2019-064 - Approving Commitments of Fund Balance Under GASB 54RESOLUTION 2019-064
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
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Resolution 2019-064 December 17, 2019
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 CaIPERS/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 CaIPERS/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
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Resolution 2019-064 December 17, 2019
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, 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
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Resolution 2019-064 December 17, 2019
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:
Fund Balance
Restricted for:
Capital Outlay
Pension
Repairs and Maintenance
Committed to:
Budget Stabilization
Catastrophic
CaIPERS/OPEB
Almond Grove Street Project
Assigned to:
Open Space
Parking
Sustainability
Capital/Special Projects
Carryover Encumbrances
Comcast PEG
Vehicle Maintenance & Stores
Compensated Absences
To Workers' Comp
Special Revenue Funds
Total Fund Balances
Appropriated
General Fund Reserves
$ - $ 133,169
5,015,316 -
5,419,222
5,419,222
4,232,500
2,579,997
Other
Nonmajor Total
Governmental Governmental
Funds Funds
$ 6,562,064 $ 6,695,233
- 5,015,316
208,139 208,139
- 5,419,222
- 5,419,222
4,232,500
2,579,997
562,000
-
- 562,000
-
1,460,210
- 1,460,210
140,553
-
- 140,553
13,262,303
4,344,618
- 17,606,921
413,729
-
- 413,729
-
50,000
- 50,000
1,040,375
-
- 1,040,375
1,232,654
-
- 1,232,654
1,232,653
-
- 1,232,653
-
326,102 326,102
$ 37,970,527
$ 8,567,994 $
7,096,305 $ 53,634,826
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Resolution 2019-064 December 17, 2019
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: Rob Rennie, Marico Sayoc, Barbara Spector, Mayor Marcia Jensen
NAYS: None
ABSENT: Steve Leonardis
ABSTAIN: None
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: / L, 2-i
ATTEST:
%hCQQ2a-k -N)'kN
TOWN CLERK OF THE TOWN OF LOS GATOS
LOS GAT OS, CALIFORNIA
DATE: 01
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Resolution 2019-064 December 17, 2019