2026-035 - Approve Commitments of Fund Balance under GASB 54RESOLUTION 2026-035
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 Restricted General Fund Pension Reserve in the form of an IRS
115 Pension Trust; and
WHEREAS, there exists a balance of $3,780,731 as of June 30, 2026 in the restricted
Pension 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 Reserve fund balances and outlines policies and procedures for
use and restoration of these balances; 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 to be determined at the close of FY 2025-26; and
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Resolution 2026-035 June 2, 2026
WHEREAS, there exists an assigned Capital/Special Projects Reserve to fund key
infrastructure and capital/special projects as identified in the Town's five-year Capital
Improvement Plan, and/or other Council priorities; and
WHEREAS, there exists an assigned authorized Carry Forward Reserve for materials and
services on approved purchase order and contracts which were issued but not finalized or fulfilled
as of the end of the fiscal year but for which funds will be carried forward to the following fiscal
year. Actual reserve balance will be established at the close of FY 2025-26; and
WHEREAS, in June 2016, the Town Council established the committed Pension/OPEB
Reserve to provide funding toward pension and Other Post -Employment Benefits (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, there is an anticipated excess balance of $1,300,000 as of June 30, 2026 in the
assigned OPEB/Pension Reserve, and
WHEREAS, The Town Council established the assigned Sustainability Reserve in FY 2008-
09 by closingthe Solid Waste Management fund and placingthe initial residual balance dedicated
for conservation, recycling, and sustainability; and
WHEREAS, there exists an excess balance of $140,553 as of June 30, 2026 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, actual reserve
balance will be established at the close of FY 2026-27; and
WHEREAS, there exists an assigned 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 50%for operating expenditures and 50%for capital purposes until the end
of FY 2024-25; and
WHEREAS, the Town Council has determined the use of 100% of the Measure G
estimated proceeds from FY 2025-26 will go towards operating expenditures; and
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Resolution 2026-035 June 2, 2026
WHEREAS, the Town Council will determine the use of Measure G beyond FY 2027-28
after the completion of the external review of the Five -Year Forecast and a comprehensive Fiscal
Impact Analysis, and
WHEREAS, the committed residual balance of $590,581 that was set aside for operating
purposes in FY 2020-21 was programmed to be used for operating expenses in FY 2024-25 if
needed; and
WHEREAS, the portion of the committed residual balance of $590,581 was not used for
operating expenses in FY 2024-25, and was placed in the Unassigned Fund Balance, and
WHEREAS, there exists an excess balance of $0 as of June 30, 2026 in the Measure G Sales
Tax Reserve for Operation, and
WHEREAS, there exists an excess balance of $11,488,344 as of June 30, 2026 in the
Unassigned Fund Balance, and
WHEREAS, the FY 2026-27 budget transfers $3,000,000 from the General Fund
Unassigned Fund Balance to the newly established Committed General Fund Appropriated Long -
Term Community Benefit Reserve; and
WHEREAS, the FY 2026-27 budget anticipates a deficit of $2,653,497; and
WHEREAS, there exists an excess balance of $8,444,847 as of June 30, 2027 in the
Unassigned Fund Balance, final balances will be determined at the close of the FY 2026-27 fiscal
year; 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
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Resolution 2026-035 June 2, 2026
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY
RESOLVE that the following estimated Pension, Budget Stabilization, Catastrophic,
Pension/OPEB, Capital/Special Projects, Compensated Absences; Market Fluctuations,
Sustainability, Open Space, and Unassigned Fund Balance as of June 30, 2026 and as of June 30,
2027 as restricted, assigned, unassigned or formally committed as follows:
Actual
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General Fund
Budget, GF
Budget, GF
General Fund
Budget
Budget
General Fund
Reserves
Reserve Policy,
Reserve Policy,
Reserves
Resolution
Resolution
Reserves
June 30, 2025
and this
and this
June 30, 2026
Approved
Approved
June 30, 2027
Resolution
Resolution
Increase
(Decrease)
Approved
Approved
Increase
(Decrease)
Restricted Fund Balances
Pension
$ 3,090,731 $
690,000 $
-
$ 3,780,731 $ 390,000
$ - $ 4,170,731
Nonspendable
Rehab Loan Reserve(Nonspendable)
159,000
-
-
159,000 -
- 159,000
Committed Fund Balances
Budget Stabilization
7,870,639
(332,187)
7,539,452 -
- 7,538,452
Catastrophic
7,870,639
(332,187)
7,538,452 -
- 7,538,452
Pension/OPEB
1,300,000
300,000
(300,000)
1,300,000 -
- 1,300,000
Assigned Fund Balances
Capital/Special Projects
1,983,271
-
1,983,271 -
- 1,983,271
Compensated Absences
1,519,243
-
-
1,519,243
- 1,519,243
Open Space
410,000
-
-
410,000 -
- 410,000
Sustainability
140,553
-
140,553 -
- 140,553
Market Fluctuations
1,201,824
-
-
1,201,824 -
- 1,201,824
Carryover Encumbrances
6,367
-
-
6,367 -
- 6,367
Unassigned Fund Balance
10,211,049
1,277,295
-
11,488,344 6,503
(3,050,000) 8,444,847
Total Fund Balances
$ 35,763,316
$ 37,066,237
$ (3,050,000) $ 34,412,740
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Los Gatos held on the 2pd day of June, 2026, by the following vote:
COUNCIL MEMBERS:
AYES: Rob Rennie, Maria Ristow, Matthew Hudes, Mary Badame, Mayor Rob Moore
NAYS: None
ABSENT: None /
ABSTAIN: None
SIGNED: _
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTES
TOWN CLE I O'r THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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Resolution 2026-035 June 2, 2026