Desk Item
PREPARED BY: STEPHEN CONWAY
FINANCE DIRECTOR
Reviewed by: Town Manager and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 02/21/2017
ITEM NO: 11
DESK ITEM
DATE: FEBRUARY 21, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: FISCAL YEAR 2016/17 MID-YEAR BUDGET PERFORMANCE AND STATUS
REPORT - SIX MONTHS ENDING DECEMBER 31, 2016
A. RECEIVE FY 2016/17 MID-YEAR BUDGET PERFORMANCE AND STATUS
REPORT, INCLUDING FY 2016/17 YEAR-END PROJECTIONS;
B. CONSIDER AUTHORIZING BUDGET ADJUSTMENTS AS RECOMMENDED IN
THE ATTACHED SECOND QUARTER BUDGET PERFORMANCE REPORT;
C. RECEIVE THE TOWN’S FIVE-YEAR FINANCIAL PROJECTION FROM FY
2017/18 TO FY 2021/22;
D. APPROVE A RESOLUTION TRANSFERRING $1,984,402 MILLION EXCESS
BALANCE FROM THE BUDGET STABILIZATION RESERVE TO THE CALPERS
RESERVE; AND
E. APPROVE THE UPDATED GENERAL FUND RESERVE POLICY TO RENAME
THE CALPERS RESERVE TO ENCOMPASS ALL POST-EMPLOYMENT
LIABILITIES BY CHANGING ITS TITLE TO CALPERS/OPEB RESERVE.
REMARKS:
After the release of the report a graphing error was found on page 8 of the FY 2016/17 Mid-
Year Budget Performance Report. A replacement page is contained in Attachment 4.
In addition, below are responses to a Council Member’s inquiries regarding this agenda item.
PAGE 2 OF 2
SUBJECT: FISCAL YEAR 2016/17 MID-YEAR BUDGET PERFORMANCE AND STATUS
REPORT - SIX MONTHS ENDING DECEMBER 31, 2016
DATE: FEBRUARY 21, 2017
S:\COUNCIL REPORTS\2017\02-21-17\Mid- Year\Desk Item FY 2016-17 2nd Quarter Budget Report FINAL.docx 2/21/2017 3:15 PM SLL
: Briefly provide the history and an update regarding the Albright Settlement (see pages 13 and
16):
Please see the table below regarding the Albright Settlement proceeds. There is no legal
restriction on use of the community benefit regarding the buildings, and therefore, the Finance
Department budgeted this money as General Fund revenue. The Council requested that these
funds be placed in a separate account, requiring an adjustment from the General Fund Revenue
Source. The monies were reclassified from General Fund revenues to GFAR deposits and now
are held in deposit on the GFAR balance sheet until the ultimate use and disposition of the
funds is determined by Town Council.
Please explain “sales tax recovery services”:
Sales tax recovery services are those that our sales tax auditor, MuniServices, conducts on our
behalf. MuniServices identified two major corrections of sales tax misallocations. The first was
$3.4 million in sales tax revenues misallocated to another County. The Town’s share of the
County pool is 1.844%. As a result of the correction to the pool, the Town received an
additional $63,107.17 in sales tax revenue. Per the Town’s agreement with MuniServices, 25%
($15,776.79) of the recovered $63,000 is the payment due to MuniServices. Overall, the Town
obtained a net gain of $47,330.38 of new sales tax revenue as a result of this MuniServices
audit correction.
The second MuniServices audit discovery was a misallocation of sales tax revenue from General
Motors Acceptance Corporation to another city in the amount of $44,266.01. Per the Town’s
agreement with Muni Services, 25% ($11,066.50) of the recovered revenue was due back to
Muni Services. Overall, a net gain of $33,199.51 of new sales tax revenue for the Town as a
result of this Muni audit correction.
Attachments (previously received with the report):
1. Budget Performance Report for the Three Months Ending December 31, 2017.
2. Draft Resolution of the Town Council of the Town of Los Gatos Approving Commitments of
fund balance under Government Accounting Standard Board (GASB) 54
3. Proposed update to the General Fund Reserve Policy (red-lined)
Attachment 4 received with the Desk Item:
4. Replacement page 8.