Los Gatos City Council
January 16, 2024

IMPORTANT NOTICE
This is a hybrid meeting and will be held in-person at the Town Council Chambers at 110 E. Main Street and virtually through Zoom Webinar (log-in information provided below). Members of the public may provide public comments for agenda items in-person or virtually through the Zoom Webinar by following the instructions listed below. The live stream of the meeting may be viewed on television and/or online at www.LosGatosCA.gov/TownYouTube.

HOW TO PARTICIPATE
The public is welcome to provide oral comments in real-time during the meeting in three ways:
 Zoom Webinar (Online): Join from a PC, Mac, iPad, iPhone or Android device. Please click this URL to join: https://losgatosca-gov.zoom.us/j/87343508612?pwd=g6cSuz5IUXwtcYdTqBNHvV4H39pfg.nzFsRpaTVSmnTXIV Passcode: 099349. You can also type in 87343508612 in the “Join a Meeting” page on the Zoom website at https://zoom.us/join and use passcode 099349.
o When the Mayor announces the item for which you wish to speak, click the “raise hand” feature in Zoom. If you are participating by phone on the Zoom app, press *9 on your telephone keypad to raise your hand.
 Telephone: Please dial (877) 3361839 for US Toll-free or (636) 651-0008 for US Toll. (Conference code: 686100). If you are participating by calling in, press #2 on your telephone keypad to raise your hand.
 In-Person: Please complete a “speaker’s card” located on the back of the Chamber benches and return it to the Town Clerk before the meeting or when the Mayor announces the item for which you wish to speak.

NOTES: (1) Comments will be limited to three (3) minutes or less at the Mayor’s discretion. (2) If you are unable to participate in real-time, you may email to [email protected] the subject line “Public Comment Item #__ ” (insert the item number relevant to your comment). All comments received will become part of the record.
(3) Deadlines to submit written public comments are:
- 11:00 a.m. the Thursday before the Council meeting for inclusion in the agenda packet. - 11:00 a.m. the Monday before the Council meeting for inclusion in an addendum. - 11:00 a.m. on the day of the Council meeting for inclusion in a desk item. (4) Persons wishing to make an audio/visual presentation must submit the presentation electronically to [email protected] no later than 3:00 p.m. on the day of the Council meeting.

TOWN OF LOS GATOS

COUNCIL MEETING AGENDA
JANUARY 16, 2024
110 EAST MAIN STREET AND TELECONFERENCE

TOWN COUNCIL CHAMBERS
7:00 PM
Mary Badame, Mayor
Matthew Hudes, Vice Mayor
Rob Moore, Council Member
Rob Rennie, Council Member
Maria Ristow, Council Member

CALL MEETING TO ORDER

ROLL CALL
APPROVE REMOTE PARTICIPATION (This item is listed on the agenda in the event there is an emergency circumstance requiring a Council Member to participate remotely under AB 2449 (Government Code 54953)).

PLEDGE OF ALLEGIANCE

PRESENTATIONS
i. Recognize Outgoing Commissioners

CLOSED SESSION REPORT

COUNCIL / MANAGER MATTERS
CONSENT ITEMS (Items appearing on the Consent Items are considered routine Town business and may be approved by one motion. Any member of the Council may request to have an item removed from the Consent Items for comment and action. Members of the public may provide input on any or multiple Consent Item(s) when the Mayor asks for public comments on the Consent Items. If you wish to comment, please follow the Participation Instructions contained on Page 1 of this agenda.

If an item is removed, the Mayor has the sole discretion to determine when the item will be heard.)

1. Approve Town Council Closed Session Minutes of December 19, 2023.

2. Approve Town Council Study Session Minutes of December 19, 2023.

3. Approve Council Meeting Minutes of December 19, 2023.

4. Adopt a Resolution to Extend the Term of the Housing Element Advisory Board.

5. Authorize the Town Manager to Execute a Six-Year Agreement for Services with New Image Landscape Co. for Landscape Maintenance Services for a Total Agreement Amount Not to Exceed $846,932 Plus Allowable Increase Adjustments Made for Consumer Price Index (CPI) Beginning in Year 2 of Contract.

6. Rescind Resolution 2023-063 and Adopt a Revised Resolution Making Determinations and Approving the Reorganization of an Uninhabited Area Designated as Los Gatos Boulevard No. 20, Approximately 0.521 Acres on Property Pre-Zoned R-1:8. APN 523-01-001.

Annexation Application AN22-001. Project Location: 15810 Los Gatos Boulevard.

Property Owner/Applicant: Jesus Ching and Kathleen Ban.

7. Authorize the Town Manager to Execute the Following Agreements with San José Conservation Corps:
a. Episodic Support for Winter Storm Response in an Amount Not to Exceed $15,000 and b. Parks-Related Support Staffing in an Amount Not to Exceed $87,100.

8. Receive the Monthly Financial and Investment Report for November 2023.

9. Authorize the Town Manager to Negotiate and Execute a Lease Agreement with Candler for LTFJ S Corp for 41 North Santa Cruz Avenue, in Substantially the Form Presented for a 23-Month Initial Term with One Option to Extend for an Additional 24 Months.

10. Authorize the Town Manager to Negotiate and Execute a Fifth Amendment to a Parking Lot Lease with Frontier California Inc. (formerly Verizon), in Substantially the Form

Presented, to Extend the Lease for an Additional Five Years in an Amount Not to Exceed $363,146 Over Those Five Years.

VERBAL COMMUNICATIONS (Members of the public are welcome to address the Town Council on any matter that is not listed on the agenda and is within the subject matter jurisdiction of the Town Council. The law generally prohibits the Town Council from discussing or taking action on such items. However, the Council may instruct staff accordingly. To ensure all agenda items are heard, this portion of the agenda is limited to 30 minutes. In the event additional speakers were not able to be heard during the initial Verbal Communications portion of the agenda, an additional Verbal Communications will be opened prior to adjournment. Each speaker is limited to no more than three (3) minutes or such time as authorized by the Mayor.)
OTHER BUSINESS (Up to three minutes may be allotted to each speaker on any of the following items.)

11. Review and Discuss the Proposed Revisions to the Draft Revised 2023-2031 Housing Element. Location: Town-Wide. General Plan Amendment Application GP-22-003.

PUBLIC HEARINGS (Applicants/Appellants and their representatives may be allotted up to a total of five minutes maximum for opening statements. Members of the public may be allotted up to three minutes to comment on any public hearing item. Applicants/Appellants and their representatives may be allotted up to a total of three minutes maximum for closing statements. Items requested/recommended for continuance are subject to Council’s consent at the meeting.)

12. Conduct a Public Hearing for the Town’s Transportation Impact Fee Program to:
a. Adopt a Resolution to Adopt the Transportation Impact Nexus Study Dated November 2023 (including the Project List – Appendix 1 Which Serves as the Town’s Transportation Capital Improvement Plan);
b. Adopt a Resolution to Update a Transportation Impact Fee to Replace the Town’s Existing Traffic Impact Mitigation Fee;
c. Introduce an Ordinance Titled “An Ordinance of the Town of Council of the Town of Los Gatos Amending Town Code Section 15, Article VII ‘Traffic Impact Mitigation Fees’”; and
d. Adopt a Resolution to Modify Town Council Policy 1-08: “Transportation Impact Policy.”

13. Weed Abatement Public Hearing to Consider Objections to the Proposed Abatement of Hazardous Vegetation (Weeds) for Properties Listed on the 2024 Weed Abatement Program Commencement Report and Order the Abatement.

OTHER BUSINESS (Up to three minutes may be allotted to each speaker on any of the following items.)

14. Consider the Following Actions:
a. Receive the Information Provided in the Police Services Report: July – December 2023, b. Authorize the Town Manager to Execute an Agreement with Meliora Public Safety Consulting to Conduct an Organizational Assessment and Develop a Data Analysis Toolkit in an Amount Not to Exceed $80,000, and
c. Approve an Expenditure Budget Adjustment in the Amount of $80,000 from the Available General Fund Capital/Special Projects Reserve.

15. Consider Whether the Town Should Retain a Separate Building Board of Appeals and Provide Direction to Staff.

16. Provide Direction Regarding Potential Amendments to the Historic Preservation Committee Ordinance and Enabling Resolution.

PUBLIC HEARINGS (Applicants/Appellants and their representatives may be allotted up to a total of five minutes maximum for opening statements. Members of the public may be allotted up to three minutes to comment on any public hearing item. Applicants/Appellants and their representatives may be allotted up to a total of three minutes maximum for closing statements. Items requested/recommended for continuance are subject to Council’s consent at the meeting.)

17. Consider an Appeal of a Planning Commission Decision to Deny a Fence Height Exception Request at 124 Garden Hill Drive for the Construction of a Six-Foot Tall Fence Located Within the Required Front Yard Setback, Street Side Yard Setback, and Corner Sight Triangle on Property Zoned R-1:8. APN 424-23-084. Fence Height Exception Application FHE-23-005. Categorically Exempt Pursuant to CEQA Guidelines Section 15303: New Construction or Conversion of Small Structures and Section 15301: Existing Facilities.

Property Owner: Rushikesh Kulkarni. Applicant/Appellant: Martin Lettunich. Project Planner: Ryan Safty.

ADJOURNMENT (Council policy is to adjourn no later than midnight unless a majority of Council votes for an extension of time.)
Town Council Meetings Broadcast Live on KCAT, Channel 15 (on Comcast) on the 1st and 3rd Tuesdays at 7:00 p.m.

Rebroadcast of Town Council Meetings on the 2nd and 4th Tuesdays at 7:00 p.m.

Live & Archived Council Meetings can be viewed by going to:
www.LosGatosCA.gov/TownYouTube

110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 1
DRAFT
Minutes of the Town Council Special Meeting – Closed Session Tuesday, December 19, 2023
The Town Council of the Town of Los Gatos conducted a Special Meeting in person and utilizing teleconferencing means on Tuesday, December 19, 2023, at 5:15 p.m. to hold a Closed Session to discuss anticipated litigation.

MEETING CALLED TO ORDER AT 5:15 P.M.

ROLL CALL

Present: Mayor Mary Badame, Vice Mayor Matthew Hudes, Council Member Rob Moore, Council Member Rob Rennie, and Council Member Maria Ristow.

Absent: None

VERBAL COMMUNICATIONS (ONLY ON ITEMS ON THE AGENDA)
None.

THE TOWN MOVED TO CLOSED SESSION ON THE FOLLOWING ITEM:

1. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Significant exposure to litigation pursuant to subsection (e)(3) of Government Code Section 54956.9: 1 case. (E-mail from Ben Eilenberg threatening litigation is available in the Town Attorney’s office.) The Town Council reconvened in open session. The Town Attorney stated there was no reportable action.

ADJOURNMENT
The meeting adjourned at 5:42 p.m.

Attest: Submitted by:
___________________________ ___________________________ Wendy Wood, Town Clerk Laurel Prevetti, Town Manager

110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 2
DRAFT
Minutes of the Town Council Study Session
Tuesday, December 19, 2023
The Town Council of the Town of Los Gatos conducted a Special Meeting in person and utilizing teleconferencing means on Tuesday, December 19, 2023, at 5:45 p.m. to discuss and provide direction on the Pinehurst Community Garden and Lynn Avenue Pedestrian Pathway projects.

MEETING CALLED TO ORDER AT 5:45 P.M.

ROLL CALL

Present: Mayor Mary Badame, Vice Mayor Matthew Hudes, Council Member Rob Moore, Council Member Rob Rennie, and Council Member Maria Ristow.

Absent: None
Vice Mayor Hudes disclosed that he met with residents of the Lynn neighborhood and spoke with Heidi Owens and Kevin Arroyo.

Council Member Moore disclosed that he met with residents of the Lynn neighborhood and spoke with Heidi Owens and Kevin Arroyo.

Council Member Ristow spoke with residents; and attended the Arts and Parks Commission joint public meeting, and a community meeting.

VERBAL COMMUNICATIONS (ONLY ON ITEMS ON THE AGENDA)
Kay Van Kirk
- Commented on the item and suggested looking at alternative locations for the garden and preserving the natural landscape.

Bob Bergthhold
- Commented on the item, stated concerns, and spoke in opposition of the project.

Venkata Nambula
- Commented on the item and stated support for the project.

David Winter
- Commented on the item and stated support for the project.

Jon Levitow
- Commented on the item, stated concerns, and spoke in opposition of the project.

PAGE 2 OF 3
SUBJECT: Draft Minutes of the Special Town Council Meeting of December 19, 2023 DATE: December 19, 2023
Einat Clark
- Commented on the item and stated support for the project.

Paul Marshik
- Commented on the item, stated concerns, and spoke in opposition of the project.

Lisa Marshik
- Spoke about the proposed community garden, stated concerns, and commented on using better location.

Alrie Middlebrook
- Commented on the item, spoke about the benefits of community gardens, and stated support for the project.

Tom Picraux
- Commented on the item and stated support for the project.

Joseph Enz
- Commented on the item and stated support for the project.

Heidi Owens
- Commented on the item and stated support for the project.

Tevis Ignacio
- Commented on the item, stated concerns, and spoke in opposition of the project.

Terri Gorman
- Commented on the item, stated concerns, and spoke in opposition of the project.

OTHER BUSINESS

1. Receive a Report and Provide Direction on the Pinehurst Community Garden (CIP No. 831- 4610) and Lynn Avenue Pedestrian Pathway (CIP No. 832-4510).

Environmental Programs Specialist Marina Cheslett presented the staff report.

The Town Council asked questions, discussed the item, and provided feedback.

Staff addressed the questions.

PAGE 3 OF 3
SUBJECT: Draft Minutes of the Special Town Council Meeting of December 19, 2023 DATE: December 19, 2023

ADJOURNMENT
The meeting adjourned at 6:56 p.m.

Respectfully Submitted:
_____________________________________
Wendy Wood, Town Clerk

110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 3
DRAFT
Minutes of the Town Council Meeting
Tuesday, December 19, 2023
The Town Council of the Town of Los Gatos conducted a regular meeting in-person and utilizing teleconferencing means on Tuesday, December 19, 2023, at 7:00 p.m.

MEETING CALLED TO ORDER AT 7:04 P.M.

ROLL CALL

Present: Mayor Mary Badame, Vice Mayor Matthew Hudes, Council Member Rob Moore, Council Member Rob Rennie, Council Member Maria Ristow.

Absent: None

PLEDGE OF ALLEGIANCE
Vice Mayor Hudes led the Pledge of Allegiance. The audience was invited to participate.

CLOSED SESSION REPORT
Gabrielle Whelan, Town Attorney, stated the Town Council met in closed session pursuant to Government Code Section 54956.9 and there is no reportable action.

COUNCIL/TOWN MANAGER REPORTS
Council Matters
- Council Member Ristow stated she met with residents on several issues including the Housing Element, pedestrian safety, Town Government, Shannon Road, Community Center plans, and Community Garden; and attended the Community Garden public meeting, participated in the interview and selection of the poet laureate, Leigh High School Winter Production of “Clue,” Finance Commission meeting, St. Luke’s Christmas Feast, Hannukah on Main Street, Assembly Select Committee on Mental Health, Cities Association Holiday Party, and Wreaths Across America.
- Council Member Moore stated he completed an emergency medical responder class at San Jose City College and encouraged all to take a CPR, first aid, and AED class; gave a presentation on Housing to the West San Jose-Almaden Kiwanis Club; held his Council Member Community Coffee at Purple Onion; volunteered with Street Dog coalition; and attended a West Valley Sanitation District Authority meeting. - Council Member Rennie stated he attended a Valley Transportation Authority (VTA) Board meeting; Chaired the VTA Policy Advisory Committee meeting; attended the 21st Century Holiday Club event, Finance Commission meeting, Silicon Valley Clean Energy Authority (SVCEA) End-of-the-Year Event, a SVCEA Board meeting, and a SVCEA Risk Oversight Committee meeting.

PAGE 2 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of December 19, 2023 DATE: December 19, 2023
- Vice Mayor Hudes stated he met with the Executive Committee of Older Adults Thrive Foundation; participated in the Town Commission interviews; observed the Finance Commission meeting; met with the Chair of Finance Commission, developers and real estate brokers regarding upcoming developments; attended the Assembly Select Committee on Mental Health; and met with Lynn Avenue and Pinehurst neighborhood residents.
- Vice Mayor Badame stated she met with Rob Stump to discuss wildfire safety; attended an introductory meeting with the Town Executive Team; and provided a Commendation to the Los Gatos Kiwanis Club of Los Gatos for its 100th anniversary.

Manager Matters
- Announced Town Offices are closed beginning Friday and will reopen on January 2. - Announced the Library will be closed December 22-25 and December 29 through January 1. - Wished everyone safe and happy holidays on behalf of the Town.

CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION)

1. Approve Minutes of the December 5, 2023 Town Council Meeting.

2. Approve Minutes of the December 6, 2023, Town Council Special Meeting Regarding Commission Interviews.

3. Approve Minutes of the December 12, 2023 Town Council Special Meeting.

4. Authorize the Town Manager to Execute a Fourth Amendment to a Consultant Agreement for Executive Recruitment Services with Teri Black & Company, LLC for an Additional Amount of $35,000 with a Total Amount Not to Exceed $205,500 and Authorize an Expenditure Budget Adjustment from Available General Fund Capital/Special Projects Reserve.

5. Add One Limited Term, Full-Time Equivalent Human Resources Administrative Analyst and Approve a Budget Adjustment of $103,370 from the Available Special/Capital Projects Reserve.

6. Appoint William Ward Butler to the Honorary Position of Town Poet Laureate to Serve a Three-Year Term Beginning in January of 2024.

7. Authorize Revenue and Expenditure Budget Adjustments in the Amount of $50,000 to Recognize County of Santa Clara Grant Receipt for Case Management for Unhoused Los Gatos Residents.

8. Authorize the Town Manager to Execute a Second Amendment with HdL Companies for Business License Operations Management Services for Up to $70,000 Annually Through December 31, 2025 with the Total Contract Not to Exceed $233,000, and Discontinue the Business License Late Fee Penalty Waiver in the 2024 Calendar Year.

9. Receive the Monthly Financial and Investment Report for October 2023.

10. Receive an Annual Report Regarding the Independent Police Auditor Function.

11. Adopt Council Committee Appointments Effective January 1, 2024.

12. Annual Comprehensive Financial Report (ACFR):
a. Receive the Annual Comprehensive Financial Report (ACFR) for the Fiscal Year Ended June 30, 2023, and

PAGE 3 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of December 19, 2023 DATE: December 19, 2023
b. Adopt a Resolution Confirming June 30, 2023 Fund Balances in Accordance With Fiscal Year 2022/23 Final Audit and Town Council General Fund Reserve Policy. RESOLUTION 2023-067

13. Approve the Following Actions for Americans with Disabilities Act (ADA) Transition Plan (CIP No. 812-0129):
a. Authorize the Town Manager to Execute a Second Amendment to the Agreement for Consultant Services with Disability Access Consultants, LLC for Additional Services, in an Amount of $50,000 for a Total Agreement Not to Exceed $220,000; and b. Authorize An Expenditure Budget Transfer in an Amount of $35,150 from Project #411- 813-9921 (Curb, Gutter & Sidewalk Maintenance).

14. Axon Enterprises Agreement:
a. Authorize the Town Manager to Execute a Five-Year Agreement with Axon Enterprises Incorporated for the Purchase and Maintenance of Axon Officer Safety Plan 10+ Body Worn Cameras (BWC), Tasers, and a Digital Evidence Management System in The Amount Not to Exceed $800,000; and
b. Authorize an Expenditure Budget Adjustment in the Amount of $68,356 from the Available General Fund Capital/Special Projects Reserve.

Mayor Badame opened public comment.

No one spoke.

Mayor Badame closed public comment.

MOTION: Motion by Council Member Ristow to approve consent items 1-14. Seconded by Council Member Moore.

VOTE: Motion passed unanimously.

VERBAL COMMUNICATIONS
Travis Ignacio
- Commented in opposition of the Lynn Avenue Path.

Jay Plett
- Commented on building setbacks and Senate Bill 9.

Karen Rubio
- Did not comment due to microphone issues.

PUBLIC HEARINGS

15. Review and Discuss the Draft Revised 2023-2031 Housing Element. Location: Town-Wide.

General Plan Amendment Application GP-22-003.

PAGE 4 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of December 19, 2023 DATE: December 19, 2023
Jocelyn Shoopman, Associate Planner, presented the staff report.

Council asked preliminary questions of the Housing Consultant.

Mayor Badame opened public comment.

Richard Kananen
- Commented on Housing Element, supported creating a plan to create the Regional Housing Needs Allocation (RHNA) numbers and preserve the existing small-town character of Los Gatos.

Chris Bajorek
- Commented on concerns with the progress, and requested the Town create a task force to finish the Housing Element.

Angela Di Berardino
- Commented on the cancelled Housing Element Advisory Board (HEAB) meetings, expressed concerns with the progress and the revised RHNA numbers.

Melanie Kemp
- Commented on concerns with communication regarding proposed developments and requested an informational meeting or communication regarding the Housing Element process.

Lee Fagot
- Requested the Council control the calendar regarding adoption of the Housing Element and commented on concerns.

Lisa Harris
- Commented on Land Use Goals and concerns with proposed development projects.

Lee Quintana
- Commented on the certification process and the zoning of specific areas of the Town.

Tony Alarcon
- Commented on legislation passed to allow Accessory Dwelling Units (ADUs) to be sold separately from the primary property and spoke about Mills Act properties.

Ron Meyer
- Commented on concerns with the process.

Rich Dobner
- Commented on the proposed pending developments and concerns with future projects.

PAGE 5 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of December 19, 2023 DATE: December 19, 2023
Mayor Badame closed public comment.

Council discussed the item.

MOTION: Motion by Vice Mayor Hudes to follow a process of the following five steps: first, prioritize comments based on how challenging and impactful they are to address, suggesting three categories of straightforward, moderately complex, and challenging and no precedent, and if the consultant can come up with their own framework that would be fine; second, start with most challenging and impactful first, bring draft Los Gatos Housing Element text to the Council with examples from two to three other similar certified Housing Elements, and obtain public comment in that process and direct staff to address those comments in subsequent meetings; three, review several of these comments with Council on a regular basis at the discretion of the Mayor to schedule those and work to include the presence of the Housing consultant at these meetings; fourth, review with California Department of Housing and Community Development (HCD) as frequently as they will permit and provide written feedback to the Council on what has been covered and what the content of the responses have been in the calls and include the response from HCD; fifth, review the Housing Element with the Housing Element Advisory Board as the center point for community outreach and communications when the draft is complete.

Seconded by Council Member Moore.

VOTE: Motion passed unanimously.

MOTION: Motion by Vice Mayor Hudes for the Council meet and review the Housing Element prior to submission of the Housing Element to HCD. Seconded by Council Member Ristow.

VOTE: Motion passed unanimously.

16. Open the Public Hearing for an Appeal of a Planning Commission Decision to Deny a Fence Height Exception Request at 124 Garden Hill Drive for the Construction of a Six-Foot Tall Fence Located Within the Required Front Yard Setback, Street Side Yard Setback, and Corner Sight Triangle on Property Zoned R-1:8 and Continue the Matter to January 16, 2024.

APN 424-23-084. Fence Height Exception Application FHE-23-005. Categorically Exempt Pursuant to CEQA Guidelines Section 15303: New Construction or Conversion of Small Structures and Section 15301: Existing Facilities. Property Owner: Rushikesh Kulkarni.

Applicant/Appellant: Martin Lettunich. Project Planner: Ryan Safty.

Jennifer Armer, Planning Manager, presented the staff report.

Mayor Badame opened public comment.

PAGE 6 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of December 19, 2023 DATE: December 19, 2023
No one spoke.

Mayor Badame closed public comment.

MOTION: Motion by Mayor Badame to continue the hearing to January 16, 2024. Seconded by Council Member Moore.

VOTE: Motion passed unanimously.

Recess 9:20 p.m.

Reconvene 9:31 p.m.

17. Consider an Appeal of a Planning Commission Decision to Approve a Lot Line Adjustment Application in Accordance with California Government Code Section 66412(d) for Three Adjoining Lots on Property Zoned R-1:20. Located at 17200 Los Robles Way. APNs 532- 36- 075, -076, and -077. Lot Line Adjustment Application M-23-001. Statutorily Exempt from CEQA as a Ministerial Approval in Accordance with Public Resources Code Section Page 5 21080(b)(1) (CEQA Statute) and CEQA Guidelines Section 15268. Application is Only for Ministerial Approval of a Lot Line Adjustment Pursuant to Section 66412(d) of the Subdivision Map Act. Property Owners: Daran Goodsell, Trustee and Mark Von Kaenel.

Applicant: Tony Jeans. Appellant: Alison Steer. Project Planner: Ryan Safty. RESOLUTION 2023-068
Jennifer Armer, Planning Manager, presented the staff report.

Mayor Badame opened public comment.

Allison Steer, Appellant, made opening comments.

Tony Jeans, Applicant, made opening comments.

No one from the public spoke.

Shannon Jones, Applicant Representative, made closing comments.

Babak Naficy, Appellant Representative, made closing comments.

Mayor Badame closed public comment.

Council discussed the item.

MOTION: Motion by Council Member Rennie to deny the appeal and adopt the resolution in Attachment 9 of the Staff Report. Seconded by Council Member Ristow.

PAGE 7 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of December 19, 2023 DATE: December 19, 2023
VOTE: Motion passed 4-0-1. Vice Mayor Hudes abstained.

OTHER BUSINESS

18. Authorize Revenue and Expenditure Budget Adjustments in the Amount of $125,000 to Recognize Receipt and Expenditure of a County of Santa Clara Grant Received by the Town, and Provide Direction on the Allocation of the Grant for Adult Day Services and/or Case Management in Consideration of the Recommendation from the Community Health and Senior Services Commission.

Katy Nomura, Acting Human Resources Director and Assistant Town Manager, presented the staff report.

Mayor Badame opened public comment.

No one spoke.

Mayor Badame closed public comment.

MOTION: Motion by Council Member Rennie to authorize revenue and expenditure budget adjustments in the amount of $125,000 to recognize the receipt and expenditure of a County of Santa Clara Grant Received by the Town, and accept the Community Health and Senior Services Commission recommendation that the funds be divided to fund at least a 1.0 Full-Time Employee (FTE) for adult day services and to fund contract case management services with the remaining amount with a goal to be as close as possible to a 0.5 FTE for case management, not require a graduate degree for the case manager position, and have the adult day services Request for Proposals (RFP) be issued first. Seconded by Council Member Ristow.

VOTE: Motion passed unanimously.

19. Review the Revenue Modeling Report Prepared by NBS and Provide Direction on Any Ballot Measures to Consider for Polling.

Katy Nomura, Acting Human Resources Director and Assistant Town Manager, presented the staff report.

Mayor Badame opened public comment.

No one spoke.

Mayor Badame closed public comment.

PAGE 8 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of December 19, 2023 DATE: December 19, 2023
Council discussed the item.

MOTION: Motion by Council Member Moore to authorize consultant to poll for a 1/8 cent sales tax and a commercial parcel tax. Motion failed for lack of a second.

MOTION: Motion by Council Member Hudes to continue this item to February 20, 2024, and consider it at the same time they look at the five-year forecast, with a document stating what the messaging will be. Seconded by Mayor Badame.

VOTE: Motion passed unanimously.

ADJOURNMENT
The meeting adjourned at 11:33 p.m.

Respectfully Submitted:
_____________________________________
Jenna De Long, Deputy Town Clerk

PREPARED BY: Jennifer Armer, AICP
Planning Manager
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Community Development Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 4
DATE: January 11, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution to Extend the Term of the Housing Element Advisory Board
RECOMMENDATION:

Adopt a resolution to extend the term of the Housing Element Advisory Board.

BACKGROUND:

On August 3, 2021, Town Council adopted a resolution (Attachment 1) to establish the Housing Element Advisory Board (HEAB) for the 2023-2031 Housing Element update. This resolution stated that the HEAB would sunset on February 1, 2023, unless extended by the Town Council.

On January 17, 2023, May 16, 2023, and August 15, 2023, Town Council adopted resolutions (Attachments 2 through 4) to extend the term of the HEAB to May 31, 2023, August 30, 2023, and January 31, 2024, to allow them to continue their work.

DISCUSSION:

The HEAB has been working diligently, and additional time is needed to complete the work on the Housing Element update. The remaining work will include review of future revisions in response to comments received from the California Department of Housing and Community Development (HCD) on December 1, 2023, and revisions in response to any future HCD comments. Attachment 5 contains a draft resolution to extend the term of the HEAB until August 31, 2024.

PAGE 2 OF 2
SUBJECT: HEAB Extension
DATE: January 11, 2024
FISCAL IMPACT:

The General Plan Update Fund has monies available to cover the additional HEAB meetings, the overall Housing Element update, and its environmental review.

ENVIRONMENTAL ASSESSMENT:

This action will have no effect on the environment and is not subject to the California Environmental Quality Act.

Attachments:

1. Resolution 2021-032

2. Resolution 2023-003

3. Resolution 2023-029

4. Resolution 2023-042

5. Draft Resolution

ATTACHMENT 1

This Page
Intentionally
Left Blank

ATTACHMENT 2

ATTACHMENT 3

ATTACHMENT 4

1 of 2
Resolution 2023 - Date
Draft Resolution to
be modified by Town
Council deliberations
and direction.

DRAFT RESOLUTION

RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS

EXTENDING THE TERM OF THE HOUSING ELEMENT ADVISORY BOARD WHEREAS, the Housing Element Advisory Board (HEAB) is intended to be an advisory board created for the purpose of advising Town staff, providing a forum for public involvement, and making recommendations to the Planning Commission and Town Council on updates to the Housing Element; and
WHEREAS, the HEAB was established by Town Council on August 3, 2021, by Resolution 2021-032; and
WHEREAS, the term of the HEAB was extended by Town Council on January 17, 2023, by Resolution 2023-003; and
WHEREAS, the term of the HEAB was extended by Town Council on May 16, 2023, by Resolution 2023-029; and
WHEREAS, the term of the HEAB was extended by Town Council on August 15, 2023, by Resolution 2023-042; and
WHEREAS, the HEAB has worked diligently in reviewing the updated Housing Element; and
WHEREAS, additional time needed for the HEAB to complete their work including review of comments received from California Department of Housing and Community Development (HCD) on December 1, 2023, and revisions in response to any future HCD comments.

NOW, THEREFORE, BE IT RESOLVED, the Town Council of the Town of Los Gatos extends the term of the HEAB to August 31, 2024, unless extended by the Town Council.

ATTACHMENT 5

2 of 2
Resolution 2023 - Date
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 16
th day of January, 2024, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

PREPARED BY: Jim Harbin
Superintendent
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Finance Director, and Director of Parks and Public Works
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 5
DATE: December 21, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Six-Year Agreement for Services with New Image Landscape Co. for Landscape Maintenance Services for a Total Agreement Amount Not to Exceed $846,932 Plus Allowable Increase Adjustments Made for Consumer Price Index (CPI) Beginning in Year 2 of Contract
RECOMMENDATION:

Authorize the Town Manager to execute a six-year agreement for services (Attachment 1) with New Image Landscape Co. for landscape maintenance services for a total agreement amount not to exceed $846,923 (see Table 2), plus allowable increase adjustments made for Consumer Price Index (CPI) beginning in year 2 of contract.

BACKGROUND:

As part of the Operating Budget, landscape maintenance funds are provided for mowing, edging, and landscape maintenance in Town parks, median islands, facilities, right of ways, and the Town’s Landscape and Lighting Districts.

The Town has utilized contractual landscape services for routine maintenance to supplement Town staff, allowing the Parks and Public Works staff to focus on providing day to day operational services within the parks system. Staff reviews such maintenance contracts routinely to ensure the contract services align with the Town’s needs, the contracts are competitively priced, and the service provider continues to meet the Town’s expectations and contract terms.

PAGE 2 OF 4
SUBJECT: Authorize the Town Manager to Execute a Multi-Year Agreement for Services with New Image Landscape Co.

DATE: December 21, 2023
BACKGROUND (continued):

On August 31, 2023, Parks and Public Works staff received written notice from its existing landscape maintenance contractor, Brightview Landscape Services, Inc., terminating service based on Section 4.3 - Termination of Agreement of the Agreement for Services dated June 21, 2022. The reason given for the termination of services was the scope of the contracted services could not be completed for the compensation agreed to in the agreement. The termination of services would take effect on September 30, 2023.

To maintain uninterrupted landscape services and allow staff time to procure a new vendor, the Town entered into a short-term four-month agreement with Jensen Landscape Services, Inc. as they are the former contractor for the Town and familiar with the scope and submitted the second lowest quote on the original Request for Proposal for landscape services. The agreement entered into with Jensen Landscape Services, Inc. is scheduled to expire on February 16, 2024.

DISCUSSION:

Staff prepared a Request for Proposals (RFP) for the following landscape maintenance service categories:
 Median island, roadside, and facilities landscape maintenance  Turf mowing
 Landscape and Lighting Assessment District (LLD) landscape and mowing maintenance As a result of the RFP process, five proposals were received on December 20, 2023, with one deemed as non-responsive. The results are summarized in Attachment 2.

Staff determined that New Image Landscape Co. was the most cost competitive firm to provide the requested services. New Image Landscape Co. provides landscape maintenance services to multiple Bay Area cities including the City of San Jose, City of Fremont, and San Benito County.

The agreement term is for five years and four months, beginning March 1, 2024 through June 30, 2029, which allows the end date to align with a fiscal year budget, allows for continuity of service, and maximizes savings by engaging the firm for multiple years. The contract language provides for cancellation should the Town desire to do so during the contract term. To accommodate the potential impacts of inflation on the service, the contract allows for annual increases based on the Consumer Price Index beginning in year two.

PAGE 3 OF 4
SUBJECT: Authorize the Town Manager to Execute a Multi-Year Agreement for Services with New Image Landscape Co.

DATE: December 21, 2023
CONCLUSION:

Staff recommends Town Council authorize the Town Manager to execute a six-year agreement for services (Attachment 1) with New Image Landscape Co. for landscape maintenance services for a total agreement amount not to exceed $846,923 (see Table 2), plus allowable increase adjustments made for Consumer Price Index (CPI) beginning in year 2 of contract.

FISCAL IMPACT:

Annually, multiple programs are included in the Operating Budget for landscape maintenance services, with Parks Services as the main program, and six Landscape and Lighting Assessment District (LLD) programs which receive and pay for the service within each District.

Sufficient funds are provided in the Fiscal Year (FY) 2023/24 Operating Budget to cover the cost of Year 1 of the contract.

The tables below show the annual cost and the total agreement amount for all years prior to any CPI increase adjustments.

Table 1:
$ 31,944 Median Island, Roadside, and Facilities Landscape Maintenance $ 97,428 Mowing
$ 129,372
Landscape & Lighting Districts (LLD) Landscape and Mowing $ 1,116 Blackwell Drive District
$ 552 Gemini Court District
$ 7,308 Kennedy Meadows District
$ 6,708 Santa Rosa Heights District
$ 1,680 Hillbrook District
$ 4,500 Vasona Heights District
$ 21,864
$ 7,562 Unanticipated Services (5%)
$ 158,798 Total Annual Amount
Annual Cost

PAGE 4 OF 4
SUBJECT: Authorize the Town Manager to Execute a Multi-Year Agreement for Services with New Image Landscape Co.

DATE: December 21, 2023
FISCAL IMPACT (continued):

Table 2:

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachments:

1. Agreement for Services including Exhibit A – New Image Landscape Company

2. Bid Summary Sheet
$ 10,648 Median Island, Roadside, and Facilities Landscape Maintenance $ 32,476 Mowing
$ 2,521 Unanticipated Services (5%)
$ 7,288 Total LLDs
$372 - Blackwell Drive District
$184 - Gemini Court District
$2,436 - Kennedy Meadows District
$2,236 - Santa Rosa Heights District
$560 - Hillbrook District
$1,500 - Vasona Heights District
$ 52,933 Year 1 - 3/1/24-6/30/24 (4 months)
$ 158,798 Year 2 - 7/1/24-6/30/25
$ 158,798 Year 3 - 7/1/25-6/30/26
$ 158,798 Year 4 - 7/1/26-6/30/27
$ 158,798 Year 5 - 7/1/27-6/30/28
$ 158,798 Year 6 - 7/1/28-6/30/29
$ 846,923 Total Agreement Amount
Total Agreement Amount Prior to CPI Increase Adjustments

Agreement for Services
New Image Landscape Company

AGREEMENT FOR SERVICES
THIS AGREEMENT is dated for identification this 1st of March 2024 and is made by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and New Image Landscape Company (“Service Provider”), identified as a C Corporation and whose address is 3250 Darby Common Fremont, CA 94539. This Agreement is made with reference to the following facts.

I. RECITALS

1.1 Town sought quotations for the services described in this Agreement, and Service Provider was found to be the lowest responsible supplier for this purchase.

1.2 Service Provider represents and affirms that it is willing to perform the desired work pursuant to this Agreement.

1.3 Town desires to engage Service Provider to provide Landscape Services.

1.4 Service Provider warrants it possesses the distinct professional skills, qualifications, experience, and resources necessary to timely perform the services described in this Agreement. Service Provider acknowledges Town has relied upon these warranties to retain Service Provider.

II. AGREEMENT

2.1 Scope of Services. Service Provider shall provide services as described in that certain Proposal sent to the Town on December 20, 2023, which is hereby incorporated by reference and attached as Exhibit A.

2.2 Term and Time of Performance. The effective date of this Agreement shall begin March 1, 2024, or on the agreement execution date, whichever is later, and will continue through June 30, 2029, subject to appropriation of funds, notwithstanding any other provision in this agreement.

2.3 Compliance with Laws. The Service Provider shall comply with all applicable laws, codes, ordinances, and regulations of governing federal, state and local laws. Service Provider represents and warrants to Town that it has all licenses, permits, qualifications and approvals of whatsoever nature which are legally required for Service Provider to practice its profession. Service Provider shall maintain a Town of Los Gatos business license pursuant to Chapter 14 of the Code of the Town of Los Gatos.

2.4 Sole Responsibility. Service Provider shall be responsible for employing or engaging all persons necessary to perform the services under this Agreement.

ATTACHMENT 1

Agreement for Services
New Image Landscape Company

2.5 Information/Report Handling. All documents furnished to Service Provider by the Town and all reports and supportive data prepared by the Service Provider under this Agreement are the Town’s property and shall be delivered to the Town upon the completion of services or at the Town's written request. All reports, information, data, and exhibits prepared or assembled by Service Provider in connection with the performance of its services pursuant to this Agreement are confidential until released by the Town to the public, and the Service Provider shall not make any of these documents or information available to any individual or organization not employed by the Service Provider or the Town without the written consent of the Town before such release. The Town acknowledges that the reports to be prepared by the Service Provider pursuant to this Agreement are for the purpose of evaluating a defined project, and Town's use of the information contained in the reports prepared by the Service Provider in connection with other projects shall be solely at Town's risk, unless Service Provider expressly consents to such use in writing. Town further agrees that it will not appropriate any methodology or technique of Service Provider which is and has been confirmed in writing by Service Provider to be a trade secret of Service Provider.

2.6 Compensation: shall be as follows, per the bid pricing sheet as described in Exhibit A.

Total Bid Pricing
Medians & Facilities $31,944
Mowing $97,428
Landscape & Lighting $21,864
Total $151,236
Preventative maintenance – shall not exceed $151,236 annually.

Unanticipated maintenance – shall not exceed $7,562 annually.

For a total amount not to exceed $158,798 annually, and a total agreement base amount valued at $846,923, prior to any increase adjustments for CPI.

Compensation for year one (March 1 through June 30, 2024) shall not exceed $52,933.

Compensation for future years shall be adjusted upward annually for the remaining term of this agreement by the change, if any, in the San Francisco-Oakland-San Jose Metropolitan Area Consumer Price Index for All Urban Consumers, all items (CPI). The adjustment shall be based upon the CPI published on December 31 of the preceding year. If the CPI indicates a $ 52,933 Year 1 - 3/1/24-6/30/24 (4 months)
$ 158,798 Year 2 - 7/1/24-6/30/25
$ 158,798 Year 3 - 7/1/25-6/30/26
$ 158,798 Year 4 - 7/1/26-6/30/27
$ 158,798 Year 5 - 7/1/27-6/30/28
$ 158,798 Year 6 - 7/1/28-6/30/29
$ 846,923 Total Agreement Amount

Agreement for Services
New Image Landscape Company
downward adjustment, compensation will remain at the base amount. Payment shall be based upon Town approval of each task.

2.7 Billing. Billing shall be monthly by invoice within thirty (30) days of the rendering of the service and shall be accompanied by a detailed explanation of the work performed by whom at what rate and on what date. Also, plans, specifications, documents or other pertinent materials shall be submitted for Town review, even if only in partial or draft form.

Payment shall be net thirty (30) days. All invoices and statements to the Town shall be addressed as follows:

Invoices:

Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655
Los Gatos, CA 95031-0655

2.8 Failure to Perform. It is mutually agreed by SERVICE PROVIDER and TOWN that in the event that performance of the work by SERVICE PROVIDER under this Agreement is not completed as scheduled, TOWN will suffer damages and will incur other costs and expenses of a nature and amount which is difficult or impractical to determine. The Parties agree that by way of ascertaining and fixing the amount of damages, costs and expenses, and not by way of penalty, SERVICE PROVIDER shall pay to TOWN the sum of one hundred dollars ($100.00) per location per scheduled service in liquidated damages for every missed service beyond three missed services in a month in addition to reducing the monthly payment by the cost of that service. In the event that the liquidated damages are not paid, SERVICE PROVIDER agrees that TOWN may deduct the amount of unpaid damages from any money due or that may become due to SERVICE PROVIDER under this Agreement.

2.9 Schedule. Service Provider shall provide a schedule to the Town prior to beginning work.

The schedule shall identify dates of service for each location. Schedule changes shall be approved by the Town with 24-hour notice. Each missed location shall be considered a failure to perform, unless the contractor provides advance notice of schedule change.

2.10 Availability of Records. Service Provider shall maintain the records supporting this billing for not less than three years following completion of the work under this Agreement. Service Provider shall make these records available to authorized personnel of the Town at the Service Provider offices during business hours upon written request of the Town.

2.11 Assignability and Subcontracting. The services to be performed under this Agreement are unique and personal to the Service Provider. No portion of these services shall be assigned or subcontracted without the written consent of the Town.

Agreement for Services
New Image Landscape Company

2.12 Independent Contractor. It is understood that the Service Provider, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and not an agent or employee of the Town. As an independent contractor he/she shall not obtain any rights to retirement benefits or other benefits which accrue to Town employee(s). With prior written consent, the Service Provider may perform some obligations under this Agreement by subcontracting, but may not delegate ultimate responsibility for performance or assign or transfer interests under this Agreement. Service Provider agrees to testify in any litigation brought regarding the subject of the work to be performed under this Agreement. Service Provider shall be compensated for its costs and expenses in preparing for, traveling to, and testifying in such matters at its then current hourly rates of compensation, unless such litigation is brought by Service Provider or is based on allegations of Service Provider's negligent performance or wrongdoing.

2.13 Conflict of Interest. Service Provider understands that its professional responsibilities are solely to the Town. The Service Provider has and shall not obtain any holding or interest within the Town of Los Gatos. Service Provider has no business holdings or agreements with any individual member of the Staff or management of the Town or its representatives nor shall it enter into any such holdings or agreements. In addition, Service Provider warrants that it does not presently and shall not acquire any direct or indirect interest adverse to those of the Town in the subject of this Agreement, and it shall immediately disassociate itself from such an interest, should it discover it has done so and shall, at the Town's sole discretion, divest itself of such interest. Service Provider shall not knowingly and shall take reasonable steps to ensure that it does not employ a person having such an interest in this performance of this Agreement. If after employment of a person Service Provider discovers it has employed a person with a direct or indirect interest that would conflict with its performance of this Agreement Service Provider shall promptly notify Town of this employment relationship, and shall, at the Town's sole discretion, sever any such employment relationship.

2.14 Equal Employment Opportunity. Service Provider warrants that it is an equal opportunity employer and shall comply with applicable regulations governing equal employment opportunity. Neither Service Provider nor its subcontractors do and neither shall discriminate against persons employed or seeking employment with them on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical condition, unless based upon a bona fide occupational qualification pursuant to the California Fair Employment & Housing Act.

III. INSURANCE AND INDEMNIFICATION

3.1 Minimum Scope of Insurance:
i. Service Provider agrees to have and maintain, for the duration of the contract, General Liability insurance policies insuring him/her and his/her firm to an amount not less than: two million dollars ($2,000,000) combined

Agreement for Services
New Image Landscape Company
single limit per occurrence for bodily injury, personal injury and property damage.
ii. Service Provider agrees to have and maintain for the duration of the contract, an Automobile Liability insurance policy ensuring him/her and his/her staff to an amount not less than one million dollars ($1,000,000) combined single limit per accident for bodily injury and property damage. iii. Service Provider shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. Service Provider agrees that all certificates and endorsements are to be received and approved by the Town before work commences.

General Liability:
i. The Town, its elected and appointed officials, employees, and agents are to be covered as insured as respects: liability arising out of activities performed by or on behalf of the Service Provider; products and completed operations of Service Provider, premises owned or used by the Service Provider. ii. The Service Provider's insurance coverage shall be primary insurance as respects the Town, its elected and appointed officials, employees, and agents. Any insurance or self-insurances maintained by the Town, its officers, officials, employees or volunteers shall be excess of the Service Provider's insurance and shall not contribute with it.
iii. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or volunteers.
iv. The Service Provider's insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer's liability.

3.2 All Coverages. Each insurance policy required in this item shall be endorsed to state that coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Town. Current certification of such insurance shall be kept on file at all times during the term of this agreement with the Town Clerk.

3.3 Workers’ Compensation. In addition to these policies, Service Provider shall have and maintain Workers' Compensation insurance as required by California law and shall provide evidence of such policy to the Town before beginning services under this Agreement.

Agreement for Services
New Image Landscape Company
Further, Service Provider shall ensure that all subcontractors employed by Service Provider provide the required Workers' Compensation insurance for their respective employees.

3.4 Indemnification. The Service Provider shall save, keep, hold harmless and indemnify and defend the Town its elected and appointed officials, agents, employees, and volunteers from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of, or in the course of performing work which may be occasioned by a willful or negligent act or omissions of the Service Provider, or any of the Service Provider's officers, employees, or agents or any subcontractor.

IV. GENERAL TERMS

4.1 Waiver. No failure on the part of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of a subsequent breach of the same or any other provision of this Agreement.

4.2 Governing Law. This Agreement, regardless of where executed, shall be governed by and construed to the laws of the State of California. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara.

4.3 Termination of Agreement. The Town and the Service Provider shall have the right to terminate this agreement with or without cause by giving not less than fifteen days (15) written notice of termination. In the event of termination, the Service Provider shall deliver to the Town all plans, files, documents, reports, performed to date by the Service Provider.

In the event of such termination, Town shall pay Service Provider an amount that bears the same ratio to the maximum contract price as the work delivered to the Town bears to completed services contemplated under this Agreement, unless such termination is made for cause, in which event, compensation, if any, shall be adjusted in light of the particular facts and circumstances involved in such termination.

4.4 Prevailing Wages. This project is subject to the requirements of Section 1720 et seq. of the California Labor Code requiring the payment of prevailing wages, the training of apprentices and compliance with other applicable requirements. Contractors and all subcontractors who perform work on the project are required to comply with these requirements. Prevailing wages apply to all projects over $1,000 which are defined as a “public work” by the State of California. This includes: construction, demolition, repair, alteration, maintenance and the installation of photovoltaic systems under a Power Purchase Agreement when certain conditions are met under Labor Code Section 1720.6. This include service and warranty work on public buildings and structures.

4.4.1 The applicable California prevailing wage rate can be found at www.dir.ca.gov and are on file with the Town of Los Gatos Parks and Public Works Department,

Agreement for Services
New Image Landscape Company
which shall be available to any interested party upon request. The contractor is also required to have a copy of the applicable wage determination posted and/or available at each jobsite.

4.4.2 Specifically, contractors are reminded of the need for compliance with Labor Code Section 1774-1775 (the payment of prevailing wages and documentation of such), Section 1776 (the keeping and submission of accurate certified payrolls) and 1777.5 in the employment of apprentices on public works projects. Further, overtime, weekend and holiday pay, and shift pay must be paid pursuant to applicable Labor Code section.

4.4.3 The public entity for which work is being performed or the California Department of Industrial Relations may impose penalties upon contractors and subcontractors for failure to comply with prevailing wage requirements. These penalties are up to $200 per day per worker for each wage violations identified; $100 per day per worker for failure to provide the required paperwork and documentation requested within a 10-day window; and $25 per day per worker for any overtime violation.

4.4.4 As a condition to receiving progress payments, final payment and payment of retention on any and all projects on which the payment of prevailing wages is required, the contractor agrees to present to the TOWN, along with its request for payment, all applicable and necessary certified payrolls (for itself and all applicable subcontractors) for the time period covering such payment request.

The term “certified payroll” shall include all required documentation to comply with the mandates set forth in Labor Code Section 1720 et seq, as well as any additional documentation requested by the Agency or its designee including, but not limited to: certified payroll, fringe benefit statements and backup documentation such as monthly benefit statements, employee timecards, copies of wage statements and cancelled checks, proof of training contributions (CAC2 if applicable), and apprenticeship forms such as DAS-140 and DAS-142.

4.4.5 In addition to submitting the certified payrolls and related documentation to the TOWN, the contractor and all subcontractors shall be required to submit certified payroll and related documents electronically to the California Department of Industrial Relations. Failure to submit payrolls to the DIR when mandated by the project parameters shall also result in the withholding of progress, retention and final payment.

4.4.6 No contractor or subcontractor may be listed on a bid proposal for a public works project unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)].

4.4.7 No contractor or subcontractor may be awarded a contract for public work on a public works project, unless registered with the Department of Industrial Relations pursuant to Labor Code section 1725.5. Contractors MUST be a registered “public works contractor” with the DIR AT THE TIME OF BID. Where the prime contract is less than $15,000 for maintenance work or less than

Agreement for Services
New Image Landscape Company
$25,000 for construction alternation, demolition or repair work, registration is not required.

4.4.8 Should any contractor or subcontractors not be a registered public works contractor and perform work on the project, Contractor agrees to fully indemnify the TOWN for any fines assessed by the California Department of Industrial Relations against the TOWN for such violation, including all staff costs and attorney’s fee relating to such fine.

4.4.9 The TOWN shall withhold any portion of a payment; including the entire payment amount, until certified payroll forms and related documentation are properly submitted, reviewed and found to be in full compliance. In the event that certified payroll forms do not comply with the requirements of Labor Code Section 1720 et seq., the TOWN may continue to hold sufficient funds to cover estimated wages and penalties under the contract.

4.5 Amendment. No modification, waiver, mutual termination, or amendment of this Agreement is effective unless made in writing and signed by the Town and the Service Provider.

4.6 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal.

4.7 Notices. Any notice required to be given shall be deemed to be duly and properly given if mailed postage prepaid, and addressed to:

Town of Los Gatos
Attn: Town Clerk
110 E. Main Street
Los Gatos, CA 95030
New Image Landscape Company
3250 Darby Common
Fremont, CA 94539
or personally delivered to Service Provider to such address or such other address as Service Provider designates in writing to Town.

4.8 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the terms and conditions of this Agreement in respect of the Products or Services and any attachments to this Agreement, then the terms and conditions of this Agreement shall prevail over attachments or other writings.

4.9 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and exclusive statement of the Agreement between the Town and Service Provider. No terms, conditions, understandings or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.

Agreement for Services
New Image Landscape Company
IN WITNESS WHEREOF, the Town and Service Provider have executed this Agreement.

Town of Los Gatos by:

Laurel Prevetti, Town Manager
Recommended by:

Nicolle Burnham
Director of Parks and Public Works
New Image Landscape Company, by:

Russell Takehara, Vice President
_____________________________________
Irene Briggs, Chief Financial Officer
Approved as to Form:
_____________________________________
Gabrielle Whelan, Town Attorney
Attest:
______________________________________
Wendy Wood, CMC, Town Clerk

Annual Cost
1 $ 780.00
2 $ 2,064.00
3 $ 1,548.00
4 $ 5,160.00
5 $ 1,032.00
6 $ 516.00
7 $ 516.00
8 $ 780.00
9 $ 1,800.00
10 $ 4,128.00
11 $ 516.00
i2 $ 1,032.00
13 $ 2,064.00
14 $ 1,032.00
15 $ 516.00
16 $ 516.00
$ 2,000.00 $ 24,000.00
17 $ 172.00
18 $ 172.00
19 $ 172.00
20 $ 696.00
21 $ 348.00
22 $ 172.00
23 $ 1,380.00
24 $ 696.00
25 $ 172.00
26 $ 172.00
27 $ 696.00
28 $ 2,400.00
29 $ 348.00
30 $ 348.00
$ 1,986.00 $ 7,944.00
$31,944.00

ATTACHMENT D

COST PROPOSAL FORM
ITEM #1- MEDIAN ISLANDS, ROADSIDE, & FACILITIES LANDSCAPING Locations: Frequency
Services per
year
Monthly/Quarter(
Cost
Hwy 9 from University Ave. to w/o Massol Ave. - medians Monthly 12 $ 65.00 Hwy 9 from Los Gatos Blvd. to University Ave. - medians Monthly 12 $172.00 Oka Rd. from Courtside to W. Mozart Ave. - hillsides Monthly 12 $129.00 Los Gatos Blvd. from Van Meter School to Lark Ave. - medians Monthly 12 $430.00 Blossom Hill Rd. from Los Gatos Bl. to Cherry Blossom Ln. - medians Monthly 12 $ 86.00 Los Gatos-Almaden and Los Gatos Blvd. - triangle median Monthly 12 $ 43.00 Los Gatos-Almaden Rd. at Los Gatos Blvd. next to triangle median
Monthly 12 $43.00
Lark Ave. from Los Gatos Blvd. to Winchester Blvd. - medians Monthly 12 $65.00 Winchester Blvd. from Fire Station to E. Division St. - medians Monthly 12 $150.00 Pollard Rd. north & south hillsides & the median island between York Ave. & Wedgwood Ave
Monthly 12 $ 344.00
162 Wedgewood Ave. from Pollard Rd. to Calle Marguerita - roadside Monthly 12 $43.00 More Ave. between Pollard Ave. and Roxbury Ln. - medians Monthly 12 $ 86.00 Police Operations Building front area. Monthly 12 $172.00 4 Tait Ave. property (old museum site) Monthly 12 $ 86.00 Gateway Dr. e/o Los Gatos Blvd. - median Monthly 12 $43.00 Belwood Gateway s/o Blossom Hill Rd. - median Monthly 12 $ 43.00 Almond Blossom Ln. e/o Harwood Rd. - median Quarterly 4 $ 43.00 Harwood Rd. n/o Alerche Dr. - median Quarterly 4 $ 43.00 Vineland Ct. - median Quarterly 4 $ 43.00
Marchmont Rd./ Hilow Rd. - roadside and Eucalyptus row Quarterly 4 $174.00 Oak Rim Wy. n/o Blossom Hill Rd. - median Quarterly 4 $ 87.00 Campanula Pl./ Carlton Ave. - porkchop island Quarterly 4 $ 43.00 LG Library off Villa Ave. - hillside Quarterly 4 $ 345.00 Hwy 9 between Los Gatos Blvd. & Bella Vista Bridge - roadside Quarterly 4 $174.00 Worcester Loop - median triangle Quarterly 4 $ 43.00
Blossom Hill Rd./ University Ave. - porkchop island Quarterly 4 $43.00 Lark Ave. from Garden hill Dr. to LG Creek Trail - southside roadside Quarterly 4 $174.00 Wedgewood Ave. from Wimbledon Dr. to Granada Wy. - southside roadside Quarterly 4 $ 600.00 Subtotal
s $ 3,986.00

Quarterly: $1,986.00
Alpine Ave. Parking Lot Quarterly 4 $ 87.00
75 Church Ave. - Forbes Mill site Quarterly 4 $ 87.00

EXHIBIT A

31 32
33 34
35 36
37 38
39 40
41 42
42 43
44 45
46 47
Monthly Quarterly Total annual
$11,941.00 $ 1,986.00 $151,236.00
$ 143,292.00 $ 7,944.00 $ 151,236.00
ITEM #2-MOWING
Mowing Locations
Frequency Services/yr Monthly Cost Annual Cost
Oak Meadow Park Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-Bi-Weekly 44 $1,735.00 $20,820.00
Live Oak Manor Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $ 946.00 $11,352.00 Bachman Park Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $ 946.00 $11,352.00 Plaza Park Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $ 473.00 $5,676.00 Blossom Hill Park Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $1,735.00 $20,820.00 Belgatos Park Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-Bi-Weekly 44 $630.00 $7,560.00
Howes Play Lot Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $ 236.00 $2,832.00 Pageant Grounds Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $158.00 $1,896.00 Civic Center Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $630.00 $7,560.00 Los Gatos Youth Rec Jan & Feb-Bi-Weekly; Mar. to Oct.-Weekly; Nov.& Dec.-BiWeekly 44 $ 158.00 $1,896.00 Subtotals $8,119.00 $97,428.00
ITEM #3 - LANDSCAPE AND LIGHTING DISTRICTS
LLD Name Frequency Services/yr Monthly Cost Annual Cost Oak Hill Play Lot Jan & Feb-Bi-Weekly; Mar. to Oct-Weekly; Nov.& Dec.-BiWeekly 44 $236.00 $2,832.00 La Rinconada Park Jan & Feb-Bi-Weekly; Mar. to Oct-Weekly; Nov.& Dec.-BiWeeklv 44 $236.00 $2,832.00 Blackwell Dr. Bi-Weekly 26 $ 93.00 $1,116.00
Gemini Ct. Bi-Weekly 26 $46.00 $552.00
Kennedy Meadows Bi-Weekly 26 $609.00 $7,308.00
Santa Rosa Heights Bi-Weekly 26 $ 559.00 $6,708.00
Subtotals $1,822.00 $21,864.00
Total Annual Cost I $ I $151,236.00 I
Monthly: $11,941.00
Quarterly: $1,986.00

Hillbrook@ Blossom Hill Rd. Bi-Weekly 26 $140.00 $1,680.00 Vasona Heights @ Blossom Hill Rd./Roberts
Rd. Bi-Weekly 26 $ 375.00 $4,500.00
COST PROPOSAL FORM (continued)

Landscape Maintenance RFP Bid Proposal Results 12/21/2023 New Image Landscape Co. Brightview Landscape Services
Item #1 Median, Roadside, Facilities $ 31,944.00 Item #1 Median, Roadside, Facilities $ 90,533.76 Item #2 Mowing $ 97,428.00 Item #2 Mowing $ 71,994.36
Item #3 Landscape & Lighting Districts $ 21,864.00 Item #3 Landscape & Lighting Districts $ 39,375.60 Total $ 151,236.00 $ 201,903.72
Dinsmore Landscape Co. JensenMonarch Landscape Companies Item #1 Median, Roadside, Facilities $ 74,129.00 Item #1 Median, Roadside, Facilities $ 79,200.00 Item #2 Mowing $ 104,310.00 Item #2 Mowing $ 118,800.00 Item #3 Landscape & Lighting Districts $ 42,301.44 Item #3 Landscape & Lighting Districts $ 66,000.00 $ 220,740.44 $ 264,000.00
ATTACHMENT 2

PREPARED BY: Jocelyn Shoopman
Associate Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Community Development Department Director, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 1/16/2024
ITEM NO: 6
DATE: January 11, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Rescind Resolution 2023-063 and Adopt a Revised Resolution Making Determinations and Approving the Reorganization of an Uninhabited Area Designated as Los Gatos Boulevard No. 20, Approximately 0.521 Acres on Property Pre-Zoned R-1:8. APN 523-01-001. Annexation Application AN22- 001. Project Location: 15810 Los Gatos Boulevard. Property Owner/Applicant: Jesus Ching and Kathleen Ban.

RECOMMENDATION:

Rescind Resolution 2023-063 (Attachment 1) and adopt a revised resolution (Attachment 2) making determinations and approving the reorganization of an uninhabited area designated as Los Gatos Boulevard No. 20, approximately 0.521 acres, located at 15810 Los Gatos Boulevard (APN 523-01-001) (Attachment 3).

BACKGROUND:

On October 17, 2023, the annexation was introduced at a Town Council meeting. On November 7, 2023, the Town Council adopted a resolution making determinations and approving the annexation request (Attachment 1).

DISCUSSION:

After the November 7, 2023, Town Council meeting, staff submitted certified copies of the adopted Resolution approving the annexation, as well as the annexation description and map to the Santa Clara County Local Agency Formation Commission (LAFCO) and the State Board of Equalization for review and certification.

PAGE 2 OF 2
SUBJECT: Los Gatos Boulevard No. 20/AN22-001
DATE: January 11, 2024
DISCUSSION (continued):

On December 12, 2023, LAFCO notified the Town that revisions were required to the adopted Resolution to remove reference to the County Library Service Area as it was dissolved by LAFCO on May 13, 2023, as well as removing reference to the parcel being located within the County Lighting Service Area.

CONCLUSION:

Council is being asked to rescind Resolution 2023-063 and adopt a revised resolution with the corrections (Attachment 2).

COORDINATION:

The preparation of this report was coordinated with LAFCO, County of Santa Clara Assessor, County of Santa Clara Surveyor, and the County of Santa Clara Planning Division.

FISCAL IMPACT:

Once the annexation is certified by the State Board of Equalization, the Town will receive approximately 9.3 percent of the property taxes.

ENVIRONMENTAL ASSESSMENT:

The project is exempt pursuant to the California Environmental Quality Act Guidelines under Section 15061(b)(3): Review for Exemption, in that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. A Notice of Exemption will not be filed.

Attachments:

1. Resolution 2023-063

2. Revised Resolution, with Exhibit A - Geographic Description, and Exhibit B - Plat Map

3. Location Map

ATTACHMENT 1

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DRAFT RESOLUTION 2024-

RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS RESCINDING RESOLUTION 2023-063, MAKING DETERMINATIONS, AND APPROVING

THE REORGANIZATION

OF AN UNINHABITED TERRITORY DESIGNATED AS
LOS GATOS BOULEVARD NO. 20
APN: 523-01-001
APPROXIMATELY 0.521 ACRES
ANNEXATION APPLICATION: AN22-001
PROPERTY LOCATION: 15810 LOS GATOS BOULEVARD
PROPERTY OWNER/APPLICANT: JESUS CHING AND KATHLEEN BAN
WHEREAS, the Town Council of the Town of Los Gatos has received a request for annexation of territory designated as Los Gatos Boulevard No. 20 from Jesus Ching and Kathleen Ban; and
WHEREAS, the property, is approximately 0.2629 acres and includes 0.2581 acres of County street right-of-way for a total of 0.521 acres located at 15810 Los Gatos Boulevard, APN:
523-01-001, is contiguous to a Town boundary and within the Town’s Urban Service Area; and WHEREAS, the annexation would provide for use of Town services; and WHEREAS, the Town Council enacted Ordinance 1267 in 1975 pre-zoning the subject territory with an R-1:8 (single-family residential, 8,000 square foot minimum lot size) zoning designation; and
WHEREAS, the Town of Los Gatos, as Lead Agency for environmental review for the reorganization, has determined annexation of the subject property is exempt from the California Environmental Quality Act guidelines, pursuant to Section 15061(b)(3); and WHEREAS, the County Surveyor of Santa Clara County has found the description and map (Exhibits A and B) to be in accordance with Government Code Section 56757, the ATTACHMENT 2

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boundaries to be definite and certain, and the proposal to be in compliance with LAFCO’s road annexation policies; and
WHEREAS, as provided in Government Code Section 56757, the Town Council of the Town of Los Gatos shall be the conducting authority for a reorganization including an annexation to the Town; and
WHEREAS, the territory is uninhabited and all owners of land included in the proposal have consented to this annexation; and
WHEREAS, the Town Council held a public hearing to hear any protests on November 7, 2023.

WHEREAS, the Town Council adopted Resolution 2023-063 to approve the reorganization;
WHEREAS, Resolution 2023-063 contains references to the County Library Service Area and the County Lighting Service Area;
WHEREAS, the Local Agency Formation Commission stated that the Resolution should not contain references to the County Lighting Service Area and the County Library Service Area because it was dissolved by LAFCO on May 13, 2023;
WHEREAS, on January 16, 2024, the Town Council held a public hearing to consider the recission of Resolution 2023-063 and the replacement resolution.

NOW, THEREFORE, BE IT RESOLVED, that the that the Town Council of the Town of Los Gatos does as follows:

1. That it rescinds Resolution 2023-063;

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2. That it is the conducting authority pursuant to Section 56757 of the Government Code for the annexation of property designated as Los Gatos Boulevard No. 20, more particularly described in Exhibits A and B;

3. That the following findings are made by the Town Council of the Town of Los Gatos:
a. Said territory is uninhabited and comprises approximately 0.521 acres; b. The annexation is consistent with the orderly annexation of territory within the Town’s Urban Service Area and is consistent with the Town policy of annexing when required by the Town’s agreement with the County of Santa Clara; c. The project is exempt from the California Environmental Quality Act (CEQA) under Title 14 Code of Regulations, Chapter 3: Guidelines for the Implementation of CEQA Section 15061(b)(3): Review for Exemption; d. The Town Council enacted Ordinance 1267 in 1975 pre-zoning the subject territory with an R-1:8 (Single-Family Residential, 8,000 square foot minimum lot size) zoning designation;
e. The territory is within the Town’s Urban Service Area as adopted by the Local Agency Formation Commission of Santa Clara County;
f. The County Surveyor has determined the boundaries of the proposed annexation to be definite and certain, and in compliance with the Commission’s road annexation policies. The County Surveyor has been reimbursed for the actual cost incurred by the County Surveyor in making this determination; g. The proposed annexation will not create an area in which it would be difficult to provide municipal services;
h. The proposed annexation does not split lines of assessment or ownership; i. The proposed annexation is consistent with the Town’s General Plan; j. The territory to be annexed is located within 300 feet of a Town boundary; and k. The Town has complied with all conditions imposed by the Commission for inclusion of the territory in the Town’s Urban Service Area.

4. That all owners of land within the affected territory have provided written consent to the reorganization and no protests have been received; and

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5. That upon completion of these reorganization proceedings the territory reorganized will be taxed on the regular County assessment roll, including taxes for existing bonded indebtedness.

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PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 16th day of January 2024, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

EXHIBIT A
LOS GATOS BOULEY ARD NO. 20

ANNEXATION TO THE TOWN OF LOS GATOS

GEOGRAPHIC DESCRIPTION
All that certain real property lying in the Rancho Rinconada De Los Gatos, County of Santa Clara, State of California, being more particularly described as follows:

Beginning at the southwest corner of Lot 9 of Tract 649, Recorded October 17, 1949 in Book 24 of Maps at Page 32-33, in the Office of the County Recorder of said Santa Clara County, said Point of Beginning being on the easterly line of Los Gatos Boulevard and Bascom Avenue(Parcel Number 2) Annexation as passed and adopted January 25, 1969, Thence, (1) along the easterly line of said annexation and the westerly line of said Lot 9 North 20°
44'00" East, 110.94 feet;
Thence, (2) along the westerly and northerly line of said Lot 9 and the easterly line of said annexation along a tangent curve to the right, concave to the southeast, having a radius of

20.00 feet, having an included angle of 78°
53'00", an arc length of 27.54 feet;
Thence, (3) leaving said northerly line of Lot 9 and continuing along the easterly line of said annexation North 09°
37'00" East, 30.00 feet to the centerline of Farley Road, being the most northeasterly corner of said annexation and on the southerly line of Blossom Hill Manor Number One Annexation as passed and adopted June 15, 1959; Thence, (4) along the centerline of Farley Road and the southerly line of last said annexation South 80°
23'00" East, 116.83 feet;
Thence, (5) along the easterly line of last said annexation North 20°44'00" East, 30.57 feet to the northerly right of way line of Farley Road and the southwest corner of Lot 8 of said Tract 649;
Thence, (6) leaving last said annexation and along said right of way line of Farley Road and the southerly line of said Lot 8 South 80°
23'00" East, 110.94 feet;
Thence, (7) along said right of way line and southerly line of said Lot 8 around a tangent curve to the left, concave to the northwest, having a radius of 20.00 feet, an included angle of 78°
53'47", and an arc length of 27.54 feet;
Thence, (8) South 20°
43'47" West, 101.91 feet to a point on the westerly right of way line of Camellia Terrace as shown on the Map of said Tract 649; Thence, (9) along said right of way line along a non tangent curve to the left, concave to the southwest, whose center bears North 69°
16'00" West, having a radius of 20.00 feet, and
included angle of 101 °
06'34", and an arc length of 35.29 feet;
Thence, (10) along the southerly right of way line of Farley Drive and the northerly line of Lots 10 and 11 of said Tract 649 North 80°
23'00" West, 150.69 feet to the northeast corner of
aforesaid Lot 9 of Tract 649;
Thence, (11) along the easterly line of said Lot 9 South 09° 37'00" West, 125.00 feet to the
southeast corner of said Lot 9;
Thence, (12) along the southerly line of sais Lot 9 North 80° 23'00" West, 104.35 feet to the
Point of Beginning.

EXHIBIT A

EXHIBIT B

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Los
Gatos

LILAC WAY

FARLEY RD

CHIRCO DR

LEROY AVE

FRANK AVE

PLACER OAKS RD

LOS GATOS ALMADEN RD

LOS GATOS BLVD

CAMELLIA
TER

OLEANDER AVE

CORCEL CT

CARLTON
AV

BENEDICT LN
E

PEACH BLOSSOM LN

NB LOS GATOS TO EB LG-ALMADEN

APPLE BLOSSOM LN

FARNHAM LN

CHERRYSTONE DR
¯ 0 150
Feet

SARATOGA
·|}þ17
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LOS
GATOS
SAN
JOSE
Prepared for the Office of the County Surveyor
September 5, 2023
August Hanks, County Surveyor

EXHIBIT A
Los Gatos Boulevard No. 20

0.521 acres +/-
County of Santa Clara
Department of Planning and Development
County Government Center, East Wing
70 West Hedding St., 7th Floor
San Jose, California 95110
Los Gatos Boulevard No. 20
Unincorporated Lands
Area of Annexation
Incorporated Lands
ATTACHMENT 3

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PREPARED BY: Nicolle Burnham
Parks and Public Works Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 7
DATE: December 21, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute the Following Agreements with San José Conservation Corps:
a. Episodic Support for Winter Storm Response in an Amount Not to Exceed $15,000 and
b. Parks-Related Support Staffing in an Amount Not to Exceed $87,100.

RECOMMENDATION:

Authorize the Town Manager to execute the following agreements with San José Conservation Corps (SJCC):
a. Episodic support for storm response in an amount not to exceed $15,000 (Attachment 1) and
b. Parks-related support staffing in an amount not to exceed $87,100 (Attachment 2).

BACKGROUND:

The Department of Parks and Public Works (PPW) is funded for eight full-time Parks and Maintenance Worker positions, with the resources split evenly between parks and streets. The parks team currently has two vacancies. One position has been vacant since June 12, 2023.

The second parks position was filled for a short time in 2023 and is now vacant again. Efforts to recruit for this position have proven challenging given the high cost of living in the Bay Area and limited qualified applicants.

The Parks and Maintenance Worker position is the labor source for all Parks and Public Works tasks throughout the Town of Los Gatos. This team maintains parks and trails, as well as storm drainage systems, roadways, road signs, and other appurtenant assets owned by the Town.

During storms such as the winter storms of 2023, the Parks and Maintenance Workers served as the front line responding to reports of drainage problems and trees down. In January 2023,

PAGE 2 OF 3
SUBJECT: Authorize Town Manager to Enter in Agreements with San José Conservation Corps
DATE: December 21, 2023
BACKGROUND (continued):
this team was issued 298 work requests, compared to 88 in January 2022 and 81 in January 2021. The increase in work requests is solely attributed to the winter storms. This level of response is challenging to provide when the team is short staffed, and storm response makes routine park maintenance challenging, if not impossible, to perform.

The San José Conservation Corps (SJCC) is a workforce development program that was founded in 1987. The SJCC currently offers both job training and a charter school experience to support youth in developing valuable work skills, as well as the soft skills that are needed to thrive in today’s job market. The SJCC provides service to communities and quasi-governmental agencies throughout the Bay Area in fields such as flood response, trail maintenance, emergency response, erosion control, fire fuel load reduction, graffiti removal, and similar services.

DISCUSSION:

Given the vacancy rate among Parks and Maintenance in PPW, the Department is proposing the temporary use of SJCC staff for two specific purposes. The first is episodic services primarily for storm response (Attachment 1). This service would be provided on an as-needed basis in the event of storms like those of winter 2023 or other natural disasters that required extensive clean up
The second is auxiliary staffing to provide much needed support for the Park Operations Team (Attachment 2). The SJCC staff would work alongside PPW staff to perform parks and trails related maintenance. The intent of this agreement is to provide two SJCC staff through March 31, 2024, with the option to extend the agreement to June 30, 2024, upon mutual agreement between both the Town and the American Federation of State, County, and Municipal Employees (AFSCME), during which time PPW will continue its efforts to recruit permanent Parks and Maintenance Workers. The Town met and conferred with the AFSCME representatives on these proposed contracts. The bargaining unit is fine with these limited duration contracts through March with possible extensions.

CONCLUSION:

Approval of this item will provide support staff for Parks and Public Works and improve maintenance of Town-owned parks and public spaces.

PAGE 3 OF 3
SUBJECT: Authorize Town Manager to Enter in Agreements with San José Conservation Corps
DATE: December 21, 2023
COORDINATION:

This item was coordinated with the Finance Department, Human Resources Department, the local chapter of AFSCME, and the San José Conservation Corps.

FISCAL IMPACT:

There is a budget savings due to Park and Maintenance Worker vacancies. There are sufficient funds available in the FY 2023/24 Parks and Streets Operating Budget to cover the agreements for episodic services and auxiliary staffing.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachments:

1. Agreement for Episodic Services

2. Agreement for Auxiliary Staffing for the Parks and Maintenance Worker Job Class

Agreement for Consultant Services

ATTACHMENT 1

AGREEMENT FOR CONSULTANT SERVICES
THIS AGREEMENT is dated for identification on January 16, 2024 by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and the San Jose Conservation Corps (“Consultant”), a 501(c)(3) non-profit organization, whose address is 1560 Berger Drive, San Jose CA, 95112. This Agreement is made with reference to the following facts.

I. RECITALS

1.1 The Town desires to engage Consultant to provide services for episodic services related to storms from 1/17/24 through 3/31/24.

1.2 The Consultant represents and affirms that it is willing to perform the desired work pursuant to this Agreement.

1.3 Consultant warrants it possesses the distinct professional skills, qualifications, experience, and resources necessary to timely perform the services described in this Agreement.

Consultant acknowledges Town has relied upon these warranties to retain Consultant.

II. AGREEMENTS

2.1 Scope of Services. Consultant shall provide services as described in that certain proposal sent to the Town on November 20, 2023 which is hereby incorporated by reference and attached as Exhibit A.

2.2 Term and Time of Performance. This contract will remain in effect upon execution to March 31, 2024, with the option to extend the agreement to June 30, 2024, upon mutual agreement between the Town and the American Federation of State, County, and Municipal Employees (AFSCME). Consultant shall perform the services described in this agreement as described in Exhibit A.

2.3 Compliance with Laws. The Consultant shall comply with all applicable laws, codes, ordinances, and regulations of governing federal, state and local laws. Consultant represents and warrants to Town that it has all licenses, permits, qualifications and approvals of whatsoever nature which are legally required for Consultant to practice its profession. Consultant shall maintain a Town of Los Gatos business license pursuant to Chapter 14 of the Code of the Town of Los Gatos.

2.4 Sole Responsibility. Consultant shall be responsible for employing or engaging all persons necessary to perform the services under this Agreement.

2.5 Information/Report Handling. All documents furnished to Consultant by the Town and all reports and supportive data prepared by the Consultant under this Agreement are the Town’s property and shall be delivered to the Town upon the completion of Consultant's

Agreement for Consultant Services

ATTACHMENT 1
services or at the Town's written request. All reports, information, data, and exhibits prepared or assembled by Consultant in connection with the performance of its services pursuant to this Agreement are confidential until released by the Town to the public, and the Consultant shall not make any of these documents or information available to any individual or organization not employed by the Consultant or the Town without the written consent of the Town before such release. The Town acknowledges that the reports to be prepared by the Consultant pursuant to this Agreement are for the purpose of evaluating a defined project, and Town's use of the information contained in the reports prepared by the Consultant in connection with other projects shall be solely at Town's risk, unless Consultant expressly consents to such use in writing. Town further agrees that it will not appropriate any methodology or technique of Consultant which is and has been confirmed in writing by Consultant to be a trade secret of Consultant.

2.6 Compensation. Compensation for Consultant's professional services shall not exceed $15,000 based on the hourly rates contained in Exhibit A and based on actual time worked.

The rates are inclusive of all costs. Payment shall be based upon Town approval of each task.

2.7 Billing. Billing shall be monthly by invoice within thirty (30) days of the rendering of the service and shall be accompanied by a detailed explanation of the work performed by whom at what rate and on what date. Also, plans, specifications, documents or other pertinent materials shall be submitted for Town review, even if only in partial or draft form.

Payment shall be net thirty (30) days. All invoices and statements to the Town shall be addressed as follows:

Invoices:

Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655
Los Gatos, CA 95031-0655
Email: [email protected]

2.8 Availability of Records. Consultant shall maintain the records supporting this billing for not less than three years following completion of the work under this Agreement. Consultant shall make these records available to authorized personnel of the Town at the Consultant's offices during business hours upon written request of the Town.

2.9 Assignability and Subcontracting. The services to be performed under this Agreement are unique and personal to the Consultant. No portion of these services shall be assigned or subcontracted without the written consent of the Town.

Agreement for Consultant Services

ATTACHMENT 1

2.10 Independent Contractor. It is understood that the Consultant, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and not an agent or employee of the Town. As an independent contractor he/she shall not obtain any rights to retirement benefits or other benefits which accrue to Town employee(s). With prior written consent, the Consultant may perform some obligations under this Agreement by subcontracting, but may not delegate ultimate responsibility for performance or assign or transfer interests under this Agreement. Consultant agrees to testify in any litigation brought regarding the subject of the work to be performed under this Agreement. Consultant shall be compensated for its costs and expenses in preparing for, traveling to, and testifying in such matters at its then current hourly rates of compensation, unless such litigation is brought by Consultant or is based on allegations of Consultant's negligent performance or wrongdoing.

2.11 Conflict of Interest. Consultant understands that its professional responsibilities are solely to the Town. The Consultant has and shall not obtain any holding or interest within the Town of Los Gatos. Consultant has no business holdings or agreements with any individual member of the Staff or management of the Town or its representatives nor shall it enter into any such holdings or agreements. In addition, Consultant warrants that it does not presently and shall not acquire any direct or indirect interest adverse to those of the Town in the subject of this Agreement, and it shall immediately disassociate itself from such an interest, should it discover it has done so and shall, at the Town's sole discretion, divest itself of such interest. Consultant shall not knowingly and shall take reasonable steps to ensure that it does not employ a person having such an interest in this performance of this Agreement. If after employment of a person, Consultant discovers it has employed a person with a direct or indirect interest that would conflict with its performance of this Agreement, Consultant shall promptly notify Town of this employment relationship, and shall, at the Town's sole discretion, sever any such employment relationship.

2.12 Equal Employment Opportunity. Consultant warrants that it is an equal opportunity employer and shall comply with applicable regulations governing equal employment opportunity. Neither Consultant nor its subcontractors do and neither shall discriminate against persons employed or seeking employment with them on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical condition, unless based upon a bona fide occupational qualification pursuant to the California Fair Employment & Housing Act.

III. INSURANCE AND INDEMNIFICATION

3.1 Minimum Scope of Insurance:
i. Consultant agrees to have and maintain, for the duration of the contract, General Liability insurance policies insuring him/her and his/her firm to an

Agreement for Consultant Services

ATTACHMENT 1
amount not less than: two million dollars ($2,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. ii. Consultant agrees to have and maintain for the duration of the contract, an Automobile Liability insurance policy ensuring him/her and his/her staff to an amount not less than one million dollars ($1,000,000) combined single limit per accident for bodily injury and property damage. iii. Consultant shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. Consultant agrees that all certificates and endorsements are to be received and approved by the Town before work commences.
iv. Consultant agrees to have and maintain, for the duration of the contract, professional liability insurance in amounts not less than $1,000,000 which is sufficient to insure Consultant for professional errors or omissions in the performance of the particular scope of work under this agreement.

General Liability:
i. The Town, its elected and appointed officials, employees, and, agents are to be covered as insured as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of Consultant, premises owned or used by the Consultant. This requirement does not apply to the professional liability insurance required for professional errors and omissions.
ii. The Consultant's insurance coverage shall be primary insurance as respects the Town, its elected and appointed officials, employees, and agents. Any insurance or self-insurances maintained by the Town, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it.
iii. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or volunteers.
iv. The Consultant's insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer's liability.

3.2 All Coverages. Each insurance policy required in this item shall be endorsed to state that coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except

Agreement for Consultant Services

ATTACHMENT 1
after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Town. Current certification of such insurance shall be kept on file at all times during the term of this agreement with the Town Clerk.

3.3 Workers’ Compensation. In addition to these policies, Consultant shall have and maintain Workers' Compensation insurance as required by California law and shall provide evidence of such policy to the Town before beginning services under this Agreement. Further, Consultant shall ensure that all subcontractors employed by Consultant provide the required Workers' Compensation insurance for their respective employees.

3.4 Indemnification. The Consultant shall save, keep, hold harmless and indemnify and defend the Town its elected and appointed officials, agents, employees and volunteers from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of, or in the course of performing work which may be occasioned by a willful or negligent act or omissions of the Consultant, or any of the Consultant's officers, employees, or agents or any subconsultant.

IV. GENERAL TERMS

4.1 Waiver. No failure on the part of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of a subsequent breach of the same or any other provision of this Agreement.

4.2 Governing Law. This Agreement, regardless of where executed, shall be governed by and construed to the laws of the State of California. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara.

4.3 Termination of Agreement. The Town and the Consultant shall have the right to terminate this agreement with or without cause by giving not less than fifteen days (15) written notice of termination. In the event of termination, the Consultant shall deliver to the Town all plans, files, documents, reports, performed to date by the Consultant. In the event of such termination, Town shall pay Consultant an amount that bears the same ratio to the maximum contract price as the work delivered to the Town bears to completed services contemplated under this Agreement, unless such termination is made for cause, in which event, compensation, if any, shall be adjusted in light of the particular facts and circumstances involved in such termination.

4.4 Amendment. No modification, waiver, mutual termination, or amendment of this Agreement is effective unless made in writing and signed by the Town and the Consultant.

Agreement for Consultant Services

ATTACHMENT 1

4.5 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal.

Agreement for Consultant Services

ATTACHMENT 1

4.6 Notices. Any notice required to be given shall be deemed to be duly and properly given if mailed postage prepaid, and addressed to:

Town of Los Gatos
Attn: Town Clerk
110 E. Main Street
Los Gatos, CA 95030
San Jose Conservation Corps
1560 Berger Drive
San José, CA 95112
or personally delivered to Consultant to such address or such other address as Consultant designates in writing to Town.

4.7 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the terms and conditions of this Agreement in respect of the Products or Services and any attachments to this Agreement, then the terms and conditions of this Agreement shall prevail over attachments or other writings.

4.8 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and exclusive statement of the Agreement between the Town and Consultant. No terms, conditions, understandings or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.

Agreement for Consultant Services

ATTACHMENT 1
IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.

Town of Los Gatos by:

Laurel Prevetti, Town Manager

Recommended by:

Nicolle Burnham
Director of Parks and Public Works
Consultant, by:

Dorsey Moore, Executive Director/CEO
Dorsey Moore, Executive Director/CEO
Approved as to Form:

Gabrielle Whelan, Town Attorney
Attest:

Wendy Wood, CMC, Town Clerk

Agreement for Consultant Services – Exhibit A
Page A1
Exhibit A
WORK SUMMARY: Consultant agrees to perform services required by the Town of Los Gatos due to inclement weather or any other cause deemed necessary by the Town. The Town will define when services are required and request services as needed. The services can be required for any type of episodic event, major or minor emergency and can be man-made or natural.

LENGTH OF SERVICE: Service period is between January 17, 2024 and June 30th, 2024 and can only be extended by written agreement from the Town. The cost of any/all services cannot exceed $15,000 unless agreed upon in advance by the Town.

PRICING: Service will be billed on an hourly basis at the rates below.

Regular Overtime
-Corpsmember $52.32 $78.48
-Supervisor $66.16 $99.24

Agreement for Consultant Services Page 1 of 7
ATTACHEMENT 2

AGREEMENT FOR CONSULTANT SERVICES
THIS AGREEMENT is dated for identification on January 16, 2024 by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and the San Jose Conservation Corps (“Consultant”), a 501(c)(3) Corporation, whose address is 1560 Berger Drive, San Jose CA, 95112.

This Agreement is made with reference to the following facts.

I. RECITALS

1.1 The Town desires to engage Consultant to provide services to two interns from January 17, 2024 through March 31, 2024.

1.2 The Consultant represents and affirms that it is willing to perform the desired work pursuant to this Agreement.

1.3 Consultant warrants it possesses the distinct professional skills, qualifications, experience, and resources necessary to timely perform the services described in this Agreement.

Consultant acknowledges Town has relied upon these warranties to retain Consultant.

II. AGREEMENTS

2.1 Scope of Services. Consultant shall provide services as described in Exhibit A.

2.2 Term and Time of Performance. This contract will remain in effect upon execution to March 31, 2024, with the option to extend the agreement to June 30, 2024, upon mutual agreement between the Town and the American Federation of State, County, and Municipal Employees (AFSCME). Consultant shall perform the services described in this agreement as described in Exhibit A.

2.3 Compliance with Laws. The Consultant shall comply with all applicable laws, codes, ordinances, and regulations of governing federal, state and local laws. Consultant represents and warrants to Town that it has all licenses, permits, qualifications and approvals of whatsoever nature which are legally required for Consultant to practice its profession. Consultant shall maintain a Town of Los Gatos business license pursuant to Chapter 14 of the Code of the Town of Los Gatos.

2.4 Sole Responsibility. Consultant shall be responsible for employing or engaging all persons necessary to perform the services under this Agreement.

2.5 Information/Report Handling. All documents furnished to Consultant by the Town and all reports and supportive data prepared by the Consultant under this Agreement are the Town’s property and shall be delivered to the Town upon the completion of Consultant's services or at the Town's written request. All reports, information, data, and exhibits prepared or assembled by Consultant in connection with the performance of its services

Agreement for Consultant Services Page 2 of 7
ATTACHEMENT 2
pursuant to this Agreement are confidential until released by the Town to the public, and the Consultant shall not make any of the these documents or information available to any individual or organization not employed by the Consultant or the Town without the written consent of the Town before such release. The Town acknowledges that the reports to be prepared by the Consultant pursuant to this Agreement are for the purpose of evaluating a defined project, and Town's use of the information contained in the reports prepared by the Consultant in connection with other projects shall be solely at Town's risk, unless Consultant expressly consents to such use in writing. Town further agrees that it will not appropriate any methodology or technique of Consultant which is and has been confirmed in writing by Consultant to be a trade secret of Consultant.

2.6 Compensation. Compensation for Consultant's professional services shall not exceed $87,100, inclusive of all costs. Payment shall be based upon Town approval of each task.

Services shall be charged and invoiced based on actual hours worked at a rate of $52.32 per hour.

2.7 Billing. Billing shall be monthly by invoice within thirty (30) days of the rendering of the service and shall be accompanied by a detailed explanation of the work performed by whom at what rate and on what date. Also, plans, specifications, documents or other pertinent materials shall be submitted for Town review, even if only in partial or draft form.

Payment shall be net thirty (30) days. All invoices and statements to the Town shall be addressed as follows:

Invoices:

Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655
Los Gatos, CA 95031-0655
Email: [email protected]

2.8 Availability of Records. Consultant shall maintain the records supporting this billing for not less than three years following completion of the work under this Agreement. Consultant shall make these records available to authorized personnel of the Town at the Consultant's offices during business hours upon written request of the Town.

2.9 Assignability and Subcontracting. The services to be performed under this Agreement are unique and personal to the Consultant. No portion of these services shall be assigned or subcontracted without the written consent of the Town.

2.10 Independent Contractor. It is understood that the Consultant, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and not an agent or employee of the Town. As an independent contractor he/she shall not

Agreement for Consultant Services Page 3 of 7
ATTACHEMENT 2
obtain any rights to retirement benefits or other benefits which accrue to Town employee(s). With prior written consent, the Consultant may perform some obligations under this Agreement by subcontracting, but may not delegate ultimate responsibility for performance or assign or transfer interests under this Agreement. Consultant agrees to testify in any litigation brought regarding the subject of the work to be performed under this Agreement. Consultant shall be compensated for its costs and expenses in preparing for, traveling to, and testifying in such matters at its then current hourly rates of compensation, unless such litigation is brought by Consultant or is based on allegations of Consultant's negligent performance or wrongdoing.

2.11 Conflict of Interest. Consultant understands that its professional responsibilities are solely to the Town. The Consultant has and shall not obtain any holding or interest within the Town of Los Gatos. Consultant has no business holdings or agreements with any individual member of the Staff or management of the Town or its representatives nor shall it enter into any such holdings or agreements. In addition, Consultant warrants that it does not presently and shall not acquire any direct or indirect interest adverse to those of the Town in the subject of this Agreement, and it shall immediately disassociate itself from such an interest, should it discover it has done so and shall, at the Town's sole discretion, divest itself of such interest. Consultant shall not knowingly and shall take reasonable steps to ensure that it does not employ a person having such an interest in this performance of this Agreement. If after employment of a person, Consultant discovers it has employed a person with a direct or indirect interest that would conflict with its performance of this Agreement, Consultant shall promptly notify Town of this employment relationship, and shall, at the Town's sole discretion, sever any such employment relationship.

2.12 Equal Employment Opportunity. Consultant warrants that it is an equal opportunity employer and shall comply with applicable regulations governing equal employment opportunity. Neither Consultant nor its subcontractors do and neither shall discriminate against persons employed or seeking employment with them on the basis of age, sex, color, race, marital status, sexual orientation, ancestry, physical or mental disability, national origin, religion, or medical condition, unless based upon a bona fide occupational qualification pursuant to the California Fair Employment & Housing Act.

III. INSURANCE AND INDEMNIFICATION

3.1 Minimum Scope of Insurance:
i. Consultant agrees to have and maintain, for the duration of the contract, General Liability insurance policies insuring him/her and his/her firm to an amount not less than: two million dollars ($2,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. ii. Consultant agrees to have and maintain for the duration of the contract, an Automobile Liability insurance policy ensuring him/her and his/her staff to

Agreement for Consultant Services Page 4 of 7
ATTACHEMENT 2
an amount not less than one million dollars ($1,000,000) combined single limit per accident for bodily injury and property damage. iii. Consultant shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. Consultant agrees that all certificates and endorsements are to be received and approved by the Town before work commences.
iv. Consultant agrees to have and maintain, for the duration of the contract, professional liability insurance in amounts not less than $1,000,000 which is sufficient to insure Consultant for professional errors or omissions in the performance of the particular scope of work under this agreement.

General Liability:
i. The Town, its elected and appointed officials, employees, and, agents are to be covered as insured as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of Consultant, premises owned or used by the Consultant. This requirement does not apply to the professional liability insurance required for professional errors and omissions.
ii. The Consultant's insurance coverage shall be primary insurance as respects the Town, its elected and appointed officials, employees, and agents. Any insurance or self-insurances maintained by the Town, its officers, officials, employees or volunteers shall be excess of the Consultant's insurance and shall not contribute with it.
iii. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or volunteers.
iv. The Consultant's insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer's liability.

3.2 All Coverages. Each insurance policy required in this item shall be endorsed to state that coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the Town. Current certification of such insurance shall be kept on file at all times during the term of this agreement with the Town Clerk.

3.3 Workers’ Compensation. In addition to these policies, Consultant shall have and maintain Workers' Compensation insurance as required by California law and shall provide evidence

Agreement for Consultant Services Page 5 of 7
ATTACHEMENT 2
of such policy to the Town before beginning services under this Agreement. Further, Consultant shall ensure that all subcontractors employed by Consultant provide the required Workers' Compensation insurance for their respective employees.

3.4 Indemnification. The Consultant shall save, keep, hold harmless and indemnify and defend the Town its elected and appointed officials, agents, employees and volunteers from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of, or in the course of performing work which may be occasioned by a willful or negligent act or omissions of the Consultant, or any of the Consultant's officers, employees, or agents or any subconsultant.

IV. GENERAL TERMS

4.1 Waiver. No failure on the part of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of a subsequent breach of the same or any other provision of this Agreement.

4.2 Governing Law. This Agreement, regardless of where executed, shall be governed by and construed to the laws of the State of California. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara.

4.3 Termination of Agreement. The Town and the Consultant shall have the right to terminate this agreement with or without cause by giving not less than fifteen days (15) written notice of termination. In the event of termination, the Consultant shall deliver to the Town all plans, files, documents, reports, performed to date by the Consultant. In the event of such termination, Town shall pay Consultant an amount that bears the same ratio to the maximum contract price as the work delivered to the Town bears to completed services contemplated under this Agreement, unless such termination is made for cause, in which event, compensation, if any, shall be adjusted in light of the particular facts and circumstances involved in such termination.

4.4 Amendment. No modification, waiver, mutual termination, or amendment of this Agreement is effective unless made in writing and signed by the Town and the Consultant.

4.5 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal.

Agreement for Consultant Services Page 6 of 7
ATTACHEMENT 2

4.6 Notices. Any notice required to be given shall be deemed to be duly and properly given if mailed postage prepaid, and addressed to:

Town of Los Gatos
Attn: Town Clerk
110 E. Main Street
Los Gatos, CA 95030
San José Conservation Corps
1560 Berger Drive
San José, CA 95112
or personally delivered to Consultant to such address or such other address as Consultant designates in writing to Town.

4.7 Order of Precedence. In the event of any conflict, contradiction, or ambiguity between the terms and conditions of this Agreement in respect of the Products or Services and any attachments to this Agreement, then the terms and conditions of this Agreement shall prevail over attachments or other writings.

4.8 Entire Agreement. This Agreement, including all Exhibits, constitutes the complete and exclusive statement of the Agreement between the Town and Consultant. No terms, conditions, understandings or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.

Agreement for Consultant Services Page 7 of 7
ATTACHEMENT 2
IN WITNESS WHEREOF, the Town and Consultant have executed this Agreement.

Town of Los Gatos by:

Laurel Prevetti, Town Manager

Recommended by:

Nicolle Burnham
Director of Parks and Public Works
Consultant, by:

Dorsey Moore, Executive Director/CEO
Dorsey Moore, Executive Director/CEO
Approved as to Form:

Gabrielle Whelan, Town Attorney
Attest:

Wendy Wood, CMC, Town Clerk

Agreement for Consultant Services Page A1
Exhibit A
Scope of Services
San Jose Conservation Corps will provide two intern staff capable of meeting the following standards and requirements:

POSITION SUMMARY: Incumbents shall perform a variety of semiskilled and skilled tasks in the maintenance of streets, street medians and park grounds, storm lines and related public works installations, and equipment and buildings in a designated geographical area; and to perform related duties as assigned.

ESSENTIAL FUNCTIONS:

1. Assist in the maintenance of medians, grounds, equipment, and facilities in a designated geographical area. Water, weed, apply pesticides, prune, empty trash containers and perform minor repairs and custodial maintenance to restrooms.

2. Assist in the maintenance and repair of sprinkler systems, plumbing fixtures, and light standards.

3. Assist in locating the proper storm lines through maps, operate rodding and flushing equipment.

4. Perform manual work on maintenance, repair and construction projects such as street patching and resurfacing, concrete finishing, and installation of guardrails, retaining walls, and storm lines, building of concrete installations, installation of metal fences, painting, and fabrication shelves, bins, playground and exercise equipment.

5. Use a variety of hand and power tools and operate light motorized equipment.

6. May operate a variety of light and medium equipment, including but not limited to: pick-up trucks, loaders, rollers and street sweepers, dump trucks, power mowers, sprayers, tractors, and lift trucks.

7. May assist in making minor repairs to tools, parts and materials.

8. May assist in making wooden signs, using router, planer, table saw, and drill press.

9. As assigned, work extended or irregular hours, storm patrol and emergency repair work.

10. Operate a variety of light, medium and some heavy equipment, including but not limited to:
pick-up trucks, loaders, rollers and street sweepers, dump trucks, power mowers, sprayers, tractors, and lift trucks. May occasionally operate heavier or more complex equipment such as backhoes.

11. Maintain a supply and inventory control system, which includes the issuance of tools, parts and material to other personnel.

12. Make minor repairs to tools, parts and materials.

15. Performs other work-related duties as assigned.

PREPARED BY: Eric Lemon
Finance and Accounting Manager
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 8
DATE: January 3, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Receive the Monthly Financial and Investment Report for November 2023 RECOMMENDATION:

Receive the Monthly Financial and Investment Report for November 2023.

BACKGROUND:

California Government Code Section 41004 requires that the Town Treasurer submit to the Town Clerk and the legislative body a written report and accounting of all receipts, disbursements, and fund balances. The Finance Director assumes the Town Treasurer role.

Attachment 1 contains the November 2023 Monthly Financial and Investment Report which fulfills this requirement. The November 2023 Monthly Financial and Investment Report was received by the Finance Commission on January 8, 2024.

DISCUSSION:

The November 2023 Monthly Financial and Investment Report includes a Fund Balance Schedule, representing estimated funding available for all funds at the end of the respective month. The fund balances were estimated at a point in time and will be finalized at the final close of the fiscal year.

Please note that the amount in the Fund Schedule differs from the Portfolio Allocation and Treasurer’s Cash Fund Balances Summary schedule because assets and liabilities are components of the fund balance.

PAGE 2 OF 3
SUBJECT: Monthly Financial and Investment Report for November 2023 DATE: January 9, 2024
DISCUSSION (continued):

As illustrated in the summary below, Total Cash is adjusted by the addition of Total Assets less the amount of Total Liabilities to arrive at the Ending Fund Balance – which represents the actual amount of funds available.

As of November 30, 2023, the Town’s financial position (Assets $80.63M, Liabilities $27.00M, and Fund Equity $53.62M) remains strong and there are no issues meeting financial obligations in the near future.

As of November 30, 2023, the Town’s weighted portfolio yield for investments under management was 4.20% which was 36 basis points above the Local Agency Investment Fund (LAIF) yield of 3.84% for the same reporting period. Currently, the LAIF portfolio’s weighted average maturity (WAM) is 244 days versus the Town’s longer WAM of 573 days. The longer maturity (WAM) for Town assets under management reflects the Town’s strategy to take advantage of higher yields associated with longer maturities balanced with shorter term yields available on investments held with the State’s LAIF. The Town’s weighted average rate of return on investments under management of 4.20% at the close of November was 8 basis points higher when compared to the prior month’s return of 4.12 % reported as of October 31, 2023.

Since November 30, 2022, LAIF yields had climbed from 201 basis points (2.01%) to 384 basis points (3.84%) through the end of November 2023.

Staff, in coordination with the Town’s investment advisor, primarily replaced maturing investments with short term maturities in the one- to two-year maturity range. These investments capture current yields that exceed the rates expected to be earned in the LAIF pool during that same time period. The State LAIF pool typically lags the market when current market yields are either increasing or decreasing.

On March 22, 2023, the Federal Reserve voted to approve a ¼ percentage basis point increase from 4.75% to 5.00%. This action was followed with additional hikes in May 2023 from 5.00% to 5.25% and July from 5.25 % to 5.5 %. Through these actions over time, the Federal Open Market Committee’s (FOMC) goal is to bring year to year inflation to its targeted level of 2%.

The labor market remained tight overall. The US economy added 150,000 jobs in

PAGE 3 OF 3
SUBJECT: Monthly Financial and Investment Report for November 2023 DATE: January 9, 2024
DISCUSSION (continued):

October, slightly less than expected. The previous two months were revised down 101,000. The unemployment rate unexpectedly rose to 3.9% from 3.8% despite a decline in the labor force participation rate from 62.8% to 62.7%.

The Town's investments are in compliance with the Town's Investment Policy dated February 21, 2023, and also in compliance with the requirements of Section 53600 at seq. of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

CONCLUSION:

Receive Monthly Financial and Investment Report for November 2023.

Attachment:

1. Financial and Investment Report (November 2023)

Weighted Average YTM Portfolio Yield on Investments
under Management 4.20%
Weighted Average Maturity (days) 573
This Month Last Month One year ago
Portfolio Allocation & Treasurer's Cash Balances $65,687,227 $64,959,615 $65,273,987 Cert. of Participation 2002 Lease Payment Fund
Managed Investments $49,418,729
Local Agency Investment Fund $11,278,106
Reconciled Demand Deposit Balances $4,990,392
Portfolio Allocation & Treasurer's Cash Balances $65,687,227 Benchmarks/ References:

Town's Average Yield 4.20% 4.12% 2.03%
LAIF Yield for month 3.84% 3.67% 2.01%
3 mo. Treasury 5.40% 5.48% 4.38%
6 mo. Treasury 5.41% 5.57% 4.71%
2 yr. Treasury 4.68% 5.09% 4.31%
5 yr. Treasury (most recent) 4.27% 4.86% 3.74%
10 Yr. Treasury 4.33% 4.93% 3.61%
Town of Los Gatos
Summary Investment Information
November 30, 2023
0 - 1 year
50% 1 - 2 years
14%
2 - 3 years
12%
3 - 5 years
24%
Portfolio Maturity Profile
Compliance: The Town's investments are in compliance with the Town's investment policy dated February 21, 2023 and also in compliance with the requirements of Section 53600 at seq. of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

ATTACHMENT 1 Page 91
Month YTD
Cash & Investment Balances - Beginning of Month/Period $ 64,959,615.32 $ 78,384,947.79 Receipts 5,700,169.78 26,119,904.60
Disbursements (4,972,558.26) (38,817,625.55)
Cash & Investment Balances - End of Month/Period $65,687,226.84 $65,687,226.84 Portfolio Allocation Amount % of Portfolio
Max. % or $ Allowed
per State Law or Policy
BNY MM $93,429.22 0.15% 20% of Town Portfolio
US Treasury Notes $17,791,675.69 29.31% No Max. on US Treasuries Government Agency Debenture Notes $17,528,739.65 28.88% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $14,004,884.01 23.07% 30% of Town Portfolio Local Agency Investment Fund $11,278,106.16 18.58% $75 M per State Law Subtotal - Investments 60,696,834.73 100.00%
Reconciled Demand Deposit Balances 4,990,392.11
Total Portfolio Allocation & Treasurer's Cash Balances $65,687,226.84 Town of Los Gatos
Portfolio Allocation & Treasurer's Cash Balances
November 30, 2023
BNY MM

0.15%
US Treasury Notes

29.31%
Government Agency Debenture
Notes

28.88%
Corporate Medium Term Bonds

23.1%
Local Agency Investment Fund

18.6%
Portfolio Investment Allocation
$65.3 M $65.7 M
$0.0 M
$10.0 M
$20.0 M
$30.0 M
$40.0 M
$50.0 M
$60.0 M
$70.0 M
$80.0 M
$90.0 M
Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Treasurer's Fund Balances

November 2023 November 2023 November 2023
Beginning Deposits Interest/ Ending
Balance Realized Gain/Adj. Earnings Withdrawals Balance Non-Treasury Funds:

Cert. of Participation 2002 Series A Reserve Fund $ 706,795.41 $ 2,902.45 $ 709,697.86 Note 1 Cert. Of Participation 2010 Ser A Lease Pymt Fund 787.24 3.45 790.69 Note 1 Cert. of Participation 2002 Lease Payment Fund 434.98 1.86 436.84 Note 1 Cert. of Participation 2010 Series Reserve Fund 1,341,417.55 5,976.81 1,347,394.36 Note 2 Total Restricted Funds: $ 2,049,435.18 $ - $ 8,884.57 $ - $ 2,058,319.75 CEPPT IRS Section 115 Trust 1,322,659.96 77,471.76 $ 1,400,131.72 Grand Total COP's and CEPPT Trust $ 3,372,095.14 $ - $ 86,356.33 $ - $ 3,458,451.47 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

Note 1: The three original funds for the Certificates of Participation 2002 Series A consist of construction funds which will be expended over the next few years, reserve funds which will guarantee the payment of lease payments, and a third fund for the disbursement of lease payments and initial delivery costs.

Note 2: The 2010 COP Funds are all for the Library construction, reserves to guarantee lease payments, and a lease payment fund for the life of the COP issue. The COI fund was closed in September 2010.

Note 3: The CEPPT Section IRS Section 115 Trust was established as an irrevocable trust dedicated to accumulate resources to fund the Town's unfunded liabilities related to pension and other p Town of Los Gatos
Non-Treasury Restricted Fund Balances
November 30, 2023

July 2023 $ 133,845.42
August 2023 129,679.93
September 2023 158,361.71
October 2023 151,048.03
November 2023 154,152.18
December 2023 -
January 2024 -
February 2024 -
March 2024 -
April 2024 -
May 2024 -
June 2024 -
$ 727,087.27
Interest by Month
Town of Los Gatos
Statement of Interest Earned
November 30, 2023

Market Value Maturity Yield to Interest Interest Interest Days Deposit Par Original Market Above (Under) Purchased Date or Maturity Received Earned Earned to Institution CUSIP # Security Coupon Date Value Cost Value Cost Interest Call Date or Call to Date Prior Yrs. Current FY Maturity FFCB 3133EKMX1 Gov. Agency Debenture 2.23% 8/2/2019 1,000,000.00 1,014,400.00 992,560.00 (21,840.00) 2/23/2024 1.90% $ 96,075.83 $ 74,902.07 $ 8,025.22 85 FFCB 3133EMBE1 Gov. Agency Debenture 0.30% 10/8/2020 1,600,000.00 1,598,000.00 1,572,176.00 (25,824.00) 3/28/2024 0.34% $ 14,253.34 $ 14,655.57 $ 2,253.57 119 Apple 037833DB3 Corporate Bond 2.90% 12/20/2022 1,300,000.00 1,228,591.00 1,223,807.00 (4,784.00) 6/21/2027 4.19% $ 27,437.22 $ 28,170.97 $ 22,448.74 1299 Cert. of Participation 2002 Le 437076BM3 Corporate Bond 3.00% 8/4/2022 1,000,000.00 991,960.00 959,110.00 (32,850.00) 1/1/2026 3.04% $ 34,750.00 $ 29,252.66 $ 13,562.60 763 US Treasury 912828ZW3 US Treasury Note 0.25% 8/9/2022 350,000.00 322,096.88 325,542.00 3,445.12 6/30/2025 3.16% $ 779.89 $ 9,366.72 $ 4,409.56 578 IBM 459200JY8 Corporate Bond 3.00% 3/25/2021 1,000,000.00 1,071,040.00 988,480.00 (82,560.00) 5/15/2024 0.71% $ 79,166.67 $ 16,751.96 $ 3,099.21 167 FFCB 3133EN5V8 Gov. Agency Debenture 4.13% 1/17/2023 236,000.00 239,174.20 233,300.16 (5,874.04) 1/11/2027 3.76% $ 4,705.25 $ 4,016.30 $ 3,746.92 1138 US Treasury 91282CBT7 US Treasury Note 0.75% 9/30/2022 800,000.00 712,565.18 733,344.00 20,778.82 3/31/2026 4.14% $ 6,000.00 $ 23,165.06 $ 12,982.62 852 FFCB 3133ENP95 Gov. Agency Debenture 4.25% 9/30/2022 900,000.00 900,939.60 888,948.00 (11,991.60) 9/30/2025 4.14% $ 38,250.00 $ 28,374.86 $ 15,902.39 670 American Honda 02665WCZ2 Corporate Bond 2.40% 11/27/2019 1,000,000.00 1,012,410.01 982,130.00 (30,280.01) 6/27/2024 2.12% $ 96,733.34 $ 76,483.79 $ 8,926.03 210 JP Morgan Chase 46625HRS1 Corporate Bond 3.20% 9/23/2022 500,000.00 474,660.00 477,025.00 2,365.00 3/15/2026 4.70% $ 11,644.44 $ 17,865.15 $ 9,762.03 836 Honeywell Int'l. 438516BW5 Corporate Bond 2.30% 11/20/2019 1,000,000.00 1,014,660.00 978,540.00 (36,120.00) 7/15/2024 1.64% $ 85,483.33 $ 71,679.55 $ 8,320.92 228 Caterpillar Financial Serv 14913Q2V0 Corporate Bond 2.85% 2/23/2021 1,000,000.00 1,077,370.00 987,470.00 (89,900.00) 5/17/2024 0.44% $ 77,900.00 $ 10,677.18 $ 1,906.19 169 FNMA 3135G0V75 Gov. Agency Debenture 1.75% 10/17/2019 1,100,000.00 1,105,833.30 1,077,516.00 (28,317.30) 7/2/2024 1.63% $ 71,706.25 $ 66,718.86 $ 7,550.29 215 US Bancorp 91159HHV5 Corporate Bond 3.38% 12/24/2019 1,000,000.00 1,049,040.00 995,500.00 (53,540.00) 1/5/2024 2.12% $ 121,968.75 $ 75,978.33 $ 9,053.49 36 FFCB 3133EKQA7 Gov. Agency Debenture 2.08% 10/21/2019 1,000,000.00 1,019,780.00 974,280.00 (45,500.00) 9/10/2024 1.66% $ 80,831.11 $ 61,888.40 $ 7,024.42 285 FHLB 3135G05X7 Gov. Agency Debenture 0.38% 6/10/2022 1,200,000.00 1,102,952.40 1,111,860.00 8,907.60 8/25/2025 3.04% $ 5,437.50 $ 36,626.55 $ 14,555.48 634 US Treasury 912828ZL7 US Treasury Note 0.38% 4/12/2022 1,700,000.00 1,583,927.57 1,594,090.00 10,162.43 4/30/2025 2.72% $ 9,879.49 $ 54,017.06 $ 18,613.99 517 JP Morgan Chase 46625HJT8 Corporate Bond 3.88% 9/23/2019 1,400,000.00 1,485,414.00 1,395,674.00 (89,740.00) 2/1/2024 2.39% $ 209,163.89 $ 130,689.90 $ 14,531.65 63 US Treasury 912828V23 US Treasury Note 2.25% 11/29/2021 1,000,000.00 1,032,933.04 997,380.00 (35,553.04) 12/31/2023 0.66% $ 35,706.52 $ 10,649.43 $ 2,818.97 31 US Treasury 91282CBE0 2 US Treasury Note 0.13% 10/7/2021 1,000,000.00 994,768.98 993,620.00 (1,148.98) 1/15/2024 0.36% $ 2,214.67 $ 6,137.79 $ 1,488.24 46 FHLB 3130ALH98 Gov. Agency Debenture 0.25% 2/26/2021 1,000,000.00 997,610.00 987,860.00 (9,750.00) 2/26/2024 0.33% $ 6,250.00 $ 7,713.30 $ 1,381.89 88 FHLB 3130AQF65 Gov. Agency Debenture 1.25% 11/30/2022 1,300,000.00 1,160,559.40 1,179,074.00 18,514.60 12/21/2026 4.15% $ 9,072.92 $ 29,385.32 $ 21,207.33 1117 US Treasury 912828X70 US Treasury Note 2.20% 12/30/2019 1,000,000.00 1,010,589.29 986,560.00 (24,029.29) 4/30/2024 1.75% $ 84,703.30 $ 68,481.11 $ 8,198.44 152 US Treasury 912828XT2 US Treasury Note 2.00% 10/31/2019 1,000,000.00 1,015,667.41 983,520.00 (32,147.41) 5/31/2024 1.64% $ 81,639.34 $ 60,792.37 $ 6,951.59 183 FFCB 3133EJ3Q0 Gov. Agency Debenture 2.88% 8/28/2019 1,500,000.00 1,587,503.75 1,497,915.00 (89,588.75) 12/21/2023 2.12% $ 164,473.96 $ 87,804.46 $ 9,582.08 21 US Treasury 91282CBE0 US Treasury Note 0.13% 9/15/2021 650,000.00 647,615.46 645,853.00 (1,762.46) 1/15/2024 0.28% $ 1,488.12 $ 3,281.18 $ 768.79 46 FHLB 3130APJH9 Gov. Agency Debenture 0.75% 1/17/2023 1,000,000.00 907,010.00 918,640.00 11,630.00 10/28/2026 4.17% $ 5,854.17 $ 14,420.85 $ 13,453.60 1063 FFCB 3133EN5N6 Gov. Agency Debenture 4.00% 2/8/2023 1,700,000.00 1,706,732.00 1,667,904.00 (38,828.00) 1/6/2028 3.91% $ 27,955.56 $ 25,921.64 $ 27,929.66 1498 Freddie Mac 3137EAEX3 Gov. Agency Debenture 0.04% 5/1/2023 750,000.00 689,032.50 692,647.50 3,615.00 156.26 9/23/2025 3.97% $ (156.26) $ 4,222.09 $ 10,766.33 663 American Honda 02665WED9 Corporate Bond 4.70% 5/11/2023 600,000.00 608,856.00 591,162.00 (17,694.00) 1/12/2028 4.34% $ 4,778.33 $ 3,603.61 $ 11,027.05 1504 US Treasury 91282CEF4 US Treasury Note 2.50% 6/9/2023 1,500,000.00 1,416,626.12 1,411,875.00 (4,751.12) 3/31/2027 4.09% $ 11,577.87 $ 3,416.23 $ 24,889.71 1217 US Treasury 91282CGA3 US Treasury Note 4.00% 6/20/2023 2,100,000.00 2,080,558.59 2,071,776.00 (8,782.59) 1,147.54 12/15/2025 4.40% $ (1,147.54) $ 2,515.25 $ 38,483.28 746 Colgate-Palmolive 194162AR4 Corporate Bond 4.60% 7/14/2023 500,000.00 504,655.00 504,035.00 (620.00) 2/1/2028 4.37% $ 3,002.79 $ - $ 8,369.82 1524 FannieMae 3135G06G3 Gov. Agency Debenture 0.50% 7/14/2023 500,000.00 455,157.00 460,755.00 5,598.00 11/7/2025 4.63% $ 784.72 $ - $ 8,311.18 708 FFCB 3133EPQC2 Gov. Agency Debenture 4.63% 7/17/2023 500,000.00 501,957.50 500,050.00 (1,907.50) 7/17/2026 4.48% $ - $ - $ 8,373.54 960 FFCB 3133EPBM6 Gov. Agency Debenture 4.13% 7/14/2023 600,000.00 596,220.00 592,074.00 (4,146.00) 8/23/2027 4.29% $ 2,681.25 $ - $ 9,775.39 1362 PNC Bank 69353RFJ2 Corporate Bond 3.25% 7/25/2023 1,000,000.00 921,490.00 918,580.00 (2,910.00) 270.83 12/23/2027 5.23% $ (270.83) $ - $ 17,631.30 1484 US Treasury 91282CFU0 US Treasury Note 4.13% 7/31/2023 1,300,000.00 1,290,660.60 1,287,819.00 (2,841.60) 10/31/2027 4.31% $ 13,406.25 $ - $ 18,657.65 1431 Toyota Motor Credit 89236TKL8 Corporate Bond 5.45% 8/25/2023 1,600,000.00 1,617,168.00 1,631,232.00 14,064.00 11/10/2027 5.16% $ 18,166.67 $ - $ 22,090.93 1441 US Treasury 912810FE3 US Treasury Note 5.50% 10/3/2023 1,200,000.00 1,238,207.14 1,258,356.00 20,148.86 8,788.04 8/15/2028 4.76% $ (8,788.04) $ - $ 9,241.32 1720 Pepsico Inc 713448DF2 Corporate Bond 2.85% 10/16/2023 1,000,000.00 947,570.00 957,590.00 10,020.00 4,116.67 11/24/2025 5.24% $ (4,116.67) $ - $ 6,577.79 725 FFCB 3133EPUW3 Gov. Agency Debenture 4.75% 10/13/2023 1,000,000.00 994,338.00 1,004,720.00 10,382.00 5,541.67 9/1/2026 4.96% $ (5,541.67) $ - $ 6,504.43 1006 Freddie Mac 3137EAEP0 Gov. Agency Debenture 1.50% 10/13/2023 1,000,000.00 951,540.00 959,900.00 8,360.00 2,541.67 2/12/2025 5.32% $ (2,541.67) $ - $ 6,739.16 440 US Treasury 91282CEW7 US Treasury Note 3.25% 10/16/2023 1,000,000.00 950,039.06 962,070.00 12,030.94 9,538.04 6/30/2027 4.73% $ (9,538.04) $ - $ 5,668.52 1308 US Treasury 91282CEN7 US Treasury Note 2.75% 10/31/2023 1,300,000.00 1,214,336.39 1,231,802.00 17,465.61 4/30/2027 4.82% $ - $ - $ 4,950.81 1247 US Treasury 912828YV6 US Treasury Note 1.50% 11/15/2023 700,000.00 673,667.97 674,982.00 1,314.03 11/30/2024 5.26% $ 430.33 $ - $ 1,468.20 366 US Treasury 91282CAB7 US Treasury Note 0.25% 11/15/2023 675,000.00 623,900.39 625,853.25 1,952.86 490.66 7/31/2025 4.92% $ (490.66) $ - $ 1,297.71 609 US Treasury 91282CGU9 US Treasury Note 3.88% 11/30/2023 1,000,000.00 983,515.62 985,390.00 1,874.38 6,458.33 3/31/2025 5.17% $ (6,458.33) $ - $ - 487 Subtotal $ 50,061,000.00 $ 49,325,299.35 $ 48,672,346.91 $ (652,952.44) $ 39,049.71 $ 1,507,303.37 $ 1,159,625.58 $ 501,280.04 BNY MM Money Market 93,429.22 93,429.22 0.00 0.00% 1
LAIF State Investment Pool 11,278,106.16 11,123,683.39 (154,422.77) 3.84% 212,100.86 1 $60,696,834.73 $59,889,459.52 ($807,375.21) $39,049.71 $ 1,507,303.37 $ 1,159,625.58 $ 713,380.90 Matured Assets
PNC Financial 69349LAM0 Corporate Bond 3.80% 2/7/2022 1,000,000.00 1,033,470.00 7/25/2023 1.49% $ 55,733.33 $ 20,987.56 $ 1,032.85 US Treasury 91282CCN9 US Treasury Note 0.13% 1/13/2022 1,200,000.00 1,188,375.00 7/31/2023 0.75% $ 2,323.37 $ 13,176.45 $ 766.36 Toyota Motor Credit 89236THA6_1 Corporate Bond 1.35% 4/12/2021 500,000.00 510,580.00 8/25/2023 0.45% $ 15,993.75 $ 5,065.91 $ 350.67 Toyota Motor Credit 89236THA6 Corporate Bond 1.35% 1/11/2022 1,100,000.00 1,107,315.00 8/25/2023 0.94% $ 24,090.00 $ 15,144.57 $ 1,585.23 US Treasury 91282CDA6 US Treasury Note 0.25% 1/31/2022 1,100,000.00 1,085,222.44 9/30/2023 1.07% $ 4,570.74 $ 16,417.94 $ 2,932.91 American Honda 02665WCQ2 Corporate Bond 3.63% 9/14/2021 950,000.00 1,012,871.00 10/10/2023 0.41% $ 71,362.15 $ 7,316.05 $ 1,141.03 FFCB 3133EMCQ3 Gov. Agency Debenture 0.28% 10/16/2020 2,000,000.00 1,998,000.00 10/13/2023 0.31% $ 16,753.33 $ 16,950.71 $ 1,803.27 US Treasury 91282CAP6 US Treasury Note 0.13% 6/30/2021 1,000,000.00 995,390.63 10/15/2023 0.33% $ 2,865.44 $ 6,520.12 $ 955.69 US Treasury 91282CDD0 US Treasury Note 0.38% 1/13/2022 1,100,000.00 1,090,675.78 10/31/2023 0.85% $ 7,406.77 $ 13,599.56 $ 3,138.36 US Treasury 91282CAW1 US Treasury Note 0.25% 7/15/2021 1,200,000.00 1,199,437.50 11/15/2023 0.27% $ 7,002.72 $ 6,348.21 $ 1,225.25 US Treasury 912828U57 US Treasury Note 2.13% 7/31/2019 1,000,000.00 1,011,875.00 11/30/2023 1.84% $ 92,083.33 $ 72,526.17 $ 7,759.79 Total Investments "Matured" $ 13,706.37
Total Interest FY 23_24 Matured and Current $ 727,087.27 Maturity Profile Amount Percent
0-1 year $ 30,106,170.62 50%
1-2 years $8,286,729.93 14%
2-3 years $7,610,619.27 13%
3-5 years $ 14,693,314.91 24%
$60,696,834.73
Town of Los Gatos
Investment Schedule
November 30, 2023

Date Cusip/Id Description Transaction Type
Settlement
Date Par Coupon
Maturity
Date Price Principal Interest
Transaction
Total
11/2/2023 Cash-USD Cash-USD S-T INV FUND INCOME 11/2/2023 1,471.57 0.000% 100.00 - - 1,471.57 11/7/2023 3135G06G3 FANNIE MAE 0.5% 07NOV2025 BOND INTEREST 11/7/2023 500,000 0.500% 11/7/2025 - - 1,250.00 1,250.00 11/10/2023 89236TKL8

TOYOTA MOTOR CREDIT CORP

5.45% 10NOV2027 BOND INTEREST 11/10/2023 1,600,000 5.450% 11/10/2027 - - 43,600.00 43,600.00 11/15/2023 912828YV6 USA TREASURY 1.5% 30NOV2024 PURCHASE 11/15/2023 700,000 1.500% 11/30/2024 96.24 673,667.97 4,819.67 678,487.64 11/15/2023 91282CAB7 USA TREASURY 0.25% 31JUL2025 PURCHASE 11/15/2023 675,000 0.250% 7/31/2025 92.43 623,900.39 490.66 624,391.05 11/15/2023 91282CAW1 USA TREASURY 0.25% 15NOV2023 BOND INTEREST 11/15/2023 1,200,000 0.250% 11/15/2023 - - 1,500.00 1,500.00 11/15/2023 459200JY8 IBM CORP 3% 15MAY2024 BOND INTEREST 11/15/2023 1,000,000 3.000% 5/15/2024 - - 15,000.00 15,000.00 11/15/2023 91282CAW1 USA TREASURY 0.25% 15NOV2023 REDEMPTION 11/15/2023 1,200,000 0.250% 11/15/2023 100.00 1,200,000.00 - 1,200,000.00 11/17/2023 14913Q2V0
CATERPILLAR FINL SERVICE 2.85%
17MAY2024 BOND INTEREST 11/17/2023 1,000,000 2.850% 5/17/2024 - - 14,250.00 14,250.00 11/30/2023 91282CGU9 USA TREASURY 3.875% 31MAR2025 PURCHASE 11/30/2023 1,000,000 3.875% 3/31/2025 98.35 983,515.63 6,458.33 989,973.96 11/30/2023 912828YV6 USA TREASURY 1.5% 30NOV2024 BOND INTEREST 11/30/2023 700,000 1.500% 11/30/2024 - - 5,250.00 5,250.00 11/30/2023 912828U57 USA TREASURY 2.125% 30NOV2023 BOND INTEREST 11/30/2023 1,000,000 2.125% 11/30/2023 - - 10,625.00 10,625.00 11/30/2023 912828XT2 USA TREASURY 2% 31MAY2024 BOND INTEREST 11/30/2023 1,000,000 2.000% 5/31/2024 - - 10,000.00 10,000.00 11/30/2023 912828U57 USA TREASURY 2.125% 30NOV2023 REDEMPTION 11/30/2023 1,000,000 2.125% 11/30/2023 100.00 1,000,000.00 - 1,000,000.00 Town of Los Gatos
Investment Transaction Detail
November 30, 2023

Security Description Maturity Date Par/Shares Moody Rating S&P Rating Insight ESG Rating Environment Social Governance JPMORGAN CHASE & CO 3.875% 01FEB2024 2/1/2024 $ 1,400,000 A1 A- 3 1 3 4 US BANCORP 3.375% 05FEB2024 (CALLABLE 05JAN24) 2/5/2024 $ 1,000,000 A3 A 3 3 4 4 IBM CORP 3.0% 15MAY2024 5/15/2024 $ 1,000,000 A3 A- 2 1 2 3 CATERPILLAR FIN SERVICES 2.85% 17MAY24 5/17/2024 $ 1,000,000 A2 A 4 4 3 4 AMERICAN HONDA FINANCE 2.4% 27JUN2024 6/27/2024 $ 1,000,000 A3 A- 2 1 3 3 HONEYWELL INTERNATIONAL 2.3% 15AUG2024 (CALLABLE 15JUL24) 8/15/2024 $ 1,000,000 A2 A 4 3 4 3 PEPSICO INC 2.85% 24FEB2026 (CALLABLE 24NOV25) 2/24/2026 $ 1,000,000 A1 A+ 2 2 2 2 HOME DEPOT INC. 3% 01APR2026 (CALLABLE 01JAN2026) 4/1/2026 $ 1,000,000 A2 A 2 2 2 3 JPMORGAN CHASE & CO 3.2 15JUN2026 (CALLABLE 15MAR26) 6/15/2026 $ 500,000 A1 A- 3 1 3 4 APPLE INC. 2.9% 12SEP2027 (CALLABLE 12JUN27) 9/12/2027 $ 1,300,000 Aaa AA+ 4 1 4 5 TOYOTA MOTOR CREDIT CORP 5.45% 10NOV2027 11/10/2027 $ 1,600,000 A1 A+ 3 2 3 4 AMERICAN HONDA FINANCE 4.7% 12JAN2028 1/12/2028 $ 600,000 A3 A- 2 1 3 3 PNC BANK NA 3.25% 22JAN2028 (CALLABLE 01 FEB28) 1/22/2028 $ 1,000,000 A2 A 3 2 3 3 COLGATE-PALMOLIVE CO 4.6% 01MAR2028 (CALLABLE 01FEB28) 3/1/2028 $ 500,000 Aa3 AA- 3 3 3 3 Total/Average $ 13,900,000 2.9 1.9 3.0 3.4
*ESG ratings are from 1 to 5, with 1 as the highest rating and 5 as the lowest. All ratings are weighted by industry rankings, based on the importance of the category within the individual industry.

Town of Los Gatos
Insight ESG Ratings as of November 30, 2023

Fund Schedule
Fund
Number Fund Description
Current
Revenue
Current
Expenditure
Transfer
In Transfer Out

GENERAL FUND
Non-Spendable:

Loans Receivable 159,000 - - - - - 159,000
Restricted Fund Balances:

Pension 1,400,163 - - - - - 1,400,163
Land Held for Resale 44,338 - - - - - 44,338
Committed Fund Balances:

Budget Stabilization 6,129,774 - - - - - 6,129,774
Catastrophic 6,129,775 - - - - - 6,129,775
Pension/OPEB 300,000 - - - - - 300,000
Measure G District Sales Tax 590,581 - - - - - 590,581
Assigned Fund Balances:

Open Space 410,000 - - - - - 410,000
Sustainability 140,553 - - - - - 140,553
Capital/Special Projects 10,359,577 - - - - - 10,359,577 Carryover Encumbrances 37,698 - - - - - 37,698
Compensated Absences 1,580,623 - - - - - 1,580,623
ERAF Risk Reserve 689,608 - - - - - 689,608
Council Priorities - Economic Recovery 1,556,614 - - - - - 1,556,614 Unassigned Fund Balances:
111 Other Unassigned Fund Balance Reserve (Pre YE distribution) - (3,910,766) 4,282,167 (3,889,899) - - (3,518,498) General Fund Total 29,528,304 (3,910,766) 4,282,167 (3,889,899) - - 26,009,806.00 * Interfund transfers and ARPA funding allocation to be performed as part of the fiscal year end closing entries.

Nov 2023
Prior Year
Carryforward
7/1/2023
Increase/
(Decrease)
July - Oct
Estimated Fund
Balance
11/30/2023*

Fund Schedule
Fund
Number Fund Description
Current
Revenue
Current
Expenditure Transfer In Transfer Out

SPECIAL REVENUE
211/212 CDBG 166,653 - - - - - 166,653
222 Urban Runoff (NPDES) 629,843 24,035 29,996 (18,452) - - 665,422 231-236 Landscape & Lighting Districts 176,964 (8,779) - (4,995) - - 163,190 241 ARPA - - - - - - -
251 Los Gatos Theatre 74,991 6,182 2,450 (10,851) - - 72,772 711-716 Library Trusts 530,173 69,738 8,750 (2,133) - - 606,528 Special Revenue Total 1,578,624 91,176 41,196 (36,431) - - 1,674,565

CAPITAL PROJECTS
411 GFAR - General Fund Appropriated Reserve 21,725,837 (1,140,211) 449,932 (202,777) - - 20,832,781 421 Grant Funded Projects (406,889) (73,544) 62,884 (87,528) - - (505,077) 461-463 Storm Basin Projects 3,218,331 71,949 - - - - 3,290,280 471 Traffic Mitigation Projects 431,079 - - - - - 431,079 472 Utility Undergrounding Projects 3,438,996 10,658 - - - - 3,449,654 481 Gas Tax Projects 1,671,245 (754,276) 76,494 (237,315) - - 756,148 Capital Projects Total 30,078,599 (1,885,424) 589,310 (527,620) - - 28,254,865

INTERNAL SERVICE FUNDS
611 Town General Liability 212,022 (1,014,660) 514,450 - - - (288,188) 612 Workers Compensation 514,813 (694,730) 418,461 (4,624) - - 233,920 621 Information Technology 2,474,618 (273,484) 14,917 (52,927) - - 2,163,124 631 Vehicle & Equipment Replacement 2,413,719 232,110 - - - - 2,645,829 633 Facility Maintenance 927,699 (31,627) 6,933 (112,681) - - 790,324 Internal Service Funds Total 6,542,871 (1,782,391) 954,761 (170,232) - - 5,545,009 Trust/Agency
942 RDA Successor Agency (6,187,789) (1,673,960) - (175) - - (7,861,924) Trust/Agency Fund Total (6,187,789) (1,673,960) - (175) - - (7,861,924) Total Town 61,540,609 5,867,434 (4,624,357) - - 53,622,321 * Interfund transfers and ARPA funding allocation to be performed as part of the fiscal year end closing entries.

Deposit Accounts of Interest:
111-23541 General Plan Update deposit account balance $1,031,991.79 111-23521 BMP Housing deposit account balance $4,021,280.60 Prior Year
Carryforward
7/1/2023
Increase/
(Decrease)
July - Oct
Nov 2023
Estimated Fund
Balance
11/30/2023*

PREPARED BY: Katy Nomura
Assistant Town Manager
Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 9
DATE: January 10, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Negotiate and Execute a Lease Agreement with Candler for LTFJ S Corp for 41 North Santa Cruz Avenue, in Substantially the Form Presented for a 23-Month Initial Term with One Option to Extend for an Additional 24 Months
RECOMMENDATION:

Authorize the Town Manager to negotiate and execute a lease agreement with Candler for LTFJ S Corp for 41 North Santa Cruz Avenue, in substantially the form presented for a 23-Month initial term with one option to extend for an additional 24 months (Attachment 1).

BACKGROUND:

On December 30, 2021, the Town completed the transfer of the Los Gatos Theatre property to the Town’s ownership. The property acquisition included assuming landlord oversight and the two respective leases for the existing retail properties at 41 and 45 North Santa Cruz Avenue.

The lease at 41 North Santa Cruz Avenue expired December 31, 2022 and has been month to month since. Lisa T Fine Jewelry has been the business operating at this lease space since the Town acquired the property. This business was recently sold to Jennifer Candler, the new owner of Candler for LTFJ S Corp, dba Lisa T Fine Jewelry, and as such staff is bringing forward a new lease agreement (Attachment 1). The property consists of approximately two hundred and forty-five (245) square feet of space and is currently utilized for the sale of jewelry.

DISCUSSION:

Provided on the following page are the salient elements of the draft Lease Agreement (Agreement) staff is recommending.

PAGE 2 OF 2
SUBJECT: Draft Lease Agreement 41 North Santa Cruz
DATE: January 10, 2024
DISCUSSION (continued):

Agreement Elements Comments
Term 23-month initial agreement ending on December 31,
2025, with one 24-month option.

Base Rent Schedule
(@ $7.21 per square foot per month
with a 3% annual escalator)
Year Monthly Base
Rent
Annual Base
Rent
Year 1
(Months 1-11)
$1,766 $19,426 (11
months)
Year 2
(Months 12-23)
$1,819 $21,828
The proposed monthly rent per square foot is the same as the existing rental rate established for 45 N Santa Cruz Avenue. The only difference is that the timing of the annual 3% escalator occurs in January instead of July for 41 N Santa Cruz Avenue. This is due to the fact that the 45 N Santa Cruz Avenue lease is on a July renewal cycle while the 41 N Santa Cruz Avenue lease would be on a January renewal cycle, should renewal be considered.

CONCLUSION:

Lisa T Fine Jewelry is an established business which complements the reactivation of the Los Gatos Theatre well. Staff recommends leasing 41 North Santa Cruz Avenue to Candler for LTFJ S Corp dba Lisa T Fine Jewelry to allow Lisa T Fine Jewelry to continue to operate at this location.

COORDINATION:

This staff report was coordinated with the Town Manager, Town Attorney, and Finance Director.

FISCAL IMPACT:

Income derived from this agreement will be deposited to a Special Revenue Fund and would be utilized for the ongoing capital needs of the Theatre.

ENVIRONMENTAL ASSESSMENT:

In accordance with CEQA Guidelines Section 15301, this lease is categorically exempt from CEQA because it is a lease of an existing structure and will involve negligible expansion of an existing structure.

Attachment:

1. Draft Lease Agreement

1 LEASE AGREEMENT BETWEEN TOWN OF LOS GATOS AND CANDLER FOR LTFJ S CORP Summary of Key Terms
Landlord: Town of Los Gatos
Tenant: CANDLER FOR LTFJ S Corp, dba “Lisa T” Fine Jewelry Premises: Approximately two hundred and forty-five (245) square feet of space within the Los Gatos Theatre Building (as more particularly defined in the Lease) comprising of 41 N. Santa Cruz Avenue in Los Gatos, California 95030 in the Town of Los Gatos, Santa Clara County, California ("Property"). Consists of the area marked “Existing Retail Space” in Exhibit A.

Lease Term: 23 months
Lease Commencement Date: February 1, 2024
Rent Commencement Date: Rent shall begin on the date of lease commencement. Rent is established according to the schedule below, starting at $7.21 per square foot, rounding to the nearest dollar for monthly rent, and increasing by 3% annually in January.

Base Rent Schedule:

Year Monthly Base Rent Annual Base Rent
Year 1
(Months 1-11
February – December 2024)
$1,766 $19,426 (11 months)
Year 2
(Months 12-23
January – December 2025)
$1,819 $21,828
Option to Extend: At the discretion of the Landlord, one (1) twenty-four (24) month option to extend at a 3% increase of prior base year, with at least 90-day written notice from the tenant asking for the extension.

Permitted Use: Retail
Landlord’s Address: The Town of Los Gatos – 110 E. Main Street, Los Gatos, California 95030, Attention: Finance Department
Landlord’s Telephone: 408-354-6836
Property Manager: Town of Los Gatos Attn: Katy Nomura Assistant Town Manager Tenant Address:

Redacted
ATTACHMENT 1

2 Tenant Telephone:

Lease Exhibits:

Exhibit A: Premises
Exhibit B: Floor Plan
Town of Los Gatos ("Landlord") and CANDLER FOR LTFJ S Corp, dba “Lisa T” Fine Jewelry ("Tenant") agree as follows:

1. PROPERTY: Landlord rents to Tenant and Tenant rents from Landlord, an approximately two hundred and forty-five (245) square feet of space within the Los Gatos Theatre Building comprising 41 N. Santa Cruz Avenue in Los Gatos, California 95030 in the Town of Los Gatos, Santa Clara County, California ("Property"). Consists of the area marked “Existing Retail Space” in Exhibit A.

2. BASE RENT: Beginning on February 1, 2024, Tenant agrees to pay a monthly Base Rent (“Base Rent”) at the rate of $1,766 per month, with a 3 percent annual increase effective January 1 of each year. The base rent schedule shall be as follows:

Months Monthly Base Rent Annual Base
Rent
1-11 $1,766 $19,426 (11 months)
12-23 $1,819 $21,828

3. RENT:

A. Definition: "Rent" shall mean all monetary obligations of Tenant to Landlord under the terms of this Lease, except security deposit.

B. Payment: Rent shall be paid at Los Gatos Town Hall, Finance Department, or at any other location specified by Landlord in writing to Tenant.

C. Timing: Rent is payable in advance on the 1st day of each calendar month and is delinquent 10 days after.

4. TENANT OPERATING EXPENSES: Landlord shall provide, during normal business hours, to the extent applicable and not separately metered to the Premises, water, gas, power and electric current to the Premises. Tenant shall pay for all telephone, broadband, cable, security alarm services and other utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Tenant, together with any taxes thereon. Under no circumstances shall Landlord be liable in damages or otherwise for any failure or interruption of any utility service being furnished to the Premises. No such failure or interruption shall entitle Tenant to terminate this Lease.

Redacted

3 Tenant shall be responsible and directly pay for all other charges, including, but not limited to, Town permit fees, fees for any regulatory licenses or inspections, or other governmental charges such as unsecured business property tax, possessory interest tax, or ABC permits.

5. TAXES, ASSESSMENTS, FEES, AND CHARGES: The property interests created by this Lease may be subject to property taxation and Tenant, in whom the possessory interest is vested, will be responsible for the timely payment of any property taxes levied on such possessory interest. Tenant agrees to pay before delinquency all lawful taxes, assessments, fees or charges which at any time may be levied by the state, county, city or any tax or assessment levying body against the transfer of the leasehold interest hereunder upon recordation or otherwise, or upon any activity carried on under this Lease, any interest in this Lease or any possessory right which Tenant may have in or to the Premises by reason of its use or occupancy thereof or otherwise.

Tenant specifically acknowledges that, in accordance with Revenue and Taxation Code Section 107.6, the Premises may be subject to possessory interest tax and that Tenant is responsible for any possessory interest tax levied on Tenant’s leasehold interest in the Premises.

6. TERM: Lease terminates on December 31, 2025 at 6:00 p.m.

7. EXTENSION OPTION: Provided Tenant has not been late in payment of rent more than 2 times in a calendar year, Tenant shall have one (1) option to extend the Term of the Lease beyond the expiration date for an additional period of twenty-four (24) months by giving Landlord and the Town’s Property Manager a written notice of such election no later than 90 days prior to the expiration of the Lease. The option to exercise the extension notice shall be given by certified or registered mail (return receipt requested) or by Federal Express, United Parcel Service or other overnight courier service which obtains personal signatures upon delivery. If Landlord does not receive the notification to extend the term within the time period provided above, all rights under the extension option shall terminate. Tenant shall have no right to exercise the extension option notwithstanding any provision to the contrary while Tenant is in default of the Lease beyond any applicable cure period.

A. Monthly Base Rent During Extended Term: Monthly Base Rent for the extended term shall include a 3% increase of prior base year with an annual increase of three percent 3% per year.

8. SECURITY DEPOSIT:

A. Tenant agrees to pay Landlord $4,000 as a security deposit.

B. All or any portion of the security deposit may be used, as reasonably necessary, to:
(i) cure Tenant's default in payment of Rent, late charges, non-sufficient funds ("NSF") fees, or other sums due; (ii) repair damage, excluding ordinary wear and tear, caused by Tenant or by a guest or licensee of Tenant; (iii) broom clean the Premises, if necessary, upon termination of

4 tenancy; and (iv) cover any other unfulfilled obligation of Tenant. SECURITY

DEPOSIT SHALL NOT BE USED BY TENANT IN LIEU OF PAYMENT OF LAST MONTH'S RENT. If all or any portion of the security deposit is used during tenancy, Tenant agrees to reinstate the total security deposit within 5 days after written notice is delivered to Tenant. Within 30 days after Landlord receives possession of the Premises, Landlord shall:
(i) furnish Tenant an itemized statement indicating the amount of any security deposit received and the basis for its disposition, and (ii) return any remaining portion of security deposit to Tenant.

C. No interest will be paid on security deposit.

9. PARKING: There shall be no assigned parking spaces associated with this Lease.

10. LATE CHARGE; INTEREST; NSF CHECKS: Tenant acknowledges that either late payment of Rent or issuance of a NSF check may cause Landlord to incur costs and expenses, the exact amount of which are extremely difficult and impractical to determine. These costs may include, but are not limited to, processing, enforcement and accounting expenses, and late charges imposed on Landlord. Therefore, if Town does not receive any installment of rent due from Tenant within ten (10) days after the date such rent is due, Tenant shall pay to Town an additional sum of five percent (5%) of the overdue rent as a late charge. The parties agree this late charge represents a fair and reasonable estimate of the costs Town will incur by reason of late payment by Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's default with respect to the overdue amount, nor prevent Town from extending any of the other rights and remedies available to Town.

Landlord's right to collect a late charge or NSF fee shall not be deemed an extension of the date Rent is due under section 2.

11. CONDITION OF PREMISES: Landlord warrants that the Premises will be in the following condition on delivery:

Tenant acknowledges that Landlord has made no representation or warranty with respect to the Premises, or the suitability of the Premises for the conduct of the Tenant's business, nor has Landlord agreed to undertake any modification, alteration or improvement to the Premises except as provided in this Lease. The taking of possession of the Premises by Tenant shall conclusively establish that the Premises was at such time in satisfactory condition. Tenant shall be solely responsible for any and all costs and/or expenses associated with improvements to the Premises relative to this Lease.

Tenant has examined the Premises and acknowledges that Premises is clean and in operative condition.

Tenant is responsible for the immediate notification to Landlord of maintenance, loss, damage or any other issues related to the Premises as indicated:

Maintenance Issues, - Public Works, 408-399-5770
Claims - First, Tenant insurer as stated in Lease

5 Secondly, the Town Attorney’s Department, 408-
354-6818
All other questions – Town Manager’s Office, 408-
354-6836

12. ZONING AND LAND USE: Tenant accepts the Premises subject to all local, state and federal laws, regulations and ordinances ("Laws"). Landlord makes no representation or warranty that Premises are now or in the future will be suitable for Tenant's use. Tenant has made its own investigation regarding all applicable Laws.

13. USE: The Premises are for the sole use as specified:

A. Use of the Premises: Retail
B. Exclusive Use: Tenant shall have the right to use the Premises for the sale of soft goods retail and jewelry. Tenant shall have exclusive use of the Premises for the uses allowed under this Article, except that Landlord shall be allowed entry on the Premises to conduct necessary maintenance and repairs within its responsibility and as otherwise allowed under this Lease. No other use is permitted without Landlord's prior written consent. Tenant will comply with all Laws affecting its use of the Premises.

14. RULES/REGULATIONS: Tenant agrees to comply with all rules and regulations of Landlord that are at any time posted on the Premises or delivered to Tenant.

Tenant shall not, and shall ensure that guests and licensees of Tenant do not, disturb, annoy, endanger, or interfere with other tenants of the building or neighbors, or use the Premises for any unlawful purposes, including, but not limited to, using, manufacturing, selling, storing, or transporting illicit drugs or other contraband, or violate any law or ordinance, or committing a waste or nuisance on or about the Premises. Tenant shall have access to operate the use upon the Premises twentyfour (24) hours a day, seven (7) days a week.

15. MAINTENANCE:

A. Tenant shall professionally maintain the interior of the Premises. If Tenant fails to maintain the interior of the Premises, Landlord may contract for or perform such maintenance, and charge Tenant for Landlord's cost. Tenant shall be responsible for all expenses for maintenance, repair, replacement and all other associated expenses for all interior tenant improvements in the Premises, including but not limited to floors, walls, and fixtures.

B. Landlord shall maintain the roof, foundation, exterior walls, common areas and exterior of the Premises and keep glass, windows and doors in operable and safe condition. Landlord will warrant the good operating condition of the HVAC and electrical systems serving the premises for the lease term.

16. LOSS OF KEY: Loss of any key will result in re-keying of lock with all costs to re-key paid for by Tenant.

6 17. TENANT IMPROVEMENTS: Tenant shall be responsible for all improvements essential to their business operation.

18. ALTERATIONS: Tenant shall not make any alterations in or about the Premises, including installation of trade fixtures and signs, without Landlord's prior written consent, which shall not be unreasonably withheld. Any alterations to the Premises shall be done according to law and with required permits. Tenant shall give Landlord advance notice of any planned alteration, so that Landlord, at its option, may post a Notice of Non-Responsibility to prevent potential liens against Landlord's interest in the Premises. Landlord may also require Tenant to provide Landlord with lien releases from any contractor performing work on the Premises. T h e Premises have been offered and accepted in an “as is” condition. Any Tenant alterations will be made at Tenant’s expense.

19. GOVERNMENT IMPOSED ALTERATIONS: Any alterations required by law as a result of Tenant's use shall be Tenant's responsibility. Landlord shall be responsible for any other alterations required by Law.

20. PREVAILING WAGES: Tenant understands that any improvements to the Premises paid for in whole or in part out of public funds will require the payment of prevailing wages in accordance with California Labor Code Sections 1720 et seq. and that, in the event that improvements are paid for in whole or in part out of public funds, Tenant will be responsible for compliance with state prevailing wage laws.

21. ENTRY: Tenant shall make Premises available to Landlord or Landlord's agent for the purpose of entering to make inspections, necessary or agreed repairs, alterations, or improvements, or to supply necessary or agreed services, or to show Premises to prospective or actual purchasers, tenants, mortgagees, lenders, appraisers, or contractors. Landlord and Tenant agree that 24 hours’ notice (oral or written) shall be reasonable and sufficient notice. In an emergency, Landlord or Landlord's representative may enter Premises at any time without prior notice.

22. SIGNS: Tenant authorizes Landlord to place a FOR LEASE sign on the Premises within the 30-day period preceding the termination of the Lease. Tenant may install signs in conformance with the Town’s sign ordinance.

23. SUBLETTING/ASSIGNMENT: Tenant shall not sublet or encumber all or any part of Premises, or assign or transfer this Lease or any interest in it, without the prior written consent of Landlord, which shall not be unreasonably withheld. Unless such consent is obtained, any subletting, assignment, transfer, or encumbrance of the Premises, Lease, or tenancy, by voluntary act of Tenant, operation of law, or otherwise, shall be null and void, and, at the option of Landlord, terminate this Lease. Any proposed sublessee, assignee, or transferee shall submit to Landlord an application and credit information for Landlord's approval, and, if approved, sign a separate written Lease with Landlord and Tenant. Landlord's consent to any one sublease, assignment, or transfer, shall not be construed as consent to any subsequent sublease, assignment, or transfer, and does not release Tenant of Tenant's obligation under this Lease.

7 24. POSSESSION: If Landlord is unable to deliver possession of Premises on January 1, 2024, the rent commencement date shall be extended to the date on which possession is made available to Tenant. However, the expiration date shall remain the same as specified in section 5. If Landlord is unable to deliver possession within 90 calendar days after January 1, 2024, Tenant may terminate this Lease by giving written notice to Landlord, and shall be refunded all Rent and security deposit paid.

25. TENANT'S OBLIGATIONS UPON VACATING PREMISES: Upon termination of this Lease, Tenant shall: (i) give Landlord all copies of all keys or opening devices to Premises, including restroom and any common areas; (ii) vacate Premises and surrender it to Landlord empty of all persons and personal property; (iv) deliver Premises to Landlord in the same condition as referenced in section 11; (v) clean Premises; and (vi) give written notice to Landlord of Tenant's forwarding address. All improvements installed by Tenant, with or without Landlord's consent, become the property of Landlord upon termination. Landlord may nevertheless require Tenant to remove any such improvement that did not exist at the time possession was made available to Tenant.

26. DEFAULT:

A. Event of Default: The occurrence of any of the following shall constitute an Event of Default of this Lease by Tenant:
(i) The failure of Tenant to pay or cause to be paid within 10 days after receipt of written notice from Landlord, any Rent or charges required by this Lease to be paid by Tenant;
(ii) The abandonment of the Premises by Tenant;
(iii) The failure of Tenant to do or cause to be done any act, other than payment of rent, monies, or charges, required by this Lease within 30 days after written notice thereof to Tenant or such longer period as may be reasonably required to complete such cure so long as such cure is promptly commenced within such 30-day period and thereafter diligently and continuously prosecuted to completion;
(iv) Tenant causing, permitting, or suffering, without the prior written consent of Landlord, any act when this Lease requires Landlord’s prior written consent or prohibits such act, and failing to cure such act within 10 days after written notice thereof to Tenant; or
(v) Any act of bankruptcy caused, suffered, or permitted by Tenant that is not discharged within 60 days. For the purposes of this Lease, “act of bankruptcy” shall include any of the following: i) Any general assignment or general arrangement for the benefit of creditors; ii) The filing of any petition by or against Tenant to have Tenant adjudged a bankrupt; iii) The appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets;

8 iv) The attachment, execution, or other judicial seizure of substantially all of Tenant’s assets;
(vi) The failure of Tenant to maintain insurance coverage as defined in section 31 of this Lease.

B. In the event of a Tenant default in the payment of any installment of Rent, which default continues for ten (10) days after notice to Tenant and demand in writing by Landlord to correct such default, or, in the event of any other default which continues for thirty (30) days after notice from Landlord to Tenant, or if Tenant abandons the Premises prior to the expiration of the Term provided for in this Lease, the Landlord may at his option pursue the Default Remedies contained in this Lease.

C. Default Remedies: If an Event of Default shall occur and continue, then in addition to any other remedies available to Landlord at law or in equity, Landlord shall have the immediate option to terminate this Lease and bring suit against Tenant and recover as an award in such suit the following:
(i) the worth at the time of award of the unpaid Rent and all other sums due hereunder which had been earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid Rent and all other sums due hereunder which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid Rent and all other sums due hereunder for the balance of the term after termination exceeds the amount of such rental loss that Tenant proves could be reasonably avoided;
(iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease; and
(v) such amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law.

27. DAMAGE TO PREMISES: If, by no fault of Tenant, Premises are totally or partially damaged or destroyed by fire, earthquake, accident or other casualty, Landlord shall have the right to restore the Premises by repair or rebuilding. If Landlord elects to repair or rebuild, and is able to complete such restoration within 90 days from the date of damage, subject to the terms of this section, this Lease shall remain in full force and effect. If Landlord is unable to restore the Premises within this time, or if Landlord elects not to restore, then either Landlord or Tenant may terminate this Lease by giving the other written notice. Rent shall be abated as of the date of damage. The abated amount shall be the current monthly Rent prorated on a 30-day basis. If this Lease is not terminated, and the damage is not repaired, then Rent shall be reduced based on the extent to which the damage interferes with Tenant's reasonable use of Premises. If damage occurs as a result of an act of Tenant or Tenant's guests, only Landlord shall have the right of termination, and no reduction in Rent shall be made.

9 28. HAZARDOUS MATERIALS: Tenant shall not use, store, generate, release or dispose of any hazardous material on the Premises or the property of which the Premises are part. However, Tenant is permitted to make use of such materials that are required to be used in the normal course of Tenant's business provided that Tenant complies with all applicable Laws related to the hazardous materials.

Tenant is responsible for the cost of removal and remediation, or any clean-up of any contamination caused by Tenant.

29. CONDEMNATION: If all or part of the Premises is condemned for public use, either party may terminate this Lease as of the date possession is given to the condemner. All condemnation proceeds, exclusive of those allocated by the condemner to Tenant's relocation costs and trade fixtures, belong to Landlord.

30. INDEMNIFICATION: Tenant agrees to indemnify, and hold harmless Landlord, and its officers, officials, agents, and employees, from any and all liabilities, claims, demands, actions, losses, damages, and costs, including all costs of defense thereof and any award of attorney’s fees, caused by, arising out of, or in any way related to Tenant’s use or occupancy of the leased premises. Tenant agrees to defend Landlord against any such claims.

31. INSURANCE: Tenant shall procure and maintain for the duration of the Lease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Tenant’s operation and use of the Premises, as described in this section. The cost of such insurance shall be borne by the Tenant.

A. Minimum Scope Of Insurance:
• Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001).
• Workers’ compensation insurance as required by the State of California and Employer’s Liability insurance (for tenants with employees).
• Property insurance against all risks of loss to any tenant improvements or betterments.

B. Minimum Limits Of Insurance: Tenant shall maintain limits no less than:
• General liability: $2,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. • Employer’s liability: $1,000,000 per accident for bodily injury or disease (for tenants with employees).
• Property insurance: Full replacement cost with no coinsurance penalty provision.

10 C. Deductibles And Self-Insured Retentions: Any deductibles or selfinsured retentions must be declared to and approved by the Landlord. At the option of the Landlord, either: The insurer shall reduce or eliminate such deductibles or self- insured retentions as respects the Landlord, its officers, officials, agents, and employees; or the Tenant shall provide a financial guarantee satisfactory to the Landlord guaranteeing payment of losses and related investigations, claim administration, and defense expenses.

D. Other Insurance Provisions: The general liability policy is to contain, or be endorsed to contain, the following provisions:
• The Landlord, its officers, officials, agents, and employees are to be covered as insureds with respect to liability arising out of ownership, maintenance or use of that part of the premises leased to the Tenant. • The Tenant’s insurance coverage shall be primary insurance as respects the Landlord, its officers, officials, agents, and employees. Any insurance or self- insurance maintained by the Landlord, its officers, officials, agents and employees shall be excess of the Tenant’s insurance and shall not contribute with it.
• Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled, except after 30 days’ prior written notice by certified mail, return receipt requested, has been given to the Landlord.

E. Acceptability Of Insurer: Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII.

F. Verification Of Coverage: Tenant shall furnish Landlord with the original certificates and amendatory endorsements effecting coverage required by this clause. The endorsements should be on forms provided by the Landlord or on other than the Landlord’s forms, provided those endorsements or policies conform to the requirements. All certificates and endorsements are to be received and approved by the Landlord before taking possession of the Premises. The Landlord reserves the right to require complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by these specifications at any time.

32. TENANT REPRESENTATIONS; CREDIT: Tenant warrants that all information provided to Landlord is accurate. Tenant authorizes Landlord to obtain Tenant's credit report at time of application and periodically during tenancy in connection with approval, modification, or enforcement of this Lease. Landlord may cancel this Lease: (i) before occupancy begins, upon disapproval of the credit report(s); or (ii) at any time, upon discovering that information in Tenant's application is false. A negative credit report reflecting on Tenant's record may be submitted to a credit reporting agency, if Tenant fails to pay Rent or comply with any other obligation under this Lease.

33. DISPUTE RESOLUTION:

11 D. Mediation: Tenant and Landlord agree to mediate any dispute or claim arising between them out of this Lease, or any resulting transaction, before resorting to court action, subject to subsection (1) below. Mediation fees, if any, shall be divided equally among the parties involved. If for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.
(1) Exclusions From Mediation: The following matters are excluded from Mediation hereunder:
(i) a judicial or non-judicial foreclosure or other action or proceeding to enforce a deed of trust, mortgage, or Installment land sale contract as defined in Civil Code §2985; (ii) an unlawful detainer action; (iii) the filing or enforcement of a mechanic's lien; (iv) any matter that is within the jurisdiction of a probate, small claims, or bankruptcy court; and (v) an action for bodily injury or wrongful death, or for latent or patent defects to which Code of Civil Procedure §337.1 or §337.15 applies. The filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other provisional remedies, shall not constitute a violation of the mediation provision.

34. NOTICE: Notices may be served by certified mail, email, or courier at the following address or location or at any other location subsequently designated:

Landlord: Town of Los Gatos
Attn: Katy Nomura
Assistant City Manager
110 E. Main Street,
Los Gatos, CA 95030
408-354-6836
Tenant: Candler for LTFJ S Corp dba “Lisa T” Fine Jewelry Attn: Jennifer Candler
41 N Santa Cruz Ave,
Los Gatos, CA 95030
Notice is deemed effective upon the earliest of the following: (i) personal receipt by either party or their agent; or (ii) written acknowledgement of notice.

35. WAIVER: The waiver of any Event of Default shall not be construed as a continuing waiver of the same Event of Default or a waiver of any subsequent Event of Default.

36. OTHER TERMS AND CONDITIONS/SUPPLEMENTS: Exhibit A – Leased Premises, Exhibit B – Floor Plan

12 37. NONDISCRIMINATION: The Tenant herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises nor shall the Tenant himself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Premises.

38. ENTIRE CONTRACT: All prior agreements between Landlord and Tenant are incorporated in this Lease, which constitutes the entire contract. It is intended as a final expression of the parties' agreement, and may not be contradicted by evidence of any prior Lease or contemporaneous oral agreement. The parties further intend that this Lease constitutes the complete and exclusive statement of its terms, and that no extrinsic evidence whatsoever may be introduced in any judicial or other proceeding, if any, involving this Lease. Any amendment to this Lease must be in writing.

39. SEVERABILITY: Any provision of this Lease that is held to be invalid shall not affect the validity or enforceability of any other provision in this Lease.

40. BINDING ON SUCCESSORS: This Lease shall be binding upon, and inure to the benefit of, the heirs, assignees and successors to the parties.

41. GOVERNING LAW AND VENUE: This Lease is governed by the laws of the State of California and, in the event of litigation, venue will be in the County of Santa Clara.

IN WITNESS WHEREOF, TOWN OF LOS GATOS and CANDLER FOR LTFJ S Corp, dba “Lisa T” Fine Jewelry have executed this LEASE.

LANDLORD TENANT
TOWN OF LOS GATOS CANDLER FOR LTFJ S Corp, dba “Lisa
T” Fine Jewelry
Laurel Prevetti, Town Manager Jennifer Candler, President and CEO

13 APPROVED AS TO FORM:

Gabrielle Whelan, Town Attorney

16 Exhibit B

FLOOR PLAN

PREPARED BY: Katy Nomura
Assistant Town Manager
Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/16/2024
ITEM NO: 10
DATE: January 11, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Negotiate and Execute a Fifth Amendment to a Parking Lot Lease with Frontier California Inc. (formerly Verizon), in Substantially the Form Presented, to Extend the Lease for an Additional Five Years in an Amount Not to Exceed $363,146 Over Those Five Years RECOMMENDATION:

Authorize the Town Manager to negotiate and execute a fifth Amendment to a parking lot lease with Frontier California Inc. (formerly Verizon), in substantially the form presented, to extend the lease for an additional five years in an amount not to exceed $363,146 over those five years (Attachment 1).

BACKGROUND:

The Town currently leases approximately 61 parking spaces located at 15 Montebello Way from Frontier California Inc. (formerly Verizon). Approximately 35 parking spaces are subleased to the Los Gatos Post Office and offsets some the Town’s leasing costs. The remaining spaces are used to provide public parking.

The original lease was executed in May 2002 for a 15-year period with the following monthly lease amounts:

Monthly Lease
Years 1-5 $4,345.84
Years 6-10 $4,997.71
Years 11-15 $5,747.36
A first amendment was executed in March 2003 with no changes to the lease amount, and the primary purpose was to allow the Town to sub-lease parking spaces.

PAGE 2 OF 3
SUBJECT: Frontier Parking Lot Lease
DATE: January 11, 2024
BACKGROUND (continued):

A second amendment was executed in October 2006 with the following changes to the monthly lease amounts:

Monthly Lease
5/1/04 - 10/31/06 $4,345.84
11/1/06 - 4/30/09 $3,917.38
5/1/09 - 4/30/14 $4,504.98
5/1/14 - 4/30/19 $5,180.72
A third amendment was executed in November 2009 with the following changes to the monthly lease amounts:

Monthly Lease
12/1/09 - 4/30/14 $4,293.81
5/1/14 - 4/30/19 $4,937.87
A fourth amendment was executed in July 2018 to exercise an option to a 5-year lease extension which was included in the original agreement from 2002. Exercising this option resulted in the following changes to the monthly lease amounts:

Monthly Lease
5/1/19 – 4/30/24 $5,700
DISCUSSION:

The current lease expires on April 30, 2024 and would need to be extended in order for the Town to continue leasing the parking spaces. This amendment would extend the lease for an additional five years from May 1, 2024 to April 30, 2029. The annual rental amount would be $68,400 per year ($5,700 monthly) with a 3% annual increase over the term. This would result in approximately the following rate schedule:

Annually Monthly
Year 1 $68,400 $5,700
Year 2 $70,452 $5,871
Year 3 $72,566 $6,047
Year 4 $74,743 $6,229
Year 5 $76,985 $6,415
The total leasing costs over the additional five years would be $363,146. All other terms and conditions of the lease would remain the same.

PAGE 3 OF 3
SUBJECT: Frontier Parking Lot Lease
DATE: January 11, 2024
CONCLUSION:

Staff recommends that the Town Council authorize the Town Manager to negotiate and execute a fifth Amendment to the parking lot lease with Frontier California Inc. (formerly Verizon) to extend the lease for an additional five years with an amount not to exceed $363,146 over those five years (Attachment 1).

COORDINATION:

This staff report was coordinated with the Town Manager, Town Attorney, and Finance Director.

FISCAL IMPACT:

There are sufficient funds budgeted for this amendment through the 1201-62521 Program Budget.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachment:

1. Fifth Amendment

2. Prior Amendments and Original Lease Agreement

1 of 1
Frontier California Inc. – Parking Lot Lease Amendment ATTACHMENT 1

FIFTH AMENDMENT TO PARKING LOT LEASE
THIS FIFTH AMENDMENT TO PARKING LOT LEASE is dated for identification this 16 th day of
January, 2024 and amends that certain lease dated November 13, 2009, made by and between the Town of Los Gatos ("Tenant”) and Frontier California Inc. (formerly Verizon) (“Landlord”).

RECITALS
A. Landlord and Tenant entered into a Parking Lot Lease dated May 28, 2002, as amended by that certain First Amendment to Parking Lot Lease dated March 17, 2003, that certain Second Amendment to Parking Lot Lease dated October 10, 2006, that certain Third Amendment dated November 13, 2009, and that certain Fourth Amendment dated November 13, 2009 (as amended, the “Lease”) for a portion of the property located at 15 Montebello Way, Los Gatos, California.

AMENDMENT

1. This amendment to the agreement shall extend the term of the Lease for five (5) years.

The term of the Lease extension shall be May 1, 2024 to April 30, 2029. The annual rental amount shall be $68,400.00 per year, to be paid in equal monthly installments for the term of the Lease. The rental rate shall be subject to a three percent (3%) annual increase over the term.

2. All other terms and conditions of the Lease remain in full force and effect.

IN WITNESS WHEREOF, the Landlord and Tenant have executed this Fifth Amendment as of the date indicated above.

Town of Los Gatos Frontier California Inc.

By: _______________________________ By: ______________________________ Laurel Prevetti, Town Manager Kelley Stewart, DIR-Real Estate and Facilities
Approved as to Form: Attest:
______________________________ ______________________________ Gabrielle Whelan, Town Attorney Wendy Wood, CMC
Town Clerk

AGR IT, I"
11 -iH

FOURTH AMENDMENT TO PARKING LOT LEASE
This Fourth Amendment to Parking Lot Lease ( "Amendment ") dated for reference purposes only, November 13, 2009, is made by and between by Verizon California Inc., a California corporation, now known as Frontier California Inc., a California corporation ( "Landlord ") and Town of Los Gatos, a municipal corporation ( " Tenant ").

RECITALS
A. Landlord and Tenant entered into a Parking Lot Lease dated May 28, 2002, as amended by that certain First Amendment to Parking Lot Lease dated March 17, 2003, and as further amended by that certain Second Amendment to Parking Lot Lease dated October 10, 2006, and Third Amendment dated November 13, 2009 ( as amended, the " Lease ") for a portion of the property located at 15 Montebello Way, Los Gatos, California.

NOW THEREFORE, in consideration of the mutual covenants herein expressed and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Tenant and Landlord agree as follows:

Rent. Commencing upon May 1, 2019, the Base Rent set forth in Paragraph 2( a) of the Lease ( as modified by Paragraph 2 of the 3'd Amendment) shall be amended to read as follows:

Period Monthly Base Rent
05/ 01/ 2019- 04/ 30/ 2024 $ 5, 700

2. Notices. Landlord' s notice address contained in Paragraph 15 of the Lease ( as modified by Paragraph 3 of the 3' a Amendment) is hereby deleted in its entirety and replaced with the following:

Notice to Landlord:

Frontier California Inc.
21 West Avenue
Spencerport, NY 14559
Copies to:

Jones Lang LaSalle Americas, Inc.
c/ o Frontier California Inc.
260 Forbes Ave., Suite 1300
Pittsburgh, PA 15222
And:

Attachment 2

Frontier Communications Corporation
805 Central Expressway South
Allen, TX 75013
Attn: Director Real Estate Services

3. Patriot Act Compliance. Each party shall take any actions that may be required to comply with the terms of the USA Patriot Act of 2001, as amended, any regulations promulgated under the foregoing law, Executive Order No. 13224 on Terrorist Financing, any sanctions program administered by the U.S. Department of Treasury' s Office of Foreign Asset Control or Financial Crimes Enforcement Network, or any other laws, regulations, executive orders or government programs designed to combat terrorism or money laundering, or the effect of any of the foregoing laws, regulations, order of programs, if applicable, on this Lease. Each party represents and warrants to the other party that it is not an entity named on the List of Specially Designated Nationals and Blocked Persons maintained by the U. S. Department of Treasury, as last updated prior to the date of this Lease.

4. Effectiveness of Lease. All terms and provisions of the Lease shall remain in full force and effect, except as expressly amended or modified hereby, and are hereby ratified and reaffirmed. In the event of any inconsistency between the provisions of this Amendment and the provisions of the Lease, the provisions of this Amendment shall control.

5. Counterparts and Facsimile. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. The parties acknowledge the validity of signatures by facsimile.

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Amendment as of the day and year first above written.

LANDLORD: TENANT:

FRONTIER CALIFORNIA INC., TOWN OF LOS GATOS,
a California ( corporation
n
a municipal corporation
A/" O
By: ' YtiM2 V 4t tiles By:

MARK NIELSEN
Title: EVP., CHIEF LEGAL OFFICER Title:
y.

Tit
ATTEST:
o
APPROVED AST RM:

By:<"&"
Robert % aultz, Town t
ey

EXHIBIT " A"

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8132463399 Verizon
02: 02: 42 p. m. 06 - 18 - 2013 1/ 1
Verimn GWW Fee: Fshte
Fudolo Manageramt
Town of WE. Gatos
Civic Center
110 E. Main Street
Los Gatos, CA 95031
Attn: Clerk Administrator
RE: Varizon California, Inc.

1.1; Montebello Way Parking, Los Gatos, CA
GLC# 092501 B S3
AGR: 09.267
1907 U.S. Highvray3ol North, FLGI vo
7vnps, FL33619
la f; g_1t: 4001 il3l
Please be advised that effective immedlately, all correspondence, notim:> and rapt payments for the a111ched referenced Leases should be sent to Cushman & Wakefield at the address below. It Is critical that the mall code stared be on all correspondence In order to fadlitale timely receipt and processing of payments.

Verimn Global Real Estats
Attn: Lease Administration
Mail Code FLG1 - 300
1907 U. S. Highway 301 North
Tampa, FL 33619
If you have any questions, please contact Shon Weldon at 813. 2463392, Fax 813 -246 -3399.

Thank you in advance for your cooperatlon.

Yours truly,
Stan R. Cocpor
Manager — National Umse Administration

EXHIBIT B
o W'^ A+*bi&-r

JFFICE OF THE TOWN CLERK
AGR © 2 . 113
ME

PARKING LOT LEASE ORD
This Parking Lot Lease ( " Lease ") is entered into this 28th REC
Effective Date ") by and between Verizon California Inc. ( "Landii trtLFown aFi ee bates Tenant").

1. Lease: Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, for the term, at the rental, and upon all of the conditions set forth herein, the property located at 15 Montebello Way, Los Gatos, California (the " Premises "), as more specifically shown on Exhibit "A" attached hereto. Notwithstanding anything contained herein to the contrary, Landlord reserves for its use and for the use of its assignees, the parking area shown on Exhibit `B" attached hereto and incorporated herein by this reference ( the " Landlord' s Parking Area ") and the Premises shall not include Landlord' s Parking Area. Landlord shall have use of and access to Landlord' s Parking Area twenty -four hours a day, seven days a week. The Premises and Landlord' s Parking Area shall be collectively referred to herein as the " Property."

2. Rent.
a) Initial Term. On the first day of each month, Tenant shall pay Landlord, as rent for the rights and privileges granted in the Lease, the following amount (" Base Rent "):

Lease Years 1 through 5: 4,345. 84 per month
Lease Years 6 through 10: 4,997. 71 per month
Lease Years 11 through 15: 5, 747. 36 per month.

All costs and expenses which Tenant assumes, agrees or is obligated to pay to Landlord under this Lease shall be deemed additional rent (which, together with the Base Rent is sometimes referred to as the " Rent "). Rent shall be payable in lawful money ofthe United States to Landlord at the address stated in the Paragraph 16 hereof, or to such other persons or at such other places as Landlord may designate in writing.
b) Administrative Fee. Upon mutual execution of this Lease, Tenant shall pay Landlord an administrative reimbursement fee equal to Six Thousand Dollars ($6,000.00). c) Utilities. Throughout the Term, Tenant shall pay directly for all utilities and services supplied to the Premises, including but not limited to water, gas, electricity, telephone, security and cleaning ofthe Premises, together with any taxes thereon. d) Payment of Taxes. The real property taxes applicable to the Premises shall be paid by Landlord to the taxing authority. Tenant shall pay prior to delinquency all taxes assessed against and levied upon Tenant' s fixtures, furnishings and all personal property of Tenant contained on the Premises.
e) Late Payment Penalties: If Tenant fails to make timely payment of any sum it is obligated to pay to Landlord in accordance with the terms and conditions of this Lease, Landlord, at its option and after fifteen ( 15) days' prior written notice to Tenant, may forthwith terminate this Lease and all rights of Tenant hereunder. Any late payment of the Rent will result 01107/ 0153 60606A
I

in additional administrative and processing costs being incurred by Landlord, the exact amount of which would be extremely difficult to determine, and it is agreed that with respect thereto a late fee of ten percent ( 10 %) of the overdue amount is a reasonable estimate thereof and will be payable by Tenant with regard to any Rent not paid after fifteen ( 15) days' prior written notice to Tenant that such amount is overdue. Additionally, Tenant shall pay Landlord interest at the lower of the highest rate permitted by law or eighteen percent ( 18 %) per annum on the amount of any Rent or any other amounts not paid by Tenant, when due, from the date due and payable.

Tenant shall also pay Landlord such interest on the amount of any payment made, and on the amount of any expenses including reasonable attorneys' fees, incurred by Landlord in connection with the taking of any action to cure any default by Tenant, from the date of making any such payment or the advancement of such expenses by Landlord. Notwithstanding anything contained herein to the contrary, in no event shall Landlord be entitled to terminate this Lease for Tenant' s non - payment of Rent the first time any such payment is late in any twelve ( 12) month period so long as Tenant pays such Rent within thirty ( 30) days of receipt of written notice from Landlord that such Rent is overdue.

3. Term.
a) Initial Term. The term ofthis Lease (the " Term ") shall commence on the date that occurs sixty ( 60) days after notice from Tenant to Landlord that Tenant is prepared to commence construction of the Tenant Improvements ( as defined in Paragraph 4 below), but in no event shall the Lease Term commence on a date later than December 1, 2002 (the Commencement Date "). The Lease shall terminate on that date that occurs fifteen years after the Commencement Date ( the " Termination Date "), unless sooner terminated pursuant to any provision hereof, and subject to the terms of Paragraph 3( b) below. b) Extension Option. Notwithstanding anything contained in Paragraph 3( a) to the contrary, Tenant shall have one option to extend the Term for a period offive years. No later than three months prior to the Termination Date, Tenant shall give Landlord written notice that it is exercising its option to extend the Lease Term. The Rent for the Extension Option shall be equal to the fair market rent for comparable space in the Town of Los Gatos, California. c) Termination Option. Either party may elect to terminate this Lease effective anytime after the sixtieth (60") month of the Term by providing no less than one hundred and eighty ( 180) days prior written notice to the other party.

4. Tenant Improvements. At Tenant' s sole cost and expense, on the Commencement Date, Tenant shall commence construction of new parking improvements on the Property in accordance with the terms and conditions ofthis Lease and per the diagram attached hereto as Exhibit ' B" and incorporated herein by this reference ( the " Tenant Improvements ").

The Tenant Improvements being constructed on Landlord' s Parking Area shall be completed by Tenant no later than two ( 2) months after the Commencement Date. The Tenant Improvements being constructed on the Premises shall be completed no later than six ( 6) months after the Commencement Date.
01107/ 0153 60606. 4
3

a) Procedures for Improvements. Tenant shall construct and build out the new parking improvements on the Property at its sole cost and expense. Tenant shall conduct its own bidding process and shall use its selected construction manager, general contractor, and subcontractors to coordinate and manage the demolition and construction process. Landlord shall have no obligations to perform any work or provide any services in the construction ofthe Tenant Improvements. Tenant' s construction shall be made ( a) in accordance with plans and specifications prepared by Tenant and approved in writing by Landlord in accordance with Paragraph 4( b) below; ( b) in a diligent and good, workmanlike matter, with all new materials; and, ( c) in accordance with all applicable laws, rules, regulations, ordinances, directives, covenants, easements, zoning and land use regulations, and restrictions of record, permits, building codes, and the requirements of any applicable fire insurance underwriter or rating bureau, now in effect or which may hereafter come into effect ( including, without limitation, the Americans with Disabilities Act and laws regulating Hazardous Materials) ( collectively Laws'. At a minimum, Tenant' s plans and specifications must include the criteria set forth on Exhibit "C," attached hereto and incorporated herein by this reference. b) Plans and Specifications. Prior to commencing the construction of the Tenant Improvements, Tenant shall submit to Landlord for approval copies of the Tenant' s plans and specifications for such Tenant Improvements. Landlord shall review the plans and specifications within twenty ( 20) days after receipt from Tenant and shall either ( a) advise Tenant of its approval, or ( b) advise Tenant of its disapproval specifying the required changes or modifications to the plans and specifications. Landlord shall not unreasonably withhold its approval. Tenant shall make any changes or modifications reasonably required by Landlord and submit the modified plans and specifications to Landlord for approval. Landlord' s approval of the plans and specifications shall be evidenced by Landlord' s initials on each page of the final plans and specifications. No modifications or revisions to the plans and specifications, except changes or modifications required by an authorized public official to bring the Tenant Improvements in compliance with applicable Laws, shall be made without Landlord' s prior written approval. Landlord' s approval of the plans and specifications shall not (a) be deemed or construed as its approval of engineering design or integrity; or ( b) create any responsibility or liability on the part of the Landlord for their completeness, design sufficiency or compliance with all Laws or this Lease.
c) Ownership of Tenant Improvements. Upon completion ofthe Tenant Improvements, ownership of such Tenant Improvements shall pass to Landlord without any lien of any kind. Tenant shall execute any and all documents reasonably requested by Landlord to confirm Landlord' s ownership of such Tenant Improvements. d) Liens. Tenant shall not allow on or permit to be enforced against the Property or Tenant Improvements or any part thereof any mechanic' s, materialmen' s, contractor' s or subcontractor' s liens arising from any work of construction, repair, restoration, replacement or improvement on the Property, including the initial making ofthe Tenant Improvements. Tenant shall pay or cause to be paid all such liens, claims or demands before any action is brought to enforce them against the Property. Tenant agrees to indemnify and hold Landlord and the Property free and harmless from all liability for all such liens, claims and 0110710153 60606. 4
4

demands, together with reasonable attorneys' fees and costs, incurred by Landlord in negotiating, settling, defending, and otherwise protecting against such liens, claims, and demands. e) Temporary Parking. At all time periods during the construction of the new parking improvements on the Property, Tenant shall provide Landlord with no less than eleven ( 11) reserved parking spaces on the Property in a location that is safe from construction debris and damage.

5. Compliance with Law. Tenant shall, at Tenant' s sole expense, comply promptly with all federal, state and local statutes, ordinances, rules, regulations, orders, and requirements, as well as all covenants and restrictions ofrecord in effect during the Term, including any restrictions imposed by any governmental agency having jurisdiction over the Property and any recorded covenants, conditions, and restrictions or easements regulating the use or occupancy by Tenant, or any other party, ofthe Premises or the Tenant Improvements, or the undertaking of any Tenant Improvements ( collectively, the " Laws ").

6. Condition of the Premises / Maintenance. The Premises are being delivered to Tenant in their current, " AS IS" condition without representation or warranty of any kind by Landlord or any agent or employee of Landlord. Throughout the Term ofthis Lease, Tenant shall maintain the Premises, including every part thereof, and all building systems servicing the Premises in good order, condition and repair and in compliance with all Laws.

7. Rights Non - Transferable. This Lease and the rights granted herein are personal . to Tenant and Tenant shall not assign, convey, or otherwise transfer said Lease or any ofthe rights granted herein in any manner whatsoever without Landlord' s prior written consent. Any attempt by Tenant to do so shall be null and void and, at Landlord' s election, shall constitute a material default hereunder.

8. Tenant Indemnification. Except to the extent such claims arise out of Landlord' s gross negligence or intentional misconduct, Tenant shall indemnify, defend and hold harmless Landlord and its parent, subsidiaries, affiliates and each oftheir respective directors, officers, agents, servants and employees ( the " Landlord Parties") from and against any and all claims arising from or in connection v,6th ( a) the Premises or of any business therein or any work or thing whatsoever done, or any condition created in, on or about the Premises during the Term or during the period of time, if any, prior to the Commencement Date that Tenant may have been given access to the Premises; ( b) any act, omission or negligence ofTenant or any of its agents, employees or invitees or its or their partners, joint venturers, directors, officers, agents, employees or contractors; ( c) any accident, injury or damage occurring in the Premises; and (d) any breach or default by Tenant in the full and prompt payment and performance of Tenant' s obligations under this Lease. Tenant' s obligation to indemnify shall also include all costs, expenses and liabilities incurred in or in connection with each such claim or action or proceeding brought thereon, including without limitation, all attorney' s fees, expert fees and expenses. In case any action or proceeding is brought against the Landlord Parties or any of them by reason of such claim, Tenant upon notice from Landlord shall resist and defend such action or proceeding by counsel reasonably satisfactory to Landlord.
0110710153 60606. 4
5 if

9. Release. Except in the event of Landlord' s gross negligence or intentional misconduct, Landlord and the Landlord Parties shall not be liable to or responsible for, and Tenant hereby releases Landlord and the Landlord Parties from all liability and responsibility to Tenant and any person claiming by, through or under Tenant, by way of subrogation, for any injury, loss or damage to any person or property in the Premises or to Tenant' s business irrespective of the cause of such injury, loss or damage. Nothing herein shall be construed to impose any other or greater liability upon Landlord than would have existed in the absence of this provision.

10. Hazardous Materials.
a) Reportable Uses Require Consent. The term " Hazardous Material" as used in this Lease shall mean any product, substance, chemical, material or waste whose presence, nature, quantity or intensity of existence, use, manufacture, disposal, transportation, spill, release or effect, either by itself or in combination with other materials present on or expected to be on the Premises, is: ( i) potentially injurious to the public health, safety or welfare, the environment, or the Premises; ( ii) regulated or monitored by any governmental authority; or iii) a basis for potential liability of Landlord to any governmental agency or third party under any applicable statute or common law theory. Hazardous Material shall include, but not be limited to, hydrocarbons, petroleum, gasoline, asbestos, crude oil or any products or by- products thereof.
b) Environmental Indemnitees. Landlord agrees to indemnify, defend and hold Tenant harmless from and against any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses ( including, without limitation, diminution in value of the Premises, and sums paid in settlement of claims, reasonable attorneys' fees, consultant fees and expert fees) collectively, "Claims ") that arise as a result ofthe presence of any Hazardous Material in, on, under or about the Premises to the extent that such Claims result from the presence of any Hazardous Material that was introduced onto the Premises by Landlord. Tenant agrees to indemnify, defend and hold Landlord harmless from and against any and all Claims which arise as a result ofthe presence of any Hazardous Material in, on, or under or about the Premises to the extent that such Claims result from the presence of any Hazardous Material that was introduced onto the Premises by Tenant or during the Term of this Lease. The parties agree that this Paragraph shall survive the termination of this Lease.

11. Insurance.
a) Liability Insurance. Tenant shall obtain and keep in force during the Term ofthis Lease a Commercial General Liability policy of insurance protecting Tenant, Landlord and any Lender( s) whose names have been provided to Tenant in writing ( as additional insureds) against claims for bodily injury, personal injury and property damage based upon, involving or arising out ofthe ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $ 2, 000, 000 per occurrence. The policy shall not contain any intra - insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an " Insured Contract" for the performance of Tenant' s indemnity obligations under this Lease. The limits of said insurance required by this Lease or as 01107/ 0153 60606. 4
1!

carried by Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation hereunder.
b) Property Insurance. Tenant shall obtain and keep in force during the Term ofthis Lease a policy or policies in the name of Tenant, with loss payable to Landlord, insuring against loss or damage to the structures, including, but not limited to, the Tenant Improvements, on the Property. Such insurance shall be for the full replacement cost, as the same shall exist from time to time. Tenant' s policy or policies shall insure against all risks of direct physical loss or damage ( except the perils offlood and earthquake unless included in the Base Premium), including coverage for any additional costs resulting from debris removal and reasonable amounts of coverage for the enforcement of any ordinance or law regulating the reconstruction or replacement of any undamaged sections of any structure required to be demolished or removed by reason ofthe enforcement of any building, zoning, safety or land use laws as the result of a covered loss, but not including plate glass insurance. Said policy or policies shall also contain an agreed valuation provision in lieu of any co- insurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located.
c) Insurance Policies. Insurance required hereunder shall be in companies duly licensed to transact business in the state where the Premises are located, and maintaining during the policy term a " General Policyholders Rating" of at least B +, V, as set forth in the most current issue of `Best' s Insurance Guide.' Tenant shall not do or permit to be done anything which shall invalidate the insurance policies referred to in this Paragraph. Tenant shall cause to be delivered to Landlord, within thirty (30) days after the Commencement Date, certificates evidencing the existence and amounts of, the insurance required under Paragraph. No later than 30) days after the expiration ofthe policies, Tenant shall famish Landlord with evidence of renewals, or Landlord may order such insurance and charge the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand. Notwithstanding anything contained herein to the contrary, Tenant shall be permitted to provide the insurance coverage required in this Lease via a self - insurance pool of municipalities ( the " ABAG Plan') so long as the ABAG Plan has a net worth equal to or greater than $ 10, 000, 000. d) Waiver of Subrogation. Without affecting any other rights or remedies, Tenant and Landlord each hereby release and relieve the other, and waive their entire right to recover damages (whether in contract or in tort) against the other, for loss or damage to their property arising out of or incident to the perils required to be insured against under Paragraph.

The effect of such releases and waivers ofthe right to recover damages shall not be limited by the amount of insurance carried or required or by any deductibles applicable thereto. Landlord and Tenant agree to have their respective insurance companies issuing property damage insurance waive any right to subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as the insurance is not invalidated thereby. 01107/ 0153 60606. 4
7 1

12. Interruption of Use: Except in the event of Landlord' s gross negligence or intentional misconduct, Landlord shall not be liable to Tenant for any interruption of Tenant' s use of the rights granted hereunder resulting from any cause.

13. Default and Remedies.
a) Default. The occurrence of any one or more ofthe following events shall constitute a default and breach ofthis Lease by Tenant:
1) If Tenant abandons or vacates the Premises; or
2) If Tenant fails to pay any Rent or any other charges required to be paid by Tenant under this Lease and such failure continues for ten ( 10) days after such payment is due and payable; or
3) If Tenant fails to promptly and fully perform any other covenant, condition or agreement contained in this Lease and such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; or 4) If a writ of attachment or execution is levied on this Lease or on any of Tenant's property; or
5) If Tenant makes a general assignment for the benefit of creditors, or provides for an arrangement, composition, extension or adjustment with its creditors; or 6) If Tenant files a voluntary petition for relief or if a petition against Tenant in a proceeding under the federal bankruptcy laws or other insolvency laws is filed and not withdrawn or dismissed within forty-five (45) days thereafter, or if under the provisions of any law providing for reorganization or winding up of corporations, any court of competent jurisdiction assumes jurisdiction, custody or control of Tenant or any substantial part ofits property and such jurisdiction, custody or control remains in force unrelinquished, unstayed or unterminated for a period of forty -five ( 45) days; or 7) If in any proceeding or action in which Tenant is a party, a trustee, receiver, agent or custodian is appointed to take charge of the Premises or Tenant' s property ( or has the authority to do so) for the purpose of enforcing alien against the Premises or Tenant' s property.

Any written notice of default based upon Tenant' s failure to pay Rent or any other charges under the Lease which is given by Landlord pursuant to this Paragraph shall also constitute a notice to pay rent or quit pursuant to any applicable unlawful detainer statute, provided that such notice is served in accordance with the provisions of any such statute. b) Remedies. In the event of Tenant' s default hereunder, then in addition to any other rights or remedies Landlord may have under any law, Landlord shall have the right, at Landlord' s option, without further notice or demand of any kind to do the following:
01107/ 0153 60606. 4 0 Page 134
1) Terminate this Lease and Tenant's right to possession ofthe Premises and reenter the Premises and take possession thereof, and Tenant shall have no further claim to the Premises or under this Lease; or
2) Continue this Lease in effect, reenter and occupy the Premises for the account of Tenant, and collect any unpaid Rent or other charges which have or thereafter become due and payable; or
3) Reenter the Premises under the provisions of subparagraph 2, and thereafter elect to terminate this Lease and Tenant' s right to possession of the Premises.

If Landlord reenters the Premises under the provisions of subparagraphs 2 or 3 above, Landlord shall not be deemed to have terminated this Lease or the obligation of Tenant to pay any Rent or other charges thereafter accruing, unless Landlord notifies Tenant in writing of Landlord' s election to terminate this Lease. In the event of any reentry or retaking of possession by Landlord, Landlord shall have the right, but not the obligation, to remove all or any part of Tenant' s property in the Premises and to place such property in storage at a public warehouse at the expense and risk of Tenant. If Landlord elects to relet the Premises for the account of Tenant, the rent received by Landlord from such reletting shall be applied as follows: first, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord; second, to the payment of any costs of such reletting; third, to the payment ofthe cost of any alterations or repairs to the Premises; fourth to the payment of Rent due and unpaid hereunder; and the balance, if any, shall be held by Landlord and applied in payment of future Rent as it becomes due. Ifthat portion of rent received from the reletting which is applied against the Rent due hereunder is less than the amount of the Rent due, Tenant shall also pay to Landlord, as soon as determined, any costs and expenses incurred by Landlord in connection with such reletting or in making alterations and repairs to the Premises, which are not covered by the rent received from the reletting.

Should Landlord elect to terminate this Lease under the provisions of subparagraph 1 or 3 above, Landlord may recover as damages from Tenant the following:
1) Past Rent. The worth at the time of the award of any unpaid Rent which had been earned at the time oftermination; plus
2) Rent Prior to Award. The worth at the time of the award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus
3) Rent After Award. The worth at the time ofthe award ofthe amount by which the unpaid Rent for the balance ofthe Term after the time of award exceeds the amount of the rental loss that Tenant proves could be reasonably avoided; plus 01107/ 0153 60606. 4
9 N

4) Proximately Caused Damages. Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant' s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses ( including attorneys' fees), incurred by Landlord in (a) retaking possession of the Premises, ( b) maintaining the Premises after Tenant' s default, ( c) preparing the Premises for reletting to a new tenant, including any repairs or alterations, and ( d) reletting the Premises, including broker' s commissions.

The worth at the time of the award" as used in subparagraphs ( 1) and ( 2) above, is to be computed by allowing interest at the rate of ten percent ( 10 %) per annum. " The worth at the time of the award" as used in subparagraph ( 3) above, is to be computed by discounting the amount at the discount rate ofthe Federal Reserve Bank situated nearest to the Premises at the time of the award plus one percent ( 1 %).

The waiver by Landlord of any breach of any term, covenant or condition ofthis Lease shall not be deemed a waiver of such term, covenant or condition or of any subsequent breach of the same or any other term, covenant or condition. Acceptance of Rent by Landlord subsequent to any breach hereof shall not be deemed a waiver of any preceding breach other than the failure to pay the particular Rent so accepted, regardless of Landlord' s knowledge of any breach at the time of such acceptance ofRent. Landlord shall not be deemed to have waived any term, covenant or condition unless Landlord gives Tenant written notice of such waiver. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

14. Signage. Tenant may install signage on the Premises, at its sole costs and expense, subject to Landlord' s prior written approval ( not to be unreasonably withheld) ofthe drawings, plans and specifications for such signage. Notwithstanding the foregoing to the contrary, Tenant shall only be entitled to install signage on the Premises that complies with all Laws.

15. Real Estate Brokers. The following brokerage relationship exists in this transaction and is approved by the parties: Cushman & Wakefield of California represents Landlord exclusively ( "Landlord' s Broker "). Upon complete execution of this Lease by the parties, Landlord shall pay Tenant' s Broker a commission based upon a separate agreement between Landlord' s Broker and Landlord for brokerage services rendered by Landlord' s Broker in connection with this transaction. Tenant and Landlord each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder other than the Landlord' s Broker in connection with the negotiation ofthis Lease and the consummation ofthe transaction contemplated hereby, and that no broker or other person, firm or entity other than the Landlord' s Broker is entitled to any commission or finder' s fee in connection with said transaction. Tenant and Landlord do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying party, including any costs, expenses, and attorneys' fees reasonably incurred with respect thereto.
01107/ 0153 60606. 4 Page 136 to

16. Notices. All notices required or permitted by this Agreement shall be in writing and may be delivered in person ( by hand or by messenger or courier service) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission during normal business hours, and shall be deemed sufficiently given if served in a manner specified in this Paragraph. The following address shall be used for notices to Landlord: Verizon California Inc., c% Corporate Real Estate, 112 Lakeview Canyon, Mailcode: CA500CW, Thousand Oaks, CA 91362. The following address shall be used for notices to Tenant: Town Manager, 110 E. Main Street, P.O. Box 949, Los Gatos, CA 95031.

Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or ifno delivery date is shown, the postmark thereon. If sent by regular mail, the notice shall be deemed given forty -eight ( 48) hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given twenty-four (24) hours after delivery of the same to the United States Postal Service or courier. If any notice is transmitted by facsimile transmission or similar means, the same shall be deemed served or delivered upon telephone or facsimile confirmation ofreceipt of the transmission thereof, provided a copy is also delivered via delivery or mail. If notice is received on a Saturday or a Sunday or a legal holiday, it shall be deemed received on the next business day

17. No Right To Holdover. Tenant has no right to retain possession ofthe Premises or any part thereof beyond the expiration or earlier termination of this Lease unless the parties are negotiating a new lease or lease extension in good faith In the event that the parties are not in the process of negotiating a new lease or lease extension in good faith, Tenant holds over in violation of this Paragraph 17 then the Base Rent then in effect payable from and after the time ofthe expiration or earlier termination ofthis Lease shall be increased to two hundred percent 200 1%) of the Base Rent applicable during the month immediately preceding such expiration or earlier termination.

18. Attorneys' Fees. If any party brings an action or proceeding to enforce the terns hereof or declare rights hereunder, the Prevailing Party in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term " Prevailing Party" shall include, without limitation, a party who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other party of its claim or defense.

The attorneys' fee award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred.

19. PUC Approval. Notwithstanding anything to the contrary contained in the Lease, the Lease shall not commence until and shall be contingent upon obtaining final approval ofthe Lease by the California Public Utilities Commission ( "PUC ") on terms acceptable to Landlord in Landlord' s sole discretion ("PUC Approval'. Until such time, if any, that the PUC Approval is obtained, the Lease shall not be deemed to grant, demise, transfer or otherwise convey to Tenant any right, title or interest whatsoever to any portion ofthe Premises. 01107/ 0153 60606. 4
11 11

20. Interpretation and Modification. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. Preparation of this Lease by either Landlord or Tenant or Landlord' s agent or Tenant' s agent and submission of same to Tenant or Landlord shall not be deemed an offer to lease. This Lease is not intended to be binding until executed and delivered by all parties hereto. This Lease may be modified only in writing, signed by the parties in interest at the time of the modification. This Lease was drafted by both parties to the transaction; therefore, neither party shall be construed as the drafter or author of this Lease for purposes of interpreting any provision hereof. Except as otherwise expressly provided herein, ifmore than one person or entity is named herein as either Landlord or Tenant, the obligations of such multiple parties shall be the joint and several responsibility of all persons or entities named herein as such Landlord or Tenant. The captions, headings and titles in this Lease are solely for convenience of reference and shall not affect its interpretation. The invalidity of any provision of this Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

21. Authority. It any signatory hereto is a corporation, trust, general or limited partnership or other legal entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf.

22. Binding Effect; Choice of Law. This Lease shall be binding upon the parties, their personal representatives, successors and assigns and be governed by the laws of the State of California. Any litigation between the parties hereto concerning this Lease shall be initiated in the county in which the Premises are located and be governed by the laws of the State of California.

23. Entire Agreement. This Lease, together with its exhibits, contains all agreements ofthe parties to this Lease and supersedes any previous negotiations. There have been no representations made by either party or understandings made between the parties other than those set forth in this Lease and its exhibits. This Lease may not be modified except by a written instrument duly executed by the parties to this Lease.

LANDLORD: TENANT:

By: By:
micnael J. Baumann
TITLE: Director -Real Estate Portfolio Management Till
IW
TITLE:

Before execut—ing this document least
review

APPROVED AS TO FORM
01107101536D606. 4
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gy; Date: J
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IN WITNE S WHEREOF, the parties hereto have executed this Agreement as ofthe& AL/, day Of 2V
Ir
LANDLORD: TENANT:

VERIZON CALIFORNIA, INC., by: TOWN OF LOS GATOS, by:

By: Debra J. ' go e, Town Manager
Title:

X
MMENDED BY:

By: odd, Chief of Police
Title:

APPROVED AS TO FORM:

Business Address P. Korb, Town Attorney
z4V Al,- A Aim JLQ.4' 4aoq ,
Ma V. , o ov Town Clerk
Town of Los Gatos
C: WynI mmi Flkcon . ne.. l. mw1G" a

EXHIBIT A

THE PREMISES
See attached.
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EXHIBIT B
DIAGRAM OF NEW. PARIUNG IMPROVEMENTS TO BE

CONSTRUCTED BY TENANT
See attached.
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EXHIBIT C

MINIMUM CRITERIA FOR NEW PARKING IMPROVEMENTS
As shown on Exhibit A, Landlord' s Parking Area shall, at a minimum, consist of the following: ( a) two ( 2) fifteen foot oversized parking spaces; ( b) one ( 1) ADA compliant parking space; ( c) eight ( 8) standard ten foot parking spaces; ( d) a loading zone; and ( e) an area for a trash dumpster.

2. Tenant shall construct a six -foot (6') high fence enclosing Landlord' s Parking Area,

3. Tenant shall construct two gates to provide ingress / egress to Landlord' s Parking Area, consisting of, at a minimum:

A. One 6 -foot high " Roller Gate" and
B. One motorized 6 -foot high and 15 -foot wide main gate on Montebello Way.

4. Tenant shall install a vehicle detector on or near the interior portion of the main gate located on Montebello Way for exiting vehicles.

Tenant shall install a card reader on or near the exterior portion of the main gate located on Montebello Way to allow admission of vehicles entering the parking area.

6. Tenant shall install ( a) a 5 -foot " Pedestrian Gate" will be installed on Montebello Way; and ( b) a 24 -foot " New Gate" to limit access to the Ramp to Lower Level.

Tenant shall relocate the existing Verizon telephone /card reader currently located at the front entrance of the Verizon -owned building to an area near the Pedestrian Gate on Montebello way.

8. Tenant shall install and maintain, at Tenant' s sole cost and expense, new landscaping and irrigation systems for the Premises.

9. Tenant shall install and maintain, at Tenant' s sole cost and expense, all necessary and required lighting associated with the Premises.
01107/ 0153 60606. 4
k

OFFICE OF THE TOWN CLERK
AGR 03. 03Z
1HH

FIRST AMENDMENT TO PARKING LOT LEASED'
REC X REF,' 0-2- 143
This First Amendment to Parking Lot Lease (" First Amendment ") is yd into this 17th day of March, 2003 ( the " Effective Date ") by and between Verizon California Inc.

Landlord ") and Town of Los Gatos ( "Tenant ").

RECITALS
A. Landlord and Tenant entered into a Parking Lot Lease ( the " Lease ") dated May 28, 2002 for the property located at 15 Montebello Way, Los Gatos, California ( the " Premises "), as more specifically shown on Exhibit " A" attached to the Lease.

B. The parties are now entering into this First Amendment (" First Amendment ") to Lease to modify the Lease as set forth herein. All capitalized terms not defined herein shall have the same meaning they are given in the Lease.

NOW, THEREFORE, in consideration of the mutual covenants herein expressed and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Tenant and Landlord agree as follows:

1. Term. The first sentence of Section 3( a) of the Lease is hereby deleted and replaced with the following: " The term of this Lease ( the " Term ") shall commence on the date that occurs sixty (60) days after notice from Tenant to Landlord that Tenant is prepared to commence construction of the Tenant Improvements ( as defined in Paragraph 4 below), but in no event shall the Lease Term commence on a date later than December 1, 2003 ( the Commencement Date" Y'

2. Sublease. Notwithstanding Section 7 ofthe Lease to the contrary, Tenant shall be permitted to sublease the Premises with Landlord' s prior written consent, which shall not be unreasonably withheld, conditioned or delayed. In the event of any sublease, whether or not with Landlord' s consent, Tenant shall not be released or discharged from any liability, whether past, present or future. Tenant' s liability shall remain primary, and in the event of default by any subtenant ofTenant in performance or observance of any ofthe covenants or conditions ofthe Lease, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against said subtenant.

3. Landlord' s Parking Area. Tenant is permitted to open the gate to and make use of Landlord' s Parking Area for special events, including the Sunday Farmer' s Market and Montebello Way road closures, without Landlord' s consent; however, upon notice from Landlord to Tenant to cease and desist use of Landlord' s Parking Area, Tenant shall immediately cease and desist from using Landlord' s Parking Area. Landlord may give Tenant notice to cease and desist utilizing Landlord' s Parking Area in Landlord' s sole discretion. When Tenant is utilizing Landlord' s Parking Area, Tenant shall be responsible for Landlord' s Parking Area as if such area where part of the Premises.

4. Effectiveness of Lease. All terms and provisions of the Lease shall remain in full force and effect, except as expressly amended or modified hereby, and are hereby ratified and 01 107/ 015 3 75953 3

EXHIBIT C

reaffirmed. In the event of any inconsistency between the provisions ofthis Amendment and the provisions of the Lease, the provisions of this Amendment shall control.

5. Counterparts and Facsimile. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. The parties acknowledge the validity of signatures by facsimile.

6. Exhibit C. Section 1 ofthe Lease entitled Minimum Criteria for New Parking Improvements is hereby deleted and replaced with the following: " As shown on Exhibit A and Exhibit B, the Landlord' s Parking Area shall consist ofthe area located within the boundary of the Landlord' s Parking Area as shown on said Exhibits. The number of conforming parking spaces will be adjusted and constructed within the boundary based on specifications and direction provided by the Landlord."
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
0110710153 759533 Page 146
IN WITNESS WIIEREOF, the parties hereto have executed this Agreement as of the 17th day of March, 2003.

LANDLORD: TENANT:

VERIZON CALIFORNIA, INC., by: TOWN OF LOS GATOS, by:

By Debra e, Town Manager
aa rT T r zch° ra ( k f43
Title:

By:

Title:

Business Address

APPROVED AS TO FORM

TROY & GOULD
By:

Date:
01107/0153 759533
DED BY:

Scott R. Seaman, Chief of Police
APPROVED AS TO FORM:

O Korb, Town Attorney
ATTEST:
y
xrirnVkbs ove, Town Clerk
To,Am of Los Ga os

FICE OF THE TOWN CLERK
AGR_U 2 11.3
1HH

PARKING LOT LEASE ORD
REC
This Parking Lot Lease ( " Lease ") is entered into this 28th ay, e Effective Date ") by and between Verizon California Inc. ( "Land Tenant ").

1. Lease: Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, for the term, at the rental, and upon all ofthe conditions set forth herein, the property located at 15 Montebello Way, Los Gatos, California ( the " Premises "), as more specifically shown on Exhibit " A" attached hereto. Notwithstanding anything contained herein to the contrary, Landlord reserves for its use and for the use of its assignees, the parking area shown on Exhibit `B" attached hereto and incorporated herein by this reference ( the " Landlord' s Parking Area ") and the Premises shall not include Landlord' s Parking Area. Landlord shall have use of and access to Landlord' s Parking Area twenty -four hours a day, seven days a week. The Premises and Landlord' s Parking Area shall be collectively referred to herein as the " Property."

2. Rent.
a) Initial Term. On the first day of each month, Tenant shall pay Landlord, as rent for the rights and privileges granted in the Lease, the following amount ( " Base Rent "):

Lease Years 1 through 5: 4, 345. 84 per month
Lease Years 6 through 10: 4, 997. 71 per month
Lease Years l 1 through 15: 5, 747. 36 per month.

All costs and expenses which Tenant assumes, agrees or is obligated to pay to Landlord under this Lease shall be deemed additional rent (which, together with the Base Rent is sometimes referred to as the " Rent "). Rent shall be payable in lawful money of the United States to Landlord at the address stated in the Paragraph 16 hereof, or to such other persons or at such other places as Landlord may designate in writing.
b) Administrative Fee. Upon mutual execution of this Lease, Tenant shall pay Landlord an administrative reimbursement fee equal to Six Thousand Dollars ($ 6, 000. 00). c) Utilities. Throughout the Term, Tenant shall pay directly for all utilities and services supplied to the Premises, including but not limited to water, gas, electricity, telephone, security and cleaning of the Premises, together with any taxes thereon. d) Payment of Taxes. The real property taxes applicable to the Premises shall be paid by Landlord to the taxing authority. Tenant shall pay prior to delinquency all taxes assessed against and levied upon Tenant' s fixtures, furnishings and all personal property of Tenant contained on the Premises.
e) Late Payment Penalties: If Tenant fails to make timely payment of any sum it is obligated to pay to Landlord in accordance with the terms and conditions ofthis Lease, Landlord, at its option and after fifteen ( 15) days' prior written notice to Tenant, may forthwith terminate this Lease and all rights of Tenant hereunder. Any late payment ofthe Rent will result onot/ mst 006.4
Cx d FflQlf A

CLERK DEPART l
AGR
1HH
ORD
THIS SECOND AMENDMENT TO PARIONG LOT LEASE ( " this
Amendment!% made as of the 10th day of October, 2006, between Verizon California Inc.

Landlord') and Town of Los Gatos (" Tenant').

RECITALS:

A. Landlord and Tenant are parties to a Parking Lot Lease ( the " Original Lease') dated May 28, 2002, as amended by that certain First Amendment to Parking Lot Lease the " First Amendment') dated March 17, 2003 ( the Original Lease and the First Amendment are hereinafter referred to as the " Lease', pursuant to which Landlord . leases to Tenant and Tenant hires from Landlord certain property located at 15 Montebello Way, Los Gatos, California ( the " Premises'), containing a total of seventy -one ( 71) parking spaces, thirty -seven 37) of which have been subleased by Tenant to the U.S, Postal Service.

B. The parties desire to amend the Lease in the manner hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, the parties agree as follows:

1. All terms used herein, but not defined herein, shall have the meanings ascribed to such terms in the Lease.

2. Paragraph 3( a) of the Original Lease and Paragraph 1 of the First Amendment are hereby deleted in their entirety and replaced with the following: " Initial Term.

The term of this Lease ( the " Term') shall commence on May 1, 2004 ( the " Commencement Date "), and shall end on April 30, 2019 ( the " Termination Date'), unless sooner terminated pursuant to any provision hereof, subject to the terms of Paragraph 3( b) below."

3. The Base Rent set forth in Paragraph 2(a) of the Original Lease shall be amended to read as follows:

Period Monthly Base Rent
5/ 1/ 04 - 10131/ 06 4, 345. 84
11/ 1/ 06 - 4/ 30/ 09 3, 917. 38
5/ 1/ 09- 4/ 30/ 14 4, 504.98
5/ 1/ 14 - 4130/ 19 5, 180. 72

4. The address for notices from Tenant to Landlord contained in Paragraph 15 ofthe Original Lease is hereby changed is hereby changed to: Verizon Corporate Real Estate, 750 Canyon Drive, Mail Code: SV 1E5143, Coppeli, TX 75019, Attn: Lease Administration.

CHG02440145567. 2 10/ 9/ 06 04:49 PM

EXHIBIT D

5. Landlord' s Parking Area ( as defined in the Original Lease and depicted on Exhibits A and B attached to the Original Lease) shall be modified . to include seven ( 7) additional parking spaces, as well as the driveway connecting the lower and upper parking lots.

Exhibit B attached to the Original Lease is hereby deleted and replaced with Exhibit B attached to this Amendment, and the first sentence inside of the quotation marks in. Paragraph 6 of the First Amendment is hereby deleted and replaced with the following: " Landlord' s Parking Area shall consist of the shaded area depicted on Exhibit B."

6.. Subject to the provisions contained in Paragraph 3 of the First Amendment, Landlord shall, at its sole cost and expense, install and maintain additional gates on the Premises, as shown on Exhibit B.

7. Landlord and Tenant represent and warrant tot each other that they have not negotiated with any broker in connection with this Agreement. Landlord and Tenant agree that should any claim be made against the other for a broker' s commission, finder' s fee or similar compensation by reason of the acts of such party, the party upon whose acts such claim is predicated shall indemnify and hold the other party harmless from all losses, costs, damages, claims, liabilities and expenses in connection therewith ( including, but not limited to, reasonable legal fees and the cost of enforcing this indemnity).

8. Each of the parties hereto represents and warrants to the other that the person executing this Agreement on behalf of such party has the full right, power and authority to enter into and execute this Agreement on such party' s behalf and that no consent from any other person or entity is necessary as a condition precedent to the legal effect ofthis Agreement.

9. All prior understandings and agreements between the parties with respect to the subject matter ofthis Agreement are merged within this Agreement, which alone fully and completely sets forth the understanding of the parties with respect thereto. This Agreement may not be changed or modified nor may any of its provisions be waived orally or in any manner other than by a writing signed by the party against whom enforcement of the change, modification or waiver is sought.

10. Except as herein provided, the Lease and all of its terms, covenants and conditions remain in full force and effect.

11. The terms, covenants and conditions contained herein are binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors and assigns.

SIGNATURES APPEAR BELOW]
CH002W0145567. 2I0/ 9/ 06 04: 49 PM

y
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date first above written.

LANDLORD:

VERIZON CALIFORNIA INC.

CHG02\ 40145567. 21019106 04A9 PM
TENANT:

TOWN OF LOS GATOS
B. Q.

Name: & d i-- R- - C
Title: CFH&F-ar- t
0 1
I1
APPROVED AS TO FORM:

ATTEST:

Title: 6 , CPage 151

EXHIBIT B

LANDLORD' S PARKING AREA
CHOM40145567. 210/ 9/ 06 04: 49 PM 4
Gm
Om

AGR
CLERK
DEPARTMEMENf
T..

HH t n

THIRD AMENDMENT TO PARKING LOT LEASE
RESO
This Third Amendment to Parking Lot Lease (" Amendment") dated for reference purposes only, November 13, 2009, is made by and between by and between Verizon California Inc., a California corporation (" Landlor(T") and Town of Los Gatos, a municipal corporation Tenant").

RECITALS
A. Landlord and Tenant entered into a Parking Lot Lease dated May 28, 2002, as amended by that certain First Amendment to Parking Lot Lease dated March 17, 2003, and as further amended by that certain Second Amendment to Parking Lot Lease dated October 10, 2006 (as amended, the " Lease ") for a portion of the property located at 15 Montebello Way, Los Gatos, California.

B. The parties are now entering into this Amendment to reduce the number of parking spaces leased by Tenant from sixty -four ( 64) parking spaces to sixty- one ( 6 1) parking spaces and to make certain additional modifications to the Lease as set forth herein. All capitalized terms not defined herein shall have the same meaning they are given in the Lease.

NOW, THEREFORE, in consideration of the mutual covenants herein expressed and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Tenant and Landlord agree as follows:

1. Landlord' s Parking Area Premises. The parties acknowledge and agree that effective as of December 1, 2009, Landlord' s Parking Area shall be modified to include three ( 3) additional parking spaces and the number of Tenant' s parking spaces contained in the Premises shall be reduced by three ( 3) parking spaces, which parking spaces shall be reserved for Landlord' s exclusive use. Accordingly, as of December 1, 2009, ( i) the number of Tenant' s parking spaces within the Premises shall be reduced from sixty -four ( 64) parking spaces to sixty -one ( 61) parking spaces, ( ii) Exhibit " A" ( Depiction of Premises) attached to the Lease shall be replaced and superseded with Exhibit " A" attached to this Amendment, and ( iii) Exhibit B" ( Depiction of Landlord' s Parking Area) attached to the Lease ( as modified by Exhibit " B" attached to the Second Amendment to Parking Lot Lease ( the " 2nd Amendment ")) shall be replaced and superseded with Exhibit "B" attached to this Amendment. Tenant shall not make any modifications to the Premises, including, without limitation, striping of parking spaces, without Landlord' s prior written consent.

2. Rent. Commencing upon December 1, 2009, the Base Rent set forth in Paragraph 2( a) of the Lease ( as modified by Paragraph 3 of the 21d Amendment) shall be amended to read as follows:

Period Monthly Base Rent
12/ 01/ 2009 — 04/ 30/ 2014 $ 4, 293. 81
05/ 0112014 — 04/ 30/ 2019 $ 4, 937. 87
M140643. 2

EXHIBIT E

3. Notices. Landlord' s notice address contained in Paragraph 15 of the Lease ( as modified by Paragraph 4 of the 2ix1 Amendment) is hereby deleted in its entirety and replaced with the following:

Jones Lang LaSalle Americas, Inc.
c/ o Verizon California Inc,
2200 West Airfield Drive, Dock E
Dallas/ Fort Worth Airport, TX 75261

4. Patriot Act Compliance. Each party shall take any actions that may be required to comply with the terms ofthe USA Patriot Act of 2001, as amended, any regulations promulgated under the foregoing law, Executive Order No. 13224 on Terrorist Financing, any sanctions program administrated by the U. S. Department of Treasury' s Office of Foreign Asset Control or Financial Crimes Enforcement Network, or any other laws, regulations, executive orders or government programs designed to combat terrorism or money laundering, or the effect of any of the foregoing laws, regulations, orders or programs, if applicable, on this Lease. Each party represents and warrants to the other party that it is not an entity named on the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Department ofTreasury, as last updated prior to the date of this Lease.

5. Effectiveness of Lease, All terms and provisions of the Lease shall remain in full force and effect, except as expressly amended or modified hereby, and are hereby ratified and reaffirmed. In the event of any inconsistency between the provisions of this Amendment and the provisions of the Lease, the provisions of this Amendment shall control.

6. Counterparts and Facsimile. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. The parties acknowledge the validity of signatures by facsimile.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10140643. 2

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Amendment as of the day and year first above written.

LANDLORD:

VERIZON CALIFORNIA INC.,
a California corporation
By.
r
Title: Ac / V\7 J a\ Mat

APPROVED AS TO FORM MCQUIREWOODS LLP
Date :!+ 2n
10140643. 2
TENANT:

TOWN OF LOS GATOS,
a municipal corporation
By: , 49 _ -- A).

Title: Yt A L! 1V"": CylTCtiA>rl
Title:

ATTEST:

S; Clerk Administrator
APPROVED AS TO FORM:

By: U / P. LC
Orry orb, Town Attorney

EXHIBIT " A"

DEPICTION OF PREMISES
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DEPICTION OF LANDLORD'S PARKING AREA
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PREPARED BY: Erin Walters, Associate Planner and
Jocelyn Shoopman, Associate Planner
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and the Community Development Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6872 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 1/16/2024
ITEM NO: 11
DATE: January 11, 2024
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Review and Discuss the Proposed Revisions to the Draft Revised 2023-2031 Housing Element. Location: Town-Wide. General Plan Amendment Application GP-22-003.

RECOMMENDATION:

Discuss and provide direction to staff on the proposed revisions to the Draft Revised Housing Element.

BACKGROUND:

On December 1, 2023, the Town received the California Department of Housing and Community Development’s (HCD) findings/comment letter (Attachment 3) on the Town’s Draft Revised Housing Element as submitted to HCD on October 2, 2023 along with the modifications submitted on November 28, 2023.

On December 19, 2023, the Town Council unanimously voted to follow a five-step process regarding the 2023-2031 Housing Element update, which includes the following actions:

1. Prioritizing the comments from the December 1, 2023 HCD comment letter;

2. Addressing the most challenging comments first and presenting the draft text of the Draft Revised Housing Element to the Town Council for review, including examples from two to three certified Housing Elements. Additionally, the Town Council hearing will provide the public with an opportunity to comment on the draft text with staff addressing the public comments in subsequent meetings, as needed;

3. Scheduling Town Council meetings with staff and the Housing Element consultant on a regular basis to complete the edits;

PAGE 2 OF 4
SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003 DATE: January 11, 2024
BACKGROUND (continued):

4. Reviewing the proposed edits with HCD, as frequently as HCD is able to meet with Town staff, and the Housing Element consultant and providing written feedback to the Council about HCD’s responses; and

5. Conducting public engagement with the Housing Element Advisory Board (HEAB) after the Town Council completes its review of the draft text to the Draft Revised Housing Element.

The Town Council also unanimously voted to review the Draft Revised Housing Element prior to a resubmittal to HCD.

The primary purpose of this agenda item is for Town Council to review and discuss the proposed revisions that staff and the Housing Element consultant have made to the Draft Revised Housing Element (Attachment 1), and the Draft Response Table (Attachment 2), that address the comments from the December 1, 2023 HCD comment letter (Attachment 3).

DISCUSSION:

A. HCD Communications
Town staff and the Housing Element consultant met with the Town’s HCD reviewer and the HCD Senior Program Manager, Paul McDougall on December 13, 2023 and received feedback on the following topics:
 Additional discussion of income and race at a local level as part of the Affirmatively Furthering Fair Housing analysis;
 Additional actions specific to promoting housing mobility;  Additional discussion and a potential modification to the maximum building height within the Housing Element Overlay Zone (HEOZ) for General Plan land use designations with a density range of 30 to 40 dwelling units per acre;
 Refinement of the definition of a mixed-use project within the HEOZ Ordinance;  Refinement of the language of Implementation Program AA to include a defined action; and
 Additional evaluation of the Town’s guest parking requirements for multi-family and mixed-use projects.

Additionally, staff discussed the actions taken by the Town Council at the meeting of December 5, 2023, and received feedback that modifications to the Story Pole Policy “does seem to address the intent” of HCD’s December 1, 2023 comment to modify the Story Pole Policy with cost effective measures.

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SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003 DATE: January 11, 2024
DISCUSSION (continued):

On December 24, 2023, the Housing Element consultant requested informal feedback from the Town’s HCD reviewer on the Town’s draft approach, as described below, for addressing a portion of HCD’s comments from the December 1, 2023 letter:
 Including additional regional data for the Racial Concentration Area of Affluence (RCAA) analysis and prioritizing mobility issues (HCD comment #1a, as numbered in Draft Response Table, Attachment 2);
 Addressing small sites and their lot consolidation potential (HCD comment #2a);  Including additional discussion on the HEOZ development standards, such as height, parking, and open space requirements (HCD comment #3a); and  Including additional actions to address development standards considered to be a constraint and implementation program actions to promote mobility (Senate Bill 9, additional Accessory Dwelling Unit actions, small multi-family housing in low density neighborhoods, and homesharing) (HCD comment #1c).

Staff is awaiting a response back from HCD with preliminary feedback on the aforementioned topics. If feedback is provided from HCD, an Addendum or Desk Item will be prepared for the Town Council prior to the meeting.

B. Proposed Revisions to the Draft Revised Housing Element Potential revisions to the Draft Revised Housing Element in response to the December 1, 2023 HCD comment letter have been prepared by Town staff and the Housing Element consultant in track changes with a blue highlight (Attachment 1). The edits shown are all those that have been made since the last submittal to HCD in November. A detailed draft response table has been provided in Attachment 2. In response to the December 19, 2023 Town Council motion, this table describes each HCD comment, a priority rating for the comment, a summary of the proposed revisions and their location within the Draft Revised Housing Element, and examples of similar text and/or language from other certified Housing Elements (Attachment 2).

C. Next Steps
This agenda item provides the Town Council an opportunity to discuss the proposed revisions to the Draft Revised Housing Element. The Housing Element consultant will be available, remotely, to answer Council Member questions.

On January 18, 2024, the Housing Element Advisory Board (HEAB) will be meeting to discuss and review the December 1, 2023 HCD comment letter and proposed revisions to the Draft

PAGE 4 OF 4
SUBJECT: DRAFT REVISED 2023-2031 HOUSING ELEMENT/GP-22-003 DATE: January 11, 2024
DISCUSSION (continued):

Revised Housing Element. If additional revisions or other direction are received from Council, an Addendum or Desk Item will be prepared for the HEAB prior to their meeting.

As required by AB 215, revisions to the Draft Revised Housing Element must be made available to the public for a seven-day review period prior to a formal resubmittal to HCD.

Should the Town Council be satisfied with the proposed revisions to the Draft Revised Housing Element, the seven-day review period could be started on Monday, January 22, 2024 ending on Monday, January 29, 2024 with a formal resubmittal to HCD in early February 2024.

CONCLUSION:

Staff looks forward to the Town Council’s discussion and direction.

PUBLIC COMMENTS:

Public comments received between 11:01 a.m., Tuesday, December 19, 2023 and 11:00 a.m., Thursday, January 11, 2024 are included as Attachment 4.

COORDINATION:

The Community Development Department coordinated with the offices of the Town Attorney and Town Manager in the preparation of this report.

ENVIRONMENTAL ASSESSMENT:

An Environmental Analysis was prepared for the Housing Element update and available on the Town’s Housing Element website at: https://www.losgatosca.gov/EnvironmentalAnalysis. All potentially significant effects have been analyzed adequately in the Town of Los Gatos 2040 General Plan Environmental Impact Report (EIR), pursuant to applicable standards including CEQA Guidelines Section 15168(c)2, because the Housing Element update is consistent with the growth projections evaluated in the General Plan EIR.

Attachments:

1. Draft Revised Housing Element, Track Changes Copy

2. Draft Response Table

3. December 1, 2023, HCD’s Findings Comment Letter

4. Public Comments Received Between 11:01 a.m., Tuesday, December 19, 2023, and 11:00 a.m., Thursday, January 11, 2024

Town of Los Gatos 6th Cycle
2023-2031 Housing Element Update
HCD Draft Revised Draft
January 2024November 2023 September 2023 March 2023
ATTACHMENT 1 Page 164
This document was produced on recycled paper.

HCD DRAFT REVISED DRAFT

TOWN OF LOS GATOS
6 TH CYCLE 2023-2031 HOUSING ELEMENT
JAN U AR Y 2024 NO VE MB E R 2023SE P T EM BE R 2023 MAR CH 2023

PREPARED BY
Town of Los Gatos
Community Development Department
110 E. Main Street
Los Gatos, CaliforniaCA 95030
Tel 408.354.6872
Veronica Tam and Associates, Inc.
107 S. Fair Oaks Avenue, Suite 212
Pasadena, California
Tel 626.304.0440
EMC Planning Group Inc.
601 Abrego Street
Monterey, CA 93940
Tel 831.649.1799
Fax 831.649.8399
www.emcplanning.com
Root Policy Research
6740 East Colfax Avenue
Denver, Colorado 80220
Tel 970-880-1415
www.rootpolicy.com

Table of Contents
JanuaryNovember September March 20232024 HCD Draft Revised Draft 2023-2031 Housing Element i

10. Housing Element ......................................................................................................... 10-1

10.1 Introduction .............................................................................................................. 10-1

10.1.1 California Housing Crisis .................................................................................. 10-2

10.1.2 Regional Housing Needs Assessment. .............................................................. 10-2

10.1.3 Affirmatively Furthering Fair Housing ............................................................. 10-3

10.1.4 Overview of Planning and Legislative Efforts .................................................... 10-8

10.1.5 Public Participation ....................................................................................... 10-10

10.1.6 Public Comment ............................................................................................ 10-16

10.2 Overview of Housing Needs and Constraints ........................................................ 10-1617

10.2.1 Introduction .............................................................................................. 10-1617

10.2.2 Los Gatos Overview. .................................................................................. 10-1617

10.2.3 Demographics .......................................................................................... 10-1920

10.2.4 Household Characteristics ......................................................................... 10-2223

10.2.5 Housing Stock Characteristics .................................................................... 10-2425

10.2.6 Special Housing Needs .............................................................................. 10-2627

10.2.7 Governmental and Non-Governmental Constraints .................................... 10-3031

10.3 Site Inventory and Opportunities ......................................................................... 10-3132

10.3.1 Introduction .............................................................................................. 10-3132

10.3.2 Sites Summary. ......................................................................................... 10-3132

10.3.3 Summary of Quantified Objectives………………………………………………………….…10-3233

10.4 Energy and Resource Conservation ...................................................................... 10-3334

10.4.1 Opportunities for Energy Conservation ...................................................... 10-3334

10.4.2 Energy-Related Goals and Policies. ............................................................ 10-3335

10.5 Goals and Policies ............................................................................................... 10-3435

10.6 Implementation Programs ................................................................................10-394140

10.7 Glossary and Acronyms ................................................................................ 10-68717577

Appendices
Appendix A Affirmatively Furthering Fair Housing Reports Appendix B Housing Needs Assessment
Appendix C Governmental and Non-Governmental Constraints Appendix D Sites Inventory Analysis
Appendix E Review of Previous Housing Element
Appendix F List of Organizations Contacted
Appendix G AFFH Segregation Report Los Gatos
Appendix H Sites Inventory Form
Appendix I Public Comments

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is The 2023-2031 Housing Element is the Town of Los Gatos’ response to meet the housing needs of our community while meeting the State's housing goals as set forth in Article 10.6 of the California Government Code.

The California State Legislature has identified the attainment of a decent home and a suitable living environment for every Californian as the State's major housing goal. The Los Gatos Housing Element analyzes the Town’s housing needs, assesses fair housing practices, identifies opportunities for future residential development, and addresses potential constraints to housing development in the Town. Based on this research, the Housing Element includes goals, policies, and implementation programs aimed at addressing existing and future housing needs of Los Gatos. represents a sincere and open-minded effort to meet local and regional housing needs within the constraints of a largely built-out community, limited land availability, and extraordinarily high costs of land and housing. The Housing Element serves as Chapter 10 of the Town’s 2040 General Plan.  A copy of the Town’s 2015-2023 Housing Element can be found at this link:
https://www.losgatosca.gov/1735/General-Plan---Housing-Element

10.1 Introduction
Pursuant to State law, the Housing Element must be updated periodically according to statutory deadlines. This 6 th Cycle Housing Element covers the planning period January 31, 2023, through January 31, 2031 and replaces the Town's 5th Cycle Housing Element that covered the period 2015 through 2023.

Per State Housing Element law, the document must be periodically updated to:
 Outline the community’s housing production objectives consistent with State and regional growth projections;
 Describe goals, policies, and implementation programs to achieve local housing objectives;  Examine the local need for housing with a focus on special needs populations;  Identify adequate sites for the production of housing serving various income levels;  Analyze potential constraints to new housing production;  Evaluate the Housing Element for consistency with other General Plan elements; and  Evaluate Affirmatively Furthering Fair Housing.

A Housing Element is considered to be out of compliance with the State’s Housing Element law if one of the following applies:
 It has not been revised and updated by the statutory deadline; or  Its contents do not substantially comply with the statutory requirements.

HCD Revised Draft Revised 2023-2031 Housing Element
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Repercussions for a jurisdiction which does not comply with the Housing Element Law include:
 Limited access to State Funding.
 Vulnerability to litigation from housing rights’ organizations, developers, and the Department of Housing and Community Development (HCD), resulting in the following potential consequences:
a. The court may order the jurisdiction to bring its Housing Element into compliance within 120 days; b. Suspension of a jurisdiction’s authority to issue building permits or grant zoning changes, variances, or subdivision map approvals;
c. The court may step in and approve housing projects; and d. If a jurisdiction faces a court action stemming from its lack of compliance and either loses or settles the case, it often must pay substantial attorney fees to the plaintiff’s attorneys in addition to the fees paid to its own attorneys.

10.1.1 California’s Housing Crisis
The 6th Cycle Housing Element Update comes at a critical time because California is experiencing a housing crisis. As is the case for all jurisdictions in California, Los Gatos must play its part in meeting the demand for housing. In the last Housing Element cycle (2015 to 2023), Los Gatos’ Regional Housing Needs Allocation (RHNA) called for 619 new housing units; however, as of December 31, 2021, only 81 percent of these housing units have been permitted (502 units). Of those constructed, the large majority were affordable only to households making more than the Town’s area median income (AMI). In 2022, this amounted to $168,500 for a family of four.

Without immediate action, the housing crisis will only get worse. In the 20-year period (2020 to 2040), Santa Clara County is projected to add 169,450 jobs, which represents a 15 percent increase. Los Gatos is projected to add nearly 1,030 jobs in the same period, a five percent increase. These changes will increase demand for housing across all income levels. The Town and region must identify ways to significantly increase housing production, or risk worsening the burden for existing lower income households. Many lower income households do not have the means to move to a new location of employment and are faced with unsustainable increases in housing cost.

The lack of affordable housing has constrained the Silicon Valley economy as well-educated workers have become increasingly mobile in searching for better jobs and a higher quality of life.

If Los Gatos and the region become more competitive in attracting high-skilled workers and increasingly unaffordable to lower income workers and seniors, then social and economic segregation will worsen, only exacerbating historic patterns of housing discrimination, racial bias, and segregation. This potentiality has become so acute in recent years that the California Legislature addressed the issue with new legislation in 2018.

Assembly Bill (AB) 686 requires all State and local agencies to explicitly address, combat, and relieve disparities resulting from past patterns of housing segregation to foster more inclusive communities. This is commonly referred to as Affirmatively Furthering Fair Housing (AFFH). The legislation applies to all Housing Elements revised after January 1, 2021.

10.1.2 Regional Housing Needs Allocation
The Plan Bay Area 2050 Final Blueprint forecasts that the nine Bay Area counties will add 1.4 million new households between 2015 and 2050. For the eight-year time frame covered by this Housing Element Update, HCD has identified the region’s housing need as 441,176 units. The total number of housing units assigned by HCD is separated into four income categories that cover housing types for all income levels, from very lowincome households to market rate housing.1 This calculation, known as the Regional Housing Needs
1 HCD divides the RHNA into the following four income categories: Very Low income: 0-50 percent of AMI, Low income: 50-80 percent of AMI, Moderate income: 80-120 percent of AMI, and Above Moderate income: 120 percent or more of AMI.

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Determination (RHND), is based on population projections produced by the California Department of Finance as well as adjustments that incorporate the region’s existing housing need.

Almost all jurisdictions in the Bay Area received a larger RHNA this cycle compared to the last cycle, primarily due to changes in State law that led to a considerably higher RHND compared to previous cycles.

On January 12, 2022, HCD approved the Association of Bay Area Government’s (ABAG) adopted RHNA Methodology. For Los Gatos, the RHNA to be planned for this cycle is 1,993 units, an increase from the last cycle. Table 10-1 shows the RHNA, including breakdown by affordability levels, for Los Gatos for the period 2023 through 2031.

Table 10-1 Regional Housing Needs Allocation
Income Group Percentage of AMI Share
Extremely Low Income 0-30 268
Very Low Income 31-50 269
Low Income 51-80 310
Moderate Income 81-120 320
Above Moderate Income Over 120 826
Total 1,993
Note: State law requires that jurisdictions project the housing needs of extremely low income households. This projection can be estimated at 50 percent of the very low income need.

10.1.3 Affirmatively Furthering Fair Housing
In 2018, AB 686 established an independent State mandate to address AFFH. AB 686 extends requirements for Federal grantees and contractors to “affirmatively further fair housing,” including requirements in the Federal Fair Housing Act, to public agencies in California. Affirmatively furthering fair housing is defined specifically as taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity by replacing segregated living patterns with truly integrated and balanced living patterns; transforming racially and ethnically concentrated areas of poverty into areas of opportunity; and fostering and maintaining compliance with civil rights and fair housing laws.

AB 686 requires public agencies to:
 Administer their programs and activities relating to housing and community development in a manner to affirmatively further fair housing;
 Not take any action that is materially inconsistent with the obligation to affirmatively further fair housing;  Ensure that the program and actions to achieve the goals and objectives of the Housing Element affirmatively further fair housing; and
 Include an assessment of fair housing in the Housing Element.

The requirement to AFFH is derived from The Fair Housing Act of 1968, which prohibited discrimination concerning the sale, rental, and financing of housing based on race, color, religion, national origin, or sex and was later amended to include familial status and disability. The 2015 U.S. Department of Housing and Urban

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Development (HUD) Rule to Affirmatively Further Fair Housing and California AB 686 (2018) both mandate that each jurisdiction takes meaningful action to address significant disparities in housing needs and access to opportunity. AB 686 requires that jurisdictions incorporate AFFH into their Housing Elements, which includes inclusive community participation, an assessment of fair housing, a site inventory reflective of AFFH, and the development of goals, policies, and programs to meaningfully address local fair housing issues.

An AFFH analysis was prepared by Root Policy Research and is included as an appendix to this Housing Element (see Appendix A). An action matrix for programs and actions that aim to affirmatively further fair housing is included in Section 10.6, Implementation Programs, of this Housing Element.

Defining Segregation
Segregation is the separation of different demographic groups into concentrated geographic locations or communities, meaning that groups are unevenly distributed across geographic space. Appendix A examines two spatial forms of segregation: neighborhood level segregation within a local jurisdiction; and Town level segregation between jurisdictions in the Bay Area.

Neighborhood level segregation (within a jurisdiction, or intra-Town): Segregation of race and income groups can occur from neighborhood to neighborhood within a Town. For example, if a local jurisdiction has a population that is 20 percent Latinx, but some neighborhoods are 80 percent Latinx while others have nearly no Latinx residents, that jurisdiction would have segregated neighborhoods.

Town level segregation (between jurisdictions in a region, or inter-jurisdiction): Race and income divides also occur between jurisdictions in a region. A region could be very diverse with equal numbers of White, Asian, Black, and Latinx residents, but the region could also be highly segregated with each jurisdiction consisting solely of one racial group.

There are many factors that have contributed to the generation and maintenance of segregation. Historically, racial segregation stemmed from explicit discrimination against people of color, such as restrictive covenants, redlining, and discrimination in mortgage lending. This history includes many overtly discriminatory policies made by Federal, State, and local governments. Segregation patterns are also affected by policies that appear raceneutral, such as land use decisions and the regulation of housing development.

Segregation has resulted in vastly unequal access to public goods such as quality schools, neighborhood services and amenities, parks and playgrounds, clean air and water, and public safety. Segregation has lasting generational affects that target low-income and minority communities. Unequal access to public goods disproportionately affects undeserved communities, leading to lower levels of educational attainment, higher morbidity rates, and higher mortality rates.

Segregation Patterns in the Bay Area
Across the San Francisco Bay Area, White residents and above moderate-income residents are significantly more segregated from other racial and income groups (see Appendix B). The highest levels of racial segregation occur between the Black and White populations. The analysis completed for Appendix A indicates that the amount of racial segregation both within Bay Area cities and across jurisdictions in the region has decreased since the year 2000. This finding is consistent with recent research from the Othering and Belonging Institute at UC Berkeley, which concluded that, “[a]lthough seven of the nine Bay Area counties were more segregated in 2020 than they were in either 1980 or 1990, racial residential segregation in the region appears to have peaked around the year 2000 and has generally declined since.” However, compared to cities in other parts of California, Bay Area jurisdictions have more neighborhood level segregation between residents from different racial groups.

Additionally, there is also more racial segregation between Bay Area cities compared to other regions in the State.

The Federal Fair Housing Act prohibits discrimination in housing on the basis of race or color, national origin, religion, sex, familial status, and disability. Figure 10-1 on the following page shows the number of HCD Fair Housing Inquiries for the period 2013 through 2021.

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Figure 10-1 HCD Fair Housing Inquiries (2013- 2021)
Source: California Department of Housing.

Segregation and Land Use
It is difficult to address segregation patterns without an analysis of both historical and existing land use policies that impact segregation patterns. Land use regulations influence what kind of housing is built in a county, city, town, or neighborhood. These land use regulations in turn impact demographics, and they can be used to affect the number of houses in a community, the number of people who live in the community, the wealth of the people who live in the community, and where within the community they reside. Land use regulations have led to disparities among neighborhoods based on class and race.

Segregation in the Town of Los Gatos
 As of 2020, White residents are the most geographically concentrated compared to other racial groups in Los Gatos, as measured by the isolation index. White residents live in neighborhoods where they are less likely to come into contact with other racial groups.
 Among all racial groups, the White population’s isolation index value has changed the most over time, becoming less segregated from other racial groups between 2000 and 2020.  According to the dissimilarity index, within Los Gatos, racial segregation is most significant between Black and White populations. 2 However, this dissimilarity index 3 value is not a reliable data point due to small population size.
2 The analysis conducted for this report suggests that dissimilarity index values are unreliable for a population group if that group represents approximately less than 5% of the jurisdiction’s total population. ABAG/MTC recommends that when cities have population groups that are less than 5% of the jurisdiction’s population (see Figure B-4 in Appendix B) the assessment could focus on the isolation index or Thiel’s H-Index to gain a more accurate understanding of neighborhood-level racial segregation in their jurisdiction. 3 The “index of dissimilarity” is the most commonly used and accepted method of measuring segregation, and compares how evenly one population subgroup is spread out geographically compared to another population sub-group.

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 According to the Theil H-Index,4 neighborhood racial segregation in Los Gatos increased between 2010 and 2020. Neighborhood income segregation stayed about the same between 2010 and 2015.  Above moderate-income residents are the most segregated compared to other income groups in Los Gatos. Above moderate-income residents live in neighborhoods where they are less likely to encounter residents of other income groups.
 Among all income groups, the above moderate-income population’s segregation measure has changed the most over time, becoming less segregated from other income groups between 2010 and 2015.  According to the dissimilarity index, segregation between lower income residents and residents who are not lower income has increased between 2010 and 2015. In 2015, the income segregation in Los Gatos between lower income residents and other residents was higher than the average value for Bay Area jurisdictions.

Figures 10-2 and 10-3 identify HCD Fair Housing Inquiries by bias for the period 2013 through 2021 and a list of Fair Housing Assistance organizations within Santa Clara County. Figure 10-2 shows that a total of eight fair housing inquiries for Los Gatos were submitted with two submittals citing familial status as a bias and six cases citing no specific bias.

Figure 10-2 HCD Fair Housing Inquiries by Bias, January 2013-March 2021 Source: California Department of Housing and Community Development AFFH Data Viewer 4 The Theil H-Index is a statistic primarily used to measure economic inequality and other economic phenomena.