Agenda packet — Los Gatos City Council, May 19, 2026 (part 4 of 5)

ITEM NO. 11.
22 | TOWN OF LOS GATOS | OBJECTIVE DESIGN STANDARDS LISA WISE CONSULTING, INC.

IRVINGTON BART STATION SITE PLAN, STATION AREA PLAN, AND ENVIRONMENTAL REVIEW

BART AND THE CITY OF FREMONT
UPP led a team of consultants on the
development of a Station Site Plan and Station
Area Plan for the new Irvington BART Station.

Working with a large team and two different
clients on a controversial project required a
proactive project management approach and
robust community outreach.

Leading the development of the Station Area
Plan, UPP worked with Urban Field Studio to
guide future development in the area
surrounding Irvington Station and stitch the
new station into the existing community. We prioritized crafting a Station Area Plan that is useful and easily readable for planners and developers and that includes objective development standards.

The outreach strategy for Irvington BART Project included message development, targeted stakeholder engagement, and public outreach. Targeted stakeholder outreach included focus groups with the Irvington Business Association, Washington Township Historical Society, and property owners and developers with property interests near the station. Involving these groups early in the planning process in a transparent and collaborative manner allowed the project team to gain a diverse group of supportive stakeholders. UPP also organized and led classroom presentations to approximately 150 students at Irvington High School, spoke to over 100 people while tabling at the Irvington Farmer’s Market, developed multiple online surveys, and led large community workshops that attracted over 100 participants.

UPP also led the streamlined environmental review process to clear the Irvington Station which consisted of an addendum to the 1991 Warm Springs BART Extension EIR and 2003 Warm Springs Extension Supplemental EIR. Completion of this project has achieved the City of Fremont’s longstanding vision of a transit-oriented, active area, strategically integrated with the future Irvington BART Station; consistent with the City’s 2011 General Plan and Irvington Community Plan goals.

Client Contact
Kristie Wheeler, Interim Assistant Community Development Director (former Fremont Planning Manager)
City of Dublin
925.833.6610
[email protected]
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ITEM NO. 11.

QUALIFICATIONS OF KEY PERSONNEL
LWC’s approach for the Objective Design Standards
Project will rely on our team’s expertise in California Housing Law, best practices for Zoning Code audits and
updates, and our experience on similar projects. The
LWC Team assigned to this Project brings decades of
relevant practice and understanding:

Lisa Wise, AICP (Principal) has over 30 years of
professional Project Management experience leading
housing element updates in the 4th, 5th and 6th cycles
as well as zoning code audits and updates throughout
California and the U.S. as well as large-scale code
engagements in the Middle East.

David Bergman (Director) brings over 25 years of
experience in California Housing law and zoning
regulation. David was the LWC Project Manager for 6th
Cycle Housing Element Updates, Inclusionary Housing
Ordinances and Density Bonus programs in Long
Beach, Alameda County and Novato and has served
as the Director of Planning and Building in the City of South Pasadena.

Monica Szydlik, AICP (Project Manager) brings over
18 years of project management, zoning code and
community design experience. Monica holds a Master’s
degree in architecture and has led objective design
standards and design guidelines projects in Piedmont,
Los Altos, Woodland, South San Francisco, Saratoga,
Portola Valley, Redwood City, and Seal Beach.

Stefano Richichi (Senior Associate) has over nine years of zoning code and community development experience.

He supports the LWC team in comprehensive code
review, assessment, and strategies to ensure more userfriendly, streamlined, modern development regulations that implement the community’s vision.

Caroline Chen (Associate) brings nearly four years of
graphics, design and long-range planning experience
and will support the team with comprehensive research
and developing drafts and editing deliverables.

Lisa Wise Consulting, Inc. The UPP team bring extensive expertise in community development, and land use and policy planning. The
UPP Team assigned to this Project brings the following
qualifications and experience:

Curtis Banks, AICP (Principal-in-Charge) has over
30 years of experience in planning and community
development, including affordable housing, building,
and code enforcement. Curtis has managed a wide
variety of residential and non-residential projects,
coordinating all facets of the project from the beginning of the planning and environmental review process
through construction. Curtis has spent his entire career working for communities in Santa Clara and San Mateo
counties (including as consultant to Los Gatos). Curtis is currently overseeing projects in Saratoga and Newark.

Carla Violet (Project Manager) has over 10 years of
experience managing land use and policy planning,
environmental review, and community engagement
projects customized to address specific project
objectives, anticipated challenges and opportunities,
and community concerns. She is skilled at effectively
evolving community engagement strategies to ensure
responsiveness to project issues that arise during
the planning process and to ensure an appropriately
representative cross-section of the community and/
or stakeholders are engaged. Carla serves as the East
Bay Community Relationship Manager for the Link 21
Program which aims to expand BART and other rail
systems by adding another transbay crossing between
Oakland and San Francisco.

Grant Sles (Project Planner) has nearly five years of
experience in urban planning and has worked in both
the public and private sector. His main areas of expertise are housing policy, community engagement, climate
resilience, and environmental justice. He has played a
key role in developing general plan elements and specific plans throughout the West Coast and implemented
affordable housing programs at the County of Ventura.

Urban Planning Partners, Inc.

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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | 870 MARKET STREET, STE 977, SAN FRANCISCO, CA 94102 | 939 S BROADWAY, STE 611, LOS ANGELES, CA 90015 LISAWISECONSULTING.COM

LISA WISE, AICP
President, CEO
As a certified planner and public accountant, Lisa has over 30 years of professional experience in housing policy, land use regulation, real estate finance, and the management of complex projects. Lisa is a part-time lecturer at the California Polytechnic State University in San Luis Obispo focusing on courses in housing and real estate finance.

Lisa has been directly responsible for a breadth of large-scale projects aimed at accelerating housing production and complying with State housing law. These include 35 housing elements in the 4th, 5th, and 6th Cycles as well as Fair Housing Assessments, Inclusionary Housing Ordinances, Objective Design Standards, and Density Bonus Programs. She has also overseen over 23 master and specific plans, 80 zoning coed audits and updates and 35 economic and financial feasibility engagements.

Select Relevant Project Experience:
• Arroyo Grande, CA | Housing Element Update, 4th and 5th Cycle • Austin, TX I Citywide Code Update
• Atascadero, CA | Affordable Housing Short Sale Policy, Housing Element Implementation and Housing Element 4th and 5th Cycle
• Benicia, CA | Housing Element Update, 4th and 5th Cycle • Columbus, OH, Code Assessment and Code and Zoning Map Update • Flagstaff, AZ | Zoning Ordinance Update
• Grover Beach, CA | Zoning Code Update, West Grand Avenue Masterplan, and 4th Cycle Housing Element Update
• Hayward, CA I Downtown Specific Plan and Code Update
• King City, CA | Housing Element, 4th Cycle
• Livermore, CA | Development Code Update and 5th Cycle Housing Element Update
• Long Beach, CAI 6th Cycle Housing Element Update
• Long Beach, CA I SB9 Ordinance and ADU Ordinance
• Loomis, CA | Housing Element Update 3rd, 4th and 5th Cycle • Malibu, CA | Zoning Code and Local Implementation Plan Update • Merced, CA | Bellevue Corridor Plan
• Mesa, AZ | Form-Based Code and Regulating Plan
• Petaluma, CA | SMART Rail Station Areas: TOD Master Plan • Pismo Beach, CA | Housing Element, 4th Cycle
• Richmond, CA | Livable Corridors Plan, South Shore Specific Plan, and 4th and 5th Cycle Housing Element Update, Fair Housing Ordinance Evaluation and Update
• Saratoga, CA I Mixed Use Multifamily Objective Design Standards • Tehachapi, CA | Housing Element Update 4th and 5th Cycle • Vallejo, CA | Housing Element Update 5th Cycle
• Woodland, CA, 6th Cycle Housing Element Update
• Woodland, CA I Comprehensive Code Update

PAST WORK EXPERIENCE

EDUCATION

CERTIFICATIONS & MEMBERSHIPS
California Polytechnic State University
Adjunct Faculty | San Luis Obispo, CA | 2002 - Present
Crawford, Multari & Clark Associates
Professional Consultant | San Luis Obispo, CA
2001 – 2006
Governor’s Office of Planning & Research (OPR)
Intern | Sacramento, CA | 1999 – 2000
PricewaterhouseCoopers, LLP
Financial Services Manager | New York, NY
1990 – 1999
California Polytechnic State University
Master of City & Regional Planning | San Luis Obispo, CA DePaul University
M.S., Accountancy | Chicago, IL
University of Cincinnati
B.S., Business Administration in Marketing & Finance
American Planning Association (APA)
American Institute of Certified Planners (AICP)
California Planning Foundation
Treasurer, 2019 – Present
Dean’s Leadership Council
California Polytechnic State University, College of
Architecture & Environmental Design, 2018 – Present
Congress for the New Urbanism (CNU)
Paul Crawford Award for Excellence in Planning, 2017
Form-Based Code Institute (FBCI)
Chair, 2015 – 2018 | Treasurer, 2014 – 2015
Certified Public Accountant, 1991 – 1999
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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | 870 MARKET STREET, STE 977, SAN FRANCISCO, CA 94102 | 939 S BROADWAY, STE 611, LOS ANGELES, CA 90015 LISAWISECONSULTING.COM

DAVID BERGMAN
Director
With over 25 years of experience, David has focused on housing regulation, financial feasibility analysis, and urban planning projects, with an emphasis on the formation and implementation of local and regional development strategies. He brings an understanding of California Housing Law earned working directly with California cities and counties on the identification and assessment of financing options for affordable housing, student and workforce housing, and inclusionary housing, and strategies for improved jobs/housing balance and anti-displacement programs.

As the Director of Planning for the City of South Pasadena, he oversaw the successful approval of the City’s first density bonus application and adoption of an Accessory Dwelling Unit (ADU) Ordinance that was approved by the California Department of Housing and Community Development (HCD). David successfully led 6th Cycle Housing Element Updates in Long Beach, Novato, and Alameda County among others.

Relevant Project Experience:
• Alameda County, CA | 6th Cycle Housing Element Update • Artesia, CA | Mixed-Use Overlay Zone Analysis and Recommendations • Beverly Hills, CA | Economic Sustainability Plan Update • Citrus Heights, CA | Housing Prototype Testing
• Cypress, CA | Inclusionary Housing Feasibility Study
• Folsom, CA | Financial Feasibility Analysis for Residential and Mixed Use • Long Beach, CA | 6th Cycle Housing Element Update
• Long Beach, CA | SB9 and ADU Ordinance
• Lompoc, CA | Housing Market Analysis
• Modesto, CA | Financial Feasibility Analysis for Residential and Mixed Use • Novato, CA | 6th Cycle Housing Element Update, Rezoning Program, and Inclusionary Housing Ordinance
• Portola Valley, CA | Conceptual Site Plans, Zoning Code Amendments, and Objective Design Standards
• Rancho Cucamonga, CA | Economic Development Strategic Plan • San Diego, CA | Barrio Logan Affordable Housing Strategy • San Fernando, CA | Workforce Housing Analysis
• San Gabriel, CA | Inclusionary Housing Ordinance
• Santa Maria, CA | 6th Cycle Housing Element Update and Market Analysis • Santa Rosa, CA | Jobs Housing Balance Study
• Seal Beach, CA | 6th Cycle Housing Element Update
• St. Helena, CA | Inclusionary Housing Ordinance
• Sun Cal, Anaheim, CA | Inclusionary Housing Strategy, Palatium Triangle • Tehachapi, CA | 6th Cycle Housing Element Update
• Woodland, CA | Financial Feasibility Analysis for Residential and Mixed Use

PAST WORK EXPERIENCE

EDUCATION

ACADEMIC EXPERIENCE
Metropolitan Research and Economics
Principal, Director, and Owner | Santa Monica, CA
2009 - 2020
City of South Pasadena, CA
Director, Planning and Building
2018 - 2019
City of Santa Cruz, CA
Manager of Special Projects, Economic Development
2014 - 2017
Economics Research Associates
Principal | Los Angeles, CA
1996 - 2009
University of California
M. of Planning Geography | Los Angeles, CA
University of Wisconsin
B.A., Geography and Classical History | Madison, WI
University of Southern California
School of Architecture
2016 – 2019
Southern California Institute of Architecture
2001 – 2016
University of Michigan
School of Architecture
2009 – 2010
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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | 870 MARKET STREET, STE 977, SAN FRANCISCO, CA 94102 | 939 S BROADWAY, STE 611, LOS ANGELES, CA 90015 LISAWISECONSULTING.COM

MONICA SZYDLIK, AICP
Senior Associate
Monica brings over 18 years’ experience in planning and urban design to LWC.

She has focused her career on leading specific plans, transit-oriented development plans, streetscape design, design guidelines, form-based development regulations, and zoning code updates. Her skills include managing multidisciplinary teams, meticulous attention to detail, deep understanding of land use regulations, facilitating community outreach, and delivering projects on time and within budget. Monica is an expert in integrating 3-D modeling, diagramming, and photo simulations for more attractive, publishing-quality reports and presentations.

Monica brings a comprehensive approach that combines technical urban planning knowledge, an emphasis on architecture and design, and a focus on feasibility of implementation.

Monica holds a Master of Architecture from the University of Michigan and a Bachelor of Arts in History from the University of California, Berkeley.

Relevant Project Experience:
• Avondale, AZ | Avondale City Center Specific Area Plan • Belmont, CA | Belmont Village Specific Plan
• Burbank, CA | Single-Family Neighborhood Compatibility and Design • Honolulu, HI | Downtown and Kalihi Neighborhood TOD Plans • Livermore, CA | Isabel Neighborhood Plan and EIR
• Long Beach, CA | ADU and SB 9 Local Ordinances
• Los Altos, CA | Objective Design Standards
• Piedmont, CA | Mixed-Use and Multi-Family Objective Design Standards, Prototype Plans and Incentives for Accessory Dwelling Units • Portola Valley, CA | Conceptual Site Plans, Zoning Code Amendments, and Objective Design Standards
• Rancho Cucamonga, CA | Form-Based Code
• Redwood City, CA | Hillside Regulations
• Redwood City, CA | Citywide Single-Family Residential Design Guidelines • Saratoga, CA | Objective Design Standards
• San Bruno, CA | Bayhill Specific Plan
• San Diego, CA | Mission Valley Community Plan - Urban Design • San Jose, CA | Santana Row/Valley Fair and Winchester Boulevard Urban Village Master Plans
• San Pablo, CA | San Pablo Avenue Specific Plan
• Santa Cruz County, CA | Accessory Dwelling Unit Guidebooks • Seal Beach, CA | Housing Element Implementation, Objective Design Standards
• South Lake Tahoe | CA, Tahoe Valley Development and Design Standards • South San Francisco, CA | El Camino Real/Chestnut Avenue Area Plan • South San Francisco, CA | Zoning Code Update & Form-Based Code • Woodland, CA | Comprehensive Zoning Code Update

PAST WORK EXPERIENCE

EDUCATION

CERTIFICATIONS, MEMBERSHIPS, AND AWARDS
Dyett & Bhatia Urban and Regional Planners
Senior Associate | Oakland, CA
2006 – 2018
Kirk Miller Affiliates
Architectural Designer | San Francisco, CA
2005 – 2006
University of Michigan, Ann Arbor
Master of Architecture
University of California, Berkeley
B.A. History
American Institute of Certified Planners (AICP)
2017 – Present
American Planning Association
• California Chapter Award of Excellence, 2018,
Belmont Village Specific Plan
• Hawaii Chapter Honor Award for Urban Design,
2016, Downtown and Kalihi Neighborhood TOD
Plans
• California Northern Section Award of Honor for
Neighborhood Planning, 2012, El Camino Real/
Chestnut Avenue Area Plan
• Arizona Chapter Award, Master Plan Category,
2009, Avondale City Center Specific Area Plan
26 | TOWN OF LOS GATOS | OBJECTIVE DESIGN STANDARDS LISA WISE CONSULTING, INC.

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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | 870 MARKET STREET, STE 977, SAN FRANCISCO, CA 94102 | 706 SOUTH HILL STREET, STE 1100, LOS ANGELES, CA 90014 LISAWISECONSULTING.COM

PAST WORK EXPERIENCE
County of Lassen, CA
Senior Planner
January 2020-August 2021
Associate Planner
April 2017-January 2020
Assistant Planner
May 2015-April 2017
City of Monterey Park, CA
Economic Development Intern
November 2014-April 2015

EDUCATION
Azusa Pacific University
Azusa, CA
Bachelor of Arts, Economics
Concentration: Business
Bachelor of Arts, Philosophy

CERTIFICATIONS & MEMBERSHIPS
American Planning Association (APA)
2021 - Present

STEFANO RICHICHI
Senior Associate
Stefano has eight years of experience focused on housing regulation and programs for establishing objective design standards, density bonus programs, inclusionary housing ordinances, and ADU ordinances. He has a practiced understanding of California housing regulation and effective strategies for legal compliance while honoring a community’s vision for preserving the character of established neighborhoods and enabling attractive, affordable housing choices. Stefano supports the team in conducting site inventories and rezone candidate sites analysis, legal consistency review, workshop facilitation, and project management support.

Stefano’s increasing responsibilities include serving as Deputy Project Manager for 6th Cycle Housing Element Updates in Alameda County, CA and Richmond CA, where he developed housing sites inventories, assessed existing housing policies and programs, and prepared and implemented community outreach aimed at historically disadvantaged and marginalized communities. He also created detailed demographic profiles and analyses of governmental and non-governmental constraints to housing, and works closely with City staff and the California Department of Housing and Community Development (HCD) in the Housing Element Update review, approval, and certification processes.

Stefano has a Bachelor of Arts in Economics and Philosophy from Azusa Pacific University in Azusa, California.

Relevant Project Experience:
• Alameda County, CA, 6th Cycle Housing Element Update
• Beaumont, CA, 6th Cycle Housing Element Update, Objective Design Standards and ADU Ordinance
• Coachella, CA, 6th Cycle Housing Element Update
• Costa Mesa, CA, Short-Term Rental Analysis
• Kingdom of Saudi Arabia, Development Authority Saudi Commission, Comprehensive Zoning Code
• Las Vegas, NV, Downtown Form-Based Code
• Lassen County, CA, 6th Cycle Housing Element Update and ADU Ordinance • Lassen County, CA, Comprehensive Economic Development Strategy • Lassen County, CA, Noise Element Update and Ordinance • Los Altos, CA, 6th Cycle Housing Element Update
• Milpitas, CA, Comprehensive Zoning Code Update
• Novato, CA 6th Cycle Housing Element Update
• Palmdale, CA, Zoning Code Update
• Piedmont, CA, 6th Cycle Housing Element Update
• Pleasanton, CA, 6th Cycle Housing Element Update
• Richmond, CA, 6th Cycle Housing Element Update
• Riyadh, Kingdom of Saudi Arabia, Riyadh Urban Code
• San Gabriel, CA, 6th Cycle Housing Element Update
• Santa Maria, CA, 6th Cycle Housing Element Update
• Temple City, CA, 6th Cycle Housing Element Update
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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | 870 MARKET STREET, STE 977, SAN FRANCISCO, CA 94102 | 939 S BROADWAY, STE 611, LOS ANGELES, CA 90015 LISAWISECONSULTING.COM

CAROLINE CHEN
Associate
Caroline brings four years of expertise in communicating how two-dimensional regulations influence the three-dimensional environment of residential neighborhoods, commercial corridors, and mixed-use zones. She is an expert in using the Adobe Creative Suite, SketchUp, AutoCAD, and other design programs to produce infographics, maps, and 3D models that enhance LWC’s Housing Element updates, housing implementation programs, development codes, and long-range plans. Caroline has taken on increasing responsibility, supporting the LWC Team on housing-related engagements in Beaumont, Alameda County, Novato, Piedmont, Saratoga, and Seal Beach.

Caroline’s professional background includes knowledge of the permit application and approval process through her work with San Francisco-based Geddes Ulinskas Architects. She holds a Bachelor of Science in City & Regional Planning and a minor in Landscape Architecture from California Polytechnic University, San Luis Obispo.

Relevant Project Experience:
• Alameda County, CA | Implementation of the Castro Valley General Plan, 6th Cycle Housing Element Update
• Beaumont, CA | 6th Cycle Housing Element Update, Objective Design Standards, and ADU Ordinance
• Columbus, OH | Zoning Code Update
• La Quinta, CA | Highway 111 Form-Based Code
• Las Vegas, NV | Downtown Form-Based Code
• Millbrae, CA | Citywide Objective Design Standards and Implementation of Related Zoning Code Amendments for Residential Developments • Milpitas, CA | Zoning Code Update
• Norco, CA | Industrial Standards Update
• Novato, CA | 6th Cycle Housing Element Update
• Piedmont, CA | 6th Cycle Housing Element Update
• Portola Valley, CA | Conceptual Site Plans
• Portola Valley, CA | Zoning Code Amendments
• Rancho Cucamonga, CA | Form-Based Code Revisions
• Riyadh, Saudi Arabia | Riyadh Urban Code
• Saratoga, CA | Objective Design Standards
• Seal Beach, CA | Zoning Code Update
• South San Francisco, CA | Zoning Code Update
• St. Helena, CA | Zoning Code Update
• Vacaville, CA | Development Code Update
• Woodland, CA | Comprehensive Zoning Code Update

PAST WORK EXPERIENCE

EDUCATION
Geddes Ulinskas Architects
Project Designer | San Francisco, CA
September 2019 – January 2021
Urban Planning Concepts
Planning Intern | Santa Maria, CA
June 2018 – August 2018
California Polytechnic State University
B.S., City & Regional Planning | San Luis Obispo, CA
Minor in Landscape Architecture
28 | TOWN OF LOS GATOS | OBJECTIVE DESIGN STANDARDS LISA WISE CONSULTING, INC.

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ITEM NO. 11.

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EXPERIENCE
Carla has ten years of experience in land use planning and environmental review services. She has managed several large projects with community outreach and engagement efforts customized to address specific project objectives, anticipated challenges and opportunities, and community concerns. She is skilled at effectively evolving community engagement strategies, as needed, to ensure responsiveness to project issues that arise during the planning process and to ensure an appropriately representative cross-section of the community and/or stakeholders are engaged. Carla has been a key player in Urban Planning Partners’ success in gaining an informed and more aligned citizenry that supports change once the change is better understood.

Carla previously managed the entitlements assistance and community engagement process for the El Cerrito Plaza TOD project. This includes strategizing with the developer team, the City of El Cerrito, and BART on an entitlements process for securing project entitlements under Assembly Bill 2923 and the San Pablo Avenue Specific Plan as well as facilitating focused stakeholder meetings and both virtual and pop-up community meetings. She co-led the community engagement efforts for the Irvington BART Station Site Plan and Area Plan, collaborating closely with the City of Fremont and BART, ultimately evolving significant community opposition to valuable input and support. She also played a key part in supporting Urban Planning Partners role in leading all the City of Richmond’s community outreach and engagement efforts related to its review and ultimate approval of the Chevron Refinery Modernization project, which involved a series of educational sessions and many stakeholder and community workshops, including a final series related to prioritizing community benefits.

PROJECT EXPERIENCE HIGHLIGHTS
• Link21 BART East Bay Relationship Manager
• Portola Valley Housing and Safety Elements Update and Community Engagement • MTC/ABAG, Alameda County Housing Collaborative Technical Assistance, CA – Project Manager • El Cerrito Plaza BART TOD Entitlements and Community Engagement, El Cerrito and BART • Downtown and Brentwood Boulevard Specific Plan Updates • Irvington BART Station Site Plan and Area Plan Community Engagement, City of Fremont and BART • Chevron Refinery Modernization Project Outreach, Richmond, CA • Eastline Project at 2100 Telegraph Avenue Entitlements and EIR, Oakland, CA • Alameda Point Main Street Neighborhood Specific Plan CAREER
Houseal Lavigne Associates Associate Intern
Texas Low Income Housing Information Services Policy Analyst Intern Energy Solutions Contracts Manager

CERTIFICATION
IAP2 Foundations in Public Participation

EDUCATION
Master of Science, Community and Regional Planning, University of Texas at Austin Bachelor of Arts, Sociology, University of California, Davis

CARLA VIOLET
A s s o c i A t e P r i n c i P A l A n d P l A n n i n g M A n A g e r Docusign Envelope ID: DCBAF5EA-5651-4430-AF6A-57E5AEA67357

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ITEM NO. 11.
30 | TOWN OF LOS GATOS | OBJECTIVE DESIGN STANDARDS LISA WISE CONSULTING, INC.

CURTIS BANKS, AICP
A s s o c i A t e P r i n c i P A l

EXPERIENCE
Curtis has over 30 years of experience with expertise in planning and community development, including planning, building, affordable housing, and code enforcement. He has served as a Community Development Director and has worked in a variety of capacities. Curtis has experience interacting closely with elected officials, senior management, commissioners, city departments, state and local agencies, and members of the public. He is skilled at leading staff, preparing budgets, and managing complex planning projects. He has managed comprehensive General Plan updates, Downtown Development Plan updates, Neighborhood Plans, and the preparation of ordinances. Curtis has worked on a wide variety of residential and nonresidential projects, included mixed-use projects, and has overseen the management of affordable housing programs.

Curtis was the project manager for the redevelopment of a 20-acre industrial site for the City of Redwood City.

Curtis was also the Project Director for the Saratoga Housing Element Update and EIR, the Portola Valley Housing and Safety Element Updates IS/MND, and the Antioch Housing and Safety Element Updates and EIR.

PROJECT EXPERIENCE HIGHLIGHTS
• Harbor View Redevelopment Project, Contract Planning, Redwood City, CA • 505 East Bayshore Townhouse Project, Contract Planning Redwood City, CA • Roselli Park Expansion IS/MND, Contract Planning, Redwood City, CA • 6781 Thorton Avenue Mixed Use Project, Contract Planning, Newark, CA • Affordable Housing Program Management, Foster City, CA • Land Use/Circulation, Housing, and Recreation Elements of the General Plan, Foster City, CA • Foster Square Mixed Use Senior Development, Foster City, CA • Pilgrim Triton Master Plan, Foster City, CA
• Levee Protection Planning and Improvements Project, Foster City, CA • Gilead Sciences Master Plan, Foster City, CA
• Lincoln Centre Life Sciences Research Campus Project, Foster City, CA CAREER
City of Foster City Community Development Director/Planning Manager/Senior Planner City of Los Gatos Planning Consultant
City of Los Altos Senior Planner
City of Mountain View Senior Planner
City of Morgan Hill Senior Planner
City of Menlo Park Associate Planner
City of Campbell Planner II/I/Intern

EDUCATION
Master of Urban & Regional Planning, San Jose State University Bachelor of Arts, Public Administration/Political Science, Hayward State University Docusign Envelope ID: DCBAF5EA-5651-4430-AF6A-57E5AEA67357

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ITEM NO. 11.

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EXPERIENCE
Grant’s background in long-range planning, policy development, and program implementation allows him to support Urban Planning Partners with long-range planning efforts, entitlements assistance, and development application review. In his previous work with Dudek, Grant provided support with existing conditions analyses, public workshops and outreach events, and policy writing. He has experience working in a variety of communities on issues related to land use, transportation, climate resilience, and environmental justice.

Moreover, he has helped manage both large and small long-range planning projects.

Drawing upon his strong technical experience, Grant effectively analyzes data and create maps and graphics to convey research findings, design and facilitate community outreach activities, and develop actionable policies to address issues and achieve project goals. He is currently assisting to develop tools to advance affordable housing development in jurisdictions throughout Alameda County via the Alameda County Housing Collaborative.

PROJECT EXPERIENCE HIGHLIGHTS
• MTC/ABAG, Alameda County Housing Collaborative Technical Assistance, CA • Newport Beach Comprehensive General Plan Update, Newport Beach, CA* • Fresno Climate Adaptation Plan and Environmental Justice Element, Fresno, CA* • Concord Housing Element Update, Concord, CA*
• Rialto General Plan Update, Rialto, CA*
• Eureka Waterfront Specific Plan, Eureka, CA*
• Clark County Aging Readiness Plan, Clark County, WA*
• Ventura County ADU Ordinance Update, Ventura County, CA* CAREER
Dudek Planner II
County of Ventura CivicSpark Fellow
Institute of Transportation Studies Advanced Research Aid

EDUCATION
Bachelor of Science, Environmental Policy Analysis and Planning, University of California, Davis * Work with previous employer

GRANT SLES

ASSOCIATE PLANNER
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ITEM NO. 11.

TIMELINE

JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC JAN FEB Task 1:

Project Initiation,
Analysis, and
Recommendations
Task 2:

Community
Engagement
Task 3:

Administrative Draft
Objective Design
Standards
Task 4:

Public Review Draft
Objective Design
Standards
Task 5:

Review and Adoption
2025 2026
Town of Los Gatos
Updated/Additional Objective Design Standards
Project Schedule | October 26, 2024
Analysis and Site
Evaluation
Project Initiation
Meeting
TC Hearing
PC Hearing
Working Meetings
Consultant Effort Meeting Community Workshop Product Public Hearing Public Review
Draft ODS
Recommendations
Memo
Engagement
Program
Focus Group
Meetings
Community
Workshop Admin Draft
ODS
Working Meetings
32 | TOWN OF LOS GATOS | OBJECTIVE DESIGN STANDARDS LISA WISE CONSULTING, INC.

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ITEM NO. 11.

SAMPLES
City Name Project (Link to)
City of Piedmont Multi-Family and Mixed-Use Design Standards City of Saratoga Article 15-58 - Mixed-Use and Multi-Family Design and Development Standards
City of Redwood City Residential Design Guide

DISCLOSURE OF LITIGATION/DISCIPLINE
As the President and CEO of Lisa Wise Consulting, Inc., I attest that the firm has not been disciplined or censured by a regulatory body within the last 5 years nor has the firm been involved in litigation or other legal proceedings relating to the provision of services.

Lisa Wise, AICP
President, CEO
[email protected]
(805) 595-1345
LISA WISE CONSULTING, INC. OBJECTIVE DESIGN STANDARDS | TOWN OF LOS GATOS | 33 Docusign Envelope ID: DCBAF5EA-5651-4430-AF6A-57E5AEA67357

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ITEM NO. 11.

REFERENCES
34 | TOWN OF LOS GATOS | OBJECTIVE DESIGN STANDARDS LISA WISE CONSULTING, INC.

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ITEM NO. 11.

LISA WISE CONSULTING, INC. OBJECTIVE DESIGN STANDARDS | TOWN OF LOS GATOS | 35 Docusign Envelope ID: DCBAF5EA-5651-4430-AF6A-57E5AEA67357

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ITEM NO. 11.

INSURANCE COVERAGE

ANY PROPRIETOR/PARTNER/EXECUTIVE
OFFICER/MEMBER EXCLUDED?

INSR ADDL SUBR LTR INSD WVD

PRODUCER CONTACT
NAME:

PHONE FAX (A/C, No, Ext): (A/C, No):

E-MAIL
ADDRESS:

INSURER A :

INSURED INSURER B :

INSURER C :

INSURER D :

INSURER E :

INSURER F :

POLICY NUMBER POLICY EFF POLICY EXP TYPE OF INSURANCE LIMITS (MM/DD/YYYY) (MM/DD/YYYY)

AUTOMOBILE LIABILITY

UMBRELLA LIAB

EXCESS LIAB

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

AUTHORIZED REPRESENTATIVE
EACH OCCURRENCE $
DAMAGE TO RENTED CLAIMS-MADE OCCUR PREMISES (Ea occurrence) $ MED EXP (Any one person) $
PERSONAL & ADV INJURY $
GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $

PRO- POLICY JECT LOC PRODUCTS - COMP/OP AGG
OTHER: $

COMBINED SINGLE LIMIT
(Ea accident) $
ANY AUTO BODILY INJURY (Per person) $
OWNED SCHEDULED BODILY INJURY (Per accident) $ AUTOS ONLY AUTOS HIRED NON-OWNED PROPERTY DAMAGE $ AUTOS ONLY AUTOS ONLY (Per accident) $

OCCUR EACH OCCURRENCE
CLAIMS-MADE AGGREGATE $
DED RETENTION $

PER OTH- STATUTE ER
E.L. EACH ACCIDENT
E.L. DISEASE - EA EMPLOYEE $
If yes, describe under
DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT INSURER(S) AFFORDING COVERAGE NAIC #

COMMERCIAL GENERAL LIABILITY
Y / N
N / A
(Mandatory in NH)

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

CERTIFICATE HOLDER CANCELLATION

CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY)
$
$
$
$
$
3/28/2024
License # 0305584
(805) 543-6887 341 (805) 543-3064
11000
Lisa Wise Consulting, Inc.
983 Osos Street
San Luis Obispo, CA 93401
24082
34630
29459
A 2,000,000
51SBABA5314 4/1/2024 4/1/2025 1,000,000
10,000
2,000,000
4,000,000
4,000,000
B 1,000,000
BAS56524792 4/1/2024 4/1/2025
C
LIWC524575 4/1/2024 4/1/2025 1,000,000
1,000,000
1,000,000
D Professional Liab. 51PG028245723 4/1/2024 Per Claim & Agg. 2,000,000 D Professional Liab. 51PG028245723 4/1/2024 4/1/2025 Deductible 5,000 Re: Proof of Insurance.

Proof of Insurance
LISAWIS-01 BOTCERTS
Morris & Garritano Insurance Agency, Inc.

PO Drawer 1189
San Luis Obispo, CA 93406
Megan Chew
[email protected]
Sentinel Insurance Company
Ohio Security Insurance Company
Oak River Insurance Company
Twin City Fire Insurance Company
X
4/1/2025
X
X
X
X

ANY PROPRIETOR/PARTNER/EXECUTIVE
OFFICER/MEMBER EXCLUDED?

INSR ADDL SUBR LTR INSD WVD

PRODUCER CONTACT
NAME:

PHONE FAX (A/C, No, Ext): (A/C, No):

E-MAIL
ADDRESS:

INSURER A :

INSURED INSURER B :

INSURER C :

INSURER D :

INSURER E :

INSURER F :

POLICY NUMBER POLICY EFF POLICY EXP TYPE OF INSURANCE LIMITS (MM/DD/YYYY) (MM/DD/YYYY)

AUTOMOBILE LIABILITY

UMBRELLA LIAB

EXCESS LIAB

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

PRO- POLICY JECT LOC PRODUCTS - COMP/OP AGG
OTHER: $

OCCUR EACH OCCURRENCE
CLAIMS-MADE AGGREGATE $
DED RETENTION $

PER OTH- STATUTE ER
E.L. EACH ACCIDENT
E.L. DISEASE - EA EMPLOYEE $
If yes, describe under
DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT INSURER(S) AFFORDING COVERAGE NAIC #

COMMERCIAL GENERAL LIABILITY
Y / N
N / A (Mandatory in NH)

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

CERTIFICATE HOLDER CANCELLATION
ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved.

CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY)
$
$
$
$
$
The ACORD name and logo are registered marks of ACORD
3/28/2024
License # 0305584
(805) 543-6887 341 (805) 543-3064
11000
Lisa Wise Consulting, Inc.
983 Osos Street
San Luis Obispo, CA 93401
24082
34630
29459
A 2,000,000
51SBABA5314 4/1/2024 4/1/2025 1,000,000
10,000
2,000,000
4,000,000
4,000,000
B 1,000,000
BAS56524792 4/1/2024 4/1/2025
C
LIWC524575 4/1/2024 4/1/2025 1,000,000
1,000,000
1,000,000
D Professional Liab. 51PG028245723 4/1/2024 Per Claim & Agg. 2,000,000 D Professional Liab. 51PG028245723 4/1/2024 4/1/2025 Deductible 5,000 Re: Proof of Insurance.

Proof of Insurance
LISAWIS-01 BOTCERTS
Morris & Garritano Insurance Agency, Inc.

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ITEM NO. 11.

PRELIMINARY FEE SCHEDULE
Town of Los Gatos
Updated/Additional Objective Design Standards
Budget Worksheet | October 26, 2024
Hours Fee Hours Fee Hours Fee Hours Fee Hours Fee Hours Fee Hours Fee Hours Fee Hours Fee Hours Fee 1A Project Initiation Meeting and Site Tour 2 $ 594 4 $ 1,000 8 $ 1,560 8 $ 1,280 22 4,434 6 $ 1,500 6 $ 1,380 6 $ 930 18 $ 3,810 40 $ 8,244 1B Analyses and Evaluation - $ - 4 $ 1,000 20 $ 3,900 20 $ 3,200 44 8,100 2 $ 500 4 $ 920 6 $ 930 12 $ 2,350 56 $ 10,450 1C Recommendations Memo 2 $ 594 4 $ 1,000 20 $ 3,900 20 $ 3,200 46 8,694 - $ - - $ - - $ - - $ - 46 $ 8,694 4 $ 1,188 12 $ 3,000 48 $ 9,360 48 $ 7,680 112 $ 21,228 8 $ 2,000 10 $ 2,300 12 $ 1,860 30 $ 6,160 142 $ 27,388 2A Community Engagement Program $ - 2 $ 500 6 $ 1,170 6 $ 960 14 2,630 - $ - - $ - - $ - - $ - 14 $ 2,630 2B Focus Group Meetings (2) - $ - 4 $ 1,000 12 $ 2,340 12 $ 1,920 28 5,260 8 $ 2,000 12 $ 2,760 16 $ 2,480 36 $ 7,240 64 $ 12,500 2C Community Workshop - $ - 8 $ 2,000 32 $ 6,240 32 $ 5,120 72 13,360 8 $ 2,000 24 $ 5,520 40 $ 6,200 72 $ 13,720 144 $ 27,080 - $ - 14 $ 3,500 50 $ 9,750 50 $ 8,000 114 $ 21,250 16 $ 4,000 36 $ 8,280 56 $ 8,680 108 $ 20,960 222 $ 42,210 3A Working Meetings with Town Staff (2) - $ - 2 $ 500 8 $ 1,560 8 $ 1,280 18 3,340 6 $ 1,500 8 $ 1,840 8 $ 1,240 22 $ 4,580 40 $ 7,920 3B Administrative Draft ODS - $ - 4 $ 1,000 36 $ 7,020 36 $ 5,760 76 13,780 2 $ 500 6 $ 1,380 8 $ 1,240 16 $ 3,120 92 $ 16,900 - $ - 6 $ 1,500 44 $ 8,580 44 $ 7,040 94 $ 17,120 8 $ 2,000 14 $ 3,220 16 $ 2,480 38 $ 7,700 132 $ 24,820 4A Working Meetings with Town Staff (2) - $ - 2 $ 500 6 $ 1,170 6 $ 960 14 2,630 6 $ 1,500 8 $ 1,840 8 $ 1,240 22 $ 4,580 36 $ 7,210 4B Public Review Draft ODS 2 $ 594 4 $ 1,000 16 $ 3,120 16 $ 2,560 38 7,274 2 $ 500 6 $ 1,380 8 $ 1,240 16 $ 3,120 54 $ 10,394 2 $ 594 6 $ 1,500 22 $ 4,290 22 $ 3,520 52 $ 9,904 8 $ 2,000 14 $ 3,220 16 $ 2,480 38 $ 7,700 90 $ 17,604 5A Planning Commission Hearing (1) $ - 4 $ 1,000 12 $ 2,340 12 $ 1,920 28 5,260 - $ - - $ - - $ - - $ - 28 $ 5,260 5B Town Council Hearing (1) - $ - 4 $ 1,000 10 $ 1,950 10 $ 1,600 24 4,550 - $ - - $ - - $ - - $ - 24 $ 4,550 - $ - 8 $ 2,000 22 $ 4,290 22 $ 3,520 52 $ 9,810 - $ - - $ - - $ - - $ - 52 $ 9,810 1,500 $ - $ - $ - $ 1,500 - $ 3,000
6 $ 1,782 46 $ 11,500 186 $ 36,270 186 $ 29,760 424 $ 80,812 40 $ 10,000 74 $ 17,020 100 $ 15,500 214 $ 44,020 638 $ 124,832 6A Additional Focus Groups (per meeting) - $ - 4 $ 1,000 8 $ 1,560 8 $ 1,280 20 3,840 4 $ 1,000 6 $ 1,380 8 $ 1,240 18 $ 3,620 38 $ 7,460 6B Educational Story Map and Survey - $ - - $ - - $ - - $ - - - 6 $ 1,500 8 $ 1,840 24 $ 3,720 38 $ 7,060 38 $ 7,060 6C Test Site Feasibility Analysis/Proforma 8 $ 2,376 24 $ 6,000 24 $ 4,680 16 $ 2,560 72 15,616 - $ - - $ - - $ - - $ - 72 $ 15,616 6D Community Open House on PRD - $ - 8 $ 2,000 24 $ 4,680 24 $ 3,840 56 10,520 8 $ 2,000 24 $ 5,520 24 $ 3,720 56 $ 11,240 112 $ 21,760 6E PC/TC Study Session (per meeting) 2 $ 594 6 $ 1,500 16 $ 3,120 16 $ 2,560 40 7,774 - $ - - $ - - $ - - $ - 40 $ 7,774 6F PC/TC Hearing (per hearing) 2 $ 594 4 $ 1,000 10 $ 1,950 10 $ 1,600 26 5,144 - $ - - $ - - $ - - $ - 26 $ 5,144

OPTIONAL TASKS
TASK 5 REVIEW AND ADOPTION
TASK 3 ADMINISTRATIVE DRAFT
Project Total
Task 4 Subtotal
Task 5 Subtotal
Task 1 Subtotal
Task 2 Subtotal
Task 3 Subtotal
Direct Costs (Not to Exceed)
TASK 1 PROJECT INITIATION AND ANALYSIS
Senior
TASK 2 COMMUNITY ENGAGEMENT
UPP Total
TASK 4 PUBLIC REVIEW DRAFT
$230
TOTAL
LWC
Principal Project Manager Project Planner
UPP
Associate LWC Total
$297 $250 $195 $160
Director
$250
Principal
$155
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ITEM NO. 11.

SAN LUIS OBISPO SAN FRANCISCO LOS ANGELES
LISAWISECONSULTING.COM | 805-595-1345
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ITEM NO. 11.

AMENDMENT TO AGREEMENT FOR CONSULTANT SERVICES

PREAMBLE
This First Amendment to Agreement for Services is dated for identification on this 2nd day of December 2025, and amends that certain Agreement for Consultant Services dated February 26, 2025, made by and between the Town of Los Gatos (“Town”) and Lisa Wise Consulting, Inc. (“Consultant”), identified as a C Corporation and whose address is 870 Market Street, Suite 977, San Francisco, CA 94102.

I. RECITALS
A. Town and Consultant entered into Agreement for Consultant Services on February 26, 2025 (“Agreement”).

B. Town desires to amend the Agreement to revise the scope of services without increasing the compensation of the Agreement.

II. AMENDMENT

1. Task 6 - Optional Tasks in the “Scope of Services” attached to the original Agreement is amended as follows and the remainder of the tasks remain unchanged:
a. Task 6A - Increase the total number of Task 6A Additional Focus Group Meetings to six. This is an increase by five meetings, from one additional focus group meeting to six additional focus group meetings.
b. Delete Task 6B – Educational Story Map/Survey.
c. Delete Task 6C – Test Site Feasibility Analysis/Proforma. d. Delete Task 6D – Open House on the Public Review Draft. e. Add Contingency. The unallocated funds remaining from the four changes above are put in a new Contingency line.

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

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ITEM NO. 11.

IN WITNESS WHEREOF, the Town and Service Provider have executed this Amendment.

Town of Los Gatos by:
_________________________________________________
Chris Constantin, Town Manager
Lisa Wise Consulting, Inc. by:
_________________________________________________
Lisa Wise, AICP, President, CEO Lisa Wise Consulting, Inc.

Recommended by:
_________________________________________________
Joel Paulson, Community Development Director
Approved as to Form:
_________________________________________________
Gabrielle Whelan, Town Attorney
Docusign Envelope ID: 083BDB0C-6051-491E-8A71-12E73C9A78B0 12/5/2025
12/5/2025
12/7/2025
12/8/2025

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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | (805) 595 1345 | LISAWISECONSULTING.COM | 1 MEMO
To: Sean Mullin, Town of Los Gatos
From: Lisa Wise Consulting, Inc.

Date: September 4, 2025
Subject: Los Gatos Objective Design Standards Update – Amendment #1 This Amendment #1 summarizes the proposed changes to the March 5, 2025 contract by and between the Town of Los Gatos and Lisa Wise Consulting, Inc., for Implementation of the Updated/Additional Objective Design Standards for Qualifying Multi-Family and Mixed-Use Residential Developments Project (“Project”).

The Scope of Work (p. 2) changes indicated herein (in “track changes”) represent the sole modifications to the Scope of Work as indicated in the March 5, 2025 contract. The Budget (p. 6) indicates the requested re-allocation of funds from tasks 6B, 6C and 6D to Task 6A, as well as the addition of a Contingency for the remaining funds.

In summary, the proposed scope changes:
• Increase the total number of Task 6A Additional Focus Group Meetings to Six. This is an increase by five meetings, from one additional focus group meeting to six additional focus group meetings.
• Delete Task 6B – Educational Story Map/Survey. During the April 7, 2025 kick-off meeting, Staff suggested that this could be replaced by tabling at a community event such as a Farmer’s Market. We have recommended deleting it altogether.
• Delete Task 6C – Test Site Feasibility Analysis/Proforma. Deleted per September 4, 2025 Staff request.
• Delete Task 6D – Open House on the PRD. During the April 7, 2025 kick-off meeting, Staff suggested that this event is not needed.
• Add Contingency. The unallocated funds remaining from the four changes above are put in a new Contingency line.

There is no change to the overall project budget.

EXHIBIT A
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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | (805) 595 1345 | LISAWISECONSULTING.COM | 2 Town of Los Gatos
Updated/Additional Objective Design Standards for
Qualifying Multi-Family and Mixed-Use Residential
Development – Amendment #1

SCOPE OF WORK
Task 1: Project Initiation and Analysis
A. Project Initiation Meeting and Site Tour. The consulting team will meet in-person with Town staff to discuss the goals and priorities for the Updated/Additional Objective Design Standards; finalize the work program, timeline, and milestones; discuss the outreach program; and clarify roles and responsibilities. Following the meeting, Town staff will lead the team on a tour of the Town to understand existing character, visit key housing opportunity sites, and document the intensity, forms, and character of Los Gatos neighborhoods. A key part of the tour will be a discussion about the Town staff’s experience with community expectations and what is important from a design perspective to achieve desired development outcome.

B. Technical Analysis, Site Analysis, and Evaluation. LWC will prepare a Technical Analysis, Site Analysis and Evaluation that addresses the following:
• Applicable ordinances, plans, and policy documents including General Plan 2040, Residential Design Guidelines, Commercial Design Guidelines, and Chapter 29 of the Town Code (Zoning Regulations).
• The adopted Objective Design Standards and Checklist (yes/no and B.4.3 points system). • Evaluation of existing typical development projects that demonstrate local context and character. • Documentation of recent, pipeline, and proposed development projects. • Council direction related to high-quality building design, architectural style, and height transitions. • Design and feasibility considerations for small multifamily housing types including townhomes, triplexes and fourplexes, “house-scale” small multi-unit buildings, and other small-scale configurations.

Prior to preparation of the Analyses and Evaluation, the consulting team will prepare and submit to the Town a data request for material related to the Project. This may include but is not limited to unpublished GP and Zoning amendments, a list of Staff’s zoning interpretations, minutes of hearing design review discussions, GIS data, original files from the adopted Objective Design Standards, and other material relevant to the Project.

C. Updated/Additional Objective Design Standards Recommendations Memo. Based on the Technical Analyses and Town staff comments, the consulting team will prepare a Recommendations Memo. The Memo will outline recommendations for:
• Revised content. Changes to existing standards and recommended new standards, with a focus on building massing, height transitions, building design and articulation, and architectural style, and Town character and scale. This includes recommendations for revisions to existing graphics/illustrations and preparation of new graphics/illustrations.

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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | (805) 595 1345 | LISAWISECONSULTING.COM | 3 • Organization and implementation. How the material may be added to or integrated within the existing Town’s regulatory framework to facilitate streamlined ministerial review. This includes recommendations for how the standards may be administered and reviewed (yes/no, point system, allowed modifications, etc.).

Task 2: Community Engagement
A. Community Engagement Program. LWC will prepare a Community Engagement Program outlining a public process that enables the community to review and comment on the Updated/Additional Objective Design Standards as they are being formulated. The Program will refine Task 2 of the Scope of Work as needed to ensure that approaches and formats used will be most effective for the Los Gatos community; that the community has ample opportunity to express its values and priorities for residential design; and, that, ultimately, the community has ownership of the process.

B. Focus Group Meetings (2). The consulting team will hold two virtual small-group (up to four individuals per group) meetings with key stakeholders. Stakeholders, to be identified and contacted by Town staff, are anticipated to include local designers/architects, developers, neighborhoods representatives, residents of mixed-use or multi-family areas of Los Gatos, real estate professionals, or other interested code users. The goals of the meetings are to identify important issues and constraints to residential design; hear the group members’ design preferences and priorities; and understand the group members’ views on the feasibility and marketability of various design features and standards.

The consulting team will prepare an introductory presentation, identify discussion topics, and lead the discussion. Following the meetings, the consulting team will summarize the feedback collected and identify ways to incorporate feedback into the standards.

C. Community Workshop. The consulting team will design and facilitate an in-person interactive community workshop prior to drafting of the Administrative Draft Standards. The workshop will:
• Introduce the project to the community. The workshop will begin with a presentation on the project background, recent State housing legislation, and Town policy goals and standards. The presentation will describe the advantages of ODS for small towns like Los Gatos and underscore the role of community members in developing them. The community will also gain the vocabulary needed to provide impactful feedback once the draft standards are ready for public review. • Solicit input from the community. Following the presentation, the workshop will provide activities for community members to offer ideas and priorities and shape the emerging standards.

Activities may include but are not limited to live visual preference surveys, interactive stations with presentation boards, and small-group facilitated discussions with tabletop materials. While the format will be developed in coordination with Town staff, the interactive portion of the workshop will be designed to prompt community members to:
o Identify and discuss key elements that contribute to Los Gatos’ neighborhood character. o Visualize and articulate priorities for a range of building and site design elements with a focus on architectural style, building height transitions between different residential densities and districts, and details of building design. o Ask questions about and lend input into the emerging standards to ensure that the Project is truly a community-led effort.

After the workshop, the consulting team will summarize the feedback collected from all participants and identify ideas to be incorporated into the Updated/Additional Objective Design Standards.

Task 3: Administrative Draft Updated/Additional Objective Design Standards A. Working Meetings with Town Staff (2). The consulting team will participate in two one-hour working meetings with Town staff during the development of the Administrative Draft. LWC will provide a summary memo for each meeting.

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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | (805) 595 1345 | LISAWISECONSULTING.COM | 4 B. Administrative Draft Updated/Additional Objective Design Standards. The consulting team will prepare the Administrative Draft Updated/Additional Objective Design Standards to satisfy the State’s requirements in accordance with SB330 as well as the community’s design priorities. While the scope and nature of the amendments will be determined through Tasks 1 and 2, the consulting team anticipates the Standards will include the following:
• Site Standards. Edits and additions to existing standards to support high-quality site design of small-scale multi-family development types, including common and private open space, bicycle parking, vehicular parking, landscaping.
• Building Standards. Edits and additions to existing standards to require high-quality building design that demonstrates the Los Gatos character. This includes edits and additions to existing standards for massing and scale; parking structure design; roof design; façade design and articulation, and other design elements. In developing this material, the consultant team will focus on:
o High-quality building design – Building design (form, massing, materials, and details) that is high in quality and that reflects the Town’s character, detailed in an objective manner. o Architectural style – Styles that are typical of the Town, both within and outside of the historic Downtown, and the hallmarks of each style, described as objective features. o Height transitions – Strategies for appropriate massing transitions between different zones and residential densities, and how such transitions may impact solar access. • Anticipating Density Bonus. Edits and additions to the standards to ensure that key community priorities are preserved when concessions are granted to density bonus projects. • Updated and new graphics/illustrations. Updated and new figures and illustrations that accurately reflect the scale and character of Los Gatos and that represent the range of forms and scales of residential and residential mixed-use development in the Town and that can be used to clearly illustrate the standards. The graphics will be developed using a combination of SketchUp and Adobe Illustrator.
• Implementation. Edits and additions to existing checklist review process to ensure application of the standards is predictable, clear, and easy to follow. The consulting team will also identify places elsewhere in the Town’s regulatory framework that may need to be updated for consistency with the Updated/Additional Objective Design Standards and to ensure predictable and streamlined ministerial review.

Task 4: Public Review Updated/Additional Objective Design Standards A. Working Meetings with Town Staff (2). The consulting team will participate in two one-hour working meetings with Town staff during the development of the Public Review Draft. LWC will provide a summary memo for each meeting.

B. Public Review Draft Objective Design Standards. The consulting team will prepare a Public Review Draft based on a single set of consolidated, non-conflicting comments from the Town staff review of the Administrative Draft.

Task 5: Review and Adoption
A. Planning Commission Public Hearing. LWC will prepare materials/presentations for, and present at one in-person Planning Commission public hearing to support adoption of the Updated/Additional Objective Design Standards.

B. Town Council Public Hearing. LWC will prepare materials/presentations for, and present at one inperson Town Council public hearing to support adoption of the Updated/Additional Objective Design Standards.

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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | (805) 595 1345 | LISAWISECONSULTING.COM | 5 C. Final Objective Design Standards. Based on the Town Council’s final adoption and final text changes provided by Town staff, LWC will prepare, and provide in Word and PDF, the final Objective Design Standards.

Task 6 - Optional Task
A. Additional Focus Group Meetings (6). The consulting team will hold six (6) additional focus group meetings similar in format to and the same week as those described in Task 2B, to be held at any point in the process. Discussion topics will be developed in coordination with Town Staff.

B. Educational Story Map/Survey. Using ArcGIS Online, the UPP team will develop a Story Map that provides an overview of objective design standards, showcases existing and proposed multi-family and mixed-use residential development in the Town, and collects feedback from users. UPP will analyze this feedback and work with LWC to incorporate it into the draft objective design standards.Deleted.

C. Test Site Feasibility Analysis/Proforma. LWC will prepare a financial feasibility analysis for selected sites or building prototypes identified in the ODS drafting process. The goal is to ensure that development standards result in economically feasible conditions that will allow for projects to be developed. This analysis will also establish that the ODS do not serve as a constraint on housing production. LWC will develop a financial model (static developer-side pro forma) based on the proposed standards. The definition of potential building envelopes and development standards can be prepared concurrently to establish the economic feasibility of the proposed standards as they are being formulated.Deleted.

D. Community Open House on the Public Review Draft. The consulting team will hold an in-person Open House to present the Public Review Draft Updated/Additional Objective Design Standards to the community and gather the community’s feedback and input. The input gathered from the Open House will be reflected in the subsequent draft of the design standards.Deleted.

E. Planning Commission/Town Council Study Session. LWC will prepare materials/presentations for, and present at a Planning Commission or Town Council study session on the Public Review Draft updated/Additional Objective Design Standards.

F. Additional Planning Commission/Town Council Hearing. LWC will prepare materials/presentations for, and present at a Planning Commission and Town Council Hearing study session on the Public Review Draft Updated/Additional Objective Design Standards.

Docusign Envelope ID: 083BDB0C-6051-491E-8A71-12E73C9A78B0

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ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | (805) 595 1345 | LISAWISECONSULTING.COM | 6 BUDGET
Town of Los Gatos - Amendment #1
Task
Total
Existing
Budget
Remaining
Existing
Budget
Proposed
Change
New Total
Budget
New
Remaining
Budget
Task 6A – Additional Focus
Groups ($7,460 per meeting) $7,460 $7,460 $37,300 $44,760 $44,760 Task 6B – Deleted $7,060 $7,060 ($7,060) $0.00 $0.00
Task 6C – Deleted $15,616 $15,616 ($15,616) $0.00 $0.00 Task 6D – Deleted $21,760 $21,760 ($21,760) $0.00 $0.00 [New] Contingency $0 $0 $7,136 $7,136 $7,136
Net Change $0
Docusign Envelope ID: 083BDB0C-6051-491E-8A71-12E73C9A78B0

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ITEM NO. 11.
-1-

AMENDMENT TO AGREEMENT FOR PROGRAM ADMINISTRATIVE SERVICES

PREAMBLE
This Second Amendment to Agreement for Services dated for identification on this 19th day of May, 2026, and amends that certain agreement for Consulting Services dated February 26, 2025, made by and between the Town of Los Gatos (“Town”) and Lisa Wise Consulting, Inc. (“Consultant”), identified as a C Corporation and whose address is 983 Osos St., San Luis Obispo, CA 93401.

I. RECITALS
A. Town and Consultant entered into Agreement for Consultant Services on February 26, 2025.

B. Town desires to amend the Agreement to revise the term of the agreement with no monetary value.

II. AMENDMENT

1. 2.1 Term and Time of Performance – The original agreement is amended to extend the expiration date from June 30, 2026, to June 30, 2027. In doing so will align it with existing agreements that are set to expire on that date.

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

ATTACHMENT 3

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ITEM NO. 11.
-2-
IN WITNESS WHEREOF, the Town and Consultant have executed this Amendment.

Town of Los Gatos by:

Chris Constantin, Town Manager
Lisa Wise Consulting, Inc. by:

Lisa Wise, AICP, President, CEO Lisa Wise Consulting, Inc.

Recommended by:

Joel Paulson, Community Development Director
Approved as to form:

Gabrielle Whelan, Town Attorney
Attest:

Wendy Wood, CMC, Town Clerk

Page 437 ends

ITEM NO. 11.
983 OSOS STREET, SAN LUIS OBISPO, CA 93401 | (805) 595 1345 | LISAWISECONSULTING.COM Lisa Wise Consulting, Inc.
983 Osos Street
San Luis Obispo, CA 93401
April 15, 2026
Sean Mullin, AICP
Planning Manager
Community Development Department
City of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
[email protected]
Subject: Request for Contract Extension – Objective Design Standards Dear Mr. Mullin,
Lisa Wise Consulting, Inc. (LWC) is currently under contract with the City of Los Gatos for the Objective Design Standards project. That contract has an expiration date of June 30, 2026.

To enable the completion of the remaining work under the existing scope of services, LWC respectfully requests a one-year extension of the contract term. This would revise the expiration date to June 30, 2027.

This request does not include changes to the approved scope, budget, or other terms of the agreement and is solely intended to provide sufficient time to complete the authorized work.

We appreciate your consideration of this request and are available to provide any additional information needed to facilitate the extension.

Sincerely,
Monica Szydlik
Lisa Wise Consulting, Inc.

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ITEM NO. 11.

This Page
Intentionally
Left Blank

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ITEM NO. 11.

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

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/19/2026
ITEM NO: 12
DATE: May 19, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Execute an Agreement with Tesla, Inc. to Continue Operation of Charging Stations for a Period of 10 Years with One Five-year Renewal Period in the Town of Los Gatos Northside Parking Lot for the Payment to the Town of $8,616 Per Month, Subject to Five Percent Annual Escalation
RECOMMENDATION: Authorize the Town Manager to execute an agreement with Tesla, Inc. to continue receiving Town revenues (4118011-45333) for Tesla’s operation of 20 charging stalls using 26 parking spaces in the Town of Los Gatos Northside Parking Lot for a ten-year period with one five-year renewal period at the rate of $8,616 per month, subject to five percent annual escalation.

FISCAL IMPACT:

The proposed agreement generates $8,616 per month ($103,392 annually) in revenue to the Town, representing an increase from the prior agreement rate of $8,000 per month ($96,000 annually) in the amount of $7,392 in year one. The agreement includes a 5% annual escalation, resulting in increasing revenue over the term. Rent payment is contingent on completion of Tesla vendor onboarding documentation. Staff will confirm completion of all required onboarding documentation before the Effective Date to prevent accrual without payment.

Revenues will be deposited to account 4118011 45333 and assigned within the General Fund Appropriations Reserve for future downtown parking and infrastructure improvements. Council approval will be required before assigned reserve funds may be appropriated for expenditure.

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ITEM NO. 12.

PAGE 2 OF 3
SUBJECT: Tesla Charging Agreement
DATE: May 19, 2026
STRATEGIC PRIORITY:

This item supports the 2025 to 2027 Additional Priority to promote sustainability practices and protect and conserve the natural environment for present and future generations under the Community Character core goal. The item also relates to the Quality Public Infrastructure core goal because the agreement concerns downtown parking assets, and to the Fiscal Stability core goal because it generates ongoing Town revenue.

BACKGROUND:

In 2018, the Town entered into an agreement with Tesla, Inc. (Attachment 2) to allow construction and operation of Tesla charging stations in the Northside lot. The initial agreement granted Tesla access to 18 parking spaces, up to five additional feet of parking width for compliance with the Americans with Disabilities Act, and up to 400 square feet of landscape space for equipment. The 18 parking spaces included space for 12 Tesla chargers, four parking spaces with chargers for use by any electric vehicle, and two spaces for ADA compliant charging stations. This agreement was granted with no revenue to the Town of Los Gatos. This item was authorized by the Town Council on December 19, 2017.

At its meeting of February 2, 2021, Town Council approved the First Amendment to the charging station agreement (Attachment 2), increasing the number of parking spaces allocated to 26, with 20 parking spaces for Tesla Level 3 chargers, four parking spaces for all EV use chargers, and two spaces for charger cabinets and ancillary equipment. This amendment set a payment of $8,000 per month from Tesla to the Town of Los Gatos, with the revenues allocated to the “Future Downtown Parking Fund to Collect Parking Revenue for Infrastructure Improvements in Downtown.”
Two additional Tesla-branded all electric vehicle chargers are located at the south end of the Northside Lot near the Highway 9 entrance. These chargers were installed by Tesla as a community benefit during the original installations in 2018, but they are not part of this agreement.

DISCUSSION:

The First Amendment authorized the chargers for a five year term beginning on an updated Commencement Date. Staff has identified June 16, 2021 as the updated Commencement Date.

Under the First Amendment, the initial term expires five years from the last day of the month in which that Commencement Date occurred, which is June 30, 2026.

Staff and Tesla began discussions in November 2025 to determine the next steps for the continued use of this area for charging infrastructure. As a result of those discussions, the proposed agreement was developed (Attachment 1). The proposed agreement is for a 10-year

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ITEM NO. 12.

PAGE 3 OF 3
SUBJECT: Tesla Charging Agreement
DATE: May 19, 2026
period, with one five-year automatic renewal period. The monthly payment is increased to $8,616, escalating 5% per year through the term of the agreement.

The proposed 10 year term provides long term operational stability for both the Town and Tesla while ensuring continued access to charging infrastructure for residents and visitors. The proposed agreement includes one five year renewal term that automatically goes into effect unless Tesla provides notice of non-renewal at least 30 days before expiration of the then current term. The Town may terminate the agreement during the term by providing the required 18 months’ notice and paying the termination fee described in Attachment 1. The updated monthly payment and annual escalation provide increasing revenue over time for the use of public parking assets. The proposed agreement does not expand the physical footprint or number of charging stations beyond what was authorized in 2021.

CONCLUSION:

This proposed action will allow Tesla to retain the charging stations in the Northside Lot for public use. These chargers are widely used by Tesla and non-Tesla electric vehicle drivers alike, providing an important community amenity.

COORDINATION:

This staff report was coordinated with the Town Attorney.

ENVIRONMENTAL ASSESSMENT:

This action is categorically exempt pursuant to CEQA Guidelines Section 15301 (Existing Facilities), because it authorizes continued operation, leasing, maintenance, and minor alteration of existing charging infrastructure within the existing approved premises and does not authorize expansion of the existing physical footprint or expansion of use beyond the existing charging station use. Any future physical expansion or materially different use would require separate Town review and any required environmental review.

Attachments:

1. Supercharger Agreement – 2026

2. First Amendment and Original Charging Station Agreement

Page 442 ends

ITEM NO. 12.

Key Terms to Supercharger Agreement – Page 1 of 3 CONFIDENTIAL Attachment 1

SUPERCHARGER AGREEMENT
This Supercharger Agreement (this “Agreement”) is effective as of the date it is fully executed (the “Effective Date”) by and between Counterparty (as defined below) (“Counterparty”) and Tesla, Inc., a Texas corporation (f/k/a Tesla, Inc., a Delaware corporation) (“Tesla”). Counterparty and Tesla are each referred to herein as a “Party” and collectively as the “Parties.” Clause references are to clauses in the Key Terms, and section references are to sections in the General Terms and Conditions (Exhibit B). Exhibit A and Exhibit B are incorporated by reference in this Agreement. In the event of a conflict between the Key Terms and Exhibit B, the Key Terms shall prevail.

Key Terms
(a) Counterparty The Town of Los Gatos, a local government. (b) Property
(Section 1)
Commonly known as the Northside Parking Lot, located 142 Los GatosSaratoga Rd, Los Gatos, CA 95032 (the “Property”). (c) Premises
(Section 1)
Twenty-six (26) parking spaces, up to five (5) feet of additional parking width to provide disability access and approximately two hundred to four hundred (200-400) square feet of space for equipment on the Property, all as depicted on Exhibit A (the “Premises”).
(d) Charging Stalls
(Section 1)
The parking spaces within the Premises contain twenty (20) charging stalls (Level 3 DC fast chargers) with electric vehicle chargers (“Chargers”). (e) Commencement Date
(Section 4)
The Effective Date of this Agreement (the “Commencement Date”). (f) Base Term
(Section 5)
Ten (10) years from the last day of the month in which the Commencement Date occurs (the “Base Term”).
(g) Renewal Term
(Section 5)
One (1) period of five (5) years (the “Renewal Term”) and the Renewal Term shall automatically go into effect unless Tesla delivers advance notice of nonrenewal at least thirty (30) days prior to the expiration of the then current Term (as defined below).
(h) Termination Notice
(Section 5)
At least eighteen (18) months (the “Notice Period”).
(i) Rent Beginning on the Effective Date of this Agreement, Tesla will pay Eight Thousand six hundred and sixteen Dollars ($8,616.00) per month (the “Rent”) for the Premises in advance on the first business day of each calendar month during the Term. If the Effective Date is any day other than the first business day of a month, the first Rent payment shall include payment for the partial month in which the Effective Date occurs, prorated based on the number of days in such month. The Rent shall increase by five percent (5 %) on each anniversary of the Commencement Date.

Notwithstanding the foregoing, Rent payments shall accrue but be payable only after Counterparty has completed Tesla’s vendor onboarding documentation, and payments of Rent shall be made to the account or

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ITEM NO. 12.

Key Terms to Supercharger Agreement – Page 2 of 3 CONFIDENTIAL Attachment 1
address specified by Counterparty in such documents. If Counterparty provides notice of any change in the payment of Rent, including but not limited to a change of payment account or address, or if there is a change in ownership of the Premises during the Term, Rent payments shall continue to accrue but thereafter be payable only after Counterparty, or any successor in interest, again completes Tesla’s vendor onboarding documentation. For the avoidance of doubt, Tesla shall only pay Rent for the twenty (20) parking spaces occupied by the Level 3 DC fast chargers. (j) Special Terms and
Conditions
Replacement of the Original Agreement. Pursuant to that certain Supercharger Agreement dated February 13, 2018, as amended (collectively, the “Original Agreement”), Tesla currently operates a Charging Station in the Premises. Upon the execution of this Agreement, the Original Agreement shall terminate and be of no further, force or effect.

Additional Alterations. Pursuant to the Original Agreement, Tesla has constructed and operates a Charging Station in the Premises. Following the Effective Date of this Agreement, any alterations to the Charging Station performed by Tesla shall be approved by Counterparty in accordance with Section 3 below.

Mediation. Should any dispute arise out of this Agreement, beyond any applicable notice or cure periods any party may request that it be submitted to mediation. The parties shall meet in mediation within 90 days of a request. The mediator shall be agreed to by the mediating parties; in the absence of an agreement, the parties shall each submit one name from mediators listed by either the American Arbitration Association, the California State Board of Mediation and Conciliation, or other agreed-upon service. The mediator shall be selected by a blind draw. The cost of mediation shall be borne equally by the parties. Neither party shall be deemed the prevailing party. No party shall be permitted to file a legal action without first meeting in mediation and making a good faith attempt to reach a mediated settlement. The mediation process, once commenced by a meeting with the mediator, shall last until agreement is reached by the parties but not more than 60 days, unless the maximum time is extended by the parties.

Termination Fee. The “Termination Fee” means an amount equal to Tesla’s total undepreciated costs of the Charging Station (calculated on a straightline basis over twelve (12) years), including the costs of the Trade Fixtures, Infrastructure, and construction, plus Tesla’s costs to remove the Charging Station. For the avoidance of doubt, the Termination Fee shall also include all costs incurred by Tesla to expand or upgrade the Charging Station from the date such expansion or upgrades were first opened to the public.

Counterparty shall pay the Termination Fee in full on or before the effective date of termination specified in the Termination Notice, provided that such date complies with the applicable Notice Period. Tesla shall promptly furnish Counterparty with reasonable supporting documentation evidencing the amounts claimed for the Termination Fee. Counterparty’s obligation to pay

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ITEM NO. 12.

Key Terms to Supercharger Agreement – Page 3 of 3 CONFIDENTIAL Attachment 1
the Termination Fee shall survive the termination or expiration of this Agreement.
[SIGNATURES ON FOLLOWING PAGE]

Page 445 ends

ITEM NO. 12.

Signature Page to Supercharger Agreement CONFIDENTIAL
IN WITNESS WHEREOF, the Parties have each caused an authorized representative to execute this Agreement as of the Effective Date.

COUNTERPARTY: TESLA:

The Town of Los Gatos, Tesla, Inc.
a local government a Texas corporation
By: _______________________________ By: _______________________________ Name: _______________________________ Name: _______________________________ Title: _______________________________ Title: _______________________________ Date: _______________________________ Date: _______________________________ E-mail for notices:
[email protected]
Phone number for urgent issues:
408-394-5770
E-mail for notices:
[email protected]
Phone number for urgent issues:
725-223-2400
By: _______________________________
Name: _______________________________
Title: _______________________________
Date: _______________________________
E-mail for notices:

[email protected]
Phone number for urgent issues:
408-394-5770

Page 446 ends

ITEM NO. 12.

Exhibit A to Supercharger Agreement – Page 1 of 2 CONFIDENTIAL

EXHIBIT A
Premises
Property Address: Northeast Parking Garage-Northside Parking Lot – Town of Los Gatos, CA – 142 Los Gatos-Saratoga Rd, Los Gatos, CA 95032
Premises Depiction:

Page 447 ends

ITEM NO. 12.

Exhibit A to Supercharger Agreement – Page 2 of 2 CONFIDENTIAL Page 448 ITEM NO. 12.

US v.20240213 Exhibit B to Supercharger Agreement – Page 1 of 4 Exhibit B
General Terms and Conditions

1. Premises. Counterparty hereby grants to Tesla the right to use the Premises pursuant to Section 6, to install, operate and maintain a Charging Station (defined below), together with the right of ingress and egress to the Premises. This Agreement shall not create any leasehold interest in the Property.

2. Intentionally Omitted.

3. Alterations. Tesla shall, at its sole cost, make alterations to the Premises to install the Charging Station (“Tesla’s Work”). Tesla’s Work shall only occur after: (a) Counterparty has approved the plans and specifications in writing; and (b) Tesla has obtained all permits and approvals required by applicable governing bodies. Once Tesla’s Work begins, it shall proceed with diligence and continuity until complete. Tesla may upgrade or replace its Trade Fixtures in its sole discretion during the Term, provided that any other alterations to the Charging Station shall be approved in advance by Counterparty. Counterparty’s approval of the plans and specifications shall not be unreasonably withheld, conditioned or delayed. Tesla shall promptly repair any damage to the Property caused by Tesla, its agents, contractors and employees (collectively, “Tesla Parties”) while performing Tesla’s Work.

4. Intentionally Omitted.

5. Term and Termination. The term of this Agreement shall begin on the Commencement Date and shall expire at the end of the Base Term. Upon expiration of the Base Term, this Agreement shall automatically renew for one Renewal Term, subject to the Key Terms above. Notwithstanding any provision of this Agreement to the contrary, Counterparty may terminate this Agreement at any time for any reason by delivering to Tesla: (a) written notice of termination in accordance with Clause (h) of the Key Terms; and (b) payment of the Termination Fee as set forth above in Clause (j).

6. Permitted Use. Tesla may use and occupy the Premises during the Term to: install, operate and maintain a Charging Station (as defined below) for charging Tesla and third-party electric vehicles and autonomous vehicles, and for incidental purposes, which may include generating photovoltaic electricity and operating an energy storage system or for any other lawful purpose. Tesla may, in its sole discretion provide on-site personnel, contractors, autonomous attendants and/or security personnel at no cost to Counterparty. All uses under this Section are collectively referred to herein as the “Permitted Use”. Tesla is authorized to operate and collect payment for the Permitted Use year-round, twenty-four (24) hours per day and seven (7) days per week. The “Charging Station” shall consist of: (a) Chargers as determined by Tesla in its sole discretion, signage and power electronics equipment to provide charging to the charging stalls described in Clause (d) and other trade fixtures determined by Tesla that may include, without limitation, air pumps, a canopy, solar panels, an energy storage system and fence or other visual barriers, security cameras (collectively, the “Trade Fixtures”); and (b) necessary utility infrastructure, which may include, without limitation, a utility transformer, metering equipment, switchgear, conduit, wiring and foundations (collectively, the “Infrastructure”).

7. Removal. On or before the final day of the Term, Tesla shall, at its sole cost, remove the Trade Fixtures, leave the Infrastructure in a safe condition, and restore the Premises to the condition that existed as of the first day of the Term, subject to exceptions for reasonable wear and tear.

Counterparty agrees that the Trade Fixtures and personal property are and shall remain the property of Tesla, and the Infrastructure shall become the property of Counterparty upon termination of this Agreement (except that Infrastructure upstream of the meter is and shall remain the property of the utility).

8. Utilities.

Page 449 ends

ITEM NO. 12.

US v.20240213 Exhibit B to Supercharger Agreement – Page 2 of 4 A. Tesla agrees to arrange and pay the charges for all Tesla-related utility services provided or used in or at the Premises during the Term. Tesla shall pay directly to the utility company the cost of installation of any and all such Tesla-related utility services and shall arrange to have the utility service separately metered. Counterparty shall not be responsible for any damages suffered by Tesla in connection with the quality, quantity or interruption of utility service, unless the cause of the disruption or damage was Counterparty’s gross negligence or intentional misconduct.

B. If required by the utility, Counterparty shall execute and notarize a formal utility easement (or such other agreement or authorization required by the utility service provider) AS-IS, within ten (10) business days of receipt from Tesla or the utility service provider.

9. Maintenance. Tesla shall be responsible for maintaining the Charging Station at its sole cost (including repair and replacement of equipment, as necessary). Notwithstanding the foregoing, Counterparty’s normal responsibility to maintain the common areas of the Property shall also apply to the Premises, including but not limited to landscaping, pest control, trash removal, snow removal, repaving and restriping, and Counterparty agrees to coordinate with Tesla on maintenance that will prevent the use of the Charging Station. If Tesla determines that the Premises needs additional trash cans, or if Counterparty requests additional trash cans, Tesla shall provide such trash cans to Counterparty at Tesla’s sole cost.

10. Counterparty Covenants. Counterparty represents that: (a) it owns or leases the Property and has the power and authority to enter into this Agreement; (b) it has obtained any required consents to enter into this Agreement; (c) the Property is not subject to any conditions, restrictions or covenants incompatible with the Permitted Use; (d) this Agreement does not violate any agreement, lease or other commitment by which Counterparty is bound; (e) it will not lease, Agreement or commit the parking spaces within the Premises to any third party during the Term; and (f) it will not perform or allow excavation in the Premises during the Term without Tesla’s advance written consent, other than superficial repaving.

11. Default. It shall be an “Event of Default” under this Agreement if either Party fails to perform or observe any material term or condition of this Agreement and such failure continues for a period of thirty (30) days after receipt of written notice thereof from the other Party, provided, however, that if the nature of such default is such that it cannot reasonably be cured within such thirty (30) day period and the defaulting Party commences to cure within the thirty (30) day period and proceeds with diligence and continuity, then such Party shall have additional time to cure as is reasonably required.

12. Remedies. The Parties acknowledge and agree that, if an Event of Default by the other Party has occurred and is continuing, the non-defaulting Party may: (a) terminate this Agreement upon thirty (30) days advance written notice; and/or (b) exercise any other remedy available at law or in equity.

13. Exclusions. Notwithstanding anything herein to the contrary, each Party expressly releases the other from any claims for speculative, indirect, consequential or punitive damages, including, without limitation, any lost sales or profits.

14. Indemnification. Except to the extent a claim arises from any negligence or willful misconduct of an Indemnified Party, or any breach or alleged breach of Section 25 by Counterparty, Tesla hereby agrees to indemnify, hold harmless and defend Counterparty, its directors, officers, managers, members, employees, agents and representatives (each an “Indemnified Party”) from all losses and liabilities, including court costs and reasonable attorneys’ fees, on account of or arising out of or alleged to have arisen out of any third party claim directly related to: (i) Tesla’s use of the Premises; (ii) Tesla’s breach of this Agreement; or (iii) bodily injury or damage to real or tangible personal property caused by the use of the Trade Fixtures.

Page 450 ends

ITEM NO. 12.

US v.20240213 Exhibit B to Supercharger Agreement – Page 3 of 4

15. Insurance. Through the duration of this Agreement, Tesla shall maintain commercial general liability insurance with limits of not less than Two Million Five Hundred Thousand US Dollars ($2,500,000 USD) per occurrence and Four Million US Dollars ($4,000,000 USD) aggregate for combined single limit for bodily injury or third-party property damage. The total limits above may be met by any combination of primary and excess liability insurance. A certificate evidencing such insurance shall be delivered to Counterparty upon the execution of this Agreement and upon reasonable request by Counterparty. Tesla shall include Counterparty as additional insured on its commercial general liability and, if applicable to meet limit requirements, umbrella and/or excess insurance policies, with respect to liability for services provided under this Agreement. Tesla will maintain worker’s compensation insurance in accordance with state and federal law. This requirement may be waived by Tesla if Tesla is a qualified self-insured in the state where the Premises is located. Insurance shall be maintained with responsible insurance carriers with a Best Insurance Reports rating of “A-“ or better or through a formal self-insurance mechanism that has either (a) a Best Insurance Reports rating of “A-“ or better; or (b) a financial size category of “VI” or higher, provided, that if such selfinsurance program does not meet either (a) or (b), then Tesla’s use of self-insurance for the required coverages shall be subject to Counterparty’s approval, not to be unreasonably withheld, conditioned or delayed.

16. Environmental Matters. Counterparty represents and warrants that, to the best of its knowledge, the Premises shall be delivered free of contamination that violates any applicable environmental law. Notwithstanding any provision in this Agreement to the contrary, Counterparty agrees that it will indemnify and hold Tesla harmless from all costs from, and Tesla shall have no liability for, any contamination of the Property, unless caused by Tesla Parties. Counterparty is responsible for remediating to the extent required by applicable environmental law any contamination not caused by Tesla Parties, including any contamination encountered by Tesla Parties during construction.

17. Confidentiality. The Parties agree that the terms of this Agreement and any non-public, confidential or proprietary information or documentation provided to one Party by the other Party in connection with this Agreement are confidential information, and the Parties agree not to disclose such confidential information to any person or entity during the Term and for a period of three (3) years thereafter. Notwithstanding the foregoing, the Parties may disclose information (i) to their respective Affiliates, subcontractors, lenders, employees, financial, legal and space planning consultants, in each case that have a “need to know” such confidential information and have committed to treat the information as confidential under terms no less protective than the terms of this Section 17, provided that the Party disclosing such confidential information shall be liable for any disclosure by such authorized recipients, (ii) as permitted in Section 20, and (iii) as required by law, including the California State Public Records Act. “Affiliate” of a Party is an entity that controls, is controlled by or is under common control with that Party, where “control” means possessing, directly or indirectly, the power to direct or cause the direction of the management, policies or operations of an entity, through ownership of voting securities, by contract or otherwise.

18. Publicity. Neither Party will use the other Party’s name, trademark or logo without obtaining the other Party’s prior written consent.

19. Notices. All notices, demands and approvals shall be in writing and shall be delivered to the electronic mail addresses provided on the signature page, and shall be deemed given on proof of transmission. Either Party may change their respective address for notices by giving written notice of such new address in accordance with this Section 19.

20. Incentives. Counterparty agrees that Tesla shall own and receive the benefit of all Incentives derived from the construction, ownership, use or operation of the Charging Station, including, without limitation, from electricity delivered through, stored at or generated by the Charging Station.

Counterparty will cooperate with Tesla in obtaining all Incentives, provided that Counterparty is not

Page 451 ends

ITEM NO. 12.

US v.20240213 Exhibit B to Supercharger Agreement – Page 4 of 4 obligated to incur any out-of-pocket costs in doing so unless reimbursed by Tesla. If any Incentives are paid directly to Counterparty, Counterparty agrees to immediately pay such amounts over to Tesla. “Incentives” means (a) electric vehicle charging or renewable energy credits or certificates, carbon credits and any similar environmental or pollution allowances, credits or reporting rights, (b) rebates or other payments based in whole or in part on the cost or size of equipment, (c) performance-based incentives paid as periodic payments, (d) tax credits, grants or benefits, and (e) any other attributes, commodities, revenue streams or payments, in each of (a) through (e) under any present or future law, standard or program and whether paid by a utility, private entity or any governmental, regulatory or administrative authority. Counterparty agrees that Tesla may disclose a redacted copy of this Agreement if necessary to obtain Incentives.

21. Governing Law. This Agreementshall be construed and enforced in accordance with the laws of the state in which the Premisesis located. Venue for any action regarding this Agreement shall be in the Superior Court of the County of Santa Clara.

22. Entire Agreement. Each Party acknowledges and agrees that it has read and understood this Agreement, and that it represents the entire agreement and understanding of the Parties with respect to the subject matter herein and supersedes all prior agreements, communications, or understandings, whether oral or written, with respect to the subject matter herein.

23. Assignment. Tesla shall not assign this Agreement without the prior written consent of Counterparty, which shall not be unreasonably withheld, conditioned or delayed; provided that the foregoing prohibition shall not limit Tesla’s ability to transfer this Agreement to a Tesla Affiliate.

24. Sale or Transfer. In the event of a sale or transfer of all or a portion of Counterparty’s interest in the Property or Premises during the Term, Tesla’s rights shall be conveyed with such interests in the Property or Premises and Counterparty warrants that any transferee shall be bound by all terms and condition of this Agreement, and Counterparty shall obtain any necessary documents to confirm such assignment including, without limitation, providing Tesla with updated contact information for the buyer or transferee of the Property or Premises.

25. Miscellaneous. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together will constitute one agreement. Electronic signatures and other signed copies transmitted electronically in PDF or similar format shall be treated as originals. If any provision of this Agreement is invalid or unenforceable, the remainder of this Agreement shall not be affected, and each provision shall be valid and enforceable to the fullest extent permitted by law.

Any outstanding payment obligations and the terms of Section 17 shall survive termination of this Agreement. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. Each Party shall comply with all applicable codes, laws and ordinances in fulfilling its respective obligations under this Agreement. Tesla shall promptly remove or bond any liens placed on the Property as a result of any claims for labor or materials furnished to Tesla at the Premises. This Agreement is subject and subordinate to all ground or superior leases and to all mortgages which may now or hereafter affect such leases or the Property, and to all renewals, modifications, consolidations, replacements and extensions thereof; provided that Tesla’s rights under this Agreement shall not be disturbed by such subordination so long as no Event of Default by Tesla exists beyond all notice and cure periods. COUNTERPARTY AND TESLA EACH WAIVE,

TO THE EXTENT PERMITTED BY APPLICABLE LAWS, THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT.

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ITEM NO. 12.

FIRST AMENDMENT OF CHARGING STATION AGREEMENT
THIS FIRST AMENDMENT OF CHARGING STATION AGREEMENT (this "Amendment") is made and entered into as of February 2, 2021 (the "Amendment Effective Date") by and between The Town of Los Gatos, a local government ("Counterparty"), and Tesla, Inc., a Delaware corporation ("Tesla").

R E C I T A L S

1. Counterparty and Tesla are parties to that certain Charging Station Agreement dated February 13, 2018 (the “Agreement”). Pursuant to the Agreement, Counterparty granted Tesla possession and control of eighteen (18) parking spaces (the “Existing Premises”) at the Property for the installation and operation of a Charging Station.

2. During the initial construction of the Charging Station, Tesla installed Infrastructure in eight (8) parking spaces (“Expansion Premises”) adjacent to the Existing Premises.

3. Counterparty and Tesla now desire to expand the Existing Premises extend the Term and amend the Agreement, as more particularly described herein.

T E R M S
NOW THEREFORE, in consideration of the foregoing recitals, the mutual covenants herein contained, and good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows, as of the Amendment Effective Date:

1. Defined Terms. All capitalized terms used in this Amendment shall have the same meaning given such terms in the Agreement, unless otherwise defined in this Amendment.

2. Amendment of the Agreement: As of the Amendment Effective Date:

2.1. Expansion of the Existing Premises. Tesla shall, at its sole cost, expand the Existing Premises by installing Trade Fixtures at the Expansion Premises. As of the Amendment Effective Date, all references in the Agreement to the “Premises” shall be deemed to include the Existing Premises and the Expansion Premises consisting of a total of twenty-six (26) parking spaces, as depicted on Exhibit A attached hereto. For the avoidance of doubt, the Premises shall consist of twenty-six (26) Dedicated Stalls.

2.2. Term. The Possession Date for the work contemplated by this Amendment shall be March 1st, 2021 Upon the opening of the Charging Station (including the Expansion Premises), Tesla shall deliver written notice to Counterparty of the updated Commencement Date and the old Commencement Date, which occurred on September 24th 2018 shall be of no further force or effect.

For the avoidance of doubt, the initial term of this Agreement shall begin on the updated Commencement Date and shall expire five (5) years from the last day of the month in which the updated Commencement Date occurs (the “Initial Term”). Tesla shall have one (1) option to extend the term of this Agreement for an additional five (5) years (the “Renewal Term” and together with the Initial Term, the “Term”), upon the same terms contained in the Agreement.

2.3. Confidentiality. Section 21 of the Agreement shall be deleted and replaced in its entirety with the following:
“21. CONFIDENTIALITY AND PUBLICITY: Except as provided below, to the maximum extent permitted by law, Tesla and Counterparty agree that the terms of this Agreement and any non-public, confidential or proprietary information or documentation provided to one Party by the other Party in connection with this Agreement are confidential information, and the Parties agree not to disclose such confidential information to any person or entity during

ATTACHMENT 2

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ITEM NO. 12.
2 the Term and for a period of three (3) years thereafter.

Notwithstanding the foregoing, the Parties may disclose information (i) to their respective Affiliates, subcontractors, lenders, employees, financial, legal and space planning consultants, in each case that have a “need to know” such confidential information and have committed to treat the information as confidential under terms no less protective than the terms of this Section 21, and (ii) as required by law, including the California State Public Records Act; provided that if Counterparty receives such a request, then Counterparty shall promptly notify Tesla to allow Tesla to seek a protective order or other appropriate remedy before the Agreement is released.

Neither Party will use the other Party’s name, trademark or logo without obtaining the other Party’s prior written consent.”

2.4. Rent. The following shall be added to the Agreement as Section 31:
“31. RENT: Tesla will pay Counterparty Eight Thousand Dollars ($8,000.00) per month (the “Rent”) for a portion of the Premises on the first business day of each calendar month during the Term. If the Commencement Date is any day other than the first business day of a month, the first rent payment shall include payment for the partial month in which the Commencement Date occurs, prorated based on the number of days in such month. All rent payments shall be made either electronically to an account specified by Counterparty to Tesla in writing, or by check to the Counterparty address provided in Section Error! Reference source not found.. Tesla shall have no obligation to pay any other charge to Counterparty.

For the avoidance of doubt, Tesla shall only pay Rent for the twenty (20) parking spaces occupied by the Level 3 DC fast chargers and Counterparty agrees that the Rent shall not increase during the Term.”

2.5. Incentives. The following shall be added to the Agreement as Section 32:
“32. INCENTIVES: Counterparty agrees that Tesla shall own and receive the benefit of all Incentives derived from the construction, ownership, use or operation of the Charging Station, including, without limitation, from electricity delivered through, stored at or generated by the Charging Station. Counterparty will cooperate with Tesla in obtaining all Incentives, provided that Counterparty is not obligated to incur any out-of-pocket costs in doing so unless reimbursed by Tesla. If any Incentives are paid directly to Counterparty, Counterparty agrees to immediately pay such amounts over to Tesla. “Incentives” means (a) electric vehicle charging or renewable energy credits or certificates, carbon credits and any similar environmental or pollution allowances, credits or reporting rights, (b) rebates or other payments based in whole or in part on the cost or size of equipment, (c) performance-based incentives paid as periodic payments, (d) tax credits, grants or benefits, and (e) any other attributes, commodities, revenue streams or payments, in each of (a) through (e) under any present or future law, standard or program and whether paid by a utility, private entity or any governmental, regulatory or administrative authority.”

2.6. Exhibit A. Exhibit A of the Agreement shall be deleted in its entirety and replaced by the Exhibit A, attached hereto and incorporated herein.

2.7. Exhibit B. The bullet points on Exhibit B of the Agreement shall be deleted in its entirety and replaced with the following:
x Ten (10) Chargers Cabinets
x Twenty (20) charge posts (Level 3 DC fast chargers)
x Two (2) Level 2 posts (Four (4) parking spaces in total) for all EV use (at no charge to the users

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ITEM NO. 12.
3 x Switchgear and meter panel
x Signage

3. Effect. Except as expressly modified by this Amendment, the Agreement shall remain unchanged and in full force and effect. Except as otherwise set forth in this Amendment, nothing in this Amendment shall be deemed to waive or modify any of the provisions of the Agreement.

4. Consent. The parties represent and warrant that there are no consents of third parties (including any lenders) that are necessary for the execution and performance of this Amendment or that each party has obtained all consents of third parties necessary for the execution and performance of this Amendment.

5. Counterparts. This Amendment may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Amendment. Any signature to this Amendment that is transmitted electronically through email as a PDF or DocuSign will be deemed an original signature, be binding upon the parties hereto and will have the same force and effect as an original signature.

6. Brokers. Counterparty and Tesla each represents that they have not dealt with any broker and each hereby agrees to indemnify and hold the other harmless from any claims for any broker related commissions or fees.

7. Successors. The provisions of this Amendment shall bind and inure to the benefit of the heirs, representatives, successors and assigns of the parties hereto. [Signatures appear on following page]

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ITEM NO. 12.
4 IN WITNESS WHEREOF, Counterparty and Tesla have executed this Amendment as of the Amendment Effective Date.

COUNTERPARTY: TESLA:

Town of Los Gatos Tesla, Inc.
a local government a Delaware corporation
By: __________________________ By: _______________________________ Name: Laurel Prevetti Name: Maximilien de Zegher
Title: Town Manager Title: Senior Manager, Global Charging Infrastructure By: __________________________
Name: Matt Morley
Title: Director of Parks and Public Works
By: __________________________
Name: Robert Schultz
Title: Town Attorney
Attest:
_____________________________
Shelley Neis, MMC, CPMC, Town Clerk

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ITEM NO. 12.
5 EXHIBIT A
Premises Depiction and Address
Northeast Parking Garage Address –Northside Paring Lot - Town of Los Gatos, CA – 142 Los Gatos-Saratoga Rd, Los Gatos, CA 95032
Premises Depiction:

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ITEM NO. 12.
6

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ITEM NO. 12.

AGR I 8.0.;1!
!HH, ____ _

CHARGING STATION AGREEMENT
;20 I fr
This Supercharger Agreement (the "Agreement") is effective as of <t-/13>, Z6r1 (the "Effective Date") by and between The Town of Los Gatos a local government ("Counterparty") and Tesla, Inc., a Delaware corporation ("Tesla").

WHEREAS, Tesla, through the provision of electric vehicle charging services at the Property, will provide value to Counterparty by attracting Tesla vehicle owners and the public to, and providing additional visibility of, the Property;
WHEREAS, Counterparty acknowledges the value of Tesla's charging station at the Property and desires to grant possession and control of the Premises to Tesla pursuant to the terms set forth herein; NOW THEREFORE, in consideration of the above and for other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the parties agree as follows:

1. CONTACT INFORMATION:

Counterparty's Address for Notices:

Town of Los Gatos
41 Miles Ave.

Attention: Jim Harbin
Phone: (408) 395-5310
Email: [email protected]
Tesla's Address for Notices:

Tesla, Inc.
3500 Deer Creek Road
Palo Alto, CA 94304
Attention: Supercharger Team
Phone: (650) 681-5000
Email: [email protected]
24-hour Technical Support & Service:
877-79-TESLA (877-798-3752)

2. PREMISES: Counterparty hereby grants to Tesla possession and control of eighteen (18) parking spaces, up to five (5) feet of additional parking width to comply with the Americans with Disabilities Act of 1990 and approximately 200-400 square feet of landscaped space for equipment (the "Premises") on the property commonly known as the North Parking Lot, located between University Ave. and North Santa Cruz Ave., north of Los Gatos -Saratoga Rd., and as depicted on Exhibit A attached hereto (the "Property") in order to build an electric vehicle charging station to charge Tesla vehicles (the "Charging Station").

3. CONSTRUCTION: Upon delivery of possession of the Premises to Tesla, Tesla shall, at its sole expense, construct improvements as described in and pursuant to the procedures set forth in Exhibit 8, attached hereto and made a part hereof, and will install certain trade fixtures indicated in Exhibit 8 (the "Trade Fixtures" as further described and defined in Exhibit B).

4. INITIAL FOOTPRINT: A total of eighteen (18) parking spaces are needed to outfit the charging facility. Twelve (12) parking spaces will be outfitted with charge posts ("Chargers") and shall serve as dedicated charging stalls to be used only by Tesla vehicles ("Dedicated Stalls"). The four (4)

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ITEM NO. 12.

5. 6.

7. 8.

9. 10.
additional parking spaces shall be outfitted with chargers to be used by all other electric vehicles.

Two (2) additional spaces are needed one each for ADA requirements and station infrastructure.

The Dedicated Stalls and any applicable restrictions shall be identified by signage substantially similar to the signage depicted in Exhibit B.

POSSESSION DATE: The first date where Tesla may enter the Premises and Property to begin its work pursuant to the Agreement is January 15, 2018 (the "Possession Date").

COMMENCEMENT DATE: The date that the Charging Station opens to the public (the "Commencement Date") shall be within one hundred and fifty (150) days following the Possession Date, provided that no external permitting, utility or other requirements beyond Tesla's control delay the installation, despite the best efforts of Tesla. Tesla shall deliver written notice to Counterparty promptly following the Commencement Date to confirm such date for recordkeeping purposes. /
TERM: The initial term of the Agreement shall expire five (5) years from the Commencement Date (the "Initial Term"). Tesla shall have the right to once extend the Agreement and such extension shall be for an additional period offive (5) years (the "Renewal Term" and together with the Initial Term, the "Term"). Following the Renewal Term, any further renewals will be subject to mutual agreement between Tesla and Counterparty. To extend the Term, Tesla shall deliver written notice of such extension to Counterparty no later than thirty (30) days prior to the expiration of the Term. In the event of a sale or transfer of the Property or Premises by Counterparty while the Agreement is in effect, Tesla's rights shall be conveyed with the Property or Premises.

UTILITIES: Tesla agrees to arrange and pay the charges for all Tesla-related utility services provided or used in or at the Premises during the Term. Counterparty grants to Tesla and such public utility companies an easement to install, operate, inspect, maintain and repair such public utility facilities as may be reasonably necessary over the Property to serve the Premises. Tesla shall pay directly to the utility company the cost of installation of any and all such Tesla-related utility services and shall arrange to have the utility service separately metered. Counterparty shall not be responsible for any damages suffered by Tesla in connection with the quality, quantity or interruption of utility service, unless the cause of the disruption or damage was due to Counterparty's gross negligence or willful misconduct.

USE: Tesla shall use and occupy the Premises during the Term for a Charging Station and incidental purposes, including generating photovoltaic electricity and operating an energy storage system. All use of the Premises by Tesla shall comply with applicable codes, laws, and ordinances.

PAYMENT FOR CHARGING SERVICES: Counterparty shall have no right to request or accept payment from Tesla, Tesla customers or any other third-parties in connection with Tesla charging services.

11. MAINTENANCE: Tesla shall be responsible for maintaining the Trade Fixtures and Infrastructure (as defined in Exhibit B) and Counterparty shall not have any liability for damage to the Trade Fixtures or the Infrastructure unless such damage is caused by Counterparty's gross negligence or willful misconduct. Notwithstanding the foregoing, Counterparty's normal responsibility to maintain the common areas of the Property shall also apply to the Premises, such as for debris and garbage collection and removal. Counterparty agrees to coordinate any parking lot

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ITEM NO. 12.
maintenance with Tesla to ensure that charging stalls remain available as much as is reasonably feasible. Te·sla may, in its discretion and at its sole cost, install security cameras and other equipment to monitor the Premises from off-site. All site equipment installed in relation to the charging infrastructure shall be maintained in good condition for the entire term of the agreement.

12. COUNTER PARTY COVENANTS: Counterparty represents that they are the owner of the Property and that this Agreement does not violate any agreement, lease or other commitment of Counterparty. Counterparty shall not take any action that would impair or interrupt the use of the Premises or the Trade Fixtures. Counterparty agrees to notify Tesla within a commercially reasonable time if (i) it has knowledge of third-parties impairing or misusing the Premises or Trade Fixtures, or (ii) it obtains knowledge of a needed repair to the Premises or Trade Fixtures. If nonTesla motorists repeatedly park in the Dedicated Stalls, thereby impairing use of the Dedicated Stalls, then the parties shall together determine and implement an appropriate and effective strategy for preventing such impairment, including, without limitation, alternative signage and painted asphalt. Counterparty shall use commercially reasonable efforts to actively monitor the Premises to ensure that use of the charging stalls is not impaired.

13. ASSIGNMENT: Tesla shall not assign this Agreement voluntarily or by operation of law, or any right hereunder, nor sublet the Premises or any part thereof, without the prior written consent of Counterparty, which shall not be unreasonably withheld, conditioned or delayed; provided that the foregoing prohibition shall not limit Tesla's ability to transfer this Agreement to a company that is controlled by, controls, or is under common control with Tesla.

14. ALTERATIONS: Excepting the items of Exhibit 8, Tesla shall not make or permit to be made any alterations, changes in or additions to the Premises without the prior written consent of Counterparty, which shall not be unreasonably withheld, conditioned or delayed. Upon termination of this Agreement, unless terminated due to a default of Counterparty, the Infrastructure shall become the property of Counterparty; provided that all Trade Fixtures and all related intellectual property shall at all times remain the property of Tesla and all Trade Fixtures will be promptly removed by Tesla upon termination of the Agreement.

15. SIGNAGE: Tesla signage to be installed at the Premises is represented in Exhibit B and shall include signs to identify Dedicated Stalls. Any material revisions or additions to the signage depicted in Exhibit B shall be subject to Counterparty approval, which shall not be unreasonably withheld, conditioned or delayed. All signage shall be professionally prepared, installed and maintained at Tesla's expense.

16. INDEMNIFICATION: Except to the extent of any gross negligence or willful misconduct of Counterparty, Tesla hereby agrees to indemnify, hold harmless and defend the Property, Counterparty, its managers, members, agents and representatives from all liability, damages, loss, costs and obligations, including, court costs and attorney's fees, on account of or arising out of or alleged to have arisen out of any claim of any third party directly related to Tesla's use of the Premises. Tesla shall promptly remove or bond any liens placed on the Property as a result of any claims for labor or materials furnished to or for Tesla at or for use on the Premises.

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ITEM NO. 12.

Except to the extent of any gross negligence or willful misconduct of Tesla, Counterparty hereby agrees to indemnify, hold harmless and defend Tesla, its directors, officers, employees, consultants, agents and representatives from all liability, damages, loss, costs and obligations, including, court costs and attorney's fees, on account of or arising out of or alleged to have arisen out of directly or indirectly, any claim of any third party directly related to Counterparty's actions with respect to the Premises.

17. DESTRUCTION: Any total destruction of the Premises shall, at Counterparty's or Tesla's written election within thirty (30) days of such destruction, terminate the Agreement.

18. DEFAULT: Each of the following shall constitute an "Event of Default" by Tesla under this Agreement:
(1) the failure by Tesla to perform or observe any material term or condition of the Agreement and such failure continues for a period of thirty (30) days after receipt of written notice thereof, provided however, that if the nature of such default is such that the same cannot reasonably be cured within said thirty (30) day period, then Tesla shall have such additional time as is reasonably required to cure such failure provided Tesla commences to cure such failure within such thirty (30) day period and proceeds to cure such failure with diligence and continuity; or
(2) the appointment of a receiver or trustee to take possession of all or substantially all of the assets of Tesla located at the Premises if possession is not restored to Tesla within sixty (60) days; or a general assignment by Tesla for the benefit of creditors; or any action or proceeding commenced by or against Tesla under any insolvency or bankruptcy act, or under any other statute or regulation having as its purpose the protection of creditors and in the case of involuntary actions filed against the Tesla the same are not discharged within sixty (60) days after the date of commencement.

19. REMEDIES: Counterparty and Tesla acknowledge and agree that each party shall have all remedies available at law or in equity if the other party is in default under the terms of this Agreement. If an Event of Default has occurred and is continuing, then Counterparty, in addition to any other remedies given at law or in equity, may:
(A) continue this Agreement in effect by not terminating Tesla's right to possession of said Premises and thereby be entitled to enforce all Counterparty's rights and remedies under this Agreement; or
(B) bring an action to recover and regain possession of said Premises in the manner provided by the laws of eviction of the State where the Premises are located then in effect.

20. INSURANCE: Tesla shall carry commercial general liability insurance with limits of not less than One Million Dollars ($1,000,000) for bodily injury or death and property damage and an umbrella insurance policy of not less than Five Million Dollars ($5,000,000). A certificate evidencing such insurance shall be delivered to Counterparty upon the execution of this Agreement and from time to time thereafter as may be requested by Counterparty. Upon request, Tesla shall include Counterparty as additional insured on its commercial general liability and umbrella insurance

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ITEM NO. 12.
policies. Tesla will also carry worker's compensation insurance in accordance with state and federal law.

21. CONFIDENTIALITY AND PUBLICITY: Neither party will use the other party's name, trademark or logo without such other party's prior written consent.

22. EXCLUSIONS: Notwithstanding anything herein to the contrary, Tesla shall not be liable for, and Counterparty expressly releases Tesla from any claims from, speculative, indirect, consequential or punitive damages, including any lost sales or profits of Counterparty.

23. ENVIRONMENTAL MATIERS: To the best of Counterparty's knowledge, Counterparty believes that the Premises shall be delivered free of environmental contamination. Tesla shall have no liability for any environmental contamination unless caused by Tesla, its agents, employees or contractors. During the Term, Counterparty is responsible for remediating any pre-existing contamination or any contamination not caused by Tesla, its agents, contractors or employees, except for disposal of any contaminated materials that may result from the construction of the project and limited to any excavated contaminated soil that will be properly disposed of. The cost to Tesla of the disposition of any such excavated contaminated soil will be capped at five thousand dollars ($5,000). Tesla shall have no liability for diminution in value of the Property as it relates to environmental contamination.

24. NOTICES: All notices or demands shall be in writing and shall be deemed duly served or given only if delivered by prepaid (i) U.S. Mail, certified or registered, return receipt requested, or (ii) reputable, overnight courier service (such as UPS or FedEx) to the addresses of the respective parties as specified in Section 1 above. Counterparty and Tesla may change their respective addresses for notices by giving notice of such new address in accordance with the provisions of this paragraph.

25. BROKERS: Counterparty and Tesla represent to each other that each has dealt with no broker and each hereby agrees to indemnify and hold the other harmless from any claims for any such commissions or fees.

26. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and shall inure to the benefit of Counterparty and Tesla and their respective successors and assigns.

27. GOVERNING LAW: This Agreement shall be governed by the laws of the State where the Premises are located.

28. TIME: Time is of the essence in this Agreement.

29. COUNTERPARTS: This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together will constitute one agreement. Signed copies transmitted electronically in PDF or similar format shall be treated as originals.

30. TERMINATION: Counterparty shall retain the right to terminate the Agreement by providing one hundred and eighty (180) days written notice. If Counterparty exercises its right to early

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ITEM NO. 12.
termination, then Counterparty shall pay Tesla an early termination fee on or before such early termination date equal to the unamortized costs to construct the Charging Station (including the costs of Trade Fixtures, Infrastructure and construction), calculated as of the early termination date based on straight-line depreciation over a ten (10) year period. {Signature page follaws.]
Page6
Tesla Motors, Inc. ©2015 (v. 20150923~2)

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ITEM NO. 12.

IN WITNESS WHEREOF, the parties hereto have each caused an authorized representative to execute this A!,>reement as of the Effective Date first written above.

Town of Los Gatos by: ' (\
l\i) . ; 'fc1J, .-
'<r/ 1.1 ;tll ,/V 1 1
Laurel PrtJetti, Town Manager
Approved as to Form:
~~mney AGR: Tesla Charging Station
TESLA:

Tesla, Inc.
a Delaware corporation
By: See Attached
Name:

Title: __________ _
8

Page 465 ends

ITEM NO. 12.

IN WITNESS WHEREOF, the parties hereto have each caused an authorized representative to execute this Agreement as of the Effective Date first written above.

COUNTERPARTY:
a ______________ _
By: See Attached
Name: ________________ ___
Title:-------------------
AGR: Tesla Charging Station
Tesla Motors, Inc. ©2015 (v. 20150923-2)
TESLA:

Tesla, Inc.
a Delaware corporation
By:

Name:

Title:

Page 7 ends

vP, ~t\JGl.q~ ~A.UX O.V'-t~
o Qttz.A n ot-J.

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ITEM NO. 12.

EXHIBIT A
Premises and Property Depiction and Address
Premises and Property Depiction: Northside Parking Lot- Town of Los Gatos, CA • I ~~
/

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ITEM NO. 12.

PROPOSED TESLA CHARGING STATIONS

LOCATION MAP

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ITEM NO. 12.

EXHIBIT B
Tesla Improvements
Tesla shall install the Charging Station on the Premises pursuant to the terms of this Exhibit B. Tesla installation shall include the installation of the infrastructure for the Charging Station, which may include power supply, utility connections, concrete pads, conduit and wiring (the "Infrastructure").

The Charging Station will also include certain trade fixtures as determined by Tesla, which may include, without limitation, the charger cabinets ("Charger Cabinets"). charge posts, switchgear, signage,, and an energy storage system (the "Trade Fixtures"). The type of charge posts installed at the Charging Station shall be Level3 DC fast chargers (capable of delivering up to 73 kW of power).

The Trade Fixtures to be installed as of the Commencement Date will include the following:
• Six (6) Chargers Cabinets
• Twelve (12) charge posts (Level 3 DC fast chargers)
• Two (2) Level2 posts (Four (4) parking spaces in total) for all EV use (at applicable rates) • Switchgear and meter panel
• Signage
The installation of the Infrastructure and the Trade Fixtures is collectively referred to as the "Tesla Improvements." Tesla will not perform the Tesla Improvements until the plans and specifications, including exact locations, have been approved and permitted by Counterparty, which approval ismay be by e-mail communication and shall not be unreasonably withheld, conditioned or delayed. All Tesla Improvements shall at all times comply with applicable laws, codes and ordinances and Infrastructure and Trade Fixtures shall be installed, maintained and replaced at Tesla's sole cost.

Signage

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ITEM NO. 12.

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

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/19/2026
ITEM NO: 13
DATE: May 19, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Execute an Agreement with Kaiser Permanente On-the-Job to Continue to Provide Pre-Employment Medical Screening Services Retroactive to August 1, 2025, with Automatic Renewals Every 12 Months
RECOMMENDATION: Authorize the Town Manager to execute an agreement with Kaiser Permanente On-the-Job to continue to provide pre-employment medical screening services retroactive to August 1, 2025, with automatic annual renewals every 12 months.

FISCAL IMPACT:

The cost for these services are included in the FY 2025-2026 Operating Budget and FY 2026-27 Proposed Budget.

STRATEGIC PRIORITY:

The Council action supports the Town’s strategic priority of prudent financial management.

BACKGROUND:

The Town of Los Gatos requires specialized pre-employment medical screenings for prospective police officers, public safety dispatchers, maintenance workers, and other selected classifications as part of the background investigation and hiring process. These exams ensure compliance with the Peace Officer Standards and Training (POST) and verify that candidates can meet the physical demands of their roles.

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ITEM NO. 13.

PAGE 2 OF 3
SUBJECT: Authorize the Town Manager to Execute an Agreement With Kaiser Permanente On-the-Job Job to Continue to Provide Pre-Employment Medical Screening Services
DATE: May 19, 2026
In addition to pre-employment medical screenings, the Town requires Department of Transportation (DOT) medical examinations and recertifications for employees in safetysensitive positions who operate commercial vehicles. These evaluations are conducted in accordance with Federal Motor Carrier Safety Administration (FMCSA) regulations to ensure employees are medically qualified to safely perform their job duties. Kaiser Permanente Onthe-Job has the capability to provide DOT-compliant physical examinations, including initial certifications and periodic recertifications, supporting the Town’s ongoing compliance with federal safety requirements and helping to maintain a safe and reliable workforce.

DISCUSSION:

Kaiser Permanente On-the-Job (KPOTJ) has been the primary provider of pre-employment medical screening services since July 31, 2024. This agreement expired on July 31, 2025, and due to KPOTJ staff turnover, the renewal process was delayed, resulting in a lapse of the contract. Despite the expired agreement, KPOTJ has continued to provide uninterrupted, preemployment medical screenings for new hires, which has helped the Town avoid hiring delays.

To comply with procurement policies and formalize the vendor relationship, retroactive approval is required for services rendered from August 1, 2025, to the present. To avoid future lapses in service, staff recommend transitioning this contract into an automatic annual renewal agreement.

This approach is beneficial because it ensures there is no disruption in service that could delay hiring, and it reduces the administrative burden associated with formal renewals for routine and high-performing services. The Town retains the right to terminate the contract at any time, for any reason, with 30 days' notice, ensuring the Town is not locked into the agreement should service quality decline, budgetary or other needs change.

CONCLUSION:

Staff recommends authorizing the Town Manager to execute an agreement with Kaiser Permanente On-the-Job to continue providing pre-employment medical screenings and DOT medical exam services retroactive to August 1, 2025, with automatic annual renewals every 12 months.

COORDINATION:

This report has been coordinated with the Town Attorney.

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ITEM NO. 13.

PAGE 3 OF 3
SUBJECT: Authorize the Town Manager to Execute an Agreement With Kaiser Permanente On-the-Job Job to Continue to Provide Pre-Employment Medical Screening Services
DATE: May 19, 2026
ENVIRONMENTAL ASSESSMENT:

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

Attachment:

1. The Kaiser Permanente On-The-Job Draft Agreement

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ITEM NO. 13.

Page 1 of 9 ends

ATTACHMENT 1
I. Company Name: TOWN OF LOS GATOS Date: February 2, 2026 Corporate
Address: 110 E Main St
City,
State: Los Gatos, CA Zip: 95030
Primary
Contact: Vilcia Rodriguez Email:
vrodriguez@losgatos
ca.gov Phone: (408) 399-5743 Fax: (408) 395-8640
Alternate
Contact: Mary Blekh Email:
mblekh@losgatosca.
gov Phone: (408) 399-5739 Fax: (408) 395-8640
Billing
Address: 110 E Main St
City,
State: Los Gatos, CA Zip: 95030
Billing
Contact: Mary Blekh Email:
mblekh@losgatosca.
gov Phone: (408) 399-5739 Fax: (408) 395-8640
Re: Letter of Agreement for Occupational Health and Safety Services between The Permanente Medical Group, Inc. and TOWN OF LOS GATOS
Dear Chris Constantin,
Through a series of meetings, TOWN OF LOS GATOS and The Permanente Medical Group, Inc. (“TPMG”) have reached an agreement regarding TPMG’s provision of occupational health and safety services to TOWN OF LOS GATOS. The purpose of this letter is to set forth that agreement.

TPMG, through its Occupational Health Centers collectively known as Kaiser Permanente On-theJob, will provide occupational health and safety services, as requested by TOWN OF LOS GATOS.

This letter does not obligate TOWN OF LOS GATOS to utilize TPMG services, but it does set forth applicable prices and conditions of such services when elected by TOWN OF LOS GATOS.

What TPMG Will Do For TOWN OF LOS GATOS
TPMG physicians and other practitioners will provide services for TOWN OF LOS GATOS’s current or prospective employees, contractors, and volunteers (hereinafter “workers/applicants”) as requested by TOWN OF LOS GATOS. The prices for such services are listed in Schedule A, attached to this letter of agreement. TPMG will complete appropriate documentation of those services. If further tests or other services are required, TPMG will notify TOWN OF LOS GATOS.

TPMG shall submit a monthly invoice to TOWN OF LOS GATOS for services rendered during the previous month.

TOWN OF LOS GATOS’s Obligations
If and when TOWN OF LOS GATOS determines to send prospective workers/applicants to TPMG for services, TOWN OF LOS GATOS will specify the services to be performed by TPMG. TOWN OF LOS GATOS agrees to pay TPMG for services rendered within 30 days after receipt of the invoice.

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ITEM NO. 13.

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ATTACHMENT 1
General Provisions of This Letter of Agreement
This letter of agreement is effective as of 8/1/2025 and will be in force for the period of 8/1/2025 through 7/31/2026 and for consecutive 12-month periods thereafter. All terms of this letter of agreement, including payment obligations and liability provisions, are effective as of 8/1/2025, regardless of the date the letter of agreement was executed by the Parties. This letter of agreement can be terminated by either party subject to written communication of that termination to the other party; such termination shall be effective 30 days from the notice of the terminating party. This letter of agreement replaces any previous agreements between TPMG and TOWN OF LOS GATOS with respect to the subject matter hereof and will control the relationship between TPMG and TOWN OF LOS GATOS until it is terminated, amended or replaced.

TPMG reviews its prices for occupational health and safety services on a yearly basis. If TPMG determines to change its prices, it shall notify TOWN OF LOS GATOS of any price changes at least 45 days prior to the effective date of the change.

With respect to professional services under this agreement, TPMG shall indemnify, hold harmless, release and defend TOWN OF LOS GATOS, its officers, directors, agents, volunteers, and employees from and against any and all actions, claims, damages, disabilities, liabilities and expenses, including reasonable attorney's and expert fees and witness and litigation costs that may be asserted by any person or entity, including TPMG, its officers, agents, employees and/or subcontractors, arising out of negligent acts or willful misconduct of TPMG in connection with this agreement, but excluding: (1) liabilities due to the sole negligence or willful misconduct of TOWN OF LOS GATOS, its officers, agents, employees or volunteers and (2) any liability arising as a result of an employment-related dispute (including but not limited to a lawsuit by a worker/applicant of TOWN OF LOS GATOS for employment or other discrimination based on results of TPMG services, a lawsuit by a worker/applicant of TOWN OF LOS GATOS alleging breach of an employment or other statute or regulation, etc.).

INSURANCE

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

2. General Liability:
a. The Town, its elected and appointed officials, employees, and agents are to be covered as insured as respects: liability arising out of activities performed by or on behalf of the Consultant; products and completed operations of Consultant, premises owned or used by the Consultant.

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ITEM NO. 13.

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ATTACHMENT 1
b. The Consultant's insurance coverage shall be primary insurance as respects the Town, its elected and appointed officials, employees, and agents. Any insurance or self-insurances maintained by the Town, its officers, officials, employees or agents shall be excess of the Consultant's insurance and shall not contribute with it.
c. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or agents. d. Consultant's insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer's liability.

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

4. Workers’ Compensation. In addition to these policies, Consultant shall have and maintain Workers' Compensation insurance as required by California law and shall provide evidence of such policy to the Town before beginning services under this Agreement. Further, Consultant shall ensure that all subcontractors employed by Consultant provide the required Workers' Compensation insurance for their respective employees. As required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than one million dollars ($1,000,000) per accident for bodily injury or disease.

5. Self Insurance. Such insurance may include alternative risk management programs, including self-insurance or a combination of self-insurance and insurance, provided that such alternative risk management programs provide protection equivalent to that specified under this Agreement.

Miscellaneous
This Agreement will be governed in accordance with the laws of the State of California without reference to conflict of laws principles. This Agreement may be executed in separate counterparts, none of which need contain the signatures of both Parties, and each of which, when so executed, shall be deemed an original and all together constitute and be one of the same instrument. The Parties agree that an electronic signature or a scanned or electronically reproduced copy or image of this Agreement bearing the signatures of the Parties will be deemed an original and will represent competent evidence of the execution, terms and existence of this Agreement notwithstanding the failure or inability to produce an original, executed counterpart of this Agreement, and without the requirement that the unavailability of such original executed counterpart of this Agreement first be proven. Any determination that any provision of this Agreement or any application thereof is invalid, illegal, or unenforceable shall not affect the validity, legality, and enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provision of this Agreement. This Agreement contains the complete understanding among the Parties with respect to the subject matter of this Agreement and supersedes all prior or contemporaneous oral or written representations, communications, proposals or agreements not expressly included. All Exhibits to this Agreement are incorporated into this Agreement by this reference. No changes, amendments, cancellation, or modification to this Agreement will be effective unless signed by duly authorized representatives of both Parties.

Please indicate your agreement with the terms of this Agreement by signing the enclosed copy of this Agreement and returning it to Juliana P. Fisher via Docusign.

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ITEM NO. 13.

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ATTACHMENT 1
The Permanente Medical Group, Inc.

Medical Director,
Occupational Health and
Safety Services, KPOJNCAL:

Amanpreet Dhillon, MD
Signature:

Date:

TOWN OF LOS GATOS
Company
Representative:

Chris Constantin
Signature:

Date:

Title: Town Manager
LOA Created By: Juliana P. Fisher
LOA Creation Date: January 28, 2026

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ITEM NO. 13.

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ATTACHMENT 1
Schedule A

OCCUPATIONAL HEALTH AND SAFETY SERVICES TO BE PROVIDED TO TOWN OF LOS GATOS
Services will be provided to TOWN OF LOS GATOS as follows:

Billing Code Description of Services Cost of Services
PREPLACEMENT EXAM (PP1)
300388 Preplacement Physical Exam $65.00
As Employer Requested:
86580 PPD, 1 step, placement and reading $20.00
As Clinically Indicated:
71045 Chest X-Ray, 1 view $55.00
71046 Chest X-Ray, 2 views $75.00
PREPLACEMENT EXAM (PP2)
300388 Preplacement Physical Exam $65.00
300422 PPD, 2 step, 2 placements and readings $30.00
As Clinically Indicated:
86580 PPD, 1 step, placement and reading $20.00
36415 Venipuncture $15.00
86735 Titer: Mumps Antibody Screen $35.00
86762 Titer: Rubella Antibody Screen (German Measles) $35.00 86765 Titer: Rubeola Antibody Screen (Measles) $35.00
86787 Titer: Varicella (Varicella or Chickenpox) Antibody Screen $35.00 86706 Titer: Hepatitis B Surface Antibody (HBsAb) $35.00 86708 Titer: Hepatitis A Antibody, Total $40.00
90707 Vaccine: Measles Mumps Rubella (MMR), may need
series of 2 injections
$103.00/injection
90716 Vaccine: Varivax (Varicella or Chickenpox), may need series of 2 injections
$152.00/injection
90715 Vaccine: Tdap $63.00
90658 Vaccine: Influenza (when seasonally available) $20.00 90746 Vaccine: Hepatitis B, may need series of 3 injections $130.00/injection 90632 Vaccine: Hepatitis A, may need series of 2 injections $114.00/injection 90636 Vaccine: Twinrix (Hep B and Hep A combo), series of 3 injections
$191.00/injection
71045 Chest X-Ray, 1 view $55.00
71046 Chest X-Ray, 2 views $75.00

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ITEM NO. 13.

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ATTACHMENT 1
300408 Physician consultation, each 15 minutes $64.00/15 mins PREPLACEMENT EXAM (PP3)
300388 Preplacement Physical Exam $65.00
As Employer Requested:
300415 Respirator Med Clearance/OSHA $35.00
300410 Respirator Fit Test, qualitative $41.00
92552 Audiogram, screening $54.00
As Clinically Indicated:
36415 Venipuncture $15.00
86706 Titer: Hepatitis B Surface Antibody (HBsAb) $35.00 90746 Vaccine: Hepatitis B, may need series of 3 injections $130.00/injection 90715 Vaccine: Tdap $63.00
94010 Spirometry $60.00
93000 EKG, resting $50.00
93015 Cardiac Stress Test with Treadmill $230.00
71046 Chest X-Ray, 2 views $75.00
300408 Physician consultation, each 15 minutes $64.00/15 mins

POLICE/SHERIFF PREPLACEMENT EXAM (POSTPP)
300399 POST Physical Exam $127.00
92552 Audiogram, screening $54.00
94010 Spirometry $60.00
93000 EKG, resting $50.00
93015 Cardiac Stress Test with Treadmill $230.00
86580 PPD, 1 step, placement and reading
–OR–
$20.00
86480 QuantiFERON $145.00
80053 Chem Comprehensive Panel $41.00
85025 CBC with automated differential $20.00
86706 Titer: Hepatitis B Surface Antibody (HBsAb) $35.00 86704 Titer: Hepatitis B Core Antibody (HBcAb) $31.00
86803 Titer: Hepatitis C Antibody Screen $56.00
86708 Titer: Hepatitis A Antibody, Total $40.00
36415 Venipuncture $15.00
As Clinically Indicated:
90746 Vaccine: Hepatitis B, may need series of 3 injections $130.00/injection 90632 Vaccine: Hepatitis A, may need series of 2 injections $114.00/injection

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ITEM NO. 13.

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ATTACHMENT 1
90636 Vaccine: Twinrix (Hep B and Hep A combo), series of 3 injections
$191.00/injection
90707 Vaccine: Measles Mumps Rubella (MMR), may need
series of 2 injections
$103.00/injection
90716 Vaccine: Varivax (Varicella or Chickenpox), may need series of 2 injections
$152.00/injection
90715 Vaccine: Tdap $63.00
90658 Vaccine: Influenza (when seasonally available) $20.00 86735 Titer: Mumps Antibody Screen $35.00
86762 Titer: Rubella Antibody Screen (German Measles) $35.00 86765 Titer: Rubeola Antibody Screen (Measles) $35.00
86787 Titer: Varicella (Varicella or Chickenpox) Antibody Screen $35.00 81001 Urinalysis with microscopy $16.00
71045 Chest X-Ray, 1 view $55.00
71046 Chest X-Ray, 2 views $75.00
75571 Cardiac calcium scoring CT scan $265.00
300408 Physician Consultation, each 15 minutes $64.00/15 mins

PUBLIC SAFETY DISPATCHER PREPLACEMENT EXAM (DISPATCH)
300388 Preplacement Physical Exam $65.00
92552 Audiogram, screening $54.00
As Employer Requested:
86580 PPD, 1 step, placement and reading
–OR–
$20.00
86480 QuantiFERON $145.00
As Clinically Indicated:
36415 Venipuncture $15.00
71045 Chest X-Ray, 1 view $55.00
71046 Chest X-Ray, 2 views $75.00

RESPIRATOR BASELINE / PERIODIC (RESP)
300415 Review of OSHA Respirator Questionnaire by MD/NP/RN $35.00 As Employer Requested:
300410 Respirator Fit Test, qualitative $41.00
As Clinically Indicated:
300391 Respirator Clearance Physical Exam $64.00
94010 Spirometry $60.00
71046 Chest X-Ray (2 views) $75.00
93000 EKG, resting $50.00

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ITEM NO. 13.

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ATTACHMENT 1
93015 Cardiac Stress Test with Treadmill $230.00
300408 Physician Consultation, each 15 minutes $64.00/15 mins

AUDIOGRAM (AUDIO)
92552 Audiogram, screening $54.00
As Clinically Indicated:
300408 Physician Consultation, each 15 minutes $64.00/15 mins

DMV/DOT EXAM (DMV/DOT)
300390 DMV/DOT Physical Exam $115.00
As Clinically Indicated:
92552 Audiogram, screening $54.00

VACCINATION ONLY (VAX)
300406 History/Review of Tests/Brief Screen - No Physical Exam $42.00 As Clinically Indicated:
90746 Vaccine: Hepatitis B, may need series of 3 injections $130.00/injection 90632 Vaccine: Hepatitis A, may need series of 2 injections $114.00/injection 90636 Vaccine: Twinrix (Hep B and Hep A combo), series of 3 injections
$191.00/injection
90707 Vaccine: Measles Mumps Rubella (MMR), may need
series of 2 injections
$103.00/injection
90716 Vaccine: Varivax (Varicella or Chickenpox), may need series of 2 injections
$152.00/injection
90715 Vaccine: Tdap $63.00
90658 Vaccine: Influenza (when seasonally available) $20.00

LABORATORY ONLY (LAB)
300406 History/Review of Tests/Brief Screen - No Physical Exam $42.00 36415 Venipuncture $15.00
As Clinically Indicated:
86706 Titer: Hepatitis B Surface Antibody (HBsAb) $35.00 86708 Titer: Hepatitis A Antibody, Total $40.00
86735 Titer: Mumps Antibody Screen $35.00
86762 Titer: Rubella Antibody Screen (German Measles) $35.00 86765 Titer: Rubeola Antibody Screen (Measles) $35.00
86787 Titer: Varicella (Varicella or Chickenpox) Antibody Screen $35.00

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ITEM NO. 13.

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ATTACHMENT 1

TB CLEARANCE PPD/QUANTIFERON (PPD/TB CLEARANCE)
86580 PPD, 1 step, 1 placement and reading
-OR-
$20.00
86480 QuantiFERON $145.00
As Clinically Indicated:
36415 Venipuncture $15.00
300422 PPD, 2 step, 2 placements and readings $30.00
71045 Chest X-Ray, 1 view $55.00
71046 Chest X-Ray, 2 views $75.00
99211 Brief encounter with non-MD Provider (PPD-Review of Symptoms Form)
$25.00
If TOWN OF LOS GATOS is requesting a health screening/physical examination of a job applicant/employee, TOWN OF LOS GATOS will provide to TPMG detailed information concerning the physical requirements for performing the job at issue. This information should include a written job description, including physical and mental requirements and environmental conditions. The examination and any medical conclusions will be based on the information furnished by TOWN OF LOS GATOS and the physician’s general understanding of the requirements of the jobs of similar nature. TPMG conducts such examinations with TOWN OF LOS GATOS’s assurances that the examination and TOWN OF LOS GATOS’s medical inquiries are job-related and consistent with the business needs of TOWN OF LOS GATOS, and otherwise comply with all applicable legal obligations.

Based on its health screening/physical examination of a job applicant/employee, TPMG will advise TOWN OF LOS GATOS of the following: a) the applicant/employee’s physical limitations, if any, and the specific job tasks that cannot be performed and/or environmental conditions, if any, that are related to any risk to health and safety, and b) changes that may be made to permit the job tasks to be performed and/or eliminate/reduce the risk. TPMG will make no determination of whether job tasks are essential to the position in question. Any changes that are recommended are advisory only, based on the physician’s general understanding of the job and environment in question, and are not intended to supplant the right of TOWN OF LOS GATOS to determine what modifications are available and reasonable.

To the extent that other conditions are identified, TPMG will also: a) notify the worker/applicant of any medical condition, identified during the limited medical evaluation that TOWN OF LOS GATOS requested, that TPMG believes requires further attention, and recommend that the employee/applicant seek care from his or her personal provider and b) upon authorization of the employee/applicant, TPMG will inform the worker/applicant’s personal medical provider by transmitting copies of the medical records created during the visit.

TPMG will maintain a medical record for each individual that will contain records of employer requested services in addition to past, present and future services requested by the employee/applicant.

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ITEM NO. 13.

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/19/2026
ITEM NO: 14
DATE: May 19, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Execute an Agreement with The Advantage Group to Continue to Administer Retiree Health Contribution Reimbursements Retroactive to February 1, 2026, with Automatic Renewals Every 12 Months
RECOMMENDATION: Authorize the Town Manager to execute an agreement with The Advantage Group to continue to administer retiree health contribution reimbursements retroactive to February 1, 2026, with automatic renewals every 12 months.

FISCAL IMPACT:

The annual cost based on the estimated number of Town retirees is $11,644. The annual amount is included in the FY 2025-2026 Operating Budget and the FY 2026-27 Proposed Budget.

STRATEGIC PRIORITY:

The Council action supports the Town’s strategic priority of prudent financial management.

BACKGROUND:

The Town has a Retiree Health Reimbursement Program, also commonly referred to as a Health Reimbursement Account (HRA). The Town’s HRA provides retiree health reimbursement to eligible employees hired before varying dates in 2018, including employees provided with a final offer and confirmation of employment in accordance with those varying dates, and who retire from the Town after completing five (5) years of continuous service with the Town. The monthly reimbursement amount is set annually at the cost of Kaiser CalPERS Region 1 rates,

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ITEM NO. 14.

PAGE 2 OF 3
SUBJECT: Authorize the Town Manager to Execute an Agreement With The Advantage Group to Continue to Administer Retiree Health Contribution Reimbursement Retroactive to February 1, 2026, with Automatic Renewals Every 12 Months DATE: May 19, 2026
which are adjusted annually to reflect changes in the Kaiser Region 1 premiums, and agreed upon reimbursement formulas in accordance with agreements with the Town labor unions.

Medical premiums are initially deducted from the retiree's monthly pension check. The Town uses a third-party vendor to reimburse retirees for the Town’s contribution.

On February 1, 2016, the Town entered into a month-to-month agreement with The Advantage Group (TAG) to manage the administrative work of calculating, validating, and reimbursing these premiums via paper check or direct deposit and directly resolving issues with retirees related to lost checks and questions regarding reimbursement amounts, misdirected funds, and reimbursement process.

On February 1, 2021, the Town renewed the agreement for five years. Since 2016, vendor expenditures have total approximately $75,000. The Town has been satisfied with the services provided by TAG.

DISCUSSION:

The Town has maintained a successful, ongoing relationship with TAG since 2016. The previous contract expired on January 31, 2026. Due to an administrative oversight, the contract was not renewed prior to its expiration. However, TAG continued to provide uninterrupted services, and the Town continued to receive the benefit of these services.

To comply with procurement policies and formalize the vendor relationship, retroactive approval is required for services rendered from February 1, 2026, to the present. To avoid future lapses in service, which could negatively impact Town retirees, staff recommends transitioning this contract into an automatic annual renewal agreement.

This approach is beneficial because it ensures there is no disruption in service for retirees, reduces the administrative burden associated with formal renewals for routine, highperforming services, and secures the current pricing structure for the upcoming 12-month period. The Town retains the right to terminate the contract at any time, for any reason, with 30 days’ notice, ensuring the Town is not locked into the agreement should service quality decline, budgetary or other needs change.

The cost for the agreement is based on a monthly plan administration fee of $50 and a monthly cost of $6 per retired participant receiving monthly reimbursements. Currently, there are 152 retirees receiving monthly reimbursements. There is also a $100 annual fee for required IRA non-discrimination testing that ensures employer-sponsored benefit plans comply with IRS regulations. Fees are guaranteed for a period of three (3) years from the effective date of this agreement. Following the initial three (3) year period, TAG reserves the right to adjust fees,

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ITEM NO. 14.

PAGE 3 OF 3
SUBJECT: Authorize the Town Manager to Execute an Agreement With The Advantage Group to Continue to Administer Retiree Health Contribution Reimbursement Retroactive to February 1, 2026, with Automatic Renewals Every 12 Months DATE: May 19, 2026
provided that the Town is given no less than six (6) months’ notice before any such changes take effect.

CONCLUSION:

Staff recommends authorizing the Town Manager to execute an agreement with TAG retroactive to February 1, 2026, with automatic contract renewals every 12 months to continue providing monthly retiree health contribution reimbursements.

TAG has provided reliable, accurate, and customer friendly service to Town retirees as well as supplemental support for Town staff resources.

COORDINATION:

This memo has been coordinated with the Town Attorney.

ENVIRONMENTAL ASSESSMENT:

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

Attachments:

1. The Advantage Group Administration Draft Agreement

2. The Advantage Group Administration Previous Agreements

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ITEM NO. 14.

Administration Agreement

PARTIES TO THIS AGREEMENT
The Employer, TOWN OF LOS GATOS, has established certain employee benefit programs appropriately offered under IRS Code Section105 Health Reimbursement Arrangements, Section 125 Cafeteria Plans and/or IRS Code Section 132 Qualified Transportation Plans. The employer has requested The Advantage Group(TAG), a Third Party Administrator (TPA), to act as its agent for the payment of certain benefits and to furnish certain administrative services for Flexible Spending Account (FSA), Commuter Plans and/or Health Reimbursement Arrangement (HRA), collectively referred to as the “Program”). TPA shall provide such services as agent of the employer and agent of the program.

SECTION ONE

SCOPE OF UNDERTAKING
Employer has sole and final authority to control and manage the operation of the program. TPA is an independent contractor with respect to the services being performed hereunder. TPA does not assume any responsibility for the general policy design of the program, the adequacy of it’s funding, or any act or omission or breach of duty by employer. TPA generally provides reimbursement services only and does not assume any financial risk or obligation with respect to claims for benefits payable by employer under the program.

THIRD PARTY ADMINISTRATOR (TPA) RESPONSIBILITIES:

1. Benefits Payment – TPA shall, as agent of employer, operate under the express terms of this agreement and the program. TPA shall initially determine if persons covered by the program are entitled to benefits under the program and shall pay program benefits in its usual and customary manner to participants. TPA shall have no duty or obligation with respect to claims incurred prior to the effective date and/or program administration services arising prior to the effective date. Employer agrees that TPA has no responsibility or obligation with respect to prior reimbursement requests or prior administration.

2. Claims Adjudication & Appeal – TPA shall process all claims in an appropriate manner and adjudicate all claims. TPA shall refer to employer for final determination in the event of an appealed claim after rejection by TPA.

3. Record keeping – TPA shall maintain, for the duration of this agreement, the usual and customary books, records, and documents that relate to the program and its participants. These books, records, and documents, including electronic records, are the property of employer, and employer has the right of continuing access to them during normal business hours at TPA’s offices with reasonable prior notice. If this agreement terminates, TPA may deliver, or at employer’s request, will deliver all such books, records, and documents to employer subject to TPA’s right to retain copies of any records it deems appropriate. Employer shall be required to pay TPA reasonable charges for transportation or duplication of such records.

4. Reporting – TPA shall make available to employer a master report showing the payment history and status of participant claims and the amounts and transactions of participant accounts. Upon request, TPA shall also make such information available to participants showing their individual account history.

5. Plan Documents – If employer requests, TPA shall furnish to employer plan documents to be reviewed by employer for creation of customized documentation for the program, including board resolutions, summary plan descriptions (SPDs), plan documents, and plan amendments (if any).

6. Employee Enrollment Assistance – TPA will provide employee brochures and enrollment forms for alleligible employees. Enrollment packets including claim forms and instructions for filing are provided for all enrolled participants in a reimbursement plan.

7. Participant Assistance - Participants have daytime access to customer service support through a toll-free telephone number. Employee account balance information is included on claim reimbursement check stubs and provided 60 days prior to plan year-end or at request of Participant.

ATTACHMENT 1 Page 485
ITEM NO. 14.

8. Annual Plan Compliance - TPA will perform appropriate discrimination testing at the beginning of a plan year and two additional times during the year at employer’s request. A completed IRS Form 5500 will be provided, as needed, along with information for W-2 Wage and Tax Statements that are based on information provided by employer and from account-specific data relating to the employer’s plan. However, TPA shall not be responsible for the accuracy of any information provided by the employer in preparation of the annual Form 5500 nor shall TPA be responsible for determining the level of compliance required by the employer’s plan.

9. Unpaid Benefit Funds - In compliance with employer’s plan document and any applicable state or federal law requirements, any unclaimed fund amounts remaining unpaid more than 160 days after the close of the plan year and any applicable grace and appeal periods in which the claim is incurred, are forfeited and returned to the employer, minus any necessary fees and expenses that are owing to TPA, pursuant to this Agreement

10. Compliance with Privacy Rules Under HIPAA – TPA recognizes that it is considered a “Business Associate” with regard to employer’s Health FSA for purposes of the privacy rules under HIPAA. TPA may use and disclose any PHI on behalf of employer for the proper management and administration of TPA. Notwithstanding the foregoing, such use and disclosure of PHI may not violate the privacy rules of HIPAA. At termination of this Agreement, TPA agrees to return or destroy all PHI received by TPA under this Agreement, or, to the extent thatit is not feasible, to continue to limit the further uses and disclosures of that information as provided by this section.

EMPLOYER RESPONSIBILITIES:

1. General Compliance - Employer has the sole authority and responsibility for the program and its operation.

Employer gives TPA the authority to act on behalf of employer in connection with the program. All final determinations as to a participant’s entitlement to program benefits are to be made by employer. Employer is considered the plan administrator and named fiduciary of the program benefits for purposes of ERISA. The employer remains responsible for all plan activities, including general compliance with ERISA, HIPAA, the Internal Revenue Code, COBRA, and other applicable laws or regulations.

2. Funding of Benefits – Funding for any payment on behalf of the participants under the program is the sole responsibility of employer, and employer agrees to accept liability for, and provide sufficient funds to satisfy all payments to Participants under the program including claims for reimbursement for covered expenses, where such expenses are incurred and the claim is presented for payment during the term of this agreement.

3. Information to TPA - Employer shall furnish the information requested by TPA as determined necessary to perform TPA’s functions.

4. Eligibility Changes - Employer shall notify TPA of changes in employee eligibility (e.g., addition, termination, change in family status, etc.) in the prescribed manner via fax or email. Late notification of plan eligibility may result in an erroneous payment to an employee. In this event, the risk of loss will be the burden of the employer.

5. Discriminatory Plans – Employer shall initiate any corrective action required in the event the plan(s) becomes discriminatory.

6. Ownership of Account Assets - All amounts deposited by the employer for the plan remain the employer’s assets and shall remain available for the employer’s general use or removal. TPA, or its representatives, shall only be responsible for administering the employer’s funds in accordance with the terms of this agreement.

Amounts deposited by employer shall only be disbursed by TPA, if it is an allowable expense as determined by the employer or as otherwise required by a court of appropriate jurisdiction.

7. Employee Fraud - In the event of employee fraud against the plan, it is the employer’s responsibility to make the plan whole and pursue appropriate remedies from the employee.

8. HIPAA Compliance – Employer is required to provide to TPA notice of its privacy practices and authorizations of a participant to use or disclose Protected Health Information (PHI). TPA is considered a “Business Associate” under HIPAA with regard to employer’s Health FSA and is agreeing to numerous technical requirements for “Business Associates” under HIPAA. Employer shall notify TPA of any restriction to the use or disclosure of PHI that employer has agreed to in accordance with the privacy rules under HIPAA.

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ITEM NO. 14.

SECTION TWO

EFFECTIVE DATE AND TERM
The effective date of this Agreement is February 1, 2026. The initial term shall be a twelve (12) month period commencing on the effective date. Thereafter, this agreement will renew automatically for successive periods of twelve (12) months unless services are terminated in accordance with the provisions set forth in this agreement.

TERM OF CONTRACT

1. Automatic - This Agreement shall automatically terminate as of the earliest of the following events: (a) the effective date of any legislation which makes the program and/or this agreement illegal; (b) the date employer becomes insolvent, bankrupt, or subject to liquidation, receivership, or conservatorship; (c) the termination date of the program, subject to any agreement between employer and TPA regarding payment of benefits after the program is terminated.

2. Optional – This agreement may be terminated as of the earliest of the following: (a) by TPA upon the failure of employer to pay any charges within 15 business days after they are due and payable; (b) by TPA upon failure of employer to perform its obligations in accordance with this Agreement; (c) by employer upon the failure of TPA to perform its obligations in accordance with this Agreement; (d) by either employer or TPA, at any time by giving the other party thirty (30) days written notice; (e) Any other date that is mutually agreed upon in writing between TPA and employer provided at least thirty (30) days notice of intent to terminate and otherwise not renew this agreement is given by either party.

3. Limited Continuation After Termination – If the program is terminated, employer and TPA may mutually agree in writing that this Agreement shall continue for the purpose of payment of any Program benefit, expense, or claims incurred prior to the date of program termination. In addition, if this agreement is terminated while the program continues in effect, employer and TPA may mutually agree in writing that this agreement shall continue for the purpose of payment of any claims for which request for reimbursements have been received by TPA before the date of such termination. If this agreement is continued in accordance with this subsection (3), employer shall pay the monthly service charges incurred during the period that this agreement is so continued and a final termination fee equal to the final month’s service charge and any applicable fees incurred for services rendered by TPA to satisfy plan closure.

4. Survival of Certain Provisions – Termination of this agreement shall not terminate the rights or obligations of either party arising out of a period prior to such termination. The indemnity, confidentiality, and privacy provisions of this agreement shall survive its termination.

CONTRACT AS INCLUDING ENTIRE AGREEMENT
This Agreement, and it’s attachments, constitutes the entire agreement between TAG and employer and supersedes all prior agreements and representations between the parties. No modification or amendment shall be valid unless agreed to in writing by both parties. This agreement shall be construed, enforced, and governed by the laws of the State of California to the extent they are not inconsistent with or preempted by ERISA, the Internal Revenue Code, or any other applicable federal law.

FEE SCHEDULE
Employer agrees to pay TAG for administration services pursuant to this agreement according to the fee schedule specified herein; a plan administration fee of $50.00 per month, which includes the preparation of required plan documents, summary plan descriptions (SPD) and plan compliance services; IRS required non-discrimination testing services are provided for $100.00 per year, additional testing requests made by plan sponsor may incur additional fees; participant account processing fees are $6.00 per month, per active account; participant SmartCard debit cards are $0.00 per participant, per month, and are subject to the terms and conditions of the members card services agreement; the TAG Benefit Center mobile app and online account services are included; applicable carryover and/or grace period administration is $6.00 per participant, per year; runout period administration is included. EDI connection services from approved providers are $0.00 per feed. Fees are guaranteed for a period of three (3) years from the effective date of this agreement. Following the initial three (3) year period, TAG reserves the right to adjust fees, provided that Employer is given no less than six (6) months’ notice before any such changes take effect. Additional administration functions or account services performed by TAG outside of the ordinary scope of services outlined in this agreement may incur additional fees; a fee schedule for such services will be provided in advance of services being performed.

Page 487 ends

ITEM NO. 14.

THIRD PARTY ARRANGEMENTS
Plan sponsor may designate a third party agency to assume payment of monthly administration fees on behalf of the plan sponsor. All payment terms made between plan sponsor and designated third party are made exclusive to this agreement. In the event of non-payment by plan sponsor’s designated third party, any current and past due administration fees are the responsibility of the plan sponsor.

This Agreement, including the Attachments, is accepted and agreed to by the parties as of this date. This contract made between The Advantage Group (TAG) and TOWN OF LOS GATOS, whose business address is herein referred to as “Employer":

Employer: The Advantage Group:

Name: Name: ChaseSkousen
Title: Title: Operations Manager
Company: TOWN OF LOS GATOS Company: The Advantage Group Signature: Signature:

Date: Date: 0 4 - 24 - 26

Page 488 ends

ITEM NO. 14.

ADMINISTRATIVE SERVICES AGREEMENT

ATTACHMENT B
Compliance With Privacy Rules Under HIPAA
Capitalized terms used in this section shall have the same meaning as defined in 45 C.F.R.§§ 160.103 and 164.501. Upon HIPAA’s applicability date with regard to employer’s plan, the following provision will apply:

General Responsibilities as a “Business Associate”:

1. TPA agrees not to use or further disclose PHI other than as permitted or required by this Agreement or as required by law.

2. TPA agrees to use appropriate safeguards to prevent use or disclosure of PHI other than as provided for by this Agreement.

3. TPA agrees to mitigate, to the extent practicable, any harmful effect that is known to TPA of a use or disclosure of PHI by TPA in violation of the terms of this Agreement.

4. TPA agrees to report to Employer any use or disclosure of PHI not provided for by this Agreement.

5. TPA agrees to ensure that any agent, including a subcontractor, to whom it provides PHI received from, or created or received by TPA on behalf of Employer agrees to the same restrictions and conditions that apply throughout this Agreement to TPA with respect to such information.

6. TPA agrees to provide access, at the request of Employer, and in the time and manner designated by Employer, to PHI in a Designated Record Set, to Employer or, as directed by Employer, to an Individual in order to meet the requirements of 45 C.F.R.§164.524.

7. TPA agrees to make any amendment(s) to PHI in a Designated Record Set that Employer directs or agrees to pursuant to 45 C.F.R.§164.526 at the request of Employer or an Individual, and in the time and manner designated by Employer.

8. TPA agrees to make internal practices, books, and records relating to the use and disclosure of PHI received from, or created or received by TPA on behalf of Employer available to Employer, or at the request of Employer, to the Secretary, in the time and manner designated by Employer or the Secretary, for purposes of the Secretary determining Employer’s compliance with the privacy rules under HIPAA.

9. TPA agrees to document such disclosures of PHI and information related to such disclosures as would be required for Employer to respond to a request by an Individual for an accounting of disclosures of PHI in accordance with 45 C.F.R.§164.528.

10. TPA agrees to provide to Employer or an Individual, in the time and manner designated by Employer, information collected in accordance with Section 3.11 (a)(9) to permit Employer to respond to a request by an Individual for an accounting of disclosures of PHI in accordance with 45 C.F.R.§164.528.

11. In the event that TPA conducts Standard Transactions with or on behalf of the Health FSA/ HRA, TPA will comply with the requirements in 45 C.F.R Part 162. TPA will require any subcontractor or agent involved with the conduct of such Standard Transactions to comply with each applicable requirement of 45 C.F.R. Part 162.

12. TPA will comply with any applicable provisions of the HIPAA Security Standard Requirements (as set forth in 45 C.F.R. Parts 160, 162, and 164) as of the applicable regulatory compliance date and will ensure that any agents or subcontractors that assist TPA agree in writing to comply with the HIPAA Security Standard Requirements. If the Security Standard Requirements require the Health FSA/ HRA to include additional specific contractual provisions in this Agreement, the TPA agrees to renegotiate this provision in good faith prior to such compliance date.

Permitted Uses and Disclosure by TPA. TPA may use and disclose any PHI on behalf of, or to provide services to Employer, as specified in this agreement; for the proper management and administration of TPA; to carry out the legal responsibilities of TPA; and to provide data aggregation services to Employer. Notwithstanding the foregoing, such use and disclosure of PHI may not violate the privacy rules of HIPAA.

Amendment to Comply with Privacy Rules. TPA agrees to amend this Section as is necessary from time to time to comply with the requirements of the privacy rules under HIPAA.

Termination of Agreement. TPA agrees to termination of the Agreement by Employer if the terms of this Section are violated. In addition, at termination of this Agreement, TPA agrees to return or destroy all PHI received by TPA under this Agreement or, to the extent that it is not feasible, to continue to limit the further uses and disclosures of that information as provided by this Section.

Page 489 ends

ITEM NO. 14.

CLERK DEPARTMEN�l
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ADMINISTRATIVE sERv1cEs AGREEMEfllfC Tl.:IE.AovmiAGEGRour RESO· _______ _
The Employer, Town of Los Gatos, has established certain employee benefit programs appropriately offered under IRS Code Section 105 Health Reimbursement Arrangements, Section 125 Cafeteria Plans and/or IRS Code Section 132 Qualified Transportation Plans. The Employer has requested The Advantage Group (TAG), a Third Party Administrator (TPA), to act as its agent for the payment of certain benefits and to furnish certain administrative services for Flexible Spending Account (FSA), Commuter Plans and/or Health Reimbursement Arrangement (HRA), collectively referred to as the "Program"). TPA shall provide such services as agent of the Employer and agent of the Program.

EFFECTIVE DATE AND TERM:

The effective date of this Agreement is February 1, 2016. The initial term shall be the initial twelve month period commencing on the Effective Date. Thereafter, this agreement will renew automatically for successive periods of 12 months unless this agreement is terminated in accordance with the provisions set forth in this agreement. Fees and service elections may be adjusted at each renewal.

SCOPE OF UNDERTAKING:

Employer has sole and final authority to control and manage the operation of the Program. TPA is an independent contractor with respect to the services being performed hereunder. TPA does not assume any responsibility for the general policy design of the Program, the adequacy of its funding, or any act or omission or breach of duty by Employer.

TPA generally provides reimbursement services only and does not assume any financial risk or obligation with respect to claims for benefits payable by Employer under the Program.

THIRD PARTY ADMINISTRATOR (TPA) RESPONSIBILITIES:

1. Benefits Payment- TPA shall, as agent of Employer, operate under the express terms of this Agreement and the Program. TPA shall initially determine if persons covered by the Program are entitled to benefits under the Program and shall pay Program benefits in its usual and customary manner to Participants. TPA shall have no duty or obligation with respect to claims incurred prior to the Effective Date and/or Program administration services arising prior to the Effective Date. Employer agrees that TPA has no responsibility or obligation with respect to Prior Reimbursement Requests and/or Prior Administration.

2. Claims Adjudication & Appeal- TPA shall process all claims in an appropriate manner and adjudicate all claims. TPA shall refer to Employer for final determination in the event of a claim that is appealed after rejection by TPA.

3. Recordkeeping - TPA shall maintain, for the duration of this Agreement, the usual and customary books, records, and documents that relate to the Program and its Participants. These books, records, and documents, including electronic records, are the property of Employer, and Employer has the right of continuing access to them during normal business hours at TPA's offices with reasonable prior notice. If this Agreement terminates, TPA may deliver, or at Employer's request, will deliver all such books, records, and documents to Employer subject to TPA's right to retain copies of any records it deems appropriate. Employer shall be required to pay TPA reasonable charges for transportation or duplication of such records.

4. Reporting- TPA shall make available to Employer a master report showing the payment history and status of Participant claims and the amounts and transactions of Participant accounts. Upon request, TPA shall also make such information available to Participants showing their individual account history.

5. Plan Documents - If employer requests, TPA shall furnish to Employer Plan Documents to be reviewed by Employer for creation of customized documentation for the Program, including board resolutions, summary plan descriptions (SPDs), plan documents, and plan amendments (if any).

6. Employee Enrollment Assistance - TPA will provide employee brochures and enrollment forms for all eligible employees. Enrollment packets including claim forms and instructions for filing are provided for all enrolled participants in a reimbursement plan

ATTACHMENT 2

Page 490 ends

ITEM NO. 14.

8. Annual Plan Compliance - TPA will perform appropriate discrimination testing at the beginning of a plan year and two additional times during the year at Employer's request. A completed IRS Form 5500 will be provided, as needed, along with information for W-2 Wage and Tax Statements that are based on information provided by Employer and from account-specific data relating to the Employer's Plan. However, TPA shall not be responsible for the accuracy of any information provided by the Employer in preparation of the annual Form 5500 nor shall TPA be responsible for determining the level of compliance required by the Employer's Plan.

9. Unpaid Benefit Funds - In compliance with Employer's Plan Document and any applicable state or federal law requirements, any unclaimed fund amounts remaining unpaid more than 160 days after the close of the plan year and any applicable grace and appeal periods in which the claim is incurred, are forfeited and returned to the Employer, minus any necessary fees and expenses that are owing to TPA, pursuant to this Agreement

10. Compliance with Privacy Rules Under HIPAA - TPA recognizes that it is considered a "Business Associate" with regard to Employer's Health FSA for purposes of the privacy rules under HIPAA. TPA may use and disclose any PHI on behalf of Employer for the proper management and administration of TPA. Notwithstanding the foregoing, such use and disclosure of PHI may not violate the privacy rules of HIPAA. At termination of this Agreement, TPA agrees to return or destroy all PHI received by TPA under this Agreement, or, to the extent that it is not feasible, to continue to limit the further uses and disclosures of that information as provided by this Section.

EMPLOYER RESPONSIBILITIES:

1. General Compliance- Employer has the sole authority and responsibility for the Program and its operation.

Employer gives TPA the authority to act on behalf of Employer in connection with the Program. All final determinations as to a Participant's entitlement to Program benefits are to be made by Employer. Employer is considered the Plan Administrator and Named Fiduciary of the Program benefits for purposes of ERISA. The Employer remains responsible for all Plan activities, including general compliance with ERISA, HIPAA, the Internal Revenue Code, COBRA, and other applicable laws or regulations.

2. Funding of Benefits - Funding for any payment on behalf of the Participants under the Program is the sole responsibility of Employer, and Employer agrees to accept liability for, and provide sufficient funds to satisfy all payments to Participants under the Program including claims for reimbursement for covered expenses, where such expenses are incurred and the claim is presented for payment during the term of this agreement.

3. Information to TPA - Employer shall furnish the information requested by TPA as determined necessary to perform TPA's functions. Eligibility Changes - Employer shall notify TPA of changes in employee eligibility (e.g., addition, termination, change in family status, etc.) in the prescribed manner via fax or email. Late notification of Plan eligibility may result in an erroneous payment to an employee. In this event, the risk of loss will be the burden of the Employer.

4. Discriminatory Plans- Employer shall initiate any corrective action required in the event the plan(s) becomes discriminatory.

5. Ownership of Account Assets - All amounts deposited by the Employer for the Plan remain the Employer's assets and shall remain available for the employer's general use or removal. TPA, or its representatives, shall only be responsible for administering the Employer's funds in accordance with the terms of this agreement.

Amounts deposited by Employer shall only be disbursed by TPA, if it is an allowable expense as determined by the Employer or as otherwise required by a Court of appropriate jurisdiction.

6. Employee Fraud - In the event of Employee fraud against the Plan, it is the Employer's responsibility to make the Plan whole and pursue appropriate remedies from the Employee.

7. HIPPA Compliance- Employer is required to provide to TPA notice of its privacy practices and authorizations of a Participant to use or disclose Protected Health Information (PHI). TPA is considered a "Business Associate" under HIPAA with regard to Employer's Health FSA and is agreeing to numerous technical requirements for "Business Associates" under HIPAA. Employer shall notify TPA of any restriction to the use or disclosure of PHI that Employer has agreed to in accordance with the privacy rules under HIPAA.

FEES FOR SERVICES:

In consideration for TAG's performance of services under this Agreement, Employer shall agree to be responsible for payment of the fees set forth in Attachment A of this Agreement - Service and Fee Schedule.

Administrative Services Agreement Page2

Page 491 ends

ITEM NO. 14.

TERMINATION:

1. Automatic- This Agreement shall automatically terminate as of the earliest of the following events: (a) the effective date of any legislation which makes the Program and/or this Agreement illegal; (b} the date Employer becomes insolvent, bankrupt or subject to liquidation, receivership, or conservatorship; (c) the termination date of the Program, subject to any agreement between Employer and TPA regarding payment of benefits after the Program is terminated.

2. Optional- This Agreement may be terminated as of the earliest of the following: (a} by TPA upon the failure of Employer to pay any charges within 15 business days after they are due and payable; (b) by TPA upon failure of Employer to perform its obligations in accordance with this Agreement; (c} by Employer upon the failure of TPA to perform its obligations in accordance with this Agreement; (d) by either Employer or TPA, as of the end of the term of this Agreement by giving the other party thirty (30) days written notice; (e) Any other date that is mutually agreed upon in writing between TPA and Employer provided at least thirty (30) days notice of intent to terminate and otherwise not renew this Agreement is given by either party.

3. Limited Continuation After Termination - If the Program is terminated, Employer and TPA may mutually agree in writing that this Agreement shall continue for the purpose of payment of any Program benefit, expense, or claims incurred prior to the date of Program termination. In addition, if this Agreement is terminated while the Program continues in effect Employer and TPA may mutually agree in writing that this Agreement shall continue for the purpose of payment of any claims for which request for reimbursements have been received by TPA before the date of such termination. If this Agreement is continued in accordance with this subsection (3), Employer shall pay the monthly service charges incurred during the period that this Agreement is so continued and a final termination fee equal to the final month's service charge.

4. Survival of Certain Provisions- Termination of this Agreement shall not terminate the rights or obligations of either party arjsing out of a period prior to such termination. The indemnity, confidentiality, and privacy provisions of this Agreement shall survive its termination.

MISCELLANEOUS:

This Agreement, (including the Attachments), constitutes the entire Agreement between TAG and Employer and supersedes all prior agreements and representations between the parties. No modification or amendment shall be valid unless agreed to in writing by both parties. This Agreement shall be construed, enforced, and governed by the laws of the State of California to the extent they are not inconsistent with or preempted by ERISA, the Internal Revenue Code, or any other applicable federal law.

This Agreement, including the Attachments, is accepted and agreed to by the parties as of this date.

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Administrative Services Agreement
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Page 3 ends

Page 492 ends

ITEM NO. 14.

ADMINISTRATIVE SERVICES AGREEMENT

ATTACHMENT A

SERVICE AND FEE SCHEDULE
Plan Sponsor's Name & Address:

Town of Los Gatos
11 0 East Main Street
Los Gatos, CA 95032-6999
Administrative Services Start Date: February 1, 2016
Contact Name/ Telephone #: Vilcia Rodriguez
(408) 399-5718
Fee Schedule:

Monthly Administration Fee: includes plan documents, summary plan description, all non-discimination testing and all annual compliance services.

Monthly Processing Fee: includes changes to employee eligibility, employee account management, all plan reimbursements and participant assistance.

Initial Plan Setup Fee:

Annual Plan Renewal Fee:

Non-Discrimination Testing:

FSA I Commuter I HRA Debit Cards:

Open Enrollment Kits: electronic communication kits are no charge

2.5 Month Grace Period or Carryover:

Onsite Representation:

Custom Reporting Requests:

Administrative Services Agreement
$ 50.00
$ 6.00
$ 0.00
$100.00
$NIA
$NIA
$ Included
$NIA
$ 500.00 per day
$100.00 per request
Page4

Page 493 ends

ITEM NO. 14.

ADMINISTRATIVE SERVICES AGREEMENT

ATTACHMENT B
Compliance With Privacy Rules Under HIPPA
Capitalized terms used in this Section shall have the same meaning as defined in 45 C.F.R.§§ 160.103 and 164.501.

Upon HIPAA's applicabiltty date w
t
th regard to Employer's Health FSA/ HRA, the following provision will apply:

General Responsibilities as a "Business Associate."

1. TPA agrees not to use or further disclose PHI other than as permitted or required by this Agreement or as required by law.

2. TPA agrees to use appropriate safeguards to prevent use or disclosure of PHI other than as provided for by this Agreement.

3. TPA agrees to mitigate, to the extent practicable, any harmful effect that is known to TPA of a use or disclosure of PHI by TPA in violation of the terms of this Agreement.

4. TPA agrees to report to Employer any use or disclosure of PHI not provided for by this Agreement.

11. In the event that TPA conducts Standard Transactions with or on behalf of the Health FSA/ HRA, TPA will comply with the requirements in 45 C.F.R Part 162 by October 2003. TPA will require any subcontractor or agent involved with the conduct of such Standard Transactions to comply with each applicable requirement of 45 C.F.R. Part 162.

Permitted Uses and Disclosure by TPA TPA may use and disclose any PHI on behalf of, or to provide services to Employer, as specified in this agreement; for the proper management and administration of TPA; to carry out the legal responsibilities of TPA; and to provide data aggregation seNices to Employer. Nothwithstanding the foregoing, such use and disclosure of PHI may not violate the privacy rules of HIPAA.

Amendment to Comply with Privacy Rules. TPA agrees to amend this Section as is necessary from time to time to comply with the requirements of the privacy rules under HIPAA.

Administrative SeNices Agreement Page 5

Page 494 ends

ITEM NO. 14.

Confidential Information: This information has been provided exclusively for authorized personnel of plan sponsor, consulting agency or associate partner firm. Any unauthorized distribution or reproduction of this material is strictly prohibited.

Administration Agreement

PARTIES TO THIS AGREEMENT
The Employer, Town of Los Gatos, has established certain employee benefit programs appropriately offered under IRS Code Section105 Health Reimbursement Arrangements, Section 125 Cafeteria Plans and/or IRS Code Section 132 Qualified Transportation Plans. The employer has requested The Advantage Group(TAG), a Third Party Administrator (TPA), to act as its agent for the payment of certain benefits and to furnish certain administrative services for Flexible Spending Account (FSA), Commuter Plans and/or Health Reimbursement Arrangement (HRA), collectively referred to as the “Program”). TPA shall provide such services as agent of the employer and agent of the program.

SECTION ONE

THIRD PARTY ADMINISTRATOR (TPA) RESPONSIBILITIES:

Page 495 ends

ITEM NO. 14.

EMPLOYER RESPONSIBILITIES:

1. General Compliance - Employer has the sole authority and responsibility for the program and its operation.

3. Information to TPA - Employer shall furnish the information requested by TPA as determined necessary to perform TPA’s functions.

4. Discriminatory Plans – Employer shall initiate any corrective action required in the event the plan(s) becomes discriminatory.

5. Ownership of Account Assets - All amounts deposited by the employer for the plan remain the employer’s assets and shall remain available for the employer’s general use or removal. TPA, or its representatives, shall only be responsible for administering the employer’s funds in accordance with the terms of this agreement.

Amounts deposited by employer shall only be disbursed by TPA, if it is an allowable expense as determined by the employer or as otherwise required by a court of appropriate jurisdiction.

6. Employee Fraud - In the event of employee fraud against the plan, it is the employer’s responsibility to make the plan whole and pursue appropriate remedies from the employee.

7. HIPAA Compliance – Employer is required to provide to TPA notice of its privacy practices and authorizations of a participant to use or disclose Protected Health Information (PHI). TPA is considered a “Business Associate” under HIPAA with regard to employer’s Health FSA and is agreeing to numerous technical requirements for “Business Associates” under HIPAA. Employer shall notify TPA of any restriction to the use or disclosure of PHI that employer has agreed to in accordance with the privacy rules under HIPAA.

Page 496 ends

ITEM NO. 14.

SECTION TWO

EFFECTIVE DATE AND TERM
The effective date of this Agreement is February 1, 2021. The initial term shall be a twelve (12) month period commencing on the effective date. Thereafter, this agreement will renew automatically for successive periods of twelve (12) months unless services are terminated in accordance with the provisions set forth in this agreement.

TERM OF CONTRACT

2. Optional – This agreement may be terminated as of the earliest of the following: (a) by TPA upon the failure of employer to pay any charges within 15 business days after they are due and payable; (b) by TPA upon failure of employer to perform its obligations in accordance with this Agreement; (c) by employer upon the failure of TPA to perform its obligations in accordance with this Agreement; (d) by either employer or TPA, as of the end of the term of this agreement, by giving the other party thirty (30) days written notice; (e) Any other date that is mutually agreed upon in writing between TPA and employer provided at least thirty (30) days notice of intent to terminate and otherwise not renew this agreement is given by either party.

Additional testing requests made by plan sponsor may incur additional fees; participant account processing fees are $6.00 per month, per active account; participant SmartCard debit cards are $0.00 per participant, per month, and are subject to the terms and conditions of the members card services agreement; the TAG Benefit Center mobile app and online account services are included; applicable carryover and/or grace period administration is $6.00 per participant, per year; runout period administration is included. EDI connection services from approved providers are $0.00 per feed. Fees are subject to periodic adjustments; a notice of any applicable fee adjustments will be provided no less than thirty (30) days prior to effective date. Additional administration functions or account services performed by TAG outside of the ordinary scope of services outlined in this agreement may incur additional fees; a fee schedule for such services will be provided in advance of services being performed.

Page 497 ends

ITEM NO. 14.

This Agreement, including the Attachments, is accepted and agreed to by the parties as of this date. This contract made between The Advantage Group (TAG) and Town of Los Gatos, whose business address is herein referred to as “Employer":

Employer:

Name:

Title:

Company: Town of Los Gatos
The Advantage Group:

Name: ChaseSkousen
Title: Controller
Company: The Advantage Group
Signature: Signature:

Date: Date: November 18, 2021
$33529('$672)250

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Page 498 ends

ITEM NO. 14.

ADMINISTRATIVE SERVICES AGREEMENT

General Responsibilities as a “Business Associate”:

1. TPA agrees not to use or further disclose PHI other than as permitted or required by this Agreement or as required by law.

2. TPA agrees to use appropriate safeguards to prevent use or disclosure of PHI other than as provided for by this Agreement.

3. TPA agrees to mitigate, to the extent practicable, any harmful effect that is known to TPA of a use or disclosure of PHI by TPA in violation of the terms of this Agreement.

4. TPA agrees to report to Employer any use or disclosure of PHI not provided for by this Agreement.

Amendment to Comply with Privacy Rules. TPA agrees to amend this Section as is necessary from time to time to comply with the requirements of the privacy rules under HIPAA.

Page 499 ends

ITEM NO. 14.

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/19/2025
ITEM NO: 15
DATE: May 19, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Accept the Report Regarding the Status of the Town's Vacancies, Recruitments, and Retention Efforts Pursuant to Assembly Bill (AB) 2561 RECOMMENDATION: Accept the report regarding the status of the Town's vacancies, recruitments, and retention efforts pursuant to Assembly Bill (AB) 2561.

FISCAL IMPACT:

There is no fiscal impact associated with this staff report.

STRATEGIC PRIORITY:

This item does not directly address a Strategic Priority; however, it aligns with the Core Goal of Good Governance by ensuring responsive, accountable, and collaborative government.

BACKGROUND:

This report is submitted in response to Assembly Bill 2561 (AB 2561), which took effect on January 1, 2025. The bill added Government Code section 3502.3 to the Meyers-Milias-Brown Act, the law that governs collective bargaining and labor relations at the local government level, and requires local government agencies to comply with the following:

1. Hold a public hearing before the governing body at least once per fiscal year and present the status of vacancies, recruitment and retention efforts, and identify any necessary changes to policies, procedures, and recruitment activities that may resolve obstacles in the hiring process; if the governing body will be adopting an annual budget

Page 500 ends

ITEM NO. 15.

PAGE 2 OF 5
SUBJECT: Accept the report regarding the status of the Town's vacancies, recruitments, and retention efforts pursuant to Assembly Bill (AB) 2561
DATE: May 19, 2026
during the fiscal year, the presentation shall be made before the adoption of the final budget;

2. Hold a public hearing and present additional information regarding vacancies, if the vacancy rate in a bargaining unit is at least 20%; and

3. Allow recognized employee organizations for bargaining units to make presentations at the hearing.

The Town has contracts with three labor unions, including the Police Officers’ Association (POA), Los Gatos Town Employees’ Association (TEA), and the American Federation of State, County and Municipal Employees (AFSCME).

Staff presented the first vacancy report to Council on April 15, 2025.

DISCUSSION:

This staff report contains the necessary information to comply with AB 2561.

Status of Town’s Vacancies
As of March 31, 2026, the vacancy rate in the Town of Los Gatos is 6.73%. This is an improvement compared to last year's rate of 7.82% during the same period. This figure is based on the full-time equivalent positions as reported in the Fiscal Year 2025-2026 Operating Budget, with the addition of the full-time Emergency Manager position that was added in February 2025.

The Town’s bargaining units continue to have rates below 20%, lower than those of other local agencies, in part due to the Town’s concerted and comprehensive recruitment efforts, including targeted advertising on job boards and social media, a referral program, and in-person recruitment at career fairs.

Table 1 is a comparison of the current Fiscal Year’s vacancy rate to the last five years, measured as of June 30th of each year, unless otherwise noted. The Town’s vacancy rate remained steady over the past fiscal years, which was a result of directed recruiting efforts through online government job boards, social media, and staff networking. Currently, there are no changes to policies, procedures, or recruitment activities that have led to obstacles in the hiring process or that are necessary to resolve obstacles.

It is important to note that, in general, employees leave the Town for positive transitions like retirement or external promotions. Through exit interviews with the Town Manager and

Page 501 ends

ITEM NO. 15.

PAGE 3 OF 5
SUBJECT: Accept the report regarding the status of the Town's vacancies, recruitments, and retention efforts pursuant to Assembly Bill (AB) 2561
DATE: May 19, 2026
Human Resources offboarding meetings, we actively gather their feedback to continually improve our workplace.

Table 1: Historical Vacancy Rates
Fiscal Year
(July 1 – June 30)
Benefitted Budgeted Full
Time Equivalents (FTE)
Vacancy Rate
FY 2020-2021 150 11%
FY 2021-2022 150.25 12%
FY 2022-2023 153.25 9%
FY 2023-2024 152.50 7%
FY 2024-2025 153.50 7.47 %
FY 2025-2026* 153.50 6.73 %
* Data as of March 2026
Vacancies by Employee Group
Police Officers’ Association (POA): Last year, the vacancy rate in the POA union group was

19.44%. This figure has now decreased to 11.76%, falling below the 20% threshold that would require staff to provide additional information to the Town Council. Currently, there are three vacancies, but there are also three candidates undergoing the background check process.

Town Employees’ Association (TEA): There are five vacancies in the TEA union group, representing a 9.36% vacancy rate, which is below the 20% threshold to provide any additional information to the Town Council.

American Federation of State, County and Municipal Employees (AFSCME): There is one vacancy in the AFSCME union group, representing a 3.17% vacancy rate, which is below the 20% threshold to provide any additional information to the Town Council.

Recruitment and Retention Efforts
Staff continues to monitor vacancies and implement creative solutions to address staffing challenges.

1. Process Improvements for Police Officer Recruitments: For sworn positions, we have transitioned from using oral boards for officer trainees, which require a significant amount of time and effort to organize, to conducting phone interviews with subject matter experts (SME). This change allows us to vet candidates more quickly and move them efficiently into the background check and academy phases, outperforming other agencies. More specifically, the time required for the interview process has been significantly reduced in several ways:

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ITEM NO. 15.

PAGE 4 OF 5
SUBJECT: Accept the report regarding the status of the Town's vacancies, recruitments, and retention efforts pursuant to Assembly Bill (AB) 2561
DATE: May 19, 2026
a. Phone interview dates are now consistently scheduled for the second Friday of each month. A police officer conducts these interviews using oral board questions to minimize delays between interviews.
b. Instead of requiring two to three officers to conduct in-person interviews for four to eight hours per interview day, we now only need one officer to carry out a structured 20-minute phone interview that lasts between three to five hours per interview day, saving staff resources and budget.
c. We have streamlined the Personal History Questionnaire (PHQ) and scheduling processes, allowing candidates more time to ensure their availability for interviews.

2. Recruitment Timeline & Improved Candidate Experience: Staff continues to work on reducing recruitment timelines and improving candidate experience through frequent and timely communication. In FY 2026-2027, Human Resources will implement surveys to collect input from new hires and hiring managers about their recruitment experience and ways to improve the process.

3. Review of Job Classifications: Before opening a recruitment, Human Resources reviews the job classifications with the hiring manager to ensure accuracy in job duties and requirements, and works with union representatives, if applicable, on proposed changes. Aligning job classifications with industry standards and the Town's immediate and long-term needs helps recruit the right talent. This strategy has contributed to increasing the number of qualified applications per recruitment. As part of the FY 2026- 2027 budget process, staff is requesting budget approval to hire a consultant to conduct a classification study of specific job classifications to validate job duties and responsibilities and alignment with organizational needs.

4. Advertising on Job Boards and Social Media: The Town continues to advertise career opportunities through paid and free professional and industry-specific job boards (e.g., American Public Works Association, American Planning Association, and Municipal Management Association of Northern California) and leverages the Town's social media channels (e.g., LinkedIn, Facebook, and Instagram) for broader visibility.

5. New Hire and Employee Referral Program: In September 2022, the Town established a new Hire and Employee Referral Program. The program offers bonuses to new lateral officers as well as referral bonuses to Town employees in the following amounts:
 $3,000 for an entry-level or police trainee. These candidates have no prior law enforcement experience and are or will be attending a police academy.

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ITEM NO. 15.

PAGE 5 OF 5
SUBJECT: Accept the report regarding the status of the Town's vacancies, recruitments, and retention efforts pursuant to Assembly Bill (AB) 2561
DATE: May 19, 2026
 $4,000 for pre-service. These individuals have completed a police academy but are not yet sworn in and must complete field officer training (FTO).  $5,000 for lateral police officers. Lateral officers are experienced, trained, and certified sworn peace officers.

To date, the Town has hired 11 qualified lateral police officers and issued $156,000 in new hire and referral bonuses. Bonuses are paid upon the new hire successfully achieving each of the milestones set by the program.

6. Competitive Wages and Benefits: In Fiscal Year 2024-2025, the Town negotiated successor memoranda of understandings with its three bargaining units. Each of these contracts has a term of three years, which provides labor stability for the Town workforce, and each contains significant wage increases for employees to remain competitive in the market.

In the 2026 annual employee satisfaction survey, 98% of respondents rated their satisfaction with Town-sponsored benefits (e.g., medical, dental, vision, life insurance) as neutral to very satisfied. The Town continues to allow departments to retain flexibility in work schedules through alternative work schedules and hybrid telework arrangements.

CONCLUSION:

As outlined in this report, the Town is actively reducing the current vacancy rate through focused recruitment and retention strategies. It is recommended that the Town Council accept this report.

COORDINATION:

This report has been coordinated with the Town Attorney.

ENVIRONMENTAL ASSESSMENT:

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

Page 504 ends

ITEM NO. 15.

PREPARED BY: Kristina Alfaro
Administrative Services Director
Reviewed by: Town Manager, Assistant 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: 5/19/2026
ITEM NO: 16
DATE: May 13, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
RECOMMENDATION: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030- 31; Provide direction and recommendations on any changes for the final budget; Provide direction on Finance Commission
recommendations; and Approve the FY 2026-27 List of Potential Donations Consistent with the Town’s Donation Policy.

FISCAL IMPACT:

Town staff recommends establishing an Operating Budget of $75,660,382 and a Capital Improvement Program Budget of $6,454,919 for FY 2026-27. For a total operating and capital budget of $82,115,301. Estimated revenues for the operating and capital budgets are $78,246,172 and $3,460,439, respectively, for a total of $81,706,611. This results in an estimated use of fund balance of $408,690 across both budgets.

STRATEGIC PRIORITY:

This initiative supports the Town’s 2025 to 2027 Strategic Priority to “ensure prudent financial 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.

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ITEM NO. 16.

PAGE 2 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
EXECUTIVE SUMMARY:

The Proposed Fiscal Year (FY) 2026-27 Operating and Capital Budgets reflect the Town’s continued commitment to prudent financial management, long-term fiscal sustainability, and maintaining core service levels while addressing ongoing economic and operational challenges.

The proposed budget includes total operating and capital expenditures of $82.1 million and projected revenues of $81.7 million, resulting in an estimated use of fund balance of approximately $408,690.

The FY 2026-27 General Fund budget totals approximately $65.0 million in expenditures and $64.8 million in revenues. Compared to the prior year estimate, General Fund expenditures are increasing primarily due to rising personnel-related costs, including CalPERS contributions, healthcare costs, and internal service charges associated with technology and vehicle replacement programs. At the same time, several revenue categories, including property tax, sales tax, licenses and permits, continue to perform stronger than originally forecasted and have improved the Town’s long-range financial outlook.

The Proposed Budget incorporates several significant structural improvements intended to enhance long-term fiscal sustainability and improve budget transparency. These include the implementation of a new operating expenditure base budget methodology utilizing historical expenditure trends, integration of five-year forecasts directly into financial summaries, expanded revenue and expenditure forecasting detail, and enhanced financial trend analysis.

Collectively, these efforts resulted in approximately $1.3 million in ongoing expenditure reductions compared to prior budget methodologies.

While the Town’s financial forecast has improved considerably since the FY 2025-26 Mid-Year Budget Update, the Town continues to face several long-term challenges. These include rising pension and retiree medical obligations, uncertainty surrounding economically sensitive revenues, risks associated with potential economic slowdown or recessionary conditions, and more than $300 million in unfunded infrastructure needs. Additionally, the FY 2026-27 Proposed Budget does not include the customary transfer to the General Fund Appropriated Reserve (GFAR), limiting the Town’s ability to build reserves for future liabilities and capital obligations.

The Finance Commission reviewed the Proposed Budget over multiple public meetings and provided recommendations for Council consideration. Staff is recommending several modifications to the Proposed Budget consistent with portions of the Commission’s recommendations, including adjustments to Vehicle and Equipment Fund charges, increased funding for priority facility projects, and additional appropriations for contractual obligations within the Parks and Public Works Department. These recommended changes would improve the General Fund position and result in a projected minor surplus of approximately $6,503 for FY 2026-27.

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ITEM NO. 16.

PAGE 3 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
The Proposed FY 2026-27 Budget reflects a balanced and measured approach that prioritizes fiscal responsibility, operational stability, transparency, and long-term planning while maintaining the Town’s commitment to delivering essential services to the community.

BACKGROUND:

On April 20, 2026, the Proposed FY 2026-27 Operating and Capital Budgets were posted to the Town’s website, and the links (listed below) were provided to the Town Council and Finance Commission. Per Measure A, the Finance Commission received the Proposed Budgets 21 business days before May 19, 2026, the first meeting at which the Town Council will consider the Proposed Budgets.

Proposed Operating Budget:
https://www.losgatosca.gov/3067/Proposed-FY-2026-27-Operating-Budget CIP Budget:
https://www.losgatosca.gov/3068/Proposed-FY-2026-27-Capital-Budget Pursuant to Municipal Code Section 2.50.225(a)(6), the Finance Commission shall review proposed expenditures and advise the Town Council whether such expenditures meet the Town Council’s objective for the Measure G tax. In the FY 2026-27, all Measure G proceeds are allocated to support public safety operations. This approach supports the following Measure G objectives: (a) maintaining and enhancing neighborhood police patrols and local crime prevention programs, and (d) maintaining the Town’s long-term financial stability.

At its special meeting on April 27, 2026, the Finance Commission received a comprehensive review of the operating and capital budget.

The May 4, 2026, Finance Commission staff report included the additional information that was requested at the April 27th meeting. Additionally, prior to and at the May 4th Commission meeting, more information was requested from staff. Any information request received before the meeting was provided as a desk item to the commission.

The May 11, 2026, Finance Commission reviewed staff compiled recommendations received from various Commission members and discussed and finalized those recommendations, included as Attachment 1 for Council’s consideration along with staff recommendations.

DISCUSSION:

The FY 2026-27 Proposed Budget reflects a decrease in revenues and an increase in expenditures compared to the previous year's estimated budget. Total expenditures for all funds are proposed at $82.1 million, a $2.2 million or 2.8% increase from the previous year's

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ITEM NO. 16.

PAGE 4 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
estimated budget. Total revenues for all funds are anticipated to be $81.7 million, a $4.4 million or 5% decrease from last year's estimated budget. Changes are discussed later in this report under the expenditure and revenue sections.

General Fund expenditures are recommended at $65.0 million, which is an increase of $3.3 million or 5.3%, from the previous year's estimated budget. General Fund revenues are estimated at $64.8 million, which is a $1.7 million or 2.5% decrease from the previous year's estimated budget.

The following graph shows the Town's budget by fund type.

Chart 1 FY 2026-27 Proposed Budget by Fund Type
General Fund
The General Fund is the Town's primary operating fund. It accounts for basic services such as public safety, public works, community development, park maintenance, code enforcement, and the administrative services required to support them. The fund generates revenue from the Town's discretionary funding sources (e.g., sales tax, property tax, and transient occupancy tax).

As a rule, General Fund resources are used only to fund operations that do not have other dedicated (restricted) funding sources. Operations that rely heavily upon non-General Fund resources.

General Fund Expenditures
As illustrated in the following chart, most of the General Fund supports costs for Law Enforcement, Parks and Public Works, and Administrative Services.

General
$64,974,407
79%
Special
Revenue
475,541
0%
Internal Service
6,272,388
8%
Capital
6,454,919
8%
Successor
Agency
3,938,045
5%

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ITEM NO. 16.

PAGE 5 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Chart 2 General Fund FY 2026-27 Proposed Budget – Expenditures $64,974,407
FY 2026-27 expenditures are estimated at $65.0 million, which represents a $3.3 million or 5.3% increase compared to the FY 2025-26 Estimate Budget from the previous year. This increase is discussed further below.

Police
Department
26,015,219
40%
Parks & Public
Works
12,465,495
19%
NonDepartmental
5,403,361
8%
Community
Development
6,003,115
9%
Administrative
Services
7,407,705
12%
Library services
4,198,492
7%
Town Council
204,135
0%
Town Attorney
1,219,001
2%
Town Debt
Payments
2,057,884
3%

Page 509 ends

ITEM NO. 16.

PAGE 6 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Category FY 2025-26
Estimate
FY 2026-27
Proposed $ Variance % Variance
Salary and Benefits $23,405,209 $24,176,333 $771,124 3.3% Overtime 1,384,604 1,457,000 $72,396 5.2%
CalPERS Benefits 8,790,965 10,410,788 $1,619,823 18.4%
All Other Benefits 5,349,271 6,294,481 $945,210 17.7%
OPEB Pay as you go 2,173,606 2,193,606 $20,000 0.9%
Total Salaries and Benefits $41,103,655 $44,532,208 $3,428,553 8.3% Operating Expenditures 11,569,730 10,273,206 ($1,296,524) -11.2% Grants & Awards 339,820 321,950 ($17,870) -5.3%
Utilities 723,546 817,018 $93,472 12.9%
Internal Service Charges 4,741,938 6,567,141 $1,825,203 38.5% Debt Service 2,057,884 2,057,884 $0 0.0%
Pension Pre-Funding 690,000 390,000 ($300,000) -43.5%
Fixed Assets/Equip 191,868 15,000 ($176,868) -92.2%
Transfers Out 300,000 0 ($300,000) -100.0%
TOTAL EXPENDITURES $61,718,441 $64,974,407 $3,255,966 5.3% The estimates for FY 2026-27 General Fund expenditures are based on a thorough analysis of anticipated personnel and non-personnel costs. To create a more fiscally responsible budget, department budgets for operating expenditures reflect a base budget that is reflective of ongoing expenses.

Personnel Costs
In FY 2026-27, personnel costs are expected to reach $44.5 million, accounting for 68.5% of the General Fund expenditures. These costs include salaries, overtime, and compensation for benefited and part-time staff (60%), retirement benefits (25%), and other fringe benefits (15%), such as health coverage.

To obtain these figures, the Town uses the salary projection module of its new Enterprise Resource Planning (ERP) software and made necessary updates to account for vacant positions, new hires, salary adjustments, and reallocated positions. Furthermore, the projected costs of benefits for the upcoming year, such as retirement and health plans, were taken into consideration.

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ITEM NO. 16.

PAGE 7 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
The FY 2026-27 Proposed Budget includes funding for:

Category Position Position Count
FY 2025-26 Staffing 163.74
Administration and Town Offices Deputy Town Attorney 1.0 Administrative Assistant .46
Community Development Senior Planner (.25)
Parks and Public Works Parks Services Aide .46
Maintenance Worker (.11)
TOTAL RECOMMENDED FY 2026-27 STAFFING 165.30
Non-Personnel
Non-Personnel budgets were developed based on the prior three-year actual expenses and then applied escalators to account for cost increases from FY 2024-25. One-time projects were excluded to reflect ongoing expenditure needs.

Major changes from the prior fiscal year include:
 Employee Compensation - Increasing primarily due to step progressions, cost of living adjustments, and requests to add one full-time position and a net of .56 parttime hours. Additionally, increases in retirement costs are driven by increased CalPERS costs and other benefit categories driven by health rate changes.  Operating Expenditures - The result is a reduction of $1.3 million in the operating expenditure category due to the setting of the base budget for this category.  Internal Service Charges - Increasing because of the full charge out of costs related to IT and Vehicle and Equipment Replacement.

General Fund Revenue
The Town's General Fund revenues for the upcoming fiscal year are projected to be $64.8 million, representing a decrease of $1.7 million or 2.5% from the FY 2025-26 Estimate Budget.

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ITEM NO. 16.

PAGE 8 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Category FY 2025-26
Estimated
FY 2026-27
Proposed
Variance $ % Variance
Property Tax $ 21,519,135 $ 22,560,237 $ 1,041,102 4.8% VLF Backfill 5,406,000 5,664,604 258,604 4.8%
Sales Tax 9,175,517 9,738,517 563,000 6.1%
Franchise Tax 1,008,838 1,089,210 80,372 8.0%
Transient Occupancy Tax 2,255,805 2,278,360 22,555 1.0% Business License Tax 2,601,500 2,679,550 78,050 3.0%
Licenses & Permits 7,014,459 7,549,926 535,467 7.6%
Intergovernmental 1,307,778 741,477 (566,301) -43.3%
Town Services 6,947,848 5,405,946 (1,541,902) -22.2%
Fines & Forfeitures 312,775 315,200 2,425 0.8%
Interest 1,913,261 1,926,877 13,616 0.7%
Other Sources 6,435,102 4,302,773 (2,138,854) -33.1%
Operating Transfers In 582,029 562,411 (19,618) -3.4%
TOTAL $ 66,480,047 $ 64,815,087 $ (1,664,960) -2.5%
Property tax (including VLF Backfill)– Increased by $1.3 million primarily due to actual growth in FY 2024-25 and updated budget methodology to align budget with actuals.

Sales Tax - Increased by $0.6 million primarily due to actual growth in FY 2024-25 and updated budget methodology to align budget with actuals.

Intergovernmental revenues – Decreased due to the last year of funding for the Cannabis Tax Grant.

Town Services – Decreased due to recent years, including higher revenue from major planning efforts that are not expected to return. Updating this category to match historical averages ensures a realistic baseline moving forward.

Other Sources – Decreased due to the one-time sale of 4 Tait that is anticipated to close in FY 2025-26 and is offset by increased revenue from the OPEB Trust to partially fund retiree medical pay as you go costs.

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ITEM NO. 16.

PAGE 9 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
General Fund Forecast
The Town’s forecast has been significantly improved since the FY 2025-26 update provided to the Town Council in February 2026. This is driven by increased revenues of $2.8 million from the original FY 2026-27 forecast, primarily in property and license and permit revenues, and modest increases in various other revenue categories. These increased revenues build the base that future projections are calculated from creating long-term positive impacts in the forecast.

Expenditures are up $0.2 million, driven primarily by decreases in operating expenditures, and offset by increases in various other expenditure categories.

The graph below shows the proposed FY 2026-27 Proposed Budget and five forecast years for revenue, expenditures and changes to fund balance.

Chart 3 General Fund Forecast (in millions)
The Town has been proactive in reviewing its base amount and growth factors, which included a contract with NHA Advisors, who subcontracted the baseline forecast and independent review of Town finances to Raftelis. The chart below shows four distinct forecast and their resulting impacts on the fund balance. They include the forecast presented at mid-year, a forecast with no budget balancing strategies, the forecast from the FY 2026-27 Proposed Budget, and the Raftelis forecast presented to the Town Council in April 2026.

FY 2026-27
Proposed
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
FY 2031-32
Forecast
Revenues $64.8 $66.6 $67.7 $68.7 $70.9 $73.0
Expenditures $65.3 $66.5 $68.6 $68.7 $70.0 $71.2
Changes to Fund Balance $(0.5) $0.1 $(0.9) $- $0.9 $1.8 $(10.0)
$-
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
General Fund 5- Year Forecast (in millions)
Revenues Expenditures Changes to Fund Balance

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ITEM NO. 16.

PAGE 10 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Chart 4 General Fund Forecast Comparisons (in millions) As indicated in the chart, the Town’s efforts in reducing costs and improving revenue forecast over the last few years have started to show an improved forecast. Raftelis model shows the largest deficit because it was meant to show the Council a base case if no budget balancing strategies are utilized and the Town resumes an annual transfer of $1 million to the GFAR.

The Town has now improved the trajectory of its forecast, but as discussed later in the ongoing challenges section, this may represent only a slight reprieve, and the Council and staff should remain diligent in looking for ways to slow expenditure growth to align with revenues and seek out options to fund a backlog of infrastructure projects.

Overall, this forecast reaffirms the Town’s commitment to responsible financial management and positions the Town to remain resilient in the face of future uncertainties.

Capital Improvement Program (CIP)
The FY 2026-27 CIP is recommended at $6,454,919; this total includes $557,489 in transfers out to the General Fund to fund part-time staff associated with CIPs. Total projects are recommended at 5,897,430; this includes projects across three categories, Street Improvements, Parks and Trails, and Infrastructure. CIP funding sources are:

FY 2026-27
Proposed
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
FY 2030-31
Forecast
FY 2031-32
Forecast
FY 2025-26 Mid-Year Forecast ($3.1) ($2.5) ($2.7) ($2.3) ($2.0) Proposed Budget (No balancing strategies) ($2.6) ($2.2) ($3.0) ($2.1) ($1.2) ($0.3) Proposed Budget ($0.5) $0.1 ($0.9) $0.0 $0.9 $1.8
Raftelis Forecast ($0.5) ($1.3) ($1.9) ($1.4) ($2.0) ($2.6) ($4.0)
($3.0)
($2.0)
($1.0)
$0.0
$1.0
$2.0
$3.0
FY 2025-26 Mid-Year Forecast Proposed Budget (No balancing strategies) Proposed Budget Raftelis Forecast

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ITEM NO. 16.

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SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Funding Type Funding Source Carry Forward FY 2026-27
Recommended
CIP
Total
Ongoing Gas Tax $ 2,426,270 $ 1,917,807 $ 4,344,077
One-Time GFAR 10,182,115 3,812,873 13,994,988
Grant Fund 4,606,311 36,750 4,643,061
Storm Drain Fees 1,570,000 130,000 1,700,000
Total Recommended CIP $ 18,784,696 $ 5,897,430 $ 24,682,126 Within each category projects, are further broken down by new projects, existing projects with additional funding requests, and finally carryforward projects that are not requesting any additional funding.

The CIP includes recommendations to fund the following projects by Category:

Category Project Name
One-time/
Ongoing
Estimated
Carryforward
FY 2026-27
Proposed
Budget
Total FY 2026-27
w/carryforward

STREET IMPROVEMENTS
New
Impact Fee Study One-Time - 300,000 300,000
East Main Street
Crosswalk
Improvements
One-Time - 75,000 75,000
Green
Stormwater
Infrastructure
Ongoing - 100,000 100,000
Timber Bridge
Inspection
- 50,000 50,000

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ITEM NO. 16.

PAGE 12 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Category Project Name
One-time/
Ongoing
Estimated
Carryforward
FY 2026-27
Proposed
Budget
Total FY 2026-27
w/carryforward
Roadway
Reconstruction
Santa Cruz
Avenue BHR to
Hwy 9
One-Time - 200,000 200,000
Total New Street Improvement Projects - 725,000 725,000 Carryforward -
With New Funding
Requests
Street Repair &
Resurfacing
Ongoing 6,357,803 2,865,680 9,223,483
Rehab Crack &
Seal
180,000 180,000 360,000
Annual Street
Restriping
Ongoing 30,000 15,000 45,000
Roadside Fire
Fuel Reduction
Ongoing 1,555,376 136,750 1,692,126
Unanticipated
Repairs
Ongoing 422,860 100,000 522,860
Curb, Gutter &
Sidewalk
Maintenance
Ongoing 378,007 500,000 878,007
Stormwater
System –
Pollution
Prevention
Compliance
Ongoing 43,481 30,000 73,481
709 University
Avenue Drainage
System
Replacement
One-Time 275,635 10,000 285,635
Vasona Oaks
Drainage Failure
Repair
One-Time 190,263 120,000 310,263
Total Carryforward Street Improvement Projects 9,433,425 3,957,430 13,390,855

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ITEM NO. 16.

PAGE 13 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Category Project Name
One-time/
Ongoing
Estimated
Carryforward
FY 2026-27
Proposed
Budget
Total FY 2026-27
w/carryforward
Carryforward
Downtown
Parking Lots Seal
Coat & Restriping
Ongoing 65,161 - 65,161
Highway 17
Bicycle &
Pedestrian Bridge
- Design
One-Time 3,290,173 - 3,290,173
Annual Storm
Drain
Improvement
Project
Ongoing 179,862 - 179,862
Loma Street
Drainage
One-Time 699,240 - 699,240
Blossom Hill Road
– Union to
Camden
One-Time 800,000 - 800,000
Storm Drainage
Mapping
Ongoing 266,681 - 266,681
Shannon Road
Repair
One-Time 1,748,464 - 1,748,464
Total Carryforward + New Funding Requests
Street Improvement Projects
7,049,581 - 7,049,581
TOTAL STREET IMPROVEMENT PROJECTS 16,483,006 4,682,430 21,165,436 Parks and Trails
Carryforward -
With New Funding
Requests
Parks Playground
Fibar Project
Ongoing 41,564 20,000 61,564
Vegetation
Management
Town-wide
Ongoing 498,135 100,000 598,135
Total Carryforward + New Funding Parks and
Trails Projects
539,699 120,000 659,699

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ITEM NO. 16.

PAGE 14 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Category Project Name
One-time/
Ongoing
Estimated
Carryforward
FY 2026-27
Proposed
Budget
Total FY 2026-27
w/carryforward
Carryforward
Sport Court
Resurfacing
One-Time 149,803 - 149,803
Oak Meadow
Bandstand Area
Improvements
One-Time 234,405 - 234,405
Total Carryforward Parks and Trails Projects 384,208 - 384,208 TOTAL PARKS AND TRAILS PROJECTS 923,907 120,000 1,043,907 Infrastructure
New
Downtown
Restroom Design
(New)
One-Time - 100,000 100,000
41 Miles Avenue
Emergency
Management
Improvements
(New)
One-Time - 525,000 525,000
Library Lighting
Controls
Renovation (New)
One-Time - 200,000 200,000
Condition
Assessment of
Civic Center
(New)
One-Time - 250,000 250,000
Total New Infrastructure Projects - 1,075,000 1,075,000 Carryforward -
With New Funding
Requests
Annual ADA
Compliance Work
Ongoing 67,870 20,000 87,870
Carryforward
Battery Power
Supply Library
Ongoing 2,818 - 2,818

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ITEM NO. 16.

PAGE 15 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Category Project Name
One-time/
Ongoing
Estimated
Carryforward
FY 2026-27
Proposed
Budget
Total FY 2026-27
w/carryforward
Civic Center
Plumbing Repair
and HVAC Repairs
Ongoing 50,377 - 50,377
ARC Interim
Community
Center
One-Time 437,500 - 437,500
Fleet Service
Outdoor Work
Area (Design
Phase)
One-Time 45,000 - 45,000
Enterprise
Resource
Planning (ERP)
Upgrade
One-Time 376,877 - 376,877
IT Disaster
Resiliency Project
One-Time 397,341 - 397,341
TOTAL INFRASTRUCTURE PROJECTS 1,377,783 1,095,000 3,547,783

TOTAL STREET, PARKS AND TRAILS, AND PUBLIC

FACILITIES PROJECTS
18,784,696 5,897,430 24,682,126
Ongoing Challenges
The Town continues to face several ongoing fiscal and operational challenges that could significantly impact long-term financial sustainability. While the current high-interest rate environment has generated stronger-than-anticipated investment earnings and improved short-term cash performance, these conditions also create broader economic uncertainty and place pressure on future development activity, borrowing costs, and consumer spending. The Town’s investment portfolio has benefited from higher yields; however, investment revenue remains sensitive to future interest rate adjustments and broader market volatility.

Rising retirement and other post-employment benefit (OPEB) obligations continue to place structural pressure on the Town’s finances. CalPERS employer contribution rates remain elevated due to inflationary pressures, investment market fluctuations, demographic

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ITEM NO. 16.

PAGE 16 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
assumptions, and long-term pension liability amortization schedules. Similarly, OPEB obligations continue to require ongoing monitoring to ensure long-term sustainability and funding adequacy. Additionally, both categories have benefited from the high-interest rate environment, providing some relief in employer rates and funded status.

Although the Town’s long-range financial forecast currently does not assume a recession scenario, economic slowdown risks remain significant. A recession could negatively affect economically sensitive revenues such as sales tax, transient occupancy tax (TOT), licenses and permits, and development-related activity. Sales tax performance, while relatively stable in the near term, remains vulnerable to changing consumer behavior, inflationary impacts, and continued shifts toward online purchasing patterns. In addition, several anticipated new sales tax revenue streams have not yet been fully realized, creating uncertainty around the timing and sustainability of future revenues.

The Town also continues to experience pressure within development-related revenues, which remain heavily influenced by market conditions, construction activity, and regional economic trends. Similarly, transient occupancy tax revenues continue to face uncertainty, as the full financial impact of recent hotel closures and reduced lodging inventory is still unknown. While tourism and travel activity have generally improved post-pandemic, the Town has not yet fully stabilized its TOT base.

At the same time, the Town faces substantial long-term infrastructure obligations. Current estimates identify more than $300 million in unfunded capital needs across facilities, streets, parks, utilities, and other public infrastructure assets. Without sustainable ongoing funding sources, these liabilities will continue to grow and may eventually require service level reductions, deferred maintenance, or future financing strategies.

Compounding these challenges is the Town’s reduced ability to build reserves and address future liabilities. The FY 2026-27 budget does not include the customary $1 million transfer to the General Fund Appropriated Reserve (GFAR), limiting the Town’s ability to strengthen longterm fiscal resiliency. Additionally, no Measure G revenues are currently being directed toward GFAR; previously, about half, or $600k, was transferred to the GFAR. While these actions may provide short-term budget flexibility, they reduce the Town’s capacity to plan and fund infrastructure needs.

Collectively, these challenges highlight the importance of continued fiscal discipline, conservative forecasting, strategic reserve management, and ongoing evaluation of service delivery priorities to ensure the Town’s long-term financial stability.

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ITEM NO. 16.

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SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Changes to the Budget Document
The FY 2026-27 Proposed document has undergone a few changes one of which is the introduction of a base budget for the operating expenditure category. Town staff created a new base budget using an average of the last three years’ actual expenditures. It then added escalators to account for increases in costs for FY 2025-26 and FY 2026-27. The result was a $1.3 million in savings.

The five-year forecast has been combined with the financial summaries to ensure all vital financial data lives in one place in the document. Additionally, in response to comments and recommendations received, staff created a new chart to show revenues and expenses by category in the General Fund, three years of historical information, the estimate and proposed budget, and the five-year forecast.

The updated revenue and expenditure category sections also include a description of revenues or expenditures in the category, a discussion of historical and forecast changes, the final budget to actuals average dollar, and the percent differences based on three prior year actuals. This provides the reader with a quick, holistic view of each category.

The forecast introduces an Average Annual Growth Rate (AAGR) for the last five years of actuals. In the coming year, staff will refine the AAGR to account for one-time occurrences and create better future projections.

Donation Opportunities - FY 2026-27 List of Town Needs
As part of the budget development process, the List of Town Needs is updated annually per Town Council Donation Policy (Attachment 3) to reflect goods, services, and other contributions that would help enhance Town services, programs, and events (Attachment 4).

CONCLUSION:

The FY 2026-27 Proposed Operating and Capital Budget positions the Town to continue providing high-quality municipal services while maintaining a disciplined and strategic approach to financial management. The Proposed Budget reflects significant progress in improving the Town’s long-term financial trajectory through enhanced forecasting methodologies, expenditure controls, and more conservative baseline budgeting practices.

Although the Town’s financial outlook has improved compared to prior forecasts, significant long-term challenges remain, including rising pension and healthcare costs, uncertainty in economically sensitive revenues, limited reserve growth capacity, and substantial unfunded infrastructure obligations. These ongoing pressures reinforce the importance of continued fiscal

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ITEM NO. 16.

PAGE 18 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
discipline, conservative forecasting practices, and strategic investment in the Town’s long-term financial resiliency.

The Proposed Budget balances operational needs with fiscal sustainability and demonstrates the Town’s continued commitment to responsible stewardship of public resources. Staff will continue monitoring economic conditions, expenditure trends, and revenue performance throughout the fiscal year and will return to the Town Council with updates and recommendations as necessary.

Staff recommend that the Town Council conduct the public hearing, receive public input, provide direction on Finance Commission recommendations and proposed budget modifications, and continue consideration of the FY 2026-27 Proposed Operating and Capital Budget as part of the Town’s budget adoption process.

ALTERNATIVES:

Staff would like to recommend the following changes to the FY 2026-27 Proposed Budget for council consideration:
 Reduction of Vehicle and Equipment Fund internal service fund charges by $1.5 million, consistent with Finance Commission’s recommendations.
 Transfer out $811,334 of reduced general fund internal service fund charges from the General Fund to the Facilities Internal Service Fund for projects identified in Attachment

2.  Approve a budget increase of $335,083 for the Facilities Internal Service Fund budget for projects identified for FY 2026-27 in Attachment 2.  Approve a budget increase of $134,368 for the following three contracts in Public Works that have had costs come in higher than currently budgeted: Pacific Water Art, Throne Restrooms, Specialized Elevator Corp, and Field Turf USA.

The net impact to the General Fund would be a reduction in expenses of $579,027, resulting in a FY 2026-27 General Fund budget with a minor surplus of $6,503.

COORDINATION:

The preparation of the budget documents involved the participation of all Town Departments.

The Finance Commission deliberated and provided its recommendations to the Council as discussed in this report.

ENVIRONMENTAL ASSESSMENT:

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

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ITEM NO. 16.

PAGE 19 OF 19
SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year 2026-27 and on the Proposed Capital Improvement Program for FY 2026-27 – FY 2030-31
DATE: May 13, 2026
Attachments:

1. Finance Commission Recommendations and Staff Responses

2. Tier 3 Projects - Facilities Needs

3. Solicitation and Donation Policy

4. Donation Opportunities List 2026-27

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ITEM NO. 16.

ATTACHMENT 1

DRAFT MOTIONS RECEIVED
Draft Motion #1: 115 Pension Trust
I move that the Finance Commission recommend that the Town Council direct staff in June 2026 to use the full current balance of the Town’s Pension Section 115 Trust, estimated at approximately $3.8 million, subject to staff verification, to make one or more Additional Discretionary Payments to CalPERS for the purpose of reducing the Town’s unfunded accrued pension liabilities.

The Commission further recommends that this payment not be allocated mechanically or pro rata across all unfunded liabilities, but instead be targeted, in consultation with the Town’s actuary and CalPERS as appropriate to the amortization bases, plans, or unfunded commitments where the payment is expected to produce the greatest fiscal benefit to the Town.

In determining the allocation of the ADP, staff should evaluate, at minimum:
 the projected reduction in total UAL principal;
 the net present value of avoided future UAL payments;  the reduction in future required employer contributions;  the impact on contribution volatility across the Safety and Miscellaneous plans;  the shortening or elimination of higher-cost amortization bases; and  the consistency of the payment with the Town’s reserve, liquidity, and long-term financial policies.

The Finance Commission recommends that staff return to the Town Council with a concise implementation analysis before execution or as part of the Council action, including the recommended target allocation, projected annual savings, estimated net present value savings, impact on future CalPERS contribution schedules, and confirmation that use of the Pension 115 Trust balance does not impair the Town’s operating reserves or near-term fiscal flexibility.

Background
The Pension 115 Trust provides valuable fiscal flexibility, but flexibility has value only if it is governed by a clear policy. The Town should not treat all available reserves and surplus funds the same. Some funds are needed for near-term operations, legally restricted purposes, adopted reserves, or capital commitments. Some funds should be preserved for plausible adverse scenarios identified through the Town’s Asset Liability Management work. Other funds may be genuinely excess to the Town’s current and reasonably foreseeable needs.

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ITEM NO. 16.

ATTACHMENT 1
Once funds are identified as available beyond near-term needs, adopted reserve policies, legal restrictions, capital plans, and stress scenarios, the Town should have a disciplined process for determining whether those funds can be put to better use by reducing CalPERS unfunded accrued liabilities. A clearer framework for categorizing available resources would preserve fiscal resilience while reducing the risk that the Town carries avoidable pension costs simply because it has not adopted a formal definition of deployable surplus.

I move that the Finance Commission recommend that the Town Council direct staff, as part of the Town’s Asset Liability Management work stream and long-term financial planning process, to reassess the Town’s policy for use of the Pension Section 115 Trust and broader available reserves.

The Commission recommends that this reassessment be grounded in two principles: first, that the Town should preserve appropriate fiscal flexibility; and second, that the Town should avoid unnecessarily retaining funds that could be used to reduce high-cost CalPERS unfunded pension liabilities.

To support this policy, the Commission recommends that the Town develop a formal framework that classifies available funds into three categories:

Bucket 1: Near-Term Required Funds
Funds needed for operating liquidity, adopted budget commitments, legally or contractually restricted purposes, emergency reserves, near-term capital needs, and other obligations that should remain readily available.

Bucket 2: Flexible Contingency and Scenario-Based Funds Funds not immediately required, but prudently retained because they may be needed under reasonably foreseeable adverse scenarios, including recession, revenue shortfalls, capital cost escalation, litigation, disaster response, pension contribution increases, labor cost pressures, or other fiscal risks identified through the ALM process.

Bucket 3: Deployable Surplus Available for Pension Liability Reduction Funds that are not required for near-term operations, are not legally restricted, are not needed to satisfy adopted reserve policies or capital plans, and are not needed under the Town’s adopted stress scenarios. The Commission recommends that the Town formally define this third category and establish a policy presumption that such funds should be evaluated for deployment to CalPERS through targeted Additional Discretionary Payments.

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ITEM NO. 16.

ATTACHMENT 1
The Commission further recommends that staff evaluate whether Bucket 2 funds should remain in traditional liquid reserves, be invested according to their expected time horizon and liquidity needs, be held in the Pension 115 Trust where legally and fiscally appropriate, or be reserved for future pension-cost stabilization. Funds in Bucket 3 should be evaluated primarily against the expected fiscal benefit of reducing CalPERS UAL, including projected avoided interest costs, reduced future required contributions, improved funded status, and improved long-term budget resilience.

The Commission recommends that staff return to the Town Council with a proposed policy defining these three categories, the metrics used to identify deployable surplus, and an annual process for determining whether additional targeted ADPs to CalPERS are warranted.

Staff Response: Staff agree the Council should consider use of these fund given the opportunity to reduce long-term costs and result in a better return on investment than leaving the funds in the 115. However, Council direction to staff has been to wait to act on the 115 funds until the asset, liability study is completed. Staff agree that waiting for a few more months until the ALM study is completed would be prudent, ensuring all financial information is available before deciding to transfer funds. This is because the Town retaining the funds provides flexibility to use these funds to offset pension costs as available to offset any potential budget shortfall that would otherwise result in the use of fund balance/reserves.

Draft Motion #2 : Vacancy Savings Factor and Monthly Reporting Labor costs are the most significant expense category in the operating budget and effective methods to accurately plan, track and manage this expense category is critical. The Finance Commission recognizes efforts being made to better understand labor costs and believes these efforts should remain highest priority. Completing and maintaining monthly labor reporting that provides insight to each of the significant subcategories will allow the Town to identify variances from the intended plan and either take corrective action or utilize funds for other high priority items.

This planning and reporting should clearly delineate the following:

Labor hours/FTEs - the plan should be based on the intended to deployment of human capital to achieve the intended service level. This should include planned hires.

Direct Labor Dollars - the planned salary/wages that includes contract requirements and planned Step increases. The existing salary levels and planned salary levels for hires/vacancy replacements are one variable that should be well understood given the lack of flexibility for a

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ITEM NO. 16.

ATTACHMENT 1
significant portion of salary wage escalation. Hiring is one of the few avenues the Town has to affect the overall salary and wages costs.

Pension/benefits - the costs of these items should be broken out from salary/wages.

Overtime - the Finance Commission recognizes the need and at times the benefit of utilizing overtime as a tool to manage vacancies, emergencies and other events not part of normal business. However, it can be an expensive method to provide services and should be closely tracked and managed. Maintaining overtime tracking in context of the other labor costs sub categories will help control costs and provide insight to the relationships like vacancy and need for OT.

Several years ago the Town adopted a vacancy rate applied to labor to reflect the persistent trend of significantly under running labor budgets. This method was a stop gap method to allow expected under runs to be redeployed for other Town needs. The lack of insight to the actual FTE’s being charged meant the planned headcount and actual headcount were not known until after the close of the budget year with a significant surplus. The Commission believes this vacancy rate has served its purpose but the better method would be budget plans that include planned hires and tracking to those plans by monthly FTEs. As the Town implements those improved reporting methods we encourage a transition away from the brute force method of a vacancy rate to the real labor plan that supports the Town intended service levels. It is understood there will be unexpected vacancies throughout the years which will potentially result in temporary underruns - but by identifying those as variances on a monthly basis those variances will be understood and allow identification of trends or concerns to the Town.

The decision to move away from a vacancy rate approach could be considered as the management tools are put into place and would improve the understanding and control of labor costs.

The above recommendations are a reflection of the good work that staff has accomplished and represents the next step forward in the ability to effectively plan and manage the largest cost category in Town Operating Expenses. As noted by staff, labor costs are expected to escalate at a higher rate than revenue so continuing to improve this expense category is appropriate.

Staff Response: Staff agree that more timely reporting would assist in calculating vacancy savings in the future. Additionally, staff agree that the Town should have a set number of staff to complete services at a certain level. However, because the root cause of the vacancies is do to attrition, employees leaving town service and then the lag time between filling the role, and potentially any change in compensation and benefits costs from the new hire, staff believe the current number of staff is the correct number. Under the current budget structure, the Council

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ITEM NO. 16.

ATTACHMENT 1
approved the budget at the fund level and also approves the number of authorized positions.

The Town Manager then manages both those numbers, using various tools including justification memos, use of part-time staff to backfill vacancies and overtime. Staff do not believe we will be ready to recommend a change in methodology to remove the vacancy savings factor until FY 2027-28 or beyond. As new reporting becomes available in July 2026, staff will consider potential replacement to the vacancy savings factor based on those report and within the budget approval structure of the Town.

Motion # 3: NHA Advisors Reports
Given the significance of long-term financial planning assumptions and the potential policy implications tied to analyses prepared by NHA Advisors, the Finance Commission recommends that any formal analyses, forecasts, or advisory recommendations produced by NHA first be presented to the Finance Commission for review and discussion prior to Council consideration or implementation.

This process would strengthen transparency, provide an opportunity for independent financial review, and allow the Commission to evaluate underlying assumptions, methodology, fiscal impacts, and consistency with the Town’s broader long-term financial strategy before recommendations advance further in the decision-making process.

Staff Response: Staff agrees that the Finance Commission should view final reports prior to those reports coming to Council for approval. The Commission has been integral so far in making recommendations to NHA Advisors’ work and we believe the Council and community would benefit from their continued input.

Motion #4: Internal Service Fund Charges
The Finance Commission moves to recommend that the Town Council direct staff to revise the FY2026-27 budget treatment of Internal Service Fund charges as follows:

1. Vehicle and Equipment Replacement Fund — Implement the Full $1.5 Million Reduction
The Commission endorses staff's finding that a $1.5 million reduction in Vehicle and Equipment Replacement Fund ISF charges is supportable in FY 2026-27 without creating an unfunded liability. Staff's ten-year projection confirms that ending fund balances remain healthy, averaging $4.4 million through FY 2036, even with reduced contributions. The Commission recommends that this full $1.5 million reduction be implemented. However, rather than redirecting any portion of those reduced charges to the Facilities Fund through an internal accounting transfer, the Commission recommends that the full $1.5 million in savings flow

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ITEM NO. 16.

ATTACHMENT 1
directly to the General Fund, producing a visible and reportable General Fund surplus that the Town Council can evaluate and direct. The Commission further recommends that ISF charges for the Vehicle and Equipment Replacement Fund be set going forward to recover actual and projected costs only, and not to generate structural surpluses or to compensate for prior period underspending through inflated future charges.

2. Facilities Fund — Direct Appropriation, Not ISF Reallocation Rather than funding the Facilities Fund through a reallocation of reduced Vehicle ISF charges, the Commission recommends that staff prepare and present to the Town Council a standalone analysis of the Facilities deferred maintenance backlog, including the full assessed need in current dollars (assessed at $3.4 million for FY 2025-26 and $3.3 million for FY 2026-27), a prioritized list of identified repairs, a recommended multi-year funding strategy, and the annual General Fund appropriation required to address the backlog over a defined and fiscally responsible timeframe. This analysis should be presented as a direct budget request, separate from ISF mechanics, so that the Town Council can make an informed and transparent appropriation decision.

The Commission notes that the Town Council may at any time direct staff to execute a direct transfer from the General Fund to the Facilities Fund or any other Internal Service Fund when needs are clearly identified and prioritized. This direct transfer mechanism is the appropriate and transparent tool for addressing ISF funding gaps — not artificially inflated service charges embedded in departmental billing rates that accumulate quietly and are difficult to reverse.

3. ISF Charge Methodology — Comprehensive Review
The Commission recommends that staff conduct a comprehensive review of the methodology used to set charges across all Internal Service Funds, with the objective of ensuring that charges are set to recover actual and projected costs rather than to generate structural surpluses or to compensate for past underfunding through inflated future rates. Where ISFs are genuinely underfunded relative to documented future needs, staff should bring a direct funding recommendation to the Town Council through the budget process or via a specific transfer request, rather than embedding the catch-up cost in annual service charges. This review should be completed as part of the FY 2027-28 budget preparation process and presented to the Finance Commission prior to budget adoption.

The Finance Commission believes these recommendations will produce a more transparent, more accurately reported, and more fiscally resilient budget than the approach currently proposed and will better serve the Town Council's ability to make informed, visible, and deliberate decisions about the allocation of the Town's resources.

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ITEM NO. 16.

ATTACHMENT 1
Staff Response: Staff agrees that Internal Service Fund charges for vehicles and equipment should be reduced by $1.5 million. Staff also agree that all ISFs should be reviewed to ascertain proper fund balance and annual charges to departments. Staff will be reviewing both these items in FY 2026-27. However, staff recommends that the savings garnered by these funds be used to reduce unfunded liabilities in town facilities. Staff have recommended an alternative for Council’s consideration in the staff report that recommends a transfer out of funds for identified facilities projects and still leaves the General Fund in a positive position for FY 2026-27.

Motion #5: Capital Improvement Program
 Establish an annual cash flow estimates for all capital project equal to or greater than over a million dollars so it can be tracked.
 Identify either, a PCI target specifically, or a spending capacity limit to spend on road resurfacing and repair.
 Identify a better location for the $6.5 million carry forward from the road resurfacing and repair account for future projects, ie like the highway 17 expansion.

Staff Response: Staff will evaluate these recommendations more thoroughly in partnership with Finance, but we do agree these can be addressed.

PPW does agree that cash flow statements can be developed for the specific projects requested.

The Complete Streets and Transportation recommended that the Town establish a PCI of 80 with the recommended $3.7M per year spending level. The existing and future budget is unlikely to support spending $3.7M per year in paving suggesting that within five years the overall PCI will be less than 80. The future of the paving program and required spending is a subject that staff believes warrants detailed discussion with Town Council.

It is important to note that the $6.5M in carryforward does not include a $439,706 expenditure approved by Council on April 21, and the proposed allocation of $2.4 million from this fund proposed for action on May 19, 2026. Staff would recommend that some of the remaining $3.6 million be set into reserve for future paving needs such as the North Santa Cruz Reconstruction.

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ITEM NO. 16.

Location/Building Project/System Type Project Name FY 26/27 FY 27/28 FY 28/29 FY 29/30 FY 30/31 TOTALS Civic Center Mechanical Systems Replace police dispatch AHU $ 60,000 $ 60,000 Civic Center Mechanical Systems Replace Building controls $ 225,000 $ 225,000 Civic Center Mechanical Systems Replace unit 2 in Council Chamber IT room $ 15,000 $ 15,000 Civic Center Mechanical Systems Insulate boiler room piping $ 7,500 $ 7,500 Civic Center Accessibility Issues DAC Accessibility Compliance $ 109,871 $ 109,871 $ 109,871 $ 109,871 $ 109,871 $ 549,355 Library Electrical Systems Test and Certify Main Electric Panel $ 50,000 $ 50,000 Library Electrical Systems Replace PV Inverters $ 40,000 $ 40,000 Library Interiors Replace floor coverings (carpet) $ 60,000 $ 80,000 $ 140,000 Library Accessibility Issues DAC Accessibility Compliance $ 19,059 $ 19,059 $ 19,059 $ 19,059 $ 19,059 $ 95,295 Annual Total 2022 Dollars2 $ 286,430 $ 428,930 $ 128,930 $ 128,930 $ 208,930 $ 1,182,151 Annual Total Escalated to Fiscal Year Dollars at 4% $ 335,083 $ 521,859 $ 163,138 $ 169,663 $ 285,935 $ 1,475,678 Notes:

2. Annual totals are on 2022 dollars. 2024 escalation provided for discussion. Future development of this projection will escalate all costs to year of projected expense.

Tier 3 - Town of Los Gatos Facility Needs Projection

1. Projections are based on information developed by Facility Engineering Associates in Fiscal Year 2021/22, informtation developed by Disability Access Consultants in 2022 and staff recommendations
ATTACHMENT 2

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ITEM NO. 16.

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ITEM NO. 16.

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ITEM NO. 16.

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ITEM NO. 16.

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ITEM NO. 16.

ATTACHMENT 4

TOWN OF LOS GATOS DONATION OPPORTUNITIES
FY 2026-27 LIST OF TOWN NEEDS
To ensure that all donations and contributions are sought and accepted in an ethical manner, the Council established a Donation and Solicitation Policy. A list of Town needs was developed to identify goods, services, and other contributions to enhance Town services, programs, and events. The recommended needs for FY 2026-27.

PUBLIC SAFETY
 Volunteer Program Materials and Equipment
 Specialized Public Safety Equipment and Supplies, including Support for Canine Program  Training Support for Public Safety Staff and Volunteers  Equipment, Supplies and Materials to support Police Operations  Community Outreach Program Supplies

LIBRARY SERVICES
 Children, Youth, and Adult Program Collections, Supplies and Services  Media items and other items for public circulation
 Funding to Support Technological Enhancements, including Digital Services  Equipment and Services to Support Historical Preservation Efforts  Resource Support for Collection Development and Reference, Local History, and Library Policy  Items to be Used as Prizes, Give Aways, and Incentives for Reading Programs and Events

SENIOR SERVICES
 Home Emergency Kits Geared Towards the Needs of Seniors  Targeted Solicitations for Community Engagement per the Town Solicitation and Donation Policy

COMMUNITY EVENTS
 Supplies, Materials, and Services for Special Community and Volunteer Events and Activities  Funding for the Realization of Public Art Projects or Donations of Public Art Subject to the Town’s Public Art Selection Policy

TOWN PARKS AND FACILITIES
 Beautification Materials and Services for Town Parks, Open Space, and Infrastructure  Land for Parks and Open Space
 Contributions that Support Recreation or Expansion of Athletic Fields  Contributions that Support Multi-Modal Transportation  Medical Devices that Enhance Public Safety

SUSTAINABILITY
 Contributions to Help Minimize Impacts on Local, Regional, and Global Ecosystems through Conservation, Reduced Pollution, Increased Efficiency, and Protection of Wildlife, Vegetation, and Other Ecosystems.

TECHNOLOGY
 Equipment, Software and Services to Enhance Communication with the Public and Organizational Productivity

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Los Gatos City CouncilMay 19, 2026

Los Gatos City Council
May 19, 2026