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Attachment 1CALIFORNIA T ĔĜēĔċL ĔĘG ĆęĔĘ ComprehensiveAnnualFinancialReport FiscalYear endingJune30,2018 18 ATTACHMENT 1 CoverPhotos:Ravon Dr a f t 1 2 / 1 2 / 2 0 1 8 TOWNOFLOSGATOS CALIFORNIA ͵ͲǡʹͲͳͺ Dr a f t 1 2 / 1 2 / 2 0 1 8 Dr a f t 1 2 / 1 2 / 2 0 1 8 TOWNHISTORY ThenameLosGatoscomesfrom“ElRanchodeLosGatos.”Aranchestablishedin1839bya Mexicanlandgrantandsonamedbecauseofthelargenumberofmountainlionsinthearea.In 1854,JamesAlexanderForbespurchasedsomeofthislandandbuiltaflourmill.In1860,the firsthotelwasopenedtoprovideastagestoponthetollroadwhichhadbeenbuiltbetweenSan JoseandSantaCruz. Wheatproductiongavewaytoorchards,andrapidgrowthensuedwhentherailroadreached LosGatosin1878.TheresidentialsubdivisionsofBroadway,Bayview,Fairview,andAlmond Grovewerebuiltinthe1880’s.By1887,thepopulationhadgrownto1,500andLosGatansvoted toincorporate. FruitindustriesfadedslowlyduringtheDepressionandWorldWarII, butthepostwarperiod broughtaninfluxofpeopleandassociatedresidentialandcommercialdevelopment.Highway 17wasconstructedthroughthecenterofTown.Growthlevelledoffintheearly1970’s,leaving LosGatoswithitssmallͲtownatmosphereandpedestrianͲorienteddowntown. Becauseofitsdistancefromothercentersofpopulation,LosGatosdevelopedasacomplete communityincludingresidential,businessandindustrialelements.PreservingLosGatosasa completeandwellbalancedcommunityhasbeenandremainsaprominentgoalofthe community.Fromthefirst100ͲacreTownsitein1890withapopulationof1,652,LosGatosgrew slowlysothatby1963theareawas6.3 square miles, with a population of 11,750. Today Los Gatoscoversbetween14and15squaremilesandhasapopulationof30,601.Thisgrowthover thelast80yearsresultedinacommunitywithvibrantbusinessdistricts,wellmaintained neighborhoods,andlovelyparksandopenspaces. Asitexistsnow,theTown’sboundariesencompassawidevarietyofterrain,rangingfromlevel landtosteepanddenselywoodedhillsides.Thesharpvisualcontrastsamongthesefeaturesand charmingarchitecturecreateapicturesquesettingoftheTown.Inthemidstofthegrowthof SiliconValley,LosGatosattractspeoplewithapreferencefortheTown’sdistinctive,highquality naturalandurbanenvironment.Dr a f t 1 2 / 1 2 / 2 0 1 8 InIn 1860186 uilt betweenbetween SaSa henhen thethe railroadroad rea yview,ew Fairview,irvie andd wnwn toto 1,5001,500 and LosLo G dd WorldWorld War II,II,butbu tialal andd commercialcommercial GrowthGrowt levelledvelled ofof d pedestrianedestͲorientorient ters ofof population,population usinesssiness anda industriin communityommu hash beebe 0Ͳacreacre Town sitesite inin e areaa waswas 6.36.sququ 1414 and 15 squaree mm resultedesulted in a com ,and lovelylovely parksparks ana s now,,thethe Town’sTown’s bb o steepep andand denselydensely armingarming architecturearchitecture SiliconSilic Valley,ley,Losos GG aturalatura andd urbur Dr a f t 1 2 / 1 2 / 2 0 1 8 TOWN OFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 TABLEOFCONTENTS INTRODUCTORY SECTION: LetterofTransmittal...........................................................................................................................1 OrganizationChart..............................................................................................................................7 PrincipalOfficers.................................................................................................................................8 GFOAAward.......................................................................................................................................9 FINANCIALSECTION: IndependentAuditor’sReport..........................................................................................................13 Management’sDiscussionandAnalysis............................................................................................18 BasicFinancialStatements: GovernmentͲWideFinancialStatements: StatementofNetPosition.......................................................................................................34 StatementofActivities.............................................................................................................35 FundFinancialStatements: GovernmentalFunds: BalanceSheet.......................................................................................................................38 ReconciliationoftheGovernmentalFundsBalanceSheettothe StatementofNetPosition................................................................................................39 StatementofRevenues,ExpendituresandChangesinFundBalances................................40 ReconciliationofGovernmentalFundsStatementofRevenues,Expenditures, andChangesinFundBalancestotheStatementofActivities.........................................41 StatementofRevenue,ExpendituresandChangesinFundBalances– BudgetandActual(GAAP)GeneralFund.........................................................................42 ProprietaryFunds–InternalServiceFunds: StatementofNetPosition....................................................................................................44 StatementofRevenue,ExpensesandChangesinNetPosition...........................................45 StatementofCashFlows......................................................................................................46 FiduciaryFunds: StatementofFiduciaryNetPosition....................................................................................48 StatementofChangesinFiduciaryNetPosition..................................................................49 NotestotheBasicFinancialStatements.........................................................................................51 RequiredSupplementaryInformation: ScheduleofProportionateShareofNetPensionLiability: CalPERSMisc.AgentͲMultipleEmployerPlan.............................................................................92 CalPERSSafetyCostͲSharingPlan................................................................................................93 ScheduleofPensionPlansContributions MiscellaneousAgentMultipleͲEmployerPlan............................................................................94 SafetyCostͲSharingPlan..............................................................................................................94 ActuarialMethodsandAssumptionsusedforPensionActuarially DeterminedContributions...........................................................................................................94 ScheduleofChangesinNetOPEBLiabilityandRelatedRatios......................................................95 ScheduleofEmployerContributions..............................................................................................95 ActuarialMethodsandAssumptionsusedfor2017/18OPEBActuarially DeterminedContribution............................................................................................................96 Dr a f t 1 2 / 1 2 / 2 0 1 8 1 77 8 ....99 ......................................1313 ............................................................. .................................................................... .............................................................. ..................................................................... ds Balancealan Sheetet toto thet ...................................................... ureses andd ChangesChanges in Fun l Fundsnds Statementem ofof Re ncesces to the Statementtement xpendituresditures and ChangeChang GAAP)GeneralGeneral FundF . nternal Service Funds:nds: etet PositionPositio ................... f Reevenue,venue,EExpensesxp and t of Cashsh FlowsFlows .................... y Funds:s: ement ofof Fiduciaryducia NetNe tatementment ofo ChangesChanges ini es to thehe BasicBa Financialinancia Requiredequir SupplementarSupplement ScheduleSche of PropPr CalPERSCalPERS MisMi PERSPERS TOWN OFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 TABLEOFCONTENTS SUPPLEMENTARY INFORMATION: MajorGovernmentalFundSchedules(otherthantheGeneralFund): ScheduleofRevenue,ExpendituresandChangesinFundBalance– BudgetandActual(GAAP)AppropriatedReservesFund............................................................99 NonmajorGovernmentalFunds: CombiningBalanceSheets..............................................................................................................100 CombiningScheduleofRevenues,ExpendituresandChangesin FundBalances..............................................................................................................................102 BudgetedNonmajorFundsCombiningScheduleofRevenues,Expendituresand ChangesinFundBalances–BudgetandActual(GAAP)..............................................................104 InternalServiceFunds: CombiningStatementofNetPosition............................................................................................108 CombiningStatementofRevenue,ExpensesandChangesinNetPosition...................................109 CombiningStatementofCashFlows..............................................................................................110 PrivatePurposeTrustFunds: CombiningStatementofFiduciaryNetPosition.............................................................................112 CombiningStatementofChangesinFiduciaryNetPosition...........................................................113 STATISTICALSECTION: NetPositionbyComponent............................................................................................................118 ChangesinNetPosition..................................................................................................................119 FundBalances,GovernmentalFunds..............................................................................................120 ChangesinFundBalances,GovernmentalFunds...........................................................................121 AssessedValueandEstimatedActualValueofTaxableProperty..................................................122 DirectandOverlappingPropertyTaxRates....................................................................................123 PrincipalPropertyTaxPayers.........................................................................................................124 PropertyTaxLeviesandCollections................................................................................................125 RatiosofOutstandingDebtbyType...............................................................................................126 DirectandOverlappingGovernmentalActivitiesDebt...................................................................127 LegalDebtMargin...........................................................................................................................128 DemographicandEconomicStatistics............................................................................................129 PrincipalEmployers.........................................................................................................................130 FullͲtimeEquivalentTownGovernmentEmployeesbyFunction/Program...................................131 OperatingIndicatorsbyFunction/Program....................................................................................132 CapitalAssetsStatisticsbyFunction/Program................................................................................133 OTHERINDEPENDENTAUDITOR’SREPORTS: Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance andOtherMattersBasedonanAuditofFinancialStatementsPerformedinAccordancewith GovernmentAuditingStandards.................................................................................................137 Dr a f t 1 2 / 1 2 / 2 0 1 8 99 ................1000 ......................................102102 d ................................................................ ............................................................. t PositionPosit ...................................... ............................................................ ................................................................ t Position......................Position...................... ............................................................ ............................................................. ds.............................................................. ernmentalental FundsF ............. ed Actuall Valueue ofof Taxa Propertyop Tax Rates ....... PayerPayerss ........................ s andnd CollectionsCollectio......... anding DebtDebt byb Typeype ...... verlappingpping GovernmentGovernm t Marginin ............................. graphicc andand EconomicEconomic StS ncipal Employersmplo.................... ullullͲͲtimetime EquivalentEquivale Tow OperatingOperating IndicatorsIndicator CapitalCap Assetsts Stat ERER INDEINDE INTRODUCTORYSECTION Dr a f t 1 2 / 1 2 / 2 0 1 8 TRODUCTORYODUCTOR Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional TOWNOFLOSGATOS OFFICEOFTHETOWNMANAGER ȋͶͲͺȌ͵ͷͶǦ͸ͺ͵ʹ ǣȋͶͲͺȌ͵ͻͻǦͷ͹ͺ͸ December11,2018 HonorableMayorandTownCouncil, IampleasedtosubmittheTown’sComprehensiveAnnualFinancialReport(CAFR)for thefiscalyearendingJune30,2018.ThisreportwaspreparedbytheFinance Department in conjunction with the Town Manager’s Office, which assumes responsibilityfortheaccuracyofthedataandthecompletenessandfairnessofthe presentationandalldisclosures.Theinformationinthisreportisintendedtopresent thereaderwithacomprehensiveviewoftheTown’sfinancialpositionandtheresultsof itsoperationsforthefiscalyearendingJune30,2018,alongwithadditionaldisclosures andfinancialinformationdesignedtoenablethereadertogainanunderstandingofthe Town’sfinancialactivities. ThisreportwaspreparedasprescribedinGovernmentalAccountingStandardsBoard (GASB)StatementNo.34,BasicFinancialStatementsandManagement’sDiscussionand AnalysisforStateandLocalGovernments(GASB34).ThisGASBStatementrequires managementtoprovideanarrativeintroduction,overview,andanalysistoaccompany thebasicfinancialstatementsintheformofaManagement’sDiscussionandAnalysis (MD&A).ThisletteroftransmittalisdesignedtocomplementtheMD&Aandshouldbe readinconjunctionwithit.TheMD&Acanbefoundimmediatelyfollowingthe IndependentAuditor’sReport. This Comprehensive Annual Financial Report is organized into three sections: I. TheIntroductorySectionincludesthetableofcontents,letteroftransmittal, listingofelectedofficials,Townadministrativepersonnel,andanorganization chartdelineatingorganizationalstructure. II. TheFinancialSectionincludestheindependentauditors’opinion,theMD&A,the basicfinancialstatements,notestothefinancialstatements,combining statementsofnonͲmajorfunds,andrequiredsupplementalinformation. III. TheStatisticalSectionincludesbothfinancialandnonͲfinancialdataaboutthe Town. Dr a f t 1 2 / 1 2 / 2 0 1 8 ancialcia Reportepor (CAFR preparedprepared by theth ger’sger’s Office,ffice,whichwhic completenessmpleteness andnd f inn thist reportre isis inteint wn’swn’s financialinancial positiopositi 30,2018,20 alongalong witwi ble thethe readerr toto gaga escribedscribed inn GovernmG c FinancialFinancial Statemeate alal Governmentsvernments (GA(GA a narrativearrat introdutrodu atementsnt inn theth foror err ofo transmittal isis dd nctionction withwi it.The t Auditor’sditor’Report.Report omprehensiveehensive Annunnu I.I.TheThe Introductroduc listinglisting of chartcha dd II.II.TT MayorandTownCouncil December4,2018 TheComprehensiveAnnualFinancialReportispreparedinaccordancewithGenerally AcceptedAccountingPrinciples(GAAP)promulgatedbytheGovernmentalAccounting StandardsBoard(GASB)andincludestheauditreportofBadawi&Associates,the Town’sindependentcertifiedpublicaccountants. ThisComprehensiveAnnualFinancialReportwillbesubmittedtotheGovernment FinanceOfficersAssociationforconsiderationofitsAchievementofExcellenceAwardin financialreportingcertification.Thisawardisgrantedonlytoentitieswhosereports meetthehigheststandardsofmunicipalfinancialreporting. THEREPORTINGENTITYANDITSSERVICES LosGatosisagenerallawTown,incorporatedunderthelawsofCaliforniain1887.The TownislocatedinthefoothillsandlevelterrainoftheSantaClaraValley,inanarea referredtointernationallyas“SiliconValley.”Fromthefirst100ͲacreTownsiteandan 1890populationof1,652,LosGatosgrewslowlysothatby1963theareawas6.3 squaremiles,withapopulationof11,750.TodayLosGatoscoversapproximately15 squaremileswithapopulationof30,601.Thisgrowthoverthelast80yearsresultedin acommunitywithvibrantbusinessdistricts,wellmaintainedneighborhoods,andlovely parksandopenspaces.PreservingLosGatosasacompleteandwellͲbalanced communityhasbeen,andremainsaprominentgoalforthecommunity. FivecouncilmembersareelectedatlargeforstaggeredfourͲyeartermstogovernthe Town.TheMayorandViceͲMayorareappointedbytheCouncilfromitsown ranksand serveforoneͲyearterms.TheTownManagerandTownAttorneyareappointedand superviseddirectlybytheCouncil.TheTownManageroverseestraditionalmunicipal servicessuchasPublicSafety,ParksandPublicWorks,CommunityDevelopment,a PublicLibrary,andTownAdministrationincludingHumanResourcesandFinance. ThisreportincludesallfundsoftheTownofLosGatos.AsofFebruary1,2012,in accordancewithAssemblyBill1X26,theRedevelopmentAgency(RDA)fortheTownof LosGatoswasdissolved.Untilitsdissolution,theTownofLosGatosRedevelopment AgencywasgovernedbyaboardthatwasthesameastheTown’sgoverningbody. Therefore,thefinancialactivitiesoftheRedevelopmentAgencythroughJanuary31, 2012hadbeenblendedintotheTown’sbasicfinancialstatements.Asaresultofthe dissolution,theRDASuccessorAgencyprivateͲpurposetrustfundwascreatedwhilethe CertificatesofParticipation(COP)RDADebtServiceFundandRedevelopmentAgency Low&ModerateHousingCapitalProjectsFundwereclosedoutasofJune30,2012and arenowbeingheldintheSuccessorAgencyTrustFund. nm AwardAward i hosee reportsreports s ofof Californiaalifornia inin 188 Santaant ClaraClara Valley,Valley, e firstfirst 100ͲͲacrea TowT so thathat by 19631963 tht dayay LosLos GatosGatos coverove s growthrow overov thethe la s,wellwe maintainedtained nn LosL GatosGatos as aa coc prominentminen goaloal forf t tedd at largearg forfor stag MayorMayor are appointeappointe .TheThe Town ManaMana y the Council.Council.Thehe T ublic Safety,Parksarks ndnd TownTown Administra rt includesdes alla fundsfunds ance withwith AssemblyAssemb Gatoss waswas dissolveddissolve Agency waswa governeoverne Therefore,Therefore,theth fin 2012 hadad beeneen dissolution,dissolution ertificatertificat && MayorandTownCouncil December4,2018 ECONOMICCONDITIONSANDOUTLOOK ConsistentwithotherSiliconValleycommunities,theeconomyisstrongand economicallysensitiverevenues,suchasPropertyTax,TransientOccupancyTax, BusinessLicenseTaxandLicenseandPermitrevenueshaveincreasedasprojected.The Townisseeingearlyindicationsofsofteninginthehousingmarketwithhomesforsale stayingonthemarketlongerthanthepreviousyear.However,thevalueofthehome salesremainshigh.ArecentreportlistedtheSanJoseͲSunnyvaleͲSantaClara MetropolitanStatisticalArea(MSA)asoneofthemarketswithhomepricesthefurthest abovepreͲrecessionpeaksnationallyat57percent. GeneralFundrevenues(includingtransferͲins)increased8.1%fromtheprioryear. PropertytaxrevenuesareasignificantsourceofsupportforGeneralFundoperations, comprisingapproximately39%ofGeneralFundrevenuesinFY2017/18.ForFY2017/18 propertytaxreceiptsof$16.0millionwere$1.2millionhigherthantheprioryear’s collection,reflectingthecontinueddesirabilityoftheTown,itsenvironment,culture andeducationalopportunities.BasedonvaluationprojectionsbytheSantaClara CountyAssessor’sOffice,LosGatospropertyvaluesareanticipatedtocontinuewith moderategrowthratesforthenearterm.Propertytaxesalsoincreasedmoderately duetoachangeinpropertytaxdistributionmethodologyduetothedissolutionofthe Californiaredevelopmentagencies.Itshouldbenotedthatthisincreaserepresentsa smallportionofthetotallossofredevelopmenttaxincrementpreviouslycollectedprior totheaforementionedredevelopmentdissolutionwhichoccurredinFebruary2012. TheTownreliesheavilyonsalestaxrevenuestosupportGeneralFundoperations, comprisingapproximately18.7%ofGeneralFundrevenuesinFY2017/18.ForFY 2017/18salestaxreceiptsof$7.6millionwere$1.2millionlowerthantheprioryear’s collection.Salestaxrevenuescontinuetotrendlowerduetothenegativeimpact associatedwithincreasedonlinesalesversusbrickandmortarshopping,decreased gasolinepricesduringmuchofthefiscalyearandthecontinuedimpactofthe2011 businessmodelchangeofNetflix. TheTownisalsopreparingforanincreaseinpensionemployerratesduetochangesto economicanddemographicactuarialassumptionsadoptedbyCalPERS.Todatethe Councilhasadoptedadditionaldiscretionarypensionstrategiesinexcessof$16.0 millionandprefunded$12.0milliontowardsOPEBobligations. WhiletheTownCouncilhasbeenisproactivelymanagingandworkingtomanage controltheanticipatedcostescalationinitspensionandotherpostemployment benefits(OPEB),pensionandOPEBrelatedobligationscontinuetobeoneoftheTown’s greatestlongͲtermcostdrivers.Datafromthemostrecentactuarialvaluationsshow totalNetPension($53.2)andOPEB($11.1)liabilitiesof$64.3million.Fordetailed informationabouttheTownemployees’retirementplanpleaserefertoNote9ofthe NotestoBasicFinancialStatementsSection.Inaddition,theTownprovidesextensive informationonpensionandOPEBinformationontheTownswebsite.Todatethe Dr a f t 1 2 / 1 2 / 2 0 1 8 or hehe homhom Santanta ClaraClara ceses thet furthestfurth %fromfrom thethe prior r GeneralGenera Fundnd ope n FYFY 2017/18.2017/18.ForFor F ionon higherhigher thanthan the the Town,ow itss envirenvir ationation projectionsprojections b y valueslue areare anticiptic .PropertyPr taxestaxes aa tiont methodologymethodology dd t shouldhould be notednot ededevelopmentvelopm tax inin opmentpment dissolutiondissolu on salessal tax revereve ately 18.7%18.7%ofo GenGen receipts of $7.6 millmi ss taxtax revenuesre con ith increasedincreased onlin prices duringduring muchuch s modeldel changechange ofof N he Townwn is alsoso prepreraeconomiceconomicandande Councill hash ada millionmi andan WhileWhile thth roro MayorandTownCouncil December4,2018 Councilhasadoptedadditionaldiscretionarypensionstrategiesinexcessof$16.0 millionandprefunded$12.0milliontowardsOPEBobligations. EffectiveFebruary 1,2012,redevelopmentagenciesweredissolvedandsuspendedall activities,withtheexceptionoftheimplementationofexistingcontractsandpayment ofenforceableobligationsenteredintopriortoFebruary1,2012.WhiletheSuccessor Agencywillcontinuetoreceivetaxincrementrevenuetopayenforceableobligations, likedebtservice,fundingforadministrativeservicesandvariousprogram reimbursementshasbeeneliminated. Despitethereductionstovarioussourcesof localgovernment revenue and increasing costsduetounfundedfederalandstatemandates,theTownhasmaintainedhigh servicelevelsduetotheGeneralFund’sstrongfiscalhealththroughFY2017/18.Town continuesitsoutreachtothecommunity,theLeagueofCaliforniaCities,andlocal legislatorstopreventandlimitanyfuturerevenuelossesandmandatedcostincreases. MAJORINITIATIVES Majorinitiativesaddressingthecriticalcapitalassetandinfrastructureneedsofthe Town wereapriorityforthefiscalyear.Approximately$9.210millioninTown infrastructureandothercapitalassetimprovementsweremadeinFY2017/18, including$3.9millioninstreetimprovementprojectsincludingimprovementstomajor arterialsandneighborhoodcollectorstreetstoenhancepedestrianandtrafficsafety TownͲwide,$0.18millioninvehicleandequipment,andapproximately$0.12millionon retainingwallsandparkimprovements.Inaddition,theTown invested$5.1millionin variousprojectsthatarecurrentlyinprogress,includingapproximately$4.8millionon theAlmondGroveStreetproject,andotherfacility,park,andinfrastructure improvementprojects. AdditionalinfrastructureimprovementsarescheduledinaccordancewiththeTown’s approvedCapitalImprovementPlan,andwillcontinueintofutureyears.Allofthese improvementsarefundedeitherthroughgrants,orviarevenuesaccumulatedfrom prioryearbudgetsavings and/orexcessrevenuesperTownCouncilpolicy. ACCOUNTINGSYSTEMANDBUDGETARYCONTROL Theeffectivenessofinternalcontrolisconsideredinthedevelopmentandevaluationof theTown’saccountingsystem.Internalaccountingcontrolsaredesignedtoprovide reasonablebutnotabsoluteassurance regarding: 1)safeguardingofassetsagainstlossfromunauthorizedlossordisposition, 2)accuracyandreliabilityofaccountingdata,and 3)adherencetomanagerialpolicy. Dr a f t 1 2 / 1 2 / 2 0 1 8 ce bligationsligation s programprogram venuevenue andan increasinncre wn hash maintainedmaintained throughhrough FYF 2017/18.17/ off CaliforniaCalifornia Cities,Cities ess andand mandatedndated co TIVESIVES 2/ apitalpita asset andand infinf year.year.ApproximateApproximate ssett improvementsimproveme provementprovement projectsts llectorect streetsstreets to e vehiclevehicle andd equipmuipm improvements.provements.InIn are currentlyrrently in propro ve Street project,ject rojects.ojects. infrastructuretructu impimp ed Capitalapital ImprovemImprov rovementsments arear fundfun prior yearear budgetbudget savsav hehe effeceffec ToT MayorandTownCouncil December4,2018 Theconceptofreasonableassurancerecognizesthatthecostofinternalcontrolshould notoutweighthebenefits,andthatmanagementmustmakeestimatesandjudgments inevaluatingthesecostsandbenefits. Allgovernmentalfundtypesusethemodifiedaccrualbasisofaccounting.Thismeans thatrevenuesarerecorded whenmeasurableandavailableratherthenwhenreceived. Measurablemeanstheamountcanbedeterminedandavailablemeansthecashis receivedwithinsixtydaysaftertheendofthefiscalyear.Expendituresarerecorded whentheliabilityisincurred,ratherthanwhenpaid.Anexceptiontothisruleis principalandinterestongenerallongͲtermdebt,whichisnotrecognizedbydebtservice fundsuntilitisdue. Proprietary(internalservice)fundsareaccountedforusingtheaccrualbasisof accounting,similartothatusedbycorporations.Proprietaryfundrevenuesare recognizedwhentheyareearnedratherthanwhenthecashisreceived,evenifthecash isnotavailableandproprietaryfundexpensesarerecognizedwhentheyareincurred. WiththeimplementationofGASB34,theTownnowpreparesitsBasicFinancial Statementsontheaccrualbasis. Internalaccountingprocedureshavebeendevelopedtoprovidereasonableassurance regardingthesafeguardingofassetsandthereliabilityoffinancialrecordsforpreparing financialstatementsandmaintainingassetaccountability. AnannualoperatingbudgetandfiveͲyearcapitalimprovementplanisadoptedbythe Town Councilonabasisconsistentwithgenerallyacceptedaccountingprinciples.All budgetadjustmentsandtransfersbetweenfundsmustbeapprovedbytheTown Councilduringthefiscalyear.TheTownManagerisauthorizedtotransfer unencumberedappropriationswithinabudgetcategory,withinafund.Appropriations arevalidforeachfiscalyearandlapseatyearͲend. AWARDS TheTown’sComprehensiveAnnualFinancialReportforthefiscalyearendedJune30, 2017wasawardedaCertificateofAchievementforExcellenceinFinancialReportingby thenationalGovernmentFinanceOfficersAssociation.Thisprestigiousaward recognizesthereport’sconformancewithstrictaccountingandreportingstandards establishedbytheGovernmentAccountingStandardsBoardandgovernmentfinance organizations.Thisawardisannualinnatureandvalidforoneyearonly.Thisyear’s reportwillbesubmittedforawardconsiderationbythisorganization,aswebelieveit continuestomeetthesestandards. ei ee cashcash re recordedrecorded toto this rulerul is zed byby debtdeb serviceervice singsing thethe accrualrua b oprietaryprietary fundfund revrev cashcash isis received,ceived ev ecognizedzed whenen theythey Townwn nowow preparep beenen developedeveloped to etsts andan thehe reliabilityit ainingnin assetss accountacc dgett andand fiveͲyearyear cac sis consistentonsisten withth ts and transfersrs beb thethe fiscalfis year. ed appropriationsappropriation w or each fiscalfiscal yearar ana TheThe Town’sTown’s CompC 2017 wasas awarwa thethe nationatio ecognizeecogniz blb MayorandTownCouncil December4,2018 INDEPENDENTAUDIT StatelawrequiresanannualauditoftheTown’saccountsbyindependentcertified publicaccountants.TheaccountingfirmofBadawi&Associatesperformsthisfunction fortheTownofLosGatos,andtheir reportisincludedinthefinancialsectionofthe CAFR. ACKNOWLEDGEMENTS ThepreparationofthisComprehensiveAnnualFinancialReport,aspresentedherein,is theresultofthecombinedeffortsanddedicatedservicesoftheexcellentstaffofthe DepartmentofFinance.SpecialthankstoGittaUngvari,FinanceandBudgetManager, MarkGaeta,Accountant;MelissaYnegas,FinanceAnalyst;DianeHoward,Payroll Specialist;andKennethStiles,AdministrativeTechnicianfortheireffortsinpreparing thisreport. Respectfullysubmitted, _______________________________________________________________ LaurelPrevetti StephenD.Conway TownManager DirectorofFinance Dr a f t 1 2 / 1 2 / 2 0 1 8 entednte herein,erei is ellentnt staffsta ofof thethe andnd BudgetBudg ManageMan Dianeian Howard,How PaPa r theirtheir effortsefforts inin pr _____________ Stephenep Directrect TownofLosGatos Organizational Structure Dr a f t 1 2 / 1 2 / 2 0 1 8 TOWNOFLOSGATOS PRINCIPALOFFICERS JUNE30,2018 TOWNCOUNCIL MayorRobRennie ViceMayorStevenLeonardis CouncilMemberMarciaJensen CouncilMemberMaricoSayoc CouncilMemberBarbaraSpector COUNCILAPPOINTEES TownManagerLaurelPrevetti TownAttorneyRobertSchultz APPOINTED OFFICIALS AssistantTownManagerArnAndrews ChiefofPolicePeterDecena CommunityDevelopmentDirectorJoelPaulson ParksandPublicWorksDirector MattMorley LibraryDirectorRyanBaker FinanceDirectorStephenConway HumanResourcesDirectorLisaVelasco Dr a f t 1 2 / 1 2 / 2 0 1 8 Robob RennieRennie Steveneve Leonardiseonardi MarciaMarcia Jens Maricoco Barbaraarb OFFICIALS Townown ManagerM f Policelice mmunitynity DevelopmDevelopm arks andnd PublicPublic WW Libraryrary Directorrecto FinanceFinance Dire Humanma ReR Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional FINANCIALSECTION Dr a f t 1 2 / 1 2 / 2 0 1 8 FINANCIALNANCIAL SES Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional INDEPENDENTAUDITOR’SREPORT TotheHonorableMayorandMembersoftheTownCouncilofthe TownofLosGatos LosGatos,California ReportontheFinancialStatements Wehaveauditedtheaccompanyingfinancialstatementsofthegovernmentalactivities,eachmajorfund,andthe aggregateremainingfundinformationoftheTownofLosGatos,California,asofandfortheyearendedJune30, 2018,andtherelatednotestothefinancialstatements,whichcollectivelycomprisetheTown’sbasicfinancial statementsaslistedinthetableofcontents. Management’sResponsibilityfortheFinancialStatements Managementisresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordance withaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica;thisincludesthedesign, implementation,andmaintenanceofinternalcontrolrelevanttothepreparationandfairpresentationof financialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror. Auditor’sResponsibility Ourresponsibilityistoexpressopinionsonthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmericaandthestandards applicabletofinancialauditscontainedinGovernmentAuditingStandards,issuedbytheComptrollerGeneralofthe UnitedStates.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceabout whetherthefinancialstatementsarefreefrommaterialmisstatement. Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthe financialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentofthe risksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseris k assessments,theauditorconsidersinternalcontrolrelevanttotheentity’spreparationandfairpresentationofthe financialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthe purposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Accordingly,weexpressno suchopinion.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthe reasonablenessofsignificantaccountingestimatesmadebymanagement,aswellasevaluatingtheoverall presentationofthefinancialstatements. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinions. Dr a f t 1 2 / 1 2 / 2 0 1 8 mentalmental activities,activitie eachea alifornia,aliforn asas of andnd fofo collectivelylect comprisecompris mentsts dd fairr presentationpresentation oo d inn thethe Unitednited Sta rnalnal controlcontro relevantan terialeria misstatement,misstatem opinions on thesethes fini ng standarsds generalral ditsdits containedconta in Gov standardsdards requirerequire tha ial statementstements aree frefre volvess performingperforming prp statements.ment Thehe proceproc ff materialmateria misstatemmisstatem essments,essm thehe auditoraudito ncialncial statementsen i ofof expressexpres ion.ion. 7RWKH+RQRUDEOH0D\RUDQG0HPEHUVRIWKH7RZQ&RXQFLO RIWKH7RZQRI/RV*DWRV /RV*DWRV&DOLIRUQLD 3DJH Opinions Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,therespective financialpositionofthegovernmentalactivities,eachmajorfund,andtheaggregateremainingfundinformation oftheTownasofJune30,2018,andtherespectivechangesinfinancialpositionand,whereapplicable,cashflows thereoffortheyearthenendedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesof America. OtherMatters RequiredSupplementaryInformation AccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequirethatthemanagement’sdiscussion andanalysis,budgetarycomparisoninformationpensionrelatedschedulesandOPEBrelatedschedulesonpages 18Ͳ29and92Ͳ96bepresentedtosupplementthebasicfinancialstatements.Suchinformation,althoughnotapart ofthebasicfinancialstatements,isrequiredbytheGovernmentalAccountingStandardsBoard,whoconsidersitto beanessentialpartoffinancialreportingforplacingthebasicfinancialstatementsinanappropriateoperational, economic,orhistoricalcontext.Wehaveappliedcertainlimitedprocedurestotherequiredsupplementary informationinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica,which consistedofinquiriesofmanagementaboutthemethodsofpreparingtheinformationandcomparingthe informationforconsistencywithmanagement’sresponsestoourinquiries,thebasicfinancialstatements,andother knowledgeweobtainedduringourauditofthebasicfinancialstatements.Wedonotexpressanopinionorprovide anyassuranceontheinformationbecausethelimitedproceduresdonotprovideuswithsufficientevidenceto expressanopinionorprovideanyassurance. OtherInformation Ourauditwasconductedforthepurposeofformingopinionsonthefinancialstatementsthatcollectivelycomprise theTownofLosGatos,California’sbasicfinancialstatements.Theintroductorysection,majorfunds(otherthan GeneralfundandSpecialrevenuefunds)budgetaryschedules,combiningandindividualnonmajorfundfinancial statements,andstatisticalsectionarepresentedforpurposesofadditionalanalysisandarenotarequiredpartof thebasicfinancialstatements. Themajorfunds(otherthanGeneralfundandSpecialrevenuefunds)budgetaryschedules,combiningand individualnonmajorfundfinancialstatementsaretheresponsibilityofmanagementandwerederivedfromand relatedirectlytotheunderlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatements.Such informationhasbeensubjectedtotheauditingproceduresappliedintheauditofthebasicfinancialstatements andcertainadditionalprocedures,includingcomparingandreconcilingsuchinformationdirectlytotheunderlying accountingandotherrecordsusedtopreparethebasicfinancialstatementsortothebasicfinancialstatements themselves,andotheradditionalproceduresinaccordancewithauditingstandardsgenerallyacceptedinthe UnitedStatesofAmerica.Inouropinion,thecombiningandindividualnonmajorfundfinancialstatementsarefairly stated,inallmaterialrespects,inrelationtothebasicfinancialstatementsasawhole. Theintroductoryandstatisticalsectionshavenotbeensubjectedtotheauditingproceduresappliedintheauditof thebasicfinancialstatementsand,accordingly,wedonotexpressanopinionorprovideanyassuranceonthem. Dr a f t 1 2 / 1 2 / 2 0 1 8 pects,pects, ainingnin fundfun here applicable,applicable,cac ceptedpted in thee UnitedUnited S Americarica requirere thathat t eded schedulesschedule andnd OPOP ncialcia statements.atements Sucuc ernmentalent AccountingAccountin thee basicba financncialal stst eded certainertain limitedlimited pp dardss generallygenerally accepac outout theth methodsme off ment’sent responsesesponses to o it of theth basicsi financinanc becausecaus the limitedmited y assurance.urance. cted forfor thet purposepurpos Gatos,,California’sCalifornia basba nd Specialpecial rerevenuevenue f and statisticalstatistical sectioectio financialial statements.statements majorma fundsnds (otherothe vidualvidua nonmajorajo f directlydirect toto tht nn hashas 7RWKH+RQRUDEOH0D\RUDQG0HPEHUVRIWKH7RZQ&RXQFLO RIWKH7RZQRI/RV*DWRV /RV*DWRV&DOLIRUQLD 3DJH OtherReportingRequiredbyGovernmentAuditingStandards InaccordancewithGovernmentAuditingStandards,wehavealsoissuedourreportdated[DATE]onour considerationoftheTown’sinternalcontroloverfinancialreportingandonourtestsofitscompliancewithcertain provisionsoflaws,regulations,contracts,andgrantagreementsandothermatters.Thepurposeofthatreportisto describethescopeofourtestingofinternalcontroloverfinancialreportingandcomplianceandtheresultsofthat testing,andnottoprovideanopiniononinternalcontroloverfinancialreportingoroncompliance.Thatreportis anintegralpartofanauditperformedinaccordancewithGovernmentAuditingStandardsinconsideringtheTown’s internalcontroloverfinancialreportingandcompliance. BadawiandAssociates CertifiedPublicAccountants Oakland,California [DATE] Dr a f t 1 2 / 1 2 / 2 0 1 8 8 tedted compliancempliance purposeose ofof thatthat repre plianceance and theth resultssu or onn compliance.compliance.ThaTha tandardstandards in considericonsid Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional Management’sDiscussionandAnalysis Dr a f t 1 2 / 1 2 / 2 0 1 8 ment’sment DiscusDiscu MANAGEMENT’SDISCUSSIONANDANALYSIS ThefollowingdiscussionandanalysisoftheTownofLosGatosfinancialperformance providesanoverviewoftheTown’sfinancialactivitiesforthefiscalyearendingJune30, 2018.Thisinformationispresentedinconjunctionwiththeauditedfinancial statementsthatfollowthissection. FINANCIALHIGHLIGHTS x Town assetsexceededitsliabilitiesatthecloseofFY2017/18by$109,262,066(net position).Ofthisamount,$170,590(unrestrictednetposition)maybeusedtomeet theTown’songoingobligationstoitscommunityandcreditors. x TheTown’snetpositiondecreasedby$7.8millionduringthefiscalyearlargelyasa resultofthebeginningFY2017/18netpositionbeingrestatedandreducedby approximately$8.5millionasrequiredbytheimplementationofGASB75regarding thefinancialreportingofotherpostͲemploymentbenefits(OPEB).Priortothe implementationofGASB75theTownwasonlyrequiredtoreportitsNetOPEB Obligation(NOO)inthenotessectionofitsCAFR.WiththislatestGASB pronouncementalloftheTown’spensionandOPEBobligationswillnowbefully reflectedfullyinthefinancialstatementsbasedonthecurrentJune30,2017 actuarialevaluation. x Totalfundbalancesforgovernmentalfundsatyearendwere$49,353,921,a decreaseof$3,797,817(7%)fromtheprioryear.Fundbalancesdecreasedprimarily forincreasedexpenditures,capitalspending,andthe$1.2milliontransfertothe Town IRS115PensionTrust.due toGeneralFundrevenuesaboveexpendituresof approximately$1.2millionandanetdecreaseof$5.0millionfromtheother GovernmentalFundsresultingprimarilyfromtheplanneduseoftheGFARfund balanceforinfrastructurecapitalprojects. x Duringthefiscalyear,theTown’sGeneralFundexpended$1.2millioninthenewly establishedTown’sIRSSection115PensionTrust. x AttheendofFY2017/18,fundbalancefortheGeneralFundwas$30,428,684, approximately82%ofGeneralFundexpendituresforthecurrentfiscalyear. x TheTown’stotalcapitalassetsincreasedby$5,833,077to$102,098,729netof depreciation. Dr a f t 1 2 / 1 2 / 2 0 1 8 09,262,066262,0 (net(net may bee usedused tot meet s.. ngng thethe fiscalfiscal yearyear la beingbeing restatedta andand plementationmentation off GASGA ymentyment benefitsene (OP(OP s onlyon requiredrequired to onn of itsi CAFR.CAFR. ensionon anda OPEBPEB obob atementstemen basedbas oo governmentalvernmen funfu 7 (7%)(7%from theth prioprio nditures,ures,capitalcapital spesp12ensionTrust.duedue to1yy$1.2$1.2 million andd ntalal FundsFunds resulting for infrastructurenfrastructure c Duringg thehe fiscalfiscal yeaye establishedablished Town’Town x At thethe endend o approximrox TheTh OVERVIEWOFTHEFINANCIALSTATEMENTS Thefinancial statementspresentedhereinincludealloftheactivitiesoftheTownand itscomponentunitsusingtheintegratedapproachasprescribedbyGASBStatementNo. 34. GovernmentͲWideFinancialStatements ThegovernmentͲwidefinancialstatementspresentthefinancialpictureoftheTown fromaneconomicresourcesmeasurementfocususingtheaccrualbasisofaccounting. ThestatementofnetpositionpresentsinformationonalloftheTown’sassetsand liabilities,withthedifferencebetweenthetworeportedasnetposition.Overtime, increasesordecreasesinnetpositionmayserveasausefulindicatorofwhetherthe financialpositionoftheTownisimprovingordeteriorating. ThestatementofactivitiespresentsinformationshowinghowtheTown’snetposition changedduringthemostrecentfiscalyear.All changesinnetpositionarereportedas soonastheunderlyingeventgivingrisetothechangeoccurs,regardlessofthetimingof relatedcashflows.Thus,revenuesandexpensesarereportedinthisstatementfor someitemsthatwillonlyresultincashflowsinfuturefiscalperiods(e.g.,uncollected taxesandearnedbutunusedvacationleave). BothofthegovernmentͲwidefinancialstatementsdistinguishfunctionsoftheTown thatareprincipallysupportedbytaxesandintergovernmentalrevenues(governmental activities)fromotherfunctionsthatareintendedtorecoverallorasignificantportionof theircoststhroughuserfeesandcharges(business–typeactivity).Thegovernmental activitiesoftheTownincludepublicsafety,parksandpublicworks,community development,library,communityservices,debtservice,andgeneralgovernment.The TownhasnobusinessͲtypeactivities. ThegovernmentͲwidefinancialstatementsincludenotonlytheTownitself(knownas theprimarygovernment),butalsoalegallyseparateTownofLosGatosRedevelopment Agency(theAgency)forwhichtheTownwasfinanciallyaccountable.Inaccordance withAssemblyBill(AB)1X26whichprovidesforthedissolutionofallredevelopment agenciesintheStateofCalifornia,theTownofLosGatosagreedtoserveasthe successoragencyandtherebytoholdtheassetsuntiltheyweredistributedtoother unitsofstateandlocalgovernment.InaccordancewithAB1X26,theTownofLosGatos RedevelopmentAgencydissolvedandceasedtooperateasalegalentityonFebruary1, 2012. Prior to February 1, 2012, the final seven months of activity of the redevelopment agencycontinuedtobereportedinthegovernmentalfundsoftheTown.After February1,2012,theassetsandactivitiesofthedissolvedredevelopmentagencyare Dr a f t 1 2 / 1 2 / 2 0 1 8 of thehe TownTown of accounting.accounting. hehe Town’sTown assetssets net position.position.Over fulful indicatorindicato of whew ng.ng showingshowin howho thehe ToTo changeshanges in netnet posos ee changeang occurs,occurs,regre expensespens aree reporepo hh flowsflows inn futurefuture fifi on leave).ave e financialnancial statemetem rteded by taxess andand inin nctionsons thatth aree inteinte user fees andnd chargch Townown include pubub library,brary,communitycom o businessinessͲtypeype activac governmentmentͲͲwidewide finfin e primarymary governmegovernme AgencyAgency (the(the Agencgenc withw AssemblyAssembly B agenciesagencies in t successorsuccessor tsts ofof reportedinafiduciaryfund(RDASuccessorAgencyprivateͲpurposetrustfund)inthe financialstatementsoftheTown.AdditionalinformationonthedissolutionoftheRDA andthisfiduciaryfundcanbefoundinNote12inthenotestobasicfinancial statements. FundFinancialStatements Afundisagroupingofrelatedaccountsthatisusedtomaintaincontroloverresources thathavebeensegregatedforspecificactivitiesorobjectives.TheTown,likeotherlocal governments,usesfundaccountingtoensureanddemonstratecompliancewith financeͲrelatedlegalrequirements.ThefundsoftheTownaresegregatedintothree categories:governmentalfunds,proprietaryfunds,andfiduciaryfunds. Governmentalfunds–TheTown’sbasicservicesarereportedingovernmentalfunds, whichfocusonhowmoneyflowsintoandoutofthosefundsandthebalancesleftat yearͲendthatareavailableforspending.Thesefundsarereportedusingthemodified accrualbasisofaccounting,whichmeasurescashandotherfinancialassetsthatcan readilybeconvertedtocash.Thegovernmentalfundstatementsprovideadetailed shortͲtermviewoftheTown’sgeneralgovernmentoperationsandthebasicservicesit provides.Governmentalfundinformationhelpsdetermine whethertherearemoreor fewerfinancialresourcesthatcanbespentinthenearfuturetofinancetheTown’s operations.Boththegovernmentalfundbalancesheetandthegovernmentalfund statementofrevenues,expenditures,andchangesinfundbalancesprovidea reconciliationtofacilitatethiscomparisonbetweengovernmentalfundsand governmentalactivities. Proprietaryfunds–TheTownmaintainsonetypeofproprietaryfund:internalservice funds.Proprietaryfundsarereportedusingtheaccrualbasisofaccounting.Internal servicefundsareanaccountingtoolusedtoaccumulateandallocatecostsinternally amongtheTown’svariousfunctions.TheTownusesinternalservicefundstoaccount foritsfleetofvehicles,computerequipment,riskmanagementactivities,andother items.TheInternalServicefundsareincludedwithingovernmentalactivitiesinthe governmentͲwidefinancialstatements. Fiduciaryfunds–Fiduciaryfundsareusedtoaccountforresourcesheldforthebenefit ofpartiesoutsidetheTown.FiduciaryfundsarenotreflectedinthegovernmentͲwide financialstatementsbecausetheresourcesofthosefundsarenotavailabletosupport theTown’sownprograms. IncludedinfiduciaryfundsistheRDASuccessorAgencyprivateͲpurposeTrustFund createduponthedissolutionoftheformerRedevelopmentAgency.TheTrustFundwas created to hold the assets of the former Redevelopment Agency until they are transferredforgovernmentalpurposestootherentities,ordistributedtotheunderlying taxingjurisdictionsinSantaClaraCountyafterthepaymentofenforceableobligations. Dr a f t 1 2 / 1 2 / 2 0 1 8 r resourcesresources ke otherther loclocalal compliancemplia withwith gregatedte intointo three unds.unds. rtedrted inin governmentgovernme fundsun andnd thehe balabala s arere reportedreporte usinusi h andand otherthe financinanci ntalal fundd statementtemen rnmentrnment operationserations n helpselps determinemine spentspent in thethe nearar tal fundnd balancee shs nditures,ditures,andand chan thisis comparisonmparison The Town maintainmaint ryry fundsfund are reportert aree ann accountingacc t Town’s’s variousvarious funcfu eet ofof vehicles,vehicles,com The InternalInternal Server vernmentmenͲwidewid finafina FiduciaryFiduciary fundsunds ofo partieses out financialfinancial s TowTow Notestobasicfinancialstatements Thenotesprovideadditionalinformationessentialtoafullunderstandingofthedata providedinthegovernmentͲwideandfundfinancialstatements.Thenotestobasic financialstatementscanbefoundonpages51Ͳ89ofthisreport. GovernmentͲwideFinancialAnalysis Netpositionmayserveovertimeasausefulindicatorofagovernment’sfinancial position.InthecaseoftheTown,assetsanddeferredoutflowsexceededliabilitiesand deferredinflowsby$109millionattheendofthecurrentfiscalyear. 2018 2017 CurrentandotherAssets 77,527,309$76,851,804$ CapitalAssets 102,098,72996,265,652 Total Assets 179,626,038$173,117,456$ DeferredOutflowsͲPension/OPEB 19,177,17215,666,410 CurrentLiabilities 19,125,20615,368,467 LongͲ TermLiabilitiesOutstanding 66,492,02050,630,426 Total Liabilities 85,617,226$65,998,893$ DeferredInflowsͲPension/OPEB 3,923,9185,778,114 NetPosition NetInvestmentinCapital Assets 102,098,72996,265,652 Restricted 6,992,7475,627,707 Unrestricted 170,59015,134,420 Total NetPosition 109,262,066$117,027,779$ TownofLosGatos NetPosition GovernmentalActivites Forthe YearEndedJune 30,2018 Capitalassetsrepresentapproximately57%oftheTown’stotalassetsconsistingof investmentsmadebytheTowninpermanentorlongͲlivedassets(e.g.,land,buildings, infrastructure,machineryandequipment),lessanyrelateddebtusedtoacquirethose assetsstilloutstanding.TheTownusesthesecapitalassetstoprovideservicesto residentsandcustomers;consequently,theseassetsarenotavailableforfuture spending.AlthoughtheTown’sinvestmentinitscapitalassets isreportednetofrelated debt,itshouldbenotedthattheresourcesneededtorepaythisdebtmustbeprovided fromothersourcessincethecapitalassetsthemselvescannotbeusedtoliquidatethese liabilities. Forthecurrentyear,NetInvestmentinCapitalAssetsincreasedby$5,833,077asa resultofapproximately$10millionincapitalimprovementsmadeduringthefiscalyear, Dr a f t 1 2 / 1 2 / 2 0 1 8 ent’s financialfinancial ed liabilitiesliabilities andand 20182018 2020 77,527,30977,527,30$$ 102,098,7292,098,72 179,626,038179,626,038$$ n/OPEBOPE 19,177,1719,177,17 19,12512 Outstanding 66,utstanding $$ wsͲͲPensionPen/OPEBOPEB n estmentst in Capitalal AsAs rictedicted nrestrictedstricted Totaltal NetNet PositionPosition 0,2010188 2/2 2/2 12 12 /12 /12 /12 /12 /1 /1 2/2/2 2 2 2 2/2 2/2 pital assetsassets represereprese nvestmentsnvestment mademade bb infrastructure,infrastructure,m assetsa stillstil ou residentsresidents endingendin offsetby$4.2millionincapitalassetsdepreciationandretirements.PensionandOPEB relateddeferredoutflowsincreased$3.5millionfromtheprioryearprimarilydueto implementationofGASB75andassumptionchanges. AnadditionalportionoftheTown’snetposition(6.4%)representsresourcesthatare subjecttoexternalrestrictionsonhowtheymaybeused.Thebalanceofunrestricted netpositionmaybeusedtomeettheTown’songoingobligationstocitizens,customers, andcreditors.TheTown’sunrestrictednetpositionrepresentsapproximately0.2%of theTown’snetpositionatyearend. Governmentalactivities 2018 2017 Revenues: Programrevenues: ChargesforServices 11,982,107$10,162,547$ OperatingGrantsandContributions 1,906,2241,503,108 CapitalGrantsandContributions 348,437779,880 GeneralRevenues: PropertyTaxes 15,958,40614,756,214 SalesTaxes 7,466,2538,925,276 FranchiseTaxes 2,474,8142,366,908 OtherTaxes 2,667,8402,351,223 MotorVehicleinLieu 16,48314,056 InvestmentEarnings 333,120192,260 Miscellaneous 622,105528,946 TotalRevenues 43,775,78941,580,418 Expenses: PoliceDepartment 15,545,52114,587,597 ParksandPublic Works 10,047,0039,502,707 GeneralGovernment 9,155,8196,771,628 CommunityDevelopment 4,667,6095,093,459 LibraryServices 3,087,6842,868,748 Sanitation 536,296466,762 TotalExpenses 43,039,93239,290,901 ChangeinNetPosition 735,8572,289,517 NetPosition,beginning 117,027,779112,514,506 PriorPeriodAdjustmentsͲGASB75 (8,501,570)2,223,756 NetPosition,asrestatedͲGASB 75 108,526,209114,738,262 NetPosition,Ending 109,262,066$117,027,779$ TownofLosGatos StatementofActivities FortheYearEndedJune30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 tometome elyy 0.2%0.2%ofof 18 20172017 11,982,10711,982,10$$$$ 1,906,2241,906,224 348,437348,437 15,959 lee ini Lieu nt Earningsarning llaneousus uess nses: PolicePolice DepartmDepartm ParksPark andand P GeneraGeneral ComCom L TotaTo /2 /2 20 20 Asshowninthescheduleabove,governmentalactivitiesforthe yeardecreasedthe Town’snetpositionby$7,765,713.Keyelementsofthedecreaseinnetpositionareas follows: x PropertytaxrevenuescollectedfortheTownaccountedfor37%oftotalTown revenues.PropertytaxrevenuesforTownactivitiesincreasedby$1.2millionor 8.1%,fromFY2016/17dueprimarilytothecontinuedstrongeconomy,the continuedstrongdemandforhousinginLosGatos,andseveralnew developmentsbeingaddedtothetaxroll. x Salestaxrevenueof$7.5millionaccountedforapproximately17%oftheTown’s totalrevenuesfortheyear.The16%decreaseofapproximately$1.5million fromtheprioryearcollectionsislargelyduetothetimingofthefinal“tripleflip” paymentandthereclassificationofothersalestaxrevenuetothepriorperiod. x Othertaxesandmiscellaneousrevenuesof$3.3millionaccountedfor7.5%of totalrevenues,increasingby14%fromtheprioryear.Thisincreasewas primarilytheresultofthehigheramountofTransientOccupancyTaxcollectedin FY2017/18ascomparedtotheprioryear. x Investmentearningsof$602,420netofamortizedpremiumsincreasedby $140,680fromtheprioryear.Thisincreaseisdueprimarilytotheincreasing interestrateenvironmentinanticipationofstrongereconomicgrowth. x Totalexpendituresincreasedbyapproximately$3.7millionfromtheprioryear. Thisincreasewaslargelyduetoincreasedpensionexpensesandthe$1.2million contributedtotheTown’sIRS115PensionTrustduringFY2017/18. x Unrestrictedfundbalanceof$170,590asofJune30,2018reflectinga$15 milliondecreaseresultingprimarilyfromthenetimpactsoftheimplementation ofGASB75andnetadditionstoinfrastructureinthecurrentfiscalyear.For additionalinformation,pleaserefertoNote1andNote10. FINANCIALANALYSISOFTHETOWN’SFUNDS TheTownusesfundaccountingtoensureanddemonstratecompliancewithfinanceͲ relatedlegalrequirements. Governmentalfunds ThefocusoftheTown’sgovernmentalfundsistoprovideinformationonnearͲterm inflows,outflows,andbalancesofspendableresources.AsoftheendofFY2017/18, theTown’sgovernmentalfundsreportedcombinedendingfundbalancesof $49,353,921,adecreaseof$3,797,817incomparisonwiththeprioryear.Fundbalances Dr a f t 1 2 / 1 2 / 2 0 1 8 alal nen 7%ofof thet Town’sown’s matelyy $1.5$1.5 million ofof thethe finalfin “tripleple f nue toto the priorprio per 33 millionmill accountedaccounted e priorrio year.ar.ThisTh ff TransientTransient Occupanupan ar. 20 netnet ofo amortizeortize ThisTh increaseincrease is dd anticipationanticipat of strostr creasedse byy approximapprox argelygely due too increaincrea he Town’sown’s IRSI 11515 PP tedted fundfun balance o decreaseecrease resultingre GASB 7575 andan netnet aa additionalonal informatioinforma NANCIALAL AANALYSISYSIS OFOF T TheT Townown usesuse relatedre legalleg vernver decreaseprimarilyduetocapitalexpendituresandadditional$1.2milliontransferto theTownIRS115PensionTrustFund. Approximately86%or$42,361,174ofthetotalamountofgovernmentalfundbalances of$49,353,921iscommitted,assignedorunassignedfundbalance,whichisavailable forspendingsubjecttoTowndirectionandapproval.Theremainderoffundbalanceis restrictedthereforenotavailablefornewspendingbutlimitedastousefor(1) providingforappropriatedcapitalprojects($6,794,063);and(2)toprovidefor dedicatedrepairandmaintenanceinlightingandlandscapedistricts($198,684). GeneralFundͲTheGeneralFundisthechiefoperatingfundoftheTown.Itaccountsfor allfinancialresourcesexceptthoserequiredtobeaccountedforinanotherfund.At theendofthecurrentfiscalyear,theGeneralFundnetfundbalanceincreasedby approximately5%fromprioryearbalancesto$30,428,684.Thisincreaseisprimarily duetohigherthanexpectedreceiptofeconomicallysensitiverevenues. OtherMajorFunds GeneralFundAppropriatedReserve(GFAR)CapitalProjectsFundͲTheGFARfundis usedastheprimarycapitalprojectsfundfortheTownandisusedfortheacquisition andconstructionofmajorcapitalprojectsintheTown.Fundbalancedecreasedby $5,800,599to$12,301,432.Thedecreaseisprimarilyduetocapitalproject expendituresmadetoinvestintheTown’sinfrastructure. OtherNonͲMajorOtherGovernmentalFundsͲThesefundsconsistprimarilyofspecial revenuefundsusedtoaccountforspecificrevenuesourcesforwhichexpendituresare restrictedbylaworregulationtofinanceparticularfunctionsoractivitiesoftheTown andothernonͲmajorcapitalprojectsfunds.TotalfundbalancesforothernonͲmajor othergovernmentalfundsincreasedby$814,551to$6,623,805. Proprietaryfunds TheTown’sproprietaryfundsprovidethesametypeofinformationfoundinthe governmentͲwidefinancialstatements,butinmoredetail. InternalServiceFundsͲTheTownhasseveninternalservicefunds:Workers’ Compensation,SelfͲInsurance,Stores,VehicleMaintenance,FacilitiesMaintenance, InformationTechnology,andEquipmentReplacementfunds.Revenuestothesefunds aregeneratedfromfeeschargedtotheTown’soperatingprogramsforservices provided. The Equipment Replacement Fund charges replacement costs while the Vehicle MaintenanceFundchargesvehiclemaintenancecoststoalluserdepartmentsbasedon equipmentassignmentandusageofequipment.Netoperatingincomebeforetransfers Dr a f t 1 2 / 1 2 / 2 0 1 8 forfor ( rovideovid forfor ,684).684). own.ItIt accountsccou forf r inin anotheranot fund.und. nd balancebalance increasin 4.4.ThisThis increaseincrease is sitivesitive revenues.enues. CapitalCapita Projectsrojects FuF d foror theth Townn andand ojectsect inin thethe Town.wn. e decreasecre is prip hee Town’sTown infrastrucinf overnmentalvern FundsFunds accountunt forfo specificecific regulation too financfin ajorajor capitalca projectsct mentalntal fundsfund increase ary fundsunds e Town’swn’s proprietaroprieta governmentgovernmentͲwideide fifi InternalIn ServS CompensaCompensa ormaorma atyearendforbothfundswas$36,216and$80,421respectivelyversus$41,729and $101,507intheprioryear.ThedecreaseinEquipmentReplacementFundis attributabletothecyclicalnatureoffleetpurchasesinaccordancewiththeTown’sfleet replacementschedule.ThedecreaseinoperatingincomeintheVehicleMaintenance Fundfromtheprioryearisattributabletoincreasedoperatingexpensesincurredduring thefiscalyear. TheFacilitiesMaintenance,Stores,andInformationTechnologyFundschargepremiums basedonuseandlaborchargestoprovideTownͲwidefacilitiesmaintenance,mailand officeinventoryandduplicationcharges,andinformationtechnologyservices.Net operatingincome(loss)beforetransfersatyearendwas($16,693),$27,353,and ($94,893)respectively.ExpendituresexceededrevenuesintheFacilitiesMaintenance Fundduetoincreasedheating,ventilationandairconditioningmaintenanceand unscheduledrepair costsexperiencedduringtheyear.InformationTechnologyFund alsoexperiencedincreasedrepair,replacement,andlicensingcosts.TheOfficeStore expendituresdecreasedduringthecurrentfiscal yearduetodecreasedprinting volumes. TheWorkers’CompensationandSelfͲInsuranceFundschargepremiumsbasedon exposurelevelsbydepartmentforliability,property,workers’compensationandselfͲ insurancecosts.Netoperatingincomebeforetransfersatyearendwas($281,528)and $109,329respectively,versus($123,074)and($250,079)intheprioryear.Thedecrease ofoperatingincomefortheyearforWorkers’CompensationFundreflectstheadverse experienceoflossclaimsinthefiscalyearascomparedtotheprioryear.Thegeneral liabilityclaimpaymentsandsettlementsweredecreasedinthecurrentfiscalyear. GOVERNMENTFUNDSBUDGETARYHIGHLIGHTS: BudgetAdjustments ComparingtheFY2017/18originalbudget(oradopted)GeneralFundExpendituresof $37,844,035(excludingbudgetedtransfersͲoutanddebtpaymentthatgetreimbursed) thefinalbudgetamountof$39,374222showsanetincreaseof$1.5million.Additions totheoriginalbudgetincludedapprovedencumbrancecarryͲforwardsof$34,852and additionsof$1,495,335innetmiscellaneousadjustmentsapprovedbyTownCouncil throughoutthefiscalyear. Original Budget + Approved CarryͲ forwards + PriorYear Encumbrances + Misc. Adjustments& MidͲYear Adjustments = Final Budget $37,844,035$0$34,852$1,495,335$39,374,222 TheincreaseinGeneralFundappropriationsoccurredprimarilyfromthefollowing selectedbudgetadjustmentsmadeduringthefiscalyear. Dr a f t 1 2 / 1 2 / 2 0 1 8 premiumspremiums nce,mailmail andand gy services.serv NetNet 693),$27,353,$27,35 andd FacilitiesFacilities Maintenanten tioninging maintenancinte formationformation TechnoloTechn censingcensi costs.co TheThe yearar dued toto decrdec ancee Fundsds chargeharg y,property,pro workerworker beforebefore transferstransfers atat 074)andan ($250,079)50,07 forfor Workers’Worker Comp e fiscalfis yearye asas com settlementssettlements wereere dd GETARYRY HIGHLIGHTSIGHLIGHTS:: entsents he FYFY 2017/182017/18 origo 035 (excludingexcluding budgudg al budgetdge amountamount o he originalrigina budgetbudget additionsdditions ofo $1,495,1,495 throughoutthroughout theth fi OrigOrigDD x $1,200,000increasefortransfertotheTown’sIRS115PensionTrust. x $100,350increaseforbelowmarketpricedhousingprogramforrepairsandsale servicesof108SierraLindaproperty. x $45,000budgetadjustmentforadditionallegalservicesrelatedtotheNorth40 lawsuitandpreparingthewirelessordinance. x $29,115toalignthebudgettotherevenuethattheTownreceivedfroman insurancereimbursementtoreplaceCommunityEmergencyResponseTeam equipment. x $22,000adjustmenttoimproveergonomicworkingconditionsinTownofficesand relocatetheBuildingDivisionstaffoffices. x $16,000adjustmenttocovernonͲanticipatedtuitionreimbursementsthatare mandatedthroughtheapprovedMemorandaofUnderstanding(MOU). x $9,000expenditurebudgetadjustmenttofundthereplacementofthedrinking fountainsatOakHillPlayLotandLiveOakManorPark.Theexistingconcrete drinkingfountainsareinpoorconditionandareneartheendoftheirusefullife. x $10,000forwelltestingandmonitoringrequiredbytheCountyofSantaClara. Before1990,anundergroundoiltankonTownpropertyleakedintothesurrounding soil.TheTownbegancleanupoperationsbutdidnotcompletetheongoing monitoringelement.TownstaffbegantestinginFY2014/15,andasaresult,more testingandsampleswererequiredbytheCounty.TheCountyhasrequiredthatthis projectbeclosedout. x $8,200increaseduetoincreasedcostandactivityofmandatedutilitylocation services. x $7,000toprovideadditionaltraining(e.g.AmericanswithDisabilityActcompliance) for the Community Development Department. x $24,000combinedexpenditurebudgetincreasetocovernonͲanticipatedcrossͲ departmentaloperationalexpenditures(includingmembershipsupportfortheSafe RoutestoSchool,stafftraining,parkmapprintingservices,andbackgroundcheck forincreasedhiring). ComparingtheFY2017/18finalamendedbudgettotheactualresultshows$2.4million insavingsduetooperationalcostsavingsprimarilyfrom$1.9millionofsalaryand benefitsavingsrelatedtostaffvacanciesandactualstaffcosts. CapitalAssets AsofJune30,2018,theTown’sinvestmentincapitalassetsforitsgovernmentalactivity isrecordedat$102,098,729(netofaccumulateddepreciation).Theinvestmentin capitalassetsincludesland,buildingsandimprovements,infrastructure,constructionin Dr a f t 1 2 / 1 2 / 2 0 1 8 t ved fromfrom anan Responsespon TeamTe nsns ini TownTow officesces onn reimbursementmbursement nderstandingerstanding (MOU)MO undnd theth replacemreplacemee Oakk Manorno Park.Par T andan aree nearr thee endend itoringtoring requiredrequired byby tankk ono Townn propepro nupnup operationsoperat bu stafftaf beganega testingtest ree requiredui byb thehe CC . due to increasedrease provideovide additionaladdi Communitymmunity Develoevelo 24,000 combinedcombine ee departmentalartmenta operope RoutesRoutes tot SchooSchoo foror increasedincrease ComparingComparing t nn savingsaving efief progressandmachineryandequipment.DuringFY2017/18theTown’sapproximate $9.210millioninvestmentincapitalassetsforthecurrentyear represented approximately5.1%oftotalassetsforgovernmentalactivities.Majorcapitalasset eventsduringthecurrentfiscalyearincludethefollowing: x $4.95.1 million net increase to Construction in Progress, the majority of that amount($4.8million)expendedontheAlmondGroveStreetRehabilitation Project. x $3.9millionadditiontostreetimprovementprojectsincludingimprovementsto majorarterialsandneighborhoodcollectorstreetstoenhancepedestrianand trafficsafetyTownͲwide. x $761Kinequipmentpurchasesincludingapproximately$352Kinvehiclefleet replacements,$169Kforawheelloader,$100Kforskidsteer,andapproximately $124Kforpublicsafetyradiocommunicationsupgrade. x Approximately$118257Kexpendedonbuildingimprovements,retainingwall, parkimprovement,andparkinglotimprovementprojects Governmental Activities Infrastructure 45,826,289$ Buildings 22,414,082 Land 20,333,684 Equipment 2,960,020 ConstructioninProgress 10,564,654 102,098,729$ NetInvestmentinCapitalAssets TownofLosGatos FortheYearEndedJune30,2018 AdditionalinformationontheTown’scapitalassetsisfoundinNote5ofthisfinancial report. EconomicFactorsandNextYear’sBudgetsandRates AproductofanongoingexaminationofhowtheTownprovidescostͲeffectiveservices, theTown’sbudgetemphasizesoutcomesorresultsforthecommunityandallowsfor longerͲtermfinancialplanningdecisions. DuringthedevelopmentandadoptionoftheTown’sFY2018/19budget,theTown Councilandmanagementconsideredthefollowingfactors: Dr a f t 1 2 / 1 2 / 2 0 1 8 onon provementsrovements to pedestrianestrian andd $352K52K in vehiclevehi fle kidkid steer,steer,andan appropp pgrade.grade ng improvements,provements,r vementement projectsojec structurecture uildings LandLa EquipmentEquip ConstructionConstructio ente inn CapitalCapi Assetsssets own ofof Los Gatosatos ee YearYea Endednde June 3030 itionalal informationinformation eport.p Economicmic Factct producproduc TT x The Town continues to focus on priority issues that involve maintaining public safety andTowninfrastructureincludingstreetsandparks;andprovidinglibrary, communitydevelopment,andotherservices.Theseprioritiesarecoordinatedwith otherCoreGoalsthatprotecttheTown’sfiscalhealthandensurecostefficientand effectivedeliveryofTownͲwideadministrativeservices.TheTown’sproactive approachtoreducingoperatingexpenditures,identifyingrevenueenhancements, andimplementingoperatingefficiencieshasbeenaneffectivefiscalapproach. x Reflectingthestrengthofthelocaleconomy,theFY2018/19operatingbudgetisa balancedbudget,withuseofGeneralFundreservesdedicatedforoneͲtimeuses. TheFY2018/19Budgetmaintainsexistingservicelevelswhilerecommending modestadditionsinstrategicallyimportantareas.Thisbudgetincorporates investmentstowardfutureequipmentreplacement,additionalannualdiscretionary pensionpayments,andincreasedcapacityfortheTown’sburgeoningtechnology infrastructure.TheFY2018/19budgethasbeenbalancedlargelyduetorevenue enhancements,resultingfromthepositiveeconomyandtheTown’sgrowthinthe economicallysensitiverevenuesourcessuchasPropertyTax,TransientOccupancy Tax,andBusinessLicenses.Inregardtoexpenditures,theTown’semployerͲpaid benefitsareexpectedtoincreasefortheforeseeablefuture,includingobligated pensioncontributions,thepreͲfundingofpremiumsforretiree health coverage, and theincreasingcostsofcurrenthealthplans.Specifictrendsaffectingthefund balanceforecastinclude: x Generalpropertytaxcollectionsrepresentapproximately28.9%(notincluding theState’spropertytax“backfill”shifts)oftheTown’sGeneralFundrevenues. Propertytaxcollectionsareexpectedtoincrease4%inFY18/19fromtheprior year’staxcollections.ThisforecastisbasedondatafromtheSantaClaraCounty TaxAssessor’sOffice. x TheTownanticipatesadecreaseingeneralsalestaxforFY2018/19.Salestax estimatesof$7.7millionforFY2018/19werebudgetedreflectinga2.9% decreasefromtheprioryear’sadoptedsalestaxbudget.Thenegativeimpactis associatedwithincreasedonͲlinesalesversusbrickandmortarshopping, decreasedgasolineprices,andbythecontinuingimpactofthe2011business modelchangeofNetflix.Inaddition,attheNovember6,2018electiontheTown ofLosGatosresidentsapprovedaballotmeasureenactingaoneͲeighthcent ($0.125%)salestaxfor20years,providingabout$800,000annually,requiring IndependentCitizensOversightwithpublicreviewofspending,andallrevenues controlledlocally.TheSalestaxMeasurewillbeeffectivestartingApril1,2019. StaffwillincorporatethenewsalestaxfiguresintheFY2019/20budget. x TheTown’sinvestmentportfolioexperiencedaslightincreaseinits overall weightedaverageannualyield,risingfrom1.25%atJune30,2017to1.73%at June30,2018.AnticipatingincreasinginterestratesforFY2018/19coupledwith Dr a f t 1 2 / 1 2 / 2 0 1 8 h.h. atingng budgetbudget isi aa for oneonͲtimetim uses.e whilewhile recommendrecommen his budgetbudget incorpoin ditionalditiona annualann discrdi Town’sTow burgeoningburgeoning balancedalanc largelylargely d onomyonomy andand thee TowTow h asas Propertyroperty Tax,Tax,T o expenditures,penditures,theth r thehe foreseeableforeseeable ff dingng off premiumspremiums fofo healthlth plans.SpS collectionsections represepres rty taxtax “backfill”ill”shishi llectionsons areare expectpect llections.This forecfor sor’ssor’s Office.Of Town anticipatesanticipates a timatestes off $7.7$7 m decreaseeas fromfrom thethe associatedssociated withwit decreaseddecreased gag modelmodel cha ofof Los ($0.($0 I reducedcashbalancesduetocapitalexpenditures,investmentearningsare expectedtoremainatthesamelevelasthepriorfiscalyear. x TransientOccupancyTax(TOT)revenuesareexpectedtobehigherinFY 2018/19aspersonalandbusinessrelatedtravelisexpectedtoremainstrong. x TheTown’spensionplansoverthepastseveraldecades,likeallotherCalPERS participants,haveexperiencedunfavorableinvestmentreturns,changesinactuarial assumptions,andunfavorabledemographicshiftswhichhaveoutweighedany positiveplanexperiences.Toaddressthisunfundedstatus,theTowntookproactive stepsincludinginitiatingtheprefundingofOPEBobligations,budgetingadditional discretionarypensionpaymentstoacceleratereductionofunfundedliabilities,and mostrecentlypartneringwiththeTown’semployeegroupstoeliminatetheexisting retireehealthcarebenefitfornewemployees.Evenwiththeseproactivesteps,the Town continuestobeimpactedbythecontinuingrisingcostofpensionrelated benefits.Overthenextfivefiscalyears,theTown’sfiveyearplanincludesincreasing pensioncostsduetofurtherchangesinactuarialassumptionsorloweringthe discountrate.TheTown’snetpensionliabilityplanwithCalPERSiscurrentlyfunded at69.6%$22,415,954forthesafetycostsharingplangroupand$30,788,55473.9% forthemiscellaneousgroupplanbasedupondatafromtheCalPERSJune30,2017 ActuarialValuations.FordetailedinformationabouttheTownemployees’ retirement plan please refer to Note 9 of the Notes to Basic Financial Statements Section. RequestsforInformation Thisfinancialreportisdesignedtoprovideresidents,taxpayers,customers,investors, andcreditors,withageneraloverviewoftheTown’sfinancesandtodemonstratethe Town’saccountabilityforthemoneyitreceives.Questionsaboutthisreportorrequests foranyadditionalinformation,shouldbedirectedtoStephenConway,Directorof Finance,at110EastMainStreet,LosGatos,California,95030,orphone(408)354Ͳ6828. ctuactua ighedghe anyany ook proactiveproactive getinging additionaltional nded liabilities,liabiliti andand eliminateelimina the existexi hesee proactivectiv step singing costcost ofof pensionns vev yearye planpla includenclude rial assumptionsassumptions oo planplan withth CalPERSERS isis 2/2 2/2 aringing planlan groupou andan2/upon datad fromfr thethe informationnfor abouabou otete 9 ofof thethe Noteses is designed toto prop thth aa generalge overvie ntabilityability forfor the mon ditionalal informationinformatio at 11010 EastEas MainMain St Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional BasicFinancialStatements Dr a f t 1 2 / 1 2 / 2 0 1 8 sic FinancialFinancial StS Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional TOWN OFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 GOVERNMENTWIDEFINANCIALSTATEMENTS STATEMENTOFNETPOSITIONANDSTATEMENTOFACTIVITIES ThepurposeoftheStatementofNetPositionandtheStatementofActivitiesistosummarizetheentirefinancial activitiesandfinancialpositionoftheTown.Theyarepreparedonthesamebasisofaccounting(accrual)used bymostbusinesses,whichmeanstheyincludealltheTown’sassetsandliabilities,aswellasitsrevenuesand expenses.TheeffectoftheentireTown’stransactionsisaccountedfor,regardlessofwhencashchangeshands, andallmaterialinternaltransactionsbetweenfundshavebeeneliminated. TheStatementofNetPositionreporttheTown’stotalassets,deferredoutflowsofresources,liabilities,and deferredinflowsofresources,includingcapitalassetsandlongͲtermdebt,andpresentssimilarinformationto theoldbalancesheetformatwhilefocusingthereaderonthecompositionoftheTown’snetposition(assets minusliabilities).TheStatementofNetPositionsummarizesthefinancialpositionoftheTown’sgovernmental activitiesinasinglecolumn. TheTown’sgovernmentalactivitiesincludetheactivitiesoftheGeneralFund,SpecialRevenueFunds,Capital ProjectsFundsandDebtServiceFunds.ThesefundsareservicedbytheTown’sInternalServiceFunds;therefore internalserviceactivitiesareconsolidatedwithgovernmentalactivitiesaftereliminatinginterͲfundtransactions andbalances. TheStatementofActivitiesreportsincreasesanddecreasesintheTown’snetpositionandispreparedonthe fullaccrualbasisofaccounting,whichmeansitincludesalltheTown’srevenuesandexpensesregardlessof whencashchangedhands.Thisdiffersfromthe“modifiedaccrual”basisofaccountingusedinthefundfinancial statements,whichreflectonlycurrentassets,currentliabilities,availablerevenuesandmeasurable expenditures. TheformatoftheStatementofActivitiespresentstheTown’sexpensesbeforerevenuesandbyprogram. Programrevenues(revenuesgenerateddirectlybyspecificprograms)aredeductedfromprogramexpensesto arriveatthenetexpenseofeachgovernmentalprogram,whichisoffsetbygeneralrevenuesaslistedbefore thechangeinnetposition.Fromthesecomponents,thechangeinnetpositioniscomputedandreconciledto theStatementofNetPosition. BothofthesestatementsincludethefinancialactivitiesoftheTown. TheStatementofNetPosition,StatementofActivities,fundfinancialstatementsandthenotestofinancial statementscomprisetheBasicFinancialStatementsoftheTown.Theterm“BasicFinancialStatements” replacedtheterm“GeneralPurposeFinancialStatements”whichisnolongerused. n ngng (accr(acc as itsits revenuvenu n cashh changeschanges hanha wsws ofof resources,resources,liabilia nd presentspresents similars in onon ofof thethe Town’s’s net cialal positionpositio ofof thethe TowTo hehe GeneralGeneral Fund,Fund,SpeSpe viceded by thethe Town’swn In mentalen activitiesactivitie afterfter nd decreasesecr in thethe T nsns itit iincludesnclude all the omm theth “modifiedmodified accr rrentre assets,assets,currenrren nt of Activities presepres uesues generatedgene directly nsee ofof eacheach governmeg osition.n.FromFro thesethese c Net Position.Position. se statementstements includeinclude atementatement ofof NetN Positosi ementseme compriseomprise tht acedaced the termm “Ge Governmental Activities ASSETS Cashandinvestments 73,938,079$ Restrictedcashandinvestments 37,229 Receivables: Accounts 1,432,662 Interest 231,743 Intergovernmental 1,621,833 Materials,suppliesanddeposits 28,011 Longtermnotesreceivables 237,752 CapitalAssets: Nondepreciable 30,898,338 Depreciable,netofaccumulateddepreciation 71,200,391 TotalAssets 179,626,038 DEFERREDOUTFLOWSOFRESOURCES Pensioncontributionssubsequenttomeasurementdate 4,620,844 Pensionrelatedamounts 11,621,015 OPEB contributions subsequent to measurement date 2,935,313 TotalDeferredOutflowsofResources 19,177,172 LIABILITIES Accountspayable4,395,611 Accruedpayrollandbenefits 1,463,684 Duetoothergovernments 25,945 UnearnedRevenue 4,491,047 Deposits 6,822,127 Claimspayable 1,604,067 LongͲtermliabilities: Duewithinoneyear: Compensatedabsences 322,725 Dueinmorethanoneyear: NetOPEBliability 11,165,000 Netpensionliabilities 53,204,508 Compensatedabsences 2,122,512 TotalLiabilities 85,617,226 DEFERREDINFLOWSOFRESOURCES Pensionrelatedamounts 3,622,918 OPEBrelatedamounts 301,000 TotalDeferredInflowsofResources 3,923,918 NETPOSITION Netinvestmentincapitalassets 102,098,729 Restrictedfor: Capitalprojects 6,794,063 Lightingandlandscaperepairsandmaintenance 198,684 TotalRestrictedNetPosition 6,992,747 Unrestricted 170,590 TotalNetPosition 109,262,066$ TOWNOFLOSGATOS STATEMENTOFNETPOSITION JUNE30,2018 Thenotestothefinancialstatementsareanintegralpartofthisstatement. 73,93, 37,237 1,432,6621,432,662 231,743231,743 1,621,833621,833 28, 2 ar: ities absenceses bilities DD INFLOWSINFLOWS OFOF RESOURCERESOURC sionion related amountsamounts EBEB relatedre amountsunt ll DeferredDeferred InfIn 0 Net(Expense) Revenuesand Changesin NetPosition Operating Capital Chargesfor Grantsand Grantsand Governmental Functions/Programs Expenses Services Contributions Contributions Activities GovernmentalActivities: Generalgovernment 9,155,819$1,701,146$ Ͳ$Ͳ$(7,454,673)$ Publicsafety 15,545,5211,888,359895,730Ͳ(12,761,432) Parksandpublicworks 10,047,0034,150,068953,294348,437(4,595,204) Communitydevelopment 4,667,6093,456,390 ͲͲ(1,211,219) Libraryservices 3,087,68414,70257,200Ͳ(3,015,782) Sanitation 536,296771,442ͲͲ235,146 TotalGovernmentalActivities 43,039,932$11,982,107$1,906,224$348,437$(28,803,164) Generalrevenues: Taxes: Propertytaxes 15,958,406 Salestaxes 7,466,253 Franchisetaxes 2,474,814 Othertaxes 2,667,840 Motorvehicleinlieu 16,483 Investmentearnings 333,120 Miscellaneous 622,105 Totalgeneralrevenues 29,539,021 ChangeinNetPosition 735,857 NetPositionͲBeginning,asrestated 108,526,209 NetPositionͲEnding 109,262,066$ TOWNOFLOSGATOS STATEMENTOFACTIVITIES FORTHEFISCALYEARENDEDJUNE30,2018 ProgramRevenues Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 s and GovedGove tributions Activiributions Act Ͳ$$$ ͲͲ 944 348,4377 ͲͲ 57,20057,200 ͲͲ 1,906,2241,906,224$$$ lieu arnings ousous otal generalgen revenuesevenues ngee inin NetN Positionon Net PositionositionͲͲBeginning,Beginning, Net PositionͲEndingndin 8 18 20 20 /2 /2 2 2 8 8 Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional TOWNOFLOSGATOS COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 FUNDFINANCIALSTATEMENTS& MAJORGOVERNMENTALFUNDS ______________________________________________________________________________ FundFinancialStatements TheFundFinancialStatementsonlypresentmajorfundsindividuallywhilenonmajorfundsarecombinedina singlecolumn.Majorfundsaregenerallydefinedashavingsignificantactivitiesorbalancesinthecurrentyear. Nodistinctionismadebetweenfundtypesandthepracticeofcombininglikefundsandpresentingtheirtotals inseparatecolumnshasbeendiscontinuedalongwiththeuseoftheGeneralFixedAssetsandGeneralLongͲ TermDebtAccountGroups. MajorGovernmentalFunds: TheTowndeterminedthatthefollowingfundsweremajorfundsfortheyearendedJune30,201ϴ.Individual nonͲmajorfundscanbefoundinthesupplementalsection. GeneralFundisthegeneraloperatingfundoftheTownandisusedtoaccountforallfinancialresourcesexcept thoserequiredtobeaccountedforinanotherfund. AppropriatedReservesFundisusedtoaccountforresourcesprovidedforcapitalprojectsnotfullyfundedfrom othersources. Dr a f t 1 2 / 1 2 / 2 0 1 8 ds arere combinedcombined ncesces in the currentcurrent yey and presentingpresenting theirtheir xedxed Assetsse andand GeneG or thethe year endedended JunJu nd iss usedu toto accountoun for resourcesres providedprov Other Nonmajor Total Appropriated Governmental Governmental General Reserves Funds Funds ASSETS Cash&Investments 37,907,933$18,042,657$7,239,621$63,190,211$ Receivables: Accounts 1,096,92552,579145,4061,294,910 Interest231,743 Ͳ Ͳ231,743 Intergovernmental 1,496,784 Ͳ125,0501,621,834 DuefromOtherFunds 68,569 Ͳ Ͳ68,569 Longtermnotes 159,000 Ͳ78,752237,752 TotalAssets 40,960,954$18,095,236$7,588,829$66,645,019$ LIABILITIES AccountsPayable 786,001$2,518,749$827,718$4,132,468$ AccruedPayrollandBenefits 1,424,228 Ͳ3,8821,428,110 Duetoothergovernments 25,992 Ͳ Ͳ25,992 Unearnedrevenue 1,151,1973,275,05564,8554,491,107 Deposits 6,822,127 Ͳ Ͳ6,822,127 DuetoOtherFunds Ͳ Ͳ68,56968,569 CompensatedAbsences 322,725 Ͳ Ͳ322,725 TotalLiabilities 10,532,2705,793,804965,02417,291,098 FUNDBALANCE Restrictedfor: CapitalOutlay Ͳ606,9336,187,1306,794,063 RepairsandMaintenance Ͳ Ͳ198,684198,684 Committedto: BudgetStabilization 5,037,243 Ͳ Ͳ5,037,243 Catastrophic 5,037,243 Ͳ Ͳ5,037,243 CalPERS/OPEB 2,878,913 Ͳ Ͳ2,878,913 AlmondGroveStreetProject Ͳ5,571,087 Ͳ5,571,087 Assignedto: OpenSpace 562,000 Ͳ Ͳ562,000 ParkingͲ1,460,210 Ͳ1,460,210 Sustainability 140,553 Ͳ Ͳ140,553 StrategicPlanning 129,090 Ͳ Ͳ129,090 CapitalProjects14,421,2034,613,202 Ͳ19,034,405 CarryoverEncumbrances 99,927 Ͳ Ͳ99,927 ComcastPEG Ͳ50,000 Ͳ50,000 CompensatedAbsences 2,122,512 Ͳ Ͳ2,122,512 SpecialRevenueFunds Ͳ Ͳ237,991237,991 TotalFundBalances 30,428,68412,301,4326,623,80549,353,921 TotalLiabilities,DeferredInflowofResourcesand FundBalances 40,960,954$18,095,236$7,588,829$66,645,019$ TOWNOFLOSGATOS GOVERNMENTALFUNDS JUNE30,2018 BALANCESHEET Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 ,239,621621 63,163,$$ 145,406145,40 ͲͲ ͲͲ125,0500 Ͳ ͲͲ787 18,095,23618,095,236$7$$ 00101 2,518,749518,749$$ 24,22828 25,99225 1,151,197,151,193,3 6,822,127822,127 Ͳ 322,7253 10,532,,532 ove Streetreet ProjectProject to:o: SpaceSpac kingking nabilitynabili PlanningPlanning ctscts 8 20 20 /2 /2 2 2 2/2 8 49,353,921$ 102,098,179 6,841,647 15,653,577 (3,576,458) 2,935,313 (301,000) NetPensionLiability (50,455,601)$ NetOPEBLiability (11,165,000) Compensatedabsences (2,122,512)(63,743,113) 109,262,066$NetPositionͲGovernmentalActivities LongͲtermliabilitiesarenotdueandpayableinthecurrent periodand,therefore,arenotreportedintheGovernmentalFunds. LONGͲTERMLIABILITIES ThedifferencebetweenprojectionsandactualresultsinOPEBplansisnotincludedinthe plan'sactuarialstudyuntilthenextfiscalyearandarereportedasdeferredinflowsof resourcesintheStatementofNetPosition. ContributionsandsimilaritemswillnotbeincludedinthecalculationoftheCity'snet OPEBliabilityoftheplanyearincludedinthisreportandhavebeendeferredand reportedasdeferredoutflowsofresources. DEFERREDINFLOWSOFRESOURCES Thedifferencebetweenprojectionsandactualresultsinpensionplansisnotincludedinthe plan'sactuarialstudyuntilthenextfiscalyearandarereportedasdeferredinflowsof resourcesintheStatementofNetPosition. DEFEREDOUTFLOWSOFRESOURCES ContributionsandsimilaritemswillnotbeincludedinthecalculationoftheCity'snet pensionliabilityoftheplanyearincludedinthisreportandhavebeendeferredand reportedasdeferredoutflowsofresources. DEFERREDINFLOWSOFRESOURCES certainactivitiessuchasinsurance,centralservicesandmaintenancetoindividual governmentalfunds.Thenetcurrentassetsoftheinternalservicefundsaretherefore includedasGovernmentalActivitiesintheStatementofNetPosition. DEFEREDOUTFLOWSOFRESOURCES CapitalassetsusedintheGovernmentalActivitiesarenotfinancialresourcesand, therefore,arenotreportedintheGovernmentalFunds. ALLOCATIONOFINTERNALSERVICEFUNDNETPOSITION Internalservicefundsareusedbymanagementtochargethecostofmanagementof CAPITALASSETS TOWNOFLOSGATOS RECONCILIATIONOFTHEGOVERNMENTALFUNDSBALANCESHEETTO THEGOVERNMENTͲWIDESTATEMENTOFNETPOSITIONͲGOVERNMENTALACTIVITIES JUNE30,2018 FundBalanceͲTotalGovernmentalFunds AmountsreportedforGovernmentalActivitiesintheStatementofNetPositionare differentfromthosereportedintheGovernmentalFundsbecauseofthefollowing: Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 102,0102 etet PensionPension LiabilityLiabili NetNet OPEB LiabilityLiability CompensatedCompensated absea nn ͲͲGoveGove bilities arere notot duedue andand nd,therefore,erefore arear notot re ITIES ectionsections andan actual result til thethe nextnext fiscalfis year an ment ofof NetNe Position.osition. ncludeded in thehe calculaticulat in thisthis report andnd havehave sources.es CES pensionpension plansplan is notot inclinc e reportedeported as deferreddefe f the City'sty's net eenen deferreddefer andan ereforeerefore Other Nonmajor Total Appropriated Governmental Governmental General Reserves Funds Funds REVENUES PropertyTaxes 15,958,406$ Ͳ$34,574$15,992,980$ SalesTaxes7,592,206 Ͳ Ͳ7,592,206 OtherTaxes 2,636,002 Ͳ31,8382,667,840 Licenses&Permits 4,697,560204,3911,035,0935,937,044 Intergovernmental 1,010,166261,534853,2032,124,903 ChargesforServices 4,625,136424,556345,3655,395,057 FinesandForfeitures 676,212 Ͳ Ͳ676,212 FranchiseFees 2,474,814 Ͳ Ͳ2,474,814 Interest 244,76231,94556,231332,938 UseofProperty 32,206 Ͳ Ͳ32,206 Other581,94658,898 Ͳ640,844 TotalRevenues 40,529,416981,3242,356,30443,867,044 EXPENDITURES Current: GeneralGovernment 8,770,082 Ͳ Ͳ8,770,082 PublicSafety 14,423,554 Ͳ Ͳ14,423,554 ParksandPublicWorks 7,099,527 Ͳ26,1597,125,686 CommunityDevelopment 4,192,165 Ͳ Ͳ4,192,165 LibraryServices 2,529,017 Ͳ Ͳ2,529,017 SanitationandOther Ͳ Ͳ521,147521,147 CapitalOutlay Ͳ8,894,531883,5279,778,058 TotalExpenditures 37,014,3458,894,5311,430,83347,339,709 EXCESS(DEFICIENCY)OFREVENUES OVEREXPENDITURES 3,515,071(7,913,207)925,471(3,472,665) OTHERFINANCINGSOURCES(USES) Proceedsfromsalesofassets 378,219 Ͳ Ͳ378,219 Transfersin 538,5362,638,224 Ͳ3,176,760 Transfers(out) (3,243,595)(525,616)(110,920)(3,880,131) TotalOtherFinancingSources(Uses) (2,326,840)2,112,608(110,920)(325,152) NETCHANGESINFUNDBALANCES 1,188,231(5,800,599)814,551(3,797,817) BEGINNINGFUNDBALANCES,AS RESTATED 29,240,45318,102,0315,809,25453,151,738 ENDINGFUNDBALANCES 30,428,684$12,301,432$6,623,805$49,353,921$ TOWNOFLOSGATOS GOVERNMENTALFUNDS STATEMENTOFREVENUES,EXPENDITURESANDCHANGESINFUNDBALANCES FORTHEFISCALYEARENDEDJUNE30,2018 Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 34,5744 15,915$$ Ͳ7,57 31,83831,838 1,035,0931,035,093 853,20385 6 345,36545, Ͳ Ͳ 31,94531,94 Ͳ 58,89858,898 981,324981,324 8,770,0828,770,082 14,423,554423,554 7,099,527099,527 4,192,165192,165 2,529,0529,0 Y)OF REVENUEREVENUESS URES ANCINGG SOURCESSOURCES (USE(USE edseds fromfrom salessales ofof assets nsfersnsfer in sferssfers (out) erer FinanciFinanc 8 2// 1 12 t1 t 8 NETCHANGEINFUNDBALANCESͲTOTALGOVERNMENTALFUNDS (3,797,817)$ AmountsreportedforGovernmentalActivitiesintheStatementofActivitiesare differentbecauseofthefollowing: CAPITALASSETTRANSACTIONS Governmentalfundsreportcapitaloutlaysasexpenditures.However,intheStatementof Activitiesthecostofthoseassetsiscapitalizedandallocatedovertheirestimateduseful livesandreportedasdepreciationexpense. Expendituresforcapitalassets(additions)9,864,158$ Proceedsfromsaleofassets (378,219) Gainonsaleofassets 34,698 CurrentYearDepreciation (3,686,603)5,834,034 OPEBPLANCONTRIBUTIONSANDEXPENSE Ingovernmentalfunds,actualcontributionstoOPEBplansarereportedasexpendituresintheyear incurred.However,intheGovernmentͲWideStatementofActivities,onlythecurrentyearOPEB expenseasnotedintheplans'valuationreportsisreportedasanexpense,asadjustedfordeferred inflowsandoutflowsofresources.317,658 PENSIONPLANCONTRIBUTIONSANDEXPENSE Ingovernmentalfunds,actualcontributionstopensionplansarereportedasexpendituresintheyear incurred.However,intheGovernmentͲWideStatementofActivities,onlythecurrentyearpension expenseasnotedintheplans'valuationreportsisreportedasanexpense,asadjustedfordeferred inflowsandoutflowsofresources.(2,983,954) ALLOCATIONONINTERNALSERVICEFUNDACTIVITY Internalservicefundsareusedbymanagementtochargethecostsofcertainactivitiesto individualfunds.Thenetrevenueoftheinternalservicefundisreportedwithgovernmentalactivities. 563,576 PENSIONPLANCONTRIBUTIONSANDEXPENSE Ingovernmentalfunds,actualcontributionstopensionplansarereportedasexpendituresintheyear incurred.However,intheGovernmentͲWideStatementofActivities,onlythecurrentyearpension expenseasnotedintheplans'valuationreportsisreportedasanexpense,asadjustedfordeferred928,313 inflowsandoutflowsofresources. UNAVAILABLEREVENUEINGOVERNMENTALFUNDS Ingovernmentalfunds,certainrevenuesthatwerenotavailableinprioryear,weredeferredonthe governmentalfundsinprioryearandarerecognizedasrevenueinthecurrentfiscalyear.However, thoserevenueswererecognizedintheGovernmentͲWideStatementofActivitiesinprioryear (125,953) CHANGEINNETPOSITIONͲGOVERNMENTALACTIVITIES 735,857$ JUNE30,2018 TOWNOFLOSGATOS RECONCILIATIONOFTHESTATEMENTOFREVENUES,EXPENDITURES, ANDCHANGESINFUNDBALANCESTO THEGOVERNMENTͲWIDESTATEMENTOFACTIVITIESͲGOVERNMENTALACTIVITIES Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 9,864,1589,$$ (378,2(3 3 (3 eportedorte as expendituresexpendit Activities,Activities onlyy thet currcurr ed asas anan expense,e,asas adad s to pensionpension plansp areare re tͲWideWi Statementen ofof AcAc tion reportsreport is reportedported s. RVICERVICE FUNDFU ACTIVITY re usedsed byby managemenmana The net revenuerevenu ofof thethe i N CONTRIBUTIONSTRIBUTION ANDAND nmentall funds,fun actualctual coc red.red.However,However,ininthe G xpensepen as notedted in thethe p owsows anda outflowslow o 2 VarianceWith FinalBudget Original FinalPositive Budget Budget Actual (Negative) REVENUES PropertyTaxes 14,652,443$15,370,934$15,958,406$587,472$ SalesTaxes7,972,1957,681,5467,592,206(89,340) OtherTaxes 2,067,0002,257,0002,636,002379,002 FranchiseFees 2,287,3902,317,3902,474,814157,424 Licenses&Permits 4,483,8294,558,8294,697,560138,731 Intergovernmental 716,081738,2811,010,166271,885 ChargesforServices 3,138,2973,288,6454,625,1361,336,491 FinesandForfeitures 695,400695,400676,212(19,188) Interest 270,723270,723244,762(25,961) UseofProperty 31,95931,95932,206247 Other554,711392,153581,946189,793 TotalRevenues 36,870,02837,602,86040,529,4162,926,556 EXPENDITURES Current: GeneralGovernment: TownCouncil 205,092 205,092 192,183 12,909 TownAttorney 353,383 426,466 354,205 72,261 AdministrativeServices 3,562,823 3,580,561 3,193,995 386,566 NonͲDepartmental 3,992,490 5,148,232 5,029,699 118,533 TotalGeneralGovernment 8,113,7889,360,3518,770,082590,269 PublicSafety 15,455,232 15,505,674 14,423,5541,082,120 CommunityDevelopment 4,376,673 4,520,505 4,192,165328,340 Parks&PublicWorks 7,117,3247,184,1477,099,52784,620 LibraryServices 2,781,0182,803,5452,529,017274,528 TotalExpenditures 37,844,03539,374,22237,014,3452,359,877 EXCESS(DEFICIT)OFREVENUES OVEREXPENDITURES (974,007)(1,771,362)3,515,0715,286,433 OTHERFINANCINGSOURCES(USES) Proceedsfromsaleofassets 1,0001,000378,219377,219 TransfersIn 538,536538,536538,536 Ͳ TransfersOut (3,082,227)(3,243,595)(3,243,595) Ͳ TotalOtherFinancingSources(Uses) (2,543,691)(2,705,059)(2,326,840)377,219 NETCHANGESINFUNDBALANCES (3,517,698)$(4,476,421)$1,188,2315,663,652$ BEGINNINGFUNDBALANCE 29,240,453 ENDINGFUNDBALANCE 30,428,684$ BUDGETANDACTUAL(GAAP) FORTHEFISCALYEARENDEDJUNE30,2018 TOWNOFLOSGATOS GENERALFUND STATEMENTOFREVENUES,EXPENDITURESANDCHANGESINFUNDBALANCE Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 ( 58,4066 $$ 7,592,20692,2 2,636,00236,002 2,474,8142,474,814 4,697,5604,697 81 1,010,16610,1 8,6458,645 4,625,134,625,1 695,400695,4 676676 270,723270, 31,95931,9 392,153,15 0280 37,602,8607,602,860 205,0925,09 353,383,383 3,562,83,562,8 3,993,99 8 tures EFICIT)OFOF REVENUEREVENUESS XPENDITURESXPENDITURES RR FINANCINGFIN SOURSO dsds fromfro salesale 8 2 2// 12 12 12 8 OWNOFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 PROPRIETARYFUNDS–INTERNALSERVICEFUNDS InternalservicefundsaccountforTownoperationsfinancedandoperatedinamannersimilartoaprivate businessenterprise.TheintentoftheTownisthatthecostofprovidinggoodsandservicestootherTownfunds befinancedthroughuserchargestothosefunds. Theconceptofmajorfundsdoesnotextendtointernalservicefundsbecausetheyareusedforinternalactivities only.IntheGovernmentͲWideStatementofActivities,thenetrevenuesandexpensesoftheinternalservice fundsareallocatedtotheTowndepartmentsorprogramsthatgeneratedthem,thuseliminatinginternalservice funds. Dr a f t 1 2 / 1 2 / 2 0 1 8 therther ToT useded forfo internalrna activctiv enses ofo thethe internalrnal thushus eliminatingeliminating internint Governmental Activities InternalService Funds ASSETS CurrentAssets: Cash&investments 10,747,866$ Restrictedcash&investments 37,229 AccountsReceivable 137,813 Materials,supplies,anddeposits 28,011 Totalcurrentassets 10,950,919 NoncurrentAssets: Capitalassets,netofaccumulateddepreciation 558 TotalAssets 10,951,477 DEFERREDOUTFLOWSOFRESOURCES PensionPlanContributions 238,311 Pensionrelatedamounts 349,971 Pensioncontributions 588,282 LIABILITIES CurrentLiabilities: Accountspayable 263,152 Accruedpayrollandbenefits 35,526 Totalcurrentliabilities 298,678 Noncurrentliabilities: Claimspayable 1,604,067 Netpensionliabilities 2,748,907 Totalnoncurrentliabilities 4,352,974 TotalLiabilities 4,651,652 DEFERREDINFLOWSOFRESOURCES Pensionrelatedamounts 46,460 46,460 NETPOSITION NetInvestmentincapitalassets 558 Restrictedforworkerscompensationclaims 37,229 Unrestricted 6,803,860 TotalNetPosition 6,841,647$ TOWNOFLOSGATOS PROPRIETARYFUNDS STATEMENTOFNETPOSITION JUNE30,2018 Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 r ndsnds 10,747,86610,747,866$ 37,229 137,8137 2 1 abilities es NFLOWSWS OFO RESOURCEESOURCS elatedelated amountsamoun SITIONSITIO tmenttment inin rr ww 8 20 20 Governmental Activities InternalService Funds OPERATINGREVENUES Chargesforservices 5,042,430$ Interest 5 Useofmoneyandproperty 221,761 Otherlocaltaxes 31,838 Other 364,171 TotalOperatingRevenues 5,660,205 OPERATINGEXPENSES Salariesandrelatedexpenses 1,585,094 Insuranceexpenses 725,283 Depreciation 957 ServicesandSupplies 3,488,666 TotalOperatingExpenses 5,800,000 OperatingIncome (139,795) Transfersin(Note4)703,371 Nettransfers 703,371 ChangeinNetPosition 563,576 BEGINNINGNETPOSITION 6,278,071 ENDINGNETPOSITION 6,841,647$ TOWNOFLOSGATOS PROPRIETARYFUNDS STATEMENTOFREVENUE,EXPENSES ANDCHANGESINNETPOSITION FORTHEFISCALYEARENDEDJUNE30,2018 Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 5,042,4305,042,430 5 221,761761 31,833 36464 8 r ndsnds ON TION 8 01 20 Governmental Activities InternalService Funds CASHFLOWSFROMOPERATINGACTIVITIES Receiptsfromcustomers 5,568,072$ Paymentstosuppliers (3,453,927) Paymentstoemployees (1,371,843) Claimspaid (469,607) Netcashprovided(used)byoperatingactivities 272,695 CASHFLOWSFROMNONCAPITALFINANCINGACTIVITIES TransfersOut 703,371 Netcashprovided(used)bynoncapitalfinancingactivities 703,371 NetIncrease(Decrease)inCashandInvestments 976,066 CashandinvestmentsͲbeginningofyear 9,809,029 CashandinvestmentsͲendofyear 10,785,095$ ReconciliationofOperatingIncometoCashFlows fromOperatingActivities: OperatingIncome (139,795)$ Adjustmentstoreconcileoperatingincometocashflows fromoperatingactivities: Depreciation 957 Changeinassetsandliabilities: Receivables,net (92,133) Materialandsupplies (2,991) Deferredoutflowsofresources (60,225) Netpensionliabilities 258,452 Deferredinflowsofresources 19,950 Accountspayable 37,897 Accruedpayrollandbenefits (4,926) Claimspayable 255,676 Duetoothergovernment (167) CashFlowsFromOperatingActivities 272,695$ TOWNOFLOSGATOS PROPRIETARYFUNDS STATEMENTOFCASHFLOWS FORTHEFISCALYEARENDEDJUNE30,2018 Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 5,568,072,568,$ (3,453,927)3,927) (1,371,843)(1,3 (469,6(469 2 me too cashca flowsflo of resourcesesources ilities ows off resourcesresources payable ed payrollroll andand benefitsbenefits msms payablepayable DueDue 8 r ndsnds tot otherther governmegovern FlowsFlows From Operatpe 8 01 20 2 TOWN OFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 FIDUCIARYFUNDS TrustfundsareusedtoaccountforassetsheldbytheTownasatrusteeagentforindividuals,private organizationsandothergovernments.ThefinancialactivitiesofthesefundsareexcludedfromthegovernmentͲ widefinancialstatements,butarepresentedinseparateFiduciaryFundfinancialstatements. LibraryPrivatePurposeTrustFundwasestablishedtoprovidefortheservicingofdonationsandbequeststo theTown'sLibraryProgram. RDASuccessorAgencyPrivatePurposeTrustFundwasestablishedtoaccountfortheassetsandliabilities transferredfromthedissolutionoftheTown’sformerRedevelopmentAgencyandthecontinuingoperations relatedtoexistingRedevelopmentAgencyobligations. Dr a f t 1 2 / 1 2 / 2 0 1 8 du hehe govgov s. onationations andd beqbequestues ountnt for thethe assets Agencygency andand the contincon Total Private PurposeTrust PensionTrust Funds Fund ASSETS Cashandinvestments(Note2) 2,199,020$ Ͳ$ Restrictedcashandinvestments(Note2) 1,985,8641,206,851 Accountsreceivable 38,500 Loansreceivable(Note3) 563,761 Ͳ Capitalassets(Note5): Nondepreciable 5,257,422 Ͳ Depreciable,netofaccumulateddepreciation 1,627,084 Ͳ TotalAssets 11,671,6511,206,851 LIABILITIES Accountspayable 11,380 Ͳ Duetoothergovernments(Note13) 189 Ͳ Interestpayable 326,266 Ͳ LongͲtermdebt(Note6): Duewithinoneyear 1,150,000 Ͳ Dueinmorethanoneyear 16,981,855 Ͳ TotalLiabilities 18,469,690 Ͳ NETPOSITION Heldintrust (6,798,039)1,206,851 TotalNetPosition (6,798,039)$1,206,851$ TOWNOFLOSGATOS FIDUCIARYFUNDS STATEMENTOFFIDUCIARYNETPOSITION JUNE30,2018 Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 ͲͲ 1,206,8511,206,851 Ͳ 57,4227,422 1,627,084,627,084 11,671,65111,671,651 11,38011,380 18 32632 20 /2 1 8 20 2 Total Private PurposeTrust PensionTrust Funds Fund ADDITIONS Propertytaxes 1,958,325$ Ͳ$ Investmentearnings 29,5127,228 Contributions Ͳ1,200,000 Gifts,bequestsandendowments 74,315 Ͳ Other 1,914,739 Ͳ TotalAdditions 3,976,8911,207,228 DEDUCTIONS ProgramexpensesofformerRDA 1,927,753 Ͳ InterestandfiscalagencyexpensesofRDA 749,832 Ͳ Libraryservices 77,252 Ͳ Trustadministationexpenses Ͳ377 Depreciationexpense 101,693 Ͳ TotalDeductions 2,856,530377 CHANGEINNETPOSITION 1,120,3611,206,851 NETPOSITIONͲBEGINNINGOFYEAR (7,918,400)Ͳ NETPOSITIONͲENDOFYEAR (6,798,039)$1,206,851$ Ͳ$ TOWNOFLOSGATOS FIDUCIARYFUNDS STATEMENTOFCHANGESINFIDUCIARYNETPOSITION FORTHEFISCALYEARENDEDJUNE30,2018 Thenotestothefinancialstatementsareanintegralpartofthisstatement. Dr a f t 1 2 / 1 2 / 2 0 1 8 ͲͲ 7,22828 1,200,0001,200,000 Ͳ 7399 399 976,891976,891 1,201 1,927,7531,927,753 749,832749,832 77,25277 101 0 20 12 1 8 01 20 Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional NotestoBasicFinancialStatements Dr a f t 1 2 / 1 2 / 2 0 1 8 o Basicas FinancFinan TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES A. DescriptionoftheFinancialReportingEntity TheTownofLosGatos(the“Town”)operatesunderaCouncilͲManagerformofgovernmentandprovides thefollowingservices:publicsafety(includingpoliceandemergencymanagement),parksandpublicworks, communitydevelopment,library,publicimprovements,planningandzoning,andgeneraladministration services.RedevelopmentserviceswereprovidedprimarilythroughtheRedevelopmentAgencyoftheTown whichwasdissolvedonFebruary1,2012. TheTownislargelyaresidentialcommunitylocatedinthefoothillsoftheSantaCruzMountainsandwas incorporatedasamunicipalcorporationin1887.TheTown’spopulationasofJanuary1,2018was30,601. Asrequiredbygenerallyacceptedaccountingprinciples,thesefinancialstatementspresenttheTownasthe PrimaryGovernmentandanycomponentunitsforwhichtheTownisconsideredfinanciallyaccountable. B. DescriptionofBlendedComponentUnits TheTowndidnotreportanycomponentunitsasapartoftheprimarygovernmentbecausetheTown Councilwasnotthegoverningbodyofanyentitiesandnoseparateentityprovidedservicesentirelytothe Town. C. DescriptionofJointVenturesandPublicEntityRiskPool AsdescribedinNote11,theTownparticipatesintwojointventuresandpublicentityriskpoolactivities throughformallyorganizedseparatelegalentities.ThefinancialactivitiesoftheAssociationofBayArea GovernmentsPlanCorporation(“ABAG”)andtheLocalAgencyWorkers’CompensationExcessJointPowers Authority(“LAWCX”)arenotincludedintheaccompanyingbasicfinancialstatementsasboardsareseparate fromandindependentoftheTownadministration. D. BasisofPresentation TheTown’sBasicFinancialStatementsarepreparedinconformitywithaccountingprinciplesgenerally acceptedintheUnitedStatesofAmerica.TheGovernmentAccountingStandardsBoard(“GASB”)isthe acknowledgedstandardsettingbodyforestablishingaccountingandfinancialreportingstandardsfollowed bygovernmentalentitiesintheU.S.A. TheaccompanyingfinancialstatementsarepresentedonthebasissetforthinGovernmentAccounting StandardsBoardStatementsNo.34,BasicFinancialStatements—andManagement’sDiscussionand Analysis—forStateandLocalGovernments,No.36,RecipientReportingforCertainNonͲexchangeRevenues, anAmendmentofGASBStatementNo.33,No.37,BasicFinancialStatements—andManagement’s DiscussionandAnalysis—forStateandLocalGovernments;Omnibus,andNo.38,CertainFinancial StatementNoteDisclosures. TheseStatementsrequirethatthefinancialstatementsdescribedbelowbepresented. Dr a f t 1 2 / 1 2 / 2 0 1 8 d pup ralal adminiadmi nt Agencyency ofof thethe TT antanta Cruzuz MountainsMoun s ofof JanuaryJanuary 1,201818 w alal statementsstatement preseesn n iss consideredconsidered financfinanc partrt of thehe primarymar andan no separatera entitentit ntity RiskRis Pool 2/1 participatesrticipates in twotw jo rateat legalga entities.tities.ThTh (“ABAG”)ABAG and thethe LocLo includedde inin theth accomcom the Town administrainist onnfBasic FinancialFinancial StatemStatem n the UnitedUnited StatesStates o wledgeded standardstandar settisett overnmentalvernment entitiesntities TheThe accompanyingmpanying f StandardsStand BoardBoa alysis—foralysis—for S mendmmend TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED GovernmentͲwideStatements:TheStatementofNetPositionandtheStatementofActivitiesdisplay informationabouttheprimarygovernment(theTown).Thesestatementsincludethefinancialactivitiesof theoverallTowngovernment,exceptforfiduciaryactivities.Eliminationshavebeenmadetominimizethe doublecountingofinternalactivities.However,interfundservicesprovidedandusedarenoteliminatedin theprocessofconsolidation.ThesestatementspresentgovernmentalactivitiesoftheTown.Governmental activitiesgenerallyarefinancedthroughtaxes,intergovernmentalrevenues,andothernonͲexchange transactions. TheStatementofActivitiespresentsacomparisonbetweendirectexpensesandprogramrevenuesforeach functionoftheTown’sgovernmentalactivities.Directexpensesarethosethatarespecificallyassociated withaprogramorfunctionand,therefore,areclearlyidentifiabletoaparticularfunction.Programrevenues include(a)chargespaidbytherecipientsofgoodsorservicesofferedbytheprograms,(b)grantsand contributionsthatarerestrictedtomeettheoperationalneedsofaparticularprogramand(c)fees,grants andcontributionsthatarerestrictedtofinancingtheacquisitionorconstructionofcapitalassets.Revenues thatarenotclassifiedasprogramrevenues,includingalltaxes,arepresentedasgeneralrevenues. FundFinancialStatements:ThefundfinancialstatementsprovideinformationabouttheTown'sfunds, includingfiduciaryfundsandblendedcomponentunits.Separatestatementsforeachfundcategory— governmental,proprietaryandfiduciary—arepresented.Theemphasisoffundfinancialstatementsison majorindividualgovernmentalfunds,eachofwhichisdisplayedinaseparatecolumn.Allremaining governmentalareaggregatedandreportedasnonͲmajorfunds. InternalservicefundsoftheTown(whichprovideservicesprimarilytootherfundsoftheTown)are presented,insummaryform,aspartoftheproprietaryfundfinancialstatements.Sincetheprincipalusers oftheinternalservicesaretheTown’sgovernmentalactivities,financialactivitiesoftheinternalservice fundsarepresentedinthegovernmentalactivitiescolumnwhenpresentedatthegovernmentͲwidelevel. Thecostsoftheseservicesareallocatedtotheappropriatefunction/programintheStatementofActivities. Proprietaryfundoperatingrevenues,suchaschargesforservices,resultfromexchangetransactions associatedwiththeprincipalactivityofthefund.Exchangetransactionsarethoseinwhicheachparty receivesandgivesupessentiallyequalvalues.NonͲoperatingrevenues,suchassubsidiesandinvestment earnings,resultfromnonͲexchangetransactionsorancillaryactivities. E. MajorFunds GASBdefinesmajorfundsandrequiresthattheTown’smajorgovernmentalfundsbeidentifiedand presentedseparatelyinthefundfinancialstatements.Allotherfunds,callednonͲmajorfunds,are combinedandreportedinasinglecolumn,regardlessoftheirfundͲtype. Majorfundsaredefinedasfundsthathaveassets,deferredoutflowsofresources,liabilities,deferred outflowsofresources,revenuesorexpenditures/expensesequaltotenpercentoftheirfundͲtypetotaland fivepercentofthegrandtotal.TheGeneralFundisalwaysamajorfund.TheTownmayalsoselectother fundsitbelievesshouldbepresentedasmajorfunds. Dr a f t 1 2 / 1 2 / 2 0 1 8 ott elie wn.wn.GovernGove otherer nonnonͲexchaexch ndnd programprogr revrevenuese e thattha areare specifiscallyall articularular function.tion Pro feredered byby thethe programprogra ff a particpaularula programogram on orr constructionconstruction ofof c xes,xes,area presentedpresented asas mentsnts provideovi informnfo t units.uni Separatearate stast presented.presented.The emphemph off whichwhic is displayedisplaye eded asas nonnͲͲmajorm fundsnd n (wwhichhi provideprovide sers partart of the proprietarroprieta he Town’sown’s governmernme governmentalnmental activitactivit ceses are allocated too thth operatingerating revenues,rev h the principalprincip activitactivi d giveses upup essentiallyessential ,result fromfrom nonnonͲͲexchexch jorjor FundsFunds Dr GASBGA defineses majaj resentedresen sepasep binedbined anan TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED TheTownreportedthefollowingmajorgovernmentalfundsintheaccompanyingfinancialstatements: GeneralFundisthegeneraloperatingfundoftheTownandisusedtoaccountforallfinancialresources exceptthoserequiredtobeaccountedforinanotherfund. AppropriatedReservesFundisusedtoaccountforresourcesprovidedforcapitalprojectsnotfully fundedfromothersources. TheTownalsoreportsthefollowingfundtypes: InternalServiceFundsareusedtoaccountforservices,whichareprovidedtootherdepartmentsonacostͲ reimbursementbasis.Thoseservicesincludeworkerscompensation,selfͲinsurance,stores,vehicle maintenance,buildingmaintenance,informationtechnology(calledmanagementinformationsystems),and equipmentreplacement. FiduciaryFundsincludePrivateͲPurposeTrustFundsandagencyfundsusedtoaccountforassetsheldby theTownasanagentforindividuals,privateorganizations,andothergovernments.Thefinancialactivities ofthisfundareexcludedfromthegovernmentͲwidefinancialstatementbutarepresentedinaseparate FiduciaryFundfinancialstatement. TheTownreportedthefollowingFiduciaryFundsintheaccompanyingfinancialstatements: LibraryPrivatePurposeTrustFundprovidesfortheservicingofdonationsandbequeststotheTown's LibraryProgramandincludesthefollowing: x HistoryProjectPrivatePurposeTrustFundwasestablishedtoprovidefortheservicingof donations,bequests,grantmoniesandexpenditurestothehistoryprojectpartnershipofLos GatosPublicLibraryandtheMuseumofLosGatos. x ClellesNessPrivatePurposeTrustFundwasestablishedbyAnstenR.Ness,M.D.andtheBoard ofLibraryTrusteesfortheTownofLosGatos,asamemorialtohiswife,ClellesNesstousethe incomeandprincipalofthetrustestatetoprovidematerialsandservicesnotordinarilyavailable frompublicfunds. x SusanE.(Betty)McClendonPrivatePurposeTrustFundisabequesttotheLosGatosPublic LibraryfromtheestateofSusanMcClendonwasestablishedtobeusedsolelyforchildren's services. x BarberraJ.CassinPrivatePurposeTrustFundisabequesttotheTownfromtheestateof BarberraJ.CassinwasestablishedtobedistributedtotheLosGatosPublicLibraryforthe purposeofestablishinganendowmentfund,whichistobeusedforthesupportofscience,the artsandhumanitiesprojects. Dr a f t 1 2 / 1 2 / 2 0 1 8 pital projectsprojects notnot videdided too othero departmdep nsation,sation,selfselfͲͲinsurancinsuran leded managementmanagem inforf nd agencyagency fundsds usedd zations,zations,and otherother govgo widede financialfi statemstatem aryry FundsFun inin the accom Fund providesprovide forr theth 12 es thethe following:following: ect Private Purposerpose T t1 ,,bequests,beque grant mon Publicbli LibraryLibrar and the lelless NessNes PrivatePriva PuafofLibrarybraryTrusteesTrustees incomencome andan princprin fromfro publicublic fufu x SusanSusan EDLibraLib ss TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED RDASuccessorAgencyPrivatePurposeTrustFundaccountsfortheassets,liabilitiesandoperations transferredfromthedissolutionoftheTown’sRedevelopmentAgency,whichincludesthefollowing: x CertificatesofParticipationissuedtofinanceseveralcapitalimprovementprojectsthroughout theTown. x Redevelopmentprojectsandrelatedpropertytaxrevenue. x AffordableHousingSetͲAsideProgramobligations. x RepaymentofobligationsincurredbytheTown’sRedevelopmentAgencypriortoitsdissolution. PensionTrustFundaccountsfortheassetsaccumulatedforthepurposeoffundingfutureincreasesin pensioncontribution F. BasisofAccounting ThegovernmentͲwideandfiduciaryfund(exceptforagencyfunds)financialstatementsarereportedusing theeconomicresourcesmeasurementfocusandthefullaccrualbasisofaccounting.Revenuesarerecorded whenearnedandexpensesarerecordedatthetimeliabilitiesareincurred,regardlessofwhentherelated cashflowstakeplace.Agencyfundshavenomeasurementfocus. Governmentalfundsarereportedusingthecurrentfinancialresourcesmeasurementfocusandthemodified accrualbasisofaccounting.Underthismethod,revenuesarerecognizedwhenmeasurableandavailable. TheTownconsiderspropertytaxrevenuesreportedinthegovernmentalfundstobeavailableifthe revenuesarecollectedorarereasonablyexpectedtobecollectedwithinsixtydaysafteryearͲend.For revenuesotherthanpropertytaxes,theTowngenerallyappliesthesixtyͲdayperiodrulebutwouldmake exceptionsconsideringthemeasurableandavailablecriteria.Expendituresarerecordedwhentherelated fundliabilityisincurred,exceptforprincipalandinterestongenerallongͲtermdebt,whichisrecognized uponbecomingdueandpayable;andexceptforclaims,judgmentsandcompensatedabsences,whichare recognizedwhenestimableandprobable.Governmentalcapitalassetacquisitionsarereportedas expendituresingovernmentalfunds.ProceedsofgovernmentallongͲtermdebtandacquisitionsunder capitalleasesarereportedasotherfinancingsources. Thoserevenuessusceptibletoaccrualarepropertyandsalestaxes,certainintergovernmentalrevenues, andinterestrevenue.Fines,forfeitures,licensesandpermits,andchargesforservicesarenotsusceptibleto accrualbecausetheyarenotmeasurableuntilreceivedincash. NonͲexchangetransactions,inwhichtheTowngivesorreceivesvaluewithoutdirectly,receivingorgiving equalvalueinexchange,includetaxes,grants,entitlements,anddonations.Ontheaccrualbasis,revenue fromtaxesisrecognizedinthefiscalyearforwhichthetaxesareleviedorassessed.Revenuefromgrants, entitlements,anddonationsisrecognizedinthefiscalyearinwhichalleligibilityrequirementshavebeen satisfied. Dr a f t 1 2 / 1 2 / 2 0 1 8 ectsects tht gencyy priorprior toto its dissodisso posese of fundingndin future ncycy funds)fund financialfinancial stast l accrualcc basisba ofof accoa ee liabilitiesiti arere incurrecurre asurementreme focus.us currentent fifnancialal resores method,method revenueseve ar evenuesen reportedreported in asonablyasonably expectedpected toto taxes,es,ththe Townn genegene measurableurable andan availavail except for principalcipa ndnd payable;paya and exce estimabletimable anda proba governmentalrnmental fundsfund s are reportedreported asas othe revenuesues susceptiblesusceptible interestnterest revenue.revenue.FinFin ccrualccrual becausebecause theyth ononͲͲexchangeexchange t alal valuevalue ii xexe TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED TheTownmayfundprogramswithacombinationofcostͲreimbursementgrants,categoricalblockgrants and/orgeneralrevenues.Thus,bothrestrictedandunrestrictednetpositionmaybeavailabletofinance programexpenditures.TheTown’spolicyistofirstapplyrestrictedgrantresourcestosuchprograms followedbygeneralrevenuesasnecessary. Certainindirectcostsareincludedinprogramexpensesreportedforindividualfunctionsandactivities. TheTownappliesallapplicableGASBpronouncementsforcertainaccountingandfinancialreporting guidanceincludingthoseapplicabletoaccountingandreportingforproprietaryoperations.InDecemberof 2010,GASBissuedGASBSNo.62,CodificationofAccountingandFinancialReportingGuidanceContainedin PreͲNovember30,1989FASBandAICPAPronouncements.Thisstatementincorporatespronouncements issuedonorbeforeNovember30,1989intoGASBauthoritativeliterature.Thisincludespronouncements bytheFinancialAccountingStandardsBoard(FASB),AccountingPrinciplesBoardOpinions(APB),andthe AccountingResearchBulletinsoftheAmericanInstituteofCertifiedPublicAccountants'(AICPA)Committee onAccountingProcedure,unlessthosepronouncementsconflictwithorcontradictwithGASB pronouncements. PensionͲForpurposesofmeasuringthenetpensionliabilityanddeferredoutflows/inflowsofresources relatedtopensions,andpensionexpense,informationaboutthefiduciarynetpositionoftheCity’s CaliforniaPublicEmployees’RetirementSystem(CalPERS)plans(thePlans)andadditionsto/deductions fromthePlans’fiduciarynetpositionhavebeendeterminedonthesamebasisastheyarereportedby CalPERS.Forthispurpose,benefitpayments(includingrefundsofemployeecontributions)arerecognized whendueandpayableinaccordancewiththebenefitterms.Investmentsarereportedatfairvalue. OtherPostemploymentBenefits(OPEB) ForpurposesofmeasuringthenetOPEBliability,deferredoutflowsofresourcesanddeferredinflowsof resourcesrelatedtoOPEB,andOPEBexpense,informationaboutthefiduciarynetpositionoftheTown’s plan(OPEBPlan)andadditionsto/deductionsfromtheOPEBPlan’sfiduciarynetpositionhavebeen determinedonthesamebasis.Forthispurpose,benefitpaymentsarerecognizedwhencurrentlydueand payableinaccordancewiththebenefitterms.Investmentsarereportedatfairvalue.Generallyaccepted accountingprinciplesrequirethatthereportedresultsmustpertaintoliabilityandassetinformationwithin certaindefinedtimeframes.Forthisreport,thefollowingtimeframesareused: ValuationDateJune30,2017 MeasurementDateJune30,2017 MeasurementPeriod July1,2016toJune30,2017 CashandCashEquivalentsͲTheTown’scashandcashequivalentsareconsideredtobecashonhand, demanddeposits,andshortͲterminvestmentswithoriginalmaturitiesofthreemonthsorlessfromthedate ofacquisition. StateofCaliforniastatutesandtheTown’sinvestmentpolicyauthorizetheTowntoinvestinobligationsof theU.S.Treasury,itsagenciesandinstrumentalities,collateralized,nonͲnegotiablecertificatesofdeposits, commercialpaperratedAͲ1/PͲ1,mediumͲtermcorporatenotesratedAoritsequivalentorbetterby Moody’sorStandard&Poor’s,assetbackedcorporatenotes,bankers’acceptances,mutualfunds,andthe StateTreasurer’sinvestmentpool(LocalAgencyInvestmentFund). ons andnd activities.activities ing andnd financialfinancial reprep aryary operations.operations.InIn Dec l Reportingeporting GuidanGcee mentme incorporatesincorporate p erature.rature.Thishis includesinclude g PrinciplesPrinciples BoardBoard OpO rtifiedd PublicP AccountAccount entsents conflictconflic withwith nsionon liabilityli andand defdef nformationnformation aboutut thth ystemm (CalPERS)(CalPERS)planpl aveave beenbe determineddetermined ymentsme (including(includin ref ce withith the benbefitefit tet fits (OPEB)OPEB)12 uringuring theth net OPEB lii o OPEB,OPEB,andan OPEB ex n)andd additionsadditions to/dto n the samesam basis.basi ForF accordancedance withwit thethe ting principlesrinciples requirerequire ain definedined timeframeeframe TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED TheTowndoesnotenterintorepurchaseorreverserepurchaseagreements. InvestmentsͲInvestmentsarerecordedatfairvalueinaccordancewithGASBStatementNo.72,FairValue MeasurementandApplication.Accordingly,thechangeinfairvalueofinvestmentsisrecognizedasan increaseordecreasetoinvestmentassetsandinvestmentincome.Thisstatementchangedthedefinitionof fairvalueandiseffectiveforperiodsbeginningafterJune15,2015. Fairvalueisdefinedasthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinan orderlytransaction.Indeterminingthisamount,threevaluationtechniquesareavailable: x MarketapproachͲThisapproachusespricesgeneratedforidenticalorsimilarassetsorliabilities.The mostcommonexampleisaninvestmentinapublicsecuritytradedinanactiveexchangesuchasthe NYSE. x CostapproachͲThistechniquedeterminestheamountrequiredtoreplacethecurrentasset.This approachmaybeidealforvaluingdonationsofcapitalassetsorhistoricaltreasures. x IncomeapproachͲThisapproachconvertsfutureamounts(suchascashflows)intoacurrentdiscounted amount. Eachofthesevaluationtechniquesrequiresinputstocalculateafairvalue.Observableinputshavebeen maximizedinfairvaluemeasures,andunobservableinputshavebeenminimized. Materials,SuppliesandDepositsͲTheseassetsareheldforconsumptionandarestatedatcostusingthe firstͲin,firstͲoutmethod.Thecostsarerecordedasexpendituresatthetimetheitemisconsumed. InterfundReceivablesandPayablesͲTransactionsbetweenfundsthatarerepresentativeof lending/borrowingarrangementsoutstandingattheendofthefiscalyeararereferredtoas“advances to/advancesfromotherfunds”.Allotheroutstandingbalancesbetweenfundsarereportedas“dueto/from otherfunds”. AdvancesͲAdvancesbetweenfundsareoffsetbyanonspendablefundbalanceinapplicableTownfundsto indicatetheextenttowhichtheyarenotavailableforappropriationandarenotexpendableavailable financialresources. CapitalAssetsͲCapitalassetsarevaluedathistoricalcostorestimatedhistoricalcostifactualhistoricalcost isnotavailable.Contributedcapitalassetsarevaluedattheirestimatedfairvalueonthedatecontributed. Donatedcapitalassets,donatedworksofartandsimilaritems,andcapitalassetsreceivedinaservice concessionarrangementarereportedatacquisitionvalue.Capitalassets,includinginfrastructure,are recordedifacquisitionorconstructioncostsexceeds$10,000. AsrequiredbyGASB,theTowndepreciatescapitalassetswithlimitedusefullivesovertheirestimateduseful lives.Thepurposeofdepreciationistospreadthecostofcapitalassetsequitablyamongallusersoverthe lifeoftheseassets.Theamountchargedtodepreciationexpenseeachyearrepresentsthatyear’sprorata shareofthecostofcapitalassets.TheTowndepreciatesusingthestraightlinemethodwhichmeansthe costoftheassetisdividedbyitsexpectedusefullifeinyearsandtheresultischargedtoexpenseeachyear untiltheassetisfullydepreciated. Dr a f t 1 2 / 1 2 / 2 0 1 8 ecogniecogn edd theth definde d to transfertransfe a liabilityiability areare available:availa calal oro similarsim assetssse o adedded inin ana activactivee excex untunt requiredrequired to replrepl pitalal assetsassets oro historicaistorica uree amountsam (suchsuch asa uiresuires inputsinputs to calcula d unobservableunobservable inputin sitsͲͲTheseThe assetsets areare1hecoststsarererecordedrecorded eses andand Payables ft 1 arrangementsrrangemen outsta m otherer funds”.funds”.AllAll oto cesͲAdvancesdvances betweebetwe cateate thee extentextent toto ww nancialnancial resources.resources apitalapita AssetsetsͲ CDttavailabavailab dd TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED TheTownhasassignedtheusefulliveslistedbelowtocapitalassets: Buildings25Ͳ40years Improvements25Ͳ40years Machineryandequipment2Ͳ20years Furnitureandfixtures5Ͳ12years Software5Ͳ7years Infrastructure20Ͳ40years Majorcapitaloutlayforcapitalassetsandimprovementsarecapitalizedasprojectsareconstructed. Capitalassetsmaybeacquiredusingfederalandstategrants,contributionsfromdevelopers,and contributionsorgrantsfromothergovernments.GASB34requiresthatthesecontributedassetsbe accountedforasrevenueatthetimetheyarecontributed. DeferredCompensationPlanͲTheTownestablishedadeferredcompensationplancreatedinaccordance withCaliforniaGovernmentCodeSection53212andInternalRevenueCodeSection457.Theplan,available toallTownemployees,permitsthemtodeferaportionoftheirsalaryuntilfutureyears.Thedeferred compensationisnotavailabletoemployeesuntiltermination,retirement,death,orunforeseeable emergency.DeferredcompensationplansarenotreportedaspartoftheTown’sassetsorliabilities,asthe deferredcompensationplantrusteesholdthosefundsintrustonbehalfofemployeesuntiltheemployees areeligibletoreceivethebenefits. CompensatedAbsencesͲAccumulatedVacation,SickPayandOtherEmployeeBenefitsareaccruedas earned.Upontermination,employeesarepaidforallunusedvacationattheircurrenthourlyrates.Sick leaveearnediscashedoutbasedonthefollowingscheduleforemployeeswithatleast150hoursaccrued anduptoamaximumamountasspecifiedunderlaborcontractprovisions: Foremployeesundercontract1Ͳ59months25.0% Foremployeesundercontract60Ͳ119months37.5% Foremployeesundercontract120monthsormore50.0% TheTown’sliabilityforcompensatedabsencesisdeterminedannually.Forallgovernmentalfunds,amounts expectedtobepaidoutofcurrentfinancialresourcesarerecordedasliabilitiesofeachfund;thelongͲterm portionisrecordedintheStatementofNetPosition.Thechangesofthecompensatedabsenceswereas follows: BeginningBalance $ 2,519,931 Addition 862,015 Payments (936,707) EndingBalance $ 2,445,239 CompensatedAbsencesCurrentPortion $ 322,725 Compensatedabsencesareliquidatedbythefundthathasrecordedtheliability.ThelongͲtermportionof governmentalactivitiescompensatedabsencesisliquidatedprimarilybytheGeneralfund.Only compensatedabsencesrelatedtoterminatedemployeesarereportedinthefundfinancialstatements. Dr a f t 1 2 / 1 2 / 2 0 1 8 ars yearss s projectsprojects arear construtru s,contributionscontributions fromfrom requiresequire thatat these c deferredeferred compensaticompensat Internalna Revenueve CodCod portionortio of theirei salasala ess untiltil termination,termination, are notot reporteded asas pa ldd thosethos fundsfun in trus umulatedulat Vacation,ation,SS employeesoyees area paidaid ff ut based on thee followfoll amountamoun as specified For employeesemployees undeun ForFor employeesemployees u ForF employeeemployee Town’ss liabilityliab forfor comco D xpectedxpected toto bebe paidpa ou portionpo is recordedrecorded ollows:ollow TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED UnearnedRevenueͲUnearnedrevenueariseswhenassetsarereceivedbeforerevenuerecognitioncriteria havebeensatisfied.Grantsandentitlementsreceivedbeforeeligibilityrequirementsaremetarerecorded asunearnedrevenue.Inthegovernmentalfundfinancialstatements,receivablesassociatedwithnonͲ exchangetransactionsthatwillnotbecollectedwithintheavailabilityperiodhavebeenrecordedas deferredinflowsfromunavailablerevenue. LongͲTermLiabilitiesͲInthegovernmentͲwidefinancialstatementsandprivateͲpurposetrustfundslongͲ termdebtandotherlongͲtermobligationsarereportedasliabilitiesintheapplicablestatementofnet position.Bondpremiumsanddiscounts,aswellasissuancecosts,aredeferredandamortizedoverthelife ofthebondsusingthestraightͲlinemethod.Bondspayablearereportednetoftheapplicablebondpremium ordiscount. Inthefundfinancialstatements,governmentalfundtypesrecognizebondpremiumsanddiscounts,aswell asbondissuancecosts,duringthecurrentperiod.Thefaceamountofdebtissuedisreportedasother financingsources.Premiumsreceivedondebtissuancesarereportedasotherfinancingsourceswhile discountsondebtissuancesarereportedasotherfinancinguses.Issuancecosts,whetherornotwithheld fromtheactualdebtproceedsreceived,arereportedasdebtserviceexpenditures. DeferredOutflows/DeferredInflowsofResourcesͲDeferredoutflowsofresourcesisaconsumptionofnet positionbytheTownthatisapplicabletoafuturereportingperiod,forexample,prepaiditemsanddeferred charges. DeferredinflowsofresourcesisanacquisitionofnetpositionbytheTownthatisapplicabletoafuture reportingperiod,forexample,unearnedrevenueandadvancecollections. NetPositionͲInthegovernmentͲwidefinancialstatements,netpositionisclassifiedinthefollowing categories: NetInvestmentinCapitalAssetsͲThisamountconsistsofcapitalassetsnetofaccumulateddepreciation andreducedbyoutstandingdebtthatattributedtotheacquisition,construction,orimprovementofthe assets.Inaddition,deferredoutflowsofresourcesanddeferredinflowsofresourcesthatareattributableto theacquisition,construction,orimprovementofthoseassetsorrelateddebtalsoareincludedinthenet investmentincapitalassetscomponentofnetposition. RestrictedNetPositionͲThisamountisrestrictedbyexternalcreditors,grantors,contributors,orlawsor regulationsofothergovernments. UnrestrictedNetPositionͲThisamountisallnetpositionthatdoesnotmeetthedefinitionof"net investmentincapitalassets"or"restrictednetposition." FundBalancesͲTheTowndoesnothaveapolicyidentifyingaminimumunassignedfundbalance.Because amountsinthenonspendable,restricted,committed,andassignedcategoriesaresubjecttovarying constraintsontheiruse,theremainingfundbalancesareotherwiseunassigned. InaccordancewithGovernmentAccountingStandardsBoard54,FundBalanceReportingandGovernmental FundTypeDefinitions,theTownclassifiesgovernmentalfundbalancesasfollows: Dr a f t 1 2 / 1 2 / 2 0 1 8 enen rere purposerpos trustst fundsfunds lo applicablecable statementstatement eded andand amortizedamortized ov et ofof the applicableappl bobo nizeniz bondbo prempriums amountoun of debtdebt issuiss areare reportedreporte ass othoth ncinging uses.es.Issuanceua c d as debteb servicerv expeexp rcesrceͲͲ DeferredDeferr outfloutflo/1 uturee reportingreporting perioper n acquisitionquisition of netnet unearnedearn revenuenue andan overnmentͲwidee finanfin in Capitalpital AssetssetsͲͲThT by outstandingutstanding debtbt addition,n,deferreddeferre outou quisition,on,constructionconstruction stmentt inin capitalcapital asseasse RestricRested NetNet Positosi egulationsegula ofof ot rictericte TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED NonͲspendableincludesfundbalanceamountsthatcannotbespenteitherbecauseitisnotinspendable formorbecauseoflegalorcontractualconstraints. Restrictedincludesfundbalanceamountsthatareconstrainedforspecificpurposeswhichareexternally imposedbyproviders,suchascreditorsoramountsconstrainedduetoconstitutionalprovisionsor enablinglegislation. Committedincludesfundbalanceamountsthatareconstrainedforspecificpurposesthatareinternally imposedbythegovernmentthroughCouncilResolutionwhichisaformalactionofthehighestlevelof decisionmakingauthorityanddoesnotlapseatyearͲend.Committedfundbalancesareimposedbythe TownCouncil. Assignedincludesfundbalanceamountsthatareintendedtobeusedforspecificpurposesthatare neitherconsideredrestrictedorcommitted.FundbalancemaybeassignedbytheTownManagerorthe FinanceDirector. Unassignedincludesfundbalanceswithinthefundswhichhavenotbeenclassifiedwithintheabove mentionedcategories. thegeneralfundistheonlyfundthatreportsapositiveunassignedfundbalance amount.Inothergovernmentalfundsitisnotappropriatetoreportapositiveunassignedfundbalance amount.However,ingovernmentalfundsotherthanthegeneralfund,ifexpendituresincurredforspecific purposesexceedtheamountsthatarerestricted,committed,orassignedtothosepurposes,itmaybe necessarytoreportanegativeunassignedfundbalanceinthatfund. TheTownusesrestricted/committedamountstobespentfirstwhenbothrestrictedandunrestrictedfund balanceisavailableunlesstherearelegaldocuments/contractsthatprohibitdoingthis,suchasagrant agreementrequiringdollarfordollarspending.Additionally,theTownwouldfirstusecommitted,then assigned,andlastlyunassignedamountsofunrestrictedfundbalancewhenexpendituresaremade. UseofEstimatesͲThepreparationoffinancialstatementsinconformitywithgenerallyacceptedaccounting principlesrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsof assetsandliabilitiesanddisclosureofcontingentassetandliabilitiesatthedatesofthefinancialstatements andthereportedamountsofrevenuesandexpenditures/expensesduringthereportingperiods.Actual resultscoulddifferfromthoseestimates. SubsequentEventsͲManagementhasconsideredsubsequenteventsthroughDecemberXX,2018,thedate whichthefinancialstatementswereavailabletobeissued.Thefinancialstatementsincludealleventsor transactions,includingestimates,requiredtoberecognizedinaccordancewithgenerallyaccepted accountingprinciples.ManagementhasdeterminedthattherearenononͲrecognizedsubsequentevents thatrequireadditionaldisclosureotherthandescribedinNote15. PropertyTaxLevy,CollectionandMaximumRatesͲStateofCaliforniaConstitutionArticleXIIIAprovides thatthecombinedmaximumpropertytaxrateonanygivenpropertymaynotexceed1%ofitsassessed valueunlessanadditionalamountforgeneralobligationdebthasbeenapprovedbyvoters.Assessedvalue iscalculatedat100%ofmarketvalueasdefinedbyArticleXIIIAandmaybeadjustedbynomorethan2% peryearunlessthepropertyissold,transferred,orsubstantiallyimproved.TheStateLegislaturehas determinedthemethodofdistributionofreceiptsfroma1%taxlevyamongthecounties,cities,school districtsandotherdistricts. Dr a f t 1 2 / 1 2 / 2 0 1 8 hh areare onalnal provisirovis purposesoses thatth arere inteinte ll actionactio of thee higheshig fundnd balancesance are impm toto bebe usedd for specifi may bebe assignedne byby tht nds whichwh haveha notnot onlyy fundfun that reportseports otot appropriatepropriat to reprep otherer thant the generagen ee restricted,restricted,committ ssignedgn fundun balanceala i mittedted amountsamounts toto bebe here arear legallega documocum ar for dollar D spendinpend nassignednassigne amounts off sͲThee preparationpreparation ofo quires managementmanageme tot liabilitiesties andnd disclosudisclos e reportedorted amountsmounts lts couldld differd fromfrom tt SubsequentSubsequent EventsEventsDwhichwhichthefinancna sactions,sactions, tingting TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED TheCountyofSantaClaraassessesproperties,billsforandcollectspropertytaxesonthefollowingschedule: SecuredUnsecured Valuation/liendatesJanuary1January1 LevydatesJanuary1January1 Duedates(delinquentasof)50%onNovember1(December10)March1(August31) 50%onFebruary1(April10) Theterm"unsecured"referstotaxesonpersonalpropertyotherthanlandandbuildings.Thesetaxesare securedbyliensonthepropertybeingtaxed.Propertytaxesleviedarerecordedasrevenueandreceivables whentheyarecollectedduringthefiscalyearoflevyorwithin60daysofyearͲend. BudgetsandBudgetaryAccountingͲTheTownfollowstheproceduresbelowwhenestablishingthe budgetarydatareflectedinthefinancialstatements: 1. TheTownManagersubmitstotheTownCouncilaproposedoperatingandcapitalimprovementbudget forthefiscalyearcommencingthefollowingJuly1.Thebudgetsincludetheproposedexpendituresand themeansoffinancingthem. 2. Publichearingsareconductedtoobtaintaxpayercomments. 3. ThebudgetislegallyenactedthroughadoptionofTownresolutionbyCouncil. 4. TheTownManagerisauthorizedtoimplementtheprogramsasapprovedintheadoptedbudget.Within aspecificfund,theTownManagermaytransferappropriationsbetweencategories,departments, projectsandprogramsasneededtoimplementtheadoptedbudget,whereastheTownCouncilmust authorizebudgetincreasesanddecreases,andtransfersbetweenfunds. 5. Budgetsareadoptedonabasisconsistentwithgenerallyacceptedaccountingprinciplesexceptfor proprietaryfundswhichbudgetforcapitaloutlaysbutnotdepreciation.Budgetswereadoptedforthe GeneralFund,SpecialRevenueFunds,InternalServiceFundsandCapitalProjectsFunds. 6. BudgetedamountsareasoriginallyadoptedorasamendedbyTownCouncil.Individualamendments werenotmaterialinrelationtooriginalappropriations. ExcessofExpendituresoverAppropriationsͲTherewerenosignificantexpendituresinexcessofbudget duringfortheyearendedJune30,2018. EncumbrancesͲUnderencumbranceaccounting,purchaseorders,contractandothercommitmentsfor expendituresarerecordedinordertoreservethatportionoftheapplicableappropriation.Encumbrance accountingisemployedasanextensionofformalbudgetaryintegrationinallfunds.Encumbrances outstandingatyearͲendarereportedasrestrictions,commitmentsorassignmentsoffundbalancessince theydonotconstituteexpendituresorliabilities;unexpendedandunencumberedappropriationslapseat yearendinallfunds.Encumberedappropriationsarecarriedforwardtothefollowingyear. Dr a f t 1 2 / 1 2 / 2 0 1 8 1 h 1 (AugustAugust 31)31) andand buildings.buildings.TheseTh cordedrde ass revenuerev andnd ofof yearyearͲͲend.e proceduresprocedures below w proposedoposed operatingoperatin an 1.Thehe budgetsge includnclu taxpayerpay commentsmen oughgh adoptionopt ofof Tow rizeded toto implementment thth wn Manageranager mayy tratra ms as needed too impleimp ncreasesncrease and decreas adoptedpted on aa basisbasi ary fundsnds whichwhich budgebudge al Fund,d,SpecialSpecial Reveneve BudgetedBudgeted amountsamounts aa werewere notno materialmat xcessxces of ExpendxpeDngngforforthethe TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE1ͲSUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES,CONTINUED ReclassificationsͲCertainaccountsinthepriorͲyearfinancialstatementshavebeenreclassifiedforthe presentationinthecurrentͲyearfinancialstatements. G. AccountingandReportingChanges ¾ GASBStatementNo.75,AccountingandFinancialReportingforPostemploymentBenefitsOther ThanPensionsͲTheobjectiveofthisstatementistoaddressreportingbygovernmentsthatprovide otherpostemploymentbenefits(OPEB)totheiremployeesandforgovernmentsthatfinanceOPEB foremployeesofothergovernments.TheTownrestateditsbeginningnetpositionaspartof implementationofthisstatement. ¾ GASBStatementNo.81,IrrevocableSplitͲInterestAgreements–Theobjectiveofthisstatementisto improveaccountingandfinancialreportingforirrevocablesplitͲinterestagreementsbyproviding recognitionandmeasurementguidanceforsituationsinwhichagovernmentisabeneficiaryofthe agreement.TherequirementsofthisstatementdidnotapplytotheTownforthecurrentfiscalyear. ¾ GASBStatementNo.85,Omnibus2017–Theobjectiveofthisstatementistoaddresspracticeissues thathavebeenidentifiedduringimplementationandapplicationofcertainGASBStatements.This Statementaddressesavarietyoftopicsincludingissuesrelatedtoblendingcomponentunits, goodwill,fairvaluemeasurementandapplication,andotherpostemploymentbenefits(OPEB). Therewasnoeffectonnetpositionasaresultofimplementationofthisstatement. ¾ GASBStatementNo.86,CertainDebtExtinguishmentIssues–Theobjectiveofthisstatementisto improveconsistencyinaccountingandfinancialreportingforinͲsubstancedefeasanceofdebtby providingguidancefortransactionsinwhichcashandothermonetaryassetsacquiredwithonly existingresources—resourcesotherthantheproceedsofrefundingdebt—areplacedinan irrevocabletrustforthesolepurposeofextinguishingdebt.ThisStatementalsoimprovesaccounting andfinancialreportingforprepaidinsuranceondebtthatisextinguishedandnotestofinancial statementsfordebtthatisdefeasedinsubstance.Therequirementsofthisstatementdidnotapply totheTownforthecurrentfiscalyear. NOTE2ͲCASHANDINVESTMENTS TheTownpoolscashfromallsourcesandallfundsexceptRestrictedCashandRestrictedInvestmentssothatit canbeinvestedatthemaximumyield,consistentwithsafetyandliquidity,whileexistingfundshavecash availableforexpenditures. CashandInvestmentsDefinedͲTheTownincludesonlycashdepositsinbanksascash.InvestmentsinLAIFand governmentsecuritiesmutualfundsarenetintheorderofliquidity,sincetheymaybewithdrawnwithout penalty.U.S.Treasuries,U.S.AgenciesandCertificatesofDepositaretheTown’sleastliquidinvestments,since theymustbeheldtomaturity. Dr a f t 1 2 / 1 2 / 2 0 1 8 oymentnt BenefitsBenefits OO governmentsvernments thatt provpro ernmentsents thatth financeinance inninginning net positionositio a ntsts ––TheThe objectiveobjective ofof t bleble splitspͲinterestnte agre in whichwhi a governmeovernm dd notnot applyapply tot thee TowTow objectiveobjecti off thist statestat entationation and applicatipplicat ppicsic includingncluding issuesues and application,application,anda tionion asas a resultesu of impl ertainn DebtD ExtinguishExtinguis accountingcoun andnd finanfinan for transactionsansactio inn ww s—resources otherothe sts forfor theth sole purpos al reportingreporting for prep nts forr debtdeb thathat isis defd e Townn forfo thehe currencurren CASH ANDAN INVESTMVESTM ee TownTo poolss cashcash frofr bebe investedinvested ata t ee forfor expeexpe TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE2ͲCASHANDINVESTMENTS,CONTINUED CashDepositswithBanksandCustodialCreditRiskͲCaliforniaLawrequiresbanksandsavingsandloan institutionstopledgegovernmentsecuritieswithafairvalueof110%oftheTown’scashondeposit,firsttrust deedmortgagenoteswithavalueof150%ofthedeposit,orlettersofcreditissuedbytheFederalHomeLoan BankofSanFranciscowithavalueof100%ofthedepositascollateral.UnderCaliforniaLawthiscollateralis heldintheTown’snameandplacestheTownaheadofgeneralcreditorsoftheinstitution.TheTown’scash depositsarecollateralizedunderthislaw. ThebankbalanceoftheTown’scashdepositswas$19,398,300andthebookbalancewas$18,948,901asof June30,2018.Thebankbalanceandthecarryingamountdifferedduetodepositsintransitandoutstanding checks. InvestmentsͲTheTownanditsfiscalagentinvestinindividualinvestmentsandininvestmentpools.Individual investmentsareevidencedbyspecificidentifiablepiecesofpapercalled“securitiesinstruments,”orbyan electronicentryregisteringtheownerintherecordsoftheinstitutionissuingthesecurity,calledthebookentry system.Inordertomaximizesecurity,theTownemploystheTrustdepartmentofabankasthecustodianofall itsinvestments,regardlessoftheirform. FairValueMeasurementsͲGASB72establishedahierarchyofinputstothevaluationtechniquesabove.This hierarchyhasthreelevels: x Level1inputsarequotedpricesinactivemarketsforidenticalassetsorliabilities. x Level2inputsarequotedmarketpricesforsimilarassetsorliabilities,quotedpricesforidenticalor similarassetsorliabilitiesinmarketsthatarenotactive,orotherthanquotedpricesthatarenot observable x Level3inputsareunobservableinputs,suchasapropertyvaluationoranappraisal. LocalAgencyInvestmentFund(LAIF)ͲTheTowninvestsintheCaliforniaStateTreasurer’sLocalAgency InvestmentFund.LAIF,establishedin1977,isregulatedbyCaliforniaGovernmentCodeSection16429andis underthedaytodayadministrationoftheStateTreasurer.AsofJune30,2018,LAIFhadapproximately$22.5 billionininvestments.Ofthatamount,97.33%isinvestedinnonͲderivativefinancialproductsand2.67%in structurednotesandassetͲbackedsecurities.Theseinvestmentsaredescribedasfollows: 1. StructuredNotesaredebtsecurities(otherthanassetͲbackedsecurities)whosecashflowcharacteristics (couponrate,redemptionamount,orstatedmaturity)dependupononeormoreindicesand/orthathave embeddedforwardsoroptions. 2. AssetͲBackedSecurities,thebulkofwhicharemortgageͲbackedsecurities,entitletheirpurchasersto receiveashareofthecashflowsfromapoolofassetssuchasprincipalandinterestrepaymentsfromapool ofmortgages(suchasCollateralizedMortgageObligations)orcreditcardreceivables. thishis cc .TheTh TownTo ance waswas $18,948,901$18,948,901 ositsosits inin transitit andand ou entsnts andand in investmeninvestme calledcalled “securitiesecurities insi tion issuingissu thehe securecur Trustrust departmentdepartment ofof aa ierarchyarchy of inputsuts toto t ctivective marketsmarket for iden t pricespri forfo similarmi as marketsets thatat aree notno ervableble inputs,nput suchch a FundFund (LAIF)(ͲThe TT ft 1 ,establishedestablishe in 1977, y administrationinistration ofof tht ents.OfOf thatthat amounamoun es andd assetassetͲͲbackedbacked ctured NotesNot arere debdeb Dr a couponcoupon rate,rate redemptrede embeddedem forwardsforward etetͲͲBackedBackedDaass TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE2ͲCASHANDINVESTMENTS,CONTINUED RiskDisclosures InterestRateRiskistheriskthatchangesinmarketinterestrateswilladverselyaffectthefairvalueofan investment.Generally,thelongerthematurityofaninvestment,thegreaterthesensitivityofitsfairvalueto thechangesinmarketinterestrates.OneofthewaysthattheTownmanagesitsexposuretointerestraterisk isbypurchasingacombinationofshortertermandlongerterminvestmentsandbytimingcashflowsfrom maturitiessothataportionoftheportfolioismaturingorcomingclosetomaturityevenlyovertimeasnecessary toprovidethecashflowandliquidityneededforoperations.Informationaboutthesensitivityofthefairvalues oftheTown'sinvestmentstomarketinterestratefluctuationsisprovidedinthesummaryofcashand investmentstableonthefollowingpagethatshowsthedistributionoftheTown'sinvestmentsbymaturity. CreditRiskistheriskoflossduetothefailureofthesecurityissuer.Thisriskismeasuredbytheassignmentof aratingbyanationallyrecognizedstatisticalratingorganization.Thesummaryofcashandinvestmentstableon thefollowingpageshowstheminimumratingundertheactualratingoftheTown’sinvestmentsatyearend. CustodialCreditRiskistheriskthatintheeventofthefailureofthecounterparty(e.g.,brokerͲdealer)toa transaction,agovernmentwillnotbeabletorecoverthevalueofitsinvestmentorcollateralsecuritiesthatare inthepossessionofanotherparty.TheTown’smoneymarketfundandinvestmentinLAIFarenotcategorized astocustodialcreditrisk.ItsU.S.GovernmentAgencySecuritiesinvestmentisheldbyathirdͲpartyfinancial institutionunderthethirdparty’strustdepartment’snameandthusnotexposedtocustodialcreditrisk. ConcentrationofCreditRiskistheriskthattheTown’sinvestmentsareexposedbecausethetypesof investmentshavebeentoolimited.TheTown’sPolicystatesthat,withtheexceptionofUSTreasurysecurities andLAIF,nomorethan50%oftheTown’stotalinvestmentportfoliowillbeinvestedinonesinglesecuritytype orwithasinglefinancialinstitution.TheTownwasincompliancewiththispolicyasofJune30,2018. ThefollowingtablesummarizestheTown’spolicyrelatedtomaturitiesandconcentrationofinvestments: Investment Type Maximum Maturity Maximum Portfolio Percentage USTreasuryObligations 5years None USAgencyObligations 5years None BankersAcceptances 180days 30% CommercialPaper 270days 25% MediumTermNotes 5years 30% CollateralizedCD's 5years 30% CALAIF N/A 65m MoneyMarketFunds N/A 20% Dr a f USUS TreasuryTreasury ObOb USUS Agencyency OO BankersBanke A CommComm MeM aft 1 2 / 1 2 / 2 0 1 8 nteresntere ng cashcash flowfl over timetime asas necesseces nsitivityitivit of thehe fairr valva the summarysumma ofof cascas ss investmentsinvestments byby mat skk isi measuredmeasured byby the mmarymmary ofof cashash andand invin gg ofo theth Town’sw invest ree ofof thet counterpartcounterpar luee of itss investmentinvestment markett fundfu andan invesnves ncy SecuritiesSec investmnvestm nt’st’s namem andand thuss nono hatat thethe Town’sTow inves Town’swn PolicyPol statessta th wn’s totalota investmentvestment Thehe TownT wasas inn comco es the Town’s policypolic InvestmenInvestm C af TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE2ͲCASHANDINVESTMENTS,CONTINUED ThefollowingisasummaryoftheTown’sCashandInvestments(statedatfairvalue)asofJune30,2018: InvestmentType/CashDeposit Availablefor Operations Restricted Total Concentration ofCreditRisk Minimum Rating Input level Timeto Mature (Years) Weighted Average Maturity USTreasury Securities 6,627,355$ Ͳ$6,627,355$11.59% Aaa 1 0Ͳ21.11years USInstrumentality Security 29,663,273 Ͳ29,663,27351.89% Aaa 2 0Ͳ21.16years CorporateSecurities 14,409,372 Ͳ14,409,37225.21% A1 2 1Ͳ21.26years GovernmentSecuritiesMoney MarketMutualfunds 183,203 Ͳ183,2030.32% NotRated 2 n/a n/a LAIF 6,282,764 Ͳ6,282,76410.99% NotRated n/a n/a n/a Totalinvestments 57,165,967 Ͳ57,165,967100.00% CashDeposit withBanks 18,948,90137,23018,986,131 MoneyMarketAccounts 17,3811,985,8632,003,244 Investmentheldinpensiontrust 1,206,8511,206,851 CashonhandatTown 4,850 Ͳ4,850 TownCashandInvestments 76,137,099$3,229,944$79,367,043$ Cashandinvestmentsareclassifiedinthefinancialstatementsasshownbelow,basedonwhetherornottheir useisrestrictedbyTowndebtorAgencyagreements. NOTE3ͲLONGͲTERMNOTESRECEIVABLE TheTownhadthefollowinglongͲtermnotesreceivableasofJune30,2018: Total Town FiduciaryFunds Total CashandInvestments availableforoperations 73,938,079$2,199,020$76,137,099$ Restrictedcashandinvestments 37,2293,192,7153,229,944 Totalcashandinvestments 73,975,308$5,391,735$79,367,043$ Description InterestRate Maturity Balance GeneralFund: RehabLoantoCharities Various Various 159,000$ TotalGeneralFund 159,000 CommunityDevelopmentBlockGrantFund(CDBG): HousingConservationLoans 0Ͳ5% Various 78,752 TotalCDBG 78,752 TotalLongTerm NotesReceivableͲGovernmentͲWideStatement ofNetPosition 237,752 SuccessorAgencyAffordable Housing ProjectMatch Various Various 563,761 TotalLongTerm NotesReceivable 801,513$ Dr a f t 1 2 / 1 2 / 2 0 1 8 Matu (Years)(Years) 0Ͳ21.1. 200ͲͲ21.1621.16y 2121ͲͲ21.2621.26 ott Rated 2 n/aRated 2 NotNot Rated n/a n/aated n/a n/ 0%% 4 ,851851 4,850850 79,367,0439,367$ 8 8 8 8 8 8 2 2 12 12 12 12 ncial statementstat asas s greements.reement ERM NOTESNOTES RECEIVABRECEIVA ad thee followingfollowin longlong TotTo2eforoperationsoperations$$ ments entsents Generall Fund:Fund: Rehab LoanLo TotalTotaDrDr TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE3ͲLONGͲTERMNOTESRECEIVABLE,CONTINUED ActiveHomeLoansandHousingConservationLoansͲTheTownusedCDBGFunds(fundedthroughfederal grants)toassistlowandmoderateincomehomeownerstoimprovetheirhomesandtofundlowincomehousing rentalpropertiesacquisitionandrehabilitation.Theseloansaresecuredbydeedsoftrust. ProjectMatchͲTheSuccessorAgencyhasaloanagreementwithProjectMatch,anonprofitbenefitcorporation, toacquireandrehabilitatefourͲorfiveͲbedroomsingleͲfamilyhomes.Thepropertyistoprovideaffordable housingrentaltoverylowincomeseniorhouseholds.Theloanreceivableisevidencedbyapromissorynoteand securedbyadeedoftrust.FrominceptionoftheloanthroughJune30,2018,nointerestorprincipalpayments havebeenmade. NOTE4ͲINTERFUNDTRANSACTIONS InterfundReceivablesandPayablesͲAmountsduetoorduefromotherfundsreflectinterfundbalancesfor servicesrenderedorshortͲtermloansexpectedtoberepaidinthenextfiscalyear.Advancestoorfromother fundsarelongͲtermloansbetweenfundsthataretoberepaidintheirentiretyoverseveralyears. TransfersͲWithCouncilapprovalresourcesmaybetransferredfromonefundtoanother.Transferspayfor capitalprojectsorcapitaloutlays,leaseordebtservicepayments,operatingexpensesandlowandmoderateͲ incomehousingprojects.TransfersbetweenfundsduringthefiscalyearendedJune30,2018wereasfollows: TransferIn TransferOut GeneralFund 538,536$3,243,595$ AppropriatedReserveFund 2,638,224525,616 NonͲmajorGov'tFunds Ͳ110,920 InternalServiceFunds 703,371 Ͳ TotalTransfers 3,880,131$3,880,131$ Dr a f t 1 2 / 1 2 / 2 0 1 8 enefitnef corpocorpo to providerovide affordafford by aa promissorypromissor noteote erestt oror principalprincipal paypay om otheroth fundsds reflecefle n thethe nextnext fiscalfis year.year paidd ini theireir entiretytire o transferredansf fromom onon rvicerv payments,paymen operoper nds duringdur the fiscalfisc TransferT In 53$ eserveeserve Fund 2Fund 2 Gov't't FundsFu Servicee FundsFunds tal Transfers 2/1 2/1 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE5ͲCAPITALASSETS ChangesintheTown’scapitalassetsduringthefiscalyearareshownasfollows: Depreciationexpenseischargedtofunctionsandprogramsbasedontheirusageoftherelatedassets.The amountallocatedtoeachfunctionorprogramisasfollows: Balance at Adjustments Transfersand Balanceat June30,2017 andAdditions Retirements June30,2018 Capital Assets not being Depreciated Land 20,333,684$ Ͳ$Ͳ$20,333,684$ Construction in Progress 5,629,0175,056,379(120,742)10,564,654 Total Capital Assets not being Depreciated 25,962,7015,056,379(120,742)30,898,338 Capital Assets being Depreciated Buildings and Improvements 30,039,60712,168(360,830)29,690,945 Equipment & Vehicle 10,889,173761,239(230,407)11,420,005 Infrastructure - All Other 22,473,084245,365 Ͳ22,718,449 Infrastructure - Streets 56,756,0573,909,749 Ͳ60,665,806 Total Capital Assets being Depreciated 120,157,9214,928,521(591,237)124,495,205 Less Accumulated Depreciation for: Buildings and Improvements 6,779,398517,010(19,545)7,276,863 Equipment & Vehicle 7,947,752740,403(228,170)8,459,985 Infrastructure - All Other 4,991,945742,494 Ͳ5,734,439 Infrastructure - Streets 30,135,8751,687,652 Ͳ31,823,527 Total accumulated depreciation 49,854,9703,687,559(247,715)53,294,814 Net Capital Assets being Depreciated 70,302,9511,240,962(343,522)71,200,391 Governmental Activity Capital Assets, Net 96,265,652$6,297,341$(464,264)$102,098,729$ Depreciation Governmental Activities Expense General Government 185,602$ PublicSafety 425,383 Parks &PublicWorks 2,551,682 CommunityServices 49,726 Library 391,339 Sanitation 83,827 Total Governmental Activities 3,687,559$ Dr a f t 1 2 / 1 2 / 2 0 1 8 argedrg to functionss ana h functionfunction or program 20,333,68420,333,684$ 0,742)42)10,564,654,564,654 (120,742)(120,74230,898,33 8 (360,830)30) ,239239 (230,407)(230,407) 245,365245,36 3,909,749909,73,909,74909 4,928,5214,928,52 79,39879,3 517,010517,010 7,947,75247,752 740,4740,4 4,991,9454,991,9457474 30,135,87530,1 49,854,970854 70,302,9502,9 l Assets, Netsets,96,2696,2$$ 8 nee 30,30,2 1 1 01 01 /2 /2 /2 /2 2/2 2/2 /2 /2 2/1 2/1 1 1 2/2/2 2 2 2 2 2 8 8 18 18 01 01 Governmovern GenerGen PuPafaf TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE5ͲCAPITALASSETS,CONTINUED ChangesintheRDASuccessorAgencytrustfundcapitalassetsduringthefiscalyearareshownasfollows: NOTE6ͲLONGͲTERMOBLIGATIONS TheTowngenerallyincurslongͲtermdebttofinanceprojectsorpurchaseassets,whichwillhaveusefullives equaltoorgreaterthantherelateddebt.AsofFebruary1,2012,theTowntransferredlongͲtermdebtissued bytheRedevelopmentAgencytotheSuccessorAgencytrustasapartoftheRDAdissolution.Thefollowing summarizesthechangesinlongͲtermdebtintheSuccessorAgencytrustfundduringthefiscalyearendedJune 30,2018: LongTerm Debt Interest Rate MaturityDate OriginalIssue Beginning Balance Deletion Ending Balance DueWithin OneYear DueinMore ThanOne Year 2002COP 2.5Ͳ5% 8/1/2031 10,725,000$7,115,000$335,000$6,780,000$350,000$6,430,000$ 2010COP 2.5Ͳ4.25% 8/1/2028 15,675,00011,670,000770,00010,900,000800,00010,100,000 SubtotalCOP 26,400,00018,785,0001,105,00017,680,0001,150,00016,530,000 Premiums 735,095489,51037,655451,855 Ͳ451,855 TotalLongͲTermDebt 27,135,095$19,274,510$1,142,655$18,131,855$1,150,000$16,981,855$ 2002CertificatesofParticipation(2002COPs)ͲOnJuly18,2002,theTownandtheLosGatosRedevelopment Agencyissued$10,725,000in2002COPs,SeriesA,tofinancetheacquisition,construction,rehabilitation, equippingandimprovementofseveralcapitalimprovementprojects.TheTownhadpledgedleasepaymentsof realpropertyandfacilitiescomprisedoftheParksandPublicWorksServiceCenterandBaseballField,aswellas ParkingLotNo.1,2,and3,ascollateralfortherepaymentoftheCertificates.Principalpaymentsaredue annuallyonAugust1st,withinterestpaymentsduesemiͲannuallyonFebruary1standAugust1st. 2010CertificatesofParticipation(2010COPs)ͲOnJune1,2010,$15,675,000of2010COPswereissuedto financetheacquisition,construction,andimprovementofalibraryontheTown’sCivicCentercampus,tobe ownedandoperatedbytheTown.PrincipalpaymentsaredueannuallyonAugust1,withinterestpaymentsdue semiͲannuallyonFebruary1andAugust1. Balance at Adjustments Transfers and Balanceat June 30,2017 and Additions Retirements June30,2018 Capital AssetsnotbeingDepreciated Land 5,257,422$ Ͳ$ Ͳ$5,257,422$ Total Capital AssetsnotbeingDepreciated 5,257,422 Ͳ Ͳ5,257,422 Capital AssetsbeingDepreciated BuildingsandImprovements 4,067,708 Ͳ Ͳ4,067,708 Total Capital AssetsbeingDepreciated 4,067,708 Ͳ Ͳ4,067,708 Less Accumulated Depreciationfor: BuildingsandImprovements 2,338,931101,693 Ͳ2,440,624 Total accumulated depreciation 2,338,931101,693 Ͳ2,440,624 NetCapital AssetsbeingDepreciated 1,728,777(101,693) Ͳ1,627,084 SuccessorAgency CapitalAssets,Net 6,986,199$(101,693)$ Ͳ$6,884,506$ ebt toto financenc projecroje debt.ebt As of FebrFebruaryuar o thee SuccessorSucce AgenAgen ngͲterm debtd inin theth Su rest Rate Maturityate Maturity DateDa 2.5Ͳ5% 8/1/2031% 8/1/2031 2.5ͲͲ4.25% 8/1/204.25% 8/1/20 P mss LongLongͲTermT DebtDebt af af af af ertificatesertificates oDsuedsued$ 5,257,4225,257,422$$ ͲͲ5,257,422257,422 ͲͲ4,4 ͲͲͲ 101,69310 1 101,69301,6 28,7777 (101,693)693 6,986,199986,19(101,(101$ 1 1 1 1 0 0 01 01 20 20 20 20 /2 /2 2 2 2 2 2/2 2/2 2 2 2 2 2/2/ 12 12 12 12 12 12 12 12 8 nee 30,30 8 8 18 18 18 18 01 01 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE6ͲLONGͲTERMOBLIGATIONS,CONTINUED ToassisttheTowninpayingthecostofacquisitionandconstructionofvariousprojects,theTownandits RedevelopmentAgencyenteredintoleaseandreimbursementagreementsin2002and2010.Underthe agreements,theAgencywilluseavailablenettaxincrementrevenuesresultingfromtheprojects’effectonland valuestorepaytheTownforallleasepaymentsmadebytheTowntotheAgencyundertheleaseagreements fortheprojects.NettaxincrementrevenuesarealltaxesallocatedtoandpaidintotheSuccessorAgencyprivateͲ purposetrustfund. Futuredebtservicerequirementsofthe2002and2010CertificatesofParticipationareasfollows: TheSuccessorAgencymustmaintainarequiredamountofcashandinvestmentswiththetrusteeunderthe termsoftheCOPs’debtagreements.ThesefundsarepledgedasreservestobeusediftheSuccessorAgency failstomeetitsobligationsunderthedebtagreementsandtotaled$1,985,862asofJune30,2018.TheCalifornia GovernmentCoderequiresthesefundstobeinvestedinaccordancewithTownordinances,bondindenturesor Statestatues.AllthesefundshavebeeninvestedaspermittedundertheCode. NOTE7ͲSPECIALASSESSMENTDISTRICTDEBTWITHOUTCOMMITMENT SpecialassessmentdistrictsareestablishedinvariouspartsoftheTowntoprovideimprovementstoproperties locatedinthosedistricts.Propertiesareassessedforthecostoftheimprovements.Theseassessmentsare payableoverthetermofthedebtissuedtofinancetheimprovementsandareusedtopaydebtserviceondebt issuedtofundtheimprovements. TheTownisactingonlyasanagentandhasnolegalliabilitywithrespecttothepaymentofanyindebtedness oftheDowntownParkingAssessmentDistrict.TherewasnononͲobligateddebtoutstandingasofJune30, 2018. NOTE8ͲFUNDBALANCES Fundbalanceforgovernmentalfundsisreportedinclassifications(nonspendable,restricted,committed, assigned,andunassigned)thatcompriseahierarchybasedprimarilyontheextenttowhichthegovernmentis boundtohonorconstraintsonthespecificpurposesforwhichamountsinthosefundscanbespent. FiscalYear EndedJune30, Principal Interest Total 2019 1,150,000 759,073 1,909,073 2020 1,195,000 710,024 1,905,024 2021 1,250,000 658,494 1,908,494 2022 1,300,000 599,850 1,899,850 2023 1,355,000 538,713 1,893,713 2024Ͳ2028 7,780,000 1,742,894 9,522,894 2029Ͳ2032 3,650,000 275,656 3,925,656 TotalCOPDebt Service 17,680,000$5,284,704$22,964,704$ asease aga soror AgencyAgency pp are asas follows:follo a requireduir amountamount ofo ts.TheseThe fundss areare plpl the debtdebt agreementsagreements ese funds to bebe investinv dsd havehav been investede ASSESSMENTSSMENT DISTRIDISTRI ssmentnt districtsdistrict areare ee n thosee districts.districts.ProPr bleble overover thethe termterm of th uedued tot fund thethe imprompr wnwn isis actingactin wntownto TotalT 9,073 1,909,07073 1,909,07 710,024 1,90510,024 1,9 658,494 1,8,494 1, 599,850599,850 0 538,713538,713 000 1,742,89400 1,742,894 650,000 275,50,000 275, 17,680,0000,00 5,25$ 2 2 /1 /1 /12 /12 2/1 2/1 2/1 2/1 /1 /1 /1 /1 20 20 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE8ͲFUNDBALANCES,CONTINUED AsofJune30,2018,fundbalanceswereclassifiedasfollows: Beginning Balance Adjusments Adjusted Beginning Balance Additions Deletions Ending Balance Restrictedfor Capital Outlay 5,428,064$ Ͳ5,428,0641,365,999 Ͳ6,794,063$ RepairsandMaintenance 199,643 Ͳ199,643 Ͳ959198,684 Committedto:Ͳ BudgetStabilization 4,969,847 Ͳ4,969,84767,396 Ͳ5,037,243 Catastrophic 4,969,847 Ͳ4,969,84767,396 Ͳ5,037,243 CalPERS/OPEBReserve 3,388,913 Ͳ3,388,913690,0001,200,0002,878,913 AlmondGrove StreetProject 12,155,902 Ͳ12,155,902 Ͳ6,584,8155,571,087 Assignedto:Ͳ OpenSpace 562,000 Ͳ562,000 Ͳ Ͳ562,000 Parking 1,460,210 Ͳ1,460,210 Ͳ Ͳ1,460,210 Sustainability 140,553 Ͳ140,553 Ͳ Ͳ140,553 StrategicPlanning 2,600,000 Ͳ2,600,000 Ͳ2,470,910129,090 Capital Projects 14,510,361 Ͳ14,510,3614,524,044 Ͳ19,034,405 CarryoverEncumbrances 34,852 Ͳ34,85265,075 Ͳ99,927 ComcastPEG 50,000 Ͳ50,000 Ͳ Ͳ50,000 CompensatedAbsences 2,440,170 Ͳ2,440,170 Ͳ317,6582,122,512 Special Revenue Fund 181,547 Ͳ181,54756,444 Ͳ237,991 Unassigned Ͳ59,82959,829 Ͳ59,829 Ͳ Total FundBalance ͲAll Governmental Funds 53,091,909$59,82953,151,7385,470,35510,633,21249,353,921$ Restricted CapitalOutlayfundedfromstormdrainfees,constructiontaxesanddebtproceedsarelegallyrestrictedfor majorcapitalprojects. RepairsandMaintenancereflectslegallyrestrictedbalancesforrepairsandmaintenanceoflightingand landscapepropertyandopenspacepropertythatarefinancedwithspecialtaxassessmentsonthebenefiting property. Dr a f t 1 2 / 1 2 / 2 0 1 8 etionsetions ͲͲ6$$ 959959 67,39667,396 Ͳ 67,39667,396 690,000690,1,20 ͲͲ 6, 2,000000 Ͳ 460,2100 ͲͲ 140,553140,5 2,600,0002,600,00 14,510,36114,510,3 Ͳ 34,8524,852 Ͳ50,000,000 Ͳ2,440,12,4 ͲͲ1818 59,82959,829 91,9091,9 59,82959,829 8 8 2 2 2/2/// 12 12 12 12 12 12 12 12 d fromom stormstorm draindra f ects. Maintenancentenance reflectrefle e propertyperty andd openopen rty.rty. TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE8ͲFUNDBALANCES,CONTINUED Committed StabilizationArrangements TheTownCouncilhasestablishedbyresolutionthebudgetstabilizationarrangementandthecatastrophe arrangement.Thetotalbalancesinthesearrangementsaretobemaintainedat25%ofannualGeneralFund ongoing,operatingexpenditures,excludingoneͲtimeexpendituresdividedequallybetweenbotharrangements. Wheneitherarrangementisused,TownCouncilwilldevelopa1to5yearreservereplenishmentplantomeet theminimumthresholdof25%ofGeneralFundongoing,operatingexpenditures,excludingoneͲtime expenditures.Thearrangementscanbeusedwhen: x Unforeseenemergencies,suchasadisasterorcatastrophiceventoccur x Significantdecreaseinpropertyorsalestax,orothereconomicallysensitiverevenues x Lossofbusinessesconsideredtobesignificantsalestaxgenerators x Reductionsinrevenueduetoactionsbythestate/federalgovernment x Workflow/technicalsystemimprovementstoreduceongoing,personnelcostsandenhancecustomer service x OneͲtimemaintenanceofservicelevelsduetosignificanteconomic/budgetconstraints x OneͲtimetransitionalcostsassociatedwithorganizationalrestructuringtosecurelongͲtermpersonnel costsavings. ShouldanyoftheeventslistedaboveoccurthatrequiretheexpenditureofTownresourcesbeyondthose providedforintheannualbudget,theTownManagerordesigneeshallhaveauthoritytoapproveCatastrophic orbudgetstabilizationarrangementappropriations.TheTownManagerordesigneeshallthenpresenttothe TownCouncilabudgetamendmentconfirmingthenatureoftheeventandauthorizingtheappropriationof reservefunds. PERSUnfundedLiabilitycommittedfundbalancewillbeusedtofundnetpensionliabilitiesfortheTown's MiscellaneousandSafetypensionplansadministeredbyCALPERS.InFY17/18theTownapprovedanupdate toitsGeneralFundreservepolicyprovidingtotheextentpossiblethatadditionalannualdepositsbecalculated andplacedintothisreservewiththegoalofmovingthepaymentoftheunfundedliabilityfroma29yeartoa 20yearamortizationperiod. AlmondGroveStreetProjectcommittedfundbalancewillbeusedfortheinfrastructurerepairs,improvements andconstructionalongAlmondGroveStreet. Assigned OpenSpaceassignedfundbalancewillbeusedtomakeselectiveopenspaceacquisitions. PostemploymentMedicalassignedfundbalancewillbeusedtoaidinfundingactuariallydetermined requirementsforretireemedicalcosts. ParkingassignedfundbalancewillbeusedtomitigateparkingissueswithintheTown. Sustainabilityassignedfundbalancewillbeusedtofundongoingsustainabilityinitiativesandprograms. Dr a f t 1 2 / 1 2 / 2 0 1 8 d theth catascatas annualual GeneralGeneral F weenen bothb arrangemerrangem replenishmentnishme planplan toto enditures,enditures,excludingcludi occurccu callylly sensitivesensitive revenuerevenu eratorsrators al governmernentt ongoing,ongoin personnelpersonnel c signifisigcantca economicconomic // organizationalanizat restrucrestruc that requirereq the expeex ManagerManag oror designee ropriations.priations Thehe TownT onfirmingonfirmin thehe natureture mitted fund balancebalan pensionpension plans adminisnis rveve policypolicy providing to eserveve withwith thethe goalgo on period.eriod ve Strreeteet ProjectProject comcom tructionon alonga AlmondAlmon signedigne D pacepace assignessign oymenoymen TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE8ͲFUNDBALANCES,CONTINUED StrategicPlanningassignedfundbalancewillbeusedtofundTownCouncilidentifiedstrategicpriorities includinginfrastructure,unfundedliabilityreduction,andstrategicoperatingbudgetallocationsbasedupon TownCouncildirection. ProductivityEnhancementsassignedfundbalancewillbeusedtofundrequeststhatresultinstreamliningor improvingexistingservicelevels. CapitalProjectsassignedfundbalancewillbeusedfortheacquisitionandconstructionofcapitalfacilities. CarryoverEncumbrancesassignedfundbalancewillbeusedforencumbereditemsreͲappropriatedinthe followingyear. ComcastPEGassignedfundbalancewillbeusedtofundcapitalimprovementslinkedtothetelevisingofcouncil andplanningcommissionmeetings. CompensatedAbsencesassignedfundbalancewillbeusedforvacationandsickͲpaybenefitsowedtoemployees asofJune30,2018thatwerenotanobligationoftheGeneralFundbecauseoftheirlongͲtermnature. SpecialRevenueFundassignedfundbalancewillbeusedfortheactivitiesoftherespectiverevenuefund. NOTE9ͲEMPLOYEES'RETIREMENTPLAN (a) GeneralInformationaboutthePensionPlans PlanDescriptionͲAllqualifiedemployeesareeligibletoparticipateintheTown’spooledSafetyPlan,acostͲ sharingmultipleͲemployerdefinedbenefitpensionplanandtheTown’sMiscellaneous(allother)Plan,anagent multipleͲemployerdefinedbenefitpensionplanadministeredbytheCaliforniaPublicEmployees'Retirement System(CalPERS),whichactsasacommoninvestmentandadministrativeagentforitsparticipatingmember employers.BenefitprovisionsunderthePlansareestablishedbyStatestatuteandTownresolution.CalPERS issuespubliclyavailablereportsthatincludeafulldescriptionofthepensionplansregardingbenefitprovisions, assumptionsandmembershipinformationthatcanbefoundontheCalPERSwebsite.Auditedfinancial statementsofCalPERScanbeobtainedfromitswebsitehttps://www.calpers.ca.gov/page/formsͲpublications. TheTownreliesuponactuarialandinvestmentdataprovidedbyCalPERSforinclusionandanalysisinthisreport. BenefitsProvidedͲCalPERSprovidesserviceretirementanddisabilitybenefits,annualcostoflivingadjustments anddeathbenefitstoplanmembers,whomustbepublicemployeesandbeneficiaries.Benefitsarebasedon yearsofcreditedservice,equaltooneyearoffulltimeemployment.Memberswithfiveyearsoftotalservice areeligibletoretireatage50withstatutorilyreducedbenefits.AllmembersareeligiblefornonͲdutydisability benefitsafter10yearsofservice.Thedeathbenefitisoneofthefollowing:theBasicDeathBenefit,LumpSum, orthe1959SurvivorBenefit.ThecostoflivingadjustmentsforeachplanareappliedasspecifiedbythePublic Employees’RetirementLaw. Dr a f t 1 2 / 1 2 / 2 0 1 8 inn streamlistream ion ofof capitalcapit facilitiesacilities edd itemsitems rereͲappropropr vementsveme linkedlinked toto thethe vacationvacation andnd sicksͲpaypa erall FundF becausebecause of usedd forfor thet activitiesivities sionn PlansP mployeesyees are eligiblegible ned benefitne pensionpension p benefite pension planplan actsacts asas aa common in rovisionssions underunde the P lable reportseports thatat inclinc d membershipembership inforinf f CalPERSRS canan bebe obtobt relies uponupo actuarialctuaria efitsefits ProvidedvidedͲCalPECalP deathdea benefitsfit to ofof creditedcredited se ee toto rere TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE9ͲEMPLOYEES'RETIREMENTPLAN,CONTINUED (a) GeneralInformationaboutthePensionPlan,Continued ThePlan’sprovisionsandbenefitsineffectatJune30,2018,aresummarizedasfollows: EmployeesCovered AtJune30,2017,thefollowingemployeeswerecoveredbythebenefittermsfortheMiscellaneousandSafety Plans: Miscellaneous Safety Active 110 36 Transferred 96 17 Separated 81 1 Retired 221 73 Total 508 127 Contributions–Section20814(c)oftheCaliforniaPublicEmployees’RetirementLawrequiresthattheemployer contributionratesforallpublicemployersbedeterminedonanannualbasisbytheactuaryandshallbeeffective ontheJuly1followingnoticeofachangeintherate.FundingcontributionsforbothPlansaredetermined annuallyonanactuarialbasisasofJune30byCalPERS.Theactuariallydeterminedrateistheestimatedamount necessarytofinancethecostofbenefitsearnedbyemployeesduringtheyear,withanadditionalamountto financeanyunfundedaccruedliability.TheTownisrequiredtocontributethedifferencebetweenthe actuariallydeterminedrateandthecontributionrateofemployees. Tier 1 Tier 2 PEPRA Tier 1 PEPRA Hire Date Prior to September 15, 2012 Prior to September 15, 2012 and before January 1, 2013 with reciprocity or member of CalPERS On or after January 1, 2013 Before January 1, 2013 with reciprocity or member of CalPERS On or after January 1, 2013 Benefit Formula 2.5% @ 55 2% @ 60 2% @ 62 3% @ 50 2.7% @ 57 Benefit vesting schedule 5 years 5 years 5 years 5 years 5 years Benefit payments Monthly for Life Monthly for Life Monthly for Life Monthly for Life Monthly for Life Retirement age 55 60 62 62 62 Monthly benefits as a % of eligible compensation 2% to 2.5% 1% to 2.5% 1.5% to 2.5% 3% 2% to 2.7% Required employee contribution rates 8.00% 7.00% 6.75% 9.00% 12.25% Required employer contribution rates 21.418% 12.729% Required payment of unfunded liability 1,700,602$ $936,513 30 Miscellaneous Safety 9.932% Dr a f t 1 2 / 1 2 werewere coveredcovered by the b MiscellaMiscella Activeve Transferred SeparatedS RetiredRe TotaTota 12 12 ons –SectionSection 2081420814 (c(c tion ratestes forf alll publipubli ee JulyJuly 11 followingfollowin no nuallynual on an actuarialactuaria sarysary to financean anyany unfuunfu dedett 12 / 1,700,6020,60 2/9.932%2%2/2 0 1 8 PEPRAPEPRA fore January January 1, 2013 with 13 with reciprocity or reciprocit member of membe CalPERSalPERS On or af JanuarJanu 2% @ 62 3% @ 50% @ 62 3% @ 50 5 years5 yea 5 years5 years Monthly for Life Monthly Monthly for Life Month 626 .5% 1.5% to 2.5%.5% 1.5% to 2.5% 0%%6.75%6.75% SafetySafety 8 8 8 8 8 8 2/2/2/2/ 12 12 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE9ͲEMPLOYEES'RETIREMENTPLAN,CONTINUED (b) NetPensionLiability TheTown’snetpensionliabilityfortheMiscellaneousPlanismeasuredasthetotalpensionliability,lessthe pensionplan'sfiduciarynetposition. FortheSafetyPlan,netpensionliabilityismeasuredastheproportionateshareofthenetpensionliability.The netpensionliabilityofeachofthePlansismeasuredasofJune30,2017,usinganannualactuarialvaluationas ofJune30,2016rolledforwardtoJune30,2017usingstandardupdateprocedures.TheTown’sproportionof thenetpensionliability(SafetyPlan)wasbasedonaprojectionoftheTown’slongͲtermshareofcontributions tothepensionplansrelativetotheprojectedcontributionsofallparticipatingemployers,actuarially determined.TheTown’sproportionateshareofthenetpensionliabilityfortheSafetyPlanasofthe measurementdateJune30,2017wasasfollows: Asummaryofprincipalassumptionsandmethodsusedtodeterminethenetpensionliabilityisshownbelow. ActuarialAssumptionsͲThetotalpensionliabilitiesintheJune30,2016actuarialvaluationsweredetermined usingthefollowingactuarialassumptions: ProportionateShareof NetPensionLiability ProportionͲJune30,2016 0.22394% ProportionͲJune30,2017 0.37515% ChangeͲIncrease(Decrease)0.15121% MiscellaneousAgent MultipleEmployer Plan SafetyCostSharingPlan ValuationDate June30,2016 June30,2016 MeasurementDate June30,2017 June30,2017 Actuarial CostMethod Actuarial Assumptions: DiscountRate 7.15% 7.15% Inflation 2.75% 2.75% SalaryIncreases InvestmentRateofReturn 7.15% 7.15% Mortality(1) PostRetirementBenefitIncrease EntryͲAgeNormal CostMethod Varies byEntryAgeandService DerivedusingCalPERS'MembershipData for allFunds ContractCOLAupto 2.75%until PurchasingPower ProtectionAllowanceFloor onPurchasingPower a pplies,2.75%thereafter (1) The mortalitytable usedwas developedbasedonCalPERS Ͳspecificdata.The table includes20years ofmortalityimprovements usingSocietyofActuaries Scale BB.Formore detailsonthis table,pleasereferto the April 2014CalPERS Exerience StudyandReviewof Actuarial Assumptionsreportavailableonthe CalPERS we bsite. t pensionsion liability.liability uall aacctuariall valuationvaluatio s.Thee Town’sTown proportroport ngngͲͲtermter shareshare ofof cont rticipatingcipating employersemployers ilityility forfor the SafetySafe thodsthods useded tot determ ion liabilitiesabilities in thehe JuJu ptions:ons: rtionateate Share ofof tt PensionPens LiabilityLiability 0.22394%22394% 0.37515%37515% ase)0.15121%151212/2 2/2 12 12 12 12 /12 /12 onn DateDate asurementment Datete Actuarialial Costst MethodMethod Actuarialuarial AssumptioAssumpti DiscountDiscoun RateRate Inflationation SalarySalary InI InvestInve Mo TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE9ͲEMPLOYEES'RETIREMENTPLAN,CONTINUED (b) NetPensionLiability,continued TheunderlyingmortalityassumptionsandallotheractuarialassumptionsusedintheJune30,2015 valuationwerebasedontheresultsofaJanuary2014actuarialexperiencestudyfortheperiod1997to2011. FurtherdetailsoftheExperienceStudycanfoundontheCalPERSwebsite. DiscountRateͲThediscountrateusedtomeasurethetotalpensionliabilitywas7.15%forthePlanandreflects thelongͲtermexpectedrateforthePlannetofinvestmentexpensesandwithoutreductionforadministrative expenses.Todeterminewhetherthemunicipalbondrateshouldbeusedinthecalculationofadiscountrate foreachplan,CalPERSconductedcashflowprojectionsforplanswithahigherlikelihoodofrunningoutof assetswithtoohighofadiscountrate.Basedonthetesting,noneofthetestedplansranoutofassets. Therefore,thecurrent7.15percentdiscountrateisadequateandtheuseofthemunicipalbondrate calculationisnotnecessary.Thelongtermexpecteddiscountrateof7.15percentwillbeappliedtoallplans inthePublicEmployeesRetirementFund(PERF).Thestresstestresultsarepresentedinadetailedreport thatcanbeobtainedfromtheCalPERSwebsite. IndeterminingthelongͲtermexpectedrateofreturn,CalPERStookintoaccountbothshortͲtermandlongͲterm marketreturnexpectationsaswellastheexpectedpensionfundcashflows.Usinghistoricalreturnsofallthe funds’assetclasses,expectedcompoundreturnswerecalculatedovertheshortͲterm(first10years)andthe longͲterm(11+years)usingabuildingͲblockapproach.UsingtheexpectednominalreturnsforbothshortͲterm andlongͲterm,thepresentvalueofbenefitswascalculatedforeachfund.Theexpectedrateofreturnwas setbycalculatingthesingleequivalentexpectedreturnthatarrivedatthesamepresentvalueofbenefitsfor cashflowsastheonecalculatedusingbothshortͲtermandlongͲtermreturns.Theexpectedrateofreturn wasthensetequivalenttothesingleequivalentratecalculatedaboveandadjustedtoaccountforadministrative expenses. ThetablebelowreflectsthelongͲtermexpectedrealrateofreturnbyassetclass.Therateofreturnwas calculatedusingthecapitalmarketassumptionsappliedtodeterminethediscountrateandassetallocation. New Strategic Real Return Real Return AssetClass Allocation Years1Ͳ10(a) Years 11+(b) Global Equity 47.00% 4.90% 5.38% Global FixedIncome 19.00% 0.80% 2.27% InflationSensitive 6.00% 0.60% 1.39% PrivateEquity 12.00% 6.60% 6.63% Real Estate 11.00% 2.80% 5.21% InfrastructureandForestland 3.00% 3.90% 5.36% Liquidity 2.00%Ͳ0.40%Ͳ0.90% Total 100% (a) Anexpected inflationof2.5%usedforthis period. (b) Anexpected inflationof3.0%usedforthis period. Dr a f t 1 2 / 1 2 / 2 0 1 8 odd 1997199 %foror theth Plann anda reflref reductionction forfo adminisminis ee calculatcalculaion off aa discd higherhe likelihoodeliho of ru thehe testedtested plansns ran thethe usese ofof thethe mum e ofof 7.157.1 percenterc will st resultssul are presenpresen alPERSlP tookto intont accoacco pensionsion fund cashash floflo werwee calcaculatedculat oveve pproach.ch.Using thehe expe s waswas calculatedcalcula for expepected returnreturn thatt ngg bothh shortrtͲͲtermrm aa le equivalentquiva ratete calccalc s thethe longlonͲterm expe apitaltal marketmarket assumpass Assetet ClassClass Globalobal EquityEquity Global FixedFi II InflationInflation Se PrivatePrivate ealealDr a TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE9ͲEMPLOYEES'RETIREMENTPLAN,CONTINUED (c)ChangesintheNetPensionLiability ThechangeintheNetPensionLiabilityfortheMiscellaneousPlanfollows: ForthemeasurementperiodendedJune30,2017,theTowncontributed$1,786,150forthesafetyCostͲSharing Plan. AsofJune30,2018,theTownreportednetpensionliabilitiesforitsproportionateshareofthenetpension liabilityofthesafetyCostͲSharingPlanof$22,415,954. SensitivityoftheNetPensionLiabilitytoChangesintheDiscountRateͲThefollowingpresentsthenet pensionliabilityoftheTownforeachplan,calculatedusingthediscountrateforthePlan,aswellaswhat theLocalGovernment’snetpensionliabilitywouldbeifitwerecalculatedusingadiscountratethatis1Ͳ percentagepointloweror1Ͳpercentagepointhigherthanthecurrentrate: MiscellaneousPlan Total Fiduciary Net Pension Net Pension Liability Pension Liability BeginningBalance 92,546,421$ 64,652,531$ 27,893,890$ ServiceCosts 1,651,5501,651,550 InterestonTotal Pension Liability 6,820,5366,820,536 Changes ofAssumptions 5,481,4325,481,432 Difference BetweenActual andExpected Experience (892,479)(892,479) NetPlan to Plan ResourceMovement Ͳ Ͳ EmployerContributions 2,407,496(2,407,496) Employee Contributions 682,891(682,891) NetInvestmentIncome 7,171,443(7,171,443) Employee Contribution Refunds andBenefitPayments (5,138,083)(5,138,083) Ͳ Administrative Expenses (95,455)95,455 OtherMiscellaneousIncome ͲͲ NetChanges 7,922,9565,028,2922,894,664 EndingBalance 100,469,377$ 69,680,823$ 30,788,554$ endede June 30,2017201 8,the TownTown reportedporte afety CostCostͲͲSharingSharing Plan y of thehe NetNe PensionPension n liabilityliability ofof the TowTow LocalLocal Government’sovernment centagecenta pointnt lowe 18 NetNet PensionPen n LiabilityLiability 64,652,53164,652,5 27$ 2 ,479)9) 2 (5,138,083)(5,138,083) $$ 01 01 2/1 2/1 2/2/2 2 2 2 01 8 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE9ͲEMPLOYEES'RETIREMENTPLAN,CONTINUED (c)ChangesintheNetPensionLiability,Continued SensitivitytoChanges intheDiscountRate Miscellaneous AgentMultiple EmployerPlan SafetyCost SharingPlan Total 1%Decrease(6.15%) NetPensionLiability $43,929,077$34,416,889$78,345,966 CurrentDiscount Rate(7.15%) NetPensionLiability $30,788,554$22,415,954$53,204,508 1%Increase(8.15%) NetPensionLiability $19,959,680$12,605,78932,565,469$ PensionPlanFiduciaryNetPosition–Detailedinformationaboutthepensionplan’sfiduciarynetpositionis availableinaseparatelyissuedCalPERSfinancialreport. (d)PensionExpensesandDeferredOutflows/InflowsofResourcesRelatedtoPensions FortheyearendedJune30,2018,theTownrecognizedpensionexpenseof$5,112,099fortheMiscellaneous AgentMultipleEmployerPlanand$2,710,876fortheSafetyCostSharingPlan.TheTownrecognizedtotal pensionexpenseforallplansof$7,822,975. AtJune30,2018,theTownreporteddeferredoutflowsofresourcesanddeferredinflowsofresourcesrelated topensionfromthefollowingsourcesfortheMiscellaneousAgentMultipleEmployerPlan: Deferred Outflows of Resources DeferredInflows ofResources Pensioncontributions subsequentto measurementdate 2,669,133$ Ͳ$ Changes inassumptions 2,989,872 Ͳ Differencebetween expected andactualexperiences Ͳ(519,342) Netdifferences between projectedandactual earnings onplaninvestments 929,473 Ͳ Totals 6,588,478$(519,342)$ Miscellaneous Dr a f t 1 2 / 1 2 / 2 0 1 8 78,345,966345,9 4$53,204,50853,20 ,605,78905,789 32,56532,56$$ 8 8 boutout the pensionpension planplan off ResourcesRe RelatedRelated cognizednize pensionsion exp 7676 forfo thehe Safety CosCos 5.. d deferreddefe outflowstflows oo urces forfor theth Miscellancella nsion contributionscontributions sus measurementeasureme datedate Changeshang in assumpassum DifferenceDifferenc betw Netet differencdifferen earninea TotaTota TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE9ͲEMPLOYEES'RETIREMENTPLAN,CONTINUED (d) PensionExpensesandDeferredOutflows/InflowsofResourcesRelatedtoPensions,Continued $2,669,133reportedasdeferredoutflowsofresourcesrelatedtocontributionssubsequenttothemeasurement datewillberecognizedasareductionofthenetpensionliabilityintheyearendedJune30,2019.Otheramounts reportedasdeferredoutflowsofresourcesanddeferredinflowsofresourcesrelatedtopensionswillbe recognizedaspensionexpenseasfollows: FiscalYearEndedJune 30, Deferred Outflows/(Inflows) ofResources 2019 1,999,069$ 2020 1,529,235 2021 398,040 2022 (526,340) Thereafter Ͳ AtJune30,2018,theTownreporteddeferredoutflowsofresourcesanddeferredinflowsofresourcesrelated topensionsfromthefollowingsourcesfortheSafetyCostSharingPlan: Deferred Outflows of Resureces Deferred Inflows of Resources Pensioncontributionssubsequentto measurementdate 1,951,711$ Ͳ$ Changesinassumptions 3,632,700(278,710) Differencebetweenexpectedandactualexperiences 250,488 (65,309) Changes inemployer'sproportion2,226,559(2,240,707) Differences betweentheemployer'scontributionsand theemployer's proportionateshareofcontributio 799,852(518,851) Netdifferencesbetween projectedandactual earnings onplaninvestments 792,071 Ͳ Totals 9,653,381$(3,103,576)$ Safety Dr a f t 1 2 / 1 2 / 2 0 1 8 OtheOthe o pensionspensions 699 9,235235 398,04098,040 (526,340)6,3 ͲͲ ofo resourcesources andd defdef y Costst SharingSha Plan:lan: ons subsequentubsequ too t date assumptionsassumpt e betweenbetween expected an ges in employer'semployer's proppro ferencesces betweenbetwee theh the employer'semployer propro Netet differencesdifferences bebe earningsearnings onon TotalsTotals 1 1 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE9ͲEMPLOYEES'RETIREMENTPLAN,CONTINUED (d) PensionExpensesandDeferredOutflows/InflowsofResourcesRelatedtoPensions,Continued $1,951,711reportedasdeferredoutflowsofresourcesrelatedtocontributionssubsequenttothemeasurement datewillberecognizedasareductionofthenetpensionliabilityintheyearendJune30,2019.Otheramounts reportedasdeferredoutflowsofresourcesanddeferredinflowsofresourcesrelatedtopensionswillbe recognizedaspensionexpenseasfollows: FiscalYearEnded June30, Deferred Outflows/(Inflows) ofResources 2019 1,016,264$ 2020 2,330,380 2021 1,448,063 2022 (463,469) Thereafter Ͳ (e) PayabletothePensionPlan AtJune30,2018,theTownreportedapayableof$83,235and$54,145fortheoutstandingamountof contributionstotheMiscellaneousAgentMultipleEmployerPlanandtheSafetyCostSharingPlanfortheyear endedJune30,2018. (f) IRSSection115Trust InMarch,2018theTownestablishedanIRSSection115Trust(Trust)withPublicAgenciesRetirementServices (PARS),anentityindependentofCalPERS,inordertoprefundthepensionliabilitiesforboththeMiscellaneous andSafetydefinedͲbenefitpensionplans.TheTowncontributed$1,200,000totheTrustforthefiscalyear endingJune2018whichisnotreflectedinanyofthedeferralamountsinthetablesaboveasitisseparatefrom theplans. NOTE10ͲOTHERPOSTEMPLOYMENTBENEFITS PlanDescriptionͲTheTownmakescontributionstoCaliforniaEmployer’sRetireeBenefitTrust(CERBT),an agentmultipleͲemployerdefinedbenefithealthcareplanadministeredbyCalPERS.ThepurposeoftheCERBT FundistoprovideCaliforniagovernmentemployerswithatrustthroughwhichtheymayprefundretireemedical costsandOtherPostͲEmploymentBenefits(OPEB).TheTownusesCERBTasitsinvestmentvehicleandrequests disbursementsonanasneededbasistoreimbursetheTownforthecostofretireehealthinsurancebenefits. BenefitprovisionsandallotherrequirementsareestablishedbystatestatuteandTownordinance.Copiesof PERS'annualfinancialreportmaybeobtainedfromtheirExecutiveOffice,400PStreet,Sacramento,CA95814. Dr a f t 1 2 / 1 2 / 2 0 1 8 OtheOthe o pensionspensions 38080 48,0638,063 (463,469),46 ͲͲ e ofo $83,235$83,235 andd $5$5 tiple Employermp PlanPlan an ished anan IRSRS SectionSection 1 nt of CalPERS,in orderord itit pensionpensio plans.The h iss notnot reflectedrefle in a HER POSTEMPLOYMEOSTEMPLOYME escriptionscriptionͲͲThe TownTown Dr tt multiplemultipleͲͲemployeremploy d ndnd isis to providede Califoifo andand Other PostPo mentsments oo visvis TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE10ͲOTHERPOSTEMPLOYMENTBENEFITS,CONTINUED InaccordancewiththePublicEmployees'MedicalandHospitalCareAct(PEMHCA),employeesqualifyforretiree healthbenefitsuponfive(5)yearsofserviceiftheymeetthevestingrequirementsassetforthbyCalPERSand takeaserviceordisabilityretirementfromTownemployment.Additionally,theemployeemustactuallydrawa CalPERSpensionwithinninety(90)daysofseparationfromtheTown,providedtheemployeeremainswiththe Town'shealthplanthroughCOBRA.ForemployeeswhoretireonorafterFebruary1,2016,atMedicare eligibility,theTownwillaligncontributionstothefullcostoftheemployee’senrollment,includingenrollment offamilymembers,inahealthbenefitsplanorplansuptoamaximumof100%SinglePartyand90%Dependents forKaiserBayAreaBasic/Medicare/Combopermonth. Uponretirement,employeeshavetheoptiontorollovertheirsickleaveaccrualintoaTownͲmanagedfund. Employeescanrequestreimbursementofmedicalexpensesfromthefunduptothevalueoftheirsickleaveat retirement. ContributionsͲThecontributionrequirementsofplanmembersandtheTownareestablishedandmaybe amendedbytheTown.TherequiredcontributionisbasedonprojectedpayͲasͲyouͲgofinancingrequirements, withanadditionalamounttoprefundbenefitsasdeterminedbytheTown.ForthemeasurementperiodJuly1, 2016ͲJune30,2017,theTowncontributed$3,878,000totheplanwhichincluded$1,040,000ofcashbenefit payments,administrativefeesof$9,000,and$229,000ofimpliedsubsidybenefitpayments.Allrelated obligationsarepaidfromtheTown’sGeneralFund. CoveredParticipants ActuarialMethodsandAssumptionsͲProjectionsofbenefitsforfinancialreportingpurposesarebasedonthe substantiveplan(theplanasunderstoodbytheemployerandtheplanmembers)andincludethetypesof benefitsprovidedatthetimeofeachvaluationandthehistoricalpatternofsharingofbenefitcostsbetween theemployerandplanmemberstothatpoint.Actuariallydeterminedamountsaresubjecttocontinualrevision asactualresultsarecomparedwithpastexpectationsandnewestimatesaremadeaboutthefuture.The actuarialmethodsandassumptionsusedincludetechniquesthataredesignedtoreducetheeffectsofshortͲ termvolatilityinactuarialaccruedliabilitiesandtheactuarialvalueofassets,consistentwiththelongͲterm perspectiveofthecalculations. Inactiveemployeesorbeneficiaries currentlyreceivingbenefits 122 Inactiveemployeesentitled to but notyet receivingbenefits 50 Active employees 148 Total 320 Dr a f t 1 2 / 1 2 / 2 0 1 8 emainmai 2016,016 atat M ,includinguding enrollmenrollm artyy andan 90%%DependeDepend crualua intoo aa TownTͲmama upup too theth valueue ofo th s andd thet Townw areare projectedproject paypaͲassͲͲyouyou ed byby thee Town.Town.ForF tht to thee planp whichwhich incinc 9,00000 of implieded subsub .. Methodsods andan AssumpAssump Dr a ntivetive planplan (the(th planlan aa efitsefits providedvided atat theth employeremp andnd plan ualual resultsresults aa methodmetho tyt vev employeesployees or benefenef rrentlyntly receiving benefibenefi Inactiveiv employeesmployees e not yet receivingving b ActiveA emplo Totalotal TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE10ͲOTHERPOSTEMPLOYMENTBENEFITS,CONTINUED FortheJune30,2017actuarialvaluation,theactuarialassumptionsusedareasfollows: ValuationDate June30,2017 MeasurementDate June30,2017 Actuarial Cost Method EntryͲAge Normal CostMethod Actuarial Assumptions: DiscountRate 6.75% Inflation 2.75% Contribution Policy Pre Ͳfundedthrough CERBT withthe Strategy1assetallocation SalaryIncreases VariesbyEntryAge andService Projected SalaryIncrease 3.00% InvestmentRate ofReturn 6.75% Mortality,Retirement, Diability,Termination CalPERS 1997Ͳ2015Experience Study MortalityImprovement PostͲretirementmortalityprojectedfullygenerational with ScaleMPͲ2017 HealthcareTrend Non ͲMedicare Ͳ7.5%for2019,decreasingto anultimate ra te of 4.0%in2076andlateryears Med icareͲ6.5%for2019,decreasingto anultimate rate of4.0% in2076andlateryears ParticipationatRetirement Actives ininsuranceprogram:100% Actives incash allocationprogram:90% Waivedretirees aged<65:20% Waivedretirees agedш65:0% Retirees withsickleaveconversion accountswillcontinueto participate afteraccountexhausted Dr a f t 1 2 / 1 2 / 2 0 1 8 1 assett allocationallocat rvicervice Experiencexperience StudyStudy projectedcte fully generatigenerat %forfor 2019,9,decreasingdecreas tt later yearsye 5%forfor 2019,2 decreasingreasing dd laterer yearsyears s in insurancensu programogra vesves inin cashh allocationa Waivedaiv retireesretirees ageda < Waivedaiv retireeset ageag Retirees withwith sicksic pparticipatearticipate afaftt TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE10ͲOTHERPOSTEMPLOYMENTBENEFITS,CONTINUED ThelongͲtermexpectedrateofreturnonOPEBplaninvestmentswasdeterminedusingabuildingͲblockmethod inwhichexpectedfuturerealratesofreturn(expectedreturns,netofOPEBplaninvestmentexpenseand inflation)aredevelopedforeachmajorassetclass.TheserangesarecombinedtoproducethelongͲterm expectedrateofreturnbyweightingtheexpectedfuturerealratesofreturnbythetargetassetallocation percentageandbyaddingexpectedinflation.Thetargetallocationandbestestimatesofarithmeticrealratesof returnforeachmajorassetclassaresummarizedinthefollowingtable: DiscountRateͲThediscountrateusedtomeasurethetotalOPEBliabilitywas6.75percent.Theprojectionof cashflowsusedtodeterminethediscountrateassumedthatCitycontributionswillbemadeatratesequalto theactuariallydeterminedcontributionrates.Basedonthoseassumptions,theOPEBplan’sfiduciarynet positionwasprojectedtobeavailabletomakeallprojectedOPEBpaymentsforcurrentactiveandinactive employeesandbeneficiaries.Therefore,thelongͲtermexpectedrateofreturnonOPEBplaninvestmentswas appliedtoallperiodsofprojectedbenefitpaymentstodeterminethetotalOPEBliability. Target ExpectedReal AssetClass Allocation* RateofReturn PublicEquity 57.00% 4.82% FixedIncome 27.00% 1.47% TIPS 5.00% 1.29% Commodities 3.00% 0.84% REITS 8.00% 3.76% AssumedLongͲTermRate ofInflation 2.75% AssumedLongͲTermInvestmentExpenses n/a Expected LongͲTermNetRateofReturn,Rounded 6.75% DiscountRate** 6.75% *Provided by CalPERS' Strategic Asset Allocation Analysis Overview in August 2014 – Strategy 1. **The fiduciary net position is projected to be sufficient to make projected benefit payments, and the plan assets are expected to be invested using the strategy to achieve the expected return. Dr a f t 1 2 ate usedd to measuremeasure t nee the discount ratete a eded contributioncontr rate ed too bebe availableavaila to neficiaries.ies.ThereforeTherefore eriods ofof projectedprojected beb 2/1 2 / 2 0 1 8 assetasset hmeticmet realre r Real ofof ReturnRetur 4.82%4.82% 1.47%1 1.29%1.29% %0.84%0 00%3.3 ses urn,rn,Rounded ic Asset Allocation Analysis Over Asset Allocation Analysis Ove n is projected to be sufficient to m projected to be sufficien xpected to be invested using the xpected to be invested using the 01 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE10ͲOTHERPOSTEMPLOYMENTBENEFITS,CONTINUED NetOPEBLiability–ThenetOPEBliabilityiscalculatedbysubtractingthefiduciarynetposition(FNP)ofthe PlanfromthetotalOPEBliabilityasdeterminedbytheactuary.Thetablethatfollowsdisplaysthechangesthat appliedtothetotalOPEBliability,FNP,andNetOPEBliabilityduringthemeasurementperiodofJuly1,2016 throughJune30,2017. Duetothesechanges,theTownachievedanOPEBPlanfundingstatusof54.9%fortheJune30,2017 measurementdate. Total OPEB Plan Fiduciary NetOPEB Liability NetPosition Liability/(Asset) BalanceatJune30,2017 (6/30/16measurementdate)$23,301,000$9,964,000$13,337,000 Changes intheyear: Servicecost 1,134,000 Ͳ 1,134,000 Interestonthe total pensionliability 1,607,000 Ͳ 1,607,000 Differences betweenactualand expectedexperience Ͳ Ͳ Ͳ Changes inassumptions Ͳ Ͳ Ͳ Changes inbenefitterms Ͳ Ͳ Ͳ Contributions Ͳemployer Ͳ 3,878,000 (3,878,000) Contributions Ͳemployee Ͳ Ͳ Ͳ Netinvestmentincome Ͳ 1,049,000 (1,049,000) Administrative expenses Ͳ (14,000)14,000 Benefitpayments ,includingrefunds ofemployeecontributions (1,269,000)(1,269,000)Ͳ Netchanges 1,472,000 3,644,000 (2,172,000) BalanceatJune30,2017 (6/30/17measurementdate)$24,773,000$13,608,000$11,165,000 Increase(Decrease) 6/30/2018 6/30/2017 MeasurementDate 6/30/2017 6/30/2016 Total OPEBLiability(TOL) 24,773,00023,301,000 FiduciaryNetPosition*(FNP) 13,608,0009,964,000 NetOPEBLiability(NOL) 11,165,00013,337,000 FundedStatus (FNP/TOL) 54.9% 42.8% *Changes inPlanFiduciaryNetPositionarefrom CalPERS'audited CERBT"ScheduleofChanges inFiduciaryNet PositionbyEmployer" fortheFiscal Year EndedJune30,2017. Fiscal YearEnding Dr a f t 1 2 / 1 2 / 2 0 1 8 s,thethe TownTown achieved NetNe OPEB Liability/(Asset)ability/(Asset) ,000000$$13,337,00037,0 Ͳ Ͳ 1 Ͳ Ͳ ͲͲ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 3,873,8 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ (1,269,000(1, 1,4721,47 te)$$ 0 0 2/2/2 2 8 18 18 01 01 MeMe TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE10ͲOTHERPOSTEMPLOYMENTBENEFITS,CONTINUED SensitivityofActuarialAssumptions–ThefollowingtablesindicatehowmuchthenetOPEBliabilityvariesif thediscountrateandhealthcaretrendrateusedtocalculatetheliabilityareincreasedordecreasedbyone percentagepoint. DiscountRate 1%Decrease Current Rate 1%Increase (5.75%) (6.75%) (7.75%) NetOPEBLiability $14,395,00011,165,000$8,500,000$ HealthcareTrend 1%Decrease Current Trend 1%Increase NetOPEBLiability $8,871,00011,165,000$13,584,000$ OPEBExpenseandDeferredOutflows/InflowsofResourcesRelatedtoOPEBͲGainsandlossesrelatedto changesintotalOPEBliabilityandfiduciarynetpositionarerecognizedinOPEBexpensesystematicallyover time.PartialamountsarefirstrecognizedinOPEBexpensefortheyearthegainorlossoccurs.Theremaining amountsarecategorizedasdeferredoutflowsanddeferredinflowsofresourcesrelatedtoOPEBandaretobe recognizedinfutureOPEBexpense.Therecognitionperioddiffersdependingonthesourceofthegainorloss. ThemeasurementperiodJuly1,2016throughJune30,2017gainsandlossesarespreadevenlyovera5Ͳyear period.ThetotalOPEBexpenserecognizedinthefiscalyearendingJune30,2018was$2,007,000andtheTown reporteddeferralsfromthefollowingsources: Deferred Outflows of Resources Deferred Inflows of Resources භEmployercontribuƟonsmadesubsequentto themeasurementdate 2,935,313$ Ͳ$ භDi īerencebetween expected andactualexperie Ͳ(301,000) Totals 2,935,313$(301,000)$ OPEB Dr a f t 1 2 / 1 2 / 2 0 1 8 000 8 8 1%1%IncreaseIncrea 13,584,00013,584,00$01 01 d toto OPEBEBͲGainsGains anan20gnizedizedininOPEBPEexpenexp the yearar thet gainain oror lol nflowsnflows ofo resourcesesources rer od differsiff dependingdepending o 0,201720 gains andan lossloss cal yearear endingen Juneune 33 ntribuƟons madede subsu ementement dated encece betweenbetwee expecte Totals TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE10ͲOTHERPOSTEMPLOYMENTBENEFITS,CONTINUED The$2,935,313reportedasdeferredoutflowsofresourcesrelatedtocontributionssubsequenttotheJune30, 2017measurementdatewillberecognizedasareductionofthenetOPEBliabilityduringthefiscalyearending June30,2019.OtheramountsreportedasdeferredoutflowsofresourcesrelatedtoOPEBwillberecognizedas expenseasfollows: FiscalYearEndedJune 30, Deferred Outflows/(Inflows) ofResources 2019 (75,000)$ 2020 (75,000) 2021 (75,000) 2022 (76,000) Thereafter Ͳ NOTE11ͲRISKMANAGEMENT TheTownparticipatesinthefollowingpublicentityriskpoolsthroughformallyorganizedandseparatelegal entities.TheTowndoesnothaveanequityinterestinthejointventures.Theseentitiesexercisefullpowersand authoritieswithinthescopeoftherelatedagreementsincludingthepreparationofannualbudgets, accountabilityforallfunds,thepowertomakeandexecutecontractsandtherighttosueandbesued. ObligationsandliabilitiesoftheseparateentitiesarenotthoseoftheTown,althoughtheTownretainsan ongoingfinancialinterestoranongoingfinancialresponsibility. PooledLiabilityAssuranceNetworkJointPowersAuthority(PLANJPA)ͲTheTownparticipatesinPLAN,which coversgeneralliabilityclaimsintheamountupto$5,000,000plus$15,000,000inexcessliabilityfortotal coverageof$20,000,000peroccurrence.TheTownhasadeductibleoruninsuredliabilityofupto$50,000per claim.PLANalsoprovidesallriskpropertycoverageof$100,000,000,excludingfloodandearthquakecoverage. TheTownhasa$5,000deductibleforpropertydamageanda$10,000deductibleforvehicledamage.Oncethe Town’sdeductibleismet,PLANbecomesresponsibleforpaymentofallclaimsuptothelimit.Financial statementsmaybeobtainedfromPLANat375BealeStreet,SanFrancisco,CA94105. LocalAgencyWorkers’CompensationJointPowersAuthority(LAWCX)ͲTheTownisamemberofLAWCXfor coverageofworkers’compensationclaims.TheTownhasa$250,000selfͲinsuredretentionleveloruninsured liabilityforallemployees.OncetheTown’sdeductibleismet,LAWCXbecomesresponsibleforclaimsupto $1,000,000.Forclaimsgreaterthan$1,000,000,LAWCXhasacommercialpolicyprovidingcoverage.Financial statementsmaybeobtainedfromLAWCXat1750CreeksideOaksDr.,Suite200,Sacramento,California,95833. TheTownhasnotsignificantlyreduceditsinsurancecoveragefromtheprioryearandsettlementshavenot exceededinsurancecoverageforthepastthreeyears. LiabilityforUninsuredClaimsͲTheTownisrequiredtorecorditsliabilityforuninsuredclaimsandtoreflectthe currentportionofthisliabilityasanexpenditureinitsfinancialstatements.Asdiscussedabove,theTownhas coverageforsuchclaims,butithasretainedtheriskforthedeductibles,oruninsuredportionoftheseclaims. Dr a f t 1 2 / 1 2 / 2 0 1 8 00)00) 6,000)000 ͲͲ kk poolspools throughou formform n thee jointjoin ventures.ures.TT agreementsgreements includingincluding ake andnd executee conco entitiesentities aree notn those financialan responsibilityresponsib rk Jointoint PowersP AuthoAutho12ntheamountamountuptoto occurrence.Thee TowTo allal riskrisk propertyp cove deductibleeductible forf prope is met,t,PLANPLA becombecom be obtainedbtained fromfrom PLA ncy Workers’orkers CompenCompen Dr a gege ofof workers’worker compeompe lityity forfo allall employeesemploye 000,000.000,Forr claimsclaims mentsment mayy bebe nn hashas non susu TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE11ͲRISKMANAGEMENT,CONTINUED ThechangeinWorkers’CompensationandSelfͲInsuranceServiceFunds’claimsliabilities,isbasedonhistorical trendinformationprovidedbyitsthirdpartyadministratorandwascomputedasfollowsasofJune30,2018: Workers' SelfͲ Compensation Insurance Internal Internal ServiceFund ServiceFund Total ClaimspayablebalanceͲJune30,2016 1,034,066$119,472$1,153,538$ Claimsincurred716,153229,151945,304 Claimspaid (650,483)(99,967)(750,450) ClaimspayablebalanceͲJune30,2017 1,099,736248,6561,348,392 Claimsincurred1,028,359105,0001,133,359 Claimspaid (655,770)(221,913)(877,683) ClaimspayablebalanceͲJune30,2018 1,472,324$131,743$1,604,067$ NOTE12ͲREDEVELOPMENTAGENCYDISSOLUTION OnDecember29,2011,theCaliforniaSupremeCourtupheldAssemblyBill1X26(“theBill”)thatprovidesfor thedissolutionofallredevelopmentagenciesintheStateofCalifornia.Thisactionimpactedthereportingentity oftheTownthatpreviouslyhadreportedaredevelopmentagencyasablendedcomponentunit. InaccordancewiththetimelinesetforthintheBill(asmodifiedbytheCaliforniaSupremeCourtonDecember 29,2011)allredevelopmentagenciesintheStateofCaliforniaweredissolvedandceasedtooperateasalegal entityasofFebruary1,2012. Infuturefiscalyears,successoragencieswillonlybeallocatedrevenueintheamountthatisnecessarytopay theestimatedannualinstallmentpaymentsonenforceableobligationsoftheformerredevelopmentagency untilallenforceableobligationsofthepriorredevelopmentagencyhavebeenpaidinfullandallassetshave beenliquidated. Dr a f t 1 2 / 1 2 / 2 0 1 8 TotalTotal 1,153,5381,153,538$ 1 945,304945, 9,967)967)(750,450,4 248,656656 1,348 105,000105,0001,11 (221,913)(221,9 131,743,743$$0 0 /20 /20 2 2 2 /2 2/2 2/2 2/2 18 18 01 20 20 rt upheldpheld Assemblymbly B he StateState of California.California. developmentevelopm agencyncy h in theth Billll (as modifmoi s inin the State ofo CalifoCalifo soro agencies will onlyon tallmenttallment payments o obligationsgations ofof the prio TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE13ͲCOMMITMENTSANDCONTINGENCIES FederalandStateGrantsͲTheTownparticipatesinseveralfederalandstategrantprograms.Thesearesubject toexaminationbygrantorsandtheamount,ifany,ofdisallowedexpenditurescannotbedeterminedatthis time.TheTownexpectssuchamounts,ifany,tobeimmaterial. LitigationͲTheTownissubjecttolitigationarisingfromthenormalcourseofbusiness.TheTownAttorney believesthereisnopendinglitigationwhichislikelytohaveamaterialadverseeffectonthefinancialposition oftheTown. SuccessorAgencyͲAsofJune30,2018,theSuccessorAgencyTrustfundreportedanetdeficitof$7,333,783. EncumbrancesͲAsofJune30,2018,theTownhadthefollowingencumberedbalancesthatwerecarriedinto thenextfiscalyear: NOTE14ͲTOWN/SUCCESSORAGENCYGRANTS,COOPERATIVEAGREEMENTS PublicImprovementGrantsandCooperativeAgreements InJanuaryof2011,theRedevelopmentAgencyenteredintoapublicimprovementgrantandcooperative agreementwiththeTownforthepurposeoffundingtheacquisitionofpubliclandanddesigningand constructingvariouspublicimprovementstobeownedbytheTownprovidedthattheprojectswerein accordancewiththeRedevelopmentAgency’sfiveyearimplementationplanandredevelopmentplan. Theimprovementplan,asidentifiedintheagreement,calledforapproximately$24milliontobegrantedtothe Townforthefollowingprojects: a. Expansionandimprovementofcurrentandnewdowntownparking b. Highway9improvementsfromHighway17toMonteSereno c. AlmondGroveAreastreet,sidewalkandotherimprovements d. DowntownLosGatosgateways,signage,bannersandart e. Stormdrain,retainingwall,streetandotherimprovements f. NewLosGatoslibrarybuilding DuringthefiscalyearendedJune30,2012,therightsandobligationsresultingfromthiscooperativeagreement weretransferredtotheSuccessorAgencyTrustFundasapartoftheTown’sdissolutionofitsRedevelopment Agency. General Fund 99,927$ Appropriated Reserves Fund 4,411,598 Non Ͳmajor Governmental Funds 371,367 Total Encumbrances 4,882,892$ Dr a f t 1 2 / 1 2 / TS,COOPERATIVEOPERATIVE AGA ativeve Agreementseements2/ opmentent AgencyA enteenter the purposepurpose of funfun improvements toto beb evelopmentevelopme Agency’s f plan,as identifiedidentified inin tht owingg projects:projects: pansionon andand improvemimprove HighwayHighway 99 improvemimprovem c..AlmondAlmond GroveGrove Are d.d.Downtownown Losos StormSt draindra NewNew LosLos 2/2 0 1 8 hee TownTown At the financialfinancial posipos eded aa netne deficitdeficit ofof $7,3$ eredre balancesbala thattha w 99,92799,927 4,411,598411,598 ds 371,367371,3 4,882,,882,$ 2/2/ 12 12 12 12 TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE14ͲTOWN/SUCCESSORAGENCYGRANTS,COOPERATIVEAGREEMENTS,CONTINUED AffordableHousingCooperativeAgreement InMarchof2011,theRedevelopmentAgencyenteredintoanaffordablehousingcooperativeagreementwith theTownforthepurposeoffundingaffordablehousingprojectsandprogramstobedevelopedand/or administeredbytheTowninaccordancewiththeRedevelopmentAgency’sfiveyearimplementationplanand redevelopmentplan.Theimprovementplan,asidentifiedintheagreement,calledforapproximately$16 milliontobegrantedtotheTownforthefollowingprojects: a. Developmentofaffordablehousingat224MainSt. b. DevelopmentofaffordablehousingatDittosLane c. PartnershipwithSeniorHousingSolutionsforthecreationofseniorhousinginLosGatos d. Partnershipsfortheconversionofexistingresidentialdevelopmentsdedicatedtoaffordablehousing e. GrantstotheSantaClaraCountyHousingTrustforthedevelopmentofaffordablehousing. DuringthefiscalyearendedJune30,2012,therightsandobligationsresultingfromthiscooperativeagreement weretransferredtotheSuccessorAgencyTrustFundasapartoftheTown’sdissolutionofitsRedevelopment Agency. NOTE15ͲSUBSEQUENTEVENTCALIFORNIAPUBLICEMPLOYEESRETIREMENTSYSTEMLOWERSDISCOUNT RATE InanefforttoenhancethelongtermsfiscalsustainabilityofitspensionplansstateͲwide,theCaliforniaPublic Employees'RetirementSystem(CalPERS)BoardofAdministrationvotedonDecember21,2016tolowerthe discountratefrom7.5percentto7.0percentoverthenextthreeyears.Thediscountratechangesaretobe implementedoverthreefiscalyearsinthefollowingstepreductions: x FY 2017Ͳ2018: 7.375% x FY2018Ͳ2019:7.25% x FY2019Ͳ2020:7.00% Loweringthediscountrate,alsoknownastheassumedrateofreturn,isexpectedtoresultinincreasedemployer requiredcontributionsforTown’smiscellaneousandsafetyplansfornormalcostsandthepaymentrelatedfor amortizationoftheTown’sunfundedactuarialliabilities.ActivemembershiredafterJanuary1,2013,underthe PublicEmployees'PensionReformActwillalsoseetheircontributionratesrise.Normalcostisthecostof pensionbenefitsforoneyear. ThethreeͲyearreductionofthediscountratewillresultinaverageemployerrateincreasesofabout1percent to3percentofnormalcostasapercentofpayrollformostmiscellaneousretirementplans,anda2percentto 5percentincreaseformostsafetyplans.Additionally,CalPERSreportedthattheTowncanexpecta30to40 percentincreaseintheircurrentunfundedaccruedliabilitypayments. 12 / 2 0 1 8 velopevelop mentationentation plp or approximatelypproximately ousingusin inin Los Gatosato s dedicatededicatdd toto affordaafford menten ofof affordableord houh ationsations resultingsult fromfrom partrt of thehe Town’swn disi 12 /1 /12 IC MPLOYE ETIR 2/1 2/1 2/2/1 al sustainability 12 12 / Boa of mini 12 12 perc er the12nthefollowings t1 ft 1 .375% ft 1 7.25%ft 7.00% aft af af nt rate,als kno ra raf utions for own Dr a Dr a f the wn’s un Dr Dr a Employees'Pe Dr nsio ts f onDDDeeͲyearreDto TOWN OFLOSGATOS,CALIFORNIA NOTESTOBASICFINANCIALSTATEMENTS JUNE30,2018 NOTE15ͲSUBSEQUENTEVENTCALIFORNIAPUBLICEMPLOYEESRETIREMENTSYSTEMLOWERSDISCOUNT RATE,CONTINUED NoactuarialvaluationsorfutureemployercontributionratesareavailablefromCALPERSatthistime.TheTown estimatesthepotentialfinancialimpactbeginninginfiscalyear2018/19isthatbarringunanticipatedasset valuationgains,theannualTownemployerpensioncontributionsmayriseabovecurrentfiveyearforecast projectionsinarangefrom$355,000to$950,000peryearbasedupontheCALPERSpressreleaseprojections. NOTE16–PRIORPERIODADJUSTMENTS TheTownrecordedpriorperiodadjustmentstoadjustthenetOPEBobligation,netOPEBliability,OPEB deferredcontributionsandothermiscellaneousadjustmentsasfollow: GovernmentͲwideStatements FundFinancialStatements FundBalance asPreviously Reported Other FundBalance asRestated GovernmentFunds GeneralFund $29,180,624$59,829$29,240,453 NetPosition, asPreviously Reported NetOPEB Obligation NetOPEB Liability OPEBDeferred Contribution Other NetPositionas Restated GovernmentͲWide Statements Governmental Activities 117,027,779$897,601$(13,337,000)$3,878,000$59,829$108,526,209$ PriorPeriodAdjustment Dr a f t 1 2 / 1 2 / 2 2/ FundF BaBa asas PrP rnmentment FundsFund eneral FundFund af Net OPEBOP Liabilitylit OPEB DeferrDe Contribntrib 601601 (13,337,000)(13,33$$$$12 12 2 2 /1 /1 /1 /1 /12 /12 /12 /12 2 2 2 2 2/2 0 1 8 8 8 e yea 8 ase projec 01 8 n,netne OPEBPEB liability,liability,O PeriodPerio Adjustmentust 2/2 2/2 Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional RequiredSupplementaryInformation Dr a f t 1 2 / 1 2 / 2 0 1 8 d Supplementaupplemen TOWNOFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 ScheduleofProportionateShareofNetPensionLiability–CalPERSMisc.AgentͲMultipleEmployerPlan MeasurementDate 6/30/2017 6/30/2016 6/30/2015 6/30/2014 TotalPensionLiablity ServiceCost 1,651,550$1,560,679$1,491,925$1,579,547$ Interestontotalpensionliability 6,820,5366,697,2476,483,0326,268,015 Differencebetweenexpectedandactual experience (892,479)(357,870)(623,495)Ͳ Changesinassumptions 5,481,432 Ͳ(1,513,132)Ͳ Changesinbenefits Ͳ Ͳ Ͳ Ͳ Benefitpayments,includingrefundsofemployee contributions (5,138,083)(4,953,756)(4,748,786)(4,241,487) Netchange intotalpensionliability 7,922,9562,946,3001,089,5443,606,075 TotalpensionliabilityͲbeginning 92,546,42189,600,12188,510,57784,904,502 TotalpensionliabilityͲending(a)100,469,377$92,546,421$ 89,600,121$ 88,510,577$ Planfiduciarynetposition ContributionsͲemployer 2,407,4962,223,7821,941,7651,796,079 ContributionsͲemployee 682,891691,770679,796668,167 Plantoplanresource movement Ͳ(28,866)22,561 Ͳ ProjectedEarningsonPlanInvestments Ͳ Ͳ Ͳ4,328,173 RecognizedDifferencebetweenProjectedandActual Earning Ͳ Ͳ Ͳ1,166,344 NetInvestmentIncome 7,171,443369,1851,470,873 NetDifference betweenProjectedandActualEarnings Ͳ Ͳ Ͳ4,665,374 Benefitpayments,includingrefundsofemployee contribution (5,138,083) (4,953,756)(4,748,786)(4,241,487) AdministrativeExpenses (95,455) (40,462)(74,706) Netchange inplanfiduciarynetposition 5,028,292(1,738,347)(708,497)8,382,650 PlanfiduciarynetpositionͲbeginning 64,652,53166,390,87867,099,37558,716,725 PlanfiduciarynetpositionͲending(b)69,680,823$64,652,531$66,390,878$67,099,375$ NetpensionliabilityͲending(a)Ͳ(b) 30,788,554$27,893,890$23,209,243$21,411,202$ Planfiduciarynetpositionasapercentageofthe totalpensionliability 69.36% 69.86% 74.10% 75.81% Coveredpayroll 9,190,7679,198,3188,487,9408,406,315 Netpensionliabilityasapercentageofcoveredpayroll 334.99% 303.25% 273.44% 254.70% NotestoSchedule: Benefitchanges:Thefiguresabovedonotincludeanyliabilityimpactthatmayhaveresultedfromplanchangeswhichoccurred afterJune30,2016.ThisappliesforvoluntarybenefitchangesaswellasanyoffersofTwoYearsAdditionalServiceCredit. Changesinassumptions:For2015,thediscountratewaschangedfrom7.5%(netofadministrativeexpense)to7.65%.In2017the discountratechangedfrom7.65%to7.15%. *Fiscalyear2015wasthe1styearofimplementation,thereforeonlyfouryearsareshown. Dr a f t 1 2 / 1 2 / 2 0 1 8 6/6 ,491,92549 1,579,5479$$ 6,483,032483,06,268,6,268 )(623,495)5) (1,513,132)(1,51 ͲͲ (4,953,756)4,953,756)(4,74(4 74 2,946,300,946,3001 1 89,600,12189,600,121 9,377377 922,546,421,546,421$$ 2,407,4962,4072,22, 682,891682,89 ͲͲ Ͳ d ActualAct 7 and ActualActual EarningsEarnings nds of employeeemployee uciaryary netet positionposi ositionͲͲbeginningbeginning t positiontionͲendingnding (b)) n liabilityyͲͲ endingnding (a)(a)Ͳ(b(b duciaryy netnet positiontion asas aa all pensionpension liabilityabilit CoveredCov payrolloll pensionpens liabilliab 8 8 /20 /20 20 20 2 2 2/2 2/2 2 2 2 2 2 2 2/2 2/2 2/2/ 8 8 TOWNOFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 ScheduleofProportionateShareofNetPensionLiability–CalPERSSafetyCostͲSharingPlan NotestoSchedule: Benefitchanges:Thefiguresabovedonotincludeanyliabilityimpactthatmayhaveresultedfromplanchangeswhichoccurred afterJune30,2016astheyhaveminimalcostimpact.ThisappliesforvoluntarybenefitchangesaswellasanyoffersofTwoYears AdditionalServiceCredit. Changesinassumptions:For2015,thediscountratewaschangedfrom7.75%(netofadministrativeexpense)to7.65%.In2017 thediscountratechangedfrom7.65%to7.15%. *Fiscalyear2015wasthe1styearofimplementation,thereforeonlyfouryearsareshown. MeasurementDate 6/30/2017 6/30/2016 6/30/2015 6/30/2014 Proportionofthenetpensionliability 0.37515% 0.22394% 0.14860% 0.28588% Proportionateshareofthenetpensionliability 22,415,954$19,377,843$10,199,904$17,788,690$ Coveredpayroll 4,941,138$5,022,498$4,897,104$4,916,535$ Proportionateshareofthenetpensionliability aspercentageofcoveredpayroll 453.66% 385.82% 208.28% 361.81% Planfiduciarynetpositionasa percentageof ofthetotal pensionliability 73.87% 74.06% 78.40% 75.66% Dr a f t 1 2 / 1 2 / 2 0 thathat mayay haveh resultedresulted frofr or voluntaryvoluntary benefitbenefit chanch angeded fromfr 7.75%(net(net ofof n,thereforeore only four yearyea 20 1 8 6/36/ 60% 0.28%0.28 ,199,90499,90 17,788,688$$ 4,897,10497,1044,9$ 82% 208.28%208.2 74.06% 774.06% 8 8 8 TOWNOFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 ScheduleofPensionPlanContributions–MiscellaneousAgentMultipleͲEmployerPlan FiscalYear 2018 2017 2016 2015 ActuariallyDeterminedContribution 2,669,133$2,407,496$2,223,782$1,941,765$ ContributionsinRelationtotheActuarially DeterminedContribution (2,669,133)(2,407,496)(2,223,782)(1,941,765) ContributionDeficiency(Excess)Ͳ$ Ͳ$ Ͳ$ Ͳ$ CoveredPayroll 11,269,3139,190,7679,198,3188,487,940 ContributionsasaPercentageofCovered Payroll 23.68% 26.19% 24.18% 22.88% *Fiscalyear2015wasthe1styearofimplementation,thereforeonlyfouryearsareshown. ScheduleofPensionPlanContributions–SafetyCostͲSharingPlan FiscalYear2018 2017 2016 2015 ActuariallyDeterminedContribution 1,951,711$1,738,150$1,586,129$1,999,757$ ContributionsinRelationtotheActuarially DeterminedContribution (1,951,711)(1,738,150)(1,586,129)(1,999,757) ContributionDeficiency(Excess)Ͳ$ Ͳ$ Ͳ$ Ͳ$ CoveredPayroll 3,716,4024,941,1385,022,4984,897,104 ContributionsasaPercentageofCovered Payroll 52.52% 35.18% 31.58% 40.84% *Fiscalyear2015wasthe1styearofimplementation,thereforeonlyfouryearsareshown. ActuarialMethodsandAssumptionsusedforPensionActuariallyDeterminedContributions Actuarial CostMethod EntryAge Normal Amortization Method Fordetails,seeJune 30,2014CalPERS FundingValuationReport Amortization Period Fordetails,seeJune 30,2014CalPERS FundingValuationReport AssetValuationMethod MarketValue ofAssets.Fordetails,seeJune 30,2014CalPERS FundingValuationReport Inflation 2.75% SalaryIncreases VariesbyEntryAge andService Payroll Growth 3.00% InvestmentRate ofReturn 7.5%NetofPension Pla n InvestmentandAdministrative Expenses;includesInflation. RetirementAge CalPERS1997Ͳ2011experiencestudy Mortality CalPERS1997Ͳ2011experiencestudy Pre ͲretirementandpostͲretirementmortalityrates include20 years ofprojectedmortalityimprovementusingScaleBB publishedbythe SocietyofActuaries. 78282 1,,$$ (2,223,782)223,7 (1,9411,94 ͲͲ$$$ 9,198,3189,198,318 26.19% 24.126.19% 24 8 8 18 18 8 8 18 18 rs aree shown.sho aringring PlanPlan 018 201718 2017 1,951,711951,71 1,71,7$ (1,951,711)(1,951,711) Ͳ$$ 3,716,4716 overedred 12 12 12 12 2/1 2/1 yearyear ofof implementation,i s andd AssumptionsAssumptions us Method Entryod Entry AgeA on Method Forod For de zation Period FoPeriod F etet ValuationValuation MethodMethod InflationInfla aryary IncreasesIncreases GrowtGrowt TOWNOFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 ScheduleofChangesinNetOPEBLiabilityandRelatedRatios MeasurementDate 6/30/2017 ChangesinTotalOPEBLiablity ServiceCost 1,134,000$ Interestonnetliability 1,607,000 Differencebetweenexpectedandactual Ͳ experience Ͳ Changesinassumptions Ͳ Changesinbenefits Ͳ Benefitpayments (1,269,000) NetchangeintotalOPEBliability 1,472,000 TotalOPEBliabilityͲbeginning 23,301,000 TotalOPEBliabilityͲending(a)24,773,000$ Changesinplanfiduciarynetposition ContributionssͲemployer 3,878,000 ContributionssͲemployee Ͳ NetInvestmentIncome 1,049,000 Benefitpayments (1,269,000) AdministrativeExpenses (14,000) Netchangeinplanfiduciarynetposition 3,644,000 PlanfiduciarynetpositionͲbeginning 9,964,000 PlanfiduciarynetpositionͲending(b)13,608,000$ NetOPEBliabilityͲending(a)Ͳ(b) 11,165,000$ Planfiduciarynetpositionas apercentageofthe54.9% totalOPEBliability Coveredpayroll 14,985,716 Netpensionliabilityasapercentageofcovered 74.50% payroll ScheduleofEmployerContributions FiscalYear 2018 ActuariallyDeterminedContribution(ADC) 2,129,000$ ActualContributions 2,935,000 Contributiondeficiency/(excess) (806,000) Coveredemployeepayroll 14,985,716 Contributions asapercentageofcoveredpayroll 19.6% Ͳ ,000)000 472,00072,000 23,301,0001,00 24,773,00024,773,000$$ 3,878,000878,000 1,04 (1(1 ition nningng nding (b)(b g (a)(Ͳ(b) sitiontio asas aa percentagep y oll sion liabilityability asas a perceperce oll 2 2 2/2 2/2 2/2 2/2 2/2 2/2 // ScheduleSche off EmployeEmploy alal YearYear ll TOWNOFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2018 ActuarialMethodsandAssumptionsusedfor2017/18OPEBActuariallyDeterminedContribution ValuationDate June30,2015 Actuarial CostMethod EntryAge Normal,Level Percentage ofPayroll Amortization Method Leverl percentofpay Amortization Period 21Ͳyearfixedperiodfor2017/18 AssetValuationMethod Investmentgains andlossesspreadover5Ͳyear rollingperiod DiscountRate 7.25% General Inflation 3.00% Medical Trend Non ͲmedicareͲ6.5%for2018,decreasingto an ultimate rate of5.0%in2021 Me dicareͲ6.7%for2018,de creasingto an ultimate rate of5.0%in2021 Mortality CalPERS1997Ͳ2011experiencestudy MortalityImprovement MortalityImprovementScale MPͲ2014modified to converge to ultimate mortalityimprovement rates in2022 Dr a f t 1 2 / 1 2 / 2 0 1 8 n an udy MPMͲ20144 modifiedifi ortalitylity improvementimprovement SupplementaryInformation Dr a f t 1 2 / 1 2 / 2 0 1 8 plementaryplementary In TOWN OFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2017 MAJORGOVERNMENTFUNDSCHEDULES (OTHERTHANTHEGENERALFUND)AND NONMAJORGOVERNMENTALFUNDS ScheduleofRevenue,ExpendituresandChangesinFundBalances–BudgetandActual(GAAP): AppropriatedReservesFundisusedtoaccountforresourcesprovidedforcapitalprojectsnotfullyfundedfrom othersources. CapitalProjectsFunds: StormDrainBasinFundswereestablishedtoaccountforfeespaidinconjunctionwiththedevelopmentin specifieddrainageareas. ConstructionTaxFundswereestablishedtoaccountfortaxleviesonbuildingadditionsoralterationsincluding capitalimprovements,undergroundutilitiesandparks. GasTaxFundwasestablishedtoaccountforrevenueandexpendituresundertheStateofCaliforniaStreetsand HighwaysCodeSections2106,2107and2107.5.Therevenuesmustbeusedforthemaintenanceand constructionofstreets. SpecialRevenueFunds: CommunityDevelopmentBlockGrantFundwasestablishedtoaccountforgrantfundsreceivedandexpended undertheCommunityDevelopmentActof1974. NonͲPointSourceMaintenanceFundwasestablishedtocomplywithobligationsundertheNationalPollutant DischargeEliminationsystempermitissuedbytheCaliforniaRegionalWaterQualityControlBoard. LightingandLandscapeFundwasestablishedtoaccountformaintenanceoftrees,landscaping,irrigation systemsandlightingwithintheboundariesofTractNo.8439. Dr a f t 1 2 / 1 2 / 2 0 1 8 8 AAP)P): ectss notno fullyy fundedfunded f n conjunctionconjunction withwith tt viesvies onon buildingild additaddi andd expendituresexpenditures unun 5.Thehe revenueseven mm rantt FundFun was establiestabl ment ActAct ofof 1974.19 enancenance FundF was esta systemtem permitpermi issued ndscapeape FundFund waswa e ighting withinwithin thethe bouou Variance Original FinalPositive Budget Budget Actual (Negative) REVENUES Licenses&permits 110,000$110,000$204,391$94,391$ Intergovernmental 760,6631,890,723261,534(1,629,189) Chargesforservices 471,429506,058424,556(81,502) Interest 20,00020,00031,94511,945 Other Ͳ337,51958,898(278,621) TotalRevenues 1,362,0922,864,300981,324(1,882,976) EXPENDITURES Capitaloutlay 8,397,99922,173,5688,894,53113,279,037 TotalExpenditures 8,397,99922,173,5688,894,53113,279,037 EXCESS(DEFICIENCY)OFREVENUES OVEREXPENDITURES (7,035,907)(19,309,268)(7,913,207)11,396,061 OTHERFINANCINGSOURCES(USES) Transfersin 2,482,2272,718,4322,638,224(80,208) Transfers(out) (507,824)(605,824)(525,616)80,208 TotalOtherFinancingSources(Uses) 1,974,4032,112,6082,112,608 Ͳ CHANGEINFUNDBALANCE (5,061,504)$(17,196,660)$(5,800,599)11,396,061$ BEGINNINGFUNDBALANCE 18,102,031 ENDINGFUNDBALANCE 12,301,432$ BUDGETANDACTUAL(GAAP) FORTHEFISCALYEARENDEDJUNE30,2018 TOWNOFLOSGATOS APPROPRIATEDRESERVESFUND COMBININGSCHEDULEOFREVENUES,EXPENDITURESANDCHANGESINFUNDBALANCE Dr a f t 1 2 / 1 2 / 2 0 1 8 04,39139 $$ 261,534534(1,6(1, 424,556424( 31,94531,94 58,898898 4,3000 981,3249 22,173,56822,173,5688 22,173,56822,173,568 7,035,907),035 (19,3099,30 2,482,2272,482,227 (507,824)(5 1,974,1,974 (5,(5$$ 8 0 01 20 20 /2 2 2 2/2 12 12 2/2 2 2 Total Storm Construction Gas Capital Community Drains Tax Tax Projects Development Funds Fund Fund Funds Fund ASSETS Cash&Investments 2,583,655$2,997,984$1,364,108$6,945,747$94,412$ Receivables: Accounts Ͳ Ͳ Ͳ Ͳ Ͳ IntergovernmentalReceivable Ͳ Ͳ66,37066,37058,344 LongTermNotesReceivable Ͳ Ͳ Ͳ Ͳ78,752 TotalAssets 2,583,655$2,997,984$1,430,478$7,012,117$231,508$ LIABILITIES AccountsPayable 97,657$ Ͳ$727,330$824,987$ Ͳ$ AccruedPayrollandBenefits ͲͲ Ͳ Ͳ Ͳ Duetootherfunds Ͳ Ͳ Ͳ Ͳ Ͳ Unearnedrevenue Ͳ Ͳ Ͳ Ͳ64,855 TotalLiabilities 97,657 Ͳ727,330824,98764,855 FUNDBALANCE Restrictedfor: RepairsandMaintenance Ͳ Ͳ Ͳ Ͳ Ͳ CapitalProjects2,485,9982,997,984703,1486,187,130 Ͳ Assignedfor: SpecialRevenueFunds Ͳ Ͳ Ͳ Ͳ166,653 TotalFundBalances 2,485,9982,997,984703,1486,187,130166,653 TotalLiabilitiesandFundBalances 2,583,655$2,997,984$1,430,478$7,012,117$231,508$ Ͳ$ Ͳ$(Continued) CAPITALPROJECTSFUNDS TOWNOFLOSGATOS NONMAJORGOVERNMENTALFUNDS COMBININGBALANCESHEETS JUNE30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 tsts ndsds 6,945,7476,945,$$$ Ͳ 66,37066,37066 Ͳ 984 1,430,4780,478$$ Ͳ727$ Ͳ ͲͲͲ ͲͲ 97,65797,657 ͲͲ 2,485,9485, and Fundund BalancesBalances 8 /20 20 2/2/2/2 2/2 2/2/1 2/2/ t 8 Total NonͲPoint Total Nonmajor Source Lightingand SpecialRevenue Governmental Maintenance Landscaping Funds Funds Ͳ$199,462$293,874$7,239,621$ 145,406 Ͳ145,406145,406 Ͳ33658,680125,050 Ͳ Ͳ78,75278,752 145,406$199,798$576,712$7,588,829$ 1,617$1,114$2,731$827,718$ 3,882 Ͳ3,8823,882 68,569 Ͳ68,56968,569 Ͳ Ͳ64,85564,855 74,0681,114140,037965,024 Ͳ198,684198,684198,684 Ͳ Ͳ Ͳ6,187,130 71,338 Ͳ237,991237,991 71,338198,684436,6756,623,805 145,406$199,798$576,712$7,588,829$ (Concluded) SPECIALREVENUEFUNDS 18 3,88282 68,56968,569 64,85564 965,024965,02 198,6848,6841919 Ͳ ͲͲ237,991 198,6848,68443636 199,798199,798$$$ 2 ft ft af af ra ra a a 2/1 2/ Storm Construction Gas Total Drain Tax Tax CapitalProjects Funds Fund Fund Funds REVENUES PropertyTaxes Ͳ$ Ͳ$ Ͳ$ Ͳ$ OtherTaxes Ͳ31,838 Ͳ31,838 Licenseandpermits 803,770 Ͳ Ͳ803,770 Intergovernmental Ͳ Ͳ852,300852,300 ChargesforServices Ͳ Ͳ Ͳ Ͳ Interest 3,47837,03013,30753,815 OtherͲ Ͳ Ͳ Ͳ TotalRevenues 807,24868,868865,6071,741,723 EXPENDITURES Current: ParksandPublicWorks ͲͲ Ͳ Ͳ SanitationandOther Ͳ ͲͲ Ͳ CapitalOutlay 126,692 Ͳ749,965876,657 TotalExpenditures 126,692 Ͳ749,965876,657 EXCESS(DEFICIENCY)OFREVENUES OVEREXPENDITURES 680,55668,868115,642865,066 OTHERFINANCINGSOURCES(USES) Transfers(out)Ͳ Ͳ(106,000)(106,000) TotalOtherFinancingSources(Uses)Ͳ Ͳ(106,000)(106,000) ChangesinFundBalances 680,55668,8689,642759,066 FundBalancesͲBeginningofyear,asrestated 1,805,4422,929,116693,5065,428,064 FundBalancesͲEndofyear 2,485,998$2,997,984$703,148$6,187,130$ (Continued) CAPITALPROJECTSFUNDS TOWNOFLOSGATOS NONMAJORGOVERNMENTALFUNDS COMBININGSCHEDULEOFREVENUES,EXPENDITURES,ANDCHANGESINFUNDBALANCES FORTHEFISCALYEARENDEDJUNE30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 ͲͲ$$ ͲͲ Ͳ ͲͲ852,3002,300 Ͳ 37,03037,03013,3 ͲͲ 68,8688,8 Ͳ Ͳ 126,692126 126,6926,69 ) eses (Uses)(Uses) ces Beginningning off year,year,asa re cesͲEndnd ofo yearr 8 20 20 //2 2 /1 2/1 8 Community NonͲPoint Total Development Source Lightingand SpecialRevenue Fund Maintenance Landscaping Funds Total Ͳ$ Ͳ$34,574$34,574$34,574$ Ͳ Ͳ Ͳ Ͳ31,838 Ͳ231,323 Ͳ231,3231,035,093 Ͳ903 Ͳ903853,203 Ͳ345,365 Ͳ345,365345,365 Ͳ Ͳ2,4162,41656,231 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ577,59136,990614,5812,356,304 Ͳ Ͳ26,15926,15926,159 Ͳ521,147 Ͳ521,147521,147 Ͳ Ͳ6,8706,870883,527 Ͳ521,14733,029554,1761,430,833 Ͳ56,4443,96160,405925,471 Ͳ Ͳ(4,920)(4,920)(110,920) Ͳ Ͳ(4,920)(4,920)(110,920) Ͳ56,444(959)55,485814,551 166,65314,894199,643381,1905,809,254 166,653$71,338$198,684$436,675$6,623,805$ (Concluded) SPECIALREVENUEFUNDS Dr a f t 1 2 / 1 2 / 2 0 1 8 ͲͲ 56,3046,304 5959 26,15926,159 1,14747 521,14721,147 6,870870883,583,5 554,17654,11,41, 3,9613,9 60,4050,405 (4,920) ͲͲ(4,920) 56,44444(9(9 14,89414,894 653 71,3381,338$$ /1 2/1 t t1 1 ft ft ra a D D Dr a Dr a 2 /2 /1 /1 Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Propertytaxes Ͳ$ Ͳ$ Ͳ$ Ͳ$ Ͳ$ Ͳ$ Othertaxes Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Licenseandpermits Ͳ Ͳ Ͳ231,323231,323 Ͳ Intergovernmental Ͳ Ͳ Ͳ Ͳ903903 Chargesforservices Ͳ Ͳ Ͳ353,071345,365(7,706) Interest Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ TotalRevenues Ͳ Ͳ Ͳ584,394577,591(6,803) EXPENDITURES Parksandpublicworks ͲͲ Ͳ Ͳ ͲͲ Sanitationandother Ͳ Ͳ Ͳ564,910521,14743,763 Capitaloutlay Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ TotalExpenditures Ͳ Ͳ Ͳ564,910521,14743,763 EXCESS(DEFICIENCY)OFREVENUES OVEREXPENDITURES Ͳ Ͳ Ͳ19,48456,44436,960 OTHERFINANCINGSOURCES(USES) Operatingtransfers(out)Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ TotalOtherFinancingSources(Uses)Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ CHANGEINFUNDBALANCE Ͳ$Ͳ Ͳ$19,484$56,44436,960$ BEGINNINGFUNDBALANCE 166,65314,894 ENDINGFUNDBALANCE 166,653$71,338$ (Continued) BLOCKGRANT NONͲPOINT SOURCEMAINTENANCE TOWNOFLOSGATOS BUDGETEDNONMAJORFUNDS COMBININGSCHEDULEOFREVENUES,EXPENDITURESANDCHANGESINFUNDBALANCES BUDGETANDACTUAL(GAAP) FORTHEFISCALYEARENDEDJUNE30,2018 COMMUNITYDEVELOPMENT Dr a f t 1 2 / 1 2 / 2 0 1 8 ActualActual ͲͲͲ$$$ ͲͲͲͲ 231,32323231,3232 Ͳ9 353,07107134 ͲͲͲ Ͳ584,3944 394 ͲͲ ͲͲ ͲͲͲ Ͳ ͲͲͲ ͲͲ ͲͲ ͲͲ$$ 8 20 20 0 /20 /20 2 2/ 12 2 2/2/1 2/2/ 12 2 12 12 Variance Variance Variance Positive Positive Positive Budget Actual (Negative) Budget Actual (Negative) Budget Actual (Negative) 38,220$34,574$(3,646)$ Ͳ$Ͳ$Ͳ$Ͳ$Ͳ$Ͳ$ ͲͲͲͲͲͲ30,00031,8381,838 ͲͲͲ92,500803,770711,270 ͲͲͲ ͲͲͲͲͲͲͲͲͲ ͲͲͲͲͲͲͲͲͲ 6412,4161,7758,7403,478(5,262)14,28037,030 Ͳ 38,86136,990(1,871)101,240807,248706,00844,28068,8681,838 31,53326,1595,374 ͲͲͲͲͲͲ ͲͲͲͲͲͲͲͲͲ 82,5006,87075,630179,750126,69253,058112,000 Ͳ112,000 114,03333,02981,004179,750126,69253,058112,000 Ͳ112,000 (75,172)3,96179,133(78,510)680,556759,066(67,720)68,868136,588 (4,920)(4,920) ͲͲͲͲͲͲͲ (4,920)(4,920) ͲͲͲͲͲͲͲ (80,092)$(959)79,133$(78,510)$680,556759,066$(67,720)$68,868136,588$ 199,6431,805,4422,929,116 198,684$2,485,998$2,997,984$ (Continued) STORMDRAINFUNDS CONSTRUCTIONTAXLIGHTINGANDLANDSCAPING Dr a f t 1 2 / 1 2 / 2 0 1 8 ActualActual Ͳ$$$$ 000 31,838,838 Ͳ Ͳ ͲͲ Ͳ 62)62)14,28014,2 06,00806,008 44,28080 Ͳ ͲͲ ͲͲ 6,6922 53,05853,058 126,692126,653,05853,058 680,55667 ͲͲ Ͳ (78,510)(78$$ 8 2 20 0 /2 /20 2 2// 12 12 2/2/1 1 2/2/ 12 2 12 12 Variance Variance Positive Positive Budget Actual (Negative) Budget Actual (Negative) REVENUES Propertytaxes Ͳ$ Ͳ$ Ͳ$38,220$34,574$(3,646)$ Othertaxes Ͳ Ͳ Ͳ30,00031,8381,838 Licenseandpermits Ͳ Ͳ Ͳ323,8231,035,093711,270 Intergovernmental 866,940852,300(14,640)866,940853,203(13,737) Chargesforservices Ͳ Ͳ Ͳ353,071345,365(7,706) Interest 1,10013,30712,20724,76156,2318,720 TotalRevenues 868,040865,607(2,433)1,636,8152,356,304696,739 EXPENDITURES Parksandpublicworks Ͳ ͲͲ31,53326,1595,374 Sanitationandother Ͳ Ͳ Ͳ564,910521,14743,763 Capitaloutlay 1,213,812749,965463,8471,588,062883,527704,535 TotalExpenditures 1,213,812749,965463,8472,184,5051,430,833753,672 EXCESS(DEFICIENCY)OFREVENUES OVEREXPENDITURES (345,772)115,642461,414(547,690)925,4711,473,161 OTHERFINANCINGSOURCES(USES) Operatingtransfers(out) (106,000)(106,000) Ͳ(110,920)(110,920) Ͳ TotalOtherFinancingSources(Uses) (106,000)(106,000) Ͳ(110,920)(110,920)Ͳ CHANGEINFUNDBALANCE (451,772)$9,642461,414$(658,610)$814,5511,473,161$ BEGINNINGFUNDBALANCE 693,5065,809,254 ENDINGFUNDBALANCE 703,148$6,623,805$ FORTHEFISCALYEARENDEDJUNE30,2018 TOWNOFLOSGATOS BUDGETEDNONMAJORFUNDS COMBININGSCHEDULEOFREVENUES,EXPENDITURESANDCHANGESINFUNDBALANCES BUDGETANDACTUAL(GAAP) TOTALS (Concluded) GASTAX Dr a f t 1 2 / 1 2 / 2 0 1 8 Actualctual 34,57434,57$$$$ 00 31,838838 3,823 1,035,0931,03 866,940866,940853,2053,2 353,07135345 24,76124,76 2,433)2,433)1,636,8151,636,815 ͲͲ31,531, Ͳ565 965 463,847631 749,9659,96 463,84763,847 115,642146 06,000)6,00 (106,000)06,0 (106,000)(106,00 (106,0006,00 (451,772)(451$$ 8 2 20 0 /2 /20 2 2// 12 12 2/2/1 1 2/2/ 12 2 12 12 8 TOWN OFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2017 PROPRIETARYFUNDS INTERNALSERVICEFUNDS Internalservicefundsareusedtofinanceandaccountforspecialactivitiesandserviceperformedbya designeddepartmentforotherdepartmentsintheTownonacostreimbursementbasis. Theconceptofmajorfundsdoesnotextendtointernalservicefundsbecausetheyareusedforinternal activitiesonly.IntheGovernmentͲWideStatementofActivities,thenetrevenuesandexpensesofthe internalservicefundsareallocatedtotheTowndepartmentsorprogramsthatgeneratedthem,thus eliminatinginternalservicefunds However,internalservicefundsarestillpresentedseparatelyinthefundfinancialstatementsandincludethe followingfunds: EquipmentReplacementFundwasestablishedtoaccountforthereplacementofmajorTownequipmentand allvehiclereplacement. Workers’CompensationFundwasestablishedtoaccountforfutureclaimsthatmayoccurrelatedtoworkers compensationinjuries. SelfͲInsuranceFundwasestablishedtoaccountforfuturegeneralliabilityclaimsagainsttheTown. StoresFundwasestablishedtoaccountforthepurchaseofphotocopyequipment,postageandbulkmeter expenses. InformationTechnologyFundwasestablishedtoaccountforthereplacementofmanagementinformation computersystemsandcomponents. VehicleMaintenanceFundwasestablishedtoaccountforpreventativemaintenanceandrepairprovidedforall Townvehiclesandequipment. BuildingMaintenanceFundwasestablishedtoaccountforpreventativemaintenanceandrepairforallTown buildings. Dr a f t 1 2 / 1 2 / 2 0 1 8 medmed byby e usedsed for internalternal nd expexpensesnses of thehe generatedgenerate them,m,thusth ndd financialfinancial statemestateme r thethe replacementreplacement ofof countnt forfo futuree claimclaim ountunt forfor futuretur genera untun forr the purchasepurchase nd was establishedhed to mponents.mponen ce Fundd waswas establishstablis d equipment.uipment. aintenancenance FundFu wawa gs.s. Equipment Worker's Self Information Vehicle Facilities Replacement Comp Insurance Stores Technology Maintenance Maintenance Total ASSETS Cash&Investments 2,345,816$2,170,510$1,424,107$229,147$3,080,748$605,934$891,604$10,747,866$ RestrictedCash& Investments Ͳ37,229 Ͳ Ͳ Ͳ Ͳ Ͳ37,229 Receivables: Accounts Ͳ118,926 Ͳ Ͳ2,09231216,483137,813 Materials,Suppliesand Deposits Ͳ Ͳ Ͳ173 Ͳ27,838 Ͳ28,011 Equipment(Net)Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ558558 TotalAssets 2,345,8162,326,6651,424,107229,3203,082,840634,084908,64510,951,477 DeferredOutflowsof Resources PensionPlan Contributions Ͳ31,52822,116 Ͳ84,92138,71661,030238,311 Pensionrelatedamounts Ͳ23,06455,707 Ͳ124,69856,85089,652349,971 TotalDeferred OutflowsofResources Ͳ54,59277,823 Ͳ209,61995,566150,682588,282 LIABILITIES AccountsPayable 17,20325,3494371,530120,4556,52091,658263,152 AccruedPayrolland Benefits 3433,4305,161 Ͳ14,0726,2026,31835,526 DuetoOther Governments Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ ClaimsPayable Ͳ1,472,324131,743 Ͳ Ͳ Ͳ Ͳ1,604,067 NetPensionLiabilities Ͳ255,060363,674Ͳ979,569446,588704,0162,748,907 TotalLiabilities 17,5461,756,163501,0151,5301,114,096459,310801,9924,651,652 DeferredInflowsof Resources Pensionrelatedamounts Ͳ4,3126,146 Ͳ16,5557,54911,89846,460 TotalDeferredInflows ofResources Ͳ4,3126,146 Ͳ16,5557,54911,89846,460 NETPOSITION Netinvestmentincapital assets Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ558558 Restrictedfor: Workerscompensation claims Ͳ37,229 Ͳ Ͳ Ͳ Ͳ Ͳ37,229 Unrestricted 2,328,270583,553994,769227,7902,161,808262,791244,8796,803,860 TotalNetPosition 2,328,270$620,782$994,769$227,790$2,161,808$262,791$245,437$6,841,647$ TOWNOFLOSGATOS INTERNALSERVICEFUNDS COMBININGSTATEMENTOFNETPOSITION JUNE30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 891,604891,604 ͲͲ Ͳ 3121216,4831 Ͳ27,83838 ͲͲͲ 3,082,8403,082,634,0848 Ͳ84,9214,921 70770 Ͳ121 77,82323ͲͲ 5,349,4374 3,4303,4305,1615,161 ͲͲ ͲͲ1,472,324 Ͳ255,060255 17,54617,5461,756 of atedated amountsamounts DDeefferreerredd IInnflflowsows ResourcesResou TIONTION ntnt inin capca 20 20 0 /2 /2 /1 /12 2 2/1 2/1 ft ft af af Dr a D Equipment Worker's Self Information Vehicle Facilities Replacement Comp Insurance Stores Technology Maintenance Maintenance Total OPERATING REVENUES Chargesfor services 622,313$884,190$506,519$127,786$1,172,455$586,654$1,142,513$5,042,430$ Interest Ͳ5 Ͳ Ͳ Ͳ Ͳ Ͳ5 Useofmoneyand property Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ221,761221,761 Otherlocaltaxes Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ31,83831,838 Other 50,303250,945 Ͳ Ͳ Ͳ Ͳ62,923364,171 TotalOperating Revenues 672,6161,135,140506,519127,7861,172,455586,6541,459,0355,660,205 OPERATING EXPENSES Salariesand benefits 11,533136,961203,614 Ͳ581,371269,302382,3131,585,094 Insurance expenses Ͳ597,424127,859 Ͳ Ͳ Ͳ Ͳ725,283 Depreciation expenses Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ957957 Servicesand supplies 624,867682,28365,717100,433685,977236,9311,092,4583,488,666 TotalOperating Expenses 636,4001,416,668397,190100,4331,267,348506,2331,475,7285,800,000 OperatingIncome (loss)36,216(281,528)109,32927,353(94,893)80,421(16,693)(139,795) Transfersin 398,000 Ͳ ͲͲ5,371 Ͳ300,000 703,371 NetTransfers 398,000 Ͳ Ͳ Ͳ5,371 Ͳ300,000703,371 ChangeinNet Position 434,216(281,528)109,32927,353(89,522)80,421283,307563,576 BEGINNINGNET POSITION 1,894,054902,310885,440200,4372,251,330182,370(37,870)6,278,071 ENDINGNET POSITION 2,328,270$620,782$994,769$227,790$2,161,808$262,791$245,437$6,841,647$ TOWNOFLOSGATOS INTERNALSERVICEFUNDS COMBININGSTATEMENTOFREVENUESANDCHANGESINNETPOSITION FORTHEFISCALYEARENDDEDJUNE30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 1,142,513$1,142,513 $$ Ͳ Ͳ ͲͲ221,761,761 Ͳ31,8383 Ͳ62,962, 72,4552,455 586,654586,654 Ͳ581,3711,37 Ͳ ͲͲͲ 65,71765,71100,433 688 397,190397,19011 (281,528)28 109,32929 Ͳ 8,00000 Ͳ 434,216434,216(281,(28 ET 1,894,0541,894,054 NETNET TIONION 2,328,$2,328$ 01 01 20 20 2/2/1 1 12 2 1 1 ft ft 1 1 ft ft Dr a D D Equipment Worker's Self Information Vehicle Facilities Replacement Comp Insurance Stores Technology Maintenance Maintenance Total CASHFLOWSFROM OPERATINGACTIVITIES Receiptsfromcustomers 674,205$ 1,016,214$ 506,519$ 127,786$ 1,172,219$ 586,342$ 1,484,787$ 5,568,072$ Paymentstosuppliers (623,774)(672,578)(67,566)(99,485)(621,183)(264,691)(1,104,650)(3,453,927) Paymentstoemployees (11,516)(116,874)(174,351) Ͳ(503,918)(234,832)(330,352)(1,371,843) Claimspaid Ͳ(224,835)(244,772) Ͳ Ͳ Ͳ Ͳ(469,607) NetCashProvided(Used) byOperatingActivitie 38,9151,92719,83028,30147,11886,81949,785272,695 CASHFLOWSFROM NONCAPITALFINANCING ACTIVITIES TransfersOut 398,000 Ͳ Ͳ Ͳ5,371 Ͳ300,000703,371 NetCashProvided(Used) byNoncapitalFinancing Activities 398,000 Ͳ Ͳ Ͳ 5,371 Ͳ 300,000 703,371 NetIncrease(Decrease)in CashandInvestments 436,9151,92719,83028,30152,48986,819349,785976,066 CashandinvestmentsͲ beginningofyear 1,908,9012,205,8121,404,277200,8463,028,259519,115541,8199,809,029 CashandinvestmentsͲ endofyear 2,345,816$2,207,739$1,424,107$229,147$3,080,748$605,934$891,604$10,785,095$ Ͳ$ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ ReconciliationofOperating IncometoCashFlows fromOperatingActivities: OperatingIncome 36,216$(281,528)$109,329$27,353$(94,893)$80,421$(16,693)$(139,795)$ Adjustmentstoreconcile operatingincometo cashflowsfrom operatingactivities: Depreciation Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ957957 Changeinassetsand liabilities: Receivables,net 1,589(118,926) Ͳ Ͳ(236)(312)25,752(92,133) Materialandsupplies Ͳ Ͳ Ͳ(173) Ͳ(2,818) Ͳ(2,991) Deferredoutflowsof resources Ͳ(5,587)(7,960) Ͳ(21,447)(9,778)(15,453)(60,225) Netpensionliabilities Ͳ23,94034,186 Ͳ92,10341,98866,235258,452 Deferredinflowsof resources Ͳ1,8512,638 Ͳ7,1073,2435,11119,950 Accountspayable 1,0939,705(1,849)1,12164,794(24,775)(12,192)37,897 Accruedpayrolland benefits 17(117)399 Ͳ(310)(983)(3,932)(4,926) Claimspayable 372,589(116,913) Ͳ Ͳ Ͳ Ͳ255,676 Duetoother government Ͳ Ͳ Ͳ Ͳ Ͳ(167) Ͳ(167) CashFlowsFrom OperatingActivities 38,915$1,927$19,830$28,301$47,118$86,819$49,785$272,695$ TOWNOFLOSGATOS INTERNALSERVICEFUNDS COMBININGSTATEMENTOFCASHFLOWS FORTHEFISCALYEARENDEDJUNE30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 484,787484,787 (1,104,650)1,104,650) (330,352)(330,352) Ͳ 86,8191949,78585 5,3715,371 Ͳ5,3715,371 5,3715,371 28,3018,352,4892,48 77 200,846203,023,02 1,424,10707 229,147147$ Ͳ 81,528)528)109,3299,329$$$ ͲͲ Ͳ 1,589589(118,92118,92 es Ͳ s of ͲͲ sion liabilitieitiess ͲͲ reredd ininflflowsows of sourcesourc AccountsAccou payable cruecruedd payroll andd tsts ayableayable rr 1 18 01 01 8 20 20 0 2/2 /2 1 12 2/1 2/1 2/1 2/1 8 8 TOWN OFLOSGATOS,CALIFORNIA COMPREHENSIVEANNUALFINANCIALREPORT FORTHEFISCALYEARENDEDJUNE30,2017 FIDUCIARYFUNDS PRIVATEPURPOSETRUSTFUNDS LibraryPrivatePurposeTrustFundwasestablishedtoprovidefortheservicingofdonationsandbequests totheTown'sLibraryProgram. RDASuccessorAgencyPrivatePurposeTrustFundwasestablishedtoaccountfortheassetsandliabilities transferredfromthedissolutionoftheTown'sformerRedevelopmentAgencyandthecontinuing operationsrelatedtoexistingRedevelopmentAgencyobligations. Dr a f t 1 2 / 1 2 / 2 0 1 8 ndnd bequbeq e assetssets and liabilitiesliabilities the continuingontinuin RDA Successor Library Agency Total ASSETS Cashandinvestments(Note2) 508,770$1,690,250$2,199,020$ Restrictedcashandinvestments(Note2)Ͳ1,985,8641,985,864 Accountsreceivable 38,500 Ͳ38,500 Loansreceivable(Note3)Ͳ563,761563,761 Capitalassets(Note5): Nondepreciable Ͳ5,257,4225,257,422 Depreciable,netofaccumulateddepreciation Ͳ1,627,0841,627,084 TotalAssets 547,27011,124,38111,671,651 LIABILITIES Accountspayable 11,3374311,380 Duetoothergovernments 189Ͳ189 Interestpayable Ͳ326,266326,266 LongͲtermdebt(Note6): Duewithinoneyear Ͳ1,150,0001,150,000 Dueinmorethanoneyear Ͳ16,981,85516,981,855 TotalLiabilities 11,52618,458,16418,469,690 NETPOSITION Heldintrust 535,744(7,333,783)(6,798,039) TotalNetPosition 535,744$(7,333,783)$(6,798,039)$ TOWNOFLOSGATOS PRIVATEPURPOSETRUSTFUNDS COMBININGSTATEMENTOFFIDUCIARYNETPOSITION JUNE30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 90,25025 $$ 1,985,864864 1,91 Ͳ 563,761563,7 ͲͲ5,257,4225,257,422 ͲͲ1,627,081,62 547,270547,27011,1211,1 11,33737 189 8 20 20 /20 20 1 RDA Successor Library Agency Total ADDITIONS Propertytaxes Ͳ$1,958,325$1,958,325$ Investmentearnings 6,72422,78829,512 Gifts,bequestsandendowments 74,315 Ͳ74,315 Other Ͳ1,914,7391,914,739 TotalAdditions 81,0393,895,8523,976,891 DEDUCTIONS Programexpenses Ͳ1,927,753 1,927,753 InterestandfiscalagencyexpensesofRDA Ͳ749,832749,832 Libraryservices 77,252 Ͳ77,252 Depreciationexpense Ͳ101,693101,693 TotalDeductions 77,2522,779,2782,856,530 CHANGEINNETPOSITION 3,7871,116,5741,120,361 NETPOSITIONͲBEGINNINGOFYEAR 531,957(8,450,357)(7,918,400) NETPOSITIONͲENDOFYEAR 535,744$(7,333,783)$(6,798,039)$ TOWNOFLOSGATOS PRIVATEPURPOSETRUSTFUNDS COMBININGSTATEMENTOFCHANGESINFIDUCIARYNETPOSITION FORTHEFISCALYEARENDEDJUNE30,2018 Dr a f t 1 2 / 1 2 / 2 0 1 8 58,32532 $$ 22,788788 Ͳ 1,914,7391,914,7 399 3,895,85252 ͲͲ1,921,9 ͲͲ 77,25252 ͲͲ 77,2577, 8 01 8 0 01 2/2 2/ 8 Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional STATISTICALSECTION Dr a f t 1 2 / 1 2 / 2 0 1 8 STATISTICALATISTICAL S Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional STATISTICAL(UNAUDITED) ThispartoftheTownofLosGatosComprehensiveAnnualFinancialReport(“CAFR”)presentsthedetailed informationasacontextforunderstandingwhattheinformationinthefinancialstatements,notedisclosures, andrequiredsupplementaryinformationsaysabouttheTown’soverallfinancialhealth. FinancialTrends TheseschedulescontaintrendinformationtohelpthereaderunderstandhowTown’sfinancial performanceandwellͲbeinghavechangedovertime.(Schedule1,Schedule2,Schedule3,andSchedule 4). RevenueCapacity TheseschedulescontaininformationtohelpthereaderassessoneoftheTown’smostsignificantlocal revenuesource,thepropertytax(Schedule5,Schedule6,Schedule7,andSchedule8). DebtCapacity TheseschedulespresentinformationtohelpthereaderassesstheaffordabilityoftheTown’scurrent levelsofoutstandingdebtanditsabilitytoissueadditionaldebtinthefuture(Schedule9,Schedule10, andSchedule11) DemographicandEconomicInformation Theseschedulesofferdemographicandeconomicindicatorstohelpthereaderunderstandthe environmentwithinwhichtheTown’sfinancialactivitiestakeplace(Schedule12,Schedule13,and schedule14). OperatingInformation Theseschedulescontainserviceandinfrastructuredatatohelpthereaderunderstandhowthe informationintheTown’sCAFRrelatestotheservicestheTownprovidesandactivitiesitperforms (Schedule15andSchedule16). Dr a f t 1 2 / 1 2 / 2 0 1 8 and howhow Townn’s’s finafin lee 2,2,Schedulehedule 3,3,and S sesss oneo of theth TownTow 6,6,ScheduleSchedu 7,andand ScSc elpelp thee readerread assesssess to issueissu additionaladdition de on demographicographi andd ecoec which the Town’swn’s fina on schedulesules containcontain se rmationon inin thethe Town’Tow Scheduleule 15 andnd ScheSche TownofLosGatos Schedule1 NetPositionbyComponent LastTenFiscalYears (AccrualBasisofAccounting) Fiscal NetInvestment Total Year inCapitalAssets RestrictedUnrestricted NetPosition 2009 52,665,506 15,663,436 51,619,635 119,948,577 2010 50,129,550 26,723,994 47,191,225 124,044,769 2011 72,567,355 14,652,823 29,017,520 116,237,698 (1) 2012 90,333,451 5,167,236 37,192,210 132,692,897 2013 92,558,523 3,949,583 41,480,377 137,988,483 2014 93,251,117 4,485,246 44,393,265 142,129,628 2015 93,687,029 5,663,182 7,180,919 106,531,130 (2) 2016 93,383,855 6,386,014 12,744,637 112,514,506 2017 96,265,652 5,627,707 15,134,420 117,027,779 2018 102,098,729 6,992,747 170,590 109,262,066 (1)ThedecreaseinRestrictedNetPositionfromFY2010toFY2011wasprimarilyduetotheissuanceofthe $15.7millionCertificatesofParticipationinFY2010. (2)ThedecreaseinRestrictedNetPositionGASB68ImplementationofUnfundedPensionLiabilityofStatement ofNetPosition. Dr a f t 1 2 / 1 vestmentnt Capitala Assets 52,665,50652,665,50 50,129,55050,129,550 72,567,3572,567,3 012 90,3390,33 2013 9292 20142014 2015 2016 20172017 201201 t1 1 /12 /2/ 12 / 2 0 1 8 2/2 0 1 8 2/2 0 1 2/2 0 1 2 2 2/2/2/2 2/2 2/2/ 12 12 2 8 2 /12 /12 /1 /1 2 2 /12 / 2 0 1 8 To w n of Lo s Ga t o s Sc h e d u l e 2 Ch a n g e s in Ne t Po s i t i o n La s t Te n Fi s c a l Ye a r s (A c c r u a l Ba s i s of Ac c o u n t i n g ) Ex p e n s e s 2 0 0 8 / 0 9 20 0 9 / 1 0 20 1 0 / 1 1 2 0 1 1 / 1 2 20 1 2 / 1 3 20 1 3 / 1 4 20 1 4 / 1 5 2 0 1 5 / 1 6 20 1 6 / 1 7 20 1 7 / 1 8 Go v e r n m e n t a l Ac t i v i t i e s : Ge n e r a l Go v e r n m e n t 5, 3 2 3 , 4 6 7 $ 4, 6 4 7 , 8 0 1 $ 5, 1 8 0 , 1 5 3 $ 6, 1 4 5 , 1 4 3 $ 6, 5 6 4 , 7 6 8 $ 6, 9 5 5 , 8 0 4 $ 6, 4 6 5 , 8 5 2 $ 6, 9 9 3 , 6 6 1 $ 6, 7 7 1 , 6 2 8 $ 9, 1 5 5 , 8 1 9 $ Po l i c e De p a r t m e n t 13 , 4 6 7 , 5 0 3 13 , 2 6 6 , 8 4 9 13 , 4 9 5 , 8 8 5 14 , 1 2 4 , 7 9 8 13 , 7 3 1 , 7 5 4 14 , 1 1 9 , 7 8 6 12 , 6 4 4 , 2 2 1 12 , 8 2 5 , 6 8 8 14 , 5 8 7 , 5 9 7 15 , 5 4 5 , 5 2 1 Pa r k s an d Pu b l i c Wo r k s 8 , 6 7 1 , 6 7 8 7, 4 5 8 , 0 8 5 7, 1 5 5 , 9 0 5 7, 8 2 7 , 3 3 2 7, 8 2 9 , 3 1 5 8, 1 5 4 , 6 1 6 8, 0 6 9 , 3 5 2 8, 3 2 0 , 6 2 3 9, 5 0 2 , 7 0 7 10 , 0 4 7 , 0 0 3 Co m m u n i t y De v e l o p m e n t 3, 3 8 9 , 1 5 1 3, 5 2 2 , 4 7 7 3, 0 9 9 , 2 6 9 3, 4 3 4 , 5 5 1 4, 0 9 4 , 1 8 8 4, 4 2 4 , 0 4 0 4, 0 4 7 , 7 3 8 3, 2 2 7 , 2 2 4 5, 0 9 3 , 4 5 9 4, 6 6 7 , 6 0 9 Co m m u n i t y Se r v i c e s 1, 1 6 2 , 2 8 4 1, 2 7 0 , 2 4 0 66 6 , 0 1 5 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Li b r a r y Se r v i c e s 2 , 0 6 7 , 4 7 6 2, 0 3 8 , 0 0 9 1, 8 9 2 , 8 0 5 1, 9 3 8 , 5 7 7 2, 1 2 8 , 8 2 3 2, 2 3 4 , 4 3 1 2, 5 5 3 , 4 1 4 2, 5 2 2 , 1 4 2 2, 8 6 8 , 7 4 8 3, 0 8 7 , 6 8 4 Sa n i t a t i o n 4 0 7 , 0 4 8 65 5 , 7 1 3 34 2 , 8 9 3 15 8 , 2 0 5 39 3 , 2 0 5 36 3 , 1 8 0 49 1 , 3 5 9 52 8 , 5 8 0 46 6 , 7 6 2 53 6 , 2 9 6 Re d e v e l o p m e n t 2, 9 3 9 , 5 5 0 6, 9 9 2 , 9 3 5 16 , 7 9 4 , 0 2 2 91 9 , 8 2 1 1, 2 7 7 , 0 6 3 21 , 6 8 7 Ͳ Ͳ Ͳ Ͳ In t e r e s t an d Fe e s 6 3 1 , 1 5 9 61 2 , 7 0 0 1, 2 7 8 , 3 8 1 1, 1 2 3 , 8 4 2 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ To t a l Go v e r n m e n t a l Ac t i v i t i e s 38 , 0 5 9 , 3 1 6 $ 40 , 4 6 4 , 8 0 9 $ 49 , 9 0 5 , 3 2 8 $ 35 , 6 7 2 , 2 6 9 $ 36 , 0 1 9 , 1 1 6 $ 36 , 2 7 3 , 5 4 4 $ 34 , 2 7 1 , 9 3 6 $ 34 , 4 1 7 , 9 1 8 $ 39 , 2 9 0 , 9 0 1 $ 43 , 0 3 9 , 9 3 2 $ Pr o g r a m Re v e n u e s Ch a r g e s fo r Se r v i c e s : Ge n e r a l Go v e r n m e n t 1, 1 5 5 , 4 0 9 $ 1, 3 3 7 , 7 7 2 $ 1, 1 5 6 , 9 3 1 $ 1, 1 3 1 , 4 2 4 $ 1, 4 1 6 , 5 9 3 $ 2, 1 7 9 , 0 7 7 $ 1, 8 8 8 , 2 1 3 $ 1, 5 1 7 , 0 1 2 $ 1, 6 6 9 , 0 2 0 $ 1, 7 0 1 , 1 4 6 $ Po l i c e De p a r t m e n t 1, 3 5 8 , 3 6 1 2, 1 1 0 , 3 5 7 2, 1 5 3 , 8 4 3 2, 3 2 4 , 3 9 7 2, 4 5 0 , 6 3 0 3, 2 0 6 , 5 7 9 3, 5 2 9 , 1 6 6 3, 2 7 8 , 5 8 5 2, 0 7 6 , 6 8 8 1, 8 8 8 , 3 5 9 Pa r k s an d Pu b l i c Wo r k s 6 3 7 , 9 3 3 77 9 , 3 0 0 81 0 , 0 2 2 1, 2 1 5 , 3 8 2 3, 0 4 4 , 4 0 1 1, 5 5 0 , 8 6 7 2, 2 0 6 , 7 6 5 1, 5 1 6 , 1 0 8 2, 1 5 5 , 8 4 1 4, 1 5 0 , 0 6 8 Co m m u n i t y De v e l o p m e n t 2, 7 0 0 , 6 1 4 3, 4 0 4 , 0 8 7 3, 0 9 7 , 1 9 2 3, 4 4 8 , 4 3 3 4, 6 4 9 , 4 4 4 5, 1 5 6 , 0 6 1 5, 0 2 7 , 4 9 7 4, 3 5 9 , 1 4 6 3, 8 0 3 , 6 2 6 3, 4 5 6 , 3 9 0 Co m m u n i t y Se r v i c e s 14 7 , 8 9 5 13 4 , 3 6 6 98 , 8 0 3 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Li b r a r y Se r v i c e s 5 6 , 9 3 2 57 , 6 3 3 39 , 4 9 1 37 , 6 6 2 50 , 6 9 6 51 , 7 7 5 53 , 1 2 3 46 , 1 9 2 46 , 7 4 6 14 , 7 0 2 Sa n i t a t i o n 1 3 5 , 0 0 0 13 5 , 0 0 0 13 5 , 0 0 0 13 5 , 0 0 0 40 3 , 2 9 4 32 8 , 6 4 8 32 8 , 8 6 8 36 8 , 8 1 3 41 0 , 6 2 6 77 1 , 4 4 2 Op e r a t i n g Gr a n t s an d Co n t r i b u t i o n s : Ge n e r a l Go v e r n m e n t 8, 8 3 4 10 , 2 3 7 15 , 6 3 8 6, 4 5 3 8, 4 0 6 Ͳ Ͳ 15 , 2 9 1 Ͳ Ͳ Po l i c e De p a r t m e n t 53 8 , 6 2 9 81 , 9 9 7 27 , 7 4 8 29 , 9 8 0 91 , 3 6 0 42 , 6 6 1 24 , 8 3 8 98 , 1 3 8 83 7 , 3 2 9 89 5 , 7 3 0 Pa r k s an d Pu b l i c Wo r k s 6 3 3 , 9 2 3 59 4 , 7 7 5 80 9 , 2 7 2 99 3 , 8 2 7 83 5 , 7 2 4 99 4 , 0 9 6 90 7 , 7 4 5 74 9 , 3 0 0 66 5 , 7 7 9 95 3 , 2 9 4 Co m m u n i t y Se r v i c e s 19 0 , 4 4 7 12 4 , 2 8 7 18 2 , 6 8 3 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Li b r a r y Se r v i c e s 1 0 , 4 6 2 13 , 9 9 6 10 , 6 6 2 10 9 40 14 , 6 6 2 4, 0 6 2 12 , 2 2 8 Ͳ 57 , 2 0 0 Sa n i t a t i o n 3 9 , 8 9 1 25 , 1 0 3 9, 0 0 2 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ca p i t a l Gr a n t s an d Co n t r i b u t i o n s : Ge n e r a l Go v e r n m e n t Ͳ Ͳ Ͳ Ͳ 16 9 , 2 7 0 Ͳ 17 6 , 7 0 5 Ͳ Ͳ Ͳ Pa r k s an d Pu b l i c Wo r k s 1 , 3 3 0 , 6 3 8 3, 0 7 4 , 4 5 3 2, 3 7 5 , 7 5 9 64 1 , 8 1 1 2, 7 5 7 , 6 6 0 2, 2 7 4 , 8 7 9 2, 3 3 8 , 1 5 4 1, 6 1 0 , 6 5 7 77 0 , 6 0 0 34 8 , 4 3 7 Co m m u n i t y De v e l o p m e n t Ͳ Ͳ Ͳ Ͳ Ͳ 19 , 3 6 0 Ͳ Ͳ 9, 2 8 0 Ͳ To t a l Pr o g r a m Re v e n u e s 8, 9 4 4 , 9 6 8 $ 11 , 8 8 3 , 3 6 3 $ 10 , 9 2 2 , 0 4 6 $ 9, 9 6 4 , 4 7 8 $ 15 , 8 7 7 , 5 1 8 $ 15 , 8 1 8 , 6 6 5 $ 16 , 4 8 5 , 1 3 6 $ 13 , 5 7 1 , 4 7 0 $ 12 , 4 4 5 , 5 3 5 $ 14 , 2 3 6 , 7 6 8 $ Ge n e r a l Re v e n u e s 2 0 0 8 / 0 9 20 0 9 / 1 0 20 1 0 / 1 1 2 0 1 1 / 1 2 20 1 2 / 1 3 20 1 3 / 1 4 20 1 4 / 1 5 2 0 1 5 / 1 6 20 1 6 / 1 7 20 1 7 / 1 8 Pr o p e r t y Ta x e s 1 8 , 3 4 3 , 0 6 3 $ 18 , 8 5 6 , 0 8 1 $ 18 , 2 2 6 , 0 0 1 $ 14 , 0 8 8 , 8 6 6 $ 11 , 9 6 8 , 3 7 7 $ 11 , 7 1 2 , 3 1 2 $ 12 , 9 3 1 , 6 0 3 $ 13 , 7 6 3 , 4 5 8 $ 14 , 7 5 6 , 2 1 4 $ 15 , 9 5 8 , 4 0 6 $ Sa l e s Ta x e s 8 , 4 8 7 , 0 0 0 8, 3 1 7 , 2 1 7 9, 9 7 1 , 4 0 9 9, 8 8 9 , 1 0 0 8, 7 5 7 , 4 2 8 8, 0 2 9 , 5 7 1 8, 2 0 2 , 6 7 8 7, 5 0 1 , 1 7 5 8, 9 2 5 , 2 7 6 7, 4 6 6 , 2 5 3 Fr a n c h i s e Ta x e s Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 2, 2 1 5 , 4 3 0 2, 2 5 8 , 8 9 2 2, 3 6 6 , 9 0 8 2, 4 7 4 , 8 1 4 Ot h e r Ta x e s 2 , 6 6 4 , 6 9 8 2, 6 2 3 , 6 2 2 2, 9 0 6 , 2 6 4 3, 6 9 8 , 7 5 3 3, 3 2 4 , 7 9 1 3, 7 1 8 , 4 0 5 2, 0 6 2 , 8 9 3 1, 9 9 7 , 4 9 7 2, 3 5 1 , 2 2 3 2, 6 6 7 , 8 4 0 Mo t o r Ve h i c l e in Li e u 1 0 1 , 2 6 5 92 , 5 9 5 13 9 , 8 1 4 15 , 2 3 8 15 , 7 9 0 13 , 0 6 8 Ͳ 12 , 3 0 8 14 , 0 5 6 16 , 4 8 3 In v e s t m e n t Ea r n i n g s 2, 9 4 9 , 1 1 9 1, 1 5 5 , 9 2 9 76 0 , 9 0 5 33 1 , 4 2 0 (1 3 3 , 3 7 5 ) 77 2 , 2 0 0 42 8 , 7 7 2 69 8 , 3 2 4 19 2 , 2 6 0 33 3 , 1 2 0 Lo s s on Di s p o s a l of Ca p i t a l As s e t s Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Sa l e of Pr o p e r t y 6, 5 2 5 , 0 0 0 Ͳ (8 7 0 , 1 2 7 ) Ͳ 54 , 4 2 5 ͲͲ Ͳ Ͳ Ͳ Mi s c e l l a n e o u s 66 , 8 0 2 52 , 4 5 9 41 , 9 4 3 2, 2 7 5 , 1 6 0 1, 1 5 4 , 6 4 7 35 0 , 4 6 8 81 3 , 3 2 4 59 8 , 1 7 0 52 8 , 9 4 6 62 2 , 1 0 5 Ex t r a o r d i n a r y Ga i n (L o s s ) Di s s o l u t i o n of RD A Ͳ Ͳ Ͳ 11 , 8 6 4 , 4 5 3 29 5 , 1 0 1 Ͳ Ͳ Ͳ Ͳ Ͳ To t a l Ge n e r a l Re v e n u e s 39 , 1 3 6 , 9 4 7 $ 31 , 0 9 7 , 9 0 3 $ 31 , 1 7 6 , 2 0 9 $ 42 , 1 6 2 , 9 9 0 $ 25 , 4 3 7 , 1 8 4 $ 24 , 5 9 6 , 0 2 4 $ 26 , 6 5 4 , 7 0 0 $ 26 , 8 2 9 , 8 2 4 $ 29 , 1 3 4 , 8 8 3 $ 29 , 5 3 9 , 0 2 1 $ Ch a n g e in Ne t Po s i t i o n 10 , 0 2 2 , 5 9 9 $ 2, 5 1 6 , 4 5 7 $ (7 , 8 0 7 , 0 7 3 ) $ 16 , 4 5 5 , 1 9 9 $ 5, 2 9 5 , 5 8 6 $ 4, 1 4 1 , 1 4 5 $ 8, 8 6 7 , 9 0 0 $ 5, 9 8 3 , 3 7 6 $ 2, 2 8 9 , 5 1 7 $ 73 5 , 8 5 7 $ Dr a f t 1 2 / 1 2 / $ 13 8, 6 7 3, 3 8 9 , 1 1, 1 6 2 , 2 8 4 2, 0 6 7 , 4 7 2, 0 6 40 7 , 0 4 40 7 , 8 2, 9 3 9 , 5 5 39 , 5 5 0 63 1 , 1 5 9 63 1 , 1 5 38 , 0 5 9 , 3 1 38 , 0 5 9 , 3 6 $$ 40 , 4 40 , 4 $$ 55 , 4 0 5 9 1, 3 3 7 , 7 7 2 $$ $ 36 1 1 2, 1 1 0 , 3 5 7 3 3 77 9 , 3 0 0 81 8 3, 4 0 4 , 0 8 7 3, 0 9 7 , 1 13 4 , 3 6 6 98 , 8 0 3 98 , 8 0 3 57 , 6 3 3 33 39 , 4 9 1 39 , 4 9 1 13 5 , 0 0 5, 0 0 0 0 13 5 , 0 0 35 0 37 15 , 6 3 15 , 6 3 8 8 27 , 7 4 27 7 4 8 8 29 29 80 9 , 2 7 2 99 3 , 8 2 9 18 2 , 6 8 3 18 2 , 6 8 3 Ͳ 10 , 6 6 2 10 , 6 6 2 10 9 10 9 9, 0 0 2 90 Ͳ Ͳ Ͳ Ͳ 16 9 16 9 64 1 , 8 1 1 2, 7 5 7 , 6 6 75 7 , 6 Ͳ Ͳ 9, 9 6 4 , 4 7 64 , 4 7 8 8 15 , 8 7 7 , 5 1 15 , 8 7 7 , 5 8 $$ $ D D D af f aft ft ft ft 2 2// aft 2/2 0 1 8 1 2 2 20 1 2 / 1 3 20 1 3 / 2 11 , 9 6 8 , 3 7 11 , 9 6 7 $$ 11 , 7 1 2 , 3 1 11 , 7 1 2 , 3 1 2 $ 8, 7 5 7 , 4 2 8 8, 0 2 9 , 5 7 57 1 1 Ͳ Ͳ ,3 2 4 , 7 9 32 4 , 7 9 1 1 3, 7 1 8 , 4 0 3, 7 1 8 , 4 5 2, 0 2, 0 5, 7 9 5, 7 9 0 0 13 , 0 6 ,0 6 8 8 37 5 ) 75 ) 77 2 , 2 0 72 , 2 0 0 0 42 8 , 7 7 2 42 8 Ͳ Ͳ Ͳ Ͳ 35 0 , 4 6 35 0 8 81 3 , 3 2 ,3 2 4 4 Ͳ Ͳ Ͳ 02 4 26 , 6 5 4 , 7 0 ,7 0 0 0 $ 26 , 8 2 9 , 8 2 $ 2 2/2 /2 2 2/2 /2 0 18 8, 8 6 7 , 9 0 8, 8 6 7 , 0 $ 5, 9 8 3 , 3 7 5, 9 8 6 6 $ $ 18 aft 2/2/ 01 8 18 18 18 18 18 18 To w n of Lo s Ga t o s Sc h e d u l e 3 Fu n d Ba l a n c e , Go v e r n m e n t a l Fu n d s La s t Te n Fi s c a l Ye a r s (M o d i f i e d Ac c r u a l Ba s i s of Ac c o u n t i n g ) 20 0 8 / 0 9 2 0 0 9 / 1 0 20 1 0 / 1 1 2 0 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 20 1 4 / 1 5 2 0 1 5 / 1 6 20 1 6 / 1 7 20 1 7 / 1 8 Ge n e r a l Fu n d Re s e r v e d 8 , 1 6 5 , 6 0 7 $ 4, 4 9 1 , 5 8 9 $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Un r e s e r v e d 1 6 , 8 6 1 , 7 5 2 18 , 5 9 4 , 9 8 4 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ No n s p e n d a b l e Ͳ Ͳ 1, 5 0 0 , 0 0 0 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Re s t r i c t e d Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Co m m i t t e d Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 20 , 0 1 9 , 1 8 7 15 , 1 2 9 , 9 2 5 12 , 9 5 3 , 3 9 9 As s i g n e d Ͳ Ͳ 21 , 8 0 6 , 7 8 1 21 , 9 9 2 , 8 8 6 20 , 7 5 8 , 1 5 6 23 , 7 9 1 , 7 4 9 24 , 1 2 1 , 2 5 6 9, 5 5 5 , 0 8 5 14 , 0 5 0 , 6 9 9 17 , 4 7 5 , 2 8 5 Un a s s i g n e d Ͳ Ͳ 2, 4 3 3 , 5 5 6 4, 0 1 9 , 4 0 9 7, 5 0 2 , 4 4 6 1, 3 6 3 , 3 7 6 ͲͲ Ͳ Ͳ To t a l Ge n e r a l Fu n d 2 5 , 0 2 7 , 3 5 9 $ 23 , 0 8 6 , 5 7 3 $ 25 , 7 4 0 , 3 3 7 $ 26 , 0 1 2 , 2 9 5 $ 28 , 2 6 0 , 6 0 2 $ 25 , 1 5 5 , 1 2 5 $ 24 , 1 2 1 , 2 5 6 $ 29 , 5 7 4 , 2 7 2 $ 29 , 1 8 0 , 6 2 4 $ 30 , 4 2 8 , 6 8 4 $ Al l Ot h e r Go v e r n m e n t a l Fu n d s Re s e r v e d 1 5 , 2 6 5 , 1 2 7 $ 10 , 5 2 5 , 3 8 4 $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Ͳ $ Un r e s e r v e d , re p o r t e d in : Sp e c i a l Re v e n u e Fu n d s 5 2 2 , 1 0 5 22 5 , 5 0 9 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ca p i t a l Pr o j e c t Fu n d s 1 1 , 2 0 3 , 5 2 1 24 , 4 5 4 , 3 4 7 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ De b t Se r v i c e Fu n d s 7 , 5 2 6 , 5 5 7 6, 9 5 3 , 7 3 2 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ No n s p e n d a b l e Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Re s t r i c t e d Ͳ Ͳ 14 , 7 6 4 , 3 3 4 5, 1 6 7 , 2 3 6 3, 9 4 9 , 5 8 3 4, 4 8 5 , 2 4 6 5, 6 6 3 , 1 8 2 6, 3 8 6 , 0 1 4 5, 6 2 7 , 7 0 7 6, 9 9 2 , 7 4 7 Co m m i t t e d Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 3, 6 9 6 , 0 0 0 10 , 3 5 4 , 5 8 4 5, 5 7 1 , 0 8 7 As s i g n e d Ͳ Ͳ 4, 7 8 6 , 5 4 7 5, 3 8 9 , 6 7 4 6, 0 9 7 , 1 8 2 8, 1 9 1 , 8 2 3 15 , 3 4 6 , 5 5 8 11 , 0 9 9 , 0 7 6 7, 9 2 8 , 9 9 4 6, 3 6 1 , 4 0 3 Un a s s i g n e d Ͳ Ͳ (2 3 , 8 8 9 ) 10 7 , 1 0 7 15 7 , 2 0 8 18 3 , 0 4 5 20 6 , 8 7 5 Ͳ Ͳ Ͳ To t a l Al l Ot h e r Go v e r n m e n t a l Fu n d s 34 , 5 1 7 , 3 1 0 $ 42 , 1 5 8 , 9 7 2 $ 19 , 5 2 6 , 9 9 2 $ 10 , 6 6 4 , 0 1 7 $ 10 , 2 0 3 , 9 7 3 $ 12 , 8 6 0 , 1 1 4 $ 21 , 2 1 6 , 6 1 5 $ 21 , 1 8 1 , 0 9 0 $ 23 , 9 1 1 , 2 8 5 $ 18 , 9 2 5 , 2 3 7 $ To t a l Fu n d Ba l a n c e s 5 9 , 5 4 4 , 6 6 9 $ 65 , 2 4 5 , 5 4 5 $ 45 , 2 6 7 , 3 2 9 $ 36 , 6 7 6 , 3 1 2 $ 38 , 4 6 4 , 5 7 5 $ 38 , 0 1 5 , 2 3 9 $ 45 , 3 3 7 , 8 7 1 $ 50 , 7 5 5 , 3 6 2 $ 53 , 0 9 1 , 9 0 9 $ 49 , 3 5 3 , 9 2 1 $ Fi s c a l Ye a r Dr a f t 1 20 0 8 / 0 9 2 0 0 9 / 1 00 8 / 0 9 2 0 0 9 / 0 5, 6 0 60 7 7 4, 4 9 1 , 5 8 4, 4 9 1 , 5 8 9 9 $ $$ 5 5 2 2 18 , 5 9 4 , 9 8 18 , 5 9 4 , 9 8 4 4 Ͳ 1, 5 0 0 Ͳ Ͳ Ͳ Ͳ Ͳ 21 , 8 0 6 , 7 8 1 Ͳ 2, 4 3 3 , 5 5 3, 5 5 6 6 ra ra ra raf f 12 7 3 25 , 7 4 0 , 3 3 3 7 7 $ 26 , $$ 12 1 12 12 / 1 2 Ͳ Ͳ $ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 12 / Ͳ 5, 1 6 7 , 2 3 6 3, 9 4 9 , 5 8 3, 9 3 Ͳ Ͳ Ͳ Ͳ Ͳ 9, 6 7 4 6, 0 9 7 , 1 8 18 2 2 0 7 7 15 7 , 2 0 8 1 2/ 10 , 2 0 3 , 9 7 10 , 2 0 3 , 9 7 3 3 $ 12 , 8 6 0 $$ 2/2 0 1 8 38 , 4 6 4 , 5 7 38 , 4 6 4 5 38 , 0 1 5 , 2 3 38 , 0 1 5 , 2 3 9 9 $ 2/2/2 2/2/2/2 2/2 12 2/2/2/2 2 To w n of Lo s Ga t o s Sc h e d u l e 4 Ch a n g e s in Fu n d Ba l a n c e s , Go v e r n m e n t a l Fu n d s La s t Te n Fi s c a l Ye a r s (M o d i f i e d Ac c r u a l Ba s i s of Ac c o u n t i n g ) 20 0 8 / 0 9 2 0 0 9 / 1 0 2 0 1 0 / 1 1 2 0 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 2 0 1 4 / 1 5 2 0 1 5 / 1 6 2 0 1 6 / 1 7 2 0 1 7 / 1 8 Re v e n u e s : Ta x e s 2 9 , 6 4 3 , 2 6 2 $ 29 , 9 6 7 , 3 8 5 $ 31 , 5 4 9 , 3 5 2 $ 27 , 6 7 6 , 7 1 9 $ 24 , 5 9 6 , 7 9 9 $ 23 , 4 7 5 , 3 9 3 $ 23 , 2 0 8 , 8 2 0 $ 23 , 2 6 9 , 8 9 2 $ 25 , 9 4 5 , 1 2 9 $ 26 , 2 5 3 , 0 2 6 $ In t e r g o v e r n m e n t a l 2 , 1 3 4 , 3 5 2 4, 0 8 2 , 7 2 5 3, 2 4 8 , 3 0 3 1, 6 6 9 , 7 2 9 2, 6 1 5 , 1 9 1 2, 4 4 0 , 1 2 7 2, 9 2 1 , 0 0 2 2, 5 7 3 , 4 7 5 1, 7 1 5 , 5 8 0 2, 1 2 4 , 9 0 3 Ch a r g e s fo r Se r v i c e 3 , 4 2 1 , 1 3 1 4, 4 1 8 , 0 7 4 4, 1 0 7 , 3 8 6 5, 5 5 0 , 6 7 1 6, 5 2 9 , 2 3 4 5, 8 3 7 , 5 8 1 5, 7 9 4 , 3 8 6 4, 7 7 3 , 0 0 1 4, 2 1 0 , 1 7 4 5, 3 9 5 , 0 5 7 Li c e n s e s &Pe r m i t s 2 , 6 9 2 , 1 8 7 2, 9 7 7 , 1 9 9 2, 9 6 7 , 8 1 9 3, 2 4 2 , 3 4 8 4, 0 1 5 , 8 7 1 5, 3 4 3 , 2 6 5 6, 4 6 7 , 7 7 1 5, 4 4 2 , 1 3 3 5, 0 7 5 , 5 0 3 5, 9 3 7 , 0 4 4 In ve s t m e n t In c o m e 2 , 94 9 , 1 2 0 1, 1 7 4 , 2 0 3 69 1 , 0 2 2 29 1 , 4 8 4 (1 3 3 , 3 8 0 ) 77 2 , 1 6 4 42 8 , 7 3 5 69 8 , 3 0 8 19 2 , 9 7 8 33 2 , 9 3 8 Fi n e s an d Fo r f e i t u r e s 6 1 8 , 7 7 1 66 2 , 6 9 9 73 7 , 9 0 3 80 9 , 7 9 0 68 8 , 1 2 5 79 5 , 7 2 0 86 8 , 5 6 4 87 9 , 2 7 7 91 7 , 1 0 5 67 6 , 2 1 2 Fr a n c h i s e Fe e s Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 2, 2 1 5 , 4 3 0 2, 2 5 8 , 8 9 2 2, 3 6 6 , 9 0 8 2, 4 7 4 , 8 1 4 Us e of Pr o p e r t y 6 0 , 7 4 9 51 , 9 4 8 38 , 5 0 2 38 , 9 7 4 38 , 9 1 0 37 , 7 4 1 32 , 2 0 9 31 , 7 2 3 32 , 0 9 6 32 , 2 0 6 Ot h e r 1 , 5 8 1 , 0 7 8 2, 1 0 5 , 3 3 3 2, 9 0 4 , 8 6 2 5, 4 1 2 , 3 2 8 4, 57 7 , 5 8 4 3, 6 4 8 , 2 7 7 3, 1 3 0 , 9 7 5 2, 3 9 6 , 9 9 2 1, 01 1 , 9 3 9 64 0 , 8 4 4 To t a l Re v e n u e s 4 3 , 1 0 0 , 6 5 0 45 , 4 3 9 , 5 6 6 46 , 2 4 5 , 1 4 9 44 , 6 9 2 , 0 4 3 42 , 9 2 8 , 3 3 4 42 , 3 5 0 , 2 6 8 45 , 0 6 7 , 8 9 2 42 , 3 2 3 , 6 9 3 41 , 4 6 7 , 4 1 2 43 , 8 6 7 , 0 4 4 Ex p e n d i t u r e s : Cu r r e n t Pu b l i c Sa f e t y 1 2 , 9 7 1 , 1 0 5 12 , 8 2 1 , 4 9 9 13 , 0 0 4 , 0 4 1 13 , 3 9 2 , 9 5 3 13 , 3 7 0 , 0 3 2 13 , 7 4 2 , 1 8 9 13 , 7 4 7 , 1 9 8 13 , 7 6 3 , 3 1 6 13 , 2 5 1 , 2 8 8 14 , 4 2 3 , 5 5 4 Pu b l i c Wo r k s 5 , 7 8 5 , 5 8 4 5, 1 5 2 , 7 4 5 5, 2 2 2 , 5 0 4 5, 4 4 0 , 9 6 0 5, 6 1 6 , 1 9 7 5, 6 1 1 , 2 8 3 5, 8 4 0 , 0 9 7 6, 3 0 7 , 2 6 6 6, 6 3 3 , 7 4 8 7, 1 2 5 , 6 8 6 Co m m u n i t y De v e l o p m e n t 3 , 2 8 0 , 8 5 6 3, 4 5 2 , 9 1 4 2, 9 7 3 , 5 8 7 3, 2 2 6 , 1 9 5 4, 2 3 5 , 8 3 2 4, 3 3 5 , 5 9 9 4, 2 1 8 , 5 0 0 3, 69 5 , 5 0 4 3, 7 9 3 , 9 3 0 4, 1 9 2 , 1 6 5 Co mm u n i t y Se r v i c e s 1 , 1 4 9 , 2 9 0 1, 2 6 1 , 9 8 1 66 3 , 6 4 5 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Li b r a r y Se r v i c e s 2 , 0 0 7 , 5 1 8 1, 9 9 9 , 4 3 0 1, 8 0 6 , 6 1 1 1, 8 0 5 , 4 7 9 2, 0 5 5 , 0 6 9 2, 1 3 1 , 4 3 8 2, 2 6 8 , 8 4 4 2, 3 3 2 , 2 6 8 2, 5 0 8 , 6 7 7 2, 5 2 9 , 0 1 7 Sa n i t a t i o n &Ot h e r 3 7 5 , 4 8 3 64 2 , 5 1 2 31 4 , 8 9 9 11 6 , 6 0 7 35 9 , 7 2 5 32 2 , 8 1 7 41 1 , 8 6 3 45 2 , 7 2 6 46 6 , 7 6 2 52 1 , 1 4 7 Ge n e r a l Go v e r n m e n t 5 , 1 4 5 , 3 5 5 5, 4 8 3 , 7 5 3 6, 3 1 8 , 7 0 6 8, 0 4 6 , 7 9 4 8, 3 3 1 , 4 4 4 8, 4 9 9 , 8 5 4 8, 6 4 7 , 4 5 1 9, 1 4 4 , 7 9 7 8, 3 9 0 , 9 5 9 8, 7 7 0 , 0 8 2 Re d e v e l o p m e n t 3 , 8 6 1 , 5 2 5 8, 6 9 2 , 2 1 6 18 , 9 5 8 , 1 2 6 3, 28 2 , 1 5 5 1, 2 7 7 , 0 6 3 21 , 6 8 7 Ͳ Ͳ Ͳ Ͳ Ca p i ta l Ou t l a y 7 , 7 5 9 , 5 7 7 16 , 1 4 1 , 5 6 1 15 , 8 3 9 , 3 0 3 10 , 9 2 9 , 4 9 1 6, 5 6 8 , 6 5 3 4, 0 9 7 , 6 6 2 3, 8 0 0 , 4 7 8 3, 2 4 1 , 6 5 7 6, 8 6 7 , 0 3 4 9, 7 7 8 , 0 5 8 De b t Se r v i c e Pr i n c i p a l Re p a y m e n t 4 4 5 , 0 0 0 46 5 , 0 0 0 48 5 , 0 0 0 93 4 , 1 6 7 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ In t e r e s t an d Fi s c a l Ch a r g e s 6 3 8 , 2 2 1 62 0 , 3 5 6 1, 0 1 9 , 8 8 1 1, 1 4 3 , 1 8 5 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ To t a l Ex p e n d i t u r e s 4 3 , 4 1 9 , 5 1 4 56 , 7 3 3 , 9 6 7 66 , 6 0 6 , 3 0 3 48 , 3 1 7 , 9 8 6 41 , 8 1 4 , 0 1 5 38 , 7 6 2 , 5 2 9 38 , 9 3 4 , 4 3 1 38 , 9 3 7 , 5 3 4 41 , 9 1 2 , 3 9 8 47 , 3 3 9 , 7 0 9 Ex c e s s (D e f i c i e n c y ) of Re ve n u e s Ov e r (U n d e r ) Ex pe n d i t u r e s ( 3 1 8 , 8 6 4 ) (1 1 , 2 9 4 , 4 0 1 ) (2 0 , 3 6 1 , 1 5 4 ) (3 , 6 2 5 , 9 4 3 ) 1, 1 1 4 , 3 1 9 3, 5 8 7 , 7 3 9 6, 1 3 3 , 4 6 1 3, 3 8 6 , 1 5 9 (4 4 4 , 9 8 6 ) (3 , 4 7 2 , 6 6 5 ) Ot h e r Fi n a n c i n g So u r c e s ( U s e s ) : De b t Is s u a n c e Ͳ 16 , 4 2 8 , 0 9 5 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Tr a n s f e r s In 5 , 3 7 0 , 7 0 8 4, 0 2 8 , 9 0 5 3, 9 2 8 , 1 0 7 3, 7 3 5 , 4 4 0 2, 8 4 1 , 8 8 1 3, 4 1 8 , 8 7 2 8, 9 7 7 , 2 2 0 3, 3 1 5 , 8 4 6 7, 9 0 7 , 6 9 2 3, 1 7 6 , 7 6 0 Tr a n s f e r s Ou t ( 4 , 7 3 1 , 8 8 5 ) (3 , 4 6 1 , 7 2 4 ) (3 , 5 4 5 , 1 6 8 ) (3 , 6 6 1 , 8 9 4 ) (2 , 4 6 3 , 8 5 0 ) (2 , 9 2 1 , 4 0 9 ) (7 , 7 8 8 , 0 4 9 ) (1 , 2 8 4 , 5 1 4 ) (7 , 6 1 2 , 0 1 2 ) (3 , 8 8 0 , 1 3 1 ) Pr o c e e d s fr o m Sa l e of Pr o pe r t y Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 37 8 , 2 1 9 Pr o c e e d s fr o m Is s u an c e of De b t Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 4, 4 3 5 Ͳ To t a l Ot h e r Fi n a n c i n g So u r c e s ( U s e s ) 6 3 8 , 8 2 3 16 , 9 9 5 , 2 7 6 38 2 , 9 3 9 73 , 5 4 6 37 8 , 0 3 1 49 7 , 4 6 3 1, 1 8 9 , 1 7 1 2, 0 3 1 , 3 3 2 30 0 , 1 1 5 (3 2 5 , 1 5 2 ) Sp e c i a l It e m : Sa l e of Pr o p e r t y 6 , 5 2 5 , 0 0 0 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ex t r a o r d i n a r y Ga i n (L o s s ) RD A Di s s o l u t i o n Ͳ Ͳ Ͳ (5 , 0 3 8 , 6 2 0 ) 29 5 , 9 1 3 Ͳ Ͳ Ͳ Ͳ Ͳ Pr e p a y m e n t of Pe n s i o n Ob l i g a t i o n s Ͳ Ͳ Ͳ Ͳ Ͳ (4 , 5 3 4 , 5 3 8 ) Ͳ Ͳ Ͳ Ͳ Ne t Ch a n g e in Fu n d Ba l a n c e s 3 1 9 , 9 5 9 $ 5, 7 0 0 , 8 7 5 $ (1 9 , 9 7 8 , 2 1 5 ) $ (3 , 5 5 2 , 3 9 7 ) $ 1, 4 9 2 , 3 5 0 $ 4, 0 8 5 , 2 0 2 $ 7, 3 2 2 , 6 3 2 $ 5, 4 1 7 , 4 9 1 $ (1 4 4 , 8 7 1 ) $ (3 , 7 9 7 , 8 1 7 ) $ De b t Se r v i c e as a Pe r c e n t a g e of No n Ca p i t a l Ex p e n d i t u r e s 3 . 0 4 % 2 . 6 7 % 2 . 9 6 % 5 . 5 6 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % Fi s c a l Ye a r (1 ) Fu n d ba l a n c e s de c r e a s e d du e to Ge n e r a l Fu n d re v e n u e s ab ov e ex p e n d i t u r e s of a pp r o x i m a t e l y $1 . 2 mi l l i o n an d a ne t de c r e a s e of $5 . 0 mi l l i o n fr o m th e ot h e r Go v e r n m e n t a l Fu n d s re s u l t i n g pr i m a r i l y fr o m th e pl a n n e d us e of th e GF A R fu n d ba l a n c e fo r in f r a s t r u c t u r e ca p i t a l pr o j e c t s . Dr a f t 1 2 / 1 2 / 2 0 1 8 l l Fu n d s Fu n d s ti n g ) ti n g ) 20 0 8 / 0 9 20 0 8 / 0 29 , 6 4 3 , 2 6 2 29 , 6 4 3 , 2 6 2 $ 29 $ 2, 1 3 4 , 3 5 2 52 4, 0 8 3, 4 2 1 , 1 3 1 31 4, 4 1 8 , 0 2, 6 9 2 , 1 8 7 2, 6 9 2 , 1 8 7 2, 9 7 7 , 1 9 9 2,2, 94 9 , 1 2 0 94 9 , 1 2 0 1, 1 7 4 , 2 0 3 17 4 , 2 0 3 61 8 , 7 7 1 61 8 66 2 , 6 9 9 66 2 , 6 9 9 Ͳ Ͳ Ͳ ,7 4 9 74 9 51 , 9 4 8 48 8 8 2, 1 0 5 , 3 3 3 33 3 2, 9 0 4 45 , 4 3 9 , 5 6 6 43 9 , 5 6 46 , 2 4 5 , 1 4 9 ,4 9 9 13 , 0 0 4 , 0 4 1 ,0 4 1 13 , 3 5 5, 2 2 2 , 5 0 4 22 2 , 5 0 5, 4 4 0 5, 4 4 0 2, 9 7 3 , 5 8 7 2, 9 7 3 3, 2 2 6 , 1 9 3, 2 2 6 , 1 9 66 3 , 6 4 5 6 Ͳ 1, 8 0 6 , 6 1 1 1, 8 0 5 , 4 7 9 ,4 7 9 31 4 , 8 9 9 4, 8 9 9 11 6 , 6 0 7 11 6 , 6 0 8, 7 0 6 8, 7 0 6 8, 0 4 6 , 7 9 4 80 4 8 8 26 26 3, 28 2 , 1 5 5 55 1, 2 7 10 , 9 2 9 , 4 9 1 92 9 , 4 9 1 6, 5 6 8 , 6 93 4 , 1 6 7 Ͳ 1, 1 4 3 , 1 8 5 Ͳ 7, 9 8 6 41 , 8 1 4 , 0 1 5 5 38 38 1, 1 1 4 , 3 1 9 1, 1 1 4 , 3 1 9 3, 5 8 7 , 7 3 9 3, Ͳ Ͳ Ͳ 88 1 88 1 3, 4 1 8 , 8 7 2 8, 9 8, 0)0) (2 , 9 2 1 , 4 0 9 ) (7 , 7 8 8 , 0 (7 , 7 8 Ͳ Ͳ Ͳ Ͳ Ͳ 49 7 , 4 6 3 49 7 , 4 1, 1 8 9 , 1 7 1 1, 1 8 9 Ͳ Ͳ Ͳ Ͳ Ͳ 7, 3 2 2 , 6 3 2 5, 4 1 7 , 4 9 1 5, 4 $ $ 0. 0 0 % 0% 0. 0 0 % 0. 0 ti n g g pr i m a r i l y pr fr o m om th e Dr f ft ft ft ft 1 /1 /12 2 1 12 2 2/2/20 20 0 01 01 8 1 1 18 18 D 8 8 8 TownofLosGatos Schedule5 AssessedValueandEstimatedActualValueofTaxableProperty LastTenFiscalYears Utility andTotal Fiscal UnsecuredPercent Secured Percent TotalEstimated Direct Year Property Change Property Change Assessed FullMarket TaxRate 2009 216,402,089 7.33%7,949,991,620 7.53% 8,166,393,709 31,799,966,480 1.0449 2010 241,286,055 11.50%8,076,101,607 1.59% 8,317,387,662 32,304,406,428 1.0584 2011 217,353,236 Ͳ9.92%8,044,692,600 Ͳ0.39% 8,262,045,836 32,178,770,400 1.0555 2012 217,297,593 Ͳ0.03%8,152,459,157 1.34% 8,369,756,750 32,609,836,628 1.0499 2013 211,268,609 Ͳ2.77%8,465,420,032 3.84% 8,676,688,641 33,861,680,128 1.0508 2014 224,079,502 6.06%9,238,816,900 9.14% 9,462,896,402 36,955,267,600 1.0493 2015 227,331,042 1.45%9,767,782,505 5.73% 9,995,113,547 39,071,130,020 1.0544 2016 217,035,545 Ͳ4.53%10,417,804,357 6.65%10,634,839,902 41,671,217,428 1.0533 2017 304,443,013 40.27%11,240,554,198 7.90% 11,544,997,211 44,962,216,792 1.0560 2018 330,504,877 8.56%11,969,049,272 6.48% 12,299,554,149 47,876,197,088 1.0659 Source:SantaClaraCountyAssessedValueReport Dr a f t 1 2 Percent SecurePercent Secure Change ProChang 402,089 7.33%% 41,286,055055 11.50%11.50 217,353,2363,2 Ͳ9.92%92% 217,297,5937,297,593 ͲͲ0.0 211,268,609211,268,609 224,079,50224,079,502 1515 227,331,042227,331,0 20162016 217,035,5217,035,5 77 304,44304, 33033 12 12 / 12 18 2/1 2 / 2 0 1 8 12 2/2/ 1 TownofLosGatos Schedule6 DirectandOverlappingPropertyTaxRates LastTenFiscalYears SantaClara School Fiscal BasicCounty CountyBonds ValleyWater DistrictBonds Year WideLevy andLevies District andLoans Total 2009 1.0000 0.0388 0.0061 0.0970 1.1419 2010 1.0000 0.0510 0.0074 0.1021 1.1605 2011 1.0000 0.0483 0.0072 0.1449 1.2004 2012 1.0000 0.0435 0.0064 0.1393 1.1892 2013 1.0000 0.0439 0.0069 0.1523 1.2031 2014 1.0000 0.0423 0.0070 0.1417 1.1910 2015 1.0000 0.0479 0.0065 0.1442 1.1986 2016 1.0000 0.0476 0.0057 0.1381 1.1914 2017 1.0000 0.0474 0.0086 0.1223 1.1783 2018 1.0000 0.0597 0.0062 0.1177 1.1836 Source:SantaClaraCountyBookofTaxRates Dr a f t 1 2 / 1 2 / 2 0 1 8 BasicBasic CountyCounty rWideWideLevyLevy 20099 1.0001.000 2010010 1.1. 2011201 2012012 201313 20142014 2020 a af t 1 2 / 1 2 / 2 0 1 8 /1 /1 /12 12 12 12 To w n of Lo s Ga t o s Sc h e d u l e 7 Pr i n c i p l e Pr o p e r t y Ta x Pa y e r s La s t Fi v e Fi s c a l Ye a r s * Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e Pe r c e n t a g e of To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y o f To t a l Ci t y Ta x a b l e Ta x a b l e T a x a b l e Ta x a b l e T a x a b l e Ta x a b l e T a x a b l e Ta x a b l e T a x a b l e Ta x a b l e T a x a b l e Ta x a b l e T a x a b l e Ta x a b l e T a x a b l e T ax a b l e T a x a b l e Ta x a b l e T a x a b l e Ta x a b l e As s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d A s s e s s e d AS S E S S E E NA M E V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e V a l u e 75 0 Un i v e r s i t y LL C 22 , 0 0 0 , 0 0 0 $ 0. 2 8 % 2 1 , 0 0 0 , 0 0 0 $ 0. 2 6 % 2 0 , 9 5 0 , 2 2 9 $ 0. 2 6 % Ͳ $ 12 , 1 3 7 , 9 9 9 $ 0. 1 4 % 1 8 , 6 0 0 , 0 0 0 $ 0. 2 0 % 1 9 , 0 0 0 , 0 0 0 $ 0. 1 9 % 1 9 , 3 7 9 , 6 2 0 $ 0. 1 9 % 1 9 , 6 7 5 , 1 5 9 $ 0. 1 8 % 2 5 , 2 4 1 , 8 6 3 $ 0. 2 1 % Al b e r t o Wa y Ho l d i n g s LL C 2 0 , 5 1 6 , 6 8 7 0. 2 6 % 2 0 , 9 2 7 , 0 1 8 0. 2 6 % 2 0 , 8 7 7 , 4 1 8 0. 2 6 % 2 1 , 0 3 4 , 6 2 3 0. 2 6 % 2 3 , 1 4 5 , 0 6 4 0. 2 7 % 2 3 , 6 0 7 , 9 6 4 0. 2 6 % 2 3 , 7 1 5 , 1 4 1 0. 2 4 % 2 4 , 1 8 8 , 9 6 6 0. 2 3 % 2 4 , 5 5 7 , 8 4 5 0. 2 2 % 2 5 , 0 4 8 , 9 9 8 0. 2 1 % An n R. De s a n t i s Ͳ Ͳ Ͳ Ͳ Ͳ 13 , 8 2 3 , 7 7 9 0. 1 5 % Ͳ Ͳ Ͳ Ͳ Bo c c a r d o Co r p o r a t i o n 2 0 , 5 1 9 , 2 7 4 0. 2 6 % 3 7 , 7 4 7 , 0 2 0 0. 4 7 % 36 , 8 3 9 , 0 2 1 0. 4 6 % 3 7 , 1 7 3 , 8 7 7 0. 4 6 % 3 7 , 5 5 0 , 3 6 8 0. 4 4 % 3 8 , 6 1 7 , 9 1 2 0. 4 2 % 3 8 , 7 7 2 , 9 0 5 0. 4 0 % 2 1 , 6 1 7 , 3 1 8 0. 2 1 % 2 1 , 9 1 8 , 9 2 1 0. 2 0 % 2 2 , 2 1 1 , 6 5 0 0. 1 9 % CH Re a l t y IV Do w n i n g LP 2 8 , 8 1 5 , 0 0 0 0. 3 6 % 2 9 , 3 9 1 , 3 0 0 0. 3 7 % 1 9 , 0 0 0 , 0 0 0 0. 2 4 % 1 9 , 1 4 3 , 0 6 8 0. 2 3 % 1 9 , 5 2 5 , 9 2 7 0. 2 3 % 1 9 , 9 1 6 , 4 4 3 0. 2 2 % Ͳ Ͳ Ͳ Ͳ D& K Lo s Ga t o s LL C 1 4 , 0 4 1 , 5 7 3 0. 1 8 % 2 0 , 4 0 0 , 0 0 0 0. 2 6 % 2 0 , 3 5 1 , 6 5 1 0. 2 5 % 1 5 , 2 8 4 , 3 2 4 0. 1 9 % 1 5 , 5 9 0 , 0 1 0 0. 1 8 % 1 5 , 9 0 1 , 8 0 9 0. 1 7 % 1 5 , 9 7 4 , 0 0 3 0. 1 6 % 1 6 , 2 9 3 , 1 6 3 0. 1 6 % Ͳ Ͳ Da v i d A. an d Sh a r i Fl i c k Tr u s t e e Ͳ Ͳ 14 , 6 1 4 , 4 4 7 0. 1 8 % 1 4 , 7 2 4 , 4 8 7 0. 1 8 % 1 5 , 0 1 8 , 9 7 1 0. 1 8 % Ͳ 15 , 3 8 8 , 8 8 4 0. 1 6 % Ͳ Ͳ Ͳ Do n a h u e Sc hr i b e r Re a l t y Gr o u p LP Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 53 , 8 7 2 , 0 8 3 0. 4 5 % DS Do w n i n g Lo s Ga t o s LL C Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 20 , 0 0 6 , 8 6 1 0. 2 0 % 2 1 , 9 8 0 , 5 6 8 0. 2 1 % 2 2 , 3 1 5 , 7 7 0 0. 2 0 % Ͳ DS Vi l l a g e Sq u a r e Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 22 , 7 9 9 , 5 9 9 0. 2 0 % Ͳ El Ca m i n o Ho s p i t a l Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 20 , 8 0 3 , 6 0 9 0. 2 1 % 2 6 , 4 7 7 , 1 6 0 0. 2 5 % 2 6 , 8 8 0 , 9 3 3 0. 2 4 % 2 3 , 3 5 3 , 5 7 6 0. 2 0 % Eq u e s t r i a n 3 In v e s t m e n t s LL C Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 29 , 5 8 4 , 2 5 1 0. 2 5 % G oo d Sa m a r i t a n Ho s p i t al LP Ͳ Ͳ Ͳ 19 , 3 7 2 , 7 9 5 0. 2 4 % 1 9 , 5 3 0 , 1 8 3 0. 2 3 % 1 9 , 7 1 0 , 8 9 7 0. 2 1 % 1 9 , 6 0 2 , 5 9 4 0. 2 0 % 1 9 , 8 8 0 , 3 6 6 0. 1 9 % 2 2 , 4 0 2 , 7 5 6 0. 2 0 % 2 2 , 5 1 6 , 8 2 3 0. 1 9 % Gr a d e Wa y As s o c i a t i o n s VI 1 4 , 1 5 1 , 2 3 7 0. 1 8 % 1 4 , 4 3 4 , 2 6 1 0. 1 8 % 1 4 , 4 0 0 , 0 5 0 0. 1 8 % 1 4 , 5 0 8 , 4 8 2 0. 1 8 % 1 4 , 7 9 8 , 6 5 1 0. 1 7 % 1 5 , 0 9 4 , 6 2 3 0. 1 6 % 1 5 , 1 6 3 , 1 5 2 0. 1 6 % Ͳ Ͳ Ͳ Gr e e n Ey e s LL C Ͳ Ͳ Ͳ Ͳ 12 , 5 4 2 , 5 5 5 0. 1 5 % 1 2 , 7 9 3 , 4 0 4 0. 1 4 % Ͳ Ͳ Ͳ Ͳ Gr o s v e n o r US A Lt d . 2 0 , 5 4 7 , 9 0 0 0. 2 6 % 2 0 , 9 5 8 , 8 5 8 0. 2 6 % 2 0 , 9 0 9 , 1 8 5 0. 2 6 % 2 1 , 0 6 6 , 6 3 0 0. 2 6 % 2 2 , 4 3 7 , 9 6 2 0. 2 7 % 2 2 , 8 8 6 , 7 2 0 0. 2 5 % 2 2 , 9 9 0 , 6 2 4 0. 2 4 % 2 3 , 4 4 9 , 9 7 5 0. 2 3 % Ͳ Ͳ He a l t h Ca r e RE I T In c , 2 4 , 4 8 0 , 0 0 0 0. 3 1 % 2 4 , 9 6 9 , 6 0 0 0. 3 1 % 1 9 , 7 2 0 , 7 4 9 0. 2 5 % 1 9 , 8 6 9 , 2 4 5 0. 2 4 % 1 9 , 2 2 3 , 3 4 8 0. 2 3 % 2 0 , 6 7 1 , 9 6 0 0. 2 2 % 20 , 7 6 5 , 8 1 0 0. 2 1 % 2 0 , 0 8 9 , 9 0 3 0. 1 9 % 2 0 , 3 9 6 , 2 7 4 0. 1 8 % Ͳ In t e r n a t i o n a l Ho t e l Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 30 , 1 4 4 , 6 1 7 0. 2 5 % Ka y Ka o r u an d Go Sa s a k i Sr . , Tr u s t e e s Ͳ Ͳ Ͳ Ͳ Ͳ 22 , 7 5 2 , 8 0 9 0. 2 5 % Ͳ 24 , 7 4 4 , 9 8 3 0. 2 4 % 2 5 , 1 2 2 , 1 3 1 0. 2 2 % 2 5 , 6 2 4 , 0 2 7 0. 2 1 % Kn o w l e s Lo s Ga t o s LL C 35 , 0 0 0 , 0 0 0 0. 4 4 % 3 2 , 0 0 0 , 0 0 0 0. 4 0 % 4 5 , 7 7 8 , 7 5 7 0. 5 7 % 4 6 , 1 2 3 , 4 6 8 0. 5 7 % 4 7 , 0 4 5 , 9 3 4 0. 5 6 % 4 7 , 9 8 6 , 8 5 0 0. 5 2 % 4 8 , 2 0 4 , 7 0 8 0. 4 9 % 4 9 , 1 6 7 , 8 3 6 0. 4 7 % 4 9 , 9 1 7 , 6 4 4 0. 4 4 % 5 0 , 9 1 5 , 9 9 5 0. 4 3 % KS L Ca p it a l Pa r t n e r s 27 , 8 3 8 , 9 0 3 0. 3 5 % 1 4 , 0 3 0 , 0 9 6 0. 1 8 % 3 9 , 9 6 0 , 1 1 4 0. 5 0 % 4 1 , 6 9 8 , 7 5 1 0. 5 1 % 42 , 5 3 2 , 7 2 1 0. 5 0 % 4 3 , 3 8 3 , 3 7 0 0. 4 7 % 4 3 , 5 8 0 , 3 2 6 0. 4 5 % 3 0 , 1 3 4 , 6 1 4 0. 2 9 % 3 0 , 1 0 5 , 9 4 5 0. 2 7 % 2 5 , 8 9 3 , 9 4 6 0. 2 2 % Le l a n d E Le s t e r , Tr u s t e e Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 29 , 0 0 4 , 1 6 9 0. 2 6 % Ͳ LG Bu s i n e s s Pa r k Bl d g 3 LL C Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 61 , 9 4 7 , 2 8 4 0. 5 9 % Ͳ 53 , 4 6 5 , 7 2 4 0. 4 5 % LG Bu s i n e s s Pa r k Bl d g 4 LL C Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 43 , 9 3 7 , 8 5 7 0. 3 7 % LG Bu s i n e s s Pa r k LL C Ͳ Ͳ Ͳ 18 , 3 4 2 , 9 3 1 0. 2 3 % Ͳ 47 , 2 7 6 , 9 7 7 0. 5 1 % 3 9 , 3 4 7 , 4 8 5 0. 4 0 % 1 7 , 5 0 7 , 2 6 1 0. 1 7 % 3 1 , 0 7 0 , 5 7 2 0. 2 8 % Ͳ LG Ho t e l LL C Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 15 , 4 4 8 , 0 5 7 0. 1 6 % 1 5 , 4 9 7 , 3 9 5 0. 1 5 % Ͳ Ͳ Lo s Ga to s Ho t e l Co r p . Ͳ 13 , 9 0 6 , 2 7 3 0. 1 7 % 1 5 , 9 7 8 , 0 0 9 0. 2 0 % 1 5 , 6 8 3 , 9 7 9 0. 1 9 % 1 5 , 6 1 7 , 1 3 4 0. 1 8 % 1 8 , 1 3 4 , 1 8 2 0. 2 0 % 1 5 , 5 7 3 , 3 1 4 0. 1 6 % 1 5 , 6 7 6 , 1 1 3 0. 1 5 % Ͳ Ͳ Ly o n Ba y t r e e Ap a r t m e n t s LL C 1 6 , 7 2 2 , 7 4 8 0. 2 1 % 1 4 , 1 6 1 , 5 2 5 0. 1 8 % 1 4 , 1 1 1 , 4 0 7 0. 1 8 % 1 4 , 1 7 7 , 0 3 9 0. 1 7 % 1 4 , 4 3 0 , 1 2 3 0. 1 7 % 1 4 , 6 7 4 , 7 1 6 0. 1 6 % Ͳ Ͳ Ͳ Ͳ Sa f e w a y In c . Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 24 , 3 9 4 , 4 6 8 0. 2 0 % Sa n Jo s e Wa t e r Wo r k s 19 , 9 3 4 , 4 9 1 0. 2 5 % 2 0 , 1 6 2 , 8 4 8 0. 2 5 % 2 3 , 3 1 3 , 9 7 8 0. 2 9 % 2 9 , 3 6 9 , 1 3 7 0. 3 6 % 3 0 , 8 8 2 , 0 0 9 0. 3 6 % 3 3 , 6 2 6 , 3 8 1 0. 3 6 % 3 6 , 6 9 3 , 4 5 3 0. 3 8 % 3 7 , 0 8 1 , 0 4 9 0. 3 6 % 3 8 , 7 1 0 , 7 2 8 0. 3 4 % 4 1 , 2 0 2 , 8 0 5 0. 3 4 % SI 32 LL C Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 15 0 , 5 6 3 , 1 1 9 1. 5 4 % 1 4 1 , 3 4 8 , 8 9 4 1. 3 6 % 1 4 3 , 4 4 2 , 2 6 9 1. 2 8 % 1 4 6 , 3 1 7 , 9 4 4 1. 2 2 % So b r a t o In t e r e s t s IV LL C 14 7 , 7 7 4 , 9 3 3 1. 8 6 % 1 5 6 , 9 3 4 , 5 6 1 1. 9 4 % 1 5 0 , 7 8 1 , 0 9 2 1. 8 7 % 1 5 7 , 5 5 4 , 5 2 5 1. 9 3 % 1 5 7 , 5 5 9 , 2 4 5 1. 8 6 % 1 6 9 , 8 0 9 , 6 7 6 1. 8 4 % 2 0 , 8 6 9 , 3 3 8 0. 2 1 % 4 4 , 9 3 0 , 4 8 2 0. 4 3 % 4 2 , 2 4 0 , 9 9 4 0. 3 8 % 4 3 , 0 7 1 , 8 3 7 0. 3 6 % SR I Ol d To w n LL C 29 , 0 4 5 , 4 6 3 0. 3 7 % 2 9 , 6 2 6 , 3 7 1 0. 3 7 % 2 9 , 5 5 6 , 1 5 5 0. 3 7 % 2 9 , 7 7 8 , 7 1 2 0. 3 7 % 3 0 , 3 7 4 , 2 8 6 0. 3 6 % 30 , 9 8 1 , 7 7 1 0. 3 4 % 3 1 , 1 2 2 , 4 2 7 0. 3 2 % 3 1 , 7 4 4 , 2 5 2 0. 3 0 % 3 2 , 2 2 8 , 3 5 1 0. 2 9 % 3 2 , 8 7 2 , 9 1 7 0. 2 7 % Su m m e r h il l Pr o s p e c t Av e n u e LL C Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 18 , 2 7 4 , 5 0 8 0. 1 6 % Ͳ We a l t h c a p Lo s Ga t o s 12 1 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 10 9 , 1 0 0 , 0 0 0 0. 9 7 % 1 1 1 , 2 8 2 , 0 0 0 0. 9 3 % We a l t h c a p Lo s Ga t o s 31 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 84 , 0 0 0 , 0 0 0 0. 7 5 % 8 5 , 6 8 0 , 0 0 0 0. 7 2 % To t a l Ͳ Pr i n c i p a l ta x p a y e r s 5 6 1 , 8 0 9 , 6 3 8 7. 0 7 % 5 6 0 , 9 9 9 , 6 9 5 6. 9 5 % 5 8 2 , 2 1 8 , 6 2 7 7. 2 4 % 5 8 3 , 7 9 5 , 2 4 9 7. 1 6 % 5 8 4 , 0 3 0 , 9 0 4 6. 9 0 % 6 5 0 , 2 5 2 , 2 4 3 7. 6 8 % 3 9 4 , 3 3 7 , 4 7 3 6. 4 9 % 6 6 3 , 1 3 7 , 2 0 2 6. 3 7 % 8 1 4 , 1 6 4 , 5 6 8 7. 2 4 % 9 1 6 , 6 3 3 , 3 8 1 7. 6 6 % To t a l Ͳ Al l re a l pr o p e r t i e s as s e s s e d by th e To w n (1 ) 7, 9 4 9 , 9 9 1 , 6 2 0 $ 8, 0 7 5 , 2 0 2 , 2 0 7 $ 8, 0 4 3 , 7 9 3 , 2 0 0 $ 8, 1 5 1 , 5 3 0 , 2 3 7 $ 8, 4 6 4 , 4 9 1 , 1 1 2 $ 9, 2 3 7 , 8 8 7 , 9 8 0 $ 9, 7 6 6 , 7 6 5 , 0 2 5 $ 10 , 4 1 6 , 7 8 6 , 8 7 7 $ 11 , 2 3 9 , 5 3 6 , 7 1 8 $ 11 , 9 6 8 , 0 3 1 , 7 9 2 $ (1 ) A ss e s s e d va l u e in c l u d e s on l y ne t se c u r e d re a l pr o p e r t i e s . (2 ) Ex c l u d e s th e va l u e of ta x Ͳ ex e m p t pr o p e r t i e s So u r c e Da t a : Ca l i f o r n i a Mu n i c i p a l St a t i s t i c s , In c . 20 1 7 / 1 8 20 1 6 / 1 7 20 1 0 / 1 1 20 0 8 / 0 9 2 0 0 9 / 1 0 20 1 5 / 1 6 20 1 4 / 1 5 20 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 Dr a f t 1 2 / 1 2 / 2 0 1 8 er c e n t a g e er c e n t a Pe r c e n t a g e Pe r c e n t a g e ot a l ot a l Ci t y o f Ci t y o f To t a l To t a Ci t y bl e T a x a b l e Ta x a b l e Ta x a b l e T a x Ta x a b l e As s e s s e d A s s e s s e d A s s e s s e As s e s s e d A s s e s s e d Va l u e V a l u e Va l u e V a l u e Va l u e 20 , 9 5 0 , 2 2 9 2 0. 2 6 % 0. Ͳ $ ,8 7 7 , 4 1 8 18 0. 2 6 % 2 1 , 0 3 4 , 6 2 3 0 Ͳ Ͳ Ͳ 21 21 0. 4 6 % 3 7 , 1 7 3 , 8 7 7 3, 8 7 7 0. 4 6 % 0. 4 6 % 0. 2 4 % 1 9 , 1 4 3 , 0 6 8 0. 2 3 % 0. 2 3 0. 2 5 % 1 5 , 2 8 4 , 3 2 4 4 0. 1 9 % 0 .1 8 % 1 4 , 7 2 4 , 4 8 7 48 7 0. 1 8 % Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 9, 3 7 2 , 7 9 5 95 0. 2 4 % 1 9 , 5 3 0 , 1 8 3 0. 2 4 % 1 9 , 5 3 0 0 08 , 4 8 2 8, 4 8 2 0. 1 8 % 1 4 , 7 9 8 , 6 5 1 0. 1 8 % 1 4 , 0. 1 7 0. 1 7 Ͳ Ͳ 12 , 5 4 2 , 5 5 5 0. 1 5 % 0. 1 5 % 0. 2 6 % 2 2 , 4 3 7 , 9 6 2 0. 2 6 % 2 2 , 4 3 7 , 9 6 2 0. 2 7 % 0. 2 4 % 1 9 , 2 2 3 , 3 4 8 0. 2 4 % 1 9 , 2 2 3 , 3 4 8 0. 2 3 % Ͳ Ͳ 22 47 , 0 4 5 , 9 3 4 0. 5 6 % 4 7 , 9 8 42 , 5 3 2 , 7 2 1 0. 5 0 % 4 3 , 3 8 3 , 3 0% Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 47 , 2 7 6 , 9 7 7 0. 5 1 0 Ͳ Ͳ Ͳ 0. 1 8 % 1 8 , 1 3 4 , 1 8 2 0. 2 0 % 0 0. 1 7 % 1 4 , 6 7 4 , 7 1 6 0. 1 7 % 1 4 , 6 7 4 , 7 1 6 0. 1 6 % Ͳ 6% 3 3 , 6 2 6 , 3 8 1 % 0. 3 6 % 3 6 6% Ͳ 15 0 , 5 6 15 0 16 9 , 8 0 9 , 6 7 6 16 9 , 8 0 9 , 6 7 6 1. 8 4 % 2 0 , 8 6 9 , 3 1. 8 4 % 2 0 , 8 6 9 , 30 , 9 8 1 , 7 7 1 30 , 9 8 1 , 7 7 1 0. 3 4 % 3 1 , 1 2 2 , 4 2 7 31 , 1 2 2 , 4 2 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ 24 3 3 7. 6 8 % 3 9 4 , 3 3 7 , 4 7 3 7. 6 8 % 3 9 4 , 3 3 7 , 4 6. 4 9 % 6. 4 9 9, 7 6 6 , 7 6 5 , 0 2 5 ,7 6 5 , 0 2 5 $ 10 $ 20 1 0 / 1 1 0/ 1 1 10aaf f ft /2 20 2 2 20 20 20 20 0 0 TownofLosGatosSchedule8 PropertyTaxLeviesandCollections LastTenFiscalYears Valueof Redevelopment Agency Valueof Town Redevelopment TotalProperty ValueofTown Property Property PropertyTax PropertyTax TaxLevied Propertysubject SubjecttoSubjectto Fiscal Leviedand Leviedand and toLocalTax LocalLocal Year Collected Collected Collected Rate TaxRate TaxRate 2009 7,465,4038,574,25116,039,6548,166,393,7091,096,883,5829,263,277,291 2010 7,608,1379,022,86316,630,9998,317,387,6621,134,135,4999,451,523,161 2011 7,567,8806,861,65014,429,5308,262,045,8361,117,973,3519,380,019,187 2012 7,520,2653,349,25410,869,5198,369,756,7501,109,305,6739,479,062,423 2013 8,253,442 Ͳ8,253,4428,676,688,6411,167,752,0219,844,440,662 2014 9,120,626 Ͳ9,120,6269,462,896,4021,249,873,30310,712,769,705 2015 9,787,519 Ͳ9,787,5199,995,113,5471,318,214,86311,313,328,410 2016 10,388,424 Ͳ10,388,42410,634,839,9021,395,509,48912,030,349,391 2017 11,345,588 Ͳ11,345,58811,544,997,2111,537,577,24113,082,574,452 2018 12,060,228 Ͳ12,060,22812,299,554,1491,650,746,47313,950,300,622 Sources:SantaClaraCountyAuditorͲControllerOfficeandtheTownofLosGatos Dr a f t 1 2 / 1 2 / 2 0 1 8 Redevelopment TotRedeve x PropertyProper Tax nd LeviedLevied andand ected CollectedCollected 7,465,4035,4 8,5 7,608,1377,608,137 7,567,8807,567,880 12 7,520,2652 7,520, 2013 8,253,4422013 8,253,44 2014 9,120,62014 9, 55 9,789, 101 af aft 2/1 2 / 2 0 1 8 12 / 2 0 1 8 12 / 2 0 1 8 12 12 12 12 2/2 0 1 8 2 2 2/2/2/2 2/2 /2 /2 2 2 20 20 12 0 0 1 1 8 8 8 8 /12 12 2// 1992 2002 2010 Certificate Certificate Certificate Total TotalPercentageof Fiscal of of of Governmental Primary PersonalPer Year Participation Participation Participation Activities Government Income Capita 2009 685,000$9,370,000$ Ͳ$10,055,000$10,055,000$5.5% 329.70$ 2010 470,0009,120,00015,675,00025,265,00025,265,00019.4% 820.24 2011 240,0008,865,00015,675,00024,780,00024,780,00019.7% 835.72 2012 Ͳ Ͳ Ͳ Ͳ Ͳ0.0%1)Ͳ 2013 Ͳ Ͳ Ͳ Ͳ Ͳ0.0%Ͳ 2014 Ͳ Ͳ Ͳ Ͳ Ͳ0.0%Ͳ 2015 Ͳ Ͳ Ͳ Ͳ Ͳ0.0%Ͳ 2016 Ͳ Ͳ Ͳ Ͳ Ͳ0.0%Ͳ 2017 Ͳ Ͳ Ͳ Ͳ Ͳ0.0%Ͳ 2018 Ͳ Ͳ Ͳ Ͳ Ͳ0.0%Ͳ 1DebtwastransferredtotheSuccessorAgencyTrustFundasapartoftheRDAdissolution GovernmentalActivities Dr a f t 1 2 / 1 2 / 2 0 1 8 ercentagentage ofof PersonalPersonal t IncomeIncome 5,000,000 5.5%5.5% 265,00065,000 19.4%% 24,780,00080,0 19.7% Ͳ0 Ͳ ͲͲͲ Ͳ ͲͲ ͲͲ ͲͲ cy TrustTru FundF asas aa part 01 8 01 8 8 TownofLosGatos Schedule10 DirectandOverlappingGovernmentalActivitiesDebt AsofJune30,2017 2017/18AssessedValuation: 12,299,554,149$ EstimatedShare ofDirectand TotalDebtat OverlappingDebt DIRECTANDOVERLAPPINGBONDEDDEBT: %Applicable (1)June30,2018 atJune30,2018 OverlappingTax&AssesmentDebt SantaClaraCounty 2.735% 1,012,400,000$27,689,140$ WestValleyͲMissionCommunityCollegeDistrict 9.468% 495,110,00046,877,015 CampbellUnionHighSchoolDistrict 8184.000% 210,26517,208,088 LosGatosͲSaratogaJointUnionHighSchoolDistrict 34.433% 105,845,00036,445,609 CambrianSchoolDistrict 0.265% 50,384,944133,520 CampbellUnionHighSchoolDistrict 8.355% 176,094,92214,712,731 LosGatosUnionSchoolDistrict 70.774% 85,175,00060,281,755 SaratogaUnionSchoolDistrict 0.034% 25,833,9028,784 UnionSchoolDistrict 20.946% 108,953,50522,821,401 MidpeninsulaRegionalOpenSpaceDistrict 4.633% 93,350,0004,324,906 SantaClaraValleyWaterDistrictBenefitAssessmentDistrict 2.735% 82,285,0002,250,495 TotalOverlappingTaxandAssesmetDebt 232,753,444 OverlappingGeneralFundDebt SantaClaraCountyGeneralFundObligations 2.735% 599,642,965 16,400,235 SantaClaraCountyPensionObligations 2.735% 357,547,1759,778,915 SantaClaraCountyBoardofEducationCertificatesofParticipation 2.735% 4,985,000136,340 WestValleyͲMissionCommunityCollegeDistrictGeneralFundObligations 9.468% 63,060,0005,970,521 CampbellUnionHighSchoolDistrictGeneralFundObligations 8.184% 10,000,000818,400 LosGatosͲSaratogaJointUnionHighSchoolDistrictCertificatesofParticipation 34.433% 4,424,0001,523,316 CampbellUnionSchoolDistrictGeneralFundObligations 8.355% 2,895,000241,877 SaratogaUnionSchoolDistrictCertificatesofParticipation 0.034% 3,905,0001,328 SantaClaraCountyVectorControlDistrictCertificatesofParticipation 2.735% 2,470,00067,555 MidpeninsulaRegionalOpenSpaceParkDistrictGeneralFundObligations 4.633% 123,040,6005,700,471 TotalGrossOverlappingGeneralFundDebt 40,638,958 Less:SantaClaraCountySupportedObligations 11,187,913 TotalOverlappingGeneralFundDebt 29,451,045 OverlappingTaxIncrementDebt(SuccessorAgency) TownofLosGatosCertificatedofParticipations 17,680,000 TotalofOverlappingTaxIncrementDebt 17,680,000 TotalDirectDebt Ͳ TotalGrossOverlappingDept 292,220,742 TotalNetOverlappingDebt 281,032,829 GrossCombinedTotalDebt 291,072,402(2) NetCombinedTotalDebt 279,884,489 Ratiosto2015/16AssessedValuation: TotalOverlappingTaxandAssessmentDebt:1.89% TotalDirectDebt:0.00% GrossCombinedTotalDebt:2.37% NetCombinedTotalDebt:2.28% RatiostoRedevelpmentIncrementalValuation($1,327,219,986): TotalOverlappingTaxIncrementDebt:1.33% SourceData:CaliforniaMunicipalStatistics,Inc. (1)Thepercentageofoverlappingdebtapplicabletothecityisestimatedusingtaxableassessedpropertyvalue.Applicablepercentages wereestimatedbydeterminingtheportionoftheoverlappingdistrict'sassessedvaluethatiswithintheboundariesofthecitydividedby thedistric'stotaltaxableasessedvalue. (2)Excludestaxandrevenueanticipationnotes,enterpriserevenue,mortgagerevenuebondsandnonͲbondedcapitalleaseobligations. Dr a f t 1 2 / 1 2 / 2 0 1 8 46,846 17,208,017,208,0 ,00000 36,445,60936,445,609 ,384,944944 133,52033,52 176,094,9224,9214,712 85,175,00085,176 25,833,90233,90 108,953,505108,953,505 93,350,00093,350,000 735%35%82,285,0 2.735%2.73 2.735%.73 2.735%.73 9.468%.468% 8.184184 Participatiotionn 34 n ss of Participatiocipn Generalneral FundF Obligationonss ations sors Agency)Agency ofof ParticipationParticipatios tDebtebt pping Deptpt apping Debtebt bined Totala DebtDeb mbined Totaltal DebtDebt osos toto 2015/162015/16DOverlaOverla Thehe percentagepercentage ofof overlappingpping dede werewere estimatedestimated by determiningdeterm th thethe distric's totalotal taxabletaxable asessase (2)(2)Excludes tax andand reve To w n of Lo s Ga t o s Sc h e d u l e 11 Le g a l De b t Ma r g i n In f o r m a t i o n , La s t Te n Fi s c a l Ye a r s (I n Th o u s a n d s of Do l l a r s ) As s e s s e d Va l u e 1 1 , 1 9 8 , 2 3 7 , 7 9 8 $ De b t Li m i t 1 , 6 7 9 , 7 3 5 , 6 7 0 De b t Ap p l i c a b l e to Li m i t : Le g a l De b t Ma r g i n 1 , 6 7 9 , 7 3 5 , 6 7 0 $ 20 0 8 / 0 9 2 0 0 9 / 1 0 2 0 1 0 / 1 1 2 0 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 2 0 1 4 / 1 5 2 0 1 5 / 1 6 2 0 1 6 / 1 7 2 0 1 7 / 1 8 De b t Li m i t 1 , 1 0 2 , 7 6 6 $ 1, 1 8 5 , 7 2 7 $ 1, 2 0 4 , 5 5 1 $ 1, 1 9 5 , 0 3 5 $ 1, 2 1 6 , 1 3 1 $ 1, 2 6 3 , 1 3 8 $ 1, 3 7 9 , 2 5 4 $ 1, 4 4 4 , 9 4 3 $ 1, 5 5 6 , 2 5 2 $ 1, 6 7 9 , 7 3 6 $ De b t Ap p l i c a b l e to Li m i t Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Le g a l De b t Ma r g i n 1 , 1 0 2 , 7 6 6 $ 1, 1 8 5 , 7 2 7 $ 1, 2 0 4 , 5 5 1 $ 1, 1 9 5 , 0 3 5 $ 1, 2 1 6 , 1 3 1 $ 1, 2 6 3 , 1 3 8 $ 1, 3 7 9 , 2 5 4 $ 1, 4 4 4 , 9 4 3 $ 1, 5 5 6 , 2 5 2 $ 1, 6 7 9 , 7 3 6 $ To t a l Ne t De b t Ap p l i c a b l e to th e Li m i t as a Pe r c e n t a g e of De b t Li m i t 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % 0 . 0 0 % No t e s : (1 ) Th e To w n of Lo s Ga t o s is a ge n e r a l la w ci t y an d ha s a de b t li m i t of 15 % . (2 ) Ex c l u d e s RD A as e s s e d va l u a t i o n an d de b t tr a n s f e r r e d to th e Su c c e s s o r Ag e n c y tr u s t as a pa r t of th e RD A di s s o l u t i o n . Le g a l De b t Ma r g i n Ca l c u l a t i o n fo r Fi s c a l Ye a r 20 1 7 / 1 8 Fi s c a l Ye a r Dr a f t 1 01 0 / 1 1 2 0 1 1 / 1 2 /1 1 t 1 2 4, 5 5 1 1, 1 9 5 , 0 3 5 19 5 , 0 $ $ Ͳ 12 / 1, 1 9 5 , 0 3 5 1, 1 9 5 , 0 3 5 1, 2 1 6 , 1 $$ 2/ ft 1 t1 12 2/2/1 2 / 2 0 1 8 0. 0 0 % 0. 0 0 2/ To w n of Lo s Ga t o s Sc h e d u l e 12 De m o g r a p h i c an d Ec o n o m i c St a t i s t i c s La s t Te n Fi s c a l Ye a r s Pe r s o n a l In c o m e P e r Ca p i t a P u b l i c Co u n t y Fi s c a l (t h o u s a n d s Pe r s o n a l M e d i a n Sc h o o l Un e m p l o y m e n t Ye a r P o p u l a t i o n of do l l a r s ) In c o m e A g e E n r o l l m e n t R a t e En d e d ( 1 ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) ( 6 ) 20 0 9 3 0 , 4 9 7 1, 7 0 1 , 1 5 3 55 , 7 8 1 45 . 3 5 6 , 0 0 6 11 . 8 % 20 1 0 3 0 , 8 0 2 1, 7 8 7 , 0 7 0 58 , 0 1 8 45 . 0 9 6 , 1 0 0 11 . 3 % 20 1 1 2 9 , 6 5 1 1, 8 3 3 , 4 1 0 61 , 8 3 3 44 . 2 2 6 , 1 8 4 10 . 3 % 20 1 2 2 9 , 8 0 8 1, 8 5 4 , 8 9 2 62 , 2 2 8 42 . 6 4 6 , 3 5 2 8. 7 % 20 1 3 3 0 , 2 4 7 2, 1 4 0 , 6 4 1 70 , 7 7 2 45 . 8 0 6 , 4 2 0 6. 8 % 20 1 4 3 0 , 4 4 3 2, 2 6 7 , 9 1 2 74 , 4 9 7 45 . 8 0 6 , 5 2 2 5. 7 % 20 1 5 3 0 , 5 0 5 2, 1 9 7 , 8 8 5 72 , 0 5 0 46 . 1 0 6 , 6 2 2 3. 8 % 20 1 6 3 1 , 3 7 6 2, 2 8 6 , 0 8 7 72 , 8 6 1 46 . 3 0 6 , 6 4 6 3. 5 % 20 1 7 3 1 , 3 1 4 2, 2 8 1 , 5 6 9 72 , 8 6 1 46 . 5 0 6 , 6 3 1 3. 8 % 20 1 8 3 0 , 6 0 1 2, 2 9 0 , 6 3 8 74 , 8 5 5 46 . 8 1 6 , 5 8 8 2. 6 % So u r c e : (1 ) Ca l i f o r n i a St a t e De p t . of Fi n a n c e Ͳ Po p u l a t i o n Re s e a r c h Un i t (J a n u a r y 20 1 6 ) (2 ) Ca l i f o r n i a St a t e De p t . of Fi n a n c e Ͳ Es t i m a t e eq u a l s co u n t y pe r ca p i t a av e r a g e ti m e s po p u l a t i o n (3 ) Ca l i f o r n i a St a t e De p t of Fi n a n c e Ͳ co u n t y pe r ca p i t a at : la b o r m a r k e t i n f o . e d d . c a . g o v (4 ) Cl a r i t a s de m o g r a p h i c sn a p s h o t re p o r t (5 ) Lo s Ga t o s Sa r a t o g a Jo i n t Un i o n an d Lo s Ga t o s Un i o n El e m e n t a r y Sc h o o l Di s t r i c t s (6 ) St a t e of Ca l i f o r n i a , Em p l o y m e n t De v e l o p m e n t De p t . , La b o r Ma r k e t In f o . Di v . Dr a f t 1 2 / 1 2 / 2 0 1 8 Ec Ec Ye a r s Ye a r s Po p u l a t i o n Po p u l a t i o n (1 ) (1 ) 30 , 4 9 7 30 , 4 9 7 1, 7 0 1 , 1 5 1, 7 0 1 , 80 2 0 1, 7 8 7 , 0 7 0 1, 7 8 7 1, 8 3 3 , 4 1 0 1 1, 8 5 4 , 8 9 2 2 2, 1 4 0 , 6 4 1 2, 2 6 7 , 9 1 2 12 74 74 97 , 8 8 5 ,8 8 5 72 , 0 5 72 , 08 7 72 , 8 6 1 72 , 72 , 8 6 1 86 1 74 , 8 5 5 74 , 8 5 t (J a n u a r y Ja n u a 20 1 6 ) 6) ca p i t a av e r a g e ti m e s im e po ke t i n f o . e d d . c a . g o v et i n f o . e d d . c a . g Di s t r i c t s Di s t r i c t v raf af To w n of Lo s Ga t o s Sc h e d u l e 13 Pr i n c i p a l Em p l o y e r s La s t Te n Fi s c a l Ye a r s Pe r c e n t a g e P e r c e n t a g e P e r c e n t a g e P e r c e n t a g e P e r c e n t a g e P e r c e n t a g e P e r c e n t a g e P e r c e n t a g e P e r c e n t a g e P e r c e n t a g e of To t a l To w n o f To t a l To w n o f To t a l To w n o f To t a l To w n o f To t a l To w n o f To t a l To w n o f To t a l To w n o f To t a l To w n o f To t a l To w n o f To t a l To w n Pr i c i p a l Em p l o y e r s Em p . E m p l o y m e n t E m p . E m p l o y m e n t E m p . E m p l o y m e n t E m p . E m p l o y m e n t E m p . E m p l o y m e n t E m p . E m p l o y m e n t E m p . E m p l o y m e n t E m p . E m p l o y m e n t E m p . E m p l o y m e n t E mp . E m p l o y m e n t Co l u m b i a He a l t h Ca r e As s o c / M i s s i o n Oa k s Ho s p i t a l 2 , 0 0 0 12 . 3 1 % 2 , 0 0 0 12 . 1 7 % 2 , 0 0 0 12 . 6 0 % 2 , 0 0 0 13 . 8 9 % 2 , 0 0 0 13 . 2 9 % 2 , 0 0 0 13 . 5 2 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % 80 0 4. 9 2 % 7 0 0 4. 2 6 % 7 0 0 4. 4 1 % 7 0 0 4. 8 6 % 7 0 0 4. 6 5 % 7 0 0 4. 7 3 % 5 6 0 3. 7 3 % 5 6 0 3. 5 3 % 5 6 0 3. 4 9 % 5 6 0 3. 4 3 % Lo s Ga t o s Un i o n Sc h o o l Di s t r i c t 3 0 0 1. 8 5 % 3 0 0 1. 8 3 % 3 0 0 1. 8 9 % 2 7 5 1. 9 1 % 2 7 5 1. 8 3 % 2 3 7 1. 6 0 % 2 7 3 1. 8 2 % 2 8 0 1. 7 6 % 2 7 4 1. 7 1 % 2 6 7 1. 6 4 % Lo s Ga t o s Ͳ Sa r a t o g a Hi g h Sc h o o l Di s t r i c t 3 0 0 1. 8 5 % 3 0 0 1. 8 3 % 3 0 0 1. 8 9 % 2 7 0 1. 8 8 % 2 7 0 1. 7 9 % 2 5 6 1. 7 3 % 1 5 7 1. 0 5 % 1 5 7 0. 9 9 % 3 7 0 2. 3 0 % 3 6 7 2. 2 5 % Ͳ 0. 0 0 % 2 8 0 1. 7 0 % 8 0 0 5. 0 4 % 8 0 0 5. 5 6 % 9 0 0 5. 9 8 % 8 2 5 5. 5 8 % 1 , 5 3 0 10 . 1 9 % 1 , 9 7 6 12 . 4 5 % 1 , 8 6 4 11 . 6 1 % 2 , 1 1 7 12 . 9 8 % 20 0 1. 2 3 % 2 5 0 1. 5 2 % 2 5 0 1. 5 7 % 2 5 0 1. 7 4 % 2 5 0 1. 6 6 % 2 5 0 1. 6 9 % 3 1 4 2. 0 9 % 3 1 4 1. 9 8 % 3 1 4 1. 9 5 % 3 1 4 1. 9 2 % Al a i n Pi n e l Re a l t o r s Ͳ 0. 0 0 % 2 2 0 1. 3 4 % 2 2 0 1. 3 9 % 1 5 0 1. 0 4 % 1 5 0 1. 0 0 % 1 5 6 1. 0 5 % 1 5 6 1. 0 4 % 1 4 6 0. 9 2 % 1 4 8 0. 9 2 % 1 3 1 0. 8 0 % 20 0 1. 2 3 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Co u r t s i d e Te n n i s Cl u b 2 0 0 1. 2 3 % 2 0 0 1. 2 2 % 2 0 0 1. 2 6 % 2 0 0 1. 3 9 % 2 0 0 1. 3 3 % 2 9 5 1. 9 9 % 4 4 0 2. 9 3 % 4 4 0 2. 7 7 % 4 6 8 2. 9 1 % 5 4 2 3. 3 2 % To w n of Lo s Ga t o s 1 8 9 1. 1 6 % 1 4 8 0. 9 0 % 1 3 8 0. 8 7 % 1 3 6 0. 9 4 % 1 3 8 0. 9 2 % 1 4 4 0. 9 7 % 1 5 7 1. 0 5 % 1 5 8 1. 0 0 % 1 6 0 1. 0 0 % 1 5 9 0. 9 7 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % 1 7 9 1. 1 9 % 1 7 9 1. 1 3 % 1 7 9 1. 1 1 % 1 7 9 1. 1 0 % Va s o n a Cr e e k He a l t h Ca r e Ce n t e r Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % 2 3 3 1. 5 5 % 2 3 3 1. 4 7 % 2 3 3 1. 4 5 % 2 3 3 1. 4 3 % Go o d Sa m a r i t a n Re g i o n a l Ca n c e r Ce n t e r Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % 2 0 0 1. 3 3 % 2 0 0 1. 2 6 % 2 0 0 1. 2 5 % 2 0 0 1. 2 3 % Ro k u Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % 4 8 7 3. 0 7 % 5 5 4 3. 4 5 % 6 6 4 4. 0 7 % Te r r a c e s of Lo s Ga t o s Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % Ͳ 0. 0 0 % 2 2 8 1. 4 4 % 2 2 8 1. 4 2 % 2 2 8 1. 4 0 % Wh o l e Fo o d s 20 1 4 / 1 5 20 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 El Ca m i n o Ho s p i t a l , Lo s Ga t o s 20 0 8 / 0 9 2 0 0 9 / 1 0 20 1 0 / 1 1 20 1 5 / 1 6 Ne t f l i x Sa f e w a y Ve r i z o n 20 1 7 / 1 8 20 1 6 / 1 7 Dr a f t 1 2 / 1 2 / 2 0 1 8 Pe r c e n t a g e Pe r of o To t a l To w n wn of To t a Em p l o y m e n t E m p . E m p l o y m e Em p l o y m e n t E m p . 12 . 3 1 % 2 , 0 0 0 31 % 12 . 1 7 % 4. 9 2 % 7 0 0 4. 9 2 4. 2 6 % 7 0 4. 2 % 3 0 0 30 0 1. 8 3 % 3 0 0 1. 8 3 % 30 0 30 0 1. 8 3 % 3 0 0 1. 8 3 % 3 0 0 0 0 1. 7 0 % 8 0 0 % 8 0 0 5 1. 5 2 % 2 5 0 1. 5 2 % 2 5 0 1. 5 7 % 1. 3 4 % 2 2 0 1. 3 4 % 2 2 0 1. 3 9 % 0. 0 0 % % Ͳ 0. 0 0 % Ͳ % 2 0 0 1. 2 6 % 2 0 0 % 2 0 0 13 8 0. 8 7 % 1 3 6 13 6 0. 0 0 % 0% Ͳ 0. 0. 0 0 % 0. 0 0 % Ͳ 0. 0 0 % 0. 0 0 % 0. 0 0 % 0 Ͳ 0. 0 0 % 00 % 00 % % Ͳ Ͳ 0. 0 0 % 0. 0 0 % Ͳ Ͳ 0. 0 0 % Ͳ Ͳ 20 0 8 / 0 9 20 0 D D Dr Dr r To w n of Lo s Ga t o s Sc h e d u l e 14 Fu l l Ͳ ti m e Ͳ Eq u i v a l e n t Em p l o y e e s by Fu n c t i o n / P r o g r a m La s t Te n Fi s c a l Ye a r s 20 0 8 / 0 9 2 0 0 9 / 1 0 2 0 1 0 / 1 1 2 0 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 2 0 1 4 / 1 5 2 0 1 5 / 1 6 2 0 1 6 / 1 7 2 0 1 7 / 1 8 Fu n c t i o n / P r o g r a m Ge n e r a l Go v e r n m e n t 1 9 . 9 5 18 . 3 5 18 . 9 0 20 . 1 5 20 . 4 0 20 . 7 3 20 . 9 7 20 . 9 7 21 . 3 5 21 . 9 7 Po l i c e 6 1 . 0 0 60 . 0 0 59 . 5 0 60 . 5 0 58 . 0 0 57 . 5 0 60 . 0 0 59 . 0 0 59 . 0 0 59 . 0 0 Cu l t u r e an d Re c r e a t i o n 5 . 2 5 5. 2 5 3. 2 5 ͲͲ Ͳ Ͳ Ͳ Ͳ Ͳ Ec o n o m i c De v e l o p m e n t 1 . 0 0 1. 0 0 1. 0 0 1. 0 0 Ͳ 0. 5 0 0. 6 3 0. 6 3 0. 6 3 0. 7 5 Li b r a r y 1 0 . 3 5 10 . 3 5 8. 6 0 8. 6 0 8. 6 0 10 . 3 0 10 . 8 0 11 . 0 0 12 . 2 5 12 . 2 5 Pl a n n i n g 1 8 . 8 0 17 . 8 0 15 . 0 0 16 . 0 0 17 . 5 0 17 . 5 0 19 . 5 0 19 . 0 0 19 . 2 6 19 . 6 3 Pu b l i c Wo r k s 3 7 . 0 0 35 . 0 0 32 . 5 0 32 . 0 0 31 . 0 0 31 . 5 0 32 . 0 0 33 . 5 0 33 . 5 0 34 . 5 0 To t a l 1 5 3 . 3 5 14 7 . 7 5 13 8 . 7 5 13 8 . 2 5 13 5 . 5 0 13 7 . 5 3 14 3 . 9 0 14 4 . 1 0 14 5 . 9 8 14 8 . 1 0 Fu l l Ͳ ti m e eq u i v a l e n t em p l o y m e n t is ca l c u l a t e d as on e or mo r e em p l o y e e po s i t i o n s to t a l i n g on e fu l l ye a r of se r v i c e or ap p r o x i m a t e l y 2, 0 8 0 ho u r s a ye a r . Fu l l Ͳ ti m e Ͳ Eq u i v a l e n t Em p l o y e e s as of Ju n e 30 Dr a f t ye e s ye e s by Fu n Fu n aft 09 2 0 0 9 / 1 0 2 0 1 09 2 0 0 9 / 1 0 2 0 aft 1 2 / 1 2 18 . 3 5 8. 3 18 . 9 0 8. 9 0 00 59 . 5 0 9. 5 0 6 3. 2 5 3. 1. 0 0 1. 0 0 1. 0 8. 6 0 8. 6 0 8. 6 0 8 0 0 16 . 0 0 16 . 0 0 17 32 . 0 0 31 . 0 0 31 /12 / 2 0 1 8 .2 5 5 13 5 . 5 0 5 1 ng g on e on e fu l l fu l l ye a r ye a r aft aft /12 12 2/2 2/ To w n of Lo s Ga t o s Sc h e d u l e 15 Op e r a t i n g In d i c a t o r s La s t Te n Fi s c a l Ye a r s FU N C T I O N / P R O G R A M Ge n e r a l go v e r n m e n t 20 0 8 / 0 9 2 0 0 9 / 1 0 2 0 1 0 / 1 1 2 0 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 2 0 1 4 / 1 5 2 0 1 5 / 1 6 2 0 1 6 / 1 7 2 0 1 7 / 1 8 Bu i l d i n g Pe r m i t s Is s u e d Re s i d e n t i a l Pe r m i t s Is s u e d 6 7 6 73 3 71 1 74 7 73 8 81 3 80 5 8 9 9 7 4 4 8 4 9 Re s i d e n t i a l Pe r m i t s Va l u e 4 8 , 1 6 2 , 2 7 4 51 , 0 9 0 , 8 0 8 42 , 9 7 4 , 0 4 3 66 , 0 7 2 , 3 4 1 75 , 2 2 7 , 8 8 9 87 , 3 0 7 , 8 2 2 76 , 8 9 6 , 1 1 1 85 , 0 0 0 , 7 5 4 53 , 6 2 5 , 8 9 1 63 , 0 8 3 , 2 4 9 Co m m e r c i a l Pe r m i t s Is s u e d 2 4 11 7 12 8 10 7 13 7 13 9 13 3 1 4 7 1 3 5 1 0 5 Co m m e r c i a l Pe r m i t s Va l u e 4 , 3 5 6 , 3 0 7 7, 9 0 8 , 1 4 6 31 , 2 8 9 , 4 3 1 17 , 6 6 3 , 1 2 4 46 , 8 5 5 , 6 1 5 13 8 , 6 7 6 , 5 0 7 17 8 , 1 9 5 , 9 9 7 20 , 1 8 5 , 8 8 4 50 , 0 2 4 , 1 7 7 16 , 6 2 6 , 1 9 6 Pu b l i c a l l y Ow n e d Pe r m i t s Is s u e d 2 11 11 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Pu b l i c a l l y Ow n e d Pe r m i t s Va l u e 2 , 3 0 8 , 1 6 0 5, 7 3 2 , 0 1 4 40 , 0 0 0 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Re s i d e n t i a l Pa r k i n g Pe r m i t s Nu m b e r of Sp e c i a l Ev e n t Pe r m i t s Is s u e d 7 6 87 96 89 12 5 13 3 12 7 10 7 11 8 11 3 Nu m b e r of An n u a l Pe r m i t s Is s u e d 7 5 2 68 6 71 3 1, 2 2 3 1, 3 2 0 1, 3 7 6 1, 5 7 0 1, 3 6 3 1, 2 5 1 1, 3 4 2 Ci t y Cl e r k Nu m b e r of Co u n c i l Re s o l u t i o n s Pa s s e d 1 4 3 16 7 76 59 74 86 72 6 1 6 9 6 9 Nu m b e r of Or d i n a n c e s Pa s s e d 1 3 16 6 13 20 16 91 1 5 1 7 Nu m b e r of Co n t r a c t s Pa s s e d 1 9 7 20 6 21 8 22 7 22 0 19 6 22 2 2 8 3 2 4 0 2 6 2 Ge n e r a l Se r v i c e s Nu m b e r of Pu r c h a s e Or d e r s Is s u e d 3 9 6 36 5 33 6 35 8 31 8 30 1 27 7 3 3 4 3 3 1 3 2 2 Po l i c e Ph y s i c a l Ar r e s t s 9 2 5 83 1 87 2 69 0 64 8 64 1 69 5 98 7 1, 0 3 0 1, 1 6 4 Pa r k i n g Vi o l a t i o n s 1 1 , 1 4 8 11 , 5 1 2 14 , 3 7 7 12 , 9 3 8 11 , 9 9 1 14 , 4 2 1 13 , 3 2 1 13 , 9 7 5 12 , 8 6 3 11 , 7 8 4 Tr a f f i c Vi o l a t i o n s 2 , 5 8 8 3, 0 0 8 2, 7 1 8 2, 9 0 8 3, 3 3 3 4, 7 4 7 4, 6 3 3 5, 4 0 0 4, 6 3 4 4, 7 5 7 DU I Ar r e s t s 8 8 11 0 98 89 86 62 48 58 60 51 Li b r a r y Ci r c u l a t e d e Ͳ au d i o b o o k s 1 , 5 1 6 1, 8 5 2 1, 9 9 4 3, 3 8 8 4, 7 7 4 2, 4 1 4 * 5, 8 6 7 * 7, 7 6 1 10 , 0 0 6 8, 8 4 4 Ot h e r Pu b l i c Wo r k s St r e e t Re s u r f a c i n g / O v e r l a y / R e c o n s t r u c t i o n (m i l e s ) 3 . 5 4. 7 4. 7 8. 0 8. 0 10 . 0 1. 8 8. 0 10 . 0 2. 6 AD A C o m p l i a n c e : C u r b R a m p s 9 1 3 1 7 1 9 19 1 9 2 3 1 1 3 0 6 8 Tr a f f i c Ci r c l e s 1 1 1 1 1 Ͳ 1 1 1 1 St r e e t Po l e s 1 , 5 7 5 1, 6 0 5 1, 7 0 8 1, 6 1 1 1, 6 1 1 1, 6 1 1 1, 6 0 9 1, 6 0 9 1, 6 0 9 1, 7 6 2 Pl a n n i n g an d De v e l o p m e n t De p a r t m e n t Bu i l d i n g &Sa f e t y In s p e c t i o n s Pe r f o r m e d 1 0 , 3 6 7 9, 0 5 5 10 , 9 7 7 11 , 7 3 8 11 , 9 0 2 12 , 7 6 4 11 , 6 5 2 8 , 6 5 5 1 4 , 7 2 2 1 3 , 9 1 8 Re d e v e l o p m e n t : Nu m b e r of ac t i v e pr o j e c t s 3 3 1 Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ Ͳ So u r c e : To w n of Lo s Ga t o s , Fi n a n c e De p a r t m e n t *Ju l y 20 1 3 th e Li b r a r y se p a r a t e d fr o m No r t h e r n CA Di g i t a l Li b r a r y , Pa t r o n s ha d no lo n g e r ac c e s s to co l l e c t i o n s of mu l t i p l e li b r a r i e s . By 20 1 4 th e Li b r a r y ha s ex p a n d e d it s co n t e n t s gi v i n g pa t r o n s ac c e s s to mo r e ma t er i a l s . Fi s c a l Ye a r Dr a f t 1 2 / 1 2 / 2 0 1 8 20 0 8 / 0 9 67 6 48 , 1 6 2 , 2 7 4 16 2 , 2 7 4 5 24 24 4, 3 5 6 , 3 0 7 4, 3 5 6 , 3 0 7 7, 9 0 8 , 7, 9 0 8 , 2 2 1 2, 3 0 8 , 1 6 0 2, 3 0 8 , 1 5, 7 3 2 , 0 1 4 5, 7 3 2 , 0 1 4 76 76 87 68 6 16 7 76 16 6 6 20 6 6 21 8 33 6 33 6 35 8 35 87 2 87 2 69 0 69 0 77 12 , 9 3 8 93 8 2, 9 0 8 2, 9 0 8 3 89 8 3, 3 8 8 ,3 8 8 4, 7 7 4 4 8. 0 19 19 1 1 Ͳ 1, 6 1 1 1, 6 1 1 1, 6 1 1 1, 6 1 1 12 , 7 6 4 Ͳ Ͳ ha s ha s ex p a n d e d e it s s co n t e n t s co n t g Dr D To w n of Lo s Ga t o s Sc h e d u l e 16 Ca p i t a l As s e t St a t i s t i c s by Fu n c t i o n / P r o g r a m La s t Te n Fi s c a l Ye a r s 20 0 8 / 0 9 2 0 0 9 / 1 0 2 0 1 0 / 1 1 2 0 1 1 / 1 2 2 0 1 2 / 1 3 2 0 1 3 / 1 4 2 0 1 4 / 1 5 2 0 1 5 / 1 6 2 0 1 6 / 1 7 2 0 1 7 / 1 8 Fu n c t i o n / P r o g r a m Po l i c e Nu m b e r of St a t i o n s 1 2 2 2 2 2 2 2 2 2 Nu m b e r of Pa t r o l Un i t s 1 5 14 14 14 14 14 14 14 14 14 Pa r k i n g En f o r c e m e n t Ve h i c l e s 3 2 2 2 2 2 2 2 2 2 Ot h e r Pu b l i c Wo r k s St r e e t s (m i l e s ) 1 1 2 11 2 11 2 11 2 11 2 11 2 11 2 11 2 11 2 11 2 St r e e t l i g h t s 2 , 1 9 0 2, 1 1 2 2, 1 1 5 2, 1 1 6 2, 1 1 6 2, 1 0 9 1, 6 0 9 1, 6 0 9 1, 6 0 9 1, 7 6 2 Tr a f f i c Si g n a l s 2 8 28 28 29 29 29 29 30 30 30 Pa r k s an d Re c r e a t i o n Nu m b e r of Pa r k s 1 2 12 12 12 12 12 12 12 12 12 Nu m b e r of Co m m u n i t y Ce n t e r s 1 1 1 1 1 1 1 1 1 1 Pa r k i n g Nu m b e r of Pa r k i n g Ga r a g e s 1 1 1 1 1 1 1 1 1 1 Nu m b e r of Pa r k i n g Lo t s 2 2 22 22 22 22 22 22 22 22 22 Nu m b e r of Of f St r e e t Pa r k i n g Ga r a g e Sp a c e s 1 , 1 2 6 1, 1 2 6 1, 1 2 6 1, 1 2 6 1, 1 2 6 1, 1 2 6 1, 1 2 6 1, 1 2 6 1, 1 2 6 1, 1 2 6 So u r c e : To w n of Lo s Ga t o s , Fi n a n c e De p a r t m e n t Fi s c a l Ye a r ra ra m m 2 1 1 15 15 3 3 12 11 2 11 2 2, 1 1 2 2, 1 1 2, 1 1 2, 1 1 28 28 28 12 1 1 1 1 1 1 1 1 22 22 22 1, 1 2 6 ,1 2 6 1, 1 2 6 26 Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional OTHERINDEPENDENTAUDITOR’SREPORT Dr a f t 1 2 / 1 2 / 2 0 1 8 DEPENDENTDEPENDENT AA Thispageintentionallyleftblank Dr a f t 1 2 / 1 2 / 2 0 1 8 ThisTh pagee intentionalintentional REPORTONINTERNALCONTROLOVERFINANCIALREPORTINGANDON COMPLIANCEANDOTHERMATTERSBASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMEDIN ACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS TotheHonorableMayorandMembersoftheTownCouncil oftheTownofLosGatos LosGatos,California Wehaveaudited,inaccordancewiththeauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica andthestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbythe ComptrollerGeneraloftheUnitedStates,thefinancialstatementsofthegovernmentalactivities,thebusinessͲ typeactivities,eachmajorfund,andtheaggregateremainingfundinformationoftheTownofLosGatos, California,asofandfortheyearendedJune30,2018,andtherelatednotestothefinancialstatements,which collectively comprise the Town of Los Gatos, California’s basic financial statements, and have issued our report thereondated[DATE]. InternalControlOverFinancialReporting Inplanningandperformingourauditofthefinancialstatements,weconsideredtheTownofLosGatos, California’sinternalcontroloverfinancialreporting(internalcontrol)todeterminetheauditproceduresthatare appropriateinthecircumstancesforthepurposeofexpressingouropinionsonthefinancialstatements,butnot forthepurposeofexpressinganopinionontheeffectivenessoftheTownofLosGatos,California’sinternal control.Accordingly,wedonotexpressanopinionontheeffectivenessoftheTownofLosGatos,California’s internalcontrol. Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallowmanagementor employees,inthenormalcourseofperformingtheirassignedfunctions,toprevent,ordetectandcorrect, misstatementsonatimelybasis.Amaterialweaknessisadeficiency,oracombinationofdeficiencies,ininternal control,suchthatthereisareasonablepossibilitythatamaterialmisstatementoftheentity’sfinancialstatements willnotbeprevented,ordetectedandcorrectedonatimelybasis.Asignificantdeficiencyisadeficiency,ora combinationofdeficiencies,ininternalcontrolthatislessseverethanamaterialweakness,yetimportantenough tomeritattentionbythosechargedwithgovernance. Ourconsiderationofinternalcontrolwasforthelimitedpurposedescribedinthefirstparagraphofthissection andwasnotdesignedtoidentifyalldeficienciesininternalcontrolthatmightbematerialweaknessesor, significantdeficiencies.Giventheselimitations,duringourauditwedidnotidentifyanydeficienciesininternal controlthatweconsidertobematerialweaknesses.However,materialweaknessesmayexistthathavenotbeen identified. Dr a f t 1 2 / 1 2 / 2 0 1 8 20 1 epted in t nite 20 men Auditing Stand /20 f the governmental 2/2 information of 2/2 relate not o the 2/2 c financia ateme hehe financialfinancial stateme reportingporting (internal(interna co ee purposepo ofof expresspress opinionion on the effectieffect expressss ann opinionopinion oo controlntrol existsexis when th ormal coursecou ofof perfpe a timelymely basis.basis.AA mat at therere isi aa reasonabreasonab prevented,nted,oror detectedetecte tion of deficideficencicies,es,inin ritrit attentionattention byby thoset onsiderationonsideration ofo notnot desides eficefic TotheHonorableMayorandMembersoftheTownCouncil oftheTownofLosGatos LosGatos,California Page2 ComplianceandOtherMatters AspartofobtainingreasonableassuranceaboutwhethertheTownofLosGatos,California’sfinancial statementsarefreefrommaterialmisstatement,weperformedtestsofitscompliancewithcertain provisionsoflaws,regulations,contracts,andgrantagreements,noncompliancewithwhichcouldhavea directandmaterialeffectonthedeterminationoffinancialstatementamounts.However,providingan opiniononcompliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonot expresssuchanopinion.Theresultsofourtestsdisclosednoinstancesofnoncomplianceorothermatters thatarerequiredtobereportedunderGovernmentAuditingStandards. PurposeofthisReport Thepurposeofthisreportissolelytodescribethescopeofourtestingofinternalcontrolandcompliance andtheresultsofthattesting,andnottoprovideanopinionontheeffectivenessoftheentity’sinternal controloroncompliance.Thisreportisanintegralpartofanauditperformedinaccordancewith Government AuditingStandardsinconsideringtheentity’sinternalcontrolandcompliance.Accordingly,this communicationisnotsuitableforanyotherpurpose. Badawi&Associates CertifiedPublicAccountants Oakland,California DATE Dr a f t 1 2 / 1 2 / 2 0 1 8 California’sfornia’s finfin mpliancempliance withw certce withth whichw couldcould haha unts.However,However provi udit,dit,andand accordingly,accordingly of noncomplianceoncomplian or dss.. 2/2 of our testing inte 2/inio on eff 12 / rt o t perform /12 intern ntrol /1 pose. Dr a f t 1 2 / 1 2 / 2 0 1 8 Dr a f t 1 2 / 1 2 / 2 0 1 8