Agenda packet — Los Gatos City Council, October 20, 2026 (part 2 of 4)

ITEM NO. 8.
13 Lease and in connection with all of the activities Lessee conducts on the Premises, it shall not discriminate, harass, or retaliate against any person or class of persons regardless of race, religious creed (including religious dress and grooming practices), color, national origin (including language use restrictions), ancestry, religion, disability (mental and physical), medical condition, sex, gender (including gender identity and gender expression), physical characteristics, marital status, age, sexual orientation, genetic information (including family health history and genetic test results), organizational affiliation, and military or veteran status, or any other consideration made unlawful by local, State or Federal law. Tenant shall make its accommodations and services available to all persons on equal and reasonable terms.

25. INDEPENDENT CONTRACTOR.

It is agreed that Lessee shall act and be an independent contractor and not an agent nor employee of Town.

26. CONFLICT OF INTEREST.

Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Lease. Lessee warrants and covenants that no official or employee of Town nor any business entity in which any official or employee of Town is interested: (1) has been employed or retained to solicit or aid in the procuring of this agreement; or (2) will be employed in the performance of this Lease without the divulgence of such fact to Town. In the event that Town determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of Town, Lessee upon request of Town shall immediately terminate such employment. Violation of this provision constitutes a serious breach of this Lease and Town may terminate this Lease as a result of such violation.

27. ESTOPPEL CERTIFICATE.

Lessee shall, from time to time, upon at least thirty (30) days prior written notice from Town, execute, acknowledge and deliver to Town a statement in writing: (i) certifying this Lease is unmodified and in full force and effect, or, if modified, stating the nature of the modification and certifying that the Lease, as modified, is in full force and effect, and the date to which the rental and other charges, if any, have been paid; and, (ii) acknowledging that there are not to Lessee’s knowledge, any defaults, or stating if any defaults are claimed, any statement may be relied upon by any prospective purchaser or encumbrance of the Town Property. Lessee’s failure to deliver such statements within such time shall be conclusive upon the Lessee that this Lease is in full force and effect, except as and to the extent any modification has been represented by Town, and that there are no uncured defaults in Town’s performance.

28. LIENS.

Lessee agrees at its sole cost and expense to keep the Premises free and clear of any and all claims, levies, liens, encumbrances or attachments.

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ITEM NO. 8.
14 29. VACATING.

Upon termination of the tenancy, Lessee shall completely vacate the Premises, including the removal of any and all of its property. Before departure, Lessee shall return keys and personal property listed on the inventory to Town in good, clean and sanitary condition, reasonable wear and tear excepted.

Lessee shall allow Town to inspect the Premises to verify the condition of the Premises and its contents.

30. ABANDONMENT.

Lessee's absence from the Premisesfor three (3) consecutive days, without prior notice, during which time rent or other charges are delinquent, shall be deemed abandonment of the Premises. Such abandonment will be deemed cause for immediate termination without notice. Town shall thereupon be authorized to enter and take possession and to remove and dispose of the property of Lessee or its guests without any liability whatsoever to Town.

31. NOTICES.

All notices to the Parties shall, unless otherwise requested in writing, be sent to Town addressed as follows:

Town of Los Gatos
Attention: Town Manager
110 E. Main Street
Los Gatos, CA 95030
And to Lessee addressed as follows:

Friends of the Los Gatos Public Library
Attn: Friends of the Library President
100 Villa Ave.

Los Gatos, CA 95030
Notices may be served upon Lessee in person, by first class mail, or by certified mail whether or not said mailing is accepted by Lessee. If notice is sent via facsimile or e-mail, a signed, hard copy of the material shall also be mailed. The workday the facsimile was sent shall control the date notice was deemed given if there is a facsimile machine generated document on the date of transmission. A facsimile transmitted after 1:00 p.m. on a Friday shall be deemed to have been transmitted on the following Monday. These addresses shall be used for service of process.

32. TIME.

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ITEM NO. 8.
15 Time shall be of the essence in this Lease.

33. AMENDMENTS.

It is mutually agreed that no oral Leases have been entered into and that no alteration or variation of the terms of this Lease shall be valid unless made in writing and signed by the Parties to this Lease.

34. SIGNING AUTHORITY.

If this Lease is not signed by all Lessees named herein, the person actually signing warrants that he/she has the authority to sign for the others.

35. CAPTIONS.

The captions of the various sections, paragraphs and subparagraphs of this Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation.

36. SURRENDER OF LEASE NOT MERGER.

The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Town, terminate all or any existing subleases or subtenancies, or may, at the option of Town, operate as an assignment of any and all such subleases or subtenancies.

37. INTEGRATED DOCUMENT.

This Lease, including any exhibits attached hereto, embodies the entire agreement between Town and Lessee. No other understanding, agreements, conversations or otherwise, with any officer, agent or employee of Town prior to execution of this Lease shall affect or modify any of the terms or obligations contained in any documents comprising this Lease. Any such verbal agreement shall be considered as unofficial information and in no way binding upon Town. All agreements with Town are subject to approval of the Town Council before Town shall be bound thereby.

38. WAIVER.

Waiver by Town of one or more conditions of performance or any breach of a condition under this Lease shall not be construed as a waiver of any other condition of performance or subsequent breaches. The subsequent acceptance by a Party of the performance of any obligation or duty by another Party shall not be deemed to be a waiver of any term or condition of this Lease. The exercise of any remedy, right, option or privilege hereunder by Town shall not preclude Town from exercising the same or any and all other remedies, rights, options and privileges hereunder and Town's failure to exercise any remedy, right, option or privilege at law or equity, or otherwise which Town may have, shall not be construed as a waiver.

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ITEM NO. 8.
16 39. INTERPRETATIONS.

In construing or interpreting this Lease, the word "or" shall not be construed as exclusive and the word "including" shall not be limiting. The Parties agree that this Lease shall be fairly interpreted in accordance with its terms without any strict construction in favor of or against any other Party.

40. SEVERABILITY CLAUSE.

If any provision of this Lease is held to be illegal, invalid or unenforceable in full or in part, for any reason, then such provision shall be modified to the minimum extent necessary to make the provision legal, valid and enforceable, and the other provisions of this Lease shall not be affected thereby.

41. GOVERNING LAW.

This Lease shall be governed and construed in accordance with the statutes and laws of the State of California.

42. VENUE.

In the event that suit shall be brought by any Party to this Lease, the Parties agree that venue shall be exclusively vested in the state courts of the County of Santa Clara.

43. COMPLIANCE WITH LAWS.

The Parties hereto shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments in the performance of their rights, duties and obligations under this Lease.

44. BROKERS.

Each party represents that neither has had dealings with any real estate broker, finder, or other person, with respect to this lease in any manner. Each Party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder, or other person with whom the Indemnifying Party has or purportedly has dealt.

45. ATTACHMENTS TO LEASE.

The following exhibits are attached to and made a part of this Agreement:
“A” – Description of Subject Premises
“ B” – Standard Insurance Requirements
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ITEM NO. 8.
17 IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written.

TOWN: TENANT:

TOWN OF LOS GATOS (LESSOR) FRIENDS OF THE LOS GATOS

PUBLIC LIBRARY
______ ____ ___________________________________
Chris Constantin, Town Manager Celia Bakke, President

APPROVED AS TO FORM:

________________________________
Gabrielle Whelan, Town Attorney
ATTEST:
______________
Wendy Wood, Town Clerk
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3/18/2025
3/25/2025
3/25/2025

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ITEM NO. 8.
18 LEASE AGREEMENT

BETWEEN

TOWN OF LOS GATOS
AND

FRIENDS OF THE LOS GATOS PUBLIC LIBRARY

EXHIBIT A

DESCRIPTION OF SUBJECT PREMISES
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ITEM NO. 8.
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ITEM NO. 8.
20 LEASE AGREEMENT BY AND BETWEEN TOWN OF LOS GATOS, CALIFORNIA AND

FRIENDS OF THE LIBRARY

EXHIBIT B

INSURANCE REQUIREMENTS
Upon executing this Lease Agreement, Tenant shall procure and maintain for the duration of the Lease and for so long as may be necessary to fully protect Landlord, insurance against claims for injuries to persons and/or damages to property which may arise from or in connection with the Tenant’s operations on, access to, and/or use of the Premises and Property. The cost of such insurance shall be borne by the Tenant.

A. CERTIFICATE REQUIREMENTS
The Town will be issued a Certificate of Insurance (a Memorandum of Understanding will not be accepted) with the following minimum requirements:
 Certificate(s) will show current policy number(s) and effective dates,  Coverage and policy limits will meet, or exceed, requirements below,  The Certificate Holder will be Town of Los Gatos, 110 E Main Street, Los Gatos, CA 95030,
 Certificate will be signed by an authorized representative,  An endorsement, if required below, will be provided to show the Town, its officers, officials, employees, and volunteers as additional insureds, and  Coverages must be maintained during the term of the Lease with the Town, unless a longer duration is required.

B. MINIMUM SCOPE AND LIMIT OF INSURANCE
Tenant acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage required. If Tenant maintains broader insurance coverage and/or higher limits than the minimums shown below, Landlord shall be entitled to the broader insurance coverage and/or higher limits maintained by Tenant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Landlord.

Coverage shall be at least as broad as the following:

1. Commercial General Liability (CGL): During the term of this Lease, including any extensions or renewals thereof, Tenant, at its sole cost, shall keep in full force and effect a policy of standard form commercial general liability insurance, including coverage for contractual liability, personal injury, property damage, products liability, acts of independent contractors, with a single combined liability limit of not less than One Million Dollars ($1,000,000.00) per occurrence; Two Million Dollars ($2,000,000) in the aggregate, for bodily injury and property damage insuring against all liability of Tenant and its employees, agents, representatives, subtenants, assignees and Docusign Envelope ID: 70F22342-67C3-4C2F-93CC-57473C49A87C

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ITEM NO. 8.
21 concessionaires arising out of and in connection with Tenant's use or occupancy of the Premises.

The liability insurance policy required herein shall insure Tenant's performance of the indemnity provisions of this Lease, and Landlord, and its officials, officers, employees, and agents shall be named as additional insureds with cross-liability endorsements.

The Landlord, and any person, firms or corporations designated by Landlord, by reason of their inclusion under said policy, shall not incur liability for payment of any premium for any policy of insurance required herein. If available, any policy of insurance required herein shall contain a provision requiring the insurer to give the Landlord thirty (30) days' prior written notice before canceling or changing any such coverage.

2. Automobile Liability: Tenant shall procure automobile insurance on an “Any Auto” Basis: ISO Form Number CA 00 01 covering any auto (Code 1), or if Contractor has no owned autos, hired, (Code 8) and non-owned autos (Code 9), with limit no less than $1,000,000 combined single limit each occurrence/per accident for bodily injury and property damage.

3. Workers’ Compensation and Employer’s Liability Insurance. Tenant shall obtain policies as required by applicable law against liability arising on account of injuries or death to workers or employees on the Premises or any improvement of Tenant. Such workers’ compensation insurance shall be in amounts at least equal to the maximum liability of Tenant, its agents, and contractors under the Workers’ Compensation Insurance and Safety Act of the State of California and the Federal Longshore and Harbor Workers’ Compensation Act, as applicable. Tenant shall also maintain Employer’s Liability insurance with limits no less than One Million Dollars ($1,000,000) per accident for bodily injury or disease, $1,000,000 disease – policy limit, $1,000,000 disease – each employee. Such insurance shall include a waiver of subrogation in favor of Landlord.

4. Property Insurance
Tenant shall, at Tenant's sole expense, obtain and keep in full force and effect an insurance policy covering all of Tenant's personal property, trade fixtures, equipment and merchandise located in or upon the leased Premises, and including tenant improvements and betterments in an amount sufficient to cover not less than one hundred percent (100%) of the replacement value of the personal property. Tenant shall be solely responsible for any uninsured loss or damage caused to Tenant's personal property, trade fixtures, equipment and merchandise located in or upon the leased Premises for any reason.

C. OTHER INSURANCE PROVISIONS

1. Primary Coverage:

For any claims related to this Lease, the Tenant’s insurance coverage shall be primary and non-contributory and at least as broad as ISO CG 20 01 04 13 as respects the Town, its officers,
officials, employees, and volunteers. Any insurance or self-insurance maintained by the Landlord, its
officers, officials, employees, or volunteers shall be excess of the Tenant’s insurance and shall not
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ITEM NO. 8.
22 contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies.

2. Insurance Limits, Rating, and Proof of Coverages:

All insurance policies required hereunder shall be issued by an insurance company having not less than a financial rating of Class A VIII or better as rated in the most current available Best's Key Rating Guide.

Prior to the commencement of the term of this Lease, Tenant shall provide Landlord with evidence of any insurance policies required herein and shall continue to provide such evidence of insurance upon the request of Landlord during the remaining term of this Lease, including all extensions and renewals thereto. All public liability, property damage and other casualty policies shall be written as primary policies, not contributing with and not in excess of coverage which the Landlord may carry.

3. Review of Coverage:

Landlord may increase or decrease the amount of commercial general liability insurance and other policies required herein, based upon a general review by Landlord of the standard insurance requirements. Changes in insurance amounts shall occur not more frequently than once a year. Landlord will notify Tenant of any changes under this provision of this Lease.

Landlord may also require Tenant’s contractor or subcontractor to obtain insurance sufficient in coverage, form and amount to provide adequate protection for Landlord, Tenant, and/or those using the Premises or Property.

4. Contractors:

Tenant shall require and verify that all contractors and subcontractors maintain insurance meeting all the requirements stated herein, and Tenant shall ensure that Town, its officers, officials, employees, agents, and volunteers are named as additional insureds on insurance required from its contractor(s) and subcontractor(s).

D. SPECIAL RISKS/CIRCUMSTANCES
Landlord reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances and provide notice to Tenant.

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ITEM NO. 8.

PREPARED BY: Monica Renn
Economic Vitality 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: 10/20/2026
ITEM NO: 9
DATE: September 22, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to execute an Amendment to the Annual Agreement for Services with the Los Gatos Chamber of Commerce, for a One-Time Increase in Funding From $88,000 to a Not to Exceed Amount of $108,000 for FY 2026-27, to Further Support Visitor Attraction and Engagement Services Provided by the Los Gatos Chamber of Commerce.

RECOMMENDATION: Authorize the Town Manager to execute an amendment to the FY 2026-27 Agreement for Services with the Los Gatos Chamber of Commerce, increasing the total agreement amount by $20,000, from $88,000 to an amount not to exceed $108,000, for visitor attraction and engagement services; and authorize a $20,000 increase in expenditure appropriations for Account 2106-67102, funded by the General Fund unassigned fund balance.

FISCAL IMPACT:

The proposed amendment increases the FY 2026-27 Agreement for Services with the Los Gatos Chamber of Commerce by $20,000, from $88,000 to a total amount not to exceed $108,000. At its June 16, 2026, meeting, the Town Council approved the original agreement in an amount not to exceed $88,000 and directed staff to return with a proposed amendment for the additional funding. The recommended action includes an additional expenditure appropriation of $20,000 for Account 2106-67102, funded by the General Fund unassigned fund balance. This is a one-time increase for FY 2026-27 and does not establish an ongoing funding commitment.

STRATEGIC PRIORITY:

The services provided by the Chamber of Commerce related to Visit Los Gatos and the Town’s Visitors Information Center support the Town’s goals of Community Character and Civic

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ITEM NO. 9.

PAGE 2 OF 3
SUBJECT: Amendment to the Annual Agreement for Services with the Los Gatos Chamber of Commerce for FY 2026-27
DATE: October 20, 2026
Engagement as well as the strategic priorities to fostering the economic vitality of businesses and ensuring that residents and visitors feel welcome in Los Gatos.

BACKGROUND:

The Chamber of Commerce has long been a valued partner with the Town of Los Gatos in supporting the business community and providing visitor information and destination marketing services, with formal agreements for service beginning in 2001.

The scope and compensation for services have fluctuated over the years to meet the dynamic economic and community vitality trends of the Los Gatos business community, balanced with the capacity of the Chamber of Commerce to provide services and the availability of funding within the Town’s annual budgets.

In 2024, the Town Council discussed various levels of financial support for the FY 2024-25 annual agreement for services with the Chamber of Commerce. The Council then voted unanimously to approve the continued increased amount of $88,000 for FY 2024-25 and FY 2025-26. The increased funding was supported by the General Fund.

The FY 2025-26 Agreement for Services requires the Chamber of Commerce to provide an annual report on the services rendered that provides quantitative data for services provided under the proposed agreement, illustrating the services rendered and the impact the services have on engagement with the Visit Los Gatos platform and general visitor engagement and increased vitality. The Chamber may utilize a variety of data points that are on trend with the most up to date engagement channels, such as website traffic, social media, phone applications and widgets, influencer relationships, direct services rendered, and similar destination marketing tools.

On June 3, 2026, the Chamber of Commerce provided a year-end report accounting for the services rendered throughout FY 2025-26 under the agreement for services and requested an increase in funding for FY 2026-27 from $88,000 to $108,000. Prior to this date, Town staff had conversations with the Chamber of Commerce during the budget process. At that time, the Chamber agreed to maintain the existing scope of services and compensation, in the amount of $88,000 for Visit Los Gatos Destination Marketing and Town Visitors Information Center services for FY 2026-27. These terms are reflected in the Agreement for Services with Exhibit A – Scope of Services.

DISCUSSION:

At the June 16, 2026, Town Council meeting, the Chamber of Commerce made a verbal request, asking the Town Council to increase the funding for the Scope of Services related to the Annual Agreement for Services for FY 2026-27, from $88,000 to $108,000, stating that the actual cost

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ITEM NO. 9.

PAGE 3 OF 3
SUBJECT: Amendment to the Annual Agreement for Services with the Los Gatos Chamber of Commerce for FY 2026-27
DATE: October 20, 2026
to execute the Scope of Services related to the FY2025-26 agreement was approximately $154,494.

The Town Council discussed the Chamber of Commerce's request and approved the FY 2026-27 Agreement for Services in an amount not to exceed $88,000 (Attachment 1). The Council also directed staff to return with a proposed amendment increasing the agreement amount by $20,000, to a total not to exceed $108,000, for Council consideration and approval. The proposed amendment (Attachment 2) increases compensation without changing the existing Scope of Services. Under the agreement, the Chamber of Commerce is required to submit monthly invoices with a detailed accounting of the services performed and associated charges.

The proposed one-time funding increase of $20,000 is intended to provide additional financial support for the Chamber of Commerce's existing visitor attraction, destination marketing, and community engagement services during FY 2026-27. The amendment does not expand or otherwise modify the Scope of Services previously approved by the Town Council. All existing performance, reporting, and monthly invoicing requirements remain in effect, and total compensation under the amended agreement will not exceed $108,000.

During the June 16, 2026 discussion, Town staff noted that the scope of services and agreement terms the Town looks to have delivered in future years, by the Chamber of Commerce, is evolving. Thus, Town staff will meet with the Chamber of Commerce leadership to discuss and draft a restructured scope of services and funding amount for future years.

CONCLUSION:

Staff recommends that the Town Council authorize the Town Manager to execute an amendment to the FY 2026-27 Agreement for Services with the Los Gatos Chamber of Commerce, increasing the total agreement amount by $20,000, from $88,000 to an amount not to exceed $108,000, for visitor attraction and engagement services, and authorize an additional $20,000 expenditure appropriation for Account 2106-67102, funded by the General Fund unassigned fund balance.

ENVIRONMENTAL ASSESSMENT:

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

Attachments:

1. Original Agreement for Services with the Los Gatos Chamber of Commerce for Visit Los Gatos and Destination Marketing Services, including Exhibit A, Scope of Services.

2. Amendment to the original agreement, increasing the funding for the Scope of Services from $88,000 to a not to exceed amount of $108,000.

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ITEM NO. 9.

AGREEMENT FOR SERVICES

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Agreement for Services
Los Gatos Chamber of Commerce
Agreement for Services with the Los Gatos Chamber of Commerce

PREAMBLE
This
Agreement is made with reference to the following facts.

I. RECITALS
A. Contractor represents and affirms that it is willing to perform the desired work pursuant to this Agreement.

B. Town desires to engage Contractor to provide the Annual Agreement for Services with the Los Gatos Chamber of Commerce to manage the Town's Destination Marketing Services, Visit Los Gatos, and the Town's Visitors Information Center.

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

II. AGREEMENT
A. Scope of Services. Contractor shall provide services as described in the Scope of Services, which is hereby incorporated by reference and attached as Exhibit A.

B. Term. The term of this Agreement shall be from July 1, 2026 to Wednesday, June 30, 2027.

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

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

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

ATTACHMENT 1

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ITEM NO. 9.

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Agreement for Services
Los Gatos Chamber of Commerce
F. Compensation: Compensation for services at the rates set forth in Exhibit A and in the amount not to exceed $88,000.00, inclusive of all costs subject to appropriation of funds, notwithstanding any other provision in this agreement. Payment shall be based upon Town approval of each task.

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

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

Invoices: Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655
Los Gatos, CA 95031-0655
Email (preferred): [email protected]
H. Availability of Records. Contractor shall maintain the records supporting this billing for not less than three years following completion of the work under this Agreement. Contractor shall make these records available to authorized personnel of the Town at the Contractor offices during business hours upon written request of the Town.

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

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

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

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ITEM NO. 9.

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Agreement for Services
Los Gatos Chamber of Commerce
with a direct or indirect interest that would conflict with its performance of this Agreement, Contractor shall promptly notify Town of this employment relationship, and shall, at the Town's sole discretion, sever any such employment relationship.

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

III. INSURANCE AND INDEMNIFICATION
A. Minimum Scope of Insurance:

1. Contractor 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.

2. Contractor 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.

3. Contractor shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. Contractor agrees that all certificates and endorsements are to be received and approved by the Town before work commences.

B. General Liability:

1. 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 Contractor; products and completed operations of the Contractor, premises owned or used by the Contractor.

2. The Contractor'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 Contractor's insurance and shall not contribute with it.

3. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or agents.

4. The Contractor'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.

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

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ITEM NO. 9.

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Agreement for Services
Los Gatos Chamber of Commerce
D. . In addition to these policies, Contractor 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, Contractor shall ensure that all subcontractors employed by Contractor provide the required Workers' Compensation insurance for their respective employees. As required by the S
limit of no less than one million dollars ($1,000,000) per accident for bodily injury or disease.

E. Indemnification. The Contractor shall indemnify the Town its elected and appointed officials, employees and agents from all damages, liabilities, penalties, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of, or in the course of performing work which may be occasioned by any act or omissions of the Contractor, or any of the Contractor's officers, employees, or agents or any subcontractor. Contractor shall defend the Town against any such claims.

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

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

C. Mediation. Should any dispute arise out of this Agreement, any party may request that it be submitted to mediation.

The parties shall meet in mediation within 30 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.

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

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

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ITEM NO. 9.

Page 5 of 5 ends

Agreement for Services
Los Gatos Chamber of Commerce
F. Notices. Any notice required to be given shall be deemed to be duly and properly given if mailed postage prepaid, and addressed to:

Town of Los Gatos
Attn: Town Clerk
110 E. Main Street, Los Gatos, CA 95030
Los Gatos Chamber of Commerce
10 Station Way, Los Gatos, CA 95030
or personally delivered to the Contractor to such address or such other address as the Contractor designates in writing to Town.

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

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

Attachments:

A - Exhibit A Scope of Services for Chamber AGR FY 26 27

Page 174 ends

ITEM NO. 9.

IN WITNESS WHEREOF, the Town and the Contractor have executed this Agreement.

TOWN OF LOS GATOS: CONTRACTOR: Jennifer Lin
**signature_150631**

SIGNATURE
**name_150631**

FULL NAME
**role_150631**
TITLE
**date_signed_150631**

DATE SIGNED
**signature_150632**

SIGNATURE
**name_150632**

VENDOR SIGNATORY'S FULL NAME
**role_150632**

VENDOR SIGNATORY'S TITLE
**date_signed_150632**

DATE SIGNED
Approved as to form:
**signature_150633**

SIGNATURE
**name_150633**

FULL NAME
**role_150633**
TITLE
**date_signed_150633**

DATE SIGNED
The execution date is the date on which the last party has signed.

Page 175 ends

ITEM NO. 9.

Exhibits List
A - Exhibit A Scope of Services for Chamber AGR FY 26 27

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ITEM NO. 9.

Exhibit A Exhibit A Scope of Services for Chamber AGR FY 26 27

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ITEM NO. 9.

Exhibit A
Scope of Services FY 26/27

LOS GATOS VISITOR INFORMATION CENTER, VISIT LOS GATOS WEBSITE, SOCIAL MEDIA AND DESTINATION MARKETING SERVICES FOR $88,000 All services rendered as a part of this scope of services under the function of the Los Gatos Visitor Information Center shall be to the benefit and promotion of Town-wide stakeholders including businesses, residents, and visitors.

The following services and information will be coordinated and provided by the Chamber of Commerce as a part of the operations of the Los Gatos Visitor Information Center, Visit Los Gatos Website, and Visit Los Gatos Social Media and Destination Marketing Services:

1. Provide services to manage and maintain Visit Los Gatos as follows:
a. Maintain branded website, https://visitlosgatosca.com, that is easily accessible, simple to navigate, and appears within the top online keyword searches; and b. Ensure the services, promotions, content, etc. under the umbrella of Visit Los Gatos is open to and inclusive of all Los Gatos businesses regardless of their membership status at the Los Gatos Chamber of Commerce; and c. Ensure the branding and messaging of content related to Visit Los Gatos is d. Include language on the website that clearly reflects the partnership of the Town of Los Gatos and Chamber of Commerce as partners/sponsors of the website (the Town continues to provide a direct link from its website to Visit Los Gatos); and e. Provide marketing such as digital and printed materials to visitors at the hotels, restaurants, shops, Chamber of Commerce Office, Town Hall, Library, etc. that identifies and promotes the Visit Los Gatos website, social media, and related activities; and
f. Maintain and update the information on the website in a timely manner to ensure the information provided is accurate and up to date, with a minimum of once monthly updates; and
g. Provide dedicated staffing to support the social media and destination marketing efforts of Visit Los Gatos, including Visit Los Gatos focused posts published regularly across social media and similar platforms.
h. When feasible, engage with cross-promotional opportunities, mobile applications/ widgets, social media tags, or influencer engagement to increase the visibility of the Visit Los Gatos brand and destination marketing efforts on a variety of platforms.

2. programs through social media, email, etc.
a. Promote Town events in Chamber of Commerce marketing materials including email notifications and newsletters. Content will be provided by Town staff for distribution.

Page 178 ends

ITEM NO. 9.

Exhibit A
Scope of Services FY 26/27

3. Offer in-person Los Gatos Visitor Information Center services at the Chamber of Commerce offices.
a. Respond to walk-in and call-in inquiries, and encourage engagement with the Visit Los Gatos website and social media platforms; and b. Allow Town meetings with the business community to be conducted at the Chamber of Commerce offices during mutually agreed upon times and days.

4. Provide Annual Written Reports and Monthly Invoicing. a. The annual written reports shall be provided to the Economic Vitality Manager of the Town no later than May 1, 2027 by the Chamber of Commerce that quantifies services rendered and accounts for all funds expended to meet this Scope of Services, and the attached Agreement. The report shall include data points for three different time periods, at least three months apart and within the time frame of the attached agreement that quantifies the services provided and specifies the various marketing collateral, applications, social media channels, staffing, and any other channels utilized to provide destination marketing and Visitor Information Center services; and
b. Invoice the Town for payment of services monthly, as described in the attached Agreement.

Page 179 ends

ITEM NO. 9.

AMENDMENT TO AGREEMENT

Page 1 of 2 ends

Amendment to Agreement
Los Gatos Chamber of Commerce
This AMENDMENT TO AGREEMENT amends that certain agreement titled Agreement for Services with the Los Gatos Chamber of Commerce dated July 1, 2026, made by and between the Town of Los Gatos, ("Town,") and the Los Gatos Chamber of Commerce, Corporation (“Contractor”), and whose address is 10 Station Way, Los Gatos, CA 95030 A. Town and Contractor entered into an Agreement for Services on July 1, 2026 (“Agreement”).

B. The parties wish to amend the Agreement in order to increase the funding as a one-time increase from a not to exceed amount of $88,000 to a not to exceed amount of $108,000 for the services outlined in Exhibit A.

AMENDMENT
A. Section II AGREEMENT, F is amended to read: Compensation: Compensation for services at the rates set forth in Exhibit A and in the amount not to exceed $108,000, inclusive of all costs subject to appropriation of funds, notwithstanding any other provisions in this agreement. Payment shall be based on Town approval of each task.

B. Exhibit A has been Amended to reflect the amended to reflect the change in the funding. No other amendments were made to the Scope of Services contained within Exhibit A.

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

ATTACHMENT 2

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ITEM NO. 9.

Amendment to Agreement Page 2 of 2
Los Gatos Chamber of Commerce
TOWN OF LOS GATOS CONTRACTOR: Enter name of contractor
**signature_207104**

SIGNATURE
Chris Constantin

FULL NAME
Town Manager
TITLE
**date_signed_207104**

DATE SIGNED
**signature_207103**

SIGNATURE
Jennifer Lin

CONTRACTOR SIGNATORY'S FULL NAME
CEO, Los Gatos Chamber of Commerce

CONTRACTOR SIGNATORY'S TITLE
**date_signed_207103**

DATE SIGNED
Approved as to form:
**signature_207101**

SIGNATURE
Gabrielle Whelan

FULL NAME
Town Attorney
TITLE
**date_signed_207101**

DATE SIGNED
The execution date is the date on which the last party has signed.

Page 181 ends

ITEM NO. 9.

Exhibit A
Scope of Services FY 26/27

LOS GATOS VISITOR INFORMATION CENTER, VISIT LOS GATOS WEBSITE, SOCIAL MEDIA AND DESTINATION MARKETING SERVICES FOR $108,000 All services rendered as a part of this scope of services under the function of the Los Gatos Visitor Information Center shall be to the benefit and promotion of Town-wide stakeholders including businesses, residents, and visitors.

Page 182 ends

ITEM NO. 9.

Exhibit A
Scope of Services FY 26/27

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ITEM NO. 9.

PREPARED BY: Eric Lemon
Finance & Accounting 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: 10/20/2026
ITEM NO: 10
DATE: October 20, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Receive the Finance Commission’s Recommendation and Authorize the Town Manager to Execute an Agreement with Badawi & Associates to Provide Auditing Services for the Town of Los Gatos
RECOMMENDATION: Receive the Finance Commission’s Recommendation and authorize the Town Manager to execute a three-year agreement with Badawi & Associates and include the option to extend for two additional one-year terms in an amount of $163,094 for the three-year term, $57,660 for the first year extension, $59,389 for the second year extension, and a $5,000 contingency.

FISCAL IMPACT:

The proposed agreement would include three years of auditing services for a total amount of $163,094 with the option to extend for two (2) additional one-year terms for $57,660 for the first year extension, $59,389 for the second year extension, and a $5,000 contingency.

Sufficient funds for auditing services are included in the Town’s Adopted FY 2026-27 Operating Budget. Funding for additional years will be budgeted on an annual basis.

STRATEGIC PRIORITY:

Auditing services support the Council’s Strategic Priority of Fiscal Stability by ensuring accuracy in financial reporting.

BACKGROUND:

The Finance Commission received the auditor contract at their September 14, 2026, regular meeting and recommended unanimously that the Town Council approve the agreement. The

Page 184 ends

ITEM NO. 10.

PAGE 2 OF 3
SUBJECT: Authorize the Town Manager to Execute an Agreement with Badawi & Associates to provide auditing services for the Town of Los Gatos DATE: October 20, 2026
Town made a few changes to the agreement term and amount after the Finance Commission approved the agreement. The changes were to include the total amount for the full five years that were in the bid and to adjust the agreement term to include the optional years.

With the passage of Measure A, the Finance Commission has been tasked with several mandated duties as described in the provisions of the adopted Ordinance. Section 2.50.225. – Duties states that:
(a) The Finance Commission shall:
(9) Provide written comments and recommendations regarding the selection of auditors for the Comprehensive Annual Financial Report (now called the Annual Comprehensive Financial Report).

For the past five years, the Town’s annual audits were completed by Chavan and Associates.

Consistent with Governmental Accounting Standards Board best practices and State law, it is the Town’s practice to solicit audit proposals every five years to ensure audit independence and competitive prices. If the Town is satisfied with the current audit firm’s work, then that firm may submit a proposal but must propose with an alternate audit engagement partner.

DISCUSSION:

The Town of Los Gatos sent Requests for Proposals (RFP) to qualified independent certified public accounting firms to audit its financial statement for three fiscal years, with an option to extend the agreement an additional two fiscal years with Town Council approval. The RFP was sent to thirty-seven qualified firms known to provide local government auditing services. Five firms responded with proposals.

The initial scoring panel consisted of the Administrative Services Director, Finance and Accounting Manager, Senior Administrative Analyst, and Accountant / Finance Analyst. The firms were evaluated based on their technical expertise with local government audits, qualified personnel, and responsiveness to the RFP. The top three proposals were moved forward in the evaluation process, and they had dollar cost bids that were comparable. They were Badawi & Associates, Eide Bailly, and Vasquez & Company.

The interview selection panel consisted of one Finance Commissioner, the Administrative Services Director, and the Finance and Accounting Manager. Based upon the proposals and interviews, Town staff selected the firm of Badawi & Associates.

The managing partner at Badawi & Associates is Mr. Ahmed Badawi, who has over 25 years of municipal audit experience with a special focus on cities. He is a licensed CPA in California and is a member of the Government Accounting and Auditing Committee of the California Society of Certified Public Accountants. He has participated in the audits of numerous Town,

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ITEM NO. 10.

PAGE 3 OF 3
SUBJECT: Authorize the Town Manager to Execute an Agreement with Badawi & Associates to provide auditing services for the Town of Los Gatos DATE: October 20, 2026
county and special district governments, as well as non-profit entities. The firm’s clients that are close to the Town of Los Gatos include Mountain View, Scotts Valley, Foster City, and Millbrae.

The firm will provide the following services for the Town:
 The annual audit of the basic financial statements in accordance with Governmental Accounting Standards and preparation of the Town’s Annual Comprehensive Financial Report;
 A report communicating information related to the audit to those in charge of governance (Town Council) at the conclusion of the audit;  A management letter containing any comments or recommendations resulting from the review of systems of internal controls in connection with the financial audit;  A Single Audit for grant funding if required under the Title 2 U.S. Code of Federal Regulations;
 Measure G district sales tax Agreed-upon Procedures;
 GANN Limit Agreed Upon Procedures; and
 Optional additional services, include the preparation of the annual report of financial transactions to the State Controller, TDA Audit, and Annual Street Report Preparation.

CONCLUSION:

Receive the Town Finance Commission recommendation and authorize the Town Manager to execute a three-year agreement with Badawi & Associates and include two optional one-year terms to provide auditing services for the Town of Los Gatos in the amount of $163,094 for the three-year term, $57,660 for the first year extension, $59,389 for the second year extension, and a $5,000 contingency for a five year total of $285,143.

ENVIRONMENTAL ASSESSMENT:

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

Attachment:

1. Agreement to provide auditing and optional services with Badawi & Associates, LLP.

Page 186 ends

ITEM NO. 10.

AGREEMENT FOR SERVICES

Page 1 of 5 ends

Agreement for Services
Badawi & Associates
Badawi & Associates - Professional Auditing Services

PREAMBLE
THIS AGREEMENT is by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and Badawi & Associates (“Contractor”), a Corporation and whose address is 5901 Christie Avenue, Suite 307 Emeryville CA 94608. This Agreement is made with reference to the following facts.

I. RECITALS
A. Town issued a Request for Proposal for services described in this Agreement.

B. Contractor represents and affirms that it is willing to perform the desired work pursuant to this Agreement.

C. Town desires to engage Contractor to provide professional auditing services.

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

II. AGREEMENT
A. Scope of Services. Contractor shall provide services as described in the technical proposal, which is hereby incorporated by reference and attached as Exhibit A.

B. Term. The term of this Agreement shall be from April 1, 2027, to March 31, 2030. At the Town’s option, the Agreement may be extended for two additional one-year terms, from April 1, 2030, through March 31, 2031, and from April 1, 2031, through March 31, 2032.

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

E. Information/Report Handling. All documents furnished to the Contractor by the Town and all reports and supportive data prepared by the Contractor under this Agreement are the Town’s property and shall be delivered to the Town upon the completion of services or at the Town's written request. All reports, information, data, and exhibits prepared or assembled by the Contractor in connection with the performance of its services pursuant to this Agreement are confidential until released by the Town to the public, and the Contractor shall not make any of these documents or information available to any individual or organization not employed by the Contractor or the Town without the written consent of the Town before such release. The Town acknowledges that the reports to be prepared by the Contractor pursuant to this Agreement are for the purpose of evaluating a defined project, and Town's use of the information contained in the reports prepared by the Contractor in connection with other projects shall be solely at Town's risk, unless Contractor expressly ATTACHMENT 1

Page 187 ends

ITEM NO. 10.

Page 2 of 5 ends

Agreement for Services
Badawi & Associates
consents to such use in writing. Town further agrees that it will not appropriate any methodology or technique of Contractor which is and has been confirmed in writing by Contractor to be a trade secret of the Contractor.

F. Compensation: Compensation for services at the rates set forth in Exhibit B with amounts not to exceed $163,094 for the three-year term, $57,660 for the first year extension, $59,389 for the second year extension, and a $5,000 contingency. These amounts are inclusive of all costs subject to appropriation of funds, notwithstanding any other provision in this agreement. Payment shall be based upon Town approval of each task.

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

Page 188 ends

ITEM NO. 10.

Page 3 of 5 ends

Agreement for Services
Badawi & Associates
subject of this Agreement, and it shall immediately disassociate itself from such an interest, should it discover it has done so and shall, at the Town's sole discretion, divest itself of such interest. Contractor shall not knowingly and shall take reasonable steps to ensure that it does not employ a person having such an interest in this performance of this Agreement. If after employment of a person Contractor discovers it has employed a person with a direct or indirect interest that would conflict with its performance of this Agreement, Contractor shall promptly notify Town of this employment relationship, and shall, at the Town's sole discretion, sever any such employment relationship.

III. INSURANCE AND INDEMNIFICATION
A. Minimum Scope of Insurance:

B. General Liability:

3. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or agents.

4. The Contractor'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.

Page 189 ends

ITEM NO. 10.

Page 4 of 5 ends

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

D. Workers’ Compensation. In addition to these policies, Contractor 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, Contractor shall ensure that all subcontractors employed by Contractor 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.

C. Mediation. Should any dispute arise out of this Agreement, any party may request that it be submitted to mediation.

Page 190 ends

ITEM NO. 10.

Page 5 of 5 ends

Agreement for Services
Badawi & Associates
E. Amendment. No modification, waiver, mutual termination, or amendment of this Agreement is effective unless made in writing and signed by the Town and the Contractor.

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

Town of Los Gatos
Attn: Town Clerk
110 E. Main Street, Los Gatos, CA 95030
Badawi & Associates
5901 Christie Avenue, Suite 307 Emeryville CA 94608
or personally delivered to the Contractor to such address or such other address as the Contractor designates in writing to Town.

Attachments:

A - Technical Proposal - Badawi and Associates
B - Dollar Cost Proposal - Badawi and Associates

Page 191 ends

ITEM NO. 10.

IN WITNESS WHEREOF, the Town and the Contractor have executed this Agreement.

TOWN OF LOS GATOS: Badawi & Associates
**signature_199139**

SIGNATURE
Chris Constantin

FULL NAME
Town Manager
TITLE
**date_signed_199139**

DATE SIGNED
**signature_199142**

SIGNATURE
Ahmed Badawi

VENDOR SIGNATORY'S FULL NAME
President

VENDOR SIGNATORY'S TITLE
**date_signed_199142**

DATE SIGNED
Approved as to form:
**signature_199141**

SIGNATURE
Gabrielle Whelan

FULL NAME
Town Attorney
TITLE
**date_signed_199141**

DATE SIGNED
The execution date is the date on which the last party has signed.

Page 192 ends

ITEM NO. 10.

Exhibits List
A - Technical Proposal - Badawi and Associates
B - Dollar Cost Proposal - Badawi and Associates

Page 193 ends

ITEM NO. 10.

Exhibit A
Technical Proposal - Badawi and Associates

Page 194 ends

ITEM NO. 10.

Town of
Los Gatos

TECHNICAL PROPOSAL
For Professional Auditing Services for
the Town of Los Gatos
For fiscal years ending June 30, 2027 through 2029,
with the option to extend for two (2) additional oneyear terms.

June 12, 2026
Contact Person:

Ahmed Badawi, CPA
Badawi & Associates
Certified Public Accountants
5901 Christie Avenue, Suite 307
Emeryville, CA 94608
Phone: (510) 768-8244
Fax: (510) 768-8249
E-mail: [email protected]

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ITEM NO. 10.

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ITEM NO. 10.

Town of Los Gatos
Table of Contents
Page
Letter of Transmittal ................................................................................................................................................... 1 Firm Qualifications and Experience .......................................................................................................................... 3 Independence ........................................................................................................................................................... 3 Insurance .................................................................................................................................................................. 3 License to Practice in California................................................................................................................................ 3 Conflict of Interest ..................................................................................................................................................... 3 Firm Qualifications .................................................................................................................................................... 3 Technical Approach .................................................................................................................................................. 4 Firm Experience ........................................................................................................................................................ 5 Additional Activities ................................................................................................................................................... 5 Client Training Seminar ............................................................................................................................................ 6 GASB 68 Firm Developed Tools and Assistance ..................................................................................................... 6 Flowcharting Documentation .................................................................................................................................... 6 Quality Control Review ............................................................................................................................................. 6 Federal or State Desk Reviews ................................................................................................................................ 9 Disciplinary Action ..................................................................................................................................................... 9 Litigations .................................................................................................................................................................. 9 Partner, Supervisory, and Staff Qualifications and Experiences ........................................................................ 10 Similar Engagements with Other Governmental Entities ..................................................................................... 18 Understanding of Services to be Provided ............................................................................................................ 24 Specific Audit Approach .......................................................................................................................................... 25 Objectives of Our Services ..................................................................................................................................... 25 Audit Approach ....................................................................................................................................................... 25 Technical Approach ................................................................................................................................................ 26 Use of Technology in the Audit ............................................................................................................................... 29 Audit Schedule .......................................................................................................................................................... 31 Discussion of Relevant Accounting Issues ........................................................................................................... 34 Conclusion................................................................................................................................................................. 35 Appendix .................................................................................................................................................................... 36 Exceptions to the Contract ...................................................................................................................................... 36 Prepared by Client (PBC) List ................................................................................................................................. 37 RFP Forms and Attachments.................................................................................................................................. 43

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ITEM NO. 10.

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ITEM NO. 10.

June 12, 2026
Letter of Transmittal
Mr. Eric Lemon
Finance and Accounting Manager
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
Dear Mr. Lemon:

Badawi & Associates (B&A), Certified Public Accountants (the “Firm”) is pleased to have the opportunity to respond to your request for a proposal to provide external audit services and to submit its qualifications to perform an independent audit of the financial statements of the Town of Los Gatos (the “Town”) for the fiscal years ending June 30, 2027 through 2029, with the option to extend for two (2) additional one-year terms. The objective of our audits is to issue opinions regarding the fairness of presentation of the financial position of the Town in accordance with generally accepted accounting principles. These audits are to be performed in accordance with generally accepted auditing standards, the standards set forth for financial audits in the Government Accountability Office’s (GAO) Government Auditing Standards, the provisions of the federal Single Audit Act of 1984, as amended in 1996, and the Uniform Guidance, Audits of States, Local Governments and Non-Profit Organizations, Uniform Administrative Requirements, as well as any other applicable federal, state, local or programmatic audit requirements.

We will also perform the following as part of our engagement:
- Single Audit
- Optional and additional services:
o Gann Limit Agreed-upon Procedures
o Measure G Agreed-upon Procedures
o Transportation Development Act (TDA) Audit
o State Controller’s Report Preparation
o Street Report Preparation
We will also apply limited audit procedures to Management’s Discussion and Analysis (MD&A) and required supplementary information. In addition, we will prepare the management letter containing comments and recommendations regarding our review and evaluation of the systems of internal control and accounting procedures.

This proposal will highlight the background of the partners and staff assigned to the engagement, summarize our experience in the governmental area, and describe our approach to auditing the Town.

This proposal demonstrates our ability to render the quality examination and to perform the necessary accounting and auditing services requested by the Town on a timely basis.

As a partner of the Firm, I will be the primary contact for negotiation of the contract. Additionally, I have been authorized to legally bind the Firm. You may contact me at the following address and phone number:

Ahmed Badawi, CPA
Badawi & Associates
Certified Public Accountants
5901 Christie Avenue, Suite 307
Emeryville, CA 94608
Telephone: (510)768-8244
E-mail: [email protected]

Page 199 ends

ITEM NO. 10.

Mr. Eric Lemon
Finance and Accounting Manager
Town of Los Gatos

Page 2 ends

2 We are committed to performing the required work, completing the audit, and issuing the necessary auditors’ reports.

We believe we are the best qualified to perform the audit because our audit staff includes individuals well versed in municipal auditing and reporting requirements. We have performed auditing and consulting engagements for numerous cities throughout California. We will be responsive to the needs of the Town, we understand the Town’s operational environment, and pledge to you our complete commitment to providing a quality product that meets the Town’s requirements.

The approach to the audit has been designed to meet the audit requirements of the Town with the least disruption to the Town’s office operations. The foundation of the audit approach is based on communication coupled with a strong knowledge of Town operations and detailed planning at the initial stages of the audit. Open communication lines with all parties of the Engagement Team and Town Management and staff throughout the engagement eliminate “surprises”. Initial planning and proper assignment of duties to experienced personnel provide for an effective and efficient audit process. Consequently, inefficiencies and disruptions are kept to a minimum. In addition, we perform almost half of the audit tasks during the interim phase to minimize any unforeseen delays during the year-end phase and to ensure a smooth and timely audit process.

The Firm maintains liability insurance coverage for professional liability, Workers’ Compensation, Comprehensive General Liability and Auto as part of our comprehensive insurance policy.

The Firm is an Equal Opportunity employer and complies with all Federal and State hiring requirements. The Firm also supports Affirmative Action philosophies and works hard to provide disadvantaged groups with opportunities for self enhancement.

This proposal is a firm and irrevocable offer for 180 days.

We are confident that you will find our organization offers the required expertise, technical knowledge, and business understanding to perform an audit of the Town. Our past experience provides us with a thorough understanding of the needs and requirements of the Town, as well as the technical knowledge to perform such services in accordance with the accounting and auditing guidelines as published by the various authoritative entities.

We welcome your inquiries and look forward to further discussions with you.

Sincerely,
Ahmed Badawi
Partner
Badawi & Associates
Certified Public Accountants

Page 200 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
3 Independence
The Firm is independent of the Town of Los Gatos as defined by the GAO’s Standards for Audit of Governmental Organizations, Programs, Activities and Functions, and the AICPA and California State Society of Certified Public Accountants as promulgated in various auditing and professional standards.

Insurance
The Firm maintains professional liability insurance and other coverage as part of our comprehensive insurance policy. Upon selection as the Town’s independent auditor, the Firm and our insurance provider will provide a certificate of insurance to the Town which shows the minimum requirements identified by Town have been met.

License to Practice in California
The Firm and all key professional staff assigned to the Town’s audit are properly licensed to practice as Certified Public Accountants in the State of California and comply with GAO Government Auditing Standards.

The Firm is registered with the California State Board of Accountancy. Its State number is 6823.

The Firm has met all required State and local laws, rules, and regulations.

Conflict of Interest
The Firm has no conflicts of interest in connection with providing the services described in this proposal. The Firm does not have any financial, business, or other professional relationships with the Town or any member of Town staff.

Firm Qualifications
Badawi & Associates was founded by Mr. Ahmed Badawi. Mr. Badawi has over 25 years of experience working with state and local government with a special focus on cities. Prior to founding B&A, Mr. Badawi was a partner with several local and national firms, where he headed their government practice in Northern California. Mr. Badawi founded Badawi & Associates to serve the fast-paced needs of California's local governments. The goal is to build a proactive, client-focused culture from the ground up and to eliminate the entrenched bureaucratic culture and intrinsic limitations of the big audit firms.

Located in Emeryville, CA, the Firm serves a variety of cities and towns throughout California as well as conducting financial related services for numerous special districts and authorities.

Names and phone numbers of several of our current and past clients and other references are provided for your inquiries. We encourage you to contact these individuals to obtain information on the quality of the audit and the ability of the audit staff.

Our Emeryville office will be the Engagement Office assigned to the Town.

In addition to specific Town financial statements, the Firm members have also audited numerous redevelopment agencies, public financing authorities, hospitals, housing authorities, transportation authorities, special districts, water districts, OCJP grants, self-insurance pools, joint power authorities and has also performed numerous compliance audits in accordance with the Single Audit Act, childcare regulations, TOT regulations, AQMD regulations, franchise requirements.

The Engagement Partner assigned to the Town will be Mr. Ahmed Badawi. Mr. Badawi has over 25 years of government audit experience. He is a member of various governmental committees, has actively participated in the development of accounting and audit guidelines for the governmental sector, and is an instructor for the California Society of Municipal Finance Officers.

Firm
Qualifications
and
Experience

Page 201 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
4 The professional staffs assigned to the Engagement are qualified and experienced. Each individual of the Engagement Team has several years of experience and has conducted or participated in numerous municipal audits of various sizes. Their understanding of governmental operations and the various authoritative guidelines will provide the where-with-all to perform the audit in an efficient and effective manner with minimal disruption to the Town’s finance department.

Technical Approach
The approach to the audit has been designed to meet the audit requirements of the various authorities with the least disruption to the Town’s operations. The foundation of the audit approach is based on communication coupled with a strong knowledge of Town operations and detailed planning at the initial stages of the audit. Open communication lines with all parties of the Engagement Team and Town Management and staff throughout the engagement eliminate “surprises”. Initial planning and proper assignment of duties to experienced personnel provide for an effective and efficient audit process. Consequently, inefficiencies, disruptions, and lack of understanding are kept to a minimum.

The audit approach will consist of four phases:
1) Initial Planning Meeting:

The Engagement Partner and Manager will meet with Town Management to discuss the audit approach, identify specific needs of Town Management, and familiarize themselves with Town policies and practices.
2) Interim:

The Engagement Team members including the Engagement Team Partner will perform the internal control reviews, test transactions, evaluate compliance with Single Audit Act requirements, identify potential audit issues that need to be addressed, perform limited confirmation procedures, and develop a clear understanding between the Engagement Team and Town Management of the year-end audit responsibilities and assignments. In addition, we strive to complete many of the year-end audit tasks during the interim phase to ensure a smoother audit process. We will work with the Town on providing a list of those tasks that we will target to complete during interim and work with the Town on how to complete them to minimize the amount of effort and time needed at year-end which in turn will assist the Town in meeting its goal of issuing the Annual Comprehensive Financial Report.
3) Year-end:

The Engagement Team members including the Engagement Team Partner will conduct validation procedures on general ledger account balances, complete confirmation procedures, perform analytical procedures on revenue and expenditures, perform search for unrecorded liabilities, complete compliance work on Federal Assistance, and wrap up audit field work.
4) Reporting:

Auditor’s reports for all Town reporting entities and compliance requirements will be finalized along with Single Audit Reports and Management Letter comments. The Partner and Manager will be available to make presentations to the Town Council and/or designated bodies.

Page 202 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
5 Firm Experience
The Firm provides a full range of accounting services to governmental agencies throughout California, including audit, tax and accounting. The Firm’s professional staff members provide the financial background and specific experience to meet the Town’s operational needs.

Additionally, this situation provides the Town with an auditing firm that has depth in capabilities to address any financial issue the Town may need assistance with, and the quality audit approach that you expect.

Our Emeryville office will be the Engagement Office assigned to the Town.

Firm policy requires that the Engagement Partner, during the first year of the engagement, be actively involved in the daily fieldwork. This means to the Town that Mr. Badawi will actually be on-site during the audit coordinating the audit process, supervising the audit staff, gaining a hands-on understanding of Town processes, and benefiting the Town with his broad municipal experience. We have found that this effort benefits the Town and the Firm through developing a thorough knowledge of the Town’s practices and issues and establishing a close working relationship with the Town’s Management. Additionally, continuity of audit personnel is assured because of the hands on involvement of the Partner.

We are committed to providing appropriate and related experience, personal involvement, and a broad business perspective to produce a quality end product within the time frames required.

The Firm provides financial and compliance auditing services to governmental agencies throughout California. We are a governmental agency auditing firm and our professional staff members have been performing these services for many years. As a result, we have performed financial and compliance audits on most, if not all, types of governmental agencies and operations including:
 Cities
 Redevelopment
Agencies
 Financing
Authorities
 Housing Authorities
 Special Districts
 Water Districts
 Waste Management
Authorities and
Operations
 Pension Plans
 Child Care
Operations
 Joint Power
Authorities
 Investment Activities
 Landfills
 Enterprise Funds
 Airports
 Transportation
Operations
 Federal and State
Grants
Additional Activities
We offer a full range of accounting and finance services to the governmental sector. These services include:
 Financial audits
 Compliance audits
 Tax advice
 Development of financial and
accounting policies and procedures
 Investment review and compliance
evaluation
 Operational reviews
 Technical guidance on existing and
upcoming accounting issues
 Training seminars
 Pension/profit-sharing plans
 Performance audits
 Business consulting
Consequently, Firm personnel are well qualified to perform the services expected by the Town.

Page 203 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
6 Client Training Seminar
The Firm hosts an annual update on recent technical accounting and finance issues affecting the governmental area. This all day session reviews new and anticipated pronouncements from GASB, discusses future issues under consideration by GASB, reviews accounting treatment of various transactions where issues may arise, and provides a general overview of state and federal compliance issues. All of our clients are invited to attend, free of charge. The one day session qualifies for CPE under the rules of the State Board of Accountancy and is held in the Bay Area.

GASB 68 Firm Developed Tools and Assistance
The Firm has developed tools to assist our clients with preparation of GASB 68 journal entries for the CalPERS’ Cost Sharing Plans (for which individualized actuarial valuations are no longer prepared) and the CalPERS’ Agent Multiple Employer Plans. In addition to providing our clients with these tools and instructions on how to use them, we are available to answer any questions on how to prepare and complete the GASB 68 journal entries.

Flowcharting Documentation
As part of our risk assessment procedures, we prepare flowcharts for documenting our understanding of the Town’s significant accounting and financial processes. Flowcharts are updated annually for any changes in the Town’s processes and copies can be provided upon request for the Town’s internal use. Flowcharted processes may include:
 Financial Reporting, Closing, and Manual Journal Entries  Cash Receipts, Billing, and Accounts Receivable/Revenues  Cash Disbursements, Purchasing, and Accounts Payable/Expenditures  Payroll and Human Resources
Quality Control Review
According to Government Auditing Standards, firms who perform audits under the Yellow Book are required to have a peer review once every three years. We received a report with a rating of pass with no deficiencies which we attached for your review.

Page 204 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
7

Page 205 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
8

Page 206 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
9 The Firm has policies and procedures to ensure it hires only qualified people, that it properly supervises them and provides professional training, that it advances them to responsibilities they are capable of handling, and that it provides them with necessary technical resources. All members of the Firm are very familiar with the stringent quality control standards established by the AICPA.

The Firm is a member of the AICPA Government Audit Quality Center.

The Firm is a member of the AICPA Private Companies Practice Section.

Federal or State Desk Reviews
The Firm has had no negative federal or state reviews in the past three (3) years.

Disciplinary Action
There has not been any state or federal disciplinary actions taken or pending against the Firm nor any findings to report.

Litigations
The Firm has not experienced any lawsuits or legal actions that have been resolved or are currently pending in the prior five years.

Page 207 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
10 The Engagement Team will normally consist of seven individuals who provide a broad business perspective and significant experience in governmental auditing. This team will provide access to a wide range of technical capabilities which will provide the Town with not only the technical support necessary to perform the audit, but also the broad business background to interpret findings and observations to offer effective solutions to issues, and the personal involvement of the Engagement and Compliance Partners of the Firm.

The Engagement Team will be led by Ahmed Badawi, CPA. Mr. Badawi’s background includes over twenty-five years of municipal auditing experience with a special focus on cities. Mr.

Badawi is a member of the Government Accounting and Auditing Committee of the California Society of Certified Public Accountants. He has participated in the audits of numerous Town, county and special district governments, as well as non-profit entities. His diversified background offers the technical qualities required of the governmental and non-profit areas and the necessary wherewithal to properly evaluate the entire accounting process, develop opportunities to improve the accounting process, and to offer practical business recommendations.

The second member of the Engagement Team will be Wenwei Zhao, CPA. Ms. Zhao’s background includes ten years of accounting and auditing experience. She has participated in the audits of numerous governmental entities and assisted in their efforts to publish their financial statements in compliance with various regulations and is a volunteer member of the GFOA Special Review Committee. Ms. Zhao will be the Audit Manager of this engagement.

The third member of the Engagement Team will be Samantha “Samo” Michel, CPA. Ms.

Michel’s background includes seven years of accounting and auditing experience. She has participated in the audits of numerous governmental entities and assisted in their efforts to publish their financial statements in compliance with various regulations. Ms. Michel will be the Audit Senior of this engagement.

Engagement Partner
Ahmed Badawi
CPA
Audit Manager
Wenwei Zhao
CPA
Engagement Quality
Reviewer
Mitesh Desai
CPA
Audit Senior
Samantha “Samo”
Michel, CPA
Professional
Audit Staff
Professional
Audit Staff
IT Specialist
Omar Rahman,

CPA, CISA
Partner,
Supervisory,
and Staff
Qualifications
and
Experiences

Page 208 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
11 The fourth member of the Engagement Team will be Omar Rahman, CPA, CISA. Mr. Rahman has over ten years of experience in the field of Information Technology (IT) audit and risk management at the senior and executive management level. He has worked extensively with government agencies, private organizations, and public companies, providing external and internal audit services in support of financial statement audits. Mr. Rahman will serve as the I.T.

Specialist of this engagement.

The fifth member of the Engagement Team will be Mitesh Desai, CPA. Mr. Desai’s background includes eighteen years of experience in municipal auditing. Mr. Desai has participated in the audits of numerous governmental agencies, assisted in their efforts to publish their Annual Comprehensive Financial Reports in compliance with GASB 34, and a volunteer member of the GFOA Special Review Committee. Mr. Desai is responsible for conducting in-house trainings for staff auditors and is credentialed with the Advanced Single Audit Certificate offered by the AICPA. He will serve as the Engagement Quality Reviewer.

Each member of the Engagement Team participates in continuing education programs offered by the AICPA and California State Society of Certified Public Accountants, and each has met the continuing education requirements for municipalities. In addition, the firm offers at least 60 hours of in-house CPE annually focused mainly on municipal audits.

Professional Development:

The Firm maintains a comprehensive training program targeted at appropriate professional staff levels. It utilizes in-house developed educational programs, AICPA and California CPA Foundation educational programs, and on-the-job training.

The Firm’s annual training schedule which officially begins in April for all professional staff and administrative staff includes comprehensive in-house training sessions on such topics as:
 Review of principles of accounting and financial reporting for state and local governments  Review of governmental fund types and account groups
 Review of newly issued generally accepted auditing standards and GAO auditing standards
 Review of Internal Control evaluation approaches including COSO principles  Updates on recent governmental accounting and reporting guidelines  Review of Single Audit requirements and approaches
 Review of financial audit approaches
 Overview of audit and internal control work paper techniques  Review of GASB reporting requirements
 Review of current issues facing the governmental community During the year, professional staff members are sent to various educational sessions sponsored by the AICPA and California State Society of CPAs, as considered appropriate for the level and need of the individual. These classes include, among others:
 Governmental Financial Reporting Standards and Practices  Yellow Book: Government Auditing Standards
 Financial Accounting Standards: Comprehensive Review
 Single Audit
 Governmental Auditing & Accounting Update
 Governmental Accounting Principles
 Comprehensive Review of Generally Accepted Auditing Standards The result of the Firm’s training program is the production of a highly educated and competent municipal audit group capable of performing an efficient and effective audit for the Town.

The Engagement Team members will continue their professional development efforts.

Page 209 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
12 Staff Retention and Continuity:

The Firm's policy on providing service to our clients includes a commitment to maintaining continuity of audit personnel. We cannot guarantee that our staff will remain with the Firm.

However, to encourage our staff to remain with us, we pay competitive wage rates; offer promotional opportunities; provide state-of-the-art equipment and excellent working conditions; and offer various benefits, such as retirement plans, medical plans, profit sharing programs, educational benefits, and other such benefits. We can also guarantee that the partner will be involved in future years. Continuity of audit staff is of prime concern to us and because of the hands-on involvement of the partner; we can assure you that future years’ audits will be conducted in an efficient and effective manner with qualified and experienced professionals.

Resumes of each member of the Engagement Team follow.

Page 210 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
13 Ahmed Badawi, Certified Public Accountant – Engagement Partner Length of Career
 Over twenty-five years of experience in municipal auditing and accounting with a special focus on cities
 Certified Public Accountant for the State of California Professional Experience
 Partial listing of clients served:
 Has performed numerous financial audits, Single Audits, Transportation Development Act audits, housing audits, electrical utility audits, RDA audits, PFA audits, and Trust Fund audits, and has prepared numerous Annual Comprehensive Financial Reports Education
 BS Degree in Accounting from the University of Alexandria, Egypt Professional Activities
 Member, CALCPA Government Accounting and Auditing Committee  Member, American Institute of Certified Public Accountants  Member, California Society of Certified Public Accountants  Member, Government Finance Officers Association
 Member, California Society of Municipal Finance Officers Continuing Education
 Has met the current CPE educational requirements to perform audits on governmental agencies Services Provided
Financial
Audit
Single
Audit
TDA
Audit
RDA
Audit
Enterprise
Fund Other
Cities/Towns:

Antioch x x x x x x
Atwater x x x x
Azusa x x x x x
Berkeley x x x x x x
Chino x x x x
Compton x
Crescent City x x x x x
Dinuba x x x x x
Dublin x x x x
Folsom x x x x x
Foster City x x x x x
Glendora x x x x x
Guadalupe x x x x x
Healdsburg x x x x x
La Verne x x x x
Lafayette x x x x
Larkspur x x x x
Lathrop x x x x
Lemon Grove x x x x
Millbrae x x x x x
Mountain View x x x x
Ontario x x x x x
Petaluma x x x x x x
Pomona x x x x x
Richmond x x x x x x
San Bruno x x x x x
San Carlos x x x x x x
San Luis Obispo x x x x
Sausalito x x x x
Scotts Valley x x x x x
Wasco x x x x x x
Counties:

Contra Costa County x x x x x
Santa Cruz County x x x x x
Special Districts and Other:

Alameda County Water District x x x
East Bay Regional Park District x x x

Page 211 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
14 Wenwei Zhao, Certified Public Accountant – Professional Audit Manager Length of Career
 Ten years of experience in auditing
 Certified Public Accountant for the State of California Professional Experience
 Has performed numerous financial audits, Single Audits, RDA audits, PFA audits, Transportation Development Act audits, and housing audits
 Partial listing of clients served:

Education
 Master of Accounting from University of Pittsburgh, PA Professional Activities
 Volunteer Member, GFOA Special Review Committee
Continuing Education
 Various municipal accounting courses offered by the California Society of CPAs and local universities including:
- Governmental Financial Reporting Standards and Practices - Yellow Book: Government Auditing Standards
- Municipal Accounting
- Single Audit
 Has met the current CPE educational requirements to perform audits on governmental agencies Services Provided
Financial
Audit
Single
Audit
TDA
Audit
Gann
Limit
SCO
Report Other
Cities/Towns:

Antioch x x x x x
Berkeley x x x x x
Crescent City x x x x
East Palo Alto x x x x
El Cerrito x x x
Folsom x x x x
Lafayette x x x x x x
Larkspur x x x x
Los Gatos x x x
Mountain View x x x x
Millbrae x x x x
Newark x x x x
Oakdale x x x x x
Pomona x x x x x
Richmond x x x x x x
San Luis Obispo x x x x x
San Mateo x x x x
Susanville x x
Union City x x x x x x
Waterford x x x
Yuba City x x x x x
Yountville x x x x
Child Care Programs:

Contra Costa County Child Care x
Special Districts:

Elk Grove Water District x x
Hayward Area Recreation and Park
District x x Marin Municipal Water District x
San Gabriel Valley Council of
Governments x x x San Mateo County Mosquito and
Vector Control District x Santa Cruz Regional 9-1-1 x

Page 212 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
15 Samantha “Samo” Michel, Certified Public Accountant – Professional Audit Senior Length of Career
 Seven years of experience in municipal auditing
 Three seasons of experience in personal tax preparation  Certified Public Accountant for the State of California Professional Experience
 Has participated in several financial audits, Single Audits, RDA audits, PFA audits, Transportation Development audits, and housing audits
 Partial listing of clients served:

Education
 BS, University of Washington, Seattle, WA
 Accounting, Foothill College, Los Altos Hills, CA
Professional Activities
 Member, California Society of Certified Public Accountants  Member, Forensic Services Section, California Society of Certified Public Accountants Continuing Education
 Various municipal accounting courses offered by the California Society of CPAs and local universities including:
- Governmental Financial Reporting Standards and Practices - Yellow Book: Government Auditing Standards
- Municipal Accounting
- Single Audit
 Has met the current CPE educational requirements to perform audits on governmental agencies Services Provided
Financial
Audit
Single
Audit
TDA
Audit
Gann
Limit
SCO
Report Other
Cities/Towns:

Antioch x x x x x
Barstow x x x
Berkeley x x x x x
Buena Park x x x x x
Crescent City x x x x
East Palo Alto x x x x
Folsom x x x x
Guadalupe x x x x
Lathrop x x x x x
Los Gatos x x x x
Menlo Park x x x x
Millbrae x x x x
Pacifica x x x x x x
Pismo Beach x x x x
San Bruno x x x x x x
San Carlos x x x x x x
San Luis Obispo x x x x x
San Mateo x x x x
Sausalito x x x x
Union City x x x x x x
Waterford x x x
Yuba City x x x x x
Special Districts and Other:

Amador County Transportation
Commission
x x Amador Transit x x
Central County Fire District x
Elk Grove Water District x
Hayward Area Recreation District x x x x
Port of San Luis Harbor x
StopWaste x x

Page 213 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
16 Omar Rahman, Certified Public Accountant, Certified Information System Auditor – Information Technology Specialist
Length of Career
 Over ten years of experience auditing information technology (IT) processes and controls  Certified Public Accountant for the State of California  Certified Information System Auditor
Areas of Expertise
 IT risk consulting and audit services for governmental entities, private/public companies, nonprofits, and professional service organizations
 External and internal IT audit services in support of financial statement audits  Technical guidance/support on IT risks and controls in relation to SOX 404a and SOX 404b compliance, NIST 800-53/171a, Cyber Security Framework, HIPAA Technical Safeguards, CCPA/GDPR compliance, COBIT 2019 Framework
 Managed entire life cycle of IT internal and external audit engagements from planning research, audit program development, fieldwork and reporting
 Assess risks related to IT processes/assets and corresponding applications/tools  IT control testing over business automated controls, general IT controls, and cyber security controls as well as IT substantive testing over information systems.

Partial list of governmental clients served:
- City of Berkeley
- City of Chino
- City of Dinuba
- City of Dublin
- City of Healdsburg
- City of Jurupa Valley
- City of Lathrop
- City of Laverne
- City of Lemon Grove
- City of Ontario
- City of Mountain View
- City of Pomona
- City of Richmond
- City of San Carlos
- City of Sausalito
- City of San Luis Obispo
- City of Foster City
- City of Victorville
- Sacramento Metropolitan Fire District
- Sacramento Employment and Training Agency
- Union Sanitary District
Presentations
 November 2017 - Institute of Internal Auditors - General IT Controls for Internal Audit  December 2018 - Institute of Internal Auditors - SDLC Process and Audit/Risk Considerations  February 2019 - IT Audit for Business Process Professionals  May 2019 - IT Internal Audit Emerging Technologies: Data Analytics  September 2019 - Information Systems Audit and Control Association Education
 B.S. Degree in Economics, University of California, Los Angeles, CA.

Professional Activities
 Certified Public Accountant - California
 Certified Public Accountant - Ohio
 Certified Information System Auditor

Page 214 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
17 Mitesh Desai, Certified Public Accountant – Engagement Quality Reviewer Length of Career
 Eighteen years of experience in municipal auditing with a special focus on cities  Certified Public Accountant for the State of California Professional Experience
 Has performed numerous financial audits, Single Audits, RDA audits, PFA audits, Transportation Development Act audits, and housing audits
Education
 BS Degree in Business Economics with an emphasis in Accounting from University of California, Santa Barbara
Professional Activities
 Member, American Institute of Certified Public Accountants  Member, California Society of Certified Public Accountants  Volunteer Member, GFOA Special Review Committee
Continuing Education
 Various municipal accounting courses offered by the California Society of CPAs and local universities including:
- Governmental Financial Reporting Standards and Practices - Yellow Book: Government Auditing Standards
- Municipal Accounting
- Single Audit
 Has met the current CPE educational requirements to perform audits on governmental agencies Services Provided
Financial
Audit
Single
Audit
TDA
Audit
RDA
Audit
Enterprise
Fund Other
Cities/Towns:

Antioch x x x x x x Azusa x x x x x Albany x Berkeley x x x x x x Buena Park x x x x x Calimesa x x x Crescent City x x x x x Dublin x x x x East Palo Alto x x x x El Cerrito x x x Foster City x x x x x Fremont x x x x x Lemon Grove x x x x Lindsay x x x Menlo Park x x x x x Merced x x x Millbrae x x x x x Newark x x x x Oakdale x x x x x x Pittsburg x x x x x Placerville x x x x Scotts Valley x x x x x Sebastopol x x x x Solvang x x Union City x x x x x x Waterford x x x x Yuba City x x x x x Child Care Programs: x Contra Costa County Childcare x x Menlo Park Child Care x x Counties:

Contra Costa x x x x x
Santa Cruz x x x x x
Special Districts and Other:

Marin Municipal Water District x West County Wastewater District x x

Page 215 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
18 The tables below and on the following page are a partial listing of our clients similar to the Town, and illustrates the many different types of components involved in each audit engagement that present very difficult and complex auditing and accounting challenges (in order of audit hours). ** Indicates cities with population over 50,000
** Indicates cities with governmental revenues over $100 million and population over 50,000 (A) Indicates audit completed for city that uses Tyler Technologies City Client Since Hours Engagement Partner Principal Contact Annual Comprehensive Financial Report GFOA Award RDA/Successor Agency Single Audit TDA Water Fund Sewer Fund SCO Report Housing Authority Enterprise Funds Pension Trust Fund ** (A) Richmond 2020 2,338 Ahmed
Badaw i
Jerry Chak
Accounting Manager
(510) 620-6569
[email protected]

X X X X X X X X X
** (A) Berkeley 2008 1,505 Mitesh
Desai
Henry Oyekanmi
Finance Director
(510) 981-7300
[email protected]

X X X X X X X X
** (A) Victorville 2024 950 Ahmed
Badaw i
Carmen Cun
Finance Director/City Treasurer
(760) 955-3170
[email protected]

X X X X X X
(A) San Carlos 2023 865 Ahmed
Badaw i
Paul Harris
Financial Services Manager
(650) 802-4217
[email protected]

X X X X X X X X
** Folsom 2019 786 Mitesh
Desai
Stacey Tamagni
Finance Director
(916) 461-6712
[email protected]

X X X X X X X
** Pomona 2023 756 Ahmed
Badaw i
Andrew Mow bray
Finance Director/City Treasurer
(909) 620-2353
Andrew .mow [email protected]

X X X X X X X X
** Mountain
View
2024 741 Ahmed
Badaw i
Derek Rampone
Finance & Administrative Services
Director
(650) 903-6316
derek.rampone@mountainview .gov

X X X X X X X X
* (A) Petaluma 2019 691 Mitesh
Desai
Corey Garberolio
Assistant Finance Director
(707) 778-4357
[email protected]

X X X X X X X X X
La Verne 2023 691 Ahmed
Badaw i
Christy Lopez
Finance Director
(909) 596-8752
[email protected]

X X X X X
(A) Pittsburg 2024 683 Ahmed
Badaw i
Elena Adair
Finance Director
(925) 252-4848
[email protected]

X X X X X X X X X X
* San Luis
Obispo 2019 638 Mitesh Desai
Emily Jackson
Finance Director
(805) 781-7125
[email protected]

X X X X X X
Similar
Engagements
with Other
Governmental
Entities

Page 216 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
19 City Client Since Hours Engagement Partner Principal Contact Annual Comprehensive Financial Report GFOA Award RDA/Successor Agency Single Audit TDA Water Fund Sewer Fund SCO Report Housing Authority Enterprise Funds Pension Trust Fund (A) Chino 2023 621 Ahmed
Badaw i
Kim Sao
Director of Finance/City Treasurer
(909) 334-3354
[email protected]

X X X X X X
Lafayette 2020 586 Ahmed
Badaw i
Tim Przybyla
Finance Manager
(925) 299-3213
[email protected]

X X X X X
(A) Lathrop 2023 585 Ahmed
Badaw i
Cari James
Finance Director
(209) 941-7320
[email protected]

X X X X X X X
Sausalito 2023 559 Ahmed
Badaw i
Angeline Loeffler
Finance Director
(415) 289-4150
[email protected]
X X X
(A) Pacifica 2024 559 Ahmed
Badaw i
Lucy Xie
Deputy Finance Director
(650) 738-7392
[email protected]

X X X X X
(A) Dinuba 2023 556 Ahmed
Badaw i
Karina Solis
Administrative Services Director
(559) 591-5900
[email protected]

X X X X X X X X
(A) Millbrae 2015 550 Mitesh
Desai
Mike Sung
Finance Director
(650) 259-2433
[email protected]

X X X X X X X
** (A) Dublin 2018 546 Mitesh
Desai
Jay Baksa
Finance Director
(925) 833-6648
[email protected]

X X X X X
Azusa 2017 540 Mitesh
Desai
Talika Johnson
Administrative Services Director
(626) 812-5202
[email protected]

X X X X X X X
Foster City 2023 540 Ahmed
Badaw i
Waqas Hassan
Assistant Finance Director
(650) 286-3204
w [email protected]

X X X X X X X
(A) Jurupa Valley 2023 498 Ahmed
Badaw i
Susan Paragas
Finance Director
(951) 332-6464
[email protected]
X X
(A) Glendora 2022 487 Ahmed
Badaw i
Kyle Johnson
Finance Director
(626) 914-8245
[email protected]

X X X X X X X X
(A) San Bruno 2022 486 Ahmed
Badaw i
Nick Pegueros
Chief Financial Officer
(650) 616-7054
[email protected]

X X X X X X X X

Page 217 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
20 City Client Since Hours Engagement Partner Principal Contact Annual Comprehensive Financial Report GFOA Award RDA/Successor Agency Single Audit TDA Water Fund Sewer Fund SCO Report Housing Authority Enterprise Funds Pension Trust Fund (A) Healdsburg 2023 452 Ahmed
Badaw i
Katie Edgar
Finance Director
(707) 431-3184
[email protected]

X X X X X X
* Yuba City 2017 450 Mitesh
Desai
Diona Pope
Finance Director
(530) 822-4615
[email protected]

X X X X X X X X
(A) Larkspur 2019 437 Mitesh
Desai
Emilia Gabriele
Administrative Services Director
(415) 927-5016
[email protected]
X X X
Wasco 2021 428 Ahmed
Badaw i
Rocio Mosqueda
Accounting Manager
(661) 758-7234
romosqueda@cityofw asco.org

X X X X X X X
Piedmont 2024 400 Ahmed
Badaw i
Kiran Baw a
Finance Director
(510) 420-3045
kbaw [email protected]
X X X
Pismo Beach 2022 389 Ahmed
Badaw i
Vanessa Garris
Finance Manager
(805) 773-7085
[email protected]

X X X X X X
Atw ater 2021 380 Ahmed
Badaw i
Anna Nicholas
Finance Director
(209) 357-6310
anicholas@atw ater.org

X X X X X X
Orinda 2024 378 Ahmed
Badaw i
Douglas Alessio
Assist. City Manager/Admin. Serv. Dir.
(925) 253-4220
[email protected]

X X X X X
Lemon Grove 2022 377 Ahmed
Badaw i
Stacey Tang
Finance Director
(619) 825-3803
[email protected]

X X X X
Scotts Valley 2019 311 Mitesh
Desai
Stephanie Hill
Administrative Services Director
(831) 440-5614
[email protected]

X X X X X
Waterford 2018 311 Mitesh
Desai
Tina Envia
Finance Manager
(209) 874-2328 Ext: 104
tenvia@cityofw aterford.org

X X X X
(A) Solvang 2019 308 Mitesh
Desai
Wendy Berry
Administrative Services Director
(805) 688-5575 x 205
w [email protected]

X X X X X X X
Guadalupe 2017 303 Mitesh
Desai
Janice Davis
Finance Director
(805) 356-3895
[email protected]

X X X X X

Page 218 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
21 City Client Since Hours Engagement Partner Principal Contact Annual Comprehensive Financial Report GFOA Award RDA/Successor Agency Single Audit TDA Water Fund Sewer Fund SCO Report Housing Authority Enterprise Funds Pension Trust Fund Crescent City 2014 227 Ahmed
Badaw i
Linda Leaver
Finance Director
(707) 464-7483 x224
[email protected]

X X X X X X

Page 219 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
22 The table below lists all special district engagements (in order of audit hours):

Special District Client Since Hours Engagement Partner Principal Contact Annual Comprehensive Financial Report GFOA Award Single Audit Enterprise Funds San Gabriel Valley Council
of Governments 2021 532 Ahmed Badawi
Rey Alimoren
Director of Finance
(626) 962-9292
[email protected]
No N/A X X
Sacramento Metropolitan
Fire District 2023 519 Ahmed Badawi
Ronald Empedrad
Controller
(916) 859-4510
[email protected]
Yes Yes X
County of Contra Costa
Community Services
Bureau Child Development
Program
2013 505 Mitesh
Desai
Alexandra Heinitz
Department Fiscal Officer
(925) 608-4948
[email protected]
No N/A
El Dorado Irrigation District 2024 403 Ahmed
Badawi
Penny Buchman
Finance Director
(530) 642-4139
[email protected]
Yes Yes X X
Union Sanitary District 2023 362 Ahmed
Badawi
Mark Carlson, CPA
CFO/Business Services Manager
(510) 477-7510
[email protected]
Yes Yes X
Florin Resource
Conservation District/
Elk Grove Water District
2015 350 Ahmed
Badawi
Patrick Lee
Finance Manager / Treasurer
(916) 685-3556
[email protected]
Yes Yes X
Hayward Area Recreation
and Park District 2017 350 Mitesh Desai
Anne Maze
Administrative Services Director
(510) 881-6707
[email protected]
No N/A X
San Ramon Valley Fire
Protection District 2021 285 Ahmed Badawi
Davina Hatfield
Chief Financial Officer
(925) 838-6668
[email protected]
Yes Yes X
Alameda County Waste
Management Authority
(StopWaste)
2018 212 Mitesh
Desai
Jennifer Luong
Finance Services Manager
(510) 891-6500
[email protected]
Yes Yes
Monterey Bay Unified Air
Pollution Control District 2016 225 Mitesh Desai
Rosa Rosales
Administrative Services Manager
(831) 718-8019
[email protected]
No N/A
Ross Valley Fire
Department 2021 190 Ahmed Badawi
Jeff Zuba
Finance & Admin. Services Director
(262) 989-2208
[email protected]
No N/A
Southern Marin Fire
Protection District 2020 160 Ahmed Badawi
Ken Campo
Interim Finance Manager
(925) 570-4447
[email protected]
No N/A
Central County Fire
Department 2012 150 Mitesh Desai
Jan Cooke
Finance Director
(650) 375-7408
[email protected]
Yes Yes
Central Fire Protection
District of
Santa Cruz County
2018 150 Mitesh
Desai
Nancy Dannhauser
Finance Director
(831) 479-6842
[email protected]
No N/A

Page 220 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
23 Special District Client Since Hours Engagement Partner Principal Contact Annual Comprehensive Financial Report GFOA Award Single Audit Enterprise Funds Victorville Valley Water
District 2024 129 Ahmed Badawi
Carmen Cun
Finance Director/City Treasurer
(760) 955-3170
[email protected]
No N/A X
Marin Wildfire Prevention
Authority 2021 106 Ahmed Badawi
Ken Campo
Interim Finance Manager (SMFPD)
(925) 570-4447
[email protected]
No N/A

Page 221 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
24 The Town desires an audit of the financial records for the Town and an expression of an opinion in accordance with generally accepted accounting principles on the fairness of presentation of financial statements for the fiscal years ending June 30, 2027 through 2029, with the option to extend for two (2) additional one-year terms.

The Firm will:
 Express an opinion on the fair presentation of its basic financial statements which includes but is not limited to the financial statements of governmental activities, each major fund and all aggregate remaining fund information in conformity with generally accepted accounting principles in the United States of America.
 Express an "in-relation-to" opinion on the fair presentation of its combining and individual non-major and fiduciary fund financial statements and schedules in conformity with generally accepted accounting principles. The Firm will provide an “in-relation-to” report on the supporting schedules contained in the Annual Comprehensive Financial Report based on the auditing procedures applied during the audit of the basic financial statements and schedules.
 Provide an “in-relation-to” report on the schedule of expenditures of federal awards based on the auditing procedures applied during the audit of the financial statements.  Perform the audit in accordance with generally accepted auditing standards accepted in the United States of America, applicable to the financial audit contained in the Government Auditing Standards issued by the Comptroller General of the United States and the provisions of the Uniform Guidance, Audits of States, Local Governments and Non-Profit Organizations.
 Perform limited procedures on supplementary information required by the Government Accounting Standards Board.
 Issue the following reports, following the completion of the audit of the fiscal year’s financial statements:
 Independent Auditor’s Report on Financial Statements and Schedule of Expenditure of Federal Awards
 Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
 Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with the Uniform Guidance
 Schedule of Findings and Questioned Costs
 Auditor’s Communication with Those Charged with Governance  Annual Comprehensive Financial Report following the requirements and guidelines of the GFOA award program
 Gann Limit Agreed-upon Procedures
 Measure G Agreed-upon Procedures
 TDA Audit
 State Controller’s Report
 Street Report
 Provide special assistance to the Town as needed.
 Retain all working papers and reports at the audit firm’s expense for a minimum of 7 years.

In addition, make working papers available to the Town and/or any government agency as appropriate.

Should any conditions be discovered requiring corrective action, the Firm will provide a detailed description of the findings and recommended actions as to their resolution.

Understanding of
Services to be
Provided

Page 222 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
25 The Firm will submit a report to the Town’s Council and management detailing auditor’s responsibility under generally accepted auditing standards, significant accounting policies, management judgments and accounting statements, significant audit adjustments, other information in documents containing audited financial statements, disagreements with management, management consultations with other accountants, major issues discussed with management prior to retention, difficulties encountered during the audit, and any significant deficiencies or material weaknesses found during the audit. Non-material instances of noncompliance will be reported in a separate management letter, if appropriate, along with any other observations or recommendations determined to be informative to Town Management.

The Firm will be available to provide advice and counsel regarding significant matters during the year.

The Firm’s Partner and Staff welcome the opportunity to make presentations to the Town Council and will be ready to respond to questions from the Council and citizens of the Town.

Objectives of Our Services
The basic objective of our audit of the Town is to conduct an examination of the financial statements in accordance with generally accepted auditing standards and to express our opinion on the fairness of presentation of such financial statements in conformity with generally accepted accounting principles.

Additionally, we believe that another real value of our audit lies in meeting other objectives at no additional cost. The following are other objectives of our services that have important benefits to the Town:
 To offer substantive observations and recommendations relating to accounting and operating control policies and procedures.
 To identify opportunities for operating efficiencies and isolate candidate activities for cost reduction opportunities.
 To perform a professional audit in an efficient and effective way to minimize disruption to the office operations.
 To offer ongoing advisory services to assist in the running of the operation and implementation of improved operating procedures.

The engagement will be conducted within the framework of the Firm's quality control program which includes the use of audit programs, careful planning, use of computerized audit software and internal control evaluation and documentation software, and objective review procedures.

On-site staff will use Firm supplied portable computers and printers.

Audit Approach
The specific audit approach has been designed to efficiently and effectively address the audit requirements of the Town, to perform the audit of the Town’s financial records in a timely manner with minimal disruptions to office operations, and to meet the Town’s timeline.

The audit will be conducted in accordance with:
1) Generally accepted auditing standards established by the AICPA. 2) The standards contained in Government Auditing Standards issued by the GAO. 3) Provisions of the Single Audit Act and the Uniform Guidance. 4) Requirements issued by the California State Controller’s office. 5) Other requirements as required.

Specific Audit
Approach

Page 223 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
26 We will conduct the necessary audit steps to perform:
 Planning of the engagement
 Evaluation of the existing internal control environment to determine degree of risk of material misstatement
 Determination of degree of compliance with laws, regulations, grant provisions, and Town approved policies
 Assessment of potential fraudulent issues
 Validation of account balances
 Verification of reasonableness of management estimates Technical Approach
We use an industry specific audit approach tailored to governmental entities. Our governmental audit approach addresses the special risks and circumstances of local governments. As a result, the audit is conducted efficiently and effectively with minimal disruption to your staff.

The core of our governmental technical audit approach can be summarized as follows:

1. Planning, Understanding and Communication:

Based on our previous audit experience, using the budget, organizational charts, manuals and other financial information systems and our knowledge of how governments work, we will obtain an insight to the specific concerns and sensitivities of the Town. Our understanding is updated continuously through our year-round contact and communication efforts. We will agree on common audit objectives and expectations with management before audit work begins and, throughout the audit, will meet regularly with management to discuss audit issues and to gather feedback.

2. In-Depth Review of Systems and Controls:

We have developed diagnostic reviews which enable us to evaluate your systems and controls, and to provide management with constructive feedback. Combined with our knowledge of the Town and understanding and experience with the Town’s accounting software, our control review will form the basis of our audit risk assessment. We will utilize the COSO approach in our evaluation of the Town’s internal processes to identify potential control deficiencies. In future years, we will update our understanding through similar procedures.

3. Risk-Based Customized Testing Program:

Our audit approach is tailored to governmental applications. We will use audit programs specifically designed to address the operational environment of governmental entities. Our approach will identify potential control risks and the opportunities for risk of material misstatements and fraud. We will evaluate the various risk assessments and identify the potential risks relating to the:
 Balance Sheets / Statement of Net Position
 Statement of Revenues and Expenditures / Statement of Activities  Presentation
 Disclosure
Our audit procedures will then be developed to address these risk areas.

4. Expanded Interim Fieldwork:

Timeliness and audit efficiency is enhanced by performing extensive interim work. Partners, managers and senior staff work with Town staff to identify and resolve potential audit issues early. Accordingly, the amount of audit work to perform at year end is minimized. Because our audit staff is familiar with the operations before year-end fieldwork begins, disruption of accounting staff is minimized.

Page 224 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
27 5. Smooth Transition:

Our testing program focuses on audit risks identified by our understanding of the Town’s operations. We will work with the accounting staff to identify the most effective ways to address our objectives. Communication between the members of the audit engagement team and Town staff will be fluid and continuous.

6. Sample Size and Sampling Techniques:

Our audit approach will include sampling activities. Population size and the level of assurance to be derived from a particular test will dictate the sample size. We use sampling in our audit approach to compliment skilled judgment and knowledge of the particular situation. Our sample size will range normally from 25 to 60 items.

7. Automated Systems:

We will evaluate controls over the IT functions to assess control risk. We intend to test controls for purposes of reliance. Our review procedures will evaluate controls over:
 Security Management
 Logical and Physical Access
 Configuration Management
 Segregation of Duties
 Contingency Planning
In addition, we will review controls over:
 Input, processing, output, master data
 Application interface
 Data management system interface
Our information Technology Specialists will evaluate the IT operating control environment.

8. Analytical Procedures:

We use analytical procedures in several aspects of our audit. Extensive knowledge and industry background are required for effective analytics, and our staff possesses the appropriate experience and knowledge for the Town to benefit from these procedures.

9. Approach to be Taken in Determining Laws and Regulations Subject to Audit Test Work:

We continuously refer to specific regulations, compliance supplements, state guidelines and contracts currently in force. We perform the procedures required related to laws and regulations, using inquiries, observations and sampling techniques. Some of the laws and regulations that we believe may be applicable to the Town are the requirements of the California Public Utilities Commission, Single Audit Act and other applicable laws and regulations, including the California Government Code, provisions of applicable Grant guidelines, California Constitution Gann Limit requirements, requirements of local measures, Child Care Program compliance requirements, etc.

10. Report Format:

We will meet with Town Management to review report formats. Any report format changes will be made in conjunction with approval from Town Management.

11. Work Plans:

The detailed work plans will be designed to efficiently and effectively address the audit requirements of the Town in accordance with generally accepted auditing standards, to perform the audit of the Town’s financial records in a timely manner with minimal disruptions to office operations, and to meet the Town’s timeline.

Page 225 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
28 12. Adjusting Journal Entries:

We will discuss and explain proposed audit adjusting entries with the Town’s designated Finance Department personnel prior to recording. Audit adjusting entries will be provided in a format showing the lowest level of posting detail needed for data entry on the Town’s general ledger system.

13. Listing of Schedules and Tables (anticipated to be prepared by the Town):

Based on preliminary inquiries made with management and Town staff and review of documents, we will tailor a list of schedules, tables, and other reconciliations required for the audit. We will take into account as much as possible reconciliations already prepared by the Town for day to day operations and reporting, as well as any reports that are system generated to limit the need for additional Town staff hours. We have included a sample such prepared by client (PBC) list on page 37.

Page 226 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
29 The Firm maintains a variety of specialized software packages during the audit that enable us to perform an efficient, thorough, and timely audit and keeping time demands on Town staff to a minimum.

Trial Balance Management and Financial Statement Preparation Axcess Engagement allows us to import and manage multiple years of trial balance data including budgetary information, create multiple account groupings, generate reports, post journal entries proposed during the audit (including GASB 34 conversion entries), and link information directly to the financial statements. This gives us the ability to:
 Generate immediate trend and other comparative analysis of trial balance and budget data prior to the start of the audit. This allows us to identify potential issues and make inquiries early in the audit
 Link the financial statements and footnotes prior to the start of the audit allowing us to have majority of the financial statements (including budgetary comparison schedules and other supplementary information) prepared at the time the trial balance is uploaded  Audit adjustments or Town adjustments provided during the audit are automatically reflected in the financial statements
Audit Request Management and Document Exchange
Teamwork Project Management (“Teamwork”) is a secure, cloud-based collaboration platform that our Firm now uses to manage the “Prepared by Client (PBC) List” that streamlines the process of requesting, receiving, and keeping track of documents. Teamwork helps to facilitate the engagement through seamless collaboration between the Firm and our clients. By utilizing Teamwork, the Town can do all of the following in one secure virtual environment:
 Attach files of any type to document requests
 Easily track the status of document requests
 Access templates and documents from us that require completion  Have multiple Town staff get involved and assist in the audit process  Participate in a dialog for questions and notes
We have found that the use of the PBC List in Teamwork has helped our clients be always informed as to the status of their audit, and not be surprised with new requests or follow up on outstanding requests previously provided.

Audit Reporting Phase Management
Teamwork is also used by our Firm to manage the reporting phase of the audit, including timeline, key milestones, draft reviews, and final deliverables. With Teamwork, the entire reporting process and related communications are organized within one centralized project space. Using Teamwork, the Town can:
 View the reporting timeline and track upcoming due dates and milestones  Easily see which items are pending, under review, or completed.  Access and review draft versions of reports in a single location  Receive notifications when new drafts or updated versions are uploaded  Participate in proof and review workflows for report approvals prior to final issuance.

We have found that managing the reporting phase of the audit using Teamwork has helped our clients always be informed as to the status of their reports and deliverables.

Use of
Technology
in the Audit

Page 227 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
30 Computer Aided Audit Tools (CAATs)
The Firm’s data analytics software enables our Engagement Team to perform more than 150 Computer Aided Audit Tools (or “CAATs”). CCH Teammate Analytics gives us the ability to perform advanced data analysis and increase efficiency. By utilizing this software, we can:
 Immediately visualize and analyze 100% of account populations with graphs, charts and statistics to identify anomalies
 Make fewer sample selections that are targeted to problematic areas  Quickly analyze transactional data for:
o Duplicate records
o Missing transactions
o Transaction sequence
o Unusual items
 Compare excel worksheets for changes or differences
 Generate immediate testing samples
 Perform regression analysis
 Filter and extract data from Town reports
Audit Planning, Risk Assessment, and Audit Programs
Our firm utilizes CCH Knowledge Coach, which is an expert system that adapts and customizes our audit approach specifically based on the Town’s structure, operating environment, specific transactions, and identified risks or matters to be addressed in the audit. The software is frequently updated for new industry trends and audit requirements. Included in the software is a continuous diagnosis of audit forms that identifies missing information, procedures, or any conflicts that need to be addressed prior to issuance of the audit report. We have found that this audit tool greatly benefits our audit clients in the following ways:
 Removal of standardized audit steps and procedures that do not add value to the audit  Targeted audit procedures focusing on risks and accounts specific to the Town’s operations
 Audit is always performed in accordance with audit standards especially the risk assessment standards
 Maximizing audit efficiency having less Town staff time dedicated to gathering information or responding to inquiries by focusing on material issues  Automatic self-diagnostics ensure no audit steps are missed, guaranteeing a quality audit
Research Tools
We maintain multiple research software packages that are always kept up to date to ensure compliance with accounting and auditing standards and are also a resources for us to provide guidance to our clients. In addition to accounting and audit literature, we have access to interactive disclosure checklists that include sample footnote disclosures and financial statements.

Page 228 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
31 2027
Period Audit Tasks

April - Planning and Administration
 Review and obtain copies of key work papers of prior audit firm.  The entrance conference shall be held with Town staff. The purpose of this meeting will be to discuss prior audits and the interim work to be performed. This meeting will also be used to establish overall liaison for the audits and to make arrangements for workspace and other needs
 Review and evaluate the Town's accounting and financial reporting.

Prepare an overall memo of recommendations, potential issues, and suggestions for improvements
 Prepare overall memo to the Town confirming audit procedures, timing, and assistance
 Prepare detailed audit work plan and audit programs, audit budget and staffing schedule, and list of schedules to be prepared by the Town staff
 Send the PBC List to the Town that will include all request items considered to be necessary for the audit
May - Internal Control Evaluation
 Meeting with Town Manager and Department Heads of other departments with large operating budgets or which have significant federal grant expenditures
 Attending Town Council meetings
 Meeting with off-site locations
 Meeting with key Finance Department personnel
 Obtain and document understanding of key internal control systems through walk-throughs, interviews of staff, and review of supporting documentation
o General ledger system
o Budgeting system
o Revenue, accounts receivable, and cash collections
o Purchasing, expenditures, accounts payable, and cash
disbursements
o Payroll
o Federal Financial Assistance
o Other systems
 Identify control risks
 Evaluate IT control environment
 Perform testing of the internal control system and evaluate the effectiveness of the Town’s systems. Select large dollar and random samples of transactions in key operating systems. Sample size to meet required level for determined degree of risk. Review supporting documentation of selected transactions, evaluate adequacy of support and approvals, and conclude on degree of adherence to accuracy and compliance with Town policies
 Conduct fraud assessment procedures
 Assess degree of risk for material misstatement
 Provide to the Town’s management a memo concerning
management letter points and identify issues, if any
Audit
Schedule

Page 229 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
32 2027
Period Audit Tasks

May - Other Tasks
 Review minutes of Town Council meetings and other key committees  Perform preliminary substantive procedures, which would include tests of:
o Vendor and contractor payments
o Payroll expense
o Pension and OPEB testing
o Capital asset acquisitions
o Journal entries
o Retrospective review of accounting estimates
 Financial statement database management and other setup, in addition to drafting of all necessary report templates
 Preliminary Single Audit and other compliance testing  Coordinate with Town staff and prepare of all appropriate confirmation requests including:
o Bank accounts
o Investment pool accounts
o Accounts receivable
o Federal grants
o Revenue from governmental agencies
o Bond and other debts
o Pension plan
o Attorney letters
o Others, as required
 Update the PBC List with any additional requests that will be needed for the Town's audit
 Provide the Town with audit plan and list of year-end audit schedules  Hold progress conference with Town Management
 Hold exit conference with Town Management
September –
October
- Final Fieldwork
 Entrance conference with Town Management
 Follow-up on all outstanding confirmations
 Verify and validate account balances by reviewing supporting documentation including invoices, vouchers, council resolutions, minutes, and other documents, as required
 Perform analytical review of revenue and expenditures. Determine reason for material differences between budget and actual  Perform a search for unrecorded liabilities by reviewing disbursements subsequent to June 30, testing terms of contractual obligations, and interviewing Town staff
 Perform review of subsequent events by discussions with Town Management and update all minutes of Town Council and key committees

Page 230 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
33 2027
Period Audit Tasks

- Single Audit Compliance
 Entrance conference with Town Management
 Obtain Federal Financial Assistance Schedule
 Determine grants to be considered as major programs including clusters
 Perform audit tests of major grant programs and compliance with Federal Law and Regulations
 Review grant documents, select sufficient number of transactions to test for compliance of Federal Requirements
 Coordinate Single Audit efforts with the Financial Audit efforts  Communicate findings to Town Management
 Other Compliance
October –
November
- Audit Reports
 Complete drafts of Town’s Annual Comprehensive Financial Report  Prepare draft of Single Audit Reports concerning internal control structure, compliance with laws and regulations, and administering of federal financial assistance programs
 Prepare other reports as required
 Provide revised final drafts of all required reports to the Town for approval
December - Final Town Audit Reports, Financial Statements, Single Audit Reports, and other reports delivered.
- Audit Presentation to Council (if requested)
January 2027 - State Controller’s Reports delivered and submitted - Single Audit Report package submitted to Federal Audit Clearinghouse
Note: the proposed audit schedule above can be adjusted as necessary based on the needs of the Town.

Estimated Hours by Audit Phase
Position Planning
Interim
Fieldwork
Year End
Fieldwork Reporting Total
Partner 7 9 18 6 40 Audit Manager 5 24 21 9 59 Audit Senior 2 27 51 14 94 Professional Audit Staff - 55 104 14 173 IT Specialist - 7 - - 7 Administrative Assistant 5 1 8 9 23 Total 19 123 202 52 396

Page 231 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
34 Identification of Anticipated Potential Audit Problems We do not anticipate that there will be any audit problems at the Town. However, the following are some areas that we will carefully investigate and monitor during our audit procedures:
 Financial Reporting:
 Review and evaluate that the Town’s Annual Comprehensive Financial Report is in compliance with current reporting and disclosures requirements issued by the GASB and GFOA.
 Review the Annual Comprehensive Financial Report for financial reporting conformance awards issued by CSMFO and GFOA.
 Review and evaluate degree of compliance with the various GASBs in effect.  Review degree of compliance with infrastructure obligations and regulatory provisions.  Internal Control Structure:
 Review and evaluate the Town’s internal control functions and ascertain compliance with proper internal control philosophies.
 Review computer system processes and controls and evaluate adequacy of the control environment.

Several new GASB pronouncements will become effective over the time period of this proposal.

As such, specific attention will be provided to determine the proper implementation of these new pronouncements. A list of known new pronouncements with implementation dates that fall within this proposal period are as follows:
2026
 Statement 103 – Financial Reporting Model Improvements  Statement 104 – Disclosure of Certain Capital Assets
2027
 Statement 105 – Subsequent Events

Discussion of
Relevant
Accounting
Issues

Page 232 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
35 A client relationship with the Town will be of great value to our Firm and we welcome the opportunity to develop a long-term relationship with the Town. We are committed to:
 Rendering the highest standard of service
 Developing a long-term working relationship dedicated to meeting the needs of the Town  Assisting the Town in operational issues
 Producing a quality end-product
We have the technical qualifications and experience to provide the level of service desired and expected by the Town and stand ready to provide our knowledge and experience for the benefit of your organization.

We would like to express our appreciation to the Town and to its Staff for allowing us the opportunity to submit a proposal to perform professional auditing services. We are available, at your convenience, to discuss any aspects of our proposal.

Thank you for allowing us to present our Firm to you.
* * * * * * * * * * * * * * * * *

Conclusion

Page 233 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
36 Exceptions to the Contract
With regard to the sample contract, we would like to edit the below paragraphs as follows:

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

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

Appendix

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ITEM NO. 10.

Town of Los Gatos Technical Proposal
37 Prepared by Client (PBC) List
The following is the Prepared by Client (PBC) List for the Town. The PBC List may be update as needed prior to the start of fieldwork.

INTERIM
General
 Year-to-date Trial Balance (Balance Sheet and Revenues and Expenditure Reports) for all funds for most recently closed month with comparison to prior year  Internal policies/guidelines for closing and reporting, payroll check runs, cash receipts, AP processes, and others
 Year-to-date Journal entry report for manual journal entries  Most recent budget-to-actual financial reports submitted to Town Council or Town Management
 Form 700s from the Council Members and Town Manager
 Conflict of interest codes
 List of any new funds with description (fund name, purpose, how it should be reported in the ACFR, etc.)
 Memo summarizing the FY2027 status of prior year findings (GAGAS and management comments), and processes/controls implemented to address items (if any prior year audit findings)
 Brief memo summarizing management's analysis of new accounting standards to be implemented in FY2027
 Copy of the Town's organizational chart applicable to FY2027  Any reports provided by Federal or State grantors or other regulators during FY2027 to date on reviews or audits that may impact the FY2027 audit.  Detail of legal expenses for FY2027 (as of date)
 Copy of the internal timeline used to execute all tasks for closing and report preparation and indicating responsible Town personnel.
 Complete General Ledger for Year-to-Date FY2027 (in excel), if possible  Prior Year Trial Balance for FY2025
 Prior Year ACFR Account Mapping and Fund Rollup for FY2025  Prior Year Audit Confirmation Letters
 Chart of Accounts from Accounting System including legend for each part of GL account strings
Budget
 Resolutions for adopting the 2027 budget
 Electronic report of FY2027 budget adjustments to-date (appropriation changes, object/line item transfers etc.)
Component Units/Potential Component Units
 Provide agreement/formation documents for component units and potential component units (agencies or other entities for which the Town is accountable, etc.) (if amended, or new or newly identified)
Cash
 Most recent bank reconciliation for all bank accounts  List of all bank accounts (Bank Names, Bank Account Numbers and Authorized Signers)

Page 235 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
38 Investments
 Investment Report for the most recent period submitted to Council  Annually adopted Investment Policy for FY2027
 Agreements with bank and custodians
Loan/Note receivables
 List of new loans given out in FY2027
 Most recent listing of loan receivables outstanding
 Loan agreements
Capital Assets
 Most recent capital asset policy
 Detailed listing of assets additions, including CIPs (if available)  Detailed listing of assets deletions (if available)
Payroll
 List of locations and number of employees at each location  Payroll Register for the most recent pay period in June 2027 (with employee detail)  Payroll calendar for FY2027
 System-generated report of Town employee hires, terminations, promotions during FY2027
 Copies (PDF) of or access to MOU labor agreements, and other benefit agreements applicable to payroll periods covered in FY2027
 FY2027 941 Forms
 Prior Year FY2025 941 Forms (for use in analytics)
Long-term Debt
 Debt/Bond agreements
 Bond payment schedules
 Bond issuance premium or discount amortization schedule  Journal entries for recording of new debt
 Lease payment schedules
Risk Management
 Agreements with Third Party Claim Administrators
 Detailed claim expenditure reports (General Liability and Workers Comp)  Listing of attorneys utilized by the Town during FY2027 Computer Controls
 Contingency plans for the IT department, if available  Policies and procedures manual for the IT department
Revenue
 Revenue transaction detail report for all funds
 Grant revenue reports
 Listing of all sites where cash (and checks) is collected with approximate daily or annual dollar amount

Page 236 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
39 Expenditures
 Expenditure transaction detail report for all funds
 Single excel listing of all Town active contracts during FY2027 (if available). Please ensure the report includes the following fields: contract number, date contract executed, contract amount, and amount spent in FY2027 (if possible)  Listing of contract change orders executed during FY2027  Listing of purchase card (i.e. p-card, CalCard, etc.) holders during FY2027 with Credit Limits and single purchase amounts (if applicable)
 Town procurement policy(ies)
 Travel and credit card policy(ies).

Pension
 CalPERS Appointment Status Change Report - instructions for generating are attached.
 List of new hires in FY2025 (note: FY2025 will be actuarial valuation year for FY2027 reporting)
 Census data provided to actuary for Misc. Plan GASB 68 Valuation Fund Balance
 Fund balance/GASB 54 Policies
 Listing of special revenue funds with fund description and special revenue fund justification (i.e. major revenue source and whether revenue is restricted/committed on what basis (specific law, contract, ordinance/resolution, measure, etc.)

YEAR-END
General
 Final Trial Balance as of 6/30/2027
 Original and Final Budget for revenue and expenditure accounts for FY2027 for RSI schedules
 Detailed by transaction revenue report for FY2027
 Detailed by transaction expenditure report for FY2027  ACFR rollup (updated for FYE 6/30/2027)
 ACFR Account rollup (i.e. account coding classifications) updated for FYE 6/30/2027  Any monitoring/audit reports received during FY2027 (from other auditors or agencies)
 List of all manual journal entries posted to the General Ledger for FY2027 (in Excel format, listing JE numbers, date posted, account posted and the amounts)  Complete General Ledger for FY2027 (in excel), if possible Cash and Investments
 Cash and investment summary by bank account
 Bank reconciliations as of 6/30/2027 for all bank accounts with support for reconciling items.
 Bank and Investment statements for all Town accounts as of 6/30/2027  Interest Income Fund Allocation Worksheet for FY2027
 Schedule of investments held with book values and fair value as of 6/30/2027 (GASB 31 Worksheet and Investment rollforward worksheet) along with the credit rating for each investment.
 GASB 72 Levelling information
 Bank statements for all cash with fiscal agents at 6/30/2027  Bank and Investment Statements for July and August 2027

Page 237 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
40 Accounts Receivable and Revenues
 Allowance for doubtful accounts calculations as of 6/30/2027 (if any for FY2027)  A/R aging reports by account numbers/names for all billed receivables for each fund as of 6/30/2027 (if any)
 Listing of A/R accruals by account name for each fund (include nature of revenue and when received)
 Property Tax Allocation FY2027
Interest Receivable
 Interest receivable listing with calculations as of 6/30/2027 Taxes Receivable
 Listing of all Taxes Receivable by type of revenues for each fund (please indicate the date that the cash receipt was received for each tax receivable accrual) Loan Receivable
 Listing of loans receivable by borrower as of 6/30/2027  Agreements for all loans/notes receivable
Leases Receivable
 Listing of leases by lessee as of 6/30/2027
 Copies of all lease agreements
 Leases receivable calculation as of 6/30/2027 (in accordance with GASB 87)  Intergovernmental Receivable
 Listing of all Intergovernmental Receivable for each fund (please indicate the date that the cash receipt was received for each revenue accrual) Other Assets
 Listing of Prepayments as of 6/30/2027
 Listing of Inventory as of 6/30/2027
Capital Assets
 Capital Assets Roll forward Schedule for FY2027, including any right to use leased assets
 Capital Asset Detail Listings as of FY2027
 Depreciation expense by function for FY2027
 Roll forward schedule of Construction in Progress (CIP) from 7/1/2025 to 6/30/2027.

Please include schedule showing CIP placed in service (transferred from CIP to asset accounts) during fiscal year
 Detail schedule of CIP Projects by Project number as of 6/30/2027 (accumulated costs by Project)
Interfund Transactions
 Due to/Due from schedule
 Advance to/Advance from schedule
 Interfund Transfers In/Transfers Out schedule
 Resolutions approving all interfund advances with repayment schedules Accounts Payable and Expenditures
 Accounts Payable Listing as of 6/30/2027 by fund/transaction.  Check Register for all checks written on and after 7/1/2027 through current date (by fund).
 Listing of payments made by ACH/wire transfer on and after 7/1/2027  Open encumbrance listing for each fund as of 6/30/2027 Payroll
 Town's calculation of accrued payroll as of 6/30/2027  Payroll register(s) for last pay period of FY2027 used in accruals

Page 238 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
41 Compensated Absences
 Compensated Absence Payable as of 6/30/2027 by employee  Roll forward Schedule of Compensated Absences (i.e. list beginning balance as of 7/1/2025, additions, deletions, and ending balance as of 6/30/2027  Schedule of short-term portion and long-term portion, and calculation of short-term portion.
 For the governmental activities, provide a schedule which details compensated absences by fund and expenditure function. Please reflect prior year amounts by function to determine current year adjustment required in the government-wide statement of activities.

Risk Management
 Actuarial Valuation Reports for claims payable (General Liability, Workers Comp, Others) to be used for FY2027 reporting
 Loss/Run Reports as of June 30, 2027, July 2027, and August 2027 for general liability and workers' compensation
 Memorandum of Coverage for policies in effect for FY2027 (e.g. Workers Compensation and General Liability)
Other Liabilities
 Detailed listing by fund of unearned revenues with description for each as of 6/30/2027
 Detailed listing of all deposits payable for each fund as of 6/30/2027 Leases Payable
 Listing of leases by lessor as of 6/30/2027
 Copies of all lease agreements
 Leases payable calculation as of 6/30/2027 (in accordance with GASB 87) Pension
 MyCalPERS Billing and Payment Summary for FY2027
 Actuarial Valuation Report for agent-multiple employer Misc. Plan  GASB 68 Calculation for cost-sharing Safety Plan
 Pension Journal Entries allocating pension amounts to the Town's various funds  Support for covered payroll amount to support Pension RSI for FY2027. Can use CalPERS’ Reported Member Summary Report.

Long-Term Debt
 Long-term Debt roll forward schedule
 Interest payable calculation
 Amortization schedule for bond premiums
 Debt service schedules
Commitments and Contingencies
 Listing of Commitments and Contingencies as of 6/30/2027 Fund Balances/Net Position
 GASB 54 roll forward schedule detailing listing of additions and deletions to fund balance classifications
 Any new agreements/resolutions/ordinances/laws supporting assignments/commitments/restrictions on fund balance
 Net Position worksheet, classifying reported fund balance to Net Assets/Net Position

Page 239 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
42 GANN LIMIT
 FY2028 Appropriation Limit Calculation
 FY2028 Council Resolution and Approval of Appropriation Limit TDA
 Revenue and expenditure transaction detail for FY2027  Copies of all reimbursement requests submitted for FY2027

MEASURE G
 Measure G revenue and expenditure transaction detail for FY2027

STREET REPORT
 Login credentials
 Street Report Project Expenditure Summary Report(s) for FY2027

SCO REPORT
 Login credentials
 SCO Report Nonfinancial Info Workbook – to be provided for completion.  Prior year SCO Report Account Mapping

SINGLE AUDIT
Interim
 Preliminary Schedule of Expenditure of Federal Awards for FY2027 (if available) Year End
 Schedule of all expenditures of federal awards, state grants, and local grants for FY2027
 General ledger detail expenditure report for all programs (listing of individual transactions that make up the program expenditures)
 Copies of grant agreements and applicable amendments
 Copies of monitoring reports and resulting action plans  Schedule of sub-recipients expenditures (if applicable)  Copies of reimbursement requests submitted

Page 240 ends

ITEM NO. 10.

Town of Los Gatos Technical Proposal
43 RFP Forms and Attachments
In accordance with the Town’s Request for Proposals (RFP), the below required form and attachments have been included as part of this proposal submission on the pages that follow.  RFP Appendix A: Proposer Warranties
 Attachment 1 – Conflict of Interest Statement
 Attachment 2 – Non-Collusion Declaration
 Attachment 3 – References
 Attachment 4 – Statement Regarding Insurance Coverage and Worker’s Compensation Insurance Acknowledgement Statement

Page 241 ends

ITEM NO. 10.

APPENDIX A: PROPOSER WARRANTIES
The proposer warrants that it can and will provide and make available, at a minimum, all of the services and deliverables set forth in this RFP.

The proposer warrants that it will not delegate or subcontract its responsibilities under an agreement without the prior written permission of the Town.

The proposer warrants that all information provided by it in connection with this proposal is true and accurate.

Signature: _________________________________________________________________ Printed Name: _____________________________________________________________ Title: _____________________________________________________________________ Firm: _____________________________________________________________________ Date: ________________________________________________________________ Ahmed Badawi
President
Badawi & Associates
June 12, 2026

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ITEM NO. 10.

Page 13 of 27 ends

ATTACHMENT 1 - CONFLICT OF INTEREST STATEMENT

THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL

PROFESSIONAL AUDITING SERVICES
The undersigned declares:

I/We ___________________________ (Insert Name) have the following financial, business, or other relationship with Town of Los Gatos that may have an impact upon the outcome of the contract. If none, please specify that no other relationships may have an impact on this contract or Project.

I/We (Insert Name) have the following current clients who may have a financial interest in the outcome of this contract. If none, please specify that no other clients may have a financial interest with an impact on this contract or Project.

Pursuant to Government Code section 1090 and any other laws, rules and regulations that may apply, the Proposer covenants that neither it, its subcontractors nor employees presently have an interest, and shall not acquire any interest, direct or indirect, financial or otherwise that would conflict in any manner or degree with contract awarded from this RFP. Proposer certifies that to the best of its knowledge, no one who has or will have any financial interest in the contract awarded from this RFP is an officer or employee of the Town. Through its submittal of a proposal, Proposer acknowledges that it is familiar with Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California and will Badawi & Associates
Badawi & Associates
None
None

Page 243 ends

ITEM NO. 10.

Page 14 of 27 ends

immediately notify the Town if it becomes aware of any facts concerning the contract to be awarded that constitute a violation of said provisions.

Furthermore, if there is reason to believe that collusion exists among the Proposers, the Town may refuse to consider proposals from participants in such collusion. No person, firm, or corporation under the same or different name, shall make, file, or be interested in more than one proposal for the same work unless alternate proposals are called for. A person, firm, or corporation who has submitted a sub-proposal to a Proposer, or who has quoted prices on materials to a Proposer, is not thereby disqualified from submitting a sub-proposal or quoting prices to other Proposers. Reasonable ground for believing that any Proposer is interested in more than one proposal for the same work will cause the rejection of all proposals for the work in which a Proposer is interested. If there is reason to believe that collusion exists among the Proposers, the Town may refuse to consider proposals from participants in such collusion. Proposers shall submit as part of their proposals documents the completed Non-Collusion Declaration provided herein.

I, on behalf of the Proposer, declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration is executed on __________________ [date], at ___________________[city], _______________[state].
_________________________________ ___________________________________ Proposer Name (Person, Firm, Corp.) Title of Authorized Representative _________________________________ ___________________________________ Address Name of Authorized Representative
_________________________________
City, State, Zip
________________ ___________________________________
Date Signed
June 12, 2026
Emeryville California
Ahmed Badawi President
5901 Christie Ave., Suite 307 Ahmed Badawi
Emeryville, CA 94608
June 12, 2026

Page 244 ends

ITEM NO. 10.

Page 15 of 27 ends

ATTACHMENT 2 – NON-COLLUSION DECLARATION

THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL

PROFESSIONAL AUDITING SERVICES
The undersigned declares:

I am the ______________________ [Insert Title] of ____________________________,[Insert name of company, corporation, LLC, partnership or joint venture] the party making the foregoing proposal.

The proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation. The proposal is genuine and not collusive or sham. The Respondent has not directly or indirectly induced or solicited any other respondent to put in a false or sham proposal. The Respondent has not directly or indirectly colluded, conspired, connived, or agreed with any bidder or anyone else to put in a sham proposal, or to refrain from responding. All statements contained in the proposal are true.

Any person executing this declaration on behalf of a respondent that is a corporation, partnership, joint venture, limited liability company, limited liability partnership, or any other entity, hereby represents that he or she has full power to execute, and does execute, this declaration on behalf of the respondent.

President Badawi & Associates

Page 245 ends

ITEM NO. 10.

Page 16 of 27 ends

ATTACHMENT 3 - REFERENCES

THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL

PROFESSIONAL AUDITING SERVICES
List three (3) references for work of a similar nature to the Services performed within the last five (5) years.

Use additional sheets as necessary.

1. _________________________________ ____________________________ ___________ Name of Agency Agency Address
_________________________________ ________________________________________ Contact Name Contact Title
_________________________________ ________________________________________ Contact Telephone Contact Email Address
_________________________________ ________________________________________ Contract Period Contract Amount
___________________________________________________________________________ ___________________________________________________________________________ Description of services performed including costs.

2. _________________________________ ________________________________________ Name of Agency Agency Address
_________________________________ ________________________________________ Contact Name Contact Title
_________________________________ ________________________________________ Contact Telephone Contact Email Address
_________________________________ ________________________________________ Contract Period Contract Amount
___________________________________________________________________________ City of Lafayette 3675 Mount Diablo Blvd., #210, Lafayette, CA 94549 Mr. Tim Przybyla Finance Manager
(925) 299-3213 [email protected]
(2020 - Present)
City Audit including ACFR, Single Audit, Gann Limit, TDA Audit, State Controller's Report, Lamorinda Fee and Finance Authority Audit, Lamorinda School Bus Transportation Authority Audit Approximately $60K
City of San Carlos
Mr. Paul Harris
600 Elm Street, San Carlos, CA 94070
Financial Services Manager
(650) 802-4217 [email protected]
(2023 - Present) Approximately $85K
City Audit including ACFR, Gann Limit, Measure A/M/W Examinations, C/CAG Audit, C/CAG Single Audit, Commute.org Audit, State Controller's Report

Page 246 ends

ITEM NO. 10.

Page 17 of 27 ends

___________________________________________________________________________ Description of services performed including costs.

3. _________________________________ ________________________________________ Name of Agency Agency Address
_________________________________ ________________________________________ Contact Name Contact Title
_________________________________ ________________________________________ Contact Telephone Contact Email Address
_________________________________ ________________________________________ Contract Period Contract Amount
___________________________________________________________________________ ___________________________________________________________________________ Description of services performed including costs.

I hereby certify that the Proposer performed the work listed above. _____________________ ______________________ ____________________ Signature of Proposer Name Date
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration is executed on ________ , at ______________[city], ___[state].

By: _____________________
Name: _____________________
Title: _____________________
Ahmed Badawi June 12, 2026
June 12, 2026 Emeryville CA
Ahmed Badawi
President
City of Mountain View 500 Castro Street, Mountain View, CA 94039 Mr. Derek Rampone Finance and Administrative Services Director (650) 903-6316 [email protected]
(2024 - Present) Approximately $110K
City Audit including ACFR, Single Audit, Gann Limit, TDA Audit, Shoreline Regional Park Community Audit, Lease Agreed-upon Procedures, Purchasing Card Agreed-upon Procedures

Page 247 ends

ITEM NO. 10.

Page 18 of 27 ends

ATTACHMENT 4 - STATEMENT REGARDING INSURANCE COVERAGE AND WORKER’S COMPENSATION

INSURANCE ACKNOWLEDGMENT CERTIFICATE

THIS FORM MUST BE PRINTED OUT, COMPLETED AND SUBMITTED WITH THE PROPOSAL

PROFESSIONAL AUDITING SERVICES
PROPOSER HEREBY CERTIFIES that the Proposer has reviewed and understands the insurance coverage requirements specified in the RFP. Should the Proposer be awarded a contract for Services, Proposer further certifies that the Proposer can meet the specified requirements for insurance, including insurance coverage of any subcontractors, and agrees to name the Town as additional insured for the Services specified.

By certifying this form, the Proposer also understands the Worker’s Compensation insurance requirement per the California Labor Code, Sections 1860 and 1861:

I am aware of the provisions of Section 3700 of the Labor Code, which require every employer to be insured against liability for worker's compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract. _____________________________________________
Name of Proposer (Person, Firm, or Corporation)
_____________________________________________
Signature of Proposer's Authorized Representative
_____________________________________________
Name & Title of Authorized Representative
____________________
Date of Signing
Badawi & Associates
Ahmed Badawi, President
June 12, 2026

Page 248 ends

ITEM NO. 10.

Exhibit B
Dollar Cost Proposal - Badawi and Associates

Page 249 ends

ITEM NO. 10.

Town of
Los Gatos

SEALED DOLLAR COST BID PROPOSAL
For Professional Auditing Services for
the Town of Los Gatos
For fiscal years ending June 30, 2027 through 2029,
with the option to extend for two (2) additional oneyear terms.

June 12, 2026
Contact Person:

Ahmed Badawi, CPA
Badawi & Associates
Certified Public Accountants
5901 Christie Avenue, Suite 307
Emeryville, CA 94608
Phone: (510) 768-8244
Fax: (510) 768-8249
E-mail: [email protected]

Page 250 ends

ITEM NO. 10.

Page 251 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
1 Name of Firm and Certification
Name of Firm: Badawi & Associates
Address: 5901 Christie Avenue, Suite 307
City, State, Zip: Emeryville, CA 94608
Contact Name: Ahmed Badawi
Contact Telephone Number(s): 510-768-8244
Contact Fax Number(s): 510-768-8249
Contact E-mail Address: [email protected]
I, the undersigned, certify I am duly authorized to represent the above named firm and am empowered to submit this bid. In addition, I certify I am authorized to contract with the Town of Los Gatos on behalf of the above named firm.

The Firm will honor the prices listed in this proposal for 180 days from the submittal deadline.

President June 12, 2026
Signature Title Date
Ahmed Badawi
Name

Page 252 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
2 Summary Schedules of Professional Fees
In accordance with the requirements of the Town’s request for proposals, detail schedules for each service to support the above summary schedules have been included on the pages that follow.

Optional
Year
Optional
Year
2026-27 2027-28 2028-29 2029-30 2030-31
Basic Services
Financial Statements Audit (1) 39,985 300 $ 41,185 $ 42,421 $ 43,694 $ 45,005 $ Single Audit 23 3,055 3,147 3,241 3,338 3,438 Total Basic Services 323 43,040 44,332 45,662 47,032 48,443 Optional and Additional Services:

Gann Limit Agreed-upon Procedures 5 745 767 790 814 838 Measure G Agreed-upon Procedures 18 2,415 2,487 2,562 2,639 2,718 TDA Audit 20 2,650 2,730 2,812 2,896 2,983 State Controller's Report Preparation 21 2,750 2,833 2,918 3,006 3,096 Annual Street Report Preparation 9 1,165 1,200 1,236 1,273 1,311 Total, including All Services 396 52,765 $ 54,349 $ 55,980 $ 57,660 $ 59,389 $ (1) Includes ACFR preparation and Management Letter
Description
2027
Hours
Hours Rates Hours Rates Hours Rates Hours Rates Hours Rates Partner 40 350 $ 39 360 $ 38 370 $ 37 $380 37 $390
Audit Manager 59 250 55 260 52 270 52 280 52 290
Audit Senior 94 200 91 205 87 210 87 215 86 220
Professional Audit Staff 173 150 153 155 148 160 147 165 146 170 IT Specialists 7 250 6 260 6 270 6 280 6 290
Administrative Assistant 23 125 20 130 20 135 20 140 19 145 Total Hours 396 364 351 349 346 Total Cost
Discount
Total not to exceed fees
Optional Year
Position
Optional Year
2026-27 2027-28 2028-29 2029-30 2030-31
$ 74,870 78,125 $ 74,370 $ 76,060 $ 77,745 $
(20,521) (25,360) (18,390) (18,400) (18,356) $ 54,349 52,765 $ 55,980 $ 57,660 $ 59,389 $

Page 253 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
3 Schedule of Fees and Services
Fiscal Year 2026-27
Financial Statements Audit
Hourly
Hours Rates Total
Partners 30 350 $ 10,500 $
Audit Manager 44 250 11,000 Audit Senior 71 200 14,200
Audit Staff 130 150 19,500
I.T. Specialist 7 250 1,750 Administrative 18 125 2,250 Subtotal 59,200 Discount (19,215) Total Not to Exceed Fees 39,985 $ Single Audit
Hourly
Hours Rates Total
Partners 2 350 $ 700 $
Audit Manager 4 250 1,000 Audit Senior 6 200 1,200
Audit Staff 10 150 1,500
I.T. Specialist - 250 - Administrative 1 125 125 Subtotal 4,525 Discount (1,470) Total Not to Exceed Fees 3,055 $ Gann Limit AUP
Hourly
Hours Rates Total
Partners 1 350 $ 350 $
Audit Manager 1 250 250 Audit Senior 1 200 200
Audit Staff 2 150 300
Administrative - 125 -
I.T. Specialist - 250 - Subtotal 1,100 Discount (355) Total Not to Exceed Fees 745 $

Page 254 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
4 Schedule of Fees and Services
Fiscal Year 2026-27
(Continued)
Measure G AUP
Hourly
Hours Rates Total
Partners 2 350 $ 700 $
Audit Manager 3 250 750 Audit Senior 4 200 800
Audit Staff 8 150 1,200
I.T. Specialist - 250 - Administrative 1 125 125 Subtotal 3,575 Discount (1,160) Total Not to Exceed Fees 2,415 $ TDA Audit
Hourly
Hours Rates Total
Partners 2 350 $ 700 $
Audit Manager 3 250 750 Audit Senior 5 200 1,000 Audit Staff 9 150 1,350 I.T. Specialist - 250 - Administrative 1 125 125 Subtotal 3,925 Discount (1,275) Total Not to Exceed Fees 2,650 $ SCO Report Preparation
Hourly
Hours Rates Total
Partners 2 350 $ 700 $
Audit Manager 3 250 750 Audit Senior 5 200 1,000 Audit Staff 10 150 1,500 I.T. Specialist - 250 - Administrative 1 125 125 Subtotal 4,075 Discount (1,325) Total Not to Exceed Fees 2,750 $

Page 255 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
5 Schedule of Fees and Services
Fiscal Year 2026-27
(Continued)

Street Report Preparation
Hourly
Hours Rates Total
Partners 1 350 $ 350 $
Audit Manager 1 250 250 Audit Senior 2 200 400
Audit Staff 4 150 600
I.T. Specialist - 250 - Administrative 1 125 125 Subtotal 1,725 Discount (560) Total Not to Exceed Fees 1,165 $

Page 256 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
6 Schedule of Fees and Services
Fiscal Year 2027-28
Financial Statements Audit
Hourly
Hours Rates Total
Partners 29 360 $ 10,440 $
Audit Manager 41 260 10,660 Audit Senior 69 205 14,145
Audit Staff 116 155 17,980
I.T. Specialist 6 260 1,560 Administrative 16 130 2,080 Subtotal 56,865 Discount (15,680) Total Not to Exceed Fees 41,185 $ Single Audit
Hourly
Hours Rates Total
Partners 2 360 $ 720 $
Audit Manager 3 260 780 Audit Senior 5 205 1,025 Audit Staff 9 155 1,395 I.T. Specialist - 260 - Administrative 1 130 130 Subtotal 4,050 Discount (903) Total Not to Exceed Fees 3,147 $ Gann Limit AUP
Hourly
Hours Rates Total
Partners 1 360 $ 360 $
Audit Manager 1 260 260 Audit Senior 1 205 205
Audit Staff 2 155 310
Administrative - 130 -
I.T. Specialist - 260 - Subtotal 1,135 Discount (368) Total Not to Exceed Fees 767 $

Page 257 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
7 Schedule of Fees and Services
Fiscal Year 2027-28
(Continued)
Measure G AUP
Hourly
Hours Rates Total
Partners 2 360 $ 720 $
Audit Manager 3 260 780 Audit Senior 4 205 820
Audit Staff 7 155 1,085
I.T. Specialist - 260 - Administrative 1 130 130 Subtotal 3,535 Discount (1,048) Total Not to Exceed Fees 2,487 $ TDA Audit
Hourly
Hours Rates Total
Partners 2 360 $ 720 $
Audit Manager 3 260 780 Audit Senior 5 205 1,025 Audit Staff 8 155 1,240 I.T. Specialist - 260 - Administrative 1 130 130 Subtotal 3,895 Discount (1,165) Total Not to Exceed Fees 2,730 $ SCO Report Preparation
Hourly
Hours Rates Total
Partners 2 360 $ 720 $
Audit Manager 3 260 780 Audit Senior 5 205 1,025 Audit Staff 8 155 1,240 I.T. Specialist - 260 - Administrative 1 130 130 Subtotal 3,895 Discount (1,062) Total Not to Exceed Fees 2,833 $

Page 258 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
8 Schedule of Fees and Services
Fiscal Year 2027-28
(Continued)
Street Report Preparation
Hourly
Hours Rates Total
Partners 1 360 $ 360 $
Audit Manager 1 260 260 Audit Senior 2 205 410
Audit Staff 3 155 465
I.T. Specialist - 260 - Administrative - 130 - Subtotal 1,495 Discount (295) Total Not to Exceed Fees 1,200 $

Page 259 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
9 Schedule of Fees and Services
Fiscal Year 2028-29

Financial Statements Audit
Hourly
Hours Rates Total
Partners 28 370 $ 10,360 $
Audit Manager 39 270 10,530 Audit Senior 66 210 13,860
Audit Staff 111 160 17,760
I.T. Specialist 6 270 1,620 Administrative 16 135 2,160 Subtotal 56,290 Discount (13,869) Total Not to Exceed Fees 42,421 $ Single Audit
Hourly
Hours Rates Total
Partners 2 370 $ 740 $
Audit Manager 3 270 810 Audit Senior 5 210 1,050 Audit Staff 9 160 1,440 I.T. Specialist - 270 - Administrative 1 135 135 Subtotal 4,175 Discount (934) Total Not to Exceed Fees 3,241 $ Gann Limit AUP
Hourly
Hours Rates Total
Partners 1 370 $ 370 $
Audit Manager 1 270 270 Audit Senior 1 210 210
Audit Staff 2 160 320
Administrative - 135 -
I.T. Specialist - 270 - Subtotal 1,170 Discount (380) Total Not to Exceed Fees 790 $

Page 260 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
10 Schedule of Fees and Services
Fiscal Year 2028-29
(Continued)
Measure G AUP
Hourly
Hours Rates Total
Partners 2 370 $ 740 $
Audit Manager 2 270 540 Audit Senior 4 210 840
Audit Staff 7 160 1,120
I.T. Specialist - 270 - Administrative 1 135 135 Subtotal 3,375 Discount (813) Total Not to Exceed Fees 2,562 $ TDA Audit
Hourly
Hours Rates Total
Partners 2 370 $ 740 $
Audit Manager 3 270 810 Audit Senior 4 210 840
Audit Staff 8 160 1,280
I.T. Specialist - 270 - Administrative 1 135 135 Subtotal 3,805 Discount (993) Total Not to Exceed Fees 2,812 $ SCO Report Preparation
Hourly
Hours Rates Total
Partners 2 370 $ 740 $
Audit Manager 3 270 810 Audit Senior 5 210 1,050 Audit Staff 8 160 1,280 I.T. Specialist - 270 - Administrative 1 135 135 Subtotal 4,015 Discount (1,097) Total Not to Exceed Fees 2,918 $

Page 261 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
11 Schedule of Fees and Services
Fiscal Year 2028-29
(Continued)
Street Report Preparation
Hourly
Hours Rates Total
Partners 1 370 $ 370 $
Audit Manager 1 270 270 Audit Senior 2 210 420
Audit Staff 3 160 480
I.T. Specialist - 270 - Administrative - 135 - Subtotal 1,540 Discount (304) Total Not to Exceed Fees 1,236 $

Page 262 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
12 Schedule of Fees and Services
Optional Fiscal Year 2029-30
Financial Statements Audit
Hourly
Hours Rates Total
Partners 27 380 $ 10,260 $
Audit Manager 39 280 10,920 Audit Senior 66 215 14,190
Audit Staff 110 165 18,150
I.T. Specialist 6 280 1,680 Administrative 16 140 2,240 Subtotal 57,440 Discount (13,746) Total Not to Exceed Fees 43,694 $ Single Audit
Hourly
Hours Rates Total
Partners 2 380 $ 760 $
Audit Manager 3 280 840 Audit Senior 5 215 1,075 Audit Staff 9 165 1,485 I.T. Specialist - 280 - Administrative 1 140 140 Subtotal 4,300 Discount (962) Total Not to Exceed Fees 3,338 $ Gann Limit AUP
Hourly
Hours Rates Total
Partners 1 380 $ 380 $
Audit Manager 1 280 280 Audit Senior 1 215 215
Audit Staff 2 165 330
Administrative - 140 -
I.T. Specialist - 280 - Subtotal 1,205 Discount (391) Total Not to Exceed Fees 814 $

Page 263 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
13 Schedule of Fees and Services
Optional Fiscal Year 2029-30
(Continued)
Measure G AUP
Hourly
Hours Rates Total
Partners 2 380 $ 760 $
Audit Manager 2 280 560 Audit Senior 4 215 860
Audit Staff 7 165 1,155
I.T. Specialist - 280 - Administrative 1 140 140 Subtotal 3,475 Discount (836) Total Not to Exceed Fees 2,639 $ TDA Audit
Hourly
Hours Rates Total
Partners 2 380 $ 760 $
Audit Manager 3 280 840 Audit Senior 4 215 860
Audit Staff 8 165 1,320
I.T. Specialist - 280 - Administrative 1 140 140 Subtotal 3,920 Discount (1,024) Total Not to Exceed Fees 2,896 $ SCO Report Preparation
Hourly
Hours Rates Total
Partners 2 380 $ 760 $
Audit Manager 3 280 840 Audit Senior 5 215 1,075 Audit Staff 8 165 1,320 I.T. Specialist - 280 - Administrative 1 140 140 Subtotal 4,135 Discount (1,129) Total Not to Exceed Fees 3,006 $

Page 264 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
14 Schedule of Fees and Services
Optional Fiscal Year 2029-30
(Continued)
Street Report Preparation
Hourly
Hours Rates Total
Partners 1 380 $ 380 $
Audit Manager 1 280 280 Audit Senior 2 215 430
Audit Staff 3 165 495
I.T. Specialist - 280 - Administrative - 140 - Subtotal 1,585 Discount (312) Total Not to Exceed Fees 1,273 $

Page 265 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
15 Schedule of Fees and Services
Optional Fiscal Year 2030-31
Financial Statements Audit
Hourly
Hours Rates Total
Partners 27 390 $ 10,530 $
Audit Manager 39 290 11,310 Audit Senior 65 220 14,300
Audit Staff 109 170 18,530
I.T. Specialist 6 290 1,740 Administrative 15 145 2,175 Subtotal 58,585 Discount (13,580) Total Not to Exceed Fees 45,005 $ Single Audit
Hourly
Hours Rates Total
Partners 2 390 $ 780 $
Audit Manager 3 290 870 Audit Senior 5 220 1,100 Audit Staff 9 170 1,530 I.T. Specialist - 290 - Administrative 1 145 145 Subtotal 4,425 Discount (987) Total Not to Exceed Fees 3,438 $ Gann Limit AUP
Hourly
Hours Rates Total
Partners 1 390 $ 390 $
Audit Manager 1 290 290 Audit Senior 1 220 220
Audit Staff 2 170 340
Administrative - 145 -
I.T. Specialist - 290 - Subtotal 1,240 Discount (402) Total Not to Exceed Fees 838 $

Page 266 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
16 Schedule of Fees and Services
Optional Fiscal Year 2030-31
(Continued)
Measure G AUP
Hourly
Hours Rates Total
Partners 2 390 $ 780 $
Audit Manager 2 290 580 Audit Senior 4 220 880
Audit Staff 7 170 1,190
I.T. Specialist - 290 - Administrative 1 145 145 Subtotal 3,575 Discount (857) Total Not to Exceed Fees 2,718 $ TDA Audit
Hourly
Hours Rates Total
Partners 2 390 $ 780 $
Audit Manager 3 290 870 Audit Senior 4 220 880
Audit Staff 8 170 1,360
I.T. Specialist - 290 - Administrative 1 145 145 Subtotal 4,035 Discount (1,052) Total Not to Exceed Fees 2,983 $ SCO Report Preparation
Hourly
Hours Rates Total
Partners 2 390 $ 780 $
Audit Manager 3 290 870 Audit Senior 5 220 1,100 Audit Staff 8 170 1,360 I.T. Specialist - 290 - Administrative 1 145 145 Subtotal 4,255 Discount (1,159) Total Not to Exceed Fees 3,096 $

Page 267 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
17 Schedule of Fees and Services
Optional Fiscal Year 2030-31
(Continued)
Street Report Preparation
Hourly
Hours Rates Total
Partners 1 390 $ 390 $
Audit Manager 1 290 290 Audit Senior 2 220 440
Audit Staff 3 170 510
I.T. Specialist - 290 - Administrative - 145 - Subtotal 1,630 Discount (319) Total Not to Exceed Fees 1,311 $

Page 268 ends

ITEM NO. 10.

Town of Los Gatos Cost Proposal
18 Manner of Payment:

Each Engagement Team member maintains detailed time sheets describing work performed, date of work, and amount of time spent on each task for the Engagement. The Firm will bill the Town after completion of each phase of the audit and bill the Town up to a maximum of 90%. The remaining 10% of the proposal amount will not be due until all final reports are delivered and accepted by the Town. The Town can anticipate three billings as follows:

Work Performed
% of Proposal
Amount
For interim work 45%
For year-end work 45%
At presentation and acceptance of final reports 10%
Total 100%

Rates for Additional Professional Services:

Any services outside the scope of our engagement will be promptly identified before the services are rendered. Upon mutual agreement, the out-of-scope services will be separately billed at our standard hourly rates. While it can be difficult to simply state hourly rates, as often times the needs of the client and the specific tasks directly impact the billing rates for our services, we want to provide the following information regarding our published billing rates:

Position Hourly Rate
Partner $ 350
EQR 350
Manager 250
Senior 200
Staff 150
I.T. 250
Admin. 125

Our Standard Hourly Rates are adjusted annually by 3% for Cost of Living and Inflation Adjustments Conclusion:

A client relationship with the Town will be of great value to our Firm and we welcome the opportunity to develop a long-term relationship with the Town. We are committed to:
* Rendering the highest standard of service.
* Developing a long-term working relationship dedicated to meeting the needs of the Town. * Assisting the Town in operational issues.
* Producing a quality end-product.

We have the technical qualifications and experience to provide the level of service desired and expected by the Town and stand ready to provide our knowledge and experience for the benefit of your organization.

Thank you for allowing us to present our Firm to you.
* * * * * * * * * * * * * * * * *

Page 269 ends

ITEM NO. 10.

PREPARED BY: Gabrielle Whelan
Town Attorney
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: 10/20/2026
ITEM NO: 11
DATE: October 20, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Adopt a Resolution Authorizing the Town Manger to Execute an AB 130 Tolling Agreement for a Townhome Project Located at 15495 Los Gatos Boulevard
RECOMMENDATION: Adopt a resolution authorizing the Town Manager to execute an AB 130 tolling agreement with the applicant for a townhome project located at 15495 Los Gatos Boulevard.

FISCAL IMPACT:

There are no Town fiscal impacts related to executing the proposed tolling agreement.

STRATEGIC PRIORITY:

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

BACKGROUND:

Government Code Section 65950, as amended by Assembly Bill 130 (“AB 130”), establishes an expedited review timeline and requires notice providing California Native American tribes an opportunity to consult with the Town. Staff is requesting Town Council authorization for the Town Manager to execute an AB 130 tolling agreement between the Town and the applicant for a townhome project at 15495 Los Gatos Boulevard. The proposed agreement would extend the otherwise applicable statutory deadline by mutual agreement.

Page 270 ends

ITEM NO. 11.

PAGE 2 OF 2
SUBJECT: AB 130 Tolling Agreement for a Townhome Project Located at 15495 Los Gatos Boulevard.

DATE: October 20, 2026
The planning application for this project is complete. Once a planning application has been deemed complete, AB 130 requires the Town to provide notice of an opportunity for California Native American tribes to consult on the project. Several tribes wish to consult.

Pursuant to Government Code Section 65950(a)(7), the Town is required to consider the project for approval or disapproval within 30 days of concluding the tribal consultation, or within 30 days from the expiration of the Town’s deadline to conduct its consistency review.

Town Code Sections 29.20.750-755 require both Planning Commission and Town Council review of the townhome project. Based on the legal requirement that the Town Council meeting notice include the Planning Commission’s recommendation, there is insufficient time to notice and conduct both meetings and render a decision within the 30-day deadline.

DISCUSSION:

The applicant has agreed to toll the AB 130 deadline so that the Town has up to 45 days after the Planning Commission’s review in which to hold the Town Council hearing.

CONCLUSION:

Staff recommends that the Town Council adopt a resolution authorizing the Town Manager to execute the AB 130 Tolling Agreement.

COORDINATION:

This staff report was coordinated with the Community Development Department.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required (CEQA Guidelines Section 15378.)
Attachments:

1. Resolution

2. AB 130 Tolling Agreement

Page 271 ends

ITEM NO. 11.
1 of 2
Resolution 2026-XX October 20, 2026
RESOLUTION 2026-xx

RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AUTHORIZING THE TOWN MANAGER TO EXECUTE AN AB 130 TOLLING AGREEMENT FOR A TOWNHOME PROJECT LOCATED AT 15495 LOS GATOS BOULEVARD
WHEREAS, the Town Council of the Town of Los Gatos is considering a townhome project proposed for 15495 Los Gatos Boulevard (the “Project”); and WHEREAS, the planning application for the Project has been deemed complete, and Town Code Sections 29.20.750–755 require review of the Project by both the Planning Commission and the Town Council; and
WHEREAS, the Town is required to provide California Native American tribes an opportunity to consult on the Project, and several tribes wish to consult; and WHEREAS, pursuant to Government Code Section 65950(a)(7), the Town is required to consider the Project for approval or disapproval within 30 days of concluding tribal consultation, or within 30 days from the expiration of the Town’s deadline to conduct its consistency review; and
WHEREAS, because the Town Council meeting notice must include the Planning Commission’s recommendation, there is insufficient time to notice and conduct both meetings and render a decision within the 30-day deadline, and the applicant has agreed to toll the AB 130 deadline to allow the Town up to 45 days after the Planning Commission’s review to hold the Town Council hearing; and
WHEREAS, the Town Council finds that authorizing the Town Manager to execute the AB 130 tolling agreement for the Project is appropriate; NOW, THEREFORE, BE IT RESOLVED that the Town Council of the Town of Los Gatos does hereby declare, determine, and order that the Town Manager is authorized to execute the AB 130 tolling agreement on behalf of the Town.

PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 20th day of October, 2026, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

Draft Resolution: Subject to
modification by Town Council based on
deliberations and direction.

Page 272 ends

ITEM NO. 11.
2 of 2
Resolution 2026-XX October 20, 2026
SIGNED:
_______________________________

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
ATTEST:
___________________________________

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
ATTACHMENT 2

Page 273 ends

ITEM NO. 11.

TOLLING AGREEMENT FOR AB 130 DEADLINES
15495 Los Gatos Boulevard (“Newtown”), Los Gatos, CA
Townhome Project
This Tolling Agreement (the “Agreement”), dated as of the date all parties sign this Agreement (the “Effective Date”), is entered into by and among Green Valley Corporation dba Swenson (the “Applicant”) and the Town of Los Gatos (“Town”). Applicant and the Town are individually referred to herein as a “Party,” and collectively referred to as the “Parties.”

RECITALS
WHEREAS, on November 4, 2025, the Applicant submitted an application(s) (the “Application”) (Architecture and Site Application-S-25-050, Conditional Use Permit ApplicationU-25-009, and Vesting Tentative Map Application-M-25-009) to demolish the existing commercial/retailstructureslocated at 15495 Los Gatos Boulevard, Los Gatos, CA 95032 (APN 424-22-030) (the “Property”) and construct townhomes thereon (the “Townhome Project”).

WHEREAS, the Town deemed the Application complete on June 24, 2026.

WHEREAS, the Applicant has invoked the provisions of State Density Bonus Law (Gov.

Code §65915), the Housing Accountability Act (Gov. Code §65589.5), and AB 130 (Gov. Code § 65950 and Pub. Res. Code § 21080.66), which limit the Town’s discretion, exempt the Townhome Project from CEQA, and limit the time in which the Town must act on the Townhome Project.

WHEREAS, the Town deemed the Townhome Project eligible for AB 130 on August 19, 2026.

WHEREAS, pursuant to AB 130, the Town must provide notice of the opportunity for California Native American Tribes to consult on the Townhome Project within 14 days of the Application being deemed complete and determined eligible for AB 130 pursuant to Government Code Section 65589.5.

WHEREAS, the Town sent out all required tribal consultation requests on September 1, 2026.

WHEREAS, the deadline for tribes to request tribal consultation is October 31, 2026, and, as of the Effective Date, two tribes have contacted the Town to request a tribal consultation and the Town has initiated each consultation.

WHEREAS, if a tribe requests a tribal consultation, the Town has 14 days to initiate the consultation, and the Town must complete each tribal consultation within 45 days of initiation, with one 15-day extension if requested by the tribe.

WHEREAS, pursuant to Government Code Section 65950(a)(7), the Town is required to considerthe Townhome Project for approval or disapproval within 30 days of concluding the tribal consultation, or 30 days from expiration of the applicable time limit to conduct a consistency review pursuant to Government Code Section 65589.5(j)(2) (the “AB 130 Deadline”).
1 Docusign Envelope ID: 9B222E95-8C6D-8114-8059-3DE745307372 ATTACHMENT 2

Page 274 ends

ITEM NO. 11.
2 WHEREAS, pursuant to Town Code Sections 29.20.750-755, the Town requires the Planning Commission to review each project andmake a recommendation to Town Council, which makes the final determination on the Townhome Project.

WHEREAS, the Town is unable to conduct both public hearings (Planning Commission and Town Council) with the required legal noticing and lead time within the required 30-day AB 130 Deadline, and has requested that this deadline be tolled for the Townhome Project.

WHEREAS, Government Code Sections 65950(b) and 65957 allow a one-time extension of the deadline to approve or disapprove a project upon mutual written agreement of the Applicant and the Town for a period not to exceed 90 days from the date of the AB 130 Deadline.

Now therefore, with reference to the foregoing recitals, which are incorporated into this Agreement, and for good and valuable consideration, sufficiency of which is hereby acknowledged, the Parties agree as follows:

TERMS AND CONDITIONS

1. Tolling. The AB 130 Deadline for the Town to act on the Townhome Project Application shall be extended beyond the statutory 30-day period as follows:
a. The Planning Commission shall review the Townhome Project Application at the next soonest scheduled hearing date at which a quorum will be present after tribal consultation is concluded or deemed concluded, subject to the Town’s standard noticing requirements.

Attached as Exhibit A to this Agreement is the current status of the Town’s tribal consultations. b. Town Council shall review the Townhome Project Application at the next soonest scheduled hearing date at which a quorum will be present immediately following Planning Commission review, subject to the Town’s standard noticing requirements; provided that in any event, no more than 45 daysshall elapse between the Planning Commission hearing and the Town Council hearing.
c. Subject to the Town’s compliance with this Agreement, Applicant hereby waives any right it may have to claim the Town violated the AB 130 Deadline. d. Nothing herein shall modify the required timeframes for the Town to provide comments on any resubmitted materials for the Application.

2. Each Party’s Role in Drafting the Agreement. Each Party to this Agreement has had an opportunity to review the Agreement, confer with legal counsel regarding the meaning of the Agreement, and negotiate revisions to the Agreement. Accordingly, neither Party shall rely upon Civil Code Section 1654 in order to interpret any uncertainty in the meaning of the Agreement.

Docusign Envelope ID: 9B222E95-8C6D-8114-8059-3DE745307372

Page 275 ends

ITEM NO. 11.
3 3. Governing Law; Venue. This Agreement shall be governed by the laws of the State of California, excluding its conflict of laws principles. Any suit, claim or legal proceeding of any kind related to this Agreement shall be heard and filed in a court of competent jurisdiction in the County of Santa Clara.

IN WITNESS WHEREOF, the Parties do hereby agree to the full performance of the terms set forth herein.

TOWN OF LOS GATOS
By:

Chris Constantin, Town Manager
Dated:

APPROVED AS TO FORM:

By:

Gabielle Whelan, Town Attorney
Dated:

GREEN VALLEY CORPORATION,
a California corporation
By:

Case Swenson, President
Dated:

APPROVED AS TO FORM:

By:

Summer Ludwick, Esq.

Situs Law, PC
Dated:

Docusign Envelope ID: 9B222E95-8C6D-8114-8059-3DE745307372 10/15/2026
10/15/2026
10/15/2026

Page 276 ends

ITEM NO. 11.

TOWN OF LOS GATOS
Exhibit A
Subject: Tribal Consultation Schedule for 15495 Los Gatos Boulevard (“Newtown”), Los Gatos, CA Townhome Project – Tolling Agreement for AB 130 Deadlines As of October 8, 2026, the Town has received four responses. As a reminder, the tribes have until October 31, 2026 to respond, requesting consultation. o Amah Mutsun Tribal Band of Mission San Juan Bautista responded via email on September 1, 2026. They sent recommendations but did not request consultation. Consultation is closed.
o Indian Canyon Mutsun Band of Costanoan responded via email on September 24, 2026. They sent recommendations. Staff responded on September 29, 2026, asking for confirmation that no formal consultation is required. No response has been received as of October 8, 2026.
o Muwekma Ohlone Tribe of SF Bay Area responded via email on September 2, 2026. They requested consultation. Staff scheduled for the first available date on their calendar of October 21, 2026. However, this date is beyond the 45-day consultation deadline. Staff informed the tribe they must either request a 15-day extension or propose earlier dates to consult within the AB 130 timelines. The 45-day window was mutually agreed to be extended until November 1, 2026. o Tamien Nation responded via email on September 3, 2026. They requested consultation. Staff scheduled for the first available date on their calendar of October 1, 2026. On September 29, 2026, they emailed staff stating no consultation is required after further review.
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
Docusign Envelope ID: 9B222E95-8C6D-8114-8059-3DE745307372

Page 277 ends

ITEM NO. 11.

PREPARED BY: Gary Heap
Town Engineer
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: 10/20/2026
ITEM NO: 12
DATE: October 20, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Two-Year Professional Services Agreement with Transtech Engineers, Inc. for CIP Program Management; Authorize Re-assignment of the Kennedy Road Sidewalk and Bike Lanes Project to Tier 1; and Authorize a Budget Adjustment from the Available Unassigned GFAR Fund Balance
RECOMMENDATION: Authorize the Town Manager to execute a two-year Agreement for Professional Services with Transtech Engineers, Inc. for an amount not to exceed $1,018,000 for FY26-27 Capital Improvement Program (CIP) Management and Engineering Support Services in the general form provided here; authorize the Town Manager to re-assign the Kennedy Sidewalk and Bike Lanes Project from Tier 2 to Tier 1; and authorize a budget adjustment in the amount of $150,000 to fund the Kennedy Road Sidewalk and Bike Lanes Project (4118146) Feasibility Analysis.

FISCAL IMPACT:

The proposed recommendation requests an increase in expenditure appropriation of $150,000 in the General Fund Appropriations Reserve (GFAR) for the Kennedy Road Sidewalk and Bike Lanes Project 8146. The $150,000 increase is funded from the GFAR fund balance. The current year end estimated GFAR balance is $2,731,913. If the proposed transfer is approved the estimated GFAR ending fund balance will be $2,581,913.

The proposed Agreement for Professional Services with Transtech Engineers, Inc. has a total not-to-exceed amount of $1,018,000. Of this amount, $150,000 would be associated with

Page 278 ends

ITEM NO. 12.

PAGE 2 OF 5
SUBJECT: Authorize Agreement with Transtech Engineers, Inc. for Program Management; Authorize Re-assignment of the Kennedy Sidewalk and Bike Lanes Project to Tier 1; and Authorize Budget Adjustments from the Available Unassigned GFAR Fund Balance
DATE: October 20, 2026
Kennedy Sidewalk and Bike Lanes Project for feasibility analysis and requires the budget adjustment described above. This project was assigned to Tier 2 in the FY 2026-27 Capital Improvement Program budget due to lack of staffing and no budget was assigned. Staff are recommending an initial phase of work be funded with the enhanced staff resources afforded by this contract. If reallocating this project to Tier 1, and the associated budget transfer are not approved, then this project will be removed from the agreement. This is discussed in detail in the discussion section of this staff report.

STRATEGIC PRIORITY:

This item supports the Core Goals of Quality Public Infrastructure by advancing adopted capital improvement projects and Fiscal Stability by advancing the CIP in a financially responsible manner.

BACKGROUND:

The Town CIP consists of transportation, storm drainage, parks, facilities, and infrastructure improvement projects. Delivery of this program requires engineering resources to augment existing Town Staff.

To maintain project schedules, provide specialized technical expertise, and ensure efficient delivery of the adopted CIP, the Town solicited qualifications from firms experienced in municipal capital program management. On June 5, 2026, Parks and Public Works issued a Request for Qualifications for CIP Management Services. The RFQ closed on June 26, 2026, with eight firms submitting proposals. The proposals were evaluated by a scoring committee based on the capital improvement program delivery approach, qualifications of the firm and project personnel, references, and similar program management experience. The two top firms were invited to an interview on July 24, 2026. Transtech was selected as the most qualified firm to provide these services. Transtech was determined to provide the best overall value based upon demonstrated municipal program management experience, qualifications of key personnel, understanding of the Town's CIP, project delivery approach, and interview performance.

DISCUSSION:

The proposed agreement would allow Transtech to provide engineering resources that will supplement Town Staff in delivering the adopted CIP Projects. Services by Transtech may include:
 Capital project management
 Engineering design support

Page 279 ends

ITEM NO. 12.

PAGE 3 OF 5
SUBJECT: Authorize Agreement with Transtech Engineers, Inc. for Program Management; Authorize Re-assignment of the Kennedy Sidewalk and Bike Lanes Project to Tier 1; and Authorize Budget Adjustments from the Available Unassigned GFAR Fund Balance
DATE: October 20, 2026
 Preparation of plans, specifications, and estimates (PS&E)  Construction support
 Technical engineering assistance
 General engineering services
 Other engineering services as assigned by the Town
Transtech’s proposed work program includes support for numerous transportation, storm drainage, parks, facilities, and general engineering projects identified in Table 1. The proposal establishes an estimated budget for each project, allowing the Town to authorize work based upon project schedules and development of detailed scoping for each project. The total contract NTE amount is $1,018,000. The level of service provided will vary for each project depending on its funding level and work plan outlined in the CIP.

With this action, staff is requesting that funding be allocated to the Kennedy Road Sidewalk and Bike Lanes Project and the project be moved from Tier 2 to Tier 1. This request is being made because the project has $1,861,816 in Measure B funding that can be used for Final Design and Construction (the grant cannot be used for Project Feasibility). Within this fiscal year, the Town must either advance the final design of the project using the grant funds, request that the Measure B funds be reallocated to a different Town project or return the grant funding to the granting agency (Valley Transportation Authority).

The project had been moved to Tier 2 due to lack of staffing in the CIP program, and lack of clarity regarding the project scope. Staff recommends that a feasibility study be completed to assess constructability of the project concept. If the study reveals the project is not feasible, staff can discuss next steps and recommend reallocation of the grant resources. As noted above, the Town must discuss the future of this grant funding with the granting agency in this fiscal year and so is seeking to move this project forward outside of the capital budget process.

PPW Staff and the Human Resources Director have also met multiple times with the Town Employee Association (TEA) leadership regarding the provisions of this agreement, and TEA has no objection to this agreement with Transtech moving forward for approval.

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ITEM NO. 12.

PAGE 4 OF 5
SUBJECT: Authorize Agreement with Transtech Engineers, Inc. for Program Management; Authorize Re-assignment of the Kennedy Sidewalk and Bike Lanes Project to Tier 1; and Authorize Budget Adjustments from the Available Unassigned GFAR Fund Balance
DATE: October 20, 2026
Table 1. Agreement Funding by Project
CONCLUSION:

Approval of the recommended actions will provide the engineering resources necessary to deliver the FY 2026/27 Capital Improvement Program.

Project # Project Name Scope Costs Org Code
8101 2027 Street Repair & Resurfacing Transtech to PS&E & construction support $ 20,000 4118104 8103 Annual Street Restriping Transtech to provide PS&E support $ 2,000 4118104 8116 East Main Street Crosswalk Improvements Transtech to provide Project Management $ 30,000 4118116 8120 Curb, Gutter, & Sidewalk Maintenance Transtech to PS&E & construction support $ 20,000 4118120 8146 Kennedy Sidewalk and Bike Lanes (Los Gatos
Blvd - Englewood)
Feasibility analysis and preliminary design
including topography and boundary survey
$ 150,000 4118146
8151 Unanticipated Repairs - Annual Transtech to provide support as requested $ 25,000 4118151 8156 Roadway Reconstruction of Santa Cruz Ave
(BHR to Hwy 9)
Transtech to provide PS&E $ 200,000 4118156
8304 Annual Storm Drain Imp Transtech to provide support as requested $ 25,000 4638306 8311 Loma Street Drainage Transtech to provide Project Management $ 5,000 4618311 8315 Storm Drainage Mapping Transtech to provide technical support $ 5,000 4618315 8317 Green Stormwater Infrastructure Transtech to provide general and PS&E support $ 10,000 4118317 8405 Oak Meadow Bandstand Area Improvements Transtech to provide Project Management $ 5,000 4118405 8511 Timber Bridge Inspection Transtech to provide evaluation and design recommendations by a licensed structural
engineer
$ 50,000 4118511
8739 Condition Assessment of Civic Center
Transtech to provide space assessment for
existing and future staffing needs, and baseline
asset management
$ 250,000
4118739
8740 Fleet Service Outdoor Work Area (Design
Phase)
Transtech to provide PS&E. Deliverable as
preliminary design
$ 11,000 4118740
8743 Downtown Restroom Design Transtech to provide concept sketches to two locations, lifecycle cost analysis and PS&E
$ 100,000 4118743
8744 41 Miles Emergency Management
Improvement
Transtech to PS&E & construction support $ 50,000 4118744 8745 Library Lighting Controls Renovation Transtech to support town staff in correcting lighting issues
$ 10,000 4118745
5201 GENERAL ENGINEERING General Engineering support $ 50,000 1115201 TOTAL $ 1,018,000

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ITEM NO. 12.

PAGE 5 OF 5
SUBJECT: Authorize Agreement with Transtech Engineers, Inc. for Program Management; Authorize Re-assignment of the Kennedy Sidewalk and Bike Lanes Project to Tier 1; and Authorize Budget Adjustments from the Available Unassigned GFAR Fund Balance
DATE: October 20, 2026

ALTERNATIVES
Alternative 1 – Do Not Approve the Agreement
 Council could decline to authorize the agreement.

This alternative is not recommended because existing staffing resources are insufficient to deliver the adopted Capital Improvement Program within desired schedules and service levels.

Alternative 2 – Direct Staff to Re-Solicit Consultant Services  Council could direct staff to conduct a new consultant selection process.

This alternative is not recommended because it would delay delivery of numerous capital projects, increase administrative costs, and postpone implementation of Town Council adopted infrastructure improvements.

Alternative 3 – Approve the Agreement without the Kennedy Road Sidewalks and Bike Lanes Project Funding
 Council could authorize the agreement without including this project. In this scenario, staff would amend the agreement to remove that project before executing the agreement.

This alternative is not recommended because the Kennedy Road project was the fourth ranked project in the Town’s Bicycle and Pedestrian Master Plan (Master Plan) which is why grant funding was sought. Completing a feasibility study will determine if the project should ever move forward; without completing the feasibility study it will never be clear whether this project should remain in the Master Plan. It would have been ideal for the feasibility assessment to be completed before construction grants were sought but that was not the case for this project, so staff recommend completing this task now.

COORDINATION:

This report and the proposed agreement were coordinated with the Town Attorney and the Administrative Services Department.

ENVIRONMENTAL ASSESSMENT:

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

Attachments:

1. Agreement for Professional Services with Transtech Engineers, Inc.

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ITEM NO. 12.

AGREEMENT FOR PROFESSIONAL SERVICES

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Agreement for Professional Services
Transtech Engineers, Inc.

Capital Improvement Program Management Services

PREAMBLE
THIS AGREEMENT is by and between TOWN OF LOS GATOS, a California municipal corporation, (“Town”) and Transtech Engineers, Inc. (“Contractor”), a Corporation whose address is 13367 Benson Avenue, Chino, CA 91710. This Agreement is made with reference to the following facts.

I. RECITALS
A. Town desires to engage Consultant to provide management and oversight of the Town's Capital Improvement Program.

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

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

II. AGREEMENT
A. Scope of Services. Consultant shall provide services for the projects defined in the Scope of Services, which is hereby incorporated by reference and attached as Exhibit A. For each of the projects listed, Consultant and Town will agree on a list of tasks and deliverables prior to the start of the work.

B. Term. The term of this Agreement shall be from upon execution to Wednesday, November 1, 2028.

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

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

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

ATTACHMENT 1

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ITEM NO. 12.

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Agreement for Professional Services
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F. Compensation: Compensation for Consultant's professional services shall not exceed $1,018,000.00 at the rates set forth in Exhibit A which is attached and incorporated by reference. Payment shall be based upon Town approval of each task and work item. Any services and compensation for any future projects will be authorized through a written amendment signed by the Town and the Consultant.

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

Invoices: Town of Los Gatos
Attn: Accounts Payable
P.O. Box 655
Los Gatos, CA 95031-0655
Email (preferred): [email protected]
H. Availability of Records. Consultant shall maintain the records supporting this billing for not less than three years following completion of the work under this Agreement. Consultant shall make these records available to authorized personnel of the Town at the Consultant offices during business hours upon written request of the Town.

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

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

K. Conflict of Interest. Consultant understands that its professional responsibilities are solely to the Town. The Consultant has and shall not obtain any holding or interest within the Town of Los Gatos. Consultant has no business holdings or agreements with any individual member of the Staff or management of the Town or its representatives, nor shall it enter into any such holdings or agreements. In addition, Consultant warrants that it does not presently and shall not acquire any direct or indirect interest adverse to those of the Town in the subject of this Agreement, and it shall immediately disassociate itself from such an interest, should it discover it has done so and shall, at the Town's sole discretion, divest itself of such interest. Consultant shall not knowingly

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ITEM NO. 12.

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Agreement for Professional Services
Transtech Engineers, Inc.
and shall take reasonable steps to ensure that it does not employ a person having such an interest in this performance of this Agreement. If after employment of a person Consultant discovers it has employed a person with a direct or indirect interest that would conflict with its performance of this Agreement, Consultant shall promptly notify Town of this employment relationship, and shall, at the Town's sole discretion, sever any such employment relationship.

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

III. INSURANCE AND INDEMNIFICATION
A. Minimum Scope of Insurance:

1. 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.

2. 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.

3. 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.

4. 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.

B. General Liability:

1. 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.

2. 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.

3. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the Town, its officers, officials, employees or agents.

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ITEM NO. 12.

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Agreement for Professional Services
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4. 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.

D. 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.

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

C. Mediation. Should any dispute arise out of this Agreement, any party may request that it be submitted to mediation.

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

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ITEM NO. 12.

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Agreement for Professional Services
Transtech Engineers, Inc.
same ratio to the maximum contract price as the work delivered to the Town bears to completed services contemplated under this Agreement, unless such termination is made for cause, in which event, compensation, if any, shall be adjusted in light of the particular facts and circumstances involved in such termination.

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

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

Town of Los Gatos
Attn: Town Clerk
110 E. Main Street, Los Gatos, CA 95030
Transtech Engineers, Inc.
13367 Benson Avenue, Chino, CA 91710
or personally delivered to Consultant to such address or such other address as Consultant designates in writing to Town.

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

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ITEM NO. 12.

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Agreement for Professional Services
Transtech Engineers, Inc.

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

TOWN OF LOS GATOS: TRANSTECH ENGINEERS, INC.:
**signature_179105**

SIGNATURE
Chris Constantin

FULL NAME
Town Manager
TITLE
**date_signed_179105**

DATE SIGNED
**signature_179106**

SIGNATURE
Melissa Demirci

ENTER CONSULTANT SIGNATORY'S NAME
Chief Executive Officer

ENTER CONSULTANT SIGNATORY'S TITLE
**date_signed_179106**

DATE SIGNED
Approved as to form:
**signature_179108**

SIGNATURE
Gabrielle Whelan

FULL NAME
Town Attorney
TITLE
**date_signed_179108**

DATE SIGNED
The execution date is the date on which the last party has signed.

Attachments:

A - Scope and Fee Schedule for Services

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ITEM NO. 12.

Exhibits List
A - Scope and Fee Schedule for Services

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ITEM NO. 12.

Exhibit A
Scope and Fee Schedule for Services

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ITEM NO. 12.
www.transtech.org
September 23, 2026
Town of Los Gatos
41 Miles Ave
Los Gatos, CA 95030
Attn.: Gary Heap, PE,
Town Engineer
Email: [email protected]
SUBJECT: SCOPE AND FEE – CAPITAL IMPROVEMENTS PROJECT MANAGEMENT Dear Mr. Heap,
Thank you for selecting Transtech to provide project management and engineering support services for the Town of Los Gatos’ Capital Improvement Program. We sincerely appreciate the Town’s confidence in our team and value the opportunity to continue supporting the delivery of important capital improvement projects throughout the community.

Attached is Transtech’s proposed scope and fee for supporting the Town’s Capital Improvement Program. The proposal identifies the Tier 1 projects in the Town’s approved Fiscal Year 2026/27 CIP Budget to be supported by Transtech, along with our proposed level of involvement and corresponding estimated fees.

Services may include:
▪ Project Management - Overall project coordination, schedule and budget oversight, and support through project delivery.
▪ Engineering & Design Support – Technical assistance and engineering support based on the needs of each project.
▪ PS&E Development - Preparation and support of plans, specifications, and estimates for identified projects. This may include coordination of and subcontracting for field survey, architectural services, geotechnical or other engineering services not provided by Transtech staff.
▪ Deliverables will include bid ready engineering documents for the Town's use. This would not include construction management services unless specifically stated herein or stipulated in an amendment to this scope of services and agreement.
▪ Technical & General Engineering Support - Assistance with project-specific technical needs and other general engineering services requested by the Town.
▪ Other tasks as assigned.

As an extension of Town staff, Transtech will work closely with the Town to provide responsive and proactive project management and engineering support throughout project delivery. We value our partnership with the Town and look forward to continuing our collaboration and contributing to the successful delivery of the Town’s Capital Improvement Program.

Thank you for the opportunity to submit this proposal. Should you have any questions, please contact the undersigned.

Sincerely
Okan Demirci, PE, QSD/P, MBA, Principal Project Manager E: [email protected]; C: 714-319-6137
Ahmad Ansari, PE, Contract Principal
E: [email protected]; C: 949-702-5612

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ITEM NO. 12.

PrjNo. PROJECT NAME SCOPE MAX FEE
8101 2027 Street Repair & Resurfacing Transtech to PS&E & construction support $ 20,000 8103 Annual Street Restriping Transtech to provide PS&E support $ 2,000 8116 East Main Street Crosswalk Improvements Transtech to provide Project Management $ 30,000 8120 Curb, Gutter, & Sidewalk Maintenance Transtech to PS&E & construction support $ 20,000 8146 Kennedy Sidewalk and Bike Lanes
(Los Gatos Blvd - Englewood)
Feasibility analysis and preliminary design including
topography and boundary survey $ 150,000
8151 Unanticipated Repairs - Annual Transtech to provide support as requested $ 25,000 8156 Roadway Reconstruction of Santa Cruz Ave
(BHR to Hwy 9) Transtech to provide PS&E $ 200,000
8304 Annual Storm Drain Imp Transtech to provide support as requested $ 25,000 8311 Loma Street Drainage Transtech to provide Project Management $ 5,000 8315 Storm Drainage Mapping Transtech to provide technical support $ 5,000 8317 Green Stormwater Infrastructure Transtech to provide general and PS&E support $ 10,000 8405 Oak Meadow Bandstand Area Improvements Transtech to provide Project Management $ 5,000 8511 Timber Bridge Inspection Transtech to provide evaluation and design recommendations by a licensed structural engineer $ 50,000 8739 Condition Assessment of Civic Center
Transtech to provide space assessment for existing
and future staffing needs, and baseline asset
management
$ 250,000
8740 Fleet Service Outdoor Work Area (Design Phase) Transtech to provide PS&E. Deliverable as preliminary design
$ 11,000
8743 Downtown Restroom Design Transtech to provide concept sketches to two locations, lifecycle cost analysis and PS&E $ 100,000
8744 41 Miles Emergency Management Improvement Transtech to PS&E & construction support $ 50,000 8745 Library Lighting Controls Renovation Transtech to support town staff in correcting lighting issues $ 10,000
GEN GENERAL ENGINEERING General Engineering support $ 50,000 TOTAL $ 1,018,000
Transtech Fee Proposal
for
Town of Los Gatos Parks Public Works Department
1 of 1 9/23/2026 Page 292
ITEM NO. 12.

Proposal 28
Municipal Services
Service Category: CIP Management

7. Proposed Fee
Principal Engineer, Project/Program Manager (on-site) $295/hr Principal Engineer, Project/Program Manager (off-site/virtual) $275/hr Sr. Engineer, Project/Program Manager (on-site) $260/hr Sr. Engineer, Project/Program Manager (off-site/virtual) $240/hr Project Controls/Management Support Staff (off-site/virtual) $220/hr Note: The fees are adjusted annually on July 1st by the percentage change in the Local Area Consumer Price Index for All Urban Consumers (CPI-U) for the preceding twelve-month period, as calculated for February by the U.S. Department of Labor, Bureau of Labor Statistics, and published by the Bureau of Labor Statistics.

Docusign Envelope ID: 70CDA847-F66E-8977-817E-35ACFAE2E76D

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ITEM NO. 12.

PREPARED BY: Ryan Safty
Associate Planner
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: 10/20/2026
ITEM NO: 13
DATE: October 15, 2026
TO: Mayor and Town Council
FROM: Chris Constantin, Town Manager
SUBJECT: Consider a Recommendation by the Planning Commission to Introduce an Ordinance Amending Chapter 29 (Zoning Regulations) of the Town Code Regarding Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions. The Proposed Amendments to the Town Code are Not Subject to CEQA Review Pursuant to CEQA Section 15061(b)(3) Because it can be Seen with Certainty that they will not Significantly Affect the Physical Environment in that they Make Minor Changes to the Regulations and Design Review Process Applicable to New Single-Family and Two-Family Residential Dwelling Units and SecondStory Additions. Town Code Amendment Application A-26-003. Project Location: Town Wide. Applicant: Town of Los Gatos. Project Planner: Ryan Safty.

RECOMMENDATION: Accept the Planning Commission’s recommendation, conduct a public hearing, and introduce an Ordinance amending Chapter 29 (Zoning Regulations) of the Town Code regarding objective design standards for single-family and two-family residential dwelling units and second-story additions.

FISCAL IMPACT:

There is no fiscal impact associated with this action. Adopting the draft Ordinance would not in itself result in an impact on the Town’s budget.

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ITEM NO. 13.

PAGE 2 OF 6
SUBJECT: Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions / A-26-003
DATE: October 15, 2026
STRATEGIC PRIORITY:

The amendments to Chapter 29 of the Town Code regarding new objective design standards for single-family and two-family residential dwelling units and second-story additions supports the Town’s core goal of Community Character and the strategic priority to preserve the Town’s small-town charm and provide a range of housing opportunities and historic neighborhoods, while diligently maintaining and implementing the Housing Element.

BACKGROUND:

In September 2021, Governor Newsom signed a new state law, Senate Bill 9 (SB 9), which went into effect on January 1, 2022. SB 9 requires ministerial approval of certain housing development projects and lot splits on a single-family zoned parcel, with the intent to increase residential densities within single-family neighborhoods across the State.

The law allows for two new types of development activities that must be reviewed ministerially, without any discretionary action or public input:
 Two-unit housing development – Two residences on an eligible single-family residential parcel.
 Urban lot split – A one-time subdivision of an existing single-family residential parcel into two parcels.

On December 21, 2021, the Town Council adopted an Urgency Ordinance to implement local objective design standards for SB 9 applications. On November 15, 2022, the Town Council approved Ordinance 2334, which established the permanent SB 9 Ordinance within Chapter 29 (Zoning Regulations) of the Town Code. On May 21, 2024, the Town Council approved Ordinance 2359 (Attachment 3, Exhibit 2), which included modifications to the previous ordinance to modify design review standards and make clarifying revisions. Ordinance 2359 is the Town’s current SB 9 Ordinance, which is found in Division 10 of Article 1 of Chapter 29 of the Town Code.

Previous SB 9 law allowed jurisdictions to adopt objective zoning, subdivision, and design standards specific to two-unit housing development and urban lot split applications so long as they would not preclude the construction of two, 800-square foot units with four-foot side and rear setbacks. As a reminder, objective design standards are development regulations that involve no personal or subjective judgment by a public official. They must be uniformly verifiable using an external, measurable benchmark known to both the applicant and the public official before application submittal. The Town’s current SB 9 Ordinance includes a Design Review Standards Section applicable to two-unit development applications [Town Code Section

29.10.630 (2)] and a Subdivision Standards Section applicable to urban lot split applications

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ITEM NO. 13.

PAGE 3 OF 6
SUBJECT: Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions / A-26-003
DATE: October 15, 2026
[Town Code Section 29.10.650 (1)]. Since SB 9 applications allow reduced side and rear setbacks and require ministerial review, and since design guidelines aren’t enforceable on these projects, the objective design standards for SB 9 projects were created to protect neighbor privacy and enforce some of the Town’s residential and hillside design guidelines to encourage orderly development and neighborhood compatibility.

In September of 2024, Governor Newsom signed a new state law, Senate Bill 450 (SB 450), which went into effect on January 1, 2025 (Attachment 3, Exhibit 3). SB 450 updates and expands the required provisions of SB 9. The most significant change from SB 450 is that it now prohibits the Town from adopting specific zoning, subdivision, or design standards for SB 9 projects that do not already apply uniformly to development in the underlying zoning district.

Instead, the Town can only apply objective zoning, subdivision, and design standards to SB 9 projects if those standards are applicable to or are more permissive than standards within the underlying zone. As a result, many of the Town’s existing objective SB 9 standards are no longer enforceable. Attachment 3, Exhibit 4, includes a strike-through version of the Town’s current SB 9 Ordinance, showing which provisions are no longer enforceable based on SB 450.

Several neighboring jurisdictions have recently updated their SB 9 process following the adoption of SB 450, which highlights the array of options available to the Town. On one end of the spectrum is the City of Campbell, who reduced their objective standards across the majority of their jurisdiction to line up with the increased allowances of SB 9, essentially removing their standard discretionary process and reducing setbacks for all new single-family units down to four feet side and rear. The City of Berkeley took a different approach, essentially eliminating single-family zoning altogether, and therefore removed the ability to use SB 9 since it is only applicable in single-family zones. Lastly, the cities of Cupertino, Sunnyvale, and Palo Alto have created new objective design standards to be applicable to all new single- and two-family dwelling units and second-story additions; therefore, allowing them to apply to SB 9 projects as well as those units created through their discretionary processes. Palo Alto and Cupertino took their previous SB 9 design standards and made them applicable across all residential zones.

Therefore, the cities can continue to apply the previous standards to SB 9 projects while providing an exception process for standard discretionary applications that do not meet these new standards. Sunnyvale took their existing, subjective residential design guidelines and, with the support of a consultant, completed an extensive update to turn them into modernized, objective design standards within City Code and applicable across all residential zones. The following hyperlink includes the council reports for the various approaches for each of the neighboring jurisdictions listed above:
https://www.losgatosca.gov/DocumentCenter/Index/2977

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ITEM NO. 13.

PAGE 4 OF 6
SUBJECT: Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions / A-26-003
DATE: October 15, 2026
In March of this year, staff met with the local architect and design community to discuss the new changes to state law and the need to create objective design standards. The group of roughly ten architects and designers discussed what they have seen work well in other jurisdictions and, in summary, concluded that “less is more” when it comes to objective design standards. They noted that jurisdictions that tried to overly control architectural styles and detailing tended to result in poor design, and that if new standards are necessary, they prefer options rather than one set standard.

In addition to the architect and design community input, staff has received input from the public since SB 9 was first adopted in 2021. The primary concerns, both before and after SB 450 was adopted, have largely been centered around privacy as SB 9 allows reduced four-foot side and rear setbacks. Now that SB 450 has removed some of the previous attempts to protect neighborhood privacy, there is a need to modify Town Code to introduce protections applicable to all new single- and two-family residential dwelling units and second-story additions, including those created through SB 9. Specifically, as detailed in the Planning Commission report in Attachment 3, staff recommends new objective design standards related to porches, patios, decks, platforms, balconies, and other open, unenclosed areas; and window restrictions when over a certain height and within a certain distance of a shared property line.

In developing the draft Ordinance, staff considered the feedback from the architects and design community and Town residents; conducted research on the approaches used by neighboring jurisdictions; and drafted a new Town Code section as discussed below. Staff recommends an approach similar to Palo Alto and Cupertino, where many of the existing SB 9 standards, and some commonly used design guidelines, are added into Town Code to apply across all residential zones and be applicable to all single-family and two-family projects.

On August 12, 2026, the Planning Commission received the staff report and considered public comments on the draft Ordinance (Attachment 2). The Planning Commission discussed the matter and forwarded suggested edits in their recommendation of approval to Town Council (see Verbatim Minutes in Attachment 4).

DISCUSSION:

On August 12, 2026, the Planning Commission forwarded a recommendation of approval of the draft Ordinance to the Council (Attachments 3 and 4). The recommendation included suggested edits to the draft Ordinance, which included the following:
 Add material specifications to the mechanical equipment screening standard in Section

29.40.090 (5) of the draft Ordinance, ensuring that new screening proposed will be of a permanent material used on the adjacent residence; and

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SUBJECT: Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions / A-26-003
DATE: October 15, 2026
 Correct a typo regarding allowed building heights (25 feet instead of 30 feet) for the height definitions in Sections 29.40.410 and 29.40.745 of the draft Ordinance for R-1 and R-1D zoned properties located within the Town’s Hillside Area.

Following consideration by the Planning Commission, staff made a clarifying revision to the draft Ordinance to address public comment regarding mandatory Building and Fire Code access and site standards. Specifically, the site grading standard in Section 29.40.090 (b) would be amended to clarify that both “drainage” and “required minimum access” were also intended to be allowed when grading a site in the Hillside Area.

The recommended edits from the Planning Commission are included in the draft Ordinance in Attachment 2.

The Town’s existing SB 9 regulations are contained in Division 10 of Article I of Chapter 29. Staff anticipates bringing forward separate amendments to those regulations to address changes in State law and reconcile applicable standards. The proposed ordinance in Attachment 2 establishes the new objective design standards, while the separate SB 9 ordinance update will address the existing provisions specific to two-unit housing developments and urban lot splits.

PUBLIC OUTREACH:

In addition to the in-person meeting with local architects and designers in March of this year, staff has conducted outreach through the following media and social media resources, as well as direct communication with stakeholders prior to Planning Commission review in August and prior to this Town Council review, as summarized below:
 The Town’s website home page, What’s New;
 The Town’s Facebook page;
 The Town’s Twitter account;
 The Town’s Instagram account;
 The Town’s NextDoor page; and
 Direct email communication to local architects and designers.

No public comments were received prior to the deadline for the August 12, 2026, Planning Commission meeting. Public comments received between 11:01 a.m. Wednesday, August 12, 2026, and 3:00 p.m. Thursday, October 15, 2026, are included as Attachment 5.

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SUBJECT: Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions / A-26-003
DATE: October 15, 2026
CONCLUSION:

In response to recent changes to state law, the Town must rely on objective design standards in the review of certain types of applications, including SB 9 applications. The draft Ordinance in Attachment 2 takes current SB 9 standards that were removed through SB 450, as well as some existing design guidelines, and makes them objective and applicable to all single-family and two-family residential dwelling units and second-story additions.

COORDINATION:

This report was coordinated with the offices of the Town Manager and Town Attorney.

ENVIRONMENTAL ASSESSMENT:

The proposed amendments establish design and development standards for future residential projects but do not approve or authorize the construction of any specific residential development. The amendments include provisions addressing building placement, hillside grading, building height, exterior materials, architectural details, and privacy screening. In determining the applicability of CEQA Guidelines Section 15061(b)(3), the Town has considered the nature and scope of these amendments and their potential direct and reasonably foreseeable indirect physical environmental effects. A Notice of Exemption will not be filed.

ATTACHMENTS:

1. Required Findings

2. Draft Ordinance

3. August 12, 2026, Planning Commission Staff Report with Exhibits

4. August 12, 2026, Planning Commission Verbatim Minutes

5. Public Comments Received Between 11:01 a.m. Wednesday, August 12, 2026, and 3:00 p.m.

Thursday, October 15, 2026

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ITEM NO. 13.

TOWN COUNCIL – October 20, 2026
REQUIRED FINDINGS FOR:

Town Code Amendment Application A-26-003
Consider a Recommendation by the Planning Commission to Introduce an Ordinance Amending Chapter 29 (Zoning Regulations) of the Town Code Regarding Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions. The Proposed Amendments to the Town Code are Not Subject to CEQA Pursuant to CEQA Section 15061(b)(3), Because it can be Seen with Certainty that they will not Significantly Affect the Physical Environment in that they Make Minor Changes to the Regulations and Design Review Process Applicable to New Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions. Project Location: Town Wide. Applicant: Town of Los Gatos.

FINDINGS
Required Findings for CEQA:
 The proposed amendments establish design and development standards for future residential projects but do not approve or authorize the construction of any specific residential development. The amendments include provisions addressing building placement, hillside grading, building height, exterior materials, architectural details, and privacy screening. In determining the applicability of CEQA Guidelines Section 15061(b)(3), the Town has considered the nature and scope of these amendments and their potential direct and reasonably foreseeable indirect physical environmental effects. A Notice of Exemption will not be filed.

Required Findings for General Plan:
 The amendments to Chapter 29 of the Town Code regarding these new objective design standards applicable to new single-family and two-family residential dwelling units and second-story additions are consistent with the General Plan.

ATTACHMENT 1
S:\COUNCIL REPORTS\2026\10-20-26\SINGLE AND TWO-FAMILY ODS\ATTACHMENT 1 - REQUIRED FINDINGS.DOCX

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DRAFT ORDINANCE

AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS AMENDING CHAPTER 29, ZONING REGULATIONS, OF THE TOWN CODE

REGARDING OBJECTIVE DESIGN STANDARDS FOR SINGLE-FAMILY AND TWO-FAMILY RESIDENTIAL DWELLING UNITS AND SECOND-STORY ADDITIONS.

TOWN CODE AMENDMENT APPLICATION A-26-003.

WHEREAS, the Town of Los Gatos (Town) has adopted a General Plan to ensure a wellplanned and safe community; and WHEREAS, protection of public health, safety, and welfare is fully articulated in the General Plan; and
WHEREAS, state law requires that the Town’s Zoning Code conform with the General Plan’s goals and policies; and
WHEREAS, in 2021, the California Legislature approved, and the Governor signed into law Senate Bill (SB) 9, which among other things, added Government Code Sections 65852.21 and 66411.7 to impose new limits on local authority to regulate two-unit housing development and urban lot splits; and
WHEREAS, SB 9 requires the Town to provide for the ministerial (or “by right”) approval of a housing development containing no more than two residential units of at least 800 square feet in floor area (two-unit housing development) and a parcel map dividing one existing lot into two approximately equal parts (urban lot split) within a single-family residential zone; and WHEREAS, SB 9 eliminates discretionary review and public oversight of proposed twounit housing developments and urban lot splits by removing public notice and hearings by the Development Review Committee or Planning Commission, by requiring only administrative review of the project, and by requiring ministerial approval of two-unit housing developments and/or urban lot splits that meet objective design or subdivision standards; and WHEREAS, original SB 9 law from 2021 allowed the Town to adopt objective zoning, design, and subdivision standards for two-unit housing developments and urban lot splits; and WHEREAS, the Town desired to amend its local regulatory scheme to comply with and implement Government Code Sections 65852.21 and 66411.7 and to appropriately regulate projects under SB 9; and
WHEREAS, on November 15, 2022, Town Council adopted Ordinance 2334 to regulate SB 9 projects within the Town by creating objective design and subdivision standards applicable to SB 9 projects; and
Draft Ordinance to be
modified by Town
Council deliberations
and direction.

ATTACHMENT 2

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WHEREAS, the Town Council of the Town of Los Gatos adopted the 2023-2031 Housing Element on January 30, 2023, which includes policies that promote SB 9 units as a means to increase access to opportunity for lower-income households by encouraging infill of smaller units in single-family neighborhoods (Policy HE-1.7); and WHEREAS, on May 21, 2024, Town Council adopted Ordinance 2359 to modify certain design provisions of previous SB 9 Ordinance 2334; and
WHEREAS, in 2024, the California Legislature approved, and the Governor signed into law Senate Bill (SB) 450, which among other things, amended Government Code Sections 65852.21 and 66411.7 to prohibit local jurisdictions from adopting specific zoning, subdivision, or design standards for SB 9 two-unit housing development and urban lot split projects that do not already apply uniformly to development in the underlying zoning district; and WHEREAS, SB 450 eliminated many of the Town’s SB 9 standards for two-unit housing developments as the standards in Ordinance 2359 are more restrictive than the standards in the underlying zone; and
WHEREAS, the previous standards in Ordinance 2359 must first be made applicable and applied uniformly to all development in the underlying zoning district in order to apply to SB 9 projects; and
WHEREAS, the Town researched state law and analyzed how other neighboring jurisdictions have addressed the changes from SB 450 and has drafted new objective design standards applicable to all new single-family and two-family residential dwelling units and second-story additions, along with other clarifying revisions; and WHEREAS, this matter was regularly noticed in conformance with state and Town law and came before the Planning Commission for public hearing on August 12, 2026; and WHEREAS, the Planning Commission at its meeting on August 12, 2026, reviewed the proposed amendments in the draft Ordinance, held a public hearing, and forwarded a recommendation of approval to the Town Council with suggested modifications; and WHEREAS, this matter was regularly noticed in conformance with state and Town law and came before the Town Council for public hearing on October 20, 2026; and WHEREAS, on October 20, 2026, the Town Council accepted the report of the Planning Commission’s recommendation of approval on the draft Ordinance regarding new Objective Design Standards for Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions, held a public hearing, and voted to introduce the Ordinance.

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NOW, THEREFORE, BE IT ORDAINED by the Town Council of the Town of Los Gatos as follows:

SECTION I. Section 29.10.020, “Definitions,” of Division 1, “Miscellaneous”, of Article I, “In General”, of Chapter 29, “Zoning Regulations,” of the Town of Los Gatos Town Code is amended to include the following definitions in alphabetical order:

Sec. 29.10.020. Definitions.
[…]
Hillside Area means all properties zoned Hillside Residential or properties located within the Hillside Area Map of the Town’s Hillside Development Standards and Guidelines. […]
Landscaping means an area devoted to plantings, lawn, ground cover, gardens, trees, shrubs, and other plant materials.
[…]
SECTION II. Section 29.40.070, “Projections allowed into yards”, of Division 1, “Generally,” of Article IV, “Residential Zones,” of Chapter 29, “Zoning Regulations,” of the Town of Los Gatos Town Code is amended to read as follows:

Sec. 29.40.070. Projections allowed into yards.
(a) A porte cochere may be permitted over a driveway in a side yard, provided that it is not more than one (1) story high and twenty-four (24) feet long, with supporting columns a minimum of three (3) feet from the side lot line with a maximum eave length of twelve (12) inches, and is entirely open on at least three (3) sides, except for the necessary supporting columns and customary architectural features. (b) Cornices, eaves, belt courses, sills, canopies, bay windows, chimneys or other similar architectural features may extend or project into a required side yard not more than twenty-four (24) inches and may extend or project into a required front or rear yard not more than thirty (30) inches.
(c) Porches, patios, decks, platforms, balconies, and other open, unenclosed areas, not covered by a roof or canopy:
(1) Less than one (1) foot above grade, may project into front, side or rear yards. The maximum projection into the front or street-side yard shall be six (6) feet, and in no case shall the projection be closer than ten (10) feet from a front or street-side property line.
(2) Less than four (4) feet above grade may project into front, side, or rear yards or into any court up to six (6) feet. In no case shall the projection into a side or rear yard be

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closer than six (6) feet to the property line, or into a front or street-side yard be closer than ten (10) feet from the property line, or into a court exceed a distance of more than twenty (20) percent of the width of such court.

SECTION III. Division 1, “Generally,” of Article IV, “Residential Zones,” of Chapter 29, “Zoning Regulations,” of the Town of Los Gatos Town Code is amended to include the following sections in numerical order:
[…]
Sec. 29.40.080. Objective Design Standards for New Single-Family and Two-Family Residential Dwelling Units and Second-Story Additions.

Sec. 29.40.085. Purpose and applicability.

The purpose of these Objective Design Standards is to ensure that new single-family and two-family residential dwelling units and second-story additions meet minimum design standards to maintain privacy and neighborhood compatibility with surrounding use(s). These standards apply to both ministerial and discretionary application types for any new single- or two-family residential dwelling unit(s), whether attached or detached; a new second story; an addition to an existing second-story; or any new porches, patios, decks, platforms, balconies, and other open, unenclosed areas four (4) feet above grade or greater.

These standards are subject to the following application types, and are in addition to other, existing Town standards:

Ministerial Applications: Projects invoking a ministerial approval process for a new residential dwelling unit (such as two-unit housing developments) shall comply with these standards except to the extent that State law requires minimum unit sizes of 800 square feet, pursuant to Government Code Section 65852.21 (b)(2)(A).

Discretionary Applications: In addition to these standards, discretionary applications (architecture and site and minor residential project applications) are also reviewed for compliance with the Town’s Single- and Two-Family Residential Design Guidelines and Hillside Development Standards and Guidelines (when applicable) by the Town’s Consulting Architect, and/or the Historic Preservation Committee, depending on if the existing structure or property is considered historic. Projects proceeding with an architecture and site application may request exceptions from these standards during the discretionary review process, pursuant to Town Code Section 29.40.100.

Sec. 29.40.090. Site Planning and Architectural Detail Standards. (a) Building sites. The footprint of the proposed residential unit(s) and garage(s) shall not be located on lands with slopes exceeding thirty (30) percent. (b) Site grading. In the Hillside Area, site grading shall not extend beyond the minimum areas necessary for the footprint of the house, driveway, drainage, parking, required minimum

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access, and vehicular turnaround areas. Required minimum access includes pedestrian access, ingress, egress, and emergency access required by applicable building and fire codes.
(c) Material changes. Exterior material changes shall occur at the inside corner of two walls and not the outside corner. See Section 3.8.4 of the Town’s Single- and Two-Family Residential Design Guidelines for an example diagram.
(d) Exterior materials. For properties in the Hillside Area, exterior material colors for dwelling units and garages shall comply with the requirements in Chapter V, Section I, Standard 2 of the Town's Hillside Development Standards and Guidelines for maximum light reflectivity value (LRV).
(e) Mechanical equipment screening. Heating, ventilation, and air conditioning (HVAC) units, generators, energy storage systems (ESS) and other similar ground mounted mechanical equipment shall be screened from view from any adjacent street. If not already located out of view behind a building or solid fence, the equipment shall be screened with an exterior building material used on the adjacent residence. The screening shall be at least the same height as the item being screened.

Sec. 29.40.095. Massing and Privacy Standards.
(a) Porches, patios, decks, platforms, balconies, and other open, unenclosed areas, with or without a roof or canopy cover.
(1) See Town Code Section 29.40.070 for projection allowances for unroofed areas under four (4) feet in height.
(2) If four (4) feet above grade or greater, including rooftops, the underlying setbacks of the zone shall be met, and in no case shall they be located less than twenty (20) feet from a rear property line and ten (10) feet from any other property line. Additionally, each area shall also include a minimum of one of the following screening techniques along the entire portion of the open area that faces existing residential use(s) or zone(s). The additional screening techniques are not required when these open areas are proposed facing a public right-of-way.
a. Solid or opaque privacy wall of at least six (6) feet in height, measured from the deck surface below, blocking direct visibility along the edges of the deck or open, unenclosed area; or
b. Property line fence of at least six (6) feet solid material with one (1) foot lattice above (seven (7) feet high in total) and privacy landscape screening consisting of native, evergreen species. Trees are to be a minimum of twenty-four (24) inch box size, shall be a minimum of six (6) feet tall at the time of planting, with a typical mature height of at least twenty-five (25) feet and mature canopy width of fifteen (15) feet, and planted at a rate of one (1) tree for every twenty-five (25) linear feet between. Three closely spaced tall screening shrubs of at least

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fifteen (15) gallon in size with a mature height of at least fifteen (15) feet and a mature width of at least three (3) feet may be substituted for one screening tree.

Both fencing and landscaping shall be located on the subject property, adjacent to the shared property line, with a cone-of-vision defined by a thirty (30) degree angle from the furthest edges of the deck or open, unenclosed area. (b) Windows. All new second-story windows less than twenty (20) feet from a rear property line or ten (10) feet from any other property line, and all new first-story windows less than six (6) feet from a property line where the finished floor is three (3) feet or more above grade, shall comply with at least one of the following. This standard does not apply to windows facing a public right-of-way.
(1) Clerestory, with the bottom of the glass at least six (6) feet above the finished floor; (2) Opaque glazing, blocking direct visibility; or
(3) Property line fence of at least six (6) feet solid material with one (1) foot lattice above (seven (7) feet high in total) and privacy landscape screening consisting of native, evergreen species. Trees are to be a minimum of twenty-four (24) inch box size, shall be a minimum of six (6) feet tall at the time of planting, with a typical mature height of at least twenty-five (25) feet and mature canopy width of fifteen (15) feet, and planted at a rate of one (1) tree for every twenty-five (25) linear feet between. Three closely spaced tall screening shrubs of at least fifteen (15) gallon in size with a mature height of at least fifteen (15) feet and a mature width of at least three (3) feet may be substituted for one screening tree. Both fencing and landscaping shall be located on the subject property, adjacent to the shared property line, with a cone-of-vision defined by a thirty (30) degree angle from the furthest side window jamb. (c) Second story location. A new second story, whether a new second-story added above an existing single-story structure, addition to an existing second-story, or new two-story structure, shall meet the underlying setbacks of the zone, and in no case be less than eight (8) feet from a property line except as allowed in Section 29.10.245. (d) Plate height. The maximum plate height of the first story shall be limited to ten (10) feet, and the maximum plate height of the second story shall be limited to eight (8) feet. This standard does not apply to additions to existing first and second stories where the existing plate height exceeds these limits.
(e) Two-story articulation. A new second-story which is not stepped-back from the single-story wall below and creates a two-story wall shall include at least one of the following to provide visual relief along that two-story wall:
(1) Bellyband extending the full width of the two-story elevation; (2) Projections or bay windows;
(3) Material and color changes;

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(4) Chimneys;
(5) Overhangs with projecting brackets;
(6) Juliet balconies;
(7) Window boxes; or
(8) Landscaped trellis or lattice.

Sec. 29.40.100. Exceptions.

An exception to any of these Objective Design Standards for New Single-Family and TwoFamily Residential Dwelling Units and Second Story Additions may be granted if the project is submitted as a discretionary architecture and site application. In granting an exception, the applicable deciding body shall make a finding, based on the circumstances of the proposed project, that the exception is consistent with the purposes of these standards and that the proposed design provides adequate consideration of neighborhood compatibility and neighboring privacy. In making this finding, the deciding body shall consider the Town’s Singleand Two-Family Residential Design Guidelines and Hillside Development Standards and Guidelines, when applicable.
[…]
SECTION IV. Section 29.40.170 (a), “Development Standards”, of Division 2, “RC or Resource Conservation Zone,” of Article IV, “Residential Zones,” of Chapter 29, “Zoning Regulations,” of the Town of Los Gatos Town Code is amended to read as follows:

Sec. 29.40.170. Development standards.
(a) Height. The maximum height of any principal building in a RC zone is eighteen (18) feet unless a Visibility Analysis is provided pursuant to Chapter II, Section B of the Town’s Hillside Development Standards and Guidelines, demonstrating that the proposed building(s) is not visible from any of the Town’s established viewing platforms, in which case the maximum height is twenty-five (25) feet. The height shall be measured as provided in section 29.40.045 and is subject to the exception listed in Section 29.10.090. […]
SECTION V. Section 29.40.275, “Height”, of Division 3, “HR or Hillside Residential Zone,” of Article IV, “Residential Zones,” of Chapter 29, “Zoning Regulations,” of the Town of Los Gatos Town Code is amended to read as follows:

Sec. 29.40.275. Height.

The maximum height of any principal building in an HR zone is eighteen (18) feet unless a Visibility Analysis is provided pursuant to Chapter II, Section B of the Town’s Hillside Development Standards and Guidelines, demonstrating that the proposed building(s) is not visible from any of the Town’s established viewing platforms, in which case the maximum

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height is twenty-five (25) feet. The height shall be measured as provided in Section 29.40.045 and is subject to the exception listed in section 29.10.090.

SECTION VI. Section 29.40.410, “Height”, of Division 4, “R-1 or Single-Family Residential Zone,” of Article IV, “Residential Zones,” of Chapter 29, “Zoning Regulations,” of the Town of Los Gatos Town Code is amended to read as follows:

Sec. 29.40.410. Height.

The maximum height of any principal building in a R-1 or single-family residential zone is thirty (30) feet. For properties located within the Hillside Area, the maximum height of any principal building is eighteen (18) feet unless a Visibility Analysis is provided pursuant to Chapter II, Section B of the Town’s Hillside Development Standards and Guidelines, demonstrating that the proposed building(s) is not visible from any of the Town’s established viewing platforms, in which case the maximum height is twenty-five (25) feet. The height shall be measured as provided in section 29.40.045 and is subject to the exception listed in Section

29.10.090.

SECTION VII. Section 29.40.745, “Height”, of Division 7, “R-1D or Single-Family Residential Downtown Zone,” of Article IV, “Residential Zones,” of Chapter 29, “Zoning Regulations,” of the Town of Los Gatos Town Code is amended to read as follows:

Sec. 29.40.745. Height.

The maximum height of any building in a R-1D or single-family residential downtown zone is thirty (30) feet. For properties located within the Hillside Area, the maximum height of any principal building is eighteen (18) feet unless a Visibility Analysis is provided pursuant to Chapter II, Section B of the Town’s Hillside Development Standards and Guidelines, demonstrating that the proposed building(s) is not visible from any of the Town’s established viewing platforms, in which case the maximum height is twenty-five (25) feet. The height shall be measured as provided in section 29.40.045 and is subject to the exception listed in Section

29.10.090.

SECTION VIII. California Environmental Quality Act (CEQA) Considerations.

The Town Council finds that the proposed amendments are not subject to CEQA review pursuant to CEQA, Section 15061(b)(3), because it can be seen with certainty that they will not significantly affect the physical environment in that they make only minor changes to the regulations and design review process applicable to single-family and two-family residential dwelling units and second-story additions.

SECTION IX. Severability.

In the event that a court of competent jurisdiction holds any Section, subsection, paragraph, sentence, clause, or phrase in this Ordinance unconstitutional, preempted, or

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otherwise invalid, the invalid portion shall be severed from this Ordinance and shall not affect the validity of the remaining portions of this Ordinance. The Town hereby declares that it would have adopted each Section, subsection, paragraph, sentence, clause, or phrase in this Ordinance irrespective of the fact that any one or more Sections, subsections, paragraphs, sentences, clauses or phrases in this Ordinance might be declared unconstitutional, preempted, or otherwise invalid.

SECTION X. Publication.

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

SECTION XI. Effective Date.

This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on the 20th day of October 2026, and adopted by the Town Council of the Town of Los Gatos at its regular meeting on the ____ day of ________ 2026, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:
_______________________________

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
ATTEST:
___________________________________

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA

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Los Gatos City CouncilOctober 20, 2026

Los Gatos City Council
October 20, 2026