City Council - May 4, 2026

Council scrutinizes $1.05 billion budget proposal without taking action

The City Council began reviewing Palo Alto’s proposed $1.05 billion all-funds budget for fiscal year 2027 but took no formal action during the study session. The proposal includes a $311 million General Fund budget, down 1.1% from the prior year, and a $313.6 million capital budget. A five-year capital plan would spend $1.2 billion across 217 projects.

The proposal addresses a projected $17.1 million General Fund deficit through measures that include $6.8 million in expenditure reductions, $1.7 million in revenue enhancements, one-time funding, reduced capital transfers and pension-cost management. It also calls for a net reduction of 22.25 positions citywide.

Proposed elimination of four crossing-guard positions drew concern from residents and council members, particularly over student safety at Meadow and Alma. Council members broadly urged that the guards be retained and that staff continue discussing cost sharing with the school district, but the council made no final decision. Members also requested closer review of proposed irrigation reductions at Foothills Nature Preserve and their possible environmental effects.

The budget includes $400,000 to design rail quiet-zone improvements. Staff said an accelerated design process could take about 10 to 11 months instead of the typical 18 months, subject to coordination with Caltrain and the California Public Utilities Commission. Construction is currently anticipated about two years out, although staff is exploring ways to accelerate that schedule.

The Finance Committee was scheduled to continue budget workshops over the following two days and hold its wrap-up May 19. Staff said the proposed budget is planned to return to the council for adoption June 15.

SB 79 and Downtown Housing Plan review is deferred

The council deferred its update on Senate Bill 79 and the Downtown Housing Plan without considering the substance of the item. Mayor Vicki Veenker proposed postponement after the meeting reached 10:15 p.m., saying the issue warranted broader public participation; no objection was voiced.

Staff identified May 18 as a possible return date but said another scheduled item might have to be moved. That date was not confirmed.

Vacancy report shows improvement as labor groups flag department shortages

Palo Alto reported a citywide vacancy rate of approximately 10%, below the 20% threshold identified in its annual Assembly Bill 2561 workforce report. The council completed the required public hearing but recorded no formal motion or vote on the informational item.

Human Resources staff said the average time from an employment offer to a new worker’s start date had fallen from more than 60 days to 23 days. Staff also planned to bring on more than 20 summer interns and reported lower vacancy rates in several categories.

Labor representatives said the citywide figure obscured pressures in individual departments. A police representative reported a 12.8% vacancy rate, said 68% of personnel were available for full duty and objected to a proposed $50,000 training reduction and freeze of a special-operations sergeant position. A fire representative said 17 of the department’s last 25 hires were emergency medical technicians and that the department remained below its 60% paramedic goal. Water Quality Control and Utilities representatives sought retention incentives, market studies and commute-related support.

An unidentified council member requested copies of the police and fire presentations and suggested that uneven vacancies could receive further scrutiny from the Finance Committee.

Council approves CEDAW and private-action provisions

The council unanimously approved the second reading of an ordinance amending Palo Alto’s policy against arbitrary discrimination. The ordinance adds municipal-code sections concerning local CEDAW principles and a private right of action. Approval came through the consent calendar.

Transit-center funds approved and bikeway grant application authorized

The council voted 7-0 to accept up to $1 million in Metropolitan Transportation Commission funds for improvements connecting Quarry Road and the Palo Alto Transit Center. It also approved a $1 million fiscal year 2026 Capital Improvement Fund budget amendment for the project, which has a preliminary estimate of approximately $5 million.

In the same unanimous consent vote, the council authorized staff to apply for $326,590 in Transportation Development Act funding for the South Palo Alto Bikeways Demonstration Project. The application is part of a project funding plan totaling approximately $2.2 million; the council’s action authorized the request but did not constitute a grant award.

Internal-audit contract is extended through 2028

The council unanimously extended its contracted internal-audit services through June 30, 2028. The two-year extension has a target value of $1,417,500, divided equally between fiscal years 2027 and 2028, with no increase to the eight-year contract’s $5,552,500 maximum.

A public commenter opposed the extension, raising concerns about contractor conflict-of-interest disclosures and advocating for a city employee to perform internal audits. The council approved the amendment as part of the consent calendar.

Five-year wetland monitoring contract wins approval

The council voted 7-0 to approve a five-year contract worth up to $399,239 for annual wetland mitigation monitoring, reporting and improvements associated with the golf course reconfiguration project. The action also included a $14,869 Capital Improvement Fund transfer.

A commenter supported moving the work forward but said required mitigation and monitoring had largely not been implemented for about a decade. The commenter urged stronger protection against invasive species and unauthorized wetland crossings.

Middlefield Road tennis lease is extended to 2040

The council unanimously approved a lease amendment with Community Skating, Inc. for the tennis facility at 3005 Middlefield Road, extending the term to Jan. 1, 2040. The agreement includes a $1,648 amendment fee and a $100 rent payment for the lease term.

A public commenter opposed the extension, questioning the site’s description as parkland and the lessee’s reporting compliance. The amendment was approved through the consent calendar.

Council establishes California Avenue entertainment zone

The council voted 7-0 on second reading to create a municipal-code chapter governing entertainment zones and establish one on a portion of California Avenue. The ordinance received final council approval as part of the consent calendar.

Primary sources

Watch the meeting on YouTube · Read the official meeting packet