Attachment 2 - Fund Balance Resolution Establishing June 30, 2021 Fund Balances1 of 4
Resolution 2021-x Council Meeting Date
DRAFT RESOLUTION 2021-
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, there exists a Nonspendable Reserve that is not readily available for
expenditure as it represents the outstanding balance of long term notes receivable; and
WHEREAS, there exists a balance of $159,000 as of June 30, 2021 in the Nonspendable
Reserve; 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, the Budget Stabilization and Catastrophic Reserve should be maintained at
the required minimum 12.5% of FY 2021/22 general fund budgeted operating expenditures of
$5,460,485 as specified in the Town Council General Fund Reserve Policy. This would increase both
Budget Stabilization and Catastrophic Reserves from $5,427,603 by $32,882 from available year-
end savings; and
ATTACHMENT 2
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Resolution 2021-x Council Meeting Date
WHEREAS, on November 6, 2018, the Town Council provided direction to establish an
unassigned Surplus Property Revenue General Fund Reserve that any monies received from the sale
of the property located on Winchester Boulevard 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, there exists an assigned approximately $1,200,000 balance in the Surplus
Property Reserve.
WHEREAS, per Town Council General Fund Reserve Policy, $300,000 will be placed to
the CalPERS/OPEB Reserve from available year-end savings; and
WHEREAS, there exists a balance of $300,000 as of June 30, 2021 in the committed
CalPERS/OPEB Reserve; 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 $410,000 as of June 30, 2021 in the
assigned Open Space Reserve; and
WHEREAS, there exists a balance of $300,000 as of June 30, 2021 in the committed
CalPERS/OPEB Reserve; 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 $410,000 as of June 30, 2021 in the
assigned Open Space Reserve; 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, 2021 in the
assigned Sustainability Reserve; and
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Resolution 2021-x Council Meeting Date
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 of $1,649,917; and
WHEREAS, there exists an assigned Market Fluctuation Reserve that represent fund
balance amounts for unrealized investment gains that have been recorded as investment income
in the financial statements in accordance with the requirements of GASB 31 in the amount of
$438,333; 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, there exists an assigned Measure G 2018 District Sales Tax Reserve to track
receipt and use of the 1/8 cent district tax funds collected by the Town; and
WHEREAS, the Town Council has determined the use of Measure G accumulated and
future proceeds to be 50% for operating expenditures and 50% for capital purposes; and
WHEREAS, there is anticipated to be an excess balance of $1,730,490 as of June 30,
2021 in the assigned Measure G District Sales Tax Reserve; and
WHEREAS, there exists an assigned Capital/Special projects Reserve to fund Council
priorities, and key infrastructure and capital/special projects as identified in the Town’s five-year
Capital Improvement Plan; and
WHEREAS, the remainder of the available year-end savings will be placed to the
Capital/Special Project Reserve according to the Town Council Reserve Policy; and
WHEREAS, there exists an assigned Capital/Special Project Reserve in the amount of
$9,965,355; and
NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES
HEREBY RESOLVE that the following fund balances as of June 30, 2021 as restricted, assigned, or
formally committed as follows:
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Resolution 2021-x Council Meeting Date
PASSED AND ADOPTED at a regular meeting of the Town Council held on the 21st day
of December 2021 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
Other
Nonmajor Total
Appropriated Governmental Governmental
General Fund Reserves Funds Funds
Fund Balance
Nonspendable 159,000$ -$ -$ 159,000$
Restricted for:
Capital Outlay - - 7,544,097 7,544,097
Library - - 552,877 552,877
Repairs and Maintenance - - 172,356 172,356
VTA - 293,323 - 293,323
Committed to:
Budget Stabilization 5,460,485 - - 5,460,485
Catastrophic 5,460,485 - - 5,460,485
CalPERS/OPEB 300,000 - - 300,000
Assigned to:
Open Space 410,000 152,000 - 562,000
Parking - 1,460,210 - 1,460,210
Sustainability 140,553 - - 140,553
Capital/Special Projects 6,965,355 13,160,379 - 20,125,734
Comcast PEG - 50,000 - 50,000
Sale of Property 1,200,000 - - 1,200,000
Market Fluctuation 438,333 - - 438,333
Compensated Absences 1,649,917 - - 1,649,917
Measure G 2018 District Sales T 1,730,490 - - 1,730,490
Special Revenue Funds - 537,892 537,892
Total Fund Balances 23,914,618$ 15,115,912$ 8,807,222$ 47,837,752$