Attachment 1 - Fiscal Analysis Options Memo1The following dwelling totals include net new dwelling units and 475 pending and approved units.
3527 Mt. Diablo Blvd. #248, Lafayette, CA 94549 ◼ Tel 925.934.8712 www.adeusa.com
MEMO
TO: Jim Harnish
Brent Gibbons
FROM: Doug Svensson, AICP
DATE: March 22, 2022
SUBJECT: Additional Fiscal Analysis Options for the Draft 2040 General Plan Land Use
Plan
The Town of Los Gatos has requested a scope and cost for additional fiscal analysis of the Draft 2040
General Plan Land Use Plan. The level of analysis completed to date (Land Use Alternatives Report,
December 2019), which is described briefly below, is generally considered adequate for most General
Plan update studies. The completed alternatives analysis evaluated the relative performance of the
alternatives in terms of their cost/revenue impact to the Town. The fiscal analysis indicated that
residential uses generally require a higher level of municipal services than do non-residential land
uses, which typically generate a fiscal surplus for most California cities. Los Gatos is no different in
this regard.
The analysis indicated that as the number of residential units included in each alternative goes up, the
added service costs begin to reduce the net benefit gained from the fixed amount of commercial
development included in the alternatives. The tipping point between an overall positive vs. negative
fiscal result is between Alternative C at 2,3031 Dwelling Units (DUs) and Alternative D at 3,176 DUs1.
In the Draft 2040 General Plan Land Use Plan, 3,2381 DUs would be permitted, which is more units
than Alternative D in the fiscal analysis. With the addition of ADUs, and the absence of any increased
increments of commercial development, the overall fiscal impact would be expected to be negative.
A more detail analysis will not change this basic conclusion. However, there are options for additional
analysis that could refine the estimate of the actual fiscal impact of the Draft 2040 General Plan Land
Use Plan, such as considering the time frame for buildout of the General Plan and also addressing
facilities improvements needed to support growth. We outline these options below.
Fiscal Analysis Completed to Date. ADE prepared a fiscal analysis of the four initial land use
alternatives (attached to this scope of work). As part of this work, we constructed a fiscal model for
the Los Gatos General Fund that includes all revenues and service cost categories funded through that
part of the Town’s budget. The model is detailed in terms of the cost and revenue categories, but the
ATTACHMENT 1
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analysis is done for full buildout of each alternative at one point in time, and does not consider the
effects of inflation, which may affect Town revenue and costs differently.
In addition, the cost analysis uses an average cost methodology which assumes all development over
the long term has the effect of raising costs for Town services due to increasing demand. It does not
account for cases in which the existing service capacity of the Town could absorb demand from growth
in the short term without increasing costs, if any such cases exist.
Finally, the analysis does not address the cost of increasing facilities and infrastructure capacities. The
assumption here is that new development would bear those costs through impact fees or developer
exactions, but it is possible there could be indirect capital costs that are not captured through those
types of funding mechanisms.
Option 1: Update the Existing Analysis for the Draft 2040 General Plan Land Use Plan. The
analysis options described below address these types of concerns, but there is also the possibility of
simply updating the existing analysis to current budgetary and market conditions and using it to
analyze the new growth increment in the Draft 2040 General Plan Land Use Plan. The original work
was conducted about two years ago, prior to the pandemic. One concern, which must be addressed in
all the options, is how much the Town’s current budget is affected by the recession that accompanied
the pandemic. A similar concern exists for real estate conditions in terms of the housing prices used in
the analysis. It may be necessary to work with Town staff to derive a likely long term cost/revenue
scenario that draws from pre-pandemic service levels and projects a budget forward when economic
conditions return to “normal.”
The following additional tasks would be needed:
▪Update the fiscal model to “likely” long term budget levels.
▪Confirm Town service standards and determine what capacity exists currently, if any, to serve
an expanded service population consistent with the Draft 2040 General Plan Land Use Plan.
▪Program the Draft 2040 General Plan Land Use Plan into the fiscal model, including updating
projected real estate values.
▪Prepare a new report with the results of the analysis and a complete methodology section.
Additional Cost: 32 hours @200 = $6,400
Expenses: $600 for real estate data
Total: $7,000
Option 2: Analyze General Plan Buildout Over Time. This analysis would use the updated fiscal
model developed for Option 1, but would project the phasing of development in Los Gatos over the
20-year buildout timeframe and analyze fiscal impacts on a year by year basis. This approach would
add the following features to the analysis:
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▪More detailed discussion with Town Departments about the existing capacity to absorb growth
in the short term before additional staff or facilities are needed to support continuing growth.
The analysis would also identify the growth thresholds for each service that would trigger the
need for personnel and equipment expansions over time.
▪The analysis would apply inflation factors to both revenues and costs, including estimates of
how the Proposition 13 restrictions on assessed value increases would affect property tax
revenues over time. In our experience, cities often experience cost inflation in “chunks” as
new labor agreements are negotiated and new staff or facilities are added, whereas revenue
inflation follows closer to the CPI and sometimes lags the cost inflation for extended periods.
▪The analysis would show the cost/revenue trend year by year over the 20-year buildout period
and calculate the present value of the cumulative net revenue or cost over that period.
This option would cost an additional $3,200 over Option 1, for a total cost of $10,200.
Option 3: Expand the Analysis Beyond the General Fund. Most fiscal studies focus on the
General Fund because the key concern is whether general tax revenues in the future will be adequate
to cover increasing service costs. The Town has less control over the annual amounts of general tax
revenues (sales tax, property tax, transient occupancy tax) because they are subject to market forces
and it is difficult to change the tax rates. Therefore, changes in land use are more important to long
term increases in these revenues. Other funds in the Town budget, such as special revenue funds and
enterprise funds, typically have dedicated funding sources, which can either be raised by Town Council
action or are based on state funding formulas that are not affected as much by the type of land use
changes included in a General Plan update.
However, there are cases where cities are concerned whether, for example, state gas taxes or water
and sewer charges will keep up with operations and maintenance costs. The fiscal model used in
Options 1 and 2 above could be expanded to include budgetary funds outside the General Fund. We
anticipate this would add about $1,600 to $2,400 to the cost of the analysis, depending on the
extent of the model expansion and which funds are added.
Option 3: Infrastructure Financing. In cases where General Plan updates also include detailed
analysis of long-term infrastructure and facilities expansion requirements, ADE is sometimes
requested to address the financing options for capital improvements or to identify if gaps in funding
may exist. Such analysis may include a preliminary impact fee nexus study or a land-based debt
capacity analysis to determine bonding capacity to fund future improvements. One caveat here is that
ADE is not staffed to prepare facilities cost estimates, but rather we rely on estimates prepared by
traffic engineers or civil engineers who are typically part of the General Plan update team.
The costs for such analysis can vary widely depending on the level of information available to work
with and the type of analysis needed. A general financing discussion can sometimes be completed for
$5,000 to $10,000, but a full development impact fee nexus study would cost about $15,000. This
analysis could be combined with either Option 1 or 2 above.
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For all options, attendance at public meetings is additional, depending on the level of effort needed to
prepare a presentation and the number of meetings required.
Please do not hesitate to contact me with any questions.
Fiscal Health
It is important to ensure that the future land use mix supports a healthy fiscal foundation for the Town. As discussed in the Background Report, different land uses generate different levels of revenue (taxes) and require different levels of costs (municipal services). Each of the land use alternatives has been evaluated to determine the cost/revenue balance at buildout of the land uses. The results are summarized in Table 5-4. The detailed methodology for this analysis is provided in Chapter 6: Alternatives Methodology.
Table 5-4: Comparison of Fiscal Impacts of the Alternatives on
Annual Operating Revenues and Costs
Alt. A Alt. B Alt. C Alt. D
Annual Revenues $4,320,000 $5,796,000 $6,564,000 $8,378,000
Annual Costs $3,710,000 $5,280,000 $6,264,000 $8,413,000
Net Fiscal Impact $610,000 $516,000 $300,000 ($35,000)
Residential Net Impact $190,000 $96,000 ($121,000)($455,000)
Non-residential Net Impact $420,000 $420,000 $420,000 $420,000
Source: ADE, Inc. Note: figures may not exactly add due to rounding.
The figures in the Table 5-4 reflect the annual impact of the incremental growth in residential and non-residential land uses in each land use alternative. The figures depicted in Table 5-4 are not the total estimated Town General Fund budget at buildout, but only the incremental change generated by new development. The non-residential development is the same for each alternative, so the variations in performance among the alternatives is due solely to the changes in residential development.
In general, the more the development in the land use alternative, the higher the annual revenues would be. However, lower density housing units (Low-Density Residential) typically have a higher market value than higher-density units, so the amount of property tax revenues, and to some degree taxable household spending that generates sales tax, is dependent on the mix of unit types in each land use alternative.
In contrast, municipal costs are largely driven by the increase in population. For purposes of the land use alternatives analysis, all housing unit types are assumed to have the same average household size. Therefore, the bottom-line cost/revenue balance for each alternative reflects the ratio of aggregate home values and household incomes to the population it creates. Alternative A results in the highest net fiscal benefit, at about $610,000 annually. As noted in the housing affordability analysis, this alternative has the lowest number of BMP housing units and the mix of market rate units is more balanced between single family and multi-family. Generally, as the number of residential units goes up in each alternative, the fiscal benefit decreases, and Alternative D actually shows a small negative fiscal impact. The mix of units in Alternative B produces a positive fiscal benefit of $516,000 overall. Alternative C has an overall positive fiscal benefit of $300,000 per year, but the residential component generates a negative fiscal impact of -$121,000 per year.
The fiscal health results should be viewed as a relative comparison among the land use alternatives and considered a best-case scenario over the long run. In the 2040 Background Report, the fiscal analysis of existing land uses showed that residential uses require more in-service cost than they generate in Town revenues. However, that is due to the fact that existing taxable assessed values are depressed due to the limitations imposed by Proposition 13. In the current real estate market, residential prices for new single family housing are high enough to generate sufficient tax revenues to support current levels of Town services, although multi-family assessed values still produce a negative fiscal impact. Over time, the revenue generating potential of the development may decline as Proposition 13 limits the escalation of assessed values compared to the inflation of municipal service costs.
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A
This appendix provides
a description of the
methodology used to
determine total housing,
and population for each
land use alternative,
followed by a description
of the methodology used
in the fiscal analysis.
Development Capacity Methodology
This section provides a description of the methodology used to determine total housing, population, and employment capacity for each of the land use alternatives. The purpose of this methodology is to support a “development capacity” analysis of the Town’s Planning Area under each of the four alternatives. Development capacity, as used in this report, is an estimate of the total housing units, population, and non-residential building square footage calculated based on a set of development assumptions and calculations. It is important to note that a development capacity analysis reflects a theoretical buildout of the available vacant land and parcels with redevelopment potential that are within the Planning Area. It is unlikely that all of the calculated potential development will be realized by 2040. In this analysis, four basic land use alternatives were prepared. The Low Growth Alternative reflects the Town’s existing General Plan relative to development density and intensity. Alternatives B, C, and D represent increasing density and intensity, increasing as you move from the lower to the higher alternative.
Alternative A, Low Growth
Alternative B, Medium Growth
Alternative C, Medium High Growth
Alternative D, High Growth
The following discussion provides an overview of the steps involved in producing the development capacity analysis.
A
B
C
D
Appendix:
Alternatives Methodology
41
Step 1: Scope of Analysis
The land use alternatives included in this evaluation were developed based on recommendations from the General Plan Update Advisory Committee (GPAC). Following GPACs recommendation, the Consultants identified five land use designations that could have potential for future development and should be evaluated in this analysis. The development capacity analysis focused on development within these designations:
Low-Density Residential (LDR)
Medium-Density Residential (MDR)
High-Density Residential (HDR)
Neighborhood Commercial (NC)
Mixed-Use Commercial (MU)
Areas not included in the analysis are those designated Hillside Residential, Mobile Home Park, Office Professional, Service Commercial, Central Business District (downtown), Light Industrial, Public, and Open Space.
To determine development potential, the development capacity analysis looked at development of existing vacant parcels as well as the redevelopment and/or intensification of some areas that contain development currently within the five identified land use designations.
Step 2: Vacant Land
To identify vacant parcels in each of the five land use designations being
analyzed, parcel data from the Santa Clara County Assessor’s Office was used.
Using the geographic information system (GIS) data provided by the Assessor,
parcels with a tax use code of “Vacant” were identified. These sites were then
visually reviewed against aerial photography to confirm that the site was truly
vacant. Once verified, the attributes of the vacant land GIS data were exported
into an Excel spreadsheet for the analysis.
Step 3: Opportunity Areas
In addition to analyzing vacant parcels, the development capacity analysis also examined the redevelopment potential of locations with existing development. Within these developed areas, locations that could support more intensive uses were identified based on location, access, infrastructure, roadway capacity, and surrounding land uses. These locations were identified and defined as “Opportunity Areas.” Parcels within designated Opportunity Areas (OA) are assumed to have a higher potential redevelopment percentage and the ability to support increased density ranges (and higher maximum building heights) for residential and increased intensity for non-residential uses, expressed by increasing the allowed floor area ratio (FAR).
If a parcel is designated Neighborhood Commercial or Mixed-Use Commerical, it was assumed that square footage of existing commercial uses would remain (as currently built or as a replacement) and residential will be added to the site, therefore, there will be no net commercial loss as part of the redevelopment assumptions.
Step 4: Redevelopment
The analysis also evaluated the potential for existing developed areas to
redevelop (e.g., remove an existing home and replace it with more units, such as
a duplex or triplex), or increase the use of a parcel (e.g., adding additional units
on a parcel with an existing home). This potential, expressed as a percentage
of the total area evaluated was applied to areas both inside and outside the
Opportunity Areas identified.
Step 5: Development Assumptions
All parcels inside and outside the Opportunity Areas, including vacant parcels,
were assigned a set of development assumptions that were specific to the four
land use alternatives. The following tables show the development assumptions
for redevelopment, density, typical density, and FAR for each alternative. On
each table, the following headings are shown:
Redevelopment Percent. This column states what percentage of the total
area under each land use designation is assumed to be redeveloped within
the 2040 planning period. The percentage shown provides numbers of
parcels outside the Opportunity Areas (Outside OA) and those inside the
Opportunity Areas (Inside OA).
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Land Use Designation
Alternative A: Low Growth
Redevelopment Percent Density Range (DU/AC)Typical Density (DU/AC)FAROutside OA Inside OA Outside OA Inside OA Outside OA Inside OA
LDR 5%5%0 to 5 5 to 12 4 10 0.25
MDR 5%10%5 to 12 12 to 20 10 16 0.5
HDR 10%10%12 to 20 20 to 30 18 26 0.75
NC 5%5%0 to 20 10 to 20 18 18 0.5
MU 5%5%0 to 20 10 to 20 18 18 0.5
Land Use Designation
Alternative B: Medium Growth
Redevelopment Percent Density Range (DU/AC)Typical Density (DU/AC)FAROutside OA Inside OA Outside OA Inside OA Outside OA Inside OA
LDR 5%5%5 to 12 8 to 16 10 14 0.25
MDR 10%10%12 to 20 14 to 24 16 20 0.75
HDR 10%10%20 to 30 20 to 30 26 26 1
NC 10%10%0 to 20 10 to 20 18 18 0.75
MU 10%15%0 to 20 20 to 30 18 26 0.75
Land Use Designation
Alternative C: Medium-High Growth
Redevelopment Percent Density Range (DU/AC)Typical Density (DU/AC)FAROutside OA Inside OA Outside OA Inside OA Outside OA Inside OA
LDR 5%10% 5 to 12 8 to 16 10 14 0.5
MDR 10%10%12 to 20 14 to 24 16 20 0.75
HDR 15%15%20 to 30 30 to 40 26 36 1.25
NC 10%15%0 to 20 20 to 30 18 26 0.75
MU 10%20%0 to 20 30 to 40 18 26 1
Land Use Designation
Alternative D: High Growth
Redevelopment Percent Density Range (DU/AC)Typical Density (DU/AC)FAROutside OA Inside OA Outside OA Inside OA Outside OA Inside OA
LDR 10%15% 5 to 12 12 to 20 10 16 0.75
MDR 15%15%14 to 24 14 to 24 20 20 1
HDR 15%20%20 to 30 30 to 40 26 36 1.5
NC 15%15%20 to 30 20 to 30 26 26 1
MU 15%20%30 to 40 30 to 40 36 36 1.5
Density Range (DU/AC). This column states the density range for residential that was assumed for each alternative. Density is expressed as the number of dwelling units per acre (DU/AC).
Typical Density. For development, on average, maximum density/intensity is not usually obtained. For the analysis, a density that estimates the “typical” density was developed. Typical density was based on previous Town
projects that were of similar size and scope to potential development in the land use
alternatives. This is the number that is used in the analysis for residential development.
FAR. Floor Area Ratio is a measure of intensity that is used to define the total building area allowed on a site. See page 4 for further information on FAR.
Structure height varies between each of the four land use alternatives depending on the specific land use designation and FAR. The potential maximum allowed height for the five land use designations in Alternative A is two stories, Alternative B is three to four stories, Alternative C is four stories, and Alternative D is five stories. A visual example of potential developments at these height intervals is provided in the Community Character and Urban Form section on pages 34, 35, 37, and 38.
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Step 6: Residential Potential
After applying the development assumptions for each of the four land use alternatives, the potential number of new housing units and population were calculated. The number of new housing units in each alternative was calculated by multiplying the typical density by the number of acres of each parcel being analyzed. For example, if a parcel was one acre in size and the typical density was 12 DU/AC, then the total potential housing units would be 12 units.
When calculating the population, the estimated number of persons per household for Los Gatos (based on data from the California Department of Finance), which is 2.4 persons per unit, was multiplied by the number of units projected. The following is a summary of the net new housing units and population for each alternative.
Alternative A: Low Growth
Net New
Housing Units Population
681 1,634
Alternative B: Medium Growth
Net New
Housing Units Population
1,416 3,398
Alternative C:
Medium-High Growth
Net New
Housing Units Population
1,828 4,387
Alternative D: High Growth
Net New
Housing Units Population
2,701 6,482
Step 7: Pending and Approved Projects
In addition to the net new housing units and population figures (from Step 6), new housing units, population, jobs, and non-residential square footage based on pending and approved Town projects were also added to the total potential. Town staff provided the Consultants a list Town approved and pending projects earlier in 2019 to inform this process.
Calculating new population for pending and approved projects used the same process for calculating the net new population. Non-residential square footage was provided by Town staff on a project by project basis. To estimate the number of jobs for non-residential projects, the Consultants used an employee per square footage assumption based on current best practice (see below) and divided the non-residential square footage per project by the employee assumption. For example, if the assumption is 500 square feet per employee for commercial and a commercial project has 10,000 square feet of retail, the estimated number of jobs for that use would be 20 jobs. Below is a summary of the net new housing units, population, jobs, and non-residential square footage for the Town identified pending and approved projects.
Employee Per Square Foot Assumptions
Office Retail Institutional Industrial
350 500 700 1,000
Pending and Approved Town Projects
Net New
Housing Units Population Jobs Non-Residential Square Footage
475 1,140 1,280 671,768
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Step 8: Results
After calculating the net new figures from the pending and approved projects, the Consultants added them to the existing (2018) Los Gatos housing units, population, and jobs totals, as well as the net new totals for each of the four land use alternatives. These combined totals provide a snapshot of the Townwide buildout of parcels within the five land use designations selected for analysis by the GPAC. The following is a summary of the Townwide net new population, housing units, and jobs by land use alternative.
Category Existing
(2018)**Alt A*Alt B*Alt C*Alt D*
Population 30,250 33,024 34,788 35,777 37,872
Jobs 20,650 21,930 21,930 21,930 21,930
Housing Units 13,069 14,225 14,960 15,372 16,245
Notes: *Totals include the pending and approved projects**Existing data is from the American Community Survey, 2018
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Fiscal Analysis Methodology
The fiscal analysis of the land use alternatives is based on estimates derived
from the Town FY 2019-2020 General Fund budget and the analysis of how
different land uses affect Town service cost and tax revenues, as described in
the Los Gatos Today Chapter of the General Plan Background Report published
in March 2019. This section describes these calculations in more detail.
The analysis allocates major revenues such as the property tax, sales tax and
transient occupancy tax (TOT) to land uses based on estimated socioeconomic
characteristics of the land uses and the legislative tax formulas. Other revenues
and most service costs are allocated based on per capita formulas using the
existing budget data and population and employment levels in Los Gatos. Each
section below describes the major assumptions and data sources used for each
revenue and cost category.
Property Tax
Property tax is based on projected market values for future development
shown in the table to the right (Projected Assessed Values by Land Use). The
Consultants researched prices for real estate sales transactions over the past
two years in Los Gatos. During that time, there were approximately 440 sales
transactions for properties in the land use types and density ranges and included
in the General Plan alternatives.
While property owners pay a total base property tax of one percent of assessed
value, the Town receives an estimated 9.3 percent of this revenue. The
remaining property tax revenue is distributed to the County and various other
taxing agencies, most notably local school districts, in the area.
In addition to the base property tax, the Town receives property tax in lieu of
vehicle license fees directly from the state. These revenues are based on annual
increases in assessed value in each Town and are equal to nearly 21.8 percent
of base tax revenues for Los Gatos.
Projected Assessed Values by Land Use
Land Use Assessed Value
Residential Per Unit
Single Family (Density)
(4 du/ac)$2,254,000
(10 du/ac)$2,031,000
(14 du/ac)$1,660,000
(16 du/ac)$1,511,000
Multi-Family
(18 du/ac)$1,343,000
(20 du/ac)$1,048,000
(26 du/ac)$1,165,000
(36 du/ac)$910,000
BMP Units
Low Income $385,000
Moderate Income $510,000
Non-Residential Per Sq. Ft.
Commercial $1,086
Industrial $200
Office $556
Institutional $189
Source: ADE,2019, based on property transaction data for 2017-2019
reported by CoreLogic ListSource.
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Sales Tax
The Town receives 1.125 percent of taxable sales that occur within the Town limits. In the Background Report, the Consultants estimated that approximately 25 percent of total retail demand leaves Los Gatos as households and businesses shop at other retail centers in the regional market area.
Based on the projected home prices and rent levels for the housing units in the land use alternatives, the Consultants estimated household income levels and calculated the amount of taxable retail sales from each income segment shown in the table below (Estimated Household Incomes and Sales Tax Generation Rates).
Estimated Household Incomes and Sales Tax Generation Rates
Residential
Land Use
Categories
Sales Price
Homeowners Renters
Spent in Los Gatos Sales Tax per HouseholdHousehold Income Retail Sales % of Income Taxable Sales
Renter
Household
Income
Retail Sales Taxable Sales
Single Family
(4 du/ac)$2,254,000 $498,200 21.0%65.7%75.0%$580
(10 du/ac)$2,031,000 $448,900 21.0%65.7%75.0%$523
(14 du/ac)$1,660,000 $366,900 21.0%65.7%75.0%$427
(16 du/ac)$1,511,000 $334,000 21.0%65.7%75.0%$389
Multi-Family
(18 du/ac)$1,343,000 $296,800 21.0%65.7%$88,209 34.0%85.0%75.0%$241
(20 du/ac)$1,048,000 $231,600 21.0%65.7%$88,209 34.0%85.0%75.0%$226
(26 du/ac)$1,165,000 $257,500 21.0%65.7%$88,209 34.0%84.0%75.0%$230
(36 du/ac)$910,000 $201,100 21.0%65.7%$88,209 34.0%84.0%75.0%$217
BMP Low $385,000 $85,050 29.8%69.5%$85,050 34.7%84.0%75.0%$197
BMP Moderate $510,000 $112,700 28.8%69.1%$112,700 34.7%84.0%75.0%$260
Source: ADE, 2019. Homeowner incomes based on qualifying income for 30 year mortgage at 3.9% with 10% down payment and housing costs, including taxes and insurance, at 33% of income. Rents assumed to
average $2,575 per month. The sales tax per household assumes 80% renters and 20% homeowners for the multi-family units.
For non-residential projects in the land use alternatives, the sales tax generation rates are based on the analysis of existing sales tax in the Background Report. In the fiscal calculations, the sales tax attributed to retail/commercial excludes sales tax generated by Los Gatos households. This was done to avoid double counting household revenues. The remaining taxable sales from retail/commercial are generated by non-Los Gatos households, visitor spending, and business to business transactions. Office, industrial, and institutional taxable sales are point of sale transactions at those places of business.
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Other Revenues and Costs
Other revenues and the Town service costs are projected
on a per capita basis. Residents in Town generate twice
the service demand per person as do the jobs supported
by businesses in Town. This rule of thumb was developed
through a fiscal impact methodology based on the data
that nighttime residents are present at least 16 hours in
a 24-hour day while those that commute into Town for
employment only occupy 8-hour shifts. With the 2019
population in Los Gatos of 30,988 and an estimated job
base of 19,667 jobs, this results in about 74.8 percent
of Town service costs allocated to residential uses and
23.7 percent to non-residential uses. The remaining
1.5 percent are allocated to visitors based on the number
of hotel rooms in Town. These percentages and the
resulting per capita revenue and cost factors are shown in
the table on the right (Per Capita Cost and Revenue Factors
by Major Land Use).
Intergovernmental revenues, including the gas tax, tend to
be allocated based on residential population only. General
Government Costs are not allocated on a per capita basis
but are applied as an overhead charge to other costs for
each land use. General Government includes the Town
management functions, finance, human resources, Town
Clerk, Town Attorney, and other similar functions. Overall,
these services represent about 20 percent of the total
General Fund expenditures for Los Gatos.
The detailed fiscal projections for each alternative are
shown in the tables on the following pages.
Per Capita Cost and Revenue Factors by Major Land Use
Budget Category
Residential Business
Percent Allocation Per Capita Factor Percent Allocation Per Capita Factor
Revenues
Franchise Fees 76%$60.51 24%$29.66
Other taxes 76%$34.46 24%$16.89
Intergovernmental 100%$31.57 0%$0.00
Town Services 76%$106.54 24%$52.22
Fines and Forfeitures 75%$11.68 24%$5.84
Other Revenues 76%$8.77 24%$4.30
Debt Service Reimbursements 76%$0.00 24%$0.00
Transfers in 76%$13.26 24%$6.50
Expenditures
Community Development 76%$141.78 24%$69.50
Library 76%$72.24 24%$35.41
Parks and Public Works 75%$60.63 24%$30.31
Debt Payments 76%$0.00 24%$0.00
Transfers Out 76%$190.83 24%$93.54
Franchise Fees 76%$60.51 24%$29.66
Other taxes 76%$34.46 24%$16.89
Source: ADE, 2019.
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Alternative A
Total Single Family Multi-Family Commercial Industrial Office Institutional
REVENUES
Property Tax $1,858,702 $599,216 $772,109 $391,559 $29,284 $60,067 $6,467
Property Tax in lieu of VLF $497,736 $160,462 $206,761 $104,854 $7,842 $16,085 $1,732
Sales Tax $720,812 $169,312 $184,914 $290,125 $11,293 $64,645 $524
Franchise Fees $207,580 $56,645 $111,101 $23,001 $6,671 $9,852 $310
Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $0
Other taxes $118,206 $32,256 $63,266 $13,098 $3,799 $5,610 $176
Licenses and Permits $285,597 $77,934 $152,858 $31,646 $9,179 $13,555 $426
Intergovernmental $87,501 $29,548 $57,954 $0 $0 $0 $0
Town Services $365,454 $99,726 $195,599 $40,494 $11,745 $17,345 $545
Fines and Forfeitures $40,213 $10,931 $21,440 $4,528 $1,313 $1,939 $61
Interest Earnings and Rents $62,721 $18,513 $26,613 $13,372 $1,231 $2,839 $153
Other Revenues $30,072 $8,206 $16,095 $3,332 $966 $1,427 $45
Transfers in $45,470 $12,408 $24,337 $5,038 $1,461 $2,158 $68
TOTAL REVENUES $4,320,066 $1,275,158 $1,833,048 $921,048 $84,785 $195,521 $10,507
EXPENDITURES
General Government $629,157 $167,134 $327,811 $90,283 $17,380 $25,712 $836
Community Development $505,602 $132,714 $260,301 $80,834 $12,504 $18,523 $726
Police Dept.$1,463,870 $382,651 $750,519 $237,738 $36,776 $54,478 $1,707
Library $247,812 $67,623 $132,634 $27,459 $7,964 $11,761 $370
Parks and Public Works $208,775 $56,753 $111,313 $23,507 $6,818 $10,068 $316
Transfers Out $654,620 $178,634 $350,367 $72,536 $21,039 $31,069 $977
TOTAL EXPENDITURES $3,709,836 $985,509 $1,932,945 $532,357 $102,482 $151,612 $4,932
TOTAL BUDGET NET (DEFICIT)/ SURPLUS $610,230 $289,649 ($99,897)$388,691 ($17,697)$43,910 $5,575
Detailed Fiscal Projections: Alternative A
Note: figures may not exactly add due to rounding.
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Alternative B
Total Single Family Multi-Family Commercial Industrial Office Institutional
REVENUES
Property Tax $2,478,760 $484,371 $1,507,012 $391,559 $29,284 $60,067 $6,467
Property Tax in lieu of VLF $663,780 $129,708 $403,558 $104,854 $7,842 $16,085 $1,732
Sales Tax $867,758 $141,992 $359,178 $290,125 $11,293 $64,645 $524
Franchise Fees $297,814 $42,335 $215,646 $23,001 $6,671 $9,852 $310
Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $0
Other taxes $169,590 $24,107 $122,799 $13,098 $3,799 $5,610 $176
Licenses and Permits $409,745 $58,246 $296,694 $31,646 $9,179 $13,555 $426
Intergovernmental $134,570 $22,083 $112,487 $0 $0 $0 $0
Town Services $524,315 $74,532 $379,654 $40,494 $11,745 $17,345 $545
Fines and Forfeitures $57,626 $8,170 $41,615 $4,528 $1,313 $1,939 $61
Interest Earnings and Rents $84,157 $14,746 $51,816 $13,372 $1,231 $2,839 $153
Other Revenues $43,145 $6,133 $31,241 $3,332 $966 $1,427 $45
Transfers in $65,236 $9,273 $47,237 $5,038 $1,461 $2,158 $68
TOTAL REVENUES $5,796,495 $1,015,697 $3,568,937 $921,048 $84,785 $195,521 $10,507
EXPENDITURES
General Government $895,398 $124,911 $636,275 $90,283 $17,380 $25,712 $836
Community Development $717,013 $99,187 $505,239 $80,834 $12,504 $18,523 $726
Police Dept.$2,073,425 $285,982 $1,456,743 $237,738 $36,776 $54,478 $1,707
Library $355,534 $50,540 $257,440 $27,459 $7,964 $11,761 $370
Parks and Public Works $299,181 $42,415 $216,056 $23,507 $6,818 $10,068 $316
Transfers Out $939,181 $133,506 $680,055 $72,536 $21,039 $31,069 $977
TOTAL EXPENDITURES $5,279,731 $736,541 $3,751,809 $532,357 $102,482 $151,612 $4,932
TOTAL BUDGET NET (DEFICIT)/ SURPLUS $516,764 $279,157 ($182,872)$388,691 ($17,697)$43,910 $5,575
Detailed Fiscal Projections: Alternative B
Note: figures may not exactly add due to rounding.
Town of Los Gatos General Plan 2040 | Land Use Alternatives Report
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Alternative C
Total Single Family Multi-Family Commercial Industrial Office Institutional
REVENUES
Property Tax $2,741,725 $558,345 $1,696,003 $391,559 $29,284 $60,067 $6,467
Property Tax in lieu of VLF $734,198 $149,517 $454,167 $104,854 $7,842 $16,085 $1,732
Sales Tax $963,242 $162,463 $434,192 $290,125 $11,293 $64,645 $524
Franchise Fees $354,403 $48,013 $266,556 $23,001 $6,671 $9,852 $310
Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $0
Other taxes $201,814 $27,341 $151,790 $13,098 $3,799 $5,610 $176
Licenses and Permits $487,603 $66,059 $366,739 $31,646 $9,179 $13,555 $426
Intergovernmental $164,088 $25,045 $139,043 $0 $0 $0 $0
Town Services $623,943 $84,529 $469,284 $40,494 $11,745 $17,345 $545
Fines and Forfeitures $68,546 $9,266 $51,440 $4,528 $1,313 $1,939 $61
Interest Earnings and Rents $95,298 $16,914 $60,789 $13,372 $1,231 $2,839 $153
Other Revenues $51,343 $6,956 $38,616 $3,332 $966 $1,427 $45
Transfers in $77,632 $10,517 $58,389 $5,038 $1,461 $2,158 $68
TOTAL REVENUES $6,563,834 $1,164,965 $4,187,009 $921,048 $87,785 $195,521 $10,507
EXPENDITURES
General Government $1,062,367 $141,666 $786,490 $90,283 $17,380 $25,712 $836
Community Development $849,596 $112,491 $624,518 $80,834 $12,504 $18,523 $726
Police Dept.$2,455,699 $324,342 $1,800,658 $237,738 $36,776 $54,478 $1,707
Library $423,091 $57,319 $318,218 $27,459 $7,964 $11,761 $370
Parks and Public Works $355,878 $48,105 $267,064 $23,507 $6,818 $10,068 $316
Transfers Out $1,117,639 $151,413 $840,606 $72,536 $21,039 $31,069 $977
TOTAL EXPENDITURES $6,264,270 $835,336 $4,637,553 $532,357 $102,482 $151,612 $4,932
TOTAL BUDGET NET (DEFICIT)/ SURPLUS $299,565 $329,629 ($450,544)$388,691 ($17,697)$43,910 $5,575
Detailed Fiscal Projections: Alternative C
Note: figures may not exactly add due to rounding.
December 2019
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Alternative D
Total Single Family Multi-Family Commercial Industrial Office Institutional
REVENUES
Property Tax $3,419,046 $744,996 $2,186,673 $391,559 $29,284 $60,067 $6,467
Property Tax in lieu of VLF $915,576 $199,500 $585,563 $104,854 $7,842 $16,085 $1,732
Sales Tax $1,178,463 $213,283 $598,593 $290,125 $11,293 $64,645 $524
Franchise Fees $477,885 $75,883 $362,169 $23,001 $6,671 $9,852 $310
Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $0
Other taxes $272,131 $43,211 $206,236 $13,098 $3,799 $5,610 $176
Licenses and Permits $657,495 $104,403 $498,287 $31,646 $9,179 $13,555 $426
Intergovernmental $228,500 $39,583 $188,917 $0 $0 $0 $0
Town Services $841,339 $133,595 $637,614 $40,494 $11,745 $17,345 $545
Fines and Forfeitures $92,376 $14,644 $69,891 $4,528 $1,313 $1,939 $61
Interest Earnings and Rents $121,642 $23,534 $80,524 $13,372 $1,231 $2,839 $153
Other Revenues $69,232 $10,993 $52,468 $3,332 $966 $1,427 $45
Transfers in $104,680 $16,622 $79,333 $5,038 $1,461 $2,158 $68
TOTAL REVENUES $8,378,365 $1,620,237 $5,546,267 $921,048 $84,785 $195,521 $10,507
EXPENDITURES
General Government $1,426,709 $223,897 $1,068,600 $90,283 $17,380 $25,712 $836
Community Development $1,138,904 $177,787 $848,529 $80,834 $12,504 $18,523 $726
Police Dept.$3,289,855 $512,610 $2,446,546 $237,738 $36,776 $54,478 $1,707
Library $570,505 $90,590 $432,361 $27,459 $7,964 $11,761 $370
Parks and Public Works $479,596 $76,028 $362,859 $23,507 $6,818 $10,068 $316
Transfers Out $1,507,050 $239,303 $1,142,128 $72,536 $21,039 $31,069 $977
TOTAL EXPENDITURES $8,412,619 $1,320,214 $6,301,023 $532,357 $102,482 $151,612 $4,932
TOTAL BUDGET NET (DEFICIT)/ SURPLUS ($34,253)$300,023 ($754,755)$388,691 ($17,697)$43,910 $5,575
Detailed Fiscal Projections: Alternative D
Note: figures may not exactly add due to rounding.
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