It's difficult to quantify, because it's hard to distinguish between what someone claims as justification and their actual motivations. Having grown up in a part of the US where racism has a long and strong history (South Carolina, where the American Civil War began), my own experience is that racism has changed its face. Old-fashioned overt, visible racism is less prevalent due to a wider shift in culture. Overt racism is publicly condemned and considered an embarrassment, but that doesn't mean it has gone away and it lurks just beneath the surface. I know and grew up with tons of people who are without a doubt strongly racist, but they find other justifications to present in public.

It's somewhat of a secret language, where certain phrases sound ok on the surface but have racist connotations. For example, "urban" or "inner city" is often a code word for "black". I have a rather racist uncle for example, he often rails about how the Democratic party has a strong grip on the "urban" vote, while the real America is the "rural" population, who are of course all true patriots and thus Republicans. Of course he is perfectly aware that political lines are not so neatly divided by population density, but that's because what he actually means is "urban" == "black" and "rural" == "white". Intentions are obscured, so everything gets fuzzy.

Going back to the Cupertino city council meeting, it makes it really hard to know what they really mean for sure. This is all based on my own experience, but I've seen enough cloak and dagger racism to know it's definitely a possibility. I think they would absolutely prefer an affluent black person over a poor white drug dealer, but on the other hand I would bet that for a significant number of the residents if you say "poor", the image that pops into their head is a black person.

It's also worth mentioning that this is a political issue, given that there is a pretty strong racial gap between political parties. I think that's where a lot of this doublespeak lingo came from, as a way to discuss race in politics (which, practically speaking is important) without sounding racist.

All that said, I think that the prevalence of sincere racism has definitely decreased significantly, so it's not all bad. Edit: I should also add, this is not universal on the American right, I know plenty of conservatives who aren't racists, nor is it only white Republicans who are racists.