Attachment 4ATTACHMENT 4
RESOLUTION 2019-
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS APPROVING COMMITMENTS OF FUND BALANCE UNDER
GASB 54
WHEREAS, the Governmental Accounting Standards Board (GASB) has issued its
Statement No. 54, Fund Balance and Governmental Fund Type Definitions with the intent of
improving financial reporting by providing fund balance categories that will be more easily
understood and to improve the comparability of governmental fund financial statements; and
WHEREAS, GASB 54 provides that the Town Council of the Town of Los Gatos classify
governmental fund balances as restricted, assigned, or committed fund balances; and
WHEREAS GASB 54 provides that restricted reserves are funds that are restricted for
externally imposed constraints such as legal contracts or state law, assigned amounts are
constrained by the Town’s intent to use them for specific purposes, and committed amounts are
dedicated for specific purposes under constraints and formal action taken by the Town Council
and these committed amounts cannot be used for any other purposes unless the Town Council of
the Town of Los Gatos removes or changes the specific use through the same formal action to
establish the commitment; and
WHEREAS, the Town Council of the Town of Los Gatos has established a General Fund
Reserve Policy providing for minimum fund balance dollar target amounts for Budget Stabilization
and Catastrophic fund balances and outlines policies and procedures for use and restoration of
these balances; and
WHEREAS, there exists an assigned General Fund Compensated Absences Reserve
allocated to fund 50% of all vested hours of sick leave, compensation, and vacation time with the
actual reserve amount to be determined at the close of FY 2018/19; and
WHEREAS, there exists an assigned Capital/Special projects Reserve to fund Council
priorities, key infrastructure and capital/special projects as identified in the Town’s five-year
Capital Improvement Plan; and
WHEREAS, there exists an assigned authorized Carry Forward Reserve for materials
and services on approved purchase order and contracts which were issued but not finalized or
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fulfilled as of the end of the fiscal year but for which funds will be carried forward to the following
fiscal year. Actual reserve balance will be established at closing FY 2018/19; and
WHEREAS, in February 2017, the Town Council established the assigned Budget
Strategy Reserve from available FY 2015/16 year-end surplus and the provisions for the reserve
specifically indicate that Council may, at its discretion, distribute those funds as it deems
appropriate; and
WHEREAS, there exists an excess balance as of June 30, 2019 in the assigned Budget
Strategy Reserve; and
WHEREAS, on May 21, 2019 the Town Council directed the transfer of approximately
$129,090 from the assigned General Fund Strategy Reserve to the assigned General Fund
Capital/Special Project Reserve to decrease the number of reserves. This would reduce the
assigned General Fund Strategy Reserve by $129,090 to $0; and
WHEREAS, in June 2016, the Town Council established the committed Pension/OPEB
Reserve to provide funding toward pension and Other Post-Employment Benefits (OPEB)
unfunded obligations by placing discretionary amounts to the reserve with formal Council action
and transferring available year-end surpluses based on the General Fund Reserve Policy; and
WHEREAS, on November 6, 2018 the Town Council provided direction to establish a
an unassigned Surplus Property Revenue General Fund Reserve that any monies received from
the sale of the property located on Winchester Boulevard and Lark Ave, APN 424-31-055 and any
monies received from the sale of future surplus property be placed in this reserve, and the
provisions for the reserve specifically indicate that Council may, at its discretion, distribute those
funds as it deems appropriate; and
WHEREAS, on May 21, 2019 the Town Council directed a transfer of approximately
$1,905,000 million (proceeds of the property located on Winchester Boulevard and Lark Ave, APN
424-31-055) from the unassigned Surplus Property Revenue Reserve to the committed General
Fund Pension/OPEB Reserve. The actual unassigned Surplus Property Revenue Reserve amount
will be established at the final close of the FY 2018/19; and
WHEREAS, on May 21, 2019 the Town Council directed an additional transfer of
approximately $1,337,500 million from the available assigned General Fund Capital/Special
Projects Reserve to the committed General Fund Pension/OPEB Reserve, and
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WHEREAS, on May 21, 2019 the Town Council provided direction to close the Vehicle
Maintenance and Stores Internal Service Funds and establish an unassigned Vehicle Maintenance
and Stores Residual Reserve and the provisions for the reserve specifically indicate that Council
may, at its discretion, distribute those funds as it deems appropriate; and
WHEREAS, on May 21, 2019 the Town Council directed the use of the total amount of
available funds in the unassigned Vehicle Maintenance and Stores Residual Reserve to provide
funding for an additional $5,000 Human Services grants, $27,685 additional sidewalk cleaning,
and approximately $972,384 transfer to the Downtown Revitalization Project in FY 2019/20. The
actual unassigned Vehicle Maintenance and Stores Residual Balance will be determined at the
final close of the FY 2018/19; and
WHEREAS, The Town Council established the assigned Sustainability Reserve in FY
2008/09 by closing the Solid Waste Management fund and placing the initial residual balance
dedicated for conservation, recycling, and sustainability; and
WHEREAS, there exists an excess balance of $140,553 as of June 30, 2019 in the
assigned Sustainability Reserve; and
WHEREAS, the $5,557,500 transfer from the Capital/Special Project Reserve to the
General Fund Appropriated Reserves provides funding to the five-year capital plan including
$1,337,500 toward improving the Street Pavement Condition Index and $1,000,000 toward
Downtown Revitalization; and
WHEREAS, The Town Council established the assigned Open Space reserve in the FY
1998/99 to be used for the preservation of open space, connection of open space trails, the
definition of the southern boundary of the Town with passive open space, and protection of
unique natural features; and
WHEREAS, there exists an excess balance of $562,000 as of June 30, 2019 in the
assigned Open Space Reserve; five-year capital plan transfers $152,000 to the Open Space Trail
Upgrades Project from this funding source; this transfer reduces the assigned General Fund Open
Space Reserve by $152,000 to $410,000 as of June 30, 2020 and
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES
HEREBY RESOLVE that the following estimated Budget Stabilization, Catastrophic, Pension/OPEB,
Capital/Special Projects, Compensated Absences; Surplus Property Revenue, Sustainability, Open
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Space, Vehicle Maintenance and Store Residual reserve and Strategic Planning Reserves as of June
30, 2019 and as of June 30, 2020 as assigned, unassigned or formally committed as follows:
Actual
General Fund
Reserves
June 30, 2018
FY 2018/19
Budget, GF
Reserve
Policy, and
this
Resolution
Approved
Increase
FY 2018/19
Budget, GF
Reserve
Policy, and
this
Resolution
Approved
(Decrease)
Estimated
General Fund
Reserves
June 30, 2019
FY 2019/20
Budget
Resolution
Approved
Increase
FY 2019/20
Budget
Resolution
Approved
(Decrease)
Estimated
General Fund
Reserves
June 30, 2020
Committed Fund Balances -
Budget Stabilization 5,037,243$ 381,979$ -$ 5,419,222 - 5,419,222
Catastrophic 5,037,243 381,979 - 5,419,222 - 5,419,222
CalPERS/OPEB 2,878,913 4,242,500 (3,188,913) 3,932,500 - 3,932,500
Assigned Fund Balances -
Capital Projects 14,421,203 129,090 (6,486,678) 8,063,615 (5,557,500) *2,506,115
Strategic Planning 129,090 - (129,090) - - -
Compensated Absences 2,122,512 - - 2,122,512 (1,061,256) 1,061,256
Open Space 562,000 - - 562,000 (152,000) 410,000
Sustainability 140,553 - - 140,553 - 140,553
Carryover Encumbrances 99,927 - - 99,927 - 99,927
Unassigned Fund Balances
Vehicle Maintenance & Stores Residual - 1,005,069 - 1,005,069 (1,005,069) -
Surplus Property Revenue Reserve - 1,905,000 (1,905,000) - - -
Designated One-Time Use of Reserves during FY 2019/20
Additional Human Services Grants 5,000$
Additional Side Walk Cleaning 27,685
Transfer to the Capital Projects (GFAR)6,681,884
Transfer to Workers Compensation 1,061,256
Total 7,775,825$
* $5,557,500 transfer inclusive of $1.3 million toward improving Street Pavement Condition Index and $1 million toward the Downtown Revitalization
PASSED AND ADOPTED at a regular meeting of the Town Council held on the 4th day of June 2019
by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA