14 - Redevelopment Agency Operating Budget, Capital Improvement ProgramoW~ nF MEETING DATE: 6/7/2010
ITEM NO: g i ~
i s COUNCIL AGENDA REPORT I '°°~
~g GASH
DATE: JUNE 3, 2010
TO: MAYOR AND TOWN COUNCIL/
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
FROM: GREG CARSON, TOWN MANAGER/EXECUTIVE DIltECTOR
SUBJECT: ADOPT RESOLUTIONS APPROVING THE TOWN AND
REDEVELOPMENT AGENCY'S FISCAL YEAR 2010/11 OPERATING
BUDGET, CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS
2010/11-2014/15, CARRY-FORWARD APPROPRIATIONS, AND OTHER
APPROVED ADNSTMENTS AND MINOR CORRECTIONS
RECOMMENDATION:
Adopt resolution approving the FY 2010/11 Operating and Capital Surnrnary Budget and
the FY 2010-15 Capital Improvement Program for the Town of Los Gatos, directing
staff to incorporate within the final adopted budget any changes related to Council
approved meet and confer process or management compensation plan amendments,
classification adjustments or minor corrections, canyforward appropriations, changes due
to more refined estimates and grant approvals, or additional Town Council direction
received by staff upon adoption of the budget.
2. Adopt resolution approving the FY 2010/11 Operating and Capital Summary Budget and
the FY 2010-15 Capital Improvement Program for the Redevelopment Agency of Los
Gatos, directing staff to incorporate within the final adopted budget any changes related
to Council approved meet and confer process or management compensation plan
amendments, classification adjustments or minor corrections, carryforward
appropriations, changes due to more refined estimates and grant approvals, or additional
Town Council direction received by staff upon adoption of the budget.
BACKGROUND:
On May 17, 2010, a public hearing was held on the Town and Redevelopment Agency's
Proposed FY 2010/l~.~Operatingr and Capital Summary Budget, and Proposed FY 2010-15
PREPARED BY:
Director
staffreport2010-11.doc
Reviewed by: ~~ Assistant Town Manager{ ~N }~" Town Attorney
Clerk Administrator Finance \ Community Development
PAGE2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE 2008/09 OPERATING/CAPITAL
BUDGET
JUNE 3, 2010
Capital Improvement Program (CIP). The Town Council considered both documents and
directed staff to bring back the documents for final approval.
Prior to Council consideration of the CII', the Planning Commission reviewed the CIP as
required by State law on April 14, 2010. The Commission determined that the CIP is consistent
with the General Plan and all specific plans.
Staff is recommending two appropriation modifications to the Proposed Operating and Capital
Budget pursuant to Council direction and one modification to the CIP at this time. Any
additional changes or corrections directed by the Town Council upon adoption of the budget can
be incorporated into the final authorized budget as provided for in the adopted Budget
Resolution.
DISCUSSION:
The attached resolutions incorporate several items as discussed below:
Limited One-Time Use of Reserves
As discussed at the May 17, 2010 budget hearing, Council authorized a reduced use of reserves
for one-time fund purposes largely related to additional budget reductions and changes that will
likely be needed in the years ahead. The $255,000 one-time use of reserves includes the
following:
^ $75 k for Police Overtime in advance of future year shift changes or other reductions
^ $40 k for Emergency Preparedness Program community outreach and restructuring
^ $40 k for New Library Transition (including $7,500 grant to the Friends of the Library)
$100 k for Budget Strategies (restructuring benefits, services and work schedules)
Note that even with this modest one time allocation ofpast reserves, the Proposed Budget
anticipates continue growth in total Town reserves given the projected set-aside of a portion of
anticipated Netflix sales tax revenue.
Denarhnental Reorganizations
The Proposed Budget includes three departmental reorganizations that realign work to maintain
services at a lower operating cost in Parks Maintenance, Facilities Maintenance, and Library
Management. As work duties are changed according to operational needs, there may be staff
position impacts subject to meet and confer with the affected bargaining group(s). If those
discussions with union representatives are not successfully concluded in a timely fashion, it may
be necessary to implement modified reorganizations to maintain the projected budget savings
and community services to the greatest extent possible.
PAGE3
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE 2008/09 OPERATING/CAPITAL
BUDGET
JUNE 3, 2010
The attached Budget Resolution includes language giving the Town Manager authority to
implement the original reorganizations as recommended in the Proposed Budget or alternatives,
if needed, to maintain the proposed level of community services and budget savings.
Existing Library Space Planning
Given the anticipated vacation of the current library space in early 2012, it is time to begin
planning for the alternative use of the existing library space, incorporating other needed changes
to Police Headquarters and the Council Chambers. Consequently, the resolution includes
authority for the Town Manager to establish a new CIP Project for Civic Center Space Planning
with $75,000 in funding from the Facilities Maintenance Fund Reserve. Further allocations to
implement any Council approved changes would be considered at the Mid-Year or subsequent
budget review.
Other Budget Items
Tow Franchise -The Town recently received a letter from Mr. Bob Coen of South Bay Towing
requesting a sole contract for towing services. Staff has reviewed the revenue estimates and
believes that the revenue will likely be lower than South Bay Towing's annual projection of
$50,000. While staff continues to consider this concept, staff has communicated to the
company's representative that it will not be pursued at this time.
Encumbered Items Outstanding at June 30, 2010 -Town policy calls for unexpended
encumbered funds to.lapse at the end of the fiscal year. However, Town policy also provides
that valid encumbrances open at the end of the fiscal year may be carried forward to the
following fiscal year and re-appropriated from the encumbrance reserve dollars set aside upon
the close of the prior fiscal year.
Because of the need to reduce expenditures, the majority of encumbrances will be closed out
during the year-end process or paid in full by the time of the final fiscal year close-out and will
not be carried forward to FY 2010/11. Only on an exception basis through Town Manager's
approval are outstanding encumbrances or unspent appropriated balances from the prior year
tamed forward. These amounts will be reserved in their respective funds at year end under a
designated reserve. Capital Project Fund appropriations differ in that encumbrances are carried
forward to the following fiscal year until the projects are completed.
Non-Encumbered Items - In addition to the open encumbrances outstanding at year-end, staff is
proposing to bring forward remaining current year appropriations for unexpended balances in its
grant funded operating projects. Grants provide matching revenues for expenditures and often
span two or three fiscal years in their program or project implementation.
PAGE4
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE 2008/09 OPERATING/CAPITAL
BUDGET
JUNE 3, 2010
FISCAL IMPACT:
The fiscal impact of the Town and Redevelopment Agency's FY 2010/11 Operating and Capital
Budgets is provided in the Financial Summaries section of the budget document including
estimates of Fund Reserves at June 30, 2011.
As stated by staff at the public hearing on May 17, 2010, the Town will continue to monitor local
economic trends and associated impacts to the Town and RDA's adopted FY 2010/11 budgets.
It is currently anticipated that staff.will bring forward any further adjustments necessary in the
Town's mid-year budget review. These adjustments may include some further actions necessary
to align operating revenues with expenditures; however, staff cannot determine at this time
whether or not these will be required. Staff will also provide an update on further
reorganizations, service reductions and cost controls necessary to balance future year budgets.
Attachments:
i. Resolution of the Town Council Approving FY 2010/11 Operating Budget and FY 2010-15
Capital Improvement Program
2. Resolution of the Redevelopment Agency Approving FY 2010/11 Operating Budget and FY
2010-15 Capital Improvement Program
RESOLUTION 2010-XXX
RESOLUTION OF THE TOWN COUNCII. OF THE TOWN OF LOS GATOS
APPROVING FY 2010/11 OPERATING BUDGET & FY's 2010/11- 2014/15 CAPITAL BUDGET
AND CARRY-FORWARD APPROPRIATIONS AND OTHER APPROVED. ADJUSTMENTS
RELATING TO MEET AND CONFER PROCESS, MANAGEMENT COMPENSATION PLAN,
CLASSIFICATION ADJUSTMENTS, MINOR CORRECTIONS, AND REFIlVED ESTIMATES
WHEREAS, Section 2.30.295(b) of the Los Gatos Town Code requires the Town Manager
to annually prepare and submit a budget to the Town Council and be responsible for its administration;
and
WHEREAS, the Town Manager submitted a Proposed Budget for FY 2010111 to the Town
Council; and
WHEREAS, the Town Manager submitted a proposed Five-Year Capital Improvement
Program for FY's 2010/11 - 2014/15; and
WHEREAS, the Town Council has considered and reviewed said Proposed Budget and
Capital Improvement Program during public hearings.
RESOLVED, that the Town Council hereby adopts as the budget for the Town of Los
Gatos for the FY 2010/1 I the schedule entitled, "Total Town Revenues By Fund and Total Town
Expenditures By Fund" (Exhibit A) including the first year (FY 2010/11) of the Town's Capital
Improvement Program budget as contained in the Town's FY's 2010/11 - 2014/15 Capital Improvement
Plan.
BE IT FURTHER RESOLVED, that the final adopted budget includes approved carry-
forward appropriations for unspent operating grants and pass-throughs from FY 2009/10, and that there
be carried forward from prior years Reserve for Encumbrances within each fund an amount sufficient to
cover approved outstanding encumbrances as of June 30, 2010;
BE IT FURTHER RESOLVED, that the Town Council hereby directs staff that any
changes or impacts resulting &om: Council approval of the meet and confer process or management
compensation plan; from classification adjustments or miscellaneous conectious; from changes due to
more refined estimates or grant approvals; or from further Town Council consensus direction received on
June 7, 2010, be incorporated within the final FY 2010/11 Operating and Capital Budget.
BE IT FURTIIER RESOLVED, that the Town Council authorizes the Town Manager to
establish a new Capital Improvement Program (CIP) project for Civic Center Space Plamung using
approxhnately $75,000 from the Facilities Maintenance Fund Reserve and implement reconunended
deparhnental reorganizations or alternative approaches that maintain the level of cormnunity services
and/or budget savings reflected in the proposed FY 2010/11 Operating and Capital Budget.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the 7`~' day of Tune, 2010 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED: /s/Diane McNutt
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:/s/ Jackie D. Rose
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
TOTAL TOWN REVENUES BY FUND AND TOTAL TOWN EXPENDITURES BY FUND
2010111 - 2D10/11
Proposed Budget Recommended
Budget Revision Budget
TOWN REVENUES & OTHER FUNDING SOURCES
General Fund $ 33,196,691 $ 33,196,691
Special Revenue Funds 312,101 312,101
Internal Service Funds 4,144,160 4,144,160
Trust & Agency Funds 180,088 180,088
Capital Project Funds (does not include cazryforwazds) 3,488,804 32,243 3,521,047
Redevelopment Agency Funds 10,722,700 456,910 11,179,610
TOTAL TOWN REVENUES & OTHER FUNDING SOURCES $ 52,044,544 $ 489,153 $ 52,533,697
TOTAL TOWN EXPENDITURES, TRANSFERS OUT & CARRYFORWARD APPROPRIATION
General Fund $ 33,002,706 $ 255,000 $ 33,257,706
Special Revenue Funds 554,940 (2,590) 552,350
Interval Service Funds 4,477,457 4,477,457
Trust & Agency Funds 476,469 476,469
Capital Project Funds (does not include cazryforvrards) 4,380,233 32,243 4,412,476
Redevelopment Agency Funds 13,265,723 456,910 13,722,633
TOTAL TOWN EXPENDITURE & OTHER FUNDING USES $ 56,157,528 $ 741,563 $ 56,899,091
EXHIBIT A
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INTENTIONALLY
LEFT BLAND
RESOLUTION 2010-XXX
RESOLUTION OF THE REDEVELOPMENT AGENCY
CONSENTING TO THE PROVISION OF PUBLIC IlVIPROVEMENTS BY THE LOS GATOS
REDEVELOPMENT AGENCY AND MAHING MANDATORY FINDINGS IN REGARDS TO
CAPITAL PROJECTS PROVIDED FOR IN THE LOS GATOS REDEVELOPMENT AGENCY
FY 2010/11 OPERATINTG AND FY's 2010/11 - 2014/15 CAPITAL ID~ROVEMENT PLAN
WHEREAS, Section 33445 of the Health and Safety Code requires the local legislative body to
consent to the provision of public improvements by its Redevelopment Agency and make findings: 1) that
the public improvements are of benefit to the project area or the immediate neighborhood of the project
area; 2) that no other reasonable means- of financing such public improvements are available to the
community, and; 3) that the Agency's contribution to the cost of the public improvement or facility will
assist in eliminating one or more blighting conditions in the project area, and is consistent with the
Agency's implementation plan adopted pursuant to Section 33490 of the Health and Safety Code, the
(Implementation Plan), and
WHEREAS, the Redevelopment Agency's FY 2010/11 - 2014/15 Capital Budget provides
funding for the following project: Almond Grove Concrete Rehabilitation
WHEREAS, the Projects will be of substantial benefit to the downtown business district and
surrounding areas of the Central Los Gatos Redevelopment Project Area (the Project Area) established
pursuant to the 1991 Redevelopment Plan (the Redevelopment Plan);
WHEREAS, the Town has limited financial resources for capital improvements and these funds
are conunitted to other critical infrastructure needs of the Town such as repairing aging streets outside of
the Project Area;
WHEREAS, the Projects have been specifically called for in the Town's Redevelopment Plan and
Implementation Plan; and
WHEREAS, the Downtown infrastructure was initially in a deteriorated condition with broken
pavement, deteriorated streets and alleys, deteriorated sidewalks, and functionally obsolescent, and the
capital projects have helped, and continue to help, eliminate these blighting conditions;
BE IT RESOLVED, that the Town Council of the TOWN OF LOS GATOS does
hereby consent to the provision of funding for the Capital Projects by the Los Gatos Redevelopment
Agency in accordance with the Agency's FY 2010/11 Operating and FY 2010/11 - 2014/15 Capital
Improvement Program budgets totaling adopted revenues of $11,179,610 and expenditures of $13,722,631
(prior to carry-fonvard appropriations); and
BE TT FURTHER RESOLVED, that the Agency Board hereby fords that the Projects are of
benefit to the Project Area and the inunediate neighborhood of the Project Area; and
BE IT FURTHER RESOLVED, that the Agency Board hereby finds that no other reasonable
means of financing such public improvements are available to the community; and
BE IT FURTI~R RESOLVED, that the Agency Board hereby fords that the Los Gatos
Redevelopment Agency's contribution to the cost of the public improvements will assist in eliminating
blighting conditions in the Project Area, and is consistent with the Implementation Plan.
BE IT FURTHER RESOLVED, that the Agency Board hereby du~ects staff that any changes or
impacts resulting from: Council approval of the meet and confer process or management compensation
plan; from classification adjustments or nuscellaneous corrections, from changes due to more refined
estimates or grant approvals; or from further Agency Board consensus direction received June 7, 2010, be
incorporated within the final FY 2010/11 Operating and Capital Budget.
PASSED AND ADOPTED at a regular meeting of the Redevelopment Agency of the Town of
Los Gatos held the 7th day of June, 2010, by the following vote:
REDEVELOPMENT AGENCY MEA'IBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED: /s/ Mayor Diane McNutt
CHAIIZ OF TI3E REDEVELOPMENT AGENCY
TOWN OF LOS GATOS, CALIFORNIA
ATTEST: /s/ Jackie D. Rose
SECRETARY OF THE REDEVELOPMENT AGENCY
TOWN OF LOS GATOS, CALIFORNIA