Portola Valley City Council
June 11, 2025

TOWN OF PORTOLA VALLEY
Regular Meeting of the Town Council
Wednesday, June 11, 2025
7:00 PM
AGENDA
Judith Hasko, Mayor
Craig Taylor, Vice Mayor
Rebecca Flynn, Councilmember
Mary Hufty, Councilmember
Helen Wolter, Councilmember
Mayor Judith Hasko will be participating remotely from the Smyth Tribeca Hotel, 85 West Broadway, Room 610, New York, NY 10007
HISTORICSCHOOLHOUSE - 765PortolaRoad,PortolaValley,CA 94028 Remote Public Comments: Meeting participants are encouraged to submit public comments in writing in advance of the meeting. Please submit your public comments by using the online form, by 1:00 PM on the day of the meeting. Time permitting, correspondence will be uploaded to the website, forwarded to the Portola Valley Town Council for consideration during the meeting and included in the public record. Members of the public may also provide comments in person at the meeting. The agenda and staff report will be posted on the Town’s website by approximately 5:00 PM the Friday prior to the meeting.

In-Person Public Comments: Please fill out and submit a Public Comment card to the Town Clerk or Mayor prior to speaking. The Mayor will call your name at the appropriate time. Each speaker’s time is limited to three (3) minutes. The Mayor reserves the right to limit speakers’ time, depending upon the number of speakers or other circumstances.

Assistance for People with Disabilities: In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Town Clerk at (650) 851-1700 or by email at [email protected]. Notification 48 hours prior to the meeting will enable the Town to make reasonable arrangements to ensure accessibility to this meeting.

1. CALL TO ORDER / ROLL CALL

2. A.B. 2449 CONSIDERATIONS: Announcements/Consideration and approval of request to attend remotely by Town Council, pursuant to AB 2449 (just cause and emergency circumstances).

3. PRESENTATIONS / PROCLAMATIONS
a. Proclamation Designating June 2025 as LGBTQ+ Pride Month – (Lowellyn Sun/SMC Pride Center will receive virtually)

4. TOWN MANAGER REPORT
There are no written materials and the Town Council does not take action under this agenda item.

VIRTUAL PARTICIPATION VIA ZOOM
To access the meeting by computer:
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Passcode: 048294
To access the meeting by phone: 1-669-900-6833 or 1-888-788-0099 (toll-free) Mute/Unmute – Press *6 / Raise Hand – Press *9

Town Council Agenda
June 11, 2025

5. ORAL COMMUNICATIONS
Persons wishing to address the Town Council on any subject may do so now. Please submit a speaker’s slip located at the back of the room to the Town Clerk or Mayor, prior to speaking. Please note the Council is not able to undertake extended discussion or action on items not on the agenda. Each speaker’s time is limited to three (3) minutes.

6. CONSENT AGENDA
a. Adopt Regular Meeting Minutes of May 28, 2025
b. Approve Warrant List of June 11, 2025
c. Appoint Delle Maxwell to the Open Space Committee
d. Adopt Resolution No. 2968-2025: Approving Plans and Specifications and Calling for Bids for the 2025/2026 Street Resurfacing Project – Overlays and Digouts No. 2025-PW01

7. REGULAR AGENDA
a. Consideration of approving Town Committees’ funding requests b. Consideration of Not-For-Profit funding requests
c. Consideration of amending General Fund Minimum Balance Policy d. Review Preliminary FY 2025-26 General Fund Budget and Fiscal Forecast e. Receive Council Subcommittee Update on the Housing Element PostAdoption Plan f. Consideration of creating a Council Resilience Planning Subcommittee g. Consideration of creating a Safety Element Council Subcommittee

8. COLLEAGUE MEMORANDUM / AGENDA SETTING

9. COUNCIL SUBCOMMITTEE, LIAISON COMMITTEE, AND REGIONAL

AGENCIES REPORTS
Oral and written reports arising out of Council subcommittee and liaison appointments to both in-town and regional committees and initiatives. The Town Council does not take action under this agenda item.

10. ADJOURNMENT
The next Regular Town Council meeting will be held on June 25, 2025, at 7:00 p.m.

Land Acknowledgement: The Town of Portola Valley acknowledges the colonial history of this land we dwell upon the unceded territory of the Ramaytush (rah-my-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.

PROCLAMATION
Honoring June 2025 as
Lesbian, Gay, Bisexual, Transgender, Queer+
“LGBTQ+” - Pride Month
WHEREAS, the Town of Portola Valley recognizes the fundamental value of every individual and is committed to ensuring that all residents are treated with dignity and respect; and
WHEREAS, “Pride Month” is celebrated across the country each June to honor the history, courage, and contributions of the Lesbian, Gay, Bisexual, Transgender, Queer, + community, and to recognize the importance of promoting equity, acceptance, and visibility; and
WHEREAS, the diversity of the LGBTQ+ community enriches the cultural fabric of our town and contributes to the vibrancy and resilience of our shared civic life; and WHEREAS, the Town of Portola Valley stands with other communities in the San Francisco Bay Area and around the United States in affirming the right of every individual to live authentically, safely, and free from discrimination; and WHEREAS, the observance of Pride Month provides an opportunity to celebrate love, foster inclusion, and educate ourselves and future generations on the ongoing work of building a more just society.

NOW, THEREFORE, BE IT PROCLAIMED, that I, JUDITH HASKO, Mayor, Town of Portola Valley, do hereby proclaim the month of June 2025, as Pride Month in the Town of Portola Valley and encourage residents to engage in acts of compassion, learning, and unity in support of all members of our community.

Dated this 11th day of June 2025.
___________________________
Judith Hasko, Mayor

PORTOLA VALLEY TOWN COUNCIL REGULAR MEETING MINUTES – MAY 28, 2025

1. CALL TO ORDER / ROLL CALL
Mayor Hasko called the meeting to order at 7:04 p.m. Roll Call was taken by the Clerk.

Present: Councilmembers Rebecca Flynn, Mary Hufty, Helen Wolter, Vice Mayor Craig Taylor and Mayor Judith Hasko

Absent: None
Others: Interim Town Manager Mark Linder, Assistant Town Manager Corie StockerPedalino, Town Attorney Catherine Engberg, Finance Director, Anthony McFarlane, Clerk Consultant Christine Boland

2. A.B. 2449 CONSIDERATIONS: Announcements/Consideration and approval of request to attend remotely by Town Council, pursuant to AB 2449 (just cause and emergency circumstances) – None.

3. PRESENTATIONS / PROCLAMATIONS - None

4. TOWN MANAGER REPORT
Interim Town Manager Linder updated the Council on the following issues:
• Town Manager recruitment
• Upcoming “PV Palooza”
• Announced the Housing Element has been certified by the State • Discussed a meeting held with Congressman Licardo
• Congratulated Finance Director McFarlane on his one-year anniversary

5. ORAL COMMUNICATIONS
• Rita Comes Whitney
• Karen Askey

6. CONSENT AGENDA
A correction was made to the Minutes of May 14, 2025 (Consent Agenda Item 6.a.) as outlined below.

Motion and second (Taylor and Hufty) moved approval of Consent Agenda items 6.a. (as amended) 6.b. and 6.c. Motion carried by unanimous voice vote. a. Adopt Regular Meeting Minutes of May 14, 2025, as amended Clerk Consultant Boland requested a correction to Page 1, Item 4, Town Manager Report, bullet #5, be stricken as follows:
• Reported that mayor Hasko was absent on a cancer research fundraising trip.

b. Adopt Special Meeting Minutes of May 21, 2025
c. Approve Warrant List of May 28, 2025

7. REGULAR AGENDA
a. Review FY 2025-26 Capital Improvement Plan Budget Development Finance Director McFarlane presented the report. Council discussion ensued.

Mayor Hasko invited public comment:
• Dale Pfau
• Rita Comes Whitney
• David Cardinal
• Karen Askey
• Kristi C
Feedback was provided to Finance Director McFarlane. No action was taken on the item. b. Presentation regarding engagement with two Public Outreach and Education Firms for possible revenue ballot measure in November 2026
Interim Town Manager Linder presented the item and received feedback from the Council on hiring two professional outreach firms in preparation for a possible ballot measure in November 2026.

8. COLLEAGUE MEMORANDUM / AGENDA SETTING – None.

9. COUNCIL SUBCOMMITTEE, LIAISON COMMITTEE, AND REGIONAL AGENCIES REPORTS Councilmembers reported on several local and regional meetings they attended recently.

10. ADJOURNMENT
The meeting adjourned at 9:29 p.m.
_____________________________ ____________________________ Judith Hasko, Mayor Christine Boland, Clerk Consultant
Submitted to the Town Council for approval at its June 11, 2025 meeting

______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Tony McFarlane, Finance Director
DATE: June 11, 2025
RE: Review and Accept Warrant List
RECOMMENDATION:

1. Review and accept the following Warrant List for the month of June:
06/11/2025 Warrant List

REPORT SUMMARY
The following table lists warrant activity by date, tracks starting and ending warrant numbers, and total amount of warrants issued.

The following table lists payments by fund.

Date
Ending
Warrant #
Warrant 6/11/2025 5173 5207 35 155,494.53 6/12/2025 5/28/2025 5172 Attached are Warrant Lists for:

Prior Warrant List
Type of Warrant Date
Starting
Warrant #
Ending
Warrant #
Total
Warrants Amount
Warrants
Released
Fund Date Amount
General 6/11/2025 131,848.34
Library 6/11/2025 1,371.19
Gas Tax 6/11/2025 900.00
Measure M 6/11/2025 1,195.00
Measure W 6/11/2025 12,544.00
WHRMD 6/11/2025 3,324.00
Customer Deposits 6/11/2025 4,312.00
Total $ 155,494.53
Payments by Fund

TOWN OF PORTOLA VALLEY

STAFF REPORT

The following table lists the warrants issued as EFT/ACH payments. EFT/ACH payments are recurring payments for contributions related to retirement and deferred compensation, workers’ compensation premiums, and utilities, etc.

The following table lists the warrants that were voided and the reason for the voided transaction.

The following table lists the warrants issued outside of the scheduled warrant list cycle for various reasons, such as processing error, reissuing a voided check, or employee separation.

DISCLOSURE
For additional information on any item disclosed in this report, please contact the Finance department directly at [email protected].

ATTACHMENTS

1. 06/11/2025 Warrant List Certification
Date Warrant # Issued to Fund Dept Purpose Amount
6/11/2025 5179 Missionsquare Retirement General Various May Employee Contributions $ 5,683.31 6/11/2025 5181 Krupka Consulting Measure W 710 Beacons Project 31,025.51 6/11/2025 5184 Navia Benefit Solutions General Various May Employee Deductions 1,824.50 6/11/2025 5187 PERS Health General Various June Premium 283.33 6/11/2025 5188 PG&E General 610 May Utilities 2,600.08
6/11/2025 5194 Verizon Wireless General 610 May Mobile Charges 130.56 Warrants issued as ACH/EFT
Date Warrant # Issued to Fund Dept Reason Amount
Warrants Voided
Date Warrant # Issued to Fund Dept Purpose Amount
Warrants Issued Outside of a Scheduled Warrant List
Date Warrant # Issued to Fund Dept Purpose Amount
Disclosure

TOWN OF PORTOLA VALLEY
Warrant Disbursement Journal
June 11, 2025
Claims totaling $155,494.53 having been duly examined by me and found to be correct are hereby approved and verified by me as due bills against the Town of Portola Valley.

Date _____________________________ ________________________________ Corie Stocker, Assistant Town Manager
Motion having been duly made and seconded, the above claims are hereby approved and allowed for payment.

Signed and sealed this (Date) _____________________
_______________________________ _________________________________ Anthony McFarlane, Finance Director Mayor

apachreg Town of Portola Valley mmagahiz 06/04/2025 14:40 Page 1 Check Register
Check Vendor Vendor Name Check Check BW CheckNumber Number Amount Date TypeChecks for Cash Account: 910-11011-000 5173 109 CITY OF BURLINGAME 65.00 06/11/255174 121 SCA OF CA, LLC 2,095.00 06/11/255175 129 COTTON SHIRES & ASSOC. INC. 4,312.00 06/11/25 5176 135 CSG CONSULTANTS INC 12,937.00 06/11/255177 176 EXCEL LD 18.77 06/11/255178 213 HILLYARD INC 395.18 06/11/255179 218 MISSIONSQUARE RETIREMENT 4,824.50 06/11/25 EFTPS5180 234 J. W. ENTERPRISES 546.88 06/11/255181 275 KRUPKA CONSULTING 12,544.00 06/11/25 ACH5182 276 KUTZMANN & ASSOCIATES 35,972.29 06/11/255183 324 MIRANDAS LANDSCAPE 2,203.31 06/11/255184 330 NAVIA BENEFIT SOLUTIONS 283.33 06/11/25 EFTPS5185 330 NAVIA BENEFIT SOLUTIONS 200.00 06/11/255186 339 OCCUSCREEN LLC 53.00 06/11/255187 364 PERS HEALTH 15,658.54 06/11/25 EFTPS5188 367 PG&E 1,705.41 06/11/25 EFTPS5189 374 PLAN JPA 5,184.56 06/11/255190 375 PLATINUM FACILITY SERVICES 4,936.68 06/11/255191 387 RELIABLE FIRE EXTINGUISHER CO 782.79 06/11/255192 403 RON RAMIES AUTOMOTIVE INC. 648.99 06/11/255193 431 SIERRA PACIFIC TURF SUPPLY INC 1,967.91 06/11/255194 489 VERIZON WIRELESS 784.68 06/11/25 EFTPS5195 518 GOT GOPHERS? 1,050.00 06/11/255196 553 COUNTY OF SAN MATEO-PSC 18,787.75 06/11/255197 731 TERESA GODFREY 3,324.00 06/11/255198 860 STEPFORD 4,541.50 06/11/255199 914 UNITED MECHANICAL INC 6,059.00 06/11/255200 1118 STERICYCLE, LNC. DBA SHRED-LT 117.68 06/11/255201 1130 COAST LIVE MUSIC INC 1,250.00 06/11/255202 1186 AT&T CORP DBA ACC BUSINESS 731.59 06/11/255203 1195 LEAF CAPITAL FUNDING, LLC 412.89 06/11/255204 1200 TRAFFIC PATTERNS LLC 1,210.00 06/11/255205 1217 WBCP, INC. 8,440.30 06/11/255206 1259 BRANCH SERVICES 1,350.00 06/11/255207 1260 NANCY KRUBERG 100.00 06/11/25Check totals: 119,694.07ACH totals: 12,544.00EFTPS totals: 23,256.46Wire transfer totals:Payment Manager totals:GRAND TOTALS 155,494.53

Check totals: 119,694.07
ACH totals: 12,544.00EFTPS totals: 23,256.46Wire transfer totals:Payment Manager totals:GRAND TOTALS 155,494.53

apackfnd2 Town of Portola Valley mmagahiz 06/04/2025 14:43 Page 1 Checks by Fund - 06/11/25 to 06/11/25
Vendor Name Account Invoice Invoice Amount Check Check
Compressed Description Number Date
Formatted
Fund 101 Dept Balance SheetBRANCH SERVICES 101-21051-000 Deposit Refund - 1,350.00 5206 06/11/25 ComHall/Buckeye/Kitchen/Redwood Grove
COAST LIVE MUSIC INC 101-21051-000 Deposit - Refund 1,250.00 5201 06/11/25 Community Hall & Buckeye Room
MISSIONSQUARE RETIREMENT 101-21036-000 Deferred Comp - May 4,824.50 5179 06/11/25 31, 2025
NANCY KRUBERG 101-21052-000 Deposit Refund - 100.00 5207 06/11/25 Picnic TableNAVIA BENEFIT SOLUTIONS 101-21033-000 Navia Benefit 283.33 5184 06/11/25 05/31/2025
--------------
Fund 101 Dept Total 7,807.83
Fund 101 Dept 110 Town CouncilCITY OF BURLINGAME 101-65013-110 Council of Cities 65.00 5173 06/11/25 Dinner/Meeting, Mayor Judith Hasko
--------------
Fund 101 Dept 110 Total 65.00
Fund 101 Dept 120 Town ManagerPERS HEALTH 101-55021-120 June Health 4,937.90 5187 06/11/25WBCP, INC. 101-62099-120 Town Manager 8,440.30 5205 06/11/25 --------------
Fund 101 Dept 120 Total 13,378.20
Fund 101 Dept 140 FinancePERS HEALTH 101-55021-140 June Health 7,533.13 5187 06/11/25 --------------
Fund 101 Dept 140 Total 7,533.13
Fund 101 Dept 230 Dispatch ServicesCOUNTY OF SAN MATEO-PSC 101-62203-230 Public Safety 18,787.75 5196 06/11/25 Dispatch Svcs, Apr-Jun 2025

apackfnd2 Town of Portola Valley mmagahiz 06/04/2025 14:43 Page 2 Checks by Fund - 06/11/25 to 06/11/25
Vendor Name Account Invoice Invoice Amount Check Check
Compressed Description Number Date
Formatted
--------------
Fund 101 Dept 230 Total 18,787.75
Fund 101 Dept 310 Planning DivisionCSG CONSULTANTS INC 101-62099-310 Apr May Bldg Svcs, 2,457.00 5176 06/11/25 In House Plan
PERS HEALTH 101-55021-310 June Health 1,673.36 5187 06/11/25 --------------
Fund 101 Dept 310 Total 4,130.36
Fund 101 Dept 320 Building DivisionCSG CONSULTANTS INC 101-62099-320 Apr May Bldg Svcs, 10,480.00 5176 06/11/25 In House Plan
KUTZMANN & ASSOCIATES 101-62042-320 April Plan Checks 35,972.29 5182 06/11/25PERS HEALTH 101-55021-320 June Health 557.79 5187 06/11/25 --------------
Fund 101 Dept 320 Total 47,010.08
Fund 101 Dept 410 Community HallPLATINUM FACILITY SERVICES 101-61051-410 Janitorial Services 1,081.49 5190 06/11/25 - May 2025
RELIABLE FIRE EXTINGUISHER CO 101-61051-410 Annual Fire 260.92 5191 06/11/25 Extinguishers Service & Parts
--------------
Fund 101 Dept 410 Total 1,342.41
Fund 101 Dept 420 Field RentalsGOT GOPHERS? 101-61055-420 Town Fields Gopher 1,050.00 5195 06/11/25 Trapping- May 2025J. W. ENTERPRISES 101-61056-420 Handicap Unit 315.44 5180 06/11/25 Rental & Services J. W. ENTERPRISES 101-61056-420 Handicap Unit 231.44 5180 06/11/25 Rental & ServicesMIRANDAS LANDSCAPE 101-61055-420 Landscape Services 315.17 5183 06/11/25MIRANDAS LANDSCAPE 101-61055-420 Landscape Services 1,888.14 5183 06/11/25SIERRA PACIFIC TURF SUPPLY INC 101-61055-420 Fields Fertilizer 1,634.31 5193 06/11/25SIERRA PACIFIC TURF SUPPLY INC 101-61055-420 Fields Fertilizer 333.60 5193 06/11/25 --------------
Fund 101 Dept 420 Total 5,768.10

apackfnd2 Town of Portola Valley mmagahiz 06/04/2025 14:43 Page 3 Checks by Fund - 06/11/25 to 06/11/25
Vendor Name Account Invoice Invoice Amount Check Check
Compressed Description Number Date
Formatted
Fund 101 Dept 510 Public WorksHILLYARD INC 101-62011-510 Janitorial Supplies 395.18 5178 06/11/25PLATINUM FACILITY SERVICES 101-61054-510 Janitorial Services 2,296.91 5190 06/11/25 - May 2025
PLATINUM FACILITY SERVICES 101-62011-510-COVD19 Janitorial Services 448.01 5190 06/11/25 - May 2025. Fridays disinfection svcs
RELIABLE FIRE EXTINGUISHER CO 101-62011-510 Annual Fire 260.95 5191 06/11/25 Extinguishers Service & Parts
RON RAMIES AUTOMOTIVE INC. 101-61081-510 May Fuel Statement 648.99 5192 06/11/25TRAFFIC PATTERNS LLC 101-62099-510 Staff Augmentation 1,210.00 5204 06/11/25 Support
UNITED MECHANICAL INC 101-62011-510 HVAC AC/HEAT Repair 3,201.00 5199 06/11/25UNITED MECHANICAL INC 101-62011-510 HVAC AC/HEAT Repair 2,858.00 5199 06/11/25 --------------
Fund 101 Dept 510 Total 11,319.04
Fund 101 Dept 610 Non-DepartmentalAT&T CORP DBA ACC BUSINESS 101-62021-610 ACC Division of 731.59 5202 06/11/25 AT&TEthernet/InternetAccess
EXCEL LD 101-62021-610 May Telephone LD 18.77 5177 06/11/25 ServicesLEAF CAPITAL FUNDING, LLC 101-62307-610 Toshiba Printer 412.89 5203 06/11/25 Copy Lease
NAVIA BENEFIT SOLUTIONS 101-55025-610 May 2025 Monthly Fe 200.00 5185 06/11/25OCCUSCREEN LLC 101-62399-610 Recruitment 53.00 5186 06/11/25PERS HEALTH 101-55021-610 June Health 956.36 5187 06/11/25PG&E 101-62022-610 May Statement 650.17 5188 06/11/25 101-62022-610 14.29 5188 06/11/25101-62022-610 971.40 5188 06/11/25 101-62022-610 69.55 5188 06/11/25
PLAN JPA 101-63102-610 General Liability 5,184.56 5189 06/11/25 Claims- May 2025STEPFORD 101-62046-610 Monthly Service 3,920.00 5198 06/11/25 Charges 06/01/2025THRU 06/30/2025
STEPFORD 101-62305-610 Veeam Backup and 621.50 5198 06/11/25 Replication for Disaster Recovery - Jun 25
STERICYCLE, LNC. DBA SHRED-LT 101-62301-610 Paper Shredding 117.68 5200 06/11/25 ServicesVERIZON WIRELESS 101-62021-610 May Cellular 784.68 5194 06/11/25

apackfnd2 Town of Portola Valley mmagahiz 06/04/2025 14:43 Page 4 Checks by Fund - 06/11/25 to 06/11/25
Vendor Name Account Invoice Invoice Amount Check Check
Compressed Description Number Date
Formatted
--------------
Fund 101 Dept 610 Total 14,706.44
--------------
Fund 101 Total 131,848.34
Fund 205 Dept 510 Public WorksPLATINUM FACILITY SERVICES 205-61054-510 Janitorial Services 1,110.27 5190 06/11/25 - May 2025
RELIABLE FIRE EXTINGUISHER CO 205-62011-510 Annual Fire 260.92 5191 06/11/25 Extinguishers Service & Parts
--------------
Fund 205 Dept 510 Total 1,371.19
--------------
Fund 205 Total 1,371.19
Fund 206 Dept 510 Public WorksSCA OF CA, LLC 206-61012-510 May Litter/Street 900.00 5174 06/11/25 Clean
--------------
Fund 206 Dept 510 Total 900.00
--------------
Fund 206 Total 900.00
Fund 212 Dept 510 Public WorksSCA OF CA, LLC 212-61017-510 May Litter/Street 1,195.00 5174 06/11/25 Clean
--------------
Fund 212 Dept 510 Total 1,195.00
--------------
Fund 212 Total 1,195.00
Fund 213 Dept 710 Roads & Right-of-Way

apackfnd2 Town of Portola Valley mmagahiz 06/04/2025 14:43 Page 5 Checks by Fund - 06/11/25 to 06/11/25
Vendor Name Account Invoice Invoice Amount Check Check
Compressed Description Number Date
Formatted
KRUPKA CONSULTING 213-74011-710-BEACNS Traffic Planning 12,544.00 5181 06/11/25

BEACONS
--------------
Fund 213 Dept 710 Total 12,544.00
--------------
Fund 213 Total 12,544.00
Fund 505 Dept 620 Road Maintenance DistrictsTERESA GODFREY 505-62311-620 Reimb. WHRMD Rd 3,324.00 5197 06/11/25 Cleanup Labor 2025
--------------
Fund 505 Dept 620 Total 3,324.00
--------------
Fund 505 Total 3,324.00
Fund 701 Dept 340 Customer DepositsCOTTON SHIRES & ASSOC. INC. 701-62036-340 Apr-May 25 4,312.00 5175 06/11/25 Applicant Charges --------------
Fund 701 Dept 340 Total 4,312.00
--------------
Fund 701 Total 4,312.00
--------------
**** Grand Total 155,494.53
* * * End of Report * * *

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apapdinv2 mmagahiz Town of Portola Valley Page 1
14:40 06/04/25 Paid Invoices by Date
From: 06/11/2025 to 06/11/2025
Check Check Special Information Net Check Total Invoice Number Date Number Amount Invoices
Paid
Vendor: 109 CITY OF BURLINGAME
06/11/25 5173 Council of Cities Dinner/Meeting, Mayor Judith Hasko 65.00 65.00 07272025 Vendor: 121 SCA OF CA, LLC
5174 May Litter/Street Clean 2,095.00 2,095.00 2025-005335 Vendor: 129 COTTON SHIRES & ASSOC. INC.
5175 Apr-May 25 Applicant Charges 4,312.00 4,312.00 2025-APR-MAY Vendor: 135 CSG CONSULTANTS INC
5176 Apr May Bldg Svcs, In House Plan 12,937.00 12,937.00 APR-MAY-2025 Vendor: 176 EXCEL LD
5177 May Telephone LD Services 18.77 18.77 1199695510
Vendor: 213 HILLYARD INC
5178 Janitorial Supplies 395.18 395.18 605840465
Vendor: 218 MISSIONSQUARE RETIREMENT
5179 Deferred Comp - May 31, 2025 4,824.50 4,824.50 MAY-202531 Vendor: 234 J. W. ENTERPRISES
5180 Handicap Unit Rental & Services 546.88 315.44 266642 Handicap Unit Rental & Services 231.44 266643
Vendor: 275 KRUPKA CONSULTING
5181 Traffic Planning BEACONS 12,544.00 12,544.00 1460
Vendor: 276 KUTZMANN & ASSOCIATES
5182 April Plan Checks 35,972.29 35,972.29 1718424
Vendor: 324 MIRANDAS LANDSCAPE
5183 Landscape Services 2,203.31 315.17 1911
Landscape Services 1,888.14 1913
Vendor: 330 NAVIA BENEFIT SOLUTIONS
5184 Navia Benefit 05/31/2025 283.33 283.33 05312025
Vendor: 330 NAVIA BENEFIT SOLUTIONS
5185 May 2025 Monthly Fee 200.00 200.00 10977746
Vendor: 339 OCCUSCREEN LLC
5186 Recruitment 53.00 53.00 253131

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apapdinv2 mmagahiz Town of Portola Valley Page 2
14:40 06/04/25 Paid Invoices by Date
From: 06/11/2025 to 06/11/2025
Check Check Special Information Net Check Total Invoice NumberDate Number Amount Invoices Paid
Vendor: 364 PERS HEALTH
5187 June Health 15,658.54 15,658.54 100000017927081
Vendor: 367 PG&E
5188 May Statement 1,705.41 1,705.41 MAY-2025
Vendor: 374 PLAN JPA
5189 General Liability Claims- May 2025 5,184.56 5,184.56 PLAN-0290 Vendor: 375 PLATINUM FACILITY SERVICES
5190 Janitorial Services - May 2025 4,936.68 4,488.67 50801 Janitorial Services - May 2025. Fridays disinfection svcs 448.01 50802 Vendor: 387 RELIABLE FIRE EXTINGUISHER CO
5191 Annual Fire Extinguishers Service & Parts 782.79 782.79 2505195 Vendor: 403 RON RAMIES AUTOMOTIVE INC.
5192 May Fuel Statement 648.99 648.99 G20250531-1
Vendor: 431 SIERRA PACIFIC TURF SUPPLY INC
5193 Fields Fertilizer 1,967.91 1,634.31 01034009
Fields Fertilizer 333.60 01034163
Vendor: 489 VERIZON WIRELESS
5194 May Cellular 784.68 784.68 6114420972
Vendor: 518 GOT GOPHERS?
5195 Town Fields Gopher Trapping- May 2025 1,050.00 1,050.00 83977 Vendor: 553 COUNTY OF SAN MATEO-PSC
5196 Public Safety Dispatch Svcs, Apr-Jun 2025 18,787.75 18,787.75 PVPD 25-04 Vendor: 731 TERESA GODFREY
5197 Reimb. WHRMD Rd Cleanup Labor 2025 3,324.00 3,324.00 REIMB_WHRMD-4 Vendor: 860 STEPFORD
5198 Monthly Service Charges 06/01/2025 THRU 06/30/2025 4,541.50 3,920.00 2501879 Veeam Backup and Replication for Disaster Recovery - Jun 25 621.50 2501880 Vendor: 914 UNITED MECHANICAL INC
5199 HVAC AC/HEAT Repair 6,059.00 3,201.00 102977
HVAC AC/HEAT Repair 2,858.00 103099
Vendor: 1118 STERICYCLE, LNC. DBA SHRED-LT

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apapdinv2 mmagahiz Town of Portola Valley Page 3
14:40 06/04/25 Paid Invoices by Date
From: 06/11/2025 to 06/11/2025
Check Check Special Information Net Check Total Invoice NumberDate Number Amount Invoices Paid
06/11/25 5200 Paper Shredding Services 117.68 117.68 8010963176 Vendor: 1130 COAST LIVE MUSIC INC
5201 Deposit - Refund Community Hall & Buckeye Room 1,250.00 1,250.00 PRCH-25-7 Vendor: 1186 AT&T CORP DBA ACC BUSINESS
5202 ACC Division of AT&T Ethernet/Internet Access 731.59 731.59 3755852015 Vendor: 1195 LEAF CAPITAL FUNDING, LLC
5203 Toshiba Printer Copy Lease 412.89 412.89 18435745
Vendor: 1200 TRAFFIC PATTERNS LLC
5204 Staff Augmentation Support 1,210.00 1,210.00 2025-507 Vendor: 1217 WBCP, INC.
5205 Town Manager 8,440.30 8,440.30 7343
Vendor: 1259 BRANCH SERVICES
5206 Deposit Refund - Com Hall/Buckeye/Kitchen/Redwood Grove 1,350.00 1,350.00 PRCH-25-30 Vendor: 1260 NANCY KRUBERG
5207 Deposit Refund - Picnic Table 100.00 100.00 PROF-25-30 Check Date Totals 155,494.53
Grand Total 155,494.53

 



 





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June 5, 2025
Dear Judith Hasko, Mayor Portola Valley
Craig Taylor, Vice Mayor
Rebecca Flynn, Council Member
Mary Hufty, Council Member
Helen Wolter, Council Member
Re: In support of the application of Delle Maxwell to the Open Space Committee.

Delle Maxwell’s application to join the Open Space Committee is a gift to the community and unusually good Open Space fit. If approved, Delle’s complement of strengths have the capacity to bring leadership strengths and a breadth of skills and perspective to our work.

Delle is immediate past chair of the Gardens of Golden Gate Park, which gardens include the Conservatory, the Japanese Tea Garden, and Botanical Gardens. She is a recipient of Portola Valley’s Backyard Habitat Award, a dedicated native plant gardener, and Master Gardener. We are fortunate that she is also willing to commit her time and talent to Portola Valley Open Spaces.

Thank you in advance for taking up consideration of her May 27th application.

With appreciation,
Betsy Morgenthaler
Chair, Open Space Committee

TOWN OF PORTOLA VALLEY

STAFF REPORT
TO: Mayor and Members of the Town Council
FROM: Robert Burtt, Town Engineer
DATE: June 11, 2025
RE: Annual Street Resurfacing Project FY 2025-26 – Overlays and Digouts Project #2025-PW01

RECOMMENDATION
Staff recommends that the Town Council:

1. Adopt the attached Resolution approving plans and specifications for the FY 2025-26 Street Resurfacing project and calling for sealed bids for this project;

2. Authorize the Town Manager to award the project to the lowest responsible bidder with a total contract and change order amount not to exceed $734,500. This would include authorization to add to (or subtract from) the project, additional work and as recommended by the Town Engineer if the allocated amount allows, in an effort to maximize paved areas and utilize the entire allocated amount;

3. Authorize the Town Manager to award any additive bid alternates within budget; and

4. Authorize the Town Manager to execute contracts related to construction management, inspection, testing, and support services related to the project within the amounts contained in the applicable fiscal year Town budget.

BACKGROUND
Regular and strategic maintenance of the Town’s roads is a cost-effective way to provide greater safety and usability for road users and extend the life of the roadway system. Each year the Town completes a road maintenance project that incorporates treatments as appropriate.

DISCUSSION
The preparation of construction documents for this year’s street resurfacing program is completed. This project will include extensive repair to the roadway base and apply a preventative maintenance surface seal on sections of roads as listed on Attachment 2.

Also included are additive bid alternates for additional roads. These bid alternates provide flexibility, savings, and efficiency. Bid alternates can be selected if the budget allows. Bid award will be based on the base bid amount.

The street sections selected for treatment this year were based on the Town’s Pavement Management System and field surveys conducted in 2021/2022. A copy of the Plans and Specifications are available for review at Town Hall in the office of the Town Clerk.

The following is our anticipated project schedule for this project weather dependent:

Town publicly advertises for the project: Week of June 27, 2025 Bid Opening: Week of July 18, 2025
Town Manager awards contract: August 2025
Construction window begins: August/September 2025
Construction window completed: November 2025
Additive Bid Alternates

1. Additive Bid Alternate One is an additive bid alternate for one street that may be included should costs allow (Attachment 1).

FISCAL IMPACT
The estimated cost of the base bid of this street resurfacing project is $734,500 including a 10% construction contingency.

The base bid estimate cost does not include the additive bid alternates. Additive Bid Alternate One adds one additional street to the program (Attachment 1) and is estimated at $81,050. The additive bid alternates or portions will only be executed if each of the projects budgets allows.

Once bids are opened and considered, staff will include the appropriate amounts and estimates in the proposed fiscal year 2025/2026 budget.

ATTACHMENTS

1. Street sections for base bid and additive bid alternates

2. Resolution

Attachment 1
2025/2026 Street Resurfacing Project Street Sections
Street No. Street Approx. Begin Limit Approx. End Limt Engineers estimate with 10% contingency
1 Firethorn Way Los Trancos End of 2-Lane Section
2 Cherokee Court Cherokee Way End3 Peak Lane Cervantes Road Golden Oak Drive4 Pomponio Horseshoe Bend Cul De Sac 5 Deer Medow Lane Golden Hills Drive Cul De Sac6 Corte Madera Road Alpine Road #170 Corte Madera Road7 Cherokee Way Cervantes Road Cherokee Court8 Escobar Road Conform at #131 Cul De Sac9 Westridge Drive 200' N/O Degas Road #909 Driveway, Cal Water Pump10 Campo Drive Corte Madera Road EndBase Bid $ 734,500 No. Street Begin Limit End Limt
1 Bear Gulch Drive Golden Oak Drive (North End) Valencia Court (#155 Bear Gulch) $ 81,050 BASE BIDADDITIVE BID ALTERNATE 1

RESOLUTION NO. 2968-2025

A RESOLUTION OF THE TOWN COUNCIL OF THE

TOWN OF PORTOLA VALLEY

APPROVING PLANS AND SPECIFICATIONS AND

CALLING FOR BIDS FOR THE
2025/2026 STREET RESURFACING PROJECT – OVERLAYS AND DIGOUTS No. 2025-PW01
The Town Council of the Town of Portola Valley does RESOLVE as follows:

Section 1. The Town Council hereby approves and adopts plans and specifications for the work in the Town of Portola Valley known as the 2025/2026 Street Resurfacing Project – Overlays and Digouts No. 2025-PW01.

Section 2. Due to public interest and convenience, the Town Council hereby orders that the work and improvements, as set forth and described in said plans and specifications, be advertised for bid and performed subject to an acceptable bid. The Town Council further orders that all of the work and improvements will be done under the direction of and to the satisfaction of the Town Engineer; and all of the work shall be done in accordance with the plans and specifications.

Section 3. Not less than the prevailing rate of per diem wages and holiday and overtime work shall be paid for any work proposed to be performed in the performance of the public work under the plans and specifications.

Section 4. The Town Clerk of the Town is hereby directed to post by two (2) successive postings in the three (3) public places that have been designated by ordinance as the places for posting public notices, there being no newspaper published in the Town, and not less than five (5) days apart, a notice inviting sealed proposals or bids for the construction of the work and improvements and referring to the plans and specifications on file in the Office of the Town Clerk, the first of which postings shall be at least ten (10) days prior to the time fixed for opening bids.

Section 5. All proposals or bids shall be accompanied by a certified check payable to the order of the Town, or cash, amounting to ten percent (10%) of the bid, or by a bond in said amount and payable to the Town, signed by a corporate surety or by the bidder and two sureties who shall justify before any officer competent to administer an oath, in double said amount and over and above all statutory exemptions. The check shall be forfeited, or the bond shall become payable to the Town, if the bidder does not, after the contract has been awarded, and within the time specified in the plans and specifications, enter into a contract with the Town, in the form set forth in the specifications. The faithful performance of the contract shall be assured by an undertaking in the amount of one

hundred percent (100%) of the amount so bid, with sureties satisfactory to the Town, and which shall be accompanied by a payment bond (labor and materials) in a sum not less than one hundred percent (100%) of the amount of the bid.

Section 6. The sealed proposals or bids shall be delivered to the Town Engineer of the Town as stated on the Notice Inviting Bids, or other later date as directed by the Town Engineer, at the Office of the Town Clerk in the Town Hall, 765 Portola Road, in the Town, said time being not less than ten (10) days from the time of the first publication of said notice. Bids will be publicly opened, examined, and the Town Manager will take action awarding the contract or rejecting all bids not later than ninety (90) days after the expiration of the time prescribed for the receipt of bids; provided the award may be made after the expiration of the specified times, if the bidder shall not have given to the Town notice in writing of the withdrawal of such bid on proposal. The Town Engineer is authorized to add or subtract work to comply with budget requirements.

Section 7. The Town Council of the Town hereby reserves the right to reject any and all bids.

Section 8. The Town Manager is authorized to enter into and execute contracts related to construction management, inspection, testing, and support services related to the project within the amounts contained in the applicable fiscal year Town budget.

PASSED AND ADOPTED this 11th day of June 2025, by the following vote:

AYES:

NOES:

ABSENT/ABSTAINED:

RECUSED:
.

Mayor
ATTEST:

Town Clerk

______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Tony McFarlane, Finance Director
DATE: June 11, 2025
RE: Town Committee Funding Requests
RECOMMENDATION:

1. Approve funding for Town Committee budget requests in an amount not to exceed $54,675:

REPORT SUMMARY
The Town has 16 permanent advisory committees as follows, • Bicycle, Pedestrian & Traffic
Safety
• Cable and Utilities
Undergrounding
• Community Engagement
• Conservation
• Cultural Arts
• Emergency Preparedness
• Finance
• Geologic Safety
• Historic Resources
• Nature and Science
• Open Space Acquisition
• Parks & Recreation
• Public Works
• Sustainability
• Trails & Paths
• Wildfire Preparedness
Volunteerism is one of the guiding principles of the Portola Valley. Dozens of dedicated residents have volunteered their time and efforts to the continued success of the Town.

Council, Commission and Committee members efforts have helped maintain the unique characteristics that is Portola Valley. Committees have two responsibilities, advisory and support. In its advisory role, committees are responsible for advising the Town Council, or other committees, on matters that fall within its area of responsibility. In its support role, committees assist and, in some cases, augment staff in the performance of their duties.

The following table illustrates the historical budget activity of the Town Committees since FY 2020-21.

TOWN OF PORTOLA VALLEY

STAFF REPORT

Community events make up most of the activities for the Cultural Arts, Parks & Recreation and Trails & Paths committees. Events include PV Palooza, the Summer Concert Series, Town Picnic, Zotts to Tots, and the Horse Fair. The Emergency Preparedness committee pays for sand for residents to fill sandbags to help mitigate runoff during the winter storm season.

For fiscal year 2025-26, the committee requests include funding for the following, • PV Palooza ($4,000)
• Summer Concert Series ($10,000)
• Zotts to Tots
• Town Picnic
• Horse Fair
• Sand
• Updates to Geologic and Ground Movement Potential Maps 20-21 21-22 22-23 23-24 24-25
Revenues
46079 Miscellaneous Revenue$ 3,465 $ 791 $ 4,199 $ - $ - 46089 Event Fundraising 18,850 40,100
Subtotal $ 3,465 $ 19,641 $ 44,299 $ - $ -
Expens es
62323 Volunteer Appreciation $ - $ - $ 16,564 $ 16,334 $ - 62324 Science & Nature - - 1,097 - -
63201 Cable Television - - - - -
63202 BicyclePedTraffic - - - - -
63203 Conservation - - 55 7,000 65
63204 Cultural Arts - 30,133 44,850 13,171 13,954
63205 Emergency Preparedne 2,394 848 2,550 2,041 1,235
63206 Historic Resources - - 180 99 2,728
63208 Parks & Recreation - 31,313 24,189 23,224 24,607
63209 Sustainability - 2,452 848 - -
63211 Trails & Paths - - 6,757 12,597 9,457
63212 Wildfire Preparedness - - 5,126 - -
63213 Open Space Acquisitio - - - - -
63214 Geologic Safety - - 55 7,000 -
Subtotal $ 2,394 $ 64,745 $ 102,271 $ 81,466 $ 52,046
Actuals

FISCAL IMPACT
The total amount approved by the Council will be reflected in the FY 2025-26 proposed budget.

ATTACHMENTS

1. Town Committee Budget Worksheets
Revis ed Proposed Difference
24-25 25-26
Revenues
46079 Miscellaneous Revenues $ - $ - $ -
46089 Event Fundraising
Subtotal $ - $ - $ -
Expens es
62323 Volunteer Appreciation $ - $ - $ -
62324 Science & Nature - - -
63201 Cable Television - - -
63202 BicyclePedTraffic - - -
63203 Conservation 1,725 1,725 -
63204 Cultural Arts 14,000 14,000 -
63205 Emergency Preparedness 1,300 1,800 500
63206 Historic Resources 2,725 200 (2,525)
63208 Parks & Recreation 19,300 25,000 5,700
63209 Sustainability - - -
63211 Trails & Paths 10,000 10,000 -
63212 Wildfire Preparedness - - -
63213 Open Space Acquisition - - -
63214 Geologic Safety 450 1,950 1,500
Subtotal $ 49,500 $ 54,675 $ 5,175

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues $ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63203 Conservation $ - $ - $ 55 $ 7,000 $ 65 $ 1,725 $ 2,410 $ 685 -
500
210
400
400
100
400
400
-
-
-
-
-
-
-
-
-
Subtotal $ - $ - $ 55 $ 7,000 $ 65 $ 1,725 $ 2,410 $ 685 Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Conservation Committee
101 - General Fund
Actuals
Broom Pull Refreshments
BYH Brochure Reprint
Table Hand-outs
Itemized Budget
Frog Pond signage, education materials
Banners
Fall Lecture Event
Spring Lecture Event

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues $ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63204 Cultural Arts $ - $ 30,133 $ 44,850 $ 13,171 $ 13,954 $ 14,000 $ 14,000 $ - -
-
6,000
3,500
500
4,000
-
-
-
-
-
-
-
-
-
-
-
Subtotal $ - $ 30,133 $ 44,850 $ 13,171 $ 13,954 $ 14,000 $ 14,000 $ - Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Cultural Arts
101 - General Fund
Actuals
PV Palooza
Itemized Budget
Summer Concert Series
Bands
A/V
Security

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues $ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63205 Emerg Preparedness $ 2,394 $ 848 $ 2,550 $ 2,041 $ 1,235 $ - $ 1,800 $ 1,800 -
1,800
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Subtotal $ 2,394 $ 848 $ 2,550 $ 2,041 $ 1,235 $ - $ 1,800 $ 1,800 Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Emergency Preparedness Committee 101 - General Fund
Actuals
Itemized Budget
Sand

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues $ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63206 Historic Resources $ - $ - $ 180 $ 99 $ 2,728 $ - $ - $ - -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Subtotal $ - $ - $ 180 $ 99 $ 2,728 $ - $ - $ -
Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Historic Resources
101 - General Fund
Actuals
Itemized Budget

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
44056 Zotts to Tots $ - $ - $ - $ - $ - $ - $ 8,000 $ 8,000 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ 8,000 $ 8,000
Expenses
63208 Parks & Recreation $ - $ 31,313 $ 24,189 $ 23,224 $ 24,607 $ 19,300 $ 25,000 $ 5,700 2,500
Bay Area Face Painters 800
Party with 360 3,200
Insurance 1,350
Music 500
Stuart Rental Company 7,650
Zotts to Tots reimbursable expenses 8,000
Skedda Court Reservation System 500
500
-
-
-
-
-
-
Subtotal $ - $ 31,313 $ 24,189 $ 23,224 $ 24,607 $ 19,300 $ 25,000 $ 5,700 Game Nights
Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Parks & Recreation
101 - General Fund
Actuals
Itemized Budget
Picnic Related Expenses:

Friendly Pony Parties

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues $ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63209 Sustainability $ - $ 2,452 $ 848 $ - $ - $ - $ - $ - -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Subtotal $ - $ 2,452 $ 848 $ - $ - $ - $ - $ -
Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Sustainability Committee
101 - General Fund
Actuals
Itemized Budget

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues$ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63211 Trails & Paths $ - $ - $ 6,757 $ 12,597 $ 9,457 $ 10,000 $ 10,000 $ - -
-
3,000
1,400
2,000
500
2,500
100
500
-
-
-
-
-
-
-
-
Subtotal $ - $ - $ 6,757 $ 12,597 $ 9,457 $ 10,000 $ 10,000 $ - Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Trails & Paths
101 - General Fund
Actuals
Los Tolucas
Harry Councell - Carriage
Chris Romano - Artist
Reimbursements
Itemized Budget
Horse Fair
Friendly Ponies Parties
Peninsula Party Rentals
Alliant Insurance Services

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues$ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63212 Wildfire Preparedness $ - $ - $ 5,126 $ - $ - $ - $ - $ - -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Subtotal $ - $ - $ 5,126 $ - $ - $ - $ - $ -
Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Wildfire Preparedness
101 - General Fund
Actuals
Itemized Budget

Revised Proposed Difference
20-21 21-22 22-23 23-24 24-25 24-25 25-26
Revenues
46079 Miscellaneous Revenues $ - $ - $ - $ - $ - $ - $ - $ - 46089 Event Fundraising - - - - - - - -
Subtotal $ - $ - $ - $ - $ - $ - $ - $ -
Expenses
63214 Geologic Safety $ - $ - $ 55 $ 7,000 $ - $ 450 $ 1,950 $ 1,500 -
300
350
1,300
-
-
-
-
-
-
-
-
-
-
-
-
-
Subtotal $ - $ - $ 55 $ 7,000 $ - $ 450 $ 1,950 $ 1,500 Town of Portola Valley
FY 2025-26 Operating and Capital Budget
115 - Town Committees - Geologic Safety Committee
101 - General Fund
Actuals
Itemized Budget
Printing, Copying, and Scanning
Community Meetings - Speaker Stipends
Meeting with Cotton, Shires to update Geologic and Ground Movement Potential Maps

______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Tony McFarlane, Finance Director
DATE: June 11, 2025
RE: Not-for-Profit Agency Funding Requests
RECOMMENDATION:

1. Approve funding for not-for-profit agencies providing services benefiting the Town, its residents, or the larger peninsula community in an amount not to exceed $18,000:

REPORT SUMMARY
Annually, the Town receives several funding requests from not-for-profit agencies. The Town Council reviews these funding requests and determines the allocation amount that each agency will receive. For Fiscal Year 2024-25, the following allocations were included in the FY 2024-25 Proposed Budget:

Approximately $12,000 of not-for-profit funding was eliminated in the Revised Budget.

Organization Requested Expensed
Emergency Preparedness in Communities (EPiC) 15,000$ 15,000$ Human Investment Project Housing (HIP) 3,000 -
Housing Endowment and Regional Trust (HEART) 1,432 -
Housing Leadership Council (HLC) - -
Joint Venture Silicon Valley (JVSV) 1,100 1,100
Meals on Wheels - Peninsula Volunteers, Inc 5,000 -
Peninsula Conflict Resolution Center (PCRC) - -
Sustainable San Mateo County (SSMC) 1,735 -
Sustainable Silicon Valley (SSV) 1,000 -
Community Overcoming Relationship Abuse (CORA) 1,610 1,610 Ombudsman Services of San Mateo County (OSSMC) - -
Total 29,877$ 17,710$
2024-25

TOWN OF PORTOLA VALLEY

STAFF REPORT

For Fiscal Year 2025-26, the Town has received the following funding requests.

Emergency Preparedness in Communities (EPiC)
Operates the WPV-Ready and WPV-CERT programs. WPV-Ready provides emergency preparedness information, education, and resources. WPV-CERT focuses on building the strongest possible volunteer emergency response team. EPiC’s goal is to promote emergency preparedness knowledge and skill at the citizen and neighborhood levels. EPiC receives funding from the WFPD, the Town of Woodside and the Town of Portola Valley.

Human Investment Project Housing (HIP)
Programs include Home Sharing, Self Sufficiency, and Housing Readiness. Home Sharing matches people seeking an affordable place to live with those who have existing space. The Self-Sufficiency program offers 1–5-year rental scholarships and access to housing and educational support to low-income parents and transitional- age foster youth. The Housing Readiness program empowers older adults and very lowincome individuals to navigate the challenging local housing landscape and provides services to prevent the most vulnerable of the community from experiencing homelessness.

Housing Endowment and Regional Trust (HEART)
Helps non-profit organizations acquire and preserve existing affordable housing. In FY 23-24, HEART launched a new program allowing HEART to use its bonding capacity to purchase existing buildings and convert them to affordable housing.

Joint Venture Silicon Valley (JVSV)
Provides analysis and operates action programs related to climate initiatives, surplus food diversion, transportation, broadband and professional economic development services. Through the Silicon Valley Index, JVSV monitors the region’s health and vitality.

Meals on Wheels – Peninsula Volunteers, Inc (PVI)
Operates the Meals on Wheels program for San Mateo County. This program provides seniors and adults with disabilities nutritious meals, daily human contact, and safety checks. According to PVI, over 16,000 seniors face food insecurity in San Mateo County. PVI delivers more than 180,000 meals to 1,200 San Mateo County residents.

Meals on Wheels receives partial funding from San Mateo County Aging and Adult Services.

Sustainable San Mateo County (SSMC)
Promotes positive community action on economic, environmental, and social equity issues. Core programs include the Indicators Report and the Annual Sustainability and Green Building Awards. New efforts include a City Sustainability Newsletter. There is also a Sustainability Ideas Bank available for local agencies to use to augment their own sustainability initiatives.

Sustainable Silicon Valley (SSV)
Assists community businesses and local governments in reducing energy and water consumption. Through data measurement, goal setting with extensive outreach, SSV helps local governments become more energy and water efficient and build better environmental health, economic vitality, and community resiliency.

Community Overcoming Relationship Abuse (CORA)
Provides emergency response services to victims of abuse as well as legal services, housing, and mental health support.

Historically, the Town Council has allocated approximately $18,400 to Non-profit agencies since FY 2020-21.

FISCAL IMPACT
The total amount approved by the Council will be reflected in the FY 2025-26 proposed budget.

ATTACHMENTS

1. Funding Schedule
Organization Requested Allocated
Emergency Preparedness in Communities (EPiC) 10,000$ $ 7,000 Human Investment Project Housing (HIP) 3,000 2,100
Housing Endowment and Regional Trust (HEART) 1,432 1,002 Housing Leadership Council (HLC) - -
Joint Venture Silicon Valley (JVSV) 1,100 770
Meals on Wheels - Peninsula Volunteers, Inc (PVI) 5,000 3,500 Peninsula Conflict Resolution Center (PCRC) - -
Sustainable San Mateo County (SSMC) 1,735 1,215
Sustainable Silicon Valley (SSV) 1,000 700
Community Overcoming Relationship Abuse (CORA) 1,675 1,675 Ombudsman Services of San Mateo County (OSSMC) - -
Total 24,942$ 17,962$
2025-26

Organization Proposed Recommended
20-21 21-22 22-23 23-24 24-25 25-26 70%
Citizens Emergency Response Preparedness Program (CERPP) $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ - $ - $ - Emergency Preparedness in Communities (EPiC) - - - - 15,000 10,000 7,000 Human Investment Project Housing (HIP) 3,000 3,000 3,000 2,081 - 3,000 2,100 Housing Endowment and Regional Trust (HEART) 1,432 1,432 1,432 944 - 1,432 1,002 Housing Leadership Council (HLC) 600 600 - - - - -
Joint Venture Silicon Valley (JVSV) 1,000 1,000 1,000 694 1,100 1,100 770 Meals on Wheels - Peninsula Volunteers, Inc (PVI) 3,000 3,000 3,000 3,469 - 5,000 3,500 Peninsula Conflict Resolution Center (PCRC) 552 552 2,726 1,915 - - - Sustainable San Mateo County (SSMC) 2,500 2,500 2,500 1,735 - 1,735 1,215 Sustainable Silicon Valley (SSV) 1,000 1,000 1,000 694 - 1,000 700 Community Overcoming Relationship Abuse (CORA) - - - 1,610 1,642 1,675 1,675 Ombudsman Services of San Mateo County (OSSMC) - - - - - - - Subtotal $ 18,084 $ 18,084 $ 19,658 $ 18,141 $ 17,742 $ 24,942 $ 17,962 Actuals

WPV-CERT
Q1 2025 QUARTERLY REPORT

WPV-CERT INFRASTRUCTURE
▸ Radio Repeaters
▸ WD & PV repeaters now linked by microwave
▸ Three 16’ Trailers
▸ WD & PV Logistics
▸ Incident Command Post

INCIDENT COMMAND POST TRAILER
▸ Solar panels
▸ Large Lithium Battery
▸ Inverter for mains power
▸ Starlink Internet
▸ Multiple, redundant radios
▸ Server & large screen displays

INSTANT ON, ALWAYS ON

CERT BASIC TRAINING CLASS FEB/MAR 2025
▸ PV Ranch
▸ 17 new students
▸ Skills day & final exercise at Station 7

BADGED CERTS
▸ Started 2025 with 29
▸ Added 17 this year, Total now 46 badged CERTs
▸ Radio Operator Badge (planned)
▸ Ready/Firewise neighborhood org. radio operators
▸ Towns, schools, Sequoias
▸ PVARC Radio HAMs for command post “Radio corps”

2025 RETENTION AND ENGAGEMENT PROGRAMS
▸ “1st Saturdays”
▸ Trailer organization & improvements
▸ Mini exercises: SMC Alert, set up staging area,
refine ICP processes, mobile teams
▸ Monthly Meetings: Zooms & in-person
▸ Activation exercise, Getting phones disaster ready,
Organizing Med Kits, What to bring when activated

2025 RETENTION AND ENGAGEMENT PROGRAMS
▸ Coordination & Activation via WFPD, SMCAlert
▸ Updated Website & Blog
▸ Monthly IMT meetings
▸ Outreach & Connections
▸ Neighborhood response programs
▸ HAMs
▸ Community Events: WFPD Centennial, May Day

WPV-CERT VOLUNTEER HOURS Q1 2025
▸ Total hours Q1 2025: 444
▸ ~37h/week

______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Tony McFarlane, Finance Director
DATE: June 11, 2025
RE: General Fund Minimum Balance Policy
RECOMMENDATION:

Amend General Fund Minimum Balance Policy reducing the reserve level from 60% of operating expenses to 20%.

REPORT SUMMARY
In July 2011, the Town Council adopted a General Fund Minimum Balance Policy establishing a reserve level of unreserved and spendable fund balance level of 60% of budgeted operating expenses. The adopted budget for FY 2011-12 had $3.86 million in expenditures. A 60% reserve would translate to approximately $2.32 million. The ending General Fund balance of unreserved and spendable fund balance was $2.38 million on June 30, 2012.

Since adoption of the policy, the Town’s budgeted expenses have nearly doubled as has the reserve level. There has also been a period where revenues declined due to the COVID pandemic. Over the prior three fiscal years, increased costs due to the adoption of the Housing Element and the significant increase in the San Mateo County Sheriff’s contract have eroded the General Fund reserve. Based on budgeted expenditures of $7.48 million for FY 2024-25, the reserve level should be $4.49 million. The fund balance reserve is currently estimated to be $2.2 million as of April 2025.

In the first three months of Fiscal Year 2024-25, the Finance Committee broke into several working groups to better understand the Town’s finances and its current situation. One of the working groups reviewed the reserve policy and presented their findings. Their initial recommendation was to maintain the reserve at a range of 25% to 50% with 25% being a hard floor. At its meeting on April 22, the Finance Committee recommended the following.
“The Finance Committee recommends that the Town Council amend the current policy to state that the General Fund Minimum Unrestricted Fund Balance shall be maintained at or above 20% of annual general fund expenditures.”

TOWN OF PORTOLA VALLEY

STAFF REPORT

Keeping the reserve at 60% will require a budget plan that will restore the reserve to $4.5 to $5 million over several years. Absent new revenues, this plan would include draconian cuts to staff and services. Reducing the reserve to 20% gives the Town Council more flexibility to allow for some deficit spending to gain a deeper understanding of the Town’s current situation and to explore all options to achieve long-term financial sustainability.

ATTACHMENTS

1. General Fund Minimum Balance Policy

2. Finance Committee Working Group Paper

3. April 22, 2025, Finance Committee Meeting minutes

4. GFOA – Rethinking Reserves

T:\Council Staff Reports-Deposit staff reports here\2025\06-11-2025\7c1 - 06-11-2025 General Fund Reserve Policy - Policy.docxI:\Finance Policy & Procedure\GF Minimum FB Policy.doc
6/6/20256/4/20255/30/2025
Town of Portola Valley
General Fund Minimum Fund Balance Policy
Adopted: July 27, 2011
Proposed Revised: June 11, 2025
Purpose
The purpose of this policy is to establish a target minimum level of unreserved and spendable fund balance to be maintained in the General Fund for use by the Town Council in the event of natural disaster, severe unforeseen emergencies, economic uncertainties and/or replacement of major Town infrastructure.

Background
In order to protect the fiscal solvency of the Town, it is important to maintain a minimum unreserved and spendable fund balance within the General Fund. Although the Town has acted prudently when arriving at budgetary decisions, a written policy establishing a target minimum fund balance assists both the Council and staff in focusing on this important fiscal consideration.

The current Best Practices recommendations of the Government Finance Officers’ Association (GFOA) are that a minimum General Fund reserve of 5% to 15% of operating revenues or one to two months of operating expenditures (8-17%) be maintained. In a 2007 survey performed by the GFOA, most of the participating cities had a minimum or target between 10% and 30%.

The GFOA also recommends that the adequacy of unreserved fund balance in the general fund should be assessed based on upon a government’s own specific circumstances, and that smaller cities with a less diversified tax base are advised to hold reserve percentages at the higher end of the suggested range.

A minimum General Fund operating/emergency fund balance amount can be calculated in a variety of ways, ie. as a percentage of the operating budget, appropriations, expenditures, or projected or actual revenues. It can also be calculated as a minimum flat amount that can be increased by the CPI each year.

Recommendation
As a small town with the historical precedence and risk of local natural disasters (landslides, earthquake, wildfires) and less diversified tax base, it is fiscally prudent for Portola Valley to maintain a minimum unreserved and spendable fund balance within the general fund at a higher level. It is therefore recommended that the Town maintain a minimum of 6020% of its annual budgeted operating expenditures within the General Fund’s unrestricted fund balance. This amount is to be calculated annuallyquarterly via the adopted budgetTreasurer’s Report to the Town Council and Finance Committee.

Example:
2024-25 Adopted Budget General Fund Expenditures $7,479,785 Multiplied by 20% $1,495,957
April 2025 general fund unrestricted fund balance (est.) $2,207,099 Attachment 1

August, 2024
Town of Portola Valley Finance Subcommittee for General Fund Reserve Policy Members: Chris Rittler and Bill Urban
Recommendation for Revised Town of Portola Valley General Fund reserve policy Current policy states that the General Fund minimum unrestricted fund balance shall be maintained at or above 60%, measured as the current general fund unrestricted fund balance (including funds labeled as assigned or reserved) divided by the adopted fiscal year budget general fund expenditures.

Proposed Revised Policy
The unrestricted fund balance shall be maintained in a range of 25% up to 60%, measured as the current general fund unrestricted fund balance divided by the adopted (or as amended) fiscal year budget general fund expenditures.

The reserve measurement shall be calculated and reported at the end of each calendar quarter, based on the most recent general fund unrestricted fund balance and the run rate of annualized current planned spending. If the reserve calculation ever drops to 30% or lower, the reserve measurement shall be calculated and reported at the end of each month until the reserve returns above 30%.

The 25% lower bound is a hard floor, and any decline below, or monthly forecast of a decline to below 25% will dictate the following actions be taken:

Town Council and Finance Committee shall convene a joint special meeting within 30 days to approve immediate actions to reduce current expenditures or to access alternative sources of cash to preserve essential spending. Every alternative that does not impair current essential spending shall be considered, including at a minimum, suspension of new capital projects, a pause in current ongoing capital projects, deferral of pay down of long term liabilities, and a hiring freeze and deferral of raises.

It shall also identify then available additional standby cash resources. Those standby resources shall include any external cash sources available through agency or other governmental grants or loans, as well as the existing restricted funds held in the Open Space(15) and Inclusion in Lieu (45) accounts.

These standby actions may be considered for purposes of maintaining the general fund reserve balance above the 25% level floor, but shall not be used for increasing it above the 60% reserve ceiling.

What is the goal of a reserve policy?
We understand the goal of the General Fund reserve policy is to provide sufficient funds for the continuation of essential Town services and facilities to residents, in the event of a fiscal or safety and health emergency, and to protect citizens’ personal safety and safe access to their real and personal property, and the enjoyment thereof.

What is the benefit of an unrestricted general fund reserve policy? A well designed fund reserve policy buys time for the Town to develop and implement solutions to address a fiscal emergency that threatens the ability of the Town to deliver services to its citizens. The reserve policy itself does little to address the underlying challenges that may be caused by increasing expenditures or inadequate revenues, but it can buy additional time to develop and implement solutions.

Attachment 2

Why is a change in the timing and frequency of measurement recommended? This measurement has traditionally been taken annually, in early July following adoption of the new fiscal year budget, based on the unrestricted fund balance as of June 30.

However, to the extent that some reserved or assigned funds are highly likely to be spent within a known time period, even if they are not fully expected to be spent in the current fiscal year budget, these funds may be less available or prudent to tap in a financial emergency. For example, capital expenditure assignments may represent actual planned spending in current year, or in a future budget, whereas an assignment to pay off all or part of a long future liability, such as other post-employment benefits (OPEB), may not actually require full or even partial payment in the near term, and thus is more clearly available to serve as an emergency reserve source. Hence, a calculation of a second, or “immediately available” fund balance percent excluding both restricted funds and funds in likely near term expenditure assignments should be calculated on a periodic basis.

Why is an acceptable range being recommended, rather than a single minimum 60% figure? A single number or percentage implies a precision in the determination of an acceptable limit that may not be warranted or supported by available data or experience with managing financial emergency conditions. The reserve measurement can be affected dramatically by either large changes in planned expenditures over which the Town has some control, or large changes in revenues over which the Town may have little to no control, particularly in the short term. For example, there is a normal seasonal large cash drawdown period between the two annual dates of property tax collections forwarded by the County tax assessor to the Town at end of April and end of December.

A single minimum percentage also tends to bias management of unrestricted cash reserves to be at or above that amount at all times, without recognizing that there are both opportunity costs to the Town and taxpayers of holding excessive reserve funds, not just risks of holding insufficient reserve funds in a financial emergency. The current Town policy already acknowledges that the Government Finance Officer’s Association (from 2007 survey) has recommended minimums that are substantially lower than 60%, including as low as 10-30%. The 60% ceiling is recommended as a “soft” ceiling, not requiring Town action to reduce below that level, but to encourage consideration of the opportunity cost of holding excess reserves. Those costs include loss of inflation-adjusted purchasing power and restrictions on the investment opportunities for Town funds.

Why is quarterly measurement and reporting of the policy recommended? A single measurement on the anniversary date of new fiscal year budget adoption may mask the variability and volatility of the measurement that results from seasonal planned or unplanned changes in cash flows and spending throughout the fiscal year. Since financial risk may arise at any point during the fiscal year, more frequent measurement provides more information about the ability of the Town to manage those risks. This may be particularly important if encountering a year of potential budget deficits or surpluses and the current measurement shows a reading close to either the lower or upper limit of the range limits, as it allows the application of potential fiscal actions at times other than at a single annual measurement date. In past years, in the past decade, monthly reporting of the then current reserve ratio appeared on the Town’s monthly financial report.

For example, the proposed FY ’24-’25 budget reports estimated starting unrestricted cash reserves of $5,445,940 against annual proposed expenditures of $8.683,381, or a 62.7% reserve ratio. However, end of fiscal year estimated unrestricted reserves of $2,298,223 against next fiscal year expenditures of the identical amount to the current year, even with no spending increases, results in a ratio of 26.5%.

The possibility of such a precipitous drop over just a single year dictates much more frequent measurement and management against the then current reserve ratio.

Where and in what form should reserves be held?
Reserves can be held at any of the financial institutions currently used by the Town, including bank or credit unions, brokerage accounts, or the Local Agency Investment Fund (LAIF). Transfers should be freely and quickly available among any of these accounts.

The reserves need not, and most often should not be held in large amounts in only low-yielding bank accounts, or need not be held only in cash equivalent vehicles, such as money market mutual funds.

Exchange traded funds invested in short term government and corporate fixed income holdings are fully compliant with the government code, and are quickly convertible into cash within 24-48 hours. The Town has a separate Investment Policy Statement that governs the type of allowable securities.

Earnings from the cash reserves, restricted funds, and other Town operating accounts that are currently managed as a combined pool of funds at the various financial institutions, are allocated on a prorata basis among the various funds as required by government code. Instead, it may be advisable to set up a separate account number within the brokerage firm and the LAIF to hold the combined amounts of only the few restricted funds that have no or minimal regular annual disbursements or expenditures (Open Space-15, Park in Lieu-40, and Inclusion in Lieu-45.) In this way, the monies needed to be held by an account number in low yielding bank accounts to pay monthly payroll and warrant list expenditures will be prorated only among the other Town general funds that require frequent disbursements. The few restricted funds will be able to continuously earn the full, higher returns available in the brokerage and LAIF accounts.
-What other sources of funds beyond the reserve should be considered to cover emergency financial needs if the trajectory of the reserve level is to continue declining below 25%? Outside private or public lines of credit may be available, such as grants or loans from Federal, State or local agencies or governments, like FEMA or others, as a result of specified natural disasters that cause a financial emergency and immediate needs for additional funds.

The qualifying situations, application procedures, timelines, and amounts that the Town may be able to access from various agencies and outside grants or emergency funds should be researched and documented in advance to aid in assessing the adequacy of any changes required to the reserve requirement. We expect the major types of financial needs include costs of post-emergency cleanup and debris removal, as well as repair or replacement of physical assets such as roads and Town-owned structures and equipment. The El Nino weather damage that afflicted the Town in the late 1990’s may be a good starting point for assessing the likely types and costs of repairs and replacements, as those storms did major damage to a number of Town roads and structures. That period also likely holds some lessons about the procedures to qualify the Town to receive recovery grants and loans.

Interfund transfers/loans for periods up to one year from a restricted fund to the general fund, may be permissible under State law under certain conditions. These conditions include having a committed repayment plan and proper reporting of the existence of the transfer/loan. We would not propose actually moving funds from a restricted account to the general fund except in the case of inability to pay a Town payroll or process a warrant list. The following link comes from the California State Auditor’s office regarding limitations on the permissible use of loans from restricted funds to town general funds, and a case study from 2018 of how the town of Lincoln northeast of Sacramento attempted to manage the use of such fund transfers.
https://information.auditor.ca.gov/reports/2018-110/sections.html

TOWN OF PORTOLA VALLEY
Finance Committee Minutes [DRAFT]
Tuesday, April 22, 2025
Attendees
Tony McFarlane, Finance Director
Craig Taylor, Council Liaison
George Savage, Chair
Stephen Cassani, Member
Ken Lavine, Member
Michele Takei, Member
Bill Urban, Member
Mark Waissar, Member
Chris Rittler, Member
Call to Order and Roll Call
The Chair called the meeting to order at 4:01 pm. The Chair confirmed attendance. All committee members were present.

Oral Communications for Items Not on Meeting Agenda
There were no public comments made.

Announcements and Presentations
There were no announcements and presentations.

Approval of Minutes
The minutes of the March 27, 2025 meeting were approved.

New Business:
a. Town Manager Mark Linder requested assistance of the Committee to evaluate additional options to address the town’s finances. The four new options were:

1. Annex Ladera

2. Merge with Woodside

3. Disincorporate

4. Establish a $25M investor/donor owned split interest endowment fund in which the first 4% return each year would be donated to the town.

Brief discussion was held regarding clarifying questions raised by public comment and committee members. A subcommittee was established to address both a refresh of the Committees original options to address the town’s finances as well as the four new options.
b. Finance Update – Tony McFarlane presented two Finance Update Staff Reports for February and for March, 2025 upon which Committee members and the public asked clarifying questions.
c. Town Revenues – In preparation of the 2025/26 budget, Tony McFarlane made a presentation that discussed the types of revenue received by the Town, the authority to collect the revenue, the funds that revenues are deposited into and the timing of the revenues. Committee members and the public asked clarifying questions.

Attachment 3

Ken Lavine left the meeting at 6:05 pm. Michele Takei replaced him as acting secretary for the balance of the meeting.
d. Reserve Policy Discussion and Recommendation - Bill Urban summarized the General Fund reserve policy recommendation prepared in August, 2024 by him and Chris Rittler.

They recommended a reserve in a range of 25%-60% of general fund expenditures. The Committee, Tony McFarlane, Chris Taylor, community members David Cardinal and Rita Comes discussed the pros and cons of a reserve policy at various percentage rates.

The Committee passed the following resolution:
“The Finance Committee recommends that the Town Council amend the current policy to state that the General Fund minimum unrestricted fund balance shall be maintained at or above 20% of annual general fund expenditures.” e. Future Topics: One of the future Finance Committee meeting topics should be the subcommittee update of options the Town should consider to reduce its financial difficulties plus the pros and cons of the 4 options suggested by the Town Manager earlier in the meeting.

Other Business
None.

Adjournment
The meeting was adjourned at 6:36 pm.

Ken Lavine and Michele Takei, Acting Secretaries

14 Attachment 4

AUGUST 2023 | GOVERNMENT FINANCE REVIEW 15
Should We Rethink
Reserves?

SPECIAL SECTION
SPECIAL SECTION | RETHINKING RESERVES
While Fund Balance Guidelines for the General Fund is one of GFOA’s most often-cited best practices, there are many opportunities for reserve optimization beyond the one-size-fits-all guidance provided in the best practice. This series of articles brings what we’ve learned together with university research to describe new opportunities that will help local governments get the best value from their reserve strategies.

BY SHAYNE KAVANAGH, VINCENT REITANO, AND PETER A. JONES 1 The Governmental Accounting Standards Board (GASB) provides guidance on how to classify fund balances to differentiate between amounts that are more constrained or less constrained in their potential use. You can read more about these classifications in “GASB Statement No. 54, Fund balance reporting and governmental fund type definitions,” available at GASB.org.

A Multimillion-Dollar Question
“Fund balance” is an accounting term that describes the difference between assets and liabilities. “Reserves” is a budget and policy term that describes the fungible resources available outside of the budget for use if the resources appropriated inside of the budget are insufficient. There is an overlap between “fund balance” and “reserves,” but the most important difference is that fund balance covers a broader range of resources. For example, fund balance could include prepaid inventories or receivables for delinquent taxes, neither of which is available for current spending.1 This
paper is focused on the budget and policy role of reserves.

RESERVES VERSUS FUND BALANCE
©2023 MICHAEL AUSTIN C/O THEISPOT.COM

16 SPECIAL SECTION | RETHINKING RESERVES
Why We Should Rethink Reserves
An increasingly volatile and uncertain
world. Reserves play a role in buffering
local government from volatility;
however, if volatility is increasing,
we should reexamine how reserves
are managed to ensure that local
governments have an adequate buffer.

For example, damages from natural
disasters have been on the rise in
recent decades. Reserves fund the
response to natural disasters, and even
if federal or state/provincial financial
assistance is available, reserves fill
the gap until assistance arrives, which
can take months or even years.

It has long been thought that having
substantial reserves is desirable—
bigger is better. So why might we
need to do some rethinking here?
The reasons (which are consistent
with many of those cited for GFOA’s
Rethinking Budgeting initiative1
)
take on special significance when
applied to reserves.

Lower trust in government
and experts. Local government
stakeholders may be suspicious of
large reserves, especially if they don’t
understand why the government is
holding these resources instead of
spending them on current services or
cutting taxes. In the past, a finance
officer’s expert opinion, perhaps based
on GFOA’s best practices, might have
been sufficient to justify reserves, but
expert opinion may not be so readily
accepted in the future.2 Finance officers
may need to provide justification for
reserves that rely less on appeals to
©2023 MICHAEL AUSTIN C/O THEISPOT.COM

AUGUST 2023 | GOVERNMENT FINANCE REVIEW 17
expertise and more on the fundamental
reasons why reserves are important.

Local governments are becoming
more resource constrained. Local
governments are expected to maintain a
sizable reserve by “industry standards”
and by bond rating agencies.3 At the
same time, local governments are
facing more resource constraints,
especially with employee healthcare
and pension costs rising. For many
governments, the increases in costs
have consumed revenue increases,
which may soon level off. GFOA’s Fund
Balance Guidelines for the General
Fund best practice recommends
that—at a minimum—general-purpose
governments, regardless of size,
maintain unrestricted budgetary fund
balance in their general fund of no less
than two months of regular general
fund operating revenues or regular
general fund operating expenditures.

Moody’s Rating Agency looks for fund
balances of more than 35 percent of
annual revenue to provide a AAA rating
for general obligation debt. Long-term
demographic trends point toward an
aging population. Though the U.S.
demographic outlook is not as dire as
it is for other developed countries, an
aging population still doesn’t bode
well for local government revenues.4
Legislative constraints also limit
revenue growth. For example, there
is evidence that local government
revenues do not recover as quickly
from setbacks like recessions as
they once did because of legislative
constraints.5 (In fact, some
economists believe that the long-term
growth trajectory of the United States
will slow; indeed, the general trend has
been slowing growth since the 1970s.)
Rising costs paired with stagnating
revenue growth mean that local
governments need to make efficient
use of resources, including reserves.

Building reserves is a use of current
revenues, and governments need to
weigh the opportunity costs of doing
so. Is it better to provide services today
or to save the money for later?
None of this suggests that local
government reserves should always
and everywhere be lower than they are
today. Instead, we should look for more
and better options to provide buffers to
local governments than reserves have
traditionally provided. For example,
are there opportunities to make
more cost-effective combinations of
commercial insurance and reserves?
This might not always lead to a
decrease in reserves; in fact, it could
call for reserves to be increased as part
of a high-deductible insurance strategy
for some perils to reduce the total cost
of risk (insurance plus reserves).

Information technology makes
rethinking reserves easier.

Information technologies make it
easier to analyze reserve strategies and
optimize the strategy to the conditions
faced by the government.
1 See “Why Do We Need to Rethink Budgeting?” at gfoa.
org/materials/why-do-we-need-to-rethink-budgeting.
2 For data on declining trust in experts, see: Cary Funk, Alec Tyson, Brian Kennedy, and Courtney Johnson, “Scientists Are Among the Most-Trusted Groups in Society,”
September 29, 2020, Pew Research Center.
3 GFOA’s Fund Balance Guidelines for the General
Fund best practice recommends that—at a minimum—
general-purpose governments, regardless of size,
maintain unrestricted budgetary fund balance in their
general fund of no less than two months of regular
general fund operating revenues or regular general fund operating expenditures. Moody’s Rating Agency looks for fund balances of more than 35 percent of annual revenue to provide a AAA rating for general obligation debt.
4 Michael A. Pisano, The Puzzle of the American Economy:

How Changing Demographics Will Affect Our Future and
Influence Our Politics (Praeger: 2017).
5 See, for example, empirical research on state
governments analyzing time to fiscal recovery following economic recessions: Christian Buerger,“The effect of
economic downturns on state budgets: A counterfactual
analysis of the great recession,” Applied Economic
Letters, 28(21), 2020.

Building reserves is a
use of current revenues,
and governments need
to weigh the opportunity
costs of doing so. Is
it better to provide
services today or to save
the money for later?
Reserves are the liquid financial resources (typically cash and investments that can be turned into cash) that local governments do not include in the annual spending plan—resources that are held back from the budget and held in “reserve” for some other purpose. The most important purpose is to respond to significant, unplanned, and unavoidable costs or revenue losses such as a natural catastrophe or a recession. Another common purpose is as a sinking fund, or “piggy bank,” for a large, nonrecurring, planned future, like purchasing a capital asset. Reserves also support a strong bond rating by signaling to investors that the local government has resources to pay back debt even with potential disruptions to its financial position.

Reserves: What and Why

18 How Do We Rethink
Reserves?
We begin rethinking reserves by
starting from “first principles”—
that is, why do local governments
have reserves in the first place? To
reduce volatility and uncertainty
in public finances. Uncertainty
exposes a government to financial
risks, so framing the reserve
explicitly as a risk management
tool and linking the reserve to
concrete risks that decisionmakers can appreciate is a great way to communicate why reserves
are important. In examining the
key risks that reserves guard
against, we will see that there
are many possible risks, and it is
difficult, if not impossible, to buy
commercial insurance to protect
against many of them.

The risks we face
Cash flow risk is a concern, especially
for governments where a major
revenue source like property taxes
is received only once or twice a year
in large chunks, while expenditures
occur evenly throughout the year.

A similar problem can occur if large
portions of state-shared revenue
have to be authorized by the state
each year through the state budget
process. Delays in approving the state
budget could result in delays in local
government revenues. Reserves help
smooth out resource availability and
have important advantages over other
options like tax anticipation notes,
which can entail the risk of highinterest rates.

A big risk for many governments is
revenue instability, with recessions
being the major culprit. If a recession
dramatically reduces revenue,
then reserves can be used to help a
government make a “soft landing.”
For example, in the City of Savannah,
Georgia, sales tax was a large revenue
source that was sensitive to the economy.

The city, therefore, developed a sales tax
stabilization reserve. When the Great
Recession hit, the city was able to draw
from the reserve and avoid layoffs.

There could be other sources of
revenue instability, too. Perhaps a major
revenue source is subject to changes
in the political environment, as in the
case of some state-shared revenue. Or
a local revenue source might be subject
to periodic reapproval by the voters. In
one city, the potential for the closing of
a major industrial employer was a risk
because the city relies heavily on a local
income tax.

Historically, local governments
haven’t consistently used reserves to
offset revenue losses from a recession.1
This might be because of state and federal
government support during the last
two recessions, through the American
Recovery and Reinvestment Act of 2009
and the American Rescue Plan Act of
2021. While these pieces of legislation
were a major help to local government
fiscal health, local governments should
not expect similar support in future
recessions. Recovery funds require
Congress to pass major legislation, and
the rise of political polarization and
gridlock makes this far from guaranteed.

And even if the federal government
offers relief, future funding might have
restrictions, and it will be impossible
for local governments to predict how
much money they might receive. Local
governments should therefore prepare to
handle the impacts of recession on their
own. Reserves provide another option
than spending cuts.

Another major risk category is natural
disasters like earthquakes, wildfires,
floods, and hurricanes, which can
result in urgent needs like overtime for
first responders or shelter, food, and
supplies for displaced families. And
disaster recovery includes unforeseen
expenditures like the cleanup that
follows the initial devastation.

Sometimes, a local government will
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AUGUST 2023 | GOVERNMENT FINANCE REVIEW 19
have some of its costs reimbursed by
the Federal Emergency Management
Agency (FEMA) and/or state agencies.

If this is the case, reserves are still
important to cover the non-reimbursable
costs—including lost revenue, fees, and
increased operating costs—while also
fronting the costs until reimbursement
arrives. FEMA reimbursement for natural
disasters takes an average of 18 months,
in GFOA’s experience.

Some extreme weather events might
not be declared an “emergency” by
national or state government, in which
case the local government may be on its
own. A common example of this is an
extreme snow season that causes the
local government to dramatically exceed
its snow removal budget. Reserves could
be used to fund the overage, and the
money might be replenished by surpluses
in times of light snow.

Man-made disasters are also a risk.

The possibility of hazardous material
spills that cost a lot to clean up, for
example, can have a material impact
on local finances. Cyberattacks are
another example of a man-made risk that
might have implications for reserves.

Cyber insurance policies are becoming
more expensive or totally unavailable
to some governments, so a government
might need to raise the deductible on
a commercial policy or forgo a policy
altogether. In this case, the government
is either partially or fully self-insuring
against cyberattacks, and reserves
provide the financial backing. Capital
infrastructure also presents risks that
reserves can help mitigate. Debt is a
powerful tool for local governments to
finance infrastructure acquisitions,
and reserves provide assurances to
creditors that the government is not at
unacceptable risk of default. Reserves
can also be used to pay for capital
assets directly (such as pay-as-you-go
funding strategies).

Other risks not covered here might fall
into categories of financial/economic,
health crises, security, reputational,
and more. Here are a few examples from
governments GFOA has worked with to
analyze their risk exposure. You might
think of others that are relevant to your
jurisdiction.
 Financial/economic. For governments
with large pension liabilities, a
reduction in the rate of return on
pension investments could increase the
annually required pension payment.2
Reserves could be used to cushion
the initial shock from a reduced rate
of return and consequent increase
in required annual contributions,
but a government will, at some point,
need to realign its annual spending to
accommodate increased pension costs.
 Public health. The COVID-19 pandemic
is an extreme example of the potential
financial impact of a health event.

Less extreme outbreaks could still
have financial impacts. For example,
local governments with public health
responsibilities in urban areas could
face large costs from local outbreaks of
serious diseases like hepatitis.
 Public safety. Terrorism and civil
disorder can cause a spike in public
safety costs. Civil disorder events
could become more difficult to insure
against because social media can
spread civil disorder beyond a local
phenomenon.3 In other words, civil
disorder in one community can easily
spread to others. Insurance companies
try to avoid insuring risks where this
kind of “domino effect” is in play.

Recognizing that reserves are essentially
a tool for risk management leads to our
next point on how to rethink reserves:
adjust your mental model.

Adjusting your mental model: savings
versus insurance
Mental models are the ways in which we
see the world, and they guide how we
make decisions. If public finance officers
can give decision-makers a better mental
model, they will make better decisions.

The traditional mental model for reserves
is a savings account, and this does have
advantages. First, it’s easily understood
by people who are not public finance
experts. Second, it has a seemingly
obvious parallel to the personal lives
of local governments’ stakeholders.

This is particularly true for the “sinking
fund” function of reserves, as most
people have experience with building
up their personal savings to pay for
some consumer expenditure or personal
investment (for example, education,
house, and car).

But this model has disadvantages
as well. First, the analogy to personal
Rethinking isLocal
Each local government will need to decide how to best
apply the ideas in this article to their circumstances.

For example, a local government’s “reserves” are
commonly associated with the general fund. Yet,
many of the same ideas presented in this article could
apply to other funds, like enterprise funds.

20 In a discussion with a city council about reserve strategy, one council member asked about the practical implications of spending the reserve. Using the “reserves as insurance” mental model, you would point out that lower reserves would be the equivalent of taking a lower limit (or higher deductible) on your insurance policy. The “reserves as savings account” mental model struggles with this question because of an increasingly prevalent view that savings exist to be spent.

Reserves as Insurance and the Elected Board
resources that are removed from the
private economy. It can be argued that
excess reserves could do better for the
community if those resources were put
to work in the private economy. Even
if excess reserves weren’t returned to
the private economy, one could make a
good argument that the excess amounts
should be used by the government
to benefit the current generation of
taxpayers (the ones who provided the
money to create the reserve). Further,
putting aside money to offset risk
creates diminishing returns.

As a simple thought experiment,
imagine a person had $10,000 in their
savings account to offset personal risk.

This is a healthy amount, but it is not
hard to imagine circumstances where it
would prove insufficient. Now imagine
that a similar person had $1 million in
their savings account. It is much harder
to imagine the circumstances where
this would be insufficient. Finally,
imagine that each person was given
an additional $10,000. It’s easy to see
how the additional money would be a
big help for the first person, but it would
be hard to argue that the second person
would experience an equal gain in risk
mitigation from building their savings
further. The $10,000 creates greater
marginal benefit for the first person
than the second. The same logic applies
to government.

If the savings account mental model
has important limitations, what is the
alternative? We propose insurance
as a new mental model. This does
not necessarily replace the savings
account model but does supplement it by
providing a new and better perspective
on some of the most important purposes
of a reserve.

Insurance has an obvious parallel
to people’s personal lives. Given that
local governments hold reserves to
manage risk, insurance is an accurate
analogy for reserves. Further, insurance
is purchased before an adverse event
occurs, much like reserves must be
built up ahead of time to prepare for
unpredictable adverse events.

Another advantage of insurance as
a mental model is that it invites local
governments to think about ways in
which commercial insurance and selfinsurance can work together to create an optimized risk financing strategy.

Reserves are a self-insurance strategy,
but commercial insurance policies
(those purchased from a broker) can
supplement reserves. For example,
commercial insurance could be useful
for protecting against low-probability
but extreme-consequence events.

Using insurance as a mental model
also implies that there is an optimal
amount to have on hand. Non-experts
can appreciate that it is possible to
either over or under-insure the risks
you face. Insurance also implies a
point at which the “policy” should
be used. Let’s consider recessions as
SPECIAL SECTION | RETHINKING RESERVES
savings as a buffer against risk might
not be as powerful as it seems. Personal
savings rates have been in long-term
decline.4 Most consumers also start
saving reactively, after an adverse event
has occurred (such as a recession or
pandemic). Obviously, this is not a viable
strategy for local government reserves.5
Given the reactive strategy that most
savers adopt, it is not surprising that
most Americans are well short of
the amount of personal savings that
personal finance experts recommend
keeping for an emergency. Given the lack
of emphasis on saving for an emergency,
many people may now see personal
savings more as a vehicle for saving up
for future purchases than as a way to
manage risk.6 There is evidence that
financial managers are more likely than
the average person to view their own
personal savings as a tool for managing
risk. This means that the “savings
account” metaphor for reserves may be
more powerful in the minds of financial
managers than it is for other people.

Second, the savings account mental
model implies that having more in your
account is better, but this is not always
true of local government reserves.

Local governments face opportunity
costs that are different from those faced
by private individuals. Reserves are
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AUGUST 2023 | GOVERNMENT FINANCE REVIEW 21
Reserves as Insurance
+
Reserves as Savings Account
= Savvy
Financial Strategy
Addresses reserve’s role in guarding
against risks like revenue instability,
catastrophic events, and cashflow instability.

Addresses reserve’s role in accumulating
cash to pay for future costs that would not
be affordable within a single year’s revenue.

A capital asset is an example of such a cost.

Provides a lens that encourages new
and savvy ways to manage risk across
the government.

Provides a lens that encourages multiyear
financing strategies for large costs.
an example. Recessions are the most
important source of financial instability
for local governments, so reserves can
play a crucial role in counteracting
downturns in economic cycles. But there
is little evidence that local governments
use reserves during times of economic
recessions. In the Great Recession, the 30
largest U.S. cities used their fiscal reserves,
but only 25 percent of the 600 smaller
cities studied drew down their reserves
(the remaining cities cut spending).7
Failure to use reserves likely caused
distress to the community in the form of
interruption to public services. While local
governments should consider spending
cuts during a revenue downturn, a
strong reserve can help avoid the most
damaging spending cuts.

The insurance mental model is not
without its disadvantages. Insurance
can be an abstract and difficult concept
to grasp, even in our personal lives.

This means that people sometimes
don’t make optimal personal decisions
about insurance, just as they make
suboptimal decisions about personal
savings. Another disadvantage is that
the analogy becomes more complicated
when considering commercial
insurance and intergovernmental aid.

Taking these other risk management
tools into account is necessary for an
optimal risk management strategy, but
the trade-off is additional complexity.

Developing a more comprehensive
perspective
The reserves as insurance mental model
addresses the risk management function
of reserves well. The reserves as savings
account mental model addresses the
“sinking fund” function of reserves, so
we do not suggest discarding the savings
account mental model entirely. Rather,
putting these two models together offers
a more comprehensive perspective on
the role of reserves (see Exhibit 1).

With better mental models in place,
we are positioned to think about the
actions we can take.
1 See, for example, the following journal articles empirically examining local government expenditure stabilization:

Justin Marlowe, “Fiscal slack and counter-cyclical
expenditure stabilization: A first look at the local level,” Public Budgeting & Finance, 25(3), 2005; and Win Wang
and Yilin Hou, “Do local governments save and spend
across budget cycles? Evidence from North Carolina,”
American Review of Public Administration, 42(2), 2012.
2 For research examining the relationship between public pensions and reserves retained in budget stabilization
funds, see Travis St. Clair, “The impact of budget
stabilization funds on state pension contributions,”
Public Budgeting & Finance, 33(3), 2013.
3 This was the view an insurance industry expert expressed at an educational event hosted by GFOA in 2022.
4 From 1960 to the early 1990s, personal savings rates were around or above 10 percent but then sharply dropped,
reaching a low of around 3 to 4 percent in 2005 to 2008.

Savings increased after the 2008 Great Recession,
averaging around 7.5 percent until the COVID-19
pandemic, when it jumped to historically high levels.

After the pandemic, savings rates dropped dramatically, plummeting to the all-time lows of 2005 to 2008.
5 For a few more recent examples of research analyzing
government savings patterns over time, and in relation
to the business cycle, see: Nathan Barrett, Jacob Fowles Peter Jones, and Vincent Reitano, “Forecast bias and
fiscal slack accumulation in school districts,” American Review of Public Administration, 49(5), 2019; and
LaShonda M. Stewart, John A. Hamman, and Stephanie
A. Pink-Harper, “The stabilization effect of local
government savings: The case of Illinois counties,” Public Budgeting & Finance, 38(2), 2017.
6 For example, according to a survey conducted by
Bankrate in 2021, 46 percent of Americans are saving
for a specific financial goal such as a home purchase,
vacation, or education, while only 28 percent are saving for an emergency fund.
7 For examples of how to empirically analyze reserves,
see: Marlowe and Wang and Hou. For a study of the 30
largest U.S. cities: “America’s big cities in volatile times:

Meeting fiscal challenges and preparing for the future,” The Pew Charitable Trusts, 2013. For a study of 600
municipalities, see the “Fiscal slack, reserves, and rainy-day funds” chapter (by Justin Marlowe) of Handbook of Local Government Fiscal Health (Jones & Bartlett Learning: 2014).

EXHIBIT 1 | COMBINING THE RESERVES MODELS
The savings account mental
model implies that having
more in your account is better,
but this is not always true of
local government reserves.

22 Actions We Can Take to Rethink Reserves
Local government finance officials
have a number of strategies to
help them rethink reserves. In
rough order of importance, they
are: risk-based reserve analysis,
comprehensive reserve policies,
optimizing the combination of
commercial insurance and selfinsurance, optimizing investment strategies, pooling risk, and
understanding bond ratings and
reserves.

Risk-based reserve analysis
GFOA strongly recommends that local
governments adopt a formal policy
describing how much they will strive
to maintain in their reserve fund. The
question, of course, is “how much is
enough?” The reserves as insurance
model would say it depends on what
your risks are.

The first step toward a risk-aware
reserve target is to think of it as a range
instead of a single point. For example,
a government might decide its policy is
to maintain reserves between 15 and 25
percent of annual revenue, rather than
equal to 20 percent of annual revenue.

A range has several advantages over a
single point:
 Risks are difficult or often impossible
to estimate exactly. A range expresses
that a government requires a margin
of error to operate within. Conversely,
a single point leaves ambiguity over
whether actual reserves are too high
or too low. To take our example: if the
government’s policy was based on
a single point (20 percent) and the
actual reserves were at 17 percent of
revenue, would that be acceptable?
What if reserves were 27 percent?
Would that be too high? The singlepoint policy is not clear about boundaries the government should
stay within.1 If the policy were based
on a range, we’d know 17 percent was
acceptable, but 27 percent was too
much. This feature of ranges not only
helps decision-makers discuss reserve
strategies, but it might also help with
explaining reserve strategy to the
public.
 A range accommodates different risk
appetites. The “right” level in reserves
will be a function of the risks a
government faces and of local officials’
willingness to bear those risks.

A range can accommodate the views
of risk-averse elected officials and less
risk-averse officials. They can find
grounds for compromise by negotiating
a floor and ceiling that accommodates
different appetites for risk.
 A range better supports the ongoing
management of reserves. Reserves
fluctuate from year to year. If the reserve
stays in range, there is little need to
revisit it, whether the actual reserve
is too high or low relative to the policy.

If the reserve falls outside the range, it
suggests a clear course of action (as in,
do something to get it back in range).

This helps make sure that reserves stay
where they need to be to manage risks.
 A range includes a lower limit,
communicating that being a good
steward of the community requires a
minimum amount of reserves. It also
communicates that there is an upper
limit on the usefulness of reserves and
a point at which excess resources
should be devoted to some other purpose.

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AUGUST 2023 | GOVERNMENT FINANCE REVIEW 23
The next step in developing a risk-aware
reserves policy is to analyze the risks
the local government is subject to. A risk
analysis can take place at varying levels
of sophistication, but a qualitative or
subjective risk assessment is the most
accessible approach. A local government
can review categories of risks, like
those described earlier in this section,
and then assess their exposure in each
category and consider if their reserve
target accommodates that exposure.

GFOA has developed a simple template
to facilitate this kind of review.2
The City of Berkeley, California,
illustrates how the template can be
used. The city’s budget staff led its risk
assessment and included participation
from the Public Works, Police, and Fire
departments. The city determined that
the greatest exposure was “extreme
events and public safety concerns,”
particularly earthquakes, fires,
landslides, floods, hazardous material
spills, and terrorism. Other important
exposures included “expenditure
volatility,” due to upcoming large
expenditure obligations that did not
have a funding source, and “other funds’
dependency on the general fund.” The
city’s general fund was a backstop for
other city operations funded by other
sources, so the city would rely on the
general fund if these operations were
to encounter unplanned, unavoidable
expenditures or revenue interruptions.

By reviewing all the risks on GFOA’s
template, Berkeley determined that it
faced a moderate to high level of risk,
and that 25 to 35 percent of annual
revenues would be reasonable to buttress
the effect of routine downturns in the
economy and respond quickly and
decisively to major emergencies.

The advantage of a qualitative risk
analysis is accessibility. Berkeley
(and many other governments) have
completed such an analysis within their
own resources. A qualitative analysis
also can be effective for acclimating
the government to awareness of risk
as part of its reserve strategy. Berkeley
performed this analysis in 2016 to
2017, and it helped convince the city to
commit to reexamining its risk exposure
five years later—which the city is doing
this year (using the more sophisticated
chance-based approach that we’ll
describe later).

The disadvantage of a qualitative
risk assessment is that the results are
subjective. This means there is likely
to be a gap between the reserve target
suggested by the assessment and the
optimal reserve amount, given the risks.

There is no way to tell how accurate or
inaccurate the subjective estimate might
be, relative to the optimal amount.

The level of sophistication is to
quantify risks to reach a more objective
estimate. This involves looking at
historical experiences, the analogous
experiences of other governments, and
other sources of data to estimate the
potential cost of the risks the government
is subject to. A quantified approach might
be needed when there is controversy
about the right amount in reserves.

The easiest quantified approach to
risk analysis is to build a model using
single numbers to represent the potential
impact of risks. To estimate the risk
posed by recessions, for example, we
might look back at past recessions to see
the losses incurred. We would see that
the 2008 Great Recession represents
a particularly bad recession. Let’s say
revenues decreased by $5 million,
which would suggest that we might
need a $5 million reserve to be prepared
for most future recessions. Outside
studies and the experiences of other
local governments can also help. The
The Problem of Unknown Unknowns
A limit of any risk analysis is that you can only analyze the risks you know about, or the “known unknowns.” But there’s always a chance of experiencing a loss from a totally unexpected source, or the “unknown unknowns.” For instance, five years ago, not many governments would have anticipated the current tightening of the cyber insurance market, which might place pressure on local governments to partially or fully self-insure cyber risks. The COVID-19 pandemic is another example of an unknown unknown.

Both examples illustrate how to deal with unknown unknowns. First, a local government should periodically update the risk analysis. Cyber risk losses have been steadily increasing across all local governments for several years, so cyber risk should have been on the radar of local governments before the current tightening of the insurance market. Second, a local government should use reserves to cover multiple purposes. Though pandemics were not considered a high risk by most local governments prior to 2019, recessions certainly were. The economic slowdown caused by the COVID-19 pandemic could be considered a kind of recession. By grouping multiple risks together into the reserve, the reserve will be more likely to withstand the addition of previously unknown risks.

24 The way to overcome the disadvantages
of the single method is to evaluate the
full range of risk, rather than condensing
risk down to a single number. We will call
this approach “chance-based” because we
can use the full range of risk to determine
the chance that any given reserve level
will be adequate to protect against the
risks in question. GFOA has worked with
several local governments to develop
chance-based reserve models, also
known as probabilistic (or chance-based)
simulations, using Microsoft Excel and
open standards for computer simulation
from ProbabilityManagement.org.

These projects included working with
elected officials to bring the results of
the simulation into policy decisions. A
full explanation of what chance-based
simulation is and what it looks like is best
accomplished with a video from GFOA’s
“Risk-Savvy Thinking about Reserves”
series.6
The advantages of simulation are
many, including:
 It is the best way to estimate the
potential of pooling risks inside of local
government. (More on this later, but
suffice to say, for now that risk pooling is
a time-honored and powerful strategy for
reducing the cost of risk.)7
 It will provide the best estimate of
the range of optimal reserves for
addressing the risks that are included
in the analysis. It also provides a clear
illustration of the decreasing marginal
Town of Bluffton, South Carolina, used
a publicly available university study
that calculated the per capita cost of
recovering from hurricanes at different
storm category levels.3 The town applied
these numbers and adjusted for inflation
after the study was completed to derive a
figure that it used as the target number for
its emergency recovery reserves.

The GFOA report, “A Risk-Based Analysis
of General Fund Reserve Requirements,”
describes how to perform this analysis,
including how to account for the
possibility of historically unprecedented
events.4 The advantage of this “singlenumber” approach is that many governments should be able to perform
the analysis using their own resources.

The single-number approach has an
important disadvantage, though. Risks, by
definition, are uncertain quantities. This
approach represents these uncertainties
as single numbers, which obscures the full
range of risk that the government faces.

One of the most important
consequences of obscuring the full range
of risk is revealed in the way a total reserve
goal is determined. A total reserve target
is the sum of potential losses from each
risk a government is subject to. But
because risks are uncertain numbers, the
sum is not as straightforward as adding
the single-number estimates of risk
together. The most important potential
error is dramatically overestimating the
size of reserve the government needs.

An explanation is best provided with a
GFOA video, “Adding Risks Together:

The Surprising Truth.”5 For example,
imagine that a local government is
subject to three types of extreme events,
where there is a 5 percent chance of each
occurring in a three-year period. A simple
summation would lead a government
to prepare for a 5 percent chance of
each occurring (5 percent + 5 percent
+ 5 percent). But since reserves can be
used to respond to any extreme event,
the optimal strategy is to think about
the total risk from all extreme events at
once. There is a small chance (less than
1 percent) of all three events occurring
within a single three-year period
(5 percent x 5 percent x 5 percent).

SPECIAL SECTION | RETHINKING RESERVES
Because risks are
uncertain numbers,
the sum is not as
straightforward as
adding the singlenumber estimates of
risk together. The most
important potential
error is dramatically
overestimating the
size of reserve the
government needs.

The town of Bluffton, South Carolina arrived at a target number for its emergency recovery reserves by using a publicly available university study that calculated the per capita cost of recovering from hurricanes at different category levels.

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Develop a comprehensive
reserves policy
A reserves policy is a method to “precommit” the organization to wise decisions about reserves. Rather than
deciding on reserves strategies in the
heat of a moment when a tough decision
is required, a policy can be developed
when the pressure is off. That policy then
provides the boundaries for decisionmaking when difficult decisions need to be made about reserves. A policy
should address the following: 1) why
reserves should be accumulated;
2) how much should be accumulated;
3) what strategies should be used for
accumulation; and 4) when and for
what purpose reserves can be used.

Why? To protect the local government
against risks ranging from weather
events like flooding, earthquakes,
wildfires, and snowstorms to manmade problems like lawsuits. Citing locally relevant risks and the notion of
self-insurance as part of a policy can
help answer the question of why
reserves are needed.

A policy should also address the
“savings account” role of reserves
in saving up for larger projects.

Differentiating the “insurance policy”
role of reserves from the “savings
account” function could help decisionmakers be savvier with their reserve strategies.

A policy can also discuss strategies
to use for accumulation. This could
be as formal as formulas tied to any
yearly surplus or even a formal budget
allocation to hold back some amount of
a year’s revenue for building a reserve.

A policy could also allow for a less
structured approach by encouraging
surpluses and one-time revenue to
be used to build the reserve if the
government is below its target range.

In fact, a government could apply
some of the same risk savviness we’ve
been discussing in these articles to its
forecasting in order to estimate the size
of surpluses that could be produced by a
given spending plan.12
A policy should also address how
reserves can be used—most importantly,
discouraging the government from using
benefit of accumulating too much in
reserves and shows the point at which
the marginal benefit decreases.8
 The simulation can address a multiyear
timeframe. This is important because
it isn’t easy to increase reserve levels
quickly.9
 A simulation can include forces that
influence reserves outside of risk
factors. For example, the simulation
could include a local government’s
willingness to cut its expenditures
instead of using reserves. Or the
simulation could address how likely it
is that a local government will generate
budget surpluses that build up reserves
and offset losses.10
 Simulations can highlight the full range
of risk a local government is exposed
to—from risks that could be easily
self-insured all the way to catastrophic
risks that are impossible to fully selfinsure. This helps highlight the need for strategies like preventative investments
and a robust disaster response strategy.

RETHINKING RESERVE CHECKPOINTS
Develop a risk-aware reserves policy
Express your reserves policy as a range of desired reserves, with a floor and a ceiling.

Conduct a risk analysis to get a sense of how the risks you face affect the reserves you should hold. Any of the three methods presented would provide a reasonable basis for a more informed discussion with policymakers about why reserves are necessary and how much should be kept in reserves.

Quantification of risk offers important advantages over subjective approaches—we described both “single-number analysis” and “chance-based simulation” methods of quantification. A quantified approach might be particularly useful when there is a strong sense among decision-makers that existing reserves are too high or too low.

The single-number analysis is more accessible to local governments than a chance-based simulation; however, a chance-based simulation is better (and how insurance companies conduct their analysis). The choice between the two depends on factors such as a government’s ability to pay for outside consulting support, a need for a more rigorous analysis, and the number of risks and size of reserves in question (more/bigger risks and reserves means more potential to make the best use of funds by optimizing the size of the reserve).  Chance-based simulation is the
method insurance companies use to
develop policies, so it has proven to be
best-suited to problems of insurance.

The major disadvantage of chance-based
simulation is that it is more complex than
the single-number analysis method.

Though chance-based simulations can
be conducted in Microsoft Excel,11 GFOA
isn’t aware of any local government that
has conducted a simulation of reserves
without outside consulting support.

Also, the results are often expressed in
odds and probabilities, and though odds
and probabilities are essential for the
best understanding of risk, they are not
the first language of many people. Thus,
explaining the result of the simulation can
be more difficult than a single-number
analysis. That said, GFOA’s experience is
that it can be done—especially with the
help of interactive models, like those
you can see in the videos cited. In fact,
we have yet to meet an elected official
who could not grasp the essential ideas
of a chance-based analysis.

26 SPECIAL SECTION | RETHINKING RESERVES
reserves for ongoing expenditures (such
as hiring more employees). Reserves are
not an ongoing resource. An exception
might be made for supporting continuity
of public services in the face of a
revenue interruption like a recession.

This would be temporary, until revenues
recover or until expenditures can be
restructured to be affordable under the
revenues that are available.

A policy that addresses these
points helps foster a better and shared
understanding of reserves in relation
to the maintenance of public services
amid the risks the government faces.

Finance officers will also have to
consider how to describe the reserve
relative to the “fund balance” figures
that are included in the annual financial
report. Governmental Accounting
Standards Board (GASB) Statement
No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions,
provides a series of categories of fund
balance that must be reported. The
finance officer can make the link
between the reserve (as in, a budgetary/
financial planning strategy) and
fund balances (as in, an accounting
mechanism). Reserves can be shown
as part of the “assigned” or “committed”
categories of fund balance. In this
way, decision-makers can see the
reserve in the financial statements
and differentiate it from other forms
of fund balance, especially forms
that are unavailable for use as selfinsurance. This might be the case with fund balances that are being put aside
for spending on a future project, for
example.

Finance officers could positively
influence how stakeholders think about
reserves by developing a comprehensive
policy that describes why reserves
are important to the community
amid a budgetary shortfall or other
contingency, the range of reserves it is
prudent to maintain, and transparency
on how reserves (a budgetary strategy)
connect to the total fund balance
available in financial reports.13
Optimize the combination
of commercial insurance and
self-insurance
Commercial insurance is a valuable
complement to reserves. A useful
analogue is self-insurance programs for
employee healthcare, which have been
shown to provide potential savings for
employers, compared to commercial
insurance.14 But few governments would
self-insure every last dollar of potential
loss. Instead, self-insured governments
often purchase “stop loss coverage,” where
a commercial insurance policy kicks
in after a certain size of loss is reached.

This spares the government the cost of
covering extremely large losses and the
cost of the more expensive premiums
that would come with using commercial
coverage for more routine losses.

A similar concept can be applied to the
risks a reserve is “self-insuring” against.

Reserves will be most useful for lower
magnitude, higher frequency risks.

Commercial insurance is most valuable
when the losses from a catastrophic risk
would be unaffordable.

The most straightforward example
is purchasing higher-deductible
insurance policies for liabilities that are
commercially insured. This strategy is
useful for insurance policies that have
become more expensive because of
market conditions. Insurance against
cyberattacks is a prime example, with
some governments experiencing 100
percent year-over-year increases in
prices, as of mid-2023. For example,
increasing costs increased the $1
million deductible with $15 million in
coverage paid by Mecklenburg County,
North Carolina (covering Charlotte
and surrounding areas), to a $5 million
deductible with $10 million in coverage.15
The county has substantial general fund
reserves, so it can “self-insure” the larger
deductible and the lower limit.

Another application might be
“parametric insurance.” Parametric
insurance policies pay out a set sum of
money when a given condition comes to
pass. For instance, a policy might pay out
$10 million if hurricane wind speeds in
the community reach 120 miles per hour.

RETHINKING RESERVE CHECKPOINTS
Develop a comprehensive reserves policy
A reserves policy is a way to “pre-commit” the organization to wise decisions about reserves.

A policy should address why reserves should be accumulated, how much should be accumulated, what strategies should be used for accumulation, and when and for what purpose reserves can be used.

The finance officer should strive for transparency in how reserves (a budgetary policy) are reflected in the reporting of fund balances in the annual financial report (an accounting mechanism). ©2023 MICHAEL AUSTIN C/O THEISPOT.COM

AUGUST 2023 | GOVERNMENT FINANCE REVIEW 27
Parametric policies are in wide use in
many other sectors but are a relatively
new instrument for local governments.

Parametric policies might be most useful
for catastrophic events where a local
government’s reserve would be stretched
to respond. Of course, federal and/or state
assistance is often available for these
kinds of events, but the reimbursement
often takes more than a year to arrive.16
Further, some costs of a catastrophic
event may not be reimbursable by
the state or federal government. For
instance, if the tax base is so damaged
that tax revenues do not recover quickly,
the funds from a parametric policy
could help fill the gap. Also, parametric
policies provide full coverage as soon
as the policy goes into effect, while it
could take years to build up enough in
reserves to cover the full impact of a
catastrophic event. Parametric policies
can also be designed around a specific
geographic area. For example, perhaps
a specific area of a city is particularly
vulnerable to a certain kind of hazard.

A policy could be developed to provide
a payout for an occurrence of that
hazard in that area, allowing the local
government to provide additional
support to the people who live there.17
You can read more about parametric
insurance in the GFOA report
“Parametric Insurance: An Emerging
Tool for Financial Risk Management.”18
The report includes case studies
of local governments that have
purchased parametric policies and
how insurance policies complement
FEMA reimbursement.

Optimize investment strategies
Insurance companies invest the monies
collected from premiums to make
substantial profits.19 A government’s
reserves are basically premiums
collected from the community to
stabilize their government services
against risk. The money held in
reserves will be idle most of the time,
so governments can adopt savvy
investment strategies for it.

A risk analysis is essential for a savvy
investment strategy. A government can
divide its idle funds into tranches, with
each tranche representing a different
likelihood of the government needing
to access the money for emergency
purposes. As a simple example, let’s
assume a government has only two
investment options: 1) short-term,
lower earning; and 2) long-term,
higher earning, where the term of the
investment is three years. Let’s assume
a government does a risk analysis
that suggests $10 million is a good
ceiling amount for its reserve, and
the government has $10 million in its
reserve. The risk analysis also suggests
there is only a 10 percent chance that
the government would need to use more
than $9 million of its reserve in the next
three years. Decision-makers might
conclude that putting $1 million in the
second investment option is worth the
risk. This leaves $9 million in the shorterterm, lower-earning investments, that provides greater ability to access the
cash if the need arises. Research by one
financial technology firm that helps local
governments determine their investable
resources suggests that large gains in
investment returns are possible with a
more risk-savvy investment strategy like
the one described above. According to
data provided by the firm, returns could
improve by much as 35 to 40 percent
more than what most governments
get currently from the resources that
comprise their reserves.20
Our example assumes a probabilistic
risk analysis, but a less rigorous risk
analysis could still help reach a similar
conclusion. For example, if a less rigorous
analysis suggests that $10 million is

RETHINKING RESERVE CHECKPOINTS
Optimize commercial insurance combined with reserves
Consider if you have commercial insurance policies with a higher deductible that could be self-insured by reserves. The highest potential will usually be with policies where premium prices are going up substantially.

Consider if a parametric insurance policy could supplement reserves. Parametric insurance might be particularly useful when a government finds that it is underinsured for a catastrophic risk. This is because parametric insurance can provide additional coverage immediately, while it could take years to build an equivalent reserve.

Market conditions increased the deductible and decreased the coverage of the insurance policy held by Mecklenburg County, North Carolina, to protect against cyberattacks. Due to the county’s substantial general fund reserves, it can “self-insure” the larger deductible and lower limit.

28 SPECIAL SECTION | RETHINKING RESERVES
Pool risk
Risk pooling is widely recognized and
a time-honored strategy for reducing
the cost of risk, and it works because of
diversification. Put simply, it is unlikely
that a loss event will happen to all the
pool participants at the same time. For a
more in-depth explanation, see GFOA’s
Rethinking Revenues series video,
“Why Pooling Reduces the Cost of Risk.”21
Local governments often pool risk across
multiple local governments (regional
insurance pools). Local governments also
pool risk inside their own organizations.

Let’s return to our example of employee
self-insurance. Local governments do not
set up separate self-insurance pools for
each department or for each accounting
fund. All employees fall under the same
self-insurance program. This saves
money because the total amount needed
to insure the entire organization is less
than you would need if you insured each
department separately. This is an example
of risk not adding up the way you might
think. We also explain the concept in more
detail in GFOA’s Rethinking Reserves
series video, “Adding Risks Together:

The Surprising Truth.”22
Similarly, local governments could
realize some advantages from pooling
reserves. There are many opportunities to
apply pooling, though these opportunities
entail varying degrees of difficulty.

The first and easiest way is to make
sure there are no unrealized opportunities
for pooling within the general fund. For
example, some governments set up one
reserve for economic uncertainty (such
as recessions) and another for extreme
events (such as natural disasters). These
two reserves could be pooled because
recessions and natural disasters are
unlikely to occur at the same time, so a
combined reserve should be more costeffective. The combined reserve could still be labeled as a reserve for extreme
events and economic uncertainty, to make
the intent clear without keeping the two
reserves separate. The most accurate
way to judge the potential savings is a
probabilistic risk analysis. Combining
reserves to make the money in the reserves
the ceiling amount for reserves, then we
know that amounts closer to the ceiling
are far less likely to be used than the “first
dollar” that comprises the reserve. Thus,
a government would still have the bulk of
the $10 million invested in more liquid
assets, while placing a smaller amount in
a less liquid, higher return asset.

Our example also reveals a potentially
sticky question. The decision to invest in
any combination of assets with different
risk/reward profiles will, at some point,
depend on the subjective appetite for risk
of the decision-maker. Going back to our
example, who is to say that a 10 percent
chance of needing more than $9 million
is the objectively correct threshold for

RETHINKING RESERVE CHECKPOINTS
Optimize investment of reserve funds
Use a risk analysis to identify tranches of funding ranging from more likely to be needed to cover unplanned, unavoidable needs to less likely. The less likely tranches may be candidates for less liquid, higher-return investments.

Convene a discussion with the relevant decision-makers to determine the level of risk the government is willing to take on with respect to investment liquidity versus the potential need to draw on reserves. investing the remaining $1 million in
longer-term securities? Perhaps some
people would be comfortable with a 15 or
20 percent chance, while others may be
uncomfortable with as high as 10 percent.

These decisions will have to be discussed
with the relevant decision-makers to
come to a consensus. GFOA’s experience
has been that reaching an agreement is
easier when the discussion is based on an
objective analysis like a risk assessment.

GFOA has done this kind of analysis with
its own finances and found that reaching
agreement on the preferred investment
strategy was not that difficult, as the risk
analysis provided objective criteria and
data for decision-makers.

A risk analysis is essential for a savvy investment strategy.

A government can divide idle funds into tranches, with each one representing a different likelihood of the government needing to access the money for emergency purposes.
©2023 MICHAEL AUSTIN C/O THEISPOT.COM

AUGUST 2023 | GOVERNMENT FINANCE REVIEW 29
more fungible could improve costeffectiveness for the same reasons we described in our employee health plan
self-insurance example.

Another possibility is to define
policies for emergency interfund
borrowing. The idea is that the total
amount reserved across the entire
government could be less if each fund
did not have to prepare for the most
extreme circumstance but could rely
on financial backup from other funds in
extreme cases.23
An option that could present some
challenges also presents large potential
payoffs: pooling reserves across funds.

This has a large potential payoff because
the amounts involved will be large.

It can be challenging because monies
may be segregated into different funds
for legal reasons, creating practical
barriers to operating such a pool. Pooling
funds will be most effective when two
conditions are met: 1) the funds involved
do not have legal restrictions that make
pooling impractical; and 2) the risks
faced by funds are not overly similar.

If the risk profiles of the funds are
similar, then pooling will not be of great
benefit because each fund will receive a
shock when a given risk happens. But if
the funds have substantial differences
in their risk profiles, then pooling could
be quite valuable. A given risk may give a
shock to one fund but not the other,
and the fund that was not shocked can
support the fund that was.

Many local governments may be
unwittingly pooling the reserve risks
of several funds. In our work with
local governments, we found that an
important risk for the general fund is
that it is often a de facto “backstop” for
other funds. If those funds run into
unplanned, unavoidable emergency
financial needs, then the general fund
is on the hook. Rather than building up
separate reserves in each fund, it may
be better to formalize the current state of
affairs and enhance the pooled approach
by pulling in the pool of other funds that
have their own reserves.

GFOA is not the only entity to
advocate for the potential of pooling
reserves. In Moody’s November 2022
“U.S. Cities and Counties [Bond Rating]
Methodology,” the company introduced
a government-wide evaluation of fund
balance into its rating methodology.

The strength of fund balances and held
cash combined across all funds is worth
30 percent of the foundational score
when Moody’s evaluates a government’s
creditworthiness.24 Moody’s found
that the fund balances in different
funds are often flexible enough that
the funds can support each other. The
company believes that there is enough
potential for interfund support to justify
evaluating across the entire government
instead of fund by fund. This marks an
evolution of Moody’s approach, which
was focused on specific funds.

Finally, let’s address regional pooling.

Local governments often participate
in regional insurance pools, so why not
regional arrangements for the risks the
reserves guard against? The reason this
may not provide as much benefit as one
might expect is that the types of risks
the reserves guard against (for example,
natural catastrophes, recessions) affect
the entire region. If all members of a pool
are impacted at the same time by the
same risk, then a pool loses its value.

Another way to think about it is that a pool
within government brings together funds
that might have different exposures.

A pool between governments brings
together funds (such as, multiple general
funds) that have the same exposures.

RETHINKING RESERVE CHECKPOINTS
Apply risk pooling to reserves
If you have separate reserves in the general fund for different risks, combine those reserves.

Develop a policy for emergency interfund borrowing.

Consider pooling reserves across funds within your government. In some cases, you may already be de facto pooling the general fund with financially weaker funds. Improve your risk portfolio by adding other strong funds to the pool.

Risk pooling is widely recognized and a time-honored strategy for reducing the cost of risk, and it works because of diversification.

30 SPECIAL SECTION | RETHINKING RESERVES
Understand bond ratings
and reserves
A rationale for holding a greater amount
in reserves is that it will support a
strong bond rating, which will translate
to lower interest costs on the money a
government borrows. Reserves play an
important role in the ratings process.

According to Moody’s Investors Service’s
rating methodology, available fund
balance ratio25 is worth 20 percent of the
rating. Moody’s also examines liquidity
ratio26 because fund balance is an
accounting term that can include assets
not available for current spending. The
liquidity ratio constitutes an additional
10 percent of the rating methodology.

Thus, fund balance and cash together
comprise 30 percent of the total ratings
methodology.

First, remember that “fund balance”
and “reserves” aren’t the same, though
they are related. Fund balance includes
a wider scope of resources, so it will be a
larger number than reserves. With this in
mind, we can see that fund balance/cash
plays an important role in the ratings
method. But what is considered a good
level of fund balance? Moody’s “AAA”
rating (the highest) is associated with
fund balances exceeding 35 percent of
revenues. The “AA” rating is associated
with fund balances between 35 and 25
percent, and the “A” rating with 25 to 15
percent. That said, while 30 percent of
ratings evaluation is made up of fund
balances and cash, 70 percent is not.

Further, the Moody’s documentation is
clear that ratings analysts will consider
local factors and other idiosyncrasies to
arrive at the final rating—so it is possible
to have fund balances/cash below the
range for a given rating yet still achieve
that rating, or even a better one.

We also examined rating methodology
documentation from S&P Global. Though
the specifics of their method are different,
the general conclusion is the same: fund
balances play an important, but not
decisive, role in arriving at a final rating.

A greater fund balance will contribute to a
higher rating, but it may not be sufficient
to guarantee a higher rating. Similarly,
a lower fund balance is not guaranteed
to consign a local government to a lower
rating. Other factors weigh more heavily,
and ratings analysts have some discretion
in assigning ratings based on local context.

The next question to ask is if a higher
bond rating is worth the cost to obtain it?
A bond rating has a quantifiable benefit,
which is the interest savings available at
the next-highest bond rating. To the extent
that greater fund balance (and greater
reserves) can move a local government
from one bond rating to the next, then it is
possible to measure the benefit.

Let’s get a sense of the interest rate
differences between bond ratings. Exhibit
1 shows the differences between interest
rates (percentage points) at different bond
ratings from 1993 to 2022.27 This shows a
90 percent confidence range, which omits
outliers on both the high and low side. It
is notable that the midpoint (median) is
closer to the low side of the range, which
usually means the differences between
ratings are closer to the low value than to
the high value.

What are the implications of the
differences in interest rates? First, let’s
get a sense of the differences in the total
cost of bond issue due to an interest
rate difference. Imagine a 30-year,
$200-million bond issue at 3 percent
annual interest with a rating of A. The
total cost of interest over the life of the
bond issue would be about $106 million.

If the same bond were to be issued with a
rating of AA, let’s assume it would enjoy an
interest rate that is better by 0.20 percent
(the midpoint on our table). In that case,
the total interest rate paid over the life
of the bond would be about $98 million,
or a difference of about $8 million. This
equates to an average of about $260,000
per year. Conveniently, the midpoint for
changes between ratings in the other
columns on our table is roughly half or
double the midpoint in Exhibit 1, so it is
easy to imagine the financial benefit at
other bond rating levels.

The question of whether these benefits
are worth the cost of accumulating more
fund balance depends on several factors,
such as:
 How much debt a government issues.

If a government issues more debt, it will
get more benefit from a lower interest
rate (assuming it will issue the same
amount of debt no matter its rating).
 The duration of the payback period for
the debt. A longer payback period will
result in the government paying more
total interest over the life of the bond,
giving a lower interest rate more impact.
 How high a bond rating would be
without accumulating a large amount
in reserves. For example, Exhibit 1
shows that the interest rate benefit
between AAA and AA is much smaller
than A and BAA. This means that, all
else being equal, a government that can
improve from BAA to A by accumulating
fund balance would benefit more than a
government that can go from AA to AAA.
 The opportunity costs of holding
fund balances and reserves. Fund
balances/reserves are not without
EXHIBIT 2 | HISTORY OF INTEREST RATE DIFFERENCES BETWEEN BOND RATINGS, 1993-2022 Percentage point
differences from going from
a higher to lower rating
AAA  AA AA  A A  BAA
90% of the time,
the difference is
between these
points.

Low 0.09% 0.10% 0.12%

Notice that the midpoint is
closer to the low side of the
range. This means most of the
time the differences between
ratings are closer to the low
value than the high value.

Mid 0.11% 0.20% 0.38%
High 0.25% 0.62% 0.97%

AUGUST 2023 | GOVERNMENT FINANCE REVIEW 31
Conclusion
Reserves help local governments
manage risks by making resources
available for unplanned, unavoidable
expenditures and revenue
interruptions. This makes reserves
a form of self-insurance. We have
advocated for local governments to
treat reserves more like self-insurance,
including using insurance metaphors
to discuss and plan reserve strategies,
using risk analysis to determine the
size of the reserve, complementing
reserves with commercial insurance
strategies, pooling risks that reserves
are used to cover, and more. This
will help local governments make
savvier financial decisions about
how to manage risk and make their
communities more prepared for a
volatile and uncertain world.

Shayne Kavanagh is senior manager
of research for GFOA’s Research and
Consulting Center. Vincent Reitano
is an associate professor at Western
Michigan University’s School of Public
Affairs and Administration. Peter A.

Jones is an associate professor at The
University of Alabama at Birmingham’s
Department of Political Science and
Public Administration.
cost. Money held by the government is
money taken out of the private economy.

A less abstract opportunity cost is the
public service forgone because this
money isn’t being spent. In a private
firm, the opportunity cost of idle funds
is, essentially, the rate of profit that
could be made by directing the funds to
a business opportunity. Unfortunately,
there is not yet a widely accepted, useful
way to measure the opportunity costs
of idle funds in local government, so
the cost of holding idle funds in local
government is often underestimated.
 Secondary benefits of a higher bond
rating. A higher bond rating might confer
prestige to the local government, perhaps
resulting in more trust and confidence
from the public or making the locality
more attractive to businesses.
 How much additional risk coverage
more reserves will buy. This speaks
to the marginal value accrued from
accumulating more reserves. If the
additional reserves are unlikely to be
used, then the potential benefit from
the standpoint of risk mitigation is
low. That said, rating agencies are
measuring fund balance and cash. A
local government could also accumulate
reserves as part of a sinking fund to
pay for a special project. The monies in
the sinking fund would count positively
in the rating agency evaluation.

RETHINKING RESERVE CHECKPOINTS
Understand bond ratings and reserves
Fund balances and cash are an important but not overwhelming determinant of bond ratings.

Because accumulating and holding fund balances/cash is not without cost, governments should ask if a higher bond rating is worth the cost of holding. The cost versus benefit of a higher bond rating is a function of the amount and duration of debt the government issues, the likely improvement in interest rates available from a rating increase, the marginal improvement in risk management available from holding more reserves, and the opportunity cost of holding fund balance/cash. 1 Defining boundaries is essential to good
financial public finance. See Financial
Foundations for Thriving Communities, GFOA,
May 2019.
2 GFOA’s general fund reserve calculation
worksheet is available at gfoa.org/materials/
general-fund-reserve-calculation-worksheet.
3 Michael R. Boswell, Robert E. Deyle, Richard
A. Smith, and E. Jay Baker, “A quantitative
method for estimating probable public costs of
hurricanes,” Environmental Management, 23(3),
April 1999.
4 Shayne Kavanagh, “A Risk-Based Analysis of
General Fund Reserve Requirements,” GFOA,
January 2013.
5 See “Adding Risks Together: The Surprising
Truth” at youtube.com/watch?v=soLvUKp8C4k.

All the videos in this series are available at gfoa.
org/risk-savvy-thinking-about-reserves-videos.
6 See “About Chance Based (Probabilistic)
Reserve Models” at youtube.com/
watch?v=QDI2bYZ1dR4&t=25s. A series of
videos about simulation is available at gfoa.org/
risk-savvy-thinking-about-reserves-videos.
7 See GFOA’s Rethinking Reserves series video,
“Why Pooling Reduces the Cost of Risk,” at
youtube.com/watch?v=IHEA9m0uoaU.
8 To see how, watch GFOA’s Rethinking
Reserves video, “The Decreasing Marginal
Benefit of Reserves” at youtube.com/
watch?v=xjTJtP-yV5s.
9 Watch GFOA’s Rethinking Reserves video,
“Multi-Year Analysis of Reserves,” at
youtube.com/watch?v=uZJftwcCods.
10 The video on analyzing a multiyear time
frame provides an illustration of how
willingness to cut expenditures can be
integrated into a simulation.
11 Visit probabilitymanagement.org for
resources on how to do this.
12 See Shayne Kavanagh and Elizabeth
Fu, “Speaking Uncertainty to Power:

Risk-Aware Forecasting and Budgeting,”
Government Finance Review, April 2016,
to see how one government did just that
and use our mini stress test demonstration,
available at gfoa.org/materials/mini-stresstest-demonstration, to conduct the same analysis featured in the article.
13 Find GFOA’s reserve policy template at
gfoa.org/materials/reserve-policy-template.
14 Shayne Kavanagh, “Smart practices for
self-funded employee health insurance,”
Government Finance Review, October 2018.
15 The county also negotiated several
exclusions and limitations to the policy, which
means the final price of the new policy isn’t
comparable to the old one.
16 According to a sample of data obtained by
GFOA, it takes 18 months, on average, for a local
government to obtain FEMA reimbursement.
17 Carolyn Kousky and Helen Wiley, “Improving
the post-flood financial resilience of lowerincome households through insurance,” Wharton Risk Management and Decision
Process Center Issue Brief, January 2021.
18 Shayne Kavanagh and Elizabeth Fu,
“Parametric Insurance: An Emerging Tool
for Financial Risk Management,” GFOA,
January 2020.
19 OpenAI’s GPT 4.0 replied to an inquiry by
saying “investment income accounts for
about 25 to 30 percent of the profits of a
typical property and casualty insurance
company.” Further, GPT showed that some
insurance companies even derive most of
their revenue from investments.
20Data obtained by GFOA from the firm
three+one (which sells a software service
that helps local governments optimize the
amount of money invested in higher return
instruments).
21 The video is available at youtube.com/
watch?v=IHEA9m0uoaU.
22The video is available at youtube.com/
watch?v=soLvUKp8C4k.
23For more on how to develop a policy,
see Shayne Kavanagh and Elizabeth
Fu, “The Last Line of Financial
Defense? Internal Loans in Emergency
Situations,” Government Finance
Review, December 2019.
24Moody’s separates “fund balance ratio”
and “liquidity ratio,” but both cover all
funds. Also, the base score is a starting
point, and Moody’s analysts may adjust
a final rating up or down based on
contextual factors particular to the local
government being evaluated.
25The formula is: Available Fund Balance
+ Net Current Assets/Revenue.
26The formula is: Unrestricted cash/
revenue.
27Data sourced from SDC All Municipals,
an online data portal from Refinitiv.

______________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Tony McFarlane, Finance Director
DATE: June 11, 2025
RE: Preliminary FY 2025-26 General Fund Budget and Fiscal Forecast RECOMMENDATION:

Review preliminary FY 2025-26 General Fund Budget and 5-year Fiscal Forecast

REPORT SUMMARY
The preliminary FY 2025-26 General Fund Budget is currently showing a slight deficit of approximately -$139 thousand. Revenues are projected to be $7.95 million which is an increase of 6.29% from the prior year’s budget. The largest increases are anticipated in property tax of Expenses are projected to be $8.09 million which is an increase of 8.15% from the prior year.

Revenues
Revenues compared to the prior year budget are broken down by category as follows,

The largest increase is anticipated in Utility Users Tax and Property Tax. The projected UUT amount is a reset from the prior year as current year revenue is exceeding budget Category FY 24-25 FY 25-26 $ %
Property Taxes 4,231,055 4,355,875 124,820 2.95%
Sales & Use Tax 350,000 325,000 (25,000) -7.14%
Utility Users Tax 945,000 1,173,000 228,000 24.13%
Business License Tax 125,000 115,000 (10,000) -8.00%
Franchise Fees 405,000 424,000 19,000 4.69%
Fines & Forfeitures 2,000 2,500 500 25.00%
Licenses & Permits 292,900 322,500 29,600 10.11%
Intergovernmental 5,500 7,500 2,000 36.36%
Charges for Services 835,200 885,200 50,000 5.99%
Use of Money & Property 284,530 336,000 51,470 18.09%
Miscellaneous 3,600 3,600 - 0.00%
Transfers In - - - 0.00%
Total 7,479,785 7,950,175 470,390 6.29%

TOWN OF PORTOLA VALLEY

STAFF REPORT

by $113 thousand with three months still to collect. Sales tax is being reset due to the FY 2024-25 number being overstated.

Increases are also anticipated in Licenses & Permits, Charges for Services, and Use of Money & Property of approximately $130 thousand because of the fee study.

Expenses
Expenses compared to the prior year budget are broken down by category as follows, Salaries and benefits assume 15 FTE. However, the Town Manager salary is deferred for one month anticipating an August 2025 start saving $23 thousand. The Building & Planning Director position is being deferred for six months assuming a January 2026 start saving $100 thousand. Should this position be filled prior to January 2026, then an adjustment will be made for the mid-year budget update.

Services include utilities, merchant credit card services, software and licensing, etc.

Increase is due to anticipated increase in instructor payments and the utilities budget being understated in the prior year.

Contract includes services provided by the Town Attorney, San Mateo County Sheriff, Woodside Fire Protection District, San Mateo County Dispatch, Town Auditor, San Mateo County Animal Control, and San Mateo County Emergency Services. Vegetation management provided by the Woodside Fire Protection District has been reduced from 80 days to 60 days saving approximately $44 thousand.

Consultants include polling services for a potential revenue measure, recruitment services for the building and planning director position, and staff augmentation for building & planning, town engineer, and finance.

Excluding the transfer out to the gas tax fund of $140,000, the budget is balanced.

Category FY 24-25 FY 25-26 $ %
Salaries 2,208,513 2,274,525 66,012 2.99%
Benefits 787,193 974,016 186,823 23.73%
Services 854,091 936,606 82,515 9.66%
Maintenance 250,600 228,500 (22,100) -8.82%
Contract 2,474,650 2,740,054 265,404 10.72%
Consultants 716,000 732,000 16,000 2.23%
Development 55,047 63,700 8,653 15.72%
Transfers Out 133,691 140,000 6,309 4.72%
Total 7,479,785 8,089,401 609,616 8.15%

Budget Challenges
Balancing the budget through salary deferrals is not an effective long-term strategy, places additional strain on limited town resources and understates the true cost of providing town services. Long-term challenges include employee recruitment and retention which correlates to the use of consultants, increases to contract services with limited control. Other challenges include not having additional funds set aside for capital improvements related to infrastructure, facilities and buildings, and vehicles, and no additional funds set aside to pay down pension liability. In the event of a natural catastrophe the reserve could be fully depleted and repayment from federal funds could take years. These are costs that should be considered when calculating the total cost of services.

Fiscal Forecast
Without new revenue, or significant reductions in staff and services, the General Fund Reserve level is anticipated to drop below the 20% limit by the end of FY 2027-28 and be fully depleted by the end of FY 2030-31.

The forecast model assumes the following,
Revenues
Property Tax increases 4% per year
Sales Tax increases 3% per year

Franchise Fee increases 3% per year
User Fee increases 3% per year
Expenses
Salaries increase 3% per year
Benefits increase 7% per year
Services increase 3% per year
Consultants increase 3% per year
Contracts increase 3% per year
Corrective Action – Expenses
To maintain a 20% reserve level and avoid a structural deficit the following cost reductions will need to take place.
• FY 2026-27 - $315,000
• FY 2027-28 - $630,000
• Increases in future years will be limited to increase in revenue Corrective action will include reductions in all expense categories and will consider all the following,
• Layoffs/Hiring Freezes
• No augmentation of services through consultants
• No Town Committee or non-profit funding
• Reduction in contract services, fewer deputies, fewer vegetation management days, etc.
• Reduced facility and fields maintenance
• No staff development
The long-term implications from these actions will severely impact all services.

Revenue Enhancement
Balancing the budget and getting on the path to long-term fiscal sustainability cannot be accomplished through expense reductions alone. The Town will need an infusion of new revenue of approximately $1 million per year to preserve the reserve and start to implement long-term funding strategies for infrastructure, facilities, vehicles, pension and catastrophic events. Some revenue options that have been considered include the following,
• Charter Town amendment increasing the Real Property Transfer Tax that is currently assessed at $0.55/$1,000.
• Parcel Tax
• User Fees/Development Impact Fees (currently underway) • Reallocation of UUT
• Transaction Use Tax

Last Option
Should the Town not attain long-term fiscal sustainability then disincorporation is the last option.

ATTACHMENTS

1. Preliminary FY 25-26 General Fund Revenues

2. Preliminary FY 25-26 General Fund Expenses

General Fund Revenue by Type
FY 24-25 FY 25-26 Difference
Property Taxes
(41111) Property Taxes - Secured 3,240,297 3,305,297 65,000 (41112) Property Taxes - Unsecured 132,512 142,512 10,000 (41121) ERAF 250,000 300,000 50,000
(41122) VLF 450,000 425,000 (25,000)
(41141) Real Property Transfer Tax 150,000 175,000 25,000 (42821) Homeowners Property Tax Relief 8,246 8,066 (180) PROPERTY TAXES TOTAL 4,231,055 4,355,875 124,820
Sales & Use Tax
(41311) Sales & Use Tax 350,000 325,000 (25,000)
SALES & USE TAX TOTAL 350,000 325,000 (25,000)
Utility Users Tax
(43111) UUT-Energy 640,000 725,000 85,000
(43112) UUT - Telephone 30,000 48,000 18,000
(43113) UUT- Water 275,000 400,000 125,000
UTILITY USERS TAX TOTAL 945,000 1,173,000 228,000
Business License Tax
(41411) Business License Tax 125,000 115,000 (10,000)
BUSINESS LICENSE TAX TOTAL 125,000 115,000 (10,000)
Franchise Fees
(41601) Energy Services 108,000 133,000 25,000
(41602) Water Services 61,000 61,000 -
(41603) Garbage Services 138,000 140,000 2,000
(41604) Cable Services 98,000 90,000 (8,000)
FRANCHISE FEES TOTAL 405,000 424,000 19,000
Fines & Forfeitures
(41811) Fines & Forfeitures 2,000 2,500 500
FINES & FORFEITURES TOTAL 2,000 2,500 500
Licenses & Permits
(41911) Building Permits 195,000 205,000 10,000
(41912) Site Development Permits 35,000 43,000 8,000
(41913) Conditional Use Permits - - -
(41914) Temporary occupancy Fee - - -
(41915) Horsekeeping Permits 2,500 2,500 -
(41916) Construction & Demolition Fee 35,000 40,000 5,000 (41917) Zoning & Planning Permits 400 2,000 1,600
(41919) Variances - - -
(41951) Encroachment Permits 25,000 30,000 5,000
LICENSES & PERMITS TOTAL 292,900 322,500 29,600
Intergovernmental Revenue
(42811) Motor Vehicle 5,500 7,500 2,000
INTERGOVERNMENTAL REVENUE TOTAL 5,500 7,500 2,000
Attachment 1

General Fund Revenue by Type
Charges for Services
(43252) Town Library Maintenance 10,000 10,000 -
(43253) Town Engineer Fees 3,000 3,000 -
(43254) Applicant Development Fee 5,000 5,000 -
(43011) Plan Check Fee 260,000 260,000 -
(43012) Inspection Fee 390,000 390,000 -
(43017) Subdivision Fee 6,000 6,000 -
(43018) Residential Data Reports 5,000 5,000 -
(43019) Pre-Application Meeting Fee 18,000 18,000 -
(43021) Architectural Review Fees 18,000 18,000 -
(43024) Geology Fees 13,000 13,000 -
(43033) Town Planning Fees 20,000 20,000 -
(43042) Appeals - - -
(43043) BSA Fee 2,400 2,400 -
(43044) SMIP Fee 7,500 7,500 -
(43045) DSA Fee 1,300 1,300 -
(43049) Miscellaneous Plan Charges 1,000 1,000 -
(43121) Class Fee 75,000 125,000 50,000
(43252) Town Library Maintenance - - -
(43253) Town Engineer Fees - - -
CHARGES FOR SERVICES TOTAL 835,200 885,200 50,000
Use of Money & Property
(44011) Interest 145,000 170,000 25,000
(44051) Community Hall & Activity Room Rents 1,030 2,000 970 (44052) Community Hall Private Party Fees 14,500 16,000 1,500 (44054) Parking Lot & Field Rentals 60,000 125,000 65,000 (44055) Lease Income - Parks 60,000 15,000 (45,000)
(44056) Zots to Tots 4,000 8,000 4,000
USE OF MONEY & PROPERTY TOTAL 284,530 336,000 51,470
Miscellaneous Revenue
(46000) Miscellaneous Revenue 600 600 -
(46079) Miscellaneous Receipts 3,000 3,000 -
MISCELLANEOUS REVENUE TOTAL 3,600 3,600 -
Operating Transfers In
(49011) Operating Transfer In - - -

OPERATING TRANSFER IN TOTAL - - -
TOTAL REVENUE 7,479,785 7,950,175 470,390

General Fund Expense by Department
FY 24-25 FY 25-26 Balance
Town Council - 110
(65013) Education/Training 1,500 5,000 3,500
(65014) Dues 1,500 1,700 200
TOTAL TOWN COUNCIL 3,000 6,700 3,700
Town Committees - 115
(62323) Volunteer Appreciation - - -
(63203) Conservation 1,725 1,725
(63204) Cultural Arts Committee 14,000 14,000 -
(63205) Emergency Preparedness 1,300 1,800 500
(63206) Historic Resources 2,725 200 (2,525)
(63208) Parks & Recreation 19,300 25,000 5,700
(63209) Sustainability - - -
(63211) Trails & Paths 10,000 10,000 -
(63212) Wildfire Preparednesss - - -
(63213) Open Space Acquisition - - -
(63214) Geologic Safety 450 1,950 1,500
TOTAL TOWN COMMITTEES 49,500 54,675 5,175
Town Manager - 120
(51011) Salaries - Permanent 809,551 814,743 5,192
(51021) Vacation Buyout - 5,000 5,000
(51031) Automobile Allowance 3,750 6,000 2,250
(55011) Retirement - PERS 69,282 82,976 13,694
(55012) Retirement - Soc Sec 28,689 41,906 13,217
(55013) Medicare 10,308 12,186 1,878
(55021) Health Insurance Medical 9,032 15,302 6,270
(55022) Health Opt Out 1,200 - (1,200)
(55024) Health Ins Dental & Vision 30,892 7,693 (23,199) (55025) Cafeteria Plan Mgmt 38,304 77,958 39,654
(55031) Long Term Disability Insurance 7,000 2,804 (4,196) (55033) Workers Compensation - 5,127 5,127
(55051) Deferred Compensation - 25,704 25,704
(62099) Miscellaneous Consultants 25,000 70,000 45,000
(62329) Sustainability - - -
(65012) Education & Training - - -
(65014) Dues - - -
TOTAL TOWN MANAGER 1,033,008 1,167,399 134,391
Town Attorney - 125
(62032) Town Attorney 245,000 245,000 -
(62052) Town Attorney - 25,000 25,000
TOTAL TOWN ATTORNEY 245,000 270,000 25,000
Attachment 2

General Fund Expense by Department
FY 24-25 FY 25-26 Balance
Town Clerk - 130
(51011) Salaries - Permanent 24,296 120,000 95,704
(55011) Retirement - PERS 1,903 9,552 7,649
(55012) Retirement - Soc Sec 1,599 7,440 5,841
(55013) Medicare 1,073 1,740 667
(55021) Health Insurance Medical - - -
(55022) Health Opt Out 1,500 2,297 797
(55024) Health Ins Dental & Vision - 1,108 1,108
(55025) Cafeteria Plan Mgmt 2,451 16,693 14,242
(55031) Long Term Disability Insurance - 504 504
(55033) Workers Compensation - 732 732
(62099) Miscellaneous Consultants 104,718 30,000 (74,718) (62251) Elections
(62305) Software & Licensing 5,000 3,677 (1,323)
(65012) Education & Training 1,297 5,000 3,703
TOTAL TOWN CLERK 143,837 198,743 54,906
Finance - 140
(51011) Salaries - Permanent 503,338 486,286 (17,052)
(51031) Automobile Allowance 3,000 3,000 -
(55011) Retirement - PERS 39,613 38,708 (905)
(55012) Retirement - Soc Sec 27,909 26,892 (1,017)
(55013) Medicare 7,299 7,051 (248)
(55021) Health Insurance Medical 8,858 8,810 (48)
(55024) Health Ins Dental & Vision 8,559 7,887 (672)
(55025) Cafeteria Plan Mgmt 65,881 63,435 (2,446)
(55031) Long Term Disability Insurance 1,665 1,973 308
(55033) Workers Compensation 2,501 2,966 465
(62031) Accounting & Auditing 116,182 111,200 (4,982)
(62099) Miscellaneous Consultants 30,000 20,000 (10,000) (62305) Software & Licensing 44,400 47,750 3,350
(65012) Education & Training 20,000 10,000 (10,000)
(65014) Dues 750 1,000 250
TOTAL FINANCE 879,955 836,958 (42,997)
Police Services - 210
(62204) San Mateo County Sheriffs Ofc 1,693,317 2,028,862 335,545 TOTAL POLICE SERVICES 1,693,317 2,028,862 335,545
Fire Services - 220
(62047) WFPD-Fuel Mitigation Engineer 120,700 104,639 (16,061) (62208) Fire Prevention 185,000 106,647 (78,353)
TOTAL FIRE SERVICES 305,700 211,286 (94,414)
Dispatch Services - 230
(62203) Dispatch Services 75,151 77,406 2,255
TOTAL DISPATCH SERVICES 75,151 77,406 2,255

General Fund Expense by Department
FY 24-25 FY 25-26 Balance
Planning Division - 310
(51011) Salaries - Permanent 411,093 289,349 (121,744)
(51031) Automobile Allowance - 1,950 1,950
(55011) Retirement - PERS 27,732 20,694 (7,038)
(55012) Retirement - Soc Sec 25,180 17,940 (7,240)
(55013) Medicare 6,015 4,196 (1,819)
(55021) Health Insurance Medical 19,189 4,938 (14,251)
(55022) Health Opt Out 9,600 - (9,600)
(55024) Health Ins Dental & Vision 5,202 2,381 (2,821)
(55025) Cafeteria Plan Mgmt 10,470 35,891 25,421
(55031) Long Term Disability Insurance 1,704 606 (1,098) (55033) Workers Compensation 2,361 1,586 (775)
(55041) Tuition Reimbursement 500 500 -
(62034) Transcription Services 8,000 8,000 -
(62035) Town Geologist - - -
(62039) Planner 68,000 70,000 2,000
(62099) Miscellaneous Consultants 108,000 125,000 17,000 (62303) Scanning 7,500 7,500 -
(62305) Software & Licensing 6,000 15,600 9,600
(65012) Education & Training - 5,000 5,000
TOTAL PLANNING DIVISION 716,546 611,131 (105,415)
Building Division - 320
(51011) Salaries - Permanent 82,165 110,877 28,712
(51031) Automobile Allowance - 900 900
(55011) Retirement - PERS 7,022 6,488 (534)
(55012) Retirement - Soc Sec 5,325 6,874 1,549
(55013) Medicare 1,246 1,608 362
(55021) Health Insurance Medical 13,827 1,837 (11,990)
(55024) Health Ins Dental & Vision 923 886 (37)
(55025) Cafeteria Plan Mgmt 511 13,355 12,844
(55031) Long Term Disability Insurance - 204 204
(55033) Workers Compensation 820 497 (323)
(61031) BSA/SMIP/DSA Fees 7,874 1,000 (6,874)
(62042) Plan Check Services 120,000 125,000 5,000
(62099) Miscellaneous Consultants 200,000 115,000 (85,000) (62305) Software & Licensing 2,500 13,000 10,500
(65012) Education & Training - - -
TOTAL BUILDING DIVISION 442,213 397,526 (44,687)

General Fund Expense by Department
FY 24-25 FY 25-26 Balance
Code Compliance - 330
(51011) Salaries - Permanent - 5,000 5,000
(51031) Automobile Allowance - 150 150
(55011) Retirement - PERS - 398 398
(55012) Retirement - Soc Sec - 310 310
(55013) Medicare - 72 72
(55021) Health Insurance Medical - 115 115
(55024) Health Ins Dental & Vision - 55 55
(55025) Cafeteria Plan Mgmt - 835 835
(55031) Long Term Disability Insurance - - -
(55033) Workers Compensation - 30 30
(62099) Miscellaneous Consultants 30,000 30,000 -
TOTAL CODE COMPLIANCE 30,000 36,965 6,965
Community Hall - 410
(51011) Salaries - Permanent - 34,569 34,569
(55011) Retirement - PERS - 6,547 6,547
(55012) Retirement - Soc Sec - 2,143 2,143
(55013) Medicare - 501 501
(55021) Health Insurance Medical - 294 294
(55022) Health Opt Out - 1,080 1,080
(55024) Health Ins Dental & Vision - 628 628
(55025) Cafeteria Plan Mgmt - 2,170 2,170
(55031) Long Term Disability Insurance - 99 99
(55033) Workers Compensation - 1,314 1,314
(61051) Community Hall Maintenance 25,000 25,000 -
(62305) Software & Licensing 4,650 4,500 (150)
(62332) Merchant Svcs Credit Card - 2,000 2,000
(63013) Instructors & Class Refunds 60,000 88,000 28,000 (63104) Insurance 1,030 1,030 -
TOTAL COMMUNITY HALL 90,680 169,875 79,195
Parks & Fields Maintenance - 420
(51011) Salaries - Permanent - 18,300 18,300
(55011) Retirement - PERS - 3,466 3,466
(55012) Retirement - Soc Sec - 1,135 1,135
(55013) Medicare - 265 265
(55021) Health Insurance Medical - - -
(55022) Health Opt Out - 1,080 1,080
(55024) Health Ins Dental & Vision - 311 311
(55025) Cafeteria Plan Mgmt - - -
(55031) Long Term Disability Insurance - 56 56
(55033) Workers Compensation - 1,215 1,215
(61055)Parks & Fields Maintenance 90,000 90,000 -
(61056) Portable Lavatories 7,000 7,000 -
TOTAL PARKS & FIELDS MAINTENANCE 97,000 122,828 25,828

General Fund Expense by Department
FY 24-25 FY 25-26 Balance
Roads, Facilities Operations, & Development Services - 510 (51011) Salaries - Permanent 378,070 395,401 17,331
(51031) Automobile Allowance - 3,000 3,000
(55011) Retirement - PERS 49,872 52,929 3,057
(55012) Retirement - Soc Sec 21,757 23,033 1,276
(55013) Medicare 5,642 5,733 91
(55021) Health Insurance Medical 1,500 2,297 797
(55022) Health Opt Out 16,800 14,640 (2,160)
(55024) Health Ins Dental & Vision 7,494 5,728 (1,766)
(55025) Cafeteria Plan Mgmt 18,962 16,693 (2,269)
(55031) Long Term Disability 1,504 1,405 (99)
(55033) Workers Compensation 4,767 26,255 21,488
(55051) Deferred Compensation - - -
(61018) Repairs/Vandalism 5,000 5,000 -
(61021) NPDES Stormwater Program 7,500 7,500 -
(61052) Mechanical Sys Maint & Repair 15,000 10,000 (5,000) (61054) Janitorial Services 31,000 26,000 (5,000)
(61081) Vehicle Maintenance 20,000 20,000 -
(62011) Building Maint Equip & Supp 20,000 20,000 -
(62012) Landscape Supplies & Services 30,000 15,000 (15,000) (62014) Tools & Equipment 7,100 10,000 2,900
(62037) Engineer Services 35,000 135,000 100,000
(62044) GIS Mapping - 4,100 4,100
(62099) Miscellaneous Consultants 15,000 15,000 -
(62305) Software & Licensing 10,000 36,400 26,400
(65014) Dues - 5,000 5,000
TOTAL ROADS, FACILITIES & DEVELOPMENT 701,968 856,114 154,146

General Fund Expense by Department
FY 24-25 FY 25-26 Balance
Non-Departmental - 610
(55011) Retirement - PERS 132,000 167,759 35,759
(55014) Retirement - PERS Interest/Fee - - -
(55021) Health Insurance Medical 11,000 11,500 500
(55025) Cafeteria Plan Mgmt - - -
(55052) Wellness Program 6,000 12,000 6,000
(62021) Telephones 20,000 30,600 10,600
(62022) Utilities 85,000 130,000 45,000
(62046) IT & Website Consultants 67,000 67,000 -
(62099) Miscellaneous Consultants 43,000 30,000 (13,000) (62202) Animal Control 21,000 23,000 2,000
(62206) Emergency Services Contract 18,300 18,300 -
(62301) Office Supplies 18,800 15,000 (3,800)
(62304) Town Publications 600 3,000 2,400
(62305) Software & Licensing 71,245 71,800 555
(62306) Office Equipment 16,000 8,000 (8,000)
(62307) Equipment Services Contracts 21,800 5,000 (16,800) (62308) Postage 10,000 5,000 (5,000)
(62309) Advertising 8,500 15,000 6,500
(62327) BevRcycleComServ 20,000 20,000 -
(62331) Bank Fees 10,000 10,000 -
(62399) Miscellaneous 7,500 7,500 -
(63101) Property Insurance 61,150 61,150 -
(63102) Liability Insurance/Bonds 160,324 160,324 -
(65014) Dues 30,000 30,000 -
(65015) Mileage Reimbursement - 1,000 1,000
(75111) Transfer Out - Operating 133,691 140,000 6,309
(75112) Transfer Out - Capital - - -
TOTAL NON-DEPARTMENTAL 972,910 1,042,933 70,023
TOTAL EXPENSES 7,479,785 8,089,401 609,616

_____________________________________________________________________________________ TO: Mayor and Members of the Town Council
FROM: Judith Hasko and Craig Taylor
DATE: June 11, 2025
RE: Update on Post-Adoption Plan Activities

RECOMMENDATION
The Town Council should receive an update on Post-Adoption Plan Activities as set out in the chart attached as Appendix A.

BACKGROUND
In connection with the Town Council’s actions in September 2023 to approve in part the Post-Adoption Plan, and in April 2024 to approve the remainder of the Post-Adoption Plan activities and related budget, the Town Council had requested a proposed updated timeline for conducting the approved Post-Adoption Plan activities. Our subcommittee provided such a timeline in June 2024, and now encloses, as Appendix A, an updated chart. For reference purposes only, we attach as Appendix B some background materials that have previously been presented to the Town Council with respect to the PostAdoption Plan.

DISCUSSION
We recommend that the Town Council review and discuss the attached appendices.

FISCAL IMPACT
The budget for these activities has been approved in April 2024, so no additional impact is anticipated.

APPENDICES
A. Timeline Chart
B. Prior Post-Adoption Plan Materials

TOWN OF PORTOLA VALLEY

SUBCOMMITTEE REPORT

Appendix A
Draft Post HE Timeline
2025 updates to timeline adopted in 2024:

T1.1 All activities in T1.1 are completed, ahead of the schedule set out above.

T3.1 Pending.

T3.2 Pending.

T4 Supplemental Safety Measures are delayed but will be pursued through a combination of Committee, Commission and Council actions to be conducted during the remainder of 2025 onward.

T5.1 Work on understanding the impact of the Housing Element on services and infrastructure delayed due to Housing Element decertification and related planning tasks, and other urgent items which have required significant focus of planning staff. Consider commencing effort in fall 2025 to cover this aspect of the plan after the new Town Manager and Planning Directors are appointed.

T5.2 Insurance: This project is in progress under WPC. The committee has been monitoring and has held a meeting hosted by Ray Mueller featuring state insurance experts in December 2025. Consider having an update in the fall given significant developments in 2025 in the CA insurance space.

T7 Consider forming a working group for community outreach as proposed in the fall of 2025.

T8 Information repository work has not been conducted. Some of this information is available on our website.

Milestones: These activities are ongoing as a result of the recent Ad Hoc Housing Element Site Evaluation Committee and ensuing Planning Department and other efforts. We plan to update this later in 2025 as we understand options at alternative sites and hear back from HCD on our recent submission.

Appendix B
See Town Council agenda for April 10, 2024 for additional information:
https://www.portolavalley.net/home/showpublisheddocument/18283/638485133561170000 Below we include a part of those materials for reference.

Post-Adoption Plan Discussion
Status Summary
Note: Where items are recommended for approval to commence, the item would start in the time frame indicated in the “Topic” column as applicable.

Topic
1 Housing Site Inventory Follow up
Comment: The intent of this effort is to maximize success of Sunrise provision to identify alternatives to development of Dorothy Ford Park and Open Space, to retain the aesthetic, recreational and natural attributes of these sites while complying with our HE commitments, to the maximum extent possible. Generally, the goal is to conduct continual evaluation of housing needs and potential housing sites in Town to avoid timeconstrained, rushed analyses in future HE cycles and to address community housing needs.

Timing and Process:

Initiate subpart 1 actions in September 2023 and continue through 2-year Sunrise period. Initiate subpart 2 actions by June 2024 and continue indefinitely. Information described in Topic 8 will be useful for, and should be coordinated with, efforts under this Topic 1.

By May 2024, appoint and develop timelines for work product of a new ad hoc committee suitable to implement intent of the Sunrise provision; initial list of viable housing site alternatives should be completed no later than August 2024, and updated as needed thereafter.

If necessary, between August and October 2024, evaluate options for reconfiguring Dorothy Ford Park and Open Space and related costs, with final report submitted to the TC no later than the date that is 3 months prior to expiration of the Sunrise period.

1. Evaluate and propose Sunrise opportunity sites.

On subpart 1, form TC subcommittee to oversee preliminary work, with planning consultant/staff support, to identify potential alternative sites and/or other programs that may address our RHNA requirements currently addressed with Dorothy Ford Park and Open Space. Such subcommittee would (i) develop a comprehensive list of all sites in Town leveraging work done by the Ad Hoc Housing Element Committee, (ii) conduct initial outreach to the community generally (through public meetings) to inform the public of the need for alternative sites and gain public input on potential alternative sites, and directly to owners of properties that could feasibly serve as alternative sites, (iii)

maintain a list of activities conducted and feedback received per site, and (iv) continuously monitor potential sites as new information becomes available.

Once site listings are prepared, only minimal staff time expected to be needed to support the subcommittee.

The TC would establish an ad hoc committee consisting of Town committee, commission and council members along with Town residents, which would work with staff and consultants to discuss, evaluate and prioritize all alternative Sunrise site opportunities, considering financial, property rights and other relevant information in light of the Town ethos and the GP.

This ad hoc committee would work with input from the TC subcommittee acting under subpart 1 to (i) develop a process for recording the status of sites in Town for potential housing (e.g., whether it was assessed in the past housing efforts, what impediments or issues were identified), and monitoring any changes in status of these sites, (ii) conduct outreach to have a comprehensive effort to facilitate identification of alternative sites, (iii) establish a framework for understanding costs of developing various sites and (iv) consider developing a rank ordering system for any suitable sites.

This ad hoc committee would also evaluate opportunities to reconfigure Dorothy Ford Park and Open Space, if alternative sites are not identified prior to August 2024 and develop an understanding of the potential costs of doing so.

Meetings would be monthly or otherwise as needed to identify sites early enough in the Sunrise period to provide workable alternatives, starting no later than January 2024.

Moderate to significant staff and consultant support would be needed as the process develops.

2. Initiate longer term planning efforts for future housing cycles.

Propose this effort to be further elucidated in 2025 onward, with the goal of being more proactive in planning for local housing needs on a continual basis. 2 Zoning Design Review Actions and Related GP Updates
Comments: In the course of implementing the new HE, the Town will need to adopt zoning changes and objective design review guidelines. Objective design standards would be developed as soon as practical given that they are a critical means of requiring new project development to be consistent with the Town’s GP and ethos. The goal of actions under this topic is to provide further local control of development to the extent allowed under law.

Process and timing:

Review, discuss and adopt zoning changes needed to ensure consistency between the HE, zoning code, and the remaining elements of the GP, and develop objective design criteria that builds on Town design guidelines for use in complying with state requirements for certain future development projects in a manner consistent with the GP.

In the unlikely event that GP updates are needed in light of these changes, they could be adopted as part of longer-term effort to update GP, unless required to be adopted earlier under law.

Adopt by January 2024 as required by state law.

The Town has retained consultants with relevant expertise relating to necessary zoning changes and objective design criteria. A draft of proposed code amendments is expected to be released in August 2023 with PC consideration beginning in September.

A public awareness and education meeting should be conducted after the initial PC study session, with support by the staff and consultants to allow full participation by residents.

Efforts under this topic require moderate to significant staff and consultant support.
3 CEQA Guidelines/Local Guidelines and Thresholds
Comments: The intent of subpart 1 under this topic is to comply with state requirements in adopting local CEQA guidelines, and the intent of subprat 2 under this topic is to clarify and standardize analysis and decision making in the environmental review process for future development projects in Town, with the intent to enhance the measures included in the IS/MND as appropriate to reflect our Town’s ethos, and increase consistency and efficiency.

Guidelines and thresholds are intended to be derived from existing examples taken from other jurisdictions as adjusted to reflect the Town’s situation and would serve to frame the analyses of future project-level environmental impacts and mitigation measures for projects that are not exempt from CEQA and be informed by public input.

Any required GP amendments that may be identified in the initial process as being required to effect these actions could be implemented in the next update of the GP unless legally required to be adopted earlier.

Process and timing:

1. Establish local CEQA guidelines per 14 CCR Section 15022.

Prior to January 2024.

Planning Staff and Town Attorney to address subpart 1 under this topic and submit for PC and then TC approval.

2. Establish local thresholds, per 14 CCR Section 15064.7(b), concerning key topics that may include certain aspects such as aesthetics, parks and recreation, public services, traffic and wildfire safety to guide future development, with reference, where available, to approaches taken by jurisdictions that have adopted similar measures.

Between March and May 2024
Planning consultants with Town Attorney to develop framework for subpart 2 under this topic based on references to other jurisdictions adopting similar local parameters, then submit for discussion and input by the PC to review to refine to tailor to community values and the Town’s GP and eventual submission for adoption by the TC.

Subpart 2 is not intended to be a comprehensive analysis, but a limited set of parameters for use in guiding new developments in a manner consistent with the Town’s ethos and values. This would involve conducting a public awareness, education and comment meeting after the initial PC study session.
4 Supplemental Safety Measures for Housing Element
Comment: The goal of this effort is to optimize consistency, beyond what is required by state law, across the SE, HE, and remainder of the GP with respect to safety in light of the increase in the Town’s population under the new HE, complementing ongoing efforts already in process.

Timing and Process:

Coordinate and ensure that the Town’s ongoing SE-related activities also consider the cumulative projected increase in Town population and housing units arising out of HE adoption and adopt mechanisms to coordinate with neighboring jurisdictions with respect to safety measures such as the evacuation plan.

Initiate in January 2024 to the extent feasible. Yearly and ad hoc follow-up activities.

Staff and consultants would reach out to committees involved in the SE update process to confirm that such committees assessed and made recommendations to the PC and TC with respect to adjustments to evacuation routes and planning, building codes, and other safety measures (to address fire, geologic, flooding and other risks), specifically arising from the cumulative increase in population and housing units in the HE, adopted fire maps, other elements of the GP, and best practices.

These efforts would be made in conjunction with the ongoing SE update and discussion of evacuation plan.

TC would establish process and timing for regular periodic and ad hoc assessments of any appropriate updates to the SE and evacuation plan as best practices evolve, and as HE plan actions are carried out, to enable methodical and proactive approach. 5 Impact of Housing Element on Services and Infrastructure Comment: Increased demand for services and infrastructure merits special monitoring and planning for increased demand, while maintaining the level of services and resources.

This effort would complement the efforts staff otherwise may make with respect to services and infrastructure to focus on longer term implications of HE adoption.

Timing and Process: 2 Subparts.

1. Understand projected growth in demand on services and infrastructure resulting from increased population and housing units in Town under the HE, and potential impact on Town budget, and develop strategy for maintaining or improving current service levels.

Subpart 1 activities would start November 2023 through TC subcommittee and staff; other subparts would start in March 2024.

For subpart 1, consultants/staff working with one or more Town Council members would conduct supplemental outreach to confirm public services and infrastructure (e.g., public utilities, public services such as hospitals, fire protection services, police services, safety services, parks and recreation) will continue to be available at an appropriate level for the Town under the updated HE in terms of an current and desired future service level, quality, capacity and location, including an assessment of costs to the Town.

Additionally for subpart 1, the TC later would form a new working group including members of the planning commission to assess more detailed and longer term qualitative and quantitative implications of increasing the Town population and housing units as a result of HE adoption on services and infrastructure.

The group’s goal would be to advise the PC and TC on mechanisms recommended to make sure that public services and infrastructure (e.g., public utilities, public services such as hospitals, fire protection services, police services, safety services, parks and recreation) continue to be available appropriate for Town population in terms of an appropriate service level, quality, capacity and location, including an assessment of costs to the Town.

Community outreach sessions would be conducted from April through June 2024 to allow the public to understand and comment on the group’s efforts.

2. Understand and gather information on housing insurance challenges in Town, focusing on how additional housing units to be built in the course of implementing our HE will

impact existing insurance programs residents use, and the availability and costs of insuring new housing units.

Start in March 2024 through a working group and staff.

For subpart 2, the TC recognizes evolving challenges in insurance in WUI areas. While the initial focus on insurance in the Post HE Plan was to be insurability of new housing units, we propose that we consult with our Town lobbyist, neighboring jurisdictions and San Mateo County on current challenges in local housing insurance on a broader level.

This could occur through a TC subcommittee working with staff to gain a broader understanding of the political issues and pragmatic approaches that should be considered for all Town residents, including those new units resulting from the updated HE. The group would also seek to understand and monitor issues and developments that may impact the availability of insurance for new and existing housing units in Town. 6 Housing Funds Policy for Use of Inclusionary Funds
Comment: This effort will complement the Town’s general efforts to identify incentives and support for expanding housing options as part of the HE. As the Town assesses its financial resources to accommodate the HE, this effort could also extend to the use of other funds that may become available for housing-related purposes.

Timing and Process:

Define an Inclusionary Funds Use Policy to guide the Town’s use of funds arising from this HE program.

Policy development and adoption by October 2023.

The Town Council subcommittee, already appointed, will work with Town committees to gather input on priorities and considerations that will inform an Inclusionary Funds Use Policy. The subcommittee, with staff support, will develop a proposal for consideration by the TC for adoption.
7 Encourage Community and Civic Engagement
Comment: The intent of this activity is to engage organizations that have special insight into the housing needs of vulnerable populations in Town, and to engage them in defining Town strategies to meet these needs on an ongoing basis.

Timing and Process:

Engage community organizations in discussion of community housing needs and potential resources.

Form working group in April 2024; report on work in July 2024.

Form working group including Town committee and commission members to conduct outreach to civic organizations located or operating in Town (e.g., HOAs, medical support services, religious organizations) who are positioned to understand the needs of the most vulnerable in the local community, and assist in understanding existing impediments to development of new housing, identifying and creating opportunities for housing and developing policies to support housing needs for these populations.

This would not entail formal meetings unless the Town Council later found it necessary to conduct them. However, the working group would report its findings to the Town Council in July 2024.
8 Develop Housing Element Information Repository
Comment: Recognizing the extensive efforts of the Town to consider public comment and gather information on potential housing sites, the Town Council wishes to create an easily accessible repository that would be available for the Sunrise-related activities and other Town housing-related activities and otherwise for public understanding and awareness. This information will be useful for, and should be coordinated with, efforts under Topic 1.

Timing and Process: Organize a small group of volunteers to organize material and possibly upgrade search technology.

__________________________________________________________________________

TO: Members of the Town Council
FROM: Councilmembers Flynn and Taylor
DATE: May 21, 2025
RE: Creation of a Council Resilience Planning Subcommittee

RECOMMENDATION
Given the urgency of enhancing our safety infrastructure, the Town Council should establish two Town Council Subcommittees: 1) Safety Element Subcommittee to manage the process of finalizing the Town Safety Element ; and 2) Resilience Planning Subcommittee to create a comprehensive list of potential safety initiatives.

This memo details the second of two Subcommittees.

Action: Create a Town Council Resilience Planning Subcommittee to develop a comprehensive plan to enhance community safety and resilience. The Subcommittee will deliver, for a July Council meeting, on two immediate goals: 1) a draft list of safety initiatives roughly divided into high, medium and low priorities; 2) a recommendation on whether a multi-disciplinary Safety Task Force is warranted and how best to engage existing safety committees and the community.

The longer-term goal is to create a comprehensive Safety Framework. This would include a refined and prioritized set of safety and resilience initiatives, with estimated costs and staffing needs. Additionally, sustainable long-term funding for Town safety (Fire, Emergency, and Public Safety) will be reviewed.

DISCUSSION
Given the severity of the risks in Portola Valley around wildfire, earthquake, landslide, and flooding risks, it’s important that the Town and the Town Council prioritize getting programs and funding in place to implement safeguards for the community. The Safety Framework is an important part of this process and combined with the Safety Element can provide the Town an important roadmap for mitigating risks in the Town. Creating a Subcommittee helps ensure continued focus on this critical area.

TOWN OF PORTOLA VALLEY
Colleague’s Memo

Safety and Resilience Initiatives
A number of key safety initiatives, priorities, and tasks are already being worked on by the Town, by the safety committees, and by various Town-affiliated organizations including the WFPD, Cal Water, PG&E, Green Waste, West Bay Sanitary, Sheriff’s department, as well as property owners.

The prioritized list of safety and resilience initiatives along with the future Safety Framework is intended to give the Council a clear view of the various initiatives so we can move forward this year on critical and more easily accomplished tasks, particularly education of homeowners on basic home hardening and defensible space.

The Safety Framework can provide a unifying effect on the community as we all work together and plan, prioritize, and implement numerous needed safety initiatives.

FISCAL IMPACT
The costs to maintain, upgrade, and manage our safety infrastructure need to be determined.

Parts will be significant. Others can be researched, studied, or implemented through our committees and volunteers with staff and consultant support. Initially, some minimal staff time will be needed to support Subcommittee tasks and information requests.

APPENDIX: PRELIMINARY LIST OF SAFETY AND RESILIENCE IITIATIVES

This list is intended to be the seed for potential initiatives that enhance community safety and resilience in our Town:

1. Facilitate Home Hardening

2. Facilitate Home Vegetation Management

3. Community Engagement on Safety Issues

4. Facilitate Formation of Firewise Communities

5. Document Evacuation Routes and Analyze Potential Improvements

6. Investigate Financing: Grants, Fund Raising and Sustainable Long-term Funding

7. Review Building Standards: Consider specific development criteria for areas within designated high-risk zones (e.g. Limiting higher density, detailing fire safety enhancements)

8. Enhanced Electrical Grid Resilience

__________________________________________________________________________

TO: Members of the Town Council
FROM: Councilmembers Flynn and Taylor
DATE: May 21, 2025
RE: Creation of a Safety Element Council Subcommittee

RECOMMENDATION:

Given the urgency of enhancing our safety infrastructure, we recommend that Town Council establish two Town Council Subcommittees: 1) Safety Element Subcommittee to manage the process of finalizing the Town Safety Element; and 2) Town Resilience Planning Subcommittee to create a comprehensive list of potential safety initiatives for future action.

This memo details the first of the two Subcommittees.

Action: Create a Town Council Safety Element Subcommittee to manage the process of completing the Town Safety Element in accordance with state mandates by the first half of the 2025-26 fiscal year, no later than December 2025. The Safety Element Subcommittee would:
a) Work with Staff, Committees, residents, and consultants to finalize the Safety Element b) Plan for community education and engagement with respect to the Safety Element

DISCUSSION
The Town’s Safety Element of our General plan is the overarching view of our approach to the Town’s safety priorities. The Safety Element when paired with a set of safety initiatives begins to address in a concrete way the significant safety issues facing the Town.

A draft Safety Element document was created by Urban Planning Partners with some feedback from staff and safety committees. It’s now time to determine the status of the document, what tasks have been completed, obtain copies of the earlier feedback from the safety committees, and ensure completeness and compliance with state regulations

FISCAL IMPACT
Safety Element Subcommittee

TOWN OF PORTOLA VALLEY
Colleague’s Memo

Completion of the Safety Element will require staff time as well as potential consultant time:
● Estimate provided in February 2025: $25,000-$30,000 added to the budget for consultant work.
● Timing:
o With the additional consultant resources, the Safety Element can be completed in six months.
o Without additional resources and with a reallocation of staff time, the Safety Element can be completed in twelve months.
o Determination needed to evaluate how much work actually requires consultant time versus using volunteer town experts and staff members

EPC Jun 5, 2025
Public Comment - Bridge ingress/egress issue
• Bridge by Alpine Hills - owned by Charles Zamboni - the bridge right next to Alpine Hills is one lane - emergency services can’t get in - Family that owns the land under the bridge by Alpine Hills is willing to donate the bridge for better emergency access o He has been working with the Town on a bridge design
o He wants to donate the land under the bridge so that the Town can manage the bridge
o I shared with him that PV Fund now exists
o Due to CIPs already being decided, shared that it would prob be 2026 budget • EOC/EOP Plan
o All duties should be town staff
 It’s too messy to rely just on volunteers
 Need staff initially - they can then work with volunteers • WFPD Report
o Working up near Santa Maria - Wildland fire training
o Drone program is in testing phase
o Fuel reduction - dead vegetation needs to be removed year round • Firewise
o Coordinating with Firewise to do the home hardening assessments  Need people home - need access to home and backyard
 Need to talk to homeowner about the new ordinance
o Still need three Firewise neighborhoods in PV
• Roadway work
o Right of way work paid off with Cervantes work -
o Working on road clearing is critical to keeping roadways open during emergencies
• Gave a public presentation on ordnance w/ Conservation Committee • Wildfire Preparedness Presentation - 3rd Wed of the month • Wants a trailer sign up so that WFPD can get important info out to the community

• Chipper piles have been on the streets which will be enforced - okay on private property but
• EPIC
o Communicator Class -June 10 - 6.30 - 8.30 pm
o Hub person - they will have access to emergency access to CERT • Practice evacuation
o Will be doing a practice evacuation for one neighborhood in Town in September o Doesn’t want to do a Townwide exercise as it would be to chaotic o Neighborhood to be decided at a later date
• Power outages
o Emergency system EPC has put together was stable and up throughout the recent power outages for the radios. However, Starlink went down due to a connection with the back up generator.