Loading...
HomeMy WebLinkAboutCC 01-13-2026 Searchable PacketTuesday, January 13, 2026 6:45 PM CITY OF CUPERTINO Special Meeting 10350 Torre Avenue, Council Chamber and via Teleconference City Council KITTY MOORE, MAYOR LIANG CHAO, VICE MAYOR J.R. FRUEN, COUNCILMEMBER SHEILA MOHAN, COUNCILMEMBER R "RAY" WANG, COUNCILMEMBER IN PERSON AND TELECONFERENCE MEETING For more information: (408) 777-3200 | www.cupertino.gov AGENDA 1 CC 01-13-2026 1 of 52 City Council Agenda January 13, 2026 IN-PERSON AND TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION OPTIONS TO OBSERVE: Members of the public wishing to observe the meeting may do so in one of the following ways: 1) Attend in person at Cupertino Community Hall, 10350 Torre Avenue. 2) Tune to Comcast Channel 26 and AT&T U-Verse Channel 99 on your TV. 3) Watch a live stream online at www.Cupertino.gov/youtube and www.Cupertino.org/webcast 4) Attend in person at a remote Teleconference Location noticed pursuant to Gov. Code 54953(b)(2), which location, if noticed, would be stated on the cover page of this agenda. OPTIONS TO PARTICIPATE AND COMMENT: Members of the public wishing to address the City Council may do so in the following ways: 1) Appear in person for Open Session at Cupertino Community Hall. A. During “Oral Communications”, the public may comment on matters not on the agenda, and for agendized matters, the public may comment during the public comment period for each agendized item. B. Speakers are requested to complete a Speaker Card. While completion of Speaker Cards is voluntary and not required to attend the meeting or provide comments, it is helpful for the purposes of ensuring that all speakers are called upon. C. Speakers must wait to be called, then proceed to the lectern/podium and speak into the microphone when recognized by the Mayor. D. Speakers are limited to three (3) minutes each. However, the Mayor may reduce the speaking time depending on the number of people who wish to speak on an item. A speaker representing a group between 2 and 5 members of the public in attendance may have up to 2 minutes per group member to speak, up to 10 minutes maximum. E. Please note that due to cyber security concerns, speakers are not allowed to connect any personal devices at the lectern/podium. However, speakers that wish to share a document (e.g. presentations, photographs or other documents) during oral comments may do so in one of the following ways: a) At the overhead projector at the podium, or b) E-mail the document to cityclerk@cupertino.gov by 3:00 p.m. and staff will advance the Page 2 2 CC 01-13-2026 2 of 52 City Council Agenda January 13, 2026 slides/share the documents during your oral comment. 2) Written Communications as follows: A. E-mail comments to the City Council for Open Session at publiccomment@cupertino.gov as follows: a. E-mail comments must be received by 4:00 p.m. on the day of the meeting in order to be forwarded to the City Council before the meeting. b. Emailed comments received following agenda publication but prior to, or during, the meeting, will be posted to the City’s website after the meeting. c. These e-mail comments will also be received by each City Councilmember, the City Manager, and the City Clerk’s Office. Comments on non-agenda items sent to any other email address will be included upon the sender's request. B. Regular mail or hand delivered addressed to the: City Council, City Hall, 10300 Torre Avenue, Cupertino, CA 95014 3) Open Session Teleconference in one of the following ways: A. Online via Zoom on an electronic device (Audio and Video): Speakers must register in advance by clicking on the link below to access the meeting: https://cityofcupertino.zoom.us/webinar/register/WN_T6DEwqCeQzmT8lQF_0o_KA a) Registrants will receive a confirmation email containing information about joining the webinar. b) Speakers will be recognized by the name they use for registration. Once recognized, speakers must click ‘unmute’ when prompted to speak. c) Please read the following instructions about technical compatibility carefully: One can directly download the teleconference (Zoom) software or connect to the meeting in their internet browser. If a browser is used, make sure the most current and up-to-date browser, such as the following, is used: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+. Certain functionality may be disabled in older browsers, including Internet Explorer. B. By Phone (Audio only): No registration is required in advance and speakers may join the meeting as follows: a) Dial 669-900-6833 and enter WEBINAR ID: 845 1751 7258 b) To “raise hand” to speak: Dial *9; When asked to unmute: Dial *6 c) Speakers will be recognized to speak by the last four digits of their phone number. C. Via an H.323/SIP room system: Join from an H.323/SIP room system: H.323: Page 3 3 CC 01-13-2026 3 of 52 City Council Agenda January 13, 2026 144.195.19.161 (US West) 206.247.11.121 (US East) Meeting ID: 845 1751 7258 SIP: 84517517258@zoomcrc.com D. Online via the teleconferencing device (Audio and Video) being used to provide access to the meeting from a remote Teleconference Location noticed pursuant to Gov. Code 54953(b)(2), which location, if noticed, would be stated on the cover page of this agenda. a) Speakers are required to notify the City Clerk via email to cityclerk@cupertino.gov prior to noon on the date of the meeting during which they plan to participate and comment from the remote location noticed to ensure the City Clerk is prepared to accept their comment. b) If the teleconferencing device malfunctions impeding access to the meeting from the remote location, the speaker may alternatively participate via the other options for remote participation provided above. NOTICE AND CALL FOR A SPECIAL MEETING OF THE CUPERTINO CITY COUNCIL NOTICE IS HEREBY GIVEN that a special meeting of the Cupertino City Council is hereby called for Tuesday, January 13, 2026, commencing at 6:45 p.m. in Community Hall Council Chamber, 10350 Torre Avenue, Cupertino, California 95014 and via teleconference. Said special meeting shall be for the purpose of conducting business on the subject matters listed below under the heading, “Special Meeting." SPECIAL MEETING CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL CONSENT CALENDAR 1.Subject: Amendment to 2026 Council Committee Assignments to designate Councilmember Wang as the primary and Vice Mayor Chao as the alternate to the Cities Association of Santa Clara County Legislative Action Committee. Recommended Action: Amend the 2026 Council Committee Assignments to designate Councilmember Wang as the primary and Vice Mayor Chao as the alternate to the Cities Association of Santa Clara County Legislative Action Committee. Staff Report A - 2026 Council Committee Assignments B - Amended 2026 Council Committee Assignments (redline) C - Amended 2026 Council Committee Assignments (clean) Page 4 4 CC 01-13-2026 4 of 52 City Council Agenda January 13, 2026 STUDY SESSION 2.Subject: Study session regarding Potential November 2026 Ballot Measure on Parkland Rezoning Considerations. Recommended Action: Conduct study session and provide direction to staff to begin preliminary analysis and engagement regarding a potential parkland rezoning ballot measure, and return to City Council with recommended next steps. Staff Report 3.Subject: Study session regarding Various Revenue Tax Options. Conduct study session and provide direction to staff to begin preliminary analysis regarding budgetary need for and timeline of potential revenue generating ballot measure, and return to City Council with recommended next steps. Staff Report A – Presentation (2023.12.5) 4.Subject: Study Session to consider possible updates to the City’s practices pertaining to its advisory bodies, including its Commissions and Committees. Recommended Action: Consider and discuss options for updating the City’s practices pertaining to its advisory bodies, including (1) increasing community participation via extended nepotism restrictions, (2) filling vacancies and appointing alternates, (3) updating attendance requirements, (4) recognizing commissioner autonomy, and (5) considering the unique characteristics of Committees as compared to Commissions, including the Economic Development Committee and the Audit Committee. Staff Report ADJOURNMENT Lobbyist Registration and Reporting Requirements: Individuals who influence or attempt to influence legislative or administrative action may be required by the City of Cupertino’s lobbying ordinance (Cupertino Municipal Code Chapter 2.100) to register and report lobbying activity. Persons whose communications regarding any legislative or administrative are solely limited to appearing at or submitting testimony for any public meeting held by the City are not required to register as lobbyists. For more information about the lobbying ordinance, please contact the City Clerk’s Office at 10300 Torre Avenue, Cupertino, CA 95014; telephone (408) 777-3223; email cityclerk@cupertino.org; and website: www.cupertino.org/lobbyist. The City of Cupertino has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a final decision of the City Council must be brought within 90 days after a decision is announced unless a shorter time is required by State or Federal law. Prior to seeking judicial review of any adjudicatory (quasi-judicial) decision, interested persons must Page 5 5 CC 01-13-2026 5 of 52 City Council Agenda January 13, 2026 file a petition for reconsideration within ten calendar days of the date the City Clerk mails notice of the City’s decision. Reconsideration petitions must comply with the requirements of Cupertino Municipal Code §2.08.096. Contact the City Clerk’s office for more information or go to http://www.cupertino.org/cityclerk for a reconsideration petition form. In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this meeting who is visually or hearing impaired or has any disability that needs special assistance should call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for assistance. In addition, upon request in advance by a person with a disability, meeting agendas and writings distributed for the meeting that are public records will be made available in the appropriate alternative format. Any writings or documents provided to a majority of the Cupertino City Council after publication of the packet will be made available for public inspection in the City Clerk’s Office located at City Hall, 10300 Torre Avenue, Cupertino, California 95014, during normal business hours; and in Council packet archives linked from the agenda/minutes page on the City web site. IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section 2.08.100 written communications sent to the City Council, Commissioners or staff concerning a matter on the agenda are included as supplemental material to the agendized item. These written communications are accessible to the public through the City website and kept in packet archives. Do not include any personal or private information in written communications to the City that you do not wish to make public, as written communications are considered public records and will be made publicly available on the City website. Page 6 6 CC 01-13-2026 6 of 52 CITY OF CUPERTINO Agenda Item Subject:Amendment to 2026 Council Committee Assignments to designate Councilmember Wang as the primary and Vice Mayor Chao as the alternate to the Cities Association of Santa Clara County Legislative Action Committee. Amend the 2026 Council Committee Assignments to designate Councilmember Wang as the primary and Vice Mayor Chao as the alternate to the Cities Association of Santa Clara County Legislative Action Committee. CITY OF CUPERTINO Printed on 1/8/2026Page 1 of 1 7 CC 01-13-2026 7 of 52 OFFICE OF THE CITY CLERK CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3223 CUPERTINO.GOV CITY COUNCIL STAFF REPORT Date: January 13, 2026 Subject Amendment to 2026 Council Committee Assignments to designate Councilmember Wang as the primary and Vice Mayor Chao as the alternate to the Cities Association of Santa Clara County Legislative Action Committee. Recommended Action Amend the 2026 Council Committee Assignments to designate Councilmember Wang as the primary and Vice Mayor Chao as the alternate to the Cities Association of Santa Clara County Legislative Action Committee. Background The City Council appoints Councilmembers to serve as representatives to various local and regional organizations. Per the City Council Procedures Manual (Resolution No. 25-016), the Mayor appoints Councilmembers to standing and ad hoc committees and subcommittees established by the City Council, subject to ratification by the Council at its next regular meeting. Under the Procedures Manual, the City Council has the opportunity to ratify or modify the Mayor’s appointments. It is the responsibility of the committees and subcommittees to inform and submit recommendations to the Council. Reasons for Recommendation and Available Options On December 16, 2025, the City Council approved the annual committee assignments for the 2026 calendar year (Attachment A). Under the initial appointments, Vice Mayor Chao was designated as the primary representative for the Cities Association of Santa Clara County (CASCC) Board of Directors, Selection Committee, and the Legislative Action Committee, and Councilmember Wang was designated as the alternate. These meetings occur in a "stacked" sequence on the same evening, resulting in a lengthy continuous time block commitment that limits a single representative’s ability to remain effective throughout the session. Mayor Kitty Moore recommends amending the 2026 Council Committee Appointments to reassign Councilmember Wangas the primary for the CASCC Legislative Action Committee and Vice Mayor Chao as the alternate. This adjustment is intended to optimize councilmember time management and ensure balanced representation across the Cities Association's sequential meeting structure. 8 CC 01-13-2026 8 of 52 Sustainability Impact No sustainability impact. Fiscal Impact No fiscal impact. City Work Program (CWP) Item/Description None Council Goal: N/A California Environmental Quality Act N/A _____________________________________ Prepared by: Lauren Sapudar, Acting City Clerk Reviewed by: Astrid Robles, Senior Management Analyst Approved for Submission by: Tina Kapoor, City Manager Attachments: A - 2026 Council Committee Assignments B - Amended 2026 Council Committee Assignments (redline) C - Amended 2026 Council Committee Assignments (clean) 9 CC 01-13-2026 9 of 52 2026 Council Committees Council Committees 2026 Representative Meetings Association of Bay Area Governments (ABAG)Kitty Moore Primary 1 Liang Chao Primary 2 Annually in June (Online registration will be available in April) Sheila Mohan Alternate Bay Area Metro Center Yerba Buena Conference Room 375 Beale Street San Francisco, California Chambers, County Government Center – 70 West (hybrid in-person/zoom if possible) 456 W Olive Ave, Sunnyvale 94086 456 W Olive Ave, Sunnyvale 94086 456 W Olive Ave, Sunnyvale 94086 Committee 10 CC 01-13-2026 10 of 52 2026 Council Committees Council Committees 2026 Representative Meetings Santa Clara County Library District Joint Powers Authority - Board of Directors 1370 Dell Ave., Campbell, CA 95008 Expressway, San Jose, CA or via Zoom teleconference 12:00 p.m. 3331 North First Street, Conference Room B-106 School Partnership and School Liaison Location changes monthly 10am Cupertino Community Hall 11 CC 01-13-2026 11 of 52 2026 Council Committees City of Cupertino Council Committees 2026 Representative Meetings Audit Committee (City of Cupertino)Kitty Moore Meets quarterly, usually 4th Monday of Ray Wang Quinlan Community Center, Conference Room 4:00 p.m. - 6:00 p.m. Cupertino Public Facilities Corporation (Cupertino)All Councilmembers Meets annually, third Monday in November and as needed City Hall, Conference Room C Economic Development Committee (Cupertino)Ray Wang Primary Liang Chao Alternate Regular meetings are held quarterly and as needed (time and location to be determined) Disaster Council (Cupertino)Meets no less than annually. City Hall, Conference Room C Sister City Committees Sheila Mohan As needed Liang Chao City Hall * The Mayor, or their designee per Municipal Code section 2.40.025 12 CC 01-13-2026 12 of 52 AMENDED 2026 Council Committees Council Committees 2026 Representative Meetings Association of Bay Area Governments (ABAG)Kitty Moore Primary 1 Liang Chao Primary 2 Annually in June (Online registration will be available in April) Sheila Mohan Alternate Bay Area Metro Center Yerba Buena Conference Room 375 Beale Street San Francisco, California Chambers, County Government Center – 70 West (hybrid in-person/zoom if possible) 456 W Olive Ave, Sunnyvale 94086 Ray Wang Alternate 6pm at Sunnyvale City Hall, West conference Room 456 W Olive Ave, Sunnyvale 94086 456 W Olive Ave, Sunnyvale 94086 Committee 13 CC 01-13-2026 13 of 52 AMENDED 2026 Council Committees Council Committees 2026 Representative Meetings Santa Clara County Library District Joint Powers Authority - Board of Directors 1370 Dell Ave., Campbell, CA 95008 JR Fruen Alternate January 28, April 8, July 22, October 28 Expressway, San Jose, CA or via Zoom teleconference 12:00 p.m. 3331 North First Street, Conference Room B-106 School Partnership and School Liaison Vice Mayor - Alternate 12pm Location changes monthly 10am Location changes each quarter JR Fruen Alternate 7pm Cupertino Community Hall 14 CC 01-13-2026 14 of 52 AMENDED 2026 Council Committees City of Cupertino Council Committees 2026 Representative Meetings Audit Committee (City of Cupertino)Kitty Moore Meets quarterly, usually 4th Monday of Ray Wang Quinlan Community Center, Conference Room 4:00 p.m. - 6:00 p.m. City Hall, Conference Room C designee per Municipal 15 CC 01-13-2026 15 of 52 AMENDED 2026 Council Committees Council Committees 2026 Representative Meetings Association of Bay Area Governments (ABAG)Kitty Moore Primary 1 Liang Chao Primary 2 Annually in June (Online registration will be available in April) Sheila Mohan Alternate Bay Area Metro Center Yerba Buena Conference Room 375 Beale Street San Francisco, California Chambers, County Government Center – 70 West (hybrid in-person/zoom if possible) 456 W Olive Ave, Sunnyvale 94086 Ray Wang Alternate 6pm at Sunnyvale City Hall, West conference Room 456 W Olive Ave, Sunnyvale 94086 456 W Olive Ave, Sunnyvale 94086 Committee 16 CC 01-13-2026 16 of 52 AMENDED 2026 Council Committees Council Committees 2026 Representative Meetings Santa Clara County Library District Joint Powers Authority - Board of Directors 1370 Dell Ave., Campbell, CA 95008 JR Fruen Alternate January 28, April 8, July 22, October 28 Expressway, San Jose, CA or via Zoom teleconference 12:00 p.m. 3331 North First Street, Conference Room B-106 School Partnership and School Liaison Vice Mayor - Alternate 12pm Location changes monthly 10am Location changes each quarter JR Fruen Alternate 7pm Cupertino Community Hall 17 CC 01-13-2026 17 of 52 AMENDED 2026 Council Committees City of Cupertino Council Committees 2026 Representative Meetings Audit Committee (City of Cupertino)Kitty Moore Meets quarterly, usually 4th Monday of Ray Wang Quinlan Community Center, Conference Room 4:00 p.m. - 6:00 p.m. City Hall, Conference Room C designee per Municipal 18 CC 01-13-2026 18 of 52 CITY OF CUPERTINO Agenda Item Subject: Study session regarding Potential November 2026 Ballot Measure on Parkland Rezoning Considerations. Conduct study session and provide direction to staff to begin preliminary analysis and engagement regarding a potential parkland rezoning ballot measure, and return to City Council with recommended next steps. CITY OF CUPERTINO Printed on 1/8/2026Page 1 of 1 19 CC 01-13-2026 19 of 52 ADMINISTRATIVE SERVICES DEPARTMENT CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3220 • FAX: (408) 777-3109 CUPERTINO.GOV CITY COUNCIL STAFF REPORT Date: January 13, 2026 Subject Study Session Regarding Potential November 2026 Ballot Measure on Parkland Rezoning Considerations Recommended Action Conduct study session and provide direction to staff to begin preliminary analysis and engagement regarding a potential parkland rezoning ballot measure, and return to City Council with recommended next steps. Background Parkland Protection / Rezoning Initiative Council asked staff to bring information on parkland rezoning considerations as part of the TBD list in December 2025. Staff researched the parkland protection measure adopted by the City of Milpitas’ Measure K (2016) and seeks direction on evaluating a similar measure in Cupertino. Measure K in Milpitas proposed that any future construction or change in land use designation on parcels zoned as Parks and Open Space (POS) would require approval by two-thirds of Milpitas voters at a general or special municipal election. Specifically, Measure K did the following: - Prohibited residential, commercial, or industrial construction on land designated as Parks and Open Space unless approved by a two-thirds vote. - Prohibited redesignation of land currently zoned Parks and Open Space to another land use without two-thirds voter approval. Measure K was approved by voters with approximately 85% in favor and 15% opposed. Next Steps and Support Needed Upon direction from Council to pursue a ballot measure effort, staff will begin preliminary work, before returning to Council with a recommended scope of work and, if appropriate, a consultant contract and corresponding budget adjustment. 20 CC 01-13-2026 20 of 52 Sustainability Impact No sustainability impact. Fiscal Impact There is no direct fiscal impact from this action. If Council directs staff to proceed, costs for consultant services and placing items on the ballot would be identified in the current budget or brought forward as part of a future appropriation. City Work Program (CWP) Item/Description: Yes. Protections for Parkland/Consider establishing protections for parkland, similar to those adopted by the cities of Sunnyvale and Milpitas Council Goal: Quality of Life California Environmental Quality Act No California Environmental Quality Act impact. _____________________________________ Prepared by: Jonathan Orozco, Finance Manager Reviewed by: Floy Andrews, Interim City Attorney Approved for Submission by: Tina Kapoor, City Manager Attachments: 21 CC 01-13-2026 21 of 52 CITY OF CUPERTINO Agenda Item Subject: Study session regarding Various Revenue Tax Options. Conduct study session and provide direction to staff to begin preliminary analysis regarding budgetary need for and timeline of potential revenue generating ballot measure, and return to City Council with recommended next steps. CITY OF CUPERTINO Printed on 1/8/2026Page 1 of 1 22 CC 01-13-2026 22 of 52 ADMINISTRATIVE SERVICES DEPARTMENT CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3220 • FAX: (408) 777-3109 CUPERTINO.GOV CITY COUNCIL STAFF REPORT Date: January 13, 2026 Subject Study Session Regarding Various Revenue Tax Options Recommended Action Conduct study session and provide direction to staff to begin preliminary analysis regarding budgetary need for and timeline of potential revenue generating ballot measure and return to City Council with recommended next steps. Background Revenue Measure - History In December 2023, staff presented Council with a report and presentation on various revenue - generating options to address the City's long-term structural budget concerns. Options presented included a Transaction and Use Tax (TUT), Transient Occupancy Tax (TOT) adjustment, Parcel Tax, and Business License Tax modernization. At that meeting, Council directed staff to delay polling on any specific revenue measures, conduct outreach to the business community, and return with findings and further recommendations. In February 2024, following the survey, staff returned to Council with a recommendation to forego pursuing a revenue-generating ballot initiative for the November 2024 election. Council accepted the recommendation based on limited time, competing priorities, and the need for broader public engagement. At that time, staff committed to reintroducing the topic for future consideration if warranted. Fiscal Context for Revisiting Revenue Options Council has expressed a desire to revisit the ballot measures that were presented in 2023 as future expenditure pressures may warrant renewed consideration of revenue options. In particular, the City faces uncertainty regarding potential increases to its contract wit h the Santa Clara County Sheriff’s Office beginning in FY 2026–27. For context, each 10% increase in the Sheriff’s contract would result in approximately $1.9 million in additional annual costs to the City. A 20% or 40% increase would correspond to approximately $3.8 million or $7.6 million, respectively. Given the 23 CC 01-13-2026 23 of 52 magnitude of this potential cost driver, it is prudent for the City to begin exploring revenue measures at this time that could help address a possible structural imbalance. Revenue Measure - Utility Users Tax (UUT) The City’s existing UUT is set to sunset in FY 2030–31. Should the Council wish to extend or revise the UUT, voter approval would be required. However, placing such a measure on the 2026 ballot would not generate additional revenue in the short term and would have no impact on the current or immediate fiscal years. Council also has the option of directing staff to place a measure extending the UUT on the 2028 ballot. Next Steps and Support Needed Upon direction from Council to pursue one or more ballot measure efforts, staff will begin preliminary work, which may include updated revenue projections and an assessment of potential fiscal impacts. Staff will also return to Council with a recommended scope of work and, if appropriate, a consultant contract and corresponding budget adjustment. Sustainability Impact No sustainability impact. Fiscal Impact There is no direct fiscal impact from this action. If Council directs staff to proceed, costs for consultant services and placing items on the ballot would be identified in the current budget or brought forward as part of a future appropriation. City Work Program (CWP) Item/Description: None Council Goal: Fiscal Strategy California Environmental Quality Act No California Environmental Quality Act impact. _____________________________________ Prepared by: Jonathan Orozco, Finance Manager Reviewed by: Floy Andrews, Interim City Attorney Approved for Submission by: Tina Kapoor, City Manager Attachments: A – Presentation (2023.12.5) 24 CC 01-13-2026 24 of 52 CITY OF CUPERTINO, CALIFORNIA December 5, 2023 Updated Tax Revenue Options 25 CC 01-13-2026 25 of 52 Presentation Outline Tax Revenue Options - General Fund 3 Transaction and Use Tax (TUT)5 Transient Occupancy Tax (TOT)8 Parcel Tax 11 Business Operations Tax 15 Recommendations & Next Steps 19 2 26 CC 01-13-2026 26 of 52 Tax Revenue Options General Fund 3 27 CC 01-13-2026 27 of 52 General Fund Revenue Taxes – 4 Basic Considerations 1.Adequacy and Certainty •Sustainably generates annual needed revenue •Not subject to significant variation (low volatility) 2.Equity and Fairness •Fiscal burden appropriately spread •Proportionate to surrounding communities •Does not highly skew economic incentives 3.Transparency •Easy to find information on the revenue/tax structure and understand how it operates 4.Simplicity •Does not require multiple ballot measures (voter confusion and fatigue) •Not highly burdensome, costly or complicated to administer (by city or payors) 4 28 CC 01-13-2026 28 of 52 Transaction and Use Tax (TUT) Basics of a TUT •Functionally similar to state Sales and Use Tax (SUT) with important difference: SUT – Point of Sale Where did sales transaction occur? TUT – Point of Delivery/Use Where did Buyer receive goods or put them to use? •2022 – 73% of TUT measures for new or increased rate approved (30 of 41) •2020 - 74% of TUT measures for new or increased rate approved (65 of 88) Santa Clara Countywide Base Rate 9.125% State Sales Tax 6.25% Bradley-Burns Local Share 1.00% Santa Clara County Transit District (1976)0.50% Santa Clara County Valley Transportation Authority (2006)0.50% Santa Clara VTA BART O&M Transactions and Use Tax (2012)0.125% Santa Clara County Retail Transactions and Use Tax (2013)0.125% Silicon Valley Transportation Solutions Tax (2017)0.50% Peninsula Corridor JPA Retail Transactions and Use Tax (2020)*0.125% 5 *Authorized by special State legislation. 29 CC 01-13-2026 29 of 52 Transaction & Use Tax (TUT) •Available TUT to City = 0.25% •Statewide Cap = 9.25% + special leg. •County Rate = 9.0% + .125% special leg. •Available TUT to Cupertino = 0.25% •Total Rate in Cupertino w/ TUT = 9.375% •Additional Annual Revenue (est.) •@ 0.25% = $5.4 million annually •Excludes roughly 90% business-to- business sales (67% of City’s net state sales tax from 2 large multi-nationals) •Realization rate on remaining 33% is assumed close to 100% due to type of businesses (plus additional est. revenues from auto sales) City/Area Rate* Santa Clara Countywide 9.125% Campbell 9.375% Los Gatos 9.25% Milpitas 9.375% San Jose 9.375% San Mateo Countywide 9.375% Belmont 9.875% Brisbane 9.875% Burlingame 9.625% Daly City 9.875% East Palo Alto 9.875% Pacifica 9.875% Redwood City 9.875% San Bruno 9.875% San Mateo 9.625% South San Francisco 9.875% San Francisco 8.625% Alameda Countywide 10.25% *Effective rates as of April 2023. 6 30 CC 01-13-2026 30 of 52 Transaction & Use Tax (TUT) Pros: Standard Voter Approval Requirement – 50% + 1 voter approval required for TOT. High Approval – recent TUT measures in 2020 and 2022 have high approval rates (74% and 73% respectively) despite COVID-19 pandemic. Competitiveness/Adequacy – 0.25% TUT rate keeps City generally proportionate to surrounding communities while generating more revenue than TOT or parcel tax. Who Bears Tax Burden – tax burden spread across residents, businesses and visitors (which includes significant daytime workforce – 60,000+ pre-pandemic). “Use it or lose it” – 0.25% TUT currently available to the City could be obligated (“used”) if a regional agency or the county passed a new or increased TUT measure. Once obligated, City’s only option would be special state legislation. Cons: o Volatility – sales tax is more elastic than property/parcel tax but less than TOT (generally correlates with overall economic trends). o Equity – TUT is not applicable to large number of business-to-business sales in which purchaser is located outside the City. 7 31 CC 01-13-2026 31 of 52 Transient Occupancy Tax (TOT) Basics of a TOT •Authorized under Revenue and Tax Code s. 7280 (stays of 30 days or less) imposed on occupant based on room rate •TOT has been called a “painless” tax – paid by non-residents – but can impact hotel occupancy and future growth if disproportionate to surrounding areas •2022 – 77% of TOT measures to increase rate approved (24 of 31) •2020 – 91% of TOT measures to increase rate approved (21 of 23) Statewide Facts on TOTs* •Most cities and counties have a TOT (over 480 total) •Rates range from 3.5% to 15.5% (Palo Alto) •Statewide mean rate = 10.2% •On average, TOT provides 7% of General Fund revenue *Data as of FY 2021 – CaliforniaCityFinance.com 8 32 CC 01-13-2026 32 of 52 Transient Occupancy Tax (TOT) •City’s Current TOT = 12.0% •Additional Annual Revenue (est.) •@ 13.0% = $625,000 •@ 14.0% = $1.25 million •@ 15.0% = $1.875 million •Recent Trends in City’s TOT •City’s TOT ordinance already updated to improve collection from short-term rentals (e.g., Airbnb, VRBO, etc.) •Trendline for TOT growth is conservative (1.9% annual growth). Hospitality industry continues to recover post-pandemic and seek a “new normal.” City/Area Rate* Santa Clara County Gilroy 9.0% Mountain View, San Jose, Saratoga 10.0% Los Altos, Morgan Hill 11.0% Campbell, Los Gatos, Sunnyvale 12.0 - 12.5% Los Altos, Milpitas, Santa Clara 13.5 - 14.0% Palo Alto 15.5% San Mateo County Burlingame, Colma, East Palo Alto, Foster City, Menlo Park, Pacifica, Redwood City 12.0% Daly City 13.0% Belmont, Brisbane, Millbrae, San Bruno, San Carlos, San Mateo, South San Francisco 14.0% Half Moon Bay 15.0% San Francisco 14.0% *Rates as of November 2022.9 33 CC 01-13-2026 33 of 52 Transient Occupancy Tax (TOT) Pros: Standard Voter Approval Requirement – 50% + 1 voter approval required for TOT. High Approval – recent TOT measures in 2020 and 2022 have high approval rates (91% and 77% respectively) despite COVID-19 pandemic. Who Bears Tax Burden – TOT tax burden borne almost exclusively by non-residents. Cons: o Competitiveness - City is currently in middle of regional TOT rates @ 12% but adding 3% would place it second only to Palo Alto for the region (and make it one of the highest in state). o Adequacy - smallest overall revenue generation unless rate significantly higher than surrounding communities (increasing competitiveness concern – see above). o Volatility – TOT is more elastic than either TUT or parcel tax, resulting in higher potential fluctuation in annual revenue. 10 34 CC 01-13-2026 34 of 52 Parcel Tax Basics of a Parcel Tax •Non-ad valorem (non-value based) tax levied on parcels of property •Methodology: Either a fixed/flat rate per-parcel or a variable rate depending on the size, use, or number of units on the parcel •Can establish different rates for residential & commercial property but rate must be applied uniformly •Can include inflationary index •Voter approval required: 2/3 vote required (funds restricted to specified purposes); only majority approval required if proposed by citizen initiative Statewide Facts - Parcel Tax •Since 2010, largest percentage of approved parcel taxes (41%) are for education. •Most common methodology: flat rate per parcel. •For cities, between 2010 and 2022, 66% of proposed parcel taxes were approved by the required 2/3 vote. 11 35 CC 01-13-2026 35 of 52 Parcel Tax •No current City parcel tax •City’s clean water/storm protection assessments are property fees (not taxes). •Schools – Fremont Union HS $98 parcel tax was reauthorized in 2020 (expires 2028). Cupertino Union $250 parcel tax expired in 2022 (reauthorization with increase to $398 rejected in by voters in 2021). •Parcel tax measures in Santa Clara & San Mateo counties •18 non-school parcel taxes on ballot from 2008 to 2022. •83% approved. •All for special purposes: libraries, roads, police, water and open space. •Since 2018, 24 school parcel taxes on ballot with only 54% approved. City/Area Rate/yr. Santa Clara County Santa Clara - Libraries $34 parcel Santa Clara – Open Space $24 parcel San Jose – Libraries $30 parcel North County - Libraries $76 parcel Santa Clara Water Dist.$0.006 per sf El Matador - Roads $350-$750 parcel San Mateo County E. Palo Alto – Office Space $2.50 per sf Portola Valley – Roads $950 parcel Highlands – Police $65 parcel San Mateo – Police & Fire $65 parcel Atherton – Police $750 parcel* *Not renewed in 2017 12 36 CC 01-13-2026 36 of 52 Parcel Tax Additional Annual Revenue (est.) Fixed/Flat Rate per Parcel Parcel Type # of Parcels**Per Parcel Tax Annual Revs. (est.) Single-Family Residential (SFR)*14,152 $250 $3,537,900 Multi-Family (three-family & larger)205 $250 $51,250 Commercial/Office/Ind.471 $250 $117,750 Total $3,706,900 Variable Rate per Square Foot (SF) of Parcel Size Parcel Type (annual tax median parcel size)Total Ac.**Per SF Tax Rate Annual Revs. (est.) SFR* – 5,000 sf ($27)178 $0.021 $163,010 SFR* – 5,000 to 10,000 sf ($155)1,499 $0.021 $1,370,768 SFR* – 10,000 to 17,500 sf ($247)310 $0.021 $283,210 SFR – Over 17,500 sf ($613)407 $0.021 $372,124 Multi-Family ($219)232 $0.021 $212,224 Commercial/Office/Ind. ($613)1,500 $0.021 $1,372,140 Total $3,773,476 13 *includes condos, townhomes & duplexes **excludes vacant parcels and parcels with $0 assessed value; and assumes 10% SFR exemption rate 37 CC 01-13-2026 37 of 52 Parcel Tax Pros: Low Volatility – parcel tax revenue not impacted by overall economic trends (non-ad valorem) and inflationary index helps revenues keep pace with rising expenses. Flexibility – parcel tax provides some flexibility in designing tax structure to help mitigate equity concerns (see below) using a variable rate. High Approval but for Special Purpose – voter approval rates for city parcel taxes has been strong (83%) but all have been restricted to special not general purposes. Cons: o 2/3 Voter Approval Required – state law requires 2/3 approval by electorate. o Equity – flat/fixed rate parcel tax often considered very regressive but can be mitigated with variable rate (see above). o Adequacy/Competitiveness - rate equivalent to recently expired local school district parcel tax ($250/parcel or $0.020 per SF) is significantly higher than most parcel taxes in surrounding communities but generates significantly less revenue than TUT. o Who Bears Tax Burden – parcel tax burden borne exclusively by residents and businesses.14 38 CC 01-13-2026 38 of 52 Business Operations Tax Basics of Business Operations Tax •Tax on businesses for privilege of conducting business within the City. •Methodology: Either a fixed/flat rate per business (often varies by type of business) or a variable rate based on some measurable aspect of the business operations, such as: gross receipts/payroll, number of employees (headcount), square footage of business, etc. •Cities have wide discretion in determining methodology, rates and applicability (cannot be discriminatory or confiscatory, and state/federal law exempts certain activities). •Tax is only on business activities conducted within the City. Multi-jurisdiction businesses must be able to apportion. Statewide Facts – Business Operations Tax •More than 95% of cities impose one or more business operations taxes. •Average city generates around 3% of revenue from business operations taxes. •Top 20 cities generate between 10% and 25% of total revenue from one or more business operations taxes. •Since 2010, 65 business operations taxes on ballot with 74% approved (excludes cannabis) statewide. 92% approved in Bay Area region. 15 39 CC 01-13-2026 39 of 52 Business Operations Tax •City’s Existing Business Operations Taxes •$75 flat rate per business + rate per square foot of the business (ranging from $0.02/sf for small businesses to $0.0025/sf for largest business) •City also has operations taxes (both flat and variable) for specific businesses, such as apartments (per unit), hotels (per room), taxis (per vehicle), theaters (per seat), etc. •Annual Amount Generated = $725,000 ($12 per capita) 16 City Annual Revenue Per Capita Santa Clara County Mountain View*$6 million $74 Sunnyvale $2.1 million $14 Los Gatos*$1.1 million $34 Santa Clara*$6 million $47 Los Altos $490,000 $16 Palo Alto*$9.6 million $144 Campbell $723,000 $17 San Mateo County San Carlos $1.2 million $40 San Mateo $6.3 million $62 Foster City $1.6 million $48 * New or updated within last 5 years 40 CC 01-13-2026 40 of 52 Business Operations Tax 17 Employee Count Tax* (est.) Employee Range # of Businesses % of in Tier Estimated Employee Count Per Business Per Employee Rate Total Tax Effective Tax Rate Per Employee Effective Tax Rate Per Avg. Business 1-9 3,128 89.37%3,400 $25 $0 $78,200 $23 $25 10-49 300 8.57%4,000 $100 $15 $90,000 $23 $300 50-99 40 1.14%2,400 $250 $25 $70,000 $29 $1,750 100-249 25 0.71%3,300 $250 $50 $171,250 $52 $6,850 250-499 5 0.14%1,300 $250 $75 $98,750 $76 $19,750 500-999 1 0.03%600 $250 $100 $60,250 $100 $60,250 1,000-4,999 -0.00%-$250 $125 --- 5,000+1 0.03%24,000 $250 $150 $3,600,250 $150 $3,600,250 Totals 3,500 100.0%39,000 $4,168,700 *Business and employee count data provided by City from 2018 research. Current data likely different post-Covid. 41 CC 01-13-2026 41 of 52 Business Operations Tax 18 Pros: Standard Voter Approval Requirement – 50% + 1 voter approval required for business license taxes. High Approval – since 2010, business license tax measures in Bay Area Region have high voter approval rates (94%). Low Volatility – business operations tax based on employee count (pandemic notwithstanding) provides a stable tax base, subject to unknown longer-term impact on business location decisions (see below) Cons: o Who Bears Tax Burden/Equity – tax burden borne exclusively by local businesses but setting varying rates and caps can allocate the tax burden differently across different size businesses. o Competitiveness/Equity/Adequacy - City currently has a very low business license tax rate compared to surrounding cities as measured on a per capita basis. If an employee count tax is set at top rate in the region ($75 per capita), the annual tax revenue generated is significantly less than the 0.25% TUT and it likely requires shifting tax burden to a few very large businesses. Additionally, there is an unknown potential impact on locational choices of existing and future businesses that could erode the annual tax revenues.42 CC 01-13-2026 42 of 52 Recommendations & Next Steps 19 43 CC 01-13-2026 43 of 52 Tax Revenue Options – Recommended Ranking 20 Rank Revenue Option Est. Annual Revenue Pros Cons 1 Transaction & Use Tax (TUT) $5.4 million •50% + 1 vote required with high voter approval in recent elections. •Generates most revenue with rate proportionate to surrounding cities. •Tax paid by residents, businesses and visitors/daytime workforce. •“Use it or lose it.” •TUT is more volatile and subject to annual revenue fluctuation than parcel tax but not TOT. •TUT not applicable to large portion of business-to-business sales in which purchaser located outside the City. 2 Transient Occupancy Tax (TOT) $1.9 million •50% + 1 vote required with high voter approval in recent elections. •Tax paid by non- residents/visitors. •TOT is more volatile and subject to annual revenue fluctuation than TUT and parcel tax. •Smallest overall revenue generation unless rate significantly higher than surrounding communities. 44 CC 01-13-2026 44 of 52 Tax Revenue Options – Recommended Ranking (cont.) 21 Rank Revenue Option Est. Annual Revenue Pros Cons 3 Parcel Tax $3.7 million •Parcel tax has lowest volatility and annual revenues are very stable. •High voter approval but for restricted special purposes (not general fund). •2/3 vote required. •Tax paid by residents and businesses. •Flat/fixed parcel tax often considered regressive tax (but can use variable rate to improve equity). •Rate equivalent to expired school parcel tax generates significantly less revenue than TUT and is higher than other parcel taxes in the area. 4 Business Operations Tax – Employee Count $4.1 million •50% + 1 vote required with high voter approval over last decade. •Employee count tax has low volatility but could erode annual revenues if tax impacts business location decisions. •Tax paid exclusively by local businesses, but varying rates/caps can allocate burden. •Setting rate at top of region generates significantly less tax revenue than TUT, and likely requires shifting tax burden to a few very large businesses. 45 CC 01-13-2026 45 of 52 November 2024 Ballot Measure – Potential Timeline Dates Task January & February Community opinion research conducted. March & April Staff develops options for revenue measure based on community opinion research and feedback, Council input, and other relevant considerations. April to August Public information disseminated explaining why and how Council is considering placing a revenue measure on the ballot. June Council decision on appropriate revenue measure and direction for staff to prepare ballot measure language and required resolutions. July 16, 2024 Last regularly scheduled meeting of Council for Introduction/First Reading of revenue measure ordinance.* August 6, 2024 Last regularly scheduled meeting of Council for Second Reading/Adoption of revenue measure ordinance and approval of resolution calling the election. August 9, 2024 Deadline for City submission of ballot measure to Registrar of Voters. August 20, 2024 Deadline for City’s submittal of impartial analysis of ballot measure to Registrar of Voters. November 5, 2024 Election Day. 22 46 CC 01-13-2026 46 of 52 Recommended Action 23 Provide direction to staff regarding exploring the feasibility of one or more potential revenue tax measures—Transaction and Use Tax, Transient Occupancy Tax, Parcel Tax, and/or Business Operations Tax—through opinion research for the November 2024 election. 47 CC 01-13-2026 47 of 52 CITY OF CUPERTINO Agenda Item Subject: Study Session to consider possible updates to the City’s practices pertaining to its advisory bodies, including its Commissions and Committees. Consider and discuss options for updating the City’s practices pertaining to its advisory bodies, including (1) increasing community participation via extended nepotism restrictions, (2) filling vacancies and appointing alternates, (3) updating attendance requirements, (4) recognizing commissioner autonomy, and (5) considering the unique characteristics of Committees as compared to Commissions, including the Economic Development Committee and the Audit Committee. CITY OF CUPERTINO Printed on 1/8/2026Page 1 of 1 48 CC 01-13-2026 48 of 52 CITY ATTORNEY’S OFFICE CITY HALL 10300 TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408) 777-3403 CUPERTINO.GOV 01276.0001 2076436.2 1 CITY COUNCIL STAFF REPORT Date: January 13, 2026 Subject Study Session to consider possible updates to the City’s practices pertaining to its advisory bodies, including its Commissions and Committees. Recommended Action Consider and discuss options for updating the City’s practices pertaining to its advisory bodies, including (1) increasing community participation via extended nepotism restrictions, (2) filling vacancies and appointing alternates, (3) updating attendance requirements, (4) recognizing commissioner autonomy, and (5) considering the unique characteristics of Committees as compared to Commissions, including the Economic Development Committee and the Audit Committee. Background Various rules governing the City’s advisory bodies can be found in (1) City Resolution No. 24-022 (“Reso 24-022”), (2) Cupertino Municipal Code Chapter 2, (3) the Commissioner’s Handbook 2024 (“Commissioner’s Handbook”), and (4) the Council Procedures Manual, implementing, among other requirements, rules for complying with the Maddy Act (the “Maddy Act”), codified in Government Code Sections 54970-54975. 1. Nepotism Restrictions The City’s Municipal Code currently prevents members of the same family from serving on the same City advisory body. For example, Municipal Code section 2.36.010 states that the “Parks and Recreation Commission shall consist of five members who are residents of the City, none of whom shall be officials or employees of the City, nor cohabit with as defined by law, nor be related by blood or marriage to any member of the Commission, the City Manager or the staff person(s) assigned to this Commission.” The Council Procedures Manual at 49 CC 01-13-2026 49 of 52 01276.0001 2076436.2 2 section 4.4 further states that “[i]mmediate family members residing in the same household as a Councilmember are not eligible for appointment to any commission or committee.” The Council may wish to consider (1) further restricting appointments of family members to not only the same commission or committee, but to other City advisory bodies as well, and (2) other potential restrictions on appointments to prevent a concentration of influence over City policy. 2. Vacancies and Appointing Alternates When members of an advisory body miss meetings, it can impact the body’s ability to conduct business when a quorum is not present. Moreover, filling an unscheduled vacancy can be time-consuming and costly because Reso 24-022 and the Maddy Act require that the City undertake lengthy recruitments taking at least 30 days to complete, usually longer, in order to fill a vacancy. If the Council added a non-voting alternate to a City advisory body, then when a regular member is absent, after first being “seated” by the Chair for the meeting, the alternate could step in as a voting member. This would help ensure a quorum, thus allowing business to be conducted. Additionally, if an unscheduled vacancy occurs, that vacancy could be immediately filled by the alternate if the Council finds there is an “emergency” need to fill the vacancy. Appointing alternates might also increase community participation as such non- voting alternates could attend meetings and, local rules permitting, participate in meeting discussions. Appointed alternates would be required to file Form 700 disclosures and take the oath of office. 3. Harmonizing and Updating Attendance Requirements Reso 24-022, section C (3), the Commissioner’s Handbook, p. 5, and the Council Procedures Manual, section 4.5, each purport to govern attendance requirements. Reso 24-022 and the Commissioner’s Handbook limit the number of meetings an advisory body member may miss by automatically removing a member (“member shall be considered removed”) from an advisory body when 1) they miss more than three consecutive meetings, or when 2) they miss more than 25% of the advisory body’s regular meetings in a calendar year. The Council Procedures Manual separately states that when an advisory body member fails to comply with the attendance policies contained in the Commissioner’s Handbook, “[t]he City Clerk shall notify the City Council and make a recommendation for potential removal” of the advisory body member. Here, “Council retains full discretion to . . . 50 CC 01-13-2026 50 of 52 01276.0001 2076436.2 3 take disciplinary action as needed, including removal from the commission or committee.” These documents should be harmonized, perhaps by noting in the Commissioner’s Handbook that the rule has been updated by the Council’s further action. Additionally, because regular meetings are often cancelled and replaced with special meetings due to scheduling, often more than 25% of meetings are missed without commissioner discipline, defeating the intent of the attendance rules. 4. Commissioner Autonomy Currently, the Commissioner’s Handbook, states that it is “improper for an individual commissioner, acting in the ir official capacity, to try to persuade the Council into the acceptance of a recommendation other than that voted by the majority of the commission.” The question has been posed as to whether this is an appropriate restriction on a commissioner’s right to speak their mind. The Council might consider whether the language of the restriction limiting its application to comments made only in their “official capacity” alleviate the concern, or whether, nevertheless, it remains too restrictive of a commissioner’s right to speak freely. 5. Committee Characteristics, as compared to Commissions, including the Economic Development Committee and the Audit Committee Committees differ from Commissions in that City Councilmembers, City staff, and sometimes both, participate as Committee members on the City’s Committees. Commissions, on the other hand, are usually comprised of community members, with staff support. As such, rules applicable to Committees may vary from those applicable to Commissions. Perhaps, more clearly defining this difference would be useful. Reasons for Recommendation Provide Councilmembers and the public with an opportunity to consider and discuss ways of honing the rules governing the City’s advisory bodies. Sustainability Impact No sustainability impact Fiscal Impact No fiscal impact 51 CC 01-13-2026 51 of 52 01276.0001 2076436.2 4 City Work Program Item/Description None Council Goal Public Engagement and Transparency California Environmental Quality Act No California Environmental Quality Act impact. _____________________________________ Prepared by: Floy Andrews, Interim City Attorney Reviewed and Approved for Submission by: Tina Kapoor, City Manager Attachments: None 52 CC 01-13-2026 52 of 52