Staff Report - FY 17.18 First Qtr Budget Final.docx
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: 11/07/2017
ITEM NO: 9
DATE: NOVEMBER 1, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: RECEIVE THE FISCAL YEAR 2017/18 FIRST QUARTER BUDGET PERFORMANCE AND
STATUS REPORT FOR THE PERIOD JULY 1, 2017 – SEPTEMBER 30, 2017
RECOMMENDATION:
Receive the Fiscal Year (FY) 2017/18 First Quarter Budget Performance Report for the period
July 1, 2017 through September 30, 2017.
EXECUTIVE SUMMARY:
This report informs the Town Council on the status of the Town’s Fiscal Year 2017/18 Adopted
Budget revenues and expenditures during the first quarter.
BACKGROUND:
The attached Quarterly Budget Report covers the first three months of the fiscal year beginning
July 1, 2017 and ending September 30, 2017. The report presents an analysis related to key
General Fund revenues by category and expenditures.
Staff provides the Town Council periodic updates on the status of the current year’s adopted
budget revenues and expenditures, and the projected financial condition of Town funds,
concentrating on the Town’s General Fund. Though financial results are limited to the first
three months, staff is able to provide an update based on earl y revenue trends for the current
fiscal year, and advise on potential future revenue and expenditure challenges which may
materialize during the fiscal year.
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SUBJECT: FISCAL YEAR 2017/18 FIRST QUARTER BUDGET PERFORMANCE AND STATUS
REPORT FOR THE PERIOD JULY 1, 2017 – SEPTEMBER 30, 2017
DATE: NOVEMBER 7, 2017
S:\COUNCIL REPORTS\2017\11-07-17\FY 2017-18 1ST Q Report\Staff Report - FY 17.18 First Qtr Budget Final.docx 11/2/2017 11:52 AM SLL
DISCUSSION:
An analysis of FY 2017/18 General Fund revenues confirms that the Town is tracking below
budgeted revenues for the first quarter when compared to prior years. Key economic revenues
such as property tax, franchise fees, and transient occupancy tax have all experienced increases
from prior year first quarter results, while sales tax, business license tax, and development-
related fees decreased. The first quarter FY 2016/17 sales tax proceeds include the final, one-
time “triple flip” true up adjustment of sales tax from prior fiscal years. First quarter business
license tax proceeds primarily consist of prior year true up payments. The true up payments
will be processed in the second quarter because the Town started its follow up procedure later
this year due to staff vacancies.
Staff also reviewed first quarter budget results for all Town Departments and found that
General Fund expenditures are trending at budgeted levels. Expenditures include many one-
time annual payments that were disbursed early in the fiscal year. Staff cautions that first
quarter results cannot be relied on for projecting year end results since this report only covers
the first three months of the fiscal year.
CONCLUSION:
A recent evaluation of the Town’s forecast indicates the Town’s FY 2017/18 budget is tracking
as expected, with operating revenue balanced with operating expenditures. Staff’s preliminary
close of fiscal year 2016/17 (subject to final audit) indicates a surplus of revenues abo ve
expenditures; the surplus amount will be confirmed in December 2017 with the review of the
Comprehensive Annual Financial Report (CAFR) by both the Council Finance Committee and the
Town Council. Staff will continue its conservative fiscal planning efforts to monitor
expenditures and the Town’s economically sensitive revenues.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. Budget Performance Report for the Three Months Ending September 30, 2017.