Adopt Reso Operating Budget FY 14/15M MEETING DATE: 6/02/14
ITEM NO: i q
41 1
s s COUNCIL AGENDA REPORT
DATE: MAY 27, 2014
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS
FISCAL YEAR 2014/15 OPERATING BUDGET AND FY 2014/15 — FY
2018/19 CAPITAL IMPROVEMENT PROGRAM (CIP), NEW
APPROPRIATIONS, AND OTHER APPROVED ADJUSTMENTS AND
MINOR CORRECTIONS
RECOMMENDATION:
Adopt Resolution approving the FY 2013 /14 Operating and Capital Summary Budget and the FY
2014/15 — FY 2018/19 Capital Improvement Program (CIP) 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, carry- forward 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 19, 2014, a public hearing was held to discuss the Proposed FY 20134/15 Town
Operating and Capital Summary Budget and Proposed FY 2014/15 — FY 2018/19 Capital
Improvement Program (CIP). The Town Council considered both documents and directed staff
to bring back the documents for final approval. Any additional changes or corrections directed
by Council upon adoption of the budget can be incorporated into the final authorized budget
provided for in the attached resolution (Attachment 1).
PREPARED BY:
Finance and
Reviewed by: Assistant Town Manager
Services Director
Attorney _Finance
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE FY 2013/14 OPERATING AND
CAPITAL BUDGETS
May 27, 2013
The attached resolution incorporates the following actions directed by a majority of the Council
at the May 19, 2014 budget hearing.
Community Service Officer Pilot Program for Downtown Nuisances. At the May 19, 2014 FY
2014/15 budget hearing, Council authorized one -time funding for a pilot program to fund a part-
time temporary Community Services Officer (CSO) within the Police Department tvjespond to
evening/weekend noise, parking and other nuisance complaints. The program will be a one -year
pilot program, budgeted for $50,000 which will be allocated from the Special Studies/Incentives
reserve which totals $490,000. Staff will provide a review for Council during the mid -year
budget process to report on the effectiveness of the program and, if successful, a
recommendation regarding continuance along with potential funding sources will be included in
the FY 15/16 budget.
School Traffic Study Analysis and Improvements. Recognizing the importance of traffic flow
and the impact of traffic and parking congestion in and around the streets of Los Gatos schools, a
Council majority authorized up to $100,000 in funding for a comprehensive school - related traffic
study and improvements for the streets surrounding the Los Gatos High school, Fisher Middle
School and Van Meter Elementary School, contingent on school district participation. The study
will focus on identifying potential Town or school improvements that may help to alleviate some
of the current congestion problems at the start and end of school days. Up to $100,000 from the
Special Studies /Incentives reserve will be allocated for this study; however, use of these funds
will be contingent upon participation by and financial support from the affected school districts.
Staff will present Council with a plan for the study participation options after discussion with the
school districts.
Affordable Housing Funding Request As stated in the attached email (Attachment 2), the
regional affordable housing advocacy organizations have dropped two of their funding requests:
the ongoing funding from re- directed redevelopment sources of roughly $80,000 per year and the
$100,000 grant for the Silicon Valley Housing Trust. They continue to request reallocation of re-
directed one -time redevelopment sources up to $578,000.
The one -time request of $578,000 is based on the full amount of funding returned to the Town
from the $6.5 million of former redevelopment affordable housing funds (often called 20%
funds) that were taken from the Town with the dissolution of redevelopment. The County Board
of Supervisors has committed to "match" this maximum level of funding with $754,000 from the
County's own redirected affordable housing funds received from the Town. The Town could, if
it so chooses, establish any level of one -time affordable housing funding up to $578,000, and
County representatives have stated they would "match" that level of funding proportionately.
The alternative one -time funding level presented at the budget hearing by staff was
$237,000. This number was derived by applying the former redevelopment 20% affordable
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE FY 2013/14 OPERATING AND
CAPITAL BUDGETS
May 27, 2013
housing ratio to all of the one -time redirected redevelopment funds received by the Town
totaling $1.2 million. The County has indicated that they would match this funding on a
proportional basis with $309,000.
The County has set June 17, 2014 as the deadline by which former redevelopment agency
jurisdictions must take budgetary action designating the one -time funds that would be "matched"
by the County. To date, Mountain View, Campbell and Morgan Hill have taken such actions,
while action in Santa Clara, San Jose, Milpitas and Cupertino is still pending.
The requested budgetary action would be to set aside the funds in a Town- designated reserve for
future allocation to a qualified affordable housing use. This is the same action taken by the
County with its "matching" one -time funds. The actual use and expenditure of both the Town's
and the County's funds designated for affordable housing would be contingent on subsequent
submission, review and approval by both the Town Council and the Board of Supervisors of a
specific affordable housing proposal with associated contractual and other agreements. The
Town would retain the authority to reallocate the affordable housing designated reserve at any
point, but would consequently "lose" access to the County's "match" for future affordable
housing purposes in Los Gatos.
The County has specified that any municipal funds designated for the County "match" must not
be existing affordable housing funds, such as the $2 million the Town currently has in its
affordable housing Below Market Price in -lieu fund. Consequently, staff proposed in the
Addendum for the May 19, 2014 Budget Hearing that the Council consider reallocation of the
$490,000 in the Special Studies designated reserve (see pages C -26 and C -27 of the Proposed
Operating Budget) for this and other purposes. This designated reserve was first established
three years ago for potential special studies and was then increased to nearly $500,000 when
there was a potential need to draw on reserves to balance the FY 12/13 budget. That reserve was
not needed given higher than budgeted revenues and lower than budgeted expenditures actually
occurred during the course of the year, but the funds remain as a designated reserve available to
the Council for this or other uses.
Based on majority Council direction on May 19, 2014, the proposed budget resolution includes
the following:
Be it further resolved that $237, 000 be reallocated from the Special Studies designated reserve
to a new Affordable Housing designated reserve to be used solely for affordable housing
purposes in Los Gatos when matched with $309, 000 from the County of Santa Clara, subject to
further Council review and approval;
Ca1PERS Safety Liability Side Letter Funding. In the Staff Report for the May 19, 2014 Town
Council Budget Hearing, staff informed the Town Council of the possibility of reducing a long-
term liability remaining from the consolidation of the Town's safety pension program with other
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE FY 2013/14 OPERATING AND
CAPITAL BUDGETS
May 27, 2013
smaller safety pension programs as required by PERS. Staff indicated that staff would return
later in the calendar year with a recommendation and potential actions if the analysis proved the
early payment of the liability was financially prudent. Council members requested additional
information as soon as possible.
Working with PERS this week, staff has received preliminary information that suggests the early
payment of the existing PERS Safety liability would likely be financially beneficial to the Town
given the Town's Five Year Forecast. Specifically, if the Town provides an upfront payment of
up to $4.5 million, the Town's annual PERS payments would reduce by approximately $750,000
next fiscal year with the forecasted reduction rising to $900,000 over the following 5 years, when
the liability would have been fully paid in any case. Payment of less than the $4.5 million total
liability would have proportional reductions in the annual savings achieved thereafter.
Town staff would recommend the following sources of funds to pay down some or all of the
existing liability:
■ $2.0 million from the Budget Stabilization Fund in excess of the Council Policy
specified 12.5% reserve;
■ $1.5 million from the existing PERS reserve established during the Town's
pension "Holiday" in the late 1990's; and/or
■ $1.0 million in anticipated year -end fund balance from higher revenues and lower
expenditures than budgeted.
It is important to note that all of these are General Fund resources, as would be the savings from
the reduced annual PERS operating payments. There would be no changes to employee required
pension contributions, and neither the use of funds nor savings are subject to any collective
bargaining with employee organizations.
No action from Council would be needed at this time except for direction to pursue timely early
payment of some or all of the existing liability. Staff would then return with the PERS required
actions in August, if possible.
FISCAL IMPACT:
The fiscal impact of the Town Operating and Capital Budgets is provided in the Financial
Summaries section of the budget document including estimates of Fund Reserves at June 30,
2015. Staff will bring forward applicable budget adjustments as part of the Town's mid -year
budget review, including mid -year results of the pilot Police Community Resource Officer
position and a recommendation, if appropriate to continue the program with funding source
possibilities.
PAGE 5
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION APPROVING THE FY 2013/14 OPERATING AND
CAPITAL BUDGETS
May 27, 2013
Attachments:
1. Resolution of the Town Council Approving FY 2013/14 Operating Budget and FY
2014/15 — FY 2018/19 Capital Improvement Program (CIP)
2. Email from Kevin Zwick, Housing Trust Silicon Valley, dated May 29, 2014
3. Public communication received through 12:00 pm, May 29, 2014
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RESOLUTION 2014 -XXX
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
APPROVING THE FY 2014/15 OPERATING BUDGET AND FY 2014/15 — FY 2018/19 CAPITAL
BUDGET AND OTHER APPROVED APPROPRIATIONS RELATED TO COMMUNITY
RESOURCE OFFICER INTERN PILOT PROGRAM, ONLINE DEVELOPMENT ACTIVITY
AND PERMIT TRACKING, ARTS FUNDING, AND MINOR CORRECTIONS
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 FY 2014/15 to the
Town Council; and
WHEREAS, the Town Manager submitted a proposed five -year capital improvement plan
for FY 2014/15 — FY 2018/19; 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 2014 /15 fiscal year the schedule entitled "Total Town Revenues By Fund and Total Town
Expenditures By Fund (Exhibit A) including the first year (FY 2014/15) of the Town's Capital
Improvement Program budget as contained in the Town's FY's 2014/15 — 2018/19 Capital Improvement
Plan.
BE IT FURTHER RESOLVED, that the final adopted budget includes approved
appropriations for unspent prior year allocations, 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, 2014;
BE IT FURTHER RESOLVED, that $50,000 be allocated from the Special Studies
designated reserve for a one -time pilot program to fund a Police Community Services Officer to respond
to evening/weekend noise, parking and other nuisance complaints in the downtown;
BE IT FURTHER RESOLVED, that $100,000 be allocated from the Special Studies
designated reserve to implement a comprehensive school- retated traffic and parking study for the streets
surrounding Los Gatos High School, Fisher Middle School and Van Meter Elementary School contingent
on participation and financial support from the affected school districts;
ATTACHMENT
BE IT FURTHER RESOLVED, that $237,000 be reallocated from the Special Studies
designated reserve to a new Affordable Housing designated reserve to be used solely for affordable
housing purposes in Los Gatos when matched with $309,000 from the County of Santa Clara, subject to
further Council review and approval.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los
Gatos, California, held on the 2nd day of June, 2014 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
TOTAL TOWN REVENUES BY FUND AND TOTAL TOWN EXPENDITURES BY FUND
TOTAL TOWN EXPENDITURES, TRANSFERS OUr & CARRWORWARD APPROPRIATION
General Fund
2014 /15 Estimated
2014115
Special Revenue Funds
Proposed Budget
Recommended
Internal Service Funds
Budget Revision
Budget
TOWN REVENUES & OTHER FUNDING SOURCES
110,700
110,700
General Fund
$ 36,129,725
$ 36,129,725
Special Revenue Funds
445,622
445,622
Internal Service Funds
4,562,217
4,562,217
Trust & Agency Funds
39,099
39,099
Capital Project Funds (does not include carryforwards)
9,279,910
9,279,910
Successor Agnecy Funds
4,047,182
4,047,182
TOTAL TOWNREVINUFS & OTHER FUNDING SO11RrF.c
c 54 cna 714 e
e CA ena ,CC
TOTAL TOWN EXPENDITURES, TRANSFERS OUr & CARRWORWARD APPROPRIATION
General Fund
$ 43,113,545 $
379,442 $ 43,492,987
Special Revenue Funds
497,427
497,427
Internal Service Funds
5,681,972
5,681,972
Trust & Agency Funds
110,700
110,700
Capital Project Funds (does not include carryforwards)
8,121,746
8,121,746
Successor Agnecy Funds
4,040,766
4 040 766
TOTAL TOWN EXPENDITURE& OTHER FUNDINGii;ES
$ 61,566,156 $
379.442 S 61945.595
TOTAL SOURCE"L) OF FUND BALANCES, $ (7,062,401) $ (379,442) $ (7,441,843)
EXHIBIT A
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From: Kevin Zwick [kevin @housingtrustsv.org]
Sent: Thursday, May 29, 2014 10:36 AM
To: Greg Larson
Cc: Shiloh Ballard
Subject: Updated Boomerang Funds
Dear Greg,
In light of the discussion at the previous Town Council meeting, the Boomerang coalition will revise our
request to only pertain to the one -time funds, and not any ongoing funds.
In addition, the Housing Trust is withdrawing our pending request for a $100,000 contribution from the Town
of Los Gatos. We will work with Town staff in the coming year on any fixture request.
Thank you,
Kevin Zwick
Housing Trust Silicon Valley
ATTACHMENT
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From:
Janet Bajorek <janet @bajorek.us>
Sent:
Saturday, May 24, 2014 10:43 AM
To:
Steve Regan
Cc:
Town Manager
Subject:
2014 -2015 Budget and Kennedy Road Path
Attachments:
Kennedy Road Path Repair.doc
Dear Mr. Regan,
I am following up about my letter to you dated January 13, 2014, copy attached, requesting restoration of the
pedestrian /bicycle path along Kennedy Road from Longmeadow to Stonybrook. I have not yet received your
reply.
On June 2, 2014 the Town Council plans to formally approve the Town's budget for 2014 -2015, including a
significant allocation for capital improvements.
Please confirm that the restoration of this path, which is in serious need of reconstruction and repair and
which is heavily used by nearby residents, is included in the capital improvements plan for 2014 -2015.
By copy of this note I ask Mr. Greg Larson to help insure that this item is part of this plan.
I would be grateful for a reply before June 2.
Janet Bajorek
120 Clover Way
Los Gatos, CA 95032
(408) 356 -7865
t I a ATTACHMENT 3
January 13, 2014
Mr. Steve Regan
Maintenance Superintendent
Parks & Public Works Department
P. O. Box 949
Los Gatos, CA 95030
Dear Mr. Regan:
I am a 30 -year resident of the Surrey Farms development in Los Gatos and remember when
the town built the pedestrian/bicycle path along Kennedy Road from Longmeadow to
Stonybrook. It made the walk or ride to schools safer and was a real improvement to town
access for all of us living in this area. The use of this path has increased over the years, and
today it is an essential link to our community, especially to children attending Blossom Hill
Elementary and R. J. Fisher Middle Schools.
This path is now in urgent need of repair. A couple of sections are collapsing toward the
drainage ditch on the north side of the path, the asphalt is disintegrating in some areas, and the
railing is failing in some sections.
I would be grateful for your inspection of the path and your response indicating when it can
be restored to a safe condition.
Thank you for your attention.
Sincerely,
Janet Bajorek
120 Clover Way
Los Gatos, CA 95032
(408) 356 -7865
janet @bajorek.us
a��
From: Chris Bajorek <chris @bajorek.us>
Sent: Saturday, May 24, 2014 11:04 AM
To: Marni Moseley
Cc: Steve Regan; Town Manager
Subject: 20144 -2015 Town Budget and Kennedy Road Walkway
Attachments: Walkway Letter.docx
Dear Ms. Moseley,
I just learned that on June 2 the Town will approve the budget for 2014 -2015.
I attached a soft copy of my letter to you of May 19, 2014 requesting restoration of the Kennedy Road
walkway in connection with the Twin Oaks Development.
Given the overdue need to restore this walkway, I request that the cost of its restoration be included in the
capital budget for 2014 -2015.
My wife has also made this request via Mr. Regan.
Dr. Chris Bajorek
120 Clover Way
Los Gatos, CA 95032
(408) 356 -7865
1(a
Ms. Marni F. Moseley May 19, 2014
Associate Planner
Community Development Department
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
Subject: Kennedy Road Walkway and Twin Oaks Development
Reference: Letter of January 13, 2014, to Mr. Steve Regan, requesting restoration of the subject
walkway, copy enclosed
Dear Ms. Moseley,
The purpose of this letter is to request that the subject walkway be restored prior to approval of the
development planned for Twin Oaks in Surrey Farm, East Los Gatos.
The walkway along Kennedy Road connects Stonybrook and Longmeadow. It was built by the Town
approximately 30 years ago. It has made the walk or ride to schools safer and became a real
improvement to town access for all of us living in this area. It is heavily used on a daily basis.
However, this path is now in urgent need of restoration
. A couple of sections are collapsing toward the drainage stream on the north side of the path, the
asphalt is disintegrating in some areas, and the railing is failing in some sections. In my judgment, its
overall condition creates a serious safety exposure for the users as well as the Town.
The planned addition of housing in the Twin Oaks section of our community will increase the usage of
this path. The walkway should be reconstructed and repaired as soon as possible, certainly before
approval of this new development.
As indicated in the reference, my wife, Janet Bajorek, recently requested that the path be restored. She
has not yet received a reply from Mr. Regan.
By copy of this note I also ask that the Community Development and Parks & Public Works Departments
pull their forces together to restore this walkway in a timely manner.
I would be grateful for your reply confirming the restoration of this path as a precondition to approval of
the Twin Oaks Development.
Sincerely Yours,
Dr. Christopher Bajorek
120 Clover Way
Los Gatos, CA 95032
(408) 356 -7865; chris @baiorek.us
CC: Mr. Steve Regan
aka