2011060607 - Approval of Operating and Capital Budget FY2011/12MEETING DATE: 6/6/2011
ITEM NO:
COUNCIL AGENDA REPORT
DATE: DUNE 2, 2010
TO: MAYOR AND TOWN COUNCIL/
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT: ADOPT RESOLUTIONS APPROVING THE TOWN AND
REDEVELOPMENT AGENCY'S FISCAL YEAR 2011/12 OPERATING
BUDGET, CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEARS
2011/12-2015/16, CARRY -FORWARD APPROPRIATIONS, AND OTHER
APPROVED ADJUSTMENTS AND MINOR CORRECTIONS
RECOMMENDATION:
1. Adopt resolution approving the FY 2011/12 Operating and Capital Summary Budget and
the FY 2011-16 Capital Improvement Program for the Town of Los Gatos, directing
staff to incorporate within the final adopted budget any changes related to Council
approved meet and confer process or management compensation plan amendments,
classification adjustments or minor corrections, carryforward appropriations, changes due
to more refined estimates and grant approvals, or additional Town Council direction
received by staff upon adoption of the budget.
2. Adopt resolution approving the FY 201/12 Operating and Capital Summary Budget and
the FY 2011-16 Capital Improvement Program for the Redevelopment Agency of Los
Gatos, directing staff to incorporate within the final adopted budget any changes related
to Council approved meet and confer process or management compensation plan
amendments, classification adjustments or minor corrections, carryforward
appropriations, changes due to more refined estimates and grant approvals, or additional
Town Council direction received by staff upon adoption of the budget.
BACKGROUND:
On May 16, 2011, a public hearing was held on the Town and Redevelopment Agency's
Proposed FY 2011/12 Operating and Capital Summary Budget, and Proposed FY 2011-16
c..1 e d "a (011/9
PREPARED BY: PAMELA JACOBS
Assistant Town Manager
Reviewed by: Assiat. t Town Manager Town Attorney
Clerk Administrat.Finance ommunity Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE 2010/11 OPERATING/CAPITAL
BUDGET
JUNE 2, 2010
Capital Improvement Program (CIP). The Town Council considered both documents and
directed staff to bring back the documents for final approval.
Prior to Council consideration of the CIP, the Planning Commission reviewed the CIP as
required by State law on April 27, 2011. The Commission determined that the CIP is consistent
with the General Plan and all specific plans.
Staff is recommending one appropriation modification to the Proposed Operating and Capital
Budget pursuant to Council direction at this time. Any additional changes or corrections directed
by the Town Council upon adoption of the budget can be incorporated into the final authorized
budget as provided for in the adopted Budget Resolution.
DISCUSSION:
The attached resolutions incorporate several items as discussed below:
Limited One -Time Use of Reserves
At the May 16, 2011 budget hearing, Council authorized a one-time use of up to $65,000 of
reserves to maintain Sunday hours at the Library. Even with this minimal one-time allocation,
the Town's Budget Stabilization Reserve continues to exceed the overall minimum requirement
called for in the Reserve Policy adopted by the Town Council on May 16th. As discussed at the
budget hearing, it is expected that the Town will need to use reserves over the next five years in
response to the anticipated decline of Netflix sales tax revenues and rising employee benefit
costs.
Other Budget Items
Chamber of Commerce — An additional $2,000 will be included in the agreement with the
Chamber of Commerce to cover costs associated with the Chamber -operated Town Information
Center in its new location, including some weekend hours and services to meet the needs of
visitors.
Encumbered Items Outstanding at June 30, 2011 - Town policy calls for unexpended
encumbered funds to lapse at the end of the fiscal year. However, Town policy also provides
that valid encumbrances open at the end of the fiscal year may be carried forward to the
following fiscal year and re -appropriated from the encumbrance reserve dollars set aside upon
the close of the prior fiscal year.
Because of the need to reduce expenditures, the majority of encumbrances will be closed out
during the year-end process or paid in full bythe time of the final fiscal year close-out and will
not be carried forward to FY 2011/12. Only on an exception basis through Town Manager's
approval are outstanding encumbrances or unspent appropriated balances from the prior year
carried forward. These amounts will be reserved in their respective funds at year end under a
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE 2010/11 OPERATING/CAPITAL
BUDGET
JUNE 2, 2010
designated reserve. Capital Project Fund appropriations differ in that encumbrances are carried
forward to the following fiscal year until the projects are completed.
Non -Encumbered Items - In addition to the open encumbrances outstanding at year-end, staff is
proposing to bring forward remaining current year appropriations for unexpended balances in its
grant funded operating projects. Grants provide matching revenues for expenditures and often
span two or three fiscal years in their program or project implementation.
Community Development Staffing — The proposed operating budget includes temporary and part-
time staffing in the Community Development Department to help meet anticipated planning and
building workloads. However, if workloads and corresponding revenues increase, additional
staffing will be required. Consequently, the attached resolution includes authorization for the
Town Manager to increase temporary staffing or to convert temporary positions to regular
positions as needed to meet rising workloads with associated fee and permit revenues at no net
increase to the General Fund. Any such increases or conversions will require prior notice to the
Council.
FISCAL IMPACT:
The fiscal impact of the Town and Redevelopment Agency's FY 2011/12 Operating and Capital
Budgets is provided in the Financial Summaries section of the budget document including
estimates of Fund Reserves at June 30, 2012.
As stated by staff at the public hearing on May 16, 2011, the Town will continue to monitor state
actions and local economic trends and their associated impacts to the Town and RDA's adopted
FY 2011/12 budgets. It is currently anticipated that staff will bring forward any further
adjustments necessary in the Town's mid -year budget review. These adjustments may include
some further actions necessary to align operating revenues with expenditures; however, staff
cannot determine at this time whether or not these will be required. Staff will also provide an
update on further reorganizations, service reductions and cost controls necessary to balance
future year budgets.
Attachments:
1. Resolution of the Town Council Approving FY 2011/12 Operating Budget and FY 2011-16
Capital Improvement Program
2. Resolution of the Redevelopment Agency Approving FY 2011/12 Operating Budget and FY
2011-16 Capital Improvement Program
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RESOLUTION 2011-XXX
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
APPROVING FY 2011/12 OPERATING BUDGET & FY's 2011/12 - 2015/16 CAPITAL BUDGET
AND CARRY -FORWARD APPROPRIATIONS AND OTHER APPROVED ADJUSTMENTS
RELATED TO ANY BARGAINING GROUP, CONFIDENTIAL EMPLOYEE, OR
MANAGEMENT COMPENSATION PLANS, CLASSIFICATION ADJUSTMENTS, MINOR
CORRECTIONS, AND REFINED ESTIMATES
WHEREAS, Section 2.30.295(b) of the Los Gatos Town Code requires the Town Manager
to annually prepare and submit a budget to the Town Council and be responsible for its administration;
and
WHEREAS, the Town Manager submitted a proposed budget for the 2011/12 to the Town
Council; and
WHEREAS, the Town Manager submitted a proposed five-year capital improvement plan
for FY"s 2011/12 — 2015/16; and
WHEREAS, the Town Council has considered and reviewed said proposed budget and
capital improvement plan during public hearings.
RESOLVED, that the Town Council hereby adopts as the budget for the Town of Los
Gatos for the 2011/12 fiscal year the schedule entitled "Total Town Revenues By Fund and Total Town
Expenditures By Fund (Exhibit A) including the first year (FY 2011/12) of the Town's Capital
Improvement Program budget as contained in the Town's FY's 2011/12 — 2015/16 Capital Improvement
Plan.
BE IT FURTHER RESOLVED, that the final adopted budget includes approved carry -
forward appropriations for unspent operating grants and pass-throughs from FY 2010/11, and that there
be carried forward from prior years Reserve for Encumbrances within each fund an amount sufficient to
cover approved outstanding encumbrances as of June 30, 2011;
RESOLVED, Town Council authorizes the Town Manager to increase temporary staffing
or to convert temporary positions to regular positions as needed to meet rising workloads with associated
fee and permit revenues at no net increase to the General Fund. Any such increases or conversions will
require prior notice to the Council; and
Attachment 1
BE IT FURTHER RESOLVED, that the Town Council hereby directs staff that any
changes or impacts resulting from: Council approval of any bargaining group, confidential employee, or
management compensation plans; from classification adjustments or miscellaneous corrections; from
changes due to more refined estimates or grant approvals; or from further Town Council consensus
direction received on June 6, 2011, be incorporated within the final FY 2011/12 Operating and Capital
Budget.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the 6`h day of June, 2011 by the following vote:
COUNCIL MEMBERS: Mayor Joe Pirzynski, Vice Mayor Steve Rice, and Council
Members Diane McNutt, Barbara Spector and Steve Leonardis
AYES:
NAYS:
AB SENT:
ABSTAIN:
SIGNED: /s/ Joe Pirzynski
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:/s/ Jackie D. Rose
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
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TOTAL TOWN REVENUES BY FUND AND TOTAL TOWN EXPENDITURES BY FUND
TOWN REVENUES & OTHER FUNDING SOURCES
General Fund
Special Revenue Funds
Internal Service Funds
Trust & Agency Funds
Capital Project Funds (does not include carryforwards)
Redevelopment Agency Funds
TOTAL TOWN REVENUES & OTHER FUNDING SOURCES
2011/12 -
Proposed
Budget
$ 33,424,883
398,294
4,250,308
198,148
13,593,010
11,136,087
$ 63,000,730 $
Budget
Revision
2011/12
Recommended
Budget
$ 33,424,883
398,294
4,250,308
198,148
13,593,010
11,136,087
$ 63,000,730
TOTAL TOWN EXPENDITURES, TRANSFERS OUT & CARRYFORWARD APPROPRIATION
General Fund $ 36,266,128 $ 67,000 $ 36,333,128
Special Revenue Funds 395,031 395,031
Internal Service Funds 4,321,604. 4,321,604
Trust & Agency Funds 627,799 627,799
Capital Project Funds (does not include carryforwards) 14,266,549 14,266,549
Redevelopment Agency Funds 9,971,577 9,971,577
TOTAL TOWN EXPENDITURE& OTHER FUNDING USES $ 65,848,688 $ 67,000 $ 65,915,688
Exhibit A
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RESOLUTION 2011-XXX
RESOLUTION OF THE REDEVELOPMENT AGENCY
CONSENTING TO THE PROVISION OF PUBLIC IMPROVEMENTS BY THE LOS GATOS
REDEVELOPMENT AGENCY AND MAKING MANDATORY FINDINGS IN REGARDS TO
CAPITAL PROJECTS PROVIDED FOR IN THE LOS GATOS REDEVELOPMENT AGENCY
FY 2011/12 OPERATING AND FY's 2011/12 - 2015/16 CAPITAL IMPROVEMENT PLAN
WHEREAS, Section 33445 of the Health and Safety Code requires the local legislative body to
consent to the provision of public improvements by its Redevelopment Agency and make findings: 1) that
the public improvements are of benefit to the project area or the immediate neighborhood of the project
area; 2) that no other reasonable means of financing such public improvements are available to the
community, and; 3) that the Agency's contribution to the cost of the public improvement or facility will
assist in eliminating one or more blighting conditions in the project area, and is consistent with the
Agency's implementation plan adopted pursuant to Section 33490 of the Health and Safety Code, the
(Implementation Plan), and
WHEREAS, the Redevelopment Agency's FY 2011/12 - 2015/16 Capital Budget provides
funding for the following project: Almond Grove Concrete Rehabilitation
WHEREAS, the Projects will be of substantial benefit to the downtown business district and
surrounding areas of the Central Los Gatos Redevelopment Project Area (the Project Area) established
pursuant to the 1991 Redevelopment Plan (the Redevelopment Plan);
WHEREAS, the Town has limited financial resources for capital improvements and these funds
are committed to other critical infrastructure needs of the Town such as repairing aging streets outside of
the Project Area;
WHEREAS, the Projects have been specifically called for in the Town's Redevelopment Plan and
Implementation Plan; and
WHEREAS, the Downtown infrastructure was initially in a deteriorated condition with broken
pavement, deteriorated streets and alleys, deteriorated sidewalks, and functionally obsolescent, and the
capital projects have helped, and continue to help, eliminate these blighting conditions;
THEREFORE BE IT RESOLVED, that the Town Council of the TOWN OF LOS GATOS does
hereby consent to the provision of funding for the Capital Projects by the Los Gatos Redevelopment
Agency in accordance with the Agency's • FY 2011/12 Operating and FY 2011/12 - 2015/16 Capital
Improvement Program budgets totaling adopted revenues of $11,136,087 and expenditures of $9,971,577
(prior to carry -forward appropriations); and
ATTACHMENT 2
BE IT FURTHER RESOLVED, that the Agency Board hereby finds that the Projects are of
benefit to the Project Area and the immediate neighborhood of the Project Area; and
BE IT FURTHER RESOLVED, that the Agency Board hereby finds that no other reasonable
means of financing such public improvements are available to the community; and
BE IT FURTHER RESOLVED, that the Agency Board hereby finds that the Los Gatos
Redevelopment Agency's contribution to the cost of the public improvements will assist in eliminating
blighting conditions in the Project Area, and is consistent with the Implementation Plan.
BE IT FURTHER RESOLVED, that the Agency Board hereby directs staff that any changes or
impacts resulting from: Council approval of the meet and confer process or management compensation
plan; from classification adjustments or miscellaneous corrections; from changes due to more refined
estimates or grant approvals; or from further Agency Board consensus direction received June 6, 2011, be
incorporated within the final FY 2011/12 Operating and Capital Budget.
PASSED AND ADOPTED at a regular meeting of the Redevelopment Agency of the Town of
Los Gatos held the 6th day of June, 2011, by the following vote:
REDEVELOPMENT AGENCY MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED: /s/ Mayor Joe Pirzynski
CHAIR OF THE REDEVELOPMENT AGENCY
TOWN OF LOS GATOS, CALIFORNIA
ATTEST: /s/ Jackie D. Rose
SECRETARY OF THE REDEVELOPMENT AGENCY
TOWN OF LOS GATOS, CALIFORNIA
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