Attachment 5 - Public CommentATTACHMENT 5
Dear Town Council,
Recommendation
The LGCA is writing to you to strongly recommend that the FY 2022 – 2024 Priorities include completing
a Fiscal Impact Analysis for the draft 2040 General Plan prior to any consideration by the Planning
Commission and Town Council. As you know, the draft General Plan is promoting a 30% increase in the
Town’s population over the next 20 years. Unfortunately, there has been no analysis of the fiscal impact
this major growth will have over the 20-year planning period.
A Core Goal of the Town is “Fiscal Stability,” and a guiding principle of the 2040 General Plan is “fiscal
stability/responsibility”. How does the Town Council know or even have an informed view as to whether
the 30% growth projected in the 2040 General Plan is fiscally stable and responsible? This question
looms extremely large since the FY 2022 priorities you are considering tonight include potential
“revenue enhancements.”
Background
The LGCA believes the reason why the Town Council feels it must focus on “revenue enhancements”
today is not because the Town’s revenue has declined or stayed flat. To the contrary, over the past 6
years (2015 – 2021) the Town’s total revenue from all sources (general tax revenues, investment
earnings, charges of services, grants and miscellaneous) has increased 13% ($5.6m), which includes a
staggering 54% increase in property tax revenue. Also, during this period, the Town increased the local
sales tax rate with the promise that these funds would pay for increased police services, fix potholes,
and invest in needed infrastructure.
Yet it is in this environment that the Town has increased its total governmental expenditures by 48%
($16.3m) over the same period. Stated another way, over the last 6 years the Town’s expenditures have
grown at a rate that is more than 3.5 times the revenue growth rate. And this occurred during a time
when the Town experienced almost no growth in population.
While we acknowledge the pandemic has impacted the Town’s revenue over the past 2 years, we
cannot ignore the harsh reality that the Town’s growth in total expenditures has far outstripped the
Town’s revenue growth. The inconvenient truth is that this trend is unstainable – today, let alone for the
next 20 years.
Discussion
Enter the need for a Fiscal Impact Analysis of the draft 2040 General Plan. When we surveyed 400
registered voters on this point, 87% agreed (with 66% strongly agreeing) that a fiscal impact analysis
should be required PRIOR to adoption of the General Plan. It is clear the residents understand the fiscal
challenge that 30% growth will present and want to study it. The question is does this Council
understand and want to be proactive about the challenges? Will the Council consider that having
expenses grow at 3.5 time the rate of revenues will soon reduce the Priorities to only one – Fiscal
Survival?
ATTACHMENT 5
A fiscal impact analysis is a powerful tool to assess whether the growth induced by the 2040 General
Plan will strain government services or generate sufficient new revenues that will allow the Town to
maintain and even improve and expand services as well as invest in economic growth over the next 20
years. There is simply no compelling argument against completing a fiscal impact analysis before
adopting the Town’s “constitution” that will guide all development decisions for the next 20 years. We
cannot afford not to perform a fiscal impact analysis.
Conclusion
Please include as a very high priority for FY 2022 the completion of a fiscal impact analysis of the 2040
General Plan before presenting the Plan to the Planning Commission and Town Council for approval. The
voters want this and expect it.
Thank you.
Los Gatos Community Alliance
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The notes to the financial statements are an integral part of this statement.
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43,139,836
Net (Expense)
Revenues and
Changes in
Net Position
Operating Capital
Charges for Grants and Grants and Governmental
Functions/Programs Expenses Services Contributions Contributions Activities
Governmental Activities:
General government 7,452,136$ 1,505,899$ 388,181$ 2,365$ (5,555,691)$
Public safety 19,808,230 1,275,731 1,073,971 Ͳ (17,458,528)
Parks and public works 13,141,034 4,209,048 1,547,102 843,980 (6,540,904)
Community development 6,481,075 4,063,776 223,129 Ͳ (2,194,170)
Library services 3,496,153 Ͳ 55,181 Ͳ (3,440,972)
Sanitation 185,981 299,478 Ͳ Ͳ 113,497
Total Governmental Activities 50,564,609$ 11,353,932$ 3,287,564$ 846,345$ (35,076,768)
General revenues:
Taxes:
Property taxes 19,878,835
Sales taxes 7,933,604
Franchise taxes 2,499,463
Other taxes 1,126,887
Motor vehicle in lieu 23,058
Investment earnings 227,136
Miscellaneous 1,528,039
Total general revenues 33,217,022
Change in Net Position (1,859,746)
Net Position Ͳ Beginning, as restated 115,377,846
Net Position Ͳ Ending 113,518,100$
TOWN OF LOS GATOS
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Program Revenues
The notes to the financial statements are an integral part of this statement.
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