TOWN OF PORTOLA VALLEY
Special Meeting of the Town Council
Wednesday, April 30, 2025
4:00 PM
Judith Hasko, Mayor
Craig Taylor, Vice Mayor
Mary Hufty, Councilmember
Rebecca Flynn, Councilmember
Helen Wolter, Councilmember
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HYBRID MEETING
A G E N D A
HISTORICSCHOOLHOUSE - 765PortolaRoad,PortolaValley,CA 94028 REMOTE MEETING ADVISORY: On March 1, 2023, all public meetings in Portola Valley returned to conducting inperson meetings. A Zoom link is provided for members of the public to participate remotely. However, the Town cannot guarantee there will be no technical issues with the software during the meeting. For best public participation results, attending the meeting in person is advised.
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1. CALL TO ORDER / ROLL CALL
2. STUDY SESSION
a. Budget Study Session II - Expenses
3. ADJOURNMENT
The next regular Town Council meeting will be held on May 14, 2025 at 7:00 PM Land Acknowledgement:
The Town of Portola Valley acknowledges the colonial history of this land we dwell upon—the unceded territory of the Ramaytush (rahmy-toosh) Ohlone, Tamien Nation, and Muwekma (mah-WEK-mah) Ohlone, who endured a human and cultural genocide that included removal from their lands and their sacred relationship to the land. Portola Valley recognizes that we profit from the commodification of land seized from indigenous peoples and now bear the ecological consequences. We seek to understand the impact of these legacies on all beings and to find ways to make repair.
______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Tony McFarlane, Finance Director
DATE: April 30, 2025
RE: Budget Study Session II - Expenses
RECOMMENDATION:
Receive presentation and discuss the development of the FY 2025-2026 Operating Budget Expenses.
REPORT SUMMARY
One of the strategies laid out in the FY 2024-25 Town Council priorities was to educate the community on the Town’s finances. To accomplish this strategic goal, there will be two budget study sessions for the Town Council and two community sessions for the residents of Portola Valley to develop the FY 2025-26 Operating Budget. This will be the second of two budget study sessions for the Council and will focus solely on expenses.
Town expenses are categorized as follows,
• Salaries
• Benefits
• Supplies & Services
o San Mateo County Sheriff
o Woodside Fire Protection District
o Consultants
• Maintenance
• Capital Improvements - CIP
• Development
• Interfund Transfers
The Council will receive an overview of these expense types and how they flow into Town operations.
ATTACHMENTS
1. FY 2024-25 Revised Operating Budget Presentation
2. FY 2024-25 Revised Operating Budget Mid-Year Update Presentation
TOWN OF PORTOLA VALLEY
STAFF REPORT
Town of Portola Valley
Fiscal Year 2024-25 Revised Budget
Council Direction
• Balanced Budget
• No Declaration of Fiscal Emergency
• Pursue Charter Town
• Provide more information on Lease-leaseback option
• Review Willow Commons fee waiver
• Charge Open Space trail maintenance to Open Space fund • Modernize UUT Telephone ordinance language
• Alternative Service Delivery Models
• Shared Services/Merger
• Annexation
General Fund
Reserve
• Proposed FY 24-25 Beginning $5.4M
• Proposed FY 24-25 Deficit - $2.9M
• Proposed FY 24-25 Ending - $2.5M
• Ending FY 20-21 Reserve - $5.14M
• Estimated Deficit FY 21-22 – ($596K)
• Estimated Deficit FY 22-23 – ($1.35M)
• Estimated Deficit FY 23-24 – ($1.26M)
• Estimated FY 24-25 Beginning $1.54M
• Reclass $320K for Sheriff Contract
• Revised FY 24-25 Beginning $1.9M
General Fund Reserve Reconciliation
Proposed Beginning Reserve - FY 24-25 $ 5,445,940
Ending Reserve Balance - FY 20-21 $ 5,140,878
Estimated Deficit - FY 21-22 (495,625)
Estimated Deficit - FY 22-23 (1,625,666)
Estimated Deficit - FY 23-24 (1,435,659)
Total Change in Fund Balance $ (3,556,950)
Subtotal - Reserve $ 1,583,928
Reclass for Sheriff's contract - FY 22-23 160,000
Reclass for Sheriff's contract - FY 23-24 160,000
Subtotal - Reclassification $ 320,000
Revised Beginning Reserve - FY 24-25 $ 1,903,928
Preliminary
Budget
Revised GF Beginning Reserve - $1.9M
GF Revenue - $7.1M
GF Expenses - $8.7M
GF Transfers Out - $1.3M
Projected GF Deficit – ($2.9M)
Projected GF Ending Reserve – ($1.0M)
Town of Portola Valley
Fund Activity Summary
FY 2024-25 Preliminary Budget
Fund Beginning Estimated Estimated Transfers Ending
Balance Revenues Expenditures In/(Out) Balance
General Purpose Funds
101 - Unassigned $ 803,472 $ 7,084,058 $ 8,683,381 $ (326,474) $ (1,122,325) Assigned
UAL 249,214 - - - 249,214
Equipment Replacement 34,960 - - - 34,960
Capital Replacement/Emergency 489,447 - - (985,000) (495,553) Legal Contingency 34,960 - - - 34,960
OPEB Liability 291,875 - - - 291,875
Sub-total $ 1,903,928 $ 7,084,058 $ 8,683,381 $ (1,311,474) $ (1,006,869) Restricted Funds
201 - Grants $ 298,738 $ 238,318 $ 238,318 $ - $ 298,738 202 - Public Safety Sales Tax 57,474 16,500 16,500 - 57,474 203 - Public Safety/COPS 455,267 163,600 163,600 - 455,267 204 - Open Space 8,285,369 641,000 15,000 - 8,911,369
205 - Library Fund 72,895 35,500 35,500 - 72,895
206 - Gas Tax/RMRA 55,686 260,376 394,067 133,691 55,686 208 - Frog Pond Open Space 27,625 700 - - 28,325
211 - Measure A 1,262,067 421,130 421,130 - 1,262,067
212 - Measure M 324,067 75,000 75,000 - 324,067
213 - Measure W 473,299 169,745 169,745 - 473,299
221 - Park In-lieu 43,433 1,200 - - 44,633
222 - Inclusionary In-lieu 4,635,419 135,000 - - 4,770,419 401 - Capital Projects - - 1,177,783 1,177,783 -
701 - Applicant Deposits 186,035 475,000 475,000 - 186,035 Sub-total $ 16,177,374 $ 2,633,069 $ 3,181,643 $ 1,311,474 $ 16,940,274 Grand Total $ 18,081,302 $ 9,717,127 $ 11,865,024 $ - $ 15,933,405 FY 2024-25
Revised
Budget
• Reduced expenses – ($2.5M)
• Transfers out – ($1.17M)
• Expenses – ($1.34M)
• Revenues - $395K
• General Fund Balanced
• Ending GF Reserve - $1.9M
Town of Portola Valley
Fund Activity Summary
FY 2024-25 Revised Budget
Fund Beginning Estimated Estimated Transfers Ending
Balance Revenues Expenditures In/(Out) Balance
General Purpose Funds
101 - Unassigned $ 803,472 $ 7,479,785 $ 7,346,094 $ (133,691) $ 803,472 Assigned
UAL 249,214 - - - 249,214
Equipment Replacement 34,960 - - - 34,960
Capital Replacement/Emergency 489,447 - - - 489,447
Legal Contingency 34,960 - - - 34,960
OPEB Liability 291,875 - - - 291,875
Sub-total $ 1,903,928 $ 7,479,785 $ 7,346,094 $ (133,691) $ 1,903,928 Restricted Funds
201 - Grants $ 362,398 $ 362,398 $ 362,398 $ - $ 362,398 202 - Public Safety Sales Tax 63,910 16,500 16,500 - 63,910 203 - Public Safety/COPS 498,019 163,600 255,000 - 406,619 204 - Open Space 8,375,362 641,000 - - 9,016,362
205 - Library Fund 69,973 35,500 35,500 - 69,973
206 - Gas Tax/RMRA 94,085 260,376 394,067 133,691 94,085 208 - Frog Pond Open Space 27,625 700 - - 28,325
211 - Measure A 1,046,241 421,130 421,130 - 1,046,241
212 - Measure M 45,152 75,000 75,000 - 45,152
213 - Measure W 628,127 169,745 169,745 - 628,127
221 - Park In-lieu 43,444 1,200 - - 44,644
222 - Inclusionary In-lieu 4,635,419 135,000 - - 4,770,419 401 - Capital Projects 689,112 - 200,000 - 489,112
701 - Applicant Deposits 186,035 475,000 475,000 - 186,035 Sub-total $ 16,764,902 $ 2,757,149 $ 2,404,340 $ 133,691 $ 17,251,402 Grand Total $ 18,668,830 $ 10,236,934 $ 9,750,434 $ - $ 19,155,330 FY 2024-25
General
Fund
• Identified Savings
• Salaries – (24.55%)
• Benefits – (7.51%)
• Services – (18.98%)
• Development – (2.13%)
• Transfers – (46.83%)
• 34.2% savings from staff
related costs
Town of Portola Valley
Schedule of Adjustments - All Funds
FY 2024-25 Revised Budget
Revenues Expenses Revenues Expenses Revenues Expenses
110 Town Council - 3,000 - 3,000 - -
115 Town Committees - 48,525 - 35,050 - (13,475)
120 Town Manager - 1,012,008 - 1,033,008 - 21,000
125 Town Attorney - 245,000 - 245,000 - -
130 Town Clerk - 146,038 - 143,838 - (2,200)
140 Finance - 910,123 - 894,405 - (15,718)
210 Police Services - 1,681,348 - 1,693,317 - 11,969
220 Fire Services - 305,700 - 305,700 - -
230 Dispatch Services - 75,151 - 75,151 - -
310 Plannning Division 117,900 717,546 117,900 716,546 - (1,000) 320 Building Division 892,200 442,213 892,200 442,213 - - 330 Code Compliance - 30,000 - 30,000 - -
410 Community Hall 91,130 90,680 91,130 90,680 - -
420 PW - Parks & Fields 64,000 97,000 64,000 97,000 - - 510 PW - Streets, Facilities, Engineerig 44,000 802,883 44,000 701,968 - (100,915) 610 Non-departmental 6,270,555 836,219 6,270,555 839,219 - 3,000 Subtotal 7,479,785 7,443,434 7,479,785 7,346,094 - (97,340) Transfers In/Out
Operating - 133,691 133,691 - -
Capital - - - - -
Total - General Fund 7,479,785 7,577,125 7,479,785 7,479,785 - (97,340) Surplus / Deficit (97,340) (0)
23-Oct 13-Nov Difference
Authorized FTE
(Full-time
Equivalents)
• Proposed 20.6 FTE
• 7 positions are currently vacant or frozen
• Staff currently at 14.5 FTE
• Savings from vacancies – ($806K)
120 Town Manager 6.0
130 Town Clerk 1.0
140 Finance 4.0
310 Planning 4.2
320 Building 1.4
330 Code Enforcment 0.1
510 Public Works 4.0
Total 20.6
Authorized FTE Authorized Positions
Administration Status Planning & Building
Town Manager Vacant Planning & Building Director Ret Ann Assistant Town Manager Filled Building & Planning Manager Frozen Administrative Services Manager Filled Senior Planner Filled Senior Management Analyst Vacant Associate Planner Filled Town Clerk Cons Senior Development Review Technician Filled Administrative Analyst Frozen Development Review Technician I/II PT Administrative Assistant Filled
Temporary Help PT
Finance Public Works / Facilities Maintenance
Finance Director Filled Town Engineer PT
Senior Accountant Filled Engineer Technician I Vacant
Finance Technician Filled Recreation Facilities Coordinator Filled Lead Maintenance Worker Vacant
Maintenance Worker I/II Filled
Impact on
Services
• Counter hours will remain the same
indefinitely
• Delays in permit and plan check
processing, building inspections
• Delays in website updates, PRA
requests and other compliance
matters
• Recruitment, Retention, and
Development
• Continued reliance on consultants and
contractors
Impacts on
Future
Budgets
• FTE reduced to 15 eliminates any staff redundancy
•No development investment will increase retention and recruitment challenges •Ongoing challenges related to compliance without staff development Reduced Customer Service Expectations
• Limited staffing resources
•Will negotiate reduced hours to keep costs under control Continued reliance on Consultants/Contractors
•No additional credit after FY 2025-26 - $600K increase for FY 2026-27 Sheriff contract
• Increased maintenance costs for facilities
• Continued issues with IT
•Will invest if necessary, however will result in reductions in other areas Limited Capital Improvement Plan investment
•Will need to identify an additional $2.1M in cuts between now and FY 2029-30 Current Revenue and Expense trends
Fiscal
Forecast
Assumptions
Revenue
• Initial $86K bump from Fee study in FY 2025-26 then
grows at 3.5%
• No new revenue measures
Expenses
• Salaries grow at 3%
• Benefits grow at 7%
• Supplies and Services grow at 4% with a $150K target
reduction in FY 2025-26
• Sheriff contract assumes 10% growth starting in FY 2027- 28, credit expires in FY 2025-26
• No investment in Staff Development
• No investment in Capital Improvements, unless necessary
Fiscal
Forecast
• Expenses will exceed
revenues by FY 27-28
• Will need an additional
$2.1 million in cuts from
FY 27-28 – FY 29-30 to
maintain a balanced
budget
• Reserve will be in deficit
by early 2030’s
Lease-Leaseback
Low fixed-rate interest
financing option
Amount based on
appraised value of
property
Immediate availability of
funds
Possible arbitrage earnings
Repayment through
reduction in property tax
distribution over term of
the lease
• Lease - $3,000,000
• Interest - 3.77%
• Term – 5 Years
• Annual Base Rent - $670K
• Total Base Rent - $3.35M
• Current Investment Yield –
4.22%
Charter Town
• Charter Town status allows the Town
to set its own Real Property Transfer
Tax rate
• Current RPPT rate is $1.10 per $1,000
in sale value
• Average Revenue - $107K
• Average Home Sales – 52
• Average Sales Price - $3.7M
• Adopt an $8 per $1,000 rate will
generate an estimated $1.5M per year
• If measure is approved in Nov 2026,
rate will be effective January 1, 2027
Action
• 1. Adopt the FY 2024-25
Revised Budget
Town of Portola Valley
Fiscal Year 2024-25 Mid-year Budget Update
Purpose
• Opportunity to review the performance of all funds
• Make any necessary adjustments
• Helps shape development of next year’s budget
• Essential to maintain financial stability
• Increases budget transparency
Cash in Bank
Tech CU $ 493,237
Bank of America $ 1,115,217
LAIF $ 1,662,703
Schwab $18,755,606
Total $22,026,763
Interest Earnings $ 506,452
FY 2024-25
Fund Cash
Balance
General Purpose Funds
101 - General Fund $ 2,010,507
Sub-total $ 2,010,507
Restricted Funds
201 - Grants $ 259,575
202 - Public Safety Sales Tax 61,307
203 - Public Safety/COPS 523,035
204 - Open Space 9,050,394
205 - Library Fund 131,324
206 - Gas Tax/RMRA (22,530)
208 - Frog Pond Open Space 29,122
211 - Measure A 1,253,066
212 - Measure M 81,693
213 - Measure W 748,448
221 - Park In-lieu 45,779
222 - Inclusionary In-lieu 4,884,624
225 - ARPA 195,805
401 - Capital Projects 844,430
701 - Applicant Deposits 1,221,066
Sub-total $ 19,307,138
Fiduciary Funds
501 - Crescent Road Maintenance District $ 194,043
502 - Portola Valley Ranch Road Maintenance District 39,530 504 - Wayside II Road Maintenance District 137,867
505 - Woodside Highlands Road Maintenance District 337,677 Sub-total $ 709,118
Grand Total $ 22,026,763
General
Fund
• Deficit – ($8,564)
• Revenues and expenses
are still in line with
projections
• Consultant costs are still a
concern with staffing
vacancies
• No changes to revised
budget
Revenues Expenses Revenues Expenses Revenues Expenses
110 Town Council - 60 - 3,000 - 2,940
115 Town Committees - 28,077 - 35,050 - 6,973
120 Town Manager - 632,710 - 1,033,008 - 400,298
125 Town Attorney - 101,331 - 245,000 - 143,669
130 Town Clerk - 123,785 - 143,838 - 20,053
140 Finance - 339,915 - 894,405 - 554,490
210 Police Services - 846,659 - 1,693,317 - 846,659
220 Fire Services - 151,937 - 305,700 - 153,763
230 Dispatch Services - 37,576 - 75,151 - 37,576
310 Plannning Division 162,925 388,754 117,900 716,546 (45,025) 327,792 320 Building Division 271,333 162,544 892,200 442,213 620,867 279,669 330 Code Compliance - 12,683 - 30,000 - 17,317
410 Community Hall 46,762 48,358 91,130 90,680 44,368 42,322 420 PW - Parks & Fields 44,801 35,393 64,000 97,000 19,199 61,607 510 PW - Streets, Facilities, Engineerig 15,110 412,814 44,000 701,968 28,890 289,153 610 Non-departmental 3,299,285 526,183 6,270,555 839,219 2,971,270 313,036 Subtotal 3,840,215 3,848,779 7,479,785 7,346,094 3,639,570 3,497,316 Transfers In/Out
Operating - - 133,691 - 133,691
Capital - - - - -
Total - General Fund 3,840,215 3,848,779 7,479,785 7,479,785 3,639,570 3,631,007 Surplus / Deficit (8,564) 0
Actuals Budget Difference
General
Fund
• Revenues are at 51.34% of
the annual budget
• Tax revenues are
anticipated to hit targets
• Licenses and Permits are a
concern but are
anticipated to pick up in
the 2nd half
Category Amount Budget BBA Perc
Property Taxes 2,267,297 4,231,055 1,963,758 53.59%
Sales & Use Tax 161,962 350,000 188,038 46.27%
Utility Users Tax 588,123 945,000 356,877 62.24%
Business License Tax 41,206 125,000 83,794 32.96%
Franchise Fees 158,897 405,000 246,103 39.23%
Fines & Forfeitures 1,708 2,000 292 85.41%
Licenses & Permits 80,644 292,900 212,256 27.53%
Intergovernmental - 5,500 5,500 0.00%
Charges for Services 409,744 835,200 425,456 49.06%
Use of Money & Property 125,673 284,530 158,857 44.17%
Miscellaneous 4,962 3,600 (1,362) 137.83%
Transfers In - - - 0.00%
Total 3,840,215 7,479,785 3,639,570 51.34%
General
Fund
• Expenses are at 51.46% of
the annual budget
• Salaries included one-time
payments for employee
separations in the first
half
• Use of consultants
continue to be a concern
Category Amount Budget BBA Perc
Salaries 1,298,598 2,224,921 926,323 58.37%
Benefits 374,536 772,785 398,250 48.47%
Services 2,152,749 4,296,341 2,143,592 50.11%
Development 22,897 52,047 29,150 43.99%
Transfers Out - 133,691 133,691 0.00%
Total 3,848,779 7,479,786 3,631,007 51.46%
Fund
Balance
Overall Fund Balance
increased approximately
$730K
Fund Beginning Actual Actual Transfers Ending
Balance Revenues Expenditures In/(Out) Balance
General Purpose Funds
101 - Unassigned $ 803,472 $ 3,840,215 $ 3,848,779 $ - $ 794,908 Assigned
UAL 249,214 - - - 249,214
Equipment Replacement 34,960 - - - 34,960
Capital Replacement/Emergency 489,447 - - - 489,447
Legal Contingency 34,960 - - - 34,960
OPEB Liability 291,875 - - - 291,875
Sub-total $ 1,903,928 $ 3,840,215 $ 3,848,779 $ - $ 1,895,364 Restricted Funds
201 - Grants $ 362,398 $ 74,455 $ - $ - $ 436,853
202 - Public Safety Sales Tax 63,910 4,613 8,250 - 60,273 203 - Public Safety/COPS 498,019 136,145 125,000 - 509,164 204 - Open Space 8,375,362 437,529 - - 8,812,891
205 - Library Fund 69,973 66,568 8,662 - 127,879
206 - Gas Tax/RMRA 94,085 62,865 13,920 - 143,030
208 - Frog Pond Open Space 27,625 721 - - 28,346
211 - Measure A 1,046,241 173,781 - - 1,220,022
212 - Measure M 45,152 1,178 49,686 - (3,356)
213 - Measure W 628,127 16,387 81,623 - 562,891
221 - Park In-lieu 43,444 1,133 - - 44,577
222 - Inclusionary In-lieu 4,635,419 120,932 - - 4,756,351 401 - Capital Projects 689,112 - 17,992 - 671,120
701 - Applicant Deposits 186,035 344,489 324,183 - 206,341 Sub-total $ 16,764,902 $ 1,440,797 $ 629,317 $ - $ 17,576,382 Fiduciary Funds
501 - Crescent Road Maintenance District $ 209,474 $ 8,605 $ 28,950 $ - $ 189,130 502 - Portola Valley Ranch Road Maintenance District 37,897 519 - - 38,416 504 - Wayside II Road Maintenance District 107,023 28,098 - - 135,121 505 - Woodside Highlands Road Maintenance District 410,929 37,110 118,397 - 329,643 Sub-total $ 765,324 $ 74,333 $ 147,347 $ - $ 692,310
Grand Total $ 19,434,154 $ 5,355,344 $ 4,625,443 $ - $ 20,164,056 FY 2024-25
FY 2025-26
Budget
• Fiscal Responsibility and Long-term Viability
• Safety
• Responsible Land Use
Council Goals & Priorities - March
• Development
• Recruitment and Retention Challenges
Staffing Levels – Use of Consultants
• Identify and Prioritize Projects
• Infrastructure Maintenance
Capital Improvement Plan
• Tax revenues
• Salaries and Benefits
• Retirement and OPEB liabilities
Current Revenue and Expense Trends
• Fund Balance Reserve
Budget Policies
Questions &
Comments