Menlo Park City Council
June 23, 2026

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov City Council

SPECIAL AND REGULAR MEETING MINUTES
Date: 6/23/2026
Time: 5:30 p.m.

Locations: Teleconference and
City Council Chambers
751 Laurel St., Menlo Park, CA 94025
Special Session
A. Call To Order
Mayor Nash called the meeting to order at 5:34 p.m.

B. Roll Call

Present: Combs (remote, exited the meeting at 11:07 p.m.), Nash, Schmidt, Taylor (remote), Wise

Absent: None
Staff: City Manager Justin Murphy, Assistant City Attorney Denise Bazzano, Assistant to the City Manager/ City Clerk Judi A. Herren
C. Closed Session
C1. Conference with legal counsel – existing litigation Paragraph (1) of subdivision (d) of Section 54956.9)
Name of case: County of San Mateo, et al. v. State of California, et al. (Sup. Court, County of San Francisco, Case No. CPF-25519270)
C2. Conference with labor negotiators
Government Code Section 54957.6
Labor negotiations with Service Employees International Local 521 and Service Employees International Union Local 521 – Temporary Employees Unit Agency designated representatives: City Manager Justin I.C. Murphy, Assistant City Manager Stephen Stolte, Assistant City Attorney Denise Bazzano, Administrative Services Director Brittany Mello, Legal Counsel Charles Sakai
• Deborah Calvillo, Brandon Palominos, Radina Philyaw, Jabari Loudd, Alan Acker, Juan Quinonez spoke in support of fair contracts for the Service Employees International, Local 521 (SEIU) and SEIU – Temporary Unit.
• Keith Dowdell spoke in support of fair contracts for SEIU.

Regular Session
D. Call To Order
Mayor Nash re-called the meeting to order at 7:07 p.m.

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov E. Report from Closed Session
No reportable actions.

F. Agenda Review
None.

G. Public Comment
• San Mateo County Tobacco Education Coalition representative Alheli Kang spoke in support of a multi-unit smoke free housing ban.
• Gerald Wluka spoke on concerns about the traffic pickup time at La Entrada Middle School. • San Mateo County Tobacco Education Coalition Chair Tricia Barr spoke in support of a multiunit smoke free housing ban. • Ken Kershner requested the City Council to agendize the El Camino Real Phase 1 quick build bikeway project and to direct staff to pursue grant funding. • Will Oursler spoke in opposition of Flock, ALPRs (automate license plate readers) and Northern California Regional Intelligence Center (NCRIC) data sharing and on concerns of potential abuse.

H. Advisory Body Vacancies and Appointments
H1. Consider applicants and make appointments to fill an unexpired vacancy on the Environmental Quality Commission (Staff Report #26-105-CC)
Deputy City Clerk Sarah Sandoval introduced the item.
• Pam Jones spoke in support of Nabil Saad’s appointment to the Environmental Quality Commission.
• Takiyah Smith spoke in support of their appointment to the Environmental Quality Commission.

The City Council made an appointment to fill a vacancy on the Environmental Quality Commission:

Nabil Saad – term expiring April 30, 2028
I. Consent Calendar
I1. Accept the City Council meeting minutes for May 19 and June 2, 2026 (Attachment) I2. Consider and adopt a resolution calling and giving notice of holding a General Municipal Election for three City Council seats in Districts 1, 2 and 4, requesting that the City Council consolidate the election with the Statewide General Election to be held Nov. 3, and authorize the city manager to execute an agreement with the San Mateo County Chief Elections Officer and Assessor-County Clerk-Recorder for election services (Staff Report #26-110-CC) I3. Authorize the city manager to execute a professional services agreement with Meredith Roberts, LMFT for an amount not to exceed $160,000 for services as a Community Wellness Crisis Response Team Clinician (Staff Report #26-106-CC)
I4. Consider and adopt a resolution approving the list of projects eligible for fiscal year 2026-27 funds City Council Special and Regular Meeting Minutes
June 23, 2026

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov from Senate Bill 1: The Road Repair and Accountability Act of 2017 (Staff Report #26-107-CC) I5. Authorize the city manager to execute a maintenance agreement with Cal-West Lighting & Signal Maintenance Inc., for traffic signals and lighting maintenance services (Staff Report #26-109-CC) I6. Authorize the city manager to execute a maintenance agreement with Significant Cleaning Services for janitorial and day porter services at various city facilities (Staff Report #26-111-CC) ACTION: Motion and second (Wise/ Schmidt), to approve the consent calendar, passed unanimously.

J. Public Hearing
J1. Consider and adopt a resolution to amend the El Camino Real/Downtown Specific Plan to modify land uses allowed within the Downtown/Station Area “Main Street” Overlay land use designation; allow existing buildings within the “Main Street” Overlay to have up to two-thirds of the public benefit bonus floor area ratio for office uses, if located in the rear half of the ground floor without frontage on Santa Cruz Avenue and/or on the second floor and not increasing the overall square footage of the building, subject to a use permit and a public benefit agreement; and modify four use classifications across the entire El Camino Real/Downtown Specific Plan (Staff Report #26-112-CC)
Associate Planner Matt Pruter made a presentation (Attachment).

Applicant Co-founder of Windy Hill Property Ventures Tod Spieker made a presentation (Attachment).

Mayor Nash opened the public hearing.
• Kylie Holmes spoke in support of the proposed amendments. • Jenna Atchison spoke in support of the proposed amendments. • Kimberly Lytikainen spoke in support of the proposed amendments. • Chris Kummerer spoke in support of the proposed amendments and recommended reviewing the Specific Plan every four years.
• Chair of Downtown Menlo Fund Marnie Foody spoke in support of the proposed amendments. • Mina Malek spoke in support of the proposed amendments and continuing to broaden zoning. • Patti Fry spoke on concerns of a lack of public and community input on the Specific Plan amendments and in opposition of additional banks, personal services and offices. • Michelle Wagner spoke in support of the proposed amendments. • Laura Melahn spoke in support of the proposed amendments.

Mayor Nash closed the public hearing.

The City Council received clarification on examples of land use category designations, risks to current retail operations on Santa Cruz Avenue, adoptions and sale of live animals, process for removing provisions in the future, personal services in relation to therapeutic massage, conditional use application and permitting processes and noise from indoor sports uses.

The City Council discussed Downtown vibrancy beyond the Specific Plan, animal clinics and hospitals, retail services on Santa Cruz Avenue and a joint City Council and Planning Commission review of the Specific Plan.

City Council Special and Regular Meeting Minutes
June 23, 2026

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov The City Council directed staff to provide an annual informational item with the uses and vacancies to the City Council and Planning Commission.

ACTION: Motion and second (Combs/ Wise), to adopt a resolution approving the following amendments to the El Camino Real/Downtown Specific Plan (Specific Plan amendments):
• Modify the land uses allowed on Santa Cruz Avenue between the Caltrain station and University Drive within the Downtown/Station Area “Main Street” Overlay (“Main Street Overlay”) land use designation (Chapter E). The proposed revisions include 1) changing the banks and financial institutions use from not allowed to conditional, subject to a maximum size of 5,000 square feet and a total development limit of 30,000 square feet for all existing and proposed banks and financial institutions, 2) changing the business services use from not allowed to conditional, 3) changing the personal improvement services use from on upper floors only to permitted, 4) changing personal services – general from on upper floors only to permitted, and 5) changing commercial recreation small-scale from not permitted to conditional;
• Allow existing buildings within the Main Street Overlay (Chapters E and G) to have an additional allowance of up to two-thirds (2/3) of the public benefit bonus floor area ratio (FAR) for office uses, if located in the rear half of the ground floor without ground floor frontage on Santa Cruz Avenue and/or on the second floor, and not increasing the overall square footage of the building, subject to a use permit and a public benefit agreement;
• Modify four three use classifications across the entire El Camino Real/Downtown Specific Plan (Specific Plan) area (Chapter H): 1) business services: expand to include businesses that primarily provide goods and services to the public, 2) personal improvement services: remove spas, 3) personal services – restricted: remove therapeutic massage services, and 43) personal services – general:
expand to include therapeutic massage services, nail salons, biometric screening, and a broader set of spa services, which include non-surgical and non-invasive cosmetic and aesthetic services, such as injectables, laser treatments, skin rejuvenation, and body contouring; and • Amending table E1 of resolution removing the office use category ”see Footnote #1” reference, passed unanimously.

J2. Hold public hearing and consider and adopt a resolution approving the 2025 Urban Water Management Plan and authorizing its submittal to the Department of Water Resources (Staff Report #26-108-CC)
Associate Engineer Scott Jaw and EKI Environment & Water, Inc. Water Resources Engineer Tina Wang made the presentation (Attachment).

Mayor Nash opened the public hearing.

Mayor Nash closed the public hearing.

The City Council took a recess at 9:47 p.m.

The City Council reconvened at 10 p.m.

The City Council discussed water supply uncertainty and the San Francisco Public Utilities Commission’s (SFPUC) design drought and water supply reliability analysis.

ACTION: Motion and second (Nash/ Wise), to adopt a resolution adopting the 2025 Urban Water Management Plan and authorizing its submittal to the Department of Water Resources, passed unanimously.

City Council Special and Regular Meeting Minutes
June 23, 2026

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov K. Regular Business
K1. Consider and adopt resolutions for fiscal year 2026-27: adopting budget and capital improvement plan; establishing appropriations limit; amending salary schedule effective July 12, 2026; extending rate assistance program through June 2027; and accept award authority and bid requirements through June 2027 (Staff Report #26-114-CC)
Assistant Administrative Services Director Fenny Lei made the presentation (Attachment).

The City Council received clarification on further and future reductions and special event scope and frequency.

The City Council discussed timeline for the reduction in library services, utilizing Fund 111 for library and community services, and cost recovery amounts in gymnastics.

The City Council directed staff to
• Utilize Fund 111 to fund areas of proposed reductions in library and community services, including (a) library program offerings, small reductions of materials and contract services ($169,255) and (b) reductions to contract services for indoor recreation programs, small reductions to materials, staffing efficiencies ($104,400); and • Review and bring forward a future increase to gymnastics fees by up to 20% to generate additional revenue of $0.5 million for consideration at the July 14 City Council meeting.

ACTION: Motion and second (Taylor/ Wise), to adopt resolutions:
• Adopting fiscal year 2026-27 budget and capital improvement plan; • Utilizing Fund 111 for library and community services proposed reductions: (a) reductions to library program offerings, small reductions of materials and contract services ($169,255) and (b) reductions to contract services for indoor recreation programs, small reductions to materials, staffing efficiencies ($104,400);
• Establishing the appropriations limit;
• Amending the salary schedule effective July 12, 2026; • Extending the solid waste and water rate assistance program through June 2027; and • Accepting award memo for authority and bid requirements through June 2027, passed unanimously.

ACTION: By acclamation, the City Council extended the meeting past 11 p.m.

K2. Consider and adopt a resolution to approve the successor agreement between the City of Menlo Park and the American Federation of State, County and Municipal Employees, Local 829 expiring June 30, 2027 (Staff Report #26-104-CC)
Administrative Services Director Brittany Mello introduced the item.

ACTION: Motion and second (Wise/ Taylor), to adopt a resolution to approve the successor agreement between the City of Menlo Park and the American Federation of State, County and Municipal Employees, Local 829 (AFSCME) expiring June 30, 2027, passed unanimously.

L. Informational Items
L1. City Council agenda topics: July – August 2026 (Staff Report #26-113-CC) City Council Special and Regular Meeting Minutes
June 23, 2026

City of Menlo Park 701 Laurel St., Menlo Park, CA 94025 tel 650-330-6600 www.menlopark.gov • San Mateo County Tobacco Education Coalition Chair Tricia Barr spoke in support of a multiunit smoke free housing ban.

M. City Manager Report
City Manager Murphy reported out on gratitude for the budget process, Fourth of July events, Summer Concert series beginning July 8 and the next City Council meeting July 14.

N. City Councilmember Reports
City Councilmember Schmidt reported out on the Commute.org meeting, Assembly Bill 2667 and the Juneteenth event.

Mayor Nash reported out on a call with Galway Ireland’s Mayor Mike Cubbard celebrating 10-years as Sister Cities, Annual Service Academy event and the Association of Bay Area Governments (ABAG) meeting.

City Councilmember Taylor reported out on the Juneteenth event and Belle Haven Action Farmers Market.

O. Adjournment
Mayor Nash adjourned the meeting at 11:14 p.m.

Assistant to the City Manager/ City Clerk Judi Herren
These minutes were approved at the City Council meeting August 11, 2026.

City Council Special and Regular Meeting Minutes
June 23, 2026

Specific Plan amendments
Matt Pruter, Associate Planner
1 J1-STAFF PRESENTATION
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 7 of 59
Background
2 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 8 of 59
Background
3 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 9 of 59
Proposed Specific Plan amendments

1. Modify allowable uses within Downtown/Station Area “Main Street Overlay” land use designation

2. Allow increased office square footage within Main Street Overlay for qualifying existing buildings
- Require public benefit agreement for increased office square footage within Main Street Overlay

3. Modify four use classifications across entire Specific Plan area
4 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 10 of 59
Proposed Specific Plan amendments
5 Proposed use changes for the Main Street Overlay land use designation Land use category Current Proposed
Not permitted Use permit required Animal clinics and hospitals Permitted Permitted if < 5,000 s.f.; use permit required if ≥ 5,000
s.f.

Animal retail sales and service
Not permitted Use permit required with square footage limits Banks and financial institutions Business services Not permitted Use permit required
Not permitted Use permit required
Commercial recreation - smallscale
• No change for new construction• Existing buildings could have maximum 2/3 FAR and rear half of ground floor and upper floors if no ground floor frontage on Santa Cruz Avenue, not increasing overall square footage, and must obtain use permit and provide a public benefit Maximum 1/2 FAR and upper floors only Offices, business and professional Maximum 1/3 FAR and upper floors only Same criteria as Offices, business and professional Offices, medical and dentalPermitted on upper floors only Permitted Personal improvement services
Permitted on upper floors only Permitted Personal services – general City Council Special and Regular Meeting Minutes
June 23, 2026 Page 11 of 59
Office uses and public benefit agreement
 Allow qualifying existing
buildings within Main Street Overlay up to two-thirds of public benefit bonus floor area ratio (FAR) for office uses - Use permit and public benefit
agreement required; one PC meeting
6 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 12 of 59
Proposed Specific Plan amendments
 Modify four use classifications across entire Specific Plan area - Business services: allow services to the public- Personal improvement services: remove spas - Personal services – general: add and expand spa services - Personal services – restricted: remove massage
7 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 13 of 59
Planning Commission recommendation
 Adopt resolution with modifications
- Within Main Street Overlay land use designation:
• Maintain banks and financial institutions use classification as not allowed• Change commercial recreation – small scale use classification from not allowed to conditional
 Recommendation that City Council direct staff to prepare a Planning Commission study session to explore additional Specific Plan changes 8 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 14 of 59
Staff Recommendation
 Allow banks and financial institutions as conditional use in the Main Street Overlay with limitations:
- Maximum total square footage of 30,000 sq. ft.- Maximum individual square footage of 5,000 sq. ft.- Existing banks and financial institutions can remain  Adopt resolution to approve proposed amendments
- Promotes variety of uses and activity along Santa Cruz Ave.- Includes criteria to limit office growth in Main Street Overlay- Consolidates wellness and spa uses in one category- Expands business services uses to the public 9 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 15 of 59
Next Steps
 Take action on the proposed amendments (June 23) Amendments would be effective upon adoption 10 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 16 of 59
Thank you
11 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 17 of 59
Menlo Park
Downtown Specific Plan Text Amendments
City Council
June 23, 2026
J1-APPLICANT PRESENTATION
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 18 of 59
About Us
 Downtown Menlo Park Property– 870 Santa Cruz Avenue Mixed-Use, Commercial & Multi-Family Projects Bay Area Experience-Locally Focused Longtime Menlo Park Residents with children attending local schools
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 19 of 59
Planning Commission and City Staff Recommendations &
Goals of the General Plan and DSP
 We are in full agreement with the recommendation of the Planning Commission and City staff regarding proposed banks/financial institutions and small recreational uses. We feel these and our proposal would result in the following:
 Diverse Business Options: Allowing additional uses downtown would support a variety of businesses, benefitting the community and enhancing services for residents, shoppers, and other businesses alike.  Optimized Retail Frontage: This flexibility would enable existing and new retail tenants to optimize their floorplates, maximizing the ratio of sales to square footage along Santa Cruz Avenue.  Enhanced Pedestrian Experience: Currently, many rear sections of these buildings serve as storage or office space, providing little interaction with pedestrians. Allowing alternative uses would bring life to these spaces and increase foot traffic in underutilized areas, benefiting the entire downtown district.  Improved Leasing Opportunities: Increased flexibility would provide property owners with more options for leasing and allow them to optimize building spaces, potentially stabilizing rents. This would support property owners and help ensure that retail spaces on Santa Cruz Avenue remain viable for current and future businesses.

City Council Special and Regular Meeting Minutes
June 23, 2026 Page 20 of 59
Project Area
 Santa Cruz Avenue
between the Caltrain and University Avenue -Downtown/Station Area “Main Street” Overlay City Council Special and Regular Meeting Minutes
June 23, 2026 Page 21 of 59
Downtown Vacancies
North Side of Santa Cruz Avenue
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 22 of 59
Downtown Vacancies
South Side of Santa Cruz Avenue
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 23 of 59
Reasons for Proposal
 While some fitness studios and wellness services exist in our broader area, they are not represented on Santa Cruz Avenue itself. Bringing these uses to our downtown corridor would make them more accessible to residents, fill vacant storefronts, and draw more foot traffic that supports the shops and restaurants already here.  Given all the vacancy we need to be more accommodative and less restrictive. Adding fitness and wellness uses will bring more people downtown to eat and shop.  Allowing financial and other business-serving uses on a limited basis uses will diversify what Santa Cruz Avenue has to offer, attract more visitors throughout the day, and help support our existing local retailers and restaurants that are struggling with reduced foot traffic.  Many of the larger ground-floor spaces along Santa Cruz Avenue are simply too big to be filled by retail alone, and that is a key reason so many sit empty. Allowing a limited amount of office use in these existing buildings would enable smaller, more flexible retail floor plates that can attract a variety of vibrant, pedestrian-friendly businesses.  More office workers downtown also means more daytime foot traffic that benefits everyone on the avenue.

City Council Special and Regular Meeting Minutes
June 23, 2026 Page 24 of 59
Menlo Park
Downtown Specific Plan Text Amendments
City Council
June 23, 2026
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 25 of 59
2025 Urban Water Management Plan
Public Hearing and Adoption
Scott Jaw - Associate Engineer, EKI - Consultant
1 J2-PRESENTATION
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 26 of 59
Agenda
 Hold a public hearing on the draft 2025 Urban Water
Management Plan (UWMP) and Water Shortage Contingency Plan  Adopt a resolution adopting the 2025 Urban Water
Management Plan
2 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 27 of 59

UWMP OVERVIEW
 Key document that articulates long-term
water planning strategy to the public and governing body – promotes the “value of water”  Framework to discuss water shortage
contingency planning, water rates, and other issues
 State-mandated water supply and demand
planning document required to be updated every 5 years (pre-requisite to receive State funding)  Foundation for Water Supply Assessments
3 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 28 of 59

MENLO PARK MUNICIPAL WATER SERVICE AREA
4  Service area covers approximately
half of the City of Menlo Park
 Approximately 4,229 connections  Water sources:
 Potable water from San Francisco Public
Utilities Commission (SFPUC) Regional Water System (RWS)  Non-potable water provided by West
Bay Sanitary District (WBSD)
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 29 of 59

WATER DEMAND TRENDS
 Past 10 years - water use fluctuated in response to droughts and rebounds From 2025 to 2050  Demands projected to increase 13% Population and employment projected to increase 62% and 16%, respectively 5 0
200400600800
1,0001,2001,400
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
Water Demand (MG)
Year
Historical Demand Projected Demand
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 30 of 59
57% 51% 54% 59% 60%
0 200400600800
1,0001,2001,4001,6001,800
2021 2022 2023 2024 2025
Annual Potable Water Supply (MG)
Current and Historical Potable Water Supply
SFPUC Supply ISG

SFPUC WATER IS SOLE SOURCE OF POTABLE SUPPLY
 MPMW has a perpetual Individual Supply Guarantee (ISG) of 4.456 MGD (1,630 MGY) from SFPUC
 MPMW purchases remained well below the ISG, fluctuating between 51% and 60% of its ISG from 2021 to 2025
6 ISG = 1,630 MG
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 31 of 59

RECYCLED WATER USE IS ANTICIPATED TO GROW
 WBSD is the recycled water
purveyor within MPMW (Sharon Heights and Bayfront)
 Recycled water is currently
produced at a satellite plant and delivered to the Sharon Heights Golf Course  New facilities and customers
anticipated in the Bayfront Area post 2028
7 0
20406080
100120140
2025 2030 2035 2040 2045 2050
Projected Recycled Water Use (MG)
Landscape irrigation (exc golf courses)Commercial useGolf course irrigation City Council Special and Regular Meeting Minutes
June 23, 2026 Page 32 of 59

BAY DELTA PLAN IMPACTS ON SFPUC SUPPLY
 The Bay-Delta Plan (BDP) Amendment
(adopted in 2018) establishes water quality objectives for rivers flowing to SF Bay / Sacramento–San Joaquin Delta  No immediate impact anticipated due to
BDP implementation uncertainties
 SFPUC and stakeholders proposed
Tuolumne Healthy Rivers & Landscapes (HRL) Program as an alternative to reduce supply impacts and protect the environment  No timeline has been provided for when the
HRL will be considered for adoption by the State Water Resources Control Board  As required by the Water Code, MPMW
relied on SFPUC and BAWSCA for its potable water supply reliability information  SFPUC provided two reliability
projection scenarios
 (1) Implementation of BDP as written (2) No implementation of BDP  SFPUC presents both scenarios in their
UWMP and uses Scenario 1 in their DWR standardized table submittal  BAWSCA agencies mirroring SFPUC
approach
8 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 33 of 59

NORMAL YEAR SUPPLY SUFFICIENT TO MEET
DEMANDS Total available potable
supply is projected to meet the MPMW's ISG during normal years in both SFPUC scenarios  Recycled water supply is
drought-proof and sufficient to meet projected recycled water demands through 2050 9 0
200400600800
1,0001,2001,4001,6001,8002,000
2030 2035 2040 2045 2050
Water Supply and Demand (MG)
Normal Year Supply vs Demand
Projected Supply Projected Demand
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 34 of 59
0 200400600800
1,0001,2001,400
Water Supply and Demand (MG) 2030 2035 2040 2045 2050 (Opt) Multiple Dry Year Supply vs. Demand
First Dry Year Supply Second Dry Year SupplyThird Dry Year Supply Fourth Dry Year SupplyFifth Dry Year Supply Total Projected Demand 0 200400600800
1,0001,2001,400
2030 2035 2040 2045 2050 (Opt)
Water Supply and Demand (MG)
Single Dry Year Supply vs. Demand
Single Dry Year Supply Total Projected Demand
BDP SCENARIO: SIGNIFICANT SUPPLY SHORTFALLS PROJECTED IN DRY YEARS  Scenario 1: Implementation of BDP as written; significant shortfall during dry years  No current mechanism to allocate shortages greater than 20%; BAWSCA assumed equal percentage for UWMP planning purposes  Scenario 2: No implementation of BDP; SFPUC is able to meet 100% of projected wholesale customer demand 10 29% Total Shortfall
(31% Potable Shortfall)
34% Total Shortfall
(38% Potable Shortfall) 39% Total Shortfall (42% Potable Shortfall) 43% Total Shortfall
(48% Potable Shortfall)
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 35 of 59

ADDRESSING PROJECTED SHORTAGES
 SFPUC common language addresses
 No immediate impact on water supplies because of the inherent challenges in implementing the BDP
 SFPUC’s commitment to its Level of Service Goal: no more than 20% shortage Water supply projects included in the Alternative Water Supply Planning Program (AWSP) and BAWSCA’s Long-Term Reliable Water Supply Strategy 2050
 MPMW Actions
 (Through BAWSCA participation) advocate for SFPUC’s AWSP and alternative to the BDP Implement water conservation programs Support recycled water supply Develop alternative local supplies, including emergency groundwater wells and a potential underground reservoir
 Implement its Water Shortage Contingency Plan during dry years 11 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 36 of 59

WATER SHORTAGE CONTINGENCY PLAN (WSCP)
 Provides guidelines, actions, and procedures for managing water supply and demand during a shortage (e.g., drought or emergency).  Includes six standard stages and response actions within each stage Guiding Principles  Eliminate water waste, prioritize the reduction of non-essential water uses, and preserve water uses that are essential to the health, safety, welfare, and economic vitality of MPMW’s customers during periods of water shortage.  2025 WSCP updates are minor adjustments
 Bring information up to date with 2025 UWMP contents Incorporate actual measures implemented during 2021-2023 drought Expand list of public outreach and emergency response actions 12 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 37 of 59

KEY TAKE-AWAYS
 MPMW’s customers have become increasingly water efficient Sufficient supplies available during normal non-drought years through 2050 Uncertainties on dry-year supplies remain  Timeline on BDP implementation Adoption of voluntary agreement (or other agreement) Water supply allocation for shortages greater than 20%  MPMW is proactively managing water demands, developing its recycled water program, and evaluating alternative sources of supply (e.g., Emergency Water Storage and Supply Project)  MPMW’s WSCP provides guidelines, actions, and procedures for managing water supply and demands during a water shortage from any cause 13 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 38 of 59
UWMP and WSCP Schedule
 Public Hearing and adoption (June 23, 2026) Recommend City Council to adopt a resolution adopting the 2025 UWMP and WSCP
 Submission to DWR by July 1, 2026 Public access
 Final Draft available on City website within 30 days of submittal WSCP included as standalone appendix 14 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 39 of 59
Fiscal Year 2026-27 Budget
Adoption
June 23, 2026
K1-PRESENTATION
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 40 of 59
Agenda
 City Council priorities Summary of budget changes Updated five-year General Fund forecast Resolutions and actions Final City Council direction and adoption City Council Special and Regular Meeting Minutes
June 23, 2026 Page 41 of 59
City Council Priorities
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 42 of 59
City Council Priorities
 During the annual priority-setting workshop on March 21, the City Council identified the following priorities:
- Climate action - mitigation, adaptation and resilience- Downtown vibrancy - Public safety (new)- Housing- Safe routes City Council Special and Regular Meeting Minutes
June 23, 2026 Page 43 of 59
Proposed Fiscal Year
2026-27 Budget
Changes
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 44 of 59
Changes Since June 9 Public Hearing
 Vehicle license fee (VLF) shortfall backfill of 65% for fiscal year 2024-25 was included in the State budget bill on June 11 and passed in both the senate and assembly on June 15 - Increasing the General Fund revenues by approximately $1.9 million in fiscal year 2026-27 only
- VLF backfill revenue is not included in the forecasts for fiscal year 2027-28 through fiscal year 2030-31, as this was a one-time fix and future funds are not guaranteed - Continuing to work with partners across the County through advocacy regarding future VLF payments
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 45 of 59
General Fund changes since June 9
Public Hearing Incorporated additional expenditures of $0.2 million:
- BCJPIA insurance premium true-up- AFSCME MOU- Downtown development financial feasibility study  Included City Council directed General Fund reductions in public works of $0.4 million and library and community services of $0.5 million for a total of $0.9 million reduction  Net $0.7 million ongoing reduction
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 46 of 59
Reductions since June 9 public hearing
Description AmountReductions to library program offerings, small reductions ($169,255)of materials and contract servicesReductions to contract services for indoor recreation ($104,400)programs, small reductions to materials, staffing efficienciesReduction to pool hours after Labor Day ($273,300)Reduction in consultant services to shift focus from ($105,000)outreach to implementation efforts. Reduction in Downtown/Santa Cruz median and street ($43,000)tree lighting maintenance contractReduction in general non-herbicide weed removal ($91,600)contract Reduction in mechanical non-herbicide weed removal ($50,000)contract Reduction in landscape median and right of way ($69,800)maintenance contract Total ($906,355)
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 47 of 59
Other potential expenditure reductions
 Reduce library operating hours by 12 less hours / week, resulting in a reduction in temporary staffing hours, generating $0.2M savings - If City Council wishes to proceed, staff would develop a strategy to minimize community impact, potentially staggering reductions to keep one library location open  Reduce special events scope and frequency to generate $0.08M savings Reduce non-safety overtime hours by 33% to generate $0.08M savings Increase gymnastics fees by 44% to generate additional revenue of $0.5M - Consideration of phasing in increases to reduce impact to participants  Given structural deficit, an in-depth analysis of which services are offered, at what levels, and the level of General Fund subsidy as outlined in the User Cost Recovery Policy – Long-term process to begin with a study session planned in fall 2026 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 48 of 59
Proposed Fiscal Year 2026-27 Budget
 The City has over 55 funds with a proposed expenditure budget of $151.1 million
- General Fund: $89.8 million- All other funds: $61.3 million- Capital Improvement Plan (CIP):
• $13 million new funding, $3.1 million from General CIP• $60 million in estimated carry-over funding  The proposed fiscal year 2026-27 budget is now balanced without the use of reserves
 Budget includes General Fund expenditures of $89.8 million and revenues of $89.9 million, resulting in a nominal surplus of $9,296 City Council Special and Regular Meeting Minutes
June 23, 2026 Page 49 of 59
Path to a balanced budget
Description Amount (million)Fiscal year 2026-27 original projected deficit ($7.9)Additional costs (ISF allocation, BCJPIA, AFSCME, etc.) ($0.9)Update Master Fee Schedule and cost allocation plan $4.4Reduce General Fund transfer to CIP $1Reduce department budget June 9 $0.7Reduce department budget per City Council direction $0.9after June 9Update VLF backfill $1.9New surplus/(deficit) $0.01 *For clarity, negative values reflect actions that increase the deficit, while positive values reflect actions that reduce or offset the deficit.

City Council Special and Regular Meeting Minutes
June 23, 2026 Page 50 of 59
General Fund
Five-Year Forecast
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 51 of 59
General Fund five-year forecast
 Includes ongoing net expenditure reduction of $0.7 million Projected total fund balance would decrease from $31.1 million to $14.8 million over the five-year period
- Unassigned fund balance depleted in fiscal year 2027-28- Emergency Contingency Reserve would be fully depleted by fiscal year 2030-31
- Economic Stabilization Reserve depletion beginning in fiscal year 2030-31
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 52 of 59
Operating surplus/(deficit)
80 85 90 95
100 105
FY26-27 Proposed FY27-28 Forecast FY28-29 Forecast FY29-30 Forecast FY30-31 Forecast Millions
Revenue v Expenditure
Total Revenues Total Expenditure
Average structural deficit of $3.3 million annually
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 53 of 59
General Fund reserve impact
Unassigned reserve fully depleted
Emergency contingency reserve fully depleted
31 27
23 18
15 -
5 10 15 20 25 30 35
FY26-27 Proposed FY27-28 Forecast FY28-29 Forecast FY29-30 Forecast FY30-31 Forecast Millions
General Fund Reserve Change
Reserve below GFOA minimum threshold
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 54 of 59
Resolutions
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 55 of 59
Resolutions
 Adoption of the fiscal year 2026-27 budget and capital improvement plan
- Formally appropriates funds and expenditures during the fiscal year - Authorized payments up to the budget amount for certain items  Establish the appropriations limit for fiscal year 2026-27 - California Government Code sets a limit on appropriations based several factors, including the prior limit, population change and cost-of-living adjustment (COLA) changes  Salary schedule amendments
- Approves updates to salary schedule pursuant to AFSCME MOU with corresponding changes to Confidential and Unrepresented Management; addition of one new position; and equity adjustment for one existing position - Effective first full pay period following July 1
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 56 of 59
Resolutions
 Rate assistance program
- Extends the rate assistance program for solid waste and water utilities through June 30, 2027
- Promotes equity and helps low-income households cover basic living expenses
 Award authority
- Establishes award authority, bid requirements and approving authority for fiscal year
- Staff is developing a comprehensive purchasing policy for City Council consideration later this summer that will update procurement authorities, strengthen internal controls, and clarify key purchasing definitions City Council Special and Regular Meeting Minutes
June 23, 2026 Page 57 of 59
City Council Action
 Provide final direction on the proposed fiscal year 2026-27 budget
 Adopt resolutions
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 58 of 59
Questions
City Council Special and Regular Meeting Minutes
June 23, 2026 Page 59 of 59