Presentation FY 2022-23 MID YEAR (2)
FY 2022/23 MID-YEAR BUDGET REVIEW
Town Council Meeting
2/21/2023
Good Evening Madam Mayor and Council Members
Gitta Ungvari, Administrative Analyst, Finance Department
It is my pleasure to present to you this evening with the Finance Director the FY 2015/16 Mid-Year Budget performance report.
1
Purpose of FY 2022/23 Mid-Year Report
Fiscal Status
Strong Fiscal Internal Controls in Place
Fiscally Prudent
Fiscally Sound
Purpose & Fiscal status
The purpose of the mid-year update is to report to the Council on how the Town actual revenues and expenditures are trending against its adopted budget. In addition, this is the time
when staff request adjustments to update the adopted budget revenue and expenditure items that were not forecasted or were unknown at the time of developing the FY 2015/16 proposed
budget.
We are happy to report that as illustrated in the Town’s recently completed independent financial audit,
the Town has strong fiscal internal controls in place;
the Town uses prudent financial budgeting;
and the Town is fiscally sound.
2
Increases
Business License Tax
Property Tax and Motor Vehicle In Lieu Fee
Transient Occupancy Tax
Franchise Fees
Donation
Grant
Pass Through Developer Revenues
Decreases
Sales Tax
$2.8 MILLION GENERAL FUND REVENUE ADJUSTMENTS
REVENUE Adjustments
For FY 2015/16 staff request $1.7 million General Fund Revenue Adjustments. Current forecast indicates substantial increase in economically sensitive revenues reflecting the recovering
local economy, however Sales Tax revenues are declining due to the continued impact from Netflix business model change as well as declining gasoline prices. Significant items are listed
on the slide , details of all the requested adjustments can be found on page 12-16 of the Budget Performance Report.
$1.1 million increase in Property Tax reflecting very strong real estate market, At the time of the FY 2015/16 budget development predicted a 3% property tax growth, the recent County
estimates are closer to 8% growth
$300,000 increase in Transient Occupancy Tax reflecting increased business travel and tourism activities.
$91,000 increase in Licenses and permits for increased planning and encroachment permit activities,
and $50,000 increase in Business License Tax reflecting a recovering local economy.
The State has also released funding that was on hold from prior years for State Mandated Cost Reimbursements. These reimbursements are now being distributed to the jurisdiction with
interest. For that reason staff requests $50,000 increase to this revenue source
However, Sales Tax estimates are lower because the recent forecast from the Town’s independent sales tax advisors, MuniServices indicates a declining sales tax revenue for this fiscal
year. This is a continued impact from the Netflix change in business model, as well as decreased gasoline prices.
3
Increases
Town Share of Retiree Medical
Additional Payment to IRS Pension Trust
PG&E Loan Principal Payment
Pass Through Developer Expenditures
Landscape Maintenance
Decreases
0.75FTE
Defund One-Time Urban Forest Manager
Add 0.25 FTE Associate Planner
Net $1.4 Million General Fund Revenue Increases Above Expenditure Increases
$1.4M GENERAL FUND EXPENDITURE ADJUSTMENTS
EXPENDITURE ADJUSTMENTS
For FY 2015/16 st aff requests $700,000 General Fund Expenditure Adjustments. Significant items are listed on the slide , details of all the requested adjustments can be found on page
12-16 of the Budget Performance Report.
If all the requested revenue and expenditure adjustments are approved, staff anticipates $1 million General Fund surplus at the end of the current fiscal year. Now I am turning over
the presentation to Finance Director, Steve Conway.
Regarding expenditures, some of the significant items include the following:
$55,000 increase for Recruitment Services and Medical Examinations: Due to increased Town-wide hiring associated with vacancies staff recommends $55,000 budget increase for additional
recruitment services and required medical examination cost
$49,000 increase for Pay Ahead Software Licenses: The Town has received a 2% discount on the FY 2016/17 planning and permit management software (Accela) license and maintenance fees,
if the fees are paid before the next fiscal year. Staff recommends $49,000 budget adjustment to use the discount.
$45,000 increase for Cut-Through Traffic Expenses: At the time of cut-though traffic discussion staff noted to Council that adjustments would be brought forth during the mid-year
update process. Staff recommends $45.000 budget increase for consultant cost, overtime cost, equipment rental and equipment purchases related to the cut-through traffic management.
In addition to the cross-departmental effort to manage cut-through traffic the Town contracted for a consultant to conduct a Highway Cut-Through Traffic survey .
$40,000 increase for Downtown Waste and Collection Recycling Services: Staff recommends $40,000 budget increase for additional recycle bins purchases and weekend and Wednesday Downtown
Recycling Services.
weekend collection services, weekly cleaning of the cans, and an additional recycling pick up on Wednesdays in the Downtown area.
$40,000 increase for West Valley Clean Water Program: The West Valley Clean Water Program is a cooperative effort between Los Gatos and the cities of Campbell, Monte Sereno, and Saratoga.
The program seeks to reduce the discharge of pollutants into creeks and waterways. The program is critical in tracking and meeting regulatory requirements that are passed down to local
jurisdictions. Continued increases in unfunded mandates , including permit requirements, monitoring, and outreach, have in turn led to increased costs associated with the program.
$35.000 increase for Mandated Well Testing: Before 1990, an underground oil tank leaked into the surrounding soil. The Town began cleanup operations but did not complete the ongoing
monitoring element. County has required that this project be closed out which mandates more testing and samples to be provided to the County. Staff requests $35,000 increase for Mandated
Well Testing.
$30,000 increase for Labor Services :Due to the expiration of all three bargaining unit contracts, staff recommends a $30,000 budget adjustment for additional legal and negotiation services.
$26,000 increase for Street Signal Maintenance: Staff recommends an adjustment of $26,430 for additional contractual obligations for Street and Signal Maintenance.
Stage: Staff identified that the stage owned by the Town, used for the Music in the Park and other events has to be replaced. Staff recommends $15,000 budget increase to cover the cost.
$10,000 increase for Town-wide Mandatory Training: Staff requests $10,000 budget increase to fulfill Town-wide mandatory training requirements.
$8,000 increase for Deputy Town Attorney from 0.5 FTE to 0.625 FTE: To better meet Town Attorney department workload staff requests to raise the Deputy Town Attorney hours from 20
hours /week to 25 hours/week. Staff requests $8,000 budget increase to cover the additional cost for the remainder of the FY 2015/16.
4
Direction in Order of Authorized Sources
direction in order
5
RECOMMENDATIONS
Receive FY 2022/23 Mid-Year Budget Review Including FY 2022/23 Year-End Projections
Consider Authorizing Recommended Budget Adjustment as Outlined in the Mid-Year Budget Report
Provide Direction of the Order of Authorized Funding Sources, If Needed
6