04 Staff Report - FY 2003-04 Annual Report
DATE: TO: FROM: COUNCIL AGENDA REPORT SEPTEMBER 28, 2004 MAYOR AND TOWN COUNCIL DEBRA 1. FIGONE, TOWN MANAGER MEETING DATE: 10-04-04 ITEM NO. L-\ SUBJECT: ACCEPT FISCAL YEAR 2003-04
ANNUAL REPORT RECOMMENDATION: Accept Fiscal Year 2003-04 Annual RepOli. BACKGROUND: Town Code requires the Town Manager to provide an annual report after the close ofthe fiscal year.
DISCUSSION: In the past, the Annual Report has been presented to the Town Council in an administrative repOli format. Last year, staffproduced the report in a large-scale newsletter
format and distributed it to all households in Town as an insert in the Fall Vista newsletter. This format and distribution enabled the Town to share the Town's accomplishments with
more Los Gatos residents and businesses in keeping with the Council's goal of enhancing commtmication and outreach efforts throughout the community. This approach is continued this year.
The newsletter version of the FY 2004-05 Annual Report will be available and mailed to all Los Gatos addresses the week of October 4th following the Council meeting. Additional copies
of the Annual Report will be available for distribution throughout the year. ENVIRONMENTAL ASSESSMENT: Is not a project defined under CEQA, and no further action is required.
PREPARED BY: PAMELA S. JACOBS ASSISTANT TOWN MANAGER N:\MGR\PJacobs\Councii Reports\03-04 Annual Report.wpd Reviewed by: __Assistant Town Manager JtJlLTown Attorney __
__Community Development Revised: 9/28/04 7:53 am Reformatted: 5/30/02
PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: ACCEPT FISCAL YEAR 2003-04 ANNUAL REPORT (September 28, 2004) FISCAL IMPACT: Funds for producing the incremental cost for printing the FY 2002-03
Annual Report are available in the Town Manager's budget. Attachment: 1. 8xll copy of the Fiscal Year 2002-03 Annual Report
1 Fiscal Year 200312004 ATTACHMENT 1 Residents are satisfied with Los Gatos services -At least Through the community survey,
targeted surveys associated with particular services, and ongoing communication with our customers, the Town seeks to learn how we can best meet the needs of the community. We plan to
do another community survey in 2005. Los Gatos residents love Los Gatos -An amazing 97% said that Los Gatos is agood or excellent place to live, with the vast majority (75%) saying "excellent."
This result is higher than found in most communities. Residents also thought many quality of life attributes were good or excellent; at least three-fourths thought the appearance and
cleanliness of the Town, feeling of safety, recreational opportunities, safety of pedestrians, and arts and cultural opportunities were good or excellent. In September 2003, the Town
engaged a survey consultant to conduct a satisfaction survey of Los Gatos residents. Telephone interviews of 400 randomly-selected adult residents produced statistically valid results
for the questions answered by most of those surveyed. The entire survey is available on the Town's website, www.losgatosca.gov. Key findings of the survey include: Community Satisfaction
Survey TY STEWARDSHIP Q FUTURE FOCUS -Debra 1. Figone, Town Manager >ii 2003/04 Annual Report covers Town's efforts over the period from July rough June 2004. Not only do we think· .
is important for you to know about the accomplishments, but it is important for know what you think about the services we provide. That iswhywe conducted a ity satisfaction survey during
the year e right-hand column on this page). The of the survey indicate that residents are generally satisfied with the job the Town three-fourths of respondents said they were satisfied
with the government is doing. This is meaningful to us as' I Town's efforts to provide community events, inform the community , about services and events, and maintain parks, streets,
sidewalks, it suggests we are following our guiding" , trees, street lights, and trails. principles of SmallTown Service, Community I Stewardship, and Future Focus as we deliver services
to the Los Gatos community.
2 Town ofLos Gatos Annuat Report Fiscal Year 200312004 Hooked on Los Gatos The Los Gatos History Project The Los Gatos History Project, nicknamed "Hooked on Los Gatos," began in earnest
in the summer of 2003, and has continued to grow at asteady pace. Approximately 3,000 historic photographs and documents on the history of Los Gatos have now been scanned. Identification,
preservation, and cataloging of the collection are ongoing, and will eventually resull in a database available on the Los Gatos Library's website, Iibrary.losgatosca.gov, and The Museums
of Los Gatos website, www.losgatosmuseum.org. Protecting our cullural heritage and providing access to its riches have always been common goals of both the library and The Museums of
Los Gatos. With that in mind, the library joined with its sister institution in a collaborative effort in the spring of 2004 to file ajoint application for agrant from the Institnte
of Museum and Library Services, a federal agency charged with enhancing library and mnseum services. If received, the grant monies would enable the history project to proceed for the
next two years. Many members of the community have generonsly shared their personal collections of Los Gatos history, including some fascinating photographs.Adozen long-time Los Gatos
families and organizations have contribnted, and new materials come to the library on nearly a daily basis. Many others have contributed time and energy to fund raising and to hands-on
work for the project. The history project is fully fnnded through donations, benefit evenls, and grants.
and beloved teacher; Miss Van Merer first era de in Los Gatos for 35 years. "HOOKED" UN LOSG OS
Major Developments Los Gatos has an eclectic mix of building styles. It is a unique combination of old and new that is indicative of a community that has evolved over time. Architectural
styles range from a few homes built in the 1850s through a beautifully preserved mix of Victorian cottages and craftsman bungalows, some Victorian and Art Deco commercial buildings,
post World War II ranch houses, and post modern homes and commercial buildings from more recent decades. The Town demonstrates that it is possible to value innovation while appreciating
and preserving the past. Los Gatos is truly aspecial place and residents want to protect their community from the increasing development pressures of the region. Accordingly, the Town
evaluates all proposed new developments in light of their overall commnnity benefit. The Town's General Plan guides Town staff and decision makers in this process; it cites the necessity
to consider issues such as human scale of development, historic preservation, density and intensity, population growth, downtown, congestion, open space, views of the hills, the nature
of businesses located in Town, protection of the various neighborhoods, and community design. This year, a number of key developments were approved. Following are brief descriptions
of each: Greenbriar Development On March I, the Town Council approved an Architecture and Site application for 13 new single-family residences in the Greenbriar Development. on Shannon
Road. Los Gatos Medical Office Center On AprilS, the Town Council approved a Planned Development to construct a 20,000 square foot medical office building, on Los Gatos Boolevard. Los
Gatos Community Hospital On April 28, the Planning Commission approved a new Master Plan for the Los Gatos Community Hospital. The Commission also approved an Architecture and Site application
to construct Phase I of the Master Plan. Sobrato Development In May, the Town Council approved a modification to the Sobrato Planned Development to allow two office buildings, containing
up to 160,000 square feet; and 290 residential units, including 51 units reserved for low and moderate income families. The first office building will be the new headquarters of Netflix,
a local company. New Community Standards The role of local government is to preserve the community's identity and character. Through its powers to set standards, provide services, set
a budget, receive taxes, and regulate development, a city or town gives people the tools they can use to determine the character, priorities, amenities and physical make-up of their
community. This year, a number of community standards and guidelines were adopted by the Town Council, in response to community needs and state mandates. Secvnd Dwdling Unit OrdinaJl(:e
In response to changes in state law, the Town Council adopted aSecond Dwelling Unit Ordinance.A"second dwelling," often known colloquially as a"granny unit." is a residential unit that
is located on the same parcel as the main residential unit. State law now mandates that proposals for second dwelling units be considered without a public hearing. The new standards
are designed to ensure compatibility of any new second dwelling unit with its neighborhood. They also include avoluntary program designed to create affordable second units through financial
incentives offered to property owners who are willing to guarantee that their new second dwelling unit remains affordable to low and moderate income households. Hillside Development
Standal'ds and Guidelines In January, the Town Council adopted new Hillside Development Standards and Guidelines. These guidelines seek to maintain the rural character of our hillside
areas and ensure that new homes are sensitive to the natural environment. They are the result of a comprehensive, multi-year process involving the Town Council, Planning Commission,
Architectural Standards Committee, Los Gatos citizens, and the local chapter of the American Institute of Architects. Significant aspects of the standards include floor area ratio (building
size as a ratio ratio to lot size), grading policies, ridgeline development and height criteria,landscape guidelines, and fire safety standards. Continued on page 4
Fiscal Year 2003/2004 3
Community Development, Housing, New Community Standards, continued from page 3 Personal Service Business Standards Along-standing goal of the Town is to preserve the success and nnique
character of the downtown area by maintaining a healthy mix and balance of uses. In May, the Town Council adopted standards for personal service businesses in the downtown in response
to local concerns that an over-concentration of this type of business would displace retail stores and rednce the attractiveness of the area as adestination for residents and shoppers.
The new standards require that personal service businesses that wish to locate on the first fioor of a building in downtown obtain a conditional use permit-apermit that is reviewed at
a public hearing by the Planning Commission. Personal service businesses inclnde beauty salons, barber shops, tanning salons, and dry cleaners. Tree Removal Permits and Replacement Trcc
Requirements The Town is proud of its rich heritage of splendid trees that provide greenery and shade, and contribute to the distinct aesthetics of our community. Trees also help to
prevent the erosion of topsoil, provide protection against nood hazards and risk of landslides, connteract pollutants in the air, maintain climactic balance, and decrease wind velocities.
The Town Ear s.and Council adopted a revised Tree Ordinance in the fall, which inclndes a tree replacement reqnirement. To ensure that the tree canopy is maintained, replacement trees
must be planted ·an the property where a tree is removed, or a replacement tree fee will be charged to the property owner, to be used for the planting of trees in public areas such as
parks and street medians. Rental Dispute Resolntion Regulations The Town Code and corresponding regulations govern the monthly rent that may be charged by the owner of rental units located
in complexes of three units or more, and provide a resolution process for rent-or service-related disputes betweeu laudlords aud tenants. This March, the Town Council adopted uew rental
dispute resolution regulations. The goals of these revised regulations are to: " Resolve disputes first through informal discussion, then through formal mediation, and as a last resort
through arbitration. .. Improve communication between parties to a rental dispute. " Codify the procedures for noticing a rent increase, for disputing a rent increase, for filing aservice
reduction petition, and for holding a mediation or arbitration hearing. " Make the regulations consistent with current industry practice. The revised regulations were the result of an
extensive, two-year review by the Los Gatos Rent Advisory Committee. The Committee is an advisory body to the Town Council, and includes in its membership property owners, renters, and
other residents of Los Gatos. Bandstand Dedication p n The new Oak Meadow Park Bandstand was dedicated in aspecial ceremony in August 2003, at which the history of the bandstand was
celebrated and the strncture was donated to the Town. The bandstand features the beautifully restored, historic Lyndon cupola. The cupola originally sat atop a carriage house owned by
John W. Lyudon. Mr. Lyudon owned the Lyudon Hotel, now the site of the Lyudon Plaza building, located at the corner of Main Street and Santa Crnz Avenue, across from Towo Plaza Park.
The dedication celebration culminated a ten-year project spearheaded by the Los Gatos Community Foundation, which included finding and restoring the cupola, obtaining approval from the
Town Council to place it in Oak Meadow Park, designing astrncture to support it, and, during 2002 and 2003, having it constructed. The Los Gatos Community Foundation held many fundraising
activities, including the successful Art Cat campaign, and obtained donated labor for the design and installation of the bandstand. The celebration included ribbon-cutting ceremonies,
appearances by local dignitaries, a performance by the Los Gatos High School Band, and an evening of dinner and dancing. 4 Town ofLos Gatos Annual Report Fiscal Year 200312004
New Community Pool The Los Gatos High School Community Aquatic Center, featuring a50-meter outdoor pool, opeued Ihis June. This facility was made possible by a partnership between the
Town, the Los Gatos-Saratoga Joint Union High School District, and Los Gatos-Saratoga Community Education and Recreation. It was truly a community effort, which brought local residents
astate-of-the-art aquatic facility. The new Aquatic Center replaced the old high school pool, which was buill in 1950 and no longer served the needs of students. The Town's contribution
to the project ensured that the new facility would be available to the entire community, in addition to the high school. The new pool is available for community use throughout the summer,
as well as more restricted hours during the school year. The Recreation Department uses the facility for its expanded swim program, including master's swim, children's swim classes,
synchronized swimming camp, and boys and girls water polo. Los Gatos High School enjoys its greatly improved pool for its physical edncation program, and its swim teams. I fr Capital
Improvement Projects rogram to year program a orate hardscape Cruz;Avenue, 9al Santa Cruz and University Avenues. The Gateway improvements focus on the major entryways to the downtown
business core, further the downtown shopping areas and providing astronger link bet areas and the downtown ateway Project is pari of the Los ication Improvements
Plan approved by the Town Council in 1996, consislent with the Town's General Plan. The Gateway design was a collaborative planing process that involved aGateway Design working group,
whose members represented a broad cross-section of experience in Los Gatos. Design of the Wood Road Gateway Project will be completed in FY 2004105. The Town will seek grant funding
from the Melropolitan Transportation Commission's Transportation for Livable Communities Construction Grant program to make the improvements Ihal currently are unfunded. DO"ll-"Iltown
Parking Lots Lots Several public parking lots in the downtown were improved to provide better access for pedestrians and wheelchair users. '!\va parking lots were expanded: the South
Side Lot, on South Santa Cruz Avenue across from the Toll House Hotel; and the Montebello Lot, on Montebello Way east of the post office. Both lots allow unrestrioted parking for visitors
to the downtown. These improvements were funded through a combination of Capital Improvement Program and Redevelopment Agency funds. Street Repair and Resurfacing This ongoing work program
continued during the year, on streets throughout town. Work completed this year brought the Town's overall roadway pavement condition index from 64 (below average) up to 74 (above average).
The repairs were funded with a combination of Capital Improvement Program and General Fund monies. Anumber of capital improvement projects were completed during the past year, as part
of a continuing effort to upgrade the Town's infrastructure. Many of these projects were funded with grant monies. Retaining Walls Improvements were made to two retaining walls located
along Reservoir Road and Jackson Street. The work was funded with a combination of Capital Improvement Program and General Fund monies. Library Door Upgrades New automatic doors were
installed in the entrances to the adull and children's areas of the library. These doors comply with federal Americans with Disabilities Act requirements. The project was funded through
the federal Community Development Block Grant program. Ross Creek Pedestrian Bridge Americans with Disabilities Act compliance improvements were begun this year on the Ross Creek Pedestrian
Bridge. This pedestrian bridge crosses Ross Creek, located mid-way on Camino del Cerro in east-central Los Gatos. Improvements include new ramps so that the bridge crossing is wheelchair
and bicycle friendly. The project is funded through the federai Community Development Block Grant program. Bridge Seismic Retrofit Seismic retrofitting was installed on two bridges that
span Los Gatos Creek, at Blossom Hill Road and at Lark Avenue. This project was funded with acombination of federal and state grants. Alley Improvements Work in the Almond Grove area
completed during the summer included improvements to the drainage and pavemenf on Victory Lane between Main Street and Bachman Avenue, as well as in several nearby alleys. This project
is funded by the Los Gatos Redevelopment Agency. Curbs, Gutters, and Sidewalks Broken and lifted sidewalks, curbs, and gutlers throughout Los Gatos were repaired, making the way safe
for pedestrians and cyclists. The repairs were funded with a combination of Capital Improvement Program and General Fund monies. Town ofLos Gotos Annuol Report Fiscal Yeor 200312004
5
Adopt-A-Cop During the 2003104 school year, the Los GatosIMonte Sereno Police Department initiated a new program with the students at Fisher Middte School, called "Adopt-A-Cop." The
program is designed to create positive relationships between police officers and students. Seventh and eighth grade students "adopted" police officers, who committed to spending time
with the students and to being avisible presence at the school. The officers, many on their own time, took the students to lunch for an introductory meeting, and later to get ice cream.
Snme students were able also to go on a ride-alnng with their adopted officer. The program culminated with a group field trip to a San Francisco Giants baseball game. The program was
extremely successful, and popular with both kids and cops. The program is funded by donations from local businesses. Alive ... and Loving Life 6 Town ofLos Gotos Annual Report Fiscal
Year 200312004 In November 2002, a fatal traffic collision following ayouth party took the life of a local high school student. This accident shook the ctose-knit community of Los Gatos,
and exposed a strong culture of high-risk behavior by teens including alcohol and drug use. Key Town and other community leaders enlisted the help of other youth and adult community
members, from over 20 different interest groups and organizations, in a leadership team under the name "A1ive...and Loving Life." This broad-based coalition has continued Lo work to
identify and target issues related to youth. This year, the Town was involved in the following Alive... and Loving Life projects: • The Los GatoslMonte Sereuo Police Department developed
guidelines for police response to calls for service involving youth parties. The guidetines were developed with input from parents, youth, and other community members. • An "All Together"
community event was held at Town Plaza Park in November. The event was an opportunity for community members and police officers to interact in a positive way, and featured a demonstration
of police canine units and a "mini-SWAT" exercise for kids. • Afreshman skills training for teens and their parents was held at Los Gatos High School. In an unusual twist, the teens
played the teaching role, with their parents as students. • An "Adopt-A-Cop" program was initiated with Fisher Middle School students (see the related article in this issue, above).
• High school and middle school based programs for diversity appreciation and relationship building between police and youth were established. A1ive...and Loving Life has strengthened
relationships within the community. The initiative has created an infrastructure, especially between the police department and community groups, that fosters open communication and collaboration.
It is already being recognized for its efforts on statewide and international levels.
Onthe On the Horizon .Of. on While this Annual Report primarily reports on the Town's accomplishments in 2003104, we wouid like also to preview the following key projects planned for
the current fiscal year: Downtown Streetscape Project At the community's request, the Town is taking a hiatus during 2004105 in the work being done to enhance the downtown streetscape.
However, extensive planning will be underway this year for the Santa Cruz Avenue repaving project scheduled for construction in the summer of 2005. The project will require closure of
Santa Cruz Avenue for a period of time yet to be determined, and the Town is working with nearby merchants, property owners, and residents to minimize the impact of the closure. To receive
downtown project updates electronically throughout the year, send arequest to streetscape@Iosgatosca.govor sign up for the What's New! email news service at www.losgatosca.gov/new/.
Wayfinding Project Another enhancement planned for the downtown during 2004105 is a"wayfinding" project. The goal of this project is to assist downtown visitors to find their way to
parking and municipal facilities, such as museums and the library. Currently, minimal and inconsistent signage pose a chalienge to visitors attempting to navigate their way in the downtown.
Parking, in particular, is dirricult to locate, although the Town has an abundance of parking lots throughout the downtown area. Look for new signage by the spring of next year. North
40 Specific Plan This year, the Town will begin preparing a Specific Plan for the North 40 area. This 44-acre area is bounded by Highways 17 and 85, Lark Avenue, and Los Gatos Boulevard,
and contains the largest undeveloped commercial area remaining in town. The Specific Plan will establish a long-term blueprint for how this area can be developed in the future. Areas
to be addressed include: land uses, circulation for pedestrians and vehicles, design standards for future developments, and infrastructure improvements. The Town previously worked on
aplan for the the North 40, in 1988 and in 1999. In 1999, the Town Council decided to put the North 40 plan on hold until the Townwide General Plan 2000 was adopted. The General Plan
2000 requires that a Specific Plan now be prepared and adopted for the North 40 area. Residential Design Guidelines The Town will update its Residential Design Guidelines later this
year. The update will provide assistance to property owners and architects as they design additions to existing homes and create plans for new residences. The update will also address
requirements for historic homes. The Guidelines will be used by the Planning Commission, the Historic Preservation Committee, and Town staff when evaluating applications for residential
development. Get the latest Town news as it becomes available -sign upior the What's New! Email DeliveryService. You can subscribe to receive an email when the "What's Newl" section
of the Town's website has been updated.To subscribe, go to the Town's website, www.losgalosca.gov,andclickon"Clickheretosubscribeto the What's New! Email Delivery Service," then follow
the directions. Fiscal Year 200312004 7
AFiscal Perspective for FY 2004105 After months of planning and preparing for unknown political and economic impacts from the state's financial crisis, the Town Council adopted the I'Y
2004105 Operating, Capital, and Redevelopment Agency hudgets in early June of this year. The Town takes great care in preparing its budgets each year as these documents estahlish basic
spending policies, operational workplans, and service levels for Los Gatos. Based on sound fiscal and hudgeting practices which incorporate a five-year financial forecast, the Town's
Operating Budget establishes funding levels for ongoing services and community programs during the fiscal year. The Capital Budget is a comprehensive five-year plan for the construction,
improvement, or rehahilitation of Town infrastructure. The Redevelopment Agency budget identifies and funds infrastructure projects and economic vitality programs in the downtown redevelopment
area. This year was especially challenging, as the state's ongoing funding shortfalls resulted in additional takeaways from local government. The Bay Area economic recovery also continues
to be very slow. As part of the state's budget deliberations, local governments agreed to a two-year takeaway plan to fund the state's budget gap. As part of this agreement, the governor
worked with the legislature to put a measure, Proposition lA, that protects local government revenues in future years, on the November ballot. Under the state's planned budget, Los Gatos
will absorb between $600,000 and $800,000 in takeaways from the Operating Budget in I'Y 2004105, and again in I'Y 2005J1J6. The Town's Redevelopment Agency budget will absorb another
$300,000 in planned takeaways in both this year and the next. These state takeaways in turn affect lhe levels of service and infrastructure improvements the Town is able to provide to
Los Gatos residents. You can read more about Proposition IA on the Town's website, www.lasgatosca.gov. While the Town Council places a heavy emphasis on mitigating impacts to public
services, some service level reductions will be felt by the community. or note are reduced street and park mainteuauce schedules, a reduction in the Towu's library hours from 62 to 54
hours per week, and potentially longer response times for non-emergency police calls.Aless noticeable but costly, long-term result of the budget shortfall is the Town's inability to
commit substantial financial resources toward infrastructure maintenance and improvements. Without ongoing dedicated financial resources, the Town's infrastructure will suffer lhe effects
of delayed maintenaoce. 8 Town ofLos Gatos Annual Report Fiscal Year 200312004 General Fund Sources The General Fund supports basic Town operations and expenses. General Fund sources
include various tax revenues, such as property tax, sales tax, hotel occupancy tax, and business license tax, as well as interest earnings, intergovernmental revenues, and fees charged
for development services, permits, and fines and forfeitures. As the chart to the right shows, Los Gatos is heavily dependent upon local economybased revenues, with the sales & use tax
as the Town's primary revenue source. This revenue has remained steady the last few years, rather than experiencing the high growih rates of the past. Regardless of the level of sales
tax revenue, it is important to note that the Town receives only I cent of the 8.25 cents of sales tax per dollar of sales generated in the Town. Excluding
the state's funding shifts, property tax receipts and vehicle license tax both continue to be steadily growing revenue sources for the Town and account for more than a quarter of the
General Fund revenues. However, for every $1 of property tax paid by property owners in the Town, only 9.5 cents returns to the Town to pay for local services. Interest and hotel occupancy
tax revenues are economically sensitive revenues which continue to perform poorly. General Fund Uses Most of the Town's services are supported by the General Fund, including police services,
street and signal maintenance, park maintenance, and the library, as well as building and development services which include planning, engineering, and inspection services. The chart
to the right shows planned expenditures by service area. The Town addressed a$1.5 million shortfall in revenues this year by trimming staffing by the equivalent of nearly 12 positions
(both filled and vacant), reducing operating expenditures, increasing fees to cover costs of development-related services, and funding shifts to align costs with appropriate funding
sources outside the General Fund. Future Outlook The Town has positioned Itself well for times of economic hardship through its diligent altention to sound fiscal practices. Operational
savings were planned and set aside for strategic use in challenging times. This fiscal planning effectively builds in asmoothing effect over time in an up-and-down economy, aliOlving
the Town's core services to remain intact. The five-year forecast indicates that the local economy is strengthening, but the Town still faces obstacles in its efforts to maintain abalanced
budget. The Town Council continues to place a high priority on improving the Town's economic vitality and protecting revenues. And, the administration continues to explore operational
efficiencies that contribute toward a better use of resources. * Non-Departmental includes·$930K debt service, $303K paid/eave and retiree medical benefits, $170Kanimal control services,
$100K legal setVices for cable television franchise renewal, and other costs not associated with any specific Town program or service.