Attachment 2 - Resolution Approving Commitments of Fund Balance Under GASB 541 of 5
Resolution 2023- June 6, 2023
RESOLUTION 2023- 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 $1,380,00 as of June 30, 2023 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 2022/23; and
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Resolution 2023- June 6, 2023
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 2022/23; 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, there is anticipate an excess balance of $300,000 as of June 30, 2023 in
the assigned OPEB/Pension Reserve, that will confirmed at the close of FY 2022/23 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, 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, 2023 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 income
in the financial statements in accordance with the requirements of GASB 31 in the amount of $0,
actual reserve balance will be established at the close of FY 2022/23; 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
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Resolution 2023- June 6, 2023
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 residual balance of $590,581 that was set aside for operating
purposes in FY 2020/21 and/or FY 2021/22 should be used for operating expenses in FY 2023/24;
and
WHEREAS, the assigned Measure G Residual – Operating Reserve should be
reclassified as committed Reserve; and
WHEREAS, with the adoption of the Fiscal Year 2023/24 Budget, an assigned
Council Priorities – Economic Recovery Reserve has been established to track General Fund
revenues freed up from recognizing all ARPA “replacement” revenues to the General Fund for
essential government services, for economic recovery and business support, enhanced senior
services, capital program augmentations, and other one-time uses; and
WHEREAS, the assigned Council Priorities – Economic Recovery Reserve has an
estimated balance of $1,645,281 at June 30, 2023, with the actual reserve balance being
determined at the close of FY 2022/23; and
WHEREAS, with the adoption of the Fiscal Year 2023/24 Budget, an assigned
Education Realignment Augmentation Fund (ERAF) Risk Reserve has been established, reserving
the 30% of the anticipated ERAF proceeds from FY 2022/23 until a lawsuit between the State and
the School Districts concludes; and
WHEREAS, an excess balance of $689,608 exists as of June 30, 2023 in the assigned
ERAF Risk Reserve, with the actual amount will be determined at the close of FY 2022/23; and
WHEREAS, the $1,615,000 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 $410,000 as of June 30, 2023 in the
assigned Open Space Reserve; and
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Resolution 2023- June 6, 2023
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES
HEREBY RESOLVE that the following estimated Pension, Budget Stabilization, Catastrophic,
Pension/OPEB, Capital/Special Projects, Compensated Absences; Measure G District Sales Tax,
Surplus Property Revenue, Market Fluctuations, Sustainability, Open Space, and ARPA Reserves
as of June 30, 2023 and as of June 30, 2024 as restricted, assigned, unassigned or formally
committed as follows:
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Los Gatos held on the 6th day of June 2023 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
Actual General Fund
Reserves
June 30, 2022
FY 2022/23 Budget, GF
Reserve Policy,
and this
Resolution
Approved
Increase
FY 2022/23 Budget, GF
Reserve
Policy, and
this
Resolution
Approved
(Decrease)
EstimatedGeneral Fund
Reserves
June 30, 2023
FY 2023/24 Budget
Resolution
Approved
Increase
FY 2023/24 Budget
Resolution
Approved
(Decrease)
EstimatedGeneral Fund
Reserves
June 30, 2024
Restricted Fund Balances
Pension 690,000$ 690,000$ -$ 1,380,000$ 390,000$ -$ 1,770,000$
Committed Fund Balances -
Budget Stabilization 5,991,566 138,208$ - 6,129,774 - - 6,129,774
Catastrophic 5,991,566 138,209 - 6,129,775 - - 6,129,775
Pension/OPEB 300,000 300,000 (300,000) 300,000 - - 300,000
Measure G District Sale Tax - Operating 590,581 590,581 - - 590,581
Assigned Fund Balances - -
Capital/Special Projects 11,071,231 1,220,811 (4,271,698) 8,020,344 88,423 (1,615,000) 6,405,344
Compensated Absences 1,519,147 - - 1,519,147 - 1,519,147
Open Space 410,000 - - 410,000 - - 410,000
Sustainability 140,553 - - 140,553 - - 140,553
Market Fluctuations - - - - - - -
Measure G District Sale Tax - Operating 590,581 - (590,581) - - - -
Carryover Encumbrances 33,145 - - 33,145 - - 33,145
Council Priorities - Economic Recovery - - 1,645,281 1,645,281 - (779,000) 866,281
ERAF Risk Reserve - 689,608 - 689,608 660,900 - 1,350,508
Rehab Loan Reserve (Nonspendable)159,000 - - 159,000 - - 159,000
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Resolution 2023- June 6, 2023
DATE: __________________
ATTEST:
TOWN CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
DATE: __________________