Some time this week a "NO BIKES" sign was stenciled into the pavement as you are heading southeast on El Monte Road just past the intersection of Elena/Moody/College Loop. The only places bicycles can be prohibited are freeways (CVC 21960) and clearly this road is not that. So it would appear this ban is not allowed.
I've been in contact with Richard Chiu of Los Altos Hills Public Works (http://www.losaltoshills.ca.gov/contact/staff.html). He indicated this was done at the direction of council due to safety issues and the bike route is through the college. My understanding is that even if there is a bike route, bikes can still not be prohibited from alternate streets.
Preliminary indications are that the town council has broken the law by placing this notice, but I will see what action (if any) happens this week before deciding what to do on this weekend's ride.