2020-024 - Approving Commitments of Fund Balance Under GASB 54RESOLUTION 2020-024
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, there exists a Restricted General Fund Pension Reserve in the form of an
IRS 115 Pension Trust; 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 Reserve fund balances and outlines policies and procedures for
use and restoration of these balances; 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 to be determined at the close of FY 2019/20; 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
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Resolution 2020-024 June 2, 2020
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. Actual reserve balance will be established at closing FY 2019/20; 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
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 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, there exists an assigned approximately $1,200,000 balance in the Surplus
Property Reserve. Actual reserve balance will be established at closing FY 2019/20; and
WHEREAS, on May 19, 2020 the Town Council directed staff that the Surplus
Property Reserve balance can be used for alleviating COVID-19 economic impacts including
revenue declines (for example Sales Tax, Property Tax, and Transient Occupancy Tax) and/or
unanticipated expenditure cost increases in FY 2019/20 and beyond; 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, 2020 in the
assigned Sustainability Reserve; and
WHEREAS, the $3,401,479 transfer from the Capital/Special Project Reserve to the
General Fund Appropriated Reserves provides funding to the five-year capital plan; and
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Resolution 2020-024 June 2, 2020
WHEREAS, the $769,308 one-time use from the Capital/Special Project Reserve to
the General Fund Appropriated Reserves provides funding for additional tree maintenance and
engineering services, one-time bonuses, and one-time staffing for emergency management,
parking management and code compliance; 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 $410,000 as of June 30, 2020 in the
assigned Open Space Reserve; and
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES
HEREBY RESOLVE that the following estimated Budget Stabilization, Catastrophic, Pension/OPEB,
Capital/Special Projects, Compensated Absences; Surplus Property Revenue, Sustainability, Open
Space, Reserves as of June 30, 2020 and as of June 30, 2021 as restricted, assigned, unassigned
or formally committed as follows:
Actual
FY 2019/20
FY 2019/20
Estimated
FY2020/21
FY 2020/21
Estimated
General Fund
Budget, GF
Budget, GF
General Fund
Budget
Budget
General Fund
Reserves
Reserve
Reserve
Reserves
Resolution
Resolution
Reserves
June 30, 2019
Policy, and
Policy, and
June 30, 2020
Approved
Approved
June 30, 2021
this
this
Increase
(Decrease)
Resolution
Resolution
Approved
Approved
Increase
(Decrease)
Restricted Fund Balances
Pension
$ 5,015,316
$ 390,000
$ (4,765,797)
$ 639,519
$ 962,158
$ 1,601,677
Committed Fund Balances
Budget Stabilization
5,419,222
$ 8,381
$ -
5,427,603
-
5,427,603
Catastrophic
5,419,222
8,381
-
5,427,603
-
5,427,603
Pension/OPEB
4,232,500
4,232,500
(4,232,500)
* -
Assigned Fund Balances
Capital/Special Projects
13,262,303
(5,839,663)
7,422,640
(4,170,787)
* 3,251,853
Compensated Absences
1,232,654
-
-
1,232,654
-
1,232,654
Open Space
562,000
-
(152,000)
410,000
-
410,000
Sustainability
140,553
-
-
140,553
-
140,553
Carryover Encumbrances
413,729
-
-
413,729
-
413,729
Surplus Property Revenue Reserve
-
1,200,000
-
1,200,000
-
1,200,000
To Workers Comp
1,232,654
(1,232,654)
-
_
Vehicle Maintenance & Stores Residual
1,040,375
1,040,375
_
Designated One
-Time Use of Reserves during FY 2020122
Pension*
$ 3,270,342
General Fund One
Time Uses**
$ 769,308
Transfer to the Capital Projects (GEAR)**
3,401,479
Total
$ 7,491,129
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Resolution 2020-024 June 2, 2020
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Los Gatos held on the 2nd day of June 2020 by the following vote:
COUNCIL MEMBERS
AYES:
Rob Rennie, Marico Sayoc, Barbara Spector, Mayor Marcia Jensen
NAYS:
None
ABSENT:
None
ABSTAIN:
None
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: � f�
ATTEST:
TOWN CLERK OF FHE TOWN OF LOS GATOS
LOS GATOS, CAUFORNIA
DATE: iQ l q1 A U
-t I
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Resolution 2020-024 June 2, 2020