2025-064 - Approving Commitmetns of Fund Balance Under GASB54 RESOLUTION 2025-064
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, committed, or unassigned 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, 2025, in the Nonspendable
Reserve; and
WHEREAS, there exists a balance of $3,090,731 as of June 30, 2025, 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
WHEREAS, the Budget Stabilization and Catastrophic Reserve should be maintained at the
required minimum 12.5%of Fiscal Year(FY)2025-26 general fund budgeted operating expenditures
of$7,870,639 as specified in the Town Council General Fund Reserve Policy. This would increase
both Budget Stabilization and Catastrophic Reserves from $6,736,781 by $1,133,858 from the
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 into the reserve with formal Council action
and transferring available year-end surpluses based on the General Fund Reserve Policy; and
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Resolution 2025-064 December 16,2025
WHEREAS, per Town Council General Fund Reserve Policy, $300,000 will be placed in the
CaIPERS/OPEB Reserve from available year-end savings; and
WHEREAS, there exists a balance of $1,300,000 as of June 30, 2025, in the committed
CaIPERS/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
received in the General Fund Appropriated Reserve for capital purposes; 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, 2025, 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
WHEREAS, there exists an excess balance of$140,553 as of June 30, 2025, 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 exists a current balance of$1,201,824 as of June 30, 2025, in the assigned
Market Fluctuation Reserve; and
WHEREAS, there exists an assigned Carryover Encumbrances Reserve for material and
services on purchase orders and contracts which are unperformed in the amount of$6,367; 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$1,519,243; 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
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Resolution 2025-064 December 16,2025
WHEREAS, there exists an assigned Capital/Special Project Reserve in the amount of
$1,983,271; and
WHEREAS,the remainder of the available year-end savings will be placed in the Unassigned
Fund Balance according to the Town Council General Fund Reserve Policy; and
WHEREAS, there exists an unassigned fund balance in the amount of$10,211,049; and
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY
RESOLVE that the following fund balances as of June 30, 2025, are restricted, assigned, unassigned,
or formally committed as follows:
Other
Nonmajor Total
Appropriated Governmental Governmental
General Fund Reserves Funds Funds
Fund Balance
Nonspendable $ 159,000 $ - $ - $ 159,000
Restricted for:
Library - - 559,744 559,744
Capital Projects - - 8,719,695 8,719,695
Repairs and Maintenance - - 193,606 193,606
Pension 3,090,731 3,090,731
VTA - 263,061 - 263,061
Committed to:
Budget Stabilization 7,870,639 - - 7,870,639
Catastrophic 7,870,639 - - 7,870,639
CaIPERS/OPEB 1,300,000 - - 1,300,000
Special Revenue Fund - 1,211,943 1,211,943
Measure G District Sales Tax - 1,376,181 - 1,376,181
Assigned to:
Open Space 410,000 152,000 - 562,000
Parking - 292,000 - 292,000
Sustainability 140,553 - - 140,553
Capital/Special Projects 1,983,271 14,760,358 - 16,743,629
Comcast PEG - 50,000 - 50,000
Carryover Encumbrances 6,367 - - 6,367
Compensated Absences 1,519,243 - - 1,519,243
Market Fluctuation 1,201,824 - - 1,201,824
Unassigned 10,211,049 - - 10,211,049
Total Fund Balances $ 35,763,316 $ 16,893,600 $ 10,684,988 $ 63,341,904
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Resolution 2025-064 December 16,2025
PASSED AND ADOPTED at a regular meeting of the Town Council held on the 16th day of
December, 2025, by the following vote:
COUNCIL MEMBERS:
AYES: Maria Ristow, Rob Rennie, Matthew Eludes, Mary Badame, Mayor Rob Moore
NAYS: None
ABSENT: None
ABSTAIN: None
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
TOWN GLE OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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Resolution 2025-064 December 16,2025