Staff Report
PREPARED BY: STEPHEN CONWAY
Finance Director
Reviewed by: Town Manager, Assistant 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: 06/04/2019
ITEM NO: 3
DATE: MAY 29, 2019
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: A. ADOPT A RESOLUTION APPROVING THE TOWN OF LOS GATOS FISCAL
YEAR (FY) 2019/20 OPERATING BUDGET AND FY 2019/20 – 2023/24
CAPITAL IMPROVEMENT PROGRAM (CIP), NEW APPROPRIATIONS,
OTHER APPROVED ADJUSTMENTS, MINOR CORRECTIONS,
INCORPORATING AFSCME, TEA, CONFIDENTIAL AND MANAGEMENT
SALARY SCHEDULES; AND CARRY-FORWARD APPROPRIATIONS
B. ADOPT A RESOLUTION APPROVING COMMITMENTS OF FUND BALANCE
UNDER GASB 54
C. ADOPT AN UPDATE TO THE TOWN’S GENERAL FUND RESERVE POLICY
RECOMMENDATION:
A. Adopt a resolution approving the Town of Los Gatos Fiscal Year (FY) 2019/20 Operating
Budget and FY 2019/20 – 2023/24 Capital Improvement Program (CIP), new
appropriations, other approved adjustments, minor corrections, AFSCME, TEA,
Confidential, and Management Salary Schedules, and carry-forward appropriations
B. Adopt a resolution approving commitments of Fund Balance under GASB 54
C. Adopt an update to the Town’s General Fund Reserve Policy
BACKGROUND:
On May 21, 2019, the Town Council conducted public hearings to discuss the proposed FY
2019/20 Operating and Capital Summary Budget and Proposed FY 2019/20 – 2023/24 Capital
Improvement Program. The Town Council considered public testimony, discussed both
documents, and directed staff to bring back the documents for final approval incorporating the
staff proposed recommendations and additional Council budgetary direction.
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SUBJECT: OPERATING AND CAPITAL BUDGETS
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BACKGROUND (continued):
In preparation for the development of the FY 2019/20 budget, the Council provided direction
on the allocation of $3.7 million in FY 2017/18 surplus funds and $2.9 million of FY 2018/19
one-time monies resulting from the sale of property and the closure of two Internal Service
Funds. The areas of additional budgetary emphasis are consistent with the Council adopted
Strategic Priorities of addressing pension/OPEB unfunded obligations, enhancing PCI, and
revitalizing the downtown. The following table summarizes Council’s direction for both the FY
2017/18 surplus and FY 2018/19 one-time monies.
FY 2019/20 Allocation of Surplus and One-time Monies
FY 2017/18 $3.7 million surplus
Pension/OPEB $1,337,500
PCI Enhancement $1,337,500
Downtown Revitalization $1,000,000
Chamber Summer Events $10,000
Business Improvement District Consultant Analysis $15,000
FY 2018/19 $2.9 million one-time monies
Pension/OPEB $1,905,000
Downtown Revitalization $972,384
Additional Sidewalk Cleaning $27,685
Additional Grant Funding $5,000
DISCUSSION:
The draft resolution (Attachment 1) incorporates the budget direction provided by the Council
at the May 21, 2019 budget hearing. Attachment 2 contains the Council’s decision for the
Town’s FY 2019/20 Community Grant Program. Attachment 3 contains the salary schedules for
AFSCME, TEA, Confidential and Management. Attachment 4 contains the resolution to formally
move General Fund balances based on the Town Council General Fund Reserve Policy and
additional Council direction consistent with General Accounting Standards Board (GASB) 54.
Attachment 5 provides more detail on the FY 2018/19 and FY 2019/20 estimated General Fund
balance activity. Attachment 6 contains a redline of the General Fund Reserve Policy to reflect
reallocation options for additional discretionary payments of unfunded pension/Other Post-
Employment Benefit (OPEB) obligations.
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SUBJECT: OPERATING AND CAPITAL BUDGETS
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COORDINATION:
The preparation of the budget documents involved the participation of all Town Departments.
FISCAL IMPACT:
The fiscal impact is presented in summary form in the Financial Summaries chapter of the
Proposed Operating and Capital Budget for FY 2019/20.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Resolution of the Town Council Approving FY 2019/20 Operating Budget and FY 2019/20 –
2023/24 Capital Improvement Program (with Exhibit A)
2. FY 2019/20 Grants and Arts Funding Summary
3. AFSCME, TEA, Confidential, and Management Salary Schedules
4. Resolution of the Town Council of the Town of Los Gatos Approving Commitments of Fund
Balance under GASB 54
5. FY 2018/19 and FY 2019/20 Estimated General Fund Balance Activities
6. General Fund Reserve Policy - Redline