diagnose and restore the disrupted service.

5. Reconvening the Open Session
After the expiration of the hour, if service has not been restored, the Mayor or City Clerk shall report on the status of staff’s efforts to restore remote access services, and the City Council may reconvene to:
a. Adjourn the meeting;
b. Extend the recess to allow staff more time to make a good faith effort to restore remote access services; or
c. Continue the open session portion of the meeting by adopting, by roll call vote, the following or a substantially similar finding:
“The Town has made good faith efforts to restore telephonic or internet service in accordance with its adopted policy, and the public interest in continuing the meeting outweighs the public interest in remote public access.” Upon adoption of the finding, the City Council may continue the open session portion of the meeting despite the fact that remote access services have not been restored.

6. Recordkeeping
The City Clerk shall enter a brief statement into the meeting minutes, including:
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POLICY 421 DISRUPTION OF TELEPHONIC OR INTERNET SERVICE DURING MEETINGS • The nature and time of the service disruption;
• The time the meeting was reconvened (if applicable);
• Any finding adopted pursuant to Section 5.

7. Response to Members of the Public Disrupting a Meeting If the Mayor or City Clerk becomes aware of a member of the public who is attending the meeting through remote access services and is disrupting the meeting or otherwise preventing other members of the public from attending or observing the meeting remotely or in-person:
a. The Mayor or City Clerk shall warn the person who is participating through remote access services that he or she is disrupting the meeting and his or her failure to cease that behavior may result in his or her removal. b. If the person to whom the Mayor gave the above warning persists in disrupting the meeting, the Mayor shall order staff to:
i. mute or otherwise limit the individual’s ability to disrupt the meeting, while allowing the individual to continue to observe and attend the meeting; or
ii. remove the individual from the meeting if paragraph (a) does not address the disrupting behavior or is not available using the remote access service.

8. Review and Updates
This policy may be amended by the City Council at a noticed public meeting in open session and not on the Consent Calendar.
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POLICY 422 PUBLIC COMMENT REGULATIONS

T OWN OF H ILLSBOROUGH

PUBLIC COMMENT REGULATIONS POLICY
POLICY 422 CREATED 5/11/2026
BACKGROUND: The Brown Act (Government Code Section 54954.3) indicates that the legislative body of a local agency may adopt reasonable regulations for managing public comment. This policy shall serve as the Town of Hillsborough’s regulations for managing public comment at City Council meetings. A City Council meeting is a limited public forum for first amendment purposes and the Town is limited to imposing time, place, and manner regulations consistent with the first amendment.

1. Time Limits Three Minutes or Less or Total Time Limit on Particular Topic
All public comment shall be limited to three minutes or less. The Mayor shall have discretion to further limit public comment from three minutes to two minutes, or even to one minute based on the number of speakers and the volume of business on the agenda. Further, the Mayor shall have the option to limit the total amount of time allocated for public comment on a particular topic if warranted based on the volume of speakers seeking to speak and the volume of business on the agenda.

2. Comments on Non-Agenda Items and Agenda Items
Public Comment on Items Not on the Agenda: The City Council shall allow one general public comment period for items not on the agenda. Any public comment provided must be on a topic that is within the subject matter jurisdiction of the City Council.

Public Comments on Agenda Items: The City Council shall allow public comment on each item on the agenda. For the Consent Calendar, the City Council typically approves all items in one motion and public comment for an item will not be taken unless a speaker requests to remove an item from the Consent Calendar for discussion. Any public comment provided must relate to that agenda item and generally be within the subject matter jurisdiction of the City Council. -181-

EXHIBIT B