Attachment 1BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
1
INTRODUCTION
Purpose
This is the second quarterly budget performance
report for the Fiscal Year (FY) 2016/17, for the six
month period ending December 31, 2016. The
purpose of this quarterly public reporting is twofold.
First, it ensures that the Town is consistently
monitoring its revenues and expenditures so that it
can proactively respond to unanticipated changes or
emerging trends. Second, and equally important,
these reports increase the transparency of the
Town’s finances. The Town is ultimately accountable
to its residents to use the revenue it brings in
efficiently and effectively to provide the highest
quality services, and quarterly public reporting
provides taxpayers with information that
demonstrates the Town is meeting this standard.
Content
This quarterly report presents an overview of the
Town’s operating revenues and expenditures for the
quarter ending December 31, 2016, as compared to
previous years, and explains any notable changes or
trends in these numbers. This report also provides
information on any recommended budget
adjustments.
Timeframe and Limitations
The information in this report is the most accurate
and up-to-date information available at the time of
publication. However, this report is not an audited
financial statement and the numbers provided
herein are preliminary and subject to change as the
year progresses. No data on revenues and
expenditures is final until the Town has completed
its annual comprehensive audit and finalized its
Comprehensive Annual Financial Report (CAFR),
which is released in the winter of each year for the
prior fiscal year.
With respect to revenues: The Town regularly
monitors and adjusts its year-end revenue
projections based on revenue performance and
other developments that may affect Town revenues
in order to develop a more accurate picture of the
Town’s anticipated year-end financial position.
With respect to expenditures: The expenditure
information in this report is extracted directly from
the Town’s financial management system, and
adjustments are made to account for certain known
payments, reimbursements, or transfers between
Town Departments and funds that have not yet been
processed in the system at the time of publication. It
represents a snapshot of Town expenditures at a
certain point in time and does not reflect final
adjustments made to prepare the Town’s CAFR.
Table of Contents
Introduction .............................................................. 1
Executive Summary .................................................. 2
Status of FY 2016/17 Adopted Budget ....... 2
General Fund Reserve Status ..................... 2
Greater Economic Outlook ......................... 3
State Budget Update .................................. 3
General Fund – Key Revenue Analysis ..................... 4
Property Tax ............................................... 5
Sales Tax ..................................................... 6
Franchise Fees ............................................ 7
Business License Tax ................................... 8
Transient Occupancy Tax ............................ 9
Interest Income ........................................ 10
Charges for Services ................................. 11
Licenses & Permits ................................... 12
FY 2016/17 Recommended Budget Adjustments ... 12
Summary of Key Recommended Adjustments ....... 15
Financial Summaries and Projections ..................... 19
General Fund ............................................ 19
Special Revenue Fund .............................. 20
Capital projects Funds .............................. 21
Internal Service Funds .............................. 22
Trust and Agency Funds ........................... 23
Redevelopment Agency ........................... 23
Conclusion .............................................................. 23
ATTACHMENT 1
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
2
EXECUTIVE SUMMARY
Status of FY 2016/17 Adopted Budget
Overall, second quarter General Fund revenues are
trending favorably when compared to the second
quarter of Fiscal Year 2015/16. Due to some
projected revenue increases, staff is recommending
a net General Fund revenue increase of $1.2 million
from adopted budgeted estimates, offset by
expenditure increases (see below). The current
forecast expects a substantial increase in property
tax, motor vehicle in lieu, transient occupancy tax
(TOT), and business license tax due to the continued
surge in the local economy as well as tourism within
the Bay Area. It should be noted that while the
second quarter FY 2016/17 sales tax proceeds
indicate a significant increase, the overall sales tax
revenue is declining. The mid-year FY 2016/17 sales
tax proceeds include a one-time “triple flip” true-up
adjustment of sales tax from prior fiscal years.
Revenues such as licenses and permits, and franchise
fees are all trending favorably, a strong indication
that the economy continues to rebound (see
summary detail on page 13).
General Fund expenditure totals for the second
quarter are trending in accordance with forecasts,
with total operational expenditures at the end of the
second quarter at about 46% of the adopted budget.
With six months of data now available, staff can
better predict the next six months of expenditure
trends, although unexpected costs can occur.
Should any budget adjustments be necessary to
balance operating revenue and expenditures, staff
will advise the Council accordingly.
Expenditure additions at this time include increased
water utility expenses, mandatory well testing
expenses, increased waste management service
costs, sales tax recovery services, funding to provide
additional emergency tree services, medical
examinations, recruitment expenses, and labor
negotiation expenses (see page 13 for details).
Providing services to the community in this and
future fiscal years will continue to require strong
performance by economically sensitive revenues to
offset benefit and other cost increases. The FY
2016/17 budget is the third budget in five years that
is not projected to be a deficit budget where cuts are
needed to balance. FY 2017/18 budget will continue
to fund essential public services to ensure a status
quo budget. Contractual obligations and unfunded
mandates will be incorporated into the proposed
budget.
General Fund Reserve Status - 6/30/16
General Fund Reserves are classified into categories
– Restricted, Committed, Assigned, and Unassigned.
Restricted reserves are those which are restricted in
use by accounting standards or legal agreements and
are not considered as available for use for another
purpose. Committed reserves are established by
Council Policy for an intended purpose. Assigned
fund balance describes a portion of fund balance
that reflects a government’s intended use of
resources. Unassigned fund balance is available for
appropriation.
General Fund Reserves, exclusive of the
Compensated Absences Fund, closed on June 30,
2016 with a balance of approximately $27.5 million
in committed and assigned reserves which is in
accordance with Town financial policies and
operating and capital budget requirements.
Committed
Budget Stabilization Reserve $6.6
Catastrophic Reserve $4.6
CalPERS Reserve $0.3
Almond Grove Reserve $8.5
Assigned
Carryforward Appropriation $0.1
Strategic Planning $2.6
Capital Improvements $4.0
Open Space $0.6
Sustainability Reserve $0.1
FY 2016/17 Commitments $0.1
Total General Fund Reserves $27.5
General Fund Reserves
6/30/2016
Amount
(millions)
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
3
The Budget Stabilization Reserve was established to
serve as a transitional “bridge” funding source to
mitigate or smooth out cyclical ups and downs in
locally generated revenues due to fluctuations in the
local economy or “one-time” revenue losses where
the revenue base is likely to be restored in the near
future. The Catastrophic Reserve was established to
mitigate costs associated with unforeseen
emergencies, such as a disaster or catastrophic
event. Per the Town Council General Fund Reserve
Policy, the combined total of these two reserves is
25% of the General Fund operating expenditures.
The CalPERS Reserve was established in an initial
amount of $300,000 to mitigate the Town’s
unfunded pension liabilities in June 2016. According
to the June action, an annual payment of $300,000 is
deposited from available year-end savings.
The reserve for Capital and Special Projects, funded
from annual available General Fund budget savings,
serves as the primary source for replenishment to
the Town’s General Fund Appropriated Reserves
(GFAR), which is the Town’s Capital Improvement
Fund. This Reserve functions as a potential funding
source for new capital projects or augmentations to
authorized projects funded through the Town’s Five
Year Capital Improvement Program (CIP). Out of the
$4 million available in Capital Improvement Reserve,
$1.4 million is already committed for capital projects
in FY 2016/17.
The availability of approximately $27.5 million in
committed, assigned, and currently unassigned
General Fund Reserves provides the Town with
resources to manage through current and/or future
fiscal challenges and opportunities. The $2.6 million
Strategic Planning balance will be incorporated into
the FY 2017/18 budget process based on the Council
January 31, 2017 budget priority direction.
Federal Economic Outlook
The Congressional Budget Office (CBO) anticipates
that the economy will expand at a solid pace over
the next few years. Real Gross Domestic Product
(GDP) is anticipated to grow by about 2.3% in 2017.
By the CBO’s projections, increased hiring will
reduce the national unemployment rate and it will
reach 4.4% by the end of 2018. The increased hiring
will also encourage more people to enter or stay in
the labor force. The CBO also estimates that the rate
of inflation will rise to 1.9% in 2017 and to 2.0% in
2018.
The CBO expects that the interest rates on Treasury
securities, which have been exceptionally low since
the recession, will reach 1.1% in the fourth quarter
of 2017, 1.6% in the fourth quarter of 2018. In
addition, federal lawmakers still face the longer-
term issues posed by the large projected national
debt and the implementation of rising health care
costs for an aging population.
The US Department of Commerce reported that
home construction rose 4.4% since last year.
State Budget Update
Since 2011, the State of California’s fiscal situation
has dramatically turned around. As the State’s
economy has recovered, the past three budgets
have restored some previous budget cuts and
expanded services, such as extending health care
coverage to millions of Californians. In addition, the
State has paid down its budgetary borrowing and
addressed some long standing problems - such as
implementing a plan to restore fiscal health to
teacher pensions, and making some improvements
to the State’s water system. A strengthening State
economy is continuing to push revenues higher. The
State’s unemployment rate is below 6% for the first
time since 2007.
In 2015, capital gains - the state’s most volatile
revenue source - reached an all time high. The
economy is finishing its seventh year of expansion,
already two years longer than the average recovery.
While the timing is uncertain, the next recession is
getting closer, and the state must begin to plan for
it. The Governor’s Proposed Budget is more
conservative, anticipating reductions in revenues
and associated reductions in expenditures.
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
4
GENERAL FUND – KEY REVENUE ANALYSIS
The following discussion provides a status of significant General Fund revenue sources as of the second quarter,
ending December 31, 2016.
Staff monitors each revenue source closely and may recommend certain revenue adjustments based on revenue
actuals or state budget action.
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
5
Property Tax
Property tax is the largest revenue source for the Town’s General Fund, accounting for 27.6% of budgeted General
Fund revenues in FY 2016/17. Property tax is levied by the Santa Clara County Assessor’s Office at 1% of a
property’s assessed value, of which the Town receives approximately 9.3 cents per dollar paid on property located
within the municipal limits of Los Gatos. In compliance with Proposition 13, the assessed value of real property is
based on the 1975/76 assessment roll value, adjusted by 2% inflation factor thereafter. However, when property
changes hands or new construction occurs, property is reassessed at its current market value. Real property
values critically impact revenues. With the passage of Proposition 13, voters limited the tax rate that can be
imposed by the Town on property. With the limitation on rates, therefore, higher revenues are generated by a
higher aggregate property value.
Analysis – Property Tax distributions are largely received in the third and fourth quarters. Property tax budget
projections are based on valuation projected by the Santa Clara County Assessor’s Office, given increased home
sales, coupled with anticipated adjustments in property tax distribution due to the dissolution of California
Redevelopment Agencies. Second quarter receipts are trending higher than those received during the second
quarter of the previous fiscal year and are at 41% of budgeted totals. Based on these trends and the County
projections, staff recommends a $593,303 increase in General Property Tax.
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
2nd Quarter Actual Revenues 3,768,794$ 3,475,492$ 3,690,329$ 4,030,272$ 4,274,774$
Fiscal Year Total Actual Revenues 9,477,043$ 9,054,908$ 10,113,287$ 10,791,743$
Fiscal Year Budgeted Revenues 10,458,633$
2nd Quarter Percent of Total 40%38%36%37%41%
Recommended Budget Revision 593,303$
PROPERTY TAX
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual
Revenues
Fiscal Year Total
Actual Revenues
Fiscal Year Budgeted
Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
6
Sales Tax
Sales tax is the second largest revenue source for the Town’s General Fund, accounting for 21.6% of budgeted
General Fund revenues for FY 2016/17. The Town currently receives 1 cent for every 8.50 cents of sales tax paid
per dollar on retail sales and taxable services transacted within Los Gatos. A half-cent County-wide sales tax was
approved by the voters in November 2016 and will be effective April 1st bringing the sales tax rate to 9.00%. Since
the implementation of the mechanism commonly known as the “triple flip,” the State Board of Equalization retains
0.25 cents of the Town’s 1-cent share and requires the Santa Clara County Assessor to replace it with an equal
amount of property tax revenue. Revenues are remitted from the State to the Town on a monthly basis, and from
the County to the Town on a biannual basis. FY 2016/17 marks the final “triple flip” true-up payment. From FY
2016/17 the State Board of Equalization will distribute the full 1 percent sales tax share to the Town. These
revenues are placed in the General Fund for unrestricted uses.
Analysis – The most recent sales tax and economic review update from MuniServices, the Town’s sales tax analysis
consultant, states that while sales tax receipts statewide grew by 1.9%, Town of Los Gatos Sales Tax revenues
decreased by 2% over the same period. Second quarter receipts are trending behind tho se in the same period last
fiscal year. First quarter actual proceeds include a $900,000 final “ triple-flip” true-up payment from previous fiscal
years including FY 2015/16; as demonstrated in the graph below the FY 2015/16 proceeds were less since the final
triple-flip payment was distributed in FY 2016/17. The negative impact associated with the Netflix change in
business model continues to impact the Town as is the trend of increased on -line retail versus local brick and
mortar shopping compounded by lower gasoline prices. Staff recommends a $650,553 budget increase to reflect
the combined effect of one-time revenue and declining sales tax projection.
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
2nd Quarter Actual Revenues 2,975,082$ 2,825,414$ 2,532,086$ 2,397,533$ 4,069,524$
Fiscal Year Total Actual Revenues 8,757,428$ 8,029,571$ 8,202,678$ 7,501,175$
Fiscal Year Budgeted Revenues 8,164,403$
2nd Quarter Percent of Total 34%35%31%32%50%
Recommended Budget Revision 650,553$
SALES TAX
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter
Actual Revenues
Fiscal Year Total
Actual Revenues
Fiscal Year
Budgeted
Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
7
Franchise Fees
Franchise fees are collected by the Town for the privilege of operating a utility service within Los Gatos, and as a
fee in lieu of a business license tax. Franchise fees are currently received from Comcast for cable television, PG&E
for gas and electric services, West Valley Collection and Recycling for solid waste collection services, and AT&T and
Comcast for video services. Franchise fees represent 5.8% of budgeted General Fund revenues in FY 2016/17.
Analysis – Historically, franchise payments are not remitted equally throughout the fiscal year; therefore second
quarter receipts are not necessarily predictive. Total franchise fee revenues are trending slightly higher than those
of the second quarter in FY 2015/16. Staff recommends a $30,000 budget increase to this revenue source.
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
2nd Quarter Actual Revenues 685,308$ 681,431$ 735,550$ 755,451$ 794,077$
Fiscal Year Total Actual Revenues 2,028,903$ 2,063,756$ 2,215,430$ 2,258,892$
Fiscal Year Total Budgeted Revenues 2,191,120$
2nd Quarter Revenue Percent of Total 34%33%33%33%36%
Recommended Budget Revision 30,000$
Franchise Fees
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual
Revenues
Fiscal Year Total
Actual Revenues
Fiscal Year Total
Budgeted Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
8
Business License Tax
The Town requires all businesses located within Los Gatos and/or those that operate within Los Gatos, to obtain a
business license. The amount of business license tax paid by each business is based on its business activity. Fees for
activities such as wholesale sales and manufacturing are charged on a sliding scale b ased on gross receipts, as is
retail, but retail is capped at $975. These activities account for approximately 25% of annual business licenses,
while the remaining 75% are flat fee business es. Annual renewal payments are due on January 2 of each year.
Payments for new flat-fee-based businesses are pro-rated by quarter.
Analysis – As a result of the projected increase in economic activity, business license tax revenue for the current
fiscal year was budgeted slightly higher than the prior year budgeted number. Second quarter revenues are
significantly lower compared to prior year second quarter revenue; however, first quarter revenue is trending
higher when compared to revenues prior to FY 2014/15. FY 2014/15 actual revenues reflected below include a one-
time prior year adjustment for business license tax collection from Netflix. This adjustment was due to a
reclassification that happened in the first quarter of FY 2014/15. Current year second quarter revenues are
trending in line with prior year result consistent with the improved economic outlook. Therefore, staff recommends
a budget increase of $150,000.
FY 12/13 FY 13/14 FY 14/15
2nd Quarter Actual Revenues 327,237$ 352,049$ $ 945,846*$ 870,249**745,633$
Fiscal Year Total Actual Revenues 1,151,579$ 1,130,020$ 1,779,307$ 1,465,547$
Fiscal Year Total Budgeted Revenues 1,300,000$
2nd Quarter Revenue Percent of Total 28%31%53%59%57%
Recommended Budget Revision 150,000$
* Incudes "one-time" prior years adjustments due to Netflix recalssification to E-Commerce business
** Includes 2014 actual gross receipt adjustment for Netflix at the first time
Business License Tax
FY 15/16 FY 16/17
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual
Revenues
Fiscal Year Total
Actual Revenues
Fiscal Year Total
Budgeted Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
9
Transient Occupancy Tax
The Town levies a 12% transient occupancy tax (TOT) on all hotel and motel rooms within the municipal limits of Los
Gatos. This tax helps to fund Town services provided to visitors to Los Gatos. At the November 8, 2016 election the
Town of Los Gatos residents approved a ballot measure increase the TOT from 10% to 12%. The 12% rate is
effective from January 1, 2017.
Analysis – Visit California, formerly the California Travel and Tourism Commission, reports that the total number of
visitors to California grew 3.4% in 2015. The forecast for California visitation is increasing by 2.2% in 2016. Personal
and business related travel is gaining strength. Second quarter TOT revenues are trending higher than those of the
second quarter of 2015/16. Based on the recent trend and the combined effect of increased TOT rate, staff is
recommending a budget increase of $100,000.
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
2nd Quarter Actual Revenues 434,419$ 562,906$ 882,406$ 766,651$ 817,061$
Fiscal Year Total Actual Revenues 1,295,887$ 1,512,846$ 1,896,721$ 1,943,166$
Fiscal Year Total Budgeted Revenues 1,900,000$
2nd Quarter Revenue Percent of Total 34%37%47%39%43%
Recommended Budget Revision 100,000$
Transient Occupancy Tax
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual
Revenues
Fiscal Year Total Actual
Revenues
Fiscal Year Total
Budgeted Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
10
Interest Income
The Town earns interest income by investing monies not immediately required for daily operations in a number of
money market instruments. These investments are made within the parameters stated in the Town Council’s
Investment Policy. The Town’s investment goal is to achieve a competitive rate of return while protecting the safety
of its funds. Interest income revenue is pri marily dependent on two factors: the cash balance in the Town’s
investment portfolio and the yield on those funds.
Analysis – Second quarter receipts are trending above those in the same period in the prior fiscal year. Financial
indicators throughout the market are predicting a slight increase. The increase of the interest earnings experienced
this fiscal year are reflective of the Town’s total portfolio yield increasing from 0.76% as of December 31, 2015 to
the current yield of 0.86% as of December 31, 2016.
The strategy for the foreseeable future continues to be to remain fairly short -term and to invest in callable agency
bonds in order to attempt to pick up a few basis points over non -callable agencies and treasuries. Because of the
rising interest forecast, staff is continuing to focus on the purchase of new short-term (two years or less in maturity)
investments as the rewards for longer term investments in the three to five year maturity do not have adequate
spreads to justify the risk of holding longer term maturities. The Town also attempts to find good solid corporate
bonds when possible. Staff recommends a $60,000 budget decrease to better match current year-end estimates
with budget.
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
2nd Quarter Actual Revenues 276,974$ 251,835$ 161,825$ 146,500$ 187,954$
Fiscal Year Revenues 422,840$ 514,380$ 379,154$ 317,766$
Fiscal Year Total Budgeted Revenues 438,880$
2nd Quarter Revenue Percent of Total 66%49%43%46%43%
Recommended Budget Revision (60,000)$
Interest Income
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual
Revenues
Fiscal Year Revenues
Fiscal Year Total
Budgeted Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
11
Charges for Services
Town Service revenues consist primarily of planning, building, inspections, and engineering fees assessed on local
building and development activity. Development fees and charges are assessed based on recovery formulas, which
reflect approximate costs of providing these regulatory services.
Analysis – Second quarter Town service revenues, specifically Charges for Services, are trending in line in the second
quarter compared to the previous fiscal year, with 54% of budgeted revenues already received. Typically
development fees are collected in advance for projects and recognized as revenue in the fiscal year the work is
performed. Staff recommends a $100,000 budget increase.
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
2nd Quarter Actual Revenues 1,362,841$ 1,398,426$ 1,341,401$ 1,391,766$ 1,280,107$
Fiscal Year Total Actual Revenues 3,070,127$ 2,684,126$ 2,643,276$ 2,677,944$
Fiscal Year Total Budgeted Revenues 2,370,070$
2nd Quarter Revenue Percent of Total 44%52%51%52%54%
Recommended Budget Revision 100,000$
Charges for Services
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual
Revenues
Fiscal Year Total
Actual Revenues
Fiscal Year Total
Budgeted Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
12
Licenses and Permits
Licenses and permits consist mainly of planning and building permit fees which are collected by the Town to offset
administrative costs associated with evaluating development proposals to ensure compliance with codes and
policies. Licenses and Permit revenue was budgeted slightly lower than FY 2015/16 in anticipation of decreased
development activity.
Analysis – Second quarter License and Permit revenue is trending well ahead of second quarter results from the
previous fiscal year. Second quarter revenues include approximately $400,000 deferred revenues from FY 2015/16
as some of the big-scale development projects started last year were not completed in FY 2015/16. Therefore, staff
recommends a budget revenue increase of $50,000.
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
2nd Quarter Actual Revenues 1,566,216$ 1,950,393$ 2,282,444$ 1,975,156$ 1,879,951$
Fiscal Year Total Actual Revenues 3,060,948$ 3,235,122$ 3,687,393$ 3,552,935$
Fiscal Year Total Budgeted Revenues 2,946,583$
2nd Quarter Revenue Percent of Total 51%60%62%56%64%
Recommended Budget Revision 50,000$
Licenses & Permits
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17
Quarterly and Annual Revenues
5-Year History
2nd Quarter Actual
Revenues
Fiscal Year Total
Actual Revenues
Fiscal Year Total
Budgeted Revenues
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
13
FY 2016/17 Recommended Budget Adjustments
Budget adjustments are recommended for the following revenues and expenditures at the second quarter as
described above:
Fund Program Account
111 1201 411XX Property Tax 593,303$
111 1201 43311 Motor Vehicle In Lieu Fee 223,160
111 1201 41211 Sales & Use Tax 650,553
111 1201 41311 Transient Occupancy Tax 100,000
111 1201 41613 Garbage Franchise Fee 30,000
111 1201 45912 Albright Settlement (244,333)
111 1201 45927 Medicare Part D Subsidy (45,550)
111 2301 41411 Business License Tax 150,000
111 2301 4521X Interest (60,000)
111 2999 48623 Humane Society - Dog Project 3,002
111 3201 42413 Planning Permits 50,000
111 3201 44421 Plan Check Building 100,000
111 4303 44512 Crossing Guard Services 16,651
111 4810 43208 EMPG Grant - Laptops 11,000
111 4811 43213 Bulletproof Vest Partnership (BVP) Grant 4,076
111 7204 44529 CA Research and Education Network 11,900
TOTAL GENERAL FUND REVENUES 1,593,762$
Fund Program Account
111 1201 63211 Muniservices Sales Tax Discovery 28,000
111 1201 63213 ATM Recruitment Services 24,000
111 2201 63214 Labor Services 47,000
111 2999 68623 Humane Society - Dog Project 3,002
111 3301 61117 Reference Material 5,500
111 4302 63342 Crossing Guard Services 20,946
111 4810 61133 EMPG Grant - Laptops 11,000
111 4811 61145 Bulletproof Vest Partnership (BVP) Grant 4,076
111 5101 61241 PPW Office Furniture 19,880
111 5101 64292 Educational Reimbursement 1,500
111 5202 63356 Underground Utility Locator - Increased Cost 5,800
111 5301 62379 Increased TurfPro Contract 2,600
111 5301 62613 Water - Increased Cost in Parks Program 75,000
111 5302 61258 EV Charging Station 1,543
111 5302 62167 Outside the Box - Phase 2 17,112
111 5302 63219 Groundwater Monitoring Services 17,628
111 5302 63367 Increase Recycling Contract Cost 6,026
111 5401 62364 Additional Tree Services 75,000
111 7204 63362 CA Research and Education Network 17,000
TOTAL GENERAL FUND EXPENDITURES 382,613$
FY 2016/17 MID-YEAR BUDGET ADJUSTMENT REQUESTS - GENERAL FUND
General Fund Revenues
General Fund Expenditures
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
14
Fund Program Account -
411
411 411-832-4507 45411 Forbes Mill Footbridge Project - Donation 9,781
411 411-813-0226 49426 Bicycle & Pedestrian Master Plan - Community Health Grant 15,000
24,781$
481
481 481-811-9901 82405 Decreased Gas Tax Revenue Projections for Street Repair (26,599)
(26,599)$
621
621 2501 49711 From Library Trust - Laptops Anytime 10,000
10,000$
711
711 7301 45451 Donation from TIAA for Teens Program 500
711 7301 45452 Friends Contribution - Laptops Anytime Project 10,000
10,000$
TOTAL OTHER FUNDS REVENUES 18,182$
Fund Program Account
411
411 411-832-4507 82405 Forbes Mill Footbridge Project - Donation 9,781
411 411-813-0226 82303 Bicycle & Pedestrian Master Plan - Community Health Grant 15,000
411 411-813-0219 82405 Stonybrook and Kennedy Roads Sidewalk Improvements 150,000
411 411-821-2115 82405 HVAC - Chiller Repairs 125,000
299,781$
463
463 463-816-0410 82405 Bicknall Storm Drain Design 21,500
21,500$
481
481 481-811-9901 82405 Decreased Gas Tax Revenue Projections for Street Repair (26,599)
(26,599)$
612
2202 62332 Ergonomic Evaluation 10,500
10,500$
621
2501 61133 Laptops 10,000
10,000$
631
633 5402 81102 Vehicle Replacements - Detective Vehicles 6,521
6,521$
633
633 5404 61222 Fire Protection Services - Repair NUMU Leaks 34,607
5404 62371 Building Maintenance & Repairs 40,000
5404 62379 Window Films for Privacy at PD Facilities 15,000
5404 62613 Water - Increased Cost in Facilities Program 18,000
107,607$
711
711 7301 62420 Donation from TIAA for Teens Program 500
711 7301 99621 To MIS Cover Portion of the Laptop Anytime 10,000
10,500$
TOTAL OTHER FUNDS EXPENDITURES 439,810$
FY 2016/17 MID-YEAR BUDGET ADJUSTMENT REQUESTS - OTHER FUNDS
Library Trust Fund
Other Fund Revenues
GFAR
Library Trust Fund
Management Information Systems
Gas Tax
Other Fund Expenditures
Gas Tax
GFAR
Storm Drain 3
Facilities Maintenance
Workers Compensation
Equipment Replacement
Management Information Systems
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
15
SUMMARY OF KEY RECOMMENDED BUDGET ADJUSTMENTS
General Fund Revenues
General Property Tax and Motor Vehicle in Lieu Fee: Staff recommends an increase in projected revenues
of approximately $593,303 in General Property Tax and $223,160 Motor Vehicle in Lieu fee which are in
line with the estimates and forecasts provided to the Town from Santa Clara County.
Sales and Use Tax: Staff recommends a $650,553 budget increase to reflect the combined effect of one -
time revenue and declining sales tax projection provided by MuniServices, the Town Sales Tax advisor .
Business License: Staff recommends a revenue increase of $150,000 as a result of an increase in business
license activity received during the period.
Transient Occupancy Tax: Actual receipts and Visit California forecasts indicate a steady growth in travel.
In addition the Transient Occupancy Tax rate increased from 10% to 12% effective January 1, 2017
therefore, staff recommends recognizing a revenue increase of $100,000.
Plan Check Building Service: Staff recommends $100,000 increase in revenues due to increased building
activities.
Planning Permits: Staff recommends $50,000 increase in permit revenues due to increased planning
activities.
Garbage Franchise Fees: Staff recommends $30,000 increase in revenues due to increased garbage
franchisee fee collections.
Staff recommends a budget adjustment of $16,651 to align the budget to the revenue Town recieves from
particpating schools for cross guard services.
California Research and Education Network (CALREN) rebates: Staff recommends a budget i ncrease of
$11,900 to recognize rebates the Town will receive as part of the California statewide state-funded
initiative to connect libraries to the CALREN.
Emergency Management Performance Grant (EMPG): The Town received $11,000 grant to fund laptop
purchasing for the Emergency Operation Center (EOC). Staff recommends a budget increase of $11,000.
Bulletproof Vest Partnership (BVP) Grant: Staff recommends a budget adjustment of $4,076 to recognize
grant funds for the purchase of bulletproof vests.
Silicon Valley Humane Society – Dog Project: Staff recommend $3,002 increase to recognize funding that
received from Silicon Valley Humane Society dedicated for a infrastruture project that provides a benefit
to dogs within the Town of Los Gatos.
Medicare Part D Subisdy: Staff recommends a budget decrease of $45,550 since CalPERS discontinued the
refund due to the implementation of a Medicare waiver plan.
Interest Income: Staff recommends a $60,000 decrease to better match current year -end projection with
the budget.
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
16
Albright Settlement: Staff recommends a budget decrease of $244,333 for the Albright settlement for the
second building occupancy. The Albright settlement amount was received and moved to a deposit
account until further Council direction.
General Fund Expenditures
Water Utility: Staff recommends a $75,000 budget increase due to increased water utility cost for parks.
Water expenditures are tracking high while use remains similar to last year.
Tree Services: Staff recommends a $75,000 budget increase to supplement the annual funding of
$100,000 for tree maintenance and emergency removals due to recent storm activity.
Labor Services: Staff recommends a $47,000 budget adjustment for additional legal and negotiation
services.
Sales Tax Recovery Services: Due to a larger sales tax recovery from MuniServices, staff recommends a
$28,000 budget adjustment for the larger than usual expense associated with the recovering activities.
Recruitment Services: Staff recommends an adjustment of $24,000 for additional recruitment services for
the Assistant Town Manager position.
Mandated Well Testing and Monitoring: Staff recommends an adjustment of $17,628 for well testing and
monitoring required by the County of Santa Clara. Before 1990, an underground oil tank leaked into the
surrounding soil. The Town began cleanup operations but did not complete the ongoing monitoring
element. Town staff began testing in FY 2014/15, and as a result, more testing and samples were required
by the County. The County has required that this project be closed out.
Crossing Guard Services: Staff recommends an expenditure budget adjustment of $20,946 to meet the
increased cost of services.
PPW Office Furniture: Staff recommends a $19,880 adjustment to improve ergonomic working conditions
at the PPW offices.
Outside the Box: Staff is requesting $17,112 to fund the Outside the Box Phase 2 program. The requested
funds will cover the vinyl wraps for 8 additional boxes, artist stipends, and additional materials. Staff
anticipates one final phase of about 3 to 5 boxes next fiscal year.
EMPG Grant - Laptops: Staff was granted $11,000 in grant dollars to purchase new laptops for the EOC.
An adjustment of $11,000 is recommended.
Downtown Waste and Recycling Collection Services and Additional Recycling Bins: Staff recommends an
adjustment of $6,026 for weekend collection services, due to increased service cost in the Downtown
area.
Mandated Utility Location Services: Due to increased cost of mandated utility location services, staff
recommends an adjustment of $5,800.
Reference Material: Staff recommends an adjustment of $5,500 due to the cost of replacing outdated
reference materials.
BVP Grant: Staff was granted $4,076 in grant dollars to purchase new bulletproof vest. An adjustment of
$4,076 is recommended.
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
17
Humane Society Dog Project: Staff recommend $3,002 increase to be able to spend the funding received
from Silicon Valley Humane Society dedicated for a infrastruture project that provides a benefit to dogs
within the Town of Los Gatos.
Miscellaneous Operating Expenditures: Staff recommends $5,643 combined expenditure budget increase
to cover non-anticipated cross departmental operational expenditures (including educational
reimbursements, turf maintenance, and electric vehicle charging station).
Other Fund Revenues and Expenditures
Stonybrook and Kennedy Roads Sidewalk Improvements: The original cost estimate for the
Stonybrook/Kennedy project was based on a design that retrofit the existing retaining wall structure on
Kennedy Road. Following review of the design by a geotechnical engineer, it was determined that the
existing structure could not be used and a new structure would need to be built, thereby increasing the
cost. Additionally, following review of the project by the US Fish and Wildlife Service, it was determined
that the Town would need to hire a biological consultant to review the project and perform several
environmental studies. Staff recommends a $150,000 expenditure budget increase.
Civic Center Chiller Repair: The Civic Center chiller is at its half-life and recent tests on the chiller show
several refrigerant leaks, which will require a rebuild of the chiller to remedy. The rebuild will cost
approximately $125,000 and would be scheduled for construction in the winter months. Staff
recommends repairing the chiller before the summer months and $125,000 expenditure budget
adjustment for this project.
Bicknell Storm Drain: Town staff determined that an existing Town storm drain line that entered a
resident’s property on Bicknell Road near Montclair did not have a storm drain easement, which is
needed for the Town to use the resident’s property for this purpose. Staff recommends $21,500
expenditure budget adjustment to this capital project to fund the consultant design cost to reroute this
storm drain line off of the resident’s property. The design will result in a project estimate for future
construction costs.
Staff recommends a $15,000 revenue and expenditure budget increase to recognize the Partnership to
Improve Community Health (PICH) grant from the Santa Clara County Public Health Department that will
be received and dedicated to the Bicycle & Pedestrian Master Plan.
Laptops Anytime Program: The Library is launching is the new laptop vending machine by Laptops
Anytime. This automated checkout kiosk will house 12 Dell laptops which can be checked out with a
Library card for two hours for in-house use. The technology will create a more flexible programming
space in the Technology Lab and will also provide patrons with an opportunity to find their own
comfortable location in the Library. The machine and laptops will also be wrapped in a design unique to
Los Gatos Library. The Friends of the Los Gatos Library has generously donated $10,000 to help offset the
total cost. Staff recommends a $10,000 budget revenue and expenditure increase to receive the donation
and pay for the laptops. Management Information System budget is being adjusted to reflect the revenue
and expenditure.
Ergonomic Evaluation: Staff recommends a $10,500 budget increase to fulfill Town-wide ergonomic
evaluation and equipment needs.
Forbes Mill Footbridge Project: Staff recommends a $9,781 revenue and expenditure budget increase to
recognize the donation dedicated to the Forbes Mill Footbridge Project.
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
18
Gas Tax: Staff recommends a $26,599 revenue and expenditure budget decrease due to updated gas tax
revenue forecast.
Building Maintenance Repairs: Staff requests a $40,000 budget adjustment to cover emergency costs at
the Youth Recreation Center flood damage.
Fire Protection Services: Staff requests $34,607 budget adjustment to fund the 5-year sprinkler system
inspection and emergency expenditures which stemmed from a leak in the fire sprinkler system at NUMU.
Water Utility: Staff recommends an $18,000 budget increase due to increased water utility costs for
facilities. Water expenditures are tracking high while use remains similar to last year.
Miscellaneous Services & Repairs: Staff requests a $15,000 budget increase to fund the installation of
privacy film on the windows at the Police Operations Building to enhance security.
Vehicle Replacements: Staff recommends $6,521 expenditure budget increase to cover actual costs
associated with a rise in the price of a detective vehicle and the necessary build costs.
Teachers Insurance and Annuity Association (TIAA) Donation : Staff recommends a $500 revenue and
expenditure budget increase to recognize donation dedicated to Teen After School Programming.
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
19
FINANCIAL SUMMARIES, PROJECTIONS, AND RECOMMENDATIONS
General Fund
The following table is the Schedule of General Fund Operating Revenues Versus. Operating Expenditures for the
second quarter of FY 2016/17 which includes comparison information from the prior year. The last column
contains projections of final balances for the current fiscal year based upon the early trends observed through the
second quarter and the proposed mid-year adjustments.
FY15/16 FY15/16 FY15/16 FY15/16 FY16/17 FY16/17 FY16/17 FY16/17 FY16/17
Final Adjusted 2nd Qtr % Adopted Adjusted 2nd Qtr % Finance
Balance Budget Actuals YTD Budget Budget Actuals YTD Projection
Revenues
General Property Tax 10,791,743$ 10,269,397$ 4,030,272$ 39%10,458,633$ 10,458,633$ 4,274,774$ 41%11,051,936$
Sales & Use Tax 7,501,175 8,126,309 2,397,533 30%8,164,403 8,164,403 4,069,524 50%8,814,956
Franchise Fees 2,258,892 2,127,660 755,451 36%2,191,120 2,191,120 794,077 36%2,221,120
Transient Occ Tax 1,943,166 1,800,000 766,651 43%1,900,000 1,900,000 817,061 43%2,000,000
Business License Tax 1,465,547 1,300,000 870,249 67%1,300,000 1,300,000 745,633 57%1,450,000
Licenses & Permits 3,552,935 3,076,162 1,975,156 64%2,946,583 2,946,583 1,879,951 64%2,996,583
Motor Vehicle In Lieu 2,984,023 2,833,750 - 0%3,013,840 3,013,840 - 0%3,237,000
Intergovernmental 972,199 930,994 322,407 35%717,684 717,684 303,665 42%732,760
Charges for Services 2,677,944 2,786,451 1,391,766 50%2,370,070 2,370,070 1,280,107 54%2,498,621
Fines & Forfeitures 858,929 666,300 292,250 44%650,900 650,900 420,525 65%650,900
Interest 310,887 424,140 146,500 35%438,880 438,880 187,954 43%378,880
GASB & Other Investment To Market 310,008 (104,550) 239,189 -229%(107,687) (107,687) - 0%(107,687)
Miscellaneous/Other 3,016,355 4,706,827 2,071,937 44%3,421,579 3,444,140 3,026,612 88%3,157,259
Fund Transfers (Non Captial)508,926 633,422 2,092,312 330%363,428 363,428 103,230 28%363,428
Fund Transfer (Capital)2,516,795
Total Operating Revenues 41,669,524$ 39,576,862$ 17,351,673$ 44%37,829,433$ 37,851,994$ 17,903,113$ 47%39,445,756$
Use of Other Funding Sources:
Use of Reserves - Capital Projects 1,400,000 1,400,000 1,400,000
Almond Grove Reserve 8,459,973 8,459,973 8,459,973
Carryforward Reserve
Special Studies
Total Other Funding Sources -$ -$ 9,859,973$ 9,859,973$ -$ 9,859,973$
Total Revenues plus Reserves 41,669,524$ 39,576,862$ 17,351,673$ 47,689,406$ 47,711,967$ 17,903,113$ 49,305,729$
Expenditures (includes c/f but no encumbrances)
Mayor & Council 171,530$ 184,557$ 76,628$ 42%202,421$ 202,421$ 86,402$ 43%212,013$
Attorney 296,258 308,963 128,277 42%347,006 368,645 145,738 40%372,272
Administrative Services 2,883,289 3,183,780 1,478,019 46%3,310,379 3,314,217 1,212,337 37%3,396,830
Comm Development 4,032,333 4,417,552 1,913,998 43%4,143,098 4,160,990 1,662,604 40%4,207,433
Police 13,844,684 15,027,844 6,588,363 44%13,920,048 13,942,609 6,818,079 49%14,115,823
Parks & Public Works 6,226,196 6,613,251 2,790,451 42%6,452,425 6,452,425 3,053,886 47%6,738,004
Library 2,332,268 2,577,394 1,197,752 46%2,691,849 2,691,849 1,205,477 45%2,735,336 - -
Total Dept Expenses 29,786,558$ 32,313,341$ 14,173,488$ 44%31,067,226$ 31,133,156$ 14,184,523$ 46%31,777,712$
General Government 6,342,902 6,880,087 701,389 0 15,891,999 15,903,561 2,820,951 18%15,955,561
Total Non-Dept Expenses 6,342,902$ 6,880,087$ 701,389$ 10%15,891,999$ 15,903,561$ 2,820,951$ 18%15,955,561$
Total Operating Expenditures 36,129,460$ 39,193,428$ 14,874,877$ 38%46,959,225$ 47,036,717$ 17,005,474$ 36%47,733,273$
Other Uses
To Almond Grove Reserve 2,516,795
GASB 31 Adjust to Market Entry 310,008
Authorized Carryforwards 54,000
FY 2017/18 Salary Savings Allocation 1,000,000
Total Other Uses 2,880,803$ 1,000,000$
Total Other Expenditures and Uses 39,010,263$ 39,193,428$ 14,874,877$ 38%46,959,225$ 47,036,717$ 17,005,474$ 36%48,733,273$
Net Operating Revenues 2,659,261$ 383,434$ 2,476,796$ 730,181$ 675,250$ 897,639$ 572,456$
Town of Los Gatos
For the period ended December 31, 2016
Schedule of General Fund
Operating Revenues vs. Operating Expenditures
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
20
The group of financial summaries on the following pages present data by governmental, proprietary and fiduciary
fund types. For each, the fund information starts with a beginning fund balance, adds current year revenues, and
subtracts current year expenditures, resulting in an ending fund balance. Adopted budget amounts are provided
as a basis for comparison of actuals to date.
Special Revenue Funds (Governmental Fund Type)
Special Revenue Funds account for the proceeds derived from specific revenue sources that are legally restricted or
assigned to special purposes. The Town’s Special Revenue Funds are Community Development Block Grant Fund,
Housing Conservation Program Fund, Urban Runoff Source Fund (Non-Point Source), and several landscaping and
Lighting District Funds. The revenue from the Non-Point Source Program fund continues to lag expenses. This
largely results from increased requirements associated with the Town’s storm water permit, including increased
inspections and monitoring, trash reduction requirements, and administrative costs. Staff will develop a plan to
move the program toward a sustainable cost recovery model as part of the FY 2017/18 budget process. As
indicated in the chart below, Non-Point Source fund balance is negative. It is anticipated that revenues for the Non-
Point Source program will be received by the end of the fiscal year and therefore no budget adjustment is being
recommended at this time. Staff will continue to monitor these revenue funds to ensure payments are received.
CDBG Non-Point LLD's
Grants Source
Beginning Fund Balance 70,010$ 109,030$ 185,332$
Budgeted Revenues 70,000 367,464 38,416
Total Actual Revenues - 2nd Qtr 50$ -$ -$
Budgeted Expenditures 70,000 533,935 79,470
Total Actual Expenditures - 2nd Qtr - 285,647 9,452
2nd Quarter Ending Fund Balance 70,060$ (176,617)$ 175,880$
Special Revenue Funds
Budget to Actuals Comparisons
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
21
Capital Projects Funds (Governmental Fund Type)
Capital Projects Funds account for resources used for the acquisition and construction of capital facilities by the
Town. Funds in this category are the GFAR (General Fund Appropriated Reserve) Fund, Traffic Mitigation Fund,
Grant Funded CIP Projects Fund, Utility Underground Fund, Gas Tax Fund, and three Storm Drain Funds. Capital
Projects Funds are generally tracking in accordance with the FY 2016/17 adopted budget. Staff recommends
increasing GFAR revenue budget by $24,781 to recognize the donations and grants received. Staff recommends
increasing GFAR expenditure budget by $299,781 for the Forbes Mill Footbridge, Bicycle and Pedestrian Master
Plan, the Civic Center Chiller Repair project, and additional funding for the Stonybrook and Kennedy Roads
Sidewalk Project. Staff recommends to decrease both gas tax revenue and expenditure by $26,599 to match
current Gas Tax estimates. Staff will continue to monitor these expenditures throughout the remainder of the
year. The Grant Funded CIP fund displays a deficit balance because this grant fund expends Town dollars first, then
provides documentation of these expenditures to the State of California or other granting agencies and is
reimbursed for those costs. The reimbursements eventually result with th e fund “breaking even” or a zero fund
balance.
GFAR*Traffic *Grant Funds*Storm Utility Gas
Fund Mitigation CIP Drains Undergd Tax
Beginning Fund Balance 14,788,785$ 2,480,708$ (379,946)$ 1,668,054$ 2,881,502$ 1,651,113$
Budgeted Revenues 11,894,673 1,203,803 1,056,176 103,880 50,000 631,843
Total Actual Revenues - 2nd Qtr 883,365 - 360 59,317 8,733 319,483
Budgeted Expenditures 25,605,608 1,717,333 994,443 - 70,000 2,043,905
Total Actual Expenditures - 2nd Qtr 2,505,919 92,060 - - - 1,446,615
2nd Quarter Ending Fund Balance 13,166,231$ 2,388,648$ (379,586)$ 1,727,371$ 2,890,235$ 523,981$
Capital Project Funds
Budget to Actuals Comparisons
* GFAR, Traffic Mitigation, and Grant Funds balances are combined in the CAFR. The combined balance of $14,616,048 is
presented as an Appropriated Reserve. The Traffic Mitigation Fund balance includes $2,273,501 deferred revenue.
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
22
Internal Service Funds (Proprietary Fund Type)
Internal Service Funds finance and account for special activities and services performed by a designated Town
Department for other Town Departments on a cost reimbursement basis. Included in this fund type are the
Equipment Replacement Fund, Workers’ Compensation Fund, Association of Bay Area Governments (ABAG) Self-
Insurance Fund, Office Stores Fund, Management Information Systems Fund, V ehicle Maintenance Fund, and the
Facilities Maintenance Fund.
Internal Service Funds are generally tracking in accordance with the FY 2016/17 adopted budget. Staff recommends
a $134,628 budget adjustment to cover emergency and miscellaneous repairs, additional ergonomic evaluations,
laptop expenses, and extra replacement costs as explained in the budget adjustment section. Staff will continue to
monitor expenditures and propose a revised cost allocation if needed, during FY 2017/18 budget preparation.
Equipment Workers Self Office Mmgt Info Vehicle Facility
Replacemt Comp Insurance Stores Systems Maint.Maint.
Beginning Fund Balance 2,148,005$ 1,213,324$ (1)1,403,449$ (2)183,128$ 2,888,451$ (3)409,873$ (4)414,367$ (5)
Budgeted Revenues 381,322 934,118 535,838 95,000 1,129,006 573,865 1,381,875
Total Actual Revenues - 2nd Qtr 198,234 494,741 248,267 14,378 540,086 286,932 706,363
Budgeted Expenditures 485,418 1,258,810 808,361 134,500 1,381,818 573,866 1,381,875
Total Actual Expenditures - 2nd Qtr 128,225 505,341 492,702 46,516 475,586 229,376 549,590
2nd Quarter Ending Fund Balance 2,218,014$ 1,202,724$ 1,159,014$ 150,990$ 2,952,951$ 467,429$ 571,140$
(1) CAFR Net Position $ 1,025,384 Adjusted for Net Pension Liability
(2) CAFR Net Position $ 1,135,519 Adjusted for Net Pension Liability
(3) CAFR Net Position $ 2,166,790 Adjusted for Net Pension Liability
(4) CAFR Net Position $ 80,863 Adjusted for Net Pension Liability
(5) CAFR Net Position ($ 104,260) Adjusted for Net Pension Liability
Internal Service Funds
Budget to Actuals Comparisons
BUDGET PERFORMANCE REPORT – 2ND QUARTER FY 2016/17
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Trust and Agency Funds (Fiduciary Fund Type)
Town Trust and Agency Funds have fund balances as of December 31, 2016 of $535,869 for the Library Trust Funds
and $2,083,253 for the Successor Agency (SA) Trust Fund. Staff recommends a $10,500 revenue and expenditure
budget adjustment for the donation received. The budget adjustments were discussed in the budget adjustment
section of this report.
Successor Agency to the Redevelopment Agency
During the second quarter, the Successor Agency Board and staff continued to work diligently to satisfy the many
requirements and deadlines established by the state through AB1x26 and AB1484. AB1x26 is the “Dissolution Bill”
that eliminated the Town’s Redevelopment Agency effective February 1, 2012. AB 1484 is the “clean -up” bill that
revised and attempted to clarify AB1x26. In accordance with the law, the Successor Agency continues to wind down
the affairs and operations of the former Redevelopment Agency by implementing programs and activities in
accordance with the State-approved Recognized Obligation payment Schedule (ROPS). The Successor Agency
monies are now accounted for in a Private Purpose Trust fund and no longer part of the Town’s Financial
Statements.
CONCLUSION
The financial results from the prior fiscal year, coupled with the FY 2016/17 second quarter data, confirm that the
second quarter financial results are stable and improving. Staff is cautious as the five-year financial plan projects
shortfalls beginning in FY 2018/19. The shortfalls are due to the effect of implementing the anticipated increased
employer pension costs due to CalPERS discount rate change in December 2016. Staff is actively engaged in the
2017/18 budget process, the primary focus will continue to be on ensuring that the available Town resources are
allocated to meet the priority service needs of the community.
Library SA
Trust Trust
Beginning Fund Balance 524,453$ 3,593,571$
Budgeted Revenues 69,150 3,872,939
Total Actual Revenues - 2nd Qtr 18,000 1,924,107
Budgeted Expenditures 67,000 3,871,255
Total Actual Expenditures - 2nd Qtr 6,584 3,434,425
2nd Quarter Ending Fund Balance 535,869$ 2,083,253$
Trust & Agency Funds
Budget to Actuals Comparisons