Palo Alto Mayor Pat Burt used the annual "State of the City" address on Saturday to paint a picture of a city in transition, with key downtown areas evolving into car-free thoroughfares, the economy reviving after a sharp pandemic and signs of hope emerging in the ongoing effort to add affordable housing.

Speaking to about 80 residents and members of city staff at the Mitchell Park Community Center, Burt gave updates about each of the City Council's four priorities this year: economic recovery, housing for social and economic balance, climate change and community health and safety.

He warned about the dangers that the city needs to confront in the months to come, chief among them the growing risk of wildfires that can devastate the city. And he also made a pitch for the city's ambitious electrification effort, detailing plans to invest in solar power and battery systems and to help the community replace appliances that currently rely on gas with clean electricity.

Burt's wide-ranging speech struck its most urgent note in discussing the increasing threat of megafires. He cited the 2020 fire season and the CZU Lightning Complex fires, which destroyed large swaths of the Santa Cruz Mountains. Given Palo Alto's location next to the foothills, the threat of fire has become ever more acute.

"We've all seen what happened in Santa Rosa and Paradise, where entire communities have been wiped out," Burt said. "And we're at the edge of a wildland-urban interface. We're not exempt from all that risk."

He tied this threat to the city's ongoing initiatives on climate change, efforts that he said the city needs to accelerate. The council's Sustainability/Climate Action Plan committee, on which he serves, is now in the midst of refining the city's plans to meet its 2016 goal of reducing greenhouse gas emissions by 80% by 2030, with 1990 as the baseline.

Electrification, which involves replacing water- and space-heater systems and gas stoves with electric appliances, is by far the biggest part of initiative. But Burt also talked about the importance of improving bike safety and giving people alternatives to driving gas-powered vehicles.

The city, he said, has cut its emissions by about 50% since 1990, though some of that is attributable to the sharp drop of commuters during the pandemic. With COVID-19 out of the equation, the proportion drops to about 42%.

"We're almost 50% of the way toward our goal," Burt said. "We now have a huge focus in our utilities staff, Public Works staff and City Council to really come up with a climate plan that can really achieve our goals."

The city is also facing more near-term challenges, including reversing some of the staffing and service cuts that the council made in 2020 to account for plummeting revenues. After cutting the budget by about $40 million in the early days of the pandemic, the council is now in the process of slowly restoring positions.

"We're still in an area where we're experiencing fewer staff members and fewer city services that we've had in this community for decades — and that's a real challenge," Burt said.

Many in the community have had a chance to reflect over the course of the pandemic on what they value about their neighborhoods and on what city services they appreciate. He said he expects the next budget, which the council will start reviewing next month, to bring some moderate improvements.

"What we're now struggling with is how to respond to the recovery we're attempting to make and how to bring back those services," Burt said.

One aspect of the city's economic recovery is reimagining some of its downtown spaces. The council signaled earlier this year its desire to keep segments of California Avenue and Ramona Street car-free for the foreseeable future. Burt said these streets are having "really incredible experiences" and will continue to improve as the city moves ahead with streetscape improvements in both areas.

"We haven't really made the investment in making them the aesthetic and dynamic and social and cultural gathering spots that they have the potential to be," Burt said.

Another area that will require extensive planning and enormous investment is grade separations — the realignment of rail crossings so that train tracks and roads will no longer intersect. Despite prior councils' deliberations over the past decade about ways to reconfigure the tracks, the current council has yet to choose its preferred alignment or to identify funding sources for a project with a price tag that under some alternatives exceeds $1 billion.

Burt said that the council has made some progress on narrowing its alternatives, but he also noted that the city has some of the most dangerous rail crossings in the state.

"We often in this discussion have forgotten about how critical it is to have separations that really eliminate that risk," he said.

In a promising trend, regional and federal agencies are making more funds available for grade separation -- adding urgency to the decision-making, he noted.

"We're going to need to accelerate this again because the federal infrastructure dollars have, for the first time in a long while, dollars for grade separation," he said.

Another complex challenge that the council is facing is meeting a regional mandate calling for it to plan for more than 6,000 units of housing between 2023 and 2031. Burt said Palo Alto has historically been a leader in Santa Clara County in providing subsidized housing. Among cities in the county, only Gilroy has had a higher percentage of its dwellings offered at below-market-rate levels. But because of Palo Alto's historic status as an engine of job growths, the supply of housing continues to fall well short of the demand.

"There is a huge gulf between us being leaders and what is the actual demand for that," Burt said.

In the coming months, Palo Alto is set to complete its new housing element, which identifies potential housing sites as well as new policies for encouraging housing. It is also seeing an uptick in applications for below-market-rate housing developments, including two projects spearheaded by Santa Clara County on Grant Avenue and on Charleston Road.

Despite these challenges, Burt sounded an optimistic note about the future of Palo Alto and Silicon Valley, which has demonstrated its ability to bounce back from economic downturns in the past. The city, he said, is blessed to be adjacent to what he called the "biggest generator of new ideas and technologies" in Stanford University. And Stanford Research Park continues to be populated with leading research and technological institutions.

"What we need to do is continue to be a scene of innovation and a place that the companies find to be attractive and where their workers want to continue to live because of the wonderful quality of life and the services that we provide," he said.

Watch the full address: