Attachment 2 - Resolution Approving Commitments of Fund Balance Under GASB 541 of 5
Resolution 2021- June 2, 2020
RESOLUTION 2021
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, there exists a balance of $390,000 as of June 30, 2021 in the restricted
Pension Reserve; 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 2020/21; and
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Resolution 2021- June 2, 2020
WHEREAS, there exists an assigned Capital/Special Projects Reserve to fund key
infrastructure and capital/special projects as identified in the Town’s five-year Capital
Improvement Plan, and/or other Council priorities; 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. Actual reserve balance will be established at the close of FY 2020/21; 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
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.
WHEREAS, on May 18, 2021 the Town Council Town determined the use of the $1.2
Million in the Surplus Property Reserve (Winchester property sale proceeds) be for capital
purposes; 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, 2021 in the
assigned Sustainability Reserve; and
WHEREAS, there exists an assigned Market Fluctuation Reserve that represent
fund balance amounts for unrealized investment gains that have been recorded as investment
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Resolution 2021- June 2, 2020
income in the financial statements in accordance with the requirements of GASB 31 in the
amount of $1,218,732, actual reserve balance will be established at the close of FY 2020/21; and
WHEREAS, there exists an assigned Measure G 2018 District Sales Tax Reserve to
track receipt and use of the 1/8 cent district tax funds collected by the Town; and
WHEREAS, the Town Council has determined the use of Measure G accumulated
and future proceeds to be 50% for operating expenditures and 50% for capital purposes; and
WHEREAS, the $1,051,046 (50% of the June 30, 2020 accumulated balance and
50% of the estimates FY 2020/21 proceeds) transfer from the Measure G District Sales Tax
Reserve to the General Fund Appropriated Reserves provides funding capital projects; and
WHEREAS, there is anticipated to be an excess balance of $482,159 as of June 30,
2021 in the assigned Measure G District Sales Tax Reserve, and that the actual balance will be
determined at the close of FY 2020/21 and will be used for capital purposes; and
WHEREAS, the $550,000 transfer from the Capital/Special Project Reserve to the
General Fund Appropriated Reserve provides funding to the five-year capital plan; 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, 2021 in the
assigned Open Space Reserve; and
WHEREAS, there is exists an assigned American Recovery Act (ARPA) Reserve to
collect the anticipated proceeds less Council authorized use of ARPA revenue per US Treasury
Interim ruling for revenue replacement and other one-time uses, estimated June 30, 2022
balance is $1,656,732, and the actual reserve balance will be determined at the close of the FY
2020/21 fiscal year; and
WHEREAS, there exists an assigned Market Fluctuation Reserve that represent
fund balance amounts for unrealized investment gains that have been recorded as investment
income in the financial statements in accordance with the requirements of GASB 31 in the
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Resolution 2021- June 2, 2020
amount of $1,218,732, and the actual reserve balance will be established at the close of FY
2020/21; and
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES
HEREBY RESOLVE that the following estimated Pension, Budget Stabilization, Catastrophic,
Pension/OPEB, Capital/Special Projects, Compensated Absences; Measure G District Sales Tax,
Surplus Property Revenue, Market Fluctuations, Sustainability, Open Space, and ARPA Reserves
as of June 30, 2021 and as of June 30, 2022 as restricted, assigned, unassigned or formally
committed as follows:
Actual
General Fund
Reserves
June 30, 2020
FY 2020/21
Budget, GF
Reserve
Policy, and
this
Resolution
Approved
Increase
FY 2020/21
Budget, GF
Reserve
Policy, and
this
Resolution
Approved
(Decrease)
Estimated
General Fund
Reserves
June 30, 2021
FY2021/22
Budget
Resolution
Approved
Increase
FY 2021/22
Budget
Resolution
Approved
(Decrease)
Estimated
General Fund
Reserves
June 30, 2022
Restricted Fund Balances
Pension 669,978$ -$ (669,978)$ -$ 390,000$ 390,000$
Committed Fund Balances -
Budget Stabilization 5,427,603 32,882$ -$ 5,460,485 - - 5,460,485
Catastrophic 5,427,603 32,882 - 5,460,485 - - 5,460,485
Pension/OPEB 4,532,500 - (4,532,500) - - -
Assigned Fund Balances - -
Capital/Special Projects 8,787,958 (4,236,551) 4,551,407 - (550,000) 4,001,407
Compensated Absences 1,539,408 - - 1,539,408 - 1,539,408
Open Space 410,000 - - 410,000 - - 410,000
Sustainability 140,553 - - 140,553 - - 140,553
Market Fluctuations 1,218,732 - - 1,218,732 - - 1,218,732
Measure G District Sale Tax 1,181,162 460,465 (590,581) 1,051,046 482,160 (1,051,046) 482,159
Carryover Encumbrances - - - - - - -
Surplus Property Revenue Reserve - 1,200,000 - 1,200,000 - (1,200,000) -
American Recvovery Act (ARPA)- 2,844,315 (1,777,910) 1,066,405 2,844,315 (2,253,988) 1,656,732
- -
Designated One-Time Use of Reserves during FY 2021/22
ARPA 2,253,988$
Transfer to the Capital Projects (GFAR)**2,801,046
Total 5,055,034$
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Resolution 2021- June 2, 2020
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Los Gatos held on the 1st day of June 2021 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:
TOWN CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: __________________