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11 Staff Report.Proposed Budget with attachments PREPARED BY: Gitta Ungvari 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 COUNCIL AGENDA REPORT MEETING DATE: 05/21/2024 DATE: May 13, 2024 TO: Mayor and Town Council FROM: Laurel Prevetti, Town Manager SUBJECT: Conduct a Public Hearing on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year (FY) 2024/25 and on the Proposed Capital Improvement Program for FY 2024/25 – FY 2028/29 a. Consider the Recommendations of the Finance Commission; b. Provide Direction on the Proposed Operating Budget; c. Provide Direction on the Proposed Capital Budget; d. Approve the FY 2024/25 List of Potential Donations Consistent with the Town’s Donation Policy and e. Review and Approve the Town Investment Policy RECOMMENDATION: Staff recommends the Town Council conduct a public hearing regarding the Los Gatos Proposed Operating and Capital Budgets for Fiscal Year2024/25 and the Town of Los Gatos Proposed Capital Improvement Program for Fiscal Years 2024/25- 2028/29, and take the following actions: a. Consider the recommendations of the Finance Commission (Attachment 4); b. Provide direction on the Proposed Operating Budget; c. Provide direction on the Proposed Capital Budget; d. Approve the FY 2024/25 List of Potential Donations consistent with the Town’s Donation Policy (Attachment 8); and e. Review and approve the Town Investment Policy with no changes (Attachment 9) BACKGROUND: On April 22, 2024, the Proposed FY 2024/25 Operating and Capital Budgets were posted to the Town’s website and the links were provided to the Town Council, Finance Commission, and the PAGE 2 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 BACKGROUND (continued): public. Hard copies of the documents were provided to Council members and Commissioners who requested them. Per Measure A, the Finance Commission received the Proposed Budgets 21 business days before May 21, 2024, which is the first meeting at which the Proposed Budgets are scheduled to be considered by the Town Council. The Proposed Operating and Capital Budget for FY 2024/25 (Attachment 1) is a comprehensive financial plan that reflects the values of the Town, Council priorities, and community expectations for high levels of municipal services provided by the Town of Los Gatos. The Proposed FY 2024/25 – 2028/29 Capital Improvement Program (Attachment 2) is a five-year capital improvement plan which identifies projects to construct and maintain the Town’s infrastructure. The Transmittal Letters contained in both the Proposed Operating and Capital Budgets provide an overview of the recommendations for next fiscal year, including the fiscal outlook, key budget assumptions, and other information. Both budget documents were prepared with contributions from all Town Departments. The Finance Department took the lead in developing revenue and expenditure forecasts, ensuring that the most current information was used in the preparation of the proposed budgets. In addition, the Department of Parks and Public Works identified high priority projects for inclusion in the Capital Budget based on input from the Town Council; familiarity with the Town’s facilities, equipment, and infrastructure; and the Department’s work with various Town Commissions on these assets. In addition to the Proposed Budget documents, the Town Council is being asked to consider corrections and clarification based on additional review and analysis since publication (Attachment 3) as well as the Finance Commission recommendations contained in Attachment 4. To help the Council work through the material, staff recommends that the Council discuss and make individual motions as appropriate on the following items as presented in this staff report: • Finance Commission’s recommendations; • Any other direction on the Proposed FY 2024/25 Operating Budget; • Any other direction on the Proposed FY 2024/25– 2028/29 Capital Budget; • Consideration the Proposed Donation List; and • Consideration of the Investment Policy. Council direction regarding the Proposed Operating and/or Capital Budgets provided at the May 21, 2024` budget hearing will be incorporated into an implementing resolution to be presented for final Council approval on June 4, 2024. PAGE 3 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 DISCUSSION: Overview of Proposed Operating Budget The FY 2024/25 General Fund Budget of $56.9 million maintains existing services with modest staffing adjustments and no new programs. This Budget also provides for limited, continued strategic investments toward important wildfire vegetation management as Federal grant funding allows and other necessary infrastructure improvements to protect our community’s health and safety. The Proposed FY 2024/25 Budget endeavors to maintain essential public services while controlling operational costs. The budget is “status quo” in that no additional services are proposed to be added or removed. Staff across the Town analyzed the details of all line items and provided justification for the costs with the same inflationary pressures being felt by private businesses and residents. Even with areas of continued uncertainty, this Budget positions the organization well for continued excellence in service delivery to the community. In the evet revenue growth rate does not strengthen, the current projected deficits may need to be addressed through service delivery reductions or other actions. If this occurs, the Council will need continued input from the community to identify acceptable organizational changes and service levels. Summary of the Five-Year Forecast The Five-Year Forecast takes a forward look at the Town's General Fund revenues and expenditures and is updated regularly. Its purpose is to identify financial trends, potential shortfalls, and other issues so the Town can proactively address them and budget accordingly. It does so by projecting out into the future the fiscal results of continuing the Town's current service levels and policies. This process helps to provide a snapshot of what the future may look like as a result of the decisions made to date. Revenue forecasts for the current Budget have been developed in close consultation with the Santa Clara County Assessor, Town Sales Tax consultant MuniServices, and a review of national and regional hospitality research. The more realistic revenue growth assumptions were adopted by the Council in February 2024 (see pages A-21 and A-22 in the Proposed Operating Budget, Attachment 1). In addition to revenue projections, the Proposed Budget also forecasts anticipated increases in the Town’s pension obligation payments and salaries as well as other expenditures (pages A-23 and A-24 in the Proposed Operating Budget Attachment 1). As a service delivery enterprise, the cost of salaries and benefits are a significant portion of the budget. The delivery of Town PAGE 4 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 DISCUSSION (continued): services is highly dependent on recruiting and retaining talent which comprises 64.7% of budgeted General Fund expenditures for FY 2024/25. Although the Town is fortunate to have a diverse economy, the loss of previously projected future growth in revenue, such as Sales Tax, in conjunction with increasing expenses continue to illustrate persistent deficits in future years. The deficits are on the order of approximately $1.1 million to $1.8 million per year including the 4.6% salary saving factor and the more realistic revenue growth assumption that the Council adopted in February 2024. Balancing the Proposed FY 2024/25 Operating Budget For FY 2024/25, the Proposed Operating Budget is balanced by utilizing three primary strategies. The first strategy was the direction to all Departments to develop a status quo budget for operational expenditures. To that end, the Departments programmed existing resources by either maintaining current structures or realigning operations to remain effective and efficient. This proved exceptionally difficult as vendor, supply, and other costs rose beyond FY 2023/24 levels and Departments needed to absorb additional State unfunded mandates. In addition, Departments were provided guidance to enhance capacity where necessary through limit-dated, non-benefited personnel options when possible. The second strategy is to build in a 4.6% salary savings factor that represents approximately $1.8 million in anticipated savings. Per prior Council direction, staff continues to hire for all vacant positions. If vacancy savings do not materialize, staff will come back to Council for adjustments. The third strategy is the one-time use of $0.6 million of the Town’s residual Measure G District Sales Tax – Operating Reserve for one-time expenditures. Overview of Proposed Capital Budget The FY 2024/25 – FY 2028/29 Capital Improvement Program (CIP) sets forth a five-year plan for proposed streets, parks, and public facility projects. The Transmittal Letter contained in the CIP provides a summary of the program including funding sources, recently completed projects, and the proposed projects for FY 2024/25. The proposed $32.8 million in the first year of the CIP is comprised of approximately $25.7 million in carryover funds from FY 2023/24 and approximately $7.1 million in new funding. Carryforward is projected to decrease $1.9 million from the FY2023/24 CIP as staff is working off project backlog created by ARPA funding. The $7.1 million of new funding is comprised of $4.2 million in General Fund Appropriated Reserve (GFAR), $0.6 million in grants, and $2.3 million from other sources. Only the first year PAGE 5 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 DISCUSSION (continued): of the plan is formally adopted with funds appropriated by the Town Council as part of the budget process. Budget information for future years is based on potential future revenues that may fluctuate and change based on economic conditions. While the $32.8 million total carry forward and new appropriation represent the funding plan, the anticipated annual expenditures are detailed in Attachment 6. The first year of the five-year CIP (FY 2024/25) continues funding for the Town Council Strategic Priorities, including basic infrastructure needs. In February 2024, the Town Council established the 2024-26 Strategic Priorities. In terms of capital projects, the Town Council affirmed it support of prioritizing traffic and transportation, public safety and quality of life related projects. The proposed CIP reflects these priorities by providing funding to: • Advance bicycle and pedestrian identified in the adopted General Plan 2040 and the Bicycle and Pedestrian Master Plan (Highway 17 Overcrossing, Shannon Road Bicycle and Pedestrian Improvements); • Enhance safety on Town roadways (Annual Street Resurfacing; Annual Curb, Gutter and Sidewalk; Shannon Road Repair); • Parking management; • Vegetation management for fire safety; • Mapping the storm drainage system and analyzing critical drainage Systems; and • Resurface sport courts to increase pickleball access. Staff is recommending that the residual and current year Measure G proceeds dedicated for capital should be programmed toward the Shannon Road Repair Project. Future year Measure G proceeds dedicated for Capital Improvement Projects should be programmed toward the State Route 17 Corridor Congestion Relief Project. At the time of the budget adoption, a resolution would memorialize the project(s) that are funded by the Measure G proceeds dedicated to the Capital Improvement Program. On May 8, 2024, the Planning Commission reviewed the proposed CIP, found it consistent with the General Plan, and recommended its adoption by the Town Council. Finance Commission Recommendations As previously mentioned, the Finance Commission is tasked with a thorough review of the FY 2024/25 Proposed Operating and Capital Budgets. The Finance Commission held three meetings to review and discuss the documents. On May 13, 2024, the voting Commissioners in attendance unanimously approved the recommendations to the Town Council contained in Attachment 4. PAGE 6 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 DISCUSSION (continued): The Commission recommended adoption of the Operating Budgets subject to its seven comments and observations in Attachment 4, including: • The Proposed Operating Budget does not include the updated costs associated with future Memoranda of Understanding with two of the Town’s three bargaining units; • The conservative Sales Tax revenue projections; and • The conservative Educational Revenue Augmentation Funds (ERAF) reserve set-aside. In terms of ERAF, staff continues to recommend reserving 30% of the anticipated ERAF proceeds based on information provided by the Santa Clara County Assessor’s Office to all Santa Clara County municipalities. Based on the most recent communication from the Santa Clara County Assessor’s Office (SCAO), there is potential at-risk exposure related to the Governor’s budget proposal of ERAF funding for Charter Schools, and the SCAO’s audit findings on Excess ERAF calculation as presented below. The Town Estimated ERAF Risk Reserve is $2,235,154 as of June 30, 2025 which is below the Town’s estimated risk amount of $2,996,455. Therefore, staff recommends continuing to reserve 30% of the anticipated ERAF proceeds. The Commission also suggested that the Council receive more information regarding sales tax revenue. The Town receives 1.0 cent of the 9.125 cents of sales tax paid per dollar of taxable sales generated in Town. Sales and Use Tax remains one of the General Fund’s largest revenue sources. In addition, the Town collects 0.125 cent in dedicated sales tax as a result of a voter approved ballot initiative in 2018. The FY 2024/25 budget reflects $6.6 million in sales tax revenue and $1.3 million in dedicated sales tax revenue. Combined, this represents a 0.1% increase from the FY 2023/24 estimates, but a $0.9 million dollar decrease from FY 2022/23 actual collections. Sales tax estimates and projections are provided by MuniServices, the Town’s sales tax consultant. Overall, growth rates vary due to the anticipation of when and to what extent inflation may begin to decline. The current forecast incorporates a Recession Inflation Scenario, with the Consumer Price Index for all Urban Customers hitting a target of 2.5% at the end of 2026. Taxable sales for general retail and transportation are expected to see the greatest impacts. Increased interest rates impact business to business activities, while increased FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 FY 2024/25 Total $ Actual Actual Actual Estimated Estimated Excess ERAF 2,043,321$ 2,371,984$ 2,298,692$ 2,534,820$ 2,617,000$ According to Santa Clara County State Controller Office March 2024 Communication State Controller Audit Finding Risk %22%22%22%22%20% State Controller Audit Finding Risk ($)449,531$ 521,836$ 505,712$ 557,660$ 523,400$ Governor's Budget Proposal for Charter School Risk %N/A N/A N/A 8%9% Governor's Budget Proposal for Charter School Risk $N/A N/A N/A 202,786$ 235,530$ Total % at Risk 22%22%22%30%29% Total $ at Risk 449,531$ 521,836$ 505,712$ 760,446$ 758,930$ 2,996,455$ Town ERAF Risk Reserve - 30%689,608$ 760,446$ 785,100$ 2,235,154$ PAGE 7 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 DISCUSSION (continued): mortgage rates leave customers with less disposable income. In addition, gas service station sales are projecting decreased activity due to the popularity of electric vehicles. The Commission had eight observations and comments regarding the Proposed CIP and recommended that the Council not accept the Proposed CIP unless staff provides an “expenditure profile” to accompany the “authorization profile.” In response to the Commission’s comments, staff prepared an expenditure profile for all projects in the Proposed CIP with anticipated capital expenditures for FY 24/25 and FY 25/26 (Attachment 6). It is important to note that a municipal CIP is not an expenditure plan but rather identification, allocation, and authorization of funding for projects. Other tools are used to manage project delivery to ensure they stay on time and within budget. In response to the Commission’s comment about reconciling carry forward amounts between prior year Capital Improvement Programs that represent point in time information, , staff prepared a reconciliation (Attachment 5). The reconciliation demonstrates the difference between estimated and actual carry forwards that leads to updated budget numbers and budget actions that occur during the year that affect carry forward and budget Staff will continue to work on future budget presentations that include anticipated expenditures, explanations for carry forward, and other improvements. Consideration of Any Funding Requests As the Council considers individual requests for new spending, the Council should consider these requests in the context of the Proposed Operating Budget and identify the source(s) of funding for the(se) item(s). At the time of the preparation of this report, requests have been submitted to the Town from NUMU, Los Gatos-Saratoga Recreation, and the Anti-Racism Coalition and faith community (see Attachment 10). Donation Opportunities - FY 2024/25 List of Town Needs As part of the budget development process, the List of Town Needs is updated annually per Town Council Donation Policy (Attachment 7) to reflect goods, services, and other contributions that would help enhance Town services, programs, and events (Attachment 8). Town Investment Policy The Investment Policy (Attachment 9) establishes the investment scope, objectives, delegation of authority, standards of prudence, reporting requirements, internal controls, State mandated eligible investments, transactions, diversification requirements, risk tolerance, and safekeeping and custodial procedures for the investment of the operating funds of the Town. All Town PAGE 8 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 DISCUSSION (continued): funds are invested and/or will be invested in accordance with the Investment Policy and with applicable sections of the California Government Code. The Investment Policy requires an annual review. Staff is not recommending any changes to the Investment Policy this time. The Finance Commission reviewed the Policy at its March 2024 meeting and recommended no changes. CONCLUSION AND NEXT STEPS: At its May 21, 2024 meeting, the Council will have an opportunity to listen to public testimony, ask questions, consider the Finance Commission’s recommendations, deliberate, and direct changes to the Proposed Operating and/or Capital Improvement Program Budgets. Any changes to the Proposed Operating and/or Capital Budgets directed by Council or identified by staff (see Attachment 5.) will be included for Council consideration in the resolution formally adopting the Budgets to be considered by Council on June 4, 2024. During and after the Budget adoption, staff continues to monitor revenues and expenditures closely and will report to the Town Council actual revenues and expenditures later in the year as the data become available. Any modifications needed will be brought back to the Council as Budget Adjustments. COORDINATION: The preparation of the budget documents involved the participation of all Town Departments. The Finance Commission deliberated and provided its recommendations to the Council as discussed in this report. FISCAL IMPACT: Under State law, the Town Council is required to enact a balanced budget. The Proposed Operating and Capital Budgets are balanced and as the Council directs changes, the outcome must be a balanced fiscal plan. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. PAGE 9 OF 9 SUBJECT: FY 2024/25 Proposed Operating and Capital Budgets DATE: May 14, 2024 Attachments Provided to the Council Prior to the Distribution of this Report: 1. FY 2024/25 Proposed Operating Budget https://www.losgatosca.gov/2957/Proposed-FY-2024-25-Operating-Budget 2. FY 2024/25 – 2028/29 Proposed Capital Improvement Program Budget https://www.losgatosca.gov/2859/Proposed-2023-24-Capital-Budget Attachments Provided with this Report: 3. List of updates related to corrections based on staff and Commissioners review and comments 4. FY 2024/25 Finance Commission Operating and Capital Budget Recommendations 5. Sample Reconciliation of Carry Forward Amounts between Multiple CIPs 6. Anticipated Capital Expenditures FY 24/25 and FY 25/26 7. Town of Los Gatos Donation Policy 8. Town of Los Gatos Donation Opportunities: FY 2024/25 9. Town Investment Policy 10. Public Comment Received Before 11 a.m. on May 16, 2024 ATTACHMENT 1 Attachment 1 - FY 2024/25 Proposed Operating Budget: https://www.losgatosca.gov/2957/Proposed-FY-2024-25-Operating-Budget ATTACHMENT 2 Attachment 2 - FY 2024/25 – 2028/29 Proposed Capital Improvement Program Budget: https://www.losgatosca.gov/2859/Proposed-2023-24-Capital-Budget Updates to the Proposed FY 2024/25 Budget Documents ATTACHMENT 3 Based on additional staff review, the following updates are recommended to include in the final FY 2024/25 Operating and Capital Budget and FY 2024/25-FY 2028/29 Capital Improvement Plan (CIP) documents: Proposed Operating & Capital Summary Budget FY 2024/25 Page A-24 – Remove “POA” under Safety Management from the table. Page C-4 – Chart Horizontal Axis should be titled FY 2015/16 through FY 2024/25. Page C-5 – Include the amount of the Waste Hauler Permit fee: While collections are estimated to stay at prior year levels, the revenue shifted from Franchise Fees to Licenses and Permits. The FY 2024/25 estimates collection is $2,366,630. Page C-18 and Page C- 24 Add Footnote to the Tables. *Effective FY 2024/25 Garbage Franchise Fees are Reclassified to License and Permits. The FY 2024/25 Proposed Budget includes $2,366,630 Waste Hauler Permit Fee. Page C-41 – Correct FY 2023/24 Estimated column for One-Time ARC ICC. The amount should be $866,281 as the $877,614 amount should exclude the $11,333 included in the FY 2024/25 Proposed column. Additionally, the total for the FY 2023/24 Estimated column will be updated to $1,545,281 which will now match the FY 2023/24 Estimated Spending row in the General Fund Council Priorities – Economic Recover Reserve Tracking table. Correct capitalization: (“One-time - Adult Recreation Center Interim Community Center” to “One-Time - Adult Recreation Center Interim Community Center”). Page C-51 - Correct spelling: (“FY 2023/24” spelled “FY 223/24”). Page C-52 - Correct spelling: (to “ensure” spelled “toensure”). Page D-283 – Change language under program purpose to state: Administration’s core services are to provide administrative and managerial oversight for program and services, clerical and administrative assistance for day-to-day operations, personnel management, purchasing and physical plant maintenance, fiscal management and budget preparation, coordination with the Friends of Los Gatos Library Board, and support for the Library Board and the Arts and Culture Commission. Proposed FY 2024/25 – 2028-29 Capital Improvement Program (CIP) Budget Page A-4 - Correct spelling in chart (“Underground” spelled as “Undeground”). Page A-9 - Add a footnote to projects Storm Drainage Repairs and TMO Roof Repairs to clarify that the projects are new to the CIP document but estimated to start in FY 2023/24. Therefore, related expenditures are characterized as carryforward. *Project anticipated to start in FY 2023/24 Page C-8 – Adjust VTA Allocation – Measure B and Other GFAR line-item amounts. Total GFAR, Source/Use of funds remain unchanged. Page C-35 - FY 2024/25 Budget and Carryforward should total $8,821,334. The $8,381,333 displayed did not include 0435 Storm Drainage Mapping ($450,001). STREET REPAIR & RESURFACING Project 811-9901 Estimated 2024/25Prior Year 2023/24 Carryfwd to 2024/25 Budget 2025/26 2026/27 2027/28 2028/29 TotalSOURCE OF FUNDS Actuals Estimated 2024/25 New Funding (w/ Carryforward)Proposed Proposed Proposed Proposed Project GFAR Vehicle License Fee - 2010 Measure B 1,616,628$ 180,000$ 180,000$ 180,000$ 360,000$ 180,000$ 180,000$ 180,000$ 180,000$ 2,876,628$ VTA Allocation - Measure B - 683,680 385,753 857,873 1,243,626 857,873 857,873 857,873 857,873 5,358,797 Other GFAR 12,433,958$ 1,575,457 1,977,198 998,381 2,975,579 998,381 998,381 998,381 998,381 20,978,518 TOTAL GFAR FUND 14,050,586 2,439,136 2,542,951 2,036,254 4,579,205 2,036,254 2,036,254 2,036,254 2,036,254 29,213,943 GRANTS & AWARDS 230,000 - - - - - - - - 230,000 GAS TAXRoad Maintenance and Rehab Account (RMRA)- 803,626 - 859,033 859,033 859,033 859,033 859,033 859,033 5,098,791 Other Gas Tax & Prop 42 12,187,867 660,974 1,681,514 819,552 2,501,066 819,552 819,552 819,552 819,552 18,628,116 TOTAL GAS TAX FUND 12,187,867 1,464,600 1,681,514 1,678,585 3,360,099 1,678,585 1,678,585 1,678,585 1,678,585 23,726,907 TOTAL SOURCE OF FUNDS 26,468,453$ 3,903,736$ 4,224,465$ 3,714,839$ 7,939,304$ 3,714,839$ 3,714,839$ 3,714,839$ 3,714,839$ 53,170,849$ Estimated 2024/25 Prior Year 2023/24 Carryfwd to 2024/25 Budget 2025/26 2026/27 2027/28 2028/29 Total USE OF FUNDS Actuals Estimated 2024/25 New Funding (w/ Carryforward)Proposed Proposed Proposed Proposed Project GFARSalaries and Benefits -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Services/Supplies/Equipment - - - - - - - - - - Site Acquisition & Preparation - - - - - - - - - - Consultant Services - - - - - - - - - - Project Construction Expenses 14,050,586 2,439,136 2,542,951 2,036,254 4,579,205 2,036,254 2,036,254 2,036,254 2,036,254 29,213,943 TOTAL GFAR 14,050,586$ 2,439,136$ 2,542,951$ 2,036,254$ 4,579,205$ 2,036,254$ 2,036,254$ 2,036,254$ 2,036,254$ 29,213,943$ GRANTS & AWARDS Salaries and Benefits -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Services/Supplies/Equipment - - - - - - - - - - Site Acquisition & Preparation - - - - - - - - - - Consultant Services - - - - - - - - - - Project Construction Expenses 230,000 - - - - - - - - 230,000 TOTAL GRANTS & AWARDS 230,000$ -$ -$ -$ -$ -$ -$ -$ -$ 230,000$ GAS TAX & PROP 42 Salaries and Benefits -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Services/Supplies/Equipment - - - - - - - - - - Site Acquisition & Preparation - - - - - - - - - - Consultant Services - - - - - - - - - - Project Construction Expenses 12,187,867 1,464,600 1,681,514 1,678,585 3,360,099 1,678,585 1,678,585 1,678,585 1,678,585 23,726,907 TOTAL GAS TAX & PROP 42 12,187,867$ 1,464,600$ 1,681,514$ 1,678,585$ 3,360,099$ 1,678,585$ 1,678,585$ 1,678,585$ 1,678,585$ 23,726,907$ TOTAL USE OF FUNDS 26,468,453$ 3,903,736$ 4,224,465$ 3,714,839$ 7,939,304$ 3,714,839$ 3,714,839$ 3,714,839$ 3,714,839$ 53,170,849$ D – 29 – Updated the Source of Funds section as the ‘Total Source of Funds’ row was not correctly footing. Expended Through 2023/24 2024/25 Budget & Carryfwd* 2025/26 Budget 2026/27 Budget 2027/28 Budget 2028/29 Budget Total Budgeted Carryforward Projects 9921 Curb, Gutter & Sidewalk Maintenance 5,197,835$ 621,147$ 300,000$ 300,000$ 300,000$ 300,000$ 7,018,982$ 0218 Shannon Road Ped & Bikeway Improvements 369,421 1,937,809 - - - - 2,307,230 0225 Utility Undergrounding Improvements 2,852 299,573 - - - - 302,425 0227 Traffic Signal Modernization 2,542,401 94,858 - - - - 2,637,259 0235 Downtown Streetscape Revitalization/Economic Recovery Efforts 2,289,007 552,633 - - - - 2,841,640 0237 State Route 17 Corridor Congestion Relief Project 600,000 867,000 600,000 600,000 600,000 600,000 3,867,000 0240 Winchester Class IV Bikeway 942,062 - - - - - 942,062 0241 Kennedy Sidewalk & Bike Lanes - LGB to Englewood - 2,365,376 - - - - 2,365,376 0242 Parking Program Implementation 278,629 488,826 - - - - 767,455 0414 Stormwater System - Pollution Prevention Compliance 61,469 36,531 - - - - 98,000 0420 Annual Storm Drain Improvements 291,181 252,219 - - - - 543,400 0421 Loma Street Drainage - 350,000 496,300 - - - 846,300 0422 Harwood/Belridge Drainage Study - 100,000 - - - - 100,000 0423 709 University Avenue Drainage System Replacement - 200,000 - - - - 200,000 0424 333 University Inlet Capacity Improvements - 50,000 - - - - 50,000 0705 Downtown Parking Lots Seal Coat & Restriping 84,839 65,161 - 10,000 - 10,000 170,000 0708 Parking Lot 4 Repair/Waterproofing 199,800 50,200 - - - - 250,000 New Projects 0244 Overlook Road Tree Replacement - 40,000 - - - - 40,000 0425 Storm Drainage Mapping - 450,001 - - - - 450,001 Total Street Improvement Projects 12,859,495$ 8,371,333$ 1,396,300$ 910,000$ 900,000$ 910,000$ 25,347,129$ 8,821,334$ STREET IMPROVEMENT PROJECTS FY 2024/25 - 2028/29 CAPITAL IMPROVEMENT PROGRAM TRAILHEAD CONNECTOR Project 832-4505 Estimated 2024/25 Prior Year 2023/24 Carryfwd to 2024/25 Budget 2025/26 2026/27 2027/28 2028/29 Total SOURCE OF FUNDS Actuals Estimated 2024/25 New Funding (w/ Carryforward)Proposed Proposed Proposed Proposed Project GFAR 349,000$ 422,594$ 696,374$ -$ 696,374$ -$ -$ -$ -$ 1,467,968$ GRANTS & AWARDS MTC OBAG 343,000 311,809 5,881,191 - 5,881,191 - - - - 6,536,000 TFCA - - 755,921 - 755,921 - - - - 755,921 Measure B - 2016 - 249,656 443,844 - 443,844 - - - - 693,500 TDA Article 3 - - 68,884 - 68,884 - - - - 68,884 TOTAL SOURCE OF FUNDS 692,000$ 984,059$ 7,846,214$ -$ 7,846,214$ -$ -$ -$ -$ 9,522,273$ Estimated 2024/25 Prior Year 2023/24 Carryfwd to 2024/25 Budget 2025/26 2026/27 2027/28 2028/29 Total USE OF FUNDS Actuals Estimated 2024/25 New Funding (w/ Carryforward)Proposed Proposed Proposed Proposed Project GFARSalaries and Benefits -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Services/Supplies/Equipment - - - - - - - - - - Site Acquisition & Preparation - - - - - - - - - - Consultant Services - - - - - - - - - - Project Construction Expenses 349,000 422,594 696,374 - 696,374 - - - - 1,467,968 TOTAL GFAR 349,000$ 422,594$ 696,374$ -$ 696,374$ -$ -$ -$ -$ 1,467,968$ GRANTS & AWARDS Salaries and Benefits -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Services/Supplies/Equipment - - - - - - - - - - Site Acquisition & Preparation - - - - - - - - - - Consultant Services - - - - - - - - - - Project Construction Expenses 343,000 7,584,305 126,579 - 126,579 - - - - 8,053,884 TOTAL GRANTS & AWARDS 343,000$ 7,584,305$ 126,579$ -$ 126,579$ -$ -$ -$ -$ 8,053,884$ TOTAL USE OF FUNDS 692,000$ 8,006,899$ 822,953$ -$ 822,953$ -$ -$ -$ -$ 9,521,852$ Draft – For Discussion Purposes Only Recommendations for The Town Council – FY 25 Operating and CIP Budget Pursuant to Town Code section 2.50.225 – Duties, the Finance Commission shall review the Town Managers’ annual proposed budget and provide written comments and recommendations to the Town Council including a recommendation whether the Town Council should approve or disapprove of the proposed budget. The Town Manager’s proposed FY 2025 Operating and CIP Budget was made available to the public on April 22. The Finance Commission reviewed and discussed the proposed budget during commission meetings held on April 29, May 6th, and May 13th. The Finance Commission wishes to express our appreciation to Staff in supporting the Commission during this deliberative process. Below are the Commission’s comments and recommendations for the Town Council’s consideration and action. Proposed FY 2025 Operating Budget. Comments •It has been challenging to analyze the FY 2025 Operating Budget. The FY 25 operating plan includes many revenue and expenditure items such as tracking budgets, pass-through accounts, and debt service costs in addition to reclassifications of revenue from franchise tax to license and permits fees which are not consistent with historical financials prepared under GAAP. This lack of comparability makes it difficult to compare historical results to the FY 25 operating plan. Being able to analyze year-over-year changes in revenues and expenditures on a comparable basis is an important part of evaluating the reasonableness of a budget. Historical performance is an excellent predictor of future outcomes and can be used to quickly find anomalies. This analysis only works if there is consistency in reporting. •Using the statement of revenues and expenditures format presented in the ACFR, the FY 25 General Fund Excess of Revenues over Expenditures is $0. In FY 23 the excess of revenues over expenditures was $5.7m. That means Town’s Operating Expenditures for FY 25 are forecasted to increase $5.7m MORE than Operating Revenues. That is a troubling trend that requires cost containment strategies that are not well defined in the FY 25 plan. For example, consultant and contractor services are increasing $625k (25% growth) levels and fee charges and services are increasing $240k (15% growth) from FY 23 with little explanation provided as to the underlying cost forces. •The Town Manager references “status quo” budgeting, but the town needs a more structured approach to cost management that sends a message that taxes and spending will be held in check. The City of Los Altos recently implemented zero-base budgeting claiming much success. A starting point would be for Staff to study Los Altos and learn from their success. ATTACHMENT 4 • The decrease in the General Fund balance of $514,285 shown on schedule C-8 and referenced in the Town Manager’s transmittal letter is the result of General Fund Transfers- Out exceeding General Fund Transfers- In by $514,285 and not the result of a structural imbalance where operating expenditures exceed operating revenues. • There is one risk the Town Council needs to be aware of. Not all salary and benefit increases are reflected in the FY 25 Operating Budget. This is because the MOUs for the other two bargaining units expire June 30, 2024 and the Town is negotiating successor MOU’s. Any increases agreed in the successor MOU will require a funding source to offset the expense increase. The Finance Commission was not informed of the most likely outcome of these discussions. • In looking at tax revenues, the Finance Commission believes Staff has been too conservative in forecasting sales tax and TOT revenues. Sales Tax revenue is forecasted to decline 10% from FY 23 actual level with TOT revenues being flat from FY 23. This appears to be overly conservative. Any overachievement in revenue can be used to cover incremental salary and benefit costs arising from the new MOU’s. If in fact sales tax revenues are expected to decline, the Town should aggressively develop and pursue strategies to revitalize and diversify the business base of the Town. • The Finance Commission also believes Staff has been overly conservative in increasing the General Fund reserve for ERAF risk to $2.2m. In direct discussions with Santa Clara County Counsel, a worst-case scenario of 22% of the excess ERAF could be clawed back. But the probability of that happening is very low. In addition to the ERAF reserve, Town has set up budget and catastrophic reserves totaling over $13m. To have over $15m in reserves strikes us as being overly conservative and an inefficient allocation of the Town’s capital. The Council should consider redeploying at least $1m of the ERAF reserve to reduce the Town’s unfunded pension liability. This would have the added benefit of reducing future pension contributions. Recommendation The Finance Commission recommends that the Town Council approve the FY 2025 Operating Budget subject to the comments above. Proposed FY 25 CIP Budget Comments • The FY 25 CIP Budget totals $32.8 million made up of $25.7 million carryforward funds for 58 projects approved in prior years, new money totaling $5.6m for 20 of the 58 carryforward projects (35% of the projects in flight have budgets increased), and $1.5m for only 7 new projects. • Over the five-year period through FY 29, the total CIP budget is $53.7m, with $20.m programmed for spending from FY 26 – FY 29. • The Finance Commission is not able to judge the merit of the 65 projects programmed for FY 25. We assume these projects have been properly vetted and are consistent with the Town Council’s priorities. Our comments are focused on the planning and control processes surrounding the CIP Budget. We are concerned by the substantial number of carry-forward projects and the small number of projects that are annually closed out annually. This suggests there is insufficient project management capacity to manage a $32.8m capital budget. This might also be why 35% of the projects have their budget increased because they are running behind schedule and are subject to cost increases. • A major concern is how the CIP expenditures are planned to be spent. The expenditure budget is built on the assumption that all $32.8m (carryforward and new money) will be spent in FY 25. This will never happen. In fact, for the five-year period FY 19 – FY 23 the average annual expenditure for all capital assets per year was approximately $8m. This aggressive assumption leads to incorrect projections that the GFAR Fund balance will be substantially drained by the end of FY 25. • The assumption that all capital expenditures will be made in FY 25 also leads to the loss of normal capital project management techniques which are used to track progress against a project timeline, a project dollar budget, and a project quality spec. While we understand the need to authorize the total project cost for a given phase, how these funds will be deployed over time should also be authorized. The CIP Budget does not include a capital expenditure time profile. • For each capital project there is a project description which includes identifying the project phase (e.g., design or construction), the original date, a revised date, and a timeline for spending. However, the timeline reflects all carryforward funds and new FY 25 funds are deployed in FY 25. This should be adjusted to reflect the most likely deployment timeline which will become the basis for tracking performance to plan and on-time and on budget completions. • The CIP Budget process also seems to be more focused on the new money being approved, in this case $7m, than understanding why carry-forward projects are not being closed out on a prompt basis and why their budgets are increasing. There is little explanation as to why the carryforward amounts continue to be carried forward. This appears to be a vicious cycle the Town is trapped in. • Lastly, when we asked the staff to prove out the carryforward number in the FY 25 plan of $25.7m they were unable to do so. We computed a carryforward number of $19.9m starting with FY 24 total capital budget of $37.8m and subtracting the Town’s estimated capital spend for FY 24 of $17.9m. This is $5.8m less than the carry forward amount in the FY 25 CIP budget of $25.7m. Staff later was able to explain $2m of the $5.9m difference, but the remaining $3.8m is unexplained. Recommendation The Finance Commission’s recommends the Town Council not accept the FY 25 CIP Budget without an expenditure profile being provided in addition to the “authorization” profile currently presented. Staff should properly time all capital expenditures so projects can be properly project managed against time, dollars, and quality specifications. This was a recommendation made by the Finance Commission last year, but unfortunately was not implemented for the FY 25 budgeting cycle. FY 2023/24 Capital Budget FY 22/23 FY 22/23 to FY 22/23 FY 23/24 FY23/24 Estimated FY 23/24 New Total Expenditures Carryforward Budget Budget Budget A B C = A + B D E = B + D 11,081,810.00 27,646,692.00 38,728,502.00 10,125,131.00 37,771,823.00 FY 2022/23 Actuals Expenditures Carryforward Budget F G H = F + G 8,263,634.22 32,790,888.50 41,054,522.72 FY22/23 Actuals increased (decreased) by (2,818,175.78) I = F - A FY22/23 Budget increased (decreased ) by 2,326,020.72 J = H - C FY22/23 Carryforward increased (decreased) by 5,144,196.50 K = G - B = J - I FY 2024/25 Proposed Capital Budget FY 23/24 FY 23/24 to FY23/24 FY24/25 FY24/25 Estimated FY 24/25 New Total Expendtiures Carryforward Budget Budget Budget L M N = L + M O P = M + O 17,941,378.00 25,746,967.00 43,688,345.00 7,071,632.00 32,818,599.00 FY 2023/24 Carryforward to FY 2024/25 25,746,967.00 M Projected Carryforward 19,830,445.00 Q = E - L Difference between Projected and Proposed CF 5,916,522.00 R = M = Q Increase in Carryforward from FY 2023/24 Cap. Budget 5,144,196.50 K Remaining Change in Carryforward in Proposed FY 2024/25 772,325.50 S = R - K See Next Page ATTACHMENT 5 D G T = D + G N U = T - N = S FY23/24 Beginning FY 24/25 Row Labels Sum of Budget Carryforward FY23/24 Beginning Budget + CF Proposed Budget Difference Description Council Meeting Item #Budget Adjustment 0008 1,814,064.00 2,631,847.87 4,445,911.87 4,442,911.87 3,000.00 3k transferred out for OpenGov 11/21/2023 13 BA - 24 -15 0129 - 22,900.00 22,900.00 - 22,900.00 Budget Transfer added 35,150 Pending Budget Transfer - 50k excess to be transferred to ADA compliance 12/19/2023 13 BT - 24 - 07 0130 - 825,191.00 825,191.00 1,572,191.00 (747,000.00) 750k Budget was authorized after the CIP book was printed so wasn't carried forward. 3k transferred out for OpenGov 4/18/2023 11/21/2023 8 13 BA - 24 - 03 BA - 24 - 15 0134 - 119,674.37 119,674.37 120,674.37 (1,000.00) 1k open encumbrance 0218 - 2,044,823.05 2,044,823.05 2,043,823.05 1,000.00 1k transferred out for OpenGov 11/21/2023 13 BA-24-15 0240 693,560.00 - 693,560.00 - 693,560.00 Budget was previously recognized in another project (Trailhead Connector) 0242 - 445,389.92 445,389.92 614,344.92 (168,955.00) Transfer from Parking Program ($168,955)3/5/2024 11 BA-24-29 0243 - 39,050.00 39,050.00 - 39,050.00 Project anticipated to be complete so not in the proposed budget 2009 37,500.00 44,000.00 81,500.00 105,611.11 (24,111.11) Expenditures/Encumbrances over budget 2011 - 25,000.00 25,000.00 - 25,000.00 Project anticipated to be complete so not in the proposed budget 2121 - -- 79,640.00 (79,640.00) New Project - from Management Contingency Management Contingency BT-24-08 2207 - 114,595.66 114,595.66 - 114,595.66 Project anticipated to be complete so not in the proposed budget 2208 - -- 866,281.00 (866,281.00) New Project - Referenced in Adopted Budget 2309 - 25,000.00 25,000.00 - 25,000.00 Project anticipated to be complete so not in the proposed budget 2403 - 25,000.00 25,000.00 - 25,000.00 Project anticipated to be complete so not in the proposed budget 4508 100,000.00 5,880.77 105,880.77 102,880.77 3,000.00 3k transferred out for OpenGov 11/21/2023 13 BA-24-15 4605 - 57,469.06 57,469.06 56,969.06 500.00 500 transferred out for OpenGov 11/21/2023 13 BA-24-15 6103 - 25,283.07 25,283.07 7,000.00 18,283.07 7k Reserved, the rest to be released to fund balance 9901 - 4,547,706.69 4,547,706.69 7,768,201.14 (3,220,494.45) 73,138 Transfer out - Mid-year Adjustment 23,875 Budget Increase - Mid-year Adjustment 10,700 transferred out for OpenGov 25k transferred to 0132 - Local Road Safety Plan 2/20/2024 2/2020/24 11/21/2023 6/20/2023 13 13 13 15 BA-24-23 BA-24-23 BA-24-15 BT-24-02 9904 100,000.00 - 100,000.00 20,360.00 79,640.00 Management Contingency - 79,640k transferred to 2121 - TMO Roof Repairs Management Contingency BT-24-08 9911 3,243,977.00 - 3,243,977.00 - 3,243,977.00 Combined with 9901 - 61.48k excess expenditures 9921 300,000.00 151,331.66 451,331.66 410,681.66 40,650.00 5,500 transferred out for OpenGov 35,150 transferred to ADA 11/21/2023 12/19/2023 13 13 BA-24-15 BT-24-07 Total (all projects)10,125,131.00 32,790,888.50 42,916,019.50 43,688,344.94 (772,325.44) ATTACHMENT 5 Expended Through 2022/232023/24 Estimated ActualsEstimated Carryfwd to 2024/252024/25 Budget2025/26 Budget2026/27 Budget2027/28 Budget2028/29 Budget Total BudgetedProjected Available Funding (Total Budgeted ‐ Expended Through 2022/23)2023/24 Estimated Actuals (From CIP Budget Book B‐5, B‐6)Projected Spending 24/25Projected Spending 25/26Projected Available Funding as 7/1/26Reconstruction811‐9901Street Repair & Resurfacing24,851,825       3,723,736         4,044,465         3,534,839         3,534,839         3,534,839         3,534,839         3,534,839         50,294,221          25,442,396       3,723,736         3,800,000         3,800,000         14,118,660       811‐9903Pavement Rehab‐Crack Seal1,616,628         180,000            180,000            180,000            180,000            180,000            180,000            180,000            2,876,628            1,260,000         180,000            180,000            180,000            720,000            Maintenance‐Safety811‐9902Annual Street Restriping 180,228             ‐                           ‐                          15,000               20,000               30,000               40,000               50,000               335,228                155,000             ‐                     15,000               20,000               120,000            811‐9904Unanticipated Repairs ‐ Annual‐                          9,572                 10,788               100,000            100,000            100,000            100,000            100,000            520,360                520,360            9,572                 111,000            100,000            299,788            815‐9930Retaining Wall Repairs1,595,978         31,499               535,300            50,000               50,000               50,000               50,000               50,000               2,412,777            816,799            31,499               25,000               25,000               735,300            811‐0008Shannon Road Repair433,152            268,745            4,174,167         500,000             ‐                           ‐                           ‐                           ‐                          5,376,064            4,942,912         268,745            4,674,167          ‐                      ‐                     811‐0010Blossom Hill Rd ‐ Union to Camden Improvements‐                           ‐                           ‐                          800,000             ‐                           ‐                           ‐                           ‐                          800,000                800,000             ‐                     400,000            400,000             ‐                     812‐0130Roadside Fire Fuel Reduction ‐ Annual999,809            186,640            1,385,551         100,000            100,000            100,000            100,000            100,000            3,072,000            2,072,191         186,640            1,000,000         750,000            135,551            812‐0131East Main Street Crosswalk Improvements43,700               18,000               253,300             ‐                           ‐                           ‐                           ‐                           ‐                          315,000                271,300            18,000               100,000            153,300             ‐                     812‐0133VMT Mitigation Program134,767            48,568               66,665                ‐                           ‐                           ‐                           ‐                           ‐                          250,000                115,233            48,568               30,000                ‐                     36,665               812‐0134Measure B Education & Encouragement18,671               52,017               68,657                ‐                           ‐                           ‐                           ‐                           ‐                          139,345                120,674            52,017               30,000               30,000               8,657                 812‐0135Town‐wide Speed Studies‐                           ‐                          80,000                ‐                           ‐                           ‐                           ‐                           ‐                          80,000                  80,000                ‐                      ‐                     80,000                ‐                     Street Improvements813‐9921Curb, Gutter & Sidewalk Maintenance5,108,300         89,535               321,147            300,000            300,000            300,000            300,000            300,000            7,018,982            1,910,682         89,535               400,000            350,000            1,071,147         813‐0218Shannon Road Ped & Bikeway Improvements263,407            106,014            1,937,809          ‐                           ‐                           ‐                           ‐                           ‐                          2,307,230            2,043,823         106,014            1,937,809          ‐                      ‐                     813‐0225Utility Undergrounding Improvements2,852                  ‐                          299,573             ‐                           ‐                           ‐                           ‐                           ‐                          302,425                299,573             ‐                      ‐                      ‐                     299,573            813‐0227Traffic Signal Modernization2,001,927         540,474            94,858                ‐                           ‐                           ‐                           ‐                           ‐                          2,637,259            635,333            540,474             ‐                      ‐                     94,858               813‐0235Downtown Streetscape Revitalization/Economic Recovery Efforts1,929,140         359,867            552,633             ‐                           ‐                           ‐                           ‐                           ‐                          2,841,640            912,500            359,867             ‐                      ‐                     552,633            813‐0237State Route 17 Corridor Congestion Relief Project600,000             ‐                          867,000             ‐                          600,000            600,000            600,000            600,000            3,867,000            3,267,000          ‐                     867,000             ‐                     2,400,000         813‐0240Winchester Class IV Bikeway942,062             ‐                           ‐                           ‐                           ‐                           ‐                           ‐                           ‐                          942,062                 ‐                      ‐                      ‐                      ‐                      ‐                     813‐0241Kennedy Sidewalk & Bike Lanes  ‐ LGB to Englewood‐                           ‐                          2,365,376          ‐                           ‐                           ‐                           ‐                           ‐                          2,365,376            2,365,376          ‐                     250,000            2,115,376          ‐                     813‐0242Parking Program Implementation153,110            125,519            488,826             ‐                           ‐                           ‐                           ‐                           ‐                          767,455                614,345            125,519            384,998            20,000               83,828               813‐0244Overlook Road Tree Replacement‐                           ‐                           ‐                          40,000                ‐                           ‐                           ‐                           ‐                          40,000                  40,000                ‐                     40,000                ‐                      ‐                     816‐0414Stormwater System ‐ Pollution Prevention Compliance22,722               38,747               36,531                ‐                           ‐                           ‐                           ‐                           ‐                          98,000                  75,278               38,747               36,531                ‐                      ‐                     816‐0420Annual Storm Drain Improvements291,181             ‐                          252,219             ‐                           ‐                           ‐                           ‐                           ‐                          543,400                252,219             ‐                      ‐                      ‐                     252,219            816‐0421Loma Street Drainage‐                           ‐                          100,000            250,000            496,300             ‐                           ‐                           ‐                          846,300                846,300             ‐                     150,000            100,000            596,300            816‐0422Harwood/Belridge Drainage Study‐                           ‐                          100,000             ‐                           ‐                           ‐                           ‐                           ‐                          100,000                100,000             ‐                     50,000               50,000                ‐                     816‐0423709 University Avenue Drainage System Replacement‐                           ‐                          200,000             ‐                           ‐                           ‐                           ‐                           ‐                          200,000                200,000             ‐                     75,000               125,000             ‐                     816‐0424333 University Inlet Capacity Improvements‐                           ‐                          50,000                ‐                           ‐                           ‐                           ‐                           ‐                          50,000                  50,000                ‐                      ‐                     50,000                ‐                     816‐0425Storm Drainage Mapping‐                           ‐                          190,000            260,001             ‐                           ‐                           ‐                           ‐                          450,001                450,001             ‐                     400,000            50,001                ‐                     817‐0705Downtown Parking Lots Seal Coat & Restriping84,839                ‐                          15,161               50,000                ‐                          10,000                ‐                          10,000               170,000                85,161                ‐                      ‐                     85,161                ‐                     817‐0708Parking Lot 4 Repair/Waterproofing199,800             ‐                          50,200                ‐                           ‐                           ‐                           ‐                           ‐                          250,000                50,200                ‐                      ‐                     50,200                ‐                     Bridges818‐0801Quito Road ‐ Bridge Replacement64,594               235,087            50,000                ‐                           ‐                           ‐                           ‐                           ‐                          349,681                285,087            235,087             ‐                     50,000                ‐                     818‐0803Highway 17 Bicycle & Pedestrian Bridge ‐ Design1,083,238         2,317,745         1,056,319          ‐                           ‐                           ‐                           ‐                           ‐                          4,457,302            3,374,064         2,317,745         1,056,319          ‐                      ‐                     818‐0804Timber Bridge Inspection‐                           ‐                           ‐                           ‐                          25,000               25,000                ‐                           ‐                          50,000                  50,000                ‐                      ‐                     50,000                ‐                     Parks‐                     831‐4007Oak Meadow Bandstand Area Improvements22,282               23,223               241,225             ‐                           ‐                           ‐                           ‐                           ‐                          286,730                264,448            23,223               190,000            51,225                ‐                     831‐4008Oak Meadow Park Plane Recoating‐                           ‐                           ‐                           ‐                           ‐                          40,000                ‐                           ‐                          40,000                  40,000                ‐                      ‐                      ‐                     40,000               831‐4202Town Plaza Turf Repairs9,116                  ‐                          27,000               15,000                ‐                           ‐                           ‐                           ‐                          51,116                  42,000                ‐                     42,000                ‐                      ‐                     Project Number and NameAnticipated Capital Expenditures FY 2024/25 and FY 2025/26Proposed Financial Summary As Presented in CIP Pages B‐5 and B‐6 New Information on Projected Spending5/16/2024 3:25 PMATTACHMENT 6 Expended Through 2022/232023/24 Estimated ActualsEstimated Carryfwd to 2024/252024/25 Budget2025/26 Budget2026/27 Budget2027/28 Budget2028/29 Budget Total BudgetedProjected Available Funding (Total Budgeted ‐ Expended Through 2022/23)2023/24 Estimated Actuals (From CIP Budget Book B‐5, B‐6)Projected Spending 24/25Projected Spending 25/26Projected Available Funding as 7/1/26Project Number and NameAnticipated Capital Expenditures FY 2024/25 and FY 2025/26Proposed Financial Summary As Presented in CIP Pages B‐5 and B‐6 New Information on Projected Spending831‐4404Creekside Turf Replacement‐                           ‐                          500,000             ‐                           ‐                           ‐                           ‐                           ‐                          500,000                500,000             ‐                      ‐                      ‐                     500,000            831‐4605Parks Playground Fibar Project92,531               36,820               20,149               25,000                ‐                          25,000                ‐                          25,000               224,500                131,969            36,820                ‐                     40,000               55,149               831‐4610Pinehurst Community Garden14,314               70,627               200,059            50,000                ‐                           ‐                           ‐                           ‐                          335,000                320,686            70,627               50,000                ‐                     200,059            831‐4611Sport Court Resurfacing‐                           ‐                           ‐                          100,000             ‐                           ‐                           ‐                           ‐                          100,000                100,000             ‐                     100,000             ‐                      ‐                     Trails832‐4503Charter Oaks Trail Improvement72,942                ‐                          474,891             ‐                           ‐                           ‐                           ‐                           ‐                          547,833                474,891             ‐                      ‐                      ‐                     474,891            832‐4504Open Space Trail Upgrades‐                           ‐                          152,000             ‐                           ‐                           ‐                           ‐                           ‐                          152,000                152,000             ‐                     75,000               77,000                ‐                     832‐4505Trailhead Connector692,000            8,006,899         822,953             ‐                           ‐                           ‐                           ‐                           ‐                          9,521,851            8,829,851         8,006,899         822,953             ‐                      ‐                     832‐4508Vegetation Management ‐ Town‐wide244,826            5,423                 97,458               432,959            100,000            100,000            100,000            100,000            1,180,666            935,840            5,423                 930,417             ‐                      ‐                     832‐4510Lynn Ave Pedestrian Path Design‐                          55,448               134,552            50,000                ‐                           ‐                           ‐                           ‐                          240,000                240,000            55,448               50,000                ‐                     134,552            Town Infrastructure 821‐2002Town Beautification129,422            17,687               7,517                 15,000               15,000               15,000               15,000               15,000               229,625                100,203            17,687               15,000               15,000               52,517               821‐2009Public Art Gateway Project50,000               105,611             ‐                          37,500               37,500                ‐                           ‐                           ‐                          230,611                180,611            105,611            37,500               37,500                ‐                     821‐2012Emergency Preparedness‐                           ‐                          96,780                ‐                           ‐                           ‐                           ‐                           ‐                          96,780                  96,780                ‐                     20,000               20,000               56,780               821‐2012Annual ADA Compliance Work‐                           ‐                          10,000               70,000               20,000               20,000               20,000               20,000               160,000                160,000             ‐                     40,000               15,000               105,000            821‐2117Civic Center ADA Restrooms and HR Offices74,924               96,076               809,000             ‐                           ‐                           ‐                           ‐                           ‐                          980,000                905,076            96,076               730,000            79,000                ‐                     821‐2120Civic Center Plumbing Repair‐                           ‐                          40,000               40,000               40,000                ‐                           ‐                           ‐                          120,000                120,000             ‐                     20,000               30,000               70,000               821‐2121TMO Roof Repairs‐                           ‐                          79,640                ‐                           ‐                           ‐                           ‐                           ‐                          79,640                  79,640                ‐                     79,640                ‐                      ‐                     821‐2208ARC – Interim Community Center‐                           ‐                          866,281            11,333                ‐                           ‐                           ‐                           ‐                          877,614                877,614             ‐                     30,000                ‐                     847,614            821‐2302Building Replacement at Corporation Yard2,156,661         239,619            267,414             ‐                           ‐                           ‐                           ‐                           ‐                          2,663,694            507,033            239,619            250,000             ‐                     17,414               821‐2310Engineering Counter Modification‐                           ‐                          40,000                ‐                           ‐                           ‐                           ‐                           ‐                          40,000                  40,000                ‐                     40,000                ‐                      ‐                     821‐2311Fleet Service Outdoor Work Area (Design Phase)‐                           ‐                           ‐                          45,000                ‐                           ‐                           ‐                           ‐                          45,000                  45,000                ‐                     35,000               10,000                ‐                     821‐2404POB Space Study‐                           ‐                          75,000                ‐                           ‐                           ‐                           ‐                           ‐                          75,000                  75,000                ‐                     40,000               35,000                ‐                     821‐2504Library Improvements‐                           ‐                          22,000                ‐                           ‐                           ‐                           ‐                           ‐                          22,000                  22,000                ‐                      ‐                     10,000               12,000               821‐2505Battery Power Supply ‐ Library439,466            100,716            2,818                  ‐                           ‐                           ‐                           ‐                           ‐                          543,000                103,534            100,716             ‐                      ‐                     2,818                 821‐2601ADA Upgrade for Public Restrooms ‐ Adult Recreation Building103,964            294,099            305,799             ‐                           ‐                           ‐                           ‐                           ‐                          703,861                599,898            294,099            75,000                ‐                     230,799            Equipment841‐6003Town‐wide Document Imaging Project198,011             ‐                          16,989                ‐                           ‐                           ‐                           ‐                           ‐                          215,000                16,989                ‐                     16,989                ‐                      ‐841‐6101Enterprise Resource Planning Upgrade470,129            555,607            576,817             ‐                           ‐                           ‐                           ‐                           ‐                          1,602,554            1,132,425         555,607            505,607            71,210                ‐                     841‐6103EOC Communications Upgrade24,717               1,000                 6,000                  ‐                           ‐                           ‐                           ‐                           ‐                          31,717                  7,000                 1,000                 6,000                  ‐                     841‐6104IT Disaster Recovery Improvements171,163            757                    28,080                ‐                           ‐                           ‐                           ‐                           ‐                          200,000                28,837               757                    10,000                ‐                     18,080               TOTALS47,588,397       17,941,378       25,746,967       7,071,632         5,618,639         5,129,839         5,039,839         5,084,839         119,221,530        71,633,133       17,941,378       20,223,930       9,124,973         24,342,851       5/16/2024 3:25 PMATTACHMENT 6 ATTACHMENT 7 ATTACHMENT 8 TOWN OF LOS GATOS DONATION OPPORTUNITIES FY 2024/25 LIST OF TOWN NEEDS To ensure that all donations and contributions are sought and accepted in an ethical manner, the Council established a Donation and Solicitation Policy. A list of Town needs was developed to identify goods, services, and other contributions to enhance Town services, programs, and events. The recommended needs for FY 2024/254 PUBLIC SAFETY  Volunteer Program Materials and Equipment  Specialized Public Safety Equipment and Supplies, including Support for Canine Program  Training Support for Public Safety Staff and Volunteers  Equipment, Supplies and Materials to support Police Operations  Community Outreach Program Supplies LIBRARY SERVICES  Children, Youth, and Adult Program Collections, Supplies and Services  Media items and other items for public circulation  Funding to Support Technological Enhancements, including Digital Services  Equipment and Services to Support Historical Preservation Efforts  Resource Support for Collection Development and Reference, Local History, and Library Policy  Items to be Used as Prizes, Give Aways, and Incentives for Reading Programs and Events SENIOR SERVICES  Home Emergency Kits Geared Towards the Needs of Seniors  Targeted Solicitations for Community Engagement per the Town Solicitation and Donation Policy COMMUNITY EVENTS  Supplies, Materials, and Services for Special Community and Volunteer Events and Activities  Funding for the Realization of Public Art Projects or Donations of Public Art Subject to the Town’s Public Art Selection Policy TOWN PARKS AND FACILITIES  Beautification Materials and Services for Town Parks, Open Space, and Infrastructure  Land for Parks and Open Space  Contributions that Support Recreation or Expansion of Athletic Fields  Contributions that Support Multi-Modal Transportation  Medical Devices that Enhance Public Safety SUSTAINABILITY  Contributions to Help Minimize Impacts on Local, Regional, and Global Ecosystems through Conservation, Reduced Pollution, Increased Efficiency, and Protection of Wildlife, Vegetation, and Other Ecosystems. TECHNOLOGY ATTACHMENT 8  Equipment, Software and Services to Enhance Communication with the Public and Organizational Productivity ATTACHMENT 9 ATTACHMENT 10 Subject: Attachments: From: Kimberly Snyder Sent: Thursday, April 4, To: Laurel Prevetti Cc: Jan Schwartz FW: Proposal for Town Council 2024 Town Proposal (1) (1).pdf > >; Katy Nomura Subject: Re: Proposal for Town Council I [EXTERNAL SENDER] Dear Laurel, Thank you for getting back to me so quickly and providing that information. Please find our proposal attached and let us know when a closed session may be possible. I'll work the board on attending the public finance committee meetings. As always, I appreciate your help. Warm regards, Kimberly On Thu, Apr 4, 2024 at 3:47 PM Laurel Prevetti Good afternoon, Thank you reaching out. I hope you are both doing well. >wrote: Our proposed budget is currently in preparation for distribution on April 22rni. We welcome any proposals and we will work with the Mayor to set a future closed session for discussion and next steps. If you want to discuss the proposal publicly, the Finance Commission will be discussing the Proposed Budget on April 29, May 6, and May 13. The Council holds its Budget hearings on May 21. Please let me know if you need anything else. Thank you, 1 3 Muwekma Ohlone Tribe Land Acknowledgment - As a member of the Los Gatos community, I acknowledge that I am a guest on the ancestral and traditional land of the First People of this region, the present-day Muwekma Ohlone Tribe of the San Francisco Bay Area historically Federally Recognized as the Verona Band of Alameda County. I support the restoration and sovereignty of this Chochenyo-Thámien-Ramaytush-Awáswas speaking BIA documented Ohlone Tribe, as well as all Indigenous Peoples. -- subscribe to our e-newsletter Kimberly Snyder Executive Director she / her p: 408.354.2646 a: 106 E. Main Street Los Gatos, Ca 95030 w: numulosgatos.org Engaging the community at the intersection of Art, History, and Education. Muwekma Ohlone Tribe Land Acknowledgment - As a member of the Los Gatos community, I acknowledge that I am a guest on the ancestral and traditional land of the First People of this region, the present-day Muwekma Ohlone Tribe of the San Francisco Bay Area historically Federally Recognized as the Verona Band of Alameda County. I support the restoration and sovereignty of this Chochenyo-Thámien-Ramaytush-Awáswas speaking BIA documented Ohlone Tribe, as well as all Indigenous Peoples. March 26, 2024 Dear Los Gatos Town Council: The Honorable Mayor Badame, Vice Mayor Hudes, and Council Members Ristow, Moore, and Rennie NUMU is requesting $350k investment over the next three years. Since rebranding and opening at the Los Gatos Civic Center, New Museum Los Gatos (NUMU) has achieved tremendous growth. The Museum is a beacon for arts and history in the Bay Area, attracting 6,500+ annual visitors, 30% from the Town of Los Gatos. We receive County, State and Federal recognition and funding. This proposal will enable the museum to invest in programs and exhibits that enhance our ability to attract visitors that contribute to the strength of our town’s local economy – dining, shopping, and spreading the word about the attractions of Los Gatos. It ensures the stewardship of the Permanent Los Gatos History Collection and creates a suite of programs geared to attracting and serving seniors. Specifically,this request includes support for the Los Gatos History Project for the next three years (June 30, 2024-July 1, 2027), as well as funding a monument sign at the Los Gatos Civic Center. This proposal aligns with the Towns 2024-2026 Strategic Priorities significantly enhancing community vitality and quality of Life in Los Gatos. As outlined in the strategic plan: ●Community Vitality ○Diversity, Equity & Inclusion Efforts ○Community Where Older Adults Thrive ○Events & Other Town-Wide Efforts ○Community Engagement ○Environmental Sustainability/Climate Resiliency Request #1: Provide $100k per year over the next 3 years in matching funds for the Los Gatos History Project for accessible programming, exhibitions and collections stewardship. Overview The Los Gatos History Project makes our permanent art and history collection accessible in-person and through an online database. This project invites the community to experience the under told stories of our town’s local history through programs and rotating exhibitions. Our professional museum staff is uniquely qualified in delivering exhibitions and programs, collections care and display. The museum has actively secured funds since 2019 to help fund this project. Most recently the museum received a grant from the Institute of Museum and Library Services (IMLS)to fund the project. The $65k per year investment represents 50% of the total program budget, the Page 1 required matching funds for the national IMLS grant. The additional $35k will provide partial matching funds for a new exhibition specific IMLS grant and an NEH grant. Secured Funding to date ●The County of Santa Clara Historic Grant Program (2019-2022) invested $260k in initial funding. ●Institute of Museum and Library Services (IMLS)grant of $190k (matching grant over 3 years 2022-2025) to continue our work stewarding the Town’s history–this grant requires a 1:1 match ●Since 2021 NUMU has raised an additional $125k to continue this work over the next three years ●Institute of Museum and Library Services (IMLS)$120k in matching funds Muwekma Ohlone Exhibition. Application submitted November 2023, award notification date August 2024. ●National Endowment for the Humanities (NEH)$75k in matching funds Frank & George Exhibition. Application submitted August 2023, award notification date June 2024. Upcoming Projects/Programs ●Produce history related exhibitions and programs sharing untold histories of Los Gatos and the surrounding areas that support the town’s DEI goals. ○Upcoming Exhibitions: ■The Los Gatos History Project: exploring untold stories:rotating exhibits highlighting and displaying the wide range of artifacts from the Permanent Collection. ■Revitalization: Culture, Heritage and Traditions of the Muwekma Ohlone Tribe (2025/26.) Building on the successful Muwekma Ohlone exhibits of 2021, which traveled to the DeSaisset Santa Clara University Museum in January 2024, and has been requested by Alameda Creek Watershed, Stanford, CSU Monterey Bay and Grace Hudson Museum in Ukiah, CA. ■The Boys: Frank Ingerson and George Dennison (2026-) NUMU has the most comprehensive collection representing the lives of these prolific artists and life partners and their home, Cathedral Oaks, a mountain destination for creatives in mid-20th-century Los Gatos. ○Accessible Programs ■Monthly Free Public Art & History Tours on Free First Sundays. ■Private Tours for local senior groups. ■Monthly e-newsletters and social media posts ■Collection Lab: Lectures & talks with scholars, subject matter experts and local community partners. Examples include: ●Billy Jones Railroad Page 2 ●How to archive your family’s collection (catalogIt) ●Caring for your collection ●Lectures with Los Gatos History Bill Wulf ●History Still Life Drawing Workshops ●Talks with the Curator ●Loma Prieta Earthquake 35th anniversary ■Footbridge Aspiring Artist Mural Program: NUMU provides a 3 week camp for ages 8-12 to create a mural to be placed on the footbridge celebrating life in Los Gatos. Students learn about Los Gatos history and art basics. ■Presenting at statewide conferences bringing attention and visibility to the important work achieved in Los Gatos. ●We are asking the Town to participate in preserving and presenting its history. The Collection The Town has highly valued the importance of preserving the Town map from 1891. This is only one of the invaluable historical pieces in our collection. ●Recently acquired the collections of local historian Bill Wulf and the Billy Jones Family. These are truly historical treasures of Los Gatos history. ●To date the museum has digitized over 2,600 artifacts in our permanent collection. This funding would ensure that we can digitize our entire collection which far exceeds our original estimate of 3,000 artifacts, making them accessible for the Los Gatos community and beyond. (View the database:https://hub.catalogit.app/4267) ●Town support is critical to continuing this project, keeping the Town’s history maintained and accessible. Request #2: $50k Investment in increasing the Museum’s Visibility The museum has increased its reach in the Bay Area. Through strategic investments in marketing initiatives we will attract visitors to our exhibitions, programs and community events, encouraging Los Gatos tourism, while enhancing services and programs to our local residents. This will provide a source of direct revenue for the museum and generate indirect revenue in the town. Our vision is to make the Civic Center a central community hub. This initiative is an effort to elevate and beautify the space attracting visitors from Los Gatos and beyond. - Increase Visibility at Civic Center - Monument sign on Main Street ($50,000) NUMU’s relationship with the Town of Los Gatos is vital to us and our ongoing ability to serve our community. Thank you from all of us for your continued support. Page 3 In partnership, Kimberly Snyder, NUMU Executive Director Jan Schwartz, NUMU Board President Page 4 Museum’s Impact FY23 (July 1,2022-June 30,2023) 6,000+Annual Visitors (30%from Los Gatos,25%from San Jose) 100+Exhibiting Artists (Bay Area) ●Marie Cameron,Alexander Hernandez,Kathy Aoki ●83 emerging high school artists ●&more! 1,800+Digitally cataloged and archived items from the Permanent Collection 10 Rotating Art and History Exhibitions ●Reclamation ●ArtNow 2023:Unarmed Truth ●Terra Firma ●ArtNow,Annual High School Juried Exhibition and Educational Program ●&more! 380+Artworks &Artifacts Displayed 24 Programs &24 Workshops,highlights include: ●Content Pick-Up Party (~300 visitors) ●Aspiring Artists Footbridge Mural Project ●Honoring the Earth with Mosaic America ●&more! 30+Community Partners,including ●Muwekma Ohlone Tribe of the San Francisco Bay Area ●Mosaic America ●San Josè State University ●Los Color ●Santa Clara Office of Education ●Los Gatos Library ●Los Gatos Art Association ●&more! Museum’s Strategic Priorities 1.Visibility -signage,marketing 2.Financial strength 3.Improving operations -fill all positions with competitive packages 4.Board development -ambassadors for the Museum and the community Page 5