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Staff Report.Measure G PREPARED BY: Gitta Ungvari Interim Finance Director Reviewed by: Town Manager, Town Attorney, and Assistant Town Manager 110 E. Main Street Los Gatos, CA 95030 ● (408)354-6832 www.losgatosca.gov TOWN OF LOS GATOS FINANCE COMMISSION REPORT MEETING DATE: 10/18/2022 ITEM NO: 8 DATE: October 11, 2022 TO: Mayor and Town Council FROM: Laurel Prevetti, Town Manager SUBJECT: Receive Independent Accountants’ Report on Agreed-Upon Procedures on Measure G Revenues and Expenditures for the Period March 1, 2019 to June 30, 2021 RECOMMENDATION: Staff recommends that Town Council receive the Independent Accountants’ Report on Agreed- Upon Procedures (AUP) on Measure G Revenues and Expenditures for the period March 1, 2019 to June 30, 2021. BACKGROUND: On June 19, 2018, the Los Gatos Town Council adopted Ordinance No. 2274 establishing a General Transaction and Use Tax (“Ordinance 2274”) for a period of twenty years and put forth the required ballot measure for voter consideration. On November 6, 2018, the voters of the Town approved the 1/8 Sales Tax dedicated to Los Gatos (Measure G). Among other items, Ordinance 2274 and Measure G required Citizens Oversight to ensure funds are spent according to the Measure’s stated intent. On November 3, 2020, voters of Los Gatos approved the Measure A ballot initiative establishing a new Finance Commission and disbanding both the Finance Committee and Sales Tax Oversight Committee. Among other responsibilities, the Finance Commission is charged with: (7) Issue an annual public report of the expenditures and appropriations of sales tax revenues approved by the Town Council during each fiscal year. PAGE 2 OF 2 SUBJECT: Receive Measure G AUP Report DATE: October 11, 2022 DISCUSSION: On September 16, 2022, Badawi & Associates finished the review process and provided the Independent Accountants’ Report on Agreed-Upon Procedures on Measure G Revenues and Expenditures for the Period March 1, 2019 to June 30, 2021 as presented in Attachment 1 of this staff report. During this period, there were ten expenditures that utilized Measure G funds consistent with the Town Council’s adopted FY 2019/20 and FY 2020/21 Budgets: “State Admin Fees Withheld” is the administration fee imposed by the State Department of Tax Fee Administration to Los Gatos that is deducted from collected Measure G sales tax. Badawi & Associates found that the expenditures were consistent with the voter approved Measure G. The Finance Commission received this report on October 10, 2022 and had no comments. CONCLUSION AND NEXT STEPS: Staff recommends that the Town Council to receive the Independent Accountants’ Report. During the budget process, the Council approves the expenditures and appropriations of the sales tax revenues with consideration of the Finance Commission’s recommendation(s). Attachment: 1. Independent Accountants’ Report on Agreed-Upon Procedures for Measure G Revenues and Expenditures For the period March 1, 2019 to June 30, 2021. FY 2019/20 State Admin Fees Withheld April - June 2019 9,330$ FY 2019/20 State Admin Fees Withheld July -Sept 2019 9,330 FY 2019/20 State Admin Fees Withheld Oct - Dec 2019 9,330 FY 2019/20 State Admin Fees Withheld Jan - Mar 2020 5,060 FY 2020/21 State Admin Fees Withheld April - June 2020 10,310 FY 2020/21 State Admin Fees Withheld July -Sept 2020 10,310 FY 2020/21 State Admin Fees Withheld Oct - Dec 2020 10,310 FY 2020/21 State Admin Fees Withheld Jan - Mar 2021 7,440 FY 2020/21 State Admin Fees Withheld April - June 2021 12,670 Total Collection Fees 84,090 FY 2020/21 50% to Police Safety 549,328 Total Expenditures 633,418