Los Altos Hills City Council
December 19, 2024

Notes to Basic Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
D. Interest Rate Risk and Fair Value Hierarchy (Continued) U.S. Treasury Notes classified in Level 1 of the fair value hierarchy are valued using quoted prices in active markets. Federal Agency Collateralized Mortgage Obligations, U.S. Agency Notes and Corporate Notes, classified in Level 2 of the fair value hierarchy, are valued using pricing techniques of matrix pricing or market corroborated pricing, with inputs such as yield curves or indices. These prices are obtained from various pricing sources by our custodian bank. The Town does not have any Level 3 investments.

The Town is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The Town reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pool share. The balance is available for withdrawal on demand, and is based on the accounting records maintained by LAIF. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30, 2024, these investments matured in an average of 217 days. The California Local Agency Investment Fund is classified as exempt in the fair value hierarchy, as it is valued at amortized cost, which is exempt from being classified under GASB 72.

The Town is a participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its Participants to invest certain proceeds of debt issues and surplus funds.

CAMP’s investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. The Town reports its investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share in accordance with GASB 79 requirements. At June 30, 2024, the CAMP pool had an average maturity of 38 days and is exempt from the fair value hierarchy.

The Town, as a CAMP shareholder, may withdraw all or any portion of the funds in its CAMP account at any time by redeeming shares. The CAMP Declaration of Trust permits the CAMP trustee to suspend the right of withdrawal from CAMP or to postpone the date of payment of redemption proceeds if the New York Stock Exchange is closed other than for customary weekend and holiday closings, if trading on the New York Stock Exchange is restricted, or if, in the opinion of the CAMP trustees, an emergency exists such that disposal of the CAMP pool securities or determination of its net asset value is not reasonably practicable. If the right of withdrawal is suspended, the Town may either withdraw its request for that withdrawal or receive payment based on the net asset value of the CAMP pool next determined after termination of the suspension of the right of withdrawal.

Mutual funds are available for withdrawal on demand. At June 30, 2024, these investments have an average maturity of 988 days.

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Notes to Basic Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
E. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The state investment pool is not rated.

Investment Type AAA AA+ AA AA- A+ A A- AAAm BBB+ Total
Federal Agency Collateralized
Mortgage Obligation $ 3,252,537 - $ $ - $ - $ - $ - $ - -$ $ 3,252,537 - $ U.S. Agency Notes 959,041 - - - - - - - - 959,041
Municipal Bonds 52,397 66,779 344,833 113,145 - - - - - 577,154 Certificates of Deposit - - - 249,071 - 151,122 - - - 400,193 Money Market Mutual Fund - - - - - - 158,888 - - 158,888 CAMP Investment Pool - - - - - - 62,741 - - 62,741
Corporate Notes - 72,975 - 1,230,133 1,062,872 1,248,337 1,793,974 659,827 - 6,068,118 Totals $ 52,397 $ 4,278,357 $ 417,808 $ 1,343,278 $ 1,311,943 $ 1,399,459 $ 1,793,974 $ 221,629 $ 659,827 11,478,672 Not Rated:

Money Market Mutual Funds 1,209,137
U.S. Treasury Notes 10,187,495
Local Agency Investment Fund (LAIF) 3,800,155
Total Investments $ 26,675,459
Bank balances are insured up to $250,000 per bank by the Federal Deposit Insurance Company ("FDIC"). As of June 30, 2024, the Town’s cash in bank exceeded the insured limit by $6,667,020. None of the Town’s deposits with financial institutions in excess of FDIC limits were held in uncollateralized accounts.

F. Concentration of Credit Risk
The investment policy of the Town contains limitations on the amount that can be invested in any one issuer beyond the amount stipulated by the California Government Code. As of June 30, 2024, there are no investments, other than U.S. Treasury securities, US Agency securities, and authorized pools such as Local Agency Investment Fund (LAIF), that represent five percent or more of total investments at the Entity-wide level or in individual funds.

NOTE 3 – INTERFUND TRANSACTIONS
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. At June 30, 2024, current interfund balances are as follows:

Fund Making Loan Fund Receiving Loan Amount
General Fund Streets Capital Projects Fund $ 41,114
COPS Special Revenue Fund 188,329
$ 229,443
The following schedule summarizes the Town's transfer activity for the fiscal year ended June 30, 2024:

Amount
Fund Receiving Transfers Fund Making Transfers Transferred General Fund COPS Special Revenue Fund $ 177,488 (C)
Streets Capital Projects Fund General Fund 434,651 (A)
Other Capital Projects Fund 40,000 (A)
Other Capital Projects Fund General Fund 1,280,861 (A)
Sewer Fund General Fund 9,858 (B)
Total Interfund Transfers $ 1,942,858
(A) To fund capital projects.
(B) To pay the Sewer fund for costs incurred for the Town's use of the sewer system for the past year. (C) To fund public safety costs.

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Notes to Basic Financial Statements
NOTE 4 – CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2024, was as follows:

Balance at Balance at
June 30, 2023 Additions June 30, 2024
Governmental activities
Capital assets not being depreciated and amortized:

Land $ 250,535 $ 250,535 - $
Total capital assets not being depreciated and amortized 250,535 250,535 - Capital assets being depreciated and amortized:

SBITAs Asset (Right-to-Use) 23,429 - 23,429
Infrastructure 94,802,006 4,623,215 99,425,221
Buildings 5,152,825 5,152,825 -
Vehicles 655,629 263,060 918,689
Office Equipment 465,307 465,307 -
Total capital assets being depreciated and amortized 101,099,196 4,886,275 105,985,471 Less accumulated depreciation and amortization for:

SBITAs Asset (Right-to-Use) (7,256) (11,715) (18,971)
Infrastructure (68,840,237) (1,814,004) (70,654,241)
Buildings (2,425,117) (130,638) (2,555,755)
Vehicles (472,291) (34,857) (507,148)
Office Equipment (461,127) (4,180) (465,307)
Total accumulated depreciation and amortization (72,206,028) (1,995,394) (74,201,422) Net governmental-type activities
Capital assets being depreciated and amortized 28,893,168 2,890,881 31,784,049 Governmental activities capital assets, net $ 29,143,703 $ 2,890,881 $ 32,034,584 Balance at Balance at
June 30, 2023 Additions June 30, 2024
Business-type activities
Capital assets being depreciated:

Sewer collection system $ 12,260,577 $ 610,586 $ 12,871,163 Office equipment 1,509 - 1,509
Total capital assets being depreciated 12,262,086 610,586 12,872,672 Less accumulated depreciation for:

Sewer collection system (4,048,330) (260,918) (4,309,248) Office equipment (1,509) - (1,509)
Total accumulated depreciation (4,049,839) (260,918) (4,310,757) Net capital assets being depreciated 8,212,247 349,668 8,561,915 Business-type activities capital assets, net $ 8,212,247 $ 349,668 $ 8,561,915 Page | 54 Final Draft

Notes to Basic Financial Statements
NOTE 4 – CAPITAL ASSETS (CONTINUED)
Depreciation and amortization expense was charged to governmental functions as follows:

Governmental Activities Amount
General Government $ 351,348
Public safety 398,251
Community development 452,165
Parks and recreation 156,923
Public works 464,575
Internal service funds 172,132
Total $ 1,995,394
Business-Type Activities Amount
Sewer $ 260,918
Total $ 260,918
NOTE 5 – LEASES
The Town is a lessor for of six cell phone communications site locations. The Town recognizes a lease receivable and a deferred inflow of resources in the government-wide financial statements, as well as in the applicable funds.

At the commencement of a lease, the Town initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the Town determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as follows:
• The Town uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. • Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The Town monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

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Notes to Basic Financial Statements
NOTE 5 –LEASES (CONTINUED)
A summary of lease activities for the year ended June 30, 2024 are as follows:

Governmental Activities:

Lessor
Original
Lease Date
Expiration Date
Including Options
Monthly Revenue
as of June 30,
2024
Lease Receivable
Balance at
June 30, 2024
Deferred Inflow of
Resources at June
30, 2024
General Fund:

Purissima Hills Water 4/1/2005 3/31/2050 $ 2,950 $ 1,232,928 $ 1,171,551 Crown Castle 3/23/2006 2/23/2031 3,176 276,021 261,754
AT&T 7/18/2013 6/18/2033 2,240 272,598 258,552
Verizon Wireless 2/18/2011 2/28/2032 2,122 212,243 201,296 AT&T 6/18/2013 5/18/2033 3,497 409,882 388,770
Other Capital Projects Fund:

American Tower 3/23/2006 8/31/2036 4,676 794,801 757,723 $ 18,661 $ 3,198,473 $ 3,039,646
NOTE 6 – SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS A summary of subscription-based information technology arrangements (SBITA) transactions for the fiscal year ended June 30, 2024, are as follows:

Balance at Balance at
June 30, 2023 Additions Deletions June 30, 2024 Current Portion Subscription Liability
Zenacity $ 11,429 $ - $ (11,429) $ - $ -
Governmental activities total $ 11,429 $ - $ (11,429) $ - $ - On November 30, 2022, the Town entered into a two-year SBITA for Zenacity Engage Software. An initial subscription liability was recorded in the amount of $23,429 during fiscal year 2023, at the time the subscription was placed into service. As of June 30, 2024, the value of the subscription liability was $0. The Town was required to make annual principal and interest payments of $12,000 throughout the life of the subscription. As part of the subscription, the Town has recorded an intangible right to use subscription asset and accumulated amortization as discussed in Note

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Notes to Basic Financial Statements
NOTE 7 – SPECIAL ASSESSMENT DEBT WITHOUT TOWN COMMITMENT Special assessment districts are established in various parts of the Town to provide improvements to properties located in those districts. Properties are assessed for the cost of the improvements. These assessments are payable solely by the property owners over the term of the debt issued to finance the improvements. The Town acts solely as the collecting and paying agent for the District's debt which is not included in the general debt of the Town. The bonds are not general obligation of the Town. The Town is not legally obligated to pay these debts or be the purchaser of last resort of foreclosed properties in the special assessment district.

At June 30, 2024, the balance of the assessment district's outstanding debt was as follows:

Fiscal Year Fiscal Years Outstanding
Issue Issued Interest Rate Annual Amount Ended June 30, 2024 West Loyola Sewer Assessment District No. 1 2009 2.25% - 6.15% $35,000 - $775,000 2010-2040 1,430,000 $ Principal Maturities
NOTE 8 – NET POSITION/FUND BALANCES
A. Net Position
The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted, and unrestricted.

Net Investment in Capital Assets – This category presents all capital assets, including infrastructure, into one component of net position. Accumulated depreciation reduces the balance in this category.

Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors, laws or regulations of other governments, or restrictions imposed by law through constitutional provisions or enabling legislation.

Unrestricted Net Position – This category presents net position of the Town not restricted for any project or other purpose.

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Notes to Basic Financial Statements
NOTE 8 – NET POSITION/FUND BALANCES (CONTINUED)
B. Fund Balances – Components
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund's cash and receivables less its liabilities. Portions of a fund's balance may be non-spendable, restricted, committed, assigned or unassigned. At June 30, 2024, the following represents the components of fund balance:

Street Other Non-major
General Capital Projects Capital Projects Governmental Total Fund Balance Classifications Fund Fund Fund Funds Governmental Restricted for:

Parks and Recreation $ - $ - $ - $ 450,858 $ 450,858
Art donations - - - 34,473 34,473
Pension Trust 1,209,137 - - 1,209,137 -
American Rescue Plan Act - - - 813,105 813,105
Total Restricted Fund Balances 1,209,137 - 1,298,436 - 2,507,573 Committed for:

Disaster Contingency Reserve 1,050,000 - - 1,050,000 -
Pension Contributions Reserve 2,099,951 - - 2,099,951 - Facilities Replacement Reserve 4,619,613 - - 4,619,613 - Equipment Relacement Reserve 594,000 - - - 594,000
Street & Road Repairs - 212,184 2,468,416 - 2,680,600
All other Capital Projects 2,504,440 - - 2,504,440 -
Total Committed Fund Balances 10,868,004 212,184 2,468,416 - 13,548,604 Assigned for:

Operating Contingency Reserve 2,328,858 - - - 2,328,858 Total Assigned Fund Balances 2,328,858 - - - 2,328,858
Unassigned: 2,539,886 - - (191,023) 2,348,863
Total Unassigned Fund Balances 2,539,886 - - (191,023) 2,348,863 Total Fund Balances $ 16,945,885 $ 212,184 $ 2,468,416 $ 1,107,413 $ 20,733,898 NOTE 9 – PENSION PLAN
A. General Information About the Pension Plan
The Town participates in the Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Cost Sharing) for its Miscellaneous employees. It is administered by the California Public Employees Retirement System (CalPERS). A cost-sharing multiple-employer defined benefit pension plan is a plan in which the pension obligations to the employees of more than one employer are pooled and pension plan assets can be used to pay benefits of the employees of any employer that provides pensions through the plan.

The Town’s pension plan and its financial position is measured and reported on the same basis as the Plan’s fiduciary net position reported by CalPERS. This includes the measurement of the Plan’s fiduciary net position and additions to/deductions, as well as the Town’s share of the Plan’s net pension liability, deferred outflows/inflows of resources related to pensions, and pension expense. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

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Notes to Basic Financial Statements
NOTE 9 – PENSION PLAN (CONTINUED)
A. General Information about the Pension Plan (Continued) Plan Descriptions – All qualified permanent employees are eligible to participate in the Town’s Employee Miscellaneous Employee Pension Rate Plans. The City’s Miscellaneous Plans are part of the public agency cost-sharing multiple-employer defined pension plan (PERF C), which is administered by the California Public Employee’s Retirement System (CalPERS). PERF C consists of a miscellaneous pool (also referred to as “risk pool”, which are comprised of individual employer miscellaneous rate plans. Individual employers may sponsor more than one miscellaneous rate plan. They employer participates in one cost-sharing multiple employer defined pension plan regardless of the number of rate plans the employer sponsors. The Town has three retirement benefit tiers in the Miscellaneous Plans. Tier 1 is for employees hired prior to September 1, 2011. Tier 2 is for employees hired after September 1, 2011 and enrolled as a member of CalPERS prior to January 1, 2013. Tier 3 is for employees hired on or after January 1, 2013. Benefit provisions under the Plan are established by State statute and Town resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees, and their beneficiaries.

Benefits are based on years of credited service, equal to one year of full time employment, age and the average of the final 3 years’ compensation. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The plans’ provisions and benefits in effect at June 30, 2024, are summarized as follows:

Tier I Tier II Tier III
Hire date
Prior to
September 1, 2011
Starting
September 1, 2011
On or after
January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 60 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 63+ 50 - 63+ 52 - 67+
Monthly benefits, as a % of eligible compensation 1.426%-2.418% 1.092%-2.418% 1.0%-2.5% Required employee contribution rates 7.00% 7.00% 8.25%
Required employer contribution rates 12.63% 10.87% 8.00% Miscellaneous
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability (UAL). The dollar amounts are billed on a monthly basis or can be paid in a lump sum at a reduced amount. The Town elected to make the lump sum contribution for the unfunded liability in the amount of $171,865 in fiscal year 2024.

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Notes to Basic Financial Statements
NOTE 9 – PENSION PLAN (CONTINUED)
A. General Information about the Pension Plan (Continued) Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of change in the rate. Funding contributions for the Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The Town is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

For the year ended June 30, 2024, the contribution recognized as part of pension expense for the Plans were as follows:

Miscellaneous Plans
Contributions - employer 432,018 $
B. Net Pension Liability
The Town’s net pension liability for each Miscellaneous Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2023, using an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures.

The Town’s proportion of the net pension liability was based on a projection of the Town’s long-term share of contributions of all participating employers, actuarially determined.

Actuarial Methods and Assumptions – For the measurement period ended at June 30, 2023, the total pension liability was determined by rolling forward the June 30, 2022 total pension liability. The June 30, 2022 pension liabilities were based on the following actuarial methods and assumptions for all benefit tiers:

Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Return
Mortality Rate Table
(1) Depending on age, service, and type of employment
(2) Net of pension plan investment expenses, including inflation (3) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

All CalPERS Plans
June 30, 2022
June 30, 2023
Entry-Age Normal Cost Method

6.90%

2.30%
(1)
Varies by Entry Age and Service

6.90% (2)
Derived using CalPERS Membership Data for all Funds (3) Page | 60 Final Draft

Notes to Basic Financial Statements
NOTE 9 – PENSION PLAN (CONTINUED)
B. Net Pension Liability (Continued)
Discount Rate – The discount rate used to measure the total pension liability for the Plan was 6.90%. The projection of cash flows used to determine the discount rate for the Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of protected benefit payments to determine the total pension liability.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and longterm market return expectations. Using historical returns of all the funds’ asset classes, expected compound expected compound (geometric) returns were calculated using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

The expected real rates of return by asset class are as follows:

Asset Class
Assumed Asset
Allocation Real Return (1),(2)
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
(1) An expected inflation of 2.30% is used this period. (2) Figures are based on the 2021 Asset Liability Management Study Page | 61 Final Draft

Notes to Basic Financial Statements
NOTE 9 – PENSION PLAN (CONTINUED)
C. Changes in the Net Pension Liability
As of June 30, 2024, the Town’s Miscellaneous Plans reported a net pension liability for its proportionate share of the net pension liability of the Miscellaneous Plan as follows:

Proportionate Share
of Net Pension Liability
Miscellaneous Plans 3,109,217 $
Total Net Pension Liability $ 3,109,217
The Town’s proportionate share of the net pension liability for each Miscellaneous Plan as of June 30, 2022 and 2023 is as follows:

Miscellaneous Plans
Proportion - June 30, 2022 0.05707%
Proportion - June 30, 2023 0.06218%
Change - Increase (Decrease) 0.00511%
Sensitivity of the Proportionate Share of the Net Pension Liability for Miscellaneous Plans to Changes in the Discount Rate – The following presents the net pension liability of the Town’s proportionate share of the net pension liability for Miscellaneous Plans, calculated using the discount rate as well as what the Town’s net pension liability would be if it were calculated using a discount rate that is 1- percentage point lower or 1- percentage point higher than the current rate:

Miscellaneous Plans
1% Decrease 5.90%
Net Pension Liability 5,913,522 $
Current Discount Rate 6.90%
Net Pension Liability $ 3,109,217
1% Increase 7.90%
Net Pension Liability $ 801,034
Pension Plan Fiduciary Net Position – Detailed information about the pension plans’ fiduciary net position is available in the separately issued CalPERS financial reports.

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Notes to Basic Financial Statements
NOTE 9 – PENSION PLAN (CONTINUED)
D. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pension For the year ended June 30, 2024, the Town’s recognized pension expense of $758,886 for the Miscellaneous Plans. At June 30, 2024, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources for Miscellaneous Plans:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 432,018 $ - $ Differences between actual and expected experience 158,836 (24,639) Changes in assumptions 187,717 -
Difference between proportional and actual contributions 48,568 (399,483) Net differences between projected and actual earnings
on plan investments 503,410 -
Adjustment due to differences in proportion 716,833 (19,993) Total 2,047,382 $ (444,115) $
The $432,018 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Years Ending June 30
2025 $ 496,624
2026 308,469
2027 351,711
2028 14,445
$ 1,171,249
E. Payable to Pension Plan
As of June 30, 2024, the Town reported a payable of $9,307 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2024.

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Notes to Basic Financial Statements
NOTE 10 – RISK MANAGEMENT
A. Risk Pool
The Town is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

The Town participates in the Pooled Liability Assurance Network Joint Powers Authority (PLAN JPA), a selfinsurance pool. The PLAN JPA Plan provides certain levels of liability insurance coverage, claims management, risk management services and legal defense to each participant. The Town's general liability claims are insured up to $1 million per occurrence and $35 million per year. The Town's property claims are insured for up to $35 million per year. The Town has a deductible or uninsured liability of up to $25,000 per claim. Once the Town's deductible is met, PLAN JPA becomes responsible for payment of all claims up to the limit. During the fiscal year ended June 30, 2024, the Town contributed $328,876 for current year coverage plus settlement payments. Part of the contribution is to maintain the Plan’s reserve at 60 percent confidence funding level, per the annual actuarial report, to meet future claim liabilities.

Settlement amounts did not exceed insurance coverage for the past three years. The Town also received $21,667 in insurance recoveries during fiscal year 2024. The Town's insurance costs will increase/decrease based on its own adverse claims experience and the adverse claims experience of other agencies in the Town's risk pool.

The Shared Agency Risk Pool Joint Powers Agency (SHARP JPA) Shared Risk Pool (Pool) covers workers' compensation claims up to $250,000 each and has coverage above that limit to the statutory maximum. The Town has no deductible for these claims. During the fiscal year ended June 30, 2024, the Town contributed $100,352 for current year coverage.

As of June 30, 2024, the Town does not have earthquake insurance. • Each risk pool is governed by a Board consisting of representatives from member municipalities. The Board controls the operations of each risk pool, including selections of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on the Board. The Town's contribution to each risk pool is generally equal to the ratio of the Town's payroll to the total payrolls of all entities participating in the same layer of each program further adjusted for adverse claims experience, in each program year.
• Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. Financial statements for each agency can be obtained from PLAN, 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA, 95833. • For PLAN JPA and SHARP JPA, all participating members are responsible for their weighted share of claim liability and to replenish the Plan/Pool reserve fund as necessary.

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Notes to Basic Financial Statements
NOTE 11 – CONTINGENT LIABILITIES
A. Commitments and Contingencies
The Town is subject to litigation arising in the normal course of business. In the opinion of the Town Attorney, there is no pending litigation that is likely to have a material adverse effect on the financial position of the Town.

B. Service Concession Arrangements (SCA)
Since February 2014, the Town has partnered with Victoria Dye Equestrian, LLC (VDE) to operate the Westwind Community Barn, offering equestrian programs, horse boarding, and related services. Under the renewed 2023 agreement, VDE remits 20% of camp and lesson revenues to the Town, with the lesson rate decreasing to 18% once gross lesson revenues exceed $300,000. Key changes from the previous agreement include a reduction in the Town’s revenue share (from 25%), full coverage of the annual audit cost by the Town, reduced maintenance support hours (from 172 to 120 annually), and clarified responsibilities for routine maintenance (handled by VDE) and major capital improvements (retained by the Town). The Town also now funds professional janitorial services and increased contract services for tree maintenance and drain flushing. Westwind operations remain part of the Town’s General Fund.

NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB)
A. General Information About the OPEB Plan
Town employees are provided with other postemployment benefits (OPEB) through the Town’s agent multiemployer defined benefit postemployment healthcare plan (the “Plan”) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of participating employers of the State of California and public agencies. During fiscal year 2008, the Town elected to prefund its OPEB liabilities through an irrevocable trust, the California Employers’ Retiree Benefit Trust (CERBT). CERBT is administered by CalPERS. CERBT is a tax qualified irrevocable trust organized under the Internal Revenue Code (IRC) Section 115.

The CERBT was established by Chapter 331 of the 1988 California Statues, and employers elect to participate in the CERBT to pre-fund health, dental, and other non-pension postemployment benefits for their retirees and survivors.

B. Plan Description
The Plan provides postemployment healthcare benefits to eligible employees who retire directly from the Town under CalPERS at the minimum age of 50 with at least 5 years of CalPERS service or disability. Retirees must make a retirement election with CalPERS within 120 days following the date of separation from the Town. Benefit provisions are established, and may be amended, by the City Council. The following Note 12C below is a summary of Plan benefits by employee group as of June 30, 2024.

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Notes to Basic Financial Statements
NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) C. Benefits Provided
The Town participates in the CalPERS healthcare program (PEMHCA) and allows retirees to continue participation in the medical insurance program after retirement. Under the Plan, the Town reimburses a portion of the premium for retiree medical coverage as follows:
• Retirees from the Town and employees receiving Town medical benefits as of October 11, 2007 are eligible for a Town contribution up to an amount that is equal to what active employees receive in the cafeteria plan. As stated above, an individual must also qualify as a CalPERS annuitant in order to receive this benefit.
• Employees hired or first receiving Town medical benefits after October 11, 2007 are only eligible to receive a Town contribution equal to the PEMHCA minimum upon retirement from the Town. As stated above, retirees must qualify as a CalPERS annuitant and meet all statutory and legal requirements necessary to receive this benefit.
• Employees hired on or after October 11, 2007, who retire on or after April 2022 may qualify for a temporarily higher benefit between age 60 to 65. This higher benefit is 100% of the single premium up to but not more than the Kaiser Region 1 rate multiplied by a vesting percentage. The vesting percentage applied to determine the temporary higher benefits is: 50% after 10 years of CalPERS service (at least 5 years of Town service); increasing by 5% of each additional year; and to a maximum of 100% for 20 or more CalPERS years of service.

D. Employees Covered by Benefit Terms
Membership in the plan consisted of the following at the measurement date of June 30, 2024:

Count
Inactive employees or beneficiaries currently receiving benefits 15 Inactive employees entitled to but not yet receiving benefits 4 Active employees 25
Total 44
E. Contributions
Town contributions to the Plan occur as benefits are paid to retirees and/or to the CERBT. Benefit payments may occur in the form of direct payments for premiums and taxes (“explicit subsidies”) and/or indirect payments to retirees in the form of higher premiums for active employees (“implicit subsidies”). Benefits and other contributions paid by the Town during the measurement period and those expected to be made in the following measurement period but prior to the end of the fiscal year are shown below. For fiscal year ending June 30, 2024, Town contributions totaled $130,709.

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Notes to Basic Financial Statements
NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) E. Contributions (Continued)
Benefits Paid by Trust $ -
Benefits Paid by Employer 124,631
Implicit benefit payments 38,773
Total Benefit Payments During the Measurement Period $ 163,404 Employer Contributions to the Trust $ -
-
Implicit Contributions 38,773
Total Employer Contributions During the Measurement Date $ 38,773 Employer Contributions to the Trust $ -
-
Implicit Contributions 24,083
Total Employer Contributions Subsequent to the Measurement Date $ 24,083 Benefit Payments during the Measurement Period
(July 1, 2022 through June 30, 2023)
Employer Contributions During the Measurement Period
(July 1, 2022 through June 30, 2023)
Employer Contributions in the Form of Direct Benefit Payments (not reimbursed by the Trust)
Employer Contributions Subsequent to the Measurement Period (July 1, 2023 through June 30, 2024)
Employer Contributions in the Form of Direct Benefit Payments (not reimbursed by the Trust)
The Town prefunds its OPEB liability by contributing 100% or more of the Actuarily Determined Contribution (“ADC”) each year. The ADC consists of two components, which has been adjusted with interest, to the Town’s fiscal year ending June 30, 2024:
• The amounts attributed to service performed in the current fiscal year (the normal cost); and • Amortization of the unfunded actuarial accrued liability (UAAL).

Page | 67 Final Draft

Notes to Basic Financial Statements
NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) E. Contributions (Continued)
Expected contributions, relative to the ADC, for the fiscal year ending June 30, 2024 are as follows:

Actuarially determined contribution $ 34,933
Contributions in relation to the
actuarially determined contributions (24,083)
Contribution deficiency (excess) $ 10,850
Covered payroll $ 3,268,961
F. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ending June 30, 2024, the Town recognized OPEB expense of $187,106. At June 30, 2024, the Town reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contributions subsequent to the measurement date $ 24,083 $ - Changes of assumptions 143,774 (44,228)
Differences between expected and
actual experience 102,074 (199,905)
Net difference between projected and actual earnings on OPEB plan investments 139,516 -
Total $ 409,447 $ (244,133)
The $24,083 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Years Ending June 30
2025 $ (21,194)
2026 (32,958)
2027 83,510
2028 5,909
2029 34,971
Thereafter 70,993
Total $ 141,231
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Final Draft

Notes to Basic Financial Statements
NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) G. Net OPEB Liability (Asset)
Actuarial Methods and Assumptions
The Town’s net OPEB liability (asset) was measured as of June 30, 2023 and the total OPEB liability used to calculate the net OPEB liability (asset) was determined by an actuarial valuation dated June 30, 2023 that was rolled forward using standard update procedures to determine the total OPEB liability as of June 30, 2024, based on the following actuarial methods and assumptions:

Actuarial Assumptions:

Actuarial Valuation Date June 30, 2023
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method, level percent of pay Asset Valuation Method Market value of assets
Long Term Return on Assets 6%
Discount Rate 6%
Participants Valued Only current active employees and retired participants and covered dependents are valued. No future entrants are
considered in this valuation.

Salary Increase 3% per year, used only to allocate the cost of benefits between service years.

General Inflation 2.5% per year
Healthcare Trend Rate Actual premiumes in 2024, 9.0%/22.0% in 2025, declining each year to 4.9% in 2075 and later
Mortality rates were based on the CalPERS published rates and adjusted to back out 20 years of Scale BB to central year 2017 and then projected by medical plan premiums and claims costs by age that are assumed to increase once each year. The required PEMHCA minimum employer contribution (MEC) is assumed to increase annually by 4.5%.

The demographic actuarial assumptions used in the June 30, 2023 valuation were based on the 2017 experience study of the CalPERS system using data from 1997 to 2015, except for a different basis used to project future mortality improvements.

The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

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Final Draft

Notes to Basic Financial Statements
NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) G. Net OPEB Liability (Asset) (Continued)
The Town has elected CERBT Strategy Risk Level 1. This portfolio consists of assets management internally by CalPERS and/or external advisors. The CalPERS Investment Committee and Board of Administration directs the investment strategy and investments of the CERBT. As the CERBT is not a defined benefit plan, there is no guarantee that the portfolio will achieve its investment objectives nor provide sufficient funding to meet these employer obligations. CalPERS will not make up the difference between the employer’s CERBT assets and the actual cost of OPEB provided to the employer’s plan members. These investments are not insured by FDIC, CalPERS, the State of California, or any other government agency. The balance in the Town’s CERBT account as of June 30, 2024 was $2,758,035.

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table.

Asset Class Target Allocation Benchmarks
Global Equity 49.0% MSCI All Country World Index IMI (net) Fixed Income 23.0% Bloomberg Barclays Long Liability Index Real Estate Investment Trusts 20.0% FTSE EPRA/NAREIT Developed Liquid Index (net) Treasury Inflation Protection Securities 5.0% Bloomberg Barclays Barclays US TIPS Index Commodities 3.0% S&P GSCI Total Return Index
Total 100.0%
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Final Draft

Notes to Basic Financial Statements
NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) H. Changes in Net OPEB Liability (Asset)
The changes in the net OPEB liability (asset) follows:

Increase (Decrease)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability (Asset)
Balance at June 30, 2023
(Measurement Date 6/30/2022) $ 2,328,232 $ 2,561,271 $ (233,039) Changes for the year:

Service Cost 75,074 - 75,074
Interest on the Total OPEB Liability 139,296 - 139,296
Changes of benefit terms - - -
Differences between Expected and Actual Experience 116,594 - 116,594 Contributions:

Employer - 38,773 (38,773)
Expected Investment Income - - -
Investment Experience - 164,661 (164,661)
Benefit payments, including Refunds of
Employee Contributions (163,404) (163,404) -
Administrative Expense - (745) 745
Changes of assumptions 164,225 - 164,225
Net changes 331,785 39,285 292,500
Balance at June 30, 2024
(Measurement Date 6/30/2023) $ 2,660,017 $ 2,600,556 $ 59,461 Detailed information about the OPEB plan’s fiduciary net position is available through CalPERS for the Schedule of Changes in Fiduciary Net Position by Employer as of the measurement date on the CalPERS’ website.

I. Discount Rate
The discount rate used to measure the total OPEB liability was 6%. The projection of cash flows used to determine the discount rate assumed that contributions from the Town will be made at contractually required rates, actuarially determined. Based on this assumption, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current and inactive employees. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. There has not been a change in the discount rate since the prior measurement date.

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Final Draft

Notes to Basic Financial Statements
NOTE 12 – OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) I. Discount Rate (Continued)
Sensitivity of the Town’s proportionate share of the net OPEB liability to changes in the discount rate.

The following presents the Town’s proportionate share of the net OPEB liability, as well as what the Town’s proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1- percentage-point lower (5%) or 1-percentage-point higher (7%) than the current discount rate:
1% Decrease 5.00%
Net OPEB Liability (Asset) $ 338,835
Current Discount Rate 6.00%
Net OPEB Liability (Asset) $ 59,461
1% Increase 7.00%
Net OPEB Liability (Asset) $ (178,803)
Sensitivity of the Town’s proportionate share of the net OPEB liability to changes in the healthcare cost trend rates.

The following presents the Town’s proportionate share of the net OPEB liability, as well as what the Town’s proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point (5.8% decreasing to 4.8%) or 1-percentage point higher (5.8% increasing to

6.8%) than the current healthcare cost trend rates:
1% Decrease Current -1.0%
Net OPEB Liability (Asset) $ (193,294)
Trend Rate Current
Net OPEB Liability (Asset) $ 59,461
1% Increase Current + 1.0%
Net OPEB Liability (Asset) $ 358,628
J. OPEB Liabilities, OPEB Expenses and Deferred Outflows/Inflows of Resources Related to OPEB For purposes of measuring the net OPEB liability (asset), deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Town’s OPEB Plan and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by CERBT. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

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Final Draft

Notes to Basic Financial Statements
NOTE 13 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Excess of Expenditures Over Appropriations
The following funds had expenditures over appropriations at June 30, 2024:

Fund
Expenditures in
Excess of
Other Capital Projects Fund 2,230,461 $
COPS Special Revenue Fund 8,671
B. Deficit Fund Balances
As of June 30, 2024, the Town had a fund balance deficit in the COPS Special Revenue Fund in the amount of $191,023.

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Final Draft

Required
Supplemental Information
Page | 75 Final Draft

Variance with
Final BudgetActual Positive
Original Final Amounts (Negative)

REVENUES
Property taxes $ 8,517,183 $ 8,517,183 $ 8,531,557 $ 14,374 Taxes other than property 620,000 620,000 599,107 (20,893) Franchise fees 552,000 552,000 665,597 113,597
Licenses and permits 1,205,000 1,205,000 1,837,123 632,123 Intergovernmental 31,000 31,000 49,423 18,423
Use of money and property - - 987,048 987,048
Charges for services 889,200 889,200 1,095,806 206,606
Rental income 158,000 158,000 125,015 (32,985)
Fines and forfeitures 3,009,577 3,009,577 38,008 (2,971,569) Interfund charges 889,200 889,200 2,741,390 1,852,190
Miscellaneous 10,000 10,000 31,000 21,000
Total Revenues 15,881,160 15,881,160 16,701,074 819,914

EXPENDITURES
Current:

General government 3,353,822 3,353,822 2,875,773 478,049 Public safety 4,074,003 4,074,003 3,630,943 443,060
Community development 4,132,788 4,132,788 4,193,925 (61,137) Public works 2,949,773 2,949,773 2,783,515 166,258
Parks and recreation 1,725,426 1,725,426 1,481,576 243,850 Total Expenditures 16,235,812 16,235,812 14,965,732 1,270,080 Excess (Deficiency) of Revenues
Over Expenditures (354,652) (354,652) 1,735,342 2,089,994

OTHER FINANCING SOURCES (USES)
Transfers in - - 177,488 (177,488)
Transfers out (1,978,187) (1,978,187) (1,725,370) 252,817 Total Other Financing Sources (Uses) (1,978,187) (1,978,187) (1,547,882) 75,329 Net Change in Fund Balances (2,332,839) (2,332,839) 187,460 2,165,323 Fund Balances, Beginning of Year 16,758,425 16,758,425 16,758,425 - Fund Balances, End of Year $ 14,425,586 $ 14,425,586 $ 16,945,885 $ 2,165,323

TOWN OF LOS ALTOS HILLS

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024

GENERAL FUND
Budgeted Amounts
Page | 76 Final Draft

Required Supplemental Information
Cost-Sharing Multiple-Employer Defined Pension Plan
Last 10 Years

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Plan's Proportion of the Net Pension Liability
(Asset) 0.03226% 0.07776% 0.08293% 0.08630% 0.05018%
Plan's Proportionate Share of the Net Pension
Liability (Asset) $ 2,133,424 2,007,540 $ 2,881,005 $ 3,400,941 $ 1,891,026 $ Plan's Covered Payroll $ 1,624,334 1,607,595 $ 1,641,880 $ 1,786,436 $ 1,877,689 $ Plan's Proportionate Share of the Net Pension
Liability (Asset) as a Percentage of it's Covered
Payroll 124.88% 131.34% 175.47% 190.38% 100.71%
Plan’s Fiduciary Net Position as a Percentage of
the Total Pension Liability 79.82% 78.40% 74.06% 73.31% 77.69% Miscellaneous Plan
Measurement Date 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Plan's Proportion of the Net Pension Liability
(Asset) 0.05502% 0.05917% -0.01126% 0.05707% 0.06218%
Plan's Proportionate Share of the Net Pension
Liability (Asset) 2,203,151 $ 2,495,780 $ (213,880) $ $ 2,670,482 $ 3,109,217 Plan's Covered Payroll $ 2,381,293 $ 2,603,667 $ 2,696,540 $ 2,691,890 $ 2,909,838 Plan's Proportionate Share of the Net Pension
Liability (Asset) as a Percentage of it's Covered
Payroll 92.52% 95.86% -7.93% 99.20% 106.85%
Plan’s Fiduciary Net Position as a Percentage of
the Total Pension Liability 77.73% 77.71% 90.49% 78.19% 77.97% Miscellaneous Plan
Page | 77 Final Draft

Required Supplemental Information
Fiscal Year 2015 2016 2017 2018 2019
Actuarially determined contribution $ 181,280 $ 221,507 $ 250,340 $ 1,640,692 $ 345,118 Contributions in relation to the actuarially
determined contributions (181,280) (221,507) (250,340) (1,640,692) (345,118) Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered payroll $ 1,624,334 $ 1,641,880 $ 1,786,436 $ 1,877,689 $ 2,381,293 Contributions as a percentage of covered
payroll 11.16% 13.49% 14.01% 87.38% 14.49%
Valuation date: 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Miscellaneous Plan
Fiscal Year 2020 2021 2022 2023 2024
Actuarially determined contribution $ 397,870 $ 949,129 $ 439,202 $ 446,339 $ 432,018 Contributions in relation to the actuarially
determined contributions (397,870) (949,129) (439,202) (446,339) (432,018) Contribution deficiency (excess) $ - $ - $ - $ - $ -
Covered payroll $ 2,603,667 $ 2,696,540 $ 2,691,890 $ 2,909,838 $ 2,974,754 Contributions as a percentage of covered
payroll 15.28% 35.20% 16.32% 15.34% 14.52%
Valuation date: 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 Notes to Schedule
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed Remaining amortization period 29 years
Asset valuation method 5-year smoothed market
Inflation 2.30%
Salary increases Varies by Entry Age and Service
Investment rate of return 6.90%, net of pension plan investment and administrative expenses, including inflation Retirement age 55 years Tier 1 60 years Tier 2 62 years Tier 3 Mortality Tier 1 -The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Tier 2 - The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Tier 3 - The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

Cost-Sharing Multiple-Employer Defined Pension Plan
Last 10 Years

SCHEDULE OF CONTRIBUTIONS
Miscellaneous Plan
Page | 78 Final Draft

Required Supplemental Information
Measurement Date 2017 2018 2019 2020 2021 2022 2023
Total OPEB Liability
Service Cost $ 59,133 57,272 $ 61,054 $ 66,829 $ 68,834 $ 57,067 $ 75,074 $ Interest on the total OPEB Liability 148,769 145,306 152,261 134,496 137,420 128,654 139,296 Changes in benefit terms - - - - - 120,003 -
Differences between expected and actual experience - - (346,011) - (130,843) - 116,594 Changes of assumptions - - (25,019) - (61,901) - 164,225 Benefit Payments (157,788) (135,645) (145,442) (142,864) (166,338) (129,326) (163,404) Net change in total OPEB liability 50,114 66,933 (303,157) 58,461 (152,828) 176,398 331,785 Total OPEB liability - beginning 2,499,244 2,432,311 2,549,358 2,246,201 2,304,662 2,151,834 2,328,232 Total OPEB liability - ending (a) $ 2,549,358 2,499,244 $ 2,246,201 $ 2,304,662 $ 2,151,834 $ 2,328,232 $ 2,660,017 $ Plan fiduciary net position
Contributions - employer-Town's contribution 403,645 $ 157,788 $ 145,442 $ 59,226 $ 60,918 $ - $ 38,773 $ Contributions - employer-implicit subsidy - - - - - - - Net investment income 200,657 174,834 146,116 89,421 694,774 (414,716) 164,661 Benefit payments (135,645) (157,788) (145,442) (142,864) (166,338) (129,326) (163,404) Implicit rate subsidy fulfilled - - - - - - -
Administrative expense (1,019) (1,171) (507) (1,219) (954) (788) (745) Other Expenses - (2,906) - - - - -
Net change in plan fiduciary net position 170,757 467,638 145,609 4,564 588,400 (544,830) 39,285 Plan fiduciary net position - beginning 2,196,771 1,729,133 2,367,528 2,513,137 2,517,701 3,106,101 2,561,271 Plan fiduciary net position - ending (b) $ 2,367,528 2,196,771 $ 2,513,137 $ 2,517,701 $ 3,106,101 $ 2,561,271 $ 2,600,556 $ Net OPEB liability/(Asset) - ending (a) - (b) $ 181,830 302,473 $ (266,936) $ (213,039) $ (954,267) $ (233,039) $ 59,461 $ Town's covered payroll $ 2,082,980 1,856,292 $ 2,364,255 $ 2,829,032 $ 2,929,250 $ 2,528,304 $ 3,025,814 $ Town's proportionate share of the net OPEB liability
(asset) as a percentage of its covered-employee payroll 16.29% 8.73% -11.29% -7.53% -32.58% -9.22% 1.97% Notes to Schedule:
* Fiscal year 2018 was the first year of implementation.

Historical information is required only for measurement periods for which GASB 75 is applicable. Future year's information will be displayed up to 10 years as information becomes available.

SCHEDULE OF CHANGES IN THE TOWN'S NET OPEB LIABILITY AND RELATED RATIOS Last 10 Years*
For the measurement year ending June 30
Prepared for Town of Los Altos Hills
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Required Supplemental Information
Fiscal Year Ending 2018 2019 2020 2021 2022 2023 2024
Actuarially determined contribution $ 100,051 103,483 $ 59,226 $ 60,918 $ 20,926 $ 39,694 $ 34,933 $ Contributions in relation to the actuarially
determined contributions (157,788) (145,442) (59,226) (60,918) (38,773) - (24,083) Contribution deficiency (excess) $ (54,305) $ (45,391) $ - $ - $ 20,926 $ 921 $ 10,850 Covered payroll $ 1,856,292 $ 2,082,980 $ 2,364,255 $ 2,929,250 $ 2,528,304 $ 3,025,814 $ 3,268,961 Contributions as a percentage of covered payroll 8.50% 6.98% 2.51% 2.08% 0.00% 1.28% 0.74% Percent of ADC Contributed 152.48% 145.37% 100.00% 100.00% 0.00% 97.68% 68.94% Notes to Schedule
Valuation date: 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Methods and assumptions used to determine contribution rates:

Actuarial cost method
Asset valuation method
Inflation
Assumed Rate of Payroll Growth
Healthcare trend rates
Rate of return on assets
Retirement Age
Mortality rate
Mortality Improvement
* - Fiscal year 2018 was the 1st year of implementation.

Prepared for Town of Los Altos Hills
Age 50 and 5 years of service
CalPERS 2021 Experience Study
MacLeod Watts Scale 2022
Market value of assets

2.50%

3.00%
9%/22% pre/post 65 in 2025, decreasing until
ultimate rate of 3.90% in 2075

6.00%
Entry age normal, level percent of pay

SCHEDULE OF OPEB CONTRIBUTIONS
Last 10 Years*
For the fiscal year ending June 30
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Required Supplemental Information
NOTE 1 – BUDGETARY BASIS OF ACCOUNTING
The Town follows these procedures in establishing the budgetary data reflected in the required supplementary information:

1. The Town Manager submits to the Town Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them.

2. Public hearings are held to obtain taxpayer comments.

3. The budget is legally enacted through passage of a minute order.

4. The Town Manager is authorized to transfer budgeted amounts between departments within any fund.

However, any revisions that increase total expenditures of any fund must be approved by the Town Council. Expenditures may not legally exceed budgeted appropriations at the fund level without Town Council approval.

5. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Amounts presented include amendments approved by the Town Council. The Town adopts budgets for all funds except the Parks and Recreation In-Lieu Fee and Special Donations Special Revenue Funds.

NOTE 2 – PENSION LIABILITY AND RELATED CONTRIBUTIONS
These schedules present information that shows the Town’s proportionate share of the pension liability in the cost sharing pools, actuarial information, and contributions. The proportionate share information is useful in determining the Town’s liability in relation to all other entities in the pool.

NOTE 3 – SCHEDULE OF CHANGES IN THE TOWN’S NET OPEB LIABILITY AND RELATED RATIOS This schedule shows the funding progress for the Town's Other Postemployment Benefits whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits as required by current standards. There are no factors that significantly affect the identification of trends in the amount reported. Only years when actuarial valuations were performed are shown. Additional years will be included as subsequent valuations are performed.

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Final Draft

Supplemental Information
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Variance with
Final BudgetActual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental $ 700,525 $ 700,525 $ 727,115 $ 26,590 Charges for services 85,000 85,000 151,240 66,240
Total Revenues 785,525 785,525 878,355 92,830

EXPENDITURES
Capital outlay - 1,385,000 1,363,950 21,050
Total Expenditures - 1,385,000 1,363,950 21,050
Excess (Deficiency) of Revenues
Over Expenditures 785,525 (599,475) (485,595) 113,880

OTHER FINANCING SOURCES (USES)
Transfers in 599,475 599,475 474,651 (124,824)
Total Other Financing Sources (Uses) 599,475 599,475 474,651 (124,824) Net Change in Fund Balances 1,385,000 - (10,944) (10,944) Fund Balances, Beginning of Year 223,128 223,128 223,128 - Fund Balances, End of Year $ 1,608,128 $ 223,128 $ 212,184 $ (10,944)

TOWN OF LOS ALTOS HILLS

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

STREET CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts
Page | 84 Final Draft

Variance with
Final BudgetActual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental $ 180,000 $ 180,000 $ 183,383 $ 3,383 Charges for services - - 239,003 239,003
Rental income 50,000 50,000 66,488 16,488
Investment Income - - 61,463 61,463
Total Revenues 230,000 230,000 550,337 320,337

EXPENDITURES
General government - - 560,274 (560,274)
Capital outlay - - 1,407,128 (1,407,128)
Total Expenditures - - 1,967,402 (1,967,402)
Excess (Deficiency) of Revenues
Over Expenditures 230,000 230,000 (1,417,065) (1,647,065)

OTHER FINANCING SOURCES (USES)
Transfers in - - 1,280,861 1,280,861
Total Other Financing Sources (Uses) - - 1,280,861 1,280,861 Net Change in Fund Balances 230,000 230,000 (136,204) (366,204) Fund Balances, Beginning of Year 2,623,555 2,623,555 2,623,555 - Fund Balances, End of Year $ 2,853,555 $ 2,853,555 $ 2,487,351 $ (366,204)

TOWN OF LOS ALTOS HILLS

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

OTHER CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts
Page | 85 Final Draft

Variance with
Final BudgetActual Positive
Original Final Amounts (Negative)

OPERATING REVENUES
Charges for services $ 3,627,548 $ 3,627,548 $ 3,534,615 $ (92,933) Other income - - 13,194 13,194
Total Operating Revenues 3,627,548 3,627,548 3,547,809 (79,739)

OPERATING EXPENSES
Salaries and benefits 242,882 242,882 280,727 (37,845)
Contract services - treatment plant 1,880,000 1,880,000 1,909,639 (29,639) Professional services 40,000 40,000 13,470 26,530
Support goods and services 10,500 10,500 2,174 8,326
Repairs and maintenance 1,611,121 1,611,121 537,782 1,073,339 Utilities 8,600 8,600 12,407 (3,807)
Interfund charges 277,901 277,901 246,883 31,018
Depreciation - 260,918 (260,918)
Total Operating Expenditures 4,071,004 4,071,004 3,264,000 807,004 Operating income (443,456) (443,456) 283,809 727,265

NONOPERATING REVENUES (EXPENSES)
Capital Contributions - sewer connection fees - - 154,081 154,081 Interest income - - 171,190 171,190
Nonoperating Revenues (Expenses), net - - 325,271 325,271

NET INCOME (LOSS) BEFORE TRANSFERS
Transfers in - - 9,858 9,858
Changes in Net Position (443,456) (443,456) 618,938 1,062,394 Fund Balances, Beginning of Year 12,508,342 12,508,342 12,508,342 - Fund Balances, End of Year $ 12,064,886 $ 12,064,886 $ 13,127,280 $ 1,062,394

TOWN OF LOS ALTOS HILLS

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

SEWER ENTERPRISE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
Budgeted Amounts
Page | 86 Final Draft

Non-Major Governmental Funds

SPECIAL REVENUE FUNDS
Special revenue Funds account for specific revenues that are legally restricted to expenditures for particular purposes.

Parks and Recreation In-Lieu Fee Fund accounts for revenues from parks and recreation in-lieu fees, which are designated for park maintenance, improvement and construction.

Citizens’ Option for Public Safety (COPS) Fund accounts for revenues from the Citizens’ Option for Public Safety Program, which are designated for public safety.

Special Donations Fund accounts for donations.

ARPA Fund accounts for revenues from the Federal government for purposes as designated under the American Rescue Plan Act.

Page | 87 Final Draft

Total
Parks and Nonmajor
Recreation Special Governmental
In-Lieu Fee COPS Donations ARPA Funds
ASSETS
Cash and investments $ 450,296 $ 34,473 - $ $ 813,105 $ 1,297,874 Accounts receivable 562 - - - 562
Total Assets $ 450,858 $ 34,473 - $ $ 813,105 $ 1,298,436

LIABILITIES
Accounts payable- $ 2,694 $ $ - $ - 2,694 $
Due to other funds- 188,329 - - 188,329
Total Liabilities - 191,023 - - 191,023

FUND BALANCES
Restricted - 34,473 450,858 813,105 1,298,436
Unassigned - (191,023) - - (191,023)
Total Fund Balances 450,858 (191,023) 34,473 813,105 1,107,413

TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES $ 450,858 $ 34,473 - $ $ 813,105 $ 1,298,436

SPECIAL REVENUE FUNDS

TOWN OF LOS ALTOS HILLS

NONMAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEETS
JUNE 30, 2024
Page | 88 Final Draft

TOWN OF LOS ALTOS HILLS

NONMAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2024
Total
Parks and Nonmajor
Recreation Special Governmental
In-Lieu Fund COPS Donations ARPA Funds

REVENUES
Intergovernmental - $ 186,160 $ -$ -$ $ 186,160
Investment income 6,886 - - - 6,886
Charges for services 64,632 - - - 64,632
Other revenues - - 835 - 835
Total Revenues 71,518 186,160 835 - 258,513

EXPENDITURES
Public safety - 8,671 - - 8,671
Park and recreation 1,701 - - - 1,701
Capital outlay - - - 264,851 264,851
Total Expenditures 1,701 8,671 - 264,851 275,223

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 69,817 177,489 835 (264,851) (16,710)

OTHER FINANCING SOURCES (USES)
Transfers out - (177,488) - - (177,488)
Total Other Financing Sources (Uses) - (177,488) - - (177,488) NET CHANGE IN FUND BALANCES 69,817 1 835 (264,851) (194,198) BEGINNING FUND BALANCES (DEFICITS) 381,041 (191,024) 33,638 1,077,956 1,301,611 ENDING FUND BALANCES (DEFICITS) $ 450,858 $ (191,023) $ 34,473 $ 813,105 $ 1,107,413

SPECIAL REVENUE FUNDS
Page | 89 Final Draft

TOWN OF LOS ALTOS HILLS

BUDGETED NONMAJOR FUNDS

COMBINING SCHEDULE OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
Variance Variance
Positive Positive
Budget Actual (Negative) Budget Actual (Negative)

GOVERNMENTAL REVENUES
Charges for services -$ -$ -$ $ - $ - -$
Intergovernmental 100,000 186,160 86,160 - - -
Rental income - - - - - -
Investment income - - - - - -
Other revenues - - - - - -
Total Revenues 100,000 186,160 86,160 - - -

EXPENDITURES
Current:

General government - - - - - -
Public safety - 8,671 (8,671) - - -
Park and recreation - - - - - -
Capital outlay - - - 294,851 264,851 30,000
Total Expenditures - 8,671 (8,671) 294,851 264,851 30,000

EXCESS (DEFICIENCY) OF REVENUES
OVER EXPENDITURES 100,000 177,489 94,831 (294,851) (264,851) (30,000) NET CHANGES IN FUND BALANCES $ 100,000 (82,657) 1 $ $ (294,851) (264,851) $ (30,000) BEGINNING FUND BALANCES (DEFICITS) (191,024) 1,077,956
ENDING FUND BALANCES (DEFICITS) $ (191,023) $ 813,105

COPS ARPA

SPECIAL REVENUE FUNDS
Page | 90 Final Draft

STATISTICAL

SECTION
Page | 91 Final Draft

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Final Draft

Contents Page
Financial Trends - These schedules contain trend information to help the reader understand how Town’s financial performance and well-being have changed over time. 94 Revenue Capacity - These schedules contain information to help the reader assess one of the Town’s most significant local revenue source, the property tax. 106
Debt Capacity - These schedules present information to help the reader assess the affordability of the Town’s current levels of outstanding debt and its ability to issue additional debt in the future.
108
Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town’s financial activities take place.
111
Operating Information - These schedules contain service and infrastructure data to help the reader understand how the information in the Town’s CAFR relates to the services the Town provides and activities it performs.
116
Statistical Section
This part of the Town of Los Altos Hills Comprehensive Annual Financial Report presents the detailed information as a context for understand what the information in the financial statements, note disclosures, and required supplementary information says about the Town’s overall financial health.

Page | 93 Final Draft

Statistical Section
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2016 2017 2018
Governmental activities:

Invested in capital assets, net $ 25,370,209 $ 24,700,834 $ 24,739,048 $ 25,898,305 Restricted 1,666,812 1,706,954 115,275 192,287
Unrestricted 7,064,274 9,687,552 13,377,599 13,052,174
Total governmental activities net position $ 34,101,295 $ 36,095,340 $ 38,231,922 $ 39,142,766 Business-type activities:

Invested in capital assets, net $ 5,022,034 $ 5,244,525 $ 5,831,322 $ 6,704,180 Restricted - - - -
Unrestricted 2,774,135 2,582,858 2,607,749 2,647,350
Total business-type activities net position $ 7,796,169 $ 7,827,383 $ 8,439,071 $ 9,351,530 Primary government:

Invested in capital assets, net $ 30,392,243 $ 29,945,359 $ 30,570,370 $ 32,602,485 Restricted 1,666,812 1,706,954 115,275 192,287
Unrestricted 9,838,409 12,270,410 15,985,348 15,699,524 Total net position $ 41,897,464 $ 43,922,723 $ 46,670,993 $ 48,494,296 Source: Audited Financial Statements
Page | 94 Final Draft

Statistical Section
2019 2020 2021 2022 2023 2024
$ 26,305,865 $ 26,511,993 $ 26,253,419 $ 27,656,707 $ 29,143,703 $ 32,034,584 1,229,812 1,354,610 1,956,700 2,187,276 2,816,853 2,507,573 14,219,604 17,365,028 17,760,957 21,316,254 18,139,599 17,577,028 $ 41,755,281 $ 45,231,631 $ 45,971,076 $ 51,160,237 $ 50,100,155 $ 52,119,185 $ 7,264,306 $ 7,574,231 $ 7,717,735 $ 7,865,497 $ 8,212,247 $ 8,561,915 - - - - 12,141
3,205,406 3,291,370 3,830,656 4,177,070 4,283,954 4,572,863 $ 10,469,712 $ 10,865,601 $ 11,548,391 $ 12,042,567 $ 12,508,342 $ 13,134,778 $ 33,570,171 $ 34,086,224 $ 33,971,154 $ 35,522,204 $ 37,355,950 $ 40,596,499 1,229,812 1,354,610 1,956,700 2,187,276 2,828,994 2,507,573 17,425,010 20,656,398 21,591,613 25,493,324 22,423,553 22,149,891 $ 52,224,993 $ 56,097,232 $ 57,519,467 $ 63,202,804 $ 62,608,497 $ 65,253,963 Page | 95 Final Draft

Statistical Section
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2015 (Note 1) 2016 2017
Governmental activities:

Expenses:

Administration $ 538,004 $ 1,923,816 $ 2,339,474 $ 2,119,990 Public safety 1,567,747 1,379,621 1,601,654 1,817,299
Community development 3,324,935 2,289,743 2,167,702 2,210,748 Parks and recreation 1,358,479 621,974 738,495 680,522
Drainage and street operations 839,577 - - -
Public works 1,413,588 - 1,252,271 1,461,155
Non-Departmental - - - -
Interest on long-term debt 3,304 3,304 1,492 -
Total governmental activities expenses 7,632,046 7,632,046 8,101,088 8,289,714 Program revenues:

Charges for services:

Administration - 29,038 72,566 27,615
Public safety 1,302 1,302 - -
Community development 2,623,027 2,433,038 2,217,874 2,219,769 Parks and recreation 316,391 269,295 199,241 222,834
Drainage and street operations 340,110 - - -
Public works - 548,157 388,931 549,729
Operating contributions and grants 338,453 291,593 303,292 343,107 Capital contributions and grants 246,533 246,533 398,990 69,635 Total governmental activities program revenues 3,865,816 3,818,956 3,580,894 3,432,689 Total governmental activities net program expenses (3,766,230) (3,813,090) (4,520,194) (4,857,025) General revenues and other changes in net position:

Governmental revenues:

Taxes
Property taxes 4,606,184 4,606,184 4,960,016 5,302,028
Other taxes 649,542 649,542 565,055 666,631
Franchise taxes 513,997 513,997 474,732 573,336
Use of money and property 208,776 208,776 356,479 222,688 Rental income * - - - -
Investment Income * - - - -
Other unrestricted revenue 174,469 174,469 4,538 13,747 Sale of Capital Assets-net - - - 5,500
Other intergovernmental revenue - - - -
Transfers - 46,860 153,419 209,677
Total governmental activities general revenues
and other changes in net position 6,152,968 6,199,828 6,514,239 6,993,607 Total governmental activities changes in net position 2,386,738 2,386,738 1,994,045 2,136,582 * Change in Financial Reporting in 2018
Note 1: In fiscal year 2015-16, there are changes to the account groupings between programs. For comparison purpose, we added an additional column for fiscal year 2014-15, in which the 2014-15 audited numbers are regrouped to be consistent with the new grouping in 2015-16. One main difference in the 2014-15 numbers is in the treatment of overhead allocation paid by the sewer fund.

The original 2014-15 audited charges for services included $46,860 overhead allocation to sewer operations.

The new grouping records this as "transfers".

Source: Audited Financial Statements
Page | 96 Final Draft

Statistical Section
2018 2019 2020 2021 2022 2023 2024
$ 2,459,576 $ 2,477,572 $ 2,639,241 $ 4,701,506 $ 2,523,787 $ 4,781,296 $ 2,335,260 2,194,391 2,388,908 2,388,202 2,331,814 2,575,786 3,026,838 4,038,777 2,894,119 2,768,476 3,408,027 3,441,398 3,490,984 4,575,519 4,800,671 1,157,213 851,096 770,495 1,061,879 790,853 1,736,231 1,683,650 - - - - - - -
1,669,907 2,001,602 2,086,121 2,235,212 2,695,189 3,571,203 3,522,098 - - 1,106,626 - 279,754 106,697 -
- - - - - - -
10,375,206 10,487,654 11,292,086 14,878,435 12,356,353 17,797,784 16,380,456 tied to ACFR final tied to ACFR Draft,
1,804,216 1,970,336 2,108,477 2,557,408 3,183,113 3,229,670 3,223,304 156,083 132,138 185,743 161,285 165,271 186,159
1,792,025 1,546,016 2,028,933 2,533,045 3,189,907 1,989,196 2,434,952 394,729 255,128 224,853 290,637 695,299 334,340 385,323 - - - - - - -
513,771 476,146 592,434 471,259 554,423 270,281 495,359 194,053 230,351 347,577 294,139 1,097,126 950,243 219,153 94,031 185,744 591,956 374,296 605,866 445,174 506,455
4,948,908 4,795,859 6,079,973 6,520,784 9,487,019 7,384,175 7,450,705 (5,426,298) (5,691,795) (5,212,113) (8,357,651) (2,869,334) (10,413,609) (8,929,751) tied to ACFR Draft,
5,721,224 6,385,652 6,834,083 7,315,637 7,592,741 8,153,743 8,531,557 724,609 522,946 603,657 1,038,680 922,490 583,726 667,742 579,333 530,991 340,268 350,952 414,154 391,130 665,597 - - - - - - -
218,816 - - - - - -
32,349 530,582 897,996 59,912 (888,572) 180,170 1,063,607 39,051 334,139 42,885 631,290 26,984 54,058 30,136
5,885 - - - - - -
- - - - - - -
- - (30,426) (299,376) (9,300) (9,300) (9,858)
7,321,267 8,304,310 8,688,463 9,097,095 8,058,497 9,353,527 10,948,781 1,894,969 2,612,515 3,476,350 739,444 5,189,163 (1,060,082) 2,019,030 tied to ACFR Draft,
Page | 97 Final Draft

Statistical Section
Changes in Net Position (continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2015 (Note 1) 2016 2017
Business-type activities:

Expenses:

Sewer $ 1,591,743 $ 1,544,883 $ 1,997,399 $ 2,129,895
Total business-type activities expenses 1,591,743 1,544,883 1,997,399 2,129,895 Program revenues:

Charges for services:

Sewer 1,392,029 1,392,029 1,925,636 2,759,287
Operating contributions and grants - - - -
Capital contributions and grants 234,339 234,339 221,010 185,369 Total business-type activities program revenues 1,626,368 1,626,368 2,146,646 2,944,656 Total business-type activities net program revenue (expenses) 34,625 81,485 149,247 814,761 General revenues and other changes in net position:

Use of money and property 19,533 19,533 32,557 4,134
Investment Income * - - - -
Other unrestricted revenue - - 2,829 2,470
Transfers - (46,860) (153,419) (209,677)
Total business-type activities general revenues - - - - and other changes in net position 19,533 (27,327) (118,033) (203,073) Total business-type activities changes in net position 54,158 54,158 31,214 611,688 Total primary government change in net position $ 2,440,896 $ 2,440,896 $ 2,025,259 $ 2,748,270 * Change in Financial Reporting in 2018
Note 1: In fiscal year 2015-16, there are changes to the account groupings between programs. For comparison purpose, we added an additional column for fiscal year 2014-15, in which the 2014-15 audited numbers are regrouped to be consistent with the new grouping in 2015-16. One main difference in the 2014-15 numbers is in the treatment of overhead allocation paid by the sewer fund.

The original 2014-15 audited charges for services included $46,860 overhead allocation to sewer operations.

The new grouping records this as "transfers".

Source: Audited Financial Statements
Page | 98 Final Draft

Statistical Section
2018 2019 2020 2021 2022 2023 2024
$ 2,114,609 $ 2,061,261 $ 3,005,538 $ 2,750,983 $ 2,643,741 $ 2,926,892 $ 3,256,502 2,114,609 2,061,261 3,005,538 2,750,983 2,643,741 2,926,892 3,256,502 2,917,428 3,005,050 3,104,059 3,035,410 3,070,792 3,263,652 3,534,615 - - - - - - -
130,930 98,183 85,595 88,908 236,512 97,754 154,081
3,048,358 3,103,233 3,189,654 3,124,318 3,307,304 3,361,406 3,688,696 933,749 1,041,972 184,116 373,335 663,563 434,514 432,194 - - - - - - -
6,642 76,210 172,060 10,079 (186,156) 21,481 171,190
3,220 - 9,287 - 7,469 480 13,194
- - 30,426 299,376 9,300 9,300 9,858
- - - - - - -
9,862 76,210 211,773 309,455 (169,387) 31,261 194,242
943,611 1,118,182 395,889 682,790 494,176 465,775 626,436 $ 2,838,580 $ 3,730,697 $ 3,872,239 $ 1,422,234 $ 5,683,339 $ (594,307) $ 2,645,466 Page | 99 Final Draft

Statistical Section
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2015 2016 2017 2018
General Fund
Restricted
Committed $ 360,000 $ 1,765,000 $ 1,840,000 $ 3,125,000 Assigned - 350,000 350,000 350,000
Unassigned 7,048,964 7,606,176 10,267,874 8,254,294
Total General Fund $ 7,408,964 $ 9,721,176 $ 12,457,874 $ 11,729,294 All other governmental funds
Restricted $ 1,691,286 $ 1,706,954 $ 115,275 $ 192,287
Committed 934,569 1,086,413 2,050,545 2,041,192
Unassigned - - - -
Total all other governmental funds $ 2,625,855 $ 2,793,367 $ 2,165,820 $ 2,233,479 Source: Audited Financial Statements
Page | 100 Final Draft

Statistical Section
2019 2020 2021 2022 2023 2024
$ 528,723 $ 550,215 $ 1,178,398 $ 1,040,671 $ 1,103,320 $ 1,209,137 3,155,000 6,371,700 6,371,700 6,371,700 10,868,004 10,868,004 350,000 2,071,500 2,071,500 2,071,500 2,328,858 2,328,858 8,841,955 7,174,940 7,338,881 8,599,777 2,458,243 2,539,886 $ 12,875,678 $ 16,168,355 $ 16,960,479 $ 18,083,648 $ 16,758,425 $ 16,945,885 tied to ACFR draft
$ 804,395 701,089 $ 778,302 $ $ 1,492,635 1,146,605 $ 1,298,436 $ 2,666,028 2,449,411 2,686,754 2,846,683 2,701,679 2,680,600 - - - (191,024) - (191,023)
$ 3,470,423 3,150,500 $ 3,465,056 $ $ 4,148,294 3,848,284 $ 3,788,013 $ G.Total FB = $20
Page | 101 Final Draft

Statistical Section
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2015 2015 (Note 1) 2016 2017 2018
Revenues:

Property taxes $ 4,606,184 $ 4,606,184 $ 4,960,016 $ 5,302,028 $ 5,721,224 Taxes other than property 645,836 645,836 511,091 610,337 667,037 Franchise fees 513,997 513,997 474,732 573,336 579,333
Licenses and permits 1,485,394 1,485,394 1,334,953 1,544,996 1,246,623 Intergovernmental 397,470 397,470 752,717 412,855 489,392 Use of money and property 295,447 295,447 356,479 222,688 - Investment Income * - - - - 32,349
Charges for services 1,858,220 1,811,360 1,449,127 1,482,830 1,625,306 Interfund charges - - - - 1,632,812
Rental income - - - - 218,816
Fines and forfeitures - - - - 381
Miscellaneous 175,380 175,380 102,599 62,048 56,902
Total revenues 9,977,928 9,931,068 9,941,714 10,211,118 12,270,175 Expenditures
Current:

Administration 447,843 1,557,773 1,859,492 1,813,551 1,983,939 Public safety 1,205,913 1,075,160 1,255,198 1,560,295 1,781,425 Community development 2,557,545 1,725,877 1,641,631 1,833,654 2,540,121 Parks and recreation 1,044,944 466,881 565,440 575,594 722,696 Drainage and street operation 645,804 - - - -
Public works - 1,066,943 951,786 1,214,072 1,678,516
Non-Departmental - - - - -
Debt service: - - - - -
Principal 16,212 16,212 81,360 - -
Interest 3,372 3,372 1,492 - -
Additional pension and OPEB payments - - - - 1,660,209
Capital outlay 1,765,807 1,765,807 1,259,010 1,314,478 2,564,189 Total expenditures 7,687,440 7,678,025 7,615,409 8,311,644 12,931,095 Excess (deficiency) of revenues
over (under) expenditures 2,290,488 2,253,043 2,326,305 1,899,474 (660,920) Other financing sources (uses)
Transfers in 2,790,955 3,097,282 2,299,774 2,988,073 2,215,434 Transfers out (2,790,955) (3,059,837) (2,146,355) (2,778,396) (2,215,434) Sale of assets - - - - -
Proceeds from debt - - - - -
Other financing sources (uses) - 37,445 153,419 209,677 - Net change in fund balances $ 2,290,488 $ 2,290,488 $ 2,479,724 $ 2,109,151 $ (660,920) Debt service as a percentage of
noncapital expenditures 0.3% 0.3% 1.3% 0.0% 0.0%
* Change in Financial Reporting in 2018
Note 1:

In fiscal year 2015-16, there are changes to the account groupings between programs. For comparison purpose, we added an additional column for fiscal year 2014-15, in which the 2014-15 audited expenditures were regrouped to be consistent with the new grouping in 2015-16.

One major difference in the 2014-15 numbers is the treatment of overhead allocation. The original 2014-15 audited expenditures for Administration was reduced due to overhead charges to other programs. Under the 2015-16 new groupings, overhead allocation was eliminated within General Fund and overhead charges to other governmental funds and sewer funds are reported as "transfers" rather than "expenditures" / "expenses".

Source: Audited Financial Statements
Page | 102 Final Draft

Statistical Section
2019 2020 2021 2022 2023 2024
$ 6,385,652 $ 6,834,083 $ 7,315,637 $ 7,592,741 $ 8,153,743 $ 8,531,557 466,062 537,836 978,527 813,072 575,010 599,107
530,991 340,268 350,952 414,154 391,130 665,597
1,060,772 990,768 1,830,032 2,529,635 1,366,066 1,837,123 574,257 894,577 1,019,418 2,161,832 1,847,035 1,146,081 - - - - - -
530,582 897,996 59,912 (888,572) 180,170 1,055,397
1,282,436 1,878,256 1,514,977 1,933,466 1,279,666 1,550,681 1,748,699 1,858,142 1,898,349 2,603,083 2,625,959 2,741,390 155,719 222,534 200,584 273,474 245,472 191,503
- 4,797 1,680 32,400 24,461 38,008
364,999 339,605 747,187 89,531 58,290 52,900
13,100,169 14,798,862 15,917,255 17,554,816 16,747,002 18,409,344 2,113,083 2,127,557 4,415,774 3,439,713 3,512,265 3,436,047 1,974,021 2,084,618 2,035,269 2,300,095 2,704,971 3,639,614 2,642,159 2,860,410 3,045,611 3,746,154 3,613,069 4,193,925 742,986 652,562 940,742 1,263,679 1,496,577 1,483,277
- - - - - -
1,632,329 1,724,318 1,968,848 2,416,468 2,835,138 2,783,515 - 1,106,626 - 279,754 95,268 -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
1,932,186 1,706,371 1,318,252 2,593,256 3,505,627 3,035,929 11,036,764 11,155,836 14,831,122 16,039,119 17,762,915 18,572,307 2,063,405 3,643,026 1,086,133 1,515,697 (1,015,913) (162,963) 2,113,748 781,527 2,356,279 2,426,102 2,600,000 1,933,000 (2,113,748) (811,953) (2,655,655) (2,435,402) (2,609,300) (1,942,858) - - - - - -
- - - - - -
- (30,426) (299,376) (9,300) (9,300) (9,858)
$ 2,063,405 $ 3,612,600 $ 786,757 $ 1,506,397 $ (1,025,213) $ (172,821)

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Page | 103 Final Draft

Statistical Section
Assessed and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Fiscal Year Taxable Total % change Property tax
Ended Less Assessed Direct Tax in assessed revenue per
June 30 Secured Roll Unsecured Roll Exemptions Value Rate value fin stmt 2015 6,220,950,601 $ $ 3,384,189 $ 14,732,200 $ 6,209,602,590 0.074% 6.33% 4,606,184 $ 2016 6,668,595,288 $ $ 3,162,336 $ 14,589,400 $ 6,657,168,224 0.075% 7.21% 4,960,016 $ 2017 7,103,893,376 $ $ 3,727,197 $ 14,357,000 $ 7,093,263,573 0.075% 6.55% 5,302,028 $ 2018 7,557,427,113 $ $ 3,513,572 $ 14,109,200 $ 7,546,831,485 0.076% 6.39% 5,721,224 $ 2019 8,089,462,808 $ $ 3,773,145 $ 13,935,660 $ 8,079,300,293 0.079% 7.06% 6,385,652 $ 2020 8,527,137,778 $ $ 3,724,990 $ 13,869,800 $ 8,516,992,968 0.080% 5.42% 6,834,083 $ 2021 8,940,832,568 $ $ 3,318,142 $ 37,796,178 $ 8,906,354,532 0.082% 4.57% 7,315,637 $ 2022 9,359,977,299 $ $ 3,460,539 $ 37,873,657 $ 9,325,564,181 0.081% 4.71% 7,592,741 $ 2023 9,966,835,884 $ $ 4,292,201 $ 37,221,968 $ 9,933,906,117 0.082% 6.52% 8,153,743 $ 2024 10,537,795,056 $ $ 5,558,829 $ 36,986,174 $ 10,506,367,711 0.081% 5.76% 8,531,557 $ The total direct tax rate is computed by dividing the amount of property tax revenue recognized in the financial statements by the taxable assessed value.

Source: HDL report - FY 2023-24, ACFR
Page | 104 Final Draft

Statistical Section
Property Tax Rates - Direct and Overlapping Governments Last Ten Fiscal Years
Basic El Camino School/College Santa Clara County Mid- Per Total Fiscal County-wide Hospital District Valley and Library Peninsula Hundred $ Direct Year Levy Levy Levy Water District Retirement Open Space Total Rate 2015 1.0000 0.00910 0.1784 0.0065 0.0503 - 1.2443 0.05589 2016 1.0000 0.01290 0.1704 0.0057 0.0500 0.0008 1.2398 0.05583 2017 1.0000 0.01290 0.1618 0.0086 0.0498 0.0006 1.2337 0.05792 2018 1.0000 0.01000 0.1583 0.0062 0.0621 0.0009 1.2375 0.05894 2019 1.0000 0.01000 0.1895 0.0042 0.0589 0.0018 1.2644 0.05995 2020 1.0000 0.01000 0.1940 0.0082 0.0581 0.0032 1.2735 0.06034 2021 1.0000 0.01000 0.2280 0.0037 0.0481 0.0015 1.2913 0.06004 2022 1.0000 0.01000 0.1959 0.0051 0.0600 0.0015 1.2725 0.06020 2023 1.0000 0.00900 0.1770 0.0044 0.0583 0.0013 1.2500 0.06028 2024 1.0000 0.00500 0.0388 0.0041 0.0024 0.0012 1.0515 0.06058 Source: Santa Clara County Assessor 2014/15 - 2023/24 Tax Rate Table Page | 105 Final Draft

Statistical Section Statistical Section
Principal Taxpayers
Current Year And Ten Years Ago
2024 2015
Percentage Percentage
of Net of Net
Assessed Assessed Assessed Assessed
Taxpayer Type of Property Value Valuation Value Valuation LaPaloma Property LLC Single family residential 63,199,104 $ 0.60% 53,209,936 $ 0.86% Douglas M Leone Trustee and Et Al Single family residential 43,920,138 0.42% 26,112,407 0.42% Campo Vista Lane Single family residential 39,691,400 0.38% - 0.00% Northfork Vineyards LLC Single family residential 28,601,201 0.27% - 0.00% Westwind LAH LLC Vacant 27,341,149 0.26% - 0.00%
Homa Natoma LLC Single family residential 26,925,951 0.26% 25,062,263 0.40% Weijin Dai Trustee Single family residential 26,391,067 0.25% - 0.00% THE DAVID AND LUCILE PACKARD FOUNDATION Single family residential 25,304,345 0.24% - 0.00% Amit Singh Trustee and Et Al Single family residential 23,096,981 0.22% - 0.00% Kumar Malavalli Trustee and Et Al Single family residential 21,386,767 0.20% 18,151,122 0.29% SEHAT SUTARDJA AND DAI WEILI Single family residential - 0.00% 19,611,382 0.32% DAVID HITZ TRUSTEE Single family residential - 0.00% 16,935,315 0.27% BOOK LLC Vacant - 0.00% 16,175,474 0.26%
CHARLES F PERRELL TRUSTEE Single family residential - 0.00% 14,996,572 0.24% STEVEN KEIRN TRUSTEE Single family residential - 0.00% 14,314,695 0.23% PINUS BUNGEANA LLC Single family residential - 0.00% 14,210,000 0.23% Totals $ 325,858,103 3.10% 218,779,166 $ 3.53%
Source: Santa Clara County Assessor 2023/24 Combined Tax Rolls and the SBE Non Unitary Tax Roll Page | 106 Final Draft

Statistical Section
Property Tax Levies and Collections
Last Ten Fiscal Years
Value of
property
Fiscal Year Tax Levy % of Chg Amount % of Levy Amount % of Levy subject to
local tax rate
2015 4,606,184 $ 11% 4,606,184 $ 100% 4,606,184 $ 100% 6,209,602,590 $ 2016 4,960,016 $ 8% 4,960,016 $ 100% 4,960,016 $ 100% 6,657,168,224 $ 2017 5,302,028 $ 7% 5,302,028 $ 100% 5,302,028 $ 100% 7,093,263,573 $ 2018 5,721,224 $ 8% 5,721,224 $ 100% 5,721,224 $ 100% 7,546,831,485 $ 2019 6,385,652 $ 12% 6,385,652 $ 100% 6,385,652 $ 100% 8,079,300,293 $ 2020 6,834,083 $ 7% 6,834,083 $ 100% 6,834,083 $ 100% 8,516,992,968 $ 2021 7,315,637 $ 7% 7,315,637 $ 100% 7,315,637 $ 100% 8,906,354,532 $ 2022 7,592,741 $ 4% 7,592,741 $ 100% 7,592,741 $ 100% 9,325,564,181 $ 2023 8,153,743 $ 7% 8,153,743 $ 100% 8,153,743 $ 100% 9,933,906,117 $ 2024 8,531,557 $ 5% 8,531,557 $ 100% 8,531,557 $ 100% 10,506,367,711 $ The County of Santa Clara levies, bills, and collects property taxes for the Town. Under the Teeter Bill, the County remits the entire amount levied and handles the delinquencies, retaining interest and penalties.

Sources: Santa Clara County Assessor Office 2023-24 Combined Tax Rolls Town of Los Altos Hills financial reports
Collected within FY Total Collections
Page | 107 Final Draft

Statistical Section
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Total Governmental Debt to Debt
Fiscal Capital Activities and Personal per
Year Lease Loan Primary Government Income Capita
2015 - $ 81,360 $ 81,360 9% $ 10
2016 - - - - -
2017 - - - - -
2018 - - - - -
2019 - - - - -
2020 - - - - -
2021 - - - - -
2022 - - - - -
2023 - - - - -
2024 - - - - -
During Fiscal Year 2015-16, the Town paid off the loan balance.

Source: Debt Data - Town of Los Altos Hills Financial Statements Population: California Department of Finance
Page | 108 Final Draft

Statistical Section
Direct and Overlapping Debt
For the Year Ended June 30, 2024

TOWN OF LOS ALTOS HILLS
2023-24 Assessed Valuation: $10,506,367,711
Total Debt Town’s Share of
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2024 % Applicable (1) Debt 6/30/24 Santa Clara County 956,770,000 $ 1.592% 15,231,778 $
Foothill-DeAnza Community College District 640,179,446 4.485% 28,712,048 Palo Alto Unified School District 415,553,859 6.894% 28,648,283 Mountain View-Los Altos Union High School District 261,055,373 9.027% 23,565,469 Los Altos School District 132,000,000 20.303% 26,799,960 El Camino Hospital District 102,186,937 7.393% 7,554,680 Midpeninsula Regional Open Space District 80,700,000 2.586% 2,086,902 Santa Clara Valley Water District Benefit Assessment District 29,235,000 1.592% 465,421 Town of Los Altos Hills - 100 -
Town of Los Altos Hills 1915 Act Bonds 1,430,000 100 1,430,000 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 134,494,541 OVERLAPPING GENERAL FUND DEBT:

Santa Clara County General Fund Obligations $ 1,057,709,440 1.592% $ 16,838,734 Santa Clara County Pension Obligation Bonds 323,733,582 1.592% 5,153,839 Santa Clara County Board of Education Certificates of Participation 12,073,098 1.592% 192,204 Foothill-DeAnza Community College District Certificates of Participation - Mountain View-Los Altos Union High School District General Fund Obligations 1,452,406 9.027% 131,109 Los Altos School District General Fund Obligations 1,191,066 20.303% 241,822 Santa Clara County Vector Control District Certificates of Participation Midpeninsula Regional Open Space District General Fund Obligations 79,795,600 2.586% 2,063,514 TOTAL GROSS OVERLAPPING GENERAL FUND DEBT $ 24,621,222
Less: Santa Clara County supported obligations 42,347
TOTAL NET OVERLAPPING GENERAL FUND DEBT 24,578,875
TOTAL DIRECT DEBT $ -
TOTAL GROSS OVERLAPPING DEBT $ 159,115,763
TOTAL NET OVERLAPPING DEBT $ 159,073,416
GROSS COMBINED TOTAL DEBT $ 159,115,763 (2)
NET COMBINED TOTAL DEBT $ 159,073,416
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to 2023-24 Assessed Valuation:

Direct Debt 0.00%
Total Direct and Overlapping Tax and Assessment Debt 1.28% Gross Combined Total Debt 1.51%
Net Combined Total Debt 1.51%
AB:($550)
Source: California Municipal Statistics
Page | 109 Final Draft

Statistical Section Statistical Section
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year Total Bonded Debt Amount of
Ended Assessed Limit - 15% of Debt Subject to Legal
June 30 Valuation Assessed Valuation Limit Debt Margin
2015 $ 6,209,602,590 $ 931,440,389 - $ 931,440,389
2016 $ 6,657,168,224 $ 998,575,234 - $ 998,575,234
2017 $ 7,093,263,573 $ 1,063,989,536 - $ 1,063,989,536
2018 $ 7,546,831,485 $ 1,132,024,723 - $ 1,132,024,723
2019 $ 8,079,300,293 $ 1,211,895,044 - $ 1,211,895,044
2020 $ 8,516,992,968 $ 1,277,548,945 - $ 1,277,548,945
2021 $ 8,906,354,532 $ 1,335,953,180 - $ 1,335,953,180
2022 $ 9,325,564,181 $ 1,398,834,627 - $ 1,398,834,627
2023 $ 9,933,906,117 $ 1,490,085,918 - $ 1,490,085,918
2024 $ 10,506,367,711 $ 1,575,955,157 - $ 1,575,955,157 The Government Code of the State of California limits the amount of general bonded indebtedness for public improvements to 15% of the assessed valuation of all real and personal property of the Town.

The Town of Los Altos Hills has no general bonded indebtedness.

Source: Santa Clara County Assessor 2023/24 Combined Tax Rolls Page | 110 Final Draft

Statistical Section
Demographics and Economic Statistics
Last Ten Years
% of % of
Personal Per Capita Pop 25+ with Pop 25+ with
Town Income Personal Unemployment Median High School Bachelor's Year Population (in thousands) Income Rate Age Degree Degree 2014 8,330 $ 930,261 $ 111,676 3.4% 49.3 97.9% 84.7%
2015 8,658 $ 1,015,063 $ 117,239 2.7% 50.3 98.1% 82.8%
2016 8,634 $ 1,028,190 $ 119,086 2.4% 51.1 98.0% 83.7%
2017 8,580 $ 1,214,396 $ 141,538 2.2% 51.4 97.1% 83.5%
2018 8,559 $ 1,211,424 $ 141,538 2.6% 51.4 97.1% 83.5%
2019 8,413 $ 1,234,482 $ 146,735 14.9% 52.3 97.3% 84.3% 2020 8,390 $ 1,302,757 $ 155,274 4.2% 51.1 97.3% 85.3%
2021 8,400 $ 1,299,447 $ 154,696 3.4% 52.2 98.5% 87.6%
2022 8,380 $ 1,319,005 $ 157,399 2.3% 53.2 98.7% 86.3%
2023 8,476 $ 1,441,731 $ 170,095 3.4% 53.5 99.1% 86.3%
Sources:

Population: California State Department of Finance. Unemployment Data: California Employment Development Department Income, Age, and Education Data - US Census Bureau
Page | 111 Final Draft

Statistical Section
Principal Employers
Current Year And Ten Years Ago
2024 2015
Percent of Percent of
Number of Total Number of Total
Employer Employees Employment Employees Employment
Foothill Community College 816 1 64.92% 352 -
Pinewood School 136 10.82% 65 -
Saint Nicholas School 34 2.70% 31 -
Fremont Hills Country Club 43 3.42% 32 -
Congregation Beth Am 50 1 3.98% 50 -
Town of Los Altos Hills 28 2.23% 19 -
Los Altos School District 38 3.02% 26 -
Daughters of Charity 100 2 7.96% - -
Purissima Hills Water District 12 0.95% 15 -
Totals 1,257 100.00% 590 0.00%
The agencies listed above have operated in the Town during the past ten years.

There are no commercial or industrial employers in the Town.

Source: Information available from employers and websites. 1 Congregation Beth Am has 20 regular employees and the rest are part-time teachers who work a couple hours a week 2 Daughters of Charity has 30 regular employees and the rest are part-time employees who work a couple hours a week Page | 112 Final Draft

Statistical Section Statistical Section
Full Time Equivalent City Government Employees by Function Last Ten Fiscal Years
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Administration 5.92 6.12 6.32 6.32 6.32 6.79 8.43 9.66 9.55 9.08 Public safety - - - - - 0.18 0.29 0.20 0.22 0.20
Community development 7.66 7.61 7.61 7.61 7.61 7.88 7.25 7.12 7.88 7.40 Town center and corpyard 1.00 0.85 0.85 0.85 0.85 0.94 1.23 1.55 1.40 1.27 Parks and recreation 0.60 1.65 1.65 1.65 1.45 2.65 0.60 2.20 2.35 2.35 Pathways 1.39 1.69 1.69 1.69 1.95 2.07 1.39 2.30 2.40 2.70 Drainage and street 1.70 2.15 2.15 2.15 4.41 2.91 1.70 2.40 2.80 2.87 Sewer 1.93 1.93 2.93 2.93 1.00 1.42 0.93 1.62 1.40 1.38

20.20 19.20 22.20 23.20 23.20 26.25 24.60 27.05 28.00 27.25 Source: Town of Los Altos Hills Personnel Records
Page | 113 Final Draft

Statistical Section
Operating Indicators by Function
Last Ten Fiscal Years
2015 2016 2017 2018
Building permits issued:

New homes 37 39 33 20
Valuation $ 32,021,811 $ 27,158,677 $ 27,718,202 $ 22,404,203 Additions and remodels 132 109 113 254
$ 13,479,448 $ 10,014,195 $ 17,247,476 $ -
193 159 152 74

8.12 8.50 6.30 6.30
92 100 133 116
Valuation
Planning permits approved
Streets resurfaced/rehabilitated
Recreation classes and activities offered
Source: Town of Los Altos Hills
Page | 114 Final Draft

Statistical Section
2019 2020 2021 2022 2023 2024
17 10 15 15 11 12
$ 20,854,456 $ 12,451,026 $ 18,835,335 $ 35,732,232 $ 28,618,401 $ 38,416,894 249 20 17 21 8 94
$ 19,960,217 $ 7,628,104 $ 6,178,882 $ 12,127,302 $ 4,426,950 $ 24,757,180 54 168 199 142 175 141

5.08 4.30 2.50 4.66 4.40 4.1
157 154 129 134 97 76
Page | 115 Final Draft

Statistical Section
Capital Asset Statistics By Function
Last Ten Fiscal Years
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Parks and Recreation
Baseball fields 4 4 4 4 4 4 4 4 4 4
Playground 1 1 1 1 1 1 1 1 1 1
Park 2 2 2 2 2 2 2 2 2 2
Riding Ring 1 1 1 1 1 1 1 1 1 1
Westwind Barn 1 1 1 1 1 1 1 1 1 1
Pathways - miles 85 85 85 85 85 85 85 86 86 85
Open space - acres 55 55 55 55 55 55 55 55 55 55
Drainage and Street Operations
Street lights 6 6 6 6 6 6 6 6 6 6
Traffic lights 3 3 3 3 3 3 3 3 3 3
Paved roadway - miles 60 60 65 65 65 65 65 65 65

62.27 ***
Storm drains - miles 20 20 20 20 20 20 20 20 20 20
Sewer Operations
Sanitary sewers - miles 56 56 56 56 56 57 57 58 56.7 56.7 Source: Town of Los Altos Hills
*** Public Works Department has confirmed the FY 2023-24 total miles of 62.27 for paved roadway Page | 116 Final Draft

TOWN OF LOS ALTOS HILLS December 19, 2024
Staff Report to the City Council
SUBJECT: ANNUAL REPORT ON AB 1600 DEVELOPMENT IMPACT FEES FOR FISCAL YEAR ENDED JUNE 30, 2023
FROM: Thomas Leung, Finance Director
APPROVED: Peter Pirnejad, City Manager
RECOMMENDATION: That the City Council:

Receive and accept the Annual Report on AB 1600 Development Impact Fees for Fiscal Year Ended June 30, 2023

BACKGROUND
Under California's Mitigation Fee Act (Government Code §§ 66000-66025), commonly known as AB 1600, local agencies imposing development impact fees are required to prepare an annual report detailing the collection and use of these fees. This report must be made available to the public within 180 days after the end of the fiscal year. However, due to staffing turnover, last year's report was not completed. To maintain transparency, the 2023 report is now being provided alongside the 2024 report.

The Town collects three types of fees, as shown below:

Date of adoption Ordinance No. Fee authorized
July 3, 1976 232 Parks and recreation dedication fee
November 16, 2019 584 Pathway fee
August 14, 1999 401 Storm drainage fee
The parks and recreation dedication fee is classified as a “Quimby Act” fee (Government Code §§ 66477) and is excluded per Section 66000(b) from the reporting requirements described in the attachments. The pathway fee, storm drainage fee, and the parks and recreation dedication fee data provided in this report is for information purposes only.

ENVIRONMENTAL REVIEW:

This action does not qualify as a “Project” as defined in California Government Code Section 15378(b) of the Guidelines for California Environmental Quality Act.

ITEM 6E Staff Report

Staff Report to the City Council Page 2
Annual Report on Development Impact Fees
December 19, 2024
2024 CITY COUNCIL STRATEGIC PRIORITIES:

The report is for financial transparency and was not specified as one of Council’s priorities in 2024.

FISCAL IMPACT:

There is no fiscal impact.

ATTACHMENTS

1. Development Impact Fee Report for the Fiscal Year Ended June 30, 2023

2. Municipal Code for Pathway fee (LAHMC 3-3.303, 10-2.608)

3. Municipal Code for Drainage fee (LAHMC 3-3.403, 8-1.07)

4. Municipal Code for Parks and Recreation in-lieu fee (LAHMC 9-1-1403, 9-1.1404)

ITEM 6E Attachment 1
Town of Los Altos Hills
Development Fee Report
For Fiscal Year Ended June 30, 2023
Pathway Fee
In accordance with Municipal Code Section 10-2.608, a site development permit for a lot on which no path is needed shall be assessed a pathway fee. Municipal Code Section 3-3.303 provides that all funds received in the Pathway Fund shall be used exclusively for the maintenance, repair, construction and acquisition of property for the Town’s pathway system.

The pathway impact fee is calculated at a flat rate, $10,943 for new house and $3,826 for additions.

Fiscal Beg Fees Interest Transfers End
Year Bal Collected Income In Expenditures Bal
2023 $ 1,009,789 $ 127,242 $ 6,117 $ 89,177 $ 1,053,970 2022 1,002,312 158,751 (39,531) 12,315 124,058 1,009,789 2021 1,000,524 110,885 2,836 111,933 1,002,312
2020 795,502 279,103 44,944 119,025 1,000,524
2019 709,639 221,689 22,520 158,346 795,502
2018 479,891 262,966 634 33,852 709,639
2022-23 Expenditures
Summerhill-427902 $ 41,276
Fremont to Redwood Grove - 427903 2,814
La Paloma/Robleda - 427906 3,128
Edgerton Road - 427909 12,005
Page Mill From Lupine to Via Feliz - 427912 3,718
Miscellaneous Pathway - 427913 26,235
Total Expenditures $ 89,177
The full amount of expenditures shown above was funded with fee revenue. The pathway capital improvement budget for 2023-24 is approximately $370,000, and anticipated actual spending is approximately $1,191,000. It is anticipated that the ending balance shown above will be fully expended in connection with a variety of projects planned for completion over the next several years.

ITEM 6E Attachment 1
Town of Los Altos Hills
Development Fee Report
For Fiscal Year Ended June 30, 2023
Drainage Fee
In accordance with Municipal Code Section 8-7.07, applicants for the issuance of any building permit shall pay a drainage fee. Municipal Code Section 3-3.403 provides that all funds received in the Drainage Fund shall be used solely for the construction, or reimbursement of construction, of local drainage facilities within the Town, or to reimburse the Town for the cost of engineering and administrative services related to the Master Plan for Storm Water Drainage and the design and construction of the facilities.

Drainage fees are calculated at $.69 per square foot of development within the public right–of-way or easements and for development area added, and $.96 per square foot for impermeable structures and semi-permeable structures.

Fiscal Beg Fees Interest Transfers Transfers End
Year Bal Collected Income In Expenditures Out Bal
2023 $ 757,030 $ 47,164 $ 4,241 $ 67,666 $ 40,000 $ 700,770 2022 748,788 93,311 (29,731) 14,338 29,675 40,000 757,030 2021 764,223 41,055 1,832 18,323 40,000 748,788
2020 703,613 77,155 35,016 11,560 40,000 764,223
2019 672,053 60,410 20,451 9,301 40,000 703,613
2018 866,478 65,451 1,955 201,632 60,200 672,053
2022-23 Expenditures
Matadero Creek Erosion - 467209 $ 67,666
Total Expenditures $ 67,666
The expenditures shown above were funded with fee revenue, interest income, and fund balance.

It is anticipated that the ending balance shown above will be fully expended in connection with a variety of projects planned for completion over the next several years.

ITEM 6E Attachment 1
Town of Los Altos Hills
Development Fee Report
For Fiscal Year Ended June 30, 2023
Park and Recreation Dedication Fee (Park and Recreation in-Lieu Fee) In accordance with Municipal Code Section 9-1.1403, every subdivider shall be required to dedicate a portion of land, or pay a fee in lieu thereof, or a combination of both, for the purpose of providing park and/or recreational space/facilities. The fees are to be used only for the purpose of providing park or recreational facilities to serve the subject subdivision. Municipal Code Section 9-1.1404 provides that the specific amount of real property to be dedicated in a given subdivision shall be .018 acres for every lot or parcel. The in lieu fee is calculated by multiplying the required amount of property to be dedicated by the fair market value of the property. Fair market value is the greater of (1) the average estimated fair market value for all residentially zoned real property located in the Town as determined by the Planning Director or (2) the fair market value of the land in the subdivision based upon its then assessed value modified to equal market in accordance with the current practices of the County assessor and as determined by the Planning Director.

This fee is subject to the Quimby Act and exempt from the time requirements imposed by Section 66001 of the Mitigation Act. Unspent amounts are not required to be returned to the payors.

Fiscal Beg Fees Interest Transfers End
Year Bal Collected Income Expenditures Out Bal
2023 $ 379,884 $ 2,768 $ 1,611 $ - $ 381,040
2022 34,489 354,554 (7,592) 1,568 - 379,884
2021 35,583 - 83 1,177 - 34,489
2020 33,981 - 1,602 - - 35,583
2019 75,792 - 1,620 - 43,432 33,981
2018 69,388 123,636 (65) - 117,167 75,792
2022-23 Expenditures
Cost Allocation $ 1,611
Total Expenditures $ 1,611
The interfund transfers were made to the Capital Improvements Fund to finance related expenditures.

http://qcode.us/codes/losaltoshills/view.php?topic=3-3-3&showAll=1&frames=on 12/17/2019 Title 3 FINANCE
Chapter 3 FUNDS
Article 3. Pathway Fund
3-3.301 Established.

There is hereby established a special fund to be known as the “Pathway Fund.” (§ 1, Ord. 381, eff. April 19, 1996) 3-3.302 Deposits.

All funds collected pursuant to the provisions of Sections 9-1.1112 and 10-2.608 shall be deposited into the Pathway Fund. (§ 1, Ord. 381, eff. April 19, 1996)
3-3.303 Expenditures.

All funds received and held in the Pathway Fund shall be used exclusively construction of the Town’s pathway system. (§ 1, Ord. 381, eff. April 19, 1996; § 1, Ord. 584, eff. November 16, 2019) Title10ZONINGANDSITEDEVELOPMENT
Chapter 2 SITEDEVELOPMENT
Article 6. Pathway Dedication, Maintenance and Improvement 10-2.608 Pathway fee.

A site development permit for a lot on which no path is needed and on which is to be constructed a main residence, an accessory dwelling unit, an addition to a structure of at least nine hundred (900) square feet of “habitable” floor area (including cumulative additions of nine hundred (900) or more square feet of habitable floor area), or a barn or stable for equestrian use of at least nine hundred (900) square feet in floor area shall be assessed a pathway fee, the amount of which shall be fixed by Council resolution as a development impact fee pursuant to the Mitigation Fee Act (AB 1600) (Government Code Section 66000 et seq.). For purposes of assessing the pathway fee, “habitable” floor area does not include additions for kitchen and dining rooms, entryways, foyers, hallways, stairways, or elevators. Pathway fees collected shall be deposited in the Town’s pathway fund. No fee shall be assessed if the lot has been assessed and has paid a fee pursuant to Section 9-1.1112 of the Subdivision Ordinance. (§ 6, Ord. 381, eff. April 19, 1996; § 1, Ord. 584, eff. November 16, 2019) Los Altos Hills Municipal Code
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ITEM 6E Attachment 2

Los Altos Hills Municipal Code
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Title 3 FINANCE
Chapter 3 FUNDS
3-3.401 Established.

There is hereby established a special fund to be known as the “Drainage Fund.” (§ 3, Ord. 141; § 1(b), Ord. 375, eff. June 2, 1995)
3-3.402 Deposits.

All funds received pursuant to the provisions of Section 8-1.04 of Chapter 1 of Title 8 of this Code and Section 9-1.1106(h) of Article 7 of Chapter 4 of Title 9 of this Code, as well as any additional sums authorized by the Council, shall be deposited in the Drainage Fund. (§§ 4 and 6, Ord. 141; § 1(c), Ord. 375, eff. June 2, 1995)
3-3.403 Expenditures.

Moneys in the Drainage Fund shall be expended solely for the construction, or reimbursement for construction, of local drainage facilities within the Town, or to reimburse the Town for the cost of engineering and administrative services related to the Master Plan for Storm Water Drainage and the design and construction of the facilities. Facilities shall be constructed only in accordance with a priority list for channel improvements, which list shall be prepared by the City Engineer and approved by the Council. Such priority list shall be reviewed and revised annually, if appropriate, or as directed by the Council. Funds in the Drainage Fund shall not be restricted for use in a specific watershed from which they were collected, since the entire Town constitutes a single planned local drainage area. The Council hereby finds and determines that all lands within the Town have common drainage problems and that the correction of any problem is a benefit to the entire community. (§ 6, Ord. 141; § 1(d), Ord. 375, eff. June 2, 1995) Title 8 BUILDING REGULATIONS
Chapter 1 BUILDING CODE
8-7.05 Drainage fees.

For the purpose of providing fees for planned drainage facilities as a condition precedent to the issuance of any building permit for the construction of any structure upon any property, the applicant shall pay to the Town a fee, to be determined pursuant to a resolution adopted by the Council, per square foot for the total square footage of all roofed and paved areas required for the completion of the structure or development covered by the building permit. All monies received by the Town pursuant to the provisions of this section shall be paid into the Drainage Fund established by the provisions of Article 4 of Chapter 3 of Title 3 of this Code. (§ 1, Ord. 401, eff. August 14, 1999)
ITEM 6E Attachment 3

Los Altos Hills Municipal Code
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Title 9 SUBDIVISIONS AND PLAN LINES
Chapter 1 SUBDIVISIONS
Article 14. Parks and Recreation Requirements
9-1.1403 Requirements for park and recreation dedication fees. (a) Every subdivider shall be required to dedicate a portion of land, or pay a fee in lieu thereof, or a combination of both, at the option of the City for the purpose of providing park and/or recreational space/facilities. Said authority shall be governed by Section 9-1.1402. (b) Fees in Lieu of Land Dedication. A subdivider may pay a fee to the City in lieu of dedicating land if (1) there is no park or recreational facility to be located in whole or in part within the proposed subdivision or site, or (2) the proposed subdivision contains fifty (50) or fewer lots or parcels. Such fee shall be in an amount equal to the fair market value of the amount of land which would otherwise be required to be dedicated pursuant to subsection (b) of Section 9-1.1404. “Fair market value,” as used herein, shall be the greater of (1) the average estimated fair market value for all residentially zoned real property located in the Town as determined by the Planning Director, or (2) the fair market value of the land in the subdivision or site, based upon its then assessed value modified to equal market value in accord with the current practices of the County Assessor and as determined by the Planning Director. (c) The land, fees, or combination of both are to be used only for the purpose of providing park or recreational facilities to serve the subject subdivision. (§ 1, Ord. 232, eff. July 3, 1976; § 2, Ord. 429. eff. September 7, 2003)
9-1.1404 Amount of real property to be dedicated for park and recreation.

The amount of real property to be dedicated shall be five (5) acres for each one thousand (1,000) persons residing within the Town. For the purpose of this article the population density shall be assumed as three and six-tenths (3.6) persons per dwelling unit. (a) The basis for determining the total number of lots or parcels shall be the number of same that appears on the approved or conditionally approved tentative map. (b) The specific amount of real property to be dedicated in a given subdivision shall be eighteen thousandths of an acre, or seven hundred eighty-four (784) square feet for every lot or parcel that appears on the approved or conditionally approved tentative map. (§ 1, Ord. 232, eff. July 3, 1976)
ITEM 6E Attachment 4 Page 215 of 395
TOWN OF LOS ALTOS HILLS December 19, 2024
Staff Report to the City Council
SUBJECT: ANNUAL REPORT ON AB 1600 DEVELOPMENT IMPACT FEES FOR FISCAL YEAR ENDED JUNE 30, 2024
FROM: Thomas Leung, Finance Director
APPROVED: Peter Pirnejad, City Manager
RECOMMENDATION: That the City Council:

Receive and accept the Annual Report on AB 1600 Development Impact Fees for Fiscal Year Ended June 30, 2024

BACKGROUND
Under California's Mitigation Fee Act (Government Code §§ 66000-66025), commonly known as AB 1600, local agencies imposing development impact fees are required to prepare an annual report detailing the collection and use of these fees. This report must be made available to the public within 180 days after the end of the fiscal year.

The Town collects three types of fees, as shown below:

Date of adoption Ordinance No. Fee authorized
July 3, 1976 232 Parks and recreation dedication fee
November 16, 2019 584 Pathway fee
August 14, 1999 401 Storm drainage fee
The parks and recreation dedication fee is classified as a “Quimby Act” fee (Government Code §§ 66477) and is excluded per Section 66000(b) from the reporting requirements described in the attachments. The pathway fee, storm drainage fee, and the parks and recreation dedication fee data provided in this report is for information purposes only.

ENVIRONMENTAL REVIEW:

This action does not qualify as a “Project” as defined in California Government Code Section 15378(b) of the Guidelines for California Environmental Quality Act. 2024 CITY COUNCIL STRATEGIC PRIORITIES:

The report is for financial transparency and was not specified as one of Council’s priorities in 2024.

ITEM 6F Staff Report

Staff Report to the City Council Page 2
Annual Report on Development Impact Fees
December 19, 2024
FISCAL IMPACT:

There is no fiscal impact.

ATTACHMENTS

1. Development Impact Fee Report for the Fiscal Year Ended June 30, 2024

2. Municipal Code for Pathway fee (LAHMC 3-3.303, 10-2.608)

3. Municipal Code for Drainage fee (LAHMC 3-3.403, 8-1.07)

4. Municipal Code for Parks and Recreation in-lieu fee (LAHMC 9-1-1403, 9-1.1404)

ITEM 6F Attachment 1
Town of Los Altos Hills
Development Fee Report
For Fiscal Year Ended June 30, 2024
Pathway Fee
In accordance with Municipal Code Section 10-2.608, a site development permit for a lot on which no path is needed shall be assessed a pathway fee. Municipal Code Section 3-3.303 provides that all funds received in the Pathway Fund shall be used exclusively for the maintenance, repair, construction and acquisition of property for the Town’s pathway system.

The pathway impact fee is calculated at a flat rate, $10,943 for new house and $3,826 for additions.

Fiscal Beg Fees Interest Transfers End
Year Bal Collected Income In Expenditures Bal
2024 1,053,970 180,589 31,280 488,685 777,155
2023 1,009,789 127,242 6,117 89,177 1,053,970
2022 1,002,312 158,751 (39,531) 12,315 124,058 1,009,789 2021 1,000,524 110,885 2,836 111,933 1,002,312
2020 795,502 279,103 44,944 119,025 1,000,524
2023-24 Expenditures
Summerhill - 427902 $ 225
Fremont to Redwood Grove - 427903 15,118
Edgerton Road - 427909 41
Miscellaneous Pathway - 427913 473,301
Total Expenditures $ 488,685
The expenditures shown above were funded with fee revenue, interest income, and fund balance.

The pathway capital improvement budget for 2024-25 is approximately $425,000, and anticipated actual spending is approximately $1,132,000. It is anticipated that the ending balance shown above will be fully expended in connection with a variety of projects planned for completion over the next several years.

ITEM 6F Attachment 1
Town of Los Altos Hills
Development Fee Report
For Fiscal Year Ended June 30, 2024
Drainage Fee
In accordance with Municipal Code Section 8-7.07, applicants for the issuance of any building permit shall pay a drainage fee. Municipal Code Section 3-3.403 provides that all funds received in the Drainage Fund shall be used solely for the construction, or reimbursement of construction, of local drainage facilities within the Town, or to reimburse the Town for the cost of engineering and administrative services related to the Master Plan for Storm Water Drainage and the design and construction of the facilities.

Drainage fees are calculated at $.69 per square foot of development within the public right–of-way or easements and for development area added, and $.96 per square foot for impermeable structures and semi-permeable structures.

Fiscal Beg Fees Interest Transfers Transfers End
Year Bal Collected Income In Expenditures Out Bal
2024 $ 700,770 $ 47,571 $ 24,733 $ 164,023 $ 40,000 $ 569,050 2023 757,030 $ 47,164 4,241 67,666 40,000 700,770
2022 748,788 93,311 (29,731) 14,338 29,675 40,000 757,030 2021 764,223 41,055 1,832 18,323 40,000 748,788
2020 703,613 77,155 35,016 11,560 40,000 764,223
2023-24 Expenditures
Storm Drain Improvement -
457202 $ 46,407
Matadero Creek Erosion - 467209 117,616
Total Expenditures $ 164,023
The expenditures shown above was funded with fee revenue, interest income, and fund balance.

It is anticipated that the ending balance shown above will be fully expended in connection with a variety of projects planned for completion over the next several years.

ITEM 6F Attachment 1
Town of Los Altos Hills
Development Fee Report
For Fiscal Year Ended June 30, 2024
Park and Recreation Dedication Fee (Park and Recreation in-Lieu Fee) In accordance with Municipal Code Section 9-1.1403, every subdivider shall be required to dedicate a portion of land, or pay a fee in lieu thereof, or a combination of both, for the purpose of providing park and/or recreational space/facilities. The fees are to be used only for the purpose of providing park or recreational facilities to serve the subject subdivision. Municipal Code Section 9-1.1404 provides that the specific amount of real property to be dedicated in a given subdivision shall be .018 acres for every lot or parcel. The in lieu fee is calculated by multiplying the required amount of property to be dedicated by the fair market value of the property. Fair market value is the greater of (1) the average estimated fair market value for all residentially zoned real property located in the Town as determined by the Planning Director or (2) the fair market value of the land in the subdivision based upon its then assessed value modified to equal market in accordance with the current practices of the County assessor and as determined by the Planning Director.

This fee is subject to the Quimby Act and exempt from the time requirements imposed by Section 66001 of the Mitigation Act. Unspent amounts are not required to be returned to the payors.

Fiscal Beg Fees Interest Transfers End
Year Bal Collected Income Expenditures Out Bal
2024 $ 381,040 $ 64,633 $ 6,886 $ 1,701 $ - $ 450,858
2023 379,884 2,768 1,611 - 381,040
2022 34,489 354,554 (7,592) 1,568 - 379,884
2021 35,583 - 83 1,177 - 34,489
2020 33,981 - 1,602 - - 35,583
2023-24 Expenditures
Cost Allocation $ 1,701
Total Expenditures $ 1,701
The interfund transfers were made to the Capital Improvements Fund to finance related expenditures.

http://qcode.us/codes/losaltoshills/view.php?topic=3-3-3&showAll=1&frames=on 12/17/2019 Title 3 FINANCE
Chapter 3 FUNDS
Article 3. Pathway Fund
3-3.301 Established.

There is hereby established a special fund to be known as the “Pathway Fund.” (§ 1, Ord. 381, eff. April 19, 1996) 3-3.302 Deposits.

All funds collected pursuant to the provisions of Sections 9-1.1112 and 10-2.608 shall be deposited into the Pathway Fund. (§ 1, Ord. 381, eff. April 19, 1996)
3-3.303 Expenditures.

All funds received and held in the Pathway Fund shall be used exclusively construction of the Town’s pathway system. (§ 1, Ord. 381, eff. April 19, 1996; § 1, Ord. 584, eff. November 16, 2019) Title10ZONINGANDSITEDEVELOPMENT
Chapter 2 SITEDEVELOPMENT
Article 6. Pathway Dedication, Maintenance and Improvement 10-2.608 Pathway fee.

A site development permit for a lot on which no path is needed and on which is to be constructed a main residence, an accessory dwelling unit, an addition to a structure of at least nine hundred (900) square feet of “habitable” floor area (including cumulative additions of nine hundred (900) or more square feet of habitable floor area), or a barn or stable for equestrian use of at least nine hundred (900) square feet in floor area shall be assessed a pathway fee, the amount of which shall be fixed by Council resolution as a development impact fee pursuant to the Mitigation Fee Act (AB 1600) (Government Code Section 66000 et seq.). For purposes of assessing the pathway fee, “habitable” floor area does not include additions for kitchen and dining rooms, entryways, foyers, hallways, stairways, or elevators. Pathway fees collected shall be deposited in the Town’s pathway fund. No fee shall be assessed if the lot has been assessed and has paid a fee pursuant to Section 9-1.1112 of the Subdivision Ordinance. (§ 6, Ord. 381, eff. April 19, 1996; § 1, Ord. 584, eff. November 16, 2019) Los Altos Hills Municipal Code
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ITEM 6F Attachment 2

Los Altos Hills Municipal Code
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Title 3 FINANCE
Chapter 3 FUNDS
3-3.401 Established.

There is hereby established a special fund to be known as the “Drainage Fund.” (§ 3, Ord. 141; § 1(b), Ord. 375, eff. June 2, 1995)
3-3.402 Deposits.

All funds received pursuant to the provisions of Section 8-1.04 of Chapter 1 of Title 8 of this Code and Section 9-1.1106(h) of Article 7 of Chapter 4 of Title 9 of this Code, as well as any additional sums authorized by the Council, shall be deposited in the Drainage Fund. (§§ 4 and 6, Ord. 141; § 1(c), Ord. 375, eff. June 2, 1995)
3-3.403 Expenditures.

Moneys in the Drainage Fund shall be expended solely for the construction, or reimbursement for construction, of local drainage facilities within the Town, or to reimburse the Town for the cost of engineering and administrative services related to the Master Plan for Storm Water Drainage and the design and construction of the facilities. Facilities shall be constructed only in accordance with a priority list for channel improvements, which list shall be prepared by the City Engineer and approved by the Council. Such priority list shall be reviewed and revised annually, if appropriate, or as directed by the Council. Funds in the Drainage Fund shall not be restricted for use in a specific watershed from which they were collected, since the entire Town constitutes a single planned local drainage area. The Council hereby finds and determines that all lands within the Town have common drainage problems and that the correction of any problem is a benefit to the entire community. (§ 6, Ord. 141; § 1(d), Ord. 375, eff. June 2, 1995) Title 8 BUILDING REGULATIONS
Chapter 1 BUILDING CODE
8-7.05 Drainage fees.

For the purpose of providing fees for planned drainage facilities as a condition precedent to the issuance of any building permit for the construction of any structure upon any property, the applicant shall pay to the Town a fee, to be determined pursuant to a resolution adopted by the Council, per square foot for the total square footage of all roofed and paved areas required for the completion of the structure or development covered by the building permit. All monies received by the Town pursuant to the provisions of this section shall be paid into the Drainage Fund established by the provisions of Article 4 of Chapter 3 of Title 3 of this Code. (§ 1, Ord. 401, eff. August 14, 1999)
ITEM 6F Attachment 3

Los Altos Hills Municipal Code
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Title 9 SUBDIVISIONS AND PLAN LINES
Chapter 1 SUBDIVISIONS
Article 14. Parks and Recreation Requirements
9-1.1403 Requirements for park and recreation dedication fees. (a) Every subdivider shall be required to dedicate a portion of land, or pay a fee in lieu thereof, or a combination of both, at the option of the City for the purpose of providing park and/or recreational space/facilities. Said authority shall be governed by Section 9-1.1402. (b) Fees in Lieu of Land Dedication. A subdivider may pay a fee to the City in lieu of dedicating land if (1) there is no park or recreational facility to be located in whole or in part within the proposed subdivision or site, or (2) the proposed subdivision contains fifty (50) or fewer lots or parcels. Such fee shall be in an amount equal to the fair market value of the amount of land which would otherwise be required to be dedicated pursuant to subsection (b) of Section 9-1.1404. “Fair market value,” as used herein, shall be the greater of (1) the average estimated fair market value for all residentially zoned real property located in the Town as determined by the Planning Director, or (2) the fair market value of the land in the subdivision or site, based upon its then assessed value modified to equal market value in accord with the current practices of the County Assessor and as determined by the Planning Director. (c) The land, fees, or combination of both are to be used only for the purpose of providing park or recreational facilities to serve the subject subdivision. (§ 1, Ord. 232, eff. July 3, 1976; § 2, Ord. 429. eff. September 7, 2003)
9-1.1404 Amount of real property to be dedicated for park and recreation.

The amount of real property to be dedicated shall be five (5) acres for each one thousand (1,000) persons residing within the Town. For the purpose of this article the population density shall be assumed as three and six-tenths (3.6) persons per dwelling unit. (a) The basis for determining the total number of lots or parcels shall be the number of same that appears on the approved or conditionally approved tentative map. (b) The specific amount of real property to be dedicated in a given subdivision shall be eighteen thousandths of an acre, or seven hundred eighty-four (784) square feet for every lot or parcel that appears on the approved or conditionally approved tentative map. (§ 1, Ord. 232, eff. July 3, 1976)
ITEM 6F Attachment 4 Page 223 of 395
ITEM 6G Staff Report
REVISED & DISTRIBUTED 12.16.2024
TOWN OF LOS ALTOS HILLS December 19, 2024
Staff Report to the City Council
SUBJECT: RESOLUTION AUTHORIZING THE WRITE-OFF OF

UNCOLLECTIBLE RECEIVABLES AGED OVER THREE
YEARS
FROM: Thomas Leung, Finance Director
APPROVED: Peter Pirnejad, City Manager
RECOMMENDATION: That the City Council should:

Adopt a resolution to authorize the write-off of uncollectible receivables aged three years or older that the Town has been unable to collect, in accordance with the Town’s financial policies.

BACKGROUND:

The Town requires deposits for various activities, including planning, building, and engineering permitting. These deposits are intended to cover costs incurred by the Town for services rendered or potential damages.

Over time, some receivables related to these deposits have remained outstanding due to nonpayment or abandonment by the original depositor. Despite repeated collection efforts, including issuance of notices and follow-ups, certain receivables have proven to be uncollectible.

The Finance Department has conducted a review of outstanding receivables and identified those that are over three years old and meet the criteria for being written off. This approach is also consistent with auditors’ recommendations and financial best practices to ensure accurate reporting of receivables.

DISCUSSION:

Uncollectible deposits represent amounts billed to individuals or entities that the Town has been unable to recover. Writing off these deposits is necessary to maintain accurate financial records and ensure that the Town’s financial statements reflect only realistic and collectible amounts.

The deposits proposed for write-off meet the following criteria:
• The receivables are over three years old.
• Collection efforts, including issuance of notices and final demand letters, have been exhausted.

Staff Report to City Council Page 2
Write-Offs of Uncollectible Deposits
December 19, 2024
• The amounts are deemed uncollectible due to reasons such as unresponsive depositors, closed accounts, or insufficient funds.

The total amount recommended for write-off is $66,130.90, covering receivables over three years old. While every effort has been made to recover these amounts, further collection attempts are not anticipated to be successful and would likely incur additional costs for the Town.

ENVIRONMENTAL REVIEW:

This action does not qualify as a “Project” as defined in California Government Code Section 15378(b) of the Guidelines for California Environmental Quality Act. 2024-25 CITY COUNCIL WORK PLAN:

This action was not identified in the City Council Work Plan.

FISCAL IMPACT:

Writing off these uncollectible receivables will result in an adjustment to the Town’s accounts receivable but will not impact the Town’s General Fund, as the amounts were never recognized as revenue. This action ensures the Town’s financial records accurately reflect realistic receivables.

ATTACHMENTS:

1. Resolution

2. Proposed Write-Offs - 6.30.2024

ITEM 6G Attachment 1
REVISED & DISTRIBUTED 12.16.2024
RESOLUTION __-24

A RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS

AUTHORIZING THE WRITE-OFF OF UNCOLLECTIBLE RECEIVABLES AGED

OVER THREE YEARS
WHEREAS, the Town of Los Altos Hills requires deposits for activities such as planning, building, and engineering permits to cover associated costs; and WHEREAS, the Town has made exhaustive efforts to collect certain outstanding receivables related to deposits, and such efforts have been unsuccessful for amounts aged over three years; and WHEREAS, the total amount of uncollectible receivables identified for write-off is $66,130.90; and
WHEREAS, writing off these uncollectible amounts is necessary to maintain accurate financial records and reflects sound financial practices; and
WHEREAS, this action does not impact the Town’s General Fund, as the receivables were not recognized as revenue;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the Town of Los Altos Hills hereby authorizes the write-off of uncollectible receivables aged over three years as detailed in Attachment 1.

The above and foregoing Resolution was passed and adopted by the City Council of the Town of Los Altos Hills at a special meeting held on the 19th day of December 2024 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

BY:

ATTEST: Stanley Mok, Mayor
Arika Birdsong-Miller, City Clerk

Project # Amount Notes
EP19-0035 139.00 over 3 years
EP22-0061 2.00 over 3 years
LLA20-0001 319.85 over 3 years
LM19-0001 54.95 over 3 years
P1014 453.25 over 3 years
P10916 1,699.75 over 3 years
P1213 207.00 over 3 years
P13711 3,405.74 over 3 years
P14312 413.75 over 3 years
P14617 132.50 over 3 years
P1610 1,896.24 over 3 years
P17417 296.50 over 3 years
P1818-SPR 391.50 over 3 years
P19108 745.32 over 3 years
P2012 488.75 over 3 years
P20308 3,250.00 over 3 years
P21409 4,564.97 over 3 years
P21417 4,999.50 over 3 years
P2206 4,665.31 over 3 years
P2211 531.25 over 3 years
P22210 722.50 over 3 years
P22408 670.26 over 3 years
P22507 807.50 over 3 years
P23208 0.50 over 3 years
P23311 414.57 over 3 years
P23614 143.00 over 3 years
P24016 1,572.12 over 3 years
P25910 1,062.50 over 3 years
P2607 13.98 over 3 years
P26312 867.50 over 3 years
P26811 325.13 over 3 years
P27412 1,881.59 over 3 years
P27811 597.50 over 3 years
P28016 1,010.75 over 3 years
P28212 153.75 over 3 years
P3010 250.00 over 3 years
P32713-EP 273.00 over 3 years
P3317 2,366.25 over 3 years
P34214 336.50 over 3 years
P36017 332.00 over 3 years
P37814 504.50 over 3 years
P38416 2,110.00 over 3 years
P39213 1,042.88 over 3 years
ITEM 6G Attachment 2

P40213 739.50 over 3 years
P408 1,150.24 over 3 years
P41616 660.50 over 3 years
P42515 795.75 over 3 years
P4610 115.00 over 3 years
P5912 587.25 over 3 years
P611 325.00 over 3 years
P6212 427.50 over 3 years
P7712 278.00 over 3 years
P8205 150.00 over 3 years
SD18-0013 1,906.33 over 3 years
SD18-0014 412.00 over 3 years
SD18-0017 730.88 over 3 years
SD18-0018 876.50 over 3 years
SD18-0025 712.50 over 3 years
SD19-0016 1,010.24 over 3 years
SD19-0080 1,258.93 over 3 years
SD20-0008 1,193.50 over 3 years
SD20-0047 1,932.15 over 3 years
SD20-0083 3,120.15 over 3 years
SD20-0099 28.57 over 3 years
SR18-0010 52.75 over 3 years
SR18-0011 316.75 over 3 years
SR18-0012 168.25 over 3 years
SR18-0018 242.50 over 3 years
B18620 321.75 over 3 years
BLD18-0346 135.00 over 3 years
BLD19-0126 225.00 over 3 years
ZP18-0005 143.00 over 3 years
Total $ 66,130.90

ITEM 8H Staff Report
TOWN OF LOS ALTOS HILLS December 19, 2024
Staff Report to the City Council
SUBJECT: RESOLUTION GRANTING REQUEST FOR EXTENSION OF THE EXPIRATION DATE FOR BUILDING PERMIT AT 26759 SHADY OAKS CT.

FROM: Jay Bradford, Community Development Director
APPROVED: Peter Pirnejad, City Manager
RECOMMENDATION: That the City Council:

Adopt the resolution (Attachment 1) approving the extension request for Building Permit BLD19-0212 with a new expiration date of December 19, 2025.

DISCUSSION:

The property owner is requesting an extension of Building Permit # BLD19-0212 at 26759 Shady Oaks Court that was originally issued on November 5, 2019. See Attachment 2 for a copy of the request. Remodels are limited to 24 months following the issuance of the building permit if the estimated value of the project is between $250,001 and $500,000. See an excerpt from the Los Altos Municipal Code Title 8 Chapter 10 for time limitations set by project type and value as attachment 3. Since the estimated value of the project is between $250,001 and $500,000, the building permits expired on November 5, 2021. The Construction Time Limits Ordinance, does allow the extension of time limit by two 6 month extensions if the extension request is made in the allotted time as described in Section 8-10.04. For this request however the City Council must consider the extension as all other extension options have been exhausted. The applicant has submitted a request for an extension for up to a year to complete the work, which is their first extension request. This project, similar to others processed recently, experienced delays from COVID-19, construction issues, and utility delays. A copy of the inspection record for the project is attached as Attachment 4 to help give a better understanding of the project progress.

Staff recommends granting an extension to allow for additional inspections necessary for project closeout. With this approved permit extension, the applicant will have a year from City Council’s approval of this request to complete the project. Following a year, the applicant will have to pay the final deposit bond of $50,000 for which if they exceed the extension’s time limit, the applicant will face penalties again. In addition, they will be required to apply for another permit extension.

The individual project details are as follows:

Lands of Cohen Eli Trust - 26759 Shady Oaks Court
Permit Numbers: BLD19-0212
Original Expiration Date: November 5, 2021
New Expiration Date: December 19, 2025
Description: REMODEL OF MAIN RESIDENCE & POOL HOUSE; MINOR ADDITION W/ADU; construction delayed by survey errors, PG&E, and pandemic.

City Council Page 2
Permit Extension
December 19, 2024
ENVIRONMENTAL REVIEW:

The proposed request is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3), which exempts actions that can be seen with certainty will not cause significant environmental impacts.

FISCAL IMPACT:

There is no fiscal impact associated with this extension request as the applicant pays a fee for service covering the Town’s costs.
2024-25 CITY COUNCIL WORK PLAN:

This is not part of the 2024-25 City Council Work Plan as extensions are, depending on applicability, part of the standard site development approval process.

ATTACHMENTS

1. Attachment 1: Resolution Approving Time Extension for 26759 Shady Oaks Court, Building Permit # BLD19-0212

2. Attachment 2: Extension Request

3. Attachment 3: Construction Time Limits Section 8-10.04-10.06

4. Attachment 4: BLD19-0212 Inspection Record

ITEM 8H Attachment 1
RESOLUTION -24

RESOLUTION OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS

APPROVING A TIME EXTENSION OF AN APPROVED BUILDING PERMIT FOR A REMODEL OF MAIN RESIDENCE & POOL HOUSE; MINOR ADDITION W/ADU
(LANDS OF COHEN ELI TRUST)
WHEREAS, the Cohen Eli Trust (“Owner”) owns the property commonly known as 26759 Shady Oaks Court, Los Altos Hills, California (APN 175-32-034); and WHEREAS, the building permit (# BLD19-0212) for a remodel of main residence & pool house; minor addition w/ADU were issued on November 5, 2019, with reasonable conditions of approval; and
WHEREAS, the building permits expired on November 5, 2021, as the Town has adopted a Construction Time Limits Ordinance and, pursuant thereto, sets an expiration date for Building Permits for new dwellings and remodels with additions with a project valuation between $250,001 and $500,000 at twenty-four (24) months; and
WHEREAS, pursuant to the Construction Time Limits Ordinance, the City Council has the authority to grant reasonable extensions of time for Building Permits that have expired; and WHEREAS, the Town generally grants time extensions of one (1) calendar year; and NOW, THEREFORE, BE IT RESOLVED the City Council of the Town of Los Altos Hills does hereby approve on behalf of the Owners, a one (1) year Time Extension of approved Building Permit (#BLD19-0212).

The above and foregoing Resolution passed and adopted by the City Council of the Town of Los Altos Hills at a regular meeting held on the 19th day of December 2024, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

BY: _______________________________
Stanley Mok, Mayor
ATTEST: _______________________________
Arika Miller, City Clerk

BUILDING DEPARTMENT
Town of Los Altos Hills
http://www.losaltoshills.ca.gov/

PERMIT EXTENSION REQUEST
Permit No: BL- D l 9 - 0212.

Permit Expiration Date: ___ l-'-1-lfo=-------s-+/_2------'-I ------ Permit Description: /<eW\o
&el a+ �a..ir1 f<.esic\eV)ce t- Pool 11ouse;;J��f\
Address: �2G,-;.i5q S\;\o..dy Oa...'i.s Gt. LAH
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List any previous extensions granted: Poo\ house Co1\\.leJS10f\ .\o -A DU Expiration Date for previous extension: ___ 0_
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I would like to request a Permit Extension for the above project. Construction on this project was delayed due to.:. :tw. 9 ... i-?.'5.V.� .. :... �
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Signature ............... {b .. � ......................... .

Title (if applicable) ..... lAP.� QW. /'>..'?J.'. ............................. .

Business nrune (if applicable) .... :, ..................................... ..

Phone number ........ G..'50::3:f.�.� .. '$.f � .. 3 ............. .

Email ......... (;R.-:� f?-:-.0.P. :¥��3 �. � ::�� Y.':".'. · · · · · · · · · · · · · · · 26379 Fremont Road
Los Altos Hills, CA 94022 Phone: 650-947-2501 [email protected] ITEM 8H Attachment 2

§ 8-10.04. Construction completion time limit guidelines.

New Dwellings and Remodels with Additions. Except where a longer time period is approved pursuant to Section 8-10.05, the maximum time for completion of approved new dwellings or remodels with additions, following issuance of the building permit, shall not exceed the following time limits listed in Table 1:

TABLE 1 New Dwellings and Remodels with Additions
Estimated Value of Project ($) Construction Time Limit
$0 to $250,000 18 months
$250,001 to $500,000 24 months
$500,001 to $1,000,000 30 months
$1,000,001 and over 36 months
All Other Construction Projects. Except where a longer time period is approved pursuant to Section 8-10.05, the maximum time for completion of all other applicable construction projects (e.g., remodels, alterations, modifications, repairs, new construction of accessory structures, etc.), following issuance of the building permit, shall not exceed the following time limits listed in Table 2:

TABLE 2 All Other Construction Projects
Estimated Value of Project ($) Construction Time Limit
$0 to $100,000 12 months
$100,001 to $250,000 18 months
$250,001 to $500,000 24 months
$500,001 and over 30 months
The construction time limit period shall commence on the date the building permit is issued.

The time limits stated in Tables 1 and 2 are the maximum time limits allowed and lesser time periods may be allocated to a project depending on the status of previously issued building permits or code enforcement actions.

Every building permit issued by the Town under the provisions of the building code shall expire and automatically become null and void upon reaching the construction time limit unless a time extension is granted under Section 8-10.05. Said time extension shall be granted prior to the expiration of the building permit.
(§ 1, Ord. 555, eff. February 15, 2015)
§ 8-10.05. Extension of construction time limit.

In the event a project has not passed a final inspection in the allotted time period as prescribed by Table 1 or Table 2 under Section 8-10.04, the applicant/owner may be entitled to up to two, Town of Los Altos Hills, CA
Downloaded from https://ecode360.com/LO4964 on 2024-11-07 ITEM 8H Attachment 3

six month extensions to complete the work. An application for an extension of the construction time limit shall be submitted at least 14 days prior to the expiration of the time limit period and shall be accompanied by a written explanation of the reasons for the requested extension and a fee, as established by City Council resolution. If the Building Official, upon review of the application, grants an extension, the additional six month extension period shall start from the date of the original time limit expiration or the most recent extension expiration date. A construction completion deposit shall be required pursuant to Section 8-10.06 prior to the granting of the time extension.

Time limits shall not be increased through the issuance of subsequent building permits for the same project or for modifications to the original permit unless authorized by the City Council. (§ 1, Ord. 555, eff. February 15, 2015)
§ 8-10.06. Construction completion deposit.

Upon reaching the construction time limit set pursuant to Section 8-10.04, if a final certificate of occupancy has not been issued or final building inspection made, the property owner or representative shall deliver to the Building Department a refundable construction completion deposit (in cash or other security instrument acceptable to the Town and valid for a minimum period of two years) in an amount equal to the lesser of 10% of the estimated cost to complete the project, as determined by the Building Official, or $50,000. The deposit shall be retained until the final inspection is completed. Should penalties accrue due to failure to complete the project within the time limits granted, said penalties may be deducted from the construction completion deposit.

If a building permit issued prior to the date of adoption of the construction time limit ordinance expires, the property owner or representative shall deliver to the Building Department a construction completion deposit prior to the issuance of a new building permit for that project. (§ 1, Ord. 555, eff. February 15, 2015)
Town of Los Altos Hills, CA
§ 8-10.05 § 8-10.06
Downloaded from https://ecode360.com/LO4964 on 2024-11-07

LIST OF INSPECTIONS
SEQ

ID SCHEDULED DATE COMPLETED DATE TYPE INSPECTOR RESULT REMARKS 3/6/2020 2:00
PM 3/6/2020 FOUNDATION ROBERT JOHNSON PARTIAL
Notes:

Footing rebar, steal, strong wall all thread, and dowels are acceptable contractor may place concrete from Gridline five down to Gridline zero. 4/3/2020 1:30
PM 4/3/2020 FOUNDATION STEEL
ROBERT

JOHNSON PASS
Notes:

OK to double up forms at first floor retaining walls and stem walls, 60% ready other 40% to be completed at a separate concrete placement. Green placard issued due to residential remodel status OK to continue working. 4/6/2020 9:00
AM 4/6/2020 FOUNDATION STEEL
ROBERT

JOHNSON PARTIAL
Notes:

Inspection passed last Friday
4/17/2020 9:00
AM 4/17/2020 FOUNDATION STEEL
ROBERT

JOHNSON PASS
Notes:

EOR letter is acceptable. Mill specs are acceptable. Contractor may place concrete at footing stem walls from Gridline fiveto Gridline zero. 85% footing stem walls complete. The remainder is to be completed at a future time. 6/1/2020 6/1/2020 UNDERFLOOR
FRAME
ROBERT

JOHNSON PASS
Notes:
8/13/2020 10:30
AM 8/13/2020 FOUNDATION ROBERT JOHNSON PARTIAL
Notes:

Before placement of concrete please provide engineer of record letter of acceptance for structural rebar, Alternate hardware, and epoxy used for dowels. OK to place concrete pending above corrections. 10/6/2020 08:00
AM 10/6/2020 UNDERGROUND SEWER
ROBERT

JOHNSON PASS
Notes:

HDPE 4" passes from street to house , ok to cover.

Permit Number: BLD19-0212
Site Address: 26759 SHADY OAKS COURT
City, State Zip Code: LOS ALTOS HILLS, CA
Applied: 6/10/2019 Approved: 7/22/2019
Issued: 11/5/2019
Parent Permit:

Parent Project:

Applicant: <NONE>
Owner: Eli & Margarita Cohen Living Trust
Contractor: Lerch Construction
Description: REMODEL OF MAIN RESIDENCE & POOL HOUSE; MINOR

ADDITION W/ADU
Finaled:

Status: EXPIRED
Details:

Printed: Tuesday, 10 December, 2024 1 of 4
Permit Inspections
Town of Los Altos Hills
ITEM 8H Attachment 4

10/8/2020 02:00
PM 10/8/2020 **FINAL ROBERT JOHNSON PARTIAL
Notes:

Waste and vent "top out" inspection passes.
11/23/2020 02:30
PM 11/23/2020 ROUGH FRAME ROBERT JOHNSON PASS
Notes:

All trades rough frame and exterior sheer hold downs passes inspection. 12/4/2020 10:30
AM 12/4/2020 EXTERIOR LATH ROBERT JOHNSON PARTIAL
Notes:

Existing portion of project exterior lath pass inspection. Product information required before final. 12/28/2020 11:30
AM 12/28/2020 EXTERIOR LATH ROBERT JOHNSON PASS
Notes:
90% complete. North and east walls far from driveway pass inspection. 10% by pool remaining. 2/8/2021 03:00
PM 2/8/2021 ROUGH INSULATION
ROBERT

JOHNSON PASS
Notes:
2/25/2021 03:00
PM 2/25/2021 DRYWALL NAIL/SCREWS
ROBERT

JOHNSON PASS
Notes:
3/22/2021 3:00
PM 3/22/2021 3:30 PM SITE COMPLIANCE ROBERT JOHNSON PASS Notes:

Minimum one hand rail required at stairs. Due to width, inspector recommends a handrail on each side of stairs greater than five feet in width. 9/1/2021 03:30
PM 9/1/2021 FOUNDATION STEEL
ROBERT

JOHNSON PASS
Notes:

Ramp footing rebar is acceptable per detail number 1S Dash one also stares at North wall of piano room per detail eight page SD Dash five are acceptable and contractor may place concrete. Number four at 16 inch on center with nosing rebar and perimeter footing at front entry verified. 9/24/2021 9/24/2021 ELECTRICAL

METER RELEASE
ROBERT

JOHNSON PASS
Notes:
400 electrical meter passes meter release inspection.Work inspection required for all main and sub panels before final. 1/21/2022 10:00
AM 1/21/2022 PLUMBING FINAL ROBERT JOHNSON PASS Live
Notes:

All interior work for plumbing,mechanical, electrical, and interior finishes passes final inspection. Handrail/guard rail at exterior stairs required before final of remodel permit. Torque inspection at service panel and subpanel is required before final. 2/18/2022 03:00
PM 2/18/2022 RETAINING WALL REBAR
ROBERT
JOHNSON PASS Live
Notes:

Backyard retaining walls around cool and house pass inspection.

Printed: Tuesday, 10 December, 2024 2 of 4
Permit Inspections
Town of Los Altos Hills

12/2/2022 12/2/2022 PIERS CSG INSPECTOR PARTIAL Live Babak Notes:

NEED LETTER FROM EOR STATING ADDITIONAL 5 PIERS (16 TO 21) AND OBSERVANCE. ASLO NEED LETTER FROM SOILS ENGINEER. 12/20/2022 12/20/2022 RETAINING WALL
REBAR CSG INSPECTOR PASS Live Babak
Notes:

Footings for retaining wall - pass
1/31/2023 1/31/2023 RETAINING WALL
REBAR CSG INSPECTOR PASS Live Babak
Notes:

HORIZONTAL/VERTICAL REBAR FOR RETAINING WALL - PASS
2/22/2023 2/23/2023 SITE COMPLIANCE CSG INSPECTOR PASS Live Babak Notes:

WENT OUT TO CHECK ON STRUCTURE NOT MATCHING PLANS AND LARGER THAN PROPOSED. ENDED UP BEING ONLYA TEMPORARY STRUCTURE TO BLOCK RAIN FOR WORKERS TO CONTINUE WORKING.
3/28/2023 3/28/2023 UNDERSLAB
PLUMBING CSG INSPECTOR PASS Live Babak
Notes:

ADU - PASS
4/4/2023 4/4/2023 FOUNDATION
STEEL CSG INSPECTOR PASS Live Babak
Notes:

ADU - footings and slab foundation - pending letter from EOR 4/18/2023 4/18/2023 FOUNDATION CSG INSPECTOR PASS Live Babak Notes:

Grade beam and footings per detail SD7/7 pass pending letters from EOR 6/13/2023 6/14/2023 ROUGH FRAME CSG INSPECTOR NOT READY Live Babak Notes:
missing structural sheets from approved set.
7/5/2023 7/5/2023 ROOF NAILING CSG INSPECTOR PASS
Notes:
7/5/2023 7/5/2023 EXTERIOR SHEAR
WALL HOLDOWNS CSG INSPECTOR PASS Live - AM
Notes:
7/20/2023 7/20/2023 EXTERIOR LATH CSG INSPECTOR PARTIAL Live Babak Notes:

EXCEPT AROUND DOORS
8/1/2023 8/1/2023 EXTERIOR LATH CSG INSPECTOR PASS Live Babak Notes:

Printed: Tuesday, 10 December, 2024 3 of 4
Permit Inspections
Town of Los Altos Hills

8/21/2023 8/21/2023 ROUGH ALL
TRADES CSG INSPECTOR PASS Live Babak
Notes:
9/6/2023 9/7/2023 UNDERGROUND
SEWER CSG INSPECTOR PASS Live Babak
Notes:
9/6/2023 9/7/2023 UNDERGROUND
ELECTRIC CSG INSPECTOR PASS Live Babak
Notes:
9/6/2023 9/7/2023 UNDERGROUND
GAS CSG INSPECTOR PASS Live Babak
Notes:
9/6/2023 9/7/2023 UNDERGROUND
WATER CSG INSPECTOR PASS Live Babak
Notes:
9/11/2023 9/11/2023 DRYWALL
NAIL/SCREWS CSG INSPECTOR PASS Live Babak
Notes:
9/20/2023 9/20/2023 SITE COMPLIANCE CSG INSPECTOR PASS Live Babak Notes:

Discussed location for New Main Panel.
10/17/2023 10/17/2023 UNDERGROUND
ELECTRIC CSG INSPECTOR PASS Live Babak
Notes:

New location of main panel by side of driveway - underground electric extended through driveway to final location. 11/8/2023 11/8/2023 GAS PRESSURE
TEST CSG INSPECTOR NOT READY Live Babak
Notes:

Need to submit plans for fireplace.
11/8/2023 11/8/2023 ELECTRICAL
METER RELEASE CSG INSPECTOR PASS Live Babak
Notes:

ADU - 400 AMP METER RELEASE
4/15/2024 AM 4/15/2024
631 BLD GAS
METER

AUTHORIZATION
Building
Inspector PASS
Notes:

Printed: Tuesday, 10 December, 2024 4 of 4
Permit Inspections
Town of Los Altos Hills

ITEM 6I Staff Report

ITEM 6I Attachment 1

ITEM 6I Attachment 2

ITEM 6I Attachment 3

ITEM 6I Attachment 4

ITEM 6I Attachment 5
AMENDMENT NO. 1

TO THE UPPER RAVENSBURY AVENUE SANITARY SEWER

REIMBURSEMENT AGREEMENT BETWEEN THE TOWN OF

LOS ALTOS HILLS AND DAVE JESSEN
This Amendment No. 1 is made and entered into effective __________, 2024 as an amendment to the Sanitary Sewer Reimbursement Agreement dated March 6, 2003 (Agreement), by and between the Town of Los Altos Hills, a municipal corporation of the state of California (“Town”), and Dave Jessen (“Property Owner”) Recitals
WHEREAS the Town and the Property Owner entered into a Sanitary Sewer Reimbursement Agreement on March 6, 2003 (“Agreement”); and WHEREAS the Town and the Property Owner desire to amend the Agreement as set forth below.

Agreements
NOW THEREFORE, the Town of Los Altos Hills and Dave Jessen do hereby agree to amend the Agreement, as of December 19, 2024, as follows:

1. The Town will collect the Usage Fee for each Future user as indicated in Exhibit B upon a request or a Town requirement for hook-up to the Sanitary Sewer Extension by each Future User. On June 30th of each year, the Usage Fees set forth in Exhibit B shall be adjusted for the Construction Cost Index for the prior year. After a request by a Future User or a Town requirement of a Future User to contribute additional sewage to the Sanitary Sewer Extension by connecting to the Sanitary Sewer Extension, the Town shall be entitled to collect the Usage Fee at any time prior to the hook up by such Future User to the Sanitary Sewer Extension. Upon collection of the Usage Fee from each Future User, the Town shall deduct an administrative fee of five percent (5%) from the Usage Fee in accordance with Paragraph 8 of this Agreement. by a Future User to connect to the Sanitary Sewer Extension (“Connection Request”), or upon notice to a Future User that it is subject to a Town requirement that the Future User connect to the Sanitary Sewer Extension (“Connection Requirement Notice”).

The Town shall be entitled to collect the Usage Fee at any time after a Connection Request or Connection Requirement Notice, or prior to a hook-up by a Future User to the Sanitary Sewer Extension. Usage Fees collected from Future Users shall be adjusted annually based on compounded California Construction Cost Index and include additional five percent (5%) administration fee for Town incurred costs (“Administrative Fee”).

2. On December 31 of each year for which this Agreement is in effect, the Town shall pay to Property Owner any and all funds collected pursuant to Paragraph 1 above, less the five percent (5%) administrative fee more particularly described

in Paragraph 8. The Town shall make the check payable to David Jessen or Karen Jessen and shall send such check to Property Owner at 10435 Berkshire Drive, Los Altos Hills, California 94024. Within sixty (60) days of the end of each year during which this Agreement is in effect, the Town shall pay to Property Owner any and all funds collected pursuant to Paragraph 1 above, less the Administrative Fee. The Town shall make the check payable to David Jessen or Karen Jessen and shall send such check to Property Owner at 23225 Ravensbury Avenue, Los Altos Hills, California 94024. Property Owner agrees to indemnify and hold harmless the Town from any claims, costs or expenses incurred by the Town in connection with any claim by any person or entity with respect to this Agreement, the associated costs or the Usage Fees.

7. This Agreement, and the obligations of Town hereunder, whether or not any or all Usage Fees have been collected and remitted to Property Owner or its agents hereunder, shall terminate on the fifteenth (15th) twenty-fifth (25th) anniversary of the date of this Agreement.

Exhibit B of the Agreement updated with Amendment No. 1 per attached. All other terms of the Agreement remain in effect and unchanged.

ATTEST:
__________________________
Arika Birdsong-Miller, City Clerk

TOWN OF LOS ALTOS HILLS
__________________________
Stanley Q. Mok, Mayor
APPROVED AS TO FORM:
__________________________
Steve Mattas, City Attorney
PROPERTY OWNER:
__________________________
Dave Jessen

Exhibit B (Updated with Amendment No. 1 - December 19, 2024) Future Users
Name Address APN# Usage Fee
Seaman 11519 Arroyo Oaks Dr 331-05-44 [$17,770 + CCCI%] + 5% AF Casey 23600 Ravensbury Ave 336-38-17 [$17,770 + CCCI%] + 5% AF Philips 23576 Ravensbury Ave 336-38-18 [$17,770 + CCCI%] + 5% AF Kahn 11520 Arroyo Oaks Dr 331-05-36 [$17,770 + CCCI%] + 5% AF Lloyd 23589 Ravensbury Ave 331-05-35 [$17,770 + CCCI%] + 5% AF Grueninger 23575 Ravensbury Ave 331-05-34 [$17,770 + CCCI%] + 5% AF Hsu 23525 Ravensbury Ave 331-17-77 [$17,770 + CCCI%] + 5% AF McCauley 23548 Ravensbury Ave 336-38-24 [$17,770 + CCCI%] + 5% AF CCCI% is the California Construction Cost Index adjustment to account for construction cost escalation. 5% AF is Administrative Fee as set forth in Paragraph 2 of the Agreement.

City Clerk Arika Birdsong-Miller
&
Los Altos Hills City Council
December 18, 2024

drawings and specs for a new sewer lateral to connect to the sewer main itself. That was a substantial expense for me; the survey and engineering was approximately $15,000 and the contract to install a new sewer lateral and connection is to be $38,517.

On about October 29, Able Plumbing submitted my permit application for the new sewer lateral and connection together with the survey and engineering plans (attached here as Exhibit A), which were accepted. Fees were also paid and accepted, as shown by the attached Exhibit B. Your Etrackit shows my permit status as having been “approved with condition” (see, Exhibit C). A week later on November 7, the Town also surprisingly issued two further invoices, showing charges of $43,242.84 for “additional review deposit”, $4,324.28 for “towns administrative charge” (exactly 10% of the $43,242.84), $11,236.00 for “Los Altos Sewer Connection” and finally a charge of $388.00 for “plan review.” (Exhibit D). Of these charges, it appears as though both the $43,242.84 and $11,236.00 amounts are actually charges being made for connection under the Jessen Sewer Reimbursement Agreement from 2003.

As a result, I do believe that those charges are invalid. At that time, the Jessen Sewer Reimbursement Agreement had expired some 6 years earlier, as it had only a 15-year term per its Section 7. Accordingly, it had expired during March, 2018. To the extent that any portion of these charges of $59,191 are based upon Mr. Jessen’s Sewer Reimbursement Agreement from 2003, I must object to their being imposed on me now since the obligation to collect them and reimburse over to Jesson expired six years ago.

This issue appears to have been recognized by the Town as a result of my inquiries. Somewhat amazingly, Mr. Jessen directed a letter dated November 8, 2024 to the Town requesting an “extension” of his agreement (Exhibit E) after six years of silence and expired agreement. This was the very next day – six years after the end of his agreement -- that Town sent me its set of November 7 invoices for Jesson-based connection fees in the combined amount of $59,191.12 notwithstanding that there was no longer any agreement with, or obligation to reimburse, Mr. Jesson. It thus strongly appears that Town may have advised Jessen to take this action. As such, the proposed extension to be considered by the City Council on December 19 thus seeks to retroactively resurrect substantial fees meant to reimburse Mr. Jessen in at least substantial part for an agreement that has been expired, for years. If this is done, it will impact the third-party rights of other owners such as myself, gratuitously since the City is not obligated under the contract to now demand or collect fees under the Jessen agreement, nor does it have any liability if it should fail to do so, per the agreement’s express terms.

Several reasons strongly indicate that the Town should not resurrect this Agreement under the guise of “extending” it retroactively, 6 years after it expired.

City Clerk Arika Birdsong-Miller
&
Los Altos Hills City Council
December 18, 2024

1. Illegality and lack of compliance with statute. I also want to explain that once a reimbursement agreement expires, that these sort of connection fees become illegal pursuant to applicable law. This is because Government Code §66005 provides:
“When a local agency imposes any fee or exaction as a condition of approval of a proposed development, as defined by Section 65927, or development project, those fees or exactions shall not exceed the estimated reasonable cost of providing the service or facility for which the fee or exaction is imposed.”
Here, the Town’s “estimated reasonable cost” of installing the sewer extension at my house was essentially zero. It paid for none of the sewer extension in question here, since Mr. Jesson’s own Reimbursement Agreement required him to pay the entirety of the construction of the sewer section in question. 1 Similarly, I am to pay all
the construction costs of now connecting to the city’s sewer line at my property. Thus, the “estimated reasonable cost” of providing the sewer access now is negligible – I’m required to pay all such expenses to physically make such connection. Further, at the time of my October permit application as submitted by Able, there simply was no reimbursement agreement since it had expired six years ago. As such, any connection charge normally imposed now should not include any of Jessen’s construction costs from 21 years ago since under §66005 there are now no “estimated reasonable costs” for the Town due to my connecting to the sewer line. Even in 2003, the Town’s costs were essentially zero to install the Jessen extension, as Jessen agreed then to pay those construction costs. As such, the Town’s fees for providing a sewer connection now, after expiration of his reimbursement agreement, are at most a small maintenance charge in line with sewer subscribers in Los Altos Hills generally.

In addition, the original Jessen agreement imposed an annual increase in the reimbursed construction costs incurred by Jessen in 2003. It did so by annually increasing the fee obligation put on owners who might later seek to hook up to the new sewer extension, according to a “Construction Cost Index.” (“CCI”, see Exhibit F, section1). As a result, the fee obligation of a new user would grow with an increase in construction costs over the prior years. However, the only construction costs relevant to this sewer extension occurred in 2003, and certainly not during 2004-2024. As such, using annual increases in construction cost indices has no relevance or justification for increasing a reimbursement amount where the construction cost in question all occurred in an initial year, and no construction occurred during later years. Although a construction cost index might give an indication of what expense might be necessary to install a similar sewer now, years later, that is not relevant since payment of some estimated cost of a hypothetical, current-day construction job in order to “reimburse” for 1 Govt. Code §65927 defines a “development” in part as the “construction, reconstruction . . .of any structure”, and further that “structure” includes, but is not limited to, any . . road, pipe, flume . .”

City Clerk Arika Birdsong-Miller
&
Los Altos Hills City Council
December 18, 2024

the cost of a 21 year-old sewer pipe is not authorized by relevant Town ordinances or state statutes. It simply turns the “reimbursement” mechanism into a profit center.

In effect, Mr. Jessen’s Reimbursement Agreement is designed to obtain payment to him of his 2003 construction expenditures, plus a fictitious increase in those expenditures (according to the Construction Cost Index) over the years until such time as other owners may need to connect to the portion of sewer which he installed. No construction on the Jessen sewer has occurred since it was installed, but the fees to repay Jessen for the original construction keep increasing annually as though his construction had simply occurred in the current year. This increase has not been the subject of any City Council meeting to my knowledge, however Government Code §66016 provides in part:
“Prior to levying a new fee or service charge, or prior to approving an increase in an existing fee or service charge, a local agency shall hold at least one open and public meeting, at which oral or written presentations can be made, as part of a regularly scheduled meeting.”
This has not been done, even though the terms of the Jessen Reimbursement Agreement have increased the connection fee charged to third-party owners almost every year since 2003. Govt. Code §66016 is made specifically applicable to sewer connection fees by Govt. Code §66016(d) & §66013. As a result, the Construction Cost Index increase would need to be approved by the City Council prior to June 30 of each year, after a noticed public City Council meeting. Since this has not been done, the CCI annual increases to date in the Jessen Reimbursement Agreement are believed to be unenforceable.

A further reason makes the Jessen agreement and its annual CCI increases invalid for both the old, expired agreement and as well for the proposed “extension.” State law governs reimbursement agreements, in part via Govt. Code §§66001-66003.

Each of those sections regulates and limits reimbursement agreements according to the cost of the facility or service. In order to justify a connection charge to the “Jessen” sewer section, Govt. Code §66001(a)(4) requires that the local agency determine a reasonable relationship between the fee and the cost of the sewer. The cost here is Town’s cost to install the sewer, which was essentially zero (since Jessen paid for it).

Even if, say, “cost” arguably refers to Jessen’s cost rather than the Town’s, such would be Jessen’s expense in 2003, rather than in 2010, 2016 or 2024. T hus, the use of Construction Cost Index to set fees in 2024 is not permissible. The difference in “cost” due to application of this CCI mechanism compared to Jessen’s 2003 expenditure has now increased to approximately 245%, turning the CCI mechanism into a literal profit center and not in accord with the statutes or ordinances governing reimbursement agreements. Where almost 2/3’s of a sewer connection fee is caused by a hypothetical

City Clerk Arika Birdsong-Miller
&
Los Altos Hills City Council
December 18, 2024

or fictitious construction cost, there is no “reasonable relationship” as required by Govt.

Code §66001(a(4).

Similarly, §66002, §66003 and §66005 each refer to development fees being gauged against the cost of the facility. Indeed, the Town’s own ordinances contain the same limitations.

Town ordinance §6-4.503(b) similarly prohibits “soft costs”, and instructs the Town that:
(b) The reimbursement agreement shall calculate the division of such costs among the property owner and future users, provided that no cost of administration or management undertaken by a property owner . . . shall be included”.

Further, §6-4.503(c) refers to reimbursing the property owner for the “cost of the sewer improvement.”
None of these sections refer to or allow fees being changed or increased according to hypothetical increases in construction expenses during later years in which no construction actually occurred. This, however, is exactly what the Jessen Reimbursement Agreement does. Its fees increase according to hypothetical construction costs in the industry during years when no construction in fact occurred – a fiction simply not allowed in the statutes or Town ordinances.

Lastly, the amendment to the original Jessen Reimbursement Agreement which is up for consideration before this City Council on Dec.19 does not simply extend the preexisting, 2003 Jessen agreement (Exhibit G). Rather, it modifies these invalid provisions to increase the fees due under it considerably. First, the original agreement allowed the Town to deduct a 5% management charge from the fee amount charged to a new connecting user. The proposed amendment instead allows that the 5% management charge be added to the otherwise-calculated, CCI-enhanced fee. This adds 5% to the cost to a third party to connect to the Jessen sewer rather than simply extending the status quo of the prior, expired agreement’s fee mechanism. Even further, in the proposed amendment to be considered by this City Counsel, the enhancement to the fee caused by the Construction Cost Index is to be compounded rather than simply to be used as a chronologic index. How this calculation is to be made is unclear, but given the uniform increase in that construction index, some form of compounding calculation is likely to increase the connection fees to a third-party Town resident rather dramatically.

Since this original agreement and, as well, the proposed “extension” are to be recorded they will constitute recorded title covenants against the concerned parcels

City Clerk Arika Birdsong-Miller
&
Los Altos Hills City Council
December 18, 2024

which will impact the third-party owners of those parcels who have yet to get their connections, such as myself. As such, a retroactive change of rights or fee obligations will cause clouded titles and unnecessary claims, particularly where they are seriously not compliant with applicable statutes or ordinances.

In summay, please consider the following list of issues, each of which militate for denial of any extension, amendment or re-creation of this long-expired Reimbursement Agreement:
a. My permit was submitted, with plans, specs and fees paid during a period when no reimbursement agreement even existed yet the apparent $47,000 connection fee is almost 3 times my proportionate shate of the original construction costs;
b. The agreement in question, negotiated between Mr. Jessen and the Town, had been expired and void for 6 years, but suddenly prompted this request to the Town to retroactively reinstate an agreement, where no reason exists to do so but literally simultaneously with my application; c. The concept of “cost” in the Jessen Reimbursement Agreement has little “reasonable relationship” to his original cost to install the sewer line, yet one is required;
d. The “CCI” mechanism is not an indication of anything other than a hypothetical or fictitious estimation of current-day construction expense, so it provides no relevant or reasonable relationship to fees which are required to be based on the Town’s (or even Jessen’s) 2003 construction costs.
e. The total costs to be reimbursed to Jessen per Recital D of the negotiated agreement is limited to $142,160 and not more. This is admittedly inconsistent with the CCI mechanism in paragraph 1 of the Agreement, indicating lack of agreement during negotiation and drafting ; f. “Reimbursement” amounts increase during years where $0.00 in construction and $0.00 in costs occurred, but which costs and expense are required by statute and/or ordinance to augment or impact fees. g. Violation of Govt. Code §66016, requiring noticed public City Council meeting whenever fees are increased – i.e., every year, but which did not occur.
h. Proposed, requested “amendment” seeks to retroactively change CCI and Town’s administrative fee, without notice to or concurrence by impacted owners.
i. Both the proposed,requested “amendment” and the original Reimbursement Agreement present recorded title clouds for future connecting owners and resulting claims.

EXHIBIT A
Permit Application and Drawings

Page | 1 2020-07-17

TOWN OF LOS ALTOS HILLS
26379 Fremont Road
Los Altos Hills, CA 94022
Phone: (650) 941-7222
Fax: (650) 941-3160
www.losaltoshills.ca.gov
Building Permit Application
(For Town Use)
APN Building Permit # Receipt #

1. OWNER INFORMATION:

Last Name First Name
Property Address
Mailing Address Email Address
Home Phone Mobile Work Phone

2. CONTRACTOR INFORMATION: Owner-Builder General Electrical Plumbing Heating Company Name Company Phone
Company Address
Contact Name & Phone # (mobile preferred)
Email Address (ALL PLAN CHECK COMMENTS WILL BE SENT HERE) License Class & # LAH Business License #
Workers’ Compensation # Carrier

3. JOB DESCRIPTION AND VALUATION:

New Residence* Mechanical, Electrical and/or Plumbing
Accessory Dwelling Unit* Furnace/Water Heater Replacement, New Gas Line Pool / Spa Other (cabana, deck, demolition, re-roof, shed, windows) Addition and/or Remodel Landscape Construction Improvements (retaining wall, trellis, pillars, etc.) * New Residences and Accessory Dwelling Units may be subject to additional annual sewer service charges. Please contact the Engineering Department for additional information.

Description:

Building $ Remodeled Area sq ft
Electrical $ New Living Area sq ft
Mechanical $ MEP Subtotal $ New Non-living Area sq ft
Plumbing $ Total Valuation $ New Covered Area sq ft
MCCAULEY 23548 RAVENBURY AVE, LOS ALTOS HILLS 23548 RAVENBURY AVE, LOS ALTOS HILLS [email protected] 650-948-9471 ABLE SEPTIC 408-377-9990 1020 RUFF DR, SAN JOSE, CA 95110 JESSICA MENKEMELLER [email protected] C42 677475 57WEAAK5D1E ANDCONNECT TO NEW CITY SEWER DONALD✔ 03200214 Sentinel Insurance Company Ltd ONSITE SEWER INSTALL, BUILDING AND PL CLEANOUT, ABATE SEPTIC Page 270 of 395 Page | 2 2020-07-17

4. IDENTIFYING WHO WILL PERFORM THE WORK:
**complete either 4a OR 4b**
4a. CALIFORNIA LICENSED CONTRACTOR’S DECLARATION
I hereby affirm under penalty of perjury that I am licensed under provisions of Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, and my license is in full force and effect.

Contractor Name and Address
License Class & Number Contractor Signature
OR
4b. OWNER-BUILDER’S DECLARATION
I hereby affirm under penalty of perjury that I am exempt from the Contractors’ State License Law for the reason(s) indicated below by the checkmark(s) I have placed next to the applicable item(s) (Section 7031.5, Business and Professions Code: Any city or county that requires a permit to construct, alter, improve, demolish, or repair any structure, prior to its issuance, also requires the applicant for the permit to file a signed statement that he or she is licensed pursuant to the provisions of the Contractors’ State License Law (Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code) or that he or she is exempt from licensure and the basis for the alleged exemption. Any violation of Section 7031.5 by any applicant for a permit subjects the applicant to a civil penalty of not more than five hundred dollars ($500).):

I, as owner of the property, or my employees with wages as their sole compensation, will do all OR portions of
the work, and the structure is not intended or offered for sale (Section 7044, Business and Professions Code: The Contractors’ State License Law does not apply to an owner of property who, through employees’ or personal effort, builds or improves the property, provided that the improvements are not intended or offered for sale. If, however, the building or improvement is sold within one year of completion, the Owner-Builder will have the burden of proving that it was not built or improved for the purpose of sale.).

I, as owner of the property, am exclusively contracting with licensed contractors to construct the project. (Section 7044, Business and Professions Code: The Contractors’ State License Law does not apply to an owner of property who builds or improves thereon, and who contracts for the projects with a licensed contractor pursuant to the Contractors’ State License Law.).

I am exempt from licensure under the Contractors’ State License Law for the following reason:

By my signature below I acknowledge that, except for my personal residence in which I must have resided for at least one year prior to completion of the improvements covered by this permit, I cannot legally sell a structure that I have built as an owner-builder if it has not been constructed in its entirety by licensed contractors. I understand that a copy of the applicable law, Section 7044 of the Business and Professions Code, is available upon request when this application is submitted or at the following web site: http://www.leginfo.ca.gov/calaw.html.

Property Owner or Authorized Agent’s Signature Date

5. IDENTIFYING WORKERS’ COMPENSATION COVERAGE AND LENDING AGENCY:
**WARNING**
FAILURE TO SECURE WORKERS’ COMPENSATION COVERAGE IS UNLAWFUL AND SHALL SUBJECT AN

EMPLOYER TO CRIMINAL PENALTIES AND CIVIL FINES UP TO ONE HUNDRED THOUSAND DOLLARS ($100,000), IN ADDITION TO THE COST OF COMPENSATION, DAMAGES AS PROVIDED FOR IN SECTION 3706 OF THE LABOR CODE, INTEREST, AND ATTORNEY’S FEES.

ABLE SEPTIC 1020 RUFF DR, SAN JOSE, CA 95110 C42 677475 11/8/24 Page 271 of 395 Page | 3 2020-07-17
5a. WORKERS’ COMPENSATION DECLARATION
I hereby affirm under penalty of perjury one of the following declarations:

I have and will maintain a certificate of consent to self-insure for workers’ compensation, issued by the Director of Industrial Relations as provided for by Section 3700 of the Labor Code, for the performance of the work for which this permit is issued.

Policy Number:

I have and will maintain workers’ compensation insurance, as required by Section 3700 of the Labor Code, for the performance of the work for which this permit is issued. My workers’ compensation insurance information is as follows:

Carrier Policy # Exp. Date
Name of Agent Telephone #
I certify that, in the performance of the work for which this permit is issued, I shall not employ any person in any manner to become subject to the workers’ compensation laws of California, and agree that, if I should become subject to the workers’ compensation provisions of Section 3700 of the Labor Code, I shall forthwith comply with those provisions.
5b. DECLARATION REGARDING CONSTRUCTION LENDING AGENCY
I hereby affirm under penalty of perjury that there is a construction lending agency for the performance of the work for which this permit is issued (Section 3097, Civil Code).

Lender’s Name
Lender’s Address

6. DECLARATION BY CONSTRUCTION PERMIT APPLICANT:

By my signature below, I certify to each of the following:

I am a California-licensed contractor. OR
the property owner. * OR
authorized to act on the property owner’s behalf. *
• I have read this construction permit application and the information I have provided is correct. • I agree to comply with all applicable city and county ordinances and state laws relating to building construction. • I acknowledge that failure to complete the work as outlined in this permit and/or obtain a final inspection will result in the forfeiture of the performance deposit.
• I authorize representatives of this city or county to enter the above-identified property for inspection purposes. * California Licensed Contractor, Property Owner*, or Authorized Agent*:

Signature Date
*Requires a separate authorization form.

7. DEPOSIT REFUND:

List the name and address of the person or company to be refunded for deposits related to finalizing the building permit:

Print Name:

Signature:

Mailing Address:

Phone/Email:
■
Sentinel Insurance Company Ltd 57WEAAK5D1E 5/1/25 Jamie Kelch (408) 739-8300 11/8/24 ABLE SEPTIC 1020 RUFF DR, SAN JOSE, CA 95110 408-412-2078 [email protected] ✔

EXHIBIT B
Fees Paid Receipts

Payment Amount: $744.00
Department of Environmental Health
Thank you for your payment.

Please print this receipt and keep it for your records.

Invoice ID Facility ID Name Address Invoice Date Amount Due IN1330085 FA0307972 MCCAULEY PROPERTY 23548 RAVENSBURY AV LOS ALTOS HILLS CA Oct 29, 2024 $744.00 Receipt Number: 3884996020
Transaction Date: 11/01/2024 12:15 PM
Payment Type:

Account Number: *1376
IMPORTANT: Please note that payments made online may require up to 3 business days to post to your account. Any payment that is not honored by your bank for any reason may be subject to a non-sufficient funds fee. If you have questions relating to this payment site, please contact Department of Environmental Health, 408-918-3400.
1555 Berger Drive, Suite 300, San Jose CA 95112 dehweb
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EXHIBIT C
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Permit #
10590
8868
9365
BLD24-0555
Type: SEWER
Subtype: NEW CONNECTION MAIN RES
Short Description
(not required):

ABATING SEPTIC, INSTALLING ONSITE SEWER

WITH CLEANOUT
Status: APPROVED W CONDITION
Applied Date: 10/29/2024
Approved Date: 11/14/2024
Issued Date:

Finaled Date:

Expiration Date:

Permit #BLD24-0555
Permit Info Site Info
26379 Fremont Road Town of Los Altos Hills, CA 94022
HOME | CONTACT
The Town of Los Altos Hills, CA makes every effort to produce and publish the most current and accurate information possible. No warranties, expressed or implied are provided for the data herein, its use, or its interpretation. Utilization of this website indicates understanding and acceptance of this statement along with your express agreement that your use of this site is at your sole risk. The Town of Los Altos Hills will not be liable for any damages of any kind arising from the use of this site, including, but not limited to, direct, indirect, incidental, consequential and punitive damages. ©1990-2024 CentralSquare Technologies, LLC. All Rights Reserved.

EXHIBIT D
November 7, 2024 Town Connection Invoices

MCCAULEY DONALD D TRUSTEE
23548 RAVENSBURY AVENUE
LOS ALTOS HILLS, CA 94024-6518
Invoice Date: 11/7/2024
Record # Record Type Fee Group Fee Description Quantity Amount SR24-0037 SEWER REVIEW E060 ADDITIONAL REVIEW

DEPOSIT
1 $43,242.84

THIRD PARTY BILLING FEES TOWNS ADMINISTRATIVE
CHARGE
0 $4,324.28
$47,567.12
Invoice Total: $47,567.12
Printed: Thursday, November 07, 2024 5:13 PM 1 of 1
Please send your payment to this address:
26379 Fremont Rd
Los Altos Hills, CA 94022
Town of Los Altos Hills
Town of Los Altos Hills
26379 Fremont Rd
Los Altos Hills,CA 94022
INVOICE #
WEB-2720
Date Due: 12/7/2024

MCCAULEY DONALD D TRUSTEE
23548 RAVENSBURY AVENUE
LOS ALTOS HILLS, CA 94024-6518
Invoice Date: 11/7/2024
Record # Record Type Fee Group Fee Description Quantity Amount SR24-0037 SEWER REVIEW SEWER FEES LOS ALTOS SEWER

CONNECTION
0 $11,236.00
Time Trak 11/7/2024 2:53:05 PM PLAN REVIEW (MELI) 2 $388.00 $11,624.00
Invoice Total: $11,624.00
Printed: Thursday, November 07, 2024 4:24 PM 1 of 1
Please send your payment to this address:
26379 Fremont Rd
Los Altos Hills, CA 94022
Town of Los Altos Hills
Town of Los Altos Hills
26379 Fremont Rd
Los Altos Hills,CA 94022
INVOICE #
WEB-2719
Date Due: 12/7/2024

EXHIBIT E
Jessen Letter dtd November 8, 2024

ITEM 6I Attachment 4

EXHIBIT F
Original Jessen Reimbursement Agreement, March 2003

EXHIBIT G
Jessen Requested 2024 Amendment to 2003 Reimbursement Agmt

ITEM 6I Attachment 5
AMENDMENT NO. 1

TO THE UPPER RAVENSBURY AVENUE SANITARY SEWER

REIMBURSEMENT AGREEMENT BETWEEN THE TOWN OF

LOS ALTOS HILLS AND DAVE JESSEN
This Amendment No. 1 is made and entered into effective __________, 2024 as an amendment to the Sanitary Sewer Reimbursement Agreement dated March 6, 2003 (Agreement), by and between the Town of Los Altos Hills, a municipal corporation of the state of California (“Town”), and Dave Jessen (“Property Owner”) Recitals
WHEREAS the Town and the Property Owner entered into a Sanitary Sewer Reimbursement Agreement on March 6, 2003 (“Agreement”); and WHEREAS the Town and the Property Owner desire to amend the Agreement as set forth below.

Agreements
NOW THEREFORE, the Town of Los Altos Hills and Dave Jessen do hereby agree to amend the Agreement, as of December 19, 2024, as follows:

1. The Town will collect the Usage Fee for each Future user as indicated in Exhibit B upon a request or a Town requirement for hook up to the Sanitary Sewer Extension by each Future User. On June 30th of each year, the Usage Fees set forth in Exhibit B shall be adjusted for the Construction Cost Index for the prior year. After a request by a Future User or a Town requirement of a Future User to contribute additional sewage to the Sanitary Sewer Extension by connecting to the Sanitary Sewer Extension, the Town shall be entitled to collect the Usage Fee at any time prior to the hook up by such Future User to the Sanitary Sewer Extension. Upon collection of the Usage Fee from each Future User, the Town shall deduct an administrative fee of five percent (5%) from the Usage Fee in accordance with Paragraph 8 of this Agreement. by a Future User to connect to the Sanitary Sewer Extension (“Connection Request”), or upon notice to a Future User that it is subject to a Town requirement that the Future User connect to the Sanitary Sewer Extension (“Connection Requirement Notice”).

The Town shall be entitled to collect the Usage Fee at any time after a Connection Request or Connection Requirement Notice, or prior to a hook-up by a Future User to the Sanitary Sewer Extension. Usage Fees collected from Future Users shall be adjusted annually based on compounded California Construction Cost Index and include additional five percent (5%) administration fee for Town incurred costs (“Administrative Fee”).

2. On December 31 of each year for which this Agreement is in effect, the Town shall pay to Property Owner any and all funds collected pursuant to Paragraph 1 above, less the five percent (5%) administrative fee more particularly described

in Paragraph 8. The Town shall make the check payable to David Jessen or Karen Jessen and shall send such check to Property Owner at 10435 Berkshire Drive, Los Altos Hills, California 94024. Within sixty (60) days of the end of each year during which this Agreement is in effect, the Town shall pay to Property Owner any and all funds collected pursuant to Paragraph 1 above, less the Administrative Fee. The Town shall make the check payable to David Jessen or Karen Jessen and shall send such check to Property Owner at 23225 Ravensbury Avenue, Los Altos Hills, California 94024. Property Owner agrees to indemnify and hold harmless the Town from any claims, costs or expenses incurred by the Town in connection with any claim by any person or entity with respect to this Agreement, the associated costs or the Usage Fees.

7. This Agreement, and the obligations of Town hereunder, whether or not any or all Usage Fees have been collected and remitted to Property Owner or its agents hereunder, shall terminate on the fifteenth (15th) twenty-fifth (25th) anniversary of the date of this Agreement.

Exhibit B of the Agreement updated with Amendment No. 1 per attached. All other terms of the Agreement remain in effect and unchanged.

ATTEST:
__________________________
Arika Birdsong-Miller, City Clerk

TOWN OF LOS ALTOS HILLS
__________________________
Stanley Q. Mok, Mayor
APPROVED AS TO FORM:
__________________________
Steve Mattas, City Attorney
PROPERTY OWNER:
__________________________
Dave Jessen

Exhibit B (Updated with Amendment No. 1 - December 19, 2024) Future Users
Name Address APN# Usage Fee
Seaman 11519 Arroyo Oaks Dr 331-05-44 [$17,770 + CCCI%] + 5% AF Casey 23600 Ravensbury Ave 336-38-17 [$17,770 + CCCI%] + 5% AF Philips 23576 Ravensbury Ave 336-38-18 [$17,770 + CCCI%] + 5% AF Kahn 11520 Arroyo Oaks Dr 331-05-36 [$17,770 + CCCI%] + 5% AF Lloyd 23589 Ravensbury Ave 331-05-35 [$17,770 + CCCI%] + 5% AF Grueninger 23575 Ravensbury Ave 331-05-34 [$17,770 + CCCI%] + 5% AF Hsu 23525 Ravensbury Ave 331-17-77 [$17,770 + CCCI%] + 5% AF McCauley 23548 Ravensbury Ave 336-38-24 [$17,770 + CCCI%] + 5% AF CCCI% is the California Construction Cost Index adjustment to account for construction cost escalation. 5% AF is Administrative Fee as set forth in Paragraph 2 of the Agreement.

ITEM 6J Staff Report
TOWN OF LOS ALTOS HILLS December 19, 2024
Staff Report to the City Council
SUBJECT: RESOLUTION APPROVING A TREATED SEWER EFFLUENT TRANSFER

AGREEMENT BETWEEN THE TOWN OF LOS ALTOS HILLS AND THE

CITY OF PALO ALTO

FROM: WooJae Kim, Public Works Director
APPROVED: Peter Pirnejad, City Manager
RECOMMENDATION:

That the City Council adopt a resolution (Attachment 1) approving a treated sewer effluent transfer agreement between the Town of Los Altos Hills (Town) and the City of Palo Alto.

BACKGROUND:

The sewer effluent from the Town’s sanitary sewer system is conveyed through the cities of Palo Alto and Los Altos sewer infrastructure to the Regional Water Quality Control Plant (RWQCP) located near the Palo Alto Baylands for treatments before proper disposal and discharge. The sewer effluent generated in and from the Town has long been treated at RWQCP owned and operated by the City of Palo Alto pursuant to the terms and conditions of the Sewage Transportation, Treatment, and Disposal Agreement made and entered on March 18, 1968, by and between the City of Palo Alto and the Town, as amended. RWQCP also treats effluent from other cities and entities – the cities of Los Altos, Palo Alto, Mountain View, and East Palo Alto, and Stanford University. These entities are collectively referred to as the RWQCP Partner Agencies.

DISCUSSION:

Currently, most of the treated sewer effluent from the RWQCP is discharged to the San Francisco Bay after treatment. Only five percent is further treated to be used as recycled water to meet the limited present demand in the RWQCP Service Area. While Palo Alto anticipates greater utilization of recycled water with an advanced water purification facility project underway, most of the treated effluent is released to the Bay.

In late 2019, the cities of Palo Alto and Mountain View and the Santa Clara Valley Water District (Valley Water) entered into a long-term agreement (Valley Water Agreement) that would annually transfer nine (9) million gallons per day (MGD) of treated sewer effluent to Valley Water for regional recycled water projects as part of an effort to develop locally reliable water supply sources. The effluent would offset supplies of water for Valley Water that would otherwise be imported via the Sacramento-San Joaquin River Delta and its tributaries. The Valley Water Agreement to advance Resilient Water Reuse Programs in Santa Clara County became effective on December 10, 2019, and is incorporated herein as Attachment 2 for reference.

Staff Report to City Council Page 2
Effluent Transfer Agreement
December 19, 2024
The Valley Water Agreement is for 13 years. When and if Valley Water exercises its option to receive the treated sewer effluent from RWQCP, it would pay to Palo Alto one million dollars per year, in 2019 dollars subject to annual adjustments based on Consumer Price Index, for up to nine (9) MGD of sewer effluent to be divided proportionally among RWQCP Partner Agencies that commit to a long-term transfer of effluent to Valley Water. One million dollars would be divided proportionally among the RWQCP Partner Agencies based on the percentage share of the sewer effluent provided. If the amount of effluent provided to Valley Water falls below 9 MGD in any year, the amount of the effluent purchase payment would be reduced in proportion.

Staff is recommending the City Council to approve an Effluent Transfer Agreement with the City of Palo Alto (Attachment 3) to commit to providing the Town’s treated sewer effluent to Valley Water for purposes of the Valley Water Agreement for the County recycle water program. This agreement with Palo Alto would benefit the Town, Palo Alto, and the County-wide effort to achieve cost effective, environmentally beneficial utilization of treated wastewater and to establish a more resilient water supply, especially during drought conditions.

Once the City Council approves the agreement, the City of Palo Alto staff is planning to schedule the item for their City Council approval in January 2025, so that the Town can start receiving the annual proportional payment amounts for the Town’s sewer effluent.

ENVIRONMENTAL REVIEW
This action does not qualify as a “Project” as defined in Section 15378(b) of the California Environmental Quality Act Guidelines.
2024 -2025 CITY COUNCIL WORK PLAN:

This program is not specifically identified on the 2024-25 City Council Work Plan; however, it supports the council priority to “Increase Effective Service Delivery & Governance.”

FISCAL IMPACT
The anticipated proportional payment from the City of Palo Alto to the Town for the sewer effluent transfer to Valley Water is anticipated to be around $20,000 annually. Once the agreement is approved by the City Council and the City of Palo Alto, the City of Palo Alto would credit the amount in their annual RWQCP sewer invoice to the Town starting Fiscal Year 2025-26 and possibly for prior years that Town sewer effluent was transferred to Valley Water. There is no other fiscal impact for this item.

ATTACHMENT

1. Resolution

2. Valley Water Agreement

3. Effluent Transfer Agreement with Palo Alto

ITEM 6J Attachment 1
RESOLUTION NO.__________

A RESOLUTION OF THE CITY COUNCIL OF THE

TOWN OF LOS ALTOS HILLS APPROVING A TREATED SEWER EFFLUENT

TRANSFER AGREEMENT BETWEEN THE TOWN OF LOS ALTOS HILLS AND THE

CITY OF PALO ALTO
WHEREAS, sewer effluent generated in and from the Town has long been treated at RWQCP owned and operated by the City of Palo Alto pursuant to the terms and conditions of the Sewage Transportation, Treatment, and Disposal Agreement made and entered on March 18, 1968, by and between the City of Palo Alto and the Town, as amended; and WHEREAS, in late 2019, the cities of Palo Alto and Mountain View and the Santa Clara Valley Water District (Valley Water) entered into a long-term agreement that would annually transfer nine (9) million gallons per day of treated sewer effluent to Valley Water for regional recycled water projects as part of an effort to develop locally reliable water supply sources; and WHEREAS, under the Valley Water Agreement, when and if Valley Water exercises its option to receive the treated sewer effluent from RWQCP, it would pay to Palo Alto one million dollars per year (in 2019 dollars, subject to annual adjustment based on CPI) for up to nine (9) MGD of sewer effluent to be divided proportionally among RWQCP Partner Agencies that commit to a long-term transfer of effluent to Valley Water for 13 years; and WHEREAS, one million dollars would be divided proportionally among the RWQCP Partner Agencies based on the percentage share of the sewer effluent provided; and WHEREAS, if the amount of effluent provided to Valley Water falls below 9 MGD in any year, the amount of the effluent purchase payment would be reduced in proportion; and WHEREAS, this sewer effluent transfer agreement with Palo Alto would benefit the Town, Palo Alto, and the County-wide effort to achieve cost effective, environmentally beneficial utilization of treated wastewater and to establish a more resilient water supply, especially during drought conditions; and
WHEREAS, the City of Palo Alto would pay or credit the Town for the proportional amount of Town sewer effluent transferred to Valley Water starting Fiscal Year 2025-26 and potentially for prior years of effluent transfer.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the Town of Los Altos Hills that:

1. The Effluent Transfer Agreement with the City of Palo Alto in form is approved, and the City Manager is authorized to make nonsignificant and minor edits to the agreement for approval by the City of Palo Alto City Council; and

2. The payments or credits related to the agreement are authorized to be received for the Town’s Sewer Fund.

The above and foregoing Resolution was passed and adopted by the City Council of the Town of Los Altos Hills at a regular meeting held on 19th day of December 2024 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

BY:

ATTEST: Stanley Mok, Mayor
Arika Birdsong-Miller, City Clerk

• Valley Water

SANTA CLARA VALLEY WATER DISTRICT
January 7, 2020
Palo Alto City Hall, 7th Floor
250 Hamilton Avenue
Palo Alto, CA 94301
Attention: Mr. Ed Shikada, City Manager
(\l ..;..,_( ;>'·-, ,_..; ,,-' ~."'., \ ,f,- ?~ \\_,!t
Cleai;l,Water • !1;1~althy Environment • Flood Protection \. > .. :~--...... :_. "<..· !: .-'t' ~ . -·
2020 J~N I 3 AH 10: IO
Subject: Approval of Partnership Agreement Between the Santa Clara Valley Water District, the City of Palo Alto and the City of Mountain View to Advance Resilient Water Reuse Programs in Santa Clara County.

Enclosed please find a fully executed original copy of the aforementioned agreement between the Santa Clara Valley Water District, City of Mountain View, and City of Palo Alto, which was approved by the Santa Clara Valley Water District Board of Directors on December 10, 2019.

Should you have any questions regarding the enclosed documents, please feel free to contact me by email at [email protected], or by phone at ( 408) 630-27 49. 15 A' (/)~
Max v~ d
Assis ant Deputy Clerk II
Office of Clerk of the Board
Enclosure: (1)
cc: Board Records
Accounting Unit
Contract Admin Unit
Form 700 Processing Unit
Staff
Santa Clara Valley Water District I 5750 Almaden Expressway, San Jose, CA 95118-3686 I (408) 265-2600 I www.valleywater.org l~ ITEM 6J Attachment 2

SCVWD ENACTED COPY
Contract Administration Unit
AGMT: A4308X FILE: N/A

PARTNERSHIP AGREEMENT TO ADVANCE RESILIENT WATER REUSE

PROGRAMS IN SANTA CLARA COUNTY
This Partnership Agreement to. Advance Resilient Water Reuse Programs in Santa Clara County (Agreement) effective December 10, 2019, is entered Into by and between the City of Palo Alto, a California chartered municipal corporation (Palo Alto), the City of Mountain View, a California charter city and municipal corporation (Mountain View), and the Santa Clara Valley Water District, a Special District created by the California .

Legislature (Valley Water). Palo Alto, Mountain View, and Valley Water are referred to herein collectively as •Parties" or individually as "Party".

RECITALS
· WHEREAS, the governing bodies of Palo Alto, Mountain View and Valley Water have established policy goals for long term sustainability, which Include maintaining effective use of existing Infrastructure, lowering the carbon footprint of energy use, deploying w~ter use efficiency programs, capturing local storm water, managing groundwa~er basins, and expanding use of recycled water; and WHEREAS, the Parties have long-standing responsibilities and services to supply water to their customers in Santa Clara County (County) under both normal and drought conditions; and ·
WHEREAS, Valley Water and Palo Alto executed a Memorandum of Understanding on August 28, 2017, for the purpose of developing plans and studies to expand the production and use of recycled and purified water within the County; and WHEREAS, Valley Water and Mountain View executed an agreement on October 11, 2017, to Assess the Feasibility of Water Reuse Alternatives, by .working together and with other government agencies to expand production and use of recycl~d and purified water within the County; and
WHEREAS, the Parties seek to develop locally reliable water supply sources to offset supplies of water that would otherwise be Imported via the Sacrament~-San Joaquin River Delta and its tributaries, including the Tuolumne River and other mountain streams; and
WHEREAS, the Parties together are finalizing the Northwest County Recycled Water Strategic Plan to inform their respective policy makers of opportunities in the northwest portion of the County, including Palo Alto and Mountain View, for groundwater recharge, further recycled water development, and deployment of highly purified wastewater to supplement drinking water; and
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WHEREAS, increasing the use of recycled water decreases the volume of wastewater effluent discharged to San Francisco Bay where harm to aquatic life can occur; and
WHEREAS, Valley Water has established a goal that at least 1 O percent of total County water demands be supplied by recycled water by 2025; and WHEREAS, decreasing the salinity of the treated wastewater from the Regional Water Quality Control Plant (RWQCP) through further treatment will allow It to be used on more types of flora, especially redwood trees, thereby increasing its overall use;and
WHEREAS, Palo Alto and Mountain View benefit from the improved recycled water quality, which will facilitate use of recycled water on a wider range of landscaping and allow the Cities to expand their recycled water distribution infrastructure; and WHEREAS, the Parties recognize the importance of source control for water reuse and are studying measures to address the issue; and
WHEREAS Valley Water is currently researching and piloting both indirect and direct potable reuse technologies within the County; and
WHEREAS, decreasing the salinity in Recycled Water used for Irrigation keeps that salt and other constituents out of the soil and ultimately out of the groundwater; and WHEREAS, the Parties recognize·that well-purposed and managed partnerships can serve the public interest more effectively than individual efforts to develop and manage water supplies; and
WHEREAS, the Parties desire to cooperate to achieve the most cost effective, environmentally beneficial utilization of treated wastewater in the County.

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby · acknowledged, the Parties hereby agree as follows.

AGREEMENT
ARTICLE A. Definitions
As used In t!ils Agreement, the following terms have the following meanings. 2 Partnership Agreement to Advance Reslllent
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(a) Agreement: The December 10, 2019, Partnership Agreement to Advance Resilient Water Reuse Programs in Santa Clara County between Palo Alto, Mountain View, and Valley Water.
(b) CEQA: California Environmental Quality Act.
(c) Designated Representatives: Employees or officials designated in writing by each of the respective Parties to serve as representatives for purposes of this Agreement. In the absence of such written notice, the Designated Representatives shall be the Valley Water Chief Executive Officer, the Mountain View City Manager, and the Palo Alto City Manager. (d) Dispute Resolution Procedure: The alternative dispute resolution process to be used for disputes arising out of this Agreement. The procedure is set forth in more detail in Section 23 below.
(e) Effective Date: December 10, 2019 shall be the date this Agreement is effective.
(f) Effluent: Tertiary treated wastewater from the RWQCP that meets National Pollutant Discharge Elimination System permit requirements. (g) Effluent Transfer Option: Valley Water's option to secure Effluent, as described in Section 11 of this Agreement.
(h) Enhanced Recycled Water: Non-potable water produced by the Local Plant which is blended with Recycled Water from the RWQCP.
(i) Local Plant: A salinity removal unit to produce 1.25 MGD Enhanced Recycled Water for the RWQCP Service Area.

U) MGD: Million gallons per day, expressed as an annual average, unless otherwise noted.
(k) Minimum Flow Delivery: An annual average of 9 MGD of Effluent to be supplied by the RWQCP to Valley Water, consistent with Appendix 1. (I) NEPA: National Environmental Policy Act.
(m) O&M: Operation and maintenance.
(n) Parties: The City of Palo Alto ("Palo Alto"), the City of Mountain View ("Mountain View"), and the Santa Clara Valley Water District ("Valley Water"). 3 Partnership Agreement to Advance Resilient
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( o) Recycled Water: Effluent that is treated to meet California Code of Regulations Title 22 requirements for non-potable water. (p) Regional Plant: A purification treatment facility capable of treating Effluent flows of 9 MGD or greater for the purpose of regional water supply benefit. (q) Regional Program: Valley Water's program to derive benefits from the Effluent under the terms of this Agreement.
(r) Remaining Funds: Funds available for use by the RWQCP Partners pursuant to Section S(f).
(s) Responsible Agencies: Responsible Agencies are agencies other than the lead agency, that have some discretionary authority for carrying out or approving a project, as defined in the California Environmental Quality Act and its associated regulations.
(t) RWQCP: The Palo Alto Regional Water Quality Control Plant. (u) RWQCP Partners: The cities of Palo Alto, Mountain View, and Los Altos; the Town of Los Altos Hills; the East Palo Alto Sanitary District and Stanford University.
(v) RWQCP Service Area: RWQCP Service Area includes the service areas of the RWQCP Partners.
(w) Startup: The point in time when Valley Water begins to receive Effluent, following initial testing and commissioning, or the point in time when Valley Water begins to pay for the Effluent as part of its Regional Program, pursuant to this Agreement, whichever is earlier.
(x) Term: The total duration of the Agreement as described in Section 1 of this Agreement.
(y) Water Supply Option: Palo Alto's and Mountain View's option to secure additional water supply as described in Section 19 of this Agreement.

ARTICLE B - General Provisions

1. Term.

This Agreement shall be in effect on December 10, 2019. The Term of the Agreement shall be dependent upon the actions of the Parties pursuant to Articles C and D as set forth more particularly below:
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a. If Valley Water exercises its Effluent Transfer Option within 13 years of the Effective Date and the Local Plant is constructed in accordance with Section 5, then the Term of this Agreement shall be for as long as Valley Water is required to or elects to make annual payments for the Effluent (pursuant to Section 12, Section 17 and Section 20), up to a maximum of 63 years from Startup (not to exceed 76 years from the Effective Date). If Valley Water exercises its rights under Section 20, then the Term shall expire 30 years after the commencement date of operation of the Local Plant or the actual date of termination under Section 20 if later.
b. If Valley Water exercises its Effluent Transfer Option within 13 years of the Effective Date and the Local Plant is not constructed in accordance with Section 5, then the Term of this Agreement shall be for as long as Valley Water is required to or elects to make annual payments for the Effluent (pursuant to Section 12, Section 17 and Section 20), up to a maximum of 63 years from Startup (not to exceed 76 years from the Effective Date). If Valley Water exercises its rights under Section 20, then the Term shall expire 18 years after the Effective Date or the actual date of termination under Section 20 if later. c. If Valley Water does not exercise the Effluent Transfer Option and the Local Plant is constructed in accordance with Section 5, the Term shall expire 30 years after the commencement date of operation of the Local Plant. d. If Valley Water does not exercise the Effluent Transfer Option and the Local Plant is not constructed in accordance with Section 5, the Term of this Agreement shall expire 18 years after the Effective Date.

2. Governance.

A joint committee comprised of elected officials from Valley Water, Palo Alto and Mountain View will be established to review and accept updates on the design, construction, operation and regulatory compliance of the Local Plant and the Regional Plant if the Regional Plant is located in Palo Alto. If the Regional Plant is not located in Palo Alto then the aforementioned committee will operate only with respect to the Local Plant. The committee's role will be advisory to staff and governing bodies of the Parties.

ARTICLE C - Local Plant

3. Local Plant Beneficiaries
The Parties agree that the Local Plant will be developed by Palo Alto and operated for the benefit of Recycled Water customers of Palo Alto, Mountain View, and potentially 5 Partnership Agreement to Advance Resilient
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other RWQCP Partners. However, Palo Alto and Mountain View shall ensure that funding from Valley Water shall only be used to benefit users in Santa Clara County.

4. Local Plant Ownership, Operation and Maintenance, and Location The Parties agree that Palo Alto shall own the Local Plant and be responsible for its design, construction, operation, maintenance, ultimate decommissioning, and site restoration. The Local Plant shall be located within the RWQCP site.

Palo Alto, as the Lead Agency under CEQA for the Local Plant, has prepared an Addendum to the City of Palo Alto Recycled Water Project Environmental Impact Report certified and adopted in 2015 evaluating the environmental impacts of the Local Plant.

5. Local Plant Capital Costs
a. Valley Water's Contribution. The Local Plant capital cost is estimated to be $20 Million (2019 dollars). Valley Water's contribution shall be $16 Million (2019 dollars), escalated annually based on Valley Water's Yield-to-Maturity Rate as published in Valley Water's Quarterly Performance Reports to the Board of Directors for the fourth quarter of each fiscal year (hereinafter referred to as "$16 Million Contribution"). Valley Water's $16 Million Contribution towards the Local Plant and, if applicable, other projects described in Section 5(f), in conjunction with the Annual Option Payments set forth in Section 6, shall constitute full and final consideration for its right to secure the Minimum Flow Delivery. b. Palo Alto and Mountain View's Contribution. Subject to Section 5(d), Palo Alto's and Mountain View's combined capital contribution shall be the difference between the actual cost of the Local Plant and Valley Water's $16 Million Contribution.
c. Benefits of Grant Funding. Any federal grant funding sought by Palo Alto or Mountain View, or both, for the Local Plant shall not include the San Jose Area Water Reclamation and Reuse Program under the Title XVI Program. The benefits of any grant funding for the Local Plant shall be split by Palo Alto and Mountain View as determined in and through a separate agreement between Palo Alto and Mountain View.
d. In the Event of Elevated Costs. Should the lowest responsible construction bid, or any other circumstance, result in a Local Plant total project cost above the $20 Million (2019 dollars) estimate, Palo Alto and/or Mountain View may elect to cover the increase (above Valley Water's $16 Million contribution) independently, without an additional contribution from Valley Water. If Palo Alto and/or Mountain View are unable to identify a funding source or secure low interest rate loans to sufficiently cover costs above the $20 Million total project cost estimate, Palo Alto 6 Partnership Agreement to Advance Resilient
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or Mountain View or both may request to meet and confer with Valley Water to potentially modify this Agreement. However, absent such a modification to the Agreement, Valley Water's contribution shall be limited to the $16 Million Contribution.
e. In the Event of No Local Plant. If Palo Alto and Mountain View elect not to proceed with or complete construction of the Local Plant within 13 years of the Effective Date, they shall provide written notice to Valley Water within this 13- year period and they shall still receive the $16 Million Contribution from Valley Water so long as such funds are allocated and utilized consistent with the provisions of Sections 5(f) and 5(g).
f. Possible Alternative to Local Plant. If the Local Plant is not constructed, any portion of Valley Water's $16 Million Contribution not utilized for the capital of the Local Plant, defined as Remaining Funds, will be available for other projects, specified below. Palo Alto and Mountain View will consult with all RWQCP Partners to develop a plan for expending the Remaining Funds and notify Valley Water prior to expenditure of Remaining Funds. Remaining Funds will be allocated by Palo Alto for projects specified below that benefit all RWQCP Partners that have committed their Effluent to Valley Water for the Term of this Agreement. However, the projects specified below must be located within Santa Clara County. Eligible projects for receipt of the Remaining Funds shall be, in order of preference:
i. Recycled Water facilities at the RWQCP owned and operated by one or more RWQCP Partners.
ii. Other water supply projects, including but not limited to water conservation capital projects, owned and operated by a RWQCP Partner.
g. Time Frame for Expenditure of Funds. The time frame for any expenditure of funds for reimbursement pursuant to this Section 5 shall extend from the Effective Date to eighteen (18) years from the Effective Date. Within this time frame, Palo Alto must present to Valley Water all invoices for expenditure of funds by itself and other RWQCP Partners pursuant to this Section. Valley Water shall not reimburse any invoices presented beyond 18 years from the Effective Date. Palo Alto's failure to seek reimbursement within this timeframe shall not extinguish or otherwise impact Palo Alto's and Mountain View's obligations under Article D herein.
h. Invoicing and Payments. Monthly, Palo Alto shall invoice Valley Water for project costs expended pursuant to this Section 5, including documentation of work performed by itself and any other RWQCP Partner. Invoices shall not include 7 Partnership Agreement to Advance Resilient
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RWQCP Partners' staff costs and administrative overhead. Valley Water shall pay such valid Palo Alto invoices within thirty days of receipt.

6. Annual Option Payments Prior to Startup of Regional Plant a. Amount of Payment. Valley Water agrees to pay to Palo Alto $200,000 per year (2019 dollars) ("Annual Option Payment") from the Effective Date, until (a) June 1, 2033, or (b) at Startup, whichever occurs first. The amount of the Annual Option Payment shall be increased annually based on the annual average (previous twelve months) of the CPI-All Items for the San Francisco-OaklandHayward, California area published by the United States Department of LaborBureau of Labor Statistics (https://data.bls.gov/PDQWeb/cu), beginning on the first anniversary of the Effective Date.
b. Timing of Payment. Valley Water shall provide the Annual Option Payment to Palo Alto by June 1 of each year beginning June 1, 2020. c. Allocation of Payment.
i. Fifty percent (50%) of the Annual Option Payment will be allocated to Palo Alto and Mountain View.
ii. Palo Alto will distribute the remaining 50% of the Annual Option Payment to the RWQCP Partners ( other than Palo Alto and Mountain View) that have committed their Effluent for the Term of this Agreement by January 31 of the year that the Annual Option Payment is made. These funds will be distributed proportionally by the amount of Effluent to be contributed.

If no other RWQCP Partners commit their Effluent by January 31 of that year, this 50% of the Annual Option Payment will be allocated to Palo Alto and Mountain View.
iii. Palo Alto shall ensure that the Annual Option Payments are utilized for water supply or water reuse related projects in the RWQCP Service Area.

7. Reverse Osmosis Concentrate Produced by the Local Plant Palo Alto is responsible for securing any necessary changes in its National Pollution Discharge Elimination System (NPDES) permit to accommodate reverse osmosis concentrate discharge from the Local Plant to receiving waters under the jurisdiction of federal and state agencies.

8. Local Plant Naming and Tours
a. Valley Water reserves the right to name the Local Plant, including signage on site. Signage may be subject to approval by the appropriate Palo Alto decision maker or body, of which will not be unreasonably withheld. 8 Partnership Agreement to Advance Resilient
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b. With 48-hour advance notice to the RWQCP plant manager or his/her designee, designated Valley Water personnel may lead tours of the Local Plant by Valley Water employees or members of the public. Valley Water-led tours shall be subject to prior and ongoing review by the RWQCP plant manager or his/her designee to ensure that the tours are conducted safely and with minimal disruption to other RWQCP activities, and that parking of private vehicles by tour attendees is consistent with RWQCP requirements. Valley Water will submit a plan or program for tours of the Local Plant for the RWQCP plant manager's review and approval and shall conduct tours consistently with the approved plan or program.

9. On-site Research at the Local Plant
Valley Water may desire to conduct research work on treatment processes at the Local Plant, including installation of pilot test equipment. Valley Water-managed research teams may include personnel from RWQCP Partners, universities, private companies engaged in research, or other research laboratories. Palo Alto agrees that it will make its best effort to enable research at the Local Plant and not unreasonably deny or constrain Valley Water proposals to conduct such research. Valley Water agrees to share results of such research with Parties, upon request. In conducting such research, Valley Water shall not significantly disrupt operation of the Local Plant or the RWQCP, nor cause or result in significantly decreased flows, RWQCP upsets, or permit violations.

10. Term of Local Plant Operation
Palo Alto agrees to operate the Local Plant for a continual period of at least 30 years, unless the Parties all agree to cease operations sooner.

ARTICLE D - Effluent Delivery to Valley Water

11. Effluent Transfer Option
a. Valley Water shall have the right to exercise an exclusive Effluent Transfer Option to secure from Palo Alto and Mountain View ( or from the RWQCP Partners in aggregate) a Minimum Flow Delivery of an annual average of 9 million gallons per day (MGD) of Effluent (approximately 10,000 AFY), as described in Appendix 1. Valley Water's exercise of this Effluent Transfer Option shall be subject to CEQA review. Valley Water may elect to develop a Regional Plant to receive and treat such Effluent or may instead receive the Effluent for development of other beneficial use in Santa Clara County as part of its Regional Program.
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b. This Agreement shall not bind or commit Valley Water to any definite course of action with respect to the Effluent Transfer Option and shall not restrict Valley Water from considering any alternatives, including a no-action alternative, or requiring any feasible mitigation measures when considering whether to receive Effluent delivery.
c. If Valley does not exercise its Effluent Transfer Option within 13 years of the Effective Date all rights and obligations under Article D shall terminate.

12. Timing of Valley Water's Effluent Transfer Option
a. Valley Water's period to exercise the Effluent Transfer Option and to accomplish Startup extends for thirteen years from the Effective Date. Valley Water may exercise the Effluent Transfer Option by written notification by its Designated Representative to the Designated Representatives of Palo Alto and Mountain View. Before Startup, as needed, Palo Alto will work with Valley Water to provide adequate Effluent for testing and commissioning purposes. b. Notwithstanding Section 12 (a), Valley Water may elect to defer acceptance of the Effluent as part of its Regional Program. After 10 years from Startup, if the Parties have not agreed to amend this Agreement and Valley Water has not begun taking the Effluent, all rights and obligations under Article D shall terminate; however, all other Articles of the Agreement shall not be affected and shall remain in full force and effect.

13. Effluent to Valley Water if Valley Water Exercises its Effluent Transfer Option a. Flow Parameters. The Minimum Flow Delivery is defined as 9 million gallons per day (MGD) of annual average flow of Effluent that will be provided to Valley Water, predicated upon Valley Water exercising its Effluent Transfer Option, from Startup through the Term of this Agreement, consistent with the parameters described in Appendix 1, subject to the provisions of this Section 13. During the planning or design phases of the Regional Program, Valley Water may identify one or more other Effluent flow parameters required for operation of the Regional Program. In this case, these flow parameters shall be developed consistent with RWQCP data provided by Palo Alto, and Appendix 1 will be amended accordingly subject to approval by Palo Alto's, Mountain View's and Valley Water's Designated Representatives, which approval shall not be unreasonably withheld.
b. Water Quality. Palo Alto shall ensure that the Effluent meets all applicable federal and state water quality standards for wastewater discharge to the lower San Francisco Bay. If operational changes are anticipated at the RWQCP that could 10 Partnership Agreement to Advance Resilient
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adversely affect the quality of Effluent, Palo Alto will provide notice to Valley Water and will work in good faith to minimize potential impacts to Regional Program.
c. Supply Shortages Due to Drought. During water supply shortages such as droughts, Palo Alto and Mountain View will take certain actions to increase the volume of Effluent delivered to Valley Water (within the Minimum Flow Delivery) described as follows:
i. Palo Alto will use best efforts to temporarily modify operations to maximize the volume of Effluent delivered to Valley Water, while complying with all legal and federal, state, and local regulatory requirements and completing any legally mandated environmental review under CEQA (and NEPA, if applicable). Such modifications may include, but shall not be limited to, temporary decreases to environmental flows. ii. Palo Alto and Mountain View will implement the appropriate stages of their Water Shortage Contingency Plans and will use best efforts to reduce non-critical use of non-potable Recycled Water. Critical uses may include health and safety and preservation of tree canopies. d. Effluent Commitments. Palo Alto will make good faith efforts to sign separate agreements with other RWQCP Partners to commit their shares of Effluent for delivery to Valley Water for a period consistent with the Term of this Agreement.

Good faith efforts include sending letters to the appropriate representatives of the RWQCP Partners within 3 months of the Effective Date. Even if one or more of the other RWQCP Partners does not commit their Effluent, Palo Alto and Mountain View will ensure that the Minimum Flow Delivery will be met. e. Annual Availability of Excess Effluent. Each year following Startup, Palo Alto and Mountain View will notify Valley Water by February 1 to determine what, if any, amount of Effluent will be available to deliver to Valley Water in excess of the Minimum Flow Delivery in the following fiscal year and to describe any conditions that may apply to such delivery. On an annual basis, by February 1, any commitments for delivery in excess of the Minimum Flow Delivery for the upcoming fiscal year shall be made in writing by the Designated Representatives of Mountain View and Palo Alto.
f. Long-Term Availability of Excess Effluent. At any time, the Parties' Designated Representatives may determine that more Effluent is available beyond the Minimum Flow Delivery for a definitive number of years in the future within the Term of this Agreement. The Parties agree they will consider such increases at the request of any Party, and this Agreement may be amended to implement such increases.
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g. Proportional Reduction of Effluent Due to Reduced Flows. Subject to Section 13 (c), Mountain View and Palo Alto shall receive minimum supplies of Enhanced Recycled Water as follows: Mountain View 2.5 MGD and Palo Alto 1.0 MGD (currently estimated to be produced from 3.25 MGD and 1.3 MGD of Effluent, respectively). If Mountain View and Palo Alto are using more than 2.5 MGD and

1.0 MGD of Enhanced Recycled Water, respectively, these volumes shall be reduced to 2.5 MGD and 1.0 MGD, respectively, before Valley Water's Effluent delivery is reduced below the Minimum Flow Delivery. If insufficient Effluent is available to meet Mountain View's and Palo Alto's minimum Enhanced Recycled Water supplies and meet Valley Water's Minimum Flow Delivery, all three volumes shall be reduced proportionally based on the volumes of Effluent required to produce them. In no case shall Mountain View's or Palo Alto's Enhanced Recycled Water reduction exceed 30% below 2.5 MGD and 1.0 MGD, respectively, unless otherwise agreed to by the Parties. h. Meet and Confer Due to Reduced Effluent Flows. If the amount of Effluent Valley Water requests, up to the Minimum Flow Delivery, is not met, the Parties shall meet and confer for the purpose of identifying and implementing feasible solutions to any supply shortfall, including the potential to extend the Term of the Agreement to make up for lost Effluent delivery.

14. Regional Plant Location
a. Possible Locations. If Valley Water pursues a Regional Plant as part of its Regional Program, it is the preference of the Parties to locate the Regional Plant in Palo Alto. As such, Valley Water and Palo Alto shall evaluate the feasibility of all potential locations in Palo Alto, including: within the fence line of the RWQCP; at the Measure E site; or a yet to be determined location. If it is determined by Valley Water that it is not feasible or economical to locate the Regional Plant in Palo Alto, the Effluent may be conveyed for reuse by Valley Water to another location. The point of delivery of the Effluent to Valley Water shall be at the RWQCP, or another location mutually agreed between Valley Water and Palo Alto.
b. Local Cooperation. If Valley Water notifies Palo Alto that it intends to locate a Regional Plant in Palo Alto, Palo Alto shall cooperate with Valley Water in identifying ways to accommodate a Regional Plant to the maximum extent possible within the boundary of the RWQCP or adjacent to the RWQCP boundary pending siting evaluation results. Palo Alto will also cooperate with Valley Water as it explores siting an appropriate sized water tank, to balance inbound fluctuating flows and produce a steady flow for treatment. Valley Water 12 Partnership Agreement to Advance Resilient
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shall negotiate with Palo Alto to share costs between Palo Alto and Valley Water for use of the RWQCP site, including modification of existing facilities. c. Measure E Site Evaluation. In the event that Valley Water determines that the Measure E site adjacent to the RWQCP facility is the best location for a Regional Plant, and no extenuating circumstances (including, but not limited to, any environmental impacts identified through CEQA review) have been identified by Palo Alto, Palo Alto's staff will recommend to Palo Alto Council that the Council place a measure on the ballot to allow this use. If a Regional Plant is located, at least in part, on the Measure E site, Valley Water may lease the land from Palo Alto at a rate based on the then-current zoning, anticipated to be for "public facilities." A separate lease agreement will be required subject to approval by the Palo Alto City Council or Designated Representative.
d. Permit Processing. Palo Alto and Mountain View agree to process expeditiously, in accordance with regular city processes, Valley Water's complete nondiscretionary permit applications for a Regional Plant.

15. Regional Plant/Conveyance Facilities Ownership, Capital, Operation and Maintenance Costs
Subject to Valley Water exercising the Effluent Transfer Option, Valley Water may own and construct a Regional Plant and conveyance facilities to and from the Regional Plant (preliminary cost of $300 Million based on a comparison of like projects), or conveyance facilities to take the Effluent elsewhere. Valley Water will be responsible for all capital and O&M costs for a Regional Plant and conveyance facilities.

16. Other Development Commitments by the Parties
a. Development, Operation & Maintenance. In the event that a Regional Plant is to be located in Palo Alto, Palo Alto shall support Valley Water's chosen development and O&M approach for the Regional Plant. Approaches under consideration by Valley Water include, but are not limited to, a design-build method with Valley Water responsibility for O&M; or a public-private partnership in which, for example, Valley Water may partner with one or more private entities to provide financing, design, construction, and O&M.
b. Support of Regional Program. Additionally, in the event that Valley Water notifies Palo Alto and Mountain View that it intends to develop a Regional Plant in Palo Alto, Palo Alto and Mountain View shall provide, when requested by Valley Water, written support to State and federal agencies to which Valley Water seeks grant funding or low-interest loans for the Regional Plant, and city staff shall participate in meetings with State and federal agencies for these purposes. 13 Partnership Agreement to Advance Resilient
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c. Environmental Documentation. The Parties to this Agreement anticipate that Valley Water will be the Lead Agency and Palo Alto will be a Responsible Agency under CEQA/NEPA for a Regional Plant. Any legally mandated environmental review shall be completed prior to approval and development of the Regional Plant. The Parties shall work together to facilitate compliance under CEQA (and NEPA if applicable) for the development of the Regional Plant. As part of this process, the Parties agree to provide timely notice, review, and responses.

17. Annual Payments for Effluent
a. Initiation and Allocation of Payments. Upon Startup, Valley Water will pay Palo Alto $1,000,000 per year for the Minimum Flow Delivery during the Term of this Agreement. Valley Water shall make payments on a fiscal year basis (July - June). Valley Water's first payment following Startup shall be prorated based on Effluent received or, if Effluent deliveries have not started, shall be $1,000,000 prorated based on the number of months left in the fiscal year. The $1,000,000 annual amount referred to in this Section is in 2019 dollars, and shall be adjusted July 1 of each year by the annual average (previous 12 months) of the CPI-All Items for the San Francisco-Oakland-Hayward, California area published by the United States Department of Labor-Bureau of Labor Statistics (https://data.bls.gov/PDQWeb/cu). Valley Water's payments will be made by August 31 for the preceding fiscal year.
b. Allocation of Payments. Palo Alto will allocate these funds to RWQCP Partners that have committed their Effluent to Valley Water by January 31 proportionally based on the RWQCP Partner's share of the total Effluent committed through the Term of this Agreement.
c. Duration of Payments. Valley Water's payments for Effluent pursuant to this Article shall continue through the Term of this Agreement unless this Article D is terminated earlier subject to Sections 12(b) or 20. If Article D of the Agreement is so terminated, Valley Water's payment for Effluent in the year it is terminated shall be prorated based on the termination date and the proportion of days lapsed in the fiscal year, and Valley Water's obligation to make this last payment shall survive the termination of Article D.
d. Additional Wastewater Treatment Costs. If implementation of the Regional Program is deferred pursuant to Section 12 (b) and, during that period of deferral, Palo Alto incurs incremental wastewater treatment costs to meet new NP DES requirements adopted after Startup, Valley Water shall pay Palo Alto a proportion of the annual O&M costs, not capital costs, for such incremental wastewater treatment based on the percentage of Minimum Flow Delivery relative to the total volume of wastewater effluent produced over that period. However, Valley 14 Partnership Agreement to Advance Resilient
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Water's obligation to pay for annual O&M costs under this Sub-Section shall not begin until the five-year anniversary of Startup and shall cover the period after that date. Palo Alto shall invoice Valley Water, detailing the basis of the costs for the preceding year, after the end of the sixth year after Startup and each year thereafter until Valley Water begins to take delivery of Effluent or until Article D of the Agreement is terminated pursuant to Section 20. Valley Water's obligation to pay such costs shall be capped at $150,000 per year (in 2019 dollars, adjusted July 1 of each year by the annual average (previous 12 months) of the CPI-All Items for the San Francisco-Oakland-Hayward, California area published by the United States Department of Labor-Bureau of Labor Statistics (https://data.bls.gov/PDQWeb/cu)).
e. Payment Prorating. If the quantity of Effluent made available by Palo Alto to Valley Water in any given fiscal year falls below the Minimum Flow Delivery the payment for that year shall be prorated accordingly. If the Minimum Flow Delivery is made available but Valley Water accepts less than the Minimum Flow Delivery, Valley Water shall be responsible for the full $1,000,000. If Valley Water requests and receives more than the Minimum Flow Delivery, Valley Water's payment to Palo Alto shall be prorated accordingly.

18. Reverse Osmosis Concentrate Produced by a Regional Plant in Palo Alto In the event that a Regional Plant is located in Palo Alto, Palo Alto shall evaluate operating strategies and make best efforts to accomplish any necessary changes in its NPDES permit to accommodate reverse osmosis concentrate discharge from the Regional Plant to receiving waters under the jurisdiction of federal and state regulators.

Palo Alto staff shall include Valley Water staff in its planning and negotiations with the regulators. To the extent that discharge of the reverse osmosis concentrate to receiving waters via Palo Alto's wastewater outfall is not feasible and acceptable to the regulators, Valley Water shall evaluate and implement alternative reverse osmosis concentrate management measures acceptable to Palo Alto, if within the Palo Alto's jurisdiction. Valley Water shall pay the costs of treating the reverse osmosis concentrate to meet applicable state and federal requirements of and any alternative reverse osmosis concentrate management measures. The Parties acknowledge that a separate agreement may be needed to address management of reverse osmosis concentrate.

19. Water Supply Option for Palo Alto and Mountain View a. Volume and Timing of Request. Beginning one year from the Effective Date, at their discretion, Palo Alto or Mountain View or both shall each have an opportunity to provide Valley Water a notification of the need for additional water to meet demands in their respective service areas. The written notification shall include the amount of potable water or non-potable water, or both, requested, up to the following maximum amounts: Palo Alto may request an annual average of 15 Partnership Agreement to Advance Resilient
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up to 3.0 MGD and Mountain View may request an annual average of up to 1.3 MGD. Palo Alto and Mountain View may make multiple notifications regarding the need for additional water, but the cumulative total of the additional water requested shall not exceed the respective maximum amounts (3.0 MGD for Palo Alto and 1.3 MGD for Mountain View) over the Term of the Agreement. The notification may also include an indication of a maximum cost for the water in the first year. Valley Water will make its best effort to develop a proposal that includes at least one supply within that maximum cost for the first year. b. Valley Water Response. Within three (3) months of receiving the written notification from Palo Alto or Mountain View or both, Valley Water will provide an estimate of the incremental costs to Valley Water to prepare a proposal for the requested water. The requesting party (Palo Alto or Mountain View or both) will respond to Valley Water's cost estimate within four (4) months. After receiving written approval from the requesting party (Palo Alto or Mountain View or both) accepting the estimated cost for Valley Water to do so, Valley Water will have up to four (4) years from receipt of the original request to prepare a water supply proposal to the requesting party (Palo Alto or Mountain View or both). Parties will meet periodically as requested by any Party during this four (4) year period to discuss the request and the proposal being developed. Valley Water's proposal will include a description of the water supply, including the cost, payment schedule, and any conditions related to the supply to the requester (Palo Alto or Mountain View or both). Valley Water will submit quarterly cost invoices for its work in preparing the proposal and the requesting party (Palo Alto or Mountain View or both) will reimburse Valley Water within 30 days. c. Cost Components. Valley Water's cost estimate in its proposal shall be limited to Valley Water's costs, including all costs associated with the water supply, such as but not limited to: facility costs, commodity costs, and any wheeling fees.

Valley Water shall not be required to subsidize the cost of the water in order to meet the maximum cost pursuant to Section 19 (a). The proposal shall include or allow for subsequent increases in cost after the first year based upon Valley Water's costs.
d. Acceptance or Denial of Proposal. The requester (Palo Alto and/or Mountain View) will have up to twelve (12) months from receiving Valley Water's proposal to provide written notification that they accept or decline this proposal, unless a shorter time period is one of the conditions required by Valley Water. For example, a shorter time frame may be required if Valley Water's proposal involves a fleeting opportunity with third parties in which a commitment is needed in less than 12 months. In the event that Valley Water prepares a proposal with a time period for acceptance of less than 12 months, it shall also, with the requesting party's concurrence, proceed to develop a separate proposal for which the acceptance time period is up to twelve (12) months. 16 Partnership Agreement to Advance Resilient
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e. Reinitiating a Request. If the requesting party (Palo Alto or Mountain View or both) declines Valley Water's proposal or fails to accept it within the time prescribed in Section 19(d), starting 5 (five) years from declining the previous opportunity or five years after the time to accept the proposal expires, whichever is earlier, the requesting party (Palo Alto or Mountain View or both) may reinitiate the process as described in Section 19(a)-(d). This sequence of proposals and potential denials, including the five (5) year period between the denial (or expiration of time in which to accept) and the next request, can be repeated throughout the Term of the Agreement. Notwithstanding the minimum five-year interval between a proposal declined or not timely accepted by the requesting party (Palo Alto or Mountain View or both) and a subsequent opportunity to request a proposal, Valley Water shall have discretion to consider a request by Palo Alto or Mountain View to develop a proposal for them after a period of less than five years since they declined a prior Valley Water proposal or the time in which to accept it expired.
f. Delivery of Water. If the requesting party (Palo Alto or Mountain View or both) accepts Valley Water's proposal, Valley Water will have up to ten (10) years from the acceptance date to begin delivery of the water to the requester (Palo Alto or Mountain View or both) at cost. All water provided by Valley Water may only be utilized by the requesting party (Palo Alto or Mountain View or both) within their respective service areas and Valley Water's obligation to provide the water to Palo Alto or Mountain View or both expires at the end of the Term of this Agreement or any separately date agreed upon in writing. The Parties shall develop detailed terms and conditions for Valley Water's water supply delivery to them in a separate agreement, shall complete any environmental review legally required for adoption of such agreement, and shall provide environmental documentation to support CEQA findings, for approval by Parties' governing bodies prior to commencement of delivery of water to them under this Section.

Such separate agreement may have a term that extends beyond the Term of this Agreement and may include additional conditions dependent upon the Effluent transfer.
g. In the Event of No Regional Program. If Valley Water determines Startup of the Regional Program will not occur within thirteen (13) years of the Effective Date and the Parties have not agreed to further extend this timeline, Palo Alto and Mountain View shall no longer have the ability to request a potable and/or nonpotable water supply from Valley Water.

20. Severability and Voidance of Effluent Transfer Provisions by Valley Water Commencing thirteen years after the Effective Date, Valley Water may terminate the rights and obligations under Article D of this Agreement at its sole discretion by 17 Partnership Agreement to Advance Resilient
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providing Palo Alto and Mountain View with at least five years' written notice if Valley Water has commenced receiving Effluent or at least one years' written notice if Valley Water has not commenced receiving Effluent. If the provisions of this Section 20 are exercised by Valley Water, Article D shall be terminated at the conclusion of the notice period and shall be of no further effect; however, all other Articles of the Agreement shall not be affected and shall remain in full force and effect.

ARTICLE E - SALE OF RWQCP OR THE REGIONAL PLANT DURING TERM

21. Sale of RWQCP During Term of Agreement
Palo Alto agrees that it shall not sell or attempt to sell the RWQCP to any third-party unless Valley Water is first offered the right to purchase the RWQCP at fair market value to be determined by an independent third-party consultant qualified in the wastewater or water industry. Valley Water shall have six months after a fair market value has been determined to consider this purchase, and Palo Alto may only pursue the sale to third parties following the expiration of this six-month period or receipt of Valley Water's written notice that it does not intend to purchase the RWQCP. Upon Valley Water's expression of intent to purchase the RWQCP, Palo Alto shall provide Valley Water with an additional twelve months to complete any financing necessary for the purchase.

The provisions of Article D herein (Effluent Delivery to Valley Water), shall survive any sale of the RWQCP to a third-party during the Term, and Palo Alto shall include as an express condition in the sale of the RWQCP to a third-party the requirement that the third party assume the obligations of this Agreement for the remainder of the Term.

Valley Water shall constitute a third-party beneficiary to any agreement between Palo Alto and a third-party for the sale of the RWQCP.

22. Sale of Regional Plant
Valley Water agrees that if a Regional Plant is located in Palo Alto and if Valley Water decides to cease its operation of the Regional Plant, it shall not sell or attempt to sell the Regional Plant to any third-party unless Palo Alto is first offered the right to purchase the Regional Plant at fair market value to be determined by an independent third-party consultant qualified in the wastewater or water industry. Palo Alto shall have six months after a fair market value has been determined to consider this purchase, and Valley Water may only pursue the sale to third parties following the expiration of this six-month period or receipt of Palo Alto's written notice that it does not intend to purchase the Regional Plant. Upon Palo Alto's expression of intent to purchase the Regional Plant, Valley Water shall provide Palo Alto with an additional twelve months to complete any financing necessary for the purchase.
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ARTICLE F - OTHER PROVISIONS

23. Dispute Resolution Procedure
The process by which the Parties will attempt in good faith to resolve any dispute arising out of or relating to this Agreement, which will be undertaken promptly and initially by representatives of the Parties in the following manner:
a) If a dispute should arise, an authorized representative for each of the Parties will meet or teleconference within fourteen (14) calendar days of written notification of the dispute to resolve the dispute. Prior to such meeting or teleconference, the Party bringing the dispute will draft and submit to the other Parties a written description, including any factual support, of the disputed matter. After receiving this written description, the other Parties will provide a written response to such written description within a reasonable period of time.
b) If no resolution of the dispute occurs at this meeting or teleconference, the issue will be elevated to an executive-level manager of each Party (i.e. executive level manager for Valley Water and Assistant City Manager or higher-level executive for Palo Alto and Mountain View). Each Party's executive-level manager will meet or teleconference as soon as practical, but, in no event, later than twenty one (21) calendar days after the matter has been referred to them, with the initial meeting to occur at a location to be selected by the Parties.
c) If the dispute remains unresolved after forty-five (45) calendar days from their receipt of the matter for resolution, and any necessary Party is not willing to continue negotiations, the Parties agree to submit the dispute to mediation. Any statute of limitations shall be tolled from the time the matter is submitted to mediation until the mediation process has concluded.
d) If the Parties are not able to agree on a mediator, any necessary Party may request the American Arbitration Association or other acceptable mediation service to nominate a mediator. The Parties will share the cost of the mediator equally.
e) In the event mediation is unsuccessful, any Party may pursue other remedies available at law including filing an action in any state or federal court within the County of Santa Clara.
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24. Force Majeure.

Neither Palo Alto nor Mountain View shall be liable for delays or failures in performance of its obligations under Article D of this Agreement that arise out of or result from causes beyond its or their control, including without limitation, the occurrence or threat of the following: an act of God or public enemy; an act of civil or military authorities; a fire, flood, earthquake or other natural disaster; an explosion; a war or act of terrorism; an epidemic or pandemic; a national or state emergency; a strike; a lockout; a riot or civil unrest; a freight embargo; delays of common carriers; acts or orders of governmental authorities; impact of governmental statutes, regulations, permits or orders imposed or issued after the effective date of this Agreement; unavailability of required labor or materials; inability to obtain funding due to a financial crisis; a regulatory agency's failure to issue a required permit or other approval despite submittal of a complete application; litigation not initiated by Palo Alto; and any other events or circumstances not within the reasonable control of the affected Party whether similar or dissimilar to any of the foregoing. If Palo Alto is required to take or forego certain actions to maintain compliance with its NPDES permit and other regulatory requirements, such acts or omissions shall not be considered to be within Palo Alto's reasonable control and shall be excused under this Section 24.

25. Audit.

Valley Water shall have the right to conduct audits of Palo Alto and Mountain View to ensure that the funds paid by Valley Water under this Agreement are being used in accordance with all restrictions set forth in Sections 5 and 6 of this Agreement. Palo Alto and Mountain View shall cooperate with any such audit and shall provide records requested by Valley Water within a reasonable amount of time.

26. Mutual Benefits of this Agreement
Through execution of this Agreement, Parties agree to commit funding and resources to advance a locally controlled, drought resilient supply that improves water supply reliability and assists in maintaining local groundwater basins, to the benefit of all Parties. Additionally, the Parties seek to develop reliable water supply sources to minimize supplies of water that would otherwise have to be imported via the Sacramento-San Joaquin River Delta and its tributaries, including the Tuolumne River and other mountain streams.

27. Notifications
Palo Alto and Valley Water shall notify all RWQCP Partners of the execution of this Agreement within 30 days of the Effective Date.
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28. Choice of Law.

This Agreement shall in all respects be interpreted, enforced, and governed by and under the laws of the State of California. The parties agree that the venue of any action, proceeding or counterclaim shall be in the County of Santa Clara, California.

29. Amendments.

This Agreement may not be modified or amended except by a writing signed by all Parties.

30. Captions.

The captions in this Agreement are for reference only and shall in no way define or interpret any provision hereof.

31. Severability.

If any provision of this Agreement shall be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each provision of this Agreement shall be valid and enforced to the full extent permitted by law, provided the material provisions of this Agreement can be determined and effectuated.

32. Counterparts.

This Agreement may be executed in identical counterpart copies, each of which shall be an original, but all of which taken together shall constitute one and the same agreement.

33. Attorneys' Fees.

In the event of a dispute between the parties with respect to the terms or conditions of this Agreement, the prevailing party is entitled to collect from the other its reasonable attorneys' fees as established by the judge presiding over such dispute.

34. Entire Agreement.

This Agreement, together with Appendix 1 attached hereto, constitutes the entire agreement between the Parties and supersedes all prior written or oral understandings.

35. Cooperative Drafting.

This Agreement has been drafted through a cooperative effort of all Parties, and all Parties have had an opportunity to have the Agreement reviewed and revised by legal counsel. No Party shall be considered the drafter of this Agreement, and no 21 Partnership Agreement to Advance Resilient
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presumption or rule that an ambiguity shall be construed against the party drafting the cause shall apply to the interpretation or enforcement of this Agreement.

36. Separate Writings·, Exhibits, Appendices.

The following appendix constitutes a part of this Agreement and is incorporated into this Agreement by this reference:

Appendix 1.
37 .Time of the Essence.

Time is of the essence in respect to all provisions of this Agreement that specify a time for performance.

38. Waiver.

No waiver of any breach, any failure of a condition, or any right or remedy under this Agreement (1) shall be effective unless it is in writing and signed by the Party making the waiver; (2) shall be deemed to be a waiver of, or consent, to any other breach, failure of a condition, or right or remedy, or (3) shall be deemed to constitute a continuing waiver unless the writing expressly so states.

39. Indemnification.
a. Indemnification by Valley Water. Valley Water shall defend, hold harmless, and indemnify Palo Alto and Mountain View, their officers, agents and employees from, for and against any and all claims, injuries, losses, fines, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and costs) arising from or related to: (1) Valley Water's use of the RWQCP for tours or onsite research work as provided under this Agreement; (2) Valley Water's use, sale or distribution of the Effluent after taking delivery of the Effluent from Palo Alto; (3) siting or operating the Regional Plant, a water tank or associated facilities, or both, on Palo Alto property; (4) constructing and utilizing Effluent conveyance facilities to and from the RWQCP; and (5) litigation related to a ballot measure to allow use of the Measure E site for the Regional Program or land use approvals by Palo Alto (including actions under CEQA) for the Regional Program. This duty to indemnify shall exclude those claims, injuries, losses, fines, liabilities, damages, costs, and expenses directly caused by Palo Alto's or Mountain View's gross negligence or willful misconduct. Valley Water and Palo Alto may modify Valley Water's duty to indemnify Palo Alto through written amendment of this Agreement relating to development of the Regional Plant. b. Indemnification by Palo Alto. Palo Alto shall defend, hold harmless, and indemnify Valley Water and its officers, agents and employees from, for and against any and all claims, injuries, losses, fines, liabilities, damages, costs, and expenses (including reasonable attorneys' fees and costs) arising from or related to: (1) approval, siting, or construction of the Local Plant; (2) operation of the Local Plant; (3) allocation of Remaining funds pursuant to Section 5(f); (4) allocation of the Annual Option Payment pursuant to Section 6. This duty to indemnify shall exclude those claims, injuries, losses, 22 Partnership Agreement to Advance Resilient
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fines, liabilities, damages, costs, and expenses directly caused by Valley Water's gross negligence or willful misconduct.
c. The provisions of this Section 39 shall survive the termination of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement which shall take effect on the Effective Date as stated above.

CITY OF MOUNTAIN VIEW,
A California charter city and municipal
Corporation '- ~
By~ }/ nieii--LRich
City Manager
APPROVED AS TO CONTENT:

By: ~
~~ ~
Public Works Director
FINANCIAL APPROVAL:

By:

Takahashi
~~✓
ce and Administrative
Services Director
APPROVED AS TO FORM:

By:

Krishan
~~ Chopra
City Attorney
23 Partnership Agreement to Advance Resilient
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CITY OF PALO AL TO
A California Chartered Municipal Corporation
By:

Ed Shikada
City Manager
APPROVED AS TO FORM:

By:

Molly Stump
City Attorney

SANTA CLARA VALLEY WATER DISTRICT
By:

Norma J. Camacho
Chief Executive Officer
APPROVED AS TO FORM:

By:

Brian C. Hopper
Sr. Assistant District Coun
SIGNATURE(S) AFFIXED TO ADJ~ reRAG&vance Resilient
Water Reuse Programs in Santa Clara County
2019111401

CITY OF PALO AL TO
:y~uzunlclpal Corporalk>n
Ed Shikada =
City Manager
APPRO~ M:

By· - /~ ~ City Attorney

SANTA CLARA VALLEY WATER DISTRI
By:

By:

Nonna J. Camacho
Chief Executive Offi
rian C. Hopper
Sr. Assistant District Counsel

SIGNATURE(S) AFFIXED

TO ADJACENT PAGE
24/\
Partnership Agreement to Advance Reslllent
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CITY OF PALO AL TO
By:

By:

By:

A§~E(S) AFFIXED

TO ADJACENT PAGE
ICT
~~t V
o a J. Camacho
Chief Executive Officer
::,p~/4~~
Brian C. Hopper
Sr. Assistant District Counsel
Partnership Agreement to Advance Resilient
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Appendix 1 - Definitions of Effluent Flow and Operational Considerations

CONTEXT
This Appendix to the Agreement to Advance Resilient Water Reuse Programs in Santa Clara County (Agreement) is developed in support of Valley Water's Effluent Transfer Option as described in the Agreement. All of the descriptions and requirements described in this Appendix are written in the context of that option and do not convey any action outside the context of that option.

BACKGROUND
Parties recognize RWQCP influent and Effluent varies over time. Palo Alto and Mountain View desire enough flow for RWQCP operations, permit compliance, and contractual obligations. Valley Water desires enough Effluent flow to implement a Regional Program that assists in meeting its water supply reliability goals. "Minimum Flow Delivery" is defined in the Agreement. Maximum Delivery is described in this Appendix.

ASSUMPTIONS
a. Valley Water will receive Effluent as described in the Agreement. Valley Water will be responsible for funding and constructing necessary infrastructure and appurtenances such as pipes, pumps and valves to effectively receive Effluent. b. Quantity of Effluent transferred will be measured by a metering device. Valley Water will install and operate a metering device as close as is practical downstream of the point of connection.

Palo Alto may install a meter upstream ofthe point of connection. Meters will be operated and maintained in accordance with manufacturer specifications and industry standards for such meters. In the event of discrepancies between the Valley Water meter and Palo Alto meter, Valley Water and Palo Alto shall meet and confer, and take appropriate action consistent with the Dispute Resolution Procedure language included in Section 23 of the Agreement. c. Valley Water may need to fund and construct an equalization tank to meet the minimum daily delivery flow rate and/or provide hourly, daily and perhaps weekly operational flexibility.

EFFLUENT FLOW TO VALLEY WATER
Minimum Flow Delivery defined in the Agreement as "9 MGD" is an annual average of Effluent delivered to Valley Water and is equivalent to 10,081 acre-feet (AF) in a 365-day period. In operating the RWQCP to deliver 10,081 AF to Valley Water in a fiscal year, flow at any given moment may be different from 9 MGD. There are points in a 24-hour cycle in which flow may drop below 9 MGD, and there will likely be other points where it exceeds 9 MGD. As Palo Alto and Mountain View have committed to deliver 10,081 AF of Effluent in a 365-day period, Palo Alto will make a good faith effort to equalize the distribution of Effluent flow and meet the operational needs of Valley Water and Mountain View. Palo Alto, Mountain View, and Valley Water agree to collaborate during the design phase of Valley Water's Regional Program to meet the flow parameters listed in Table A.

Effluent delivery shall be measured as volume of Effluent delivered through the point of connection over a period of time (e.g., hour, day or year). For any period of time, Effluent delivered may be impacted by special conditions, such as:
a) The RWQCP is unable to provide Effluent to the point of connection (due to RWQCP maintenance or emergencies);
b) Regional Program is unable to take Effluent from the point of connection (due to maintenance of Valley Water's facilities);
c) Valley Water's water reuse facilities (e.g., recharge ponds) are unable to receive water from the Regional Plant (due to operational conditions at the recharge facilities); d) Other circumstances as may be agreed upon in writing by Palo Alto and Valley Water.

If Valley Water is unable to take delivery of Effluent for a short period of time (e.g., several days), Palo Alto will make best efforts to supply that Effluent at a later point in time as requested by Valley Water.

Table A: Effluent Flow Parameters
Averaging Beginning Ending Flow Delivery 2 Maximum Delivery Period1
Annual July 1 June 30 10,081-acre-feet Determined by Valley Water's design parameters and by potential
agreements by Palo Alto and Mountain
View to supply more than 10,081-acre
feet when Effluent is available
Daily 3 12:00:00 11:59:59 pm 18-acre feet Determined by Valley Water's design am unless only parameters
lower flows are
available
1 These periods shall be used unless other periods are agreed upon in writing by Valley Water and Palo Alto.
2 Values obtained from "Determination of A Guaranteed Feed to An Advanced Water Purification Facility - Revised" TM (Table 5), prepared by Palo Alto, May 3, 2018. 3 May require Valley Water to fund and construct equalization storage upstream from the Regional Plant (based on "Task 6.1- Palo Alto Advanced Water Purification System Design Flow Assessment", prepared by Woodard & Curran, September 24, 2019).

ITEM 6J Attachment 3

EFFLUENT TRANSFER AGREEMENT

BETWEEN CITY OF PALO ALTO

AND TOWN OF LOS ALTOS HILLS
This Effluent Transfer Agreement (Agreement) effective _________, 2025 (“Effective Date”), is entered into by and between the City of Palo Alto, a California chartered municipal corporation (“Palo Alto”), and the Town of Los Altos Hills, a California municipal corporation (“Los Altos Hills”). Palo Alto and Los Altos Hills are referred to together as the “Parties” and individually as a “Party”.

RECITALS
A. Effluent generated in and from Los Altos Hills has long been treated at the Regional Water Quality Control Plant (“RWQCP”) owned and operated by the City of Palo Alto pursuant to the terms and conditions of that certain Agreement for Sewage Transportation, Treatment and Disposal made and entered on March 18, 1968 by and between the City of Palo Alto and the Town of Los Altos Hills, as amended (the “RWQCP Partner Agreement”).

B. The RWQCP treats effluent from several cities and other entities – the cities of Los Altos, Palo Alto, and Mountain View, the Town of Los Altos Hills, East Palo Alto, and Stanford University. These entities are collectively referred to as the “RWQCP Partner Agencies”.

C. Currently, most of the Effluent is discharged to the San Francisco Bay after treatment. Only five percent is further treated to be used as Recycled Water to meet the limited present demand for Recycled Water in the RWCQP Service Area.

While Palo Alto anticipates greater utilization of Recycled Water will occur with an advanced water purification facility project underway at the RWQCP, most of the Effluent would continue to be released into the Bay.

D. In late 2019, Palo Alto, the City of Mountain View (“Mountain View”), and the Santa Clara Valley Water District (“Valley Water”) entered into a long-term agreement that would annually transfer 9 MGD of Effluent to Valley Water for regional recycled water projects as part of an effort to develop locally reliable water supply sources to offset supplies of water that would otherwise be imported via the Sacramento-San Joaquin River Delta and its tributaries, including the Tuolumne River and other mountain streams. This agreement, known as the Partnership Agreement to Advance Resilient Water Reuse Programs in Santa Clara County between Palo Alto, Mountain View, and Valley Water (referred to herein as the “Valley Water Agreement”), became effective on December 10, 2019 and is incorporated herein by reference.

E. Under the Valley Water Agreement, Valley Water will pay an annual option payment to Palo Alto to be divided proportionally among RWQCP Partner Agencies that commit to a long-term transfer of Effluent to Valley Water. Valley Water’s option expires after 13 years. If, and when, Valley Water exercises its option to receive the Effluent, it

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will pay to Palo Alto $1 million per year for up to 9 MGD of Effluent. The $1 million would also be divided proportionally among the RWQCP Partner Agencies based on the percentage share of the Effluent provided.

F. Los Altos Hills desires to make the commitment to provide its Effluent to Valley Water for purposes of the Valley Water Agreement.

G. This Agreement will benefit Los Altos Hills, Palo Alto, and a County-wide effort to achieve cost effective, environmentally beneficial utilization of treated wastewater and to establish a more resilient water supply, especially during drought conditions.

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.

AGREEMENT
ARTICLE A. Definitions
As used in this Agreement, the following terms have the following meanings. (a) Effluent: Tertiary treated wastewater from the RWQCP that meets National Pollutant Discharge Elimination System permit requirements. (b) MGD: Million gallons per day, expressed as an annual average, unless otherwise noted.
(c) Minimum Flow Delivery: An annual average of 9 MGD of Effluent to be supplied by the RWQCP to Valley Water, consistent with Appendix 1 in Valley Water Agreement.
(d) Recycled Water: Effluent that is treated to meet California Code of Regulations Title 22 requirements for non-potable water. (e) RWQCP: The Palo Alto Regional Water Quality Control Plant. (f) RWQCP Partner Agencies: The cities of Palo Alto, Mountain View, and Los Altos, the Town of Los Altos Hills, East Palo Alto, and Stanford University. (g) RWQCP Service Area: RWQCP Service Area includes the service areas of the RWQCP Partner Agencies.

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(h) Startup: The point in time when Valley Water begins to receive Effluent, following initial testing and commissioning, or the point in time when Valley Water begins to pay for the Effluent as part of its Regional Program, pursuant to the Valley Water Agreement, whichever is earlier.
(i) Valley Water Agreement: The Partnership Agreement to Advance Resilient Water Reuse Programs in Santa Clara County between Palo Alto, Mountain View, and Valley Water which became effective on December 10, 2019.

ARTICLE B - Terms

1. Term.

This Agreement shall be in effect on ________, 2025. The Term of the Agreement shall be dependent upon the actions of Valley Water under the Partnership Agreement to Advance Resilient Water Reuse Programs in Santa Clara County between Palo Alto, Mountain View, and Valley Water (the “Valley Water Agreement”) as follows:
a. If Valley Water does not exercise its option to receive Effluent, this Agreement shall terminate when the time for Valley Water to exercise the option expires. b. If Valley Water does exercise the option, this Agreement shall remain in effect so long as Valley Water continues to receive and pay for treated effluent under the Valley Water Agreement, up to 76 years from the effective date of the Valley Water Agreement.
c. If for any reason the Valley Water Agreement is terminated or the Effluent Transfer provision in Article D (Effluent Delivery to Valley Water) of the Valley Water Agreement is terminated by the parties to that agreement, then this Agreement will also terminate.

2. Commitment of Effluent.
a. Los Altos Hills commits and agrees to transfer, and allows Palo Alto to effect the transfer, of 60 percent to 100 percent of Los Altos Hills effluent flow into the RWQCP to Valley Water each year for the Term of this Agreement. b. When Palo Alto provides notice to Los Altos Hills of the date for Startup, Los Altos Hills will provide to Palo Alto a firm commitment of the amount of Los Altos Hills effluent flow into the RWQCP that Palo Alto may transfer to Valley Water upon Startup and for the remainder of that fiscal year. The amount shall be no less than 60 percent, and up to 100 percent, of Los Altos Hills effluent flow for the covered period.

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c. Every January 31st after Startup, Los Altos Hills will provide to Palo Alto a firm commitment of the amount of Los Altos Hills effluent flow into the RWQCP that Palo Alto may transfer to Valley Water in the next fiscal year (July 1 of the same year to June 30 of the following year). The amount shall be no less than 60 percent, and up to 100 percent, of Los Altos Hills effluent flow for the fiscal year period.

3. Option Payments Prior to Startup
a. Amount of Payment. Under the Valley Water Agreement, Palo Alto will receive from Valley Water $100,000 per year (in 2019 dollars, subject to annual adjustment based on CPI) (“Annual Commitment Payment”) until (a) June 1, 2033, or (b) at Startup, whichever occurs first.

Each year, Palo Alto will distribute to Los Altos Hills and other RWQCP Partner Agencies (other than Palo Alto and Mountain View) that have committed their Effluent for the term of this Agreement by January 31st of the same calendar year, the Annual Commitment Payment divided proportionally among the agencies, by the percentage of the effluent received at the RWQCP attributable to each agency.
b. Timing of Payment. Each year beginning in 2021, Palo Alto shall provide to Los Altos Hills its share of the Annual Commitment Payment by applying the amount of its share as a credit on future partner billing under the RWQCP Partner Agreement.
c. Responsibility for Payment.

Palo Alto’s obligations in this Section 3 are contingent on Valley Water transferring the funds to Palo Alto. Palo Alto’s responsibility to distribute the payment to Los Altos Hills only accrues upon receipt of the Annual Commitment Payment from Valley Water.

4. Payments for Effluent
a. Amount of Payment. Under the Valley Water Agreement, upon Startup, Palo Alto will receive from Valley Water $1,000,000 per year (in 2019 dollars, subject to annual adjustment based on CPI) (“Effluent Purchase Payment”) for the Minimum Flow Delivery during the term of the Valley Water Agreement, subject to proration in the first year and payments provided by August 31 for the preceding fiscal year. If the amount of Effluent provided to Valley Water falls below 9 MGD in any year, the amount of the Effluent Purchase Payment will be reduced in proportion.

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Palo Alto will distribute to Los Altos Hills and other RWQCP Partner Agencies (including Palo Alto and Mountain View) that have committed their Effluent for transfer to Valley Water by January 31st of the same calendar year, the Effluent Purchase Payment received from Valley Water divided proportionally among the agencies based on the actual amount of Effluent provided to Valley Water attributable to each agency that year.
b. Timing of Payments. Palo Alto shall provide to Los Altos Hills its share of the Effluent Purchase Payment by applying the amount of its share as a credit on future partner billing under the RWQCP Partner Agreement. c. Responsibility for Payment.

Palo Alto’s obligations under this Section 4 are contingent on Valley Water transferring the funds to Palo Alto. Palo Alto’s responsibility to distribute the payment to Los Altos Hills only accrues upon receipt of the annual Effluent Purchase Payment from Valley Water.

5. Future Sale of Additional Effluent.

If Effluent in excess of 9 MGD is available and Valley Water desires to purchase additional Effluent, any future sale will be shared proportionally among the participating RWQCP Partner Agencies that desire to participate in any future sale. Palo Alto will provide Los Altos Hills with notice of the proposed terms for a future sale and an opportunity to comment and discuss with Palo Alto prior to Palo Alto entering into an agreement or amendment governing such sale with Valley Water.

6. Local Water Conservation Programs Allowed; No Minimum Flow Required.

Los Altos Hills will continue to encourage water conservation and future water conservation programs. Nothing in this Agreement requires Los Altos Hills to guarantee a minimum effluent flow into the RWQCP.

7. Choice of Law.

This Agreement shall in all respects be interpreted, enforced, and governed by and under the laws of the State of California. The Parties agree that the venue of any action, proceeding or counterclaim shall be in the County of Santa Clara, California.

8. Amendments.

This Agreement may not be modified or amended except by a writing signed by the Parties.

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Water Reuse Programs in Santa Clara County
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9. Captions.

The captions in this Agreement are for reference only and shall in no way define or interpret any provision hereof.

10. Counterparts.

This Agreement may be executed in identical counterpart copies, each of which shall be an original, but all of which taken together shall constitute one and the same agreement.

11. Attorneys' Fees.

In the event of a dispute between the Parties with respect to the terms or conditions of this Agreement, the prevailing party is entitled to collect from the other its reasonable attorneys' fees as established by the judge presiding over such dispute.

12. Entire Agreement.

This Agreement constitutes the entire agreement between the Parties and supersedes all prior written or oral understandings.

13. Waiver.

No waiver of any breach, any failure of a condition, or any right or remedy under this Agreement (1) shall be effective unless it is in writing and signed by the Party making the waiver; (2) shall be deemed to be a waiver of, or consent, to any other breach, failure of a condition, or right or remedy, or (3) shall be deemed to constitute a continuing waiver unless the writing expressly so states. [SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Parties have executed this Agreement which shall take effect on the Effective Date as stated above.

TOWN OF LOS ALTOS HILLS
A California municipal corporation
By: ________________________________
Peter Pirnejad
City Manager
APPROVED AS TO FORM:

By: ________________________________
Steve Mattas
City Attorney

CITY OF PALO ALTO
A California chartered municipal corporation
By: ______________________________
Ed Shikada
City Manager
APPROVED AS TO FORM:

By: _____________________________
City Attorney or designee

ITEM 7A
TOWN OF LOS ALTOS HILLS December 19, 2024
Staff Report to the City Council
SUBJECT: CONSIDERATION FOR APPROVAL OF COUNCILMEMBER AND

STAFF PARTICIPATION IN INTERNATIONAL TRAVEL FOR THE

ERAT PROGRAM ON ADVANCING AI IN GOVERNMENT

OPERATIONS
FROM: Peter Pirnejad, City Manager PP
RECOMMENDATION: That the City Council should:

Discuss and provide direction on councilmember and staff participation in international travel for the ERAT (Effective, Efficient, and Strong Governance) program on advancing AI (Artificial Intelligence) in government operations.

In the event the Tranter-Leong Fellowship grant funds are awarded to the Town, the Council can do one of the following:

1. Deny the request to accept the grant and travel to Jakarta; or

2. Accept the grant and approve international travel for two members of staff (no Councilmembers); or

3. Accept the grant, approve international travel for two members of staff, and two members of the council.

1. Appoint two members of the council that would accompany staff.

BACKGROUND:

On June 15, 2023, the City Council adopted a Travel and Expense Policy (See Resolution and accompanying Policy in Attachment 1) which outlines the requirements for out-of-state and international travel for Councilmembers and staff. International travel can be approved by the City Council.

DISCUSSION:

The Town of Los Altos Hills has become a leader of innovation in the AI workspace. Starting about a year ago, staff worked with the Technology Committee to write a Generative AI Use Policy (Attachment 2) for the Town intending to embrace the digital transformation of technology to modernize Town Hall’s governing systems, processes, and services. Since then, and thanks to the support of the City Council, the Town has made a number of digital transformations including several forms of AI technology into our workspace helping staff become more efficient in our work and improve customer service.