Attachment 2 - Fund Balance Resolution Establishing 6.30.19 Fund BalancesDRAFT RESOLUTION 2019-
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS APPROVING COMMITMENTS OF FUND BALANCE UNDER GASB 54
WHEREAS, the Governmental Accounting Standards Board (GASB) has issued its
Statement No. 54, Fund Balance and Governmental Fund Type Definitions with the intent of
improving financial reporting by providing fund balance categories that will be more easily
understood and to improve the comparability of governmental fund financial statements; and
WHEREAS, GASB 54 provides that the Town Council of the Town of Los Gatos classify
governmental fund balances as restricted, assigned, or committed fund balances; and
WHEREAS GASB 54 provides that restricted reserves are funds that are restricted for
externally imposed constraints such as legal contracts or state law, assigned amounts are
constrained by the Town’s intent to use them for specific purposes, and committed amounts are
dedicated for specific purposes under constraints and formal action taken by the Town Council
and these committed amounts cannot be used for any other purposes unless the Town Council of
the Town of Los Gatos removes or changes the specific use through the same formal action to
establish the commitment; and
WHEREAS, the Town Council of the Town of Los Gatos has established a General Fund
Reserve Policy providing for minimum fund balance dollar target amounts for Budget Stabilization
and Catastrophic fund balances and outlines policies and procedures for use and restoration of
these balances; and
WHEREAS, the Budget Stabilization and Catastrophic Reserve should be maintained
at the required minimum 12.5% of FY 2019/20 general fund budgeted operating expenditures of
$5,419,222 as specified in the Town Council General Fund Reserve Policy. This would increase
both Budget Stabilization and Catastrophic Reserves from $5,037,243 by $381,979 from available
year- end savings; and
WHEREAS, in June 2016, the Town Council established the committed Pension/OPEB
Reserve to provide funding toward pension and Other Post -Employment Benefits (OPEB)
unfunded obligations by placing discretionary amounts to the reserve with formal Council action
and transferring available year-end surpluses based on the General Fund Reserve Policy; and
ATTACHMENT 2
WHEREAS, on November 6, 2018 the Town Council provided direction to establish a
an unassigned Surplus Property Revenue General Fund Reserve that any monies received from
the sale of the property located on Winchester Boulevard and Lark Ave, APN 424 -31-055 and any
monies received from the sale of future surplus property be placed in this reserve, and the
provisions for the reserve specifically indicate that Council may, at its discretion, distribute those
funds as it deems appropriate; and
WHEREAS, on May 21, 2019 the Town Council directed a transfer of $1,905,000
million (proceeds of the property located on Winchester Boulevard and Lark Ave, APN 424 -31-
055) from the unassigned Surplus Property Revenue Reserve to the committed General Fund
Pension/OPEB Reserve; and
WHEREAS, on May 21, 2019 the Town Council directed an additional transfer of
approximately $1,337,500 million from the available assigned General Fund Capital/Special
Projects Reserve to the committed General Fund Pension/OPEB Reserve, and
WHEREAS, there exists an excess balance as of June 30, 2019 from year-end surplus
beyond the minimum dollar amount required under the approved Town Council General Fund
Reserve Policy; and
WHEREAS, per Town Council General Fund Reserve Policy, $300,000 will be placed to
the CalPERS/OPEB Reserve from available year-end savings; and
WHEREAS, there exists a balance of $4,232,500 as of June 30, 2019 in the committed
CalPERS/OPEB Reserve; and
WHEREAS, The Town Council established the assigned Open Space reserve in the FY
1998/99 to be used for the preservation of open space, connection of open space trails, the
definition of the southern boundary of the Town with passive open space, and protection of
unique natural features; and
WHEREAS, there exists an excess balance of $562,000 as of June 30, 2019 in the
assigned Open Space Reserve; five-year capital plan transfers $152,000 to the Open Space Trail
Upgrades Project from this funding source; this transfer reduces the assigned General Fund Open
Space Reserve by $152,000 to $410,000 as of June 30, 2020 and
WHEREAS, The Town Council established the assigned Sustainability Reserve in FY
2008/09 by closing the Solid Waste Management fund and placing the initial residual balance
dedicated for conservation, recycling, and sustainability; and
WHEREAS, there exists an excess balance of $140,553 as of June 30, 2019 in the
assigned Sustainability Reserve; and
WHEREAS, there exists an assigned General Fund Compensated Absences Reserve
allocated to fund 50% of all vested hours of sick leave, compensation, and vacation time with the
actual reserve amount of $1,232,654; and
WHEREAS, there exists an assigned To Workers’ Comp Reserve from the other 50% of
General Fund Compensated Absences Reserve with the actual reserve amount of $1,232,653; and
WHEREAS, there exists an assigned Capital/Special projects Reserve to fund Council
priorities, key infrastructure and capital/special projects as identified in the Town’s five-year
Capital Improvement Plan; and
WHEREAS, there exists an assigned authorized Carry Forward Reserve for materials
and services on approved purchase order and contracts which were issued but not finalized or
fulfilled as of the end of the fiscal year but for which funds will be carried forward to the following
fiscal year with the actual reserve balance of $413,729; and
WHEREAS, on May 21, 2019 the Town Council provided direction to close the Vehicle
Maintenance and Stores Internal Service Funds and establish an assigned Vehicle Maintenance
and Stores Residual Reserve and the provisions for the reserve specifically indicate that Council
may, at its discretion, distribute those funds as it deems appropriate; and
WHEREAS, on May 21, 2019 the Town Council directed the use of the total amount of
available funds in the unassigned Vehicle Maintenance and Stores Residual Reserve to provide
funding for an additional $5,000 Human Services grants, $27,685 additional sidewalk cleaning,
and approximately $972,384 transfer to the Downtown Revitalization Project in FY 2019/20. The
actual assigned Vehicle Maintenance and Stores Residual Balance is $1,040,375 as of June 30,
2019; and
WHEREAS, there exists an assigned General Fund Compensated Absences Reserve
allocated to fund 50% of all vested hours of sick leave, compensation, and vacation time with the
actual reserve amount of $1,232,654; and
WHEREAS, there exists an assigned To Workers’ Comp Reserve from the other 50% of
General Fund Compensated Absences Reserve with the actual reserve amount of $1,232,653; and
WHEREAS, the remainder of the available year-end savings will be placed to the
Capital/Special Project Reserve according to the Town Council Reserve Policy; and
WHEREAS, there exists an assigned Capital/Special Project Reserve in the amount of $13,262,303;
and
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES
HEREBY RESOLVE that the following fund balances as of June 30, 2019 as restricted, assigned, or
formally committed as follows:
Other
Nonmajor Total
Appropriated Governmental Governmental
General Fund Reserves Funds Funds
Fund Balance
Restricted for:
Capital Outlay -$ 133,169$ 6,562,064$ 6,695,233$
Pension 5,015,316 - - 5,015,316
Repairs and Maintenance 208,139 208,139
Committed to:
Budget Stabilization 5,419,222 - - 5,419,222
Catastrophic 5,419,222 - - 5,419,222
CalPERS/OPEB 4,232,500 - 4,232,500
Almond Grove Street Project 2,579,997 2,579,997
Assigned to:
Open Space 562,000 - - 562,000
Parking - 1,460,210 - 1,460,210
Sustainability 140,553 - - 140,553
Capital/Special Projects 13,262,303 4,344,618 - 17,606,921
Carryover Encumbrances 413,729 - - 413,729
Comcast PEG - 50,000 - 50,000
Vehicle Maintenance & Stores 1,040,375 - - 1,040,375
Compensated Absences 1,232,654 - - 1,232,654
To Workers' Comp 1,232,653 - - 1,232,653
Special Revenue Funds - 326,102 326,102
Total Fund Balances 37,970,527$ 8,567,994$ 7,096,305$ 53,634,826$
PASSED AND ADOPTED at a regular meeting of the Town Council held on the 17th day
of December 2019 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA