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Staff Report.Measure G PREPARED BY: Gitta Ungvari Finance Director Reviewed by: Town Manager and Town Attorney 110 E. Main Street Los Gatos, CA 95030 ● (408)354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 3/21/2023 ITEM NO: 7 DATE: March 14, 2023 TO: Mayor and Town Council FROM: Laurel Prevetti, Town Manager SUBJECT: Receive the Independent Accountants’ Report on Agreed-Upon Procedures on Measure G Revenues and Expenditures for the Period July 1, 2021 to June 30, 2022 RECOMMENDATION: Staff recommends that the Town Council receive the Independent Accountants’ Report on Agreed-Upon Procedures (AUP) on Measure G Revenues and Expenditures for the period July 1, 2021 to June 30, 2022. 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. On March 3, 2023, Chavan & Associates, LLP finished the review process and provided the Independent Accountants’ Report on Agreed-Upon Procedures on Measure G Revenues and PAGE 2 OF 2 SUBJECT: Receive Measure G AUP Report DATE: March 14, 2023 DISCUSSION: Expenditures for the Period July 1, 2021 to June 30, 2022 (Attachment 1). During this period, there were collection fees, and police safety and capital transfers that utilized Measure G funds consistent with the Town Council’s adopted FY 21/22 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. Chavan & Associates, LLP found that the expenditures were consistent with the voter approved Measure G. The Finance Commission received this report on March 13, 2023. The Finance Commission recommended the Town Council receive this report by a three to one vote. Commissioner Koen voted no, and Commissioner Howard was not present. 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 July 1, 2021 to June 30, 2022. State Admin Fees Withheld July - Sept 2021 12,670$ State Admin Fees Withheld Oct - Dec 2021 12,670 State Admin Fees Withheld Jan - March 2022 9,810 State Admin Fees Withheld April - June 2022 12,630 Total Collection Fees 47,780$ 50% to Police Safety 629,148 Total Expenditures 676,928$ Transfer to Capital Improvement Program (50% of prior years and current year collections)1,769,057 Total Tranfers and Expenditures 2,445,985$ FY 2021/22 Expenditures and Transfers