City Council - June 17, 2025

California Avenue dining continues as council seeks all-weather parklets

The City Council adopted resolutions continuing dining and retail encroachments on car-free California Avenue before the existing outdoor dining authorization expired at the end of June. It also allowed open containers during 2025 Third Thursday events. The motion passed 6-0-1, with one council member absent.

The council did not approve the proposed Outdoor Activation Program Regulations. Instead, it adopted a fee structure comparable to the downtown parklet program and directed staff to develop year-round, transparent and weather-protective parklet options with Architectural Review Board input. The existing downtown parklet license fee is $10.71 per square foot annually; staff estimated a $5,004 initial application fee, a $604 annual renewal fee and a $2,750 refundable deposit.

Businesses and residents broadly supported the car-free initiative but criticized reliance on umbrellas and other temporary elements for outdoor dining. Council directed staff to consider standard and custom parklet designs, alternatives to planters and ways to keep seating near the current 880 seats rather than reduce it to 734. It also reaffirmed Cambridge as a through-bicycle route, called for signs and measures to slow bicycles on California Avenue, and referred a possible entertainment zone beyond Third Thursday events to staff.

Palo Alto Link gets a one-year extension amid subsidy concerns

The council extended the Nomad Transit, LLC contract for Palo Alto Link through June 30, 2026, while directing staff to seek flexibility to adjust the service or contract duration during the coming year, to the extent possible. The motion passed 5-0-1-1, with one recusal and one absence.

Mayor Ed Lauing questioned whether the city subsidy and dependence on grants were sustainable but supported allowing time to evaluate a wind-down or alternative service. Council member Lydia Kou raised concerns that the complete underlying contract, including its termination provisions, was not attached to the council packet. Staff said the existing agreement does not permit termination without cause unless the city renegotiates with the provider.

Agenda materials described a $1.1 million contract amendment and a revised not-to-exceed amount of $4,901,550, while the meeting discussion focused on an approximately $500,000 city general-fund commitment for fiscal 2026. The supplied record does not establish whether the adopted contract amount differed from the agenda figure.

Staff reported more than 45,000 completed rides from July through December and said approximately 40% of riders were seniors, people with disabilities or veterans, with some overlap among those groups. Monthly spending has fallen from roughly $130,000 to $150,000 to about $80,000 to $85,000 since February, accompanied by longer waits and more notices that seats were unavailable.

The city has requested $456,000 from the Transportation for Clean Air program after receiving $441,000 the prior year, along with $1.4 million from VTA that was expected to reach the VTA board in October. Staff plans to continue evaluating subsidy levels, alternatives and a possible wind-down, with Finance Committee budget discussions anticipated in August and more information expected after fall grant decisions.

Council advances Lot T housing and affordable multifamily electrification

Council directed staff to develop an electrification incentive program for affordable multifamily housing and authorized use of up to $6.6 million in Gas Utility Cap and Trade revenue. The associated budget amendment increases the Gas Resource Management contract-services appropriation and reduces the Cap and Trade Reserve by the same amount. The contemplated program could support central systems serving as many as 500 units and in-unit equipment in up to 275 units, while staff also explores a cost-sharing arrangement with a provider.

The council separately declared the approximately 19,236-square-foot Surface Parking Lot T exempt surplus land and authorized an exclusive negotiation agreement with Alta Housing for a proposed 100% affordable-housing development. The agreement provides for reimbursement to Alta Housing of up to $200,000 if the city does not proceed. The action authorizes negotiations rather than final development approval.

Council also approved a two-year, $450,600 contract with Alta Housing BMR Services LLC to administer and provide consulting for the Below Market Rate Housing Program. The action included a $31,000 increase in the fiscal 2026 Residential Housing In-Lieu Fund appropriation.

Council authorizes $8.5 million East Bayshore acquisition

The council authorized the city manager or a designee to negotiate and execute an agreement with C H LLC to acquire the industrial property at 2575 East Bayshore Road for $8.5 million plus typical closing costs. The authorization includes a refundable $255,000 deposit and a leaseback to Insulation Sources, Inc. for $12,600.33 per month for up to six months. The records do not specify the city’s intended long-term use for the property.

Council approves five-year childcare subsidy contract

The council approved a five-year contract with Palo Alto Community Child Care to manage the city’s Childcare Subsidy Program. The contract has a not-to-exceed amount of $3,228,146, including $606,794 budgeted for fiscal 2026, and the program can serve up to 45 low-income children annually.

Council approves five-year street and utility maintenance contracts

The council approved two five-year municipal maintenance contracts with combined not-to-exceed amounts of more than $26 million. Community Tree Service LLC received a utility line-clearance contract capped at $16.5 million, consisting of a $15 million base amount and $1.5 million contingency.

SCA of CA, LLC received a street-sweeping contract running from July 1, 2025, through June 30, 2030. Its $9,883,850 ceiling consists of $8,985,318 for basic residential and commercial sweeping and $898,532 for additional services.

Primary sources

Watch the meeting on YouTube · Read the official meeting packet