Agenda packet — Palo Alto City Council, June 15, 2026 (part 1 of 6)

CITY COUNCIL
Regular Meeting
Monday, June 15, 2026
Council Chambers & Hybrid
5:30 PM
Amended Agenda
Amended Agenda Items Appear Below in RED (Time Estimates Updated) Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. The meeting will be broadcast on Cable TV Channel 76, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org.

VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/362027238) Meeting ID: 362 027 238 Phone:1(669)900-6833

PUBLIC COMMENTS
General Public Comment for items not on the agenda will be accepted in person for up to three minutes or an amount of time determined by the Chair. General public comment will be heard for 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.

Public comments for agendized items will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. Requests to speak will be taken until 5 minutes after the staff’s presentation or as determined by the Chair. Written public comments can be submitted in advance to [email protected] and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line. Multiple individuals who wish to speak on the same item may designate a spokesperson. Spokespersons must be representing five or more verified individuals who are present either in person or via zoom. Spokespeople will be allowed up to 10 minutes, at the discretion of the presiding officer. Speaking time may be reduced if the presiding officer reduces the speaking time for individual speakers.

PowerPoints, videos, or other media to be presented during public comment are accepted only by email to [email protected] at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that:
(1) sticks, posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting.

TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. 1 June 15, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

CALL TO ORDER
SPECIAL ORDERS OF THE DAY (5:30 - 5:40 PM)

1. Proclamation Expressing Appreciation to Bill Gutoff Upon His Retirement

AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (5:40 - 6:10 PM)
Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.

COUNCIL MEMBER QUESTIONS, COMMENTS, ANNOUNCEMENTS (6:10 - 6:20 PM) Members of the public may not speak to the item(s).

ACTION ITEMS (Item 2: 6:20 - 7:05 PM; Item 3: 7:05 - 7:50 PM) Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

2. PUBLIC HEARING & PROPOSITION 218 HEARING: Finance Committee Recommends Adoption of Seven Resolutions: 1) Approving the Fiscal Year 2027 Water Utility Financial Forecast, Reserve Management Practices and Reserve Transfer, and Amending Water Rate Schedules W-1, W-2, W-3, W-4, and W-7; 2) Approving the Fiscal Year 2027 Wastewater Collection Utility Financial Forecast and Reserve Management Practices, and Amending Wastewater Collection Rate Schedules S-1, S-2, S-6 and S-7; 3) Amending Refuse Utility Rate Schedules R-1 and R-C; 4) Approving the Fiscal Year 2027 Electric Utility Financial Forecast and Reserve Transfer, Amending the Electric Reserve Management Practices and Electric Rate Schedules E-1, E-1 TOU, E-2, E-2-G, E-4, E-4-G, E4 TOU, E-7, E-7-G, E-7 TOU, E-14, E-16, E-EEC-1, and E-NSE-1, and Directing the Use of Up To $225,000 in Renewable Energy Certificate Exchange Net Revenues in Fiscal Year 2027 to Reduce Electric Customers’ Photovoltaic Generation and Energy Storage System Installation Costs; 5) Approving the Fiscal Year 2027 Gas Utility Financial Forecast, Reserve Transfer, and General Fund Transfer, and Amending the Reserve Management Practices and Gas Rate Schedules G-1, G-2, and G-3; 6) Amending Utility Rate Schedules EDF-1, and EDF-2; 7) Amending Storm Water Utility Rate Schedule D-1; CEQA Status: Not a project under CEQA Guidelines Sections 15378(b)(4) and (5) and Exempt Under Section 15273(a)

Charter; Accept the Bi-Annual Actuarial Valuation Report of Palo Alto's Retiree Healthcare and Other Post-Employment Benefits (OPEB) as of June 30, 2025 and Approve Annual Actuarially Determined Contribution for Fiscal Years 2027 and 2028; Authorize the City Manager or their Designee to Negotiate and Execute a Memorandum of Understanding and Funding Agreement (or Lease Agreement Amendment) with the Palo Alto Museum to Provide Cost Sharing for Repairs to the Basement and Waterproofing in the Roth Building and Improvements to Heritage Park Drainage Supplemental Report Added
CONSENT CALENDAR (7:50 - 7:55 PM)
Items will be voted in one motion unless removed from the calendar by three Council Members.

4. Approval of Minutes from June 1, 2026 Meeting

5. Approve Submittal of the 2026 Annual Water Shortage Assessment Report; CEQA status:
exempt.

6. Approve Conceptual Design for Alma Street-Charleston Road Railroad Crossing NearTerm Section 130 Safety Improvement Project – Direct Staff to Complete Final Design, Environmental Analysis, Project Specifications, and Engineering Cost Estimates based off of the Conceptual Design as Recommended by Rail Committee; CEQA status:

Categorically Exempt under Section 15301-Class 1 minor alternations to existing facilities.

7. Adoption of a Resolution Authorizing the City Manager to Submit the City’s Prohousing Designation Program Application to the California Department of Housing and Community Development. CEQA Status: Not a Project.

8. Adoption of Amended Salary Schedules for Service Employees‘ International Union, Utilities Management and Professional Association of Palo Alto, International Association of Fire Fighters, and Unrepresented Management and Professional Employees and Limited Hourly groups; and Adoption of Side letters for the International Association of Fire Fighters, Fire Chiefs‘ Association, and Palo Alto Police Officers‘ Association and Amendments to the FY 2027 Table of Organization to Reclassify 1.0 Economic Development Manager and 1.0 Treasury Manager - CEQA Status - Not A Project.

9. Approval of Construction Contract Number C26197272 with O’Grady Paving, Inc. in the Amount of $3,802,573 for the Fiscal Year 2026 Street Resurfacing Project, Capital Improvement Program Projects PE-86070, PO-12001, PG-06001, PO-11001, and OS09001; and Authorization for the City Manager or Their Designee to Execute Change Orders in an Amount Not-to-Exceed $910,258 for Related, Additional but Unforeseen 3 June 15, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

Work Which May Develop During the Project; CEQA Status – Exempt under CEQA Guidelines Section 15301(c)

10. Approval of Amendment Number 1 to Purchase Order C26195416 with Carahsoft in the Amount of $375,246 for Additional SAP Business Data Cloud Capacity Units and Related Non-Productive Memory Extension; CEQA Status - Not a Project

11. Approval of a First Amendment to Lease With 1900 Embarcadero Property Owner, LP, to Continue Occupying an Approximate 5,469 Square Foot Portion of the Office Building at 1900 Embarcadero Road, Through June 30, 2031, at a Total Base Rent of $1,306,605; CEQA Status – Exempt under CEQA Guidelines Section 15301

12. Approval of Amendment No. 4 to Contract Number C23184827 with Nomad Transit, LLC (Via) in the Amount of $152,000 for a total not to exceed $5,053,550 to Extend the City of Palo Alto On-Demand Transit Service for Four Months through October 31, 2026; Approval of Amendment No. 3 to extend the Cost Sharing Agreement with Stanford University to Partially Fund Palo Alto Link Service up to $200,000 in FY 2027 through October 31, 2026; and Approval of a three-year Contract with the Palo Alto Transportation Management Association (PATMA), in the Amount of $500,000; CEQA status – not a project.

13. Approval of Contract Amendment Number 5 to Contract S20178065 with OIR Group, in the Amount of $40,000 and for a one-year extension to continue Independent Police Auditing Services in Palo Alto. CEQA Status – Not a Project.

14. Approval of Professional Services Contract Number C26195541 with HDA Architects, Inc. in an Amount Not-to-Exceed $221,650 to Provide Architectural Design Services for the Animal Shelter Renovation – Capital Improvement Program Project PE-19002; CEQA Status – Exempt under CEQA Guidelines Section 15301(e)

15. Approval of Professional Services Contract Number C26196545 with Michael Baker International (MBI) for $116,000 in FY 2027 and a Not-to Exceed Amount of $464,000 to Provide Administration and Consulting Services for the City’s Community Development Block Grant (CDBG) Program for a Term of Four-Years Through June 2030. CEQA Status:

Exempt in Accordance with CEQA Guidelines Section 15061(b)(3).

16. PUBLIC HEARING / QUASI-JUDICIAL. 929 Laurel Glenn Dr [25PLN-00005]: Adoption of a Record of Land Use Action Approving a Major Site and Design Application for the Construction of a New 6,581-Square-Foot Single-Family Residence and Associated Site Improvements on a Vacant 4.23-Acre Site. CEQA Status: Exempt Per CEQA Guidelines 4 June 15, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

Section 15303. Zoning District: Open Space (OS).

17. QUASI-JUDICIAL. Approval of a Record of Land Use Action to Add the Property Located at 855 Hamilton Avenue to the City’s Historic Resources Inventory as a Category 2 Resource Based on Owner Interest Identified Through the 2023 Reconnaissance Survey.

CEQA Status: Not a Project.

18. QUASI-JUDICIAL. 3200 Park/340 Portage: Final Map and Street Naming [26PLN-00009]:

Item Removed Off Agenda

19. FIRST READ: Adopt an Ordinance to Amend College Terrace Residential Preferential Parking Program Fixed Permit Terms, Sale and Grace Periods in PAMC 10.46.060; CEQA status: categorically exempt.

20. FIRST READING: Adoption of an Ordinance to Amend Palo Alto Municipal Code Title 18 (Zoning) Section 18.18.120 (Noncomplying Uses and Facilities) to Allow Existing Floor Area to be Replaced in New Buildings Without Increasing the Degree of Existing NonCompliance as Recommended by the Economic Development Committee. CEQA Status:

Exempt from CEQA per Section 15061(b)(3) (Common Sense Exemption).

21. FIRST READING: Adoption of an Ordinance to Amend Various Sections of Title 16 (Building Regulations) and Title 18 (Zoning) of the Palo Alto Municipal Code to Implement Retail Vitality Policies in the Comprehensive Plan, Including Changes to the Zoning Map for Parcels Zoned CN(GF) as Recommended by the Economic Development Committee. CEQA Status: The Ordinance is Consistent with and Represents Implementation of Adopted Policies in the Comprehensive Plan, for Which an Environmental Impact Report (Comprehensive Plan EIR) was Certified on February 5, 2016.

22. SECOND READING: Ordinance of the Council of the City of Palo Alto Amending the Sign Code (PAMC section 16.20.160) to Allow Certain Signs in Conjunction with Parklets (FIRST READING: June 1, 2025; PASSED: 6-1, Lu no)

23. SECOND READING and Adoption of Temporary Ordinances Implementing Senate Bill (SB) 79, and Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Historic Resource Sites and Transit-Oriented Development (TOD) Eligible Sites from 5 June 15, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

Government Code Section 65912.157 and Authorizing Corresponding Zoning Map Updates. CEQA Status: Exempt Under Government Code Section 65912.160(c)(2).

Supplemental Report Added
a. SECOND READING and Adoption of Temporary Ordinances Implementing SB 79 (Staff Recommendations 1 & 2)
b. Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Historic Resource Sites from Government Code Section 65912.157 (Staff Recommendation 3) c. Introduction and Adoption of Interim Urgency Ordinances Excluding Certain TransitOriented Development (TOD) Eligible Sites from Government Code Section 65912.157 (Staff Recommendation 4)
CITY MANAGER COMMENTS (7:55 - 8:05 PM)
BREAK (15 MINUTES)
CLOSED SESSION (8:20 - 8:40 PM)
AA1. CONFERENCE WITH LEGAL COUNSEL—POTENTIAL LITIGATION (one case) Subject: Initiation of litigation in one case
Authority: Government Code Section 54956.9(d)(4) New Item Added ACTION ITEMS (8:40 - 10:10 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.

24. Adopt a Resolution Approving the 2026 Bicycle and Pedestrian Transportation Plan (BPTP); CEQA Status: Exempt Pursuant to Public Resources Code Section 21080.20.

ADJOURNMENT

INFORMATION REPORTS
Information reports are provided for informational purposes only to the Council and the public but are not listed for action or discussion during this meeting’s agenda.

A. Third Quarter Fiscal Year 2026 Financial Status Report 6 June 15, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

B. Independent Police Auditor's (IPA) Report of Review of Investigations as of November 2025 and Police Department Use of Force Report for June 1, 2025 – November 30, 2025 C. Semiannual Update on the Status of Capital Improvement Program Projects; CEQA Status – Not a Project
D. City of Palo Alto's Energy Risk Management Report for the first half of Fiscal Year 2026 (July 1, 2025 - December 31, 2025) CEQA Status – Not a Project

OTHER INFORMATION
Standing Committee Meetings this week

Finance Committee June 16, 2026 CANCELED

Public Comment Letters
Schedule of Meetings

SUPPLEMENTAL / AMENDED AGENDA ITEMS

3. PUBLIC HEARING: Adoption of an Ordinance Adopting the Operating and Capital Budgets, Revised Table of Organization, and Municipal Fee Schedule for Fiscal Year 2027; Adoption of a Resolution Proposing the Appropriations Limit for Fiscal Year 2027 - State Law/ City Charter; Accept the Bi-Annual Actuarial Valuation Report of Palo Alto's Retiree Healthcare and Other Post-Employment Benefits (OPEB) as of June 30, 2025 and Approve Annual Actuarially Determined Contribution for Fiscal Years 2027 and 2028; Authorize the City Manager or their Designee to Negotiate and Execute a Memorandum of Understanding and Funding Agreement (or Lease Agreement Amendment) with the Palo Alto Museum to Provide Cost Sharing for Repairs to the Basement and Waterproofing in the Roth Building and Improvements to Heritage Park Drainage Supplemental Report Added

18. QUASI-JUDICIAL. 3200 Park/340 Portage: Final Map and Street Naming [26PLN-00009]:

Request for a Final Map to Subdivide One Existing 3.92-Acre Parcel for Condominium Purposes, Consistent with the Approved Development Agreement, and to Name the New Private Streets. Zone District: PC 5597. CEQA Status: Council Adopted Resolution 10123 Certifying the EIR for the Project on September 12, 2023 (SCH # 2021120444). 7 June 15, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

Item Removed Off Agenda

23. SECOND READING and Adoption of Temporary Ordinances Implementing Senate Bill (SB) 79, and Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Historic Resource Sites and Transit-Oriented Development (TOD) Eligible Sites from Government Code Section 65912.157 and Authorizing Corresponding Zoning Map Updates. CEQA Status: Exempt Under Government Code Section 65912.160(c)(2).

Supplemental Report Added
a. SECOND READING and Adoption of Temporary Ordinances Implementing SB 79 (Staff Recommendations 1 & 2)
b. Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Historic Resource Sites from Government Code Section 65912.157 (Staff Recommendation 3) c. Introduction and Adoption of Interim Urgency Ordinances Excluding Certain TransitOriented Development (TOD) Eligible Sites from Government Code Section 65912.157 (Staff Recommendation 4)
AA1. CONFERENCE WITH LEGAL COUNSEL—POTENTIAL LITIGATION (one case) Subject: Initiation of litigation in one case
Authority: Government Code Section 54956.9(d)(4) New Item Added

PUBLIC COMMENT INSTRUCTIONS
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8 June 15, 2026
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CLICK HERE TO JOIN Meeting ID: 362-027-238 Phone: 1-669-900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing [email protected]. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service.

California Government Code §84308, commonly referred to as the "Levine Act," prohibits an elected official of a local government agency from participating in a proceeding involving a license, permit, or other entitlement for use if the official received a campaign contribution exceeding $500 from a party or participant, including their agents, to the proceeding within the last 12 months. A “license, permit, or other entitlement for use” includes most land use and planning approvals and the approval of contracts that are not subject to lowest responsible bid procedures and have a value over $50,000. A “party” is a person who files an application for, or is the subject of, a proceeding involving a license, permit, or other entitlement for use. A “participant” is a person who actively supports or opposes a particular decision in a proceeding involving a license, permit, or other entitlement for use, and has a financial interest in the decision. The Levine Act incorporates the definition of “financial interest” in the Political Reform Act, which encompasses interests in business entities, real property, sources of income, sources of gifts, and personal finances that may be affected by the Council’s actions. If you qualify as a “party” or “participant” to a proceeding, and you have made a campaign contribution to a Council Member exceeding $500 made within the last 12 months, you must disclose the campaign contribution before making your comments.
9 June 15, 2026
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas.

City Council
Staff Report
From: City Manager
Report Type: SPECIAL ORDERS OF THE DAY
Lead Department: Community Services
Meeting Date: June 15, 2026
Report #:2604-6266
TITLE
Proclamation Expressing Appreciation to Bill Gutoff Upon His Retirement

ATTACHMENTS
Attachment A: Proclamation Expressing Appreciation to Bill Gutoff Upon His Retirement APPROVED BY:

Kristen O'Kane, Community Services Director
Item 1
Item 1 Staff Report
Item 1: Staff Report Pg. 1 Packet Pg. 10 of 1165

EXPRESSING APPRECIATION TO BILL GUTOFF UPON HIS RETIREMENT WHEREAS, Bill Gutoff joined the Palo Alto Junior Museum and Zoo in June 2001 to support the summer camp program and has dedicated nearly 25 years to inspiring curiosity, creativity, and a love of science in generations of children and families throughout the Palo Alto community; and
WHEREAS, Bill served as a science teacher, educational leader, and beloved community figure, developing and facilitating exceptional school science lessons, summer camps, after-school programs, and open space programs that inspired thousands of local children through his passion for inquiry, extensive knowledge, sense of humor, patience, and kindness; and WHEREAS, Bill designed and constructed innovative teaching tools and hands-on scientific models that made complex scientific concepts engaging, accessible, and memorable for students of all ages, and became widely known for his remarkable ability to repair and improve educational equipment and exhibits; and WHEREAS, Bill played an important role in mentoring and training new Junior Museum educators, generously sharing his expertise and fostering a culture of learning, collaboration, and encouragement that earned him the deep admiration and respect of his colleagues; and
WHEREAS, Bill contributed significantly to the development of exhibits and educational experiences at the Junior Museum and Zoo, as well as within the Baylands and Foothills Preserves, while also supporting the care and wellbeing of the zoo’s animals and forming meaningful connections with many of them; and WHEREAS, Bill’s work was guided by his deeply held belief that science has the power to transform a child’s understanding of the world into one filled with wonder, discovery, and delight, and that belief was reflected in every lesson, interaction, and experience he created; and
WHEREAS, Bill’s impact on the community is reflected in the words of the students and teachers he inspired, including:
“Everything Bill touches is magic,” “Bill is a rockstar and a master,” “It is hard to improve on perfection,” “I just wish we could have more Bill time,” and “I don’t care that I’m sick, I have to go to school today because Teacher Bill is coming!”; and WHEREAS, Bill Gutoff is recognized by his colleagues, students, families, and the broader community for his extraordinary dedication, generosity, creativity, and unwavering commitment to education and public service, and his presence at the Junior Museum and Zoo will be greatly missed.

NOW, THEREFORE, I, Vicki Veenker, Mayor of the City of Palo Alto on behalf of the entire City Council, do hereby recognize Bill Gutoff for his outstanding service to this community.

PRESENTED: June 15, 2026
APPROVED:
______________________
Mayor Vicki Veenker
______________________ ______________________
Vice Mayor Greer Stone Councilmember Pat Burt
______________________ ______________________
Councilmember George Lu Councilmember Ed Lauing
______________________ ______________________
Councilmember Julie Lythcott-Haims Councilmember Keith Reckdahl ATTEST:
______________________
City Clerk
APPROVED AS TO FORM:
______________________ ______________________
City Manager City Attorney
Proclamation
Item 1
Attachment A - Proclamation
Expressing Appreciation to Bill Gutoff
Upon His Retirement
Item 1: Staff Report Pg. 2 Packet Pg. 11 of 1165
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Utilities
Meeting Date: June 15, 2026
Report #:2602-5894
TITLE
PUBLIC HEARING & PROPOSITION 218 HEARING: Finance Committee Recommends Adoption of Seven Resolutions: 1) Approving the Fiscal Year 2027 Water Utility Financial Forecast, Reserve Management Practices and Reserve Transfer, and Amending Water Rate Schedules W-1, W-2, W-3, W-4, and W-7; 2) Approving the Fiscal Year 2027 Wastewater Collection Utility Financial Forecast and Reserve Management Practices, and Amending Wastewater Collection Rate Schedules S-1, S-2, S-6 and S-7; 3) Amending Refuse Utility Rate Schedules R1 and R-C; 4) Approving the Fiscal Year 2027 Electric Utility Financial Forecast and Reserve Transfer, Amending the Electric Reserve Management Practices and Electric Rate Schedules E-1, E-1 TOU, E-2, E-2-G, E-4, E-4-G, E-4 TOU, E-7, E-7-G, E-7 TOU, E-14, E-16, E-EEC-1, and ENSE-1, and Directing the Use of Up To $225,000 in Renewable Energy Certificate Exchange Net Revenues in Fiscal Year 2027 to Reduce Electric Customers’ Photovoltaic Generation and Energy Storage System Installation Costs; 5) Approving the Fiscal Year 2027 Gas Utility Financial Forecast, Reserve Transfer, and General Fund Transfer, and Amending the Reserve Management Practices and Gas Rate Schedules G-1, G-2, and G-3; 6) Amending Utility Rate Schedules EDF-1, and EDF-2; 7) Amending Storm Water Utility Rate Schedule D-1; CEQA Status: Not a project under CEQA Guidelines Sections 15378(b)(4) and (5) and Exempt Under Section 15273(a)

RECOMMENDATION
Note: Resolutions are included in the packet as Attachments A – G, Attachment H reflects the Table of URLs for the Exhibits to Attachments A – G.

The Finance Committee recommends that the City Council adopt the following:

1. For the Water Utility, a Resolution (Attachment A):
a. Approving the FY 2027 Water Utility Financial Forecast and Reserves Management Practices; and
b. Approving the transfer of up to $5.5 million from the Operations Reserve to the CIP Reserve in FY 2026; and
c. Amending the Water Utility Rate Schedules effective July 1, 2026 (FY 2027):
i. W-1 (General Residential Water service),
ii. W-2 (Water Service from Fire Hydrants),
Item 2
Item 2 Staff Report
Item 2: Staff Report Pg. 1 Packet Pg. 12 of 1165
iii. W-3 (Fire Service Connections),
iv. W-4 (Residential Master-Metered and General Non-Residential Water Service), and
v. W-7 (Non-Residential Irrigation Water Service); and

2. For the Wastewater Collection Utility, a Resolution (Attachment B):
a. Approving the Fiscal Year (FY) 2027 Wastewater Collection Utility Financial Forecast and Reserves Management Practices; and
b. Amending the Wastewater Collection Utility Rate Schedules effective July 1, 2026 (FY 2027):
i. S-1 (Residential Wastewater Collection and Disposal), ii. S-2 (Commercial Wastewater Collection and Disposal), iii. S-6 (Restaurant Wastewater Collection and Disposal), and iv. S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger); and

3. For Refuse, a Resolution (Attachment C):
a. Amending the Refuse Rate Schedules effective July 1, 2026 (FY 2027):
i. R-1 (Domestic Refuse Collection), and
ii. R-C (Commercial Refuse Collection); and

4. For the Electric Utility, a Resolution (Attachment D):
a. Approving the FY 2027 Electric Utility Financial Forecast, and Amending the Electric Utility Reserves Management Practices; and
b. Approving the transfer of up to $5 million from the Electric Utility Distribution Operations Reserve to the Electric Utility Capital Reserve in FY 2026; and c. Amending the Electric Utility Rate Schedules effective July 1, 2026 (FY 2027):
i. E-1 (Residential Electric Service),
ii. E-1 TOU (Residential Time of Use Electric Service)
iii. E-2 (Small Non-Residential Electric Service),
iv. E-2-G (Residential Master-Metered and Small Non-Residential Green Power Electric Service,
v. E-4 (Medium Non-Residential Electric Service),
vi. E-4-G (Medium Non-Residential Green Power Electric Service), vii. E-4 TOU (Medium Non-Residential Time of Use Electric Service), viii. E-7 (Large Non-Residential Electric Service),
ix. E-7-G (Large Non-Residential Green Power Electric Service), x. E-7 TOU (Large Non-Residential Time of Use Electric Service), xi. E-14 (Street Lights),
xii. E-16 (Unmetered Electric Service),
xiii. E-EEC-1 (Export Electricity Compensation),
xiv. E-NSE-1 (Net Surplus Electricity Compensation); and d. Directing the Use of Up To $225,000 in Renewable Energy Certificate Exchange Net Revenues in Fiscal Year 2027 to Reduce Electric Customers’ Photovoltaic Generation and Energy Storage System Installation Costs, as local decarbonization efforts, via:
i. Changing the funding mechanism for the Cap-and-Invest Reserve to allocate up to $225,000 less in Cap-and-Invest auction revenues in FY 2027 to the City’s Item 2
Item 2 Staff Report
Item 2: Staff Report Pg. 2 Packet Pg. 13 of 1165
Cap-and-Invest Reserve and instead allocate these funds for other local decarbonization efforts; and, as a related matter:

1. Directing staff to review existing HVAC incentive levels including consideration of financial offsets to lower the cost of related work including panel upgrades, electric utility service upgrades, or the cost of building permit fees; and

2. Directing staff to return to City Council within FY 2027 to review the Electric Supply Portfolio Carbon Neutral Plan and use of revenues derived from the REC Exchange program.

5. For the Gas Utility, a Resolution (Attachment E):
a. Approving the FY 2027 Gas Utility Financial Forecast, and Amending the Gas Utility Reserves Management Practices; and
b. Approving the transfer of up to $1.5 million from the Gas Utility Operations Reserve to the Distribution Rate Stabilization Reserve in FY 2026; and c. Transferring up to 18% of gas utility gross revenues received during FY 2025 to the General Fund in FY 2027; and
d. Amending the Gas Utility Rate Schedules effective July 1, 2026 (FY 2027):
i. G-1 Residential Gas Service,
ii. G-2 Residential Master-Metered and Commercial Gas Service, and iii. G-3 Large Commercial Gas Service; and

6. For the Fiber Optics Utility, a Resolution (Attachment F):
a. Amending the Dark Fiber Optic Utility Rate Schedules, consistent with the applicable Consumer Price Index, effective July 1, 2026 (FY 2027):
i. EDF-1 (Dark Fiber Licensing Services), and
ii. EDF-2 (Dark Fiber Service Connection Fees); and

7. For Storm Water Management, a Resolution (Attachment G):
a. Amending the Storm Water Management Fee Rate Schedule, consistent with the applicable Consumer Price Index, D-1 effective July 1, 2026 (FY 2027):
i. D-1 (General Storm and Surface Water Drainage)

EXECUTIVE SUMMARY
The City of Palo Alto Utilities (CPAU) provides electricity, water, wastewater, natural gas, and fiber optic services to the Palo Alto community. The Public Works Department also provides refuse collection and processing for recycling, compost, and garbage, wastewater treatment and storm water management. The recommended resolutions propose rate schedules for these services in FY 2027, beginning July 1, 2026, and present the financial forecasts, reserve management practices, and additional financial adjustments to support the recommended rates, for Council approval as recommended by a majority of the Finance Committee.

The City’s primary goals are to manage these services in a way that ensures continued safe, reliable, environmentally sustainable, and cost-effective operations. The City is proposing rate increases this year for electric, natural gas, refuse, wastewater and water services. Storm water management fees and two Dark Fiber rates will increase per the Consumer Price Index (CPI).

These rate adjustments are necessary to:

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• Cover operating costs: As a municipal utility, CPAU's rates are designed to recover the costs of providing services.
• Invest in infrastructure: Funds are needed for critical projects like modernizing the electric grid, rebuilding the wastewater treatment plant (Regional Water Quality Control Plant), and maintaining the water distribution system.
• Replenish reserves: Utility reserves are currently low due to minimal rate increases during the pandemic, rising commodity prices and past droughts, and need to be restored for financial stability and to prepare for unexpected events.

The city aims to provide safe, reliable, environmentally sustainable, and cost-effective services, and is committed to transparency in communicating these rate changes to customers. Estimates for retail revenue impacts are included in the FY 2027 budget assumptions.

From November 2025 through June 2026, the Utilities Advisory Commission (UAC) and Finance Committee reviewed preliminary and proposed rate changes recommended by staff for Fiscal Year 2027. This report summarizes the meetings and incorporates UAC and Finance Committee recommendations into the recommendations for Council adoption.

The expected residential median utility bill changes are listed below, with the expected overall median utility bill for residential services to increase 8% or approximately $35.20/month in FY 2027:
• 8% increase for Water,
• 16% increase for Wastewater Collection,
• 3% increase for Refuse,
• 4.5% increase for Electric,
• 9% increase for Gas,
• 3% increase for Dark Fiber for pre-2006 commercial customers only, and • 3% increase for Storm Water Management Fee

ANALYSIS
The rate schedules and recommended changes are summarized below, further details for each can be found in the referenced Utilities Advisory Commission and Finance Committee reports.

Water Utility Proposal
The FY 2027 Water Utility rate proposal reflects an 8% distribution rate increase and a 7% commodity rate increase, which is equivalent to an 8% overall system average increase. The Water Utility’s five-year financial forecast projects annual rate increases ranging from 6% to 9% for fiscal years 2028 through 2031 (see Table 1). Both the FY 2027 proposed rate increase and the projected increases in the five-year forecast are lower than those included in the FY 2026 Financial Forecast presented to Council on June 16, 20251 (see Table 1). The 5-year projected distribution rate increases are primarily driven by capital spending. The capital plan’s largest projects include water main replacement projects and seismic improvements 1 Staff Report 2411-3776: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83992 Item 2
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to two reservoirs. Additionally, rate increases continue to reflect inflationary increases to operating costs, revenue impacts from the most recent drought, long-term decline in demand, and low rate increases in earlier years.

On April 28, 2026, the San Francisco Public Utilities Commission adopted a wholesale rate (commodity rate) of $6.23/CCF for FY 2027, representing an increase of $0.43/CCF or 7.4%.

SFPUC also projects a rate increase of 7.5% in FY 2028, 3.4% in FY 2029, 2.3% in FY 2030, and

4.5% in FY 2031, although the projection is highly uncertain and subject to change.

Since the March 17, 2026 Finance Committee meeting3, Staff updated the Water Utility Financial Forecast based on updated SFPUC wholesale rate information and the Committee’s feedback and adopted rate recommendation, as described below and in the tables in Exhibit 2 to Attachment A, which amend the Financial Forecast presented to the Finance Committee on March 17, 2026:

1. Updated FY 2027 water purchase costs from $6.24/CCF to $6.23/CCF, as approved by the SFPUC on April 28, 2026. This decreased FY 2027 Water Purchase costs by $46,000.

2. Updated water purchase costs in FY 2028 through FY 2031 in accordance with the April 28, 2026 SFPUC forecast, as shown in Table 1.

3. Reduced the proposed distribution rate increase from staff’s original 12% to 8%, lowering the overall rate increase from 10% to 8%, consistent with the rate recommendations approved by the UAC on March 4, 20264, and the Finance Committee on March 17, 2026. This update lowered the operations reserve by $1.2 million for FY 2027 and resulted in lower contributions to the Operations Reserve and CIP reserves in subsequent years (see Exhibit 2 to Attachment A for details).

4. Lowered the overall rate increases for fiscal years 2028 and 2029 to 10% from 9% by lowering the distribution rate increases to 11% from 12% for fiscal year 2028 and to 13% from 14% for fiscal year 2029, based on affordability concerns from the UAC and the Finance Committee.

This update lowers the Operations Reserve and CIP reserves for the 5-year forecast period (see Exhibit 2 to Attachment A for details).

5. Adjusted the water sales projections for fiscal years 2028 through 2031 to include assumptions for housing development expected during the forecast period to better align with RHNA-related growth assumptions and future housing development, based on feedback from the Finance Committee.

Compared to the FY26 Water Utility Financial forecast, significant forecast updates include changes to the Water Fund’s CIP, higher than projected reserve balances as of June 30, 2025, and the revised SFPUC commodity rate trajectory (see Table 1). The 5-year CIP budget for fiscal years 2027 through 2031 totals $71.7 million, $5.0 million lower than the prior year’s 5- year budget, and some projects have been deferred to later years within the 5-year period. 3 Staff Report 2512-5604: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86855 4 Staff Report 2512-5639:
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Moreover, as of June 30, 2025, the Operations Reserve balance was $16.5 million, approximately $10.2 million higher than projected levels, and the Rate Stabilization Reserve had a balance of $4.0 million. The positive variance is primarily attributed to salary and benefits expenses and capital expenses in FY 2025 that were lower than forecasted by $3.8 million and $5.4 million, respectively. This positive fiscal year-end result contributes to higher reserve balances over the five-year planning period compared to the FY 2026 Financial Forecast. These updates also contribute to the City’s updated rate projections that are lower compared to the FY 2026 Financial Forecast’s rate projections (see Table 1).

Table 1: 2026 Actual Rate Increases and Projected Water Rate Trajectory from FY 2027 to FY 2031
Figure 1: Water Utility Operations Reserve Adequacy Fiscal Year Ending Balances Proposed Rates
The current rates became effective on July 1, 2025. CPAU has five water rate schedules:
separately metered residential customers (W-1), commercial and master-metered multi-family residential customers (W-4), irrigation-only services (W-7), services to fire sprinkler systems in buildings and private hydrants (W-3), and service to fire hydrant rental meters used for Fiscal Year 2026 2027 2028 2029 2030 2031
FY 2027 Proposal 10% 8% 9% 9% 7% 6%
FY 2026 Forecast 10% 10% 10% 10% 10%
FY 2027 Proposal 17% 8% 11% 13% 9% 7%
FY 2026 Forecast 17% 16% 15% 12% 11%
FY 2027 Proposal 2% 7% 8% 3% 2% 4%
FY 2026 Forecast 2% 1% 1% 5% 8%
Overall System Average Rate Trajectory
Distribution Rate Trajectory
Commodity Rate Trajectory
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construction (W-2). All customers pay a monthly service charge based on the size of their inlet meter. This charge represents metering, billing, and other customer service costs, and also the cost of maintaining the capability to deliver a peak flow for that customer based on their meter size.

Water rates are composed of two general types of costs: distribution and commodity. Proposed distribution rates for the water utility are shown in Tables 2 – 5. The commodity rate is a passthrough of the 7% wholesale water rate increase approved by SFPUC, effective July 1, 2026.

Council approved the pass-through provision for a five year period, effective July 1, 2024.7 Table 2 shows the current and proposed consumption charges, which are distribution rates.

Table 2: Current and Proposed Water Distribution Charges Current Rates
(as of 7/1/2025)
Proposed Rates
(effective 7/1/2026)
Change
($/CCF)
Change
(%)
W-1 (Residential) Volumetric Rates ($/CCF)
Tier 1 Rate 3.49 3.77 0.28 8%
Tier 2 Rate 8.14 8.81 0.67 8%
W-2 (Construction) Volumetric Rates ($/CCF)
Uniform Rate 4.92 5.32 0.40 8%
W-4 (Commercial) Volumetric Rates ($/CCF)
Uniform Rate 4.92 5.32 0.40 8%
W-7 (Irrigation) Volumetric Rates ($/CCF)
Uniform Rate 7.49 8.11 0.62 8%
Table 3 and Table 4 show the current monthly service charges for rate schedules W-1, W-4 and W-7. These monthly service charges are also considered distribution rates.

Table 3: Current and Proposed Water Monthly Service Charges for W-1 Monthly Service Charge
($/month based on meter size)
Change
Meter
Size Current
(as of 7/1/2025)
Proposed
(effective 7/1/2026)
$ %
5/8” 27.63 29.92 2.29 8%
3/4” 27.63 29.92 2.29 8%
1” 27.63 29.92 2.29 8%
1 ½” 89.28 96.69 7.41 8%
2” 138.11 149.57 11.46 8%
3” 292.75 317.04 24.29 8%
4” 520.66 563.87 43.21 8%
7 See Resolution 10176 “Resolution of the Council of the City of Palo Alto Approving the FY 2025 Water Utility Financial Plan and Reserve Transfers, and Increasing Water Rates by Amending Rate Schedules W-1 (General Residential Water Service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master-Metered and General Non-Residential Water Service), and W-7 (Non-Residential Irrigation Water Service),” June 17, 2024.

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6” 1,065.97 1,154.44 88.47 8%
8” 1,961.28 2,124.06 162.78 8%
10” 3,100.74 3,358.10 257.36 8%
12” 4,077.45 4,415.87 338.42 8%
Table 4: Current and Proposed Water Monthly Service Charges for W-4 and W-7 Monthly Service Charge
($/month based on meter size)
Change
Meter
Size Current
(as of 7/1/2024)
Proposed
(effective 7/1/2025)
$ %
5/8” 24.16 26.16 2.00 8%
3/4” 32.31 34.99 2.68 8%
1” 48.59 52.62 4.03 8%
1 ½” 89.28 96.69 7.41 8%
2” 138.11 149.57 11.46 8%
3” 292.75 317.04 24.29 8%
4” 520.66 563.87 43.21 8%
6” 1,065.97 1,154.44 88.47 8%
8” 1,961.28 2,124.06 162.78 8%
10” 3,100.74 3,358.10 257.36 8%
12” 4,077.45 4,415.87 338.42 8%
Table 5 shows the current and proposed monthly service charges for fire services rate schedule W-3.

Table 5: Current and Proposed Water Monthly Service Charges for W-3 Monthly Service Charge
($/month based on meter size)
Change
Meter
Size Current
(as of 7/1/2025)
Proposed
(effective 7/1/2026)
$ %
2” 5.68 6.15 0.47 8%
4” 35.22 38.14 2.92 8%
6” 102.32 110.81 8.49 8%
8” 218.07 236.16 18.09 8%
10” 392.19 424.74 32.55 8%
12” 633.50 686.08 52.58 8%
Wastewater Collection Utility Proposal
The Wastewater Collection Utility financial forecast proposes a 16% rate increase for FY 2027, which is equivalent to approximately $10.70 per residential customer per month. This forecast also projects annual rate increases of 14% in FY 2028, and 6% annually from FY 2029 and FY 2031.

The proposed Wastewater Collection rate trajectory is shown in Table 6 below. The additional funding generated by this rate increase is required to pay for ongoing wastewater treatment and Item 2
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collection operations costs, and collection capital improvement projects (CIP).

Staff updated cost projections for the FY 2027 to FY 2031 five-year financial planning period using the most recent cost data and updated escalation assumptions. Total expenses are expected to increase by an average of about 7% annually over the five-year financial planning period, driven primarily by increased wastewater treatment operating and capital costs as well as collection system CIP costs, partially offset by higher projected capacity fee revenues and lower collection operations costs. Consistent with the FY 2026 financial forecast9, this forecast assumes deferral of the next sewer main replacement project to FY 2028. This approach limits CIP spending to the highest priority projects, allowing the Wastewater Collection Operations Reserve to recover to within guideline levels and avoid the need for a higher rate increase.

Table 6: Projected Wastewater Collection Rate Trajectory from FY 2027 to FY 2031 With the proposed rate trajectory, the Wastewater Collection Operations Reserve is projected to be between the minimum and target guideline levels at the end of FY 2027 through FY 2030, and gradually return to the target level by FY 2031.

Figure 1 shows the Operations Reserve ending balances alongside the minimum, maximum, and target guidelines and risk assessment levels.

Figure 2: Operations Reserve Adequacy Fiscal Year Ending Balances Note: Operations Reserve shown with a minimum balance of $0.

The CIP Reserve has a zero balance due to insufficient wastewater collection revenues to maintain the annual Capital Program Contribution to the CIP Reserve. However, starting in FY 9 Staff Report 2412-3871: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=64772 Item 2
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2027, staff anticipates the wastewater utility can resume contributions to the CIP reserve.

Proposed Rates
The current rates were effective July 1, 2025, when the City increased sewer rates by 20%. The average monthly sewer bill for a Palo Alto single family residential customer is $67 at current rates, which is about 12% lower than the neighboring community average.

CPAU has three sewer rate schedules applicable to current customers: one for residential customers (S-1), one for non-residential customers (other than restaurants) (S-2), and one for restaurants (S-6).

Table 7 below summarizes the current and proposed rates for all customer classes.

Table 7: Current and Proposed Sewer Rates
Current Change
(as of 7/1/2025)
Proposed
(effective 7/1/2026) $ %
Monthly Service Charges ($/Month)
S-1 (Residential) Service Charge $ 67.11 $ 77.84 $ 10.73 16% Water Quantity Rates ($/CCF)
S-2 (Commercial) Quantity Rates $ 12.52 $ 14.52 $ 2.00 16% S-6 (Restaurant) Quantity Rates 18.69 21.68 2.99 16%
The proposed rates for the S-7 (Industrial Discharger) rate schedule are also increasing 16% to the rates shown below:

1. Collection System Operation, Maintenance, and Infiltration Inflow: $7.20 per 100 cubic feet of metered water use.

2. Advanced Waste Treatment Operations and Maintenance Charge: $2.87 per 100 cubic feet of metered water use

3. $352.84 per 1000 pounds (lbs) of COD (Chemical Oxygen Demand)

4. $850.74 per 1000 lbs of SS (Suspended Solids)

5. $5,878.53 per 1000 lbs of NH3 (Ammonia)

6. $25,791.37 per 1000 lbs of toxics (chromium, copper, cyanide, lead, nickel, silver, and zinc)
Refuse Rate Proposal
Refuse rates are designed to recover the City’s costs of collecting, transporting, processing, recycling, composting, and disposing of materials collected curbside, as well as providing extensive waste diversion services, and compliance with State and local regulatory requirements.

The rates are based on the customer level of container size subscription, which provide a bundled comprehensive suite of essential services. The current commercial rates were effective July 1, Item 2
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201611, and the current residential rates were effective July 1, 201712. The proposed rate increase is necessary to meet increasing operating expenses, increased expenses related to the cost-ofliving adjustments based on multiple indices required in the City’s solid waste contracts, including GreenWaste of Palo Alto and GreenWaste Recovery contracts which account for 76% of fund expenses, increased cost for street sweeping and the post-closure monitoring of the City’s closed landfill, and to reduce reliance on the Refuse Fund’s Rate Stabilization Reserve. Staff reviewed the City’s costs of providing refuse collection services and determined that the 3% increase for Fiscal Year 2027 would not exceed those costs. Staff is conducting a more detailed cost of service analysis and comprehensive review of future financial needs and reserve requirements and will use the results to confirm cost allocation to inform next year’s rate-setting actions.

Proposed Rates
The 3% Refuse rate proposal recommendation to increase residential and commercial refuse service rates for Fiscal Year 2027 as presented to the Finance Committee13 was approved unanimously (3-0). The current and proposed residential rates are reflected in Table 8 and the current and proposed rates for the most common commercial service levels are reflected in Table 9 below.

Table 8: Current and Proposed Residential Refuse Monthly Rates Container Size Current Rates Proposed Rates Change
(effective 7/1/2026) $ %
20-gallon $27.81 $28.64 $0.83 3%
32-gallon $50.07 $51.57 $1.50 3%
64-gallon $100.15 $103.15 $3.00 3%
96-gallon $150.22 $154.72 $4.50 3%
Table 9: Current and Proposed Most Common Commercial Refuse Monthly Rates Container Size and Change
Service Frequency
Current Rates Proposed Rates
(effective 7/1/2026) $ %
96-gallon garbage, 1x/week $109.87 $113.16 $3.29 3%
2-cubic yard garbage, 1x/week $309.02 $318.29 $9.27 3%
96-gallon compost, 1x/week $87.90 $90.53 $2.63 3%
2-cubic yard compost, 1x/week $247.21 $254.62 $7.41 3%
11 City Council, June 13, 2016; Agenda Item #9; SR #6932 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=878 12 City Council, June 19, 2017; Agenda Item 14; SR #8171 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=36130 13 Finance Committee, March 17, 2026; Agenda Item #3; SR #2601-5866 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86858 Item 2
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Electric Utility Proposal
The Electric Utility rate forecast proposes a 4.5% overall rate increase for FY 2027. Beyond 2027, the forecast shows additional increases that are slightly lower than the forecasts prepared last year.17 Table 10 shows the proposed rate increases for FY 2027 through FY 2031.

Table 10: Projected Overall Electric Rate Trajectory from FY 2027 to FY 2031 Fiscal Year 2027 2028 2029 2030 2031
FY 2027 Proposal 4.5% 7% 7% 7% 6%
FY 2026 Forecast 6% 8% 8% 6% -
The drivers for lower rate increases relative to last year’s forecast include a new approach to grid modernization described to the Utilities Advisory Commission on January 7, 2026.18 The new “when and where” approach to grid modernization provides the opportunity to delay costly system upgrades until electric customers are ready to replace gas appliances or install EV chargers. This approach lowers the expected rate increases compared with pre-scheduled upgrades by neighborhood. The rate increases in the outer years of the forecast could change as the Council finalizes plans for debt financing grid modernization costs.

In the current year, FY 2026, power supply costs are expected to be slightly lower than forecasted a year ago, mainly due to unexpected extremely high market prices for resource adequacy capacity and renewable energy credits, which have yielded higher wholesale revenues for the City. The City’s load (consumption) for the current year is forecasted to be about 14% higher than previously forecasted but is then expected to be relatively flat over the next several years.

Meanwhile, output from the City’s hydroelectric resources is forecasted to be roughly equal to long-term average levels over the next few years. Hydroelectric revenue continues to be a large source of uncertainty in the City’s supply cost forecasts. In the next five years, staff expect steadily increasing electric supply costs due to increasing transmission access charges, rising renewable portfolio standard requirements, and increasing resource adequacy purchase obligations. Capital spending and distribution system maintenance spending is rising due to grid modernization, a dedicated fiber backbone supporting critical City services, and an upgrade to the Hanover Substation which will benefit all electric ratepayers. Staff expect grid modernization and related capital costs to be offset after a series of debt financing with the first bond issuance in FY 2027.

The Hydroelectric Rate Stabilization Reserve has a balance of $18.8 million, or approximately equal to the reserve’s target level of $19 million. This reserve is used to manage the supply cost impacts associated with variations in generation from hydroelectric resources. Having sufficient 17 The current year (FY 2026) Financial Forecast for the Electric Utility (approved June 16, 2025) is described in the Finance Committee Staff Report 2412-3870 from April 15, 2025:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=64778 Changes made after the Finance Committee Staff Report are described in the City Council Report 2411-3776:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83992 18 Staff Report 2512-5638 Fiscal Year 2026 Mid-Year Electric Grid Modernization Update https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=85181 Item 2
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funds in the reserve allows the City to avoid activating the hydroelectric rate adjuster if an upcoming winter is drier than average. This FY 2027 forecast includes a transfer of an additional $3 million into the Hydroelectric Rate Stabilization Reserve from the Operations Reserve in FY 2027 consistent with guidance from the Finance Committee during its April 21, 2026 meeting.

Staff expect that debt will be issued in FY 2027 to cover the grid modernization costs already spent and planned over the period FY 2025-FY 2029. The Electric Distribution Operations Reserve is forecasted to be low at the end of FY 2026 because it reflects grid modernization costs, commitments, and reappropriations planned to be reimbursed through the debt issuance. On a combined basis, the Electric Distribution and Supply Operations Reserves are within the guideline range and are forecasted to remain within the guideline range throughout the five-year forecast period, FY 2027 to FY 2031.

As directed by the Finance Committee on April 7, 2026, staff reviewed the building permit fees related to PV, ESS, HVAC installations, and new or replacement electric panels less than 400A.

From that review, staff recommends the use of non-rate revenues from the Renewable Energy Certificates (REC) Exchange Program21 to partially offset the cost of PV and ESS permit fees, and the use of proceeds gained through the sale of freely allocated Cap-and-Invest (C&I) allowances or Public Benefits funds to support HVAC incentives, including costs of related work such as panel replacements, utility service upgrades, or building permit fees. For electric panel replacements less than 400A where there is no direct tie to an action supporting building or transportation electrification, staff is recommending that these building permit fees not be subsidized, to encourage customers to participate in an EV charger or HVAC installation at the time of electric panel replacement, versus some uncertain future date.

Staff recommends, as shown in the attached Electric Resolution, that Council direct the use of up to $225,000 in REC Exchange net revenues in FY 2027 to reduce electric customer costs related to photovoltaic generation and energy storage system installations, as local decarbonization efforts, and direct staff to take the following actions:
a. instead of allocating an amount equivalent to the REC Exchange Revenue from the City’s Cap-and-Invest Reserve, allocate up to $225,000 less to the City’s Cap-andInvest Reserve in FY 2027 for other local decarbonization efforts; and b. review existing HVAC incentive levels including consideration of financial offsets to lower the cost of related work including panel upgrades, electric utility service upgrades, or the cost of building permit fees; and c. return to Council within Fiscal Year 2027 to review the Electric Supply Portfolio Carbon Neutral Plan and use of revenues derived from the REC Exchange Program.
21 Reaffirmation of the Carbon Neutral Plan and the Renewable Energy Credit Exchange Program as Recommended by the Utilities Advisory Commission; CEQA Status: Not a project, December 15, 2025 https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=af8b2a 70-d917-4868-baa8-8157048a5cc3
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Proposed Rates
The City adopted its current electric rates effective July 1, 2025. All FY 2026 rates are increased by 4.5% to develop the proposed FY2027 rates. The current and proposed rates are reflected in Table 11 below.

Table 11: Current and Proposed Electric Rates
Rate Schedule
Current Rates
(as of 7/1/25)
Proposed Rates
(effective of 7/1/26)
Change Change
(%)
E-1 (Residential)
Tier 1 Energy ($/kWh) 0.20570 0.21494 0.00924 4.5%
Tier 2 Energy ($/kWh) 0.22944 0.23975 0.01031 4.5%
Customer Charge ($/month) 5.15 5.38 0.23 4.5%
E-2 & E-2-G (Small Non-Residential)
Summer Energy ($/kWh) 0.26485 0.27676 0.01191 4.5%
Winter Energy ($/kWh) 0.17290 0.18067 0.00777 4.5%
Customer Charge ($/month) 6.22 6.49 0.27 4.3%
E-4 & E-4-G (Medium Non-Residential)
Summer Energy ($/kWh) 0.15842 0.16553 0.00711 4.5%
Winter Energy ($/kWh) 0.11429 0.11942 0.00513 4.5%
Summer Demand ($/kW) 49.17 51.37 2.20 4.5%
Winter Demand ($/kW) 26.09 27.25 1.16 4.4%
Customer Charge ($/month) 126.24 131.92 5.68 4.5%
E-7 & E-7-G (Large Non-Residential)
Summer Energy ($/kWh) 0.13792 0.14412 0.00620 4.5%
Winter Energy ($/kWh) 0.08970 0.09372 0.00402 4.5%
Summer Demand ($/kW) 43.61 45.56 1.95 4.5%
Winter Demand ($/kW) 30.57 31.93 1.36 4.4%
Customer Charge ($/month) 578.08 604.09 26.01 4.5%
Under the proposed FY2027 rates, and the median consumption level, the CPAU residential electric monthly bill is about $92.97. This is about 45% lower than the monthly bill for a PG&E customer and about 29% higher than the bill for a City of Santa Clara (Silicon Valley Power) customer with the same consumption level, based on comparable rates effective on January 1, 2026.

Table 12 shows the current rates effective July 1, 2025 and proposed NEM Buyback rates effective July 1, 2026. The details of these rates adjustments were described in the April 21, 2026 Finance Committee meeting staff report23.
23 Staff Report #2512-5603: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87766 Item 2
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Table 12: Current and Proposed Electric NEM Buyback Rates Rate Schedule Current Rates
$/kWh
Proposed Rates
$/kWh
Net Surplus Electricity (E-NSE-1) $0.1012 $0.1064
Export Electricity (E-EEC-1) $0.1206 $0.0990
The City offers an E-16 rate for unmetered electric service for wireless communication facilities and related equipment on wood utility poles and streetlight poles. The E-16 unmetered service rate aligns closely with the E-2 rate for small commercial electric service, excludes costs related to meter reading and is determined based on the energy requirement of equipment specifications. The E-16 rate also includes miscellaneous electric utility charges such as licensing fees for City-owned spare conduit, usable space for utility pole attachments, and mounting communication equipment on utility poles and streetlight poles. In FY 2026, CPAU engaged the services of EES Consulting (EES) to perform a cost of service analysis of the E-16 rate and update the rate schedule to ensure the City is recovering the actual costs of delivering these services. As part of the final cost of service study, EES recommends increasing the miscellaneous unmetered electric service rates by the Consumer Price Index for All Urban Consumers (CPI-U) in the San Francisco area, to recover capital and maintenance expenses associated with utility pole attachments and telecom conduit. This year’s change in CPI-U was 3%, as reported by the Bureau of Labor Statistics.

Gas Utility Proposal
The Gas Utility financial forecast proposes a 9% overall rate increase for FY 2027, which includes a 14.5% increase to distribution rates, assuming no change in supply costs, effective July 1, 2026.

Additionally, this forecast projects overall rate increases of 7% in FY 2028, and 6% annually from FY 2029 through FY 2031. The proposed Gas rate trajectory is shown in Table 13 below.

Table 13: Projected Overall Gas Rate Trajectory from FY 2027 to FY 2031 Staff updated cost projections for the FY 2027 to FY 2031 five-year financial planning period using the most recent load forecast, cost data, and escalation assumptions. Lower-than-projected gas usage is driving the need for a 9% overall rate increase in FY 2027. In FY 2025 gas usage was 8% below the forecast. Staff expects usage to continue to drop by approximately 1.1% annually from FY 2027 through 2031. Relative to the FY 2026 financial forecast25, the updated forecast projects total gas usage to be about on average 4% lower in the FY 2027 to FY 2031 period, resulting in 25 FY 2026 Financial Forecast for the Gas utility (approved June 16, 2025) is described in the Finance Committee Staff Report 2412-3868: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=64777 Item 2
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decreased retail sales revenue.

Operations and Capital Improvement Project (CIP) expenses for critical gas main replacements are also expected to rise over the next five years. These higher expenses are forecasted to reduce the Operations Reserve balance below the risk-assessment threshold at the end of FY 2027. With the proposed set of rate increases, the reserve is projected to recover above the minimum guideline level by FY 2028 and return to target levels by FY 2031. Figure 2 shows the actual and projected year-end balance.

Figure 3: Operations Reserve Projection
General Fund Transfer
The Gas Utility's transfer to the City’s General Fund is a component of the City’s gas rates. This transfer was first authorized by voters in 1950 and reaffirmed in November 2022 with the passage of Measure L, which authorizes a transfer amount up to 18% of the gross revenues of the Gas Utility. This financial forecast proposes a transfer of $10.7 million in FY 2027, 18% of FY 2025 gross revenues. This transfer of 18% is in alignment with the assumptions in the FY 2027 Proposed Budget.

Proposed Rates
Table 14 shows the current and proposed monthly service charges, while Table 15 shows the volumetric charges related to distribution for all rate schedules. Supply-related charges are passthrough charges that update periodically. The latest charges are published online27 in the City’s Rates website. The calculated monthly gas bill based on current rates for the median Palo Alto residential customer is about 11% lower than that of a PG&E customer with equivalent consumption. The proposed rates reflect the proposed rate increases compared to the current rates, which are based on the Natural Gas Cost of Service and Rate Study and were adopted by 27 City’s Gas Monthly Supply Rates: https://www.cityofpaloalto.org/files/assets/public/v/25/utilities/rates-schedulesfor-utilities/residential-utility-rates/monthly-gas-volumetric-and-service-charges-residential-3.pdf Item 2
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City Council at the December 1, 2025 meeting29
.

Table 14: Current and Proposed Gas Monthly Service Charges ($/Month) Rate Schedule Current Rates
(as of 2/1/2026)
Proposed Rates
(effective 7/1/2026)
Change
($)
Change
(%)
G-1 (Residential) $ 19.58 $ 22.41 $ 2.83 14.5%
G-2 (Small Commercial)
G-2 (≤ 220 scfh) $ 29.24 $ 33.47 $ 4.23 14.5%
G-2 (> 220 and < 4,000 scfh) 94.56 108.27 13.71 14.5%
G-2 (≥ 4,000 scfh) 419.08 479.84 60.76 14.5%
G-3 (Large Commercial) $ 1,712.36 $ 1,960.65 $ 248.29 14.5% Table 15: Current and Proposed Gas Distribution Charges ($/Therm) Rate Schedule Current Rates
(as of 2/1/2026)
Proposed Rates
(effective 7/1/2026)
Change
($)
Change
(%)
G-1 (Residential)
Tier 1 Rates $ 1.0456 $ 1.1972 $ 0.1516 14.5%
Tier 2 Rates 2.5203 2.8857 0.3654 14.5%
G-2 (Residential Master-Metered and Small Commercial)
Uniform Rate $ 1.2204 $ 1.3973 $ 0.1769 14.5%
G-3 (Large Commercial)
Uniform Rate $ 1.1874 $ 1.3595 $ 0.1721 14.5%
Fiber Utility Proposal
Since 2007, the EDF-1 and EDF-2 rates for Dark Fiber customers have increased annually by the annual December change in the Consumer Price Index for All Urban Consumers (CPI-U) in the San Francisco area, as stated in their dark fiber license agreements. Based on prior Utilities Advisory Commission and City Council direction, these rate changes are routinely included as part of the Budget adoption process rather than in a separate staff report. This year’s change in CPI-U was 3%, as reported by the Bureau of Labor Statistics. The City has four customers remaining on the pre-2006 EDF-1 rate schedule. All other dark fiber customers are on the EDF-3 rate schedule, for which no increase is proposed.

Storm Water and Surface Water Drainage Proposal
On April 11, 2017, a majority of Palo Alto property owners approved a ballot measure approving a monthly Storm Water Management Fee. This fee funds thirteen storm drainage capital 29 Staff Report 2506-4908: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=84117 Item 2
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improvement projects listed in the ballot measure, enhanced maintenance of the storm drainage system, and a variety of storm water quality protection programs. The approved ballot measure allows for an annual adjustment based on the Consumer Price Index (CPI) for the San Francisco-Oakland-San Jose CSMA or 6%, whichever is less. The Storm Water and Surface Drainage Rate will increase 3%, increasing the monthly charge per Equivalent Residential Unit by $0.53, from $17.61 to $18.14 for Fiscal Year 2027, effective July 1, 2026, to reflect the annual CPI change. See Staff Report 2602-598131 for more information.

TIMELINE
Water, Wastewater Collection, and Refuse Rates
After the June 15th Public Hearing is opened and testimony from members of the public accepted, City Council may choose to:

1. Close the hearing and take action; or

2. Close the hearing and defer action until the close of the Budget Adoption Hearing on June 15th; or

3. Continue the hearing until the end of the Budget Adoption Hearing (should the Budget Adoption Hearing be continued to another Council meeting), and then reconvene the hearing, take any additional water, wastewater collection, and refuse rate testimony, close the hearing, and take action.

The latter option has been used in prior years when the Budget Adoption process has spanned multiple City Council meetings. It is customary in such circumstances to continue to accept written protests up until the hearing is closed. Unless written protests are filed by a majority of affected water, wastewater, or refuse customers, Council may vote on the proposed rate actions.

If approved, the water, wastewater, and refuse rates will become effective July 1, 2026. The City Council will also consider changes to the Financial Forecasts for the water, wastewater collection and refuse utilities, and should they take action to approve these forecasts, they will also become effective July 1, 2026.

Electric, Gas, and Fiber Rates and Utility Financial Forecasts and Storm Water Management Rates The electric, gas, and fiber rates and financial forecasts, and the storm water management rates will be considered at the June 15, 2026 public hearing. Should the City Council take action to approve any or all of these rates, they will become effective July 1, 2026.

FISCAL/RESOURCE IMPACT
The resource impact of the recommendations and rate increases summarized in this report is the continued financial solvency of the various utilities through the revenue increases described below. Table 17 shows the estimated FY 2027 revenue impacts of the recommendations in this report, relative to projected revenue for FY 2027 without changing utility rates. Streetlight 31 Staff Report 2602-5981: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87150 Item 2
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expenses (which are paid from the General Fund) are projected to increase by 4.5% or $0.1 million.

Table 17: Median Residential Bill Increase and Revenue Impact Utility Median Residential
Bill Increase
FY 2027 Estimated
Overall
Revenue Impact
Water 8% $6.2 million
Wastewater Collection 16% $4.9 million
Refuse 3% $1.0 million
Electric 4.5% $10.8 million
Gas 9% $5.5 million33
Storm Water Management 3% $0.2 million
Below are the impacts to the general fund from the adopted 2026 budget to the proposed 2027 budget, related to General Fund Transfers and revenues from utility users tax:
• Water: General Fund utility users tax revenue would increase by $0.2 million from estimated $2.6 million in FY 2026 to $2.8 million in FY 2027. • Electric: General Fund revenues from the Electric Utility General Fund Transfer and utility users tax would increase $0.4 million (from an estimate of $17.6 million in FY 2026 to an estimated $18.0 million in FY 2027) and $0.5 million (from $9.0 million in FY 2026 to $9.5 million in FY 2027), respectively.
• Gas: General Fund revenues from the Gas Utility Equity Transfer would increase from about $9.7 million in FY 2026 to $10.7 million in FY 2027, an increase of $1.0 million.

General Fund utility users tax revenue, in addition to General Fund Revenues, would increase by $0.2 million from estimated $2.8 million in FY 2026 to $3.0 in FY 2027.

Staff proposes the use of Electric Utility’s net revenues from the REC Exchange Program to offset building permit fees. This REC Exchange Program net revenue is non-rate revenue. The use of this revenue will maintain current funding for local decarbonization efforts, including electric customer costs related to photovoltaic generation and energy storage system installations. Up to $225,000 of Net REC Exchange revenue will be used for local decarbonization in FY 2027 while up to $225,000 of equal and offsetting Cap-and-Invest Auction revenues that would have been used for local decarbonization will instead be used for renewable energy purchases.

Resource impacts to City departments and funds of the recommended rate adjustments are programmed in the FY 2027 Proposed Operating Budget. If the final rates adopted by Council in June differ from those proposed in this report, further adjustments may be brought forward as part of the annual budget process.
33 Not including fluctuations in commodity revenue/cost.

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POLICY IMPLICATIONS
Policy implications related to the proposed electric, gas, water, wastewater collection, fiber, storm water management fee, and refuse rate actions are detailed fully in the attached Resolutions and associated exhibits.

STAKEHOLDER ENGAGEMENT
On November 5, 202535, staff presented the preliminary rate proposals at the UAC meeting. The UAC subsequently formed a Subcommittee on December 3, 2025 with a defined scope of reviewing the FY 27 Financial Plan and 5-Year Forecast regarding affordability for the electric and water utilities regarding affordability.

On November 18, 202536, staff presented the same preliminary rate proposals to the Finance Committee. Council members emphasized that the absence of rate increases during the pandemic created a catch-up scenario that should be avoided in the future.

Water
On March 4, 202637, staff presented the Water Utility rate proposal to the UAC, recommending a 12% increase to distribution rates and an 8% increase to commodity rates, for an overall system average increase of 10%. The primary drivers of the proposed distribution rate increase were restoring reserves and funding capital expenses. Commissioners expressed concern that the SFPUC’s FY 2027 wholesale rate increase had risen from the previously projected 1% to 7.4% and noted that wholesale rate projections in subsequent years could increase further. Commissioners also recommended a cost-of-service study, evaluation of rates for different pressure zones, and legal guidance on tiered rates. Commissioners also asked about the proposed $5.5 million transfer from the Operations Reserve to the CIP Reserve and questioned whether reserve guidelines remain appropriate. Some commissioners expressed lack of confidence in the 5-year forecast during the outer years because an updated water master plan was unavailable to inform the capital project forecasts. The UAC then voted 7-0 not to approve the FY 2027 Water Utility Financial Forecast and voted 5-2 to approve both the reserve transfer and an 8% FY 2027 rate increase by decreasing the contribution to the Operations Reserve by $1.2 million from the proposed level.

At the March 17, 202638 Finance Committee, Staff presented its recommendation of an overall 10% rate increase. Council members unanimously supported the UAC’s recommendation of an 8% overall rate increase, while emphasizing the need for clearer public communication and additional analysis. They noted the importance of explaining to residents that although unit rates may increase, conservation can help limit bill impacts because customers use fewer units of water. They also encouraged staff to better communicate that investments in technology, such as AMI, are helping reduce labor costs. They emphasized the importance of communicating that 35 Staff Report 2503-4364: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=84164 36 Staff Report 2508-5119: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83887 37 Staff Report 2512-5639: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86697 38 Staff Report 2512-5604: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86855 Item 2
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rates fund needed investments in infrastructure. A council member noted ongoing coordination with regional partners and other elected officials to obtain additional information from SFPUC.

One council member expressed support for taking a more conservative approach to reserves, while also noting hesitation pending completion of the reserve study by Baker Tilly and requesting additional information on debt capacity. Council members also asked staff to revisit the water sales forecast to better align with RHNA-related growth assumptions and future housing development, and to coordinate with planning staff to confirm which housing unit projections are reflected in the forecast.

Wastewater Collection
On March 4, 202643, staff presented the Wastewater Collection Utility rate proposal to the UAC.

The UAC voted 6-1 to recommend that the City Council adopt a resolution approving the 16% rate increase. Commissioners asked about wastewater treatment costs including underlying drivers, impact on Wastewater Collection utility rates, and potential cost-saving opportunities at the treatment plant. One Commissioner asked about the assumptions underlying projected capacity fee revenues and the risks associated with those projections. Commissioners also inquired about rainwater infiltration and its potential impact on Collection system costs. In addition, one Commissioner asked about the findings of the sewer master plan and recommended improving the staff report narrative, particularly the discussion of FY 2025 actuals and neighborhood bill comparisons.

The Finance Committee reviewed staff’s proposals for the Wastewater Collection Utilities at its March 17, 2026 meeting44 and unanimously approved the proposal.

Refuse
The Finance Committee reviewed staff’s proposals for Refuse rates at its March 17, 2026 meeting45 and the Finance Committee unanimously approved the proposal.

Electric
At the UAC meeting on March 31, 202646, the UAC reviewed the Electric rate proposals and financial forecast and voted 6-1 to approve the staff recommendation.

During the discussion, the UAC Subcommittee reported out on their meeting to discuss Electric rate affordability and reported that they discussed rates in general, data centers, and rebates to low-income customers. The discussion noted that the City’s consultant ran a model and found that the addition of data centers would result in reductions to marginal cost. Additionally, UAC Subcommittee was in agreement with staff’s approach to increase the eligibility thresholds as well as electric discount levels to low-income customers through a separate report to the City Council. One Commissioner requested information in the future showing a histogram of the number of customers at each level of electricity usage and their bill impacts. Commissioners 43 Staff Report 2512-5640: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86546 44 Staff Report 2512-5608: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86854 45 Staff Report 2601-5866: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86856 46 Staff Report 2603-6163: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87029 Item 2
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asked questions about time-of-use rates, indexing rate increases to inflation indices, and reserves.

The April 7, 2026 Finance Committee Meeting included a review of proposed building permit fees related to installation of photovoltaic (PV) systems, energy storage systems (ESS), and electrification51. As a result of this discussion, the Committee directed Utilities Department Staff to develop a rebate program for building permit fees related to PV and ESS. Further, the Committee directed Utilities Department Staff to develop rebate programs related to HVAC systems and new or replacement service panels less than 400A52.

At the Finance Committee meeting on April 21, 202653, a UAC Commissioner summarized the perspectives of the UAC including that the Commission was generally aligned with the current strategy, expressing support for continued investment in grid modernization while stretching project timelines to mitigate near-term rate pressure.

Finance Committee members asked about the load forecast assumptions, second transmission line status, and clarifying resource adequacy for public communication purposes. A Committee member highlighted the importance of communicating that Palo Alto has historically benefited from early procurement of low-cost green energy, generating additional revenue and delivering value to the community.

A Committee member asked about the reason for the $6 million transfer to the hydro stabilization reserve. Staff explained the transfer was to hedge against volatility in hydropower costs driven by drought conditions. While hydropower remains a low-cost resource, it is highly sensitive to water availability, creating exposure to sudden cost increases.

The Finance Committee modified staff’s proposal to transfer the $6 million to the hydro stabilization reserve over a two-year period ($3 million per year), instead of all in FY 2027, with a corresponding reduction in the rate increase. The Finance Committee unanimously approved the staff proposal with this revision.

Gas
On March 31, 202654, staff presented the rate proposal to the UAC. Commissioners voted 4-3 to recommend to maintain an overall rate increase of no more than 7% for FY 2027 through a combination of reducing the General Fund Transfer and potentially using other levers such as reserve levels. Commissioners raised concerns about the gas utility's long-term financial sustainability, highlighting the challenge of planning for end-of-life of the gas system while 51 The April 7, 2026, staff report can be viewed through this link. https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=3f9162f0-a2c5-4baf-942e-cf17727675e1 52 The April 7, 2026 Finance Committee meeting resulted in actions directing staff to develop a rebate program funded through Utilities non-rate revenues that provides subsidies for all fee categories at an amount that approximates the difference between City costs and state caps, and to develop a rebate program funded through Utilities non-rate revenues that provides subsidies for all fee categories at an amount that approximates the proposed cost in Table 2, excluding “Electric Service – New or Replacement 400 amp and Greater.” 53 Staff Report 2512-5603: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87766 54 Staff Report 2512-5641: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87025 Item 2
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managing rising operating and capital costs. Lastly, Commissioners debated the General Fund Transfer assumption, with some recommending a reduction from 18%.

At the Finance Committee meeting on April 21, 202659, a Committee member recommended that future reports more explicitly acknowledge that reserve balances were drawn down during COVID to support lower rate increases, and that current upward rate pressure is partially a consequence of those prior decisions. A Finance Committee member noted recent news from the U.S. Energy Information Administration (EIA) of a potential price spike in FY 2027. Staff responded that they actively monitor market conditions and, based on current trends showing declining prices and high levels of storage staff does not anticipate any spike.

The Committee then discussed the UAC recommendation and Committee members expressed reluctance to reduce the general fund transfer, citing ongoing general fund budget deficits. In response, staff outlined alternative options for lowering the rate increases and there was a discussion of the option to extend the collection of the gas price spike mitigation adder.

Ultimately, the Finance Committee approved the staff’s proposal, which passed on a 2-1 vote.

Stormwater Management
The Finance Committee reviewed staff’s proposals for the Stormwater Management rate increase on April 7, 202660 and unanimously approved the proposal61. The rate increase was subsequently discussed with the Stormwater Management Oversight Committee on April 13, 2026.

This rate increase is in accordance with the Stormwater Management Fee ballot measure passed by a majority of Palo Alto property owners on April 11, 2017.

ENVIRONMENTAL REVIEW
Adoption of the attached Financial Forecasts and budgeted transfers does not meet the California Environmental Quality Act’s definition of a project, pursuant to Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(4) and (5), because it is a governmental fiscal and administrative activity which will not cause a direct or indirect physical change in the environment. Adoption of the proposed water, wastewater collection, refuse, electric, gas, and fiber rates, and the storm water management fee to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption. 59 Staff Report 2512-5607: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87765 60 Finance Committee, April 7, 2026; Agenda Item #1; SR #2602-5981, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87150 61 Finance Committee, April 7, 2026; Agenda Item #1, Action Minutes, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87140 Item 2
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ATTACHMENTS
Attachment A: Resolution for the FY 2027 Water Utility
Attachment B: Resolution for the FY 2027 Wastewater Collection Utility Attachment C: Resolution for the FY 2027 Refuse Rates
Attachment D: Resolution for the FY 2027 Electric Utility Attachment E: Resolution for the FY 2027 Gas Utility
Attachment F: Resolution for the FY 2027 Fiber Optic Utility Attachment G: Resolution for the FY 2027 Storm Water Management Fee Rates Attachment H: Table of URLs for Exhibits to Attachments A - G APPROVED BY:

Alan Kurotori, Director of Utilities
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*NOT YET APPROVED* Attachment A
1 027060226
Resolution No.

Resolution of the Council of the City of Palo Alto Approving the FY 2027 Water Utility Financial Forecast and Reserve Transfer, and Amending Rate Schedules W-1 (General Residential Water Service), W-2 (Water Service from Fire Hydrants), W-3 (Fire Service Connections), W-4 (Residential Master-Metered and General Non-Residential Water Service), and W-7 (Non-Residential Irrigation Water Service)

R E C I T A L S
A. Each year the City of Palo Alto (“City”) assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. The City does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Plans or Forecasts to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspectsof its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices (Attachment A, Exhibit 3) and Water Utility Financial Details (Attachment A, Exhibit 2) attached to this resolution and made a part of the staff report presented to the City Council.

C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.

D. On June 15, 2026, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals.

E. Asrequired by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 15, 2026 public hearing was mailed to all City of Palo Alto Utilities water customers on April 30, 2026.

F. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it waslessthan fifty percent (50%) of the total number of customers and property owners subject to the proposed water rate amendments, therefore a majority protest does not exist against the proposal.

The Council of the City of Palo Alto RESOLVES as follows:

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SECTION 1. The Council hereby approves the Reserves Management Practices (Attachment A, Exhibit 3) and Water Utility Financial Details (Attachment A, Exhibit 2) presented to City Council on June 15, 2026, which are attached to this resolution and made a part of the staff report presented to the City Council.

SECTION 2. The Council hereby approves the transfer of up to $5,500,000 from the Operations Reserve to the CIP Reserve in FY 2026, as described in the FY 2027 Water Utility Financial Forecast.

SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-1 (General Residential Water Service) is hereby amended to read asshown in Attachment A, Exhibit 1. Utility Rate Schedule W-1, as amended, shall become effective July 1, 2026.

SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-2 (Water Service from Fire Hydrants) is hereby amended to read asshown in Attachment A, Exhibit 1. Utility Rate Schedule W-2, as amended, shall become effective July 1, 2026.

SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-3 (Fire Service Connections) is hereby amended to read shown in Attachment A, Exhibit 1. Utility Rate Schedule W-3, as amended,shall become effective July 1, 2026.

SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-4 (Residential Master-Metered and GeneralNon-ResidentialWater Service) is hereby amended to read as shown in Attachment A, Exhibit 1. Utility Rate Schedule W-4, as amended, shall become effective July 1, 2026.

SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule W-7 (Non-Residential Irrigation Water Service) is hereby amended to read as shown in Attachment A, Exhibit 1. Utility Rate Schedule W-7, as amended,shall become effective July 1, 2026.

SECTION 8. The City Council finds asfollows:
a. Revenues derived from the water rates approved by thisresolution do not exceed the funds required to provide waterservice.
b. Revenues derived from the water rates approved by thisresolution shall not be used for any purpose other than providing water service, and the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto, consistent with any limitations imposed by Article XIII C and Article XIII D of the California Constitution. c. The amount of the water ratesimposed upon any parcel or person as an incident of property ownership shall not exceed the proportional cost of the water service attributable to the parcel.

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SECTION 9. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable coststo the City of providing the service orproduct.

SECTION 10. The Council finds that the adoption of this resolution approving the FY 2027 Water Financial Forecast and Reserve transfers does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental review is required. The Council finds that the adoption of this resolution changing water rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
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1 6059756
Resolution No. ______
Resolution of the Council of the City of Palo Alto Approving the FY 2027 Wastewater Collection Utility Financial Forecast and Reserve Management Practices, and Amending Rate Schedules S-1 (Residential Wastewater Collection and Disposal), S-2 (Commercial Wastewater Collection and Disposal), S-6 (Restaurant Wastewater Collection and Disposal) and S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger)

R E C I T A L S
A. Each year the City of Palo Alto (“City”) assessesthe financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. The City does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Forecasts or Plans to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices (Attachment B, Exhibit 3) and Wastewater Collection Utility Financial Details (Attachment B, Exhibit 2) attached to this resolution and made a part of the staff report presented to the City Council.

C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.

D. On June 15, 2026, the City Council held a full and fair public hearing regarding the proposed rate increase and considered all protests against the proposals.

E. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 15, 2026 public hearing was mailed to all City of Palo Alto Utilities wastewater customers on April 30, 2026.

F. The City Clerk has tabulated the total number of written protests presented by the close of the public hearing, and determined that it was less than fifty percent (50%) of the total number of customers and property owners subject to the proposed wastewater rate amendments, therefore a majority protest does not exist against the proposal.

The Council of the City of Palo Alto RESOLVES as follows:

SECTION 1. The Council hereby approves the Reserves Management Practices (Attachment B, Exhibit 3) and Wastewater Collection Utility Financial Details (Attachment B, Exhibit 2) presented to City Council on June 15, 2026, which are attached to this resolution and made a part of the staff report presented to the City Council.

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SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-1 (Residential Wastewater Collection and Disposal) is hereby amended to read as shown in Attachment B, Exhibit 1. Utility Rate Schedule S-1, as amended, shall become effective July 1, 2026.

SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-2 (Commercial Wastewater Collection and Disposal) is hereby amended to read as shown in Attachment B, Exhibit 1. Utility Rate Schedule S-2, as amended,shall become effective July 1, 2026.

SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-6 (Restaurant Wastewater Collection and Disposal) is hereby amended to read as shown in Attachment B, Exhibit 1. Utility Rate Schedule S-6, as amended,shall become effective July 1, 2026.

SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule S-7 (Commercial Wastewater Collection and Disposal – Industrial Discharger) is hereby amended to read as shown in Attachment B, Exhibit 1. Utility Rate Schedule S-7, as amended, shall become effective July 1, 2026.

SECTION 6. The Council finds that the revenue derived from the wastewater rates approved by this resolution do not exceed the funds required to provide wastewater service, and the revenue derived from the adoption of this resolution shall be used only for the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto, consistent with any limitations imposed by Article XIII C and Article XIII D of the California Constitution.

SECTION 7. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product.
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Item 2
Attachment B - Resolution
for the FY 2027 Wastewater
Collection Utility
Item 2: Staff Report Pg. 29 Packet Pg. 40 of 1165
*NOT YET APPROVED* Attachment B
3 6059756
SECTION 8. The Council finds that the adoption of this resolution approving the FY 2027 Wastewater Collection Utility Financial Forecast and Reserve Management Practices does not meet the California Environmental Quality Act’s definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental review is required. The Council finds that the adoption of this resolution changing Wastewater collection rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS
ATTEST:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager
Director ofUtilities
Director of Administrative Services
Item 2
Attachment B - Resolution
for the FY 2027 Wastewater
Collection Utility
Item 2: Staff Report Pg. 30 Packet Pg. 41 of 1165
***NOT YET APPROVED***
1 0290196_20260604_ms29
Attachment C
Resolution No. ______
Resolution of the Council of the City of Palo Alto Amending the Utility Rate Schedules R-1 and R C to Increase Refuse Rate for Fiscal Year 2027

R E C I T A L S
A. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the City Council may by resolution adopt rules and regulations governing utility services, fees, and charges; and B. The City has considered the need for an adjustment in refuse collection rates to reconcile the solid waste revenues with the projected costs of providing refuse services and to minimize reliance on the Refuse Fund Rate Stabilization Reserve and has determined that the proposed refuse collection rates will not result in revenues that exceed the funds required to provide refuse service or in fees imposed on any parcel that exceed the proportional cost of service attributable to that parcel; and
C. Pursuant to Article XIIID Sec. 6 of the California Constitution and Government Code Section 53755, on June 15, 2026 the Council of the City of Palo Alto held a full and fair public hearing to consider all protests against the proposed refuse rate increases; and D. As required by Article XIII D, Section 6 of the California Constitution and applicable law, notice of the June 15, 2026 public hearing was mailed to all City of Palo Alto Utilities refuse customers and property owners on April 30, 2026; and
E. The total number of written protests submitted by parcels receiving refuse collection services, prior to the close of the public hearing, was less than fifty percent (50%) of the total number of parcels subject to the proposed refuse rate increases.

The Council of the City of Palo Alto RESOLVES as follows:

SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule R-1 (Domestic Refuse Collection) is hereby amended to read as shown in Attachment C, Exhibit 1. Utility Rate Schedule R-1, as amended, shall become effective on July 1, 2026.

SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule R-C (Commercial Refuse Collection) is hereby amended to read in as shown in Attachment C, Exhibit 1. The foregoing Utility Rate Schedule R-C, as amended, shall become effective on July 1, 2026.

SECTION 3. The Council finds that the revenue derived from the authorized Item 2
Attachment C - Resolution
for the FY 2027 Refuse
Rates
Item 2: Staff Report Pg. 31 Packet Pg. 42 of 1165
2 0290196_20260604_ms29
Attachment C
adjustments of the refuse collection rates shall be used only for the purpose of providing refuse service and minimizing reliance on the Refuse Fund Rate Stabilization Reserve, the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto, consistent with any limitations imposed by Article XIII C and Article XIII D of the California Constitution.

SECTION 4. The Council finds that the adoption of this resolution amending the Utility Rate Schedules R-1 and R-C to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a).

This action is also not subject to CEQA under 14 CCR Sec. 15378(b)(4), as a fiscal activity that does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:
__________________________ _____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

__________________________ _____________________________ City Attorney or Designee City Manager
_____________________________
Director of Public Works / City Engineer
_____________________________
Director of Administrative Services
Item 2
Attachment C - Resolution
for the FY 2027 Refuse
Rates
Item 2: Staff Report Pg. 32 Packet Pg. 43 of 1165
NOT YET APPROVED Attachment D
1 027060426
Resolution No. _
Resolution of the Council of the City of Palo Alto Approving the Fiscal Year 2027 Electric Utility Financial Forecast and Reserve Transfer, Amending the Electric Utility Reserves Management Practices and Utility Rate Schedules E-1 (Residential Electric Service), E-1 TOU (Residential Time of Use Electric Service), E-2 (Residential Master-Metered and Small Non-Residential Electric Service), E-2-G (Residential Master- Metered and Small Non-Residential Green Power Electric Service), E-4 (Medium Non-Residential Electric Service), E-4-G (Medium NonResidential Green Power Electric Service), E-4 TOU (Medium Non-Residential Electric Time of Use Service), E-7 (Large Non Residential Electric Service), E-7-G (Large NonResidential Green Power Electric Service), E-7 TOU (Large Non-Residential Electric Time of Use Service), E-14 (Street Lights), E-16 (Unmetered Electric Service), E-EEC-1 (Export Electricity Compensation), and E-NSE-1 (Net Metering Surplus Electricity Compensation), and Directing the Use of Up To $225,000 in Renewable Energy Certificate Exchange Net Revenues in Fiscal Year 2027 to Reduce Electric Customers’ Photovoltaic Generation and Energy Storage System Installation Costs

R E C I T A L S
A. Each year the City of Palo Alto (“City”) assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations. This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Forecasts or Plans to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices (Attachment D, Exhibit 3) and Electric Utility Financial Details (Attachment D, Exhibit 2) attached to this resolution and made a part of the staff report presented to the City Council.

C. On April 7, 2026, the Finance Committee directed staff1 to develop financial offsets for building permits related to electrification, photovoltaic (PV) generation, energy storage systems (ESS), HVAC systems, and electric panel upgrades less than 400amps.

D. After review of possible funding sources, which include revenues from the REC 1 April 7, 2026 Action Minutes for item 2:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=18557&compileOutputType=1 Item 2
Attachment D - Resolution
for the FY 2027 Electric
Utility
Item 2: Staff Report Pg. 33 Packet Pg. 44 of 1165
NOT YET APPROVED Attachment D
2 027060426
Exchange Program2, public benefits funds, and Cap-and-Invest program revenues, staff recommend using REC Exchange Program revenues for PV and ESS building permit fees, and using existing efficiency electrification incentive programs to offset the related costs of HVAC systems, including panel upgrades, service upgrades, and building permit fees.

E. The use of REC Exchange Program revenues for local decarbonization requires an offsetting reduction in the allocation of Cap-and-Invest auction revenues to the City’s Cap-andInvest Reserve.

F. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.

G. On June 15, 2026, the City Council heard and approved the proposed rate increase at a noticed public hearing.

The Council of the City of Palo Alto RESOLVES asfollows:

SECTION 1. The Council hereby approves the fiscal year (“FY”) 2027 Amended Electric Utility Reserve Management Practices (Attachment D, Exhibit 3) and Electric Utility Financial Details (Attachment D, Exhibit 2) presented to the City Council on June 15, 2026, which are attached to this resolution and made a part of the staff report presented to the City Council; SECTION 2. The Council hereby approves the transfer of up to $5 million from the Electric Utility Distribution Operations Reserve to the Electric Utility Capital Reserve in FY 2026, as described in the FY 2027 Electric Utility Financial Forecast (Attachment D, Exhibit 2); SECTION 3. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 (Residential Electric Service) is hereby amended to read as shown in Attachment D, Exhibit 1. Utility Rate Schedule E-1, as amended, shall become effective July 1, 2026;
SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 TOU (Residential Time of Use Electric Service) is hereby amended to read as shown in Attachment D, Exhibit 1. Utility Rate Schedule E-1 TOU, as amended, shall become 2 On August 24, 2020, the City Council adopted Resolution 9913, amending the Electric Utility’s Carbon Neutral Plan to permit the exchange of Bucket 1 RECs for Bucket 3 RECS (the REC Exchange Program); Staff report 11556, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86875&dbid=0&repo=PaloAlto&cr=1. In 2022 and 2025 Council directed staff via minute order to allocate an amount equivalent to all of the revenues earned from the REC Exchange Program from the City’s Cap and Trade Reserve to local decarbonization efforts. Staff Report 14735, 12/12/2022, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82045; Staff Report 2510-5281, 12/15/25, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=84126 Item 2
Attachment D - Resolution
for the FY 2027 Electric
Utility
Item 2: Staff Report Pg. 34 Packet Pg. 45 of 1165
NOT YET APPROVED Attachment D
3 027060426
effective July 1, 2026;
SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2 (Residential Master-Metered and Small Non-Residential Electric Service) is hereby amended to read as shown in Attachment D, Exhibit 1. Utility Rate Schedule E-2, as amended, shall become effective July 1, 2026;
SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-2-G (Residential Master-Metered and Small Non-Residential Green Power Electric Service) is hereby amended to read as shown in Attachment D, Exhibit 1. Utility Rate Schedule E-2-G, as amended, shall become effective July 1, 2026; SECTION 7. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 (Medium Non-Residential Electric Service) is hereby amended to read shown in Attachment D, Exhibit 1. Utility Rate Schedule E-4, as amended, shall become effective July 1, 2026;
SECTION 8. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4-G (Medium Non-Residential Green Power Electric Service) is hereby amended to read shown in Attachment D, Exhibit 1. Utility Rate Schedule E-4-G, as amended, shall become effective July 1, 2026;
SECTION 9. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-4 TOU (Medium Non-Residential Time of Use Electric Service) is hereby amended to read shown in Attachment D, Exhibit 1. Utility Rate Schedule E-4 TOU, as amended, shall become effective July 1, 2026; and
SECTION 10. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 (Large Non-Residential Electric Service) is hereby amended to read shown in Attachment D, Exhibit 1. Utility Rate Schedule E-7, as amended, shall become effective July 1, 2026;
SECTION 11. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7-G (Large Non-Residential Green Power Electric Service) is hereby amended to read as shown in Attachment D, Exhibit 1. Utility Rate Schedule E-7-G, as amended, shall become effective July 1, 2026;
SECTION 12. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-7 TOU (Large Non-Residential Time of Use Electric Service) is hereby amended to read as shown in Attachment D, Exhibit 1. Utility Rate Schedule E-7 TOU, as amended, shall become effective July 1, 2026;
Item 2
Attachment D - Resolution
for the FY 2027 Electric
Utility
Item 2: Staff Report Pg. 35 Packet Pg. 46 of 1165
NOT YET APPROVED Attachment D
4 027060426
SECTION 13. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-14 (Street Lights) is hereby amended to read shown in Attachment D, Exhibit

1. Utility Rate Schedule E-14, as amended, shall become effective July 1, 2026; SECTION 14. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-16 (Unmetered Electric Service) is hereby amended to read shown in Attachment D, Exhibit 1. Utility Rate Schedule E-16, as amended, shall become effective July 1, 2026;
SECTION 15. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-EEC-1 (Export Electricity Compensation) is hereby amended to read shown in Attachment D, Exhibit 1. Utility Rate Schedule E-EEC-1, as amended, shall become effective July 1, 2026;
SECTION 16. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-NSE-1 (Net Surplus Electricity Compensation Rate) is hereby amended to read shown in Attachment D, Exhibit 1. Utility Rate Schedule E-NSE-1, as amended, shall become effective July 1, 2026;
SECTION 17. The Council finds that the revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto, consistent with any limitations imposed by Article XIII C and Article XIII D of the California Constitution.

SECTION 18. The Council finds that the fees and charges adopted by thisresolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product.

SECTION 19. The Council directs the use of up to $225,000 in REC Exchange net revenues in FY 2027 to reduce electric customer costs related to photovoltaic generation and energy storage system installations, as local decarbonization efforts, and directs staff to take the following actions:
a. change the funding mechanism for the Cap-and-Invest Reserve to allocate up to $225,000 less in Cap-and-Invest auction revenues in FY 2027 to the City’s Capand-Invest Reserve and instead allocate these funds for other local decarbonization efforts; and
b. review existing HVAC incentive levels including consideration of financial offsets to lower the cost of related work including panel upgrades, electric utility service upgrades, or the cost of building permit fees; and c. return to Council within Fiscal Year 2027 to review the Electric Supply Portfolio Carbon Neutral Plan and use of revenues derived from the REC Exchange Program.

Item 2
Attachment D - Resolution
for the FY 2027 Electric
Utility
Item 2: Staff Report Pg. 36 Packet Pg. 47 of 1165
NOT YET APPROVED Attachment D
5 027060426
SECTION 20. The Council finds that approving the Electric Reserves Management Practices, Electric Financial Forecast, Electric Reserve transfer and Directing the Use of Up To $225,000 in Renewable Energy Certificate Exchange Net Revenues in Fiscal Year 2027 to Reduce Electric Customers’ Photovoltaic Generation and Energy Storage System Installation Costs does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because each is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental assessment is required. The Council finds that changing electric rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain fundsfor capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and CEQA Guidelines Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
Item 2
Attachment D - Resolution
for the FY 2027 Electric
Utility
Item 2: Staff Report Pg. 37 Packet Pg. 48 of 1165
*NOT YET APPROVED* Attachment E
6059758
1 Resolution No.

Resolution of the Council of the City of Palo Alto Approving the Fiscal Year 2027 Gas Utility Financial Forecast, Reserve Transfer and General Fund Transfer, and Amending the Gas Utility Reserves Management Practices and Rate Schedules G-1 (Residential Gas Service), G-2 (Residential Master-Metered and Commercial Gas Service), and G-3 (Large Commercial Gas Service)

R E C I T A L S
A. Each year the City of Palo Alto (“City”) regularly assesses the financial position of its utilities with the goal of ensuring adequate revenue to fund operations, including reserves.

This includes making long-term projections of market conditions, the physical condition of the system, and other factors that could affect utility costs, and setting rates adequate to recover these costs. It does this with the goal of providing safe, reliable, and sustainable utility services at competitive rates. The City adopts Financial Forecasts or Plans to summarize these projections.

B. The City uses reserves to protect against contingencies and to manage other aspects of its operations, and regularly assesses the adequacy of these reserves and the management practices governing their operation. The status of utility reserves and their management practices are included in Reserves Management Practices(Attachment E, Exhibit 3) and Gas Utility Financial Details (Attachment E, Exhibit 2) attached to this resolution and made a part of the staff report presented to the City Council.

C. Pursuant to Chapter 12.20.010 of the Palo Alto Municipal Code, the Council of the City of Palo Alto may by resolution adopt rules and regulations governing utility services, fees and charges.

D. On June 15, 2026, the City Council heard and approved the proposed rate increase at a noticed public hearing.

The Council of the City of Palo Alto RESOLVES as follows:

SECTION 1. The Council hereby approves the fiscal year (“FY”) 2027 Amended Reserves Management Practices (Attachment E, Exhibit 3) and Gas Utility Financial Details (Attachment E, Exhibit 2) presented to the City Council on June 15, 2026, which are attached to this resolution and made a part of the staff report presented to the City Council.

SECTION 2. The Council hereby approves the transfer of up to $1.5 million from the Gas Utility Operations Reserve to the Distribution Rate Stabilization Reserve in FY 2026.

SECTION 3. The Council hereby approves the transfer of up to 18% of gas utility gross revenues received during FY 2025 to the general fund in FY 2027.

SECTION 4. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-1 (Residential Gas Service) is hereby amended to read as shown in Attachment E, Exhibit 1. Utility Rate Schedule G-1, as amended, shall become effective July 1,2026.

Item 2
Attachment E - Resolution
for the FY 2027 Gas Utility
Item 2: Staff Report Pg. 38 Packet Pg. 49 of 1165
*NOT YET APPROVED* Attachment E
6059758
2 SECTION 5. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-2 (Residential Master-Metered and Commercial Gas Service) is hereby amended to read as shown in Attachment E, Exhibit 1. Utility Rate Schedule G-2, as amended, shall become effective July 1, 2026.

SECTION 6. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule G-3 (Large Commercial Gas Service) is hereby amended to read as shown in Attachment E, Exhibit 1. Utility Rate Schedule G-3, as amended, shall become effective July 1, 2026.

SECTION 7. The City Council finds that revenues derived from the gas rates approved by this resolution do not exceed the funds required to provide gas service and shall not be used for any purpose other than providing gas service, and the purposes set forth in Article VII, Section 2, of the Charter of the City of Palo Alto, consistent with any limitations imposed by Article XIII C and Article XIII D of the California Constitution.

SECTION 8. The Council finds that the fees and charges adopted by this resolution are charges imposed for a specific government service or product provided directly to the payor that are not provided to those not charged, and do not exceed the reasonable costs to the City of providing the service or product.
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Item 2
Attachment E - Resolution
for the FY 2027 Gas Utility
Item 2: Staff Report Pg. 39 Packet Pg. 50 of 1165
*NOT YET APPROVED* Attachment E
6059758
3 SECTION 9. The Council finds that approving the FY 2027 Gas Utility Financial Forecast does not meet the California Environmental Quality Act’s (CEQA) definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment, and therefore, no environmental assessment is required.

The Council finds that changing gas rates to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
Item 2
Attachment E - Resolution
for the FY 2027 Gas Utility
Item 2: Staff Report Pg. 40 Packet Pg. 51 of 1165
*NOT YET APPROVED* Attachment F
027060426 1
Resolution No. _________
Resolution of the Council of the City of Palo Alto Amending Rate Schedules EDF-1 (Dark Fiber Licensing Services) and EDF-2 (Dark Fiber Connection Fees)
The Council of the City of Palo Alto RESOLVES as follows:

SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-1 (Dark Fiber Licensing Services) is hereby amended to read as shown in Attachment F, Exhibit 1. Utility Rate Schedule EDF-1, as amended, shall become effective July 1, 2026.

SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule EDF-2 (Dark Fiber Connection Fees) is hereby amended to read as shown in Attachment F, Exhibit 1. Utility Rate Schedule EDF-2, as amended, shall become effective July 1, 2026.

SECTION 3. The Council finds that the revenue derived from the adoption of this resolution shall be used only for the purpose set forth in Article VII, Section 2, of the Charter of the City of Palo Alto, consistent with any limitations imposed by Article XIII C and Article XIII D of the California Constitution.
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Item 2
Attachment F - Resolution
for the FY 2027 Fiber Optic
Utility
Item 2: Staff Report Pg. 41 Packet Pg. 52 of 1165
*NOT YET APPROVED* Attachment F
027060426 2
SECTION 4. The Council finds that the adoption of this resolution amending Dark Fiber utility rates by the Consumer Price Index to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

Assistant City Attorney City Manager
Director of Utilities
Director of Administrative Services
Item 2
Attachment F - Resolution
for the FY 2027 Fiber Optic
Utility
Item 2: Staff Report Pg. 42 Packet Pg. 53 of 1165
Attachment G
***NOT YET APPROVED***
1 0290195_20260604_ms29
Resolution No. ______
Resolution of the Council of the City of Palo Alto Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm Water Management Fee Rates by 3.0% Per Month Per Equivalent Residential Unit for Fiscal Year 2027

R E C I T A L S
A. In April 2017, a majority of property owners approved a ballot measure adopting a monthly Storm Water Management Fee to fund storm drain capital improvements projects, enhanced maintenance of the storm drain system, storm water quality protection programs, and related activities.

B. The ballot measure allowed for annual increases to the fee based on lesser of the local rate of inflation (based on changes to the Consumer Price Index for the San FranciscoOakland-San Jose region as published by the Bureau of Labor Statistics) or 6%.

C. According to the Bureau of Labor Statistics, the Consumer Price Index for the San Francisco-Oakland-San Jose region increased by 3.0% between December 2024 and December 2025.

The Council of the City of Palo Alto RESOLVES as follows:

SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read as shown in Attachment G, Exhibit 1. Utility Rate Schedule D-1, as amended, shall become effective July 1, 2026.

SECTION 2. The Council finds that this rate increase is being imposed to offset the effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator provision of the Storm Water Management Fee ballot measure, which was approved by a majority of Palo Alto property owners on April 11, 2017.

SECTION 3. The Council finds that the revenue derived from the authorized adoption enumerated herein shall be used only for the purposes set forth in the 2017 Storm Water Management Fee ballot measure, and Article VII, Section 2, of the Charter of the City of Palo Alto, consistent with any limitations imposed by Article XIII C and Article XIII D of the California Constitution.
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Item 2
Attachment G - Resolution
for the FY 2027 Storm
Water Management Fee
Rates
Item 2: Staff Report Pg. 43 Packet Pg. 54 of 1165
Attachment G
***NOT YET APPROVED***
2 0290195_20260604_ms29
SECTION 4. The Council finds that the adoption of this resolution changing the Storm Water Management Fee to meet operating expenses, purchase supplies and materials, meet financial reserve needs and obtain funds for capital improvements necessary to maintain service is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15378(b)(4). After reviewing the staff report and all attachments presented to Council, the Council incorporates these documents herein and finds that sufficient evidence has been presented setting forth with specificity the basis for this claim of CEQA exemption.

INTRODUCED AND PASSED:

AYES:

NOES:

ABSENT:

ABSTENTIONS:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM: APPROVED:

City Attorney or Designee City Manager
Director of Public Works
Director of Administrative Services
Item 2
Attachment G - Resolution
for the FY 2027 Storm
Water Management Fee
Rates
Item 2: Staff Report Pg. 44 Packet Pg. 55 of 1165
Attachment H: Table of URLs for Exhibits to Attachments A - G Attachment Exhibit Title URL
A 1 FY27 Water Rate
Schedule
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-a-exhibit-1-fy27-water-rateschedules.pdf A 2 FY27 Water Utility
Financial Details
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-a-exhibit-2-fy27-water-utilityfinancial-details.pdf A 3 FY27 Water Reserve
Management Practices
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-a-exhibit-3-fy27-waterreserve-management-practices.pdf A 4 FY27 Water Utility
Communications Plan
and Samples
https://www.paloalto.gov/files/assets/public/v/2/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-a-exhibit-4-fy27-water-utilitycommunications-plan-and-samples.pdf B 1 FY27 Wastewater
Collection Rate Schedule
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-b-exhibit-1-fy27-wastewatercollection-rate-schedules.pdf B 2 FY27 Wastewater
Collection Utility
Financial Details
https://www.paloalto.gov/files/assets/public/v/2/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-b-exhibit-2-fy27-wastewatercollection-utility-financial-details.pdf B 3 FY27 Water Utility
Reserves Management
Practices
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-b-exhibit-3-fy27-wastewatercollection-reserve-management-practices.pdf B 4 FY27 Wastewater
Collection Utility
Communications Plan
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-b-exhibit-4-fy27-wastewatercollection-utility-communications-plan.pdf C 1 FY27 Refuse Rate
Schedules
https://www.paloalto.gov/files/assets/public/v/2/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-c-exhibit-1-fy27-refuse-rateschedules.pdf D 1 FY27 Electric Rate
Schedules
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-d-exhibit-1-fy27-electric-rateschedules.pdf D 2 FY27 Electric Utility
Financial Details
https://www.paloalto.gov/files/assets/public/v/2/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-d-exhibit-2-fy27-electricutility-financial-details.pdf Item 2
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URLs for Exhibits to
Attachments A-G
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Attachment H: Table of URLs for Exhibits to Attachments A - G Attachment Exhibit Title URL
D 3 FY27 Electric Reserves
Management Practices
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-d-exhibit-3-fy27-electricreserves-management-practices-redline.pdf D 4 FY27 Electric Utility
Communications Plan
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-d-exhibit-4-fy27-electriccommunications-plan.pdf E 1 FY27 Gas Rate Schedules https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-e-exhibit-1-fy27-gas-rateschedules.pdf E 2 FY27 Gas Utility Financial
Details
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-e-exhibit-2-fy27-gas-utilityfinancial-details.pdf E 3 FY27 Gas Reserve
Management Practices
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-e-exhibit-3-fy27-gas-reservemanagement-practices-redline.pdf E 4 FY 27 Gas Utility
Communications Plan
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-e-exhibit-4-fy27-gas-utilitycommunications-plan.pdf F 1 FY27 Fiber Rate
Schedules
https://www.paloalto.gov/files/assets/public/v/1/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-f-exhibit-1-fy27-fiber-rateschedules.pdf G 1 FY27 Storm and Surface
Water Drainage Rate
Schedule
https://www.paloalto.gov/files/assets/public/v/2/agendas-minutesreports/agendas-minutes/city-council-agendasminutes/2026/june/rates/attachment-g-exhibit-1-fy27-storm-andsurface-water-drainage-rate-schedule.pdf Item 2
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URLs for Exhibits to
Attachments A-G
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Administrative Services
Meeting Date: June 15, 2026
Report #:2512-5698
TITLE
PUBLIC HEARING: Adoption of an Ordinance Adopting the Operating and Capital Budgets, Revised Table of Organization, and Municipal Fee Schedule for Fiscal Year 2027; Adoption of a Resolution Proposing the Appropriations Limit for Fiscal Year 2027 - State Law/ City Charter; Accept the Bi-Annual Actuarial Valuation Report of Palo Alto's Retiree Healthcare and Other Post-Employment Benefits (OPEB) as of June 30, 2025 and Approve Annual Actuarially Determined Contribution for Fiscal Years 2027 and 2028; Authorize the City Manager or their Designee to Negotiate and Execute a Memorandum of Understanding and Funding Agreement (or Lease Agreement Amendment) with the Palo Alto Museum to Provide Cost Sharing for Repairs to the Basement and Waterproofing in the Roth Building and Improvements to Heritage Park Drainage

RECOMMENDATION
The Finance Committee and Staff recommend that the City Council hold a public hearing to:

1. Adopt the Fiscal Year 2027 Budget Ordinance (Attachment A), which includes:
• City Manager’s Fiscal Year 2027 Proposed Operating and Capital Budgets, previously distributed at the May 4th City Council Meeting (Attachment A, Exhibit 1) • Amendments to the City Manager’s Fiscal Year 2027 Proposed Operating Budget (Attachment A, Exhibit 2)
• Amendments to the City Manager’s Fiscal Year 2027 Proposed Capital Budget (Attachment A, Exhibit 3)
• Fiscal Year 2027 City Table of Organization (Attachment A, Exhibit 4) • Fiscal Year 2027 Municipal Fee Changes (Attachment A, Exhibit 5)

2. Accept the Fiscal Year 2027 – 2031 Capital Improvement Program (CIP)

3. Adopt a Resolution determining the Appropriations Limit for Fiscal Year 2027 (Attachment B)

4. Accept the June 30, 2025 actuarial valuation of Palo Alto's Retiree Healthcare Plan and fund the annual Actuarially Determine Contribution (ADC) for Fiscal Year 2027 and 2028

5. Authorize the City Manager or their designee to negotiate and execute a Memorandum of Understanding and Funding Agreement (or Lease Agreement Amendment) with the Item 3
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Palo Alto Museum to provide cost sharing for repairs to the basement and waterproofing in the Roth Building and improvements to Heritage Park drainage.

EXECUTIVE SUMMARY
The FY 2027 Adopted Budget will be $1.04 billion including the General Fund Budget of $312.0 million and capital budget across all funds of $316.8 million. The five-year 2027-2031 Capital Improvement Program (CIP) is $1.2 billion. Compared to the proposed budget, General Fund expenses overall increased by $0.9 million, offset by the recognition of estimated new revenue and a reduction of the general fund transfer to the CIP. This net adjustment reflects the combined actions including: restoring partial funding for school crossing guards and Track Watch rail crossing monitors contingent upon PAUSD matching funds, sustaining the Oversized Vehicle (OSV) program at Geng Road alongside enhanced towing capacity, providing a direct allocation to Option C of the Non-Profit Work Plan, capturing target operational savings from Junior Museum & Zoo hourly position reductions, and other technical adjustments. The capital budget across all funds had a net increase of $2.1 million compared to the proposed budget.

This budget recommends citywide staffing levels of 1,089.10 FTE in FY 2027. This is a net increase of 1.00 full-time FTE. Additionally, a reduction of 0.48 FTE Zoological Assistant, a parttime a part-time temporary position, is recommended from the proposed budget.

This memorandum provides all necessary documents and transactions for the City Council adoption of the Fiscal Year (FY) 2027 Operating Budget, Capital Budget, and Municipal Fee schedule effective July 1, 2026, unless otherwise regulated. This action reflects two months of public dialogue by the Council and Finance Committee and provides a summary of all changes to the City Manager’s FY 2027 Proposed Budget received by the Council on May 4, 2026. The necessary supporting documents for formal adoption by the City Council include the FY 2027 Budget Ordinance and the Table of Organization, and Resolution for Appropriations Limit for FY 2027.

On May 19, 2026, the Finance Committee (Staff Report #: 2605-63391) recommended the City Council adopt the FY 2027 budget inclusive of the Final Recommended Changes (and technical changes) section of this memorandum. The Finance Committee voted unanimously (3-0) to recommend adoption of the Operating and Capital Budgets, the Municipal Fee Schedule, and the FY 2027-2031 Capital Improvement Program as amended. However, the motion to fund the approved City Council Administrative Assistant pilot program with FY 2026 funds through December 2026 was split for the purposes of voting and passed on a 2-1 vote. All changes to the Proposed Budget recommended by the Finance Committee are detailed for the FY 2027 Operating Budget, by fund and by department, in Attachment A, Exhibits 2 and 3. 1 Finance Committee, May 19 2026; Agenda Item #1; SR #2605-6339 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=88191&dbid=0&repo=PaloAlto&searchid=ab93b1d 7-9fab-454a-afcb-bedc8a387cdc
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The City continues to make infrastructure a priority through capital project investments in FY 2027 and through the 2027–2031 Capital Improvement Program (CIP). The FY 2027 budget includes projects to maintain current infrastructure such as streets, sidewalks, and facilities as well as enterprise funded capital needs such as electric, gas and water distribution networks and substantial improvements at the Regional Water Quality Control Plant. The 2027–2031 CIP also includes projects to upgrade the City’s infrastructure by accelerating design and construction timelines for key rail crossing Quiet Zone improvements, implementing regional transportation and bicycle pathway enhancements, and continuing multi-year investments in grid modernization and public safety facilities.

At the conclusion of the Finance Committee Budget Hearings, no referrals were recommended as part of staff’s workplan for FY 2027 for Council consideration.

FY 2027 Appropriation Limit
Also included in this staff report is the approval of the FY 2027 Appropriations (Gann) Limit that is required under Article XIIIB to the California State Constitution, as amended by Proposition 98 in 1988 and Proposition 111 in 1990 (Attachment B). The appropriations limit for Fiscal Year 2027 is $246.8 million with net budgeted appropriation subject to the limit of $168.21 million.

The budgeted appropriations are estimated to be $78.59 million under the limit (Attachment B, Exhibit 1).

Actuarial Report of Retiree Healthcare and Other Post-Employment Benefits (OPEB) The City of Palo Alto provides a Retiree Healthcare benefit plan administered by CalPERS. Every two years, staff contracts with an independent actuary to evaluate the plan's status. This actuarial report establishes baseline assumptions to calculate the annual Actuarially Determined Contribution (ADC) and guide trust pre-funding in accordance with Council policy.

The report was provided to Finance Committee on May 19 (Staff Report #: 2512-5689). 3

BACKGROUND
The City Charter requires the City Manager prepare and submit to the Council a budget that provides a clear and complete financial plan for all City activities proposed for the coming budget cycle, or fiscal year. The FY 2027 Proposed Operating and Capital Budgets were released April 24, 2026 and transmitted to the City Council at their meeting on May 4, 2026. These documents represent the planned expenditures and revenues for FY 2027 for the various fund types that constitute the City’s Budget: General Funds, Capital Funds, Enterprise Funds, Internal Service Funds, Special Revenue Funds, and Debt Service Funds. The budget documents contain 3 Finance Committee, May 19, 2026; Agenda Item #2; SR #2512-5689 https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=88190&dbid=0&repo=PaloAlto&searchid=d9f6aacd -de03-4347-9eca-ef790f500ab0
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an overview section with descriptions of each of these fund types and detailed information of the revenues and expenses for each fund as well as for each individual department.

The FY 2027 Proposed Operating and Capital Budgets May 4, 2026 Council Study Session presentation provided an overview of the budget for review and discussion, including Citywide budget strategies, assumptions used in budget development, and a summary of service adjustments. As part of this discussion, the City Council provided guidance to the Finance Committee for their review of the budget documents during hearings on May 5, 6, and 19.

The Finance Committee review of operating and capital budgets is structured around public hearings conducted prior to the City Council adoption to complete a detailed review of the budget documents and to incorporate opportunities for community input into the decisionmaking process. These meetings are organized by service area and include presentations by each City department to highlight areas of emphasis for their respective department and fund(s). The Finance Committee reviews individual budget sections for tentative approval of the budget, potential amendments, and requests for additional information to aid in their review.

Staff held an additional study session on May 11 to check in with the City Council for their feedback before the final budget wrap meeting on May 19. At the conclusion of these hearings (Budget Wrap-Up), the Finance Committee is ultimately tasked to provide recommendations to amend the Proposed Operating and Capital Budgets and Municipal Fee Schedule for City Council consideration. These amendments, and additional information recommended for City Council review, are included in this adoption memorandum.

This memo also includes three additional actions. Two of the actions result in a complete and comprehensive adopted budget approval: the establishment of the statutory Fiscal Year 2027 Appropriations Limit and the acceptance of the bi-annual OPEB Actuarial Valuation Report, with the verified Actuarially Determined Contribution for Fiscal Year 2027 having been fully integrated into the final Adopted Budget. The third authorizes the City Manager to negotiate and execute a Memorandum of Understanding and Funding Agreement with the Palo Alto Museum to provide cost sharing for repairs to the basement and waterproofing in the Roth Building and improvements to Heritage Park drainage.

The City Council adoption of the City Manager’s FY 2027 Proposed Operating and Capital Budgets and FY 2027 Municipal Fee Schedule, including the amendments summarized in the Budget Wrap-up Memorandum on May 19, 2026 (Staff Report #: 2605-6339)5, will represent the ratification of the amendments that were approved by vote through the budget hearings. These amendments include all changes to the Table of Organization. A comprehensive list of meeting materials issued during Finance Committee budget hearings is available on the City website, www.paloalto.gov/budget.
5 Finance Committee, May 19, 2026; Agenda Item #1; 2605-6339, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=88191&dbid=0&repo=PaloAlto&searchid=cd9f5ca8- 35aa-47ce-9a87-5d6c17516935
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ANALYSIS
This report is organized by the following sections:
• FY 2027 Final Recommended Changes: A summary of final direction given by the Finance Committee on May 19th and additional recommended technical and staff adjustments organized by fund type.
• Table of Organization: A summary of additional changes to the Table of Organization because of adjustments made to the proposed budget that was presented to City Council on May 4, 2026.
• Municipal Fee Schedule: A summary of the changes in the review and recommendations to Council for the FY 2026 Municipal Fee Schedule for incorporation in the FY 2027 Proposed Budget (Staff Report #: 2604-6297).7
• FY 2027 Utility Rate Changes: A brief overview of the rate changes reviewed by the Utilities Advisory Commission and Finance Committee and the final decision the City Council will make on June 15, 2026; each of these rate changes are included in the FY 2027 budget assumptions.
• FY 2027 Appropriation Limit Resolution: Review and approval of a resolution based on California Article XIIIB to the State Constitution, as amended by Proposition 98 in 1988 and Proposition 111 in 1990. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. • Attachments: Attached to this report are several documents as outlined and referenced throughout the recommendation language and the report. In addition, links to all the materials presented throughout the budget process to the City Council such as staff reports, At Places Memorandums, presentations made during the budget hearings, and transcripts from City Council Budget Hearings are included.

Although Council only adopts the budget for the upcoming Fiscal Year, the FY 2027 Proposed Budget continues the practice of outlining a long-range balancing strategy, while investing in priority services, infrastructure, and saving for long-term liabilities. The strategy includes revenue enhancements, limiting or reducing ongoing costs and looking for innovations to mitigate the potential for greater future deficits. While there are continued unknowns and uncertainties ahead, the FY 2027 Budget offers the Council, community, and staff the ability to address community priorities while reducing expenses working toward an ongoing balanced financial strategy.

FY 2027 FINAL RECOMMENDED CHANGES
This section reviews amendments to the FY 2027 Proposed Operating and Capital Budgets presented to the City Council on May 4th, including final adjustments recommended by the 7 Finance Committee, May 6, 2026; Agenda Item #4; SR #2604-6297, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87994&dbid=0&repo=PaloAlto&searchid=9902123 d-9a2a-487e-841e-95ad41048777
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Finance Committee and technical adjustments recommended by staff. A comprehensive list of these adjustments by Fund Type, Fund, and Department is included in Attachment A, Exhibit 2 for changes to the FY 2027 Operating Budget, and Attachment A, Exhibit 3 for funding recommended to be reappropriated from FY 2026 to FY 2027 to continue work on capital projects. Changes to the Table of Organization are discussed later in this memorandum, and an updated Table of Organization is included in Attachment A, Exhibit 4.

Overall, these amendments and technical adjustments will adjust the FY 2027 Citywide Budget from a total of $1.05 billion to $1.04 billion. Specifically, this reflects a $1.8 million, or 0.2%, decrease compared to the FY 2027 Proposed Budget across all funds. In addition, amendments to the budget include an increase from the FY 2027 Proposed Budget of net 1.00 FTE full-time staff, an Assistant Engineer in the Office of Transportation and a decrease of one 0.48 FTE part-time staff. These actions result in a total of 1,089.10 full-time positions (592.86 FTE in the General Fund).

OPERATING BUDGET
OPERATING BUDGET – General Fund
Overall, the City’s General Fund FY 2027 budget is recommended to have $312.0 million in revenues, $311.8 million in expenses, and $0.2 million in transfers. This budget addresses the financial challenge through multi-year comprehensive budget balancing strategies including spending reductions focused on greater government efficiencies where cost allocations are realigned to the appropriate funds to reduce reliance on the General Fund and major contracts and appropriations are thoroughly reviewed. Revenue enhancements maximize revenues by reflecting the higher investment earning yield from the recently updated investment policy and portfolio management change. To maintain service continuity, the strategies utilize one-time funding from Measure B, Stanford University Medical Center development agreement final proceeds, and the Hamilton Avenue Benefit Fund to sustain essential community and senior programming. Furthermore, the plan incorporates a CIP reduction that reduces capital funding from projected to appropriated levels, alongside proactive pension cost and liability management using the Section 115 Pension Trust to reduce pension costs and liability.

Budget Stabilization Reserve
The FY 2027 Proposed Budget recommended retaining the BSR at $53.7 million or 17.4% of General Fund Expenditures for FY 2027. As part of the budget actions recommended for adoption by the Finance Committee, the BSR will be maintained at $53.7 million; however, due to the increased budget of $312.0 million, the BSR is projected at 17.2%. This is still below the

18.5% target level, but within the Council’s recommended range of 15-20% of General Fund Expenditures. Staff anticipates a sales tax prior year one-time adjustment will be more favorable than assumed in this financial plan, which may improve the BSR by $2.0 million bringing it to a projected $55.7 million or 17.9% of General Fund expenditures.

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Finance Committee Recommended Adjustments
Throughout budget hearings in May, the Finance Committee engaged in several meetings to review proposed budget documents and recommend tentative adjustments. Two of these adjustments will leverage FY26 budget funding via reappropriations. They include $30,000 for the City Council Administrative Assistant pilot program and $150,000 to support oversized vehicle compliance and enforcement work performed by the Office of Transportation. Table 1 summarizes the Finance Committee General Fund recommended adjustments to the proposed budget.

TABLE 1: FY 2027 General Fund Recommended Budget Adjustments Dept Descriptions FY27
Revenue
FY27
Expense
FY27 Net
Revenue/
(Expense)
FY28/
Ongoing
(Savings)
CSD
JMZ Conservation Costs and explore
utilizing existing conservation programs
to fulfill the AZA requirements to the
extent possible | Reduce Hourly Positions
- (64,000) 64,000 (64,000)
POL School Crossing Guards | Contingent
upon 50% match from PAUSD 51,250 102,500 (51,250) TBD
POL Track Watch | Contingent upon 50%
match from PAUSD (March - June) 307,715 615,430 (307,715) TBD NON
OSV - Geng Road parking site from SeptJune ($200k) and additional towing capacity to include ($184K) for
enforcement and street sweeping.
- 384,000 (384,000) TBD
NON Non-Profit Work Plan - Option C - 124,000 (124,000) TBD PWD
Adjust Canopy contract with total
reduction of $15,000 instead of the
$43,550 and direct staff to communicate
with Canopy regarding scope reductions
- 28,550 (28,550) 28,550
OOT

1.0 FTE Assistant Engineer - Office of
Transportation (leveraging $150K OSV
Reappropriations from FY26)
38,646 38,646 - TBD
OOT Quiet Zone – accelerate design to FY27
and construction to FY28 - 1,000,000 (1,000,000) N/A
NON TOT Revenue Increase and Increase of CIP
Transfer 542,000 542,000 - N/A
NON General Fund Base Transfer to CIP
Decrease - (460,059) 460,059 N/A
NON Use of Measure K | Affordable Housing - (384,000) 384,000 N/A NON Use of Measure K | Transportation - (1,000,000) 1,000,000 N/A Item 3
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Dept Descriptions FY27
Revenue
FY27
Expense
FY27 Net
Revenue/
(Expense)
FY28/
Ongoing
(Savings)
NON Technical Adjustments (net aggregated to
balance) - 12,544 (12,544) N/A
Total 939,611 939,611 -
While the City adopts an annual budget, Finance Committee made recommendations for FY 2027 in consideration of our multi-year budget balancing strategy to reduce the City’s multiyear budget deficit. Table 2 reflects the updated forecast:

TABLE 2: General Fund Long-Range Financial Plan Summary *FY2029 does not reflect fiscal impact of bi-annual OPEB actuarial fluctuation, which staff roughly estimates an additional $2 million of expense appropriation.

While the adjustments in Table 1 above outline the immediate balancing framework for Fiscal Year 2027, there are services and programs not integrated into the City’s formal Long-Range Financial Forecast (LRFF) beyond the upcoming fiscal year within Table 2, as the formal LRFF is published annually in December. In the interim, a preliminary LRFF is published and shown as Table 2. However starting in FY 2028, these programs present an ongoing deficit risk to the General Fund that varies based on the status of Palo Alto Unified School District matching funds. With the 50% cost-share maintained, the ongoing deficit exposure to the General Fund increases by approximately $1.41 million annually, which includes $51,250 for crossing guards and current $854,156 share of the full $1.70 million full fiscal year cost for the Track Watch contract, alongside the fully absorbed $384,000 oversized vehicle program and $124,000 nonprofit allocation. Without the school district cost-share, the deficit exposure increases by approximately $2.31 million annually. These costs will be considered during the next update of the LRFF and especially FY 2028 budget development.

OPERATING BUDGET – Other Funds
Actuarial Report of Retiree Healthcare and Other Post-Employment Benefits (OPEB) The City of Palo Alto provides a Retiree Healthcare benefit plan administered by CalPERS. Every two years, staff contracts with an independent actuary to evaluate the plan's status. This actuarial report establishes baseline assumptions to calculate the annual Actuarially Determined Contribution (ADC) and guide trust pre-funding in accordance with Council policy.

Line Item FY 2027
Forecast
FY 2028
Forecast
FY 2029*
Forecast
Revenue $312.0 $318.7 $329.2
Expenses $311.8 $322.7 $331.1
Transfers (Measure K) $0.2 $(2.3) $1.3
Projected Net Surplus / (Deficit) - $(1.7) $(3.2)
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On May 19, 2026 the Finance Committee reviewed and accepted the June 30, 2025 actuarial valuation of Palo Alto’s Retiree Healthcare Plan and recommended funding the annual ADC for Fiscal Year 2027 and 2028 (Staff Report #: 2512-5689).9 The FY 2027 Budget includes an ADC of $26.1 million, an increase of $3.5 million from FY 2026 Adopted levels of $22.6 million. These costs were included in the FY 2027 Proposed Budget so this action does not require additional appropriation.

Community Development Block Grant (CDBG) Fund
The U.S. Department of Housing and Urban Development requires jurisdictions to prepare a five-year strategic plan, referred to as the Consolidated Plan, and an accompanying Annual Action Plan identifying projects and activities to be funded during the upcoming program year.

On June 1, 2026, the City Council adopted the FY 2026-2027 Annual Action Plan and approved the associated CDBG funding allocations recommended by the Human Relations Commission.

The FY 2027 Budget includes the associated appropriations and incorporation of these federally restricted funds within the CDBG for eligible community development activities benefiting lowand moderate-income residents.

Gas Tax Fund – Gas Tax Revenue Adjustment
This action is a technical update to increase Gas Tax revenue estimates for Palo Alto based on the California Department of Finance’s May 2026 updates for estimated Highway Users Tax Account (HUTA) and Road Maintenance and Rehabilitation Account (RMRA) taxes for FY 2027.

CAPITAL BUDGET
The City’s Capital Improvement Program reflects a $316.8 million FY 2027 budget, and a $1.2 billion program over the 2027-2031 five-year Capital Improvement Program (CIP). Of this, the Capital Improvement Fund FY 2027 budget reflects expected expense of $106.5 million and $390.8 million over the five-year CIP.

Capital Reappropriations
The Municipal Code requires City Council authorization to reappropriate funds for capital projects from one fiscal year to the next. The FY 2027 budget process continues this procedure, and the FY 2027 Proposed Capital Budget included approximately $142.0 million in reappropriated funds for project expenditures across all funds. In the time since the FY 2027 Proposed Budget figures, staff refined the FY 2027 estimated project activity levels and provided further updates to increase the reappropriations by $0.1 million, to $142.1 million across all funds. The additional reappropriation adjustments are summarized in Attachment A, Exhibit 3.
9 Finance Committee, May 19, 2026; Agenda Item #2; 2512-5689, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=88190&dbid=0&repo=PaloAlto&searchid=e07b77d 1-bb65-4a9f-9abc-790ee978c553&cr=1
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Other Capital Project Adjustments
In addition to the reappropriations from FY 2026 to FY 2027, several capital projects need to be adjusted based on updated information that became available after the release of the FY 2027 Proposed Capital Budget or as a result of actions recommended in this memorandum. These adjustments are discussed below and summarized in Attachment A, Exhibit 2.

Capital Improvement Fund
- Art in Public Spaces (AC-86017): Ordinance no. 5301 stipulates that one percent (1%) of the CIP budget be set aside for public art, with certain exceptions. Annual adjustments to allocated amounts are made as the CIP budget changes, and the recommended action does so based on the 2027-31 CIP, reducing the previously programmed FY 2027 budget by $5,100.
- Bicycle and Pedestrian Transportation Plan Implementation (PL-04010): Consistent with Finance Committee action on May 5, 2026, the recommended action reallocates $240,000 of previously programmed FY 2027 expenditure and Measure B LSR revenue to the new Chimalus Shared Use Path (TR-28000) project for use in FY 2028. - Embarcadero Road Improvements (TR-26000): Consistent with Report #2604-6269, the recommended action adds $260,000 of expenditure and Measure B LSR revenue as the second year of funding for the project.
- Quiet Zone Improvements (TR-27000): Consistent with Finance Committee recommendation on May 5, 2026, the recommended action moves $1.0 million of design costs and Measure K revenue from FY 2028 to FY 2027.
- Roth Building Rehabilitation Phase 1 (PF-23001): Consistent with Finance Committee recommendation on May 19, 2026, transfer $250,000 from the Mitchell Park Library (PE24006) to Roth Building Rehabilitation (PF-23001) in case needed. - Heritage Parks Site Amenities Replacement (PG-21000): Consistent with Finance Committee recommendation on May 19, 2026, the recommended action prioritizes evaluating and utilizing the remaining funding in the project for Heritage Park drainage improvements related to Roth Building water intrusion.

Electric Fund
- Foothills Rebuild Fire Mitigation (EL-21001): The recommended action increases the budget by $1.8 million in order to complete the project in December 2026, supporting substructure work, installation of 10,000 feet of underground wire, and removal of 92 wood poles.

TABLE OF ORGANIZATION
During the budget process, changes to the City Table of Organization were processed through both Finance Committee policy recommendations and staff technical adjustments. The Finance Committee recommended adding a 1.00 FTE Assistant Engineer to the Office of Transportation to support the implementation of street safety and oversized vehicle programs. Separately, a adjustment was processed to reduce the addition of a part-time temporary 0.48 FTE Zoological Assistant in the Community Services Department. These specific actions, detailed in Attachment A, Exhibit 2, modify the baseline to establish a citywide staffing level of 1,089.10 FTE in FY 2027, Item 3
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which represents a net increase of 1.00 full-time FTE and a reduction of 0.48 part-time FTE from the previously proposed budget numbers. An updated Table of Organization is included in Attachment A, Exhibit 4.

MUNICIPAL FEE SCHEDULE
The City charges fees for a variety of services, including parking permits, building inspection services, and facility rentals, to ensure that the cost of service is borne by the users receiving the benefit. As part of the annual budget process, departments review and propose updates to existing fees and incorporate previously approved fee actions into the Municipal Fee Schedule.

The Finance Committee reviewed the FY 2027 Proposed Municipal Fee Schedule and recommended approval as outlined in Staff Report #: 2604-629711, included in Attachment A, Exhibit 5.

FISCAL YEAR 2027 RATE CHANGES
An overview of the rate changes was reviewed and approved by the Utilities Advisory Commission (UAC) in April 2026 and Finance Committee on May 6, 2026. These rate changes integrated into the FY 2027 budget (as of this memo).
• 4.5% rate change for Electric (Finance Committee unanimous vote of 4.5% instead of proposed 6% rate increase change)
• 3.0% CPI increase for pre-2006 Dark Fiber customers
• 9.0% rate increase for Gas
• 3.0% rate change for Refuse
• 3.0% CPI increase for Stormwater
• 16.0% rate change for Wastewater
• 8.0% rate change for Water
The proposed rate changes will allow Palo Alto to invest in utility infrastructure, gradually increase reserves to guideline levels, and to support community goals. As utility infrastructure ages, investment is needed to maintain the reliability of the electric, gas, stormwater, wastewater, and water utilities. These rate increases will support the maintenance and replacement of infrastructure including rebuilding Palo Alto’s wastewater treatment plant (Regional Water Quality Control Plant). Investment in modernizing the electric grid will allow the City to achieve the Council’s Sustainability and Climate Action goals.

STAFF REFERRALS
During the Budget Hearings, various items were discussed that did not require additional appropriation but not ultimately approved by Finance Committee as formal Referrals for 11 Finance Committee, May 6, 2026; Agenda Item #4; SR #2604-6297, https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87994&dbid=0&repo=PaloAlto&searchid=9902123 d-9a2a-487e-841e-95ad41048777
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 11 Packet Pg. 68 of 1165
Council consideration. Staff will take into consideration their feedback as a part of FY 2028 budget development and/or work that may already be underway.

APPROPRIATIONS LIMIT FOR FISCAL YEAR 2027
California voters approved an initiative on November 6, 1979, that added Article XIIIB to the State Constitution, as amended by Proposition 98 in 1988 and Proposition 111 in 1990. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of government. The appropriation limit is adjusted annually on the basis of population and per capita income changes provided annually by the California Department of Finance.

Based on Article XIIIB, the City of Palo Alto can use the larger of two measurements of population growth, (county or city population growth) in the appropriations limit calculation.

For Fiscal Year 2027, the City is using the 2025-2026 percent change in population growth of the County of Santa Clara in the calculation. The City typically uses the highest factor in order to provide maximum appropriation flexibility.

The appropriations limit for Fiscal Year 2027 is $246.8 million with net budgeted appropriation subject to the limit of $168.21 million. The budgeted appropriations are estimated to be $78.59 million under the limit (Attachment B, Exhibit 1). As required by State law, documentation used to compute the appropriations limit has been made available to the public at least fifteen days prior to the Council meeting at which the appropriations limit is being adopted, and notice was published of the availability of these materials.

FISCAL/RESOURCE IMPACT
This report summarizes and seeks the City Council approval of the FY 2027 Operating and Capital Budgets, the supporting fee schedules, and table of organization to support the projections and appropriations included.

The approval of the City Manager’s FY 2027 Capital and Operating Budget, as recommended to be amended in this report, would result in a projected General Fund Budget Stabilization Reserve of $53.7 million. At $312.0 million, the BSR is at 17.2%, slightly below the Council’s target of 18.5% and within the recommended range of 15-20% of General Fund Expenditures.

Table 3 summarizes the projected changes to the fund balance for all other funds for budget amendments from Proposed to Adopted FY27 budget. This includes Capital Funds, Enterprise Funds, Internal Services Funds, and Special Revenue Funds, with detail in Attachment A Exhibits 2 and 3.

Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 12 Packet Pg. 69 of 1165
TABLE 3: Resource Impact of Amendments to Proposed Budget (Non-General Funds with Fund Balance Change)
Fund Type Fund Name Fund Balance Change
Capital Capital Improvement Fund ($373.8k)
Capital Infrastructure Fund $1.2k
Airport Fund $10.6k
Electric Funds $9,976.9k
Fiber Fund $13.9k
Gas Fund $2,413.5k
Refuse Fund $12.1k
Stormwater Management Fund $13.8k
Wastewater Collection Fund ($2,871.7k)
Wastewater Treatment Fund $178.3k
Enterprise
Water Fund $1,009.6k
Internal Service General Benefits Fund ($6,183.3k)
Liability Insurance Fund $0.7k
Printing & Mailing Fund $0.6k
Technology Fund $30.0k
Vehicle Replacement & Maintenance Fund $235.4k
Worker’s Compensation Fund $1.2k
Community Development Block Grant Fund ($565.0k)
Gas Tax Fund $132.k
Public Art Fund $1.0k
Housing In-Lieu/Residential Fund $0.1k
Housing In-Lieu/Commercial Fund $0.1k
Residential Preferential Parking Permits
Fund
$1.4k
University Avenue Parking Permits $12.8k
Special Revenue
California Avenue Parking Permits $6.5k

STAKEHOLDER ENGAGEMENT
Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 13 Packet Pg. 70 of 1165
The budget process is structured around public hearings conducted before City Council adoption to complete a detailed review of the budget documents and incorporate opportunities for community input in the decision-making process. The community was encouraged to engage with the budget process through scheduled public meetings with the Finance Committee and City Council, a community informational session with City staff, and direct emails to the City Manager and City Council. Additionally, the City maintains a dedicated webpage for meeting materials and other budget information13

ENVIRONMENTAL REVIEW
Adoption of the City budget and associated actions is not a project under California Environmental Quality Act (CEQA) Guidelines because it is a government fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines Section 15378(b)(4).

ATTACHMENTS
Attachment A - FY 2027 Budget Adoption Ordinance
Attachment A, Exhibit 1 - Fiscal Year 2027 Proposed Budgets & Municipal Fee Schedule Attachment A, Exhibit 2 and 3 - Amendments to the Fiscal Year 2027 Proposed Budgets Attachment A, Exhibit 4 - Table of Organization
Attachment A, Exhibit 5 - Fiscal Year 2027 Municipal Fee Changes Attachment B - FY 2027 City Appropriations Limit Resolution Attachment B, Exhibit 1 - Appropriations Limit Calculation Attachment C - FY 2027 Summary of Stanford Investments
APPROVED BY:

Lauren Lai, Administrative Services Director
13 City’s Budget Website: www.cityofpaloalto.org/budget Item 3
Item 3 Staff Report
Item 3: Staff Report Pg. 14 Packet Pg. 71 of 1165
1 ATTACHMENT A
ORDINANCE NO. XXXX

ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING THE BUDGET FOR FISCAL YEAR 2027
SECTION 1. The Council of the City of Palo Alto finds and determines as follows:

A. Pursuant to the provisions of Section 6(g) of Article IV of the Charter of the City of Palo Alto and Chapter 2.28 of the Palo Alto Municipal Code, the City Manager has prepared and submitted to the City Council, by letter of transmittal, a budget proposal for Fiscal Year 2027; and B. Pursuant to the provisions of Section 12 of Article III of the Charter, the Council did, on June 15, 2026, hold public hearings on the budget after publication of notice in accordance with Section 2.28.070 of the Palo Alto Municipal Code; and
C. In accordance with the provisions of Chapter 8 of Division 1, of Title 7, commencing with Section 66016 of the Government Code, as applicable, the Council did on June 15, 2026, hold a public hearing on the proposed amendments to the Municipal Fee Schedule, after publication of notice and after availability of the data supporting the amendments was made available to the public at least 10 days prior to the hearing.

SECTION 2. Pursuant to Chapter 2.28 of the Palo Alto Municipal Code, the following documents, collectively referred to as “the budget” are hereby approved and adopted for Fiscal Year 2026:
(a) The budget document (Exhibit “1”) containing the proposed operating and capital budgets submitted on May 4, 2026, by the City Manager for Fiscal Year 2027, entitled “City of Palo Alto - City Manager’s Fiscal Year 2027 Proposed Budget” covering General Government Funds, Enterprise Funds, Special Revenue Funds, and Internal Service Funds, a copy of which is on file in the Department of Administrative Services, to which copy reference is hereby made concerning the full particulars thereof, and by such reference is made a part hereof; and (b) The Amendments to the City Manager’s Fiscal Year 2027 Proposed Budget, attached hereto as Exhibit “2” and Exhibit “3” and made a part hereof; and (c) Changes and revised pages in the Table of Organization, as displayed on pages 515 Item 3
Attachment A - FY 2027
Budget Adoption Ordinance
Item 3: Staff Report Pg. 15 Packet Pg. 72 of 1165
2 ATTACHMENT A
through 536 in “Exhibit 1,” and amended in Exhibit “4” made a part hereof; and (d) Fee changes of the Municipal Fee Schedule attached hereto as Exhibit “5” including changes recommended in the Planning and Municipal Cost of Services Study attached hereto as Exhibit “6” and the Citywide Cost of Services Study attached hereto as Exhibit “7
SECTION 3. The sums set forth in the budget for the various departments of the City, as herein amended, are hereby appropriated to the uses and purposes set forth therein.

SECTION 4. All expenditures made on behalf of the City, directly or through any agency, except those required by state law, shall be made in accordance with the authorization contained in this ordinance and the budget as herein amended.

SECTION 5. Appropriations for the Fiscal Year 2026 that are encumbered by approved purchase orders and contracts for which goods or services have not been received or contract completed, and/or for which all payments have not been made, by the last day of the Fiscal Year 2026 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2027.

SECTION 6. The City Manager is authorized and directed to make changes in the department and fund totals and summary pages of the budget necessary to reflect the amendments enumerated and aggregated in the budget as shown in Exhibit “2” and Exhibit “3” and the Fiscal Year 2026 appropriations carried forward as provided in Section 5.

SECTION 7. As specified in Section 2.04.320 of the Palo Alto Municipal Code, a majority vote of the City Council is required to adopt this ordinance.

SECTION 8. As specified in Section 2.28.140(b) of the Palo Alto Municipal Code, the Council of the City of Palo Alto hereby delegates the authority to invest the City’s funds to the Director of Administrative Services, as Treasurer, in accordance with the City’s Investment Policy for Fiscal Year 2027.

SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit “5” including changes to Impact and In-Lieu Fees in Exhibit “6”.The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer’s burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning & Community Environment Department fees relating to a “development project” as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption.

Item 3
Attachment A - FY 2027
Budget Adoption Ordinance
Item 3: Staff Report Pg. 16 Packet Pg. 73 of 1165
3 ATTACHMENT A
SECTION 10. Fees in the Municipal Fee Schedule are for government services provided directly to the payor that are not provided to those not charged. The amount of this fee does not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to Art.

XIII C, Section 1(e)(2), such fees are not a tax.

SECTION 11. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption.

SECTION 12. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary.

INTRODUCED AND PASSED: Enter Date Here
AYES:

NOES:

ABSENT:

ABSTENTIONS:

NOT PARTICIPATING:

ATTEST:

City Clerk Mayor
APPROVED AS TO FORM:

APPROVED:

City Attorney
City Manager
Director of Administrative Services
Item 3
Attachment A - FY 2027
Budget Adoption Ordinance
Item 3: Staff Report Pg. 17 Packet Pg. 74 of 1165
ATTACHMENT A, EXHIBIT 1
Fiscal Year 2027 City Manager’s
Proposed Operating & Capital Budgets and Municipal Fees These documents were originally distributed on May 4, 2026. Printed copies of the Proposed Budgets are available upon request for $52 per book (FY 2027 fee).

Printed copies of the Municipal Fees are available upon request for $10 per book.

These documents may be viewed at any City of Palo Alto Library or the City’s website: www.paloalto.gov/budget
Changes to the Municipal Fee Schedule were distributed in the Finance Committee Packet on May 6, 2026. The City Manager’s Staff Report (#2604-6297) can be viewed on the City’s website: CoPA Laserfiche WebLink: Staff Report 2604-6297
In addition, various at places memorandum and presentations were presented throughout the Finance Committee Hearings in May 2026 to provide additional information. These documents can be found on the City’s budget website under “FY 2027 Budget Process”: www.paloalto.gov/budget
Item 3
Attachment A, Exhibit 1 -
Fiscal Year 2027 Proposed
Budgets & Municipal Fee
Schedule
Item 3: Staff Report Pg. 18 Packet Pg. 75 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment
GENERAL FUND (102 & 103)
Administrative
Services
Staffing Adjustment
This action reclasses the Senior Management Analyst in the Real Estate Division to a Management Analyst to redistribute workload within the department with partial offset capacity for remaining grant-related tasks; on-going savings begin in FY 28.
- $ - $ -
Non-Departmental Oversized Vehicle Initiative (OSV)
Consistent with Finance Committee's direction, this action allocates funding to the Oversized Vehicle Initiative. Finance Committee recommends City Council to consider potential alternative funding methods for the Geng Road parking site from September through June ($200k) and additional towing capacity to include ($184K) for enforcement and street sweeping. (One-time cost: $384,000) $ - $ 384,000
Non-Departmental Use of Measure K Reserve for Housing Affordability This action utilizes funding from the Reserve for Business Tax Housing Affordability to support additional funding needs for the Oversized Vehicle Program (OSV).
$ - $ (384,000)
Non-Departmental Use of Measure K Reserve for Transportation This action utilizes funding from the Reserve for Business Tax Transportation to support the Capital Improvement Program (CIP). $ - $ (1,000,000)
Non-Departmental Use of Measure K Reserve for Transportation This transfers funds to the Capital Improvement Program to support advancing of the Quiet Zone Improvements (TR-27000) Project.
$ 1,000,000
Non-Departmental Major Tax Updates Revenue Adjustment (TOT) This action increases Transient Occupancy Tax (TOT) revenue estimates, reflecting a ~2.5% increase on projected receipts, and increases transfers to the Capital Improvement Fund.
$ 542,000 $ 542,000
Non-Departmental Major Tax Updates Revenue Adjustment (UUT) This action adjusts Utility Users Tax (UUT) revenue estimates based on updated model tracking files. This technical correction decreases the City utility tax baseline by $340,000, partially offset by a $292,000 increase in telephone tax projected receipts. $ (48,000) $ -
Non-Departmental Non-Profit Workplan Option C Funding Increase Finance Committee recommended for FY 2027 Adopted to add a budget adjustment to approve "Option C" of the Non-Profit Workplan. This adjustment provides a direct allocation of to three specific initiatives: Magical Bridge ($150,000), California Avenue special events ($40,000), and the United Nations Association Film Festival ($45,000).
$ - $ 124,000
Non-Departmental Reduction in General Fund Base Transfer to CIP Consistent with the direction from the Finance Committee, this action reduced the General Fund base transfer to the Capital Improvement Program in Fiscal Year 2027.
$ - $ (460,059)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 19 Packet Pg. 76 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment
GENERAL FUND (102 & 103)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Non-Departmental Early Reappropriation: City Council Executive Assistant Consistent with Finance Committee's direction, this action approves an early reappropriation of unspent prior-year operating balances to support a City Council Executive Assistant position. $ - $ 30,000
Non-Departmental Early Reappropriation: Engineering Services for Oversized Vehicle (OSV) Program
Consistent with Finance Committee's direction, this action approves an early reappropriation of $150,000 in unspent prioryear operating balances to support engineering services for the Oversized Vehicle (OSV) program.
$ - $ 150,000
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for General Fund operating lines. (Ongoing savings: $499,658)
$ (499,658)
Multiple
Departments
Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing costs: $145,818) $ - $ 118,891
Multiple
Departments
Citywide Allocated Interfund Charges True-Up
This technical correction realigns interfund transfers for citywide building facility rentals and municipal utilities. $ (63)
Utilities $ (140,000) $ -
Multiple
Departments
$ - $ 141,379
Planning and
Development
Services

This technical action updates budgeted transfers to reflect the revised electric utility equity transfer forecast.

Electric Retail Revenue Alignment
This technical action updates budgeted transfers to reflect the revised electric utility equity transfer forecast (Ongoing costs:
$141,379)
Solar and Energy Storage Permit Fee Subsidy Program
This action recognizes $225,000 in additional General Fund revenue from increasing photovoltaic (solar) and energy storage system permit fees to full cost recovery and $275,000 in Electric Utility Fund expenditures for rebate programs that offset permit costs and support broader electrification goals. Funding will be provided from available non-rate utility resources.
$ 225,000 $ -
Community Services JMZ Conservation Costs and Program Reduction $ - $ (64,000) Public Works
Consistent with Finance Committee's direction, this action eliminates proposed part-time staffing and associated contract & supplies and materials funding to explore utilizing existing conservation programs to fulfill the AZA. (On-going savings:
$64,000)
Canopy Contract Reduction Adjustment
As Directed by the Finance Committee, this action adjusts the reduction to the Canopy contract for a total reduction of $15,000 instead of the $43,550 originally proposed. Staff is directed to communicate with Canopy regarding scope reductions. (Ongoing costs: $28,550).
$ - $ 28,550
Equity Transfer Adjustment
Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 20 Packet Pg. 77 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment
GENERAL FUND (102 & 103)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Public Works Tree Contract True Up 0.03 $ 4,077
Multiple (PDS &
OOT)

1.40 $ - $ 255,701
Office of
Transportation

1.00 $ 38,646 $ 38,646
Fire $ 29,216
Police 1.00 $ - $ -
Police $ 51,250 $ 102,500
Police
This action corrects a clerical error made during budget development that reduced position #5219 in conflict with a separate action that eliminated that same position.

Citywide 2.0 FTE Planner Restoration
This action restores the operating fund allocations for PCN 790 and 7544 that should not have been eliminated, preserving advanced planning and development safety compliance baselines. (Ongoing costs: $255,701)

1.0 FTE Assistant Engineer Staffing Addition
This funds the addition of 1.0 FTE Assistant Engineer to the Office of Transportation to address oversized vehicle (OSV) and recreational vehicle (RV) impacts, and provide essential technical engineering support and field verification to support the design and delivery of bicycle, pedestrian, and street safety projects.

Salary and Benefit Technical Adjustment
This action corrects a clerical error made during budget development. This technical correction is necessary to cleanly align salary and benefit baseline appropriations within the Fire Department. (Ongoing costs: $29,216)

1.0 FTE Police Sergeant Restoration
This action restores 1.0 FTE Police Sergeant. The position is defunded in FY 2027 but will remain in the Table of Organization.

School Crossing Guards Contract Service Restoration
Consistent with Finance Committee's direction, this action restores half of the proposed reduction for crossing guard services, provided that the Palo Alto Unified School District (PAUSD) matches the contribution. This decision aims to maintain critical intersection coverage while targeting a collaborative funding commitment from PAUSD. (Ongoing costs: $51,250)
Track Watch Guard Service Extension
Consistent with Finance Committee's direction, this action extends funding for the rail crossing monitor program (March-June 2027), representing the City's 50% share of the projected total cost for the four-month extension, provided that the Palo Alto Unified School District (PAUSD) matches the contribution. Committee members emphasized that maintaining these safety measures is a vital priority.
$ 307,715 $ 615,430
Fund Balance Adjustment to Fund Balance (Budget Stabilization Reserve) This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ (180,000)
GENERAL FUND (102 & 103) SUBTOTAL 3.43 $ 976,611 $ 976,611 Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 21 Packet Pg. 78 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

CAPITAL IMPROVEMENT FUNDS
CAPITAL IMPROVEMENT FUND (471)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2026 to FY 2027, as outlined in Attachment A, Exhibit 3.

Projects with other recommended adjustments are detailed below.
$ - $ 130,586
OOT Citywide 2.0 FTE Planner Restoration
This action restores the capital fund allocations for PCN 7544 that should not have been eliminated, preserving advanced planning and development safety compliance baselines.
(Ongoing costs: $108,234)

0.60 $ - $ 108,234
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Capital
Improvement Fund. (Ongoing savings: $28,003)
$ - $ (28,003)
Non-Departmental Major Tax Updates Revenue Adjustment (TOT) This action increases Transient Occupancy Tax (TOT) revenue estimates, reflecting a ~2.5% increase on projected receipts, and increases transfers to the Capital Improvement Fund.
$ 542,000 $ -
Non-Departmental Transfer to the Capital Improvement Fund Reduction Consistent with Finance Committee direction on May 19, 2026, this action reduces the base transfer from the General Fund to the Capital Improvement Fund in order to accommodate
operating adjustments in the General Fund.
$ (460,059) $ -
Capital Art in Public Spaces (AC-86017)
This action reduces the previously programmed FY 2027 budget by $5,100. Ordinance no. 5301 stipulates that one percent (1%) of the CIP budget be set aside for public art, with certain exceptions, and annual adjustments to allocated amounts are made in accordance with changes to the proposed CIP budget.
$ - $ (5,100)
Capital Bicycle and Pedestrian Transportation Plan Implementation (PL04010) Consistent with Finance Committee direction on May 5, 2026, this action reallocates $240,000 of previously programmed FY 2027 expenditure and Measure B LSR revenue to the new Chimalus Shared Use Path (TR-28000) project for use in FY 2028.
$ (240,000) $ (240,000)
Capital Embarcadero Road Improvements (TR-26000)
Consistent with Report #2604-6269, this action adds $260,000 of expenditure and Measure B LSR revenue as the second year of funding for the project.
$ 260,000 $ 260,000

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year
2027 Proposed Budgets
Item 3: Staff Report Pg. 22 Packet Pg. 79 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

CAPITAL IMPROVEMENT FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Capital Quiet Zone Improvements (TR-27000)
Consistent with Finance Committee direction on May 5, 2026, this action moves $1.0 million of design costs and Measure K revenue from FY 2028 to FY 2027.
$ 1,000,000 $ 1,000,000
Capital Roth Building Rehabilitation Phase 1 (PF-23001) Consistent with Finance Committee direction on May 19, 2026, this action increases the budget by $250,000 for potential needs in FY 2027 utilizing anticipated FY 2026 savings from the Mitchell Park Library Repair (PE-24006) project.
$ - $ 250,000
Fund Balance Adjustment to Fund Balance (Infrastructure Reserve) This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ (373,776)
CAPITAL IMPROVEMENT FUND (471) SUBTOTAL 0.60 $ 1,101,941 $ 1,101,941 Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year
2027 Proposed Budgets
Item 3: Staff Report Pg. 23 Packet Pg. 80 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

CAPITAL IMPROVEMENT FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET CUBBERLEY INFRASTRUCTURE FUND (472)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Cubberley Property Infrastructure Fund. (Ongoing savings: $1,157) $ (1,157)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 1,157
CUBBERLEY INFRASTRUCTURE FUND (472) SUBTOTAL 0.00 $ - $ - Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year
2027 Proposed Budgets
Item 3: Staff Report Pg. 24 Packet Pg. 81 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS
AIRPORT FUND (530)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Airport Enterprise Fund. (Ongoing savings: $5,138)
$ - $ (5,138)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing savings: $7,971)
$ - $ (5,313)
Capital Capital Improvement Project Amendments to Proposed Reappropriations
This action reflects the impact from adjustments to capital projects as a result of funds recommended to be reappropriated from FY 2026 to FY 2027, as outlined in Attachment A, Exhibit 3. Projects with other recommended adjustments are detailed below.
$ - $ -
Utilities Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing savings: $12) $ - $ (198)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 10,649
AIRPORT FUND (530) SUBTOTAL 0.00 $ - $ -
UTILITIES ADMINISTRATION FUND (521)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Utilities Administration Fund. (Ongoing savings: $18,950)
$ - $ (18,950)
Utilities Utilities Administration Cost Allocation
This action updates Utilities enterprise fund budgets to reflect the allocation of Utilities Administration Fund costs based on headcount. (Ongoing savings: $184,000)
$ (195,876) $ -
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ (176,926)
UTILITIES ADMINISTRATION FUND (521) SUBTOTAL 0.00 $ (195,876) $ (195,876) ELECTRIC FUND (513 & 523)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Electric Fund and Electric Supply Fund. (Ongoing savings: $109,167)
$ - $ (109,167)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 25 Packet Pg. 82 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Planning and
Development Services
$ - $ 275,000
Non-Departmental $ - $ (140,000)
Utilities $ (195,584) $ (4,537)
Utilities $ - $ (127)
Utilities $ - $ 100,000
Utilities $ - $ (12,124,009)
Utilities
Solar and Energy Storage Permit Fee Subsidy Program
This action recognizes $225,000 in additional General Fund revenue from increasing photovoltaic (solar) and energy storage system permit fees to full cost recovery and $275,000 in Electric Utility Fund expenditures for rebate programs that offset permit costs and support broader electrification goals. Funding will be provided from available non-rate utility resources. (Ongoing costs:
$0)
Equity Transfer Adjustment
This technical action updates budgeted transfers to reflect the revised electric utility equity transfer forecast. (Ongoing savings:
$0)
Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing costs: $3,469,098)
Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing costs: $145,818) Reliability and Resiliency Program Support
This one-time action funds hourly staffing support for outreach, education, and program development activities that promote distributed energy resources and support implementation of the Reliability and Resiliency Strategic Plan. (Ongoing costs: $0) Clerical Error Budget Correction
This technical action corrects a duplicate expense entry and does not represent a change in service levels or program funding. (Ongoing savings: $0)
Tree Contract True Up
This action corrects a clerical error made during budget development that reduced position #5219 in conflict with a separate action that eliminated that same position.
(0.03) $ - $ (4,077)
Multiple Departments Citywide Allocated Interfund Charges True-Up This technical correction realigns interfund transfers for citywide building facility rentals and municipal utilities. (Ongoing savings:
$86,880)
$ - $ (92,486)
Capital Foothills Rebuild Fire Mitigation (EL-21001) $ - $ 1,750,000 Fund Balance
This action increases the budget by $1.8 million in order to complete the project in December 2026, supporting substructure work, installation of 10,000 feet of underground wire, and removal of 92 wood poles.

Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 10,153,820
ELECTRIC FUND (513 & 523) SUBTOTAL (0.03) $ (195,584) $ (195,584) FIBER FUND (533)
Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 26 Packet Pg. 83 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Fiber Optics Fund. (Ongoing savings: $8,015)
$ - $ (8,015)
Utilities Utilities Administration Cost Allocation
This action updates Utilities enterprise fund budgets to reflect the allocation of Utilities Administration Fund costs based on headcount. (Ongoing savings: $5,490)
$ - $ (5,844)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 13,859
FIBER FUND (533) SUBTOTAL 0.00 $ - $ -
GAS FUND (514 & 524)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Gas Fund and Gas Supply Fund. (Ongoing savings: $41,690)
$ - $ (41,690)
Utilities Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing savings: $9) $ - $ (21)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing savings: $7,971)
$ - $ (22)
Utilities Clerical Error Budget Correction
This technical action corrects a duplicate expense entry and does not represent a change in service levels or program funding. $ - $ (2,379,750)
Public Works Street Cut Fees and Water Treatment Charges This technical action updates charges to reflect the latest forecasted assumptions.
$ - $ 50,000
Utilities Utilities Administration Cost Allocation
This action updates Utilities enterprise fund budgets to reflect the allocation of Utilities Administration Fund costs based on headcount. (Ongoing savings: $184,000)
$ - $ (42,025)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 2,413,508
GAS FUND (514 & 524) SUBTOTAL 0.00 $ - $ -
Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 27 Packet Pg. 84 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET REFUSE FUND (525)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Refuse Fund. (Ongoing savings: $11,194)
$ - $ (11,194)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing savings: $1,252)
$ - $ (840)
Utilities Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing savings: $49) $ - $ (110)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 12,144
REFUSE FUND (525) SUBTOTAL 0.00 $ - $ -
STORMWATER MANAGEMENT FUND (528)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Stormwater Management Fund. (Ongoing savings: $10,721)
$ - $ (10,721)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing savings: $4,483)
$ - $ (2,988)
Utilities Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing savings: $12) $ - $ (104)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 13,813
STORMWATER MANAGEMENT FUND (528) SUBTOTAL 0.00 $ - $ -
WASTEWATER COLLECTION FUND (527)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Wastewater Collection Fund. (Ongoing savings: $21,261)
$ - $ (21,261)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing savings: $71)
$ - $ (41)
Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 28 Packet Pg. 85 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Public Works $ - $ 2,914,640
Utilities $ - $ (21,605)
Fund Balance
Street Cut Fees and Water Treatment Charges
This technical action updates charges to reflect the latest forecasted assumptions. (Ongoing costs: $2,914,640)
Utilities Administration Cost Allocation
This action updates Utilities enterprise fund budgets to reflect the allocation of Utilities Administration Fund costs based on headcount. (Ongoing savings: $20,296)
Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ (2,871,733)
WASTEWATER COLLECTION FUND (527) SUBTOTAL 0.00 $ - $ -
WASTEWATER TREATMENT FUND (526)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Wastewater Treatment Fund. (Ongoing savings: $60,650)
$ - $ (60,650)
Utilities Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing savings: $12) $ - $ (348)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing savings: $4,483)
$ - $ (117,332)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments

$ - $ 178,330
WASTEWATER TREATMENT FUND (526) SUBTOTAL 0.00 $ - $ 178,330 $ - $ 356,661
WATER FUND (522)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Water Fund. (Ongoing savings: $36,560)
$ - $ (36,560)
Utilities Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing savings: $12) $ (38,016) $ (231)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing savings: $544,231)
$ - $ (26,909)
Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 29 Packet Pg. 86 of 1165
ATTACHMENT A, EXHIBIT 2
FTE Revenues Expenses
Department Adjustment Adjustment Adjustment

ENTERPRISE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Utilities $ - $ (1,000,000)
Public Works $ - $ 50,000
Utilities $ - $ (33,914)
Fund Balance
Water Financial Forecast Update
This technical action updates the Water Operating budget to align with the latest Water Financial Forecast. Emergency generator purchases previously budgeted in operations are now being funded through the Water System Improvements capital project WS-11004. (Ongoing savings: $1,000,000)
Street Cut Fees and Water Treatment Charges
This technical action updates charges to reflect the latest forecasted assumptions. (Ongoing costs: $50,0000)
Utilities Administration Cost Allocation
This action updates Utilities enterprise fund budgets to reflect the allocation of Utilities Administration Fund costs based on headcount. (Ongoing savings: $31,858)
Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 1,009,599
WATER FUND (522) SUBTOTAL 0.00 $ (38,016) $ (38,016)
Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year 2027
Proposed Budgets
Item 3: Staff Report Pg. 30 Packet Pg. 87 of 1165
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

SPECIAL REVENUE FUNDS
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND (232)
Planning and
Development
Services
CDBG FY26-27 Allocation
This action updates the CDBG budget to reflect finalized funding sources and FY 2026-27 Annual Action Plan expenditures. $ 47,139 $ 612,139
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
$ - $ (565,000)
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUND (232) SUBTOTAL $ 47,139 $ 47,139 GAS TAX FUND (231)
NonDepartmentalGas Tax Revenue Increase
This action increases Gas Tax revenue estimates based on the California Department of Finance's May 2026 updates for estimated 2025-26 HUTA and RMRA-SB1 taxes.
$ 131,999 $ -
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
$ - $ 131,999
GAS TAX FUND (231) SUBTOTAL $ 131,999 $ 131,999
PUBLIC ART FUND (207)
Human
Resources
Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Public Art Fund. (Ongoing savings: $1,026)
$ - $ (1,026)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
$ - $ 1,026
PUBLIC ART FUND (207) SUBTOTAL $ - $ -
HOUSING IN-LIEU/RESIDENTIAL FUND (233)
Human
Resources
$ - $ (140)
Fund Balance
Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Housing InLieu Residential Fund. (Ongoing savings: $140) This action adjusts the fund balance to offset the actions $ - $ 140 HOUSING IN-LIEU/RESIDENTIAL FUND (233) SUBTOTAL $ - $ -

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Item 3
Attachment A, Exhibit 2 and
3 - Amendments to the
Fiscal Year 2027 Proposed
Budgets
Item 3: Staff Report Pg. 31 Packet Pg. 88 of 1165
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

SPECIAL REVENUE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET HOUSING IN-LIEU/COMMERCIAL FUND (234)
Human
Resources
Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Housing In-Lieu Commercial Fund. (Ongoing savings: $140)
$ - $ (140)
Fund Balance
j
This action adjusts the fund balance to offset the actions $ - $ 140 HOUSING IN-LIEU/COMMERCIAL FUND (234) SUBTOTAL $ - $ -
RESIDENTIAL PREFERENTIAL PARKING PERMITS FUND (239)
Human
Resources
Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Residential Parking Permit Programs Fund. (Ongoing savings: $1,411) $ - $ (1,411)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
$ - $ 1,411
RESIDENTIAL PREFERENTIAL PARKING PERMITS FUND (239) SUBTOTAL $ - $ - UNIVERSITY AVENUE PARKING PERMITS FUND (236)
Utilities $ - $ (203)
Office of
Transportation
$ - $ (9,684)
Human
Resources
Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations.

Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations.

Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the University Avenue Parking Permits Fund. (Ongoing savings: $2,870)
$ - $ (2,870)
Item 3
Attachment A, Exhibit 2 and
3 - Amendments to the
Fiscal Year 2027 Proposed
Budgets
Item 3: Staff Report Pg. 32 Packet Pg. 89 of 1165
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

SPECIAL REVENUE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
$ - $ 12,756
UNIVERSITY AVENUE PARKING PERMITS FUND (236) SUBTOTAL $ - $ - CALIFORNIA AVENUE PARKING PERMITS FUND (237)
Utilities Water Sales to City True-Up $ - $ (159)
Office of
Transportation
Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing costs: $141,379)
$ - $ (5,562)
Human
Resources
Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the California Avenue Parking Permits Fund. (Ongoing savings: $745)
$ - $ (745)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
$ - $ 6,466
CALIFORNIA AVENUE PARKING PERMITS FUND (237) SUBTOTAL $ - $ - Item 3
Attachment A, Exhibit 2 and
3 - Amendments to the
Fiscal Year 2027 Proposed
Budgets
Item 3: Staff Report Pg. 33 Packet Pg. 90 of 1165
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

INTERNAL SERVICE FUNDS
GENERAL BENEFITS FUND (687)
NonDepartmental$ - $ (900,658)
NonDepartmental$ (10,932,048) $ (3,848,113)
Fund Balance
Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the General Benefits Fund. This brings the total estimated savings in FY 2027 to $2.2 million. (Ongoing savings: $900,658)
General Benefits Fund Alignment
This technical action aligns the revenue and expenses within the General Benefits Fund in to budgetary actions for FY 2027. The General Benefits Fund acts as a pass-through for benefit costs like pension and healthcare costs; therefore this action aligns expenditures and anticipated revenues correspondingly.
(Ongoing cost: $0)
Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ (6,183,277)
GENERAL BENEFITS FUND (687) SUBTOTAL $ (10,932,048) $ (10,932,048) WORKER'S COMPENSATION FUND (688)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Worker's Compensation Fund. (Ongoing savings: $1,189)
$ - $ (1,189)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 1,189
WORKER'S COMPENSATION FUND (688) SUBTOTAL $ - $ -
LIABILITY INSURANCE FUND (689)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Liability Insurance Fund. (Ongoing savings: $678)
$ - $ (678)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 678
LIABILITY INSURANCE FUND (689) SUBTOTAL $ - $ -
PRINTING & MAILING FUND (683)

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year
2027 Proposed Budgets
Item 3: Staff Report Pg. 34 Packet Pg. 91 of 1165
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

INTERNAL SERVICE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Printing & Mailing Services Fund. (Ongoing savings: $642)
$ - $ (642)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 642
PRINTING & MAILING FUND (683) SUBTOTAL $ - $ -
TECHNOLOGY FUND (682)
Human Resources Section 115 ADP UAL Savings Correction $ - $ (29,652) Utilities $ - $ (127)
Utilities $ - $ (270)
Fund Balance
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Technology Fund. (Ongoing savings: $29,652)
Water Sales to City True-Up
This technical action adjusts City expenditures to reflect the finalized customer cost allocations. (Ongoing costs: $145,818) Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing costs: $141,379)
Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 30,050
TECHNOLOGY FUND (682) SUBTOTAL $ - $ -
VEHICLE REPLACEMENT & MAINTENANCE FUND (681)
Human Resources Section 115 ADP UAL Savings Correction
This technical action recognizes the outstanding Unfunded Actuarial Liability (UAL) savings anticipated from the FY 2027 Additional Discretionary Payment (ADP) for the Vehicle
Replacement & Maintenance Fund. (Ongoing savings: $10,004) $ - $ (10,004)
Utilities Electric Retail Revenue Alignment
This action updates support funding to reflect the finalized 4.5% electric retail rate increase and revised cost allocations. (Ongoing costs: $141,379)
$ - $ (419)
Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year
2027 Proposed Budgets
Item 3: Staff Report Pg. 35 Packet Pg. 92 of 1165
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment

INTERNAL SERVICE FUNDS

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Public Works Fleet Fuel Contract Reduction
This action reflects a technical adjustment associated with lowered allocated vehicle maintenance charges to departments and the corresponding revenue in the Vehicle Replacement and Maintenance Fund. (Ongoing savings: $225,000)
$ - $ (225,000)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
$ - $ 235,422
VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL $ - $ - Item 3
Attachment A, Exhibit 2 and 3 -
Amendments to the Fiscal Year
2027 Proposed Budgets
Item 3: Staff Report Pg. 36 Packet Pg. 93 of 1165
ATTACHMENT A, EXHIBIT 3
Capital Improvement Plan FY 2026 Reappropriations to FY 2027 Fund Number and Name Project Title
ProjectNumber
ExpenseReappropriationAdjustment(Proposed)
ExpenseReappropriationAdjustment(A2P)
ExpenseReappropriationAdjustmentTOTAL
RevenueReappropriationAdjustment(Proposed)
RevenueReappropriationAdjustment(A2P)
RevenueReappropriationAdjustmentTOTAL
471 ‐ Capital Improvement Fund Americans With Disabilities Act Compliance PF‐93009 450,000 450,000 Animal Shelter Renovation PE‐19002 2,145,239 2,145,239
Art In Public Spaces AC‐86017 1,745,398 1,745,398
Baylands Comprehensive Conservation Plan PG‐17000 43,000 43,000 Baylands Levee Repair for Public Safety Access OS‐09002 29,210 29,210 Bicycle and Pedestrian Transportation Plan Implementation PL‐04010 435,000 435,000 86,300 86,300 Building Systems Improvements PF‐01003 246,030 246,030
California Avenue Streetscape Update PL‐23000 241,000 241,000 Churchill Avenue Enhanced Bikeway PL‐14000 256,000 256,000 1,878,328 1,878,328 Civic Center Electrical Upgrade & EV Charger Installation PE‐17010 1,351,085 1,351,085 174,000 174,000 Civic Center Fire Life Safety Upgrades PE‐18016 324,997 324,997 Civic Center Waterproofing Study and Repairs PE‐15020 941,037 941,037 Downtown Automated Parking Guidance Systems, Access Controls & RPL‐15002 32,898 32,898 Electric Charger Infrastructure Installation PF‐23000 436,857 436,857 Electrification of City Facilities PE‐24001 626,179 626,179 Fire Station 4 Replacement PE‐18004 2,349,248 2,349,248 Fire Training Facility Replacement FD‐24000 49,988 49,988 Foothills Nature Preserve Dam Seepage Investigation and Repairs PE‐20000 100,144 100,144 Foothills Nature Preserve Improvements PE‐21000 494,646 494,646 Heritage Park Site Amenities Replacement PG‐21000 77,586 77,586 JMZ Renovation AC‐18001 185,000 185,000
Johnson Park Renovation PE‐21002 25,000 25,000
Library Automated Material Handling LB‐21000 329,248 329,248 Lucie Stern Community Theater Mechanical Equipment Replacement PE‐24002 1,949,713 1,949,713 Lucie Stern Community Theatre Fire Curtain AC‐24001 200,000 200,000 Mitchell Park Community Center Audio Visual Equipment AC‐26000 340,000 340,000 Municipal Service Center Lighting, Mechanical, and Electrical ImprovemPF‐16006 6,165,504 6,165,504 New California Avenue Area Parking Garage PE‐18000 997,012 997,012 New Downtown Parking Garage PE‐15007 12,896,981 12,896,981 12,896,981 12,896,981 New Public Safety Building PE‐15001 978,087 978,087
Newell Road/San Francisquito Creek Bridge Replacement PE‐12011 976,810 976,810 10,268,732 10,268,732 Off‐Road Pathway Resurfacing And Repair OS‐09001 170,000 (132,000) 38,000 Park and Open Space Emergency Repairs PG‐09002 43,779 43,779 Park Restroom Installation PG‐19000 319,704 319,704 319,704 319,704 Parking District Implementation PL‐15003 193,900 193,900 Performing Arts Venues Seat Replacement AC‐18000 108,023 108,023 Railroad Grade Separation and Safety Improvements PL‐17001 1,999,819 1,999,819 2,093,843 2,093,843 Rinconada Park Improvements PE‐08001 101,150 101,150
Rinconada Pool Family Changing Room PE‐24004 1,158,326 1,158,326 Robles Park Improvements PE‐18015 891,958 891,958
Roofing Replacement PF‐00006 300,000 300,000
San Francisquito Creek Joint Powers Authority Ongoing Creek Projects PE‐22000 54,521 54,521 Traffic Signal and Intelligent Transportation Systems PL‐05030 1,350,000 1,350,000 800,000 800,000 University Avenue Parking Improvements PF‐14003 103,527 103,527 University Avenue Streetscape Update PE‐21004 1,946,000 1,946,000 Mitchell Park Library Repair PE‐24006 50,000 50,000
Palo Alto Art Center Ceramics Equipment AC‐28003 68,527 68,527 Fire Equipment Replacement FD‐25000 279,908 279,908 262,557 262,557 California Avenue Parking District Parking Improvements PF‐25000 50,000 50,000 50,000 50,000

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Item 3: Staff Report Pg. 37 Packet Pg. 94 of 1165
ATTACHMENT A, EXHIBIT 3
Capital Improvement Plan FY 2026 Reappropriations to FY 2027 Fund Number and Name Project Title
ProjectNumber
ExpenseReappropriationAdjustment(Proposed)
ExpenseReappropriationAdjustment(A2P)
ExpenseReappropriationAdjustmentTOTAL
RevenueReappropriationAdjustment(Proposed)
RevenueReappropriationAdjustment(A2P)
RevenueReappropriationAdjustmentTOTAL

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET Baylands Interpretive Signage Program OS‐24001 34,163 34,163 34,163 34,163 Meadow Drive and Charleston Road Rail Grade Separation and Safety PL‐24000 1,593,463 1,593,463 1,197,619 1,197,619 Charleston Road/Alma Street Railroad Crossing Safety Improvements PL‐25002 682,400 682,400 713,248 713,248 Churchill Avenue Rail Grade Separation and Safety Improvements PL‐24001 658,835 658,835 2,000,000 2,000,000 Children's Theatre Facility Upgrade/Repair AC‐28002 125,000 125,000 Charging Stations Repair and Maintenance PF‐26001 92,349 92,349 Ramona Street Streetscape Update PE‐26002 139,328 139,328 PAAC Auditorium Audio Visual Equipment and Facility Public Announc AC‐26001 165,506 165,506 Parking Infrastructure Improvements PL‐12000 200,000 200,000 Congestion Relief Projects PL‐25001 400,000 400,000 400,000 400,000 Emergency Gate at Foothill and Miranda PE‐26003 50,000 50,000 471 ‐ Capital Improvement Fund Total 50,486,497 130,586 50,617,083              ‐ 33,175,475 33,175,475 472 ‐ Cubberley Property Infrastructure Fund Cubberley Community Center Redevelopment CB‐26000 305,061 305,061 Cubberley Repairs CB‐17001 100,000 100,000
472 ‐ Cubberley Property Infrastructure Fund Total                    ‐ 405,061                   ‐ 405,061                                 ‐                                 ‐ 523 ‐ Electric Fund Inter‐substation Line Protection Relay EL‐17005 645,333 645,333 Smart Grid Technology Installation EL‐11014 268,098 268,098 Substation Facility Improvements EL‐89044 974,866 974,866 Underground System Rebuild EL‐16001 612,910 612,910
Hanover Substation Upgrade Project EL‐24001 2,957,140 2,957,140 Colorado 60kV Bus Rebuild EL‐17002 3,498,849 3,498,849
Colorado Transformer #3 Replacement EL‐19001 3,780,000 3,780,000 Grid Modernization 12kV Distribution Residential Rebuild EL‐24000 12,762,653 12,762,653 39,240,000 39,240,000 523 ‐ Electric Fund Total              ‐ 25,499,849 25,499,849              ‐ 39,240,000 39,240,000533 ‐ Fiber Optics Fund Fiber Optics Network ‐ System Improvements FO‐10001 43,310 43,310 Fiber Optics Network ‐ System Rebuild FO‐16000 2,948,211 2,948,211 Fiber‐to‐the‐Premises (FTTP) FO‐24000 7,501,748 7,501,748 533 ‐ Fiber Optics Fund Total              ‐ 10,493,269             ‐ 10,493,269                                 ‐                                 ‐ 524 ‐ Gas Fund Gas Distribution System Improvements GS‐11002 758,910 758,910 Gas Main Replacement ‐ Project 25 GS‐15000 5,138,088 5,138,088 7,500,000 7,500,000 Gas Main Replacement ‐ Project 26 GS‐16000 2,002,190 2,002,190 Gas Meters and Regulators GS‐80019 198,910 198,910
Gas Line Repair at Arastradero Creek GS‐25001 143,916 143,916 524 ‐ Gas Fund Total                ‐ 8,242,014 8,242,014                ‐ 7,500,000 7,500,000528 ‐ Stormwater Management Fund Corporation Way System Upgrades and Pump Station SD‐21000 201,333 201,333 Green Stormwater Infrastructure SD‐22001 1,030,250 1,030,250 1,030,250 1,030,250 Storm Drainage System Replacement And Rehabilitation SD‐06101 882,265 882,265 West Bayshore Road Trunk Line Improvements SD‐23000 19,236 19,236 Center Drive Capacity Upgrades SD‐26001 65,200 65,200
Hamilton Avenue System Upgrades SD‐25000 98,292 98,292
528 ‐ Stormwater Management Fund Total                ‐ 2,296,576 2,296,576                ‐ 1,030,250 1,030,250 527 ‐ Wastewater Collection Fund Sewer Lateral/Manhole Rehabilitation and Replacement WC‐99013 927,852 927,852 Wastewater Collection System Rehabilitation/Augmentation Project 3 WC‐20000 334,530 334,530 527 ‐ Wastewater Collection Fund Total                ‐ 1,262,382                ‐ 1,262,382                                 ‐                                 ‐526 ‐ Wastewater Treatment Fund Headworks Facility Replacement WQ‐16002 2,988,974 2,988,974 2,988,974 2,988,974 New Laboratory And Environmental Services Building WQ‐14002 15,166,602 15,166,602 15,166,602 15,166,602 Outfall Line Construction WQ‐19000 10,593,300 10,593,300 10,582,800 10,582,800 Secondary Treatment Upgrades WQ‐19001 1,112,320 1,112,320 1,112,320 1,112,320 Local Advanced Water Purification System WQ‐19003 1,000,000 1,000,000 1,000,000 1,000,000 Item 3: Staff Report Pg. 38 Packet Pg. 95 of 1165
ATTACHMENT A, EXHIBIT 3
Capital Improvement Plan FY 2026 Reappropriations to FY 2027 Fund Number and Name Project Title
ProjectNumber
ExpenseReappropriationAdjustment(Proposed)
ExpenseReappropriationAdjustment(A2P)
ExpenseReappropriationAdjustmentTOTAL
RevenueReappropriationAdjustment(Proposed)
RevenueReappropriationAdjustment(A2P)
RevenueReappropriationAdjustmentTOTAL

CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2027 PROPOSED BUDGET 526 ‐ Wastewater Treatment Fund Total              ‐ 30,861,196 30,861,196              ‐ 30,850,696 30,850,696 522 ‐ Water Fund Water Distribution System Improvements WS‐11003 96,300 96,300 Water Main Replacement ‐ Project 30 WS‐16001 4,366,839 4,366,839 Water Meters WS‐80015 154,630 154,630
Water Service and Hydrant Replacement WS‐80014 50,000 50,000 Water System Supply Improvements WS‐11004 1,061,540 1,061,540 Water Tank Seismic Upgrade and Rehabilitation WS‐09000 100,000 100,000 522 ‐ Water Fund Total                ‐ 5,829,309                ‐ 5,829,309                                 ‐                                 ‐ 682 ‐ Technology Fund City Council Chambers Upgrade TE‐19001 1,641,440 1,641,440 Computer Aided Dispatch (CAD) Upgrade TE‐23000 126,841 126,841 Enterprise Resource Planning Upgrade TE‐19000 894,907 894,907 Infrastructure Management System TE‐13004 365,281 365,281 IT Data Center Upgrade TE‐25000 980,000 980,000
682 ‐ Technology Fund Total                ‐ 4,008,469                ‐ 4,008,469                                 ‐                                 ‐ 681 ‐ Vehicle Replacement & Maintenance FundScheduled Vehicle and Equipment Replacement ‐ Fiscal Year 2024 VR‐24000 1,987,783 1,987,783 Scheduled Vehicle and Equipment Replacement ‐ Fiscal Year 2025 VR‐25000 625,812 625,812 681 ‐ Vehicle Replacement & Maintenance Fund Total                ‐ 2,613,595                ‐ 2,613,595                                 ‐                                 ‐ All Funds Total 141,998,217 130,586 142,128,803           ‐ 111,796,421 111,796,421 Item 3: Staff Report Pg. 39 Packet Pg. 96 of 1165

TABLE OF ORGANIZATION
Table of Organization
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
General Fund
Administrative Services
Account Specialist 4.13 4.13 4.13 4.13 — —%
Account Specialist-Lead 3.45 3.45 3.45 3.45 — —%
Accountant 2.00 2.00 2.00 2.00 — —%
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 1.00 1.00 1.00 — (1.00) (100.0)% Administrative Associate III 1.00 1.00 1.00 1.00 — —%
Assistant Director Administrative Services 1.65 1.65 1.65 1.65 — —% Buyer 2.00 2.00 2.00 2.00 — —%
Chief Procurement Officer 1.00 1.00 1.00 1.00 — —%
Contracts Administrator 3.70 3.70 2.70 2.70 — —%
Director Administrative Services/CFO 0.80 0.80 0.80 0.80 — —% Director Office of Management and Budget 1.00 1.00 1.00 1.00 — —% Management Analyst** 2.00 3.00 2.00 2.00 — —%
Manager Budget 2.00 2.00 2.00 2.00 — —%
Manager Real Property 1.00 1.00 1.00 1.00 — —%
Manager Revenue Collections 0.62 0.62 0.62 — (0.62) (100.0)% Manager Treasury, Debt & Investments 0.60 0.60 0.60 0.60 — —% Manager, Finance 1.00 1.00 1.00 1.00 — —%
Payroll Analyst 2.00 2.00 2.00 2.00 — —%
Senior Accountant 3.00 3.00 3.00 3.00 — —%
Senior Buyer 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst** 2.30 2.30 3.40 2.40 (1.00) (29.4)% Storekeeper 2.00 2.00 2.00 2.00 — —%
Storekeeper-Lead 0.20 0.20 0.20 0.20 — —%
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TABLE OF ORGANIZATION
Warehouse Supervisor 0.20 0.20 0.20 0.20 — —%
Total Administrative Services 40.65 41.65 40.75 38.13 (2.62) (6.4)% City Attorney
Assistant City Attorney 4.00 4.00 4.00 3.75 (0.25) (6.3)% Chief Assistant City Attorney 1.00 1.00 1.00 1.00 — —%
City Attorney 1.00 1.00 1.00 1.00 — —%
Claims Investigator 1.00 1.00 1.00 1.00 — —%
Deputy City Attorney 0.50 0.50 0.50 0.50 — —%
Legal Fellow 1.00 1.00 1.00 0.75 (0.25) (25.0)%
Secretary to City Attorney 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Total City Attorney 10.50 10.50 10.50 10.00 (0.50) (4.8)% City Clerk
Administrative Associate III 2.00 2.00 2.00 1.75 (0.25) (12.5)% Assistant City Clerk 2.00 2.00 2.00 2.00 — —%
City Clerk 1.00 1.00 1.00 1.00 — —%
Total City Clerk 5.00 5.00 5.00 4.75 (0.25) (5.0)%
City Manager
Administrative Assistant 3.00 3.00 3.00 3.00 — —%
Assistant City Manager 1.00 1.00 1.00 0.80 (0.20) (20.0)% Assistant to the City Manager 3.00 3.00 3.00 3.00 — —%
Chief Communications Officer 1.00 1.00 1.00 1.00 — —%
City Manager 1.00 1.00 1.00 1.00 — —%
Deputy City Manager 1.00 1.00 1.00 1.00 — —%
Executive Assistant to the City Manager 1.00 1.00 1.00 1.00 — —% Management Fellow — — 0.20 0.20 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Management Specialist — 1.00 — — — —%
Manager Communications 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Total City Manager 13.00 14.00 13.20 13.00 (0.20) (1.5)% Community Services
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Animal Caretaker — 4.00 4.00 4.00 — —%
Assistant Director Community Services 2.00 2.00 2.00 2.00 — —% Building Serviceperson 2.00 2.00 2.00 2.00 — —%
Building Serviceperson-Lead 2.00 2.00 2.00 2.00 — —%
Coordinator Recreation Programs 5.75 5.75 6.00 6.00 — —% Director Community Services 1.00 1.00 1.00 1.00 — —%
Division Manager Open Space, Parks & Golf 1.00 1.00 1.00 1.00 — —% Inspector, Field Services 2.00 2.00 2.00 2.00 — —%
Junior Museum & Zoo Educator 4.85 4.85 5.85 5.85 — —%
Management Analyst 1.00 1.00 1.00 1.00 — —%
Management Assistant 1.00 1.00 1.00 1.00 — —%
Manager Community Services 5.00 5.00 5.00 5.00 — —%
Manager Community Services Senior Program 4.00 4.00 4.00 4.00 — —% Manager Human Services 1.00 1.00 1.00 1.00 — —%
Park Maintenance Person 6.00 6.00 6.00 5.40 (0.60) (10.0)% Park Maintenance-Lead 1.00 1.00 1.00 — (1.00) (100.0)%
Park Ranger 6.00 6.00 6.00 6.00 — —%
Parks/Golf Crew-Lead 2.00 2.00 2.00 2.00 — —%
Producer Arts/Science Program 9.50 9.50 9.50 7.50 (2.00) (21.1)% Program Assistant I 3.75 4.75 5.75 6.75 1.00 17.4%
Program Assistant II 4.00 4.00 4.00 3.00 (1.00) (25.0)% FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Project Manager 0.10 0.10 0.10 0.10 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Sprinkler System Representative 4.00 4.00 4.00 3.60 (0.40) (10.0)% Superintendent Community Services 2.00 2.00 2.00 2.00 — —% Theater Specialist 5.00 5.00 5.00 7.00 2.00 40.0%
WGW Heavy Equipment Operator 0.07 0.07 0.07 0.07 — —%
Total Community Services 78.02 83.02 85.27 83.27 (2.00) (2.3)% Fire
40-Hour Captain 0.20 — — — — —%
40-Hour Training Battalion Chief 1.00 1.00 1.00 1.00 — —% 40-Hour Training Captain 1.00 1.00 1.00 1.00 — —%
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 2.20 3.00 3.00 3.00 — —%
Administrative Associate III 0.20 1.00 2.00 2.00 — —%
Assistant Fire Marshal — 1.00 1.00 1.00 — —%
Battalion Chief 3.00 3.00 3.00 3.00 — —%
Business Analyst 0.80 0.80 0.80 0.80 — —%
Deputy Director Technical Services Division 0.20 0.20 0.20 0.20 — —% Deputy Fire Chief 2.00 2.00 2.00 2.00 — —%
Emergency Medical Service Director 1.00 1.00 1.00 1.00 — —% Emergency Medical Services Data Specialist 1.00 1.00 1.00 1.00 — —% Fire Apparatus Operator 26.00 26.00 26.00 26.00 — —%
Fire Captain 20.00 20.00 23.00 23.00 — —%
Fire Chief 1.00 1.00 1.00 1.00 — —%
Fire Fighter 34.00 37.00 37.00 37.00 — —%
Fire Fighter Trainee* 3.00 3.00 3.00 1.00 (2.00) (66.7)% Fire Inspector 2.40 3.20 3.20 3.20 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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Fire Marshal 0.05 0.75 0.75 0.75 — —%
Geographic Information System Specialist 0.50 0.50 0.50 0.50 — —% Hazardous Materials Inspector 0.70 3.93 3.93 3.93 — —%
Manager, EMS* — — 1.00 1.00 — —%
Plans Check Engineer — 0.50 0.50 0.50 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Single Role EMT — — 2.00 2.00 — —%
Single Role Paramedic — — 2.00 2.00 — —%
Total Fire 102.25 112.88 121.88 119.88 (2.00) (1.6)%
Human Resources
Administrative Assistant 0.75 0.75 0.75 0.50 (0.25) (33.3)% Assistant Director Human Resources 1.00 1.00 1.00 1.00 — —% Director Human Resources/CPO 1.00 1.00 1.00 1.00 — —%
Human Resources Representative 4.00 4.00 4.00 4.00 — —% Human Resources Technician 2.00 2.00 2.00 1.00 (1.00) (50.0)% Management Fellow — — 0.30 0.30 — —%
Manager Employee Benefits 1.00 1.00 — — — —%
Manager Employee Relations 1.00 1.00 1.00 1.00 — —%
Recruitment Division Manager — 1.00 1.00 1.00 — —%
Senior Human Resources Administrator 4.00 4.00 3.00 3.00 — —% Senior Management Analyst 2.00 2.00 2.00 2.00 — —%
Total Human Resources 16.75 17.75 16.05 14.80 (1.25) (7.8)% Library
Administrative Assistant 1.00 1.00 1.00 0.50 (0.50) (50.0)% Coordinator Library Programs 5.00 5.00 5.00 5.00 — —%
Director Libraries 1.00 1.00 1.00 1.00 — —%
Division Head Library Services 2.00 2.00 2.00 2.00 — —% FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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Librarian 4.00 4.00 4.00 4.00 — —%
Library Associate 10.00 10.00 10.00 8.00 (2.00) (20.0)% Library Specialist 8.00 8.00 8.00 7.50 (0.50) (6.3)%
Management Analyst 1.00 1.00 1.00 1.00 — —%
Manager Library Services 3.00 3.00 3.00 3.00 — —%
Senior Business Analyst 1.00 1.00 1.00 1.00 — —%
Senior Librarian 8.00 8.00 8.00 7.00 (1.00) (12.5)%
Supervising Librarian 5.00 5.00 5.00 5.00 — —%
Total Library 49.00 49.00 49.00 45.00 (4.00) (8.2)%
Office of Emergency Services
Director Office of Emergency Services 1.00 1.00 1.00 1.00 — —% Office of Emergency Services Coordinator 2.00 2.00 2.00 2.00 — —% Total Office of Emergency Services 3.00 3.00 3.00 3.00 — —% Office of Transportation
Administrative Assistant 0.60 0.60 0.60 0.50 (0.10) (16.7)% Assistant Engineer** — — — 1.00 1.00 —%
Associate Engineer 0.35 0.35 0.35 0.35 — —%
Associate Planner 0.40 1.40 1.40 1.40 — —%
Chief Transportation Official 0.70 0.70 0.70 0.50 (0.20) (28.6)% Coordinator Transportation Systems
Management

0.65 — — — — —%
Parking Operations-Lead 0.05 0.05 0.05 0.05 — —%
Planner** — 0.40 0.40 0.40 — —%
Principal Transportation Engineer — — 0.20 0.20 — —%
Project Engineer 0.25 0.25 0.35 0.35 — —%
Senior Engineer 0.55 0.55 0.35 0.35 — —%
Senior Management Analyst 0.50 0.50 0.50 0.40 (0.10) (20.0)% FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Senior Planner 1.40 1.65 1.65 1.65 — —%
Transportation Planning Manager 1.00 1.00 1.00 1.00 — —% Total Office of Transportation 6.45 7.45 7.55 8.15 0.60 7.9% Planning and Development Services
40-Hour Captain 0.80 — — — — —%
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 0.80 — — — — —%
Administrative Associate III 7.80 6.00 6.00 4.00 (2.00) (33.3)% Assistant Chief Building Official 2.00 1.00 1.00 1.00 — —% Assistant Director PCE 1.00 1.00 1.00 1.00 — —%
Associate Engineer 0.50 0.50 0.50 0.50 — —%
Associate Planner 1.25 1.25 1.25 1.25 — —%
Building/Planning Technician 2.50 2.50 2.50 2.50 — —%
Chief Building Official 1.00 1.00 1.00 1.00 — —%
Chief Planning Official 1.00 — — — — —%
Code Enforcement Officer 1.00 1.00 1.00 1.00 — —%
Code Enforcement-Lead 1.00 1.00 1.00 1.00 — —%
Development Project Coordinator I — — — 2.00 2.00 —%
Development Project Coordinator II 2.00 2.00 2.00 2.00 — —% Development Project Coordinator III 3.00 3.00 3.00 3.00 — —% Director Planning/Community Environment 1.00 1.00 1.00 1.00 — —% Division Manager Planning — 1.00 1.00 1.00 — —%
Engineer 0.52 0.52 0.52 0.52 — —%
Engineering Technician III 1.00 1.00 1.00 1.00 — —%
Fire Inspector 1.60 0.80 0.80 0.80 — —%
Fire Marshal 0.80 0.25 0.25 0.25 — —%
Hazardous Materials Inspector 3.20 0.07 0.07 0.07 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Industrial Waste Investigator 0.35 0.35 0.35 0.35 — —%
Inspector, Field Services 0.68 0.68 0.68 0.68 — —%
Landscape Architect Park Planner 0.50 0.50 0.50 0.50 — —% Manager Planning 4.00 4.00 5.00 5.00 — —%
Plan Review Manager — 1.00 — — — —%
Planner** 5.00 5.00 5.00 3.00 (2.00) (40.0)%
Plans Check Engineer 1.00 0.50 0.50 0.50 — —%
Principal Planner 2.00 3.00 4.00 4.00 — —%
Project Manager 0.50 0.50 0.50 0.50 — —%
Senior Building Inspector 8.00 8.00 8.00 8.00 — —%
Senior Business Analyst 1.00 — — — — —%
Senior Engineer 0.45 0.45 0.45 0.45 — —%
Senior Management Analyst 2.00 2.00 2.00 2.00 — —%
Senior Plan Check Engineer 2.00 3.00 3.00 3.00 — —%
Senior Planner 7.65 8.75 8.75 7.75 (1.00) (11.4)%
Senior Program Manager — 1.00 1.00 1.00 — —%
Senior Technologist — 1.00 1.00 1.00 — —%
Supervisor Inspection and Surveying 0.25 0.25 0.25 0.25 — —% Supervisor of Code Enforcement 1.00 1.00 1.00 1.00 — —% Technologist — 1.00 1.00 1.00 — —%
Transportation Planning Manager 0.05 0.05 0.05 0.05 — —% Total Planning and Development Services 71.20 67.92 68.92 65.92 (3.00) (4.4)% Police
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 3.00 3.00 3.00 3.00 — —%
Animal Control Officer 2.00 2.00 2.00 2.00 — —%
Animal Control Officer-Lead 1.00 1.00 1.00 1.00 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Assistant Police Chief 1.00 1.00 1.00 1.00 — —%
Business Analyst 2.20 2.20 2.20 2.20 — —%
Code Enforcement Officer 1.00 1.00 1.00 1.00 — —%
Community Service Officer 5.63 4.69 4.69 3.69 (1.00) (21.3)% Court Liaison Officer 2.00 2.00 2.00 2.00 — —%
Crime Analyst 1.00 1.00 1.00 1.00 — —%
Deputy Director Technical Services Division 0.80 0.80 0.80 0.80 — —% Forensic Coordinator — 1.00 1.00 1.00 — —%
Forensic Specialist — 1.00 1.00 1.00 — —%
Geographic Information System Specialist 0.50 0.50 0.50 0.50 — —% Police Agent 19.00 19.00 19.00 19.00 — —%
Police Captain 2.00 2.00 2.00 2.00 — —%
Police Chief 1.00 1.00 1.00 1.00 — —%
Police Lieutenant 4.00 5.00 5.00 5.00 — —%
Police Officer 45.00 45.00 45.00 45.00 — —%
Police Records Specialist II 6.00 6.00 6.00 6.00 — —%
Police Records Specialist-Lead 1.00 1.00 1.00 1.00 — —% Police Sergeant*,** 14.00 14.00 14.00 14.00 — —%
Program Assistant II 1.00 1.00 1.00 2.00 1.00 100.0%
Property Evidence Technician 2.00 — — — — —%
Public Safety Communications Manager 1.00 1.00 1.00 1.00 — —% Public Safety Dispatcher 16.00 16.00 16.00 16.00 — —%
Public Safety Dispatcher-Lead 4.00 4.00 4.00 4.00 — —%
Public Safety Program Manager 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Total Police 139.13 139.19 139.19 139.19 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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Public Works
Administrative Assistant 0.50 0.50 0.75 0.55 (0.20) (26.7)% Administrative Associate II 2.65 2.65 2.65 1.62 (1.03) (38.9)% Assistant Director Public Works 0.73 0.73 0.73 0.73 — —% Associate Engineer 0.45 0.45 0.45 0.45 — —%
Building Serviceperson-Lead 1.00 1.00 1.00 1.00 — —%
Building/Planning Technician 0.50 0.50 0.50 0.50 — —%
Cement Finisher 2.00 2.00 2.00 2.00 — —%
Cement Finisher-Lead 0.26 0.26 0.26 0.26 — —%
Coordinator Public Works Projects 1.50 1.50 0.70 0.70 — —% Director Public Works/City Engineer 1.00 1.00 1.00 1.00 — —% Electrician 0.80 0.80 0.80 0.80 — —%
Engineer 0.48 0.48 0.48 0.48 — —%
Engineering Technician III 1.80 1.80 1.80 1.80 — —%
Environmental Specialist 0.33 0.33 0.33 0.33 — —%
Equipment Operator 2.46 2.46 2.46 2.46 — —%
Facilities Carpenter 1.00 1.00 1.00 1.00 — —%
Facilities Maintenance-Lead 1.85 1.85 1.85 1.85 — —%
Facilities Painter 1.75 1.75 1.75 1.75 — —%
Facilities Technician 5.05 5.05 5.05 5.05 — —%
Heavy Equipment Operator 2.10 2.10 2.10 2.10 — —%
Heavy Equipment Operator-Lead 0.85 0.85 0.85 0.85 — —%
Inspector, Field Services 0.11 0.11 0.11 0.11 — —%
Landscape Architect Park Planner 0.60 0.60 0.60 0.60 — —% Management Analyst 0.70 0.80 0.80 0.80 — —%
Manager Environmental Control Program 0.33 0.33 0.33 0.33 — —% Manager Facilities 0.90 0.90 0.90 0.50 (0.40) (44.4)%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Manager Maintenance Operations 1.20 1.20 1.20 0.50 (0.70) (58.3)% Manager Urban Forestry 1.00 1.00 1.00 0.96 (0.04) (4.0)% Manager Watershed Protection 0.05 0.05 0.05 0.05 — —%
Project Manager 2.85 2.85 2.85 2.78 (0.07) (2.5)%
Senior Engineer 0.60 0.60 0.60 0.60 — —%
Senior Management Analyst 1.11 1.11 1.11 1.11 — —%
Supervisor Inspection and Surveying 0.10 0.10 0.10 0.10 — —% Surveyor, Public Works 0.33 0.33 0.33 — (0.33) (100.0)% Traffic Controller Maintainer I 1.94 1.94 1.94 1.94 — —% Traffic Controller Maintainer II 1.00 1.00 2.00 2.00 — —% Tree Maintenance Person 1.00 1.00 1.00 1.02 0.02 2.0%
Tree Trim/Line Clear 7.00 7.00 7.00 5.88 (1.12) (16.0)% Tree Trim/Line Clear-Lead 1.00 1.00 1.00 0.98 (0.02) (2.0)% WGW Heavy Equipment Operator 0.23 0.23 0.23 0.23 — —%
Total Public Works 51.11 51.21 51.66 47.77 (3.89) (7.5)% Total General Fund 586.06 602.57 611.97 592.86 (19.11) (3.1)% Enterprise Fund
Public Works
Accountant 0.70 0.70 0.70 0.70 — —%
Administrative Assistant — — — 0.30 0.30 —%
Administrative Associate I 1.00 1.00 1.00 1.00 — —%
Administrative Associate II 2.15 2.15 2.15 2.15 — —%
Administrative Associate III 0.20 0.20 0.20 0.20 — —%
Airport Specialist II 2.50 2.50 2.50 2.50 — —%
Assistant Director Public Works 1.30 1.30 1.30 1.30 — —% Assistant Manager WQCP 2.00 2.00 2.00 2.00 — —%
Associate Engineer 3.05 3.05 3.05 3.05 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Chemist 3.00 3.00 3.00 3.00 — —%
Electrician 3.00 3.00 3.00 3.00 — —%
Electrician-Lead 2.00 2.00 2.00 2.00 — —%
Engineer 1.90 1.90 1.90 1.90 — —%
Engineering Technician III 0.20 0.20 0.20 0.20 — —%
Environmental Specialist 2.33 2.33 3.33 3.33 — —%
Equipment Operator 0.54 0.54 0.54 0.54 — —%
Facilities Maintenance Lead 1.00 1.00 1.00 1.00 — —%
Fire Marshal 0.07 — — — — —%
Hazardous Materials Inspector 0.04 — — — — —%
Heavy Equipment Operator 0.90 0.90 0.90 0.90 — —%
Heavy Equipment Operator-Lead 1.15 1.15 1.15 1.15 — —%
Industrial Waste Inspector 3.00 3.00 3.00 3.00 — —%
Industrial Waste Investigator 1.15 1.15 1.15 1.15 — —%
Instrumentation Electrician — — 1.00 1.00 — —%
Laboratory Technician WQC 3.00 3.00 3.00 3.00 — —%
Landfill Technician 2.00 2.00 2.00 2.00 — —%
Management Analyst 2.30 2.90 2.90 2.90 — —%
Manager Airport 1.00 1.00 1.00 1.00 — —%
Manager Environmental Control Program 5.33 5.33 5.33 5.33 — —% Manager Information Technology — — — 1.00 1.00 —%
Manager Laboratory Services 1.00 1.00 1.00 1.00 — —%
Manager Maintenance Operations 1.96 1.96 1.96 2.96 1.00 51.0% Manager Solid Waste 1.00 1.00 1.00 1.00 — —%
Manager Water Quality Control Plant 1.00 1.00 1.00 1.00 — —% Manager Watershed Protection 0.95 0.95 0.95 0.95 — —%
Plant Mechanic 7.00 7.00 7.00 7.00 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Program Assistant I 1.00 1.00 1.00 1.00 — —%
Program Assistant II 2.00 2.00 2.00 2.00 — —%
Project Engineer 2.83 2.83 2.83 2.83 — —%
Project Manager 1.35 1.35 1.35 1.35 — —%
Senior Accountant 0.30 0.30 0.30 0.30 — —%
Senior Buyer 1.00 1.00 1.00 1.00 — —%
Senior Chemist 2.00 2.00 2.00 2.00 — —%
Senior Engineer 3.76 3.76 3.76 3.76 — —%
Senior Industrial Waste Investigator 1.00 1.00 1.00 1.00 — —% Senior Management Analyst 0.21 0.21 0.61 0.61 — —%
Senior Mechanic 1.00 1.00 1.00 1.00 — —%
Senior Operator WQC 6.00 6.00 7.00 8.00 1.00 14.3%
Senior Technologist 1.00 1.00 1.00 1.00 — —%
Storekeeper 1.00 1.00 1.00 1.00 — —%
Street Sweeper Operator 1.63 1.63 1.63 1.63 — —%
Supervisor WQCP Operations 3.00 3.00 3.00 3.00 — —%
Surveyor, Public Works 0.12 0.12 0.12 — (0.12) (100.0)% Technologist 1.00 1.00 1.00 1.00 — —%
Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 — —% WQC Plant Operator II 16.00 16.00 16.00 16.00 — —%
Zero Waste Coordinator 1.00 1.00 1.00 1.00 — —%
Total Public Works 106.98 107.47 110.87 114.05 3.18 2.9% Utilities
Account Specialist 1.00 1.00 1.00 1.00 — —%
Accountant 1.30 1.30 1.30 1.30 — —%
Administrative Assistant 1.00 1.00 1.75 1.75 — —%
Administrative Associate II 6.00 6.00 6.00 6.03 0.03 0.5% FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Administrative Associate III — — — 0.25 0.25 —%
Assistant City Attorney 2.00 2.00 2.00 2.25 0.25 12.5%
Assistant City Manager — — — 0.20 0.20 —%
Assistant Director Administrative Services 0.25 0.25 0.25 0.25 — —% Assistant Director Sustainability and Climate
Action

1.00 1.00 1.00 1.00 — —%
Assistant Director Utilities Customer Support
Services*

2.00 2.00 2.00 2.00 — —%
Assistant Director Utilities Engineering 1.00 1.00 1.00 1.00 — —% Assistant Director Utilities Operations 1.00 1.00 1.00 1.00 — —% Assistant Director Utilities/Resource
Management

1.00 1.00 1.00 1.00 — —%
Associate Sustainability Program Administrator 1.00 2.00 2.00 2.00 — —% Business Analyst 6.00 6.00 6.00 6.00 — —%
Cathodic Protection Technician Assistant 1.00 1.00 — — — —% Cathodic Technician 1.00 1.00 2.00 2.00 — —%
Cement Finisher 2.00 3.00 3.00 3.00 — —%
Contracts Administrator 0.70 0.70 0.70 0.70 — —%
Coordinator Utilities Projects 8.00 10.00 10.00 10.00 — —% Customer Service Representative 7.00 7.00 7.00 7.00 — —% Customer Service Specialist 2.00 2.00 2.00 2.00 — —%
Customer Service Specialist-Lead 2.00 2.00 2.00 2.00 — —% Deputy City Attorney 0.50 0.50 0.50 0.50 — —%
Director Administrative Services/CFO 0.20 0.20 0.20 0.20 — —% Electric Heavy Equipment Operator 1.00 1.00 1.00 1.00 — —% Electric Project Engineer 8.00 10.00 10.00 10.00 — —%
Electric Underground Inspector 2.00 2.00 2.00 2.00 — —% Electric Underground Inspector-Lead 1.00 1.00 1.00 1.00 — —% Electrical Equipment Technician 1.00 1.00 1.00 1.00 — —% FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Electrician Assistant I 3.00 3.00 3.00 3.00 — —%
Electrician-Lead — 1.00 1.00 1.00 — —%
Engineer 5.00 5.00 5.00 5.00 — —%
Engineering Manager - Electric 1.00 1.00 1.00 1.00 — —% Engineering Manager - WGW 1.00 1.00 1.00 1.00 — —%
Engineering Technician III 3.00 3.00 3.00 3.00 — —%
Environmental Specialist 0.34 0.34 0.34 0.34 — —%
Equipment Operator 1.00 1.00 2.00 2.00 — —%
Fire Marshal 0.08 — — — — —%
Gas and Water Meter Measurement and
Control Technician

4.00 5.00 5.00 5.00 — —%
Gas and Water Meter Measurement and
Control Technician - Lead

1.00 1.00 1.00 1.00 — —%
Hazardous Materials Inspector 0.06 — — — — —%
Heavy Equipment Operator - Install/Repair 4.00 5.00 5.00 5.00 — —% Human Resources Representative 1.00 1.00 1.00 1.00 — —% Industrial Waste Investigator 0.50 0.50 0.50 0.50 — —%
Inspector, WGW Utilities Field Svc 5.00 5.00 6.00 6.00 — —% Legal Fellow — — — 0.25 0.25 —%
Lineperson/Cable Specialist 10.00 10.00 10.00 10.00 — —% Lineperson/Cable Specialist-Lead 4.00 4.00 4.00 4.00 — —% Maintenance Mechanic-Welding 2.00 2.00 2.00 2.00 — —%
Management Analyst 1.00 1.00 1.00 1.00 — —%
Management Fellow — — 0.50 0.50 — —%
Manager Communications 1.00 1.00 1.00 1.00 — —%
Manager Customer Service 1.00 1.00 1.00 1.00 — —%
Manager Electric Operations 1.00 1.00 1.00 1.00 — —%
Manager Environmental Control Program 0.34 0.34 0.34 0.34 — —% FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Manager Information Technology* 1.00 1.00 1.00 1.00 — —% Manager Treasury, Debt & Investments 0.40 0.40 0.40 0.40 — —% Manager Urban Forestry — — — 0.04 0.04 —%
Manager Utilities Compliance 1.00 1.00 1.00 1.00 — —%
Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 — —% Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 — —% Manager Utilities Program Services 2.00 2.00 2.00 2.00 — —% Manager Utilities Strategic Business 1.00 1.00 1.00 1.00 — —% Manager Utilities Telecommunications* 3.00 3.00 3.00 3.00 — —% Meter Reader 5.00 5.00 5.00 1.00 (4.00) (80.0)%
Meter Reader-Lead 1.00 1.00 1.00 — (1.00) (100.0)%
Metering Technician 2.00 2.00 2.00 2.00 — —%
Metering Technician-Lead 1.00 1.00 1.00 1.00 — —%
Offset Equipment Operator 0.48 0.98 0.48 0.48 — —%
Overhead Underground Troubleman 2.00 2.00 2.00 2.00 — —% Principal Business Analyst 1.00 1.00 1.00 1.00 — —%
Program Assistant I 2.00 2.00 2.00 2.00 — —%
Project Engineer 5.00 5.00 5.00 5.00 — —%
Project Manager 0.75 0.75 0.75 0.82 0.07 9.3%
Resource Planner 5.00 5.00 5.00 5.00 — —%
Restoration Lead 1.00 1.00 1.00 1.00 — —%
Senior Accountant 0.70 0.70 0.70 0.70 — —%
Senior Business Analyst 3.00 3.00 3.00 3.00 — —%
Senior Buyer — — 1.00 1.00 — —%
Senior Electrical Engineer 5.00 5.00 5.00 5.00 — —%
Senior Engineer 5.00 5.00 5.00 5.00 — —%
Senior Management Analyst 0.70 0.70 1.00 1.00 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Senior Marketing Analyst 1.00 1.00 1.00 1.00 — —%
Senior Mechanic 1.00 1.00 1.00 1.00 — —%
Senior Resource Planner 7.00 7.00 7.00 7.00 — —%
Senior Utilities Field Service Representative 1.00 1.00 1.00 1.00 — —% Senior Utilities System Operator 1.00 1.00 1.00 1.00 — —% Senior Water Systems Operator 2.00 2.00 2.00 2.00 — —%
Storekeeper 1.00 1.00 1.00 1.00 — —%
Storekeeper-Lead 0.80 0.80 0.80 0.80 — —%
Street Light, Traffic Signal & Fiber Technician 4.00 4.00 4.00 4.00 — —% Street Light, Traffic Signal & Fiber-Lead 2.00 2.00 2.00 2.00 — —% Substation Electrician 6.00 6.00 6.00 6.00 — —%
Substation Electrician-Lead 2.00 2.00 2.00 2.00 — —%
Sustainability Programs Administrator 5.00 5.00 5.00 5.00 — —% Tree Maintenance Person 1.00 1.00 1.00 0.98 (0.02) (2.0)% Tree Trim/Line Clear — — — 0.12 0.12 —%
Tree Trim/Line Clear-Lead — — — 0.02 0.02 —%
Utilities Chief Operating Officer 1.00 1.00 1.00 1.00 — —% Utilities Compliance Technician 3.00 3.00 3.00 3.00 — —% Utilities Compliance Technician-Lead 1.00 1.00 1.00 1.00 — —% Utilities Credit/Collection Specialist 2.00 2.00 2.00 2.00 — —% Utilities Director 1.00 1.00 1.00 1.00 — —%
Utilities Engineer Estimator 5.00 5.00 5.00 5.00 — —%
Utilities Field Services Representative 5.00 5.00 5.00 5.00 — —% Utilities Install Repair-Lead-Welding Certified 3.00 3.00 3.00 3.00 — —% Utilities Install Repair-Welding Certified 3.00 3.00 3.00 3.00 — —% Utilities Install/Repair 10.00 11.00 11.00 11.00 — —%
Utilities Install/Repair Assistant 1.00 1.00 — — — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Utilities Install/Repair-Lead 4.00 4.00 3.00 3.00 — —%
Utilities Key Account Representative 3.00 3.00 3.00 3.00 — —% Utilities Locator 3.00 3.00 3.00 3.00 — —%
Utilities Safety Officer 1.00 1.00 1.00 1.00 — —%
Utilities Supervisor 12.00 12.00 12.00 12.00 — —%
Utilities System Analyst 2.00 2.00 2.00 2.00 — —%
Utilities System Operator 5.00 5.00 5.00 5.00 — —%
Utility Engineering Estimator - Lead 1.00 1.00 1.00 1.00 — —% Warehouse Supervisor 0.80 0.80 0.80 0.80 — —%
Water System Operator II 4.00 4.00 4.00 4.00 — —%
WGW Heavy Equipment Operator 4.70 4.70 4.70 4.70 — —%
Total Utilities 273.60 283.96 286.01 282.22 (3.79) (1.3)% Total Enterprise Fund 380.58 391.43 396.88 396.27 (0.61) (0.2)% Other Funds
Capital Project Fund
Administrative Assistant 0.65 0.65 0.65 0.55 (0.10) (15.4)% Administrative Associate III 0.80 0.80 0.80 0.80 — —%
Assistant Director Public Works 0.72 0.72 0.72 0.72 — —% Associate Engineer 1.65 1.65 1.65 1.65 — —%
Associate Planner 0.35 0.35 0.35 0.35 — —%
Cement Finisher-Lead 0.74 0.74 0.74 0.74 — —%
Chief Transportation Official 0.30 0.30 0.30 0.50 0.20 66.7% Contracts Administrator 0.60 0.60 0.60 0.60 — —%
Coordinator Public Works Projects 1.30 1.30 1.30 1.30 — —% Coordinator Transportation Systems
Management

1.35 — — — — —%
Engineer 3.10 3.10 3.10 2.10 (1.00) (32.3)%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Engineering Technician III 0.50 0.50 0.50 0.50 — —%
Facilities Technician 1.50 1.50 1.50 1.50 — —%
Inspector, Field Services 1.21 1.21 1.21 1.21 — —%
Landscape Architect Park Planner 0.90 0.90 0.90 0.90 — —% Management Analyst 0.80 0.90 0.90 0.90 — —%
Manager Facilities 0.10 0.10 0.10 0.50 0.40 400.0%
Manager Maintenance Operations 0.65 0.65 0.65 0.50 (0.15) (23.1)% Park Maintenance Person — — — 0.60 0.60 —%
Parking Operations-Lead 0.30 0.30 0.30 0.30 — —%
Planner** — 0.60 0.60 0.60 0.60 —%
Principal Transportation Engineer — — 0.80 0.80 — —%
Project Engineer 7.92 7.92 8.82 8.82 — —%
Project Manager 1.45 1.45 1.45 1.45 — —%
Senior Engineer 4.64 4.64 3.84 3.84 — —%
Senior Management Analyst 0.75 0.75 0.75 0.85 0.10 13.3% Senior Planner 1.55 2.30 2.30 2.30 — —%
Sprinkler System Representative — — — 0.40 0.40 —%
Supervisor Inspection and Surveying 0.65 0.65 0.65 0.65 — —% Surveyor, Public Works 0.55 0.55 0.55 — (0.55) (100.0)% Transportation Planning Manager 0.45 0.45 0.45 0.45 — —% Total Capital Project Fund 35.48 35.58 36.48 36.38 (0.10) (0.3)% General Benefits Fund
Human Resources Technician — — 0.50 0.50 — —%
Manager Employee Benefits — — 0.75 0.75 — —%
Senior Human Resources Administrator — — 0.75 0.75 — —% Total General Benefits Fund — — 2.00 2.00 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
General Liabilities Insurance Program Fund
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Total General Liabilities Insurance Program
Fund

1.00 1.00 1.00 1.00 — —%
Printing and Mailing Services
Manager Revenue Collections 0.10 0.10 0.10 — (0.10) (100.0)% Offset Equipment Operator 1.52 2.02 1.52 1.52 — —%
Total Printing and Mailing Services 1.62 2.12 1.62 1.52 (0.10) (6.2)% Special Revenue Funds
Account Specialist 1.37 1.37 1.37 1.37 — —%
Account Specialist-Lead 0.55 0.55 0.55 0.55 — —%
Administrative Assistant 0.25 0.25 0.25 0.25 — —%
Administrative Associate II 0.20 0.20 0.20 0.20 — —%
Community Service Officer 0.37 0.31 0.31 0.31 — —%
Coordinator Public Works Projects 0.20 0.20 — — — —%
Electrician 0.20 0.20 0.20 0.20 — —%
Facilities Maintenance-Lead 0.15 0.15 0.15 0.15 — —%
Facilities Painter 0.25 0.25 0.25 0.25 — —%
Facilities Technician 0.45 0.45 0.45 0.45 — —%
Manager Community Services Senior Program 1.00 1.00 1.00 1.00 — —% Manager Maintenance Operations 0.19 0.19 0.19 0.04 (0.15) (78.9)% Manager Revenue Collections 0.28 0.28 0.28 — (0.28) (100.0)% Parking Operations-Lead 0.65 0.65 0.65 0.65 — —%
Senior Management Analyst 0.35 0.35 0.35 0.35 — —%
Senior Planner 0.40 0.30 0.30 0.30 — —%
Street Maintenance Assistant 2.00 2.00 2.00 2.00 — —%
Street Sweeper Operator 0.37 0.37 0.37 0.37 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
Transportation Planning Manager 0.50 0.50 0.50 0.50 — —% Total Special Revenue Funds 9.73 9.57 9.37 8.94 (0.43) (4.6)% Technology Fund
Administrative Assistant 1.00 1.00 1.00 1.00 — —%
Assistant Director Administrative Services 0.10 0.10 0.10 0.10 — —% Assistant Director Information Technology — 1.00 1.00 1.00 — —% Business Analyst 1.00 1.00 1.00 1.00 — —%
Desktop Technician 6.00 4.00 4.00 4.00 — —%
Director Information Technology/CIO 1.00 1.00 1.00 1.00 — —% Management Analyst 1.00 1.00 1.00 1.00 — —%
Manager Information Technology 3.00 3.00 4.00 3.00 (1.00) (25.0)% Senior Business Analyst 2.00 2.00 2.00 2.00 — —%
Senior Management Analyst 1.00 1.00 1.00 1.00 — —%
Senior Technologist 17.00 17.00 16.00 16.00 — —%
Technologist — 2.00 2.00 2.00 — —%
Total Technology Fund 33.10 34.10 34.10 33.10 (1.00) (2.9)% Vehicle Replacement and Maintenance Fund
Administrative Assistant — — — 0.10 0.10 —%
Assistant Director Public Works 0.25 0.25 0.25 0.25 — —% Assistant Fleet Manager 1.00 1.00 1.00 1.00 — —%
Equipment Maintenance Service Person 2.00 2.00 2.00 2.00 — —% Fleet Services Coordinator 2.00 2.00 2.00 2.00 — —%
Management Analyst 0.20 0.40 0.40 0.40 — —%
Management Assistant 1.00 1.00 1.00 1.00 — —%
Manager Fleet 1.00 1.00 1.00 1.00 — —%
Motor Equipment Mechanic II 5.00 5.00 5.00 5.00 — —%
Motor Equipment Mechanic-Lead 1.00 1.00 1.00 1.00 — —%
FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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TABLE OF ORGANIZATION
*The Table of Organization includes positions that have been frozen. These positions have been defunded. The affected classifications are denoted by a single asterisk (*) following the job classification title. **Position adjustments recommended by Finance Committee and technical corrections made subsequent to the presentation of the FY 2027 Proposed Budget. The technical corrections include:
• 1.00 Planner, OOT
• 1.00 Planner, PDS
• 1.00 Police Sergeant, POL
The Finance Committee recommended adjustment is to add 1.00 Assistant Engineer, OOT. ***The prior year adopted budget does not include City Council actions to amend staffing levels approved subsequent to the adoption of the budget. If applicable, these positions appear as a base adjustment in the current year budget.

Project Manager 1.00 1.00 1.00 1.00 — —%
Senior Management Analyst 0.08 0.08 0.28 0.28 — —%
Total Vehicle Replacement and
Maintenance Fund

14.53 14.73 14.93 15.03 0.10 0.7%
Workers' Compensation Program Fund
Human Resources Technician — — 0.50 0.50 — —%
Manager Employee Benefits — — 0.25 0.25 — —%
Senior Human Resources Administrator 1.00 1.00 1.25 1.25 — —% Total Workers' Compensation Program
Fund

1.00 1.00 2.00 2.00 — —%
Total Other Funds 96.46 98.10 101.50 99.97 (1.53) (1.5)% Total Citywide Positions** 1,063.10 1,092.10 1,110.35 1,089.10 (21.25) (1.9)% FY 2024
Actuals
FY 2025
Actuals
FY 2026
Adopted
Budget
FY 2027
Proposed
Budget
FY 2027
Change
FTE
FY 2027
Change %
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Item No. 4. Page 1 of 7
Finance Committee
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: May 6, 2026
Report #:2604-6297
TITLE
FY 2027 Proposed Municipal Fee Schedule

RECOMMENDATION
Staff recommends that the Finance Committee review amendments to the Municipal Free schedule for FY 2027 and make recommendations to Council for incorporation into the FY 2027 budget.

EXECUTIVE SUMMARY
This report presents the annual update to over 950 fees as part of the budget process and highlights proposed changes to the FY 2027 Municipal Fee Schedule. The proposed changes include 13 new fees, the deletion of 62 fees, and adjustments to existing fees.

Most fees are adjusted annually by the General Rate Increase (GRI) of 4.59% or applicable cost indices to reflect changes in the cost of service. This year’s adjustments also include the implementation of a credit card processing fee to recover merchant service costs and the incorporation of select Utility fees1 and all Airport fees into the Citywide Municipal Fee Schedule.

Upon Council approval, the recommended Municipal Fees included here will be incorporated into the FY 2027 Adopted Budget and take effect July 1, 2026.

BACKGROUND
The City charges fees for a variety of services, including parking permits, building inspection services, and facility rentals, to ensure that the cost of service is borne by the users receiving the benefit. As part of the annual budget process, departments review and propose updates to 1 Council previously approved these connection and capacity fees on October 20, 2025, and the accompanying staff report explained how these fees would be incorporated into the Municipal Fe Schedule starting in FY 2027; Agenda Item #1, #2505-4736: https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=f6825375- 8aac-44fd-bc66-1fde8593eeb3
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the Municipal Fee Schedule, which are presented for Finance Committee review and subsequently adopted by the City Council.

To ensure fees reflect the cost of service, the City periodically conducts cost of services studies in addition to making annual adjustments. Last year, the City completed a citywide Cost of Services Study and a focused Planning and Development Services fee study. Since their adoption, departments have continued to evaluate fees and, where appropriate, adjust them to better align with the full cost of providing services or move closer to established cost recovery targets, including through efforts such as the Palo Alto Airport Rates and Charges Study.3 In addition, the City is implementing a credit card processing fee to align transaction costs with users who elect to pay by credit card, applied where costs are not otherwise recovered.

At the same time, the City recognizes that not all fees are intended to achieve full cost recovery. Recent discussions related to Planning and Development Services fees4 highlighted that, while fees can be established at full cost recovery based on cost of service analysis, the City Council retains discretion to subsidize certain fees based on policy objectives. In such cases, fees may be set below full cost to support policy objectives, improve accessibility, or incentivize desired outcomes. These policy-driven decisions are evaluated on a case-by-case basis and are reflected in the proposed fee adjustments.

Utilities Department connection and capacity rate schedules (Utility Rate Schedule E-15 (Electric Service Connection Charges), G-5 (Gas Service Connection Charges), S-5 (Wastewater Service Connection Charges), W-5 (Water Service Connection Charges), and portions of C-1 (Miscellaneous Charges) will be incorporated into the Municipal Fee Schedule as part of this update, with no changes in the fee amounts. The connection and capacity fee rate schedules will be repealed as part of Council’s adoption of the Municipal Fee Schedule. Approved by Council on October 20, 2025, beginning in FY 2027, utility connection and service-related fee adjustments will follow the California Construction Cost Index (CCCI) as published by the California Department of General Services (DGS). Two new service call fees for unscheduled disconnection of gas services and removal of the meters have also been added. These fees reflect the Utility’s cost to disconnect gas service prior to construction to discourage unsafe or hazardous construction activities within 10 feet of a live gas service or meter. The responsible party will be responsible for the disconnection and/or removal fees and penalties. 3 Finance Committee recommended that Council approve the FY 2027 Airport Rates and Charges Schedule, accept the Palo Alto Airport Rates and Charges Study, and authorize annual fee adjustments based on the Airport Benchmark Index (ABI) on April 21, 2026; Agenda Item #3, #2602-5923 4 Finance Committee discussed Planning and Development Services fee structures and cost recovery considerations on April 7, 2026; Agenda Item #2, #2511-5562:
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Additionally, the Staff recommended Airport Fees updates that were reviewed and recommended by Finance Committee on April 21, 2026 will be incorporated into the Municipal Fee Schedule as a part of this update, repealing previously separate rate schedules.

These updates are guided by the City’s User Fee Cost Recovery Level Policy, which was last updated by Council in FY 2019 and establishes the framework for aligning fees with the cost of service.

Table 1: Summary of Municipal Fee Cost Recovery Policy
This annual report brings forward amendments to the Municipal Fee Schedule organized into three categories
(1) New fees,
(2) Deletion of existing fees, and
(3) Changed fees to attain a cost recovery level consistent with other fees or based on a market study for similar services.

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ANALYSIS
The development of the Municipal Fee Schedule for FY 2027 reflects some department service realignments as most fees across the City have been updated to maintain cost recovery levels.

The General Rate Increase (GRI) for FY 2027 is 4.59% and reflects a combination of increases in salaries and benefits as well as inflationary factors. This rate is applied to most fees to maintain current cost recovery levels, consistent with City policy. Fees that were updated by a factor greater or less than 4.59% to achieve a different cost recovery level or based on staff recommendation are further detailed in Attachment A.

New Fees
As identified in Table 2 below, thirteen (13) new fees are recommended to be added to the FY 2027 Municipal Fee Schedule.

For Airport and Utilities, this table includes only newly established fees; other fees are incorporated into the Municipal Fee Schedule as part of this update.

Table 2. New Fees for FY 2027
Department Fee Title FY 2027 Proposed Fee Cost
Recovery
Level
Administrative
Services
Credit Card Service Fee 2-3% of transaction; actual
amount will be based on
percentage charged to City
High
Community
Services
Leptospirosis Vaccine $45.00 per pet High
Community
Services
FeLV Vaccine $45.00 per pet High
Community
Services
Fluid Therapy - SQ $50.00 - 75.00 each High
Community
Services
Medication $15.00 - $250.00 each High
Community
Services
Sedation/Anesthesia $150.00 - $350.00 High
Community
Services
Surgery, Preparation and Recovery $550.00 - $1,650.00 per hour High Utilities Unscheduled Gas Disconnection Service Call
- After Hours
$9,798 per mobilization High
Utilities Unscheduled Gas Disconnection Service Call
- Weekend
$13,065 per mobilization High
Airport Transient Aircraft Landing Fee $3/1000lbs MTOW per landing High Attachment A, Exhibit 5

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Department Fee Title FY 2027 Proposed Fee Cost
Recovery
Level
Airport Automobile Parking Citation Fee $57 per occurance High Airport Hangar Ground Lease Origination / Transfer
Fee
2% of sale of assessed value
per agreement
High
Airport Expired Certification of Insurance Fee $50 per month High Deleted Fees
A total of 62 fees are proposed for deletion as part of this update. These fees are no longer applicable, have been consolidated, or are administered by external entities. Examples include the veterinary and massage establishment fees. A complete list of deleted fees and associated justifications is provided at the end of Attachment A.

Changed Fees
241 fees are recommended to be adjusted by a factors other than the General Rate of Increase or applicable cost indices, including, but not limited to:
(1)Attain a cost recovery level consistent with other fees; (2)Align with a market study;
(3)Modify the fee structure to align with current service delivery; or (4)Hold the fee flat to avoid discouraging use of the service of activity Consistent with ongoing cost-of-service efforts, departments have continued to evaluate service costs and revenues and, where appropriate, adjust fees to better align with cost recovery targets; as a result, some fees in this section reflect increases.

Each fee is listed by name along with the Adopted FY 2026 rate, the Proposed FY 2027 rate, and the fee change justification in Attachment A.

Parking In-Lieu fees
Palo Alto Municipal Code (PAMC) Chapter 16.57.030 requires that the Parking In-Lieu Fee be recalculated in the event the City Council approved the construction of a public parking structure.

Per the Municipal Code, the fee shall be adjusted at the time the construction contract is awarded to include actual costs to date, plus the projected construction cost, and authorized contingency.

A second recalculation must occur after the project is completed, based on actual design and construction costs incurred. The recalculated fee may be higher or lower than the initial fee.

In December 2018, Council awarded a construction contract to Swinerton Builders (CMR 9688) for the California Avenue Area Parking Garage. The total project cost was calculated per PAMC

16.57.030 and includes design costs plus additional services, the construction bid with authorized Attachment A, Exhibit 5

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contingency, and all other staff and administrative costs incurred. This calculation was done and approved as part of the Fiscal Year 2020 budget development process (CMR 10225). The cost per parking space was calculated at $106,171 for the Fiscal Year 2020 Adopted Municipal Fee Schedule.

The California Avenue Parking Garage was completed and opened in December 2020. Staff has completed all project close-out documents and recalculated the Parking In-Lieu Fee at $105,811.

After adding the appropriate construction cost indexes for the San Francisco Bay Area for Fiscal Year 2021 through Fiscal Year 2026, the revised fee was set at $130,823. Adding the respective construction cost index for FY 2027 brings the fee to $131,634.

Development Impact and In-Lieu Fees
In the Planning and Development Services Department, impact fees (i.e., community center, park, library, and citywide transportation impact fees) and in-lieu fees were increased by 0.62% percent to reflect the most recently published Construction Cost Index (CCI) for the San Francisco Bay Area, as calculated by the Engineering News Record. This is in accordance with Municipal Code 16.64.110, as amended on November 28, 2016 (CMR 7518), to standardize when these fees are paid, bring uniformity to the calculation in effect, bring uniformity to the annual adjustment rate, and other updates. Since these fees are governed by the applicable Municipal Code section, they are not discussed in Attachment A.

FISCAL/RESOURCE IMPACT
This action aligns fees with expense increases associated with these services. It works to ensure the City can maintain cost recovery levels, and is part of the FY 2027 Proposed Operating Budget.

POLICY IMPLICATIONS
These recommendations are consistent with existing City policies. Where a fee or charge is subject to Proposition 26, voter approval is required to adopt the fee, unless the amount of the new or increased fee is no more than necessary to cover the reasonable cost of the City service, and the fee represents a reasonable relationship to the payer’s burden on, or benefits received from, the City service funded by the fee. Certain types of fees, such as fines, penalties and/or late charges, or charges imposed for entrance to or use of, as well as the purchase, rental, or lease of local government property, are generally not limited to the actual costs of providing service.

Instead, these types of fees are more typically governed by local market rates, reasonableness, and policy factors. These types of fees may have rates that are higher than the full cost recovery level.

STAKEHOLDER ENGAGEMENT
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Staff has coordinated internally with budget and management staff in each department citywide to develop the recommendations in this report. Conversations with the City Council throughout May and June prior to the adoption of the FY 2027 Operating and Capital Budgets and Municipal Fee Schedule allow for public participation in this annual process.

ENVIRONMENTAL REVIEW
Adjustment to the Municipal Fee Schedule is a governmental fiscal activity that does not involve any commitment to any specific project, and therefore does not constitute a “project” pursuant to CEQA regulation 15378(b)(4).

ATTACHMENTS
Attachment A: Municipal Fee Schedule Amendments for FY 2027 Changed and Deleted Fees Attachment B: List of all Utility Fees Moved to Citywide Municipal Fee Schedule Attachment C: Palo Alto Airport Rates and Charges Study Summary of Fee Changes to be Incorporated into the Municipal Fee Schedule
APPROVED BY:

Lauren Lai, Administrative Services Director
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Palo Alto City CouncilJune 15, 2026

Palo Alto City Council
June 15, 2026