Los Gatos City Council
January 20, 2026

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ITEM NO. 14.
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Ordinance Council Meeting Date

DRAFT ORDINANCE

AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS

AMENDING THE ZONING CODE
FROM C-2:LHP (CENTRAL BUSINESS DISTRICT WITH A LANDMARK AND HISTORIC

PRESERVATION OVERLAY)
TO R-1D:LHP (SINGLE-FAMILY RESIDENTIAL DOWNTOWN WITH A LANDMARK AND

HISTORIC PRESERVATION OVERLAY)
FOR PROPERTY LOCATED AT 4 TAIT AVENUE.

WHEREAS, the applicant requests approval to change the zoning from C-2:LHP (Central Business District with a Landmark and Historic Preservation Overlay) to R-1D:LHP (Single-Family Residential Downtown with a Landmark and Historic Preservation Overlay) on property located at 4 Tait Avenue (Santa Clara County Assessor Parcel Number 510-44-054); and WHEREAS, the Planning Commission recommended approval of the zone change at its regularly noticed public hearing on December 10, 2025, finding that the R-1D:LHP (SingleFamily Residential Downtown with a Landmark and Historic Preservation Overlay) zoning is consistent with the zoning of neighboring properties and consistent with the proposed use of the property; and
WHEREAS, this matter was regularly noticed in conformance with State and Town law and came before the Town Council for public hearing on ______________, 2025; and WHEREAS, the Town Council accepted the report of the Planning Commission’s recommendation of approval for the proposed General Plan amendment; and WHEREAS, the Town Council considered all facts and information related to a request to change the zoning designation for the property at 4 Tait Avenue from C-2:LHP (Central Business District with a Landmark and Historic Preservation Overlay) to R-1D:LHP (Single-Family Residential Downtown with a Landmark and Historic Preservation Overlay) as shown on Exhibit A.

EXHIBIT 6 Page 293
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NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY ORDAIN AS FOLLOWS:

SECTION I. Legislative Findings.

A. With regard to CEQA, there is no possibility that this project will have a significant impact on the environment; therefore, the project is not subject to the California Environmental Quality Act, Section 15061 (b)(3), in that it can be seen with certainty that there is no possibility that the proposed amendments to the General Plan and Town Code will have a significant effect on the environment, because the project does not include any modification that would affect the historical significance of the building.

B. With regard to required consistency with the Town’s General Plan, the zone change is consistent with the General Plan and its Elements, including but not limited to Goals LU-1, LU-6, CD-6, CD-10, CD-12, and CD-13, and Policies LU-1.4, LU-6.1, LU-6.3, LU-6.4, LU-6.5, CD6.1, CD-10.1, CD-12.1, and CD-12.2.

SECTION I. Zone Change.

The Town Code of the Town of Los Gatos is hereby amended to change the zoning of the property at 4 Tait Avenue (Santa Clara County Assessor Parcel Number 510-44-054) as shown on the map attached hereto as Exhibit A, and is part of this Ordinance, from C-2:LHP (Central Business District with a Landmark and Historic Preservation Overlay) to R-1D:LHP (Single-Family Residential Downtown with a Landmark and Historic Preservation Overlay).

SECTION III. Severability.

In the event that a court of competent jurisdiction holds any Section, subsection, paragraph, sentence, clause, or phrase in this Ordinance unconstitutional, preempted, or otherwise invalid, the invalid portion shall be severed from this Ordinance and shall not affect the validity of the remaining portions of this Ordinance. The Town hereby declares that it would have adopted each Section, subsection, paragraph, sentence, clause, or phrase in this Ordinance irrespective of the fact that any one or more Sections, subsections, paragraphs,

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Ordinance Council Meeting Date
sentences, clauses, or phrases in this Ordinance might be declared unconstitutional, preempted, or otherwise invalid.

SECTION IV. Publication.

In accordance with Section 36937 of the Government Code of the State of California, this Ordinance takes effect 30 days from the date of its passage. The Town Council hereby directs the Town Clerk to cause this Ordinance or a summary thereof to be published or posted in accordance with Section 36933 of the Government Code of the State of California.

SECTION V. Effective Date.

This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on the ___ day of _____ 2025, and adopted by the Town Council of the Town of Los Gatos on the ____ day of _____ 2025, 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: __________________

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ITEM NO. 14.

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TOWN OF LOS GATOS
Application No.

Change of zoning map amending the Town Zoning Ordinance.

Zone Change
Prezoning
From: C-2:LHP To: R-1D:LHP
Z-25-002 A.P.N. # 510-44-054
Forwarded by Planning Commission
Approved by Town Council
Clerk Administrator
Date:

Mayor
Date:

Ord:
§
4 Tait Avenue

EXHIBIT A

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Resolution 25 - _______ __, 2025
Draft Resolution to
be modified by Town
Council deliberations
and direction.

RESOLUTION 2025-

RESOLUTION OF THE TOWN COUNCIL

OF THE TOWN OF LOS GATOS

AMENDING THE GENERAL PLAN LAND USE DESIGNATION FROM CENTRAL BUSINESS

DISTRICT TO MEDIUM DENSITY RESIDENTIAL
FOR PROPERTY AT 4 TAIT AVENUE.

WHEREAS, the applicant requests approval to change the General Plan Land Use designation from Central Business District to Medium Density Residential on property located at 4 Tait Avenue (Santa Clara County Assessor Parcel Number 510-44-054); and WHEREAS, the Planning Commission recommended approval of the General Plan amendment at its regularly noticed public hearing on December 10, 2025, finding that the Medium Density Residential designation is consistent with the land use designations of neighboring properties and consistent with the proposed use of the property; and WHEREAS, this matter was regularly noticed in conformance with State and Town law and came before the Town Council for public hearing on ______________, 2021; and WHEREAS, the Town Council accepted the report of the Planning Commission’s recommendation of approval for the proposed General Plan amendment; and WHEREAS, the Town Council considered all facts and information related to a request to change the General Plan Land Use designation for the property at 4 Tait Avenue from Central Business District to Medium Density Residential as shown on Exhibit A.

NOW, THEREFORE, BE IT RESOLVED, that the Town Council hereby changes the General Plan Land Use designation for property at 4 Tait Avenue as shown on Exhibit A, from Central Business District to Medium Density Residential.

Finding for the California Environmental Quality Act (CEQA):

1. The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Section 15061(b)(3), in that it can be seen with certainty that there is no possibility that the proposed amendments to the General Plan and Town Code will have a significant effect on the environment, because the EXHIBIT 7 Page 299
ITEM NO. 14.
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Resolution 25 - _______ __, 2025
project does not include any modification that would affect the historical significance of the building.

Finding for Consistency with the Town’s General Plan:

1. That the General Plan amendment is internally consistent with the existing goals and policies of the General Plan and its corresponding Elements.

PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the ___th day of _____, 2025, 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: __________________

ITEM NO. 14.

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TOWN OF LOS GATOS
From: Central Business District
To: Medium Density Residential
Application No. GP-25-002 A.P.N. # 510-44-054
Change of the general plan map amending the Town General Plan Forwarded by Planning Commission
Approved by Town Council
Clerk Administrator
Date:

Mayor
Date:

Resolution:
4 Tait Avenue
§

EXHIBIT A

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ITEM NO. 14.

EXHIBIT 8

ITEM NO. 14.

ITEM NO. 14.

PREPARED BY: Sean Mullin, AICP
Planning Manager
Reviewed by: Community Development Director and Town Attorney 110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

PLANNING COMMISSION
REPORT
MEETING DATE: 12/10/2025
ITEM NO: 6

ADDENDUM
DATE: December 9, 2025
TO: Planning Commission
FROM: Joel Paulson, Community Development Director
SUBJECT: Consider a Request for Approval for a Zone Change from C-2:LHP (Central Business District with a Landmark and Historic Preservation Overlay) to R-1D:LHP (Single-Family Residential Downtown with a Landmark and Historic Preservation Overlay) and a General Plan Amendment to Change the Land Use Designation from Central Business District to Medium Density Residential, for Property Located at 4 Tait Avenue. APN: 510-44-054.

Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Section 15061 (b)(3). Zone Change Application Z-25-002 and General Plan Amendment Application GP-25-002. Property Owner/Applicant: Town of Los Gatos.

Project Planner: Sean Mullin.

REMARKS:

Exhibit 9 includes a revised draft resolution for the General Plan Amendment.

EXHIBITS:

Previously Received with the December 10, 2025, Staff Report:

1. Location Maps (showing existing and proposed General Plan Land Use designations and Zoning)

2. Ordinance 2317

3. Resolution 2021-009

4. Resolution 2025-002

5. Draft Required Findings

6. Draft Ordinance for the Zone Change, with Exhibit A
ATTACHMENT 6 Page 305
ITEM NO. 14.

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SUBJECT: 4 Tait Avenue/Z-25-002 and GP-25-002
DATE: December 9, 2025

7. Draft Resolution for the General Plan Amendment, with Exhibit A

8. Property Plans
Received with this Addendum Report:

9. Revised Draft Resolution for the General Plan Amendment, with Exhibit A

ITEM NO. 14.
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Resolution 25 - _______ __, 2025
Draft Resolution to
be modified by Town
Council deliberations
and direction.

RESOLUTION 2025-

RESOLUTION OF THE TOWN COUNCIL

OF THE TOWN OF LOS GATOS

AMENDING THE GENERAL PLAN LAND USE DESIGNATION FROM CENTRAL BUSINESS

DISTRICT TO MEDIUM DENSITY RESIDENTIAL
FOR PROPERTY AT 4 TAIT AVENUE.

WHEREAS, the applicant requests approval to change the General Plan Land Use designation from Central Business District to Medium Density Residential on property located at 4 Tait Avenue (Santa Clara County Assessor Parcel Number 510-44-054); and WHEREAS, the Planning Commission recommended approval of the General Plan amendment at its regularly noticed public hearing on December 10, 2025, finding that the Medium Density Residential designation is consistent with the land use designations of neighboring properties and consistent with the proposed use of the property; and WHEREAS, this matter was regularly noticed in conformance with State and Town law and came before the Town Council for public hearing on ______________, 2025; and WHEREAS, the Town Council accepted the report of the Planning Commission’s recommendation of approval for the proposed General Plan amendment; and WHEREAS, the Town Council considered all facts and information related to a request to change the General Plan Land Use designation for the property at 4 Tait Avenue from Central Business District to Medium Density Residential as shown on Exhibit A.

NOW, THEREFORE, BE IT RESOLVED, that the Town Council of the Town of Los Gatos does hereby declare, determine, and order that the following findings are made by the Town Council of the Town of Los Gatos:

1. The project is Categorically Exempt pursuant to the adopted Guidelines for the Implementation of the California Environmental Quality Act, Section 15061(b)(3), in that it can be seen with certainty that there is no possibility that the proposed amendments to the General Plan and Town Code will have a significant effect on the environment, because the project does not include any modification that would affect the historical significance of the building.

2. This amendment is in the public interest because it changes the Land Use designation to Medium Density Residential consistent with the proposed R-1D zoning and provides for multiple-family residential, duplex, and/or small single-family homes consistent with the surrounding parcels.

EXHIBIT 7
EXHIBIT 9

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Resolution 25 - _______ __, 2025

3. The General Plan amendment is internally consistent with the existing goals and policies of the General Plan and its corresponding Elements, including but not limited to: LU-1, LU-6, LU-1.4, LU-6.1, LU-6.3, LU-6.4, LU-6.5, CD-6, CD-10, CD-12, CD-13, CD-6.1, CD-10.1, CD-12.1, and CD-12.2.

NOW, THEREFORE, BE IT FURTHER RESOLVED, that upon the effective date of the ordinance effecting the Zone Change, the Town Council of the Town of Los Gatos hereby changes the General Plan Land Use designation for property at 4 Tait Avenue as shown on Exhibit A, from Central Business District to Medium Density Residential.

PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the ___
th day of _____, 2025, 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: __________________

ITEM NO. 14.

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TOWN OF LOS GATOS
From: Central Business District
To: Medium Density Residential
Application No. GP-25-002 A.P.N. # 510-44-054
Change of the general plan map amending the Town General Plan Forwarded by Planning Commission
Approved by Town Council
Clerk Administrator
Date:

Mayor
Date:

Resolution:
4 Tait Avenue
§

EXHIBIT A

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ITEM NO. 14.

LOS GATOS PLANNING COMMISSION 12/10/2025
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A P P E A R A N C E S:

Los Gatos Planning
Commissioners:

Emily Thomas, Chair
Kendra Burch, Vice Chair
Jeffrey Barnett
Susan Burnett
Steve Raspe
Joseph Sordi
Rob Stump
Community Development
Director:

Joel Paulson
Town Attorney: Gabrielle Whelan
Transcribed by: Vicki L. Blandin
(619) 541-3405
ATTACHMENT 7

ITEM NO. 14.

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P R O C E E D I N G S:

CHAIR THOMAS: We will now move on to Item 6,
which is to consider a request for approval of a Zone
Change from C-2:LHP (Central Business District with a
Landmark and Historic Preservation Overlay) to R-1D:LHP (Single-Family Residential Downtown with a Landmark and Historic Preservation Overlay), and General Plan Amendment to change the land use designation from Central Business District to Medium Density Residential for property located at 4 Tait Avenue. APN 510-44-054. Categorically exempt
pursuant to the adopted guidelines for the implementation of the California Environmental Quality Act, Section
15061(b)(3). Zone Change Application Z-25-002, and General Plan Amendment Application GP-25-002. Property Owner and Applicant is the Town of Los Gatos.

Before the Staff Report, may I have a show of
hands of Commissioners that have visited the property? Are there any disclosures?
Mr. Mullin, you will be providing the Staff
Report this evening?
SEAN MULLIN: Yes. Good evening, Chair. Thank
you.

ITEM NO. 14.

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The subject parcel is owned by the Town and
located at the northeast corner of Tait Avenue and West Main Street in the Broadway Historic District. The property is developed with a primary and accessory building,
originally constructed as a fire station and later used as a museum. The museum use was discontinued several years ago and both buildings are currently unoccupied.

The Town seeks to rezone the property from C2:LHP to R-1D:LHP, and a General Plan Amendment to change the land use designation from Central Business District to Medium Density Residential. These changes would essentially revert to the previous Residential designation of the
property, while continuing to maintain the Landmark and Historic Presentation Overlay on the property. The Staff Report describes how the proposed Zone Change and General Plan Amendment would be consistent with the General Plan and consistent with each other.

With that, Staff recommends that the Planning
Commission forward a recommendation of approval as provided on page 6 of your Staff Report to the Town Council.

This concludes Staff’s presentation. We are
available to support your discussion.

CHAIR THOMAS: Okay, thank you. Are there any
questions for Staff at this time? Commissioner Barnett.

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COMMISSIONER BARNETT: Mr. Mullin, what is the
proper action for the Planning Commission with respect to the draft ordinance? Is that something before us or not? SEAN MULLIN: Tonight, the Planning Commission’s
role is to provide a recommendation to the Town Council, who would then consider both items at a future meeting.

COMMISSIONER BARNETT: Okay, thank you.

CHAIR THOMAS: Commissioner Burnett.

COMMISSIONER BURNETT: I just have a
clarification here. When we’re doing this General Plan
Amendment and we’re changing the wording from it being
Medium Density to Single-Family Residential, like the R1:D, it would still be R-1:D, but the wording has changed from Single-Family Residential to Medium Density, and there is quite a difference in the amount of housing, the
description of what you can do with that property. That’s why I’m concerned about why are we changing that wording? SEAN MULLIN: I can clarify. There are two
actions proposed with these applications. One is a rezone, and one is a General Plan Amendment.

The rezone, the request there is to change it
from C-2, which is a Commercial designation, back to R-1D, which is Residential Downtown. The Residential Downtown designation, that zone I should say, allows for SinglePage 314 ITEM NO. 14.

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Family Residential and two-family dwellings, and if it’s a two-family dwelling, it would need to be contained in a single building. So, the proposal from the zoning
perspective is to change it back to a Single-Family
Residential or two-family zone, which would match the
surrounding neighborhood.

The second action, which is the General Plan
Amendment, would change it from a Commercial designation to Medium Density Residential, and you are correct, and while the Medium Density Residential carries a density range of 5-12 dwelling units per acre, the lot is small enough that it would never achieve the 5-12, but also, and more
importantly from a consistency with the neighborhood use standpoint, the catch valve is that the zoning limits the use of property to Single-Family Residential or two-family, so you would not get multi-family on that property based on the zoning and the Town rules.

DIRECTOR PAULSON: I’ll just add also, this is
what it was General Planned before we changed it to
Commercial a few years ago, and the R-1D, the corresponding General Plan designation, is Medium Density Residential.

COMMISSIONER BURNETT: Okay.

CHAIR THOMAS: I have a follow-up to that. I just
want to confirm that all the surrounding properties in that

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area are also General Plan Medium Density Residential,
correct?
SEAN MULLIN: Partially correct, yes. On one side
it’s Medium Density Residential, and the other side it’s Commercial. This is right on the boundary, so either
direction it goes it’s consistent and it’s not spot zoning or a spot designation.

COMMISSIONER BURNETT: Just a follow-up? So, the
bottom line is that it wouldn’t change what could be there? I mean, we’re not looking at duplexes and triplexes.

SEAN MULLIN: What could be there under the
proposed zone is a duplex, but a triplex, under the Town’s rules, would not be allowed or anything, any more units than that in a multi-family configuration. One-family or two-family dwelling is what’s allowed from a Residential perspective as a permitted use in that zone.

COMMISSIONER BURNETT: Okay, thank you.

CHAIR THOMAS: Are there any other questions for
Staff at this time? We will now open the public portion of this public hearing on Item 6, and because the Town is the Applicant, we skip over that part and we will offer up
comments from the public.

The first speaker card I have is for Steve
McGrath. Mr. McGrath, if you could come up, state your name

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for the record, and you can adjust the microphone
accordingly, and then you will have three minutes to speak on this topic.

I do just want to tell everyone here in the
audience that this is a public comment, and then we have the opportunity to ask you questions, and we can ask Staff follow-up questions, but it’s not an exchange. So, express your questions, please, but just know that typically we do not respond and go back and forth.

STEVE McGRATH: My name is Steve McGrath. I am
here with my son, Marcus, and represent my family. We live at 305 West Main Street, so we are directly across Main Street from the property.

I’m here to strongly support the zone change as
proposed. I feel that the zoning would preserve the history of the neighborhood, which we feel is very, very important.

There are so many areas of Los Gatos that are changing so quickly, we feel that this is a really positive influence to maintain the unique character of our town.

I think you made the comment that we’re trying to
match the surrounding neighborhood. We really feel strongly that this property should match the surrounding
neighborhood. In particular, the Single-Family Residential is appropriate in this area due to the adjacency of the

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nursery and elementary schools, so that’s very important.

Because it is surrounded on all sides, three sides
certainly, by Residential, anything other than that would be a significant change to the character of this historic area.

Noise, traffic, and parking are already
challenging in this area, and anything other than SingleFamily Residential would certainly generate more noise, more traffic, and more parking issues. Thank you.

CHAIR THOMAS: Do we have any questions for the
speaker? Thank you very much for your comments. The next card, I don’t have a name at the top, but I think it’s for Irina Graff. Thank you very much. If you speak together, then you will have three total minutes, whereas if you
speak separately then you will have three minutes each.

ATTORNEY WHELAN: You can either choose to speak
together for three, or separately for more.

CHAIR THOMAS: Will you state your name for the
record, and whoever did not fill out a speaker card,
whoever is not Irina, can you also fill out a speaker card? Thank you.

SERGEI GRAFF: Good evening, Commissioners. My
name is Sergei Graff. This is my wife, Irina Graff. We are

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Los Gatos residents. I’m also part of the St. Mary School community, and also the St. Mary parish community.

I am here to respectfully request the Commission
to pause the zoning decision for 4 Tait Avenue so we can present our community-serving alternative.

Four Tait Avenue is not just a building, it was
an art museum for many years, and right now we have a
proposal and a plan for establishing an art museum for
kids, that St. Mary’s kids can attend, and also for Los Gatos kids and teenagers. It will be a place for art
creativity, and we are proposing a (inaudible) and
innovation center as a building, so it would fully preserve the architecture and design of this building. Also, it was an art museum before, and we will keep that in line.

I think it is a great opportunity and our
community supported that, and they spoke with the principal of St. Mary School and the parish, Father Angelo for the St. Mary Church, and they fully supported the opportunity to collaborate with the art center, so they will
collaborate and fully support that idea.

We are asking for maybe a 60- or 30-day pause on
this proposal so we can create the full plan for funding and financial plan for that idea. We are asking to give the

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community a chance to bring this art center back to life, and also create a museum and art center for kids.

Thank you very much for your time and considering
this idea.

IRINA GRAFF: Also, we have a (inaudible) concept
of this art space and combination between art innovation and technology, and we would like to serve our community with new technology from Netflix, Google, and (inaudible) and we have a representative from big tech company. People like to serve our kids and teens, to support them, and we have lot of representatives from our community who had
cancer, and art therapy supports them.

SERGEI GRAFF: We also plan to do the art therapy
for people who have illnesses.

CHAIR THOMAS: Thank you. Before you leave, are
there any questions for the speakers? Vice Chair Burch.

VICE CHAIR BURCH: Just so I’m clear. You guys
are putting together a proposal to purchase the property for like an art studio; sounds like an immersive
experience.

SERGEI GRAFF: I think the best thing is so we
will put (inaudible) this property and renting it.

IRINA GRAFF: For community purpose and for
serving…

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SERGEI GRAFF: Yes, as a nonprofit organization
like (inaudible).

VICE CHAIR BURCH: Okay, thank you.

CHAIR THOMAS: Commissioner Barnett.

COMMISSIONER BARNETT: Did you have any
communications with the real estate broker who has been trying to sell that property on behalf of the Town?
SERGEI GRAFF: No, we don’t unfortunately. We
just had this idea (inaudible) a long time ago.

IRINA GRAFF: If it is possible, we would like to
send our concept presentation about this potential art
center, and maybe is it possible to pause this kind of
decision to deep dive into our proposal.

COMMISSIONER BARNETT: Thank you.

CHAIR THOMAS: Okay, thank you. Did you get your
question answered? I think that we will get you in contact with Staff to discuss and disseminate the proposal.

I did also have a question for you. This space is
designated an historic structure, and so that really limits some of the remodeling, use, existing use, all of the
things, so in your proposal have you considered how this space being historic might impact the ability for it to be used?
IRINA GRAFF: Of course, yes.

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SERGEI GRAFF: We’re not planning to change
anything outside, so inside we looked at the plans. I think it is absolutely fine to create that space for learning and art classes and everything, so we don’t think the parking, because most of the parents are parked in St. Mary parking spots. Also, I think we can some café, so yes.

IRINA GRAFF: Community, yes.

SERGEI GRAFF: For community.

IRINA GRAFF: And we would like to propose afterschool programs, so our children and kids don’t need to drive and drop-off to this center, they just walk away from the school, and the pre-school also is near this building, and it will be very beneficial for all teenagers and kids of Los Gatos.

CHAIR THOMAS: Thank you. Are there any other
questions for the speakers? Thank you very much. The next speaker card that I have is for Kat Battaglia.

KAT BATTAGLIA: My name is Kat Battaglia. My
husband and I live on the other corner of West Main and Tait at 300 West Main Street, and we are also requesting and in support of hopefully reverting back to the original and historic zoning for the property for similar reasons as my neighbors.

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The character of that property has seemed very
residential, and appearance-wise it’s never appeared to be a commercial style building, so the blend with the
neighborhood, assuming that it’s under Residential, seems to be a better fit, especially with all the little kids behind it. They share a long boundary line on the back
side, and then of course on the other three sides of the property is all Residential. The frontage of the property faces Tait, which is all Residential.

There are a lot of challenges for parking in the
area as it is. Tait is really difficult. There is one side that has a section in front where there is no parking. We see a lot of people just traffic-wise looking for parking anywhere. They tend to come around the corner and make a Uturn and go back; I think they’re looking for parking.

It seems that if there was a commercial building
or business there that that would just extremely exacerbate the problem for everyone with parking challenges, and it would change the entire flavor of the neighborhood. It’s very much more Residential feeling after a certain time, particularly in the evening. I think that that would
completely change.

I am also concerned that with those parking and
traffic issues we’d get a lot of gridlocks in the area. I

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just think that would be worse if there was any kind of Commercial business there. There is also concern for
emergency response when we have these gridlocked areas.

Residential is just calmer, and I think it keeps in the flavor of the area and that particular building.

CHAIR THOMAS: Thank you. Are there any questions
for the speaker? Thank you. The next speaker card I have is for Mike Wasserman.

MIKE WASSERMAN: Good evening, everyone. It’s
always nice to be back here, and nice to see all of you all. I want to thank you all first for your community
service. It’s nice to see some new faces, it’s nice to see some familiar faces.

I want to thank Staff for making the
recommendation that they’ve made thus far. I’m going to repeat a couple of things that you’ve heard already, but I think what is before you tonight and endorsed by Staff is an appropriate recommendation on their part.

If you’ve all been out to the site—I liked seeing
all the hands raised beforehand, thank you for doing that— to the north of the property is a Single-Family Residential home, to the west of the property is a Single-Family
Residential home, to the south of the property are two
Single-Family Residential homes, and for the record, I own

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301 and I live at 303 West Main Street, so three out of four homes surrounding this piece of property are SingleFamily Residential, and that’s an important thing.

The front door, as was mentioned, the house faces
Tait. Tait is a residential street. To throw a Commercial use out there is, in my opinion, not appropriate. It’s
residential; residential fits there. There is a salon and such to the east, and that’s kind of the line that we in the neighborhood see where Commercial creep into the
neighborhood stops and Residential continues from there.

Adjacent to this also is a nursery school. There
is a traffic issue there. I would lobby for a stop sign as you’re coming up Main Street or coming down Main Street right there at Tait, because people coming east on Main Street, coming down on Main Street, turn left onto Tait when people on Tait are trying to pull out. At my house, I hear horns every day.

The Single-Family Residential use is a lot less
intense, or intensive, as far as parking or noise. Whether it’s one home or a duplex, it’s that parking can be off the street. Tait, at that area, because St. Mary is down there, is parking only on one side, not on both sides. If it’s a Commercial use, where are they going to park? It has to be in front of homes. If it’s a Single-Family, there’s enough

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space there for a Single-Family or a duplex there and offstreet parking to be there. Noise would be less.

I can say I’ve lived on Tait, Broadway, and Main
Street, and Saturday my family and I, including my
granddaughter, were either in or participating in our 43rd consecutive Christmas parade, and I hope each of you were there. I know on Friday night I saw a lot of faces.

I will close by saying Single-Family with
historic preservation is appropriate.

CHAIR THOMAS: Thank you. Are there any questions
for the speaker at this time. No. Okay, thank you very
much. The next speaker card I have is for Alexei Mollick (phonetic).

ALEXEI MOLLICK (phonetic): Good evening. It is
an honor for me to have this moment to share my perspective with you. I understand it is pretty sensitive for the
community, but I will speak as a human being that strongly believes in a long-term benefit of what will be the best usage of this space.

I do want to vote for changing the zoning,
because we can always look up like for the high standards how to manage it, number one. Number two, the educational purposes and contributing to the community perspective of bringing in something as a value within the art purposes

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will, in my opinion, definitely bring a more positive longterm effect from historical perspective, from today’s standpoint, and as a town I think we will maintain a better historical preservation for Los Gatos as compared to
transitioning to the Residential project. Thank you for your attention.

CHAIR THOMAS: Thank you. Are there any questions
for the speaker? Commissioner Sordi.

COMMISSIONER SORDI: I just want to make sure I
understand your point of view. I think you were saying
you’re supporting reverting back to the residential,
correct?
ALEXEI MOLLICK: I’m sorry. No, that was wrong. I
am supporting remaining the zoning.

COMMISSIONER SORDI: Remaining the Commercial.

ALEXEI MOLLICK: And I will add, my friends who
are sitting in the first row, Irina and her husband, am totally in line with their proposition.

COMMISSIONER SORDI: I understand now. Thank you.

ALEXEI MOLLICK: You’re welcome. Thank you. Any
other questions?
CHAIR THOMAS: I don’t think so. Thank you. The
last speaker card that I have is for Natalia.

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NATALIA: I am Natalia (inaudible), and I have
three kids, and I went through cancer in 2017 and I’d be so happy that in this time… In 2017 I had such kind of center as family of Graff presented today, to leave my kids there, because I had full support from our community from Daves.

They’re driving my kids, and I have three kids, and helping with after school programs, but I’d be really happy as a psychologist, as an economist, and lawyer in (inaudible), so to have such kind of amazing center.

And actually, I’m doing AI for (inaudible) and I
understand that we live different lives and a lot of
changes happened, so we have to be kind of… It’s great to have next generation (inaudible) here. They present it, and I think I’m really happy to have family of Graff here,
because they organized amazing St. Mary’s Carnival in
autumn, and they’re going to organize art festivals in
spring, and it’s great. Irina also is running our
(inaudible) program in St. Mary’s, and she does amazing marketing background, and her husband, he is amazing
architecture and designer from (inaudible) School of
Design, and I think it’s great to allow them to organize such kind of center in Los Gatos.

Also, I am presented parents from (inaudible). My
older son, he’s graduated from Los Gatos High School and he

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starts his (inaudible) there. And my daughter and my 14- year-old son, he is (inaudible), so I’m presenting
(inaudible) family. They live in Los Gatos, and also they fully support this art immersive center here, also to have after school programs, and that will be great for the
community, and especially because we are living mostly in the walking distance, and so it’s not huge traffic for
downtown, because we are just walking, and kids are walking here, and it will be amazing if you fully support their immersive art center for youth.

I think it’s great also to preserve this spirit
of the fire station we used to have, and to preserve it not as residential, but as (inaudible) art and here (inaudible) historical landmark. I really support Sergei, who is an architect. He will keep the beauty as it is.

CHAIR THOMAS: Thank you. Do we have any
questions for the speaker? Thank you very much. I do not have any more speaker cards. Is there anyone else from the audience that would like to speak on this item? Are there any hands raised on Zoom?
DIRECTOR PAULSON: Yes, there are a couple of
hands. The first to speak will be Susanne.

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SUZANNE FIORE: My name is Suzanne Fiore. I live
at 5 Tait Avenue; I am directly across the street from 4 Tait Avenue that is in question.

I will save time and not repeat everything that
some of the other speakers that are in favor of returning to the initial zoning of Residential with Historic have mentioned. I am very strongly in favor of that for all the reasons that were mentioned, the ones that are really
important to me.

Parking issues are very difficult with only side
of the street, and the whole length of the curb on Tait to the corner to the driveway is non-parkable, as it should be because of safety issues.

Our street is quite narrow. If you aren’t parked
very tightly to the curb, people’s mirrors have been
clipped, and it’s not a place to be adding a lot more
traffic, for sure.

The concern that I had when it was changed to
Commercial, and would still exist if it stays that way and has other uses than Residential, is noise. This is a quiet neighborhood. I know the school is nearby, the church is nearby, the nursery school is nearby, but on Tait
specifically those things aren’t existing; they are on the other side. As some of the other people said, that property

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is three sides Residential and one side that backs up to Commercial and the nursery school.

And it suits the neighborhood. One person said
the building style suits the Residential and historic
nature of this neighborhood.

I am thrilled that this is being looked at, and I
strongly support the Residential change. Thank you.

CHAIR THOMAS: Thank you. Are there any questions
for the speaker? Are there more?
DIRECTOR PAULSON: The next speaker will be Lisa.

LISA MAMMEL: Hello, my name is Lisa Mammel. I’m
at 33 Tait. I have lived on Tait Avenue for over 30 years.

I am six houses from the building that is in question.

I strongly support reverting back to the SingleFamily Residential District with Landmark Historic Preservation status. I echo some of the comments before, but I will just rejoin them by stating them.

I want to remind those here that the width of
this block on the street is three cars wide. There is
difficulty with ingress and egress of cars coming in and out of St. Mary, both as a church and as a school. I live across the street from their parking lot. The addition of something that would stay in business and/or amplified as a business would only add to this traffic issue.

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At times I have had to park a block or two away.

I only have room for my one car in my driveway, and I can’t access my home. This happened way back when the museum had artist showings that would happen for the weekend, that we couldn’t access our own housing.

You compound that with the summer beach traffic,
and this is a jammed street. This last block here is
gridlock. We have also worried about emergency vehicles, and indeed within that past six years there was an
emergency vehicle that could not get through.

For the past few years there was an attempt to
get a Commercial resident in this building, and it’s gone somehow astray; I don’t know the reasons for which. That said, it’s gone into disrepair, not finding a Commercial resident to lease it.

We have an obvious housing shortage in Los Gatos;
it has been mandated from the state, it has been reflected in our housing values and our marketing of our residential area. This is an opportunity to chip away at some of that housing question.

Finally, Tait Avenue is a proud community that
hosts the Children’s Parade. It hosts the bike race. It hosts Halloween. This is a community that comes together as neighbors and as ones who know each other and welcome

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others, but it’s a neighborhood, it is not a Commercial district, and therefore I strongly support reverting it back to the Single-Family Residential Downtown with
Landmark Historic Preservation.

CHAIR THOMAS: Thank you. Are there any questions
for the speaker? Are there any other hands raised on Zoom? DIRECTOR PAULSON: There are no other hands
raised.

CHAIR THOMAS: We will now close the public
portion of the public comments on Item 6, and I invite
Commissioners to ask Staff questions, and/or eventually proposed a motion. Commissioner Sordi.

COMMISSIONER SORDI: Just a question for Staff
for clarification. I think one of the Commissioners asked earlier about whether or not the party interested in a
Commercial use reached out to the broker, but do we know if anyone who is in the principal role in this real estate transaction, which is the Town, has been contacted as well? They’re aware of that potential deal?
DIRECTOR PAULSON: I know that the Town has taken
the action to make the surplus land for sale. We do have a broker, I believe it’s through Cosmont (phonetic) is the brokers. They’re preparing materials, but they have had inquiries from a number of folks interested in the property

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that know that it will be sold, so I suggest that folks continue to look at that, but the Town’s intent currently is to sell this property.

Even with the reversion to R-1D that the Town
Attorney has looked up, you can do that type of use in this zone with a Conditional Use Permit, so should things change or should someone buy the property and work out an
agreement with them, then that’s still an opportunity.

COMMISSIONER SORDI: Thank you.

CHAIR THOMAS: Commissioner Barnett.

COMMISSIONER BARNETT: I’m concerned because
there is legitimate interest in a possible—I wouldn’t call it Commercial, but I would call it family-oriented—use of the property, but I’m concerned because there was no input to the Commission in advance of tonight and there is a
request for a continuance from the public.

My thought is since we’re only making a
recommendation to the Council that the parties have an
opportunity to speak to the Council about their concerns, or perhaps there will be a change with respect to the
broker in the interim, but my thought would be to approve the application, and I can make a motion when appropriate.

CHAIR THOMAS: Okay, thank you.

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DIRECTOR PAULSON: Through the Chair, just from a
timing perspective, so the folks are aware. This process is the Planning Commission reviews this and they make a
recommendation to the Council. It won’t go to Council until their second meeting in January, because they will be
cancelling their first one. Then it will have to go back for a second reading, which will probably be the first
meeting in February, and if they take that action, then it doesn’t go into effect until 30 days after that.

That’s going to be clearly delineated in the
marketing materials that the broker is putting together.

This process is underway, but just so folks have an idea of this isn’t going to be like next week where we’ve changed the zoning. It’s got some additional process that it needs to go through.

CHAIR THOMAS: Thank you. Then another follow-up
question to that. I remember when we voted to change this to the Commercial. That’s when you know you’ve been on the Planning Commission long enough is when you’re undoing your own changes. But in that time the Town has been trying to get this property leased, and every opportunity has fallen through, that’s correct?
DIRECTOR PAULSON: A longer story than that, but
generally the Town had an agreement with a master developer

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who was actively pursuing Commercial opportunities. None of those ever came to fruition. If I recall correctly, I can’t remember if we just withdrew it or if we let it lapse from a time period, and so that’s when the Council started
looking at other opportunities and landed on the sale of it and then reverting back to the Residential zoning
designation and General Plan.

CHAIR THOMAS: Okay, thank you. With that
clarification, I also agree that we should move this
recommendation that Staff has given us with the findings on page 6, or In Considerations on page 6, that we need to make. It is on a border area, and so originally, and we do need housing, and it’s currently sitting vacant, and there are things that have been happening to try to fill this space for a while, but I do think it is worth noting that the changes won’t be made, as Director Paulson mentioned, for a while, and also that there is the possibility to
present for a Conditional Use Permit of the space that
would be other than Residential. I think in that case, as Commissioner Barnett noted, we would have more information for being able to make an informed decision about the best use of that space.

That being said, Commissioner Barnett, do you
want to make a motion?

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COMMISSIONER BARNETT: I do. I have the findings
as Exhibit 5; I think you mentioned 6.

CHAIR THOMAS: Oh, I think maybe I wrote down the
wrong… Maybe it was page 6 of the last Staff Report, but yes.

COMMISSIONER BARNETT: It’s on page 51 of the
Staff Report.

With respect to Item 5 on our calendar regarding
4 Tait Avenue, Zone Change Application Z-25-002, General Plan Amendment General Plan-25-002, I can make the finding that the property is categorically exempt from CEQA, and I can make all the findings in the Staff Report in Exhibit 5 on page 51 of the Staff Report, and my reasons were
previously stated. Thank you.

ATTORNEY WHELAN: Just one thing to note for the
record, it’s Agenda Item 6, but that’s it.

COMMISSIONER BARNETT: Oh, Agenda Item 6, yes.

CHAIR THOMAS: Vice Chair Burch.

VICE CHAIR BURCH: I was going to second the
motion.

CHAIR THOMAS: Okay, thank you.

DIRECTOR PAULSON: Before we go forward, just so
we can understand the maker and the seconder, the motion is to forward recommendation of approval of both the Zone

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Change and General Plan Amendment as illustrated in the Staff Report, as well as the modified resolution in the addendum.

VICE CHAIR BURCH: Correct.

COMMISSIONER BARNETT: That is correct.

CHAIR THOMAS: Is there any discussion?
Commissioner Burnett.

COMMISSIONER BURNETT: Thank you. I think this is
a great use for this property to go back to Residential. I think it is a perfect place to have a residence there. My only concern was the General Plan Amendment, which was
answered to my satisfaction.

I was a little confused speaking about the
gallery. Is that what we’re talking about with the
Conditional Use Permit? So, it would be a business within the residence? That was confusing to me.

CHAIR THOMAS: Director Paulson.

DIRECTOR PAULSON: Thank you. The use that
members of the public spoke about, even with the Zone
Change that is a use that could be allowed through a
Conditional Use Permit. That’s not what is before you
currently.

COMMISSIONER BURNETT: Thank you.

ITEM NO. 14.

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CHAIR THOMAS: Any other questions or discussion?
Then I will call the question. All those in favor, please raise your hand. The motion passes unanimously, and because this is a recommendation, there are no appeal rights.

DIRECTOR PAULSON: That’s correct.

CHAIR THOMAS: But it will be seen by Council
sometime in January or February.

DIRECTOR PAULSON: Correct.

CHAIR THOMAS: Okay, thank you.
(END)

ITEM NO. 14.

ATTACHMENT 8
From: Nora C
Sent: Tuesday, January 13, 2026 8:16 PM
To: Council <[email protected]>; Planning <[email protected]> Cc: Rob Moore <[email protected]>; Maria Ristow <[email protected]>; Mary Badame <[email protected]>; Rob Rennie <[email protected]>; Matthew Hudes <[email protected]>
Subject: Opposition to proposed commercial zoning at 4 Tait Ave [EXTERNAL SENDER]
To whom it may concern,
Please print and pass this email to all members of city council in advance of next week's meeting, thank you!
My apologies that I can't attend the meeting.

Hence my below comments:

I have owned W Main St Los Gatos since November 2015 and I have enjoyed living there since December 2016. I'm writing to formally share my concerns regarding the current City Council proposal to convert 4 Tate Ave into a commercial property.

I strongly oppose any change that would make this property commercial. Our neighborhood is a small, residential community and introducing a commercial use would have a detrimental impact. Parking in the area is already extremely limited and traffic congestion is a persistent issue - particularly on Tate and Main Street when there is an accident on Hwy 17 or when drivers use Tate as a shortcut to access the freeway. These situations already create significant challenges for residents.

Adding a commercial business would only exacerbate these problems and place an unreasonable burden on our neighborhood. If the property is to be redeveloped, maintaining it as a residential property would be far more appropriate and consistent with the character of our community.

I respectfully urge the City Council to reconsider this proposal and vote NO on any plan to covert 4 Tate Ave into a commercial property.

Preserving the residential nature of this area is essential to protecting the quality of life and integrity of our neighborhood.

Thank you for your time and consideration.

Sincerely,
Nora
Nora Comee

ITEM NO. 14.

PREPARED BY: Wendy Wood
Town Clerk
Reviewed by: Town Manager and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 01/20/2026
ITEM NO: 15
DATE: January 20, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Adopt the Revised Town Agenda Format and Rules Policy 2-01 RECOMMENDATION: Adopt the revised Town Agenda Format and Rules Policy 2-01 FISCAL IMPACT:

There is no fiscal impact associated with this action.

STRATEGIC PRIORITY:

This item is not associated with a strategic priority. However, it does align with the Town’s core goal of good governance and civic engagement.

BACKGROUND:

This item was continued from the December 16, 2025, Town Council Meeting due to the late hour of the meeting.

Policy 2-01, Town Agenda Format and Rules, establishes procedures for preparing agendas and conducting meetings of the Town Council and all Town boards, commissions, and committees.

Over the past year, staff and the Council Policy Committee have undertaken a comprehensive review to improve clarity, transparency, and consistency.

The first set of proposed revisions was discussed on November 26, 2024. Staff presented updates related to public communication to remove redundancy, agenda preparation to help establish a transparent and inclusive process for Council Members to propose future agenda items, and the conduct of meetings to adopt Rosenberg's Rules of Order. The Committee

ITEM NO. 15.

PAGE 2 OF 4
SUBJECT: Adopt the Revised Town Agenda Format and Rules Policy 2-01 DATE: January 20, 2026
requested further examination of several issues, including the use of Rosenberg’s Rules of Order and the timing for Council Members to ask clarifying questions after public comment.

On January 29, 2025, staff returned with a more comprehensive set of revisions that addressed the order of the agenda, procedures for verbal communication and written materials, Council Matters, and processes for requesting future agenda items, adjournment procedures, agenda preparation responsibilities, conduct of meetings, remote attendance requirements, behavior expectations, and procedures for managing disruptive behavior. During this meeting, the Committee requested additional analysis regarding the Mayor’s role in agenda setting, the ability of a minority of Council Members to raise issues for Council consideration, and practices used in other jurisdictions. The Committee asked that further review occur after the Cities Association meeting, so that additional information could be obtained on how other jurisdictions address the Mayor’s role in agenda setting and how a minority of Council Members might raise issues for Council consideration.

On September 23, 2025, staff brought the item back for additional Committee consideration.

The Committee discussed the proposed revisions and requested further clarification on whether separate policies should be established for the Town Council and other Town bodies, how the Mayor’s authority to place items on an agenda differs from the process for items requiring significant staff work, and what legal requirements apply when addressing disruptive behavior during public meetings. The Committee also requested a categorized breakdown of all proposed changes.

On October 28, 2025, the Committee considered alternative policy language proposed by the Mayor in addition to the staff draft. Following discussion, the Committee agreed that the Mayor’s final authority to approve the Council agenda should be retained, except for items that would require significant staff work or have substantial administrative, operational, financial, or compliance impacts. The Committee supported granting the Town Manager discretion to determine when staff effort would be significant and to adjust agenda scheduling accordingly.

The Committee also directed staff to add an agenda preparation process and schedule for Town boards, commissions, and committees, and to incorporate modified procedures related to Rosenberg’s Rules of Order, including the opportunity for Council Members to ask clarifying questions after public comment and a revised process for reconsideration. Staff was directed to return with a revised draft incorporating these changes.

Staff incorporated the October 28 Committee direction into a new draft and presented it to the Policy Committee on December 8, 2025. The draft policy included revisions to the agenda order, procedures for public comment under verbal communication and public hearings, updated expectations for the timely submission of written materials by applicants and appellants, and clarification on the process for a Council Member to request an item for future Council discussion, allowing the Town Manager to determine whether staff work associated with an item would be significant and require three or more members of the Council to vote to

ITEM NO. 15.

PAGE 3 OF 4
SUBJECT: Adopt the Revised Town Agenda Format and Rules Policy 2-01 DATE: January 20, 2026
place an item on a future agenda for action. The Mayor’s agenda-setting authority remained with added language to authorize the Town Manager to adjust agenda order or scheduling of an item to mitigate any operational, financial, or compliance impacts. New sections were also added to define procedures and timelines for preparing agendas and materials for Town boards, commissions, and committees, distinguishing these processes from those used by the Town Council.

The Conduct of Meetings section was also revised to incorporate Rosenberg’s Rules of Order with modifications, including allowing Council Members to ask clarifying questions after public comment. The Reconsideration of a Prior Action section was updated to allow a motion to reconsider a prior action no later than the next regularly scheduled meeting. Finally, minor modifications were made to the proposed language related to behavior expectations and disruptive behavior.

DISCUSSION:

At the December 8 Policy Committee meeting, the Committee reviewed the revised draft Policy 2-01 and provided additional direction for further modification. The Committee requested that the Presentations section be updated to require that visual presentations be submitted to staff at least 24 hours in advance of the meeting unless otherwise authorized by the Mayor. The Committee also directed that the Council Matters section be revised to clarify that “brief announcements” should be related to activities performed on behalf of the Town or its residents, and that personal business and political campaign activities should not be reported under Council Matters. Additionally, the Committee requested that Council Members’ reports during Council Matters be limited to three minutes each.

The Committee also provided additional direction regarding the Preparation of the Town Council Agenda section. Specifically, the Committee directed staff to remove the second paragraph and delete the first three sentences of the third paragraph because the process for Council Members to request an item for discussion is now addressed in the Council Matters section. For consistency, the Committee also requested relocating the remaining sentences of the third paragraph to the Council Matters section. These changes, along with all other Committee direction from the December 8 meeting, have been incorporated into the redline policy presented for Council consideration.

CONCLUSION:

Staff requests that the Town Council review the proposed edits to Policy 2-01, provide any revisions, and adopt the revised policy.

COORDINATION:

This report was prepared in coordination with the Town Attorney and the Town Manager’s

ITEM NO. 15.

PAGE 4 OF 4
SUBJECT: Adopt the Revised Town Agenda Format and Rules Policy 2-01 DATE: January 20, 2026
Office.

ENVIRONMENTAL ASSESSMENT:

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

Attachments:

1. Draft Town Agenda Format and Rules Policy (redline)

2. Draft Town Agenda Format and Rules Policy (clean) with Exhibit A - Modified Rosenberg’s Rules of Order

ITEM NO. 15.

ATTACHMENT 1

COUNCIL POLICY MANUAL
TITLE: Town Agenda Format and Rules POLICY NUMBER: 2-01 EFFECTIVE DATE: 12/15/1986 PAGES: 7
ENABLING ACTIONS: 1986-183; 1987-
024; 1988-124; 1993-181; 1994-057;
1996-108; 2001-077; 2004-033; 2009-
002; 2021-047
REVISED DATES: 12/15/1986; 3/2/1987;
6/6/1988; 6/15/1992; 12/6/1993; 4/4/1994;
8/5/1996; 7/2/2001; 4/5/2004; 1/20/2009;
3/16/2009; 12/6/2010; 8/5/2013; 3/3/2015;
9/20/2016; 6/20/2017; 8/1/2017; 12/4/18/;
8/20/19; 12/3/19; 6/1/2021; 11/2/2021;
9/20/22; 2/7/2023; 11/21/2023; 8/6/2024;
12/11/2025
APPROVED:

PURPOSE
To establish procedures which standardize Town agendas and ensure an orderly meeting. This Policy applies to Town Council and all Town Boards, Commissions, and Committees, and references to Mayor will apply to Boards, Commissions, and Committees Chairpersons as set forth in this Policy.

POLICY
The following policies have been established:

A. Order of the Agenda
Subject to the Mayor’s discretion to change the order of consideration of any agenda item during any individual meeting:

Call Meeting to Order
Roll Call
Pledge of Allegiance
Presentations
Consent Calendar
Verbal Communications
Public Hearings
Other Business
Council Matters
Manager Matters
Attorney Matters and Closed Session Report
Small Town Service Community Stewardship Future Focus

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
2 of 9
POLICY NUMBER:
2-01
Adjournment (No later than midnight without vote.)
B. Closed Session Report
As required by the Brown Act, the Town Attorney will report on actions taken at the Closed Session, but without reporting any information which could damage the Town’s position on a) potential or existing litigation, b) the acquisition or disposition of property, or c) any employee’s privacy interests. In addition, the Closed Session agenda shall clearly identify the subject of each agenda item consistent with the requirements of the Brown Act.

C. Communications by Members of the Public
Speakers at public meetings will be asked to provide their full name and to state whether they are a resident of the Town of Los Gatos. This information is optional but not required.

1. Verbal Communications. Comments by members of the public during the initial Verbal Communications portion of the agenda on items not on the Council agenda shall be limited to 30 minutes and no more than three (3) minutes per speaker, or at the discretion of the Mayor. Town resources may not be used to facilitate audio or visual presentations. Individuals addressing the Town Council under Verbal Communications may submit written materials and must provide at least one (1) copy for inclusion in the administrative record. As an item not listed on the agenda, no response is required from Town staff or the Council and no action can be taken. However, the Council may instruct the Town Manager to place the item on a future agenda. At the conclusion of the first Verbal Communications, the agenda will proceed onto the Public Hearings and Other Business sections of the agenda. In the event additional speakers were not able to be heard during the initial Verbal Communications portion of the agenda, an additional Verbal Communications section can be opened prior to Adjournment.

2. Public Hearings. Presentations during the Public Hearings portion of the agenda by appellants and applicants, including any expert or consultant assisting with the presentation, shall be limited to a total of no more than five (5) minutes for all speakers.

Appellants and applicants shall be provided no more than three (3) minutes to rebut at the end of the public hearing. Visual presentations that require the use of staff resources shall be limited to appellants and applicants. Other members of the public testifying at public hearings shall be limited to no more than three (3) minutes and may submit written materials, provided that one (1) copy is submitted for inclusion in the administrative record.

3. Submittal of written materials by Applicant and Appellant. To allow Town Council, Boards, Commissions, Committees, Town Staff, and the public the opportunity to review material in advance of a hearing, all materials should be submitted by the Applicant or Appellant to the designated staff member prior to the publishing of the report for the scheduled public hearing. Documents and materials received from the Applicant or Appellant after the publishing of the report will be accepted; however, the Town Staff and the Town Council may not be able to analyze the late submissions based on the time provided by the submitter for such material to be reviewed.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
3 of 9
POLICY NUMBER:
2-01

4. Other Agenda Items. Comments by members of the public concerning any other item on an agenda shall be limited to no more than three (3) minutes per item.

5. Mayor’s Discretion. All time limits noted above shall be subject to change at the Mayor’s discretion.

D. Consent Calendar
Items on the Council agenda that are considered to be of a routine and non-controversial nature are placed on the Consent Calendar. Typical items include meeting minutes, final reading and adoption of ordinances, resolutions approving agreements, awards of contracts, status staff reports, etc.

Consent items shall be approved by a single Council motion unless a member of the Council requests that an item be removed for separate Council action. Members of the public may speak on an item on the Consent Calendar during the public comment portion before the Council votes on the Consent Calendar. Items removed from the Consent Calendar may be considered at that meeting at the Mayor’s discretion.

E. Presentations
The Presentations portion of the agenda is intended to allow organized groups to make formal presentations to the Council and to recognize and honor deserving individuals and organizations. All matters included on the Presentations portion of the agenda require the prior approval of the Mayor and shall be limited to no more than ten (10) minutes, unless the Mayor grants additional time. Visual presentations must be submitted to the staff 24 hours in advance of the meeting unless otherwise authorized by the Mayor.

F. Council Matters
Members of Council may report on the activities of the committees to which they belong or the meetings they attend, question staff briefly on matters upon which the Council has taken action or given direction, make brief announcements related to activities that a Council Member performs on behalf of the Town or its residents, or discuss whether to place particular items on future agendas for action by the Council. Personal business and personal political campaign activities are not Council Matters. Council Members’ reports are limited to three minutes each. Public comment on any Council Matter will be provided during Verbal Communications section of the agenda.

During the Council Matters portion of the meeting, any Council Member may request that an item be placed on a future agenda for Council discussion. If a second Councilmember supports the request or if such request is solely made by the Mayor, the item will be scheduled on the next agenda under Council Matters for discussion purposes only.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
4 of 9
POLICY NUMBER:
2-01
If the item requires significant staff effort as determined by the Town Manager, then three or more members of the Council must vote in favor of placing an item on a future agenda for action. If more information is needed, the Council can continue the item to allow staff to obtain the required information, with approval by a majority of the Council.

Discussion items are intended solely for dialogue between Councilmembers and shall not require staff research, reports, or preparation beyond listing the item on the agenda. If, after such discussion, three or more Councilmembers support further consideration through a vote to agendize, the item shall be placed on a future agenda for formal action. At that time, staff will prepare the necessary materials and reports consistent with standard agenda procedures.

Nothing shall limit three or more Council members from providing direction in requesting action at any time. The Mayor in good faith will make every effort to place a Council Requested item on the first available Council agenda in consultation with the Town Manager.

G. Adjournment
Council meetings will be adjourned at midnight unless a majority of the Council Members present vote to extend the adjournment time.

H. Americans with Disabilities Notice on Town Agendas
As part of the requirements under the Americans with Disabilities Act, the Town is required to provide notice of whom to contact in advance of a public meeting for assistance to disabled individuals who might wish to participate. The following notice shall be provided in at least one location on each Town agenda for Council, Boards, Commissions, or Committees.

I. Preparation of the Town Council Agenda
The agenda is prepared by staff in consultation with the Mayor for the Mayor’s final approval. If there is a disagreement between The Mayor and staff, the Mayor makes the ultimate call on the Agenda and its items. In the case of any order change or scheduling agenda items, the Town Manager has the discretion to adjust the order and scheduling if such change is necessary to mitigate an operational, financial, or compliance related impact.

In compliance with the Americans with Disabilities Act, if you require special assistance to participate in this meeting, please contact the Clerk’s Office at (408) 354-6834. Please notify the Clerk’s Office at least two (2) business days prior to the meeting so that reasonable arrangements can be made to ensure accessibility in compliance with 28 CFR §35.102-35.104 and related provisions.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
5 of 9
POLICY NUMBER:
2-01
If the wish of the Council is to add an item on the agenda of the current meeting, then the Brown Act generally requires a two-thirds (2/3) vote or a unanimous vote of those present if less than five (5) Council Members are present, with a finding that there is a need to take immediate action and the need for action came to the attention of the Town after the agenda was posted.
i. Preparation of the Town Boards, Commissions, and Committees Agenda For Town Boards, Commissions, and Committees, the staff liaison will consult and consider the Chairs’s input on the items scheduled for future meetings.

J. Council Regular Meeting Agenda Schedule and Preparation In general, questions or inquiries from Council Members to the Town Manager and/or Town Attorney regarding agenda items should be responded to within 24 hours, and then placed into Addenda and/or Desk Items, as appropriate.

The following timeline outlines the standard schedule for finalizing and distributing Town Council meeting materials. While this schedule will be followed under normal circumstances, adjustments may occur based on staff availability, meeting demands, or unforeseen circumstances.

Thursday, prior
to the meeting
Written agenda is finalized and printed. Agenda packets distributed to Town Council Members.

Friday, prior to
the meeting
Additional information from staff available after the Thursday distribution of the agenda packet, and public comments received prior 3:00 p.m. will be distributed to Town Council members as an Addendum to a staff report.

Monday, prior
to the meeting
Additional information from staff available after the Friday Addendum and public comment received prior to 3:00 p.m. on Monday will be distributed to Town Council members as an Addendum to a staff report.

Day of Council
Meeting
Public comments received by 11:00 a.m. on the morning of a Council meeting will be included in a Desk Item for distribution to Town Council members by 3:00 p.m. on the afternoon of a Council meeting. Public comment received after 11:00 a.m. will not be distributed to the Council in the Desk Item; however, public comment may be submitted by individuals during the Council meeting.
i. Boards, Commissions, and Committee Schedule and Preparation.

The schedule for Boards, Commissions and Committee meetings will follow a corresponding schedule, depending on their meeting day.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
6 of 9
POLICY NUMBER:
2-01
K. Agenda Posting
Agendas shall be posted at least 72 hours prior to a regular meeting, and at least 24 hours prior to a special meeting in compliance with the Brwon Act.

L. Conduct of Town Council Meetings
The Council shall adopt:

1. Modified Rosenberg’s Rules of Order (Exhibit A - changes are bolded and noted with asterisks)with a change to the “Basic Format for an Agenda Item Discussion” section to allow Council Members to ask questions after public comment; and a change to the reconsideration process to allow a reconsideration of a motion as outlined in this policy under Section O; or

2. Allow the Mayor to conduct the meeting as deemed appropriate so long as all members of the Council concur.

M. Attendance at Meetings
The Town Council and Commissioners are expected to attend all meetings as part of their commitment to their positions. Attendance requirements for Commissioners are set forth in Town Council Policy 2-11: Commission Appointments, Residency and Attendance Requirements, and Establishing a Quorum. Consistent with the Family Medical Leave Act and the California Family Rights Act, absences of up to 12 weeks due to the birth of a child constitute excused absences.

N. Remote Attendance
In addition to the requirements of the Brown Act, the following guidelines apply to Town meetings:

1. Town Council Meetings: Requests by Council Members to attend a regular Council meeting via remote appearance (either Zoom or telephone) are allowed on a limited basis and with no more than two regular meeting remote participations in a row. In addition, at least a quorum of the Council must participate from a location within the Town and comply with other requirements of the Brown Act. However, a Council Member may participate remotely under the ‘Just Cause’ provisions of Government Code Section 54953, with remote participation limited to five meetings per calendar year. When a Council Member is participating remotely, they shall have their camera on and be visible for the duration of the meeting.

2. Town Board, Committee, and Commission Meetings: Board, Committee, and Commission members may participate remotely by telephone only, with the exception of the Finance and Planning Commissioners who have the choice of either Zoom or telephone. Requests by Commissioners to attend a Commission meeting via remote appearance should be allowed on a limited basis, with no more than four remote participations annually, no more than two regular meeting remote participations in a row, and in compliance with the Brown Act.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
7 of 9
POLICY NUMBER:
2-01

3. Remote Participation by the Public: In conformance with Government Code Section 54953, the public may participate in Town Council meetings remotely. The public may also participate in Finance Commission and Planning Commission meetings remotely as technology allows. Individuals can join these meetings using the remote participation instructions provided on the agenda, based on the available technology and equipment.

The remote participation instructions shall be provided on all Town Council, Finance Commission, and Planning Commission agendas with the exception of Town Council Closed Sessions. There is not a remote public participation option for other Town Boards, Committees, or Commissions.

O. Proposed Reconsideration of Prior Council Actions
Reconsideration of prior Council actions is discouraged and may only occur in special circumstances subject to the procedural restrictions outlined herein. Reconsideration does not include, and this Policy does not prohibit, the repeal of a resolution or ordinance in response to a lawsuit or a referendum challenging that adoption.

Step 1 – Motion to Place Reconsideration of a Prior Action on a Future Council Agenda a. The motion must be made by a Council Member who previously voted on the prevailing side of the prior action, while the second can be any Council Member ; b. The maker of the motion shall specifically articulate the new information, analysis and/or circumstances that warrant(s) reconsideration of the prior action; c. The motion must be adopted by a majority of the full Council; and d. The motion may be made and considered no later than the next regularly scheduled meeting of the Council after the item was originally acted upon.

Step 2 – Full Reconsideration of the Prior Action, if a motion as outlined in Step 1 is approved.
a. The full reconsideration of the prior action will be placed on the next available Council agenda following the agenda-setting and required public notification process. b. The agenda, public notification and staff report for the full reconsideration of the prior action shall clearly state that the item has been previously acted upon by the Council and is being reconsidered by the Council.
c. Action on the reconsideration of the prior action shall adhere to regular Council policies and practices as if the item was being heard for the first time. d. The full reconsideration of the prior action (whether sustained, reversed or otherwise modified) will be the final action on that item, and no further reconsiderations will be considered.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
8 of 9
POLICY NUMBER:
2-01
P. Motions by the Mayor
The Mayor may make or second motions. The Mayor may also restate, or ask that the maker restate, all motions immediately prior to any vote.

Q. Behavior Expectations at Town Meetings
At each meeting, the Mayor should welcome the public to participate in the meetings, understanding that the purpose of the meeting is to conduct the important business of the Town in an efficient and effective manner. The Mayor may promote constructive communication by asking Council members, staff, and community members to embrace and adhere to the following values:
 Be respectful, welcoming, inclusive, compassionate, and kind to each other,  Appreciate the diversity of perspectives and views in our community,  Express your views and share your perspectives in helpful ways,  Listen to understand and empathize with each other, and  Collaborate and work together to do what is best for Los Gatos.

As needed, the Mayor may need to remind the public about the Town’s civility rules listed below:

1. For the benefit of the entire community, the Town of Los Gatos asks that all speakers follow the Town’s meeting guidelines by treating everyone with respect and dignity. This is done by following meeting guidelines set forth in State law, in the Town Code, and on the cover sheet of the Council agenda.

2. The Town embraces diversity and strongly condemns hate speech and offensive, hateful language or racial intolerance of any kind at Council meetings.

3. Town Council and staff are well aware of the public’s right to disagree with their professional opinion on various Town issues. However, anti-social behavior, slander, hatred, and bigotry statements are completely unacceptable and will not be tolerated in any way, shape, or form at Town Council meetings.

4. All public comments at the Town Council meeting must pertain to items within the subject matter jurisdiction of the Town and shall not contain slanderous statements, hatred, and bigotry against non-public officials.

R. Managing Disruptive Behavior During Meetings
The Town will go through the following steps in the event of a meeting disturbance :

1. If the individual is participating remotely, the Mayor, or their designee shall warn the individual that their behavior is disrupting the meeting and that their failure to cease their behavior may result in their removal. If they do not promptly cease their disruptive behavior after the warning their permission to speak will be removed.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
9 of 9
POLICY NUMBER:
2-01

2. If the individual participating in-person, the Mayor or their designee shall warn the individual that their behavior is disrupting the meeting and that their failure to cease their behavior may result in their removal. If the speaker does not promptly cease their disruptive behavior after the warning, they may be removed from the meeting.

3. In accordance with Government Code Section 54957.9, in the event that any meeting is willfully interrupted by a group or groups of persons so as to render the orderly conduct of such meeting infeasible and order cannot be restored by the removal of individuals who are willfully interrupting the meeting, the members of the legislative body conducting the meeting may order the meeting room cleared and continue in session.

Only matters appearing on the agenda may be considered in such a session.

Representatives of the press or other news media, except those participating in the disturbance, shall be allowed to attend any session held pursuant to this section.

Nothing in this section shall prohibit the legislative body from establishing a procedure for readmitting an individual or individuals not responsible for willfully disturbing the orderly conduct of the meeting.

Nothing in this policy limits other options to resolve disruptions, including but not limited to, taking a recess.

APPROVED AS TO FORM:
_________
Gabrielle Whelan, Town Attorney

ITEM NO. 15.

ATTACHMENT 2

COUNCIL POLICY MANUAL
TITLE: Town Agenda Format and Rules POLICY NUMBER: 2-01 EFFECTIVE DATE: 12/15/1986 PAGES: 7
ENABLING ACTIONS: 1986-183; 1987-
024; 1988-124; 1993-181; 1994-057;
1996-108; 2001-077; 2004-033; 2009-
002; 2021-047
REVISED DATES: 12/15/1986; 3/2/1987;
6/6/1988; 6/15/1992; 12/6/1993; 4/4/1994;
8/5/1996; 7/2/2001; 4/5/2004; 1/20/2009;
3/16/2009; 12/6/2010; 8/5/2013; 3/3/2015;
9/20/2016; 6/20/2017; 8/1/2017; 12/4/18/;
8/20/19; 12/3/19; 6/1/2021; 11/2/2021;
9/20/22; 2/7/2023; 11/21/2023; 8/6/2024
APPROVED:

PURPOSE
To establish procedures which standardize Town agendas and ensure an orderly meeting. This Policy applies to Town Council and all Town Boards, Commissions, and Committees, and references to Mayor will apply to Boards, Commissions, and Committees Chairpersons as set forth in this Policy.

POLICY
The following policies have been established:

A. Order of the Agenda
Subject to the Mayor’s discretion to change the order of consideration of any agenda item during any individual meeting:

Call Meeting to Order
Roll Call
Pledge of Allegiance
Presentations
Consent Calendar
Verbal Communications
Public Hearings
Other Business
Council Matters
Manager Matters
Attorney Matters and Closed Session Report
Adjournment (No later than midnight without vote.)
Small Town Service Community Stewardship Future Focus

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
2 of 9
POLICY NUMBER:
2-01
B. Closed Session Report
As required by the Brown Act, the Town Attorney will report on actions taken at the Closed Session, but without reporting any information which could damage the Town’s position on a) potential or existing litigation, b) the acquisition or disposition of property, or c) any employee’s privacy interests. In addition, the Closed Session agenda shall clearly identify the subject of each agenda item consistent with the requirements of the Brown Act.

C. Communications by Members of the Public
Speakers at public meetings will be asked to provide their full name and to state whether they are a resident of the Town of Los Gatos. This information is optional but not required.

1. Verbal Communications. Comments by members of the public during the initial Verbal Communications portion of the agenda on items not on the Council agenda shall be limited to 30 minutes and no more than three (3) minutes per speaker, or at the discretion of the Mayor. Town resources may not be used to facilitate audio or visual presentations. Individuals addressing the Town Council under Verbal Communications may submit written materials and must provide at least one (1) copy for inclusion in the administrative record. As an item not listed on the agenda, no response is required from Town staff or the Council and no action can be taken. However, the Council may instruct the Town Manager to place the item on a future agenda. At the conclusion of the first Verbal Communications, the agenda will proceed onto the Public Hearings and Other Business sections of the agenda. In the event additional speakers were not able to be heard during the initial Verbal Communications portion of the agenda, an additional Verbal Communications section can be opened prior to Adjournment.

2. Public Hearings. Presentations during the Public Hearings portion of the agenda by appellants and applicants, including any expert or consultant assisting with the presentation, shall be limited to a total of no more than five (5) minutes for all speakers.

Appellants and applicants shall be provided no more than three (3) minutes to rebut at the end of the public hearing. Visual presentations that require the use of staff resources shall be limited to appellants and applicants. Other members of the public testifying at public hearings shall be limited to no more than three (3) minutes and may submit written materials, provided that one (1) copy is submitted for inclusion in the administrative record.

3. Submittal of written materials by Applicant and Appellant. To allow Town Council, Boards, Commissions, Committees, Town Staff, and the public the opportunity to review material in advance of a hearing, all materials should be submitted by the Applicant or Appellant to the designated staff member prior to the publishing of the report for the scheduled public hearing.

Documents and materials received from the Applicant or Appellant after the publishing of the report will be accepted; however, the Town Staff and the Town Council may not be able to analyze the late submissions based on the time provided by the submitter for such material to be reviewed.

3. Other Agenda Items. Comments by members of the public concerning any other item on an agenda shall be limited to no more than three (3) minutes per item. Page 355 ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
3 of 9
POLICY NUMBER:
2-01

4. Mayor’s Discretion. All time limits noted above shall be subject to change at the Mayor’s discretion.

D. Consent Calendar
Items on the Council agenda that are considered to be of a routine and non-controversial nature are placed on the Consent Calendar. Typical items include meeting minutes, final reading and adoption of ordinances, resolutions approving agreements, awards of contracts, status staff reports, etc.

Consent items shall be approved by a single Council motion unless a member of the Council requests that an item be removed for separate Council action. Members of the public may speak on an item on the Consent Calendar during the public comment portion before the Council votes on the Consent Calendar. Items removed from the Consent Calendar may be considered at that meeting at the Mayor’s discretion.

E. Presentations
The Presentations portion of the agenda is intended to allow organized groups to make formal presentations to the Council and to recognize and honor deserving individuals and organizations. All matters included on the Presentations portion of the agenda require the prior approval of the Mayor and shall be limited to no more than ten (10) minutes, unless the Mayor grants additional time. Visual presentations must be submitted to the staff 24 hours in advance of the meeting unless otherwise authorized by the Mayor.

F. Council Matters
Members of Council may report on the activities of the committees to which they belong or the meetings they attend, question staff briefly on matters upon which the Council has taken action or given direction, make brief announcements related to activities that a Council Member performs on behalf of the Town or its residents, or discuss whether to place particular items on future agendas for action by the Council. Personal business and personal political campaign activities are not Council Matters. Council Members’ reports are limited to three minutes each. Public comment on any Council Matter will be provided during Verbal Communications section of the agenda.

During the Council Matters portion of the meeting, any Council Member may request that an item be placed on a future agenda for Council discussion. If a second Councilmember supports the request or if such request is solely made by the Mayor, the item will be scheduled on the next agenda under Council Matters for discussion purposes only.

If the item requires significant staff effort as determined by the Town Manager, then three or more members of the Council must vote in favor of placing an item on a future agenda for action. If more information is needed, the Council can continue the item to allow staff to obtain the required information, with approval by a majority of the Council.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
4 of 9
POLICY NUMBER:
2-01
Discussion items are intended solely for dialogue between Councilmembers and shall not require staff research, reports, or preparation beyond listing the item on the agenda. If, after such discussion, three or more Councilmembers support further consideration through a vote to agendize, the item shall be placed on a future agenda for formal action. At that time, staff will prepare the necessary materials and reports consistent with standard agenda procedures.

Nothing shall limit three or more Council members from providing direction on requesting action at any time.

G. Adjournment
Council meetings will be adjourned at midnight unless a majority of the Council Members present vote to extend the adjournment time.

H. Americans with Disabilities Notice on Town Agendas
As part of the requirements under the Americans with Disabilities Act, the Town is required to provide notice of whom to contact in advance of a public meeting for assistance to disabled individuals who might wish to participate. The following notice shall be provided in at least one location on each Town agenda for Council, Boards, Commissions, or Committees.

I. Preparation of the Town Council Agenda
The agenda is prepared by staff in consultation with the Mayor for the Mayor’s final approval. If there is a disagreement between The Mayor and staff, the Mayor makes the ultimate call on the Agenda and its items. In the case of any order change or scheduling agenda items, the Town Manager has the discretion to adjust the order and scheduling if such change is necessary to mitigate an operational, financial, or compliance related impact.

The Mayor in good faith will make every effort to place a Council requested item on the first available Council agenda in consultation with the Town Manager.

If the wish of the Council is to add an item on the agenda of the current meeting, then the Brown Act generally requires a two-thirds (2/3) vote or a unanimous vote of those present if less than five (5) Council Members are present, with a finding that there is a need to take immediate action and the need for action came to the attention of the Town after the agenda was posted.

In compliance with the Americans with Disabilities Act, if you require special assistance to participate in this meeting, please contact the Clerk’s Office at (408) 354-6834. Please notify the Clerk’s Office at least two (2) business days prior to the meeting so that reasonable arrangements can be made to ensure accessibility in compliance with 28 CFR §35.102-35.104 and related provisions.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
5 of 9
POLICY NUMBER:
2-01
i. Preparation of the Town Boards, Commissions, and Committees Agenda For Town Boards, Commissions, and Committees, the staff liaison will consult and consider the Chairs’s input on the items scheduled for future meetings.

J. Council Regular Meeting Agenda Schedule and Preparation In general, questions or inquiries from Council Members to the Town Manager and/or Town Attorney regarding agenda items should be responded to within 24 hours, and then placed into Addenda and/or Desk Items, as appropriate.

The following timeline outlines the standard schedule for finalizing and distributing Town Council meeting materials. While this schedule will be followed under normal circumstances, adjustments may occur based on staff availability, meeting demands, or unforeseen circumstances.

Thursday, prior
to the meeting
Written agenda is finalized and printed. Agenda packets distributed to Town Council Members.

Friday, prior to
the meeting
Additional information from staff available after the Thursday distribution of the agenda packet, and public comments received prior 3:00 p.m. will be distributed to Town Council members as an Addendum to a staff report.

Monday, prior
to the meeting
Additional information from staff available after the Friday Addendum and public comment received prior to 3:00 p.m. on Monday will be distributed to Town Council members as an Addendum to a staff report.

Day of Council
Meeting
Public comments received by 11:00 a.m. on the morning of a Council meeting will be included in a Desk Item for distribution to Town Council members by 3:00 p.m. on the afternoon of a Council meeting. Public comment received after 11:00 a.m. will not be distributed to the Council in the Desk Item; however, public comment may be submitted by individuals during the Council meeting.
i. Boards, Commissions, and Committee Schedule and Preparation.

The schedule for Boards, Commissions and Committee meetings will follow a corresponding schedule, depending on their meeting day.

K. Agenda Posting
Agendas shall be posted at least 72 hours prior to a regular meeting, and at least 24 hours prior to a special meeting in compliance with the Brwon Act.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
6 of 9
POLICY NUMBER:
2-01
L. Conduct of Town Council Meetings
The Council shall adopt:

1. Modified Rosenberg’s Rules of Order (Exhibit A - changes are bolded and noted with asterisks) with a change to the “Basic Format for an Agenda Item Discussion “section to allow Council Members to ask questions after public comment; and a change to the reconsideration process to allow a reconsideration of a motion as outlined in this policy under Section O; or

2. Allow the Mayor to conduct the meeting as deemed appropriate so long as all members of the Council concur.

M. Attendance at Meetings
The Town Council and Commissioners are expected to attend all meetings as part of their commitment to their positions. Attendance requirements for Commissioners are set forth in Town Council Policy 2-11: Commission Appointments, Residency and Attendance Requirements, and Establishing a Quorum. Consistent with the Family Medical Leave Act and the California Family Rights Act, absences of up to 12 weeks due to the birth of a child constitute excused absences.

N. Remote Attendance
In addition to the requirements of the Brown Act, the following guidelines apply to Town meetings:

1. Town Council Meetings: Requests by Council Members to attend a regular Council meeting via remote appearance (either Zoom or telephone) are allowed on a limited basis and with no more than two regular meeting remote participations in a row. In addition, at least a quorum of the Council must participate from a location within the Town and comply with other requirements of the Brown Act. However, a Council Member may participate remotely under the ‘Just Cause’ provisions of Government Code Section 54953, with remote participation limited to five meetings per calendar year. When a Council Member is participating remotely, they shall have their camera on and be visible for the duration of the meeting.

2. Town Board, Committee, and Commission Meetings: Board, Committee, and Commission members may participate remotely by telephone only, with the exception of the Finance and Planning Commissioners who have the choice of either Zoom or telephone.

Requests by Commissioners to attend a Commission meeting via remote appearance should be allowed on a limited basis, with no more than four remote participations annually, no more than two regular meeting remote participations in a row, and in compliance with the Brown Act.

3. Remote Participation by the Public: In conformance with Government Code Section 54953, the public may participate in Town Council meetings remotely. The public may also participate in Finance Commission and Planning Commission meetings remotely as technology allows. Individuals can join these meetings using the remote participation instructions provided on the agenda, based on the available technology and equipment.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
7 of 9
POLICY NUMBER:
2-01
The remote participation instructions shall be provided on all Town Council, Finance Commission, and Planning Commission agendas with the exception of Town Council Closed Sessions. There is not a remote public participation option for other Town Boards, Committees, or Commissions.

O. Proposed Reconsideration of Prior Council Actions
Reconsideration of prior Council actions is discouraged and may only occur in special circumstances subject to the procedural restrictions outlined herein. Reconsideration does not include, and this Policy does not prohibit, the repeal of a resolution or ordinance in response to a lawsuit or a referendum challenging that adoption.

Step 1 – Motion to Place Reconsideration of a Prior Action on a Future Council Agenda a. The motion must be made by a Council Member who previously voted on the prevailing side of the prior action, while the second can be any Council Member ; b. The maker of the motion shall specifically articulate the new information, analysis and/or circumstances that warrant(s) reconsideration of the prior action; c. The motion must be adopted by a majority of the full Council; and d. The motion may be made and considered no later than the next regularly scheduled meeting of the Council after the item was originally acted upon.

Step 2 – Full Reconsideration of the Prior Action, if a motion as outlined in Step 1 is approved.
a. The full reconsideration of the prior action will be placed on the next available Council agenda following the agenda-setting and required public notification process. b. The agenda, public notification and staff report for the full reconsideration of the prior action shall clearly state that the item has been previously acted upon by the Council and is being reconsidered by the Council.
c. Action on the reconsideration of the prior action shall adhere to regular Council policies and practices as if the item was being heard for the first time. d. The full reconsideration of the prior action (whether sustained, reversed or otherwise modified) will be the final action on that item, and no further reconsiderations will be considered.

P. Motions by the Mayor
The Mayor may make or second motions. The Mayor may also restate, or ask that the maker restate, all motions immediately prior to any vote.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
8 of 9
POLICY NUMBER:
2-01
Q. Behavior Expectations at Town Meetings
At each meeting, the Mayor should welcome the public to participate in the meetings, understanding that the purpose of the meeting is to conduct the important business of the Town in an efficient and effective manner. The Mayor may promote constructive communication by asking Council members, staff, and community members to embrace and adhere to the following values:
 Be respectful, welcoming, inclusive, compassionate, and kind to each other,  Appreciate the diversity of perspectives and views in our community,  Express your views and share your perspectives in helpful ways,  Listen to understand and empathize with each other, and  Collaborate and work together to do what is best for Los Gatos.

As needed, the Mayor may need to remind the public about the Town’s civility rules listed below:

1. For the benefit of the entire community, the Town of Los Gatos asks that all speakers follow the Town’s meeting guidelines by treating everyone with respect and dignity. This is done by following meeting guidelines set forth in State law, in the Town Code, and on the cover sheet of the Council agenda.

2. The Town embraces diversity and strongly condemns hate speech and offensive, hateful language or racial intolerance of any kind at Council meetings.

3. Town Council and staff are well aware of the public’s right to disagree with their professional opinion on various Town issues. However, anti-social behavior, slander, hatred, and bigotry statements are completely unacceptable and will not be tolerated in any way, shape, or form at Town Council meetings.

4. All public comments at the Town Council meeting must pertain to items within the subject matter jurisdiction of the Town and shall not contain slanderous statements, hatred, and bigotry against non-public officials.

R. Managing Disruptive Behavior During Meetings
The Town will go through the following steps in the event of a meeting disturbance:

1. If the individual is participating remotely, the Mayor, or their designee shall warn the individual that their behavior is disrupting the meeting and that their failure to cease their behavior may result in their removal. If they do not promptly cease their disruptive behavior after the warning their permission to speak will be removed.

2. If the individual participating in-person, the Mayor or their designee shall warn the individual that their behavior is disrupting the meeting and that their failure to cease their behavior may result in their removal. If the speaker does not promptly cease their disruptive behavior after the warning, they may be removed from the meeting.

ITEM NO. 15.

TITLE: Town Agenda Format and Rules PAGE:
9 of 9
POLICY NUMBER:
2-01

3. In accordance with Government Code Section 54957.9, in the event that any meeting is willfully interrupted by a group or groups of persons so as to render the orderly conduct of such meeting infeasible and order cannot be restored by the removal of individuals who are willfully interrupting the meeting, the members of the legislative body conducting the meeting may order the meeting room cleared and continue in session.

Only matters appearing on the agenda may be considered in such a session.

Representatives of the press or other news media, except those participating in the disturbance, shall be allowed to attend any session held pursuant to this section.

Nothing in this section shall prohibit the legislative body from establishing a procedure for readmitting an individual or individuals not responsible for willfully disturbing the orderly conduct of the meeting.

Nothing in this policy limits other options to resolve disruptions, including but not limited to, taking a recess.

APPROVED AS TO FORM:
_________
Gabrielle Whelan, Town Attorney

ITEM NO. 15.

Rosenberg's Rules of Order
REVISED 2011
Simple Rules of Parliamentary Procedure for the 21st Century By Judge Dave Rosenberg
ATTACHMENT 2

EXHIBIT A

ITEM NO. 15.

LEAGUE9
OF CALIFORNI.A
CITIES

MISSION AND CORE BELIEFS
To expand and protect local control for cities through education and advocacy to enhance the quality of life for all Californians.

VISION
To be recognized and respected as the leading advocate for the common interests of California's cities.

About the League of California Cities
Established in 1898, the League of California Cities is a member organization that represents California's incorporated cities.

The League strives to protect the local authority and automony of city government and help California's cities effectively serve their residents. In addition to advocating on cities' behalf at the state capitol, the League provides its members with professional development programs and information resources, conducts education conferences and research, and publishes Western City magazine.
© 2011 League of California Cities. All rights reserved.

ABOUT THE AUTHOR
Dave Rosenberg is a Superior Court Judge in Yolo County. He has served as presiding judge of his court, and as presiding judge of the Superior Court Appellate Division. He also has served as chair of the Trial Court Presiding Judges Advisory Committee ( the committee composed of all 58 California presiding judges) and as an advisory member of the California Judicial Council. Prior to his appointment to the bench, Rosenberg was member of the Yolo County Board of Supervisors, where he served two terms as chair. Rosenberg also served on the Davis City Council, including two terms as mayor. He has served on the senior staff of two governors, and worked for 19 years in private law practice. Rosenberg has served as a member and chair of numerous state, regional and local boards. Rosenberg chaired the California State Lottery Commission, the California Victim Compensation and Government Claims Board, the Yolo-Solano Air Quality Management District, the Yolo County Economic Development Commission, and the Yolo County Criminal Justice Cabinet. For many years, he has taught classes on parliamentary procedure and has served as parliamentarian for large and small bodies.

II

ITEM NO. 15.

TABLE OF CONTENTS
About the Author ............................................................................................................ ii Introduction .................................................................................................................... 2 Establishing a Quorum ................................................................................................... 2 The Role of the Chair ...................................................................................................... 2 The Basic Format for an Agenda Item Discussion ........................................................ 2 Motions in General ......................................................................................................... 3 The Three Basic Motions ................................................................................................ 3 Multiple Motions Before the Body ................................................................................. 4 To Debate or Not to Debate ............................................................................................ 4 Majority and Super-Majority Votes ............................................................................... 5 Counting Votes ................................................................................................................ 5 The Motion to Reconsider .............................................................................................. 6 Courtesy and Decorum .................................................................................................. 7 Special Notes About Public Input .................................................................................. 7 1

ITEM NO. 15.

INTRODUCTION
The rules of procedure at meetings should be simple enough for most people to understand. Unfortunately, that has not always been the case. Virtually all clubs, associations, boards, councils and bodies follow a set of rules - Robert's Rules of Order- which are embodied in a small, but complex, book. Virtually no one I know has actually read this book cover to cover. Worse yet, the book was written for another time and for another purpose. If one is chairing or running a parliament, then Robert's Rules of Order is a dandy and quite useful handbook for procedure in that complex setting. On the other hand, if one is running a meeting of say, a five-member body with a few members of the public in attendance, a simplified version of the rules of parliamentary procedure is in order.

Hence, the birth of Rosenberg's Rules of Order.

What follows is my version of the rules of parliamentary procedure, based on my decades of experience chairing meetings in state and local government. These rules have been simplified for the smaller bodies we chair or in which we participate, slimmed down for the 21st Century, yet retaining the basic tenets of order to which we have grown accustomed. Interestingly enough, Rosenberg's Rules has found a welcoming audience. Hundreds of cities, counties, special districts, committees, boards, commissions, neighborhood associations and private corporations and companies have adopted Rosenberg's Rules in lieu of Robert's Rules because they have found them practical, logical, simple, easy to learn and user friendly.

This treatise on modern parliamentary procedure is built on a foundation supported by the following four pillars:

1. Rules should establish order. The first purpose of rules of parliamentary procedure is to establish a framework for the orderly conduct of meetings.

2. Rules should be clear. Simple rules lead to wider understanding and participation. Complex rules create two classes: those who understand and participate; and those who do not fully understand and do not fully participate.

3. Rules should be user friendly. That is, the rules must be simple enough that the public is invited into the body and feels that it has participated in the process.

4. Rules should enforce the will of the majority while protecting the rights of the minority. The ultimate purpose of rules of procedure is to encourage discussion and to facilitate decision making by the body. In a democracy, majority rules. The rules must enable the majority to express itself and fashion a result, while permitting the minority to also express itself, but not dominate, while fully participating in the process.
2 Establishing a Quorum
The starting point for a meeting is the establishment of a quorum.

A quorum is defined as the minimum number of members of the body who must be present at a meeting for business to be legally transacted. The default rule is that a quorum is one more than half the body. For example, in a five-member body a quorum is three.

When the body has three members present, it can legally transact business. If the body has less than a quorum of members present, it cannot legally transact business. And even if the body has a quorum to begin the meeting, the body can lose the quorum during the meeting when a member departs ( or even when a member leaves the dais). When that occurs the body loses its ability to transact business until and unless a quorum is reestablished.

The default rule, identified above, however, gives way to a specific rule of the body that establishes a quorum. For example, the rules of a particular five-member body may indicate that a quorum is four members for that particular body. The body must follow the rules it has established for its quorum. In the absence of such a specific rule, the quorum is one more than half the members of the body.

The Role of the Chair
While all members of the body should know and understand the rules of parliamentary procedure, it is the chair of the body who is charged with applying the rules of conduct of the meeting. The chair should be well versed in those rules. For all intents and purposes, the chair makes the final ruling on the rules every time the chair states an action. In fact, all decisions by the chair are final unless overruled by the body itself.

Since the chair runs the conduct of the meeting, it is usual courtesy for the chair to play a less active role in the debate and discussion than other members of the body. This does not mean that the chair should not participate in the debate or discussion. To the contrary, as a member of the body, the chair has the full right to participate in the debate, discussion and decision-making of the body. What the chair should do, however, is strive to be the last to speak at the discussion and debate stage. The chair should not make or second a motion unless the chair is convinced that no other member of the body will do so at that point in time.

The Basic Format for an Agenda Item Discussion
Formal meetings normally have a written, often published agenda.

Informal meetings may have only an oral or understood agenda. In either case, the meeting is governed by the agenda and the agenda constitutes the body's agreed-upon roadmap for the meeting. Each agenda item can be handled by the chair in the following basic format:

ITEM NO. 15.

First, the chair should clearly announce the agenda item number and should clearly state what the agenda item subject is. The chair should then announce the format ( which follows) that will be followed in considering the agenda item.

Second, following that agenda format, the chair should invite the appropriate person or persons to report on the item, including any recommendation that they might have. The appropriate person or persons may be the chair, a member of the body, a staff person, or a committee chair charged with providing input on the agenda item.

Third, the chair should ask members of the body if they have any technical questions of clarification. At this point, members of the body may ask clarifying questions to the person or persons who reported on the item, and that person or persons should be given time to respond.

Fourth, the chair should invite public comments, or if appropriate at a formal meeting, should open the public meeting for public input. If numerous members of the public indicate a desire to speak to the subject, the chair may limit the time of public speakers. At the conclusion of the public comments, the chair should announce that public input has concluded ( or the public hearing, as the case may be, is closed).
* The chair should ask members of the body if they have any questions of clarification. At this point, members of the body may ask clarifying questions to the person or persons who reported on the item, and that person or persons should be given time to respond.

Fifth, the chair should invite a motion. The chair should announce the name of the member of the body who makes the motion.

Sixth, the chair should determine if any member of the body wishes to second the motion. The chair should announce the name of the member of the body who seconds the motion. It is normally good practice for a motion to require a second before proceeding to ensure that it is not just one member of the body who is interested in a particular approach. However, a second is not an absolute requirement, and the chair can proceed with consideration and vote on a motion even when there is no second. This is a matter left to the discretion of the chair.

Seventh, if the motion is made and seconded, the chair should make sure everyone understands the motion.

This is done in one of three ways:

I. The chair can ask the maker of the motion to repeat it;

2. The chair can repeat the motion; or

3. The chair can ask the secretary or the clerk of the body to repeat the motion.

Eighth, the chair should now invite discussion of the motion by the body. If there is no desired discussion, or after the discussion has ended, the chair should announce that the body will vote on the motion. If there has been no discussion or very brief discussion, then the vote on the motion should proceed immediately and there is no need to repeat the motion. If there has been substantial discussion, then it is normally best to make sure everyone understands the motion by repeating it.
3 Ninth, the chair takes a vote. Simply asking for the "ayes" and then asking for the "nays" normally does this. If members of the body do not vote, then they "abstain:' Unless the rules of the body provide otherwise ( or unless a super majority is required as delineated later in these rules), then a simple majority (as defined in law or the rules of the body as delineated later in these rules) determines whether the motion passes or is defeated.

Tenth, the chair should announce the result of the vote and what action (if any) the body has taken. In announcing the result, the chair should indicate the names of the members of the body, if any, who voted in the minority on the motion. This announcement might take the following form: "The motion passes by a vote of 3-2, with Smith and Jones dissenting. We have passed the motion requiring a 10-day notice for all future meetings of this body:'
Motions in General
Motions are the vehicles for decision making by a body. It is usually best to have a motion before the body prior to commencing discussion of an agenda item. This helps the body focus.

Motions are made in a simple two-step process. First, the chair should recognize the member of the body. Second, the member of the body makes a motion by preceding the member's desired approach with the words "I move ... "
A typical motion might be: "I move that we give a 10-day notice in the future for all our meetings."
The chair usually initiates the motion in one of three ways:

I. Inviting the members of the body to make a motion, for example, ''A motion at this time would be in order."

2. Suggesting a motion to the members of the body, ''A motion would be in order that we give a 10-day notice in the future for all our meetings."

3. Making the motion. As noted, the chair has every right as a member of the body to make a motion, but should normally do so only if the chair wishes to make a motion on an item but is convinced that no other member of the body is willing to step forward to do so at a particular time.

The Three Basic Motions
There are three motions that are the most common and recur often at meetings:

The basic motion. The basic motion is the one that puts forward a decision for the body's consideration. A basic motion might be: "I move that we create a five-member committee to plan and put on our annual fundraiser:'

ITEM NO. 15.

The motion to amend. If a member wants to change a basic motion that is before the body, they would move to amend it. A motion to amend might be: "I move that we amend the motion to have a IO-member committee:' A motion to amend takes the basic motion that is before the body and seeks to change it in some way.

The substitute motion. If a member wants to completely do away with the basic motion that is before the body, and put a new motion before the body, they would move a substitute motion. A substitute motion might be: "I move a substitute motion that we cancel the annual fundraiser this year."
"Motions to amend" and "substitute motions" are often confused, but they are quite different, and their effect (if passed) is quite different.

A motion to amend seeks to retain the basic motion on the floor, but modify it in some way. A substitute motion seeks to throw out the basic motion on the floor, and substitute a new and different motion for it. The decision as to whether a motion is really a "motion to amend" or a "substitute motion" is left to the chair. So if a member makes what that member calls a "motion to amend;' but the chair determines that it is really a "substitute motion;' then the chair's designation governs.

A "friendly amendment" is a practical parliamentary tool that is simple, informal, saves time and avoids bogging a meeting down with numerous formal motions. It works in the following way: In the discussion on a pending motion, it may appear that a change to the motion is desirable or may win support for the motion from some members. When that happens, a member who has the floor may simply say, "I want to suggest a friendly amendment to the motion:' The member suggests the friendly amendment, and if the maker and the person who seconded the motion pending on the floor accepts the friendly amendment, that now becomes the pending motion on the floor. If either the maker or the person who seconded rejects the proposed friendly amendment, then the proposer can formally move to amend.

Multiple Motions Before the Body
There can be up to three motions on the floor at the same time.

The chair can reject a fourth motion until the chair has dealt with the three that are on the floor and has resolved them. This rule has practical value. More than three motions on the floor at any given time is confusing and unwieldy for almost everyone, including the chair.

When there are two or three motions on the floor (after motions and seconds) at the same time, the vote should proceed first on the last motion that is made. For example, assume the first motion is a basic "motion to have a five-member committee to plan and put on our annual fundraiser:' During the discussion of this motion, a member might make a second motion to "amend the main motion to have a IO-member committee, not a five-member committee to plan and put on our annual fundraiser:' And perhaps, during that discussion, a member makes yet a third motion as a "substitute motion that we not have an annual fundraiser this year:' The proper procedure would be as follows:
4 First, the chair would deal with the third ( the last) motion on the floor, the substitute motion. After discussion and debate, a vote would be taken first on the third motion. If the substitute motion passed, it would be a substitute for the basic motion and would eliminate it. The first motion would be moot, as would the second motion (which sought to amend the first motion), and the action on the agenda item would be completed on the passage by the body of the third motion (the substitute motion). No vote would be taken on the first or second motions.

Second, if the substitute motion failed, the chair would then deal with the second (now the last) motion on the floor, the motion to amend. The discussion and debate would focus strictly on the amendment (should the committee be five or 10 members). If the motion to amend passed, the chair would then move to consider the main motion (the first motion) as amended. If the motion to amend failed, the chair would then move to consider the main motion ( the first motion) in its original format, not amended.

Third, the chair would now deal with the first motion that was placed on the floor. The original motion would either be in its original format (five-member committee), or if amended, would be in its amended format (IO-member committee). The question on the floor for discussion and decision would be whether a committee should plan and put on the annual fundraiser.

To Debate or Not to Debate
The basic rule of motions is that they are subject to discussion and debate. Accordingly, basic motions, motions to amend, and substitute motions are all eligible, each in their turn, for full discussion before and by the body. The debate can continue as long as members of the body wish to discuss an item, subject to the decision of the chair that it is time to move on and take action.

There are exceptions to the general rule of free and open debate on motions. The exceptions all apply when there is a desire of the body to move on. The following motions are not debatable ( that is, when the following motions are made and seconded, the chair must immediately call for a vote of the body without debate on the motion):

Motion to adjourn. This motion, if passed, requires the body to immediately adjourn to its next regularly scheduled meeting. It requires a simple majority vote.

Motion to recess. This motion, if passed, requires the body to immediately take a recess. Normally, the chair determines the length of the recess which may be a few minutes or an hour. It requires a simple majority vote.

Motion to fix the time to adjourn. This motion, if passed, requires the body to adjourn the meeting at the specific time set in the motion. For example, the motion might be: "I move we adjourn this meeting at midnight:' It requires a simple majority vote.

ITEM NO. 15.

Motion to table. This motion, if passed, requires discussion of the agenda item to be halted and the agenda item to be placed on "hold:' The motion can contain a specific time in which the item can come back to the body. "I move we table this item until our regular meeting in October." Or the motion can contain no specific time for the return of the item, in which case a motion to take the item off the table and bring it back to the body will have to be taken at a future meeting. A motion to table an item ( or to bring it back to the body) requires a simple majority vote.

Motion to limit debate. The most common form of this motion is to say, "I move the previous question" or "I move the question" or "I call the question" or sometimes someone simply shouts out "question:' As a practical matter, when a member calls out one of these phrases, the chair can expedite matters by treating it as a "request" rather than as a formal motion. The chair can simply inquire of the body, "any further discussion?" If no one wishes to have further discussion, then the chair can go right to the pending motion that is on the floor.

However, if even one person wishes to discuss the pending motion further, then at that point, the chair should treat the call for the "question" as a formal motion, and proceed to it.

When a member of the body makes such a motion ("I move the previous question"), the member is really saying: "I've had enough debate. Let's get on with the vote." When such a motion is made, the chair should ask for a second, stop debate, and vote on the motion to limit debate. The motion to limit debate requires a two-thirds vote of the body.

NOTE: A motion to limit debate could include a time limit. For example: "I move we limit debate on this agenda item to 15 minutes." Even in this format, the motion to limit debate requires a twothirds vote of the body. A similar motion is a motion to object to consideration of an item. This motion is not debatable, and if passed, precludes the body from even considering an item on the agenda. It also requires a two-thirds vote.

Majority and Super Majority Votes
In a democracy, a simple majority vote determines a question. A tie vote means the motion fails. So in a seven-member body, a vote of 4-3 passes the motion.A vote of 3-3 with one abstention means the motion fails. If one member is absent and the vote is 3-3, the motion still fails.

All motions require a simple majority, but there are a few exceptions.

The exceptions come up when the body is taking an action which effectively cuts off the ability of a minority of the body to take an action or discuss an item. These extraordinary motions require a two-thirds majority (a super majority) to pass:

Motion to limit debate. Whether a member says, "I move the previous question;' or "I move the question;' or "I call the question;' or "I move to limit debate;' it all amounts to an attempt to cut off the ability of the minority to discuss an item, and it requires a two-thirds vote to pass.
5 Motion to close nominations. When choosing officers of the body (such as the chair), nominations are in order either from a nominating committee or from the floor of the body. A motion to close nominations effectively cuts off the right of the minority to nominate officers and it requires a two-thirds vote to pass.

Motion to object to the consideration of a question. Normally, such a motion is unnecessary since the objectionable item can be tabled or defeated straight up. However, when members of a body do not even want an item on the agenda to be considered, then such a motion is in order. It is not debatable, and it requires a two-thirds vote to pass.

Motion to suspend the rules. This motion is debatable, but requires a two-thirds vote to pass. If the body has its own rules of order, conduct or procedure, this motion allows the body to suspend the rules for a particular purpose. For example, the body ( a private club) might have a rule prohibiting the attendance at meetings by non-club members. A motion to suspend the rules would be in order to allow a non-club member to attend a meeting of the club on a particular date or on a particular agenda item.

Counting Votes
The matter of counting votes starts simple, but can become complicated.

Usually, it's pretty easy to determine whether a particular motion passed or whether it was defeated. If a simple majority vote is needed to pass a motion, then one vote more than 50 percent of the body is required. For example, in a five-member body, if the vote is three in favor and two opposed, the motion passes. If it is two in favor and three opposed, the motion is defeated.

If a two-thirds majority vote is needed to pass a motion, then how many affirmative votes are required? The simple rule of thumb is to count the "no" votes and double that count to determine how many "yes" votes are needed to pass a particular motion. For example, in a seven-member body, if two members vote "no" then the "yes" vote of at least four members is required to achieve a two-thirds majority vote to pass the motion.

What about tie votes? In the event of a tie, the motion always fails since an affirmative vote is required to pass any motion. For example, in a five-member body, if the vote is two in favor and two opposed, with one member absent, the motion is defeated.

Vote counting starts to become complicated when members vote "abstain" or in the case of a written ballot, cast a blank ( or unreadable) ballot. Do these votes count, and if so, how does one count them? The starting point is always to check the statutes.

In California, for example, for an action of a board of supervisors to be valid and binding, the action must be approved by a majority of the board. ( California Government Code Section 25005.) Typically, this means three of the five members of the board must vote affirmatively in favor of the action. A vote of 2-1 would not be sufficient. A vote of 3-0 with two abstentions would be sufficient. In general law cities in

ITEM NO. 15.

California, as another example, resolutions or orders for the payment of money and all ordinances require a recorded vote of the total members of the city council. ( California Government Code Section 36936.) Cities with charters may prescribe their own vote requirements. Local elected officials are always well-advised to consult with their local agency counsel on how state law may affect the vote count.

After consulting state statutes, step number two is to check the rules of the body. If the rules of the body say that you count votes of"those present" then you treat abstentions one way. However, if the rules of the body say that you count the votes of those "present and voting;' then you treat abstentions a different way. And if the rules of the body are silent on the subject, then the general rule of thumb ( and default rule) is that you count all votes that are "present and voting:' Accordingly, under the "present and voting" system, you would NOT count abstention votes on the motion. Members who abstain are counted for purposes of determining quorum (they are "present"), but you treat the abstention votes on the motion as if they did not exist ( they are not "voting"). On the other hand, if the rules of the body specifically say that you count votes of those "present" then you DO count abstention votes both in establishing the quorum and on the motion. In this event, the abstention votes act just like "no" votes.

How does this work in practice?
Here are a few examples.

Assume that a five-member city council is voting on a motion that requires a simple majority vote to pass, and assume further that the body has no specific rule on counting votes. Accordingly, the default rule kicks in and we count all votes of members that are "present and voting:' If the vote on the motion is 3-2, the motion passes. If the motion is 2-2 with one abstention, the motion fails.

Assume a five-member city council voting on a motion that requires a two-thirds majority vote to pass, and further assume that the body has no specific rule on counting votes. Again, the default rule applies.

If the vote is 3-2, the motion fails for lack of a two-thirds majority. If the vote is 4-1, the motion passes with a clear two-thirds majority. A vote of three "yes;' one "no" and one "abstain" also results in passage of the motion. Once again, the abstention is counted only for the purpose of determining quorum, but on the actual vote on the motion, it is as if the abstention vote never existed - so an effective 3-1 vote is clearly a two-thirds majority vote.

Now, change the scenario slightly. Assume the same five-member city council voting on a motion that requires a two-thirds majority vote to pass, but now assume that the body DOES have a specific rule requiring a two-thirds vote of members "present." Under this specific rule, we must count the members present not only for quorum but also for the motion. In this scenario, any abstention has the same force and effect as if it were a "no" vote. Accordingly, if the votes were three "yes;' one "no" and one "abstain;' then the motion fails. The abstention in this case is treated like a "no" vote and effective vote of 3-2 is not enough to pass two-thirds majority muster.
6 Now, exactly how does a member cast an "abstention" vote? Any time a member votes "abstain" or says, "I abstain;' thatis an abstention. However, if a member votes "present" that is also treated as anabstention (the member is essentially saying", Count me for purposes of a quorum, but my vote on the issue is abstain:') In fact, any manifestation of intention notto vote either "yes" or "no" on the pending motion may be treated by the chair as anabstention. If written ballots are cast, a blank or unreadable ballot is counted as an abstention as well.

Can a member vote "absent" or "count me as absent?" Interesting question. The ruling on this is uptothe chair. The better approach is for the chair to count this as if the member had left his/her chair and is actually "absent." That, of course, affects the quorum. However, the chair may also treat this as a vote to abstain, particularly if the person does not actually leave the dais.

The Motion to Reconsider
There is a special and unique motion that requires a bit of explanation all by itself; the motion to reconsider. A tenet of parliamentary procedure is finality. After vigorous discussion, debate and a vote, there must be some closure to the issue. And so, after a vote is taken, the matter is deemed closed, subject only to reopening if a proper motion to consider is made and passed.

A motion to reconsider requires a majority vote to pass like other garden-variety motions, but there are two special rules that apply only to the motion to reconsider.
* First, is the matter of timing. A motion to reconsider must be made at the meeting where the item wasfirst voted upon.A motion to reconsidermade at a later time is untimely. (The body,however,can always vote tosuspend the rules and, bya two-thirds majority, allow a motion to reconsider to be made at another time.)
* The motion may be made and considered no later than the next regularly scheduled meeting of the Council after the item was originally acted upon.

Second, a motion toreconsider may be made only by certain members of the body. Accordingly, a motion to reconsider may be made only by a member who voted in the majority on the original motion. If such a member has a change of heart, he or she may make the motion to reconsider ( any other member of the body
- including a member who voted in the minority on the original motion - may second the motion). If a member who voted in the minority seeks to make the motion to reconsider, it must be ruled out of order. The purpose of this rule is finality. If a member of minority could make a motion to reconsider, then the item could be brought back to the body again and again, which would defeat the purpose of finality.

If the motion toreconsider passes, then the original matter is back before the body, and a new original motion is in order. The matter may be discussed and debated as if it were on the floor for the first time.

ITEM NO. 15.

Courtesy and Decorum
The rules of order are meant to create an atmosphere where the members of the body and the members of the public can attend to business efficiently, fairly and with full participation. At the same time, it is up to the chair and the members of the body to maintain common courtesy and decorum. Unless the setting is very informal, it is always best for only one person at a time to have the floor, and it is always best for every speaker to be first recognized by the chair before proceeding to speak.

The chair should always ensure that debate and discussion of an agenda item focuses on the item and the policy in question, not the personalities of the members of the body. Debate on policy is healthy, debate on personalities is not. The chair has the right to cut off discussion that is too personal, is too loud, or is too crude.

Debate and discussion should be focused, but free and open. In the interest of time, the chair may, however, limit the time allotted to speakers, including members of the body.

Can a member of the body interrupt the speaker? The general rule is "no:' There are, however, exceptions. A speaker may be interrupted for the following reasons:

Privilege. The proper interruption would be, "point of privilege:' The chair would then ask the interrupter to "state your point." Appropriate points of privilege relate to anything that would interfere with the normal comfort of the meeting. For example, the room may be too hot or too cold, or a blowing fan might interfere with a person's ability to hear.

Order. The proper interruption would be, "point of order:' Again, the chair would ask the interrupter to "state your point." Appropriate points of order relate to anything that would not be considered appropriate conduct of the meeting. For example, if the chair moved on to a vote on a motion that permits debate without allowing that discussion or debate.
7 Appeal. If the chair makes a ruling that a member of the body disagrees with, that member may appeal the ruling of the chair. If the motion is seconded, and after debate, if it passes by a simple majority vote, then the ruling of the chair is deemed reversed.

Call for orders of the day
. This is simply another way of saying,
"return to the agenda:' If a member believes that the body has drifted from the agreed-upon agenda, such a call may be made. It does not require a vote, and when the chair discovers that the agenda has not been followed, the chair simply reminds the body to return to the agenda item properly before them. If the chair fails to do so, the chair's determination may be appealed.

Withdraw a motion. During debate and discussion of a motion, the maker of the motion on the floor, at any time, may interrupt a speaker to withdraw his or her motion from the floor. The motion is immediately deemed withdrawn, although the chair may ask the person who seconded the motion if he or she wishes to make the motion, and any other member may make the motion if properly recognized.

Special Notes About Public Input
The rules outlined above will help make meetings very publicfriendly. But in addition, and particularly for the chair, it is wise to remember three special rules that apply to each agenda item:

Rule One: Tell the public what the body will be doing.

Rule Two: Keep the public informed while the body is doing it.

Rule Three: When the body has acted, tell the public what the body did.

ITEM NO. 15.

LEAGUE"

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ITEM NO. 15.

PREPARED BY: Gary Heap
Town Engineer
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: 01/20/2026
ITEM NO: 16
DATE: January 20, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Adopt the Draft License Agreement for Encroachments for Private Use of Public Property Policy
RECOMMENDATION: Adopt the draft License Agreements for Encroachments for Private Use of Public Property Policy, to establish clear, consistent procedures for permitting, licensing, inspection, enforcement, and revocation of private encroachments within the public right-of-way (ROW) and on Town-owned property.

FISCAL IMPACT:

Adoption of the License Agreements for Encroachments for Private Use of Public Property Policy itself has no direct fiscal impact. The policy supports recovery of regulatory costs through Council-adopted fees and allows the Town to require license consideration where appropriate.

Over time, implementation is expected to improve cost recovery, reduce enforcement uncertainty, and limit the Town’s exposure to liability associated with unauthorized private use of public property. Any applicable fees will be assessed in accordance with the Town’s adopted Fee Schedule.

STRATEGIC PRIORITY:

This item is not associated directly with a specific strategic priority; however, it aligns with the Town’s core goal of good governance.

BACKGROUND:

The Town routinely encounters private improvements located within the public right-of-way or

ITEM NO. 16.

PAGE 2 OF 3
SUBJECT: Adopt a License Agreement Policy
DATE: January 20, 2026
on Town-owned property, including fences, retaining walls, landscaping, driveways, and structures extending above or below the ROW. Historically, these situations have been addressed through a combination of encroachment permits, ad hoc license agreements, and code enforcement actions. In some cases, private improvements were installed without prior authorization, resulting in so-called “legacy encroachments.” The Town Code (Chapters 12, 23, and 29) provides authority to regulate, inspect, and remove unauthorized obstructions in the ROW. However, the Town has lacked a policy clearly defining when license agreements are appropriate, the level of approval required, and the conditions under which private use of public property may be allowed. The proposed policy addresses this gap by establishing uniform procedures and expectations for property owners and staff.

DISCUSSION:

The License Agreements for Encroachments for Private Use of Public Property Policy establishes procedures for permitting and regulating private improvements in the public ROW and on Town-owned properties. The policy emphasizes that all private use of public property remains subordinate to the public interest and does not create a vested property right. All approvals are revocable at the Town’s discretion.

The policy applies broadly to private improvements, with limited exemptions for standardmaterial driveways, walkways, and code-compliant mailboxes. Utilities and agencies operating under separate statutory authority are excluded and remain subject to applicable laws and departmental oversight.

The policy clearly delineates approval authority between the Town Manager (or designee) and the Town Council:
 Town Manager or Designee: May approve residential, minor, and low-impact encroachments that do not pose safety hazards or materially interfere with public facilities.
 Town Council: Required to approve license agreements for commercial encroachments, permanent structures, encroachments occupying a substantial portion of the ROW, or proposals with broader community impacts or precedent-setting implications.

Where an encroachment is associated with a land use entitlement, approval occurs concurrently with the applicable planning approval. This structure ensures appropriate oversight while allowing efficient administrative processing of routine requests.

Encroachment requests are evaluated based on safety, ADA compliance, drainage, utilities, zoning consistency, neighborhood character, and potential impacts on current or future Town projects. The proposed policy expressly prohibits encroachments that obstruct sidewalks, ADA

ITEM NO. 16.

PAGE 3 OF 3
SUBJECT: Adopt a License Agreement Policy
DATE: January 20, 2026
routes, sight distance triangles, utilities, drainage facilities, emergency access, or public parking, except where a clear and demonstrable public benefit exists.

All license agreements include standardized conditions such as indemnification, insurance, maintenance obligations, performance security, possessory interest tax notification, revocation rights, and restoration requirements. License agreements are recorded, are binding on the property owner and successors, and include a sunset clause requiring renewal at least every ten years.

The policy establishes a structured approach to addressing unpermitted and legacy encroachments. Staff conducts a threshold review to determine whether removal is required or whether a discretionary retroactive license application may be considered. Encroachments that pose hazards, impair access or utilities, conflict with public projects, or fail to comply with the Town Code are ineligible for retroactive licensing and must be removed. The policy emphasizes that retroactive licensing is exceptional, does not ratify unauthorized construction, and does not limit the Town’s authority to require future removal.

CONCLUSION:

The proposed Policy on Private Use of Public Property provides a clear, legally grounded, and consistent framework for managing private encroachments in the public ROW and on Townowned property. Adoption of the policy will enhance transparency, protect the public interest, and support efficient administration and enforcement. Staff recommends that the Town Council adopt the policy as proposed.

COORDINATION:

This item was coordinated with the Town Manager’s Office, Community Development, Parks and Public Works, Finance, and the Attorney’s Office.

ENVIRONMENTAL ASSESSMENT:

Adoption of the policy establishing procedures and criteria for licensing private encroachments does not constitute a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15301 and 15378(b)(5). Individual encroachment approvals will be subject to appropriate environmental review as required.

Attachments:

1. Draft License Agreements for Encroachments for Private Use of Public Property Proposed Policy

ITEM NO. 16.

COUNCIL POLICY MANUAL
TITLE: License Agreements for Encroachments for
Private Use of Public Property
POLICY NUMBER:

EFFECTIVE DATE: PAGES:

ENABLING ACTIONS: REVISED DATES:

APPROVED:

PURPOSE
This policy establishes procedures for permitting, licensing, inspecting, and enforcement of private encroachments in the Town’s public right-of-way (ROW) and on Town Owned Properties. The intent of this policy is: to protect public safety, mobility, and infrastructure; to ensure fair and consistent treatment of property owners; to recover costs associated with private use of public property; and to preserve the Town’s flexibility to implement public improvements.

Private use of any public property shall at all times remain subordinate to the public’s interest.

Any authorization granted under this policy is conditional, revocable at will, and shall not create a vested property right in the public ROW or Town Owned Properties.

This policy is further intended to provide a consistent and transparent framework for addressing previously installed, unauthorized Private Improvements in the public right of way and on Town Owned Properties, while preserving the Town’s full authority to regulate, revoke, or require removal of such improvements in the public interest.

SCOPE
This policy applies to all Private Improvements in the ROW or on Town Owned Property, except driveways and walkways constructed with Standard Materials and mailboxes placed in accordance with USPS standards. Encroachments installed by utilities or agencies acting under separate statutory authorities are exempt and subject to the direction of the Parks and Public Works Department, as applicable by law.

Encroachments typically requiring a license agreement include retaining walls, fences, gates, and driveways using non-standard materials. Encroachments extending into the airspace above Small Town Service Community Stewardship Future Focus

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
2 of 9
POLICY NUMBER:
or the subsurface below the ROW, including, but not limited to balconies, basements, structural tie-backs, utility vaults, and overhangs, are subject to this policy.

No encroachment may prevent or delay Town capital projects. Encroachments interfering with planned or future improvements shall be removed at the owner’s sole expense in a timely manner and without compensation.

POLICY
The Town’s authority is derived from Chapter 23 of the Los Gatos Town Code, which prohibits unauthorized obstructions (§23.30.005), provides inspection rights (§23.30.035), requires settlement correction (§23.30.045), and allows removal without compensation from the Town (§23.30.055). Additional authority comes from Chapter 12, which regulates grading, drainage, excavation, and public improvements; and Chapter 29, which establishes zoning and fence standards. Relevant provisions of the California Streets & Highways Code (§1921) and the Santa Clara County Assessor’s guidance on possessory interest tax also apply.

Definitions
For purposes of this policy:
 Encroachment is any Private Improvement located within the public right-of-way or on Town Owned Property.
 Encroachment Permit is a limited authorization issued by the Town for the construction of a Private Improvement that is revocable by the Town at its sole discretion.  Immediate Hazard refers to any encroachment presenting an imminent threat to public safety, traffic circulation, or Town infrastructure.
 License Agreement is a recorded legal agreement that authorizes and stipulates the terms to maintain a Private Improvement in the public ROW or on Town Owned Property. The agreement is binding on successors and generally includes revocation language with due notice from the Town.
 Legacy Encroachment is any unpermitted Private Improvement located in the public ROW or on Town Owned Property that existed prior to the effective date of this policy.

The designation of an encroachment as a Legacy Encroachment is solely for administrative consistency and does not create any vested, prescriptive, or equitable right.
 Possessory Interest Tax is a property tax levied by Santa Clara County for private benefit derived from the use of public property.
 Private Improvement is any structure, object, or other private asset within the ROW or on Town Owned Property that is owned or maintained by a private party.  Right-of-Way (“ROW”) is land dedicated to the Town in fee or as an easement for public use, including but not limited to streets, sidewalks, gutters, park strips, utility easements, and stormwater facilities. The ROW extends vertically from the center of the earth to space.
 Standard Materials are Portland cement concrete and asphalt concrete.

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
3 of 9
POLICY NUMBER:
 Substantial Portion of the Right-of-Way means more than twenty-five percent (25%) of a property’s street frontage or more than two hundred (200) square feet, whichever is less.
 Town Owned Property means any parcel owned by the Town, excluding public rights of way, which are defined separately.

PROCEDURES
I. Approval Authority
License Agreements for long-term encroachments involve discretionary consideration by the Town before granting approval. Nothing obligates the Town to approve a discretionary License Agreement, unless specifically authorized by Federal, State, or local laws or regulations. All License Agreements require Town Manager, or designee approval.

1. Town Manager or Designee Approval
The Town Manager, or designee, may approve License Agreements for encroachments that include, but are not limited to, those that are:
 Residential in nature and serve or benefit a single family, multi family, or duplex property;
 Minor in scale, such as fences, landscaping, driveways, irrigation, or retaining walls that do not require a building permit to construct;
 Not blocking or materially interfering with sidewalks, pedestrian routes, ROW sight line triangles, utilities, or stormwater facilities; and  Not creating a health or safety hazard.

2. Town Council Approval
Town Council approval is required for all other License Agreements, including any encroachment that:
 Is commercial in nature or primarily serves or benefits a commercial property or use;
 Occupies or privatizes a Substantial Portion of the ROW;  Involves permanent structures (e.g., buildings, retaining walls that require a building permit to construct, decks); or
 Has broader community impact, establishes a precedent for future requests, or is contentious, sensitive, or otherwise likely to generate significant public concern.

When a proposed private improvement is tied to a land use entitlement (such as a subdivision, variance, or design review application), the approval authority shall occur concurrently with review and approval required per the requirements of Chapter 29 of the Town Code.

II. Review Criteria and Prohibitions
No License Agreement, whether issued prospectively or retroactively, shall authorize, legalize, or allow any Private Improvement that is in violation of the Town Code, applicable state or

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
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POLICY NUMBER:
federal law, or adopted Town standards. A License Agreement shall not waive, supersede, suspend, or modify any requirement of the Town Code.

Any Private Improvement that requires a variance, exception, modification, or discretionary relief from any provision of the Town Code shall be ineligible for approval of a License Agreement. License Agreements shall not be used as a mechanism to cure, bypass, or mitigate noncompliance with the Town Code.

Applications for License Agreements will be evaluated, at the Town’s sole discretion, on factors including, but not limited to safety, including traffic visibility and Americans with Disabilities Act (“ADA”) compliance; impacts to drainage, stormwater, and utilities; compliance with zoning standards; consistency with neighborhood character; loss of public property for public benefit; and any foreseen or potential burden imposed on future Town projects or maintenance. All encroachments shall comply with applicable ADA requirements, Caltrans standards (where applicable), and Town standards. Consideration of these factors does not create an obligation for the Town to approve an encroachment.

The Town shall not approve encroachments that obstruct sidewalks, ADA routes, or ROW sight triangles; interfere with drainage or utilities; exist within intersections, fire hydrant, and utility cabinet clearance requirements, or emergency vehicle access areas; create safety hazards or public nuisances; or conflict with existing or foreseeable Town improvements.

The Town shall not approve encroachments that privatize public parking spaces, Town Owned Properties, or other ROW areas intended for public access, except where a clear and demonstrable public benefit exists.

III. Conditions of Approval
All License Agreements shall at a minimum include conditions requiring: 1) indemnification and hold harmless agreements consistent with Town Code §23.30.055; 2) an endorsement to liability insurance stating that the insurance is primary with regard to the Town and listing the Town as an additional insured with minimum limits, carriers, and renewal evidence as determined by the Town Manager, or designee, in consultation with the Town Attorney; 3) evidence of required insurance coverage provided to the Town annually; 4) ongoing maintenance of the encroachment in good working order; 5) notification of potential possessory interest tax levy by the County of Santa Clara; and 6) correction obligations for the life of the encroachment.

Encroachments permitted by a License Agreement remain revocable at the Town’s discretion, and owners must remove them within thirty (30) days of notice from the Town, or sooner if health and safety hazards exist, and shall restore the ROW or Town Owned Properties to Town standards at their sole expense. For Legacy Encroachments, the Town Engineer may establish a reasonable compliance schedule for removal based on the nature and complexity of the improvement, provided that any extension of time shall not constitute authorization to remain within the public ROW or Town Owned Property.

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
5 of 9
POLICY NUMBER:

Licensees are responsible for payment of any possessory interest tax levied by Santa Clara County. All proposed work must comply with Chapter 29, and all grading, excavation, and retaining wall work must comply with Chapter 12 of the Town Code. Compliance with the Town Code is a continuing obligation, and discovery of any noncompliance shall constitute grounds for revocation of a License Agreement and removal of the encroachment.

The licensee must provide performance security, including but not limited to a bond, letter of credit, or cash deposit for all License Agreements to ensure funding for any necessary ROW or Town Owned Property restoration efforts required due to a revocation of the License Agreement.

The Town’s failure to discover, object to, or act upon an encroachment at an earlier date shall not constitute waiver, estoppel, or limit the Town’s authority to enforce removal or impose conditions at any time.

No Legacy Encroachment shall give rise to claims of equitable estoppel, laches, or reliance against the Town based on the passage of time, prior inspections, or approvals unrelated to the encroachment.

All License Agreements shall require renewal at least once every ten (10) years, unless specified otherwise in the License Agreement. Failure to renew shall constitute automatic termination of the license, and the encroachment shall be removed at the owner’s expense within time frames permitted in the License Agreement, typically thirty days. Renewal of a License Agreement for a Legacy Encroachment does not ratify the original unauthorized construction and does not limit the Town’s authority to require future removal.

Payment of regulatory cost recovery fees, license consideration, and provision of performance security are independent requirements. Satisfaction of one requirement shall not excuse compliance with the others.

IV. Unpermitted Encroachments
The Town strongly encourages property owners to apply in advance for a License Agreement.

When an encroachment has been constructed without prior approval, the Town may take one of two approaches:

1. Code Enforcement and Removal. The Town may require the owner to remove the unlicensed improvements at their expense and may pursue code enforcement actions, including but not limited to citations, fines, and penalties.

The Town’s failure to identify or act on unlicensed improvements at an earlier time does not waive its authority to require removal or imposing other conditions at any time. Any unlicensed improvements in the public ROW or Town Owned Property resulting in, but not limited to, a

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
6 of 9
POLICY NUMBER:
hazard, health, safety, compliance, or other exposure which may impair the function or use of the ROW or Town Owned Property will require removal unless, to the satisfaction of the Town Engineer, such exposures are immediately mitigated.

2. Retroactive License Application. The granting of a retroactive License Agreement is considered an exceptional condition and not intended to encourage unauthorized improvements in the ROW or Town Owned Property. Approval of a retroactive license is entirely discretionary, and the Town Manager or designee is under no obligation to consider or grant such. Approval of a retroactive License Agreement authorizes the continued presence of an existing encroachment on a prospective basis only. Such approval does not ratify or legalize the original unauthorized construction, does not constitute a waiver of the underlying violation, and does not limit or waive the Town’s authority to revoke the license or require removal of the encroachment in the future.

Town staff may consider a retroactive License Agreement if the unlicensed improvements meet the standards specified in section IV Approval Authority, above, and meets the legacy enforcement threshold review, below. All approved retroactive License Agreements shall be recorded with the County and be on file with the Town Clerk.

V. Legacy Encroachment Threshold Review
In considering any Legacy Encroachment request for retroactive licensing, Town staff shall conduct a threshold review prior to determining whether removal will be required or whether the owner may apply for a discretionary retroactive License Agreement. The threshold review shall be applied uniformly and shall include, at a minimum, evaluation of the following:

1. Whether the encroachment presents a current or potential health or safety hazard;

2. Whether the encroachment impairs ADA access, pedestrian mobility, drainage, utilities, or emergency access;

3. Whether the encroachment conflicts with existing or reasonably foreseeable Town capital projects, public improvements, or maintenance activities;

4. Whether the encroachment occupies or privatizes public property intended for public access or parking;

5. Whether the encroachment complies with all applicable provisions of the Town Code without the need for a variance, exception, modification, or appeal of any code requirement; and

6. Whether the encroachment exceeds minor or incidental use of the public ROW.

Failure to satisfy any individual threshold criterion shall require removal of the encroachment and shall render the encroachment ineligible for a retroactive License Agreement. Any Legacy Encroachment that requires, seeks, or is the subject of a variance, exception, modification, or appeal from a Town Code requirement shall be ineligible for retroactive licensing and shall be subject to removal.

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
7 of 9
POLICY NUMBER:

Town staff may solicit and consider written public comments received during the threshold review process; however, no level of neighbor consent or opposition shall be determinative, and failure to obtain neighbor support shall not create entitlement or bar removal.

Town staff shall prioritize enforcement in the following order: (1) Private Improvements in the ROW or Town Owned Property posing immediate hazards; (2) Private Improvements in the ROW or Town Owned Property impairing compliance or function of the ROW or Town Owned Property; and (3) Private Improvements in the ROW or Town Owned Property creating aesthetic issues such as blight or nuisances such as light pollution.

VI. Notification and Enforcement Procedures
For newly discovered unpermitted Private Improvement in the public ROW or Town Owned Property, the Town will issue an initial notice requiring the owner to apply for a License Agreement or to remove the Private Improvement. If unresolved after thirty (30) days, the Town will issue a second notice that constitutes a formal violation, and the owner will not be eligible for a discretionary License Agreement. If the owner fails to address the Private Improvement in the public ROW or Town Owned Property after fifteen (15) additional days, Town staff will proceed as allowed by law. These timeframes shall constitute mandatory deadlines unless extended in writing by the Town Engineer for good cause shown.

Private Improvements in the public ROW or on Town Owned Property that pose an immediate hazard may be summarily removed by the Town pursuant to §23.30.005 and §23.30.055, with post-removal notice provided and costs billed to the property owner or responsible party by the Town.

Town staff or its contractor(s) may enter upon the encroached area of ROW or Town Owned Property to conduct inspections, abatement, or removal as authorized by this policy or the Town Code.

At no time does an unpermitted Private Improvement create a vested right in the public ROW or Town Owned Property. For Legacy Encroachments, eligibility for retroactive licensing shall be governed by the Legacy Encroachment Threshold Review, notwithstanding the general notice timelines described above.

VII. Fees and Regulatory Cost Recovery
The Town shall recover the reasonable costs incurred in administering, reviewing, inspecting, enforcing, renewing, and recording License Agreements and related encroachment authorizations through regulatory cost recovery fees adopted by resolution of the Town Council.

Regulatory cost recovery fees are imposed pursuant to the Town’s police power and Government Code sections 66014 and 66016 and are limited to recovery of the Town’s actual and reasonable costs for services provided. Such fees are not imposed for the use, occupancy,

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
8 of 9
POLICY NUMBER:
or privatization of public property and shall not exceed the cost of providing the applicable regulatory service.

Recoverable regulatory costs may include, but are not limited to:
• Application intake and processing
• Engineering, public works, and planning review
• Field inspections and compliance verification
• Legal review and document preparation
• Coordination of recordation and file maintenance
• Periodic compliance monitoring and renewal processing • Enforcement staff time short of physical abatement or removal Regulatory cost recovery fees shall be established, amended, and periodically reviewed based on a documented cost nexus study and adopted by resolution of the Town Council.

VIII. License Consideration for Use of Public Property
Separate and apart from regulatory cost recovery fees, the Town may require payment of consideration as a condition of approval of a License Agreement to compensate the Town for the private use or occupancy of public right of way or Town Owned Property.

License consideration is imposed under the Town’s proprietary authority and constitutes contractual consideration for the grant of a revocable license to occupy public property. License consideration is not a regulatory fee, is not imposed pursuant to the Town’s police power, and is not subject to the limitations applicable to regulatory cost recovery fees.

License consideration, if required, shall be established in the License Agreement and may include one time or recurring payments based on factors such as the extent, duration, location, and nature of the encroachment, the degree of exclusivity or privatization of public property, and the private benefit conferred.

The imposition or amount of license consideration shall be determined by the applicable approval authority consistent with this policy and shall be independent of any regulatory cost recovery fees or performance security requirements.

IX. Appeals
Code citations and enforcement actions may be appealed in accordance with procedures established in the Town Code. Decisions on discretionary License Agreements are final and not subject to administrative appeal, except where appeal is expressly provided by law.

Denial of a discretionary License Agreement request shall not be appealable, and approval or denial remains within the sole and absolute discretion of the Town.

Decisions to revoke an existing License Agreement shall not be appealable. Denials of initial or retroactive license requests remain non-appealable unless expressly authorized by law.

X. Implementation
The Town’s Parks and Public Works Department reviews grading, excavation, and drainage matters for the proposed Private Improvements in the public ROW or Town Owned Property,

ITEM NO. 16.

TITLE: License Agreements for Encroachments for Private Use of Public Property
PAGE:
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POLICY NUMBER:
administers the permit, License Agreement, and inspections; the Town Attorney’s Office reviews License Agreements; and the Community Development Department ensures compliance with the Town Code zoning ordinances and provides enforcement.

XI. Effective Date and Amendments
This policy is effective upon adoption and may be amended by the Town Council or Town Manager as necessary to remain consistent with Town Code and California law.

APPROVED AS TO FORM:
_________
Gabrielle Whelan, Town Attorney

ITEM NO. 16.

PREPARED BY: Jamie Field
Chief of Police
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: 01/20/2026
ITEM NO: 17
DATE: January 8, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 RECOMMENDATION: Receive the bi-annual update from the Los Gatos-Monte Sereno Police Department (LGMSPD) outlining staffing, training, operations, community engagement, and strategic efforts from July 1 through December 31, 2025, while also highlighting the workload, impact, and preparation underway for major regional events in 2026 FISCAL IMPACT:

There is no negative fiscal impact to the Town associated with receiving this report or the content.

STRATEGIC PRIORITY:

This item aligns with the strategic priority of emergency resiliency and response capabilities, along with prudent financial management and ensuring a safe feeling in Los Gatos. It also aligns with several of the Town’s Core Goals, including Good Governance, Civic Engagement, Fiscal Stability, and Public Safety.

BACKGROUND:

The second half of 2025 reflected a period of substantial transformation, workload, and measurable impact for the Los Gatos-Monte Sereno Police Department. This report captures LGMSPD’s continued dedication to excellence in public safety, strategic planning, technology implementation, and community trust-building.

ITEM NO. 17.

PAGE 2 OF 9
SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
- LGMSPD executed major projects, including the approved contract and start of the fullscale implementation of the Axon ISLE 10+ (Drone for First Responders, Real Time Crime Center, translation, and other valuable functionality and equipment), procurement of mobile data computers, automation of subpoenas and DA filings, false alarm ordinance approval and automated management system, and progress on the DLR space assessment of the Police Department buildings.
- LGMSPD managed over 3,900 training hours, hosted large-scale community events like Halloween and the 69th Children’s Holiday Parade, and navigated lean staffing through targeted recruitment and commitment to efficiency.
- LGMSPD also operationally prepared for unprecedented regional events coming this year (2026), such as Super Bowl 60, FIFA World Cup, and the 250th Anniversary of U.S.

Independence.

This high level of performance was achieved without expanding the Department’s staffing footprint, and while fulfilling daily responsibilities across enforcement, community outreach, dispatch services, and emergency preparedness.

DISCUSSION
Staffing, Recruitment, and Retention
Despite limited personnel capacity, the Department successfully hired one Records Specialist, three Officer Trainees, and one Lateral Officer from a combined applicant pool of over 768 applicants (417 sworn and 351 Records Specialist applicants).

This achievement came amid continued reliance on overtime, training pipeline management, and schedule flexibility to meet operational demands. As of December 31, 2025, LGMSPD had, 27 deployable sworn officers for daily operations out of 39 budgeted. The vacancies are due to two officers in the police academy, protected leave, and vacancies. There were several retirements during this period, including an Officer, Sergeant, and a Captain.

The Department’s recruitment pipeline remains active, though public safety market competition, along with complexities of background clearance requirements and timelines, continue to affect the onboarding velocity. There are oral boards scheduled almost monthly in the coming months. The Department’s efforts to accelerate hiring timelines without compromising quality, including hosting six oral boards in six months. A competitive recruitment strategy, including accelerated oral boards, updated outreach materials, and stronger candidate tracking and engagement, has enabled the Department to maintain momentum during lean staffing conditions.

Beyond numerical metrics, the human capital reality of LGMSPD is a testament to both

ITEM NO. 17.

PAGE 3 OF 9
SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
dedication and strategic compromise. Each unfilled position represents not just a vacancy but a shift in workload to remaining staff, many of whom absorb additional duties while maintaining response standards. This has a downstream impact on wellness, training time, and the Department’s ability to provide non-enforcement services. For example, community engagement and preventive patrols often yield to urgent calls, investigations, and mandated follow-ups. Recruitment challenges stem not from lack of effort, but from a competitive public safety labor market in the Bay Area and the rigorous standards LGMSPD maintains to preserve culture and quality that this department is proud of and known for.

These panels processed a cumulative applicant pool of 768 individuals. From this extensive pool, the Department hired 1 Records Specialist, 3 Officer Trainees, and 1 Lateral Officer. While the numeric yield may seem modest, this is reflective of the Department’s high standards in background, ethics, fitness, and community alignment. Each candidate undergoes an intensive multi-phase process, including testing, oral interviews, backgrounding, polygraph, psychological, and medical evaluations.

LGMSPD's Field Training Program remained active throughout this period, with training officers often managing dual responsibilities. The scale and selectivity of the hiring process reflect a dual imperative: the urgent need to fill vacancies, and the non-negotiable requirement to preserve cultural integrity and public trust. Each new hire represents thousands of dollars and hundreds of hours in processing and onboarding. For every one position filled, approximately 100 applicants were screened, a reality that underscores the labor-intensive and mission-critical nature of hiring in public safety.

Training and Professional Development
From July to December 2025, LGMSPD personnel completed 3,949 hours of structured training across a diverse spectrum of professional competencies. This training investment includes over 2,000 hours of POST Academy instruction, 284 hours of SWAT training, 516 hours in specialty positions, and targeted instruction in leadership, investigations, traffic, Crisis Intervention Training, and field operations. The Department also hosted and participated in high-value courses such as Field Training Program Update, substance abuse awareness and enforcement, and core or specific investigative skills.

Training remains a critical retention tool and a driver of operational excellence. LGMSPD continues to leverage both Police Officer Standards and Training (POST) funded and grantsupported opportunities to reduce training cost while maximizing impact.

The Department also facilitated Red Cross First Aid and CPR training for 24 CERT and DART volunteers at the EOC in November 2025, enhancing volunteer readiness.

Not all training hours are created equal; the quality, diversity, and strategic alignment of training content are what make LGMSPD’s investment particularly noteworthy. From statePage 387 ITEM NO. 17.

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SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
mandated curriculum to future cutting-edge virtual reality scenarios under the Axon suite, LGMSPD is building a workforce equipped to meet today’s and tomorrow’s policing needs.

Investments in Investigative Core Course certifications and digital cell phone / forensic analysis expand investigative reach, while internal FTO updates and supervisor development strengthen succession readiness. Training is also a core retention strategy. Officers who feel they are growing professionally are more likely to stay and invest back into their community. LGMSPD's 3,949 training hours reflect a department that isn't merely checking boxes, but strategically upskilling its people.

Community Engagement, Explorers, and Volunteerism
LGMSPD remained deeply engaged with the community during the second half of 2025, prioritizing visibility, transparency, and collaboration. The Department welcomed four new Police Explorers and three new Disaster Aid Response Team (DART) members, strengthening its pipeline of future volunteers. These individuals received orientation and training, and became fully active participants in event support and outreach deployments. The cumulative engagement hours by Explorers and DART/CERT exceeded 450 hours from July to December 2025, including parade support, training attendance, first aid coverage, and logistical staging.

Volunteers were integral to major event operations, including the Halloween deployment and the 69th Annual Children's Holiday Parade. CERT and DART members contributed to traffic control, crowd management, and first aid services, often working side by side with sworn personnel. Volunteers in Policing conducted 575 vacation checks during this reportable period and many Welcome Packets. Additionally, there were two Neighborhood Incident Command Posts (NICPs) completed during this reportable period to provide improved access and resilience for CERT Neighborhoods supported by CERT Leads.

In addition to traditional engagement methods, the Department significantly expanded efforts in traffic safety education and enforcement, most notably around e-bike usage and through the addition of another trained motor officer. In response to community concern, LGMSPD launched targeted saturation patrols in school zones, conducted education campaigns, and distributed a 2025 E-Bike Safety Brochure in collaboration with Safe Routes to School and the Youth Commission. There was also an immense partnership with both school districts in educating and curbing unsafe e-bike behavior, and whether e-bikes would be allowed on campuses and when.

The Department's presence at school events, civic forums, and business walkabouts further emphasized its commitment to being a proactive, collaborative partner in community safety.

Community engagement remains one of LGMSPD’s most differentiating attributes. The Department doesn’t simply respond to calls, it invests in trust, participation, and safety ownership through connecting with the community that we serve.

LGMSPD engaged community members at National Night Out, Annual LGMSPD Recognition

ITEM NO. 17.

PAGE 5 OF 9
SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
Luncheon at the JCC, and Neighborhood Watch meetings, often with 15-30 community members present. We also participated in presentations to service clubs, Terraces, faith based organizations, and preschools. These interactions create a partnership and shared vigilance.

The Youth Commission started anew with the school year and under their 2025 updated ordinance. The Youth Commission is supported by the Office of the Chief throughout monthly meetings, and its Council approved two-year work plan that is currently underway, with a report out forthcoming in May 2026.

Technology Modernization, Innovation, and Major Project Implementation LGMSPD made substantial progress in implementing several Council-approved initiatives during this reporting period. These include the Axon ISLE 10+ technology suite, mobile data computer deployment, false alarm permit ordinance overhaul, and implementation of TurboData for alarm billing and code enforcement integration.

Each of these initiatives required extensive staff coordination, program development, interdepartmental alignment, vendor management, training, and public messaging. For example, the implementation of TurboData required technical integration with Town systems, internal workflow changes, and design of community-facing materials. The successful rollout of CourtNotify automated subpoenas also reduced sworn overtime related to court appearances.

One of the most transformative achievements during this reporting period was the Councilapproved Axon ISLE 10+ agreement. This 10-year contract includes upgrades to the Department’s body-worn and in-car camera systems, virtual reality training environments, and drone surveillance capabilities. The agreement also enables real-time operations center capabilities via FUSUS integration, supporting both transparency and situational awareness.

LGMSPD further invested in mobile data technology, acquiring and configuring 14 Panasonic Toughbooks and vehicle routers to replace aging mobile units. Automation efforts extended into Records, and automated digital report filings to the DA’s Office were implemented. An update and audit of all department cell phones to allow for mobile access and automated citation ability occurred in Fall 2025 as well.

Each technology deployment is more than equipment, it is an ecosystem transformation towards modern policing. The Axon suite, for example, integrates not only cameras but cloudbased evidence management, real-time alerts, and cross-agency collaboration tools. The mobile data computer rollout is not just hardware, it ensures officers can access CAD, RMS, and dispatch information quickly and securely from the field, reducing radio traffic and increasing real-time decision-making.

CourtNotify has significantly impacted daily staffing management by removing the need for oncall court appearance prep. These gains compound over time. With automation of DA filings,

ITEM NO. 17.

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SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
LGMSPD eliminated several hours per week in manual records transport. The technological leap over the past 6 months has been a significant staff effort and time, but has materially improved operational resilience and efficiency.

These project rollouts underscore the Department’s strategic capacity and the measurable impact of Council-supported modernization efforts. As of December 2025, all major projects remain on track, but the implementation burden necessitates maintaining project stability in 2026 before initiating additional programs.

Key efficiency through technology and updating of an ordinance in this period included the revision and Council approval of the updated False Alarm Ordinance, which now encompasses residential alarm users. This was also recommended via the Meliora LGMSPD assessment report. The revised code mandates annual alarm permits, defines enforcement thresholds, and provides online permit processing, backed by the TurboData system, which also manages our parking enforcement program. Public education began in the last several months with door hangers, emails, and renewal notice inserts to existing businesses. During this reportable period, LGMSPD responded to 436 false alarms, with 216 being commercial and 220 being residential.

Facility Assessment, Space Planning, and Long-Term Infrastructure Needs Following the Council-funded DLR Group assessment, LGMSPD received a comprehensive space needs evaluation in fall 2025 for both the Police Headquarters and Police Operations Building.

Preliminary findings confirmed that current facilities fall short in capacity, functionality, and long-term viability to support existing or future staff and the needs of the community. The assessment projects a need for at least approximately 28,000 sq of space to accommodate full operations for a unified police facility. This work provides an actionable blueprint for future capital planning, reinforcing the importance of continued investment in public safety infrastructure as the Town grows and public expectations evolve.

The need for a modernized, consolidated police facility is not hypothetical, it is mission-critical.

In December 2025, the Town experienced localized flooding due to prolonged rainfall and drainage limitations. Water levels approached the Dispatch Center’s entry thresholds, raising alarms about potential operational compromise. Concurrent water intrusion also impacted shared Town offices, including in Police Headquarters, underscoring the building’s vulnerability.

These operational threats lend urgency to the findings of both the 2025 DLR Space Needs Assessment and the 2024 Meliora Report, which independently called for consolidation of the Police Department and its operations.

A centralized, purpose-built public safety facility is essential not only for infrastructure integrity, but for workforce efficiency and community experience. Currently, LGMSPD functions across disconnected spaces, creating duplication of effort, logistical strain, and security concerns.

Records staff, dispatchers, patrol officers, investigators, and command staff work in separate

ITEM NO. 17.

PAGE 7 OF 9
SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
zones, fragmenting workflows that should be integrated. In addition, modern public safety facilities are designed to host multi-agency coordination, community meeting space, real-time operations centers, and scalable EOC configurations. These needs are not met in the current footprint. A co-located facility enhances both the business plan for public safety employees and the community’s experience when seeking service, submitting records, or attending meetings.

Dispatch, Calls for Service, Records, and Operational Metrics During the second half of 2025, LGMSPD Dispatch/ Communications Center handled 8,810 calls for service. Dispatchers received 4,716 9-1-1 calls, 11,108 non-emergency calls, and 10,380 Administrative calls; for a total of 26,104 calls in the second half of the year.

Records processed 1,038 reports and 790 citations, while reducing the DA submission backlog through the newly automated filing process. These metrics do not fully capture the case management workload, follow-up investigations, redaction compliance, and subpoena preparation, all of which remain labor-intensive despite partial automation.

LGMSPD maintains a response time average of under 5 minutes for Priority 1 calls (4:22), 10 minutes for Priority 2 calls (6:28), and 15 minutes for Priority 3 calls (6:59), reflecting continued efficiency under load.

Grant Funding, Financial Efficiency, and Foundation Support LGMSPD secured the largest grant in its history just before the start of this reportable period (June 2025): a $248,955 DUI Enforcement Grant from the California Highway Patrol, supporting impaired driving reduction through directed enforcement, education, and equipment. These grant benefits have shown through officer training during the second half of 2025 and the procurement of two dedicated DUI enforcement vehicles.

The Department also received a POST Innovation Grant to fund its 2026 leadership offsite retreat, aimed at strategic planning, resiliency, and succession development. Support from the Los Gatos-Monte Sereno Police Foundation remained strong, with funding provided for ballistic helmets, the Annual Police Recognition Luncheon, Axon 10+ contribution, training, National Night Out, and more. The Department continues to model strategic fiscal stewardship through grants, partnerships, and LGMS Police Foundation support.

Special Event Management: Halloween, Los Gatos in Lights, Children’s Holiday Parade LGMSPD successfully led operations for several of the Town’s largest community events:

Halloween Night, Los Gatos in Lights, and the 69th Annual Children’s Holiday Parade. These events required mobilization of sworn and non-sworn personnel, coordination with CERT/DART and Explorers, Parks and Public Works, Economic Vitality, and event organizers. The Department’s professional handling of these events exemplifies the value it delivers beyond traditional enforcement.

ITEM NO. 17.

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SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
The workload for major event operations is often invisible to the public. Planning and multiple meetings for Halloween began months in advance, with risk assessments, staff coordination, traffic planning, and deployment rosters. During the Children’s Holiday Parade, over 30 LGMSPD personnel were deployed, managing tens of thousands of attendees. Crowd monitoring posts were staffed for hours, with staff balancing visibility, response capability, and public relations duties in a compressed downtown footprint. The evening prior, Explorer volunteers and sworn staff were present to staff and assist with the Los Gatos in Lights event as well.

Super Bowl LX and Regional Event Readiness for 2026
While Super Bowl LX will be hosted outside Town limits, LGMSPD is executing a regional readiness plan that includes proactive staffing, special deployment scheduling, and contingency resource allocation. Past major events (e.g., Super Bowl 50) have taught that the weeks leading up to and following major sporting events become stages for a wide spectrum of public safety challenges. These include, but are not limited to, unsanctioned gatherings, watch parties, celebratory motorcades, nightlife surges, protest activity, public intoxication, and regional traffic congestion. The post-event period often presents its own set of risks, particularly with crowd dispersal and celebratory behavior.

To mitigate these challenges, the Department has issued early overtime postings, engaged in inter-agency planning calls and meetings, and aligned with County resources. The FIFA World Cup and 250th Independence Celebration, both in planning phases, will require similar posture and interdepartmental support but over a much more expanded period of time between June and July 2026. These events necessitate ongoing coordination, demand forecasting, and operational agility. The Department's preparation ensures the Town remains safe, visible, and connected during nationally significant events.

The operational implications of Super Bowl LX, FIFA World Cup qualifiers, and the 250th Independence Celebration extend far beyond the physical boundaries of their respective venues. While Levi’s Stadium may serve as the host location for Super Bowl and World Cup activity, the regional footprint, including the Town of Los Gatos, is directly impacted by the influx of spectators, visitors, media, and security demands.

In preparation, LGMSPD has designated “no time off” periods of a week in February 2026 (Super Bowl operations) and an extended period in June to July 2026 (FIFA World Cup operations). These blackout dates ensure sufficient surge staffing and contingency deployment options are in place, but also come at an increased staffing cost to the Town. These weeks will require command-level oversight, dedicated traffic posts, and ongoing mutual aid coordination.

The workload burden on LGMSPD staff leading up to and during these periods is significant, not only due to the expanded hours but also to the complexity of training, preparing collateral teams, anticipating and responding to unpredictable public behavior. Officers will be operating

ITEM NO. 17.

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SUBJECT: Receive the Bi-Annual Police Services Report for July – December 2025 DATE: January 8, 2026
under extended work plans and at heightened alert, making wellness and resiliency planning a necessary complement to operational planning.

This is a defining opportunity for LGMSPD to demonstrate regional partnership in regional coordination, tactical readiness, and public service under high visibility. Council’s awareness of these demands is essential as planning intensifies over the coming weeks.

Strategic Direction, Risk, and 2026 Outlook
Looking ahead, LGMSPD’s strategic focus will center on completing current projects, continuing recruitment, deepening community relationships, and preparing for regional events. Risk factors include staffing volatility, recruitment lag time, and demand surge tied to regional events. However, the Department is positioned to meet these challenges. The strategic direction is clear: complete what has been started, remain agile, and invest in both people and platforms. The payoff will be a safer, more connected, and future-ready Los Gatos.

Looking ahead to 2026, the Department will host its formal Department Meeting, the first such gathering in three years. This all-staff event will feature a renewed articulation of the Department’s vision, goals, and operational methodology. The intent is to re-energize the workforce, reinforce shared purpose, and ensure every member understands the roadmap for service delivery and professional development.

CONCLUSION
The Department remains deeply committed to delivering high-quality, responsive public safety services. This report demonstrates a period of intense execution, innovation, and preparation for the future. With the support of the Town Council and the community, LGMSPD will continue to serve as a trusted, transparent, and adaptable organization. However, the current volume of mission-critical projects, upcoming regional events, and staffing structure necessitate a cautious consideration of new initiatives during 2026. This period will focus on stabilizing, delivering, and reinforcing the systems, programs, and operations now underway.

ENVIRONMENTAL ASSESSMENT:

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

ITEM NO. 17.

PREPARED BY: Kristina Alfaro
Administrative Services Director
Reviewed by: Town Attorney and Town Manager
110 E. Main Street Los Gatos, CA 95030 ● (408)354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

TOWN COUNCIL REPORT
MEETING DATE: 01/20/2026
ITEM NO: 18
DATE: January 20, 2026
TO: Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Discussion, consideration, and Possible Action to Provide Direction on Revenue Measure Options and Next Steps Including Engaging Professional Services to Support the Evaluation Effort in an amount Not to Exceed $80,000 RECOMMENDATION:

Staff recommends that the Town Council consider:

1. Authorizing the Town Manager, or designee, to pursue special legislative authorization from the State Legislature in the 2026 session to exempt Los Gatos from the statewide 2 percent combined district sales tax cap, preserving the Town's legal ability to place a general transactions and use (sales) tax measure on the November 2026 ballot.

2. Authorizing the Town Manager, or designee, to engage specialized professional consultants to facilitate special legislative authority to preserve the option for a transactions and use tax and to engage other such professionals to properly inform the Town Council regarding a possible revenue measure not limited to a transaction and use tax for work up to and including potential action related to that specific measure.

3. Allocate $80,000 from the General Fund unassigned fund balance for professional services to continue work related to a possible revenue measure that the Town Council may consider for the November 2026 election.

FISCAL IMPACT:

The estimated cost is $80,000 for professional services to preserve the Town’s ability to consider a future revenue measure. The allocation may need to be increased depending on the type of measure, approach, and steps required to implement any Council-identified measure.

STRATEGIC PRIORITIES:

One of the top three 2025-2027 Strategic Priorities includes ensuring “…prudent financial

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
management to result in structurally balanced five-year forecasts and fully funded five-year Capital Improvement Plans, managing liabilities such as pension costs and leveraging the Town’s assets, efficiencies, partnerships, and revenue streams. Define and implement a cohesive deferred capital improvement program for Town facilities and lifecycle assets. (Goal: Fiscal Stability)”
BACKGROUND:

The Town of Los Gatos is recognized as a safe, attractive, and welcoming community with highquality public amenities and a strong overall quality of life. Over many years, residents, businesses, and visitors have benefited from well-maintained streets and parks, vibrant downtown activity, responsive public safety services, and programs that reflect the Town’s small-town character and unique sense of place.

Continued reliance on economically sensitive revenues and expenditure assumptions that are not assured creates risk
Recent financial results show that the Town closed Fiscal Year 2024-25 with an increase in General Fund unassigned fund balance. However, a review of the updated Five-Year Forecast (Attachment 1) indicates this outcome was driven largely by variable increases, which are not indicative of sustainable structural balance over the long term.

On the revenue side, the surplus relied heavily on interest income, which surged to $3.1 million in FY 2024-25 due to market conditions but is projected to drop to $1.6 million in FY 2025-26 and further to $1.1 million by FY 2027-28. Additionally, the Town faces specific risks, such as a projected $0.4 million decline in Transient Occupancy Tax in FY 2026-27 due to a specific hotel closure, and stagnating Property Tax estimates, which assume zero growth between FY 2025-26 and FY 2026-27.

On the expenditure side, FY 2024-25 salary actuals ($22.4 million) were artificially low due to significant vacancy savings. With limited restrictions on hiring and overtime, salary costs could rise to $25.4 million, a $3.0 million increase, if full staffing or increases in overtime occur.

Another Bay Area city is currently experiencing this condition, resulting in critical impacts on fiscal stability, necessitating layoffs and service reductions. Other cities are grappling with significant deficits and considering how to best close their funding gaps. Thus, Los Gatos is not alone.

For the FY 2025-26 budget, Town staff and the Finance Commission strengthened the accuracy of revenue and expenditure assumptions. In this detailed review, the Town approved a budget that included reductions but still relied upon $0.9 million in the use of unassigned fund balance.

The purpose of planning the use of fund balance is to ensure reductions to key programming do not occur until a deficit is actually incurred. During the year, additional appropriations increased the projected operational deficit to $1.1 million for FY 2025-26.

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
Recent fund balance growth should not be interpreted as evidence that the Town’s long-term revenue structure is sufficient to sustain current service levels. While the Town has not needed to dip significantly into reserve balances yet, reliance on one-time or volatile activity that does not ensure structurally balanced future budgets, combined with not fully accounting for increasing personnel costs and future capital and deferred maintenance needs, creates risk.

Should economic dynamics change, the Town would face the need to quickly reduce expenditures with little lead time. Additionally, the halting of transfers for capital projects limits the ability to address accumulating infrastructure needs.

The Town is currently undertaking financial and fiscal impact analysis studies, which will provide a more refined outlook and Ten-year forecast leading up to a final report in April/May 2026. While the Town Council can wait for the results of these studies, it may lose the ability to respond this calendar year with some options to reduce the impact on programs, services, and capital projects.

Capital and Operational Needs far outpace available and projected revenues While the Town is not facing an immediate cash flow crisis, it faces a growing structural gap between available resources and the costs required to maintain aging infrastructure, meet emergency preparedness expectations, and modernize facilities. Without identifying new, reliable sources of funding, the Town cannot address significant obligations that are not fully captured in the annual operating budget.

Recent staff reports and condition assessments have quantified the magnitude of these unfunded liabilities. As detailed in Table 1 below, when escalating known maintenance and capital needs to 2025 dollars (at a 4% adjustment), the Town faces over $300 million in onetime unfunded liabilities, in addition to significant ongoing operational costs for wildfire safety.

Table 1: Summary of Unfunded Capital and Operational Needs (Escalated to 2025) Category Specific Need Estimated Cost (2025)
Streets & Roads Pavement & Infrastructure $172,678,480
Public Safety New Police Ops Building / EOC $50.4M – $66.0M Parks & Assets Parks Deferred Maintenance $29,316,560
Park Rehabilitation Soccer Field Turf Rehab ~$2,500,000 Storm Drains Drainage Infrastructure $24,051,560
Town Facilities Building Maintenance & Repairs and Capital $22,639,670 Wildfire Critical Infrastructure $6.0M – $11.0M
Wildfire Operations Comprehensive Wildfire Program $2.1M – $3.0M Note: IT Needs identified in previous assessments ($310,000) have been funded in the 25/26 cycle and are removed from this list.

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
Assessment of Service Gaps
Streets, Roads, and Storm Drains
The Town’s infrastructure needs constitute the largest financial liability. Escalated to 2025 costs, the Capital Infrastructure Needs assessment identifies approximately $172.7 million in unfunded needs for streets and roads. Additionally, storm drainage improvements now total over $24 million. This includes critical drainage infrastructure on major thoroughfares like Los Gatos-Almaden Road and essential improvements required to prevent system failures.

Public Safety Facilities
The Police Operations Building (POB) and the Civic Center require significant investment. The POB currently forces split operations that create inefficiencies and is stretched to meet current security standards. A study is underway to evaluate consolidating all Police Department staff into one building, with results expected in spring 2026. Preliminary information suggests 28,000 to 30,000 square feet of space is needed to support the Department and a modern Emergency Operations Center. The cost of constructing this facility is estimated between $50.4 million and $66 million ($1,800–$2,200 per sq. ft.), exclusive of land acquisition.

Parks and Public Assets
Unfunded needs for Town parks, escalated to 2025, are estimated at $29.3 million. This backlog impacts community staples, including playground replacements at Oak Meadow Park and La Rinconada Park, irrigation system replacements, and trail connectivity projects. Furthermore, this assessment does not account for the approximate $2.5 million necessary to rehabilitate soccer field turf that has reached its end of life, nor does it include the benefits of increasing tree and park strip improvements in residential and commercial areas.

Town Facilities and Deferred Maintenance
Town-owned buildings face a combined maintenance and capital shortfall of nearly $22.6 million ($21.1 million in deferred maintenance and $1.5 million in capital needs) over the next 11 years. It is important to note that these figures represent the cost to maintain current operations and generally do not include necessary modernization or expansions.

Wildfire Mitigation and Emergency Preparedness
Beyond capital infrastructure, the Town faces ongoing operational gaps. As outlined in the December 16, 2025, staff report, implementing a "Comprehensive Program" (Scenario 3) to adequately address wildfire risks requires an annual operating investment of approximately $2.1 to $3.0 million. This is in addition to $6 to $11 million in one-time capital costs over the next 5 to 10 years for critical infrastructure such as evacuation route widening and strategic fuel breaks.

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
Many of these items represent proactive investments intended to reduce long-term risk and liability, rather than discretionary enhancements. Absent additional ongoing revenue, addressing these unfunded needs requires continued deferral.

Community Priorities and Service Sustainability
Results from the 2025 Community Survey indicate that Los Gatos residents rate the Town very highly in areas that most directly shape quality of life, safety, and community character.

Residents expressed particularly strong satisfaction with Town library services, parks and recreation facilities, and police services. However, the survey also highlights that residents place the greatest importance on maintaining these outcomes over time.

The community investment areas with the highest levels of resident support include maintaining streets, sidewalks, and storm sewer systems, improving traffic flow, maintaining 911 response times, and strengthening disaster preparedness. The responses suggest that while satisfaction remains high, targeted investment in transportation, pedestrian safety, and emergency preparedness is necessary to maintain resident confidence. Ensuring the ability to sustain high-performing core services and responsibly address identified and emerging needs will require reliable, ongoing funding aligned with these community expectations. Current budget capability does not provide sufficient resources to fully address the needs identified in the community survey.

Strategic Positioning: Preserving Options and Preparing for the Future The preceding background illustrates that while Los Gatos is currently managing its budget through one-time resources and vacancies, this is not a sustainable long-term strategy given the magnitude of known capital and operational obligations.

It is important to frame the current situation accurately. The Town is not currently in a fiscal emergency that forces the Council to place a measure on the November 2026 ballot as a last resort to avoid immediate insolvency. The Town retains a degree of fiscal stability that allows for thoughtful planning rather than reactive crisis management.

However, relying on the current revenue structure to support future needs creates significant risk. By the time a structural deficit becomes critical, or a major infrastructure failure occurs, it will likely be too late to develop a thoughtful revenue measure to address it. Responsible governance requires that the Council evaluate potential revenue options before the need becomes acute.

The purpose of the current discussion is to ensure the Town does not find itself in a position where it is forced to react to a financial crisis without a plan. By exploring revenue options now, the Council preserves the optionality to act in November 2026 if it deems necessary, or to defer action with a clear understanding of the trade-offs regarding service levels and deferred maintenance. This proactive approach ensures that if a potential revenue measure is considered in the future, it is not the first time the concept has been vetted.

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
Accordingly, the following discussion section articulates the specific revenue options available to the Town, along with the timing, feasibility, and strategic considerations for each. This analysis is intended to provide the Council with the necessary information to weigh the benefits of securing additional revenue against the option of maintaining the status quo, ensuring that any future decision is made deliberately and in alignment with long-term community priorities.

On January 12, 2026, the Finance Commission met and reviewed the proposed Town Council staff report and provided support to proceeding with engaging the professional services necessary with funding authority of up to $80,000 to preserve the Town’s ability to consider a revenue measure in November 2026 including special legislative authority for a higher transaction and use tax as well as to consider other potential revenue measure options. The Finance Commission also supported waiting until the results of the financial analysis and impact analysis currently being performed by NHA Advisors prior to deciding on whether to proceed for November 2026.

DISCUSSION:

In the case of addressing deficits, the Town has the option to either 1) increase revenue, 2) decrease expenditures (generally reducing the level of service), 3) reduce the scope of services supportable by available stable revenue (eliminating functions), or 4) implement a combination of all the above.

For FY 2025-26, the Town already included revenue increases, such as higher revenue from agreements such as the Town’s contract for police services with Monte Sereno and increases to fees and charges. On the expenditure reduction side, the Town executive staff implemented some internal expenditure reductions, which included the elimination of annual funding for future capital projects. When both were combined, the Town still approved a deficit spending budget, but with a smaller use of reserve fund balance than projections would have necessitated.

On the Capital Improvement side, the Town implemented a tiered schedule for its five-year capital improvement program and reduced the projects programmed. The schedule included three tiers to classify capital projects, which included  Tier 1 – projects scheduled in a specific year with allocated funding and staff capacity to perform,
 Tier 2 – projects to be considered next when funding and staff capacity are available, and
 Tier 3 – all other projects that are neither scheduled nor considered in the five-year schedule.

In the case of the Town’s efforts to reduce the structural deficit, the Town did not consider reducing service levels for the base services, nor do any of the efforts address the multi-million

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
dollars discussed in the Additional Capital and Operational Needs section above or identified through the Town’s 2025 community survey.

Town’s Primary Ongoing Revenue Sources are Property Tax and Sales Tax Based The Town’s updated Five-Year Forecast demonstrates that the General Fund remains heavily dependent on property-related revenues, with FY 2026-27 projected property tax and Vehicle License Fee backfill totaling approximately $27.9 million, compared to roughly $8.4 million in combined sales and use tax and Measure G district tax, confirming that property tax is the Town’s single largest revenue source and sales tax is the next largest.

In that same forecast year, other major categories such as transient occupancy tax (about $2.4 million), business license tax (about $2.6 million), licenses and permits (about $6.3 million), and charges for Town services (about $5.0 million) play important but secondary roles, underscoring that the Town’s ability to sustain core services and address long-term obligations will continue to hinge on the performance of these top two revenue streams.

Given the scale and breadth of identified capital, wildfire, and facility needs relative to projected revenues, it is fiscally responsible for the Council to consider options, including a potential Town sales tax measure, a parcel tax, a bond measure, and more targeted tools such as assessment districts or Landscaping and Lighting Districts. Considering these options do not require the Town to pursue a measure in 2026, but they provide the Town with approaches to addressing the projected structural gap for existing activity, as well as for the significant additional capital and operational needs, in addition to the approaches of reducing expenditures by service level reductions or program elimination.

Revenue Measures Require Multiple Steps and Time to Implement with Potential Voter Approval
If the Council wishes to preserve the option of placing any local revenue measure on the November 3, 2026 Santa Clara County consolidated general election ballot, the Town will need to work backwards from the County Registrar of Voters’ statutory “E-88” deadline (approximately 88 days before Election Day, in early August 2026) when the Town must adopt its election resolutions and submit the final ballot question, ordinance reference, and impartial analysis request for any measure. Leading up to that date, staff and the Council would need to:
(1) conduct preliminary study and public outreach in early 2026; (2) finalize the proposed revenue mechanism and ballot framework in spring/early summer 2026; and
(3) complete all required external reviews, including submittal of a transactions and use tax ordinance for California Department of Tax and Fee Administration review in the case of a sales tax, coordination with the County for roll and administration details in

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
the case of a parcel tax, and preparation of an engineer’s report and benefit methodology for any assessment district or Landscaping and Lighting District.

Because each of these steps involves iterative legal, technical, and interagency review, the combined calendar between now and the E-88 submittal date leaves very limited schedule flexibility, meaning that any path to a November 2026 measure, whether sales tax or parcel tax, would need to be pursued on a tight and carefully managed timeline. For an assessment based option, this would be decided by mailed ballots that would be counted as a council meeting of the Town’s choosing, not in a general election.

Additional Consideration for Preserving the Ability to Pursue a Meaningful Sales Tax Measure
While any revenue measure will require additional review, staff work, and implementation steps, the State’s 2 percent limit on transaction and use tax (sales tax) increases introduces another critical path that can delay or eliminate the Town’s ability to meaningfully consider one of two major revenue options. To overcome this limitation, similar to other cities such as Campbell, Pinole, and cities in Solano County did in 2024, the Town would have to seek authority to pursue state legislative change. This additional step requires immediate consideration in order to preserve the Town’s ability to consider this option.

Existing Local Sales Tax Authority
The Town of Los Gatos currently receives revenue from the statewide base sales and use tax rate of 7.25 percent, plus voter-approved district taxes (also called transactions and use taxes) applicable in Santa Clara County, including the Town’s own one-eighth cent (0.125 percent) local transactions and use tax dedicated to Town purposes. California’s Transactions and Use Tax Law imposes a statutory cap that generally limits the combined tax rate of all local transactions and use taxes in a jurisdiction to 2 percent. Once the 2 percent ceiling has been reached in a jurisdiction, neither the county nor a city or special district can impose an additional transactions and use tax in that jurisdiction without first obtaining special enabling legislation from the State Legislature.

Current Sales Tax Rate in Los Gatos
According to the California Department of Tax and Fee Administration (CDTFA), the current combined sales and use tax rate in the Town of Los Gatos is 9.25 percent. This rate reflects the statewide 7.25 percent base rate plus 2.00 percent in countywide and local district taxes, including the Town’s 0.125 percent transactions and use tax. Although Santa Clara County voters approved Measure A in November 2025 to add a five-eighths cent (0.625 percent) countywide sales tax, that increase will not take effect until April 1, 2026, so the operative rate in Los Gatos remains 9.25 percent at this time. The Town could still seek a one-eighth cent tax without special legislation to match Milpitas or San Jose, but to seek a tax in the amount needed would exceed the cap and require special legislation similar to Campbell.

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
Statewide Cap on District Transactions and Use Taxes
Revenue and Taxation Code section 7251.1 establishes a 2 percent combined rate limitation for transactions and use taxes imposed under the Transactions and Use Tax Law in any jurisdiction.

In determining whether this 2 percent cap has been reached in a jurisdiction, the California Department of Tax and Fee Administration aggregates all transactions and use taxes in effect within that jurisdiction. In the Town, existing taxes, including the Town’s 0.125 percent tax, already use up 1.875 percent (1⅞%)of the 2 percent limit, which constrains the Town’s ability to add further transactions and use taxes under general law to only one-eighth percent. A oneeighth cent sales tax would generate approximately $1.3 million, while a one-half cent would generate an estimated $5.2 million.

Need for Special Authorizing Legislation
Because of this statutory cap, any proposal for the Town to place a meaningful transactions and use tax (more than ⅛ percent) on the ballot would require specific legislative authorization that either (a) allows Los Gatos to levy an additional tax above the 2 percent combined limit, or (b) excludes the Town’s new tax from counting against that limit. Absent such authorizing legislation, a Town-sponsored half-cent measure could be challenged as inconsistent with the existing cap, exposing the Town to legal and administrative risk and creating uncertainty for voters and bond or financing markets. Seeking a narrowly tailored or amended bill in the State Legislature would provide the Town with clear legal authority to ask Los Gatos voters to consider a higher local sales tax rate while maintaining consistency with the statewide Transactions and Use Tax Law.

Example of Recent Special Legislation (AB 3259)
Assembly Bill 3259 (Wilson, Chapter 852, Statutes of 2024) provides a recent example of the type of special legislation that can authorize local agencies to exceed the 2 percent cap. AB 3259 added specific chapters to the Revenue and Taxation Code allowing the City of Campbell, the City of Pinole, the County of Solano, and any city within Solano County, by ordinance or by citizens’ initiative, to impose a transactions and use tax of up to 0.5 percent that, when combined with existing district taxes, would otherwise exceed the 2 percent countywide limitation. The statute further provides that a tax imposed under this authority “shall not be considered for purposes of the combined rate limitation” in section 7251.1, and includes a sunset date, January 1, 2029, if a local ordinance or initiative has not been approved by voters by that time.

Rationale for Pursuing Similar Authority for Los Gatos
With the Town’s current rate at 9.25 percent, it is already almost at the full 2.00 percent in district taxes for purposes of the statutory cap, Los Gatos appears to have a 1/8th cent capacity under general law to add further Town-level transactions and use taxes without special legislation. Once the countywide Measure A increase of 0.625 percent becomes operative on April 1, 2026, the combined rate in Los Gatos will rise further. However, section 7292.5

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
authorized the County to impose a transactions and use tax of up to 0.625% that would not count against the 2% cap. Thus, the Town still retains some capacity, but any new Town-level tax increment above the 1/8th cents would need to be expressly authorized in statute so that it either (a) is permitted to exceed the cap or (b) is excluded from the cap calculation, as was done for Campbell in AB 3259 and for other jurisdictions in similar special bills.

Pursuing a narrowly tailored or amended bill for Los Gatos would therefore provide the legal mechanism necessary to place a half-cent measure before voters, notwithstanding the countywide cap, mirroring the approach taken in AB 3259 and comparable statutes that recognize unique fiscal circumstances while preserving the requirement that any new tax be approved by the electorate. Engaging a qualified legislative and public finance consultant at this time will allow the Town to: (1) confirm and monitor the status of the countywide rate relative to the 2 percent cap, including the implementation of Measure A; (2) develop bill language modeled on successful prior measures such as AB 3259; and (3) coordinate with legislative offices, regional partners, and CDTFA to ensure that any proposed Town measure is legally valid and administratively feasible.

Discussion of Various Revenue Options for a General Law City The Town has several lawful options to generate additional local revenues, each with distinct voter-approval thresholds, purposes, and policy trade-offs. Broadly, these tools include a local transactions and use (sales) tax, parcel tax, utility users tax, general obligation bonds supported by a property tax override, and a variety of assessment and district-based mechanisms that fund special-benefit improvements or services. While there are other options, this report limits the options to those that are implemented more broadly in cities.

Strategic Considerations for Measure Selection
The Town's identified funding needs fall into three broad categories: ongoing operating support, capital improvements (streets, parks, facilities), and emergency preparedness (wildfire mitigation). The revenue tools available have different strengths:
 For structural operating support: A local transactions and use (sales) tax (majority-vote general tax) is best suited, providing flexible general-fund revenue that can address the operating deficit and fund ongoing services across multiple departments without legal restrictions. A sales tax also captures non-resident spending, distributing the burden beyond property owners alone. Statewide data shows majority-vote sales tax measures have achieved passage rates of 75–85% over the past five years, compared to ~35–67% for two-thirds special taxes and bonds.
 For capital improvements alongside operating support: The Town may consider pairing a sales tax measure (operating) with a separate General Obligation bond (capital). This approach is common in California and allows voters to evaluate each tool's appropriate use.
 For narrowly targeted improvements: Assessment districts (e.g., Landscaping and Lighting districts) or Community Facilities Districts may complement broader measures

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
by funding specific neighborhood or development-area improvements, but they cannot address Town-wide structural gaps.

Given the magnitude of the identified projected operating deficit, funding needs for the Town’s top strategic priority of emergency preparedness with focus on wildfire, and the urgency of addressing significant deferred maintenance and infrastructure needs without identified revenue to support these needs, staff recommends that Council consider giving direction on whether to consider proceeding with work towards a November 2026 revenue measure, preserve the Town’s ability to benefit from a broad, general transactions and use tax measure through a legislative exemption, and provide feedback on next steps for Town staff.

The Town’s current three financial analyses will help with further information about the Town and may change how the Council evaluates options. However, absent additional, sustained revenue to address the significant financial needs and projected deficits, Town staff are obligated to consider the Town Council’s top strategic priority for ensuring prudent financial management, which includes balancing the budget and funding necessary capital improvements. As such, the Town must work towards a plan to address the scope of services, cost footprint, and statutory obligations requiring funding within the context of a structurally balanced budget. In this scenario, all options are on the table to bring the Town into sustained balance.

Constitutional Framework
California’s constitutional structure—principally Propositions 13, 218, and 26—governs how local revenues are classified, the procedures for their adoption, and the applicable voter thresholds.
 Proposition 13 limits ad valorem property taxes on real property to 1 percent of assessed value and authorizes cities, counties, and special districts to impose “special taxes” (including parcel-based special taxes) with two-thirds voter approval.  Proposition 218 requires voter approval for all local taxes, distinguishes general from special taxes, and sets procedural and substantive requirements for assessments and property-related fees and charges.
 Proposition 26 broadly defines “tax” and narrows the range of regulatory fees and other charges that may be imposed without voter approval.

Under Article XIII C, a general tax (proceeds deposited into the general fund and usable for any governmental purpose) requires majority voter approval at a regularly scheduled general municipal election at which Council Members are elected, while a special tax (proceeds legally restricted to specific purposes) requires two-thirds voter approval.

Local Transactions and Use (Sales) Tax
A local transactions and use tax (district sales tax, commonly referred to as a local sales tax) is a voter-approved tax on taxable retail sales within a city, imposed in 0.125 percent increments and administered by the California Department of Tax and Fee Administration (CDTFA). These

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
taxes are authorized by the Transactions and Use Tax Law, and the combined local rate in any jurisdiction is generally limited to 2 percent unless specific legislation allows an exception.  Structure and use: A general transactions and use tax is a majority-vote measure with proceeds deposited into the Town’s general fund and allocable through the annual budget, while a special transactions and use tax is a two-thirds-vote measure legally dedicated to specified purposes such as public safety, streets, or wildfire mitigation.  Administration: After local voter approval, the Town would adopt an ordinance, contract with CDTFA for administration and collection, and receive distributions as general-fund revenue.

For the Town, staff estimate that an additional 0.125 percent (⅛-cent) Town sales tax could generate approximately $1.3 million annually, while an additional 0.50 percent (½-cent) could generate roughly $5.2 million annually, making a half-cent measure a potentially meaningful tool to address the identified operating and capital funding gap. A local sales tax also captures contributions from non-residents who shop and dine in the Town, thereby reducing the exclusive burden on property owners.

Statewide experience over the past several election cycles indicates that majority-vote general sales tax measures have achieved passage rates in the range of roughly 75 to 85 percent, significantly higher than most two-thirds-vote special taxes or bond measures.

Parcel Taxes (Non-Ad Valorem Property Taxes)
A parcel tax is a non-value-based special tax imposed on parcels of real property, typically as a flat amount per parcel or based on specified parcel characteristics, and is collected on the property tax bill. Parcel taxes are widely used by cities, school districts, and special districts to fund services such as public safety, parks, libraries, or infrastructure maintenance.  Legal structure: Under Proposition 13 and Proposition 218, parcel taxes are treated as special taxes and must be approved by at least two-thirds of the voters; they may not be based on assessed value and must avoid functioning as ad valorem property taxes.  Implementation and equity considerations: The Town Council would define the taxable unit (e.g., per parcel or per dwelling unit), rate, duration, exemptions (such as low-income seniors), use of proceeds, and accountability provisions, with the tax then collected on the county tax roll. Because they fall solely on property owners and are often flat per parcel, parcel taxes can raise equity concerns and are generally less flexible than a general sales tax.

For the Town, a parcel tax of approximately $100 per parcel per year is estimated to generate approximately $1.1 million annually, with the exact amount dependent on the final tax structure, parcel counts, and exemptions.

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
Utility Users Tax (UUT) and Other General Taxes
A utility users tax (UUT) is a tax on the consumption of utility services, such as electricity, gas, telecommunications, and, in some jurisdictions, cable or refuse, by users within the Town.

General law cities may also consider implementing or increasing other general taxes, including transient occupancy tax (TOT) and business license taxes, to support core services.  Legal authority and use: Most UUTs are structured as general taxes requiring majority voter approval, though some jurisdictions have adopted UUTs as special taxes subject to a two-thirds threshold. A UUT is typically imposed by ordinance, collected by utility providers on customer bills, and remitted to the city as ongoing general-fund revenue.  Prevalence and considerations: Approximately 150–160 California cities and several counties levy a UUT, generating on the order of $1.8–$2.0 billion annually statewide.

UUT revenues can be significant and relatively stable, but policy concerns include the impact on ratepayers, and changes in consumption approaches can make this revenue option burdensome to current ratepayers.

Other general taxes, such as TOT or adjustments to existing business license taxes, may provide targeted revenue opportunities but are likely to generate less annual revenue than a Town-level revenue measure, depending on local economic conditions.

General Obligation (GO) Bonds with Property Tax Override General obligation bonds are voter-authorized debt instruments secured by an additional ad valorem property tax rate levied above the 1 percent Proposition 13 cap, used to finance major capital improvements rather than ongoing operating costs.  Legal and financial structure: With two-thirds voter approval, a general law city may issue GO bonds and levy a dedicated property tax sufficient to pay annual principal and interest, with the additional levy excluded from the 1 percent cap. Bond proceeds must be used for the specific capital purposes described in the ballot measure, such as facilities, infrastructure, or other long-lived assets, and cannot be used for general operations or routine maintenance.
 Use and taxpayer communication: GO bonds are commonly used to construct or rehabilitate city halls, police and fire facilities, libraries, parks, and similar infrastructure, with voter information typically presented as a total authorization (e.g., $50 million) and an estimated annual tax rate per $100,000 of assessed value.

For the Town, illustrative modeling indicates that each $10 million in GO bond authorization equates to an estimated additional property tax rate on the order of tens of dollars per $100,000 of assessed value (as an example, roughly $25 per $100,000 for a $10 million authorization), with higher authorization scaling proportionally. GO bonds can therefore be an important tool for facility and infrastructure needs but are not a substitute for a flexible revenue source to address structural operating gaps.

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
Assessments, Landscaping and Lighting, and Special District Options Special assessments and district-based financing mechanisms provide additional tools to fund improvements and services that confer “special benefits” on particular properties, but they are not general taxes and cannot support broad general-fund stabilization.  Special assessments and benefit districts: Under Proposition 218, assessments must be proportionate to the special benefit received by each parcel, require mailed notice and a property-owner balloting process, and are typically used for localized improvements such as streetscapes, storm drainage, business districts, and neighborhood amenities.  Landscaping and Lighting Act of 1972 districts and similar mechanisms: Landscaping and Lighting Act districts, street lighting districts, and related tools are used to finance landscaping, lighting, and related improvements and services within defined boundaries, subject to Proposition 218’s special-benefit and property-owner approval requirements.

Other district mechanisms, such as Mello-Roos Community Facilities Districts (CFDs), can finance infrastructure and specified services within a defined area through a special tax that typically requires two-thirds approval by the affected electors. Because these tools are geographically limited and legally tied to specific facilities or services, they are best viewed as targeted supplements for particular projects or new development areas, rather than primary tools to resolve Town-wide operating imbalances.

Recent Performance of Local Revenue Measures (Past Five Years) Experience across California over the past five years provides important context for evaluating revenue options. Election data from November 2020 through November 20241show that majority-vote general sales tax measures have enjoyed consistently high passage rates, while two-thirds measures, including parcel taxes and GO bonds, have struggled to reach the required supermajority.
 Across four election cycles, approximately 217 general sales tax measures were proposed statewide, of which about 181 were approved, for an aggregate passage rate of roughly 84 percent and annual success rates ranging from 76 to 89 percent.  In the same period, parcel taxes and city/county special taxes and bonds requiring twothirds approval achieved passage rates in the approximate range of 35 to 67 percent, depending on measure type and election.

Research and practitioner experience identify several factors associated with successful general sales tax measures:
 Clear articulation of community needs and specific service or project priorities.  Strong accountability and transparency provisions, such as independent citizens’ oversight, annual audits, and regular reporting.

1 Data compiled by Michael Coleman through his website www.californiacityfinance.com

ITEM NO. 18.

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SUBJECT: Discuss and Provide Input for Potential Revenue Measure DATE: January 20, 2026
 Emphasis on public safety, emergency response, and risk reduction, which consistently resonates with voters.
 Tangible, visible improvements (e.g., streets, parks, facilities) that demonstrate the return on investment.

These statewide results do not guarantee success for any individual measure, but they do indicate that a well-designed, majority-vote general sales tax has historically offered a significantly higher probability of passage than revenue measures requiring a two-third voter threshold. Conversely, parcel taxes, GO bonds, and other two-thirds measures may be better deployed in later phases or for specific capital projects, once a general revenue foundation is in place and community support is well established.

CONCLUSION:

The Town is not yet in a fiscal emergency, but current trends, including projected operating deficits, rising personnel costs, and significant unfunded capital and wildfire needs, show that the existing revenue structure will not sustain desired service levels over time. Acting now allows the Council to preserve options, rather than waiting until a structural crisis forces abrupt cuts or rushed measures.

Authorizing pursuit of special sales tax legislation and engaging professional consultants, along with allocating $80,000 for this work, does not commit the Town to placing a measure on the November 2026 ballot. It simply ensures that, if the Council chooses to proceed, the legal foundation, technical analysis, and community engagement necessary for a well-designed, voter-ready option will be in place.

ENVIRONMENTAL REVIEW:

The recommendations in this report are administrative and procedural in nature. They do not involve any discretionary approval of a project, land-use decision, or specific physical activity that would trigger California Environmental Quality Act (CEQA) review.

The recommendations do not commit the Town to placing any revenue measure on the ballot or to implementing any specific project. Those future decisions (should the Council elect to pursue a measure, and should voters approve it) will be separate Council actions and may require individual CEQA analysis at the time the specific project or program is proposed.

Accordingly, CEQA does not apply to the recommendations in this report.

Attachments:

1. Five-Year Forecast updated on December 29, 2025

2. CIP Agenda Report of November 19, 2024

3. Wildfire Report of December 16, 2025

ITEM NO. 18.
1 TABLE OF CONTENTS
Contents
FY 2026-27 DRAFT FORECAST UPDATED ON 12-29-2025..................................................................................... 3 FY 2026-27 UPDATED DRAFT FORECAST COMPARISON AS IT PUBLISHED WITH THE FY 2025-26 ADOPTED BUDGET COMPARED TO AS IT WAS PREPARED ON 12-29-2025 ........................................................................... 4 FY 2026-27 DRAFT FORECAST UPDATED ON 10-21-2025........................................................................................... 7 FY 2026-27 UPDATED DRAFT FORECAST COMPARISON AS IT PUBLISHED WITH THE FY 2025-26 ADOPTED BUDGET COMPARED TO AS IT WAS PREPARED ON 10-21-2025 .............................................................................................. 8 REVENUE BASELINE AND PROJECTION FACTORS (ADOPTED FY 2025-26 BUDGET).................................................. 11 EXPENDITURE BASELINE AND PROJECTION FACTORS (PROPOSED FY 2025-26 BUDGET - PUBLISHED 4/21/2025)....... 13 FY 2026-27 FORECAST IN THE FY 2025-26 ADOPTED BUDGET.................................................................................. 15 FY 2025-26 BUDGET/FORECAST COMPARISON AS IT PUBLISHED ON 4/22/2024 COMPARED TO AS IT PUBLISHED ON 4/21/2025.........................................................................................................................................................16 FY 2025-26 FORECAST- PUBLISHED 4-21-2025 (HISTORICAL DETAIL ADDED ON 4/25/2025 TO PUBLICATION)............... 19 REVENUE BASELINE AND PROJECTION FACTORS (PROPOSED FY 2025-25 BUDGET - PUBLISHED 4/21/2025) ............. 21 EXPENDITURE BASELINE AND PROJECTION FACTORS (PROPOSED FY 2025-26 BUDGET - PUBLISHED 4/21/2025)....... 23 FY 2024-25 MID-YEAR REPORT AND FORECAST – PUBLISHED 2/7/2025.................................................................... 25 REVENUE BASELINE AND PROJECTION FACTORS (FY 2024-25 MID-YEAR REPORT AND FORECAST – PUBLISHED 2/7/2025)...................................................................................................................................................... 26 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2024-25 MID-YEAR REPORT AND FORECAST – PUBLISHED 2/7/2025)...................................................................................................................................................... 28 FY 2024-25 FORECAST- PUBLISHED 4-22-2024 FY 2024-25 PROPOSED BUDGET......................................................... 30 REVENUE BASELINE AND PROJECTION FACTORS (FY 2024-25 PROPOSED BUDGET – PUBLISHED 4/22/2024)............. 32 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2024-25 PROPOSED BUDGET – PUBLISHED 4/22/2024) ...... 34 FY 2023-24 MID-YEAR-REPORT AND FORECAST – PUBLISHED 2/10/2024.................................................................. 39 REVENUE BASELINE AND PROJECTION FACTORS (FY 2023-24 MID-YEAR REPORT AND FORECAST – PUBLISHED 2/10/2024) .................................................................................................................................................... 40 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2023-24 MID-YEAR REPORT AND FORECAST – PUBLISHED 2/10/2024) .................................................................................................................................................... 42 FY 2023-24 PROPOSED BUDGET FORECAST- PUBLISHED 4/17/2023 ......................................................................... 44 REVENUE BASELINE AND PROJECTION FACTORS (FY 2023-24 PROPOSED BUDGET - PUBLISHED 4/17/2023) ............. 45 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2023-24 PROPOSED BUDGET - PUBLISHED 4/17/2023)....... 47 FY 2022-23 MID-YEAR REPORT AND FORECAST- PUBLISHED 2/10/2023.................................................................... 49 REVENUE BASELINE AND PROJECTION FACTORS (FY 2022-23 MID-YEAR REPORT AND FORECAST – PUBLISHED 2/10/2023) .................................................................................................................................................... 50 ATTACHMENT 1 Page 409
ITEM NO. 18.
2 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2022-23 MID-YEAR REPORT AND FORECAST – PUBLISHED 2/10/2023) .................................................................................................................................................... 52 FY 2022-23 PROPOSED BUDGET FORECAST- PUBLISHED 4/18/2022 ......................................................................... 54 REVENUE BASELINE AND PROJECTION FACTORS (PROPOSED FY 2022-23 BUDGET – PUBLISHED 4/17/2022)............. 55 EXPENDITURE BASELINE AND PROJECTION FACTORS (PROPOSED FY 2022-23 BUDGET – PUBLISHED 4/17/2022) ...... 57 FY 2021-22 MID-YEAR REPORT AND FORECAST- PUBLISHED 2/11/2022.................................................................... 59 REVENUE BASELINE AND PROJECTION FACTORS (FY 2021-22 MID-YEAR AND FORECAST - PUBLISHED 2/11/2022) .... 60 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2021-22 MID YEAR AND FORECAST - PUBLISHED 2/11/2022) ....................................................................................................................................................................62 FY 2021-22 PROPOSED BUDGET - PUBLISHED 4/19/2021........................................................................................ 64 REVENUE BASELINE AND PROJECTION FACTORS (FY 2011-22 PROPOSED BUDGET - PUBLISHED 4/19/2021) ............. 65 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2011-22 PROPOSED BUDGET - PUBLISHED 4/19/2021)....... 67 FY 2020-21 MID-YEAR REPORT AND FORECAST - PUBLISHED 2/12/2021................................................................... 69 REVENUE BASELINE AND PROJECTION FACTORS (FY 2020-21 MID-YEAR AND FORECAST - PUBLISHED 2/12/2021) .... 70 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2020-21 MID-YEAR AND FORECAST - PUBLISHED 2/12/2021) ....................................................................................................................................................................72 FY 2020-21 PROPOSED BUDGET - PUBLISHED 4/19/2021........................................................................................ 74 REVENUE BASELINE AND PROJECTION FACTORS (FY 2020-21 PROPOSED BUDGET - PUBLISHED 4/19/2021) ............. 75 EXPENDITURE BASELINE AND PROJECTION FACTORS (FY 2020-21 PROPOSED BUDGET - PUBLISHED 4/19/2021)....... 77

ITEM NO. 18.
3 FY 2026-27 DRAFT FORECAST UPDATED ON 12-29-2025
Revenue Category FY 2021-22
Actuals
FY 2022-23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adjusted
Budget
FY 2024-25
Actuals
FY 2025-26
Adjusted
Budget
FY 2025-26
Estimates
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Property Tax $ 16.9 $ 18.2 $ 19.3 $ 20.0 $ 20.2 $ 21.5 $ 21.4 $ 21.4 $ 22.3 $ 23.2 $ 24.1 $ 25.1 VLF Backfill Property Tax 4.2 4.6 4.9 5.1 5.1 5.4 5.4 5.6 5.9 6.2 6.5 6.8 Sales & Use Tax 7.2 7.5 6.8 6.5 7.0 6.6 6.9 7.1 7.3 7.4 7.5 7.6 Measure G District Sales Tax 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.4 1.4 1.5 Franchise Fees 2.8 3.1 2.5 1.0 1.1 1.0 1.0 1.1 1.1 1.2 1.2 1.2 Transient Occupancy Tax 1.9 2.2 2.4 2.3 2.4 2.4 2.4 2.0 2.0 2.0 2.0 2.0 Business License Tax 1.5 2.4 1.5 2.8 3.0 2.5 2.8 2.7 2.8 2.9 3.0 3.1 Licenses & Permits 4.8 3.3 4.0 6.2 6.7 6.3 6.3 6.1 6.2 6.3 6.4 6.5 Intergovernmental 1.3 1.6 1.2 1.2 1.3 0.8 0.8 0.8 0.8 0.9 0.9 0.9 Town Services 5.3 4.6 5.9 5.2 5.7 5.7 5.7 5.3 5.4 5.5 5.6 5.8 Fines & Forfeitures 0.3 0.4 0.5 0.3 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Interest (1.4) 0.6 2.7 1.4 3.1 1.6 1.6 1.2 1.1 1.1 1.1 1.2 Other Sources 7.7 8.1 4.9 4.2 3.6 3.8 3.9 3.7 3.9 3.9 2.7 2.7 Fund Transfers In 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 $ 54.4 $ 58.4 $ 58.5 $ 58.1 $ 61.5 $ 59.8 $ 60.4 $ 59.2 $ 61.0 $ 62.9 $ 63.3 $ 65.3 Use of Capital/Special Projects Reserve 0.6 $ 2.4 $ 1.6 $ 3.7 $ 1.1 $ - $ - $ - $ - $ - $ - Use of Measure G Sales Tax - Operating - - 0.6 - - - - - - Use of Pension/OPEB Reserve 0.3 0.3 0.3 - 0.3 - - - - - - Recovery - - 1.5 - - - - - - - -
Use of Unassigned Fund Balance - - - - - -
$ 57.6 $ 61.1 $ 61.9 $ 62.4 $ 62.9 $ 59.8 $ 60.4 $ 59.2 $ 61.0 $ 62.9 $ 63.3 $ 65.3 Expenditure Category FY 2021-22
Actuals
FY 2022-23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adjusted
Budget
FY 2024-25
Actuals
FY 2025-26
Adjusted
Budget
FY 2025-26
Estimates
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Salary $ 18.9 $ 20.5 $ 21.5 $ 25.2 $ 22.4 $ 25.4 $ 25.4 $ 26.8 $ 27.6 $ 28.2 $ 28.8 $ 29.4 Overtime 1.1 1.3 1.3 0.6 1.3 0.7 0.7 0.7 0.7 0.7 0.7 0.7 CalPERS Benefits 6.5 7.1 7.4 8.8 8.3 9.7 9.7 10.3 11.0 11.8 12.0 12.3 All Other Benefits 3.7 3.8 4.3 5.6 4.9 6.3 6.3 5.9 6.2 6.4 6.6 6.9

4.6% Salary and Benefits Savings - - - (1.5) - (1.9) (1.9) (2.0) (2.1) (2.2) (2.2) (2.3) OPEB Pay as You Go 1.4 1.5 1.6 2.0 1.9 2.1 2.1 2.2 2.3 2.4 2.5 2.6 Operating Expenditures 10.4 11.7 9.8 10.6 8.2 9.9 9.9 10.2 10.3 10.6 10.8 11.2 Grants & Awards 1.8 0.6 0.7 0.7 0.7 0.4 0.4 0.3 0.3 0.3 0.3 0.3 Utilities 0.6 0.6 0.7 0.7 0.8 0.7 0.7 0.9 0.9 0.9 0.9 1.0 Internal Service Charges 2.6 2.6 3.2 4.4 4.2 4.9 4.9 5.3 5.6 5.8 6.1 6.3 Debt Service 2.1 2.0 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 0.8 0.8 Additional iscretionary Payment $ 49.0 $ 51.8 $ 52.9 $ 59.2 $ 54.7 $ 60.1 $ 60.1 62.5 $ 64.8 $ 67.0 $ 67.5 $ 69.3 Pension 0.7 0.7 0.7 0.4 0.7 0.4 0.4 0.4 0.4 0.4 0.4 0.4 $ 49.8 $ 52.5 $ 53.5 $ 59.6 $ 55.4 $ 60.5 $ 60.5 $ 62.9 $ 65.2 $ 67.4 $ 67.9 $ 69.7 Capital Transfers Out to GFAR 1.2 $ 2.4 $ 1.6 $ 1.1 $ 1.1 $ - $ - $ - $ - $ - $ - $ - Transfer to General Liability - 0.4 - 0.1 - - - - - - - GASB 65 0.6 - - - - - - - - -
Fixed Assets/ Equipment 0.1 0.4 - - - - - - - -
1/2 of Measure G Proceeds to Capital 0.6 0.6 0.7 0.6 0.6 - - - - - - - Allocate to ERAF Risk Reserve - 0.7 0.7 - - - - - - - - - Allocate to GASB 31 Reserve 1.2 - -
Allocate to Pension Trust - 0.7 0.7 0.7 0.7 0.4 0.4 0.4 0.4 0.4 0.4 0.4 $ 52.1 $ 56.2 $ 57.6 $ 62.1 $ 59.1 $ 60.9 $ 60.9 63.3 $ 65.6 $ 67.8 $ 68.3 $ 70.1 $ 5.5 $ 4.9 $ 4.3 $ 0.3 $ 3.8 $ (1.1) $ (0.5) (4.1) $ (4.6) $ (4.9) $ (5.0) $ (4.8) * Due to rounding of individual categories total revenues, expenditures, and reserve allocations may include $0.1 million.

NET REVENUES , TRANSFERS IN, USE OF

RESERVES LESS EXPENDITURES,

TRANSFERS IN, AND RESERVE

ALLOCATIONS

TOTAL REVENUES, TRANSFERS, AND USE
OF RESERVES*

TOTAL EXPENDITURES & RESERVE

TOTAL OPERATING REVENUES &

TOTAL OPERATING EXPENDITURES

TOTAL OPERATING & DISCRETIONARY

EXPENDITURES
General Fund 5-Year Forecast
Updated 12-29-2025
(in $ million)

ITEM NO. 18.
4 FY 2026-27 UPDATED DRAFT FORECAST COMPARISON AS IT PUBLISHED WITH THE FY 2025- 26 ADOPTED BUDGET COMPARED TO AS IT WAS PREPARED ON 12-29-2025

A B C D
Revenue Category
FY 2026-27 Forecast
Updated 12-29-2025
FY 2026-27 Forecast
Published with the
Adopted Budget

VARIANCE
1 Property Tax $ 21.4 $ 22.2 $ (0.8)
2 VLF Backfill Property Tax 5.6 5.7 (0.1)
3 Sales & Use Tax 7.1 6.8 0.3
4 Measure G District Sales Tax 1.3 1.3 (0.0)
5 Franchise Fees 1.1 1.1 -
6 Transient Occupancy Tax 2.0 2.4 (0.4)
7 Business License Tax 2.7 2.6 0.1
8 Licenses & Permits 6.1 6.3 (0.2)
9 Intergovernmental 0.8 0.8 -
10 Town Services 5.3 5.0 0.3
11 Fines & Forfeitures 0.3 0.3 -
12 Interest 1.2 1.1 0.1
13 Other Sources 3.7 3.7 0.0
14 Fund Transfers In 0.6 0.6 -
15 $ 59.2 $ 59.9 $ (0.7)
Use of Capital/Special Projects Reserve $ - $ -
Use of Measure G Sales Tax - Operating - -
Use of Pension/OPEB Reserve - -
Recovery - -
Use of Unassigned Fund Balance - -
16 $ 59.2 $ 59.9
Expenditure Category FY 2026-27 Forecast
Updated 12-29-2025
FY 2026-27 Forecast
Published with the
Adopted Budget
Variance
17 Salaries $ 26.8 $ 26.8 $ (0.0)
18 Overtime 0.7 0.7 (0.0)
19 CalPERS Benefits 10.3 10.4 (0.1)
20 All Other Benefits 5.9 6.3 (0.4)
21 4.6% Salaries and Benefits Savings (2.0) (2.0) (0.0) 22 OPEB Pay as You Go 2.2 2.2 0.0
23 Operating Expenditures 10.2 9.9 0.3
24 Grants & Awards 0.3 0.3 (0.0)
25 Utilities 0.9 0.7 0.2
26 Internal Service Charges 5.3 5.3 0.0
27 Debt Service 2.1 2.1 (0.0)
28 $ 62.5 $ 62.7 $ (0.2)
30 y y
Pension 0.4 0.4
31 $ 62.9 $ 63.1
32 Allocate to Pension Trust 0.4 0.4
$ 63.3 $ 63.5
$ (4.1) $ (3.6)

TOTAL EXPENDITURES & RESERVE

NET REVENUES , TRANSFERS IN, USE OF

RESERVES LESS EXPENDITURES,

TRANSFERS IN, AND RESERVE

ALLOCATIONS

TOTAL OPERATING REVENUES &

TOTAL REVENUES, TRANSFERS, AND USE
OF RESERVES*

TOTAL OPERATING EXPENDITURES

TOTAL OPERATING & DISCRETIONARY

EXPENDITURES

ITEM NO. 18.
5 Below is the list of variances/or no changes in the Revenue and Expenditure estimates (12-29-2025).

Revenues:

Row 1 and Row 2 Column A – Property Tax and VLF Property Tax Backfill - Projected Variance - ($0.9) million decrease
Based on SCCAO November 12, 2025 and HdL Coren and Cane 12-19-2025 Preliminary Property Tax Update the 2026-27 Property Tax estimates are projected lower. This is a preliminary estimate, staff will further discuss and fine tune the property tax estimates with HdL Coren and Cane before the mid-year analysis. Row 3 and Row 4 Column A – Sales Tax and Measure G District Sales Tax - Projected Variance $0.3 million increase As of October 10, 2025, Muniservices, the Town’s Sales Tax consultant, provided an updated Sales Tax revenue projection indicating an increase of approximately $300,000. This revised estimate reflects stronger-thananticipated local economic activity.

The Town is in the process of signing a Sales Tax Forecasting agreement with HdL. HdL will provide an updated look for the Sales Tax forecast.

Row 5 - Column A – Franchise Fees – No Projected Variance No Projected Change.

Row 6 - Column A – Transient Occupancy Tax (TOT) – Projected Variance ($0.4) million decrease The Finance Department has received the closing notification from one of the hotels. Staff is recommending decreasing the TOT base by $0.4 million.

Row 7 - Column A – Business License Tax – Projected Variance $0.1 million increase Based on the most recent estimates, the FY 2026-27 Business License Tax is anticipated to increase by $0.1 million.

Row 8 - Column A – Licenses and Permits – Projected Variance ($0.2) million decrease Based on the most recent estimates, the FY 2026-27 License and Permits is anticipated to decrease by $0.2 million.

Row 9 - Column A – Intergovernmental - No Projected Variance Row 10 - Column A – Town Services - Projected Variance - $0.3 million increase Based on Development activities, it is anticipated that the pass-through revenues will increase by $0.3 million.

The corresponding pass-through expenditures are expected to grow by the same amount.

Row 11 - Column A – Fines and Forfeitures - No Projected Variance Row 12 - Column A – Interest - $0.1 million increase

ITEM NO. 18.
6 Based on updated interest rate estimates as of October 21, 2025, staff have conducted a comprehensive evaluation of the current interest rate environment in relation to the Town’s existing investment portfolio. The interest rate assumptions have been updated accordingly to reflect current market conditions. As the market environment continues to evolve, projected interest rates will fluctuate. Staff are actively monitoring the investment rate environment and will continue to update interest rate assumptions on a periodic basis Row 13 - Column A – Other Sources - No Projected Variance Row 14 - Column A – Fund Transfers In - No Projected Variance Expenditures:

Row 17 - Column A – Salaries - No Projected Variance
Row 18 - Column A – Overtime - No Projected Variance
Row 19 - Column A – CalPERS Benefits - Projected Variance ($0.1) million decreases Row 20 - Column A – All Other Benefits - Projected Variance ($0.4) million decreases Row 21 - Column A – 4.6 % Salaries and Benefit Savings - No Projected Variance Based on the 10/7/2025 Actual Salary Steps, Pension Benefits, and Medical Insurance selection, the projected Salaries and Benefits are $0.5 million less.

Row 22 - Column A – OPEB Pay as You Go - No Projected Variance No Projected Change.

Row 23 - Column A – Operating Expenditure - Projected Variance $0.3 million increase Operating expenditure expected to increase by $0.3 million based on estimated pass-through activities.

Row 24 - Column A – Grants and Awards - No Projected Variance No Projected Change.

Row 25 - Column A – Utilities - Projected Variance $0.2 million increase Operating expenditure expected to increase by $0.2 million based on FY 2024-25 actual utilities expenditures.

Row 26 - Column A – Internal Service Charges - No Projected Variance Row 27 - Column A – Debt Services - No Projected Variance

ITEM NO. 18.
7 FY 2026-27 DRAFT FORECAST UPDATED ON 10-21-2025
General Fund 5-Year Forecast
Updated 10-17-2025
(in $ million)
Revenue Category 2021/22
Actuals
FY 2022/23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adjusted
Budget
FY 2025-26
Adjusted
Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Property Tax $ 16.9 $ 18.2 $ 19.3 $ 20.0 $ 21.5 $ 22.2 $ 23.1 $ 24.0 $ 24.9 $ 25.9 VLF Backfill Property Tax 4.2 4.6 4.9 5.1 5.4 5.7 5.9 6.2 6.5 6.9 Sales & Use Tax 7.2 7.5 6.8 6.5 6.6 7.1 7.3 7.4 7.5 7.6 Measure G District Sales Tax 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.4 1.4 1.5 Franchise Fees 2.8 3.1 2.5 1.0 1.0 1.1 1.1 1.2 1.2 1.2
Transient Occupancy Tax 1.9 2.2 2.4 2.3 2.4 2.0 2.0 2.0 2.0 2.0 Business License Tax 1.5 2.4 1.5 2.8 2.5 2.7 2.8 2.9 3.0 3.1 Licenses & Permits 4.8 3.3 4.0 6.2 6.3 6.1 6.2 6.3 6.4 6.5 Intergovernmental 1.3 1.6 1.2 1.2 0.8 0.8 0.8 0.9 0.9 0.9 Town Services 5.3 4.6 5.9 5.2 5.7 5.3 5.4 5.5 5.6 5.8
Fines & Forfeitures 0.3 0.4 0.5 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Interest (1.4) 0.6 2.6 1.4 1.6 1.2 1.1 1.1 1.1 1.2
Other Sources 7.7 8.1 5.0 4.2 3.8 3.7 3.9 3.9 2.7 2.7
Fund Transfers In 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 $ 54.4 $ 58.4 $ 58.5 $ 58.1 $ 59.8 $ 60.1 $ 61.8 $ 63.7 $ 64.1 $ 66.2 Use of Capital/Special Projects 0.6 $ 2.4 $ 1.6 $ 3.7 $ - $ - $ - $ - $ - $ - Use of Measure G Sales Tax - - - 0.6 - - - - - -
Use of Pension/OPEB Reserve 0.3 0.3 0.3 - - - - - - -
Use of Council Priorites - Economic - - 1.5 - - - - - - - Use of Unassigned Fund Balance - - - - - -
$ 57.6 $ 61.1 $ 61.9 $ 62.4 $ 59.8 $ 60.1 $ 61.8 $ 63.7 $ 64.1 $ 66.2 Expenditure Category 2021/22
Actuals
FY 2022/23
Actuals
FY 2023-24
Actuals
FY 2024-25
Adjusted
Budget
FY 2025-26
Adjusted
Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Salary $ 18.9 $ 20.5 $ 21.5 $ 25.2 $ 25.4 $ 26.8 $ 27.6 $ 28.2 $ 28.8 $ 29.4 Overtime 1.1 1.3 1.3 0.6 0.7 0.7 0.7 0.7 0.7 0.7
CalPERS Benefits 6.5 7.1 7.4 8.8 9.7 10.3 11.0 11.8 12.0 12.3 All Other Benefits 3.7 3.8 4.3 5.6 6.3 5.9 6.2 6.4 6.6 6.9

4.6% Salary and Benefits Savings - - - (1.5) (1.9) (2.0) (2.1) (2.2) (2.2) (2.3) OPEB Pay as You Go 1.4 1.5 1.6 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Operating Expenditures 10.4 11.7 9.8 10.6 9.9 10.2 10.3 10.6 10.8 11.2 Grants & Awards 1.8 0.6 0.7 0.7 0.4 0.3 0.3 0.3 0.3 0.3 Utilities 0.6 0.6 0.7 0.7 0.7 0.9 0.9 0.9 0.9 1.0
Internal Service Charges 2.6 2.6 3.2 4.4 4.9 5.3 5.6 5.8 6.1 6.3 Debt Service 2.1 2.0 2.1 2.1 2.1 2.1 2.1 2.1 0.8 0.8
y y $ 49.0 $ 51.8 $ 52.9 $ 59.2 $ 60.1 62.5 $ 64.8 $ 67.0 $ 67.5 $ 69.3 Pension 0.7 0.7 0.7 0.4 0.4 0.4 0.4 0.4 0.4 0.4
$ 49.8 $ 52.5 $ 53.5 $ 59.6 $ 60.5 $ 62.9 $ 65.2 $ 67.4 $ 67.9 $ 69.7 Capital Transfers Out to GFAR 1.2 $ 2.4 $ 1.6 $ 1.1 $ - $ - $ - $ - $ - $ - Transfer to General Liability - 0.4 - - - - - - -
GASB 65 0.6 - - - - - - -
Fixed Assets/ Equipment 0.1 0.4 - - - - - -
1/2 of Measure G Proceeds to Capital 0.6 0.6 0.7 0.6 - - - - - - Allocate to ERAF Risk Reserve - 0.7 0.7 - - - - - - -
Allocate to GASB 31 Reserve -
Allocate to Pension Trust - 0.7 0.7 0.7 0.4 0.4 0.4 0.4 0.4 0.4 $ 52.1 $ 56.2 $ 57.6 $ 62.1 $ 60.9 63.3 $ 65.6 $ 67.8 $ 68.3 $ 70.1 $ 5.5 $ 4.9 $ 4.3 $ 0.3 $ (1.1) (3.2) $ (3.8) $ (4.1) $ (4.2) $ (3.9) * Due to rounding of individual categories total revenues, expenditures, and reserve allocations may include $0.1 million.

NET REVENUES , TRANSFERS IN, USE

OF RESERVES LESS EXPENDITURES,

TRANSFERS IN, AND RESERVE

ALLOCATIONS

TOTAL REVENUES, TRANSFERS, AND
USE OF RESERVES*

TOTAL EXPENDITURES & RESERVE

TOTAL OPERATING REVENUES &

TOTAL OPERATING EXPENDITURES

TOTAL OPERATING &

DISCRETIONARY EXPENDITURES

ITEM NO. 18.
8 FY 2026-27 UPDATED DRAFT FORECAST COMPARISON AS IT PUBLISHED WITH THE FY 2025-26 ADOPTED BUDGET COMPARED TO AS IT WAS PREPARED ON 10-21-2025

A B C D
Revenue Category
FY 2026-27 Forecast
Updated 10-21-2025
FY 2026-27 Forecast
Published with the
Adopted Budget

VARIANCE
1 Property Tax $ 22.2 $ 22.2 $ -
2 VLF Backfill Property Tax 5.7 5.7 -
3 Sales & Use Tax 7.1 6.8 0.3
4 Measure G District Sales Tax 1.3 1.3 -
5 Franchise Fees 1.1 1.1 -
6 Transient Occupancy Tax 2.0 2.4 (0.4)
7 Business License Tax 2.7 2.6 0.1
8 Licenses & Permits 6.1 6.3 (0.2)
9 Intergovernmental 0.8 0.8 -
10 Town Services 5.3 5.0 0.3
11 Fines & Forfeitures 0.3 0.3 -
12 Interest 1.2 1.1 0.1
13 Other Sources 3.7 3.7 -
14 Fund Transfers In 0.6 0.6 -
$ 60.1 $ 59.9 $ 0.2
15 Use of Capital/Special Projects $ - $ -
16 Use of Unassigned Fund Balance - -
$ 60.1 $ 59.9
Expenditure Category FY 2026-27 Forecast
Updated 10-21-2025
FY 2026-27 Forecast
Published with the
Adopted Budget
Variance
17 Salaries $ 26.8 $ 26.8 $ (0.1)
18 Overtime 0.7 0.7 -
19 CalPERS Benefits 10.3 10.4 (0.2)
20 All Other Benefits 5.9 6.3 (0.4)
21 4.6% Salaries and Benefits Savings (2.0) (2.0) -
22 OPEB Pay as You Go 2.2 2.2 -
23 Operating Expenditures 10.2 9.9 0.2
24 Grants & Awards 0.3 0.3 -
25 Utilities 0.9 0.7 0.2
26 Internal Service Charges 5.3 5.3 -
27 Debt Service 2.1 2.1 -
28 $ 62.5 $ 62.7 $ (0.2)
30 y y
Pension 0.4 0.4
31 $ 62.9 $ 63.1
32 Capital Transfers Out to GFAR $ - $ -
33 Allocate to GASB 31 Mark to Market - -
34 Allocate to Pension Trust 0.4 0.4
$ 63.3 $ 63.5
$ (3.2) $ (3.6)

TOTAL EXPENDITURES & RESERVE

NET REVENUES , TRANSFERS IN, USE

OF RESERVES LESS EXPENDITURES,

TRANSFERS IN, AND RESERVE

ALLOCATIONS

TOTAL OPERATING REVENUES &

TOTAL REVENUES, TRANSFERS, AND
USE OF RESERVES*

TOTAL OPERATING EXPENDITURES

TOTAL OPERATING &

DISCRETIONARY EXPENDITURES

ITEM NO. 18.
9 Below is the list of variances/or no changes in the Revenue and Expenditure estimates.

Revenues:

Row 1 and Row 2 Column A – Property Tax and VLF Property Tax Backfill - No Projected Variance As of the September 12, 2025 estimate from the Santa Clara County Assessor’s Office (SCCAO), projected revenues are $27,739 lower than the FY 2025–26 Adopted Budget. This is a small variance; the Finance staff does not recommend any adjustment to the FY 2026–27 Property Tax forecast at this time.

The next update from the SCCAO is scheduled for November 12, 2025, and the HdL Coren & Cone Property Tax Update is expected in January 2026.

Row 3 and Row 4 Column A – Sales Tax and Measure G District Sales Tax - Projected Variance $0.3 million increase
As of October 10, 2025, Muniservices, the Town’s Sales Tax consultant, provided an updated Sales Tax revenue projection indicating an increase of approximately $300,000. This revised estimate reflects stronger-thananticipated local economic activity.

The Town is in the process of signing a Sales Tax Forecasting agreement with HdL. HdL will provide an updated look for the Sales Tax forecast.

Row 5 - Column A – Franchise Fees – No Projected Variance No Projected Change.

Row 6 - Column A – Transient Occupancy Tax (TOT) – Projected Variance ($0.4) million decrease The Finance Department has received the closing notification from one of the hotels. Staff is recommending decreasing the TOT base by $0.4 million.

Row 7 - Column A – Business License Tax – Projected Variance $0.1 million increase Based on the most recent estimates, the FY 2026-27 Business License Tax is anticipated to increase by $0.1 million.

Row 8 - Column A – Licenses and Permits – Projected Variance ($0.2) million decrease Based on the most recent estimates, the FY 2026-27 License and Permits is anticipated to decrease by $0.2 million.

Row 9 - Column A – Intergovernmental - No Projected Variance Row 10 - Column A – Town Services - Projected Variance - $0.3 million increase Based on Development activities, it is anticipated that the pass-through revenues will increase by $0.3 million.

The corresponding pass-through expenditures are expected to grow by the same amount.

Row 11 - Column A – Fines and Forfeitures - No Projected Variance

ITEM NO. 18.
10 Row 12 - Column A – Interest - $0.1 million increase Based on updated interest rate estimates as of October 21, 2025, staff have conducted a comprehensive evaluation of the current interest rate environment in relation to the Town’s existing investment portfolio. The interest rate assumptions have been updated accordingly to reflect current market conditions. As the market environment continues to evolve, projected interest rates will fluctuate. Staff are actively monitoring the investment rate environment and will continue to update interest rate assumptions on a periodic basis Row 13 - Column A – Other Sources - No Projected Variance Row 14 - Column A – Fund Transfers In - No Projected Variance Expenditures:

Row 17 - Column A – Salaries - No Projected Variance
Row 18 - Column A – Overtime - No Projected Variance
Row 19 - Column A – CalPERS Benefits - Projected Variance ($0.1) million decreases Row 20 - Column A – All Other Benefits - Projected Variance ($0.4) million decreases Row 21 - Column A – 4.6 % Salaries and Benefit Savings - No Projected Variance Based on the 10/7/2025 Actual Salary Steps, Pension Benefits, and Medical Insurance selection, the projected Salaries and Benefits are $0.5 million less.

Row 22 - Column A – OPEB Pay as You Go - No Projected Variance No Projected Change.

Row 23 - Column A – Operating Expenditure - Projected Variance $0.3 million increase Operating expenditure expected to increase by $0.3 million based on estimated pass-through activities.

Row 24 - Column A – Grants and Awards - No Projected Variance No Projected Change.

Row 25 - Column A – Utilities - Projected Variance $0.2 million increase Operating expenditure expected to increase by $0.2 million based on FY 2024-25 actual utilities expenditures.

Row 26 - Column A – Internal Service Charges - No Projected Variance Row 27 - Column A – Debt Services - No Projected Variance

ITEM NO. 18.
11 REVENUE BASELINE AND PROJECTION FACTORS (ADOPTED FY 2025-26 BUDGET) Type of
Revenue Base
Line Estimate
FY 2025-26
Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Property Tax
SCC Assessor
Office
February 2025
Report and
HdL Coren and
Cone April
2025 Forecast

5.29%
Net Taxable
Value Change
Plus $220,000

5.42%
Net Taxable
Value Change

4.89%
Net Taxable
Value Change

4.89%
Net Taxable
Value Change

4.89%
Net Taxable
Value Change

4.89%
Net Taxable
Value Change
VLF Backfill
HdL Coren and
Cone April
2025 Forecast

5.25%
Net Taxable
Value Change

5.41%
Net Taxable
Value Change

4.90%
Net Taxable
Value Change

4.90%
Net Taxable
Value Change

4.89%
Net Taxable
Value Change

4.89%
Net Taxable
Value Change
Other
Property Tax
SCC Assessor
Office
February 2025
Report

3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
ERAF
SCC Assessor
Office March
2025
Notification
$3,220,000
Including
30% to
Reserve
$3,220,000 $3,220,000 $3,220,000 $3,220,000 $3,220,000
Sales Tax
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
Sales Tax -
Measure G
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
MuniServices
March 2025
Most Likely
Estimates
Franchise Fee
Current
baseline set by
FY 2024-25
Year-End
Estimates
3% 3% 3% 3% 3% 3%

ITEM NO. 18.
12 Type of Revenue
Base Line
Estimates
FY 2025-26
Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Transient
Occupancy Tax
Current baseline
set by FY 2024-
25 Year-End
Estimates
3%
Plus $20,000
from
anticipated
audit
3% 0% 0% 0% 0%
Business License
Tax
Current baseline
set by FY 2024-
25 Year-End
Estimates
2%
Plus $110,000
from
anticipated
audit
2% 2% 2% 2% 2%
License &
Permits
Current baseline
set by FY 2024-
25 Year-End
Estimates
3% 3% 3% 3% 3% 3%
Town Services
Current baseline
set by FY 2024-
25 Year-End
Estimates
3% 3% 0% 3% 3% 3%
Fine &
Forfeitures
Current baseline
set by FY 2024-
25 Year-End
Estimates
1% Varies Varies Varies Varies Varies
Interest
Varies, based on
Portfolio
Weighted
Portfolio Yield

3.64%
Weighted
Portfolio Yield

3.56%
Weighted
Portfolio Yield

3.45%
Weighted
Portfolio Yield

3.36%
Weighted
Portfolio Yield

3.30%
Weighted
Portfolio Yield

3.30%
Other Sources
Current baseline
set by FY 2024-
25 Year-End
Estimates
Varies Varies Varies Varies Varies Varies

ITEM NO. 18.
13 EXPENDITURE BASELINE AND PROJECTION FACTORS (PROPOSED FY 2025-26 BUDGET - PUBLISHED 4/21/2025) Beginning in FY 2020-21, the Town is budgeting salaries at the actual salary plus a one-step increase. 68% of the workforce is already at top step or one step below top step. In the Five-Year Forecast, positions are forecasted at the actual rate of pay including salaries and benefits as of March 1, 2025 and rate is increasing in the actual anniversary date. The FY 2025- 26 Budget and the FY 2026-27 – FY 30-31 Forecast includes 4.6% vacancy savings.

Type of
Expenditure
FY 2025-26
Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Salaries (TEA,
Conf, Temp)* 3% 3% 2% 2% 2% 2%
Salaries (POA)* 5% 4% 2% 2% 2% 2%
Salaries
(AFSCME)* 4% 4% 2% 2% 2% 2%
Salaries
(Management)* 3% 3% 2% 2% 2% 2%
Benefit -
Medical** 7% 7% 7% 7% 7% 7%
Vacancy Savings 4.6% 4.6% 4.6% 4.6% 4.6% 4.6%
Operating
Expenditures***
Varies 3% 3% 3% 3% 3%
Grants & Awards 0% 0% 0% 0% 0% 0%
Utilities*** Varies 3% 3% 3% 3% 3%
Internal Service
Charges***
Based on
operating
cost and
scheduled
replacement
Based on
operating
cost and
scheduled
replacement
Based on
operating
cost and
scheduled
replacement
Based on
operating
cost and
scheduled
replacement
Based on
operating
cost and
scheduled
replacement
Based on
operating
cost and
scheduled
replacement
Debt Service Debt Service Schedules
*Salary increases are based on actual step increases and approved Memoranda of Understanding with the bargaining units **Benefit increase estimates are provided by CalPERS/Public Employees’ Medical and Hospital Care Act (PEMHCA). ***Based on historical trends.

ITEM NO. 18.
14 The Town’s required employer contribution rate estimates were developed using data provided by each plan’s most recent CalPERS actuarial valuation. The employer contribution rates reflect percentages of covered payroll. Forecasted rates for FY 2055-26 and subsequent years are based on the most recent CalPERS actuarial valuation Reports as adjusted by the impact related to the FY 2022-23 CalPERS 5.8% investment return and forecasted payroll.

Type of
Expenditure
FY 2025-26
Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
Safety
POA
109.09% 109.92% 112.95% 121.16% 121.75% 124.52%
Safety
Management
POA
112.09% 112.92% 115.95% 124.16% 124.75% 127.52%
Safety

POA - PEPRA

15.84% 14.96% 20.99% 2.1.74% 22.04% 25.76%
Miscellaneous
TEA/Confidential/
Management

30.02% 30.52% 30.82% 31.78% 31.92% 32.21%
Miscellaneous
TEA/Confidential/
Management
PEPRA
Separate PEPRA
rate for
Miscellaneous has
not been
established yet by
CalPERS.

30.02% 30.52% 30.82% 31.78% 31.92% 32.21%
*Safety Classic Rate reflects 3% decrease in employer's contribution rate to reflect 3% contribution as negotiated with the Town's POA during the collective bargaining process effective FY 2019-20.

ITEM NO. 18.
15 FY 2026-27 FORECAST IN THE FY 2025-26 ADOPTED BUDGET

ITEM NO. 18.
16 FY 2025-26 BUDGET/FORECAST COMPARISON AS IT PUBLISHED ON 4/22/2024 COMPARED TO AS IT PUBLISHED ON 4/21/2025
This rest of this document includes forecasts for FY 2025-26, starting with the FY 2020-21 Proposed Budget forecast when FY 2025-26 was first forecasted. The forecast is updated periodically as the base, economy, and other factors evolve. The table on page X shows the variance between the FY 2025-26 Forecast (published on 4/22/2024) and the FY 2025-26 Proposed Budget (published on 4/21/2025). The assumptions for the FY 2025- 26 Forecast (published on 4/22/2024) and the FY 2025-26 Proposed (published on 4/21/2025) can be located on pages B and Y of this document, as well as in the Adopted FY 2024-25 and Proposed FY 2025-26 budgets.

Below is the list of significant variances in Revenue and Expenditure estimates:

Row 8 – Column E - Licenses and Permits: $2.4 million variance.

The $2.4 million Waste hauler Encroachment fee was categorized under Town Services in the Column C Forecast. Staff recategorized the estimated proceeds under Licenses and Permits in the Column D Forecast.

Row 10 – Column E – Town Services: ($1.1) million variance.

Considering the recategorization above, the Town Services increased by $1.3 million. The increase includes $647,000 development-related pass-through activities, $255,000 increase for the Monte Sereno Police Services Contract, $318,000 increased engineering services revenue, $46,000 increases for School Resource Officer support from the School Districts.

Row 13 – Column E – Other Sources: $0.7 million variance.

Since all Measure G Revenue is programmed to provide for public safety services, the pass-through tracking revenue is characterized as other revenue. In the Column C Forecast, only half of the Measure G revenue ($0.6 million) was characterized as Other sources, and the entire proceeds are characterized as Other sources in the Column D Forecast.

Row 18 – Column E – Salaries: $1.6 million variance.

Column C Forecast assumes 2% salary increases for TEA, AFSCME, Confidential, Management, and Temporary employees. The actual increase, as estimated in Column D Forecast for TEA, ASCME, Confidential, Management, and Temporary employees, was 5% in FY 2024-25, 3% in FY 2025-26, and 4% in FY 2024-25 and FY 2025-26 for AFSCME. In addition, there were equity adjustments for certain job classes that were not included in the Column C Forecast.

Row 20 – Column E – CalPERS Benefits: $0.8 million variance.

CalPERS rates are based on actual payroll, so increased salaries will cause increased CalPERS contributions. In addition, while the Miscellaneous Group rates remained relatively flat, growing from 29.6% (Column C Forecast) to 30.02% (Column D Forecast), the Classic Safety Group required contribution changed from 98.74% (Column C Forecast) to 109.09% (Column D Forecast), and the Classic Safety Management Group estimated contribution changed 101.74% (Column C Forecast) to 112.09% (Column D Forecast)

ITEM NO. 18.
17 Row 24 – Column E – Operating Expenditures: $2.03 million variance.

Operating expenditures experience inflationary factors as well. The prior year assumed a 3% increases; however, certain services and product prices increased by more than 3%. The variance is added up from many different items:
• This item shows half of the Measure G Expenditure under Row 31 – Column C in the Column C Forecast, while it is included in the Operating Expenditures in Column D Forecast. Measure G Fund is a subfund in General Fund, and all proceeds are expended in a given year and part of the operating expenditures.
• The following increases listed as an example in this category that contribute to the difference between the two forecast: $647,000 development related pass through activities, $215,000 in legal services, $190,000 special studies, $150,000 temporary employee services, 127,000 in engineering services; $70,000 miscellaneous services and repairs,$54,000 in street closures,$53,000 street sweeping services,$50,000 in tree trimming services, $37,000 townwide meetings and events, 30,000 in auto parts, $27,000 software licenses,

ITEM NO. 18.
18 A B C D E
Account Revenue Category
FY 2025-26
Forecast
Published
4/22/2024
FY 2025-26
Proposed
Budget
Published
4/21/2025
Variance
1 4100 Property Tax $ 21.3 $ (0.10) 21.2 $
2 4110 VLF Backfill Property Tax 5.3 5.4 0.10
3 4200 Sales & Use Tax 6.7 6.6 (0.16)
4 4200 Measure G District Sales Tax 1.3 1.2 (0.04)
5 4250 Franchise Fees 1.1 1.0 (0.10)
6 4251 Transient Occupancy Tax 2.4 2.4 -
7 4400 Business License Tax 2.5 2.4 (0.10)
8 4400 Licenses & Permits 3.0 5.4 2.40
9 4500 Intergovernmental 0.9 0.8 (0.10)
10 4600 Town Services 6.7 5.6 (1.10)
11 4700 Fines & Forfeitures 0.3 0.3 -
12 4800 Interest 1.4 1.4 -
13 4850 Other Sources 3.1 3.8 0.70
14 4900 Fund Transfers In 0.6 0.6 -
15 $ 56.6 $ 58.1 $ 1.50
16 Use of Capital/Special Projects Reserve $ 1.1 $ -
Use of Measure G Sales Tax - Operating - -
Use of Pension/OPEB Reserve - -
Use of OPEB Trust - -
Use of Property Surplus Reserve - -
Use of Measure G Reserve - -
ARPA Replacement Revenue - -
Use of Council Priorites - Economic Recovery - -
17 $ 57.7 $ 58.1
Account Expenditure Category FY 2025/26
Forecast
FY 2025-26
Proposed
Budget
Variance
18 5110 Salary $ 23.8 $ 25.4 $ 1.63
19 Overtime 0.7 0.7 0.01
20 5120 CalPERS Benefits 9.1 9.9 0.81
21 5200 All Other Benefits 6.1 6.3 0.13
22 4.6% Salary and Benefits Savings (1.8) (0.12) (1.9)
23 6211 OPEB Pay as You Go 1.9 2.1 0.24
24 6000 Operating Expenditures 8.3 10.3 2.03
25 7200 Grants & Awards 0.2 0.4 0.19
26 7400 Utilities 0.7 0.7 (0.01)
27 8060 Internal Service Charges 5.2 5.0 (0.19)
28 8900 Debt Service 2.1 2.1 -
$ 56.2 $ 61.0 $ 4.72
GASB 45 Retiree Medical Actuarial - -
29 Additional Discretionary Payment - Pension 0.4 0.4
$ 56.6 $ 61.4
30 Capital Transfers Out to GFAR $ 1.1 $ -
31 1/2 of Measure G Proceeds to Capital 0.6 -
32 Allocate to ERAF Risk Reserve 0.8 -
33 Allocate to Pension Trust 0.4 0.4
34 $ 59.5 61.8
35 NET REVENUES , TRANSFERS IN, USE OF RESERVES LESS $ (1.8) (3.7)

TOTAL OPERATING REVENUES & TRANSFERS
TOTAL REVENUES, TRANSFERS, AND USE OF RESERVES*

TOTAL OPERATING EXPENDITURES

TOTAL OPERATING & DISCRETIONARY EXPENDITURES

AMOUNTS AVAILABLE FOR RESERVE ALLOCATIONS
TOTAL EXPENDITURES & RESERVE ALLOCATIONS*

ITEM NO. 18.
19 FY 2025-26 FORECAST- PUBLISHED 4-21-2025 (HISTORICAL DETAIL ADDED ON 4/25/2025 TO

PUBLICATION)

ITEM NO. 18.
20 Account Revenue Category FY 2015/16
Actuals
FY 2016/17
Actuals
FY 2017/18
Actuals
FY 2018/19
Actuals
FY 2019/20
Actuals
FY 2020/21
Actuals
FY 2021/22
Actuals
4100 Property Tax $ 10.8 $ 11.5 $ 12.5 $ 13.6 $ 14.5 $ 15.8 $ 16.9 4110 VLF Backfill Property Tax 3.0 3.2 3.4 3.7 3.9 4.1 4.2 4200 Sales & Use Tax 7.5 9.2 7.6 8.0 6.5 6.8 7.2
4200 Measure G District Sales Tax - - - 0.2 1.0 1.1 1.3 4250 Franchise Fees 2.3 2.4 2.5 2.5 2.5 2.5 2.8
4251 Transient Occupancy Tax 1.9 2.3 2.6 2.7 1.9 1.0 1.9 4400 Business License Tax 1.5 1.7 1.7 1.5 1.4 1.4 1.5
4400 Licenses & Permits 3.5 3.0 3.0 3.1 2.7 3.1 4.8
4500 Intergovernmental 1.0 0.9 1.0 0.9 1.0 1.6 1.3
4600 Town Services 4.0 3.3 4.4 4.4 4.4 4.6 5.3
4700 Fines & Forfeitures 0.9 0.9 0.7 0.5 0.3 0.1 0.3
4800 Interest 0.6 0.2 0.2 1.4 2.2 0.1 (1.4)
4850 Other Sources 2.3 4.3 3.2 4.6 2.7 3.7 7.0
4900 Fund Transfers In 2.4 0.3 0.8 1.6 0.6 0.7 0.6
p /p j $ 41.7 $ 43.2 $ 43.6 $ 48.7 $ 45.6 $ 46.6 $ 53.7 Capital - 1.4 3.2 2.8 8.0 3.4 0.6
Use of Pension/OPEB Reserve - - - - - 4.5 0.3
Use of Property Surplus Reserve - - - - - - 1.2
Use of Almond Grove Reserve - - 5.9 - - - -
Use of Measure G Reserve - - - - - - 1.1
$ 41.7 $ 50.5 $ 46.8 $ 51.5 $ 53.6 $ 54.5 $ 56.9
Account Expenditure Category FY 2015/16
Actuals
FY 2016/17
Actuals
FY 2017/18
Actuals
FY 2018/19
Actuals
FY 2019/20
Actuals
FY 2020/21
Actuals
2021/22
Actuals
5110 Salary 14.5 14.8 16.0 17.9 19.3 20.2 20.0
5120 CalPERS Benefits 3.6 3.9 4.3 5.3 6.1 6.4 6.5
5200 All Other Benefits 3.2 3.2 3.3 3.6 3.6 3.7 3.7
6211 OPEB Pay as You Go 0.9 1.0 1.1 1.2 1.2 1.3 1.4
6000 Operating Expenditures 4.7 4.8 5.0 5.6 5.1 5.7 10.4 7200 Grants & Awards 0.7 0.2 0.2 0.3 0.3 0.3 1.8
7400 Utilities 0.4 0.6 0.5 0.5 0.5 0.6 0.6
8060 Internal Service Charges 3.5 3.6 3.9 2.5 2.2 2.3 2.6 8900 Debt Service 1.9 1.9 1.9 1.9 1.9 2.0 2.1
$ 33.6 $ 34.0 $ 36.2 $ 38.8 $ 40.2 $ 42.4 $ 49.0
GASB 45 Retiree Medical Actuarial 1.5 2.6 1.6 1.1 1.1 0.6 0.1 Additional Discretionary Payment - Pension - - - - - 5.6 0.7 $ 35.1 $ 36.6 $ 37.8 $ 39.9 $ 41.3 $ 48.6 $ 49.8
Capital Transfers Out to GFAR 0.5 7.3 2.6 2.3 7.0 3.4 1.2 Operating Tranfer Out - 0.1 0.6 0.5 - 1.1 -
1/2 of Measure G Proceeds to Capital - - - - - - 0.7
Fixed Assets/ Equipment - 0.4 - - - 0.1 - y
Fund - - 1.2 3.6 - 0.4 -
$ 5.6 $ 6.6 $ 4.6 $ 5.2 $ 3.7 $ 2.5 $ 5.9
Allocate to Almond Grove Reserve - 2.5 - - - - - g
Stabilization/Catastrophic - - - - - 0.1 1.1
Allocate to Compensated Absences - - - - - 0.1 (0.2)
Allocate to Market Fluctuations Reserve 0.3 - 0.3 - - 1.2 (0.4) Allocate to CalPERS/Pension Reserve - - 1.8 - - 0.3 0.3 Allocate to Measure G Reserve - - - - - 1.2 -
Allocate to VM & Stores Surplus Reserve - - - - 1.0 - - Allocate to Authorized Carryforwards - 0.1 - - - - 0.03 Sales Tax Prior - Year Adjusments - - 0.4 - - - -
Allocate to Property Surplus Reserve - - - - 1.9 - 1.2
$ 39.0 $ 46.4 $ 42.2 $ 49.2 $ 52.2 $ 53.7 $ 52.2
$ 2.7 $ 4.1 $ 4.6 $ 2.3 $ 1.4 $ 0.8 $ 4.7

TOTAL OPERATING & DISCRETIONARY EXPENDITURES

AMOUNTS AVAILABLE FOR RESERVE ALLOCATIONS

TOTAL EXPENDITURES & RESERVE ALLOCATIONS

NET REVENUES RESERVE TRANSFERS LESS EXPENDITURES &

RESERVE ALLOCATIONS FOR FINAL ALLOCATION AFTER YEAR

END CLOSE
* Due to rounding of individual categories Total Expenditures and Reserve Allocations may include $0.1 million.

General Fund (111) Historical presentaion does not include Pension Trusts activities.

TOTAL OPERATING EXPENDITURES
TOTAL OPERATING REVENUES & TRANSFERS*

TOTAL REVENUES, TRANSFERS, AND USE OF RESERVES
Town of Los Gatos General Fund Historical Year-End Results (in $ million)