Study Session - 2003/04 Second Quarter Budget Performance
DATE: TO: FROM: SUBJECT: MEETING DATE: 02/24/04 STUDY SESSION COUNCIL AGENDA REPORT February 24,2004 MAYOR AND TOWN COUNCIL DEBRA 1. FIGONE, TOWN MANAGER 2003104 SECOND QUARTER BUDGET
PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31, 2003. A. ACCEPT 2003/04 SECOND QUARTER BUDGET PERFORMANCE STATUS REPORT, INCLUDING FY 2004-09 FIVE-YEAR FINANCIAL PROJECTIONS.
B. AUTHORIZE BUDGET ADJUSTMENTS AS RECOMMENDED IN THE ATTACHED SECOND QUARTER BUDGET PERFORMANCE REPORT. C. DISCUSS AND PROVIDE DIRECTION REGARDING PRELIMINARY TIER IAND TIER II FY2004-05
BUDGET BALANCING PROPOSALS TO BE INCORPORATED INTO TOWN'S FY 2004/05 PROPOSED BUDGET. RECOMMENDATION: 1. Accept 2003/04 second quarter budget performance and status report. 2. Authorize
budget adjustments as recommended in the attached second quarter budget performance report. "3. Discuss and provide direction on the preliminary Tier I and II FY 2004/05 budget balancing
proposals to be incorporated into the Town's FY 2004/05 Proposed Budget. PREPARED BY: STEPHEN D. NWAY Finance & Administrative Services Director SDC:pg N:\MGR\AdminWorkFiles\cnclrpts\Mid-year03-04.wp
d Reviewed by: Assistant Town Manager __Town Attorney __Clerk.__Finance _"_Community Development Revised: 2/13/04 4:37 pm Reformatted: 5/30/01
PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31,2003. February 24, 2004 PURPOSE: The purpose of this
study session is to provide the Town Council with staffs most recent .information regarding the evolving budget situation for FY 2003/4 and beyond, including: • A mid-year FY 2003/04
budget update focusing on revenue and expenditure trends and financial projections for the current year. • An update to the Town's ,five year financial projections (FY 2004-09) to provide
a framework for understanding the estimated size ofthe budget challenges in future years that underlie the necessity for budget reductions and revenue enhancement recommendations that
will be discussed with the Town Council. • A forum to discuss in more detail the preliminary proposed budget reductions and revenue enhancement proposals as presented in suggested priority
order for FY 2004/05, including associated service level impacts to the community and the organization for each ofthe proposed reductions. Included with each department is an overview
describing the approach taken by the departments to develop the proposals. THE REPORT: This report comprehensively examines the current year budget status, expected fiscal outlook and
the evolving process of budget developmel1.t for FY.2004/05 and beyond. Items for Town Council consideration include: • A review of the Town's FY 2003/04 Mid Year Budget Performance
and Status Report; • An update to the Town's five-year financial projections through FY 2008/09; • An historical briefing ofthe Town's budget reduction efforts to date that have been
implemented since FY 2001/02; • A recap of the budgetary actions, trends, considerations and criteria used by the Town in developing plans to meet the forecasted budget challenges; •
A matrix of departmental proposals presented in priority order, including a discussion by departments of the service level impacts to the community of each reduction proposal. DISCUSSION:
FY 2003/04 MID YEAR BUDGET STATUS: The attached Budget Performance Report (Attachment 1) is the mid year report covering the six months beginning July 1,2003 and ending December 31,2003.
The Budget Performance Report presents analysis and recommendations related to key General Fund revenues by category and expenditures by fund.
PAGE 3 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER31, 2003. February 24, 2004 Staff provides to 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 primarily on the Town's
General Fund. Though the financial results are limited to the first six months, staffhas more information available than at the time ofthe first quarter report, allowing an update based
on revenue trends for the current fiscal year. Information is provided regarding vital revenues to the Town such as Sales Tax, Property Tax, Transient Occupancy Tax, Vehicle License
fees (Car Tax), Business License Tax, Fees and Charges and Interest Income. This information aids staff in providing the status of the revenues adopted to support the FY 2003-04 operating
budget. Furthermore, the Town Council is advised of any material recommended changes to estimated estimated revenue sources included in the Town's FY 2003/04 adopt.ed budget. . Overall,
total General Fund estimated operating revenues for the current year are anticipated to be lower by $357,100 than the adopted budget estimates. Most notably, there is a suggested lowering
of Sales Tax estimates for the current year from $6,800,000 to $6,650,000. The Interest Income estimate is also recommended to be lowered from $1,290, 100 to $1,150,000. Transient Occupancy
taxes are recommended to be adjusted lower from $900,000 to $830,000. The attached Budget Performance and Status Report provides more details and analysis regarding revenue and: expenditure
activity and the recommended budget adjustments for principal General Fund revenue sources. The mid-year budget projections for the current year assumes that the recommended adjustments
to the revenue estimates have been approved by Town Council. On a positive note, staff is encouraged by the fact that expenditures in many Town departments are·· trending below the the
expected 50% of budget level (expected level halfway through the fiscal y.ear). These savings, combined with additional savings from departmental reductions implemented since December
2003 as part of the Town's budget process, are anticipated to be enough to provide coverage for the proposed, revenue reductions in FY 2003/04 totaling $357,100. However, there may be
additional revenue impacts that will to be addressed if there are increased current year State "takes" of revenues. The availability ofexcess balances resulting from fiscal
year expenditure reductions is one important part of potential funding the Town is describing as "bridge funding." Bridge funding is conceptualized as a funding source to be used as
dollars available to move to more efficient organizational structures, ferret out and understand new service delivery options, and allow time for new initiatives and programs to become
more fully formed. Bridge funding will allow more time to ramp up or bring new programs "on-line," providing some resources for "start-up" costs until the programs can be sustained by
operating revenues. Normally, the Town's policies provide that any excess revenues over expenditures in the fiscal year not specifically designated for other uses is set aside in a reserve
for future capital improvements. This year, staff will recommend that Council consider some or all of these revenues be used as potential sources of bridge funding for next fiscal year,
if warranted.
PAGE 4 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31,2003. February 24, 2004 . The availability of bridge
funding provides the Town a longer planning horizon to develop appropriate organizational structures that align with the new fiscal reality; inform the Town's employees of potential
reductions in the workforce; inform the community about potential service level impacts; and to establish appropriate service levels that balance with revenues projected for next fiscal
year. Sources of potential bridge funding include: • Excess Revenues Over Expenditures. As discussed above, if there excess balances at the close of the fiscal year, the balances not
designated by Town Council for specific purposes are designated for Future Capital Improvements by Town policy. This year the Town may desire to designate some of this potential funding
for bridging purposes. • General Fund Reserves. FY 2003/Q4 beginning fund balance consists of approximately $10.9 million of total "available" reserves. The bulk of these reserve are
"committed" or designated for specific purposes like parking, open space, and other uses. Included in this total is the Reserve for Economic Uncertainty intact at $3,678,000. However,
then:: is an approximate $400,000 of the $10.9 million available in undesignated reserves that could be used for bridge funding. • Internal Service Fund Reserves. Staffbelieves there
is some additional capacity to absorb some additional transfers from these funds to repay the. General Fund for prior overcharges. Staff believes each fund is adequately funded,
and there remains an ability to tap some ofthis surplus for appropriate bridging uses. • Public Employees Retirement System . CPERS) Set-Aside. The Town has accumulated approximately
$3 million in its General Fund liability acco.unt to .be used to buffer future Retirement System rate increases by continuing to charge itself the Non-:-Sworn employyr PERS contribution
of 7% even when the official PERS rate charged to the Town was 0% due to the Town's surplus.at PERS. This prudent fiscal decision which we have been continuing since 1999 is proving
to be very valuable now with PERS rates rising rapidly due to stock market losses. Using reserves or other sources ofbridge funding needs to be done strategically, ensuring that these
funding sources are not used to fund ongoing cost and service delivery structures that are not supported by forecasted future operating revenues. FIVE YEAR FINANCIAL PROJECTIONS UPDATE:
Staff recently updated the Town's Five Year Financial Plan spanning fiscal years 2004/05 through 2008/09. The updated scenarios continue to demonstrate the need for the Town to take
action to maintain the Town's fiscal health. Projected FY 2004/05 revenue shortfalls in both scenarios described below Scenario I and Scenario II range from $1.5 million to $3.2
million, depenaing upon the level of recovery in local economically sensitive revenues and the amount of loss of revenue the Town is forced to absorb from potential State takes of revenue.
-, PAGES MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFOIUv1ANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31,2003. . February 24,2004 Scenario I, presented in
the following pages, assumes approximately $500,000 State takes in revenues similar to the amount the Town experienced this fiscal year. This scenario assumes that the State "back-fill"
of approximately $1.2 million in Car Tax will continue in future years as promised by the State when the fee was reduced by two-thirds. Revenues are optimistically presented with varying
growth rates, on average 5% for taxes and 3% for charges for services. Expenditures are pulled from a database using actual costs and adjusting for future known increases in labor costs
if multi-year labor agreements are in effect. , Scenario II projects a more serious loss in revenues, where local revenue and expenditure assumptions remain the same with the exception
that the annual Car· Tax revenue is lost. This scenario is presented as a potential estimate of of a "worse case" scenario. This scenario could be reality if the State budget crisis
is not resolved satisfactorily and the State eliminates all or portions ofthe back-fill, or implements a blend ofshifts such as portions ofthe Town's property tax (ERAF), or other state
funding sources such as grants and state mandated cost reimbursements. The value of these potential shifts in a worst case scenario could potentially approach the Scenario II level which
reflects an entire loss of the Car tax and State back-fill. Each of the scenarios presented assume that fixes made to the budget to eliminate the revenue shortfall in FY 2004/05 are
"permanent" fixes, thereby reducing the level of shortfall in the following fiscal years. The amounts fixed permanently in the Town's operating costs are assumed to carry forward cumulatively
each year, lessening the reduction required in subsequent years. It is possible to make some adjustments through one-time solutions or prudent use of bridge funding on a year-to-year
basis. basis. However, these solutions recognize that problems that are truly structural should be addressed eventually with new revenue sources or reduced expenditures in an ongoing
way. The following pages present Scenarios I & II. A terminology guide follows as an aid to understanding.the Updated Five Year Financial Projections data that is presented in each scenario.
PAGE 6 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31, 2003. February 24, 2004 Town of Los Gatos Scenario I
Five Year Fin;mcial Plan Town of Los Gatos Five Year Financial Plan (Car Tax Intact) Summary Data ACTIIAL ADOPTID PROJECTID PRO,JECTIDPROJECTID PRO,JECTID PROJECTID Revenue Summary 2002-03
2003-04 2004·05 2005-06 2006-07 2007-08 2008·09 Sales Ta)( 6,928,817 6,800,000 7,140.000 7,497,000 7,871.850 8.265,443 8,678.715 Property Tax 4,977,119 5,338,006 5,658.286 5.997,784
6,357,65 I 6,73.9.110 7,143.456 Hotel/Motel Tax 713,064 900,000 945,000 992,250 1,041,863 1,093,956 1.115,835 Franchise Tax 897,158 896,400 941,220 988,281 1,037,695 1,089,580 1,144,059
Busi ness Ucenses 970,554 1,065,000 1,096,950 1,129,859 1,163,754 1,198,667 1.234.627 Other Uc, and Permits 975,701 761,000 783,830 807,345 831,565 856.512 882.208 Car Tax I.722,801
1,632,000 1,713.600 1,799,280 1.889,244 1,983.706 2.082.892 Intergovernmental Rev. 1,463.388 1,368,804 1,394,190 1.415.916 1.443,293 1.472,55H 1.502,516 Charges for Services 2,209,851
2,468,961 2,567,909 2,705,883 2,847,390 3,004,928 3.130,253 Fines & Forfeitures 187,117 192,000 200,100 208,560 217,397 226,627 234,642 Investment Earnings 1,336,711 1,191,675 1,221,467
1,252,004 1,283,304 1,315,386 1,348,271 Miscellaneous 480,762 144,000 152,650 160,633 168,964 177,662 186,745 Transfers 1,105,853 1,375,517 778,705 601,736 470,418 393,855 361,133 Total
Revenues 23,968,896 24,133,363 24,593,907 25,556,529 26,624,387 27,817,983 29,045,351 Town Expenditures Salaries 11,576,547 11,548,000 12,919,260 13,221,506 13,714,074 14.213,570 14.713,959
Benefits 3,167,089 3,539.700 3.844,677 4,359,095 5,003,331 5.583.186 6.149.548 Temporary Sal & Ben. 438,711 341,500 422,566 439,411 456,051 471.258 490.122 Paid Overtime 455.418 453,000
406,926 417,461 438,334 460,250 483.263 Total Sal. & Ben. 15,637,765 15,882,200 17.593,429 18,437,473 19,611.789 20,728.264 21.836.891 Grants & Awards 230,263 213.450 213,450 213,450
213,450 213,450 224.123 Training 163,474 145,455 149,819 154,313 158;943 163.711 111.896 Employee Retiree Med** 103,162 130,000 163,000 211,000 290,000 363:000 381.150 Animal Control
oper. 179,153 196.000 164,00,0 180,400 198,440 218.284 229.198 . Supplies and Services 2,631,024 .. 2,949,660 3,038,150 3.129.294 3.223.173 3,319.868 3A85.862 't':tilities 440,352 342,670
359,804 377,794 396.683 416,518 437.343 Capital Purchases 85,689 17,500 50,000 51.500 53.045 54,636 57.368 Internal Service Funds 3,2U 1.262 3,UI9.nU 3,llU,51l:! 3.2U3.M33 J.299.94M
3.J9l:!.947 J.56M.M94 Debt ServicelTransfers 641,510 1,226,508 1.226.508 1.226.508 1.226.508 1.226.508 1.231.3 11 Storm Drains Road MaintenancelRep. 72,864 10.000 10.500 11,025 11.576
12.155 12.763 Total Expenditures 23,386,518 24,133,363 26,079,176 27,196,590 28,683,556 30,115,341 31,636,799 Ongoing Shortfall Mitigation 05·06 (Assumes Permanent Fix) 1,485,269 1,640,061
2,059,169 2.297,358 Revenues Over (Under) Exp. 582,378 (1,485,269) (154,792) (419,108) (238,189) (294,090) Revenue Shortfall as a % of Operating Revenue 0.00% 6.04% 0.61% \.57% 0.86%
1.01%
J PAGE 7 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER B'UDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31, 2003. February 24, 2004 Town of Los Gatos Scenario
II Five Year Financial Plan Town of Los Gatos Five Year Financial Plan (Car Tax Lost) Summary Data AClUAL ADOPlID PROJEClID PROJEClID PROJEClID PROJEClID PROJEClID Revenue Summary 2002-03
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Sales Tax 6.928.817 6,800.000 7.140.000 7.497.000 7.871.850 8,265,443 8.678,715 Prope rty Tax 4,977,119 5,338,006 5,658,286 5.997,784
6,357,651 6,739,110 7,143.456 HotellMotel Tax 713,064 900,000 945,000 992.250 1,041,863 1,093,956 1,115,835 Franchise Tax 897,158 896,400 941,220 ·988,281 1,037,695 1,089.580 1,144.059
Business Ucenses 970,554 \,065,000 \,096,950 \,,129,859 1,163,754 1,198,667 \ ,234,627 Other Uc. and Permits 975,701 761,000 783,830 807,345 831.565 856.512 882,208 CarTax \,722,801
1,632,000 Intergovernmen'tal Rev, 1,463,388 1,368,804 1,394,190 1,415,916 1,443,293 1,472,551 1,502.516 Charges for Services 2,209,851 2,468,961 ,2,567,909 2,705,883 2,847,390 3,004,928
3,130,253 Fines & Forfeitures 187,117 192,000 200,10,0 208.560 217,397 226.627 234.642 Investment Earnings 1,336,711 I.l91,675 1,221,467 \,252,004 1,283,304 1,315,386 1;348,271 Miscellaneous
480,762 144,000 152,650 160,633 168,964 177.662 \ 86,745 Transfers 1.105,853 1,375,517 778,705 60\,736 470,418 393,855 36\ ,133 Total Revenues 23,968,896 24,133,363 22,880,307 23,757,249
24,735,143 25,834,277 26,962,459 Town Expenditures Salaries \ \,576,547 \ 1,548,000 12,919,260 \3,221,506 13,7\4,074 14,213,570 14,713.959 Benefits 3,167,089 3,539,700 3,844,677 4,359.095
5,003,331 5,583,186 6.149,548 Temporary Sal & Ben. 438,711 341,500 422,566 439,411 456,051 47 \ ,258 490,122 Paid Overtime 455,418 453,000 406,926 417,461 438,334 460,250 483.263 Total
Sal. & Ben. \ 5,637,765 15,882,200 17,593,429 18,437,473 19,611,789 20,728,264 21,836.891 Grants & Awards 230,263 2\3,450 213,450 213,450 213,450 213.450 nU23 Training 163,474 145,455
149,819 154,313 158,943 163.711 171,896 Employee Retiree Med 103.162 130,000 163,000 211,000 290,000 363,000 381,150 Animal Control Oper.** 179,153 196,000 164,000 180,400 198,440 218.284
229.198 Supplies and Services 2,631.024 2,949,660 3,038,150 3,129,294 3.223,173 3,319,868 3,485.862 utilities 440,352 342,670 359,804 377,794 396,683 416,5\8 437,343 Capital Purchases
85,689 17,500 50,000 5\,500 53,045 54,636 57,368 Internal Se'n-ice Funds 3,201,262 3,019,920 3,110.518 3,203,833 3,299,948 3,398,947 3.568.894 Debt Sen-icefTransfers 641,5\0 1,226.508
1,226,508 1.226.508 1,226,508 1.226.508 1.231.31 \ Storm Drains Road "'lain tenancelRep. 72,864 10,000 \0.500 1\,025 1\,576 \2.155 12.763 Total Expenditures 23,386,518 24,133,363 26,079.176
27.196,590 28,683.556 30.115,341 31,636,799 Ongoing Shortfall Mitigation,05-06 (Assumes Permanent Fix) 3,198,869 3"H9,341 3,948,413 4.281,064 RevenuesOver,(Under) Exp. 582,378 (3,198.869)
(240,472) (509,072) (332,651) , (393,216) Revenue Shortfall as a % of Operating Rev. 0.00% 13.98% 1.01% 2.06% 1.29% 1.46%
PAGE 8 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31,2003. February 24, 2004 Terminology Guide in Reviewing
Five Year Financial Plan Total Revenues -Total of principal General Fund revenues, FY 2003/04 uses the adopted budget and the other years use an average 5% growth rate from adopted budget
levels for economically sensitive revenues such as Sales Tax. Total Expenditures -Total of principal General Fund expenditures by expenditure type, FY 2003/04 uses the adopted budget
and the other years use an average 3-5% growth rate infuture years depending on the expenditure type. . . Ongoing Shortfall Mitigation 05-06 (Assumes Permanent Fix) -A dollar amount
appears first in FY 2005/06. This amount is added back to revenues in that year because it assumes that the fixes the Town makes to its operating cost structure are fixed permanently,
thereby they will reduce costs on an ongoing basis in future years.· The amount accumulates by the amount of the permanent fix required every year by comparing operating revenues with
operating expenditures. The degree of fix needed depends on whether Car Tax revenues are intact or lost and whether a full fix is made each year. It is in this situation
where staffwill need to evaluate whether partial offsets with excess reserves could be used to buy the time needed to implement solutions that save costs yet require time to implement.
Revenues Over (Under Expenditures) -Compares General Fund Operating Revenues plus Permanent Fix dollars minus General Fund Operating Expenditures. Revenue Shortfall as a % of Operating
Revenues -In FY 2004/05, the projected reduction percentage required to align operating expenditures with revenues. In 2005/06 the percentage reductions required take into account the
Permanent Fix occurring in the prior year. Both updates to the long term Five Year financial scenarios indicate the Town was wise to begin strategic cost reductions dating back to FY
2001/02, with cumulative reductions of approximately $3.0 million in Town operating expenditures since that time. These efforts have been a multipronged approach to achieve operational
efficiencies, cost reductions, and exploration ofalternative methods of service delivery options by the Town. Continuing Vulnerabilities: The Town continues to be impacted by operating
revenue and expenditure challenges that must be monitored and addressed. Progress or lack thereof in these vulnerabilities will unavoidably affect Town-wide service delivery goals in
future years. Staff sees challenges in both the ongoing revenue and cost structure as described below:
PAGE 9 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31,2003. February 24,2004 Revenues Recovery in Economically
Sensitive Revenues. The financial projections assume that a modest recovery will be experienced by the Town in revenues such as Sales Tax, Business License Tax and Hotel Tax, among others:
If this recovery does not materialize, then the revenue shortfall could exceed the forecasted amounts under both scenarios. The Town's Sales Tax collections are of continuing concern.
An example is the Town's auto dealerships which experienced a decline in sales tax collections in the last quarter of 11 %, when state-wide dealerships experienced a 10% averagegrowth
in the same quarter. The Town's auto dealerships account for approximately 30% ofthe Town's total annual Sales Tax. Anotherconcern is the importance of retaining the technology sector
businesses which contribute to the Town's collections, one of which is now one of our largest providers ofsales tax annually. The importance of having a well balanced sales tax base
continues to be an important objective. State Budget Impacts to the Town are also unknown. The Governor's budget delivered in January 2004 retains the Car Tax "back-fill" but proposes
a property fax shift (ERAF) of approximately $400,000 from the Town and an additional amount from the Redevelopment Agency. If the March 2004 statewide bond measure fails to pass, the
ramifications to the Town are unknown at this time. but it is realistic to make plans to address even more painful state revenue takes. Drivers of Town Cost Salary & Benejits-Town government
is in the business ofproviding services which depend on peopIe to deliver. Consequently, the most significant driver of cost for service delivery is the cost of labor. Salaries and benefits
ofemployees comprise the largest share ofthe Town's General Fund operating expenditures (approximately 70%). In order for the Town to remain competitive in the labor market in a high
cost cost region, public safety costs in particular, have increased substantially in recent years. This is due, in part, to significant salary increases throughout the region and increasing
costs of benefits. Consistent with public safety statewide, Los Gatos sworn public safety employees were provided an enhanced retirement formula in 2000 under the State Public Employees
Retirement System (PERS). The costs associated with the new retirement formula and several years of negative investment returns in the pension system have resulted in significant changes
in.retirement contributions. The Town's contribution toward retirement for Sworn Personnel is expected to rise from the current rate of 16% for FY 2003/04 to be greater than 28% ofcovered
payroll in FY 2004/05. Recent information factored into the Five Year Forecast indicates this cost may rise to 35% of covered safety payroll. Non-sworn employee salary and benefit adjustments
have been more moderate, however the Town's retirement contrib1,ltion for these employees is expected to increase from 0% to 8% in FY 200:+/05 and the current PERS information indicates
it could rise to approximately 15% of covered payroll in FY 2008/09.
PAGE 10 MAYOR ANDTOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS 'ENDING DECEMBER31, 2003. February 24, 2004 Health care costs are also trending
upward, with increases of 16-20% annually over the past several years. This means that the Town's contribution to healthcare costs as currently stipulated in our labor contracts will
go up by these amounts. The Town will need to continue to explore ways to contain the costs of salary and benefit compensation and concurrently remain competitive to attract and retain
a qua.lified workforce. Energy Costs-Town-wide cost increases have exceeded the general inflation rate. This increase is due in part to the rise in electric and gas charges resulting
from the retent Statewide energy crisis and global fluctuations in gasoline priCes. Energy costs continUe Steps are already underway to
examine Town-wide energy costs and lo'ok for ways to manage energy use and control costs. Internal Internal Service Charges-The Town prudently charges itself on a.n annual basis internal
services charges that provide funds used to replace rolling stock, provide information services and technology replacements, perform building maintenance, and maintain workers compensation
and general liability programs, ainong others.,Though the Town could eliminate this practice and goon a "payas-you-go" basis, staffbelieves this would not be a best practice in financial
management. However, we shouldcontiIiue to ensure that our internal rate setting practices are in line with projected internal service funding needs. Performance Measures-The Town is
actively pursuing implementation of service delivery performance measures linked· to key program services that aim to measure the results of providing the service. This information will
aid the Town in better aligning scarce resources with service delivery outcomes, providing a more efficient organization with increased accountability to the public. REVENUE ENHANCEMENTS
AND COST CONTAINMENT: Real'izing thevuTnerabilities of.the Town's ongoing stream ofrevenues and its limited revenue base, it is essential that the Town ensure that it is charging adequate
fees and charges to recover the cost ofservices so as not to create public subsid1es for private development and other specialized services provided to the Town's customer base. In that
regard, staff will once again be examining and bringing forward for Town Council approval a comprehensive fee review and update as part of the FY 2004/05 budget process. The Town is
also internal costs related to Town support of special events and will discuss with the Council the desired policies regarding objectives of cost recovery. Included
in this review is a 911 system fee currently under evaluation by many cities in the region.
PAGE 11 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31, 2003. February 24, 2004 Revie'w of the FY 2004/05 budget
proposals will reveal some new revenue opportunities that the Administration will be bringing forward for discussion with the Town Council in an creative approach to develop additional
appropriate and sustainable revenue streams for Town services. In looking forward to future years, management intends to review with the Town Council other revenue options such as tax
measures, assessments or bond issues that could be explored to provide funding for community assets such as police facilities, libraries, infrastructure (streets and roads), or special
services such as public safety or library services, or some combination of both. Since proceeding with any such measure would need to be carefully analyzed, early education and review
of options would be an important
first step in this process. On the cost side, the Town is exploring as part of its budget development and in its upcoming bargaining sessions with the Town labor groups initiatives with
ongoing cost containment as a goal for the future health of the organization. Many ideas are being explored and analyzed by the Town and will continue to evolve through the budget cycle
and employee bargaining process. Global cost containment initiatives such as Town Hall closures, for example, will also be explored with Council. BUDGET REDUCTION EFFORTS TO DATE:
Since FY 2000101 the Town has been actively addressing the budget challenges facing the Town in recent years. The Town has been pro-actively taking steps that have kept the Town's operating
revenues in balance with operating expenses since that time. These steps included: • 'In early FY 2001/02 the Town began expenditure reductions across all departments in response to
the developing recession, including strategically delaying or' slowing down operating expenditures, de-funding authorized positions, enacting selected hiring freezes, and extending equipment
replacements, where practical. To date, approximately. 15 full time equivalent· positions have been de-funded from the Town's budget totaling nearly $1.7 million dollars to date, comprising
a substantial part ofthe approximately $3.0 million cumulative cost reductions made through this fiscal year. • In February 2003, the Town implemented expenditure reductions across all
Town services of nearly $1.5 million dollars of expenditure reductions (approximately 6% of General Fund FY 2002/03 budgeted expenditures). The objective was to limit the effects on
service delivery to the public by utilizing, where available, salary savings due to vacancies and hiring freezes, salary step savings and selected departmental cost saving initiatives.
• The Town's adopted budget for FY 2003/04 was developed in an environment where flat revenue growth ofeconomically-sensitive revenues was conservatively projected. Specifically, the
adopted budget incorporated approximately $1.3 million ofadditional reductions (internally referred to as "Tier I" and described in the FY 2003/04 adopted budget transmittal message)
from the prior year's adopted budget to balance operating expenditures with operating revenues.
PAGE 12 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENPING DECEMBER31, 2003. February 24, 2004 • Staff also prepared a second
round of reduction proposals (internally referred to as "Tier II" and also described in the FY 2003 -04 adopted budget transmittal message) of approximately $1.2 million in Town-wide
expenses in anticipation of any further reductions made necessary by additional State takes or unanticipated reductions in economically sensitive revenues such as Sales Tax or Transient
Occupancy Tax. These reduction proposals have been developed with the same strategies used to arrive at the FY 2004/05 Tier I reductions, but.to a deeper level. To date, FY 2003/04 reveuue
reductions incurredby the Town have not been at thy level necessary for departments to formally invoke the Tier II reductions discussed above. The current year state take ofTown revenues
is approximately $500,000, the amount assumed by staff in the adopted FY 2003/04 Tier I budget. However, of the Town's continuing vulnerability fromany current year additional
budget crisis impacts and the continuing recession and its impact to local revenues, staff has pro-actively implemented additional savings beyoud the Tier I adopted budget
reductions totaling approximately $400,000 for the current year. These savings were obtained by partial implementation of Tier II options, partial FTE reduction opportunities, and continuing
selected hiring freezes and their associated salary and benefit savings. Operational savings in FY 2003/04 can be used to mitigate projected revenue shortfalls in economically seusitive
revenues such as Sales Tax, and Transi'ent Occupancy Tax (Hotel Tax) beyond that anticipated for remainder ofthe fiscal year. Expenditure savings and any excess revenue obtained this
fiscal year can also be used as a funding source J;lecessary to bridge the organization to its recommended Tier I and II adopted budget levels in FY 2004/05, which are respectively targeted
at a level of approximately six and twelve per cent below the FY 2003/04 adopted budget levels, partially offset by any revenue enhancements that are implemented next year. PROPOSED
BUDGET REDUCTIONS & REVENUE ENHANCEMENTS FY 2004/05 As stated above, the financial projectious for next year in I & II indicated the need for permanent budget reductions
or revenue enhancements of approximately six and twelve per cent to align the Town's services with its forecasted ongoing stream of revenues depending upon the Town's local economic
fortunes and developments at the state level. Many of the reductions taken in the past two years have resulted from selected hiring freezes and other operationaL efficiencies departments
have been able to develop.. These re.ductions, though difficult, were achieved with increases in efficiency and prodw;::tivity by Town staff so that the implementation of these reductions
was made fairly seamless to the community in terms of service level impacts. The planning for FY 2004/05 reductions is made more difficult because most of this operational "low hanging
fruit" has in large measure been harvested in the $3 million dollar cost reductions already implemented by the organization the past three fiscal years.
PAGE 13 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31,2003. February 24, 2004 Staff informed the Town Council
in November 2003 that it would immediately begin the analysis and hard work of crafting a comprehensive response to the budget challenges likely to occur in the coming months. In staff
s judgment, a prudent course of action was for Town departments to begin developing budget reduction and revenue enhancement proposals sufficient to address a range of forecasted revenue
shortfalls in FY 2004/05 of between $1.5 million (6%) and approximately $3.0 million (12%). The Tier I proposals before Council total $2,039,880 (inclusive of $1,044,672 of proposed
revenue enhancements), with 5.6 additional filled and .5 vacant FTE's positions de-funded and $74,725 of temporary labor costs de-funded. Tier II proposals total an additional $1,329,284,
including an additional 11.07 filled and 5 vacant FTE's de-funded and $149,880 oftemporary labor support costs de-funded. The Town Manager's office began outreach efforts to communicate
the 2004/05 budget challenges shortly after the November session with Town employees, boards and commissions, service clubs and other stakeholders who are associated closely with Town
services. Information was provided as to the potential magnitude ofthe budget challenges and the pro-active steps the Town was taking to meet the challenge. These outreach efforts also
included a discussion of potential cost reduction scenarios that may involve reductions in operating hours, reductions in service levels, and workforce reductions. The overarching principles
that guided these proposals were (1) managing in a fiscally responsible manner, (2) preserving valued Town services to the community, and (3) mitigating the impact of reductions to the
labor force. that provides these services to the Town. With these overarching principles as a basic tenet of management's actions, budget proposals were developed with the criteria first
first discussed with the Town Council at the November 2003 study session. Listed below are the criteria staffused in evaluating priorities and service level reductions in meeting the
budgetary goals for the coming year. The criteria used by the Town Manager in evaluating the budget reduction proposals brought forward were: Do these proposals-• Reflect the Town Council
priorities? • Affect the health and safety of the community? Is there an immediate threat to the community if the service were to be reduced or eliminated? Is there a legal mandate .from
the State or Federal government to provide this service? • Reflect community priorities as demonstrated by a large customer base and demand for the service? • Preserve the value/condition/usefullife
of a public asset? • Have dedicated revenue sources or produce revenue on a cost recovery basis?
PAGE 14 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECONt) QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER. 31, 2003. February 24, 2004 •. Is the Town uniquely qualified
to provide this service? • Significantly enhance the quality of life in Los Gatos? • Enhance productivity and provide strategic support services to the public? (e.g., finance, human
resources, legal, etc)? • Reflect the organization's professionaJ judgment about priority service levels to be provided to the community? Attachment #2 provides departmental budget reduction
and revenue enhancement proposals for Town Council review, feedback and discussion at the stlidy session. It is stressed that the proposals presented at this time are preliminary and
will be further developed and refined through Town Council feedback to the Town Manager and continued staff analysis over the next six weeks before they are presented as part of the
Town Manager's Proposed Budget for FY 2004/05. While the matrices provide reduction efforts by department, the Town Manager will approach the final proposed reductions from a service
perspective aligned with cOnlmunity priorities as informed by these Council discussions. Staff would like Town Council's feedback through this study session to use in further developing
and refining the Town's Proposed FY 2004/05 Operating Budget due to the Town Council in May 2004. Due to the uiJknown impacts of the state budget crisis the length of the ldcal revenue
downturn, staff anticipates adopting a Tier I and Tier II budget that can be responsive to . developments both in locally generated revenues and at the state 'level as they evolve over
the summer months of 2004. ENVIRONMENTAL ASSESSMENT: This budget report is not a project defined under CEQA, and noTurther action is required. FISCAL IMPACT: The Second Quarter Budget
Performance Report includes a number of recommended budget adjustments necessary to balance operating revenues with operating expenditures for FY 2003/04. Upon approval of the recommended
budget adjustments by Town Council, current projections foreca.sta small shortfall of operating revenues over operating expenses for the fiscal year ending June 30, 2003 (excluding a
one-time use of General Fund reserves for parking to pay for start up costs for the new Parking Enforcement program). As detailed in the report, staffis currently engaged in FY 2004/05
budget development process which incorporates plans for a six and twelve per cent overall expenditure reduction and/or revenue enhancements depending on the actions taken by the State
of California to balance its budget deficit.
PAGE 15 MAYOR AND TOWN COUNCIL SUBJECT: 2003/04 SECOND QUARTER BUDGET PERFORMANCE AND STATUS REPORT-SIX MONTHS ENDING DECEMBER 31,2003. . February 24, 2004 Attachrnents: 1. Budget Performance
Report for the Three Months Ended December 31, 2003 2. Departmental Budget Reductions/Revenue Enhancement Proposal Matrix
TOWN OF LOS GATOS BUDGET PERFORMANCE REPORT FOR THE SIX MONTHS ENDED DECEMBER 31,2003 February 24, 2004 FINANCIAL OVERVIEW-EXECUTIVE SUMMARY Status of FY 2003/04 Adopted Budget: As discussed
in the First Quarter Budget Performance Report, financial results for the first six months confirm the tentativeness of the recovery in the Town's economically sensitive revenues. Sales
Tax collections through December are trending in line with the prior year on a percentage basis, but a recent meeting in early February 2004 with the Town's Sales Tax consultant (MBIA)
resulted in staff recommending a reduction of $150,000 in Sales Tax revenue for this fiscal year. The reduction occurred mainly due to the 10% decline in totals sales from the Town's
auto dealers in the third quarter of calendar year 2003. The auto dealers constitute approximately,30% of the Town's total Sales Tax.. In the case of Transient Occupancy Tax, second
quarter collections are trending lower than second quarter collections received in the prior year with a recommended $70,000 dollar reduction from the adopted budget estimate. Interest
income is also trending lower than estimated and is recommended for a $13 7,100 dollar reduction due mainly to historically low interest rates available in the market for investment.
Additionally, vitally important Intergovernmental revenues received from the State of California such as Motor Vehicle License fees (Car Tax) representing a funding source of approximately
$1,632,000 or 7% of the Town's operating revenue continue to be threatened by actions taken legislatively in Sacramento in its budget crisis. Early in his administration, Governor Schwarzenegger
rescinded the trigger of the Car Tax and reduced the original amount of the tax by two-thirds. With record deficits now being projected for the State, this action will make the State's
ability to provide its promised "backfill' of revenues even more challenging. The Governor's January 2004 budget called for protection ·of this vita"!. source of revenue to the Town,
but its continued receipt is certainly in jeopardy with the State dealing with a reported $25 billion dollar deficit. It should be noted that revenues for FY 2003/04 included
approximately $650,000 of transfers to the Town's General Fund from Internal Service Fund excess balances that the Town is using to supplement revenues during the current downturn in
the economy. Unfortunately, these transfers cannot be sustained on an ongoing basis. The Town's five-year plan assumes decreasing amounts of this revenue available through FY 2008/09.
If these transfers were reduced, operating revenues would be reduced accordingly. Scheduled labor cost increases and other operating expenditure increases forecasted for FY 2004/05 and
future fiscal years will continue to require an improvement in the Town's economically sensitive revenues to offset the cost increases likely to occur. The FY 2004/05 expenditure reduction
and revenue enhancement efforts now being developed and discussed with the Town Council will will aid in balancing ongoing revenues with the Town's organizational structure and its accompanying
cost of providing services and potentially provide discretionary funding for other initiatives such as funding future capital improvements. ATTACHMENT 1
GENERAL FUND-KEYREVENUE ANALYSIS FY2003104 The following presentation provides a recap of significant General Fund revenue sources as of the second quarter ending December 31, 2003.
Staff is monitoring each revenue source closely, and at this time is' most concerned about three revenue sources, Sales Tax, Transient Occupancy Tax, and Interest Income which are recommended
to be adjusted lower for the fiscal year. Property Tax appears to be tracking in line with estimates, but its growth also appears to be slowing from the 6-8% growth rate experienced
in recent years, another reflection of the recession's impact on locally generated revenues.
FINANCIAL OUTLOOK FY 2003/04 • Sales Tax Revenue • Description The State Board of Equalization allocates one (1.0) cent of the eight (8.25) cents of local sales tax collected by merchants
on retail sales and taxable . services transacted within the Town of Los Gatos. Revenues are remitted to the Town on a monthly basis. This revenue is placed in the General Fund for unrestricted
uses. Analysis The Silicon Valley/San Jose Business Journal reported on January 20, 2004 that according to a small survey of chief operating officers of companies headquartered in the
region, the new year brings with it an expectation for improved economics for Silicon Valley and the Bay Area. Nearly all (95%) of the 32 COOs of large-and medium-companies participating
in the survey are expecting 2004's economic trends in Northern California to gradually improve. While the longer term outlook for the region looks promising, local analysis implies a
less optimistic outlook for the remainder of the fiscal year. Lower than anticipated auto and retail sales in the second quarter suggest a moderate reduction in projected Sales Tax revenue
is needed to bring it in line with currently anticipated revenues. Staff is still encouraged that one local internet based business continues to gain momentum and its growth is reflected
in its contribution to the Town's sales tax collections. 510,000,000 59,000,000 58,000,000 57,000,000 56,000,000 55,000,000 54,000,000 53,000,000 52,000,000 51.000,000 5-Quarterly and
Annual Revenues 5-Year History FY 2000 FY 200 I FY 2002 FY 2003 FY 2004 I.2nd Quarter 'I ActuID Revenues I ,C FiscID Year Totaq I Actual Revenues I [.Fiscal Year I II Budgeted ' Revenues
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 2nd Quarter Actual Revenues 5 3,245,945 5 4,759,276 $ 3,288,885 $ 3,237,902 $ 3.217,070 Fiscal Year Total Actual Revenues $ 7,932,104 $ 9,429,256
$ 6,953,880 56;953,880 Fiscal Year Budgeted Revenues S 6,800,000 2nd Quarter Percent of Total 40.92% 50.47% 47.30% 46.56% 47.31% Recommended Budget Revision Reduce $150,000
FINANCIAL OUTLOOK FY 2003/04 + Property Tax Revenue + Description Property Tax is one of the Town's largest revenue sources, accounting for 22% of the Town's budgeted General Fund revenue
for FY 2003/04. Property Tax distributions are largely received in the third and fourth qwuiers of the fiscal year, meaning revenue receipts are not reflected. proportionately in the
chart below, by quarter. Property Tax is levied at one percent of the assessed value of the property, of which the Town receives approximately .thirteen cents on each dollar paid to
the County Assessor's Office. The assessed value of real property appraised by the County Assessor is levied at the 1975/76 assessment role value, adjusted by a two percent inflation
factor thereafter. When property changes hands or new construction occurs, property is reassessed to its current market value. Real property values critically impact revenues. With the
passage of Proposition 13, voters in California limited the tax rate that can be imposed by the Town on property. With this limitation on rates, the higher the aggregate property value,
the higher the revenue generated. Analysis According to the County Assessor's FY2003/04 Annual Report, Los Gatos experienced an overall 6% growth increase in assessed value in FY 2002/03.
While this favorable trend is offset by a decrease in commercial property values which declined last year, the Property Tax collections at the end of the second quarter reflect a continued
groWth increase in assessed property taxes in line wi'th forecast revenues. This resultS in a recommendation of "no change" to budgeted revenues. :56,000,000 :55,000,000 :54,000,000
:53,000,000 :52,000,000 :51,000,000 $-Quarterly and Annual Revenues 5-Year History FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 I . I , • 2nd Quarter Actual ! I Revenues I,e Fiscal Year TOlal
Actual Revenues , '.Fiscal Year I Budgeted Revenues: FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 2nd Quarter Actual Revenues $ 2,110,478 $ 2,450,173 $ 2.127,714 $ 2.246.511 $ 2,297.420 Fiscal
Year Year Total Actual Revenues $ 3,724,022 $ 4,114,196 :5 4,483,521 $ 4,977,119 Fiscal Year Budgeted Revenues $ 5,338.006 2nd Quarter Percent of Total 56.67% 59.55% 47.46% 45.14% 43,04%
Recommended Budget Revision No Change
FINANCIAL OUTLOOK FY 2003/04 Description • Motor Vehicle In-Lieu Fee (Car Tax) Analysis • The State of California imposes an annual Motor Vehicle License Fee (MVLF) on the ownership
of a registered motor vehicle, based on the vehicle's sales price. This fee is "in-lieu" of a personal property tax .on the vehicles. For those vehicles brought into California from
out of state, the fee is based on the vehicle's market value at the time of California registration. After the Department of Motor Vehicles collects this fee, the State remits the funds
to the cities and counties on a monthly basis. The State allocates the MVLF revenue, less a small allocation for administrative costs, by way of a complex formula involving population
and property tax revenues. The Town has pledged this revenue as collateral for repayment of the 1992 Certificates of Participation. In 1998, the legislature passed and Governor Wilson
signed a 25% permanent reduction in the MVLF effective January 1, 1999. Effective January 2000, the MVLF MVLF was further reduced to a total of 35% of the full rate. The law requires
the state general fund to replace any .lost revenues to cities and counties. The MVLF was reinstated to 1998 levels on June 19, 2003 On December 17, 2003, Governor Schwarzenegger issued
an executive order rescinding the restoration of the MVLF and appropriating $2.65 billion to provide backfill funding for cities and counties. Under current law, losses to cities and
counties due to the backfill gap are to be paid by August 2006. The Town will continue its efforts to protect this vital funding source. $1,800.000 $1.600,000 $1,400.000 $1,200,000 $1.000.000
$800.000 $600.000 $400.000 $200.000 $-Quarterly and Annual Revenues S-Year History Ii• 2nd Quarter Acrual I Revenues I,[I C Fiscal Year Total Acrual Revenues '.Fiscal Year Budgeted i
I Revenues ; i FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 2nd Quarter Actual Revenues $ 692,974 $ 757,519 $ 773,837 $ 815,923 S 572,331 Fiscal Year
Total Actual Revenues $ 1,478,990 $ 1,597,247 S 1.600,588 $ 1,722,801 Fiscal Year Budgeted Revenues S U32.000 2nd Quarter Revenue Percent of Total 46.9% 47.4% 48.3% 47.4% 46.5% Recommended
Budget Revision No Change
FINANCIAL OUTLOOK FY 2003/04 .' Transient Occupancy Tax Revenue • Description The To\Yn of Los Gatos levies a IO per cent Transient Occupancy Tax on aU hotel/motel rooms within Town
limits to help fund Town services provided to transient lodgers. Analysis The Transient Occupancy Revenues received in the second quarter of the fiscal year reflects a slight increase
in occupancy rates for nearly all Town hotels and motels. Smith Travel Research reported on Jariuary 24, 2004, that U.S. hotels showed a 3.0 percent rise in room revenue, the chief indicator
of lodging industry health. Occupancy'rose 2.3 percent from a year earlier and the average daily rate for rooms rose 0.6 percent, backing general industry predictions that travel is
increasing but not fast enough to let hotels hike room prices. Business Week also reported this month that while the travel indUstry is recovering, competition is still too intense for
hotels to raise prices to previous levels. This continued lag in room rates is reflected through the minimal increase in the Town's Occupancy Tax receipts. With revenues closely following
last year's level of activity, it is recommended thaf budgeted reveniIes be reduced by $70,000 at this time.' Quarterly and Annual Revenues 5-Year History $1,400,000 $1,200,000 $1,000,000
5800,000 5600,000 5400,000 $200,000 5-I I I_2nd Quarter Actual I ,Revenues I C Fiscal Yellr Total Actual Revenues _ Fiscal Year , !. Revenues I FY FY 2000 2001 FY 2002
FY FY 2003 2004 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 2nd Quarter Actual Revenues 5 415,824 S 572,874 5 334,858 5 293,570 S 312,998 Fiscal Year Total Actual Revenues $ 1,215,702 $
1,286,276 $ 788,408 $ 713,064 Fiscal Year Budgeted Revenues $ 900,090 2nd Quarter Percent of Total 34.20% 44.54% 42.47% 41.17% 34.78% Recommended Budget Revisions: Reduce $70,000
FINANCIALOUTLOOK FY 2003/04 Description • Interest Income Revenue Analysis • The Town earns Interest Income revenue by investing cash not immediately required for daily operations in
a number of money market instruments. These investments are made within parameters as stated in the Investment Policy approved by the Town Council. The Town's goal is to achieve a competitive
rate of return while protecting the safety of those funds. Interest Income reVenue for the Town is primarily dependent upon two factors: the cash balance in the Town's investment portfolio,
and the yield on those funds. Interest income has been impacted negatively by the historically low interest rate environment seen in recent years. For benchmark purposes, the average
yield, recently quoted on January 29, 2004, on a five-year Treasury Bond is 3.18%. The Town's interest earnings have been further impacted by a decreasing cash balance due to the Town-wide
Capital Improvement Program emphasizing street reconstruction iIi recent years. FY 2003/04. interest earnings to date reflects this significant continued downtrend prompting a recommended
reduction of $137,100 in budgeted revenues, $3.500.000 $3,000.000 $2.500,000 $2,000.000 $1,500.000 $1.000.000 $500.000 $-Quarterly and Annual Revenues 5-Year History II CFiscal Year
Total .1. Actual Revenues , • Fiscal Year BUdgetedl Revenues I FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 2nd Quarter Actual Revenues $ 882,081 $
1,461,312 $ 1,220,984 $ 638,036 $ 594.001 Fiscal Year Total Actual Revenues $ 2,126,766 $ 3,415,358 $2,071;129 $ 1,336,711 Fiscal Year Budgeted Revenues $ 1,290,100 2nd Quarter Revenue
Percent of Total 41.5% 42.8% 59.0% 47.7% 46.0% Recommended Budget Revision Reduce $ 137,100
FINANCIAL OUTLOOK FY 2003/04 • Business License Tax Revenue • Description The Town of Los Gatos requires businesses to obtain a business license if a business is located within ToWn
limits, or if an agent of a business conducts operations within Town limits. . The Business License Tax is based on the type of business activity. Activities such as retail sales, wholesale,
and manufacturing are based on estimated gross receipts, on a sliding scale. Other Business License Tax revenues are based oil flat fees as set forth in the Town Code. Annual business
license renewals are due and payable in on January 2nd of each year. New business license applications for flat-fee based businesses are pro-rated by quarter, from the
date of application to the end of the year. Analysis The Business License Tax revenue received in the first quarter is primarily of new Business License fees. Second
quarter collections were slightly ahead of the prior year, an encouraging sign of slow recovery. During preparation of the FY 2003/04 budget, staff anticipated the softening economy
would. affect Business Tax fees based on gross receipts. These revenues comprise approximately 40% of the Business License fees· while flat fees make up the other 60% of revenue. Budgeted
revenues were therefore established at a small amount above actual amounts received in FY 2002103. $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $-Quarterly and Annual Revenues
5-Year History FY 2000 FY 20Q 1 FY 2002 FY 2003 FY 2004 .200 Quarter Actual Revenues : C Fiscal Year Total I Actual Revenues ; • Fiscal Year Budgeted Revenues FY 2000 FY 2001 FY 2002
FY 2003 FY 2004 2nd Quarter Actual Revenues $ 400,413 $ 428,772 $ 499,446 $ 450,284 $ 458,003 Fiscal Year Total Actual Revenues $ 956,710 S 1,000,281 $ 995,699 $ 970,502 Fiscal Year
Budgeted Revenues $ 1,035,000 2nd Quarter Revenue Percent of Total 41.85% 42.87% 50.16% 46.40% 44.25% Budget Revision No Change
FINANCIAL OUTLOOK FY 2003/04• Description Franchise Fee Analvsis • Franchise Fees are collected by the Town for the privilege of operating a utility service within Town limits, and in
lieu of a business license. Franchise Fees are currently received from Comcast for cable television services, PG&E for gas and electric service, and Green Valley for solid waste collection
services. FY2003/04 Franchise Fee revenues are trending at budget estimates. $1.000.000 $900.000 $800.000 $700.000 $600,000 S500.OO0 $400,000 S300.000 $200.000 c SI00.000 SQuarterly
and Annual Revenues 5-Year History !!1_2nd Quarter Actual Revenues I . iCFiscal Year Total ! Actual Revenues !_Fiscal Year I Budgeted Revenues FY 2000 FY 200 I FY 2002 FY 2003 FY 2004
FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 2nd Quarter Actual Revenues S 217,466 S 245,116 S 267,296 S 200,819 S 239,295 Fiscal Year Total Actual Revenues S 836,489 S 929,865 S 990,861
S 897,157 Fiscal Year Budgeted Revenues S 896,400 2nd Quarter Revenue Percent of Total 26.00% 26.36% 26.98% 22.38% 26.70% Recommended Budget Revision No Change
RECOMMENDED BUDGET ADJUSTMENTS
FY 2003/04 Estimated Revenues Budget adjustments are recommended for following revenues: FY 2003/04 Recommended FY 2003/04 Revenue Adopted . Adjustment Revised Sales Tax $ 6,800,000
$ (150,000) $ 6,950,000 Occupancy Tax $ 900,000 $ (70,000) . $ 970,000 Interest Income $ 1,290,100 $ (137,100) $ 1,427,200 The revenue reductions listed above reflect declines in economically
sensitive revenlies in three major Town revenues, Sales Tax, Hotel Occupancy Tax, and Interest Income as discussed previously. FINANCIAL SUMMARIES, PROJECTIONS AND RECOMMENDAnONS General
Fund As stated earlier in this report, the attached Schedule ofFY 03104 General Fund Operating Revenues vs. Operating Expenditures presents budget to actual data for the second quarter
and comparison information from the prior year. In the last column, the Financ.e Department projects final balances for the fiscal year based upon the trends observed through the second
quarter.
Town of Los Gatos Schedule of General Fund Operating Revenues vs. Operating Expenditures For the period ended December 31. 2003 FY 02103 FY 02/03 FY 02/03 FY 02/03 FY 03/04 FY 03/04
FY 03/04 FY 03/04 Final Adjusted 2nd Qtr % Adopted 2nd Qtr 0/. Finance Balance Budget Actuals Budget Actuals Projection General Property Tax 4,977,119 $ 5,106,000 $ 2,246,511
44% $ 5,33X,006 2,297,420 43°/0 S 5,33X,006 Sales & Use Tax 6,92X,XI7 7,000,000 3,237,902 46% 6,XOO,000 3,217,070 47°'0 6,650,000 Franchise Fees 897,158 957,000 200,XI9 21 896,400
239,295 27"'0 896,400 Transient Occ Tax 713,064 800,000 293,570 37% 900,000 312,998 35%. 830,000 Business License Tax 970,554 1,000,000 450,2K4 45'% 1,035.000 458,003 44% 1,035,000 Licenses
& Pennits 975,701 761,500 504,140 66% 802,000 603.X23 75°/0 802,000 Motor Vehicle In Lieu 1,722.801 1,632,000 XI5,923 50% 1,232,000 572.332 46% 1,232,000 Intergovernmental 1,463,388
1,212,700 705,980 5X% 1,768,804 728,945 41% 1,768,804 Charges for Services 2,209,851 2,099,975 1,263,196 60% 2,370,536 1,434,071 60% 2.370,536 Fines & Forfeitures 187,117 78,500 18,044
99'% 192,000 66,920 35% 192,000 Interest 1,461,678 1,303,850 638,036 49% 1,290,100 594,001 46% 1.I53,000 GASB investment to market adj ( 124,967) MiscellaneousiOther 480,762 266,857
253,622 95% 133.000 72.711 55% 133,000 Authorized Use of Reserves (Downtown Parking Pgm) Fund Transfers I, I05.853 1,088,700 1,078,544 99% 968,820 950,325 968,820. Total Revenues
$ 23,968,895 S 23.307,082 $ 11,766,570 50% S "23,726,666 S 11,547,913 49°'0 S 23,369,566 Mayor & Council 128,859 150,400 63.104 42% 143.700 65,159 45°"0 140.826
Clerks 368,118 359,396 176,877 49%. 363,160 161.025 44% 355,897 Attorney 215,327 236,470 95,456 40% 230,060 9034 43% 225,459 Treasurer 52,169 59,502 24,489 41% 56,560 33,238 59°10 55,429
Manager 1,879,400 2,041,193 933,092 46% 1,911,740 870,725 46% 1.873,505 Comm Development 2,269,876 2,466.853 1,070,797 43% 2,443,350 1.040,228 43% 2,394,483 Parks & Public Works 4,829,722
4,749,682 2,379,151 50% 4,893,910 2,242,462 46% 4,844,971 Police 9,467.902 9,355,104 4,716,750 50% 9,029,560 4,391,079 49% 8,939,264 Community Services' 950.298 983.604 378,366 38% 957,550
370,763 39% 938.399 Library 1.811.866 1,800.747 849.663 47% 1.775,265 914,774 52% 1,739,760 Total $ 21,973,536 $ 22,202,951 S 10,687,744 48% S 21,804,855 $ 10,187,787
47°/0 S 21,507.993 Non-Dept (Uses) General Government 1.412,981 1,360,093 406,636 30% 2,053,928 501,2K4 24% 2,012,849 Total Non-Dept Expenses 1,412,981 $ 1,360,093
$ 406,636 30% 2,053,928 S 501,284 24°0 2.012,K49 Total Operating Expenditures S 23,386,518 S 23.563.044 $ 11,094,380 47% S 23,858,783 $ 10,6X9,07I ....5°'0 S 23,520,K42 :"iet Operating
Revenues 582,377 (255,962) $ 672,190 $ (132,117) $ 858,843 (151,276) Budgeted Beginning Fund Balance Revenue Budgeted Use of Reserves for Parking Management 206,516 52,150 52.150
199,580 199,580 Budgeted Use of Reserves for Capital Projects 75,000 207.857 207,857 75,000 75.000 Total Budgeted Use of Reserves 281,516 260,007 260,007 274,580 274,580 Total Reserves
& Net Available for Capital Projects 657,377 (48,105) 880,047 (57,117) 858.843 (76,276) Operating Transfers-Parking Mgmt Program 206,516 52,150 52,150 199,580 I99,5XO
Capital Transfers-Budgeted Per 5 YrClP 75,000 207,857 207,X57 100% 75,000 0 0% 75,000
All Other Funds Guide to Presc"iation: Each of follow presentations groups financial summaries by fund type -the types being Special Rt'l'enue Funds. Capital Projects Funds. Internal
Service Funds. and Redevelopment Agency Funds. In each of the following projections a similar format is presented. For illustration purposes, the following annotated presentation of
the Solid Waste Fund provides insight on how each ofthe following presentations can be read and understood by the reviewer: Solid Waste Fund Beginning Fund Balance Budgeted Revenues
Actual Revenues -2nd quarter Budgeted Expenditures Total Actual Expenditures -2nd Quarter 2nd Quarter Ending Fund Balance $ 432,528 Audited Fund Balance July I, 2002 169,400 Total Budgeted
revenues for the FY 2002103 45,028 Actual revenues collected through Decemher 31. 2002 193, I00 Total Budgeted expenditures for all accounts FY 2002103 92,132 Total Actual expenditures
hy fund through Decemher 31. 2002 Beginning Fund Balance plus actual revenues less total $ 385,424 expenditures 2nd Quarter Special Revenue Fund -Special Revenue Funds, which account
for the proceeds derived from specific revenue sources that are legally restricted to special purposes include the Town's Parking Fund, Solid Waste Fund, Community Development Block
Graht Fund, Non Point Source Fund, Sewer Maintenance Fund, Landscaping and Lighting District' Funds, and the Operating Grants Fund. Of special note here is the Parking Fund, a neW program
and fund which was created to account for parking enforcement revenues and expenditures to provide specific data regarding that activity. As previously discussed in the FY 2003/04 adopted
budget, citation revenue provides only partial funding for this enforcement program. The FY 2003/04 budget anticipated a General Fund subsidy of $199,580 that would be requireci to balance
the cost of the program with the revenues collected.' As discussed in the adopted budget, FY 2003/04 is the second year of the start-up phase of the parking program and so the need for
General Fund subsidies continues. Staff is continuing to evaluate this area, as any shortfall in this fund must be covered at year-end with a from the Town's General
Fund. SPECIAL REVENUE FUNDS FINANCIAL PROJECTIONS Parking Solid CDBG Non Point Sewer LID's Genl Fund Fund Waste '\-laint. op Grants Beginning Fund Balance 352,645 1,174,793 214,893 92,266
95.608 Revenue from Operations: Budget 872,980 147,155 331.800 254,340 646.690 39,940 14.750 . Revenue Actua1s -2nd Quarter 228,505 45.115 11.002 159.688 646.690 38.320 Expenditures:
Budget-All Expenditures 872,980 214,305 383,800 254.340 646,690 52,531 Expenditures Actuals -2nd Qtr by Category Salary Expense 189.239 23,\ 74 9.139 53.025 140.648 6.921 Fringe Benetits
59,713 3.942 1.267 15.114 37.354 1.586 Materials & Supplies 45,537 36,573 494 1.289 11.007 21.762 ( \,293) Grants 269.127 Capital Purchases Interest 2.850 Internal Service 42,376 1.630
705 21.435 42.033 730 Transfers 7,330 33.147 37.500 95.400 6.418 Total Expenditure Actuals 2nd Qtr. 336.865 72.650 316.727 128.362 326.441 28.179 7.944 2nd Quarter Ending Fund Balance
(108,360) 325,110 869.068 246,218 320,249 102.407 87.664
Capital Projects Funds -Capital Projects Funds are utilized to account for resources used for acquisition and construction of capital facilities by the Town. Funds included in this category
are the GFAR Fund (General Fund Appropriated Reserve), Traffic Mitigation Fees Fund, Grant Funded CIP's Fund, Storm Drains Fund, Utility Undergrounding Fund, and the Gas Tax Fund. Capital
Project Funds are tracking in accordance with the FY 2003/04 adopted budget. Staff is recommending no changes at this time. In developing the FY 03/04 capital program, .staff reviewed
scheduled projects for potential strategic slowdowns of expenditure activity. This slowdown will aid cash balances available for General Fund investment earnings, in light of the aggressive
capital-spending plan over the past two years. If operating revenues will support it, staff still intends to maintain the General Fund's current year $75,000 . commitment to the Town's
Capital Improvement Plan. The Grant Funded CIP fund sometimes displays a deficit balance because this grant fund expends Town dollars first, then provides documentation of these expenditures
to the State of California or other granting agencies and is reimbursed for those costs, which eventually should result with the fund "breaking even" or a zero fund balance (dollars
expended equal dollars received back in grant reimbursements). CAPITAL PROJECT FUNDS FINANCIAL PROJECTIONS GFAR Traffic Grant Funded Storm Utility Gas Fund Mitigation CIP's Drains Under.
Tax Beginning Fund Balance 6,184,611 102,070 88,240 762,754 1,769,684 567,994 Revenue from Operations Budget 144,000 637,165 141,800 104,900 547,310 Revenue Actuals -2nd Quarter 326,167
195,535 85,381 68,860 292,078 1,191,681 639,499 122,472 376,142 33,147 13,822 47,678 106,000 47,678 155,619 495,965 54,392 128,157 848,136 1,838,544 364,107 50,000 4,220 10,717 36,235
692,682 575,979 1,319,833 2nd Quarter Ending Fund Balance 5,190,945 Expenditures Budget-Al1Expenditures 3,767,402 . Expenditures Actuals -2nd Qtr by Category Salaries General Supplies
. Program Costs/Capital Purchases Engineering Design Construction Engineering Constrution Transfers Total Expenditure Actuals 2nd Qtr. Internal Service Funds -Internal Service Funds
are used to finance and account for special activities and services performed by a designated Town department for other departments on a cost reimbursement basis. Included in this fund
type are the Equipment Replacement Fund, Worker's Compensation Fund, General Liability Self Insurance Fund, Stores Fund, Management Information Systems Fund, Vehicle Maintenance Fund,
and the Building Maintenance Fund. Internal Service Funds are tracking in accordance with the adopted FY 2003/04 adopted budget. No revision to adopted revenues or expenditures is required
at this time. Staff believes there is still.some potential for further operating transfers in future years from these funds as excess balances exist in amounts needed for funding in
a number of these funds.
INTERNAL SERVICE FUNDS FINANCIAL PROJECTIONS Equipment Workers Self Stores Mmgtlnfo Yehicle ,.. l3uilding Repillcemenl Compo . Insurance Systems Maint. Maint. Beginning Fund 811lance
3,204,771 1,997,543 2,130,705 194,752 1,895,801 67,593 -192,962 Re.venue from Operations Budget 478,930 516,500 623,900 88,000 831,300 515,090 1,088,380 Revenue Actuals -2nd Quarter
239,450 250,028 319,512 49.273 432,121 256,-198 562,012 ExpellditlJres Budget-All Expenditures 453,830 656,565 714,250 88,000 1,208,800 515,080 1,088,390 Expenditures Actuals -2nd Qtr
by Category Salary Expense 14,668 37,932 116,099 77,436 22,662 Fringe Benefits 3,188 8,093 26",036 19,672 6;298 Materials & Supplies 307,381 445,461 .31,528. 88;288 89,143 309,-163 Program
Costs/Capital Purchases 19,888 Transfers 400,000 125.000 125.600 Total Expenditure Actuals 419;888 450,237 31,528 230,424 186,251 338,422 2nd Quarter.
3,024,333 1,797,335 1,833,7J:z 212,497 2;097,498 137;840 . 716,552 Trust and Agency Funds -Town Trust and Agency Funds have fund balances, as of June 30, 2003 of $284,396
Parking District #88 and $193,396 in the Library Trust Funds. No budget revlsiol1s are eontemplated at this time for these funds. Redevelopment Agency -The Agl;lncy's FY 2003/04
and FY 2003-2008 Capital Improvement Plan adopted budgets are incorporated into the Redevelopment Agency's financialS41tements.,and actuals as presented below.
The Capital Projects Fund, balances include approximately $2.3 million dollars of remaining unexpended funds from the Agency's $10.7 million dollar 2002 COP issue that was finalized
in July 2002. The true interest cost to the Agency for that issue was at an average interest rate of 4.55 per cent, providing very favorable financ'ing for Agency capital projects. The
proceeds of the bond issue are being used and appropriated for their intended purpbse, eligible capital projects in the downtown project area such as the Town Plata Reconstruction Project,
Downtown Street Repair and Streetscape Prbjects and Downtown.Parking Improvements. Since 1992 Jedevelopment agencies across the state have been required to make Educational Revenue AugmentatiohFuhd
(ERAF) payments to the State. Because of the· State budget deficit, the ERAF requirements were increased for FY 2003/04. The Agency's ERAF payment for this yearis $209,975 compared to
$104,597 due to the State the prior year. The ERAF payment will be made from fund balance. . Once the State budgetedeficit was announced for FY 2002/03, a preliminary proposal. from
the Governor was to take the unencumbered redevelopment agency affordable housing funds. The proposal did not go forward and for this year was off the table. This is not to say that
the funds are safe in the long term, but they are preserved for the current fiscal year. Staff will continue to, monitor threats to Housing Fl.lIld dollars very closely to protect them
as a valuable resource the for the Town's affordable housing programs. -For next fiscal year, FY 2004/05 and beyond, it is believed the State will always consider increasing the ERAF
payments from redevelopment agencies. Based on preliminary information, the estimated
payments from the Los Gatos Redevelopment Agency could range between $200,000 and $685,000 annually. It is anticipated that the State may allow redevelopment agencies to borrow at least
a portion of the payment from their housing funds in order to help make the payment. It is important that the Town continue its lobbying efforts to prevent the legislature from further
State takes from Redevelopment Agency Tax Increment. It is essential to preserve the Agency's tax increment revenue as any take from this source will reduce the annual revenue stream.
If a larger revenue take is enacted, the lowered revenue stream will reduce the total amount of bonds the Agency can issue in the future. REDEVELOPMENT AGENCY FINANCIAL PROJECTIONS Capital
Debt Low & Projects Service Moderate Total Beginning Fund Balance 6,207,412 3,550,572 2,651,933 12,409,917 Revenue from Operations Budget 147,885 4,272,658 858,070 5,278,613 Revenue
Actuals -2nd Quarter 64,524 1,335,358 368,135 1,768,017 All Expenditures Budget-All Expenditures Expenditures 5,141,698 3,435,785 247,125 8,824,608 Expenditures Actuals -2nd Qtr by Category
Salary Expense 138,402 11,324 149,726 Fringe Benefits 18,403 2,281 20,684 Materials & Supplies 337,628 9,556 185,725 532,909 Grants & Awards (126,801 ) (126,80 I) Internal Services Interest
281,752 Debt Service 290,000 290,000 Lease Payment 125,898 125,898 Capital Improvements 1,769,856 1,769,856 Total Expenditure Actuals 2nd Qtr. 2,264,289 707,205 72,529 3,044,024 2nd
Quarter Ending Fund Balance 4,007,646 4,178,724 2,947,539 11,133,910 CONCLUSION Second Quarter 2003/04 res'ults indicate some adjustments downward were needed in General Fund revenues
totaling approximately $360,000. Expenditure savings of approximately $400,000 are anticipated that will likely provide a balance to the revenue declines forecasted at this time. The
Town continues to possess strong reserve fund balances in the General Fund with $10.9 million in designated reserves, including the Reserve for Economic Uncertainty which remains intact
in the amount of $3,678,000. The Town's overall financial strength enables it to effec;tively manage the current economic downturn and its associated revenue reductions through careful
monitoring of revenue and expenditure trends and acting pro-actively before a financial crisis presses upon the Town. Staff continues to closely monitor all current year revenue and
expenditure activity, mindful of the necessity to balance operating revenues with operating expenditures. Now more than ever, the Town must also be aware of the need to develop appropriate
revenue sources for on-going operating and capital needs of the· community for the future,
DEPARTMENTAL BUDGET REDUCTIONSIREVENUE ENHANCEMENT . PROPOSAL MATRIX . ATTACHMENT 2
TOWN COUNCIL PROGRAM PURPOSE The Town Council is the legislative body that represents the Town of Los Gatos. The Town Council is comprised of five (5) Council members, with the Mayor
and Vice Mayor annually appointed by Council members each November. The Town Council operates under a CouncillManager form of government that combines the policy leadership of elected
officials in the form of a Town Council, with the managerial expertise of an appointed Town Manager. With the assistance of Town staff, the Mayor and Town Council identify and implement
appropriate policy, program and budget priorities for the Town. As an elective Legislature, the Town of Los Gatos Town Council's priorities reflect, through its regulatory and budgetary
enactments, the aspirations of the citizens of Los Gatos. These priorities are implicit in the programs adopted and set forth in the annual operating budget for the Town of Los Gatos.
PRELIMINARY ADJUSTMENT STRATEGY Recognizing the Town's fiscal situation, the FY 2004/05 preliminary preliminary proposed budget adjustments for Town Council reflect a variety of expenditure
reductions. When developing the reduction proposals, consideration was given to the capacity of the existing budget and minimizing the level of impact on internal processes and to the
public. While the Tier I proposal does reflect moderate impacts, the Tier II proposal involves a reduction of .10 FTE administrative support to the Council. However, it should be noted
that reductions to clerical/administrative FTEs in the Town Offices and Town Manager's Department would be implemented in coordination with an evaluation to maximize resources and efficiencies.
au TOWN COUNCIL 03 SUMMARY OF REVENUES AND EXPENDITURES REVENUES Oll02 Aetnals 02/03 Adopted 02/03 Estimated 03/04 Adopted TOTAL REVENUES $ $ $ $ EXPENDITURES Salaries and Benefits 87,558
125,100 102,612 112,100 Operating Expenditures 25,812 26,500 16,923 22,600 Fbced Assets Internal Service Charges 7,942 8,400 9,324 9,000 TOTAL EXPENDITURES $ 121,312 $ 160,000 $ 128,859
$ 143,700 TOWN COUNCIL PROGRAM STAFFING Full Time Equivalents (FTE) 01102 02/03 02/03 03/04 Town Staff Aetuals Adopted Adjusted Adopted Councilmembers 5.00 5.00 5.00 5.00 Administrative
Analyst 0.10 0.10 0.10 0.10 Secretary to the Town Manager 0.50 0.50 0.50 0.50 Office Clerk 0.25 0.25 0.25 0.25 TOTAL PROGRAM FTEts 5.85 5.85 5.85 5.85 Temporary StaffHours Intern TOTAL
At'\fNUAL HOURS 01102 Actuals 02103 Adopted 02/03 Adjusted 03/04 Adopted 500 500
KEY PROGRAM SERVICES TOWN OFFICES Town Council • Represents the residents of Los Gatos • Formulates and enacts public policy in response to current and anticipated needs within political,
administrative, and fiscal constraints • Provides community leadership as the legislative and policy-making body of the municipal government • Oversees Town boards and commissions •
Represents the Town of Los Gatos through coordination and collaboration with other government agencIes
OFFICE OF THE TOWN COUNCIL PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: Tier I p.roposed Budget Adjustment: Tier II Proposed Budget
Adjustment: $ 143,700 $ 8,600 $ 12,906 Proposal 1. 2. 3. Proposed Adjustment Reduce temporary employee budget Reduce operatillg expellditures Defimd Office Clerkpositioll-from 1.0 FTE
to .75 FTE. Tier I $2,706 $1600 $4,294 Tier II Service Impacts $2,706 It is anticipated that defunding the temporary employee budget will have a minimal to moderate impact on service
levels to' the Town Council. Impacts could include the slowing of Council-related clerical and administrative activities, including the Council agenda packet process or response to Council
and community requests. In the event supplemental clerical support is required, alternative resources within the organization will be identified. $1,600 It is anticipated that the proposed
expenditure reductions in travel/training and office supplies will have a minimal service impact. Although the workweek would be reduced for this position. the staffing distribution
for the Council would remain at existing levels -.25 FTE.
P."oposals Proposed Adjustments Tier I Tier II Service Impacts 4. Defimd Office Clerk position -from 1.0 FTE to $8,600 This proposedworkweek reduction would .50 FTE. have a significant
impact 0/1 Council clerical and administrative support. The existing staffing distribution for the Council's Office would be reducedfrolll .25 FTE to .15 FTE. This proposed reduction
could impact the Council agenda packet distribution process and other Council-related activities. However, ifadditional support is warranted, resources within the organization would
have to be reallocated. ! . TOTAL $8,600 $12,906 .
TOWN CLERK PROGRAM PURPOSE The Town Clerk is the elected custodian of Town records. This position functions jointly with the Clerk Administrator position to oversee the professional
administrative duties required of this responsibility. The purpose of the Town Clerk Administration program is to serve as the official custodian of the legislative history for the Town
of Los Gatos. In this capacity, the Office of the Town Clerk preserves, maintains, and protects Town records to accurately reflect Town actions, policies, and practices. Other core services
include notification of public meetings and hearings and the provision of passport services. PRELIMINARY ADJUSTMENT STRATEGY The FY 2004/05 proposed budget adjustments represent reductions
in salary and benefits and operating expenditures. When developing the proposals, opportunities having the least amount of community impact were given priority. As a result, Tier I and
Tier II propose to defund 1.0 FTE of a vacant position. Other areas yet to be explored include future potential vacancies which could provide additional budget savings and departmental
restructuring opportunities. Proposed clericaVadministrative FTE reductions in the Town Offices and Town Manager's Department would be implemented in coordination with an evaluation
of restructuring opportunities to maximize resources and efficiencies.
ro TOWN CLERK 03 TOWN CLERK PROGRAM STAFFING Full Time Equivalents (FTE) 01102 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Elected Town Clerk 0.25 0.25 0.25 0.25 Clerk
Administrator 0.75 0.75 0.75 0.75 Senior Deputy Clerk 1.00 1.00 1.00 1.00 Deputy Clerk 2.00 2.00 2.00 2.00 TOTAL PROGRAM FTEs 4.00 4.00 4.00 4.00 Temporary Staff Intern TOTAL ANNUAL
HOURS 01102 Actuals 605 605 02/03 Adopted 605 605 02/03 Adjusted 605 605 03/04 Adopted
KEY PROGRAM SERVICES TOWN OFFICES Town Clerk • Provides public notice of Council, Commission and Board meetings • Provides public notice ofTown Board, Commission, and Committee vacancies
• Accepts and files appropriate documents associated with municipal elections • Acts as Filing Official for the Town's Conflict of Interest Code in conformance with the requirements
of the Fair Political Practices Commission • Provides passport renewal services to the community • Preserves and maintain"s the Town and legislative history as required
by Town Code
-- OFFICE OF THE TOWN CLERK PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General FU,nd Budget 2003/04: Tier I Proposed
Budget Adjustment: Tier II Proposed Budget Adjustment: $ 363,160 $ 33,864 $ 35,864 Proposals Proposed Adjustment Tier I Tier II Service Impacts 1. Defund .50 FTE Deputy Clerk position.
$33,864 $33,864 The part-time Deputy Clerk position has been vacant since late Fall 2003 and as a result of reprioritizing and reallocating the position's duties, no significant service
level impacts to the community have been experienced. However, it should be noted that the reallocation of duties have slowed the productivity ofongoing projects such as records retention
and document imaging. 2. Reduction in Advertising Expenditures $2,000 The service impact associated with this reduction is anticipated to be minimal. Analysis of expenditures in previous
years indicates this reduction can be absorbed. TOTAL $33,864 $35,864 -... -_.."-. -..
TOWN TREASURER PROGRAM PURPOSE The Town Treasurer is the elected custodian of Town Funds, serving a four year term. The Treasurer, as the custodian of Town funds, provides oversight
and management of the Town's investments program, debt administration, and banking services. Investment activities are mandated in the State Government Code and the Town Code, and related
duties within these areas of responsibility include monthly investment reporting and preparing an annual update to the Town's InvestIIl;ent Policy. PRELIMINARY ADJUSTMENT STRATEGY Budget
Reductions were not proposed for the Town Treasurer's Office in FY 2004/05 as the minimal program expenditures are strictly related to basic staffing duties, service fees, and essential
operating services, without any discretionary funding available for reductions.
ro TOWN TREASURER 03 TOWN TREASURER PROGRAM STAFFING Full Time Equivalents (FTE) 01/02 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Treasurer 1.00 1.00 1.00 1.00 Sr.
Account Technician 0.25 0.25 0.25 0.25 TOTAL PROGRAM FTE's 1.25 1.25 1.25 1.25
KEY PROGRAM SERVICES TOWN OFFICES .Town Treasurer • Serves as custodian of all Town funds, pursuant to State Government and Town code • Provides oversight of Town investments, including
decisions related to purchases and cash management, in conformity with adopted Investment Policy • Provides oversightofTown Debt Service and banking service relationships • Informs Town
Council and Town Management of investment activity trends and results
TOWN ATTORNEY PROGRAM PURPOSE The Town Attorney is the legal advisor to the Town Council, Staff, and Redevelopment Agency. The Town Attorney processes and evaluates all claims against
the Town and manages all litigation involving the Town. PRELIMINARY ADJUSTMENT STRATEGY The FY 2004/05 preliminary proposed budget adjustments were developed considering the need to
maintain the ability to provide legal advice and conduct legal transactions to support the Town organization and Council. Given the limited capacity of the existing budget, the Tier
I and Tier II budgets proposes a reduction of .25 FTE legal assistance suppOrt to the Town Attorney from .75 FTE to .50 FTE. Currently, funding for this position is distributed between
the Attorney's Office and the Town's SelfInsurance Fund. Proposed clericaVadministrative FTE reductions in the Town Offices and Town Manager's Department would be implemented in coordination
with an evaluation of restructuring to maximize resources and efficiencies.
TOWN ATTORNEY 03 SUMMARY OF REVENUES AND EXPENDITURES REVENUES 01102 Actuals 02/03 Adopted 02/03 Estimated 03/04 Adopted TOTAL REVENUES $ $ $ $ EXPENDITURES Salaries and Benefits
234,122 170,300 157,281 159,700 Operating Expenditures 26,936 56,100 31,636 46,400 Fixed Assets Internal Service Charges 28,862 24,100 26,410 23,960 TOTAL EXPENDITURES $ 289,921 $ 250,500
$ 215,327 $ 230,060 TOWN ATTORNEY PROGRAM STAFFING Full Time Equivalents (FTE) Town Staff Town Attorney Legal Assistant Secretary to the Attorney TOTAL PROGRAM FTE's * Defunded 01/02
Actuals 1.00 0.75 1.00 2.75 02/03 Adopted 0.75 0.20 1.00 1.95 02/03 Adjusted 0.75 0.20 1.00 1.95 03/04 Adopted 0.75 0.20 1.00 * 1.95
KEY PROGRAM SERVICES TOWN OFFICES Town Attorney • Represents the Town regarding litigation matters, including criminal prosecutions of code violations • Serves as the legal advisor for
the Town Council, Town staff, and Redevelopment Agency • Processes and evaluates all claims against the Town and manages all litigation involving the Town • Drafts and/or reviews all
proposed ordinances and resolutions • Supervises personal injury or property damage claims and related litigation • Reviews and/or drafts Town staff reports and contracts
• Assists in the administration of the Town's liability insurance and risk management program • Negotiates key transactions such as property acquisitions
OFFICE OF THE TOWN
ATTORNEY PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: $ 230,060 Tier I Proposed Budget Adjustment: Tier II Proposed Budget Adjustment:
$$ 21,202 27,600 Proposals Proposed Adjustment Tier I Tier II Service Impacts 1 Defund Legal Assistant position from. 75 FTE $21,202 $21,202 The service impact ofreducing the Legal to
.50 FTE. Assistant position to .50 FTE would slow the processing ofe/aims against the Town as well as the coordination oflitigation activities. Proposed mitigation measures would include
using resources and staff (when available) from other departments to provide the necessaty administrative support. 2 Reduction oflegal service expenditures. $6,398 Reduction oflegal
service expenditures would limit the amount lif'available funding to address unji)reseen litigation involving the Town. Ifthis reduction is implemented, alternative revenue sources would
have to be identified should additional legal services be required. TOTA.L $21,202 $27,600 .-
TOWN MANAGER'S DEPARTMENT Town Manager's Office PROGRA.l\1 PURPOSE .The Office of the Town Manager ensures that all Town programs and services are provided effectively and efficiently.
It provides administrative direction, leadership, coordination and monitoring through group and individual meetings with the Executive Management Team and the Town Council, and through
specific administrative assignments. The Manager's Office approves and distributes all Council agenda reports and follow up on Council decisions; fosters public awareness of municipal
programs, services and goals; and reinforces public service orientation among employees. Additionally, the Manager's Office acts as the Public Information Office in their efforts to
respond to citizen inquiries by explaining Town' services and functions, marketing Town amenities, and investigating and solving problems and providing information. Other duties include
initiating new or special projects that enhance the Town government and community and direct staff assistance to the Mayor and Town Council on special projects and
day-to-dayactivities. PRELIMINARY ADJUSTMENT STRATEGY Given the fiscal challenges facing the Town, the preliminary proposed budget adjustments for the Town Manager's Department reflect
reductions in both salary and benefits and operational expenditures. When developing the proposed budget adjustments, consideration was given to the capacity of the department's budget,
its existing work load, and impact on the community. While the priority was to minimize service impacts, implementation of the Tier I or Tier II proposed reductions would decrease service
levels to internal and external customers, due to the ..25 FTE and .50 FTE, reduction in clerical support; respectively. Proposed clerical/administrative FTE reductions in the Town Manager's
Department and Town Offices would be implemented in coordination with an evaluation of restructuring opportunities to maximize resources and efficiencies.
ro TOWN MANAGER'S DEPARTMENT 0J TOWN MANAGER PROGRAM STAFFING Full Time Equivalents (FTE) 01102 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Town Manager 0.45 0.45 0.45
0.45 Assistant Town Manager 0.35 0.35 0.35 0.35 Administrative Analyst 0.50 0.80 0.80 0.80 * Secretary to the Town Manager 0.50 0.50 0.50 0.50 Office Clerk 0.75 0.75 0.75 0.75 TOTAL
PROGRAM FTE's 2.55 2.85 2.85 2.85 01102 02/03 02/03 03/04 Temporary StaffHours Actuals Adopted Adjusted Adopted Clerical Aide 1,480 1,480 1,480 Intern 500 TOTAL ANNUAL HOURS 1,480 1,480
1,480 500 * Defunded .25 FTE
KEY PROGRAM SERVICES TOWN MANAGER'S DEPARTMENT Town Manager's Office • Provides policy advice and staff support to the Mayor and Town Council • Provides administrative direction and
leadership over Town Departments, programs, and services • Oversees the Town's organizational and fiscal management efforts and program development and evaluation processes • Coordinates
the preparation of the annual Operating and Capital Budget • Implements the Town of Los Gatos Strategic Plan • Oversees the Town Council agenda process • Oversees the Town's cable television
franchise agreement • Addresses ,citizen complaints, inquiries, and requests • Monitors proposed state and federal legislation and coordinates response plan with key legislative organizations
• In coordination with Community Development Department, provides guidance and direction to Economic Vitality Program'
TOWN MANAGER'S DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY·2004/0S Department's Total Adopted General Fund Budget 2003/04: Tier I Proposed Budget Adjustment: Tier II Proposed Budget Adjustment:
$ 392,980 $ 23,600 . $ 41,068 Proposals Proposed Adjustment I. Reduce Temporary Employees Budget 2. Reduce operating expenditures Tier I $6,216 $4,500 Tier II $9,300 $6,000 Service Impacts
It is anticipated that defunding the Temporary Employee budget will have an impact on service levels to the Town Manager's Office, slowing some routine clerical administrative processes
and reducing support to professional staff This impact becomes more significant when taken in combination with the FTE reduction ()f the OJ/ice Clerk as described in Proposal #3. In
the event supplemental clerical support is required, alternate resources within the organization will be identified. Reductions to operating expenditures, including office supplies and
travel/training . will result in internal service impacts, requiring the reevaluation and repriori!ization purchases and training opportunities.
Proposals Proposed Adjustments Tier I Tier II Service Impacts 3. Defund .25 FTEOfJice Clerk position Position reducedfrom 1.0 FTE to. 75 FTE $12,884 This reduction will reduce the existing
stafJing distribution from. 75 FTE to .50 FTE and will have a significant impact on service levels, slowing routine clerical administrative processes and reducing support to professional
stqjf In the event supplemental clerical support IS required, alternate resources within the organization will be identified. 4. Defund .50 FTE Office Clerk position Position reduceclfrom
1.0 FTE to .50 FTE. $25,768 The proposed reduction would reduce the existing staffing distribution from. 75 FTE to .35 FTE. This reduction would significantly impact internal and external
service levels, slowing the response time to customer inquiries and clerical and administrative support to professional staff If this reduction is implemented, the redistribution of
existing clerical and administrative support and resources within the organization would would be restructured to mitigate the proposed stajJing reduction. $23,600 $41,068 I...-----l
-I.-' _ . TOTAL
TOWN MANAGER'S DEPARTMENT Human Resources PROGRAM PURPOSE The purpose of the Human Resources Program is to attract, develop and retain a quality workforce. It accomplishes this by providing
effective and efficient employee recruitment and retention, professional development, training, organizational development, compensation and classification administration, employee relations
support, safety and workers compensation administration, benefit administration, and policy and procedure development and administration. Employee relations activities emphasize prqactive
and preventative informal resolution of employee and management concerns. Program staff is responsible for the development of Memorandums of Understanding (MOU) with the Town's three
bargaining units and informal discussions with the Town's management and confidential employees. PRELIMINARY ADJUSTMENT STRATEGY The reductions in Human Resources were approached from
the perspective of maintaining a very minimal level of core service and avoiding significant operational impacts on departments. The Tier I preliminary proposed reductions result in
a .30 FTE reduction in HR positions, and the Tier II reductions would result in a .375 FTE reduction. It is likely that Human Resources will be part of a potential reorganization of
administrative functions. The goal will be to achieve operational efficiencies and cost savings in administrative services. Additionally, staff is exploring opportunities to partner
with other agencies to provide human resources servIces.
ro TOWN MANAGER'S DEPARTMENT 0J SUMMARY OF REVENUES AND EXPENDITURES 01/02 02/03 02/03 03/04 Actua.ls Adopted Estimated Adopted REVENUES Licenses and Permits Intergovernmental Revenues
Service Charges TOTAL REVENUES $ $ $ $ EXPENDITURES' " Saldries and Benefits 466;853 470,700 394,032 382,700 Operating Expenditures 158,139 133,500 . 56,264 77,900 Fixed Assets Internal
Service Charges 38,768 36,900 34,824 30,110 TOTAL EXPENDITURES $' 663,761 $ 641,100 $ 485,120 $ 490,710 ,HPMAN &ESOURCES PROGRAM,STAFFING Full Time Equivalents (FTE) , 01/02 02/03 02/03
03/04 TownStaft Actuals Adopted Adjuste<i Adopted Town Manager 0.30 0.30 0.30 0.30 ASSistant Town Manager 0.50 0.50 0.50 0.50 Human Resources Director 1.00 0.80 0.80 0.80 Human Resources
Specialist 2.00 1.80 1.80 1.80 * Administrative Analyst 0.20 0.10 0.10 0.10 TOTAL PROGRAM FTE's 4.00 3.50 3.50 3.50 1 Temporary StaftHours Project Manager TOTAL ANNUAL HOURS * Defunded
.30 FTE 01102 Actuals 1,480 1,480 02/03 Adopted 1,480 1,480 02/03 Adjusted 1,480 1,480 03/04 A
doptedKEY PROGRAM SERVICES TOWN MANAGER'S DEPARTMENT Human Resources Department • Provides effective administration of employee relations program • Conducts employee training • Administers
employee benefits • Administers recruitment and selection program • Administers classification and compensation plans • Provides information and interpretation regarding Town PersoRIlel
Rules, regulations and procedures, MOU and ordinances • Effectively resolves personnel issues • Maintains employee personnel files, records, and documentation • Administers the workers'
compensation and safety programs • Develops, implements, and maintains administrative policies and procedures • Serves as advisor to employee recognition program
HUMAN RESOURCES -TOWN MANAGER'S DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: Tier I Proposed Budget Adjustment: Tier II
Proposed Budget Adjustment: $ 490;710 $ 29,500 $ 59,000 Proposals I. Proposed Adjustment Materials and Supplies Reduction Reduction in expenditures for materials and supplies.. Tier
I $ 7,500 Tier II $ 7,500 Service Impacts Service impacts are not anticipated. 2. Defimd.30 FTE Human Resource Specialist One Human Resources Specialist position would be reduced from
40 to 30 hours per week(25 FTE) and the other would be reduced from 28 to 26 hours per week( 05 FTE) $ 22,750 $ 22,750 Service impacts will be partially o./fset through the use of a
new on-line applicant tracking and communication .'Jystem. Recruitment and selection activities will be delayed. The impact to ben4its administration will be mitigated in part through
ejficiencies gained in workjlow process, transfer ofduties to line departments, and on-line processing. There will he a reduction in hours that HR staff is available to resolve employee
benefit issues,coordinate training (lIul the employee recognition program. The ability staff to develop, maintain and deliver high quality HR programs will be diminished. The
availability HR staff to provide backup assistance to the Town Manager's Gjjice will be greatly diminished. 02/12/2004
Proposals 3. Proposed Adjustments Defund .375 FTE Human Resource Specialist Reduction A{Jditional reductions: One !)()silion would be reduced/rom 30 to 20 hours per week (.25 FTE) and
the other position would be reduced from 26 to 20 hours per week (. J25 FTE). Tier I Tier II $ 29,400 Service Impacts The reduction of staff dedicated to benefits administration will
be mitigated through efficiencies gained in workflow process, tramjer ofduties to line departments, and online processing. Staff will have very little time available to resolve employee
benefit issues, and coordinate training and the employee recognition program. The ability of staff to develop, maintain and deliver high quality HR programs will be diminished. HR staff
will be unable to provide backup assistance to the Town Manage'." 's Ofjice. A new on-line applicant tracking and communication will partially mitigate the impact on recruitment
efforts. Recruitments will take more time to complete resulting in temporary stafjing shortages, which will impact service to the community. Resolution 0/workers' compensation issues
will take longer and may result in increased costs. There will be reduced capacity to address special proje.cts and HR program development. resulting in diminished service levels. TOTAL
$ 30,250 $ 59,650 .....L-__...:.-__L-__...:.-_--J ......... -.__ .
TOWN MANAGER'S DEPARTMENT Finance & Administrative Services PROGRAM PURPOSE The Finance and Administrative Services Program provides staff support for the Town's financial functions
and responsibility, assuring both legal and fiscal accountability to the public. The Finance program's core services are to: provide financial oversight and administer accounting functions
for all of the Town's funds and accounts; prepare the Town's Annual Operating and Capital Budgets for fiscal and service· accountability; coordinate the annual financial audit and preparation
of the Comprehensive Annual Financial Report (CAFR) to verify proper fiscal practices are maintained; administer the Town's Business License, Accounts Payable, Accounts Receivable, and
Payroll functions and oversee the Town's Purchasing and Claims Administrations functions, ensuring proper practices are in place and fiscal and operational responsibility is upheld.
PRELIMINARY ADJUSTMENT STRATEGY The Finance Department approached its budget reduction targets with an objective of maintaining staff expertise in the delivery of essential core functions
and fulfilling fiscal. and legal responsibilities. With a of utilizing partial reductions of four staff positions and the elimination of operational flexibility formerly
obtained through the use of overtime hours and temporary staff, Finance will endeavor to minimize services level impacts while maintaining core services. Under the Tier I proposal, a
total of .80 . FTE will be defunded along with a reduction in overtime and temporary staff hours. Under the Tier II proposal, a total of 1.20 FTE is defunded along with the reduction
in overtime, and a deeper reduction in temporary hours.
ro TOWN MANAGER'S DEPARTMENT 03 SUMMARY OF REVENUES AND EXPENDITURES 0l/02 02/03 02/03 03/04 Actuals Adopted Estimated Adopted REVENUES Licenses and Permits 978,297 1,000,000 970,554
1,035,000 Intergovernmental Revenues 51,176 1,193 Service Charges TOTAL REVENUES $ 1,029,473 $ 1,000,000 $ 971,747 $ 1,035,000 EXPENDITURES Salaries and Benefits 717,868 882,400 776,321
824,500 Operating Expenditures 67,681 118,800 108,278 122,600 Fixed AssetS Internal Service Charges 72,635 87,400 81,738 80,950 TOTAL EXPENDITURES $ 858,185 $ 1,088,600 $ 966,337 $ 1,028,050
FINANCE & ADMINISTRATIVE SERVICES PROGRAM STAFFING Full Time Equivalents (FTE) 0l/02 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Town Manager 0.25 0.25 0.25 0.25 Assistant
Town Manager 0.15 0.15 0.15 0.15 Finance & Admin Services Director 1.00 1.00 1.00 1.00 Accounting Manager 1.00 1.00 1.00 1.00 Finance Project Coordinator 0.75 0.75 0.75 0.75 Administrative
Analyst 0.20 Accountant 0.90 0.90 0.90 1.00 * Sr. Account Technician lAO lAO lAO 1.30 Account Technician 2.00 2.00 2.00 2.00 Sr. Account Clerk 1.00 1.00 1.00 1.00 TOTAL PROGRAM FTEs
8.65 8.45 8.45 8.45 0l/02 02/03 02/03 03/04 Temporary Staff Actuals Adopted Adjusted Adopted Clerical Aide 640 Student Intern 1,200 1,200 1,200 Account Technician 240 240 240 300 Sr.
Account Clerk 480 TOTAL ANNUAL HOURS 1,840 1,200 1,440 300 * Defunded .60 FTE
KEY PROGRAM SERVICES TOWN MANAGER'S DEPARTMENT Finance and Administrative Services Department • Develop and monitor the Town's annual operating and capital budgets m accordance· with
Governmental Finance Officer Association (GFOA) guidelines • Coordinate the annual audit of the Town's financial statements and preparation of the Comprehensive Annual Financial Report
(CAFR) • Maintain the Town's financial information system for record-keeping and reporting of all financial transactions • Provide Accounts Payable and Payroll disbursement and reporting
services; Accounts Receivable invoicing, revenue collection, and cash reconcilement; and Business License Tax processing and auditing services. • Provide accounting, arbitrage reporting,
and claim reimbursement services for bond issues • Provide oversight of procurement functions including Purchase Order processing, financial tracking of contracts, vendor resolution
issues, and proper accounting allocation
FINANCE -TOWN MANAGER'S DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: Tier I Proposed Budget Adjustment: Tier II Proposed
Budget Adjustment: $ 1,028,050 $ 61,700 $ 123,400 Proposals Proposed Adjustment I Reduce staffovertime 2 Reduce temporary employee budget Tier 1-retain document retention temp and mailroom
services help or Tier 11 -retain mailroom services only Tier I 8,000 1,500 Tier II 8,000 6,000 Service Impacts This reduction rejlects anticipated savings under the assumption that Finance
staff will continue its historical practice of minimal overtime earnings and selection of compensation time rather than payment. This reduction targets part-time student assistance for
clerical junctions i.e. mail services and document retention duties. Ongoing daily operations will be impacted as Finance stqff will need to jill this additional gap in Administrative
services. 3 Reduce operating expenditures 5,500 15,000 Planned reductions to expenditures include financial consultant services. training expenditures, supplies, and printing services.
Reduction in fimding fiJr services will increase in-house workload and impact daily operations. Reductions in supplies and m{w impact efficiencies.
Proposals Proposed Adjustments 4 Defund Sr. Account Clerk position Tier I -.Fomfull-time to 80% FTE with additional jimding for peak workload periods or Tier I1-fromfull time to 75%
FTE with NO additional funding for peak workload periods. Tier I 9,900 Tier II 16,600 Service Impacts This FTE reduction will impact cashiering service availability, requmng additional
backup from jinance stqffto maintain the high level ofcustomer service andfull ojJice hours. Non-essential jimctions will be eliminated or tramferred to other staj): including assistance
with business license tax processing during peak workloads. Service level impacts will be evident internally as workload compaction will create delays and less availability ofstajf time
within the Finance Department caused by the additional cashier backup needs. Cashier service hours may need to be reduced as a result of conjlicts with workload needs, however operating
ejJiciencies will be sought to maintain a reasonable level customer service. 44 Defund FTE Business License Account Technician Tier I -fromjiill-time to 80% FTE with additionaljimding
jiJr peak workload periods or Tier I1-fromjilll time to 75% FTE with NO additional jimding jiJr peak workload periods. Dejimd Accounts Payable Account Technician Tier 1-from full-time
to 80% FTE' with additionalfimding fiJI' peak workload periods or Tier II -.limn .lidItilne to 75% FTE with NO i wlditionaljimdingjiJr peak }\'ork10(1(/periods. 11,000 11,000 19,000
19,000 This FTE reduction will decrease time available to audit reported earnings, research for unlicensed businesses, and provide support jiJr code enjiJrcement activities. the reduction
in the cashier position will create additional workload impaction to the business license position as more backup assistance will berequired to cover business hours at the cashier's
desk This FTE reduction will impact the ahility to provide immediate accounts payable services to other departments and vendors, and may result in invoice and order
processing delays. Operating eJJiciencies will be sought to best utilize stafftime.
Proposals Proposed Adjustments 4 Defund Finance Coordinator position -This position is allocated 75% to Finance and 25% to M1SjiJr website maintenance services. This reduction refers
only to the Finance Department portion ofthe position. Tier 1-.20 FTE reduction -Fom 75% to 55% with additionaljimdingjOr peak workload periods or Tier ll-.40 FTE reduction -from 75%
to 35% with NO additional fimding for peak workload periods. Tier I 14,800 Tier II 39,800 Service Impacts This FTE reduction will result in a reprioritization of work assignments to
support highest priority needs in the time available, with support jiJr some functions and !;pecial projects eliminated. Non-essential functions will be eliminated or tramferred to other
staff, including reductions in cashier backup and business license assistance during peak workloads. Service level impacts will be evident internally as departmental requests may be
delayed due to workload compaction. Under Tier 11, this reduced availability and jlexibility of stajJ time due to workload compaction becomes more pronounced with significant service
level impacts. Operating ejJiciencies will be sought to provide best use oftime. . TOTAL $ 61,700 $ 123,400 L-____---I.__"""";'
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TOWN MANAGER'S DEPARTMENT Management Information Systems PROGRAM PURPOSE Management Information Systems (MIS) supports the delivery of services to all the Town's customers through the
use of SMART technology (Sensible, Multi-modal, Accessible, Responsive, and Time phased technology). Key services include the maintenance, replacement, and upgrade of existing technology,
and the support for new information technology initiatives. In meeting the organization's information technology needs, the MIS program strives to achieve the following goals: ./Continuously
enhance and improve customer service ./Maintain and enhance a sound and reliable IT infrastructure ./Use information technology to provide seamless services ./Operate as a team to achieve
information technology goals PRELIMINARY ADJUSTMENT STRATEGY The MIS proposed reductions for FY 2004/05 respond to the Town's fiscal condition, while recognizing that continued investment
in information technology is a cost-effective approach to maintaining, or potentially increasing, service delivery levels in times of fiscal constraints. Thus, reductions are first targeted
in day-to-day services, supplies and training which should not affect service delivery to a significant extent and secondly in the Town's funds for priority new systems to enhance services.
In addition, MIS staff is exploring opportunities to partner with other cities and agencies to implement improvements in a cost-effective manner.
ro TOWN MANAGER'S DEPARTMENT 03 STATEMENT OF SOURCE AND USE OF FUNDS 01/02 02/03 02/03 03/04 Actuals Adopted Estimated Adopted SOURCEOF FUNDS Beginning Fund Balance Undesignated 1,706,033
1,826,403 1,826,403 1,895',80 I Total Beginning Fund Balance 1,706,033 1,826,403 1,826,403 1,895,801 Revenues Charges for Services 680,399 775,100 772,209 831,300 Other Sources 150 Total
Revenues 680,399 775,100 772,359 831,300 TOTAl., SOURCE OF FUNDS $ 2,386,432 $ 2,601,503 $ 2,598,762 $ 2,727,101 USE OF FUNDS Expenditures Salaries and Benefits 231,142 234,400 242,573
312,300 Operating Expenditures 312,977 461,500 373,431 756,500 Fixed Assets 15,91 I 375,000 86,957 140,000 Internal Service Charges Total Expenditures 560,029 1,070,900 702,961 1,208,800
Operating Transfers Transfer to GFAR 175,000 Transfer to General Fund Total Operating Transfers 175,000 Ending Fund Balance 1,826,403 1,355,603 1,895,801 1,518,301
Total Ending Fund Balance 1,826,403 1,355,603 1,895,801 1,518,301 TOTAL USE OF FUNDS $ $ 2,386,432 $ 2,601,503 $ 2,598,762 $ 2,727,101 MANAGEMENT INFORMATION PROGRAM STAFFING Full Time
Equivalent (FTE) 01102 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted MIS Manager 1.00 1.00 1.00 1.00 MIS Specialist 1.00 1.00 1.00 2.00 Finance Project Coordinator* 0.25
0.25 0.25 0.25 TOTAL PROGRAM FTE's 2.25 2.25 2.25 3.25 * Finance Project Coordinator is a shared position with the Finance Department and provides support for the Town's website.
KEY PROGRAM SERVICES TOWN MANAGER'S DEPARTMENT Management Information Services • Maintenance and upgrades of administrative network system (servers, PCs, notebooks, printers, hardware,
& software) • Town-wide MIS replacement program purchases • Customer technical support • Website management • Research and planning for new technology solutions
MANAGEMENT INFORMATION SYSTEMS (MIS) PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: TicI' I Proposed Budget Adjustment: Tier II Proposed
Budget Adjustment: $ 1,208,800 . $ 42,500 $ 40,000 Proposals Proposed Adjustment 1 Reduce Operating Expenditures Tier I $42,500 Tier II Impacts Reductions to material
and supplies operating expenditures are expected to have no direct immediate impact on service levels. Previous funding levels allowed response 10 unforeseen purchase or service needs
common with everchanging technology. However, some jlexibility has been retained for limited 1. T. improvement projects meeting goals ofthe 1. T. Strategic Plan. 2 Reduce IT Project
Funding The "I. T. Master Plan Projects" and "One Time Capital Purchases" (Phone System) budgeted in the Management Information Systems program will each be reduced by $20,000 in the
FY 200412005 budget. This reduction amounts to 6% of the $350,000 budget jiJr "I. T. Master Plan Projects" and 14% ofthe $140,000 budgetjiJr the phone system. TOTAL$42,SOO.00 $40,000
$40,000.00 The first reduction is expected 10 impact the ability to fund I. T. projects that meet the goals of the recent 1. T. Master Plan. However, $330,000 will still be available
for these purposes ajier this reduction. The second reduction is expected to impact the ability to fund a ji/II phone redesign, however, it is not yet known what level
of redesign is required if any, and $120,000 will still be available jiJr this pUl]Jose this r-, IlLIHd'T IHlll
t-.IISS 8: Selil·duks·.study Sl"Sllln -I'r"jlllsal t-.lalii\ Tll'rl and Il.dlll' 02 12 211lH
COMMUNITY DEVELOPMENT DEPARTMENT DEPARTMENT PURPOSE The Community Development Department guides the physical growth of the Town to maintain the character and vitality of the community.
It accomplishes this through providing current and advanced planning, redevelopment, code compliance, building inspection, and other development-related activities. . The community assists
the Department's efforts through participation on the Planning Commission, Development Review Committee, Historic Preservation Committee, Conceptual Development Advisory Committee, General
Plan Committee, Architectural· Standards/Hillside Committee and related subcommittees, all of which are supported by Department staff. In coordination with the Town Manager's Office,
guides management of the Redevelopment Agency and the Town's Economic Vitality and Affordable Housing Programs. PRELIMINARY ADJUSTMENT STRATEGY In keeping with the Town's financial policies,
the development-related services provided by the Community Development Department (COD) are supported by fees based on the actual costs of the services. COD's objective is to achieve
cost recovery. COD's approach to developing the preliminary budget was first to ensure cost recovery in three areas as follows: increasing the building pennit valuation factor; implementing
the new Administration Citation Program; and tracking planning projects that have exceeded the fee collected. The anticipated revenues will provide cost recovery for building inspection,
plan check services, and planning services to reduce the General Fund subsidy. In the event that Council does not choose to pursue these fee increases for cost recovery, COD will approach
cost savings through staff reductions. The staff reductions would result from reorganization of the duties within COD in the areas of Advanced Planning, Development Review and Inspection
Services.
ro COMMUNITY DEVELOPMENT DEPARTMENT 03 DEPARTMENTAL SUMMARY OF REVENUES AJ."JD EXPENDITURES REVENUES Licenses and Permits Service Charges Other Sources TOTAL REVENUES EXPENDITURES Salaries
and Benefits Operating Expenditures
'Fixed Assets Internal Service Charges TOTAL EXPENDITURES 01102 02/03 02/03 03/04 Actuals Adopted Estimated i\.dopted 610,207 660,000 785,503 660,000 907,476 930,000 1,024,101 1,076,000
(71) (11 ) 1,517,612 ' 1,590,000 1,809,593 1,736,000 1,356,631 1,831,900 1,779,600 485,444 462-,750 450,852 436,450' 33,665 16,000 196,542 237,600 229,490 227,300
$2,072,282 $2,548,250 $2,269,877 $2,443,350 . EXPENDITURES BY PROGRAM Administration Developmental Review Code Compliance Inspection Services Adva.nced Planning TOTAL EXPENDITURES 415,047
630,524 45,899 675,401 305,410 2,072,282 213,600 910,900 115,700 872,100 435,950 2,548,250 185,305 848,707 100,999 847,916 286,950 2,269,817 155,600 900,050 117,510 906,180 363,910 2,443,350
!, au COMMUNITY DEVELOPMENT DEPARTMENT 03 COMMUNITY DEVELOPMENT DEPARTMENT STAFFING Full Time Equivalent (FTE) 01102 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Community
Development Director 1.00 1.00 1.00 1.00 Asst. Community Development Director 1.00 1.00 1.00 1.00 Administrative Analyst 0.75 0.75 0.75 0.80 Administrative Secretary 1.00 1.00 1.00 1.00
Secretary III 1.00 1.00 1.00 1.00 Associate Planner 4.00 4.00 4.00 4.00 Planner 1.00 1.00 1.00 1.00 Assistant Planner 1.00 1.00. 1.00 1.00 Counter Technician 2.00 2.00 2.00 2.00 Code
Compliance Officer 1.00 1.00 1.00 1.00 Sr. Building Inspector 1.00 1.00 1.00 1.00 Building Inspector 4.00 4.00 4.00 4.00 Plan Check Engineer 1.00 1.00 1.00 1.00 TOTAL PROGRAM FTEs 19.75
19.75 19.75 19.80 Temporary StaffHours Intern Assistant Planner TOTAL ANNUAL HOURS * Defunded .40 PTE ** Defunded 1.0 FTE 01102 Actuals 1,040 1,040 2,080 02/03 Adopted 1,040 1,040 2,080
02/03 Adjusted. 1,040 1,040 2,080 03/04 Adopted 1,040 1,040
KEY PROGRAM SERVICES COMMUNITY DEVELOPMENT DEPARTMENT Administration Program • Set and monitor goals for the department and staff • Manage department operations, including the budget
• Provide support for Town Council and Planning Commission meetings • Provide support on Town projects and initiatives including planning and building issues Development Review Program
Provide Staff support to the following boards and commissions: • Planning Commission • Development Review Committee • Historic Preservation Committee • Conceptual Development Advisory
Committee • General Plan Committee • Architectural Standards/Hillside Committee • Various subcommittees Analyze and process the following types of applications: • General Plan amendments
• Town Code amendments • Rezoning • Architecture and Site • Variances • Conditional Use Permits • Minor Residential Development and Subdivisions • Agricultural Preserve Contracts • Home
Occupation Permits • Certificates of Use and Occupancy • Sign Permits • Secondary Dwelling Units • Mobile Home Park Conversions • Environmental Review Code Compliance Program • Resolve
complex Town code and zoning violations • Enforce various Town codes while focusing on obtaining voluntary compliance from the public • Educate the public about Town regulations for
accessory structures, inoperative vehicles, rubbish.
signs, fences, and other related matters • Review Home Occupation Permits (HOP) for proper use in residential zones • Conduct cursory inspections/investigations of structures/residences
concerning public health related issues • Coordinate with the Finance Department to ensure all businesses have a correct business license Inspection Services Program Inspection Services:
• Perform on-site field inspections for all buildings and structures under construction • Investigate Housing Code violations • Assist contractors, architects, engineers, and the general
public with construction questions Building Counter Services: • Coordinate building permit applications with other departments and agencies • Review worker's compensation requirements
and contractors' licenses • Maintain the computerized permit tracking and plan check systems including data entry for permit activity • Produce and distribute reports on statistical
information regarding building and related permit activity • Distribute and track plans, and calculate and collect fees Plan Check Services: • Perform complex professional building,
structural and life plan review of cOinmercial, industrial and residential building per the Uniform building codes, state regulations, and local ordinances. • Coordinate
building information and activity with other department and agencies • Provide building code information to customers Advanced Planning • Preparation of plans, amendments, administrative
policies, ordinances, and maps • Management of consultants assisting with the General Plan Work Program
COMMUNITY DEVELOPMENT DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: $2,443,350 Tie." I Proposed Budget Adjustment: Tie."
II Proposed Budget Adjustment: $ 698,672 $ 765,756 Proposals Proposed Adjustment Tier I Tier II Service Impacts 1a. Building Permit Valuation Revenue Enhancement The valuation calculation
used to calculate building permit fees will be increased by a modifier beyond the fee established by the Uniform. Building Code. The modifier will establish a more realistic construction
cost as determined based on surveys of contractors, similar communities and insurance companies. $648,672 $648,672 The building permit fee increase will provide for cost recovery for
building inspection and plan check services and will cause the valuation calculation to reflect realistic cost of construction in Los Gatos. Separate Council review of staff proposal
will be scheduled for a Public Hearing and action. The implementation of this program will reduce the number of times Code Compliance has to address a violation thereby abating violations
more effectively. It will also take a partial financial burden off the General Fund and place the cost ofabating violations on the violator. Administrative Citation Program Revenue $
30,000 $ 30,000 Enhancement This is a ne'w Administrative Citation Program to be implemented. The fee for the Code Compliance Program will be established as part ofthe adoption of the
Administrative Citation Program. lb. N ,I! til H ,j' I" HIli ) -1I:i 1'1 L'[l & SL'hcdu Ie, ,-Study SC'S11111 SL'h",lu Ie,\C 1)1) -1'1Il1'"""
Main \ liLT 1alld Il.elll' (): 1\.'{IIH
Proposals Proposed Adjustment Tier I 1c. Planning Project Cost Recovery $ 20,000 Planning projects that have exceeded the fee collected will be evaluated by the Planners/Oirector and
the applicants will be responsible for any additional costs above and beyond the normal fee. This will achieve cost recovelY for the projects that tend to far exceed the fees that have
been collected. 2 Potential Reallocation of RDA Manager Responsibilities and Funding Allocation Due to RDA Manager position being vacant, the RDA Manager position may be combined with
other existing funded positions in the General Fund Alternate Potential Development Positions Defunding If the building permit fee increase is not approved by Council, the alternative
will be reductions in positions in Advanced Placement, Development Review, and Inspection programs, through a reorganization of staff responsibilities. * $189,438 represents the alternative
method and is not included in the Tier II Total Tier II Service Impacts $ 20,000 Planning projects will be evaluated by the Planners/Director to determine if the original fee has been
exhausted. At that point, applicants will be informed of the issue and an additional deposit depending on the size of the project will be imposed. This deposit will be held and actual
costs that have exceeded the normal fee will be charged against the deposit. All actual costs will be tracked and documented by the Planners, Director, etc. This will achieve cost recovery
for those projects that exceed the established fee. $ 67,084 The reallocation will result in reprioritization of work assignments and some duties will assigned to other General
Fund positions, which may need to reduce other services provided. It lS not expected that Redevelopment and Economic Vitality activities will be reduced. $189,438 * The FTE reductions
will result in reprioritization of work assignments which will reduce support to customers resulting in significant delays at the customer service counter, delays in processing applications,
delays /Jl inspection schedules, and/or delays in advanced planning work items. To offset these shifts in duties, the public service counter for planning division support will be closedfrom
12 -1pm daily and all day on Friday. ''._._-'-- �
� .-J
POLICE DEPARTMENT DEPARTMENT PURPOSE The Los GatoslMonte Sereno Police Department provides public safety services to the Town of Los Gatos and to the City of Monte Sereno. The principal
goals of the Department are to: reduce crime through prevention, detection, and apprehension; provide for the safe and orderly movement of vehicular traffic through traffic calming strategies,
enforcement, accident prevention and investigation; provide public safety through regulation and control of hazardous situations; recover lost and stolen property; and prevent crime
through innovative problem solving and programs reflecting community needs. The Department also emphasizes a strong Police/Community partnership through innovative volunteer programs
such as Reserve Police Officers, Volunteers In Policing (V.I.P.), Disaster Aid Response Team (D.A.R.T.), Police Chaplain program, Parking Citation Hearing Officers, Pipe and Drum Team,
and the Police Explorer Scout program. PRELIMINARY ADJUSTMENT STRATEGY The Police Department's core purpose is to provide public safety services to the residents of Los Gatos .and Monte
Sereno. When developing its budget proposals, the department held preservation of these public safety services as its first priority. The budget adjustments proposed were selected from
the field of available options because they would have the least impact on provision of public safety services, and on those auxiliary services which directly support the public safety
function. Within the overall goal of preserving public safety services, the proposals are focused on three adjustment strategies: create new revenue opportunities, target expenditure
reductions to areas which would have the least impact on service delivery, and avoid layoff of employees (including holding personnel vacancies as they arise). The department is proposing
a new revenue opportunity, to create a vehicle impound area at the Corporation Yard, Jor storage .of impounded vehicles. This idea needs more detailed analysis, including start-up and
implementation costs and further understanding of revenue expectations. Factors to be considered regarding implementation of this proposal include the capacity of the Corporation Yard
facility to absorb this use of space, any capital improvements that would be required, security for the stored vehicles, any traffic impacts in the area, and an administrative process
for checking vehicles in and out. The department is also proposing an Alann Licensing Program revenue opportunity. Under this proposal, owners of all private security alanns would be
required to obtain a license from the department. Factors to be considered when planning an implementation strategy include the need to amend the Town Code to require security alann
licenses, a public education campaign to publicize the new requirement, the policy for residential versus commercial alann owners, an administrative process for issuing licenses. and
any violation fees to be charged for non-compliance.
ro POLICE DEPARTMENT 03 Both the Tier I and Tier II revenue impacts for these ideas assume full implementation of this proposal; however, it likely would require more than one fiscal
year to realize full benefits. If the projected revenue is not achieved in the first year, other offsetting measures would need to be taken in the Police Department or elsewhere to make
up the difference. In the parking management service area, the department is proposing adjustments that would affect its ability to implement the zoned Downtown Parking Management Plan.
The department will be seeking Council input on its desired direction for future Downtown parking management policy at a future Council meeting. Preliminary Tier I budget adjustments
would result in the reduction of a FTE filled positions and Tier II budget adjustments would result in the reduction of an additional 2.5 FTE filled positions and 2.0
vacant positions. 1I
POLICE DEPARTMENT 03 DEPARTMENTAL SUMMARY OF REVENUES AND EXPENDITURES EXPENDITURES BY PROGRAM Administration Records and Communications Patrol Investigations Traffic Personnel &
Community Srvcs * Parking Management Program TOTAL EXPENDITURES . $ 427,653 $ 1,378,788 $ 4,568,000 $1,325,737 $ 712,267 $ 872,002 $ 497,669 $ 9,782,117 $ 342,600 $ 1,424,125 $ 4,588,525
$1,555,040 $ 851,900 $ 833,400 $$ 9,595,590 $ 329,409 $ 1,345,011 $ 4,498,637 $1,650,856 $ 841,832 $ 802,158 $$ 9,467,902 $ 322,720 $ 1,263,375 $ 4,149,375 $1,668,240 $ 861,440 $ 764,410
$$ 9,029,560 Parking Management Program is reflected in Fund 207
ro POLICE DEPARTMENT POLICE DEPARTMENT STAFFING Full Time Equivalents (FTE) 01/02 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Chief of Police 1.00 1.00 1.00 1.00
Police Captain 2.00 2.00 2.00 2.00 Police Sergeant 9.00 9.00 9.00 9.00 * Police Officer 34.00 34.00 34.00 34.00 * Community Services Officer 4.00 4.00 4.00 4.00 Crime Analyst 1.00 1.00
1.00 1.00 Records Communications Manager 1.00 1..00 1.00 1.00 Secretary to Chief 1.00 1.00 1.00 1.00 Communications Dispatcher 8.00 8.00 8.00 8.00 * Administrative Analyst 1.00 1.00
1.00 1.00 Police Records Specialist 4.00 3.00 3.00 3.00 * Parking Coordinator 1.00 Parking Control Officers 10.00 PROGRAM FTEs .77.00 65.00 65.00 65.00 Temporary StaffHours
Community Service Officer Interns Communication Dispatcher -Teq TOTAL ANNVAL HOURS *Defunded 1.0 FTE 01/02 02/03 02/03 Actuals Adopted Adjusted 8,320. 9,360 9,360 520 520 520 8,840 9,880
9,880 03/04 Adopted 2,080 520 2,600
KEY PROGRAM SERVICES POLICE DEPARTMENT Administration Program • Develop and monitor the department's annual operating budget •. Administer department operations • Provide policy and
philosophy guidance Records and Communications Program Records • Respond to customer inquiries • Process police reports and citations • Process criminal and traffic warrants • Provide
fingerprint services to citizens Communications • Respond to 911 calls and other emergency/non emergency calls • Provide dispatch service to Patrol • Dispatch emergency personnel • Handle
customer inquiries • Maintain audio recordings of radio and phone traffic; provide copies for court and department use Patrol Program • Respond to calls for service • Support the Department's
traffic enforcement and traffic control program • Investigate crimes and traffic accidents • Solve citizen problems using proactive problem oriented policing techniques • Perform directed
patrol and self initiated activity during non committed time • Oversee Disaster Aid Response Team (DART) and Reserve Police Officers • Provide emergency services Investigations Program
• Investigate and solve crimes • Assist in the prosecution of offenders • Provide services to victims • Provide diversion opportunities and counseling to local youth • Assist in management
of property and evidence • Monitor and register narcotics and sex offenders • Provide strategic and tactical crime analyses
Traffic Program • Respond to and investigate traffic accidents • Educate the public on. traffic safety Personnel and Community Services Program • Provide personnel managemerit and development
• Manage volunteer program • Coordinate emergency management response, training of personnel ahdmaihtenance of Emergency Operations (EOC) • Provide services and support
to all Los Gatos schools via the two school resource officers and DARE Program • Participate in numerous crime prevention programs including National Night Out, school safety/security,
personal security, Drug Free Community, and rape awareness • Provide timely infonnation and crime data via the Police Connection Cable TV show • Develop, coordinate, and manage the Community
Emergency Response Team Parking Management Program • Manage the Parking Management Program • Monitor and enforce municipal code and vehicle code regulations • Communicate with and educate
residents, businesses, and visitors on parking regulations • Monitor residential, town employee, and business employee parking pennits • Coordinate and implement Holiday Parking Program
and promotion ',-.
LOS GATOS/MONTE SERENO POLICE DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: Tier I Proposed Budget Adjustment: Ticr II Proposed
Budget Adjustment: $ 9,029,560 $ 555,000 $ 1,090,000 Proposal 2 Proposed Adjustment New Revenue -Impounded Vehicles: Consider revenue options related to impounded vehicles. Options include
storage at Corporation Yard and institution of a storage fee. The vehicle of a driver found driving on a suspended driver's license must by state law be impounded /or 30 days. Currently,
such vehicles are stored at private impound yards, which charge a storage fee. In addition, the Town charges a jee of $100 per vehicle jvr a "Vehicle Release" jvrm, which is required
be/ore a vehicle may be released. New Revenue -Alarm Licensing Fee: Institute a new Alarm Licensing Fee, under which all private security alarms, must be licensed through the Town. This
would encourage alarm owners and alarm companies to maintain the operational reliability reliability and proper use of alarm systems, and reduce thl! occurrence offalse alarms. 1t would
also facilitate ojjicer response to alarm calls by ensuring that alarms are reviewed annually.liu' proper operation. Currently, alarm owners are charged only .fiJI". false alarm calls
fiJr serVice, (!lier the thinlfalse alarm. Tier I $156,000 $30,000 Tier II $156,000 $30,000 l Service Impacts Impacts of this proposal would vary, depending on the location and administration
!Jystem chosen. Use 0/existing Town stajf to administer the program might result in ojfsetting administrative costs, such as staff time to store and rel£!ase vehicles, record keeping
and data tracking, and management of lien sales, as applicable. Potential capital costs include boundary jencing and gates inside existing !Jpace at the COJporation Yard. Proposal may
require adoption of a Town Ordinance. This proposal would require more than one jiscal year to realize full benefits. Estimated revenues rejlect jirst-year projections; revenues are
expected to increase 111 the next few succeeding years and then level out. Local municipalities that have implemented an alarm licensing program include Los Altos, Palo Alto, and Santa
Clara. staff costs will result; these will be defined further in irnplementation plans.
Proposal Pr(.posed Adjustment 3 Reduce Materials and Supplies Expenditures: 4 Defimd 1.0 FTE Parking Control Officer: De}imd 1 Jiill-time Parking Control G}jicer (PCO) position, reducing
the number of PCG positions from 6 to 5. These non-sworn positions are held in the Parking Management Fund, a .\pecial fund partially subsidized by the General Fund. PCGs are responsible
for daily town-wide enforcement of parking regulations, including issuance ofparking violations. In 2003/04, it is estimated that PCOs will generate approximately $597,000 in parking
violation revenue. 5 Defund .50 FTE Records/Communications Manager: Reduce the ji/II-time Records/Communications Manager position to half-time. This non-sworn position supervises all
8 Communications Dispatcher and 2 Records Specialist positions. Position also serves as Custodian of Records, DOJ Agency Terminal Coordinator, and security and training coordinatorjvrNCIC/CLETS/CJIC.
Tier I $30,000 $60,000 $63,000 Tier II $30,000 $60,000 $63,000 Service Impacts Proposal would have varying impact, depending on those line items targeted. Proposal would result in reduced
number of PCGs available for enjorcement of parking regulations, .\pecijically evening enjorcement and enforcement ofpermit zones. PCGs also provide support to Patrol sta}! on an asneeded
basis, to perform non-law enforcement tasks; this proposal would reduce the ability ofPCGs to provide such support. It might be possible to use department volunteers on an increased
basis to provide this Patrol stafl support. This proposal could result in reduced citation revenue. At both the Tier I and Tier II levels, the General Fund subsidy of the Parking Management
program would be reduced. Proposal would result In reduced management oversight/supervision, creating need for acting supervisor duties from other employees. Proposal would create a
longer re:;ponse time fiJr records requests and other lower-priority duties. Allied agencies would experience delayed re.\ponse to for injiJrmation. Some duties would
be reassigned to other department staff, already a.Uected by position reductions. 6 Defimd 1.0 FTE Parking Control Officer: Dejimd an additional jidl-time Parking Control Officer (PCO)
position. reducing the number of PCO positions li'om 5 to 4. $60,000 $60,000 Proposal would result in those impacts noted in Proposal No.4. above. at an incrementally greater level.
N IHJlH": 1',IHiJ) I\llgs & Pmp"sal t\1,"ri\ T'c'r laud II dl'>'
2
Proposal Proposed Adjustment 7 Motorcycle Officer Reassignment: Reassign 1 of the 4 Police OjJicers currently assigned in Traj/ic (motorcycle enjhrcement) to Patrol. Motorcycle OjJicers
are a !'Jpecialty assignment, used primarily .f()r .\pecialized enji)rcement of trajfic regulations, and to support the Town's trajJic calming program. . Tier I $17,000 Tier II $17,000
Service Impacts Proposal would result in reduced number of OjJicers available for !'Jpecialized enforcement of trajfic regulations. The responsibility to support trajfic calming ejjhrts
would be partially assumed by Patrol. This pro/)()sal would also, however, mitigate the proposed defunding ofPolice OJ/icer positions. Savings would result from specialty pay, vehicle
replacement, and vehicle maintenance. 89 Defund 1.0 FTE Parking Coordinator: Dejimd the full-time Parking Coordinator position. This position is held in the Parking Management Fund,
a special jimd partially subsidized by the General Fund. This Management unit position is responsible for implementation zoned Parking Management Program and the annual Holiday
Parking Program, and jhr supervision Parking Control OjJicers. An evaluation of the legal and capacity issues jimding this position from the Redevelopment AgelUY is underway.
Dejim(1 Canine Unit: Defimd 1 of the 3 Canine Patrol units. Canine units are used to augment OJ/icer patrol e.!/i>r/s; the dogs are trained in .\pecialized skills such as search and
reSClle, narcotics search, and building searches. $113,000 $26,000 $113,000 $26,000 Proposal would severely limit ability to implement planned zoned Parking Management Program. A Sergeant-level
employee would assume oversight of the Parking Management Plan, and supervisory duties for Parking Control OjJicers, thereby limiting that employee's ability to perform existing duties.
Proposal would result in a reduced depth of stajjing for the .\pecialty skills that Canine units provide. Annual savings would include !'Jpecialty pay, animal care and training, and
repair and replacement of the dedicated Canine vehic·le. The .f(mner Canine vehicle could be moved into the regular Patrol jleet, precluding the need to purchase a new Patrol vehicle.
Proposal Proposed Adjustment 10 Defimd 1.0 FTE Police Officer: Dejimd 1 Police Ojficer position (hold position vacated in October 2003 vi/emIt, and dejimd it). II Defund 1.0 FTE Police
Officer: Dejimd 1 Police Ojficer position (defund position to be vacated in April 2004, as result ofemployee promotion). 12 Motorcycle Officer Reassignment: Reassign a second ofthe 4
Police OjJicers currently assigned in Trajfic to Patrol. 13 Defund 1.0 FTE Community Services Officer: Reduce the number Community Services OjJicer (CSO) positions
from 4 to 3. Tier I Tier II $130,000 $130,000 $17,000 $80,000 Service Impacts Proposal would reduce the totlll number of funded Police OfJieer positions from 33 to 32. (l of the 34 authorized
positions was dejunded in the 2003/04 Adopted Budget.) Proposal would result m reduced depth of stajJing in Patrol, and ajfect ability to respond to lower priority calls fi)r service
or to !>pend the amount of time on each call which residents are accustomed to. As partial partial mitigation, department proposes to reassign an ojJicer from current assignment in Traffic
to Patrol. Without this reassignment, proposal would necessitate reduced re.\ponse to low-priority calls for service, or (ifji;elting use ofovertime. Proposal would reduce the total
number of funded Police OjJicer positions from 32 to 31. It would result in those impacts noted in Proposal No. 10, above, at an incrementally greater level. Proposal would result in
those impacts i10ted in Proposal No.7, above, at an incrementally greater level. Proposal would result in a reduced depth (if' sta.IJing for administrative support. Duties from other
vacant/dejimded positions have been shifted to this position; therefore, oilIer duties would be reduced, such as communizy even!.'), Human Resources duties, crime scene/evidence duties,
and investigalions support.
Proposal 14 15 Proposed Adjustment Defimd 0.5 FTE Crime Analyst: Reduce thejiill-time Crime Analyst position to halj:time. Defimd 1.0 FTE Police Officer: Dejimd 1 Police Ojjicer position.
Tier I Tier II $48,000 $130,000 ...-.-.- Service Impacts Proposal would result in a jitrther reduced depth of stajjing for administrative support. Duties/rom other vacant/dejimded
positions have been shifted to this position. Therefore, other duties such as critical crime analysis and investigations support would be reduced to below 25% oftheir current level.
Proposal would reduce the total number of funded Police Ojjicer positions from 31 to 30. In addition to service impacts described above, in Proposal Nos. 10 arid 11, this proposal would
necessitate an additional reassignment of ojjicers, from Investigations, causing a reduction in the ability to initiate and prosecute criminal investigations, including sophisticated
and long-term investigations. Without this reassignment, proposal would necessitate reduced reduced response or non-response to low-priority calls for service, or of/selling use of overtime
on an ongoing basis. The impacts of this proposal would also be mitigated by increased use of the Community Services OfJicer Intern temporary positions. TOTAL $555,000 $1,090,000
PARKS & PUBLIC WORKS DEPARTMENT DEPARTMENT PURPOSE The Parks and Public Works Department (PPW) is responsible for maintaining the Town's public parks, facilities, and infrastructure.
Four organizational units (Administration, Parks and Forestry, Engineering and Capital Projects, and Streets and Signals Programs) work in to achieve the Department's
overarching goal of ensuring these public use areas are safe, functional and attractive. Additional services that support these objectives include: the Facilities and Vehicle Maintenance,
Sanitary Sewer Maintenance, and Non-Point Source Programs. In addition to providing ongoing maintenance activities, PPW staff provide information and outreach to Town residents, merchants,
and the public concerning the Department's programs and activities that are available or projects that may affect them. The Department strives to provide residents and the business community
with the highest quality service possible, with dedication and professionalism. professionalism. PRELIMINARY ADJUSTMENT STRATEGY In developing the preliminary budget proposals for FY
2004/05, the Parks and Public Works Department looked for solutions to enable the department to continue to provide core services as much as possible. The first approach was to identify
opportunities to better align service costs with funding sources. This approach relieves the General Fund of certain expenditures more appropriately funded
elsewhere, such as the Redevelopment Agency and Solid Waste Special Revenue Funds. Maintaining certain current vacancies and reallocating existing staff to meet current service levels
in core services is another approach used by the department. In addition, the department is exploring partnerships with other local agencies to share expenses for similar services. Through
attrition and partial vacancies, the department will continue to allocate staff resources to provide basic core services to the extent possible. The department anticipates additional
vacancies in the next next fiscal year. Tier II reductions will result in defunding 2.5 FTE of vacant General Fund positions.
ro PARKS & PUBLIC WORKS DEPARTMENT 03 DEPARTMENTAL SUMMARY OF REVENUES AND EXPENDITURES 01102 02/03 02/03 03/04 Actuals Adjusted Estimated Adopted REVENUES Miscellaneous Taxes 11,375
11,000 9,161 11,000 Licenses & Permits 79,946 . 81,500 91,803 101,000 Intergovernmental 1,932 Service Charges 147,368 164,700 298,476 332,200 Other Sources 71,226 50,doo 109,152 50,000
TOTAL REVENUES 311,847 307,200 508,591 494,200 EXPENDITURES Salaries and Benefits 2,405,357 2,810,900 2,728,678 3,052,500 Operating Expenditures 1,133,254 1,017,982 1,201,535 998,790
Fixed Assets 40,189 23,300 21,347 17,500 Internal Service Charges 879,665 897,500 878,161 825,120 TOTAL EXPENDITURES 4,458,465 4,749,682 4,829,721 4,893,910 EXPENDITURES BY PROGRAM Administration
Park Services Engineering & Capital Projects Streets/Signals/Sidewalks 'TOTAL ExPENDITURES 537,711 1,694,665 717,979 1,508,111 4,458,465 193,810 1,902,630 1,083,523 1,569,7t9 4,749,682
192,167 1,856,301 1,090,427 1,690,826 4,829,721 261,350 1,872,050 1,216,760 1,543,750 4,893
,910E!U PARKS & PUBLIC WORKS DEPARTMENT 03 PARKS & PUBLIC WORKS DEPARTMENT STAFFING Full Time Equivalent (FTE) 01/02 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Parks
& Public Works Director 1.00 0.80 0.80 l.00 Administrative Analyst 1.00 l.00 1.00 l.00 Administrative Specialist l.00 l.00 1.00 l.00 Public Works Specialist 1.00 1.34 1.34 1.60 Superintendent
1.70 1.70 1.70 1.60 *** Town Arborist 1.00 1.00 1.00 1.00 Facilities Coordinator 0.25 Lead Parks & Maintenance Worker 2.00 2.00 2.00 2.00 ** Senior Parks & Maintenance Worker 3.00 3.00
3.00 3.00 ** Parks & Maintenance Worker 13.00 13.00 13.00 11.25 ** Tree Trimmer I High Climber 1.00 1.00 1.00 l.00 Parks Service Officer 2.00 2.00 2.00 2.00 Town Engineer l.00 0.80 0.80
1.00 Associate Civil Engineer 4.00 3.80 3.80 3.80 Sr. Engineer Technician 1.00 1.00 1.00 1.00 Sr. Engineering Inspector 1.00 1.00 1.00 1.00 Engineering Inspector 1.00 1.00 1.00 l.00
TOTAL PROGRAM FTEs 35.70 35.44 35.44 34.50 * 01/02 02/03 02/03 Temporary StaffHours Actuals Adopted Adjusted Maintenance Assistant 5,970 5,970 5,970 Seasonal Park Ranger 80 105 105 Ticket
Booth Attendant 101 300 300 Office Intern 1,040 1,040 1,040 TOTAL ANNUAL HOURS 7,191 7,415 7,415 * Departmental FTEs include General Fund Programs only ** Defunded 1.0 FTE ***Defunded
.20 FTE 03/04 Adopted 6,100 1,495 7,595
KEY PROGRAM SERVICES PARKS AND PUBLIC WORKS DEPARTMENT Administration Program • Provide regulatory and project updates and obtain feedback from staff • Manage departmental budget • Pursue
grant funding to enable Town to implement key projects • Facilitate neighborhood meetings to discuss concerns related to traffic calming, street improvements, and other parks and public
works related issues • Provide staff support to the Parks Commission and Transportation and Parking Commission and assist in coordination of Commission-sponsored projects • Provide support
for town-wide committees having mutual project interests, such as the Chamber of Commerce's Beautification Committee • Oversight of department's employee training and safety programs
Parks & Forestry Program Park Maintenance • Maintain and improve 62 public sites including 12 parks, the Los Gatos Creek Trail, three open space areas, 15 acres of landscaping for median
islands and parking lots, and grounds maintenance for five Town owned buildings Urban Forestry Program • Maintain all park, median island trees and plants, and all trees planted on public
property • Coordinate the tree removal permit process to protect trees and manage tree inspection services Park Service Officers • Provide public assistance, user safety and code enforcement
in the Town's parks system, patrolling the park system seven days per week • Conduct interpretive programs and educational programs at parks and local schools annually Volunteer Projects
• Coordinate volunteers, including high school students, who maintain and construct parks related projects, including parks and trails system improvements, debris removal and roadside
weed abatement • Supervise the Department of Corrections Work Furlough Program for clean-up projects Open Space Maintenance Districts • Oversee contract services for six Landscaping
and Lighting Benefit Assessment Districts • Maintain three Town-owned open space areas: Heinz, Santa Rosa and Novitiate Open Space Areas Park Improvements • Conduct op.going maintenance
and improvement projects, as needed, to ensure equipment and facilities are functional and in safe operating condition
Special Events • Provide support services for Town-sponsored events, in particular the annual Keep Los Gatos Beautiful Month, Music in the Park, Screen on the Green, 4th ofJul)' event"
and the downtown tree lights and holiday tree lighting ceremony in the Town Plaza. Services for other agencysponsored events are provided on a cost-recovery basis Parks Use and Reservation
System • Manage the park reservation and user fee system Engineering & Capital Projects Program Capital Improvement Projects • Provide plans, specifications,estimates, right,.of-w;ay
property descriptions for Town projects, coordinate consultants and administer contracts • Design and administer projects for the annual Capital Improvement Program, including
curb, gutter and sidewalk improvement analysis Development Projects • Review development applications for compliance with Town grading and engineering standards • Review plans and approve
final maps (tracts) and parcel maps as required by state law • Conduct inspections of work within the public right-of-way through the encroachment permit process • Process all petitions
for annexation Traffic Engineering • Perform traffic engineering analysis • Manage neighborhood traffic concerns and requests, including traffic calming program Information Services
• Provide assistance to the public regarding right,.of-way issues Streets & Signals Program Street Maintenance/Traffic Signal Program • Maintain traffic signs along public streets •
Maintain visibility of pavement markings,' including crosswalks, red curbs and roadway striping • Maintain 29 signalized intersections and 2,062 street lights in the public right-of-way
Street Maintenance/Pavement • Maintain and repair over 105 miles ofpublie streets and 19 parking lots • Maintain storm drain basins, ditches and culverts Sidewalk Maintenance Program
• Coordinate concrete sidewalks, curbs and gutters replacement program with CIP program • Maintain the cleanliness of sidewalks, benches and waste receptacles in the business districts
using pressure washing equipment Special Events • Provide support services to Town-sponsored events • Install banners and flags throughout Town at various times during the year to celebrate
national and local events, such as the 4th of July
PARKS AND PUBLIC WORKS DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: Tier I Proposed Budget Adjustment: Tier II Proposed'
Budget Adjustment: $ 4,893,910 $ 368,940 $ 702,440 Proposals Proposed 1 Reduce PG&E Streetlight Energy Contract Rate Revised PG&E contrOdfiJr streetlight ratefiJr
all town-owned street lights to electricity-only, Current PG&E rates include maintenance service by PG&E which has been ve/y inadequate, Nnv rate savings is estimatedto be $41,600 fiJI'
maintenance and $14,400 fiJI' pole painting, a total of$56, 000, not including energy commission taxes, per year, 2 Engineering & Parks Fee Revenue Increases User Fee Rates are scheduled
IiJ increase in FY 2004/05 in both Engineering ($45,000) and ParH Programs ($15,000), totaling $50,000 in lll/ticlj}(lted additional revenlle, Tier I $ 56,000 $ 60,000 Tier II $ 56,000
$ 60,000 Service Impacts Tier I & /1: Service to change lights will octually improve fiJI' town-owned street lights. With this change, maintenance staff will be re/lponsible for street
light outoge maintenonce l/1 a cost-ellicielll.y mode, including more ellicient street light and pole maintenance procedures lhan cllrrenlly used by PG&E. Additionally, stafI are in
discussions with local agencies (Monle Sereno, Campbell & Saraloga) regarding shared streellight maintenance costs to ob'tain additional cost-containmenl. Tier I and /1: Several Engineering
fees ore being, changed to recover program costs, ,including development projects, annexations and NPDES reglliatiolls, Additionally, a Park Permit charging residents to
park at Oak Meadow Park will be eva/lloled. :--, III IHoil III I) 1I.j.II:'lIl1dgl'l I'll'I' t\llg,.1.: Sdll'dllk,SllId) Sl''']llil :-,,'lil'dllk, 1'1'\\ ·1'1"1',,,,11 t\1;llrI.\ 'Ill']
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Proposals Proposed Adj ustment 3 Funding Tram/er from Solid Waste Funds Transfer lip to $} 00, 000 ji'om Solid Waste Funds to Streets Program for debris removal activities. 4 RDA Funding
ofEngineering StaffHoursThree FY 2004/05 RDA fimded CIP projects will utilize four Engineering sltiff at a total of approximately} 850 hours. 5 Reduce Engineering Program Operating Expenditures
Eliminate any Engineering program operating expenditures that were one-time or are now managed by stall: Tier I $100,000 $ 128,940 $ 24,000 Tier II $ 100,000 $ 128,940 $ 30,600 Service
Impacts Streets Program activities related to Solid Waste Fund program objectives will be funded through a tramfer from the Solid Waste Fund. Activities to include removal ol debris
ji'om, and maintenance public streets, sidewalks, culverts and storm drains. Will fund cost of one Maintenance Worker ($77,000), to fitel and maintain truck and cleaning eqUl/Jment,
and related supplies ($23,000). Tier I & II: Charge stqfl hours to the RDA projects: Alley Improvements, Downtown Streetscape and Street Paving where engineering services can be provided
in lieu olcontractual support.. Tier I & II: This measure moves tasks lrom consultants to in-house and reduces operating expenses with minimal service impacts.
6 Dejimd 2.5 FTE Maintenance Worker Positions Dejimd vacant Maintenance Worker positions in the Streets Program ($85,588, $77,OO), $38,5(0) $ 201,100 Tier II: Ongoing basic streets and
sidewalk maintenance issues, (including jilling pot holes, removing debris pom roadways, curb & gutter and storm draim), will be delayed in core service response due to reduced staffing
level. Mitigated by lIIilizing temporaty Maintenance workers. Service/to provide extended storm at this stqlJing level. and
services such asflag displays will be limited. Potential vacancies to he mitigated with temporwy stcdl ._.••..._ .. L..... . .••._. . . ----' . -L ..L... -l \ III Iltd 1 III I)
11-1·11:' 8: S,'Ii ...dllk,.Sllldj S"'''llIlI S,h,'dllk, 1'1'\\ . 1'11I1"'"'' 11,'1 1,'.:I I.dlll' I \ !111I·l
Proposals Proposed Adjustment Tier I Tier (( Service Impacts 789 10 II Reduce Parks Program Operating ExpensesReduce contracted services jiJl' tree trimming and electrical contracts,
Place various parks program line item expenditures to eIP Park Improvements, Submit annual parks improvement recommendations during the annual CIP development. This will reduce Parks
Program operating costs. Dejund .50 FTE Maintenance Worker VacanLy to be heldjiJl' 0? year Reduce Street Repair Expenditures Tramfer road repair and curb, guller & sidewalk e).penses
in the Operation Budget into the annual ClP Street Improvement Budget, and minor reduction to general road supplies expenses. Reduce Temporary Employee Hours Reduce intern hoursfrom
1495 to }040 per year, Reduce Operating E.\penditures $ 51,000 Tier JI: Reductions in various parks expenditures and contract services, including electrical services, tree trimming,
landscaping and general supplies. Service impacts will be delays in upgrades vvhile items are placed on CIP projectlistsJ{Jr improvements. $ 38,500 Tier JI: A Parlss & Maintenance Worker
position will become vacant in Spring of 2004. Hold vacant position .lor 0? year, mitigated with tempoI'm)' sta.lJing, Fill as determined appropriate. $ 18,000 Tier JI: Service impacts
are minimal at this time because rmlJor road repair work IS accomplished Via the anl1l{al CIP Street Resurfacing Program. Pothole repairs will continue to be conducted by maintenance
sta.ff, but smaller street paving (beyond pothole!)) will not be completed by ppw. $ 10;300 Tier JI: Reduction in ojJice intern hours will be mitigated by.flexible work hours, to meet
high peak customer service hours. $ 8,000 Tier JI: Reduction 0/program training expenditures and muwr administrative supplies expenses. Mitigated by utilizing HR training.limd\' for
s({/ety courses. ...... 'I_'O_·'_I'A----'.-LS_-i.-_$_' --.:...--l " III IHii
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COMMUNITY SERVICES DEPARTMENT DEPARTMENT PURPOSE The Community Services Department serves as the center for programs which enrich the life of the community. The Department is committed
to the following: • Identifying and responding to the needs of a diverse population, with programs that serve seniors, youth, families, homeowners, renters, and low-income residents
• Promoting a spirit of hometown community by including volunteers and program participants as integral parts of ongoing projects • Facilitating communication between local human service
providers in brder to increase effectiveness and to continually improve programs through shared expertise • Managing Town compliance with a variety of federally mandated programs, targeting
those resources toward identified local priorities PRELIMINARY ADJUSTMENT STRATEGY The core services of the Community Services Department include senior services, volunteer services,
arts and cultural services, housing services, solid waste management services, and community center facility services. When developing its budget proposals, the department held preservation
of these core services as its first priority. Given the preliminary budget,proposals, the way in which these services are provided in the future will require some policy-level considerations.
The department is responsible fQr managing the Neighborhood Center. The Council's adopted use policy for this facility states that it shall be managed in a way which benefits local senior
citizens, youth, civic and service groups, and community residents. Proposed adjustments in this area would reduce the staff and other resources dedicated to the Neighborhood Center,
and result in reducing the number of hours each week that the facility is available for community use, and in eliminating the use of the facility for private parties such as wedding
receptions. Implementation of any adjustments will need to include consideration of factors including the desired purpose for the facility in future, the cost and availability of similar
services at other local facilities, actual and projected use volume', and the optimum configuration of staff and other resources to meet desired service levels. The Town grants a total
of $100,020 in General Fund monies annually to local nonprofit organizations, which provide human services and art, cultural, and educational programming. The department is
&) COMMUNITY SERVICES DEPARTMENT 05 proposing to reduce the total amount of funds available consistent with the Tier I and Tier II adjustments that the Town organization is proposing
for its operations. During the application process this year. nonprofit agencies were notified that the amount of funding might be reduced. At the April 5. 2004 Council meeting, staff
will be bringing forwardCornrrlunity Services Commission and Arts Commission grant allocation recommendations for specific Tier I and Tier II strategies. The department also proposes
to reduce (Tier I) or eliminate (Tier II) the annual grant to the Los Gatos Museum Association (LGMA). This annual grant is provided under a non-competitive 10-year grant contract, which
states that the Town may suspend grant payments at any time that the Town finds it has insufficient funds available. Staff has had initial conversations with the Executive Director and
President of the Board of Directors, who has brought the issue to the full Board ofDirectors. This same approach of making Tier I and Tier II reductions consistent with the organization's
reductions is being proposed for the annual service contract with the Chamber of Commerce. Discussions with the Chamber would need to occur to build the Chamber budget in such a way
that it achieves the Town's highest priorities in the area of economic vitality.
ro COMMUNITY SERVICES DEPARTMENT 03 DEPARTMENTAL SUMMARY GENERAL FUND REVENUES AND EXPENDITURES 01102 02/03 02/03 03/04 Actuals Adopted Estimated Adopted REVENUES Service Charges 5,055
111,375 85,433 97,350 Interest Other Sources 55,331 59,000 68,364 58,000 TOTAL REVENUES 60,385 170,375 153,797 155,350 EXPENDITURES Salaries and Benefits 314,535 358,200 331,149 362,700
Operating Expenditures 150,530 193,300 175,991 171,050 Grants 213,726 213,576 199,263 182,450 Fixed Assets Internal Service Charges 233,602 242,600 243,897 241,350 TOTAL EXPENDITURES
912,394 1,007,676 950,299 957,550 EXPENDITURES BY PROGRAM Administration 222,601 165,050 140,779· 159,260 Neighborhood Center 391,167 462,400 436,098 445,410 Housing Program 83,150 80,694
86,860 Community Grants 231,434 245,976 234,042 215,560 Arts & Culture 67,193 51,100 58,686 50,460 TOTAL EXPENDITURES 912,394 1,007,676 950,299 957,550
W COMMUNITY SERVICES DEPARTMENT 03 COMMUNITY SERVI<:;ES DEPARTMENT STAFFING Full Time Equivalent (PTE) 01102 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Community Services
Director 0.75 0.75 0.75 0.75 Administrative Analyst 0.30 0.30 0.30 0.30 Administrative Secretary 0.90 0.90 0.90 0.90 Secretary II LOO 0.95 0.95 0.95 * Senior Coordinator LOO 1.00 1.00
1.00 Volunteer Coordinator 0.75 0.75 0.75 0.75 TOTAL PROGRAM FTE's 4.70 4.65 4.65 4.65 Temporary Staff Office Clerk Facility Attendant TOTAL ANNUAL HOURS *Defunded .95 FTE 01102 Actuals
160 470 630 02/03 Adopted 160 470 630 02/03 Adjusted 160 470 630 03/04 Adopted 160 470 630 Additional Community Services Department staffing FTE's are located in Special Revenue Funds.
KEY PROGRAM SERVICES COMMUNITY SERVICES DEPARTMENT Administration Program • Produce and distribute two issues of the Town newsletter annually, and other communications materials as needed
• Manage the Departmental budget, and track fiscal and program performance • Provide staff support to the Community Services Commission, its subcommittees, ad hoc committees, and projects
• Manage implementation of the General Plan's Human Services Element • Manage effective use of Departmental personnel and related resources Neighborhood Center Program • With Building
Maintenance staff, manage Neighborhood Center facilities improvements • Manage long-term Neighborhood Center leases • Manage event-based use of the Neighborhood Center • Manage the Town's
Volunteer Program • Manage the Senior Program and the Senior Center • Monitor local provision of human services and serve as a resource for local nonprofit service agencies • Manage
Town-wide special events, such as Screen on the Green and the annual July 4th Celebration. Housing Program • Administer the Below Market Price Housing Program, in cooperation with the
Community Development Department • Administer the Rental Dispute Resolution Program • Provide staff support to 'the Rent Advisory Committee, its subcommittees, ad hoc committees, and
proj ects • Monitor the Town's affordable housing program, and assist with implementation of the General Plan's Housing Element Community Grants Program • Manage annual Community Grant
allocation process • Administer annual grant agreements; track performance and funds distribution • Monitor local provision of human services, and serve as a resource for local nonprofit
service agencles
Arts & Culture Program • Provide staff support to the Arts Commission, its subcommittees, ad hoc committees, and projects • Provide staff support to the Art Selection Panel, its subcommittees,
ad hoc committees, and projects • Provide program oversight, staff support, and fiscal accounting for Music in the Park • Provide program oversight, staff support, and fiscal accounting
for Art in the Council Chambers
COMMUNITY SERVICES DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: Tier I Proposed Budget Adjustment: Tier II Proposed Budget
Adjustment: '$ 957,550 $ 57,500 $ 115,030 Proposals 2 Proposed Adjustment FlIIu/ing Shift to Solid Waste Management Fum/: Fund an additional portion of Town waste collection activities
through the Solid Waste Management Fund, rather than the General Fund. Fund revenue comes from surcharges on franchised solid waste collection activities pelformed by Green Valley Disposal
Company. Currently, approximatezv $200,000 per year is spent for Town waste-related activities. The activities to be identified under this proposal would be performed III the Parks and
Public Works Department. Funding Shift to Re(/evelopment Agency: Fund a portion of the service contract with the Chamber of Commerce through the Redevelopment Agency. Specifically, consider
those portions ofthe marketing and other activities which benefit the Redevelopment Area Area (Downtown). The ]003104 servite contract with Ihl' C/lIIJ11!>ertotals $70,000. Tier I $100,000*
Revenue shifi represents an estimate of the fil/u!ing tran:./er to be made, As appropriate activities are identified, this figure may be revised. It is not ineluded in the Tier I and
II adjustments for this department $24,000 Tier II $100,000* $24,000 Service Impacts Proposal would have no impact on service delivery. It would merely change the funding source for
existing services, and provide relief to the General Fund portion of the Parks and Public Works Department operating budget. The proposal is fimded through undesignated Solid Waste fimd
balance. In FY 2005106 when solid waste collection rates scheduled for a(ljustment, any additional revenue needed to support these services would be included in the calculation
of new rates. Proposal would have no impact on service delivery. It would merely change the funding source for existing services, and provide relief to the General Fund. Dnzv those services
that directly benefit the Redevelopment Area would be identified under this proposal. RDA fimding capacity requires review.
'.
Proposals Proposed Adjustment 3 Reallocate Administmtive Analyst Position: Move 0.05 FTE of the halftime Administrative Analyst position from the General Fund to the Solid Waste Management
Fund. It is anticipated that tli'e Analyst will be called on to provide services in the area of solid waste administration beginning in FY 2004/05, as a number of solid waste issues
become priority work items. Specifically, the recycling and waste hauling contracts will expire in February 2007, and rate increases are scheduled for July of 2005; both issues will
require work beginning in 2004/05. 4 Reduce Operating Expellditlires: Make expense reduction in matericJ!s and supplies expense category. Tier I $5,700 $7,000 Tier II $5,700 $14,500
Service Impacts Proposal would have no significant impact on service delivery although some General Fund activities could become lower priority due to the shift in focus on Solid Waste
issues. It would merely change the funding source for the existing half-time Administrative Analyst, and provide relief to the General Fund. The Analyst position is not currently budgeted
for in the Solid Waste Management Fund; this proposal would move a portion of the position into that jimd, III order to reflect actual projected workload. Tier 1 proposal would have
no impact on service delivery. It would correct a budgeting error, which duplicated this expense in two program areas. Tier 11 proposal would defund most of the department's $9,000 furniture
.replacement budget. Replacement of any damaged or missing fimliture and equipment might be deferred until fimds were available. Neighborhood Center customers might notice the diminished
quality offimliture available to them, specifically folding tables. plastic chairs, upholstered fimliture In the Lounge and counseling rooms, and meeting room fiirniture.
Proposals Proposed Adjustment 5 Reduce Temporary Hours: Reduce the number of coniracted hours from 25 hours per week to 23 hours per week. This contract employee represents a partial
backfill of the defunded Secretary II position. The position is the front line ofcustomer contact on the phone and at the front desk of the. Neighborhood Center. Duties include word
processing, mass mailings, supply ordering, coordination of office equipment and building maintenance, room reservations, coordination of Art 11l the Council Chambers exhibits, and assisting
stajl with special projects. 6 Restructllre Chamber· of Commerce Service Contract: The Town holds an annual service contract with the Chamber; the 2003/04 contract totals $70,000. Services
inelude the downtown Information Center, Chamber website, marketing/promotional activities, and Leadership Los Gatos. For 2004/05, the Town could consider building a new contract, beginning
from a zero base, and adding services as appropriate. Tier I $4,600 $4,200 Tier II $4,600 $8,400 Service Impacts Proposal would result in a reduced depth of support staffing. Walk-in
requests for Neighborhood Center room reservations might not be accommodated. Other departmental staff would be tapped to perform support duties; the total department sleW count is 3
fiill-time and 3 part-time employees. Tier I and Tier II ([({justments represent a 6% and 12% reduction of the total contract amount, respectively. Any impact on services would depend
on the service(s) added to or removed from the Chamber contract. Town st{W might be tapped to provide some services traditionally offered by the Chamber.
Proposals Proposed Adjustment. 7 Los Gatos Museum AssoCiation Grant: Reduce or eliminate the annual grant to the Los Gatos Museum Association (LGMA). The Town and LGMA have a lO-year
(1999-2009) grant contract, under which the Town grants $12,430 each year to LGMA. The Town also leases both museum buildings to the LGMA, under a 10-year lease agreement, at the rate
of $1 per year. This lease represents an in-kind subsidy of $84, 000 per year, based on the Town's adopted lease rate of $1.75 per square foot. The grant contract states that the Town
may suspend grant payments at any time that the Town finds it has insufficient funds available. 8 Community Grant Funds: Strategically reduce the arnount of Community Grant jill/ds available.
The Community Grant program makes General Fund grants. to local nonprofit agencies jJroviding human services and art, cultural, and educational programming so Town residents may maintain
or improve their quality of life. A totalof $100,020 in grants are made anlltwlZy. (The Town Town also administers a separate, federalzv-funded CDBG grants program.) Tier I $6,000 $6,000
Tier II $12,430 $12,000 Service Impacts The Town's annual grant represents 12.2% of the LGMA 's budgeted income for 2003104 of $101,930. Service impacts are not known at this time. Tier
J and Tier II adjustments represent a 6% and 12% reduction ofthe total amount ofgrant funds. respectively. Vnder Tier I. $94,000 would be available for grants. Vnder Tier II, $88,000
would be available. Proposal would have an impact on the local nonprofit agencies that receive these jill/ds. The amount ofimpact would vary between agencies; larger agencies or agencies
with a breadth ofjimding sources might be better able to absorb a reduction. while smaller agencies or
those dependent on Town funds might be more affected.
Proposals 9 10 Proposed Adjustment Reduce Public Educatioll /Jllforllltltioll Expellditures: Reduce the department's Communit}1 Promotions budget. This budget item is mew/t· to fund
onetime public information eJJorts -such as a -"pecial edition ofthe Los Gatos Vista newsleller, a holiday shopping promotion, or a similar media piece -on an ad hoc basis. A promotions
project for 2004105 has not yet been identified. Reduce Temporary Hours: The defunded Secretary 11 position is currently backfilled through a contract employee working
25 hours per week. The position is the front line ofcusiomer contact on the phone and at the front desk ofthe Neighborhood Center. Duties include word processing, mass mailings,
ordering, coordination of office equipment and building maintenance, room reservations, coordination of Art. in the Council Chambers exhibits, and assisting staJJwith special projects.
TOTAL Tier I $57,500 Tier II 13,800 $19,600 $115,030 Service Impacts Proposal would eliminate the ability of the department to produce any ad hoc public information pieces. The only
media produced would be the twice-yearly Los Gatos Vista newsleller, and the six-yearly Senior Center Newsleller. Proposal would impact ability to safely and eJJectively
run the Neighborhood Center, a well-used community facility. Elimination of backfill would require limiting hours ofthe department to 9am-4 pm; routing all phone calls to the Town's
planned centralized call· center; relocating the Recycling Coordinator to the Secretary 11 office to perform minimal building admin duties; and revising facility use policie$ to eliminate
use ofthe facility for private parties.
LIBRARY DEPARTMENT DEPARTMENT PURPOSE The Los Gatos Public Library serves as the Town's primary provider of information services, provides access to library materials and digital resources,
promotes lifelong learning, and provides educational support. The Department provides collections and services which anticipate the needs of the community; encourages an interest in
reading and learning; supports students at the elementary and secondary level with appropriate materials and services; provides current library technologies and training in how to use
them; creates a welcoming environment for children which encourages their curiosity, imagination, creativity, and a permanent love of reading; and provides a knowledgeable and service-oriented
statT responsive to the community's need for access to the world of information and ideas. The Library provides current, high-demand, high-interest matenals in a variety of formats for
people of all ages, as well as more traditional resources. Dedicated to the spirit of a learning community, the Library provides a year-round series of children's and teen programs,
Summer Reading Clubs, and a book discussion group for adults. PRELIMINARY ADJUSTMENT STRATEGY The Library approached its reduction targets with the goal to preserve as much dir:ect public
service as possible. The two major categories of the Library's budget are materials and staffing. The Library's budget was reduced by 48% in FY 2002/03, to a level
that places Los Gatos near the bottom among Bay Area cities in expenditures per capita (see Attachment 1). Over the past year, the Library has undertaken efforts to generate public contributions
for the materials collection (see Attachment 2); however, these efforts have not yielded significant dollars. Since further reductions to the materials budget would not be sustainable,
the Library focused on staffing for its reduction proposals. Reductions in -staffing result in reduced open hours for the Library, largely due to the configuration of the Library, which
occupies two floors and offers three points of public service, and to the level of staff needed to deliver services, such as staffing the public service desks, providing reference services,
ensuring a safe environment for library patrons, and accomplishing the behind-the-scenes tasks which make operation of the library possible, such as acquisitions, cataloging, and processing
of materials. The proposed reductions in Library hours were based on an understanding of the level of use of the Library at different times and on the ability to schedule the appropriate
level of staffing. In the Tier I proposal, the Library budget is reduced by .25 FTE and 3,068 temporary staff hours through reducing twelve library hours (three hours on each of four
weekdays). Under the Tier II proposal, the Library budget is reduced by 1.45 FTE and 5,317 temporary hours by reducing 22 library hours per week and remaining open five, eight hour days
per week. The Library would work with neighboring libraries to attempt to coordinate open hours such that a nearby library could be available at most times.
ro LIBRARY DEPARTMENT 03 DEPARTMENTAL SUMMARY OF REVENUES AND EXPENDITURES 01102 02/03 02/03 03/04 Actuals Adopted Estimated Adopted REVENUES Intergovernmental Revenues 45,473 30,000
26,070 . Service Charges 3,672 3,500 3,734 3,500 Fines and Forfeitures 51,490 42,500 54,226 67,000 Other Sources TOTAL REVENUES $76,0()0 $84,()30 $70,500 EXPENDITURES
Salaries and Benefits 1,069,350 1,196,200 1;149,009 1,200,300 Operating Expenditures 292,521 311,500 281,201 214,665 Fixed Assets 6,325 Internal Service Charges 318,439 374,900 381,656
360,300 TOTAL EXPENDITURES 1,686,635 1,882,600 $1,811,866 $1,775,265 ]I EXPENDITURES BY PROGRAM Administration Adult ServiCes Children's Services Technical Services Circulation Services
TOTAL EXPENDITURES 166,703 538,109 340,831 337,616 303,377 1,686,635 225,200 498,200 367,200 312,300 479,700 1,882,600 224,419 500,289 348,624 285,536 452,998 1,811,866 213,390 451,865
357.990 243,880 508.140 1,775,265
ro LIBRARY DEPARTMENT 03 DEPARTMENT STAFFING Full Time Equivalent (FTE) 01/02 02/03 02/03 03/04 Town Staff Actuals Adopted Adjusted Adopted Library Director 1.00 1.00 1.00 1.00 Assistant
Library Director 1.00 1.00 Senior Librarian 1.00 1.00 Principal Librarian 3.00 3.00 3.00 3.00 Librarian 2.75 2.25 2.25 2.25 Associate Librarian 1.00 1.00· 1.00 1.00 * Library Assistant
1.75 2.50 2.50 2.50 Secretary III 0.50 0.50 0.50 0.50 Administnitive Analyst 0.50 0.50 0.50 0.50 * TOTAL PROGRAM FTE's 11.50 11.75 11.75 11.75 01/02 02/03 02/03 03/04 Temporary Staff
Actuals Adopted Adjusted Adopted Librarian 620 620 620 620 Library Clerks 7,910 6,660 6,660 6,600 Library Pages 4,160 5,200 5,200 5,200 TOTAL ANNUAL HOURS 12,690 12,480 12,480 12,420
* Defunded .50 FTE
KEY PROGRAM SERVICES LIBRARY DEPARTMENT Administration Program • Administer and supervise four operating programs in the department • Provide oversight of day-to-day operations and scheduling
• Prepare and monitor Library Department budget • Support Town Library Board and Friends of the Library meetings, programs, and activities • Develop master planning for Library building
replacement or improvements • Coordinate and maintain the department's existing physical spaces. • Collaborate with area libraries by serving on the Silicon Valley Library System Administrative
Council • Increase public awareness of Library services and programs through effective public relations and marketing • Provide oversight of Library staff training and development Adult
Services /Reference Meeting Information Needs • Provide reference and reader's advisory services • Maintain viable reference and circulating collections • Consistently update the Reference
Resources area of the Library's Web site to include accurate, timely information • Provide Interlibrary Loan services for our customers Information Technologies and Training • Develop
online counterparts to services traditionally available only within the Library's walls • Provide access to the Internet and training in basic searching and navigational skills Youth
Services Program Meeting information needs for children 0-17 years of age and their parents • Provide reference and reader's advisory services • Manage children's and teens' Web pages
• Manage children's and teens' collections Providing programs to youth • Provide year-around programming for infants, toddlers, preschoolers, school-age children, and families • Plan
and promote annual Summer Reading Club to listeners from ages 0-5, readers from ages 513 and teen readers from ages 13-17
Outreach to youth • Raise awareness of youth about collections, services, and programs available at the Library • Provide an easy method for youth to obtain library cards Web Management
• Design and maintain Library's Web site Technical Services Program • Maintain online catalog to assure customer access to Library materials • Acquire Library materials • Maintain Library
collections, include shelving of materials Circulation /Systems Administration Program • Manage circulation process • Management of all Library automated systems, including the Library's
network
Materials Budgets of Bay Area Libraries Based on California Library Statistics, 2003, published by California State Library, for fiscal year 2001-02, when LGPL's materials budget was
$208,811. Library System Palo Alto PL Burlingame PL Berkeley PL Santa Clara Co. PL Monterey PL Benicia PL Redwood City PL Los Gatos PL .South San Francisco PL Santa Cruz City-Co. PL
San Francisco PL Santa Clara City PL Menlo Park PL Mountain View PL San Mateo Co. PL Watsonville PL Marin Co. PL Livermore PL Sunnyvale PL . San Jose PL Alameda County Oakland PL Daly
City Expenditure Per Capita $10.43 $10.09 $9.15 $7.93 $7.56 $7.45 $7.24 $7.21 $7.19 $6.87 $6.81 $6.30 $6.23 $5.71 $5.65 $5.19 $5.11 $5.09 $4.87 $4.86 $4.69 $2.99 $2.92 Average: $6.41
Mean: $6.50 ***With LGPL's materials budget for 2003 -04 reduced by 48%, the expenditure currently is $3.45 per capita. ATTACH:VIE:\.T 1
Proposal 56 Proposed Adjustment Defimd .50 FTE Librarillll position ami increase Temporary Librarian position by 520 hOllrs. Redllce other temporary staffby 1029 hOllrs DefilJld remaining
.5 FTE Young Adult position and backjill this position to approximatezv 25% time with 520 Temporwy Librarian hours. Reduce Temporwy Librwy Clerk by 637 hours and Temporary Library Page
by 392 hours. Proposed staff -10.00 FTE and 8,979 Temporary Staj/hours. Cumulative budget reduction is $125,680 for 7%. Defimd .50 FTE Librarian position and .20 FTE of a Principal Librarian
position; redllce Temporary Staffby 1,816 hOllrs. Eliminate a .50 FTE Adult Services Librarian position ($43,944), .20 FTE of one Principal Librarian position, (as of 8/04) ($17,274),
eliminate Temporwy Librarian by 520 hours, reduce'Temporwy Librwy Clerks by 9J2 hours and Temporary Librwy Pages by 384 hours Proposed staff -9.30 FTE and 7,163 Temporary Staffhours.
Cumulative budget reduction is $186,992 for lO.5%. TOTAL Tier I $ 81,302 Tier II $ 44,378 $ $ 103,412 $ 228,992. Service Impacts From 4 to 0 hours on Sundays. Frorn 62 to 46 hours per
week. From 7 to 6 days per week. Weekend service reduced by 33%. Young Adult Librarian (least senior) reduced by half, eliminating outreach and programming to teens. From 8 to 0 hours
on Mondays. From 62 to 40 hours per week. From 7days to 5 days per week. All staff will have a Tues-Saturday work schedule. To achieve this reduction, a parttime librarian will be cut,
thus impacting. the ability to staff more {hah 5 days of service. Duties of defilJlded librarian position (least senior) will be assumed by existing staffsince hours on public service
desks are reduced. Compaction of service demand continues. Slight drop offin demand might occur. Weekend access IS maintained for working people, and the schedule will allow mOrtling
and evening access for other customers.
P."oposal 234 Proposed Adjustment Defiwd Librarian position by .10 FTE and rel/uce Temporary Staffby 624 hours Reduce .60 FTE Librarian 10 .50 FTE. Reduce Temporw)' Library Clerks by
312 hours and 'Temporwy LibralY Pages by 312 hours. Proposed slajJ -10.50 FTE and 11,232 Temporary SlajJ hours. Cumu1alive budgel reduclion is $42,859 for 2.4%. Reduce Temporary Staffby
944 hours Reduce Temporwy Librarian by 340 hours, Temporary Libral)' Clerks by 312 hours, and Temporary Library Pages by 312 hours. Proposed stajJ -10.50 FTE and 10,268 Temporwy StajJ
hours. Cumulative budget reduction is $63,489 for 3.6%. Reduce Temporary Staffby 800 hours Reduce Temporary Librarian by 280 hours, Temporwy Library Clerks hours by 288, and TemporalY
Librar]' Pages hours by 288. Proposed stajI-10.50 FTE and 9,412 hours. Clilt/u/ative budget reductioll is $8/.30:!..f(H 4.6% Tier I $ 18,420 $ 20,630 $
17,813 Tier II $ 18,420 $ 20,630 $ 17,813 Service Impacts From 11 to 8 hours on Wednesdays. From 62 to to 56 hours per week. Young Adult services will be impacted with the further reduction
ofthe librarian to a half time position, reducing outreach services to youth from 6 tirnes a year to 3. A second day ofshortened hours will further increase the service impacts as stated
in the first proposal. From 11 to 8 hours Oil Tuesdays. From 62 to 53 hours per week. All service implications ltl this proposal directly relate to open hours ofservice. From 11 to 8
hours on Mondays. From 62 to 50 hours per week. Temporary librarians are no longer funded, resulting ltl no SltW to assign to special projects (histo/Y project, web development, collection
assessment, readers assistance lists.)
LIBRARY DEPARTMENT PRELIMINARY BUDGET PROPOSALS FY 2004/05 Department's Total Adopted General Fund Budget 2003/04: Tier I Proposed Budget Adjustment: Tier II Proposed Budget Adjustment:
y These redudiolls are cumulative alld if1I0t takell ill this order, the figures lIeed to be adjusted. $ 1,775,265 $ 81,302 $ 228,992 Proposal Proposed Adjustment Deftl/Ill Librarian
position by .15 FTE and reduce Temporary Staffby 624 hours Reduce.75 Young Adult Lilmirian to .60 FTE. Reduce Temporary Librwy Clerk hours by 312 and Temporwy Library Page hours by 312.
Current staff-10.75 FTE and 12,480 Temporary Staff hours. Proposedstaff-l0.60FTEand 11,856 Temporary Staffhours. Budget redudion achieved is $24,439 for IA%. Tier I $ 24,439 Tier II
$ 24,439 Service Impacts From 11 to 8 hours on Thursdays. From 62 to 59 hours per week < Hours of operation to be determined 1I1 cooperation with area libraries. Compaction of hours
creates compaction of service at all points. Long check out· lines might be mitigated by self service opportunities. Fewer . page hours mean longer "retum to shelf' time for items and
longer time for newly acquired items to be shelfready. Ifpossible, increase in use of volunteers for processing newly acquired items. Librarian reduction is a Young Adult Librarian (least
senior), reducing programming for teens from 4 per year to 2. Possible cooperation with Recreation Services.
LIBRARY DEPARTMENT 2004/05 Proposed Reductions Library Hours/FTE Current Sun Mon Tue Wed Thu 4 11 11 11 11 Fri 7 Sat Open Staffing Hours FTE Temp Hr Expend Reduction Cumulative % Reduction
Reduction Proposal 1 Proposal 2 Proposal 3 Proposal 4 Proposal 5 Proposal 6 4444CC 11 11 11 88C 11 11 8888 11 88888 888888 777778 777778 59 56 53 50 46 40 10.60 10.50 10.50 10.50 10.00
9.30 11,856 11,232 10,268 9,412 8,979 7,163 $ 24,439 $ 18,420 $ 20,630 $ 17,813 $ 44,378 $ 103,312 $ 24,439 $ 42,859 $ 63,489 $ 81,302 $ 125,680 $ 228,992 1.4% 2.4% 3.6% 4.6% 7.0% 12.9%
7. Trader Joe's Photo Installation • In return for digital images from the Library's collection to be used in the new outlet, Trader Joe's provided our fund raising brochure for their
customers. 8. Historv Project Fund Raising: Brochure -Featuring: Girl in Carneg:ie Library, 1906. • Includes project goals and request for funding. To date, the History Project fund
raising drive has resulted in donations of $10,045 in cash and equipment. 9. Presentation to Los Gatos Lions Club • September 17,2003 presentation and PowerPoint program of historic
photos resulted in donation of funds for state-of-the-art scanner for the History Project. 10. Presentation to Los Gatos Kiwanis Club • January 29,2004 presentation and PowerPoint program
of historic photos will result in new laptop computer for History Project. . 11. Presentation to History Club of Los Gatos • January 7, 2004 presentation to History Club resulted in
an additional $1,000 for history project. 12. Collaboration with Los Gatos Weekly Times History Series -to run in 2004 • Dick Sparrer, Editor of the Los Gatos Weekly Times, will run
six cover stories on local history in the coming year, featuring the History Project in February, 2004. The Library will work collaboratively with the LGWT on the entire project, and
requests for funding for the project will be made in each issue. Library photos and results of our research will appear in each story. 13. Arcadia Publishing:'s Images ofAmerica: Los
Gatos, forthcoming: in Fall, 2004. The Library Director has finished a first draft of this book, which will be sold by the Friends of the Library, Testarossa Vineyards, and other retail
outlets in Los Gatos, providing funding for the History Project.
Fund Raising for Library Collections and Preservation June, 2003 -February, 2004 1. Amazon.com Wish List • List posted in June, 2003, asking for donations of specific books and DVDs
• A thank-you letter has gone out to each donor. • . Make Our Wish Come True bookmarks are given with every check-out, alerting patrons to list • Bookplates are placed in each donated
book, along with the URL of the Wish List. • By February 1,2004, materials have been purchased by 35 donors in the amount of $1,075. 2. Six Full Ads -Los Gatos Weekly Times
• The Friends ofLGPL sponsored a series of6 full-page ads in the Los Gatos Weekly Times, created pro bono by a professional graphic artist, and each featuring a different historic Los
Gatos photograph. The ads asked for donations to the Local History Project and to the Amazon.com Wish List. Ads were run at an expense of $3,000. • The ads resulted in many community
members and organizations bringing historic photographs and materials to the Library to be digitized, but did not generate significant revenue. 3. Los Gatos Vista • The History Project
was featured on the front page of the Fall, 2003 Los Gatos Vista. 4. Los Gatos Daily News September 20, 2003 -Front page photo and story on "Birdcage Ladies," and request for funding
. December 27,2003 -Front page photo and story on the Los Gatos Pageants, and request for funding 5. Los Gatos Weekly Times July 30, 2003 -Front page story -"Los Gatos Library Working
to Put Town's Historical Documents Online," and request for funding. December 3.2003 -Main Street Column, by Mary Ann Cook -Lead story titled "Conaway Solves Murder," concerning History
Project. • February 4,2004 -Main Street Column by Mary Ann Cook -request for older Los Gatos Phone Books and request for funding. 6. Testarossa Vineyards Benefit for History Project
Attended by several hundred people, this benefit resulted in $1,195.00 for the project. as well as the opportunity to display historic items to an interested audience. ATT
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