10 Desk Item
PREPARED BY: Robert Schultz, Town Attorney
Shelley Neis, Town Clerk
Reviewed by: Town Manager and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 03/03/2020
ITEM NO: 10
DESK ITEM
DATE: March 3, 2020
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Finance Commission Initiative
a. Accept Elections Official’s Certification of the Sufficiency of the Finance
Commission Initiative Petition.
b. Adopt a Resolution Calling the Election and Direct the Inclusion of the
Preliminary Estimated Cost of the Election for the Finance Commission
Initiative of $54,200 in the Town Manager’s Proposed Operating Budget
for Fiscal Year 2020/21; or
c. Order Report Pursuant to California Elections Code Section 9212 .
REMARKS:
Attachment 5 includes public comment received between 11:01 a.m. Thursday, February 27,
2020 and 11:00 a.m. Tuesday, March 3, 2020.
Attachment 4 is an amended Resolution Calling the Election that amends the ballot question
and adds Section 5 and 6 to incorporate the deadlines to file arguments for and against the
measure.
In regard to the public comment received, staff disagrees with the statement “ that the only
substantive changes this initiative makes to the current advisor-only Finance Committee is to a)
increase public participation by expanding the number of resident members to 5; b) expand the
scope of the Committee to include a review the annual budget; and c) to transfer the Sales Tax
Oversight Committee powers and duties to the Finance Commission.”
PAGE 2 OF 4
SUBJECT: Finance Commission Ballot Initiative
DATE: March 3, 2020
REMARKS (continued):
The initiative substantially changes the duties and responsibilities of the current Finance
Committee and includes a number of requirements that have the potential to have a fiscal
impact on the Town. These new requirements include, but are not limited to, the following:
• Requires each member of the Town Council to appoint one Citizen Appointee to serve a
four-year term with staggered terms. This is a different process from all other Town
Commissions and Boards, and the initiative does not include the process of selection or
removal for Commissioners. In addition, other provisions of the initiative are
inconsistent and incompatible with the selection process. There will be a fiscal impact
to implement this process, provide a legal opinion, and possibly defend litigation.
• Requires meetings to be determined by the Finance Commission and the Chair sets the
agendas. This is a different process than all other Boards and Commissions, and even
the Town Council. This will have a fiscal impact based upon the duties and
responsibilities of the Finance Commission that are set forth in the initiative.
• Requires the Finance Commission to provide written comments and recommendations
to the Town Council on the annual budget. There will be a fiscal impact on staff to
prepare written comments and additional meetings will be required.
• Requires the proposed budget to be presented to the Finance Commission at least
twenty (20) business days before the first meeting at which the proposed budget is
considered by the Town Council. There will be a fiscal impact on the Town organization
to prepare a budget within this timeframe and additional meetings will be required.
• Requires the Finance Commission to provide written comments and recommendations
to the Town Council on the CAFR. There will be a fiscal impact on staff to prepare
written comments and additional meetings will be required.
• Requires the Town Manager to respond in writing to the Finance Commission providing
his or her rationale for accepting or rejecting each of the Finance Commission's
comments and recommendations prior to presenting the CAFR to the Town Council for
formal consideration. There will be a fiscal impact on staff to prepare written
comments and additional meetings will be required.
• Requires the Finance Commission to provide written comments and recommendations
to the Town Council regarding the Director of Finance's summary of the Town's
financial report. There will be a fiscal impact on staff to prepare written comments and
additional meetings will be required.
• Requires the Finance Commission to provide written comments and recommendations
to the Town Council regarding the Town’s administrative financial policies and
procedures manual. There will be a fiscal impact on the Town organization to prepare
written comments and additional meetings will be required. In addition, Town Council
currently does not review Administrative Policies, so this requirement imposes a duty
and responsibility outside of Council’s purview.
PAGE 3 OF 4
SUBJECT: Finance Commission Ballot Initiative
DATE: March 3, 2020
REMARKS (continued):
• Requires the Finance Commission to make recommendations to the Town Council
regarding policies and programs to maximize the Town's revenues consistent with
existing taxation structures and inter-governmental funding opportunities. This will
require additional staff time and meetings.
• Requires the Finance Commission to make recommendations to the Town Council
regarding policies and programs to maximize fee generation consistent with market
rate charges for Town-provided services and market rate fees for utilization of Town-
owned assets. This will require additional staff time and meetings. In addition, this
section would violate state law as the Town cannot provide market rate charges.
• Requires the Finance Commission to make recommendations to the Town Council
regarding policies and programs to minimize the Town's cost to provide core services
and required activities, consistent with the desired service level for residents and other
internal and external customers. This will require additional staff time and meetings.
• Requires the Finance Commission to make recommendations to the Town Council
regarding policies and programs to set funding goals for reserves and review on-going
progress related thereto. This will require additional staff time and meetings.
• Requires the Finance Commission to make recommendations to the Town Council
regarding policies and programs to assess the risk associated with the structure and
documentation of any proposed debt financing. This will require additional staff time
and meetings.
• Requires the Finance Commission to make recommendations to the Town Council
regarding the Town's long-term compensation and benefit program liabilities in the
most responsible and cost-effective way. This will require additional staff time and
meetings. This provision may violate state law.
• Requires the Finance Commission to provide written comments and recommendations
to the Town Council regarding the selection of auditors for the CAFR. There will be a
fiscal impact on staff to prepare written comments and additional meetings will be
required. In addition, Town Council currently is not involved in the selection process of
professionals hired by Town and would give the Finance Commission a role that the
Council does not have in administrative matters.
• Requires the Finance Commission to participate in pre-audit meetings with auditors.
This will require additional staff time and meetings.
• Requires the Finance Committee to review and monitor any events or issues which may
affect the financial status of the Town. This will require additional staff time and
meetings.
Based upon all of the new responsibilities and duties of the Finance Commission that are set
forth in the initiative, it is staff’s recommendation that Town Council order a report pursuant to
California Elections Code Section 9212 to study and determine the exact fiscal impacts of the
initiative.
PAGE 4 OF 4
SUBJECT: Finance Commission Ballot Initiative
DATE: March 3, 2020
Attachments Previously Received with the Staff Report:
1. Proposed Initiative
2. Certification of Sufficiency
3. Resolution Calling the Election
Attachments Received with this Desk Item:
4. Amended Resolution Calling the Election
5. Public Comment