09 Staff Report - Operating and Capital Budgets~pW R 0
t~s aatpg COUNCIL AGENDA REPORT
MEETING DATE: 05•-19-08
ITEM NO: 9
DATE: MAY 14, 2008
TO: MAYOR AND TOWN COUNCIL
PROM: GREG LARSON, TOWN MANAGER
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2008/2009
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMROVEMENT PROGRAM FOR FISCAL YEAR 2008-2013
RECOMMENDATION:
1. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND CAPITAL
BUDGET FOR FISCAL YEAR 2008/2009
2. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL IMROVEMENT
PROGRAM FOR FISCAL YEAR 2008-2013
BACKGROUND:
On May 9, 2008, the Town Council received a copy of the Proposed Operating and Capital Budget for
FY 2008109 for the Town of Los Gatos and the Redevelopment Agency. This budget incorporates the
Proposed FY 2008-2013 Capital Improvement Program (presented in more detail in a separate
document) and the Proposed FY 2008109 Redevelopment Agency budget. The Proposed Operating and
Capital Budget for FY 2008109 represents the Town Manager's recommended comprehensive financial
plan to provide services to the Town of Los Gatos.
DISC.IN IglON.
Overview of Proposed Operating and Capital Budgets
The transmittal letter in the FY 2008109 Proposed Operating Budget provides an executive summary of
the budget, including the major issues affecting the budget, the Five-Year Financial Plan, budget
assumptions, and highlights of the proposed budget.
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PREPARED BY: PAMELA S. JACOBS
ASSISTANT TOWN MANAGER
Reviewed by: Assistant Town Manager Town Attorney
Clerk Administrator < Finance -tommunity Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2008/2009
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMROVEMENT PROGRAM FOR FISCAL YEAR 2008-2013
MAY 14, 2008
A budget is a numerical representation of an organization's goals and priorities. As such, the proposed
budget for the Town of Los Gatos reflects several goals and priorities previously established by the
community and Town Council. The key highlights are as follows:
1. A status quo budget maintaining services and prudent reserves to the extent possible in a
worsening economy;
2. Progress on key public facilities:
a. Construction and completion of the Police Operations Building,
b. Design and funding for a new community Library;
3. Increased public services:
a. Increased streets and parks maintenance services, staffing and resources,
b. Increased support for youth through shared funding of a School Resource Police
Officer and stabilization funding for the teen center;
4. Initiation of the General Plan Update to establish new long term goals and priorities for
the Town of Los Gatos.
Any changes to the proposed operating and/or capital budget directed by Council and/or identified by
staff as a "clean-up" item will be included for Council consideration in the resolution adopting the
budget to be considered by Council on June 2, 2008.
Issues for Consideration
Following are several issues addressed in the proposed budget. They are highlighted here because they
may be of special interest to Council.
Community Grant_Program
The proposed budget provides funding for the FY 07108 funded agencies at status quo levels. In
response to increased funding requests from Live Oak Nutrition Program and A Place for Teens, the
Community Services Commission requested that staff work with these agencies to determine if
increased grants were warranted and possible. Staff met with representatives of both organizations.
A Place for Teens
The Proposed Budget includes a one-time allocation of $88,000 to support teen services at The Venue,
currently operated by A Place for Teens with support from the Recreation Department. This funding
would be allocated to and administered by the Recreation Department as an incentive for other matching
funds and to ensure continued strengthening of A Place for Teens. The funding agreement would last
3.5 years through the expiration of the current lease (January, 2012) and would prohibit solicitation of
the Town for further increased operating or capital support during that time.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2008/2009
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMROVEMENT PROGRAM FOR FISCAL YEAR 2008-2013
MAY 14, 2008
Live Oak Nutrition and Services Program
The agency requested new Town funding and support in a variety of areas, including program expansion
to Villa Vasona, direct operations, and shared services. However, given the Town's financial forecasts,
no increased funding and support from the Town is recommended at this time. Instead, the Town is
facilitating potential new support and services from other community organizations including West
Valley Community Services, the Recreation Department, and local service clubs.
In-kind Facility Contributions
The Town currently provides previously unrecognized in-kind facilities to three community
organizations as follows:
The Venue/A Place for Teens
3,260
sq ft
$ 78.239.00
The Recreation Department
6,479
sq ft
$121,439.00
Tait & Forbes Mill Museums
5,160
sq ft
$138.447.00
This initial valuation of these facilities is simply based on $2 per square foot less any direct rent paid by
the organization.
Music in the Park Funding
As discussed at the February 19, 2008 Town Council meeting, the Council approved relinquishing the
Arts Commission from coordination responsibility for the July 4"' concerts and referred the Arts
Commission request that the Town further underwrite the July 41h concert costs to the budget process.
The proposed budget includes an additional $5,000 to cover the costs of the concerts, but does not
include an additional $4,000 to cover costs for operational expenses as requested by the Commission.
The Arts Commission has once again met all of its sponsorship targets (including for the Wind
Symphony), in addition to continuing to have reserve funds, so it should be able to cover the operational
expenses for these concerts.
Reallocation of Skatepark Project Funding
Due to the expiration of the Conditional Use Permit for the skatepark project located at the Miles Ave.
parking lot, the skatepark project has been withdrawn from the Capital Improvement Program. The
proposed operating and capital budgets recommend reallocating $88,000 of Town funding for this
project to the A Place for Teens as discussed above and the $100,000 of Monte Sereno's State Park
Bond fiords (which have been transferred to the Town) to the ultra-violet filtration system for the Town
PAGE 4
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2008/2009
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMROVEMENT PROGRAM FOR FISCAL YEAR 2008-2013
MAY 14, 2008
Plaza fountain. If Council approves this allocation, staff will request concurrence from Monte Sereno
regarding this reallocation.
Town Donation List
Pursuant to the adopted Solicitation and Donation Policy, the Administration has developed a list of
Town needs recommended for donation opportunities (Attachment 1). Upon Council approval, this list
will be included in the adopted operating budget.
State Budget Impacts
The effects of the State budget deliberations on the Town are not known with certainty at this time.
Because State impacts could not be accurately determined during budget preparation, no material
changes to either Town revenues or expenditures resulting from State action were made in the proposed
FY 2008/09 budget. The Governor's May Revised Budget was released on May 14a' and the
preliminary information indicates some reductions to revenues for local governments and the potential
for increased booking fee costs paid by the Town. Specifically, the May Revised Budget proposes a
10% reduction to the Town's Community Oriented Policing (COPS) grant funds (a $20K reduction in
FY 2008/09 for the Town). The Legislative Analyst Office and the California legislature have also
proposed alternatives with higher levels of local revenue reductions that involve the loss of Vehicle
License Fees and/or the loss of COPS grant funding in its entirety.
Staff expects that budget deliberations may extend well into the summer or early fall. If the State budget
includes reductions to Town revenues or increases to Town expenditures, these changes will be
incorporated into the FY 2008/09 adopted budget. Staff recommends funding any negative fiscal
impacts from the State budget using Revenue Stabilization reserves. This action will provide temporary
bridge funding for services until the FY 2009/10 budget year when services can be aligned with ongoing
operating revenues.
The Town continues to work closely with the League of California Cities and the California Police
Chiefs Association to limit additional potential State revenue takes and to work on other important
issues like pension reform, temporarily deferred by the Governor, but still an issue that may arise in the
future.
Budget Presentation
At the May 19, 2008 Town Council meeting, the Council will consider the proposed budget. The review
and discussion of the proposed Operating budget and Capital Improvement Program will occur
concurrently following the format outlined below:
PAGE 5
MAYOR AND TOWN COUNCIL
SUBJECT: OPERATING AND CAPITAL BUDGETS
A. CONSIDER THE TOWN OF LOS GATOS PROPOSED OPERATING AND
CAPITAL BUDGET FOR FISCAL YEAR 2008/2009
B. CONSIDER THE TOWN OF LOS GATOS PROPOSED CAPITAL
IMROVEMENT PROGRAM FOR FISCAL YEAR 2008-2013
MAY 14, 2008
• Opening Comments Town Manager
• Operating and Capital Budget Overview Finance Director
• Department Issue Highlights Department Directors
• Q&A Town Council
• Public Comment
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The fiscal impact is presented in summary form in the Financial Summaries chapter of the Proposed
Operating and Capital Budget for FY 2009109.
Attachments:
1. Town of Los Gatos Donation Opportunities FY2008/09 List of Town Needs
Also attached:
Proposed Operating and Capital Budget for FY 2008109 (Previously distributed to Council)
Proposed Capital Improvement Program for FY 2008-2013 (Previously distributed to Council)
TOWN OF LOS GATOS DONATION OPPORTUNITIES
FY 2008109 LIST OF TOWN NEEDS
To ensure that all donations and contributions are sought and accepted in an
ethical manner, the Council established a Donation and Solicitation Policy. A list
of Town needs was developed to identify goods, services, and other
contributions to enhance Town services, programs, and events. The
recommended needs for FY 2008109 are:
PUBLIC SAFETY
■ Volunteer Program Materials and Equipment
■ Specialized Public Safety Equipment and Supplies, including Support for
Canine Program
■ Training Support for Public Safety Staff and Volunteers
■ Equipment for New Police Operations Headquarters
■ Community Outreach Program Supplies
LIBRARY SERVICES
Children, Youth, and Adult Program Materials, Supplies and Services
Library Book and AudioNisual Collections
■ Funding to Support Technological Enhancements
Equipment and Services to Support Historical Preservation Efforts
SENIOR SERVICES
■ Senior Program Supplies, Materials, and Services
• Cell Phone and other Telecommunications Equipment
COMMUNITY EVENTS
Supplies, Materials, and Services for Special Community and Volunteer
Events and Activities
TOWN PARKS AND FACILITIES
■ Beautification Materials and Services for Town Parks, Open Space, and
Infrastructure
ATTACHMENT 1