12 Attachment 2 - Fund Balance Resolution Establishing June 30, 2023 Fund Balances
1 of 5
Draft Resolution Date
ATTACHMENT 2
DRAFT 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 Nonspendable Reserve that is not readily available for
expenditure as it represents the outstanding balance of long term notes receivable; and
WHEREAS, there exists a balance of $159,000 as of June 30, 2023 in the Nonspendable
Reserve; and
WHEREAS, there exists a balance of $44,338 as of June 30, 2023 Land held for resale
for Below Market Housing Program property in the Restricted Reserve; and
WHEREAS, there exists a balance of $1,400,163 as of June 30, 2023 in the Restricted
Pension Trust 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 fund balances and outlines policies and procedures for use and restoration of
these balances; and
2 of 5
Draft Resolution Date
ATTACHMENT 2
WHEREAS, the Budget Stabilization and Catastrophic Reserve should be maintained at
the required minimum 12.5% of Fiscal Year (FY) 2023/24 general fund budgeted operating
expenditures of $6,129,774 as specified in the Town Council General Fund Reserve Policy. This
would increase both Budget Stabilization and Catastrophic Reserves from $6,129,775 by $138,208
from available Capital/Special Projects Reserve; and
WHEREAS, in June 2016, the Town Council established the committed Pension/ Other
Post-Employment Benefits (OPEB) Reserve to provide additional funding toward pension and 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, per Town Council General Fund Reserve Policy, $300,000 will be placed to
the CalPERS/OPEB Reserve from available year-end savings; and
WHEREAS, there exists a balance of $300,000 as of June 30, 2023 in the committed
CalPERS/OPEB Reserve; and
WHEREAS, there exists a committed 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
WHEREAS, the Town Council has determined the use of Measure G accumulated and
future proceeds to be allocated 50% for operating expenditures and 50% for capital purposes; and
WHEREAS, 50% of the current Measure G proceeds dedicated for Capital Purposes was
receipted in the General Fund Appropriated Reserve for capital purposes; and
WHEREAS, there is anticipated to be an excess balance of $590,581 as of June 30, 2023
and should be used for operating expenses in FY 2023/24; 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
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
3 of 5
Draft Resolution Date
ATTACHMENT 2
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 represents 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; and
WHEREAS, there is no current balance as of June 30, 2023 in the assigned Market
Fluctuation Reserve reflecting less than $10,000 investment earnings as of June 30, 2023; and
WHEREAS, there exists an assigned Carryover Encumbrances Reserve for material and
services on purchase orders and contract which are unperformed in the amount of $37,698; and
WHEREAS, with the adoption of the Fiscal Year 2023/24 Budget, the Council
established an assigned Council Priorities – Economic Recovery Reserve to track General Fund
revenues freed up from recognizing all American Rescue Plan Act (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, there exists an excess balance of $1,556,614 as of June 30, 2023 in the
assigned Council Priorities – Economic Recovery Reserve; and
WHEREAS, the Council has established an assigned Educational Revenue
Augmentation Fund (ERAF) Risk Reserve, 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, there exists an excess balance of $689,608 as of June 30, 2023 in the
assigned ERAF Risk Reserve; 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 of $1,580,623; and
WHEREAS, there exists an assigned Capital/Special Projects Reserve to fund Council
priorities, and key infrastructure and capital/special projects as identified in the Town’s five-year
Capital Improvement Plan; and
4 of 5
Draft Resolution Date
ATTACHMENT 2
WHEREAS, the remainder of the available year-end savings will be placed in the
Capital/Special Project Reserve according to the Town Council Reserve Policy; and
WHEREAS, there exists an assigned Capital/Special Project Reserve in the amount of
$10,359,577; and
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY
RESOLVE that the following fund balances as of June 30, 2023 as restricted, assigned, or formally
committed as follows:
Other
Nonmajor Total
Appropriated Governmental Governmental
General Fund Reserves Funds Funds
Fund Balance
Nonspendable 159,000$ -$ -$ 159,000$
Loans Receivable - 5,690 - 5,690
Leases Receivable - - 50,287 50,287
Restricted for:
Library - - 530,174 530,174
Capital Projects - - 8,328,572 8,328,572
Land Held for Resale 44,338 - - 44,338
Repairs and Maintenance - - 176,966 176,966
Pension 1,400,163 - - 1,400,163
VTA - 494,826 - 494,826
Committed to:
Budget Stabilization 6,129,774 - - 6,129,774
Catastrophic 6,129,775 - - 6,129,775
Pension/OPEB 300,000 - - 300,000
Measure G 2018 District Sales Tax 590,581 1,769,057 - 2,359,638
Special Revenue Fund - - 821,200 821,200
Assigned to:
Open Space 410,000 152,000 - 562,000
Parking - 100,000 - 100,000
Sustainability 140,553 - - 140,553
Capital/Special Projects 10,359,577 19,178,452 - 29,538,029
Carryover Encumbrances 37,698 - - 37,698
Comcast PEG - 50,000 - 50,000
ERAF Risk 689,608 - - 689,608
Economic Recovery 1,556,614 - - 1,556,614
Compensated Absences 1,580,623 - - 1,580,623
Total Fund Balances 29,528,304$ 21,750,025$ 9,907,199$ 61,185,528$
5 of 5
Draft Resolution Date
ATTACHMENT 2
PASSED AND ADOPTED at a regular meeting of the Town Council held on the ____ day
of __________, 2023, by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
_______________________________
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
___________________________________
TOWN CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA