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‘Too big of an ask’ Hills council slashes relief fund contribution

On the heels of a study session for their town’s 2020-2021 budget, Los Altos Hills council members Thursday denied a request from the city of Los Altos for a $250,000 small-business relief fund donation, choosing instead to give $5,000. 

Explaining their decision, the council expressed a desire to act as responsible stewards of their residents’ tax money at a time when COVID-19 has rendered the state’s financial future uncertain.

“It’s just a little too big of an ask for me,” Councilwoman Courtenay C. Corrigan said.

Following a request from Los Altos Chamber of Commerce president Kim Mosley for $300,000 to help small local businesses, Los Altos council members allocated $250,000 to the fund at their April 28 meeting, with the hope Los Altos Hills would match their contribution and private philanthropists might also chip in. The goal is to eventually raise $1 million and provide $5,000 grants to businesses that apply.

Both Los Altos Mayor Jan Pepper and Councilwoman Fligor directly appealed to Los Altos Hills council members at the beginning of last week’s teleconferenced meeting, a joint virtual gathering between the town’s council and the Finance and Investment Committee.

“Many of your residents – many of you – view our downtown as your downtown,” Fligor said. “I see many of you at our restaurants, shopping, walking up and down Main and State streets.”

Hills council members’ decision on the matter came at the end of the meeting, after approximately two-and-a-half hours of discussion about the operating budget for the fiscal year starting July 1 and about the 2021-2025 capital improvement budget, both of which they expect to approve at their June 18 meeting.

In a letter introducing the budget, City Manager Carl Cahill indicated the COVID-19 crisis has greatly influenced financial decisions.

“With the recent pandemic of the COVID-19 it is uncertain how the state economy will affect the town financially,” he wrote. “The plan is to take a conservative approach on operating expenditures and return to City Council within 3-6 months once staff has more information on the state economy and potential impacts on the revenue.”

Staff forecast the town will bring in $16.15 million this next fiscal year, mostly from property taxes, and spend $19.71 million, mostly on public works projects such as sewer and pathways enhancements, leaving a total fund balance of $18.53 million by June 30, 2021. That’s down 16% from $22.09 million, the expected balance by the end of this fiscal year. Capital improvements ranging from the $2.65 million allocated for the town hall addition to $493,000 for various pathway construction will amount to $6.25 million in fiscal year 2020-2021; through fiscal year 2024-2025, the town expects to spend a total of $17.62 million on various improvement projects.

Uncertain conditions

Council members by and large praised the budget, which they said reflected an appropriate amount of belt tightening considering economic conditions. They elected not to remove any projects from the overall schedule, reasoning inclusion doesn’t necessarily mean the requisite funds are spent, but Mayor Michelle Wu faced pushback when she suggested setting aside $3 million in unallocated reserves to jump-start undergrounding utilities in town.

In light of the pandemic, the council agreed to grant the Community Health Awareness Council a one-time $5,000 addition to the $11,500 already budgeted for the coming year through a Joint Powers Authority agreement, but Councilman George Tyson’s request for $5,000 for Community Services Agency, another Mountain View nonprofit, was denied.

Later, when explaining his hesitation with the requested $250,000 donation to the Los Altos small-business relief fund, Tyson pointed out that Los Altos collects sales-tax revenue from the intended beneficiaries, but Los Altos Hills does not.

“I love the downtown, but I feel like it’s not our responsibility to provide support – certainly not the matching kind of support,” he said.

Councilman Roger Spreen argued that Mountain View, Palo Alto, Sunnyvale and Cupertino serve as Hills residents’ downtown just as much as Los Altos does. And while Hills residents certainly benefit from the businesses lining Main and State streets, Los Altos residents benefit from Hills amenities too.

“Our pathways are their pathways – they’re using our services as well, and we invite them there,” he said. “We’re spending half a million dollars this year to keep them in the state that they can use them as well. So we’re all in this together, to a degree, but I think that this is a request I’ll have to decline.”

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