Council Reports for 10-19-09 Part 2~owN 0 MEETING DATE: 10/19/09
_ ITEM NO:
°s"ca os COUNCIL AGENDA REPORT
DATE: September 30, 2009
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER -
SUBJECT: ESTABLISHMENT OF COMMERCIAL ALARM PERMIT FEE
A. INTRODUCTION OF AN ORDINANCE REVISING TOWN CODE
SECTION 14.50.010 REGARDING POLICE ALARMS AND
INTRODUCTION OF COMMERCIAL ALARM PERMIT FEES
B. ADOPT RESOLUTION AUTHORIZING THE TOWN MANAGER TO
NEGOTIATE AND EXECUTE AN AGREEMENT WITH PMAM
CORPORATION FOR PROFESSIONAL ALARM MANAGEMENT
CONSULTANT SERVICES
RECOMMENDATION:
1. Open and hold the public hearing.
2. Close the public hearing.
3. Direct the Cleric Administrator to read the title of the ordinance (no motion required).
4. Move to waive the reading of the ordinance (motion required).
5. Introduce the ordinance to effectuate the Zoning Code amendment (motion required).
6. Direct the Clerk Administrator to publish the ordinance within 15 days after adoption
(no motion required).
7. Adopt resolution authorizing the Town Manager to negotiate and execute an agreement with
PMAM Corporation for professional alarm management consultant services.
BACKGROUND:
The ordinance regulating police alarms was written in 1968 and revised most recently in 2001.
The Town Council approved a resolution on April 6, 2009 establishing fees for FY09-10, which
included a second false alarm fee of $50 and a commercial alarm permit fee of $50.
PREPARED BY: Scott R. Seaman, Chief of Police C~ ~t
U:ALARMconnilreport10,19.09v.2.doc
Reviewed by: Assistant Town Manager
Clerk Administrator Finance -
Town Attorney
nmunity Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: AMENDMENT TO POLICE ALARM ORDINANCE
DISCUSSION:
The Town of Los Gatos police alarm ordinance section 14.50.010 addresses police alarm fees for
false alarms, payment, appeals and no response status. The Town Council action on April 6,
2009 established a charge of $50 for each second false alarm, $110 for a third and so on to the
sixth and subsequent alarm service charge which increases by $300 per activation. Prior to this
action, there was no charge for a second false alarm at a residence or business.
One of the strategies used by other jurisdictions to minimize the impact of false alarms, increase
the amount of cost recovery associated to the responding of false alarms and ensure the
department has accurate contact information for alarm customers is to implement an alarm
permit registration process. Based on a survey of California cities through the California Police
Chief's Association (CPCA), it was determined that approximately forty-one cities throughout
California have alarm registration programs. Four jurisdictions in Santa Clara County have such
a program (Morgan Hill, Santa Clara, Mountain View and Los Altos). The common theme for
registration is that most jurisdictions require a registration for both commercial and residential
alarms, the fees range from $54100 and the majority of cities require an annual renewal with a
fine for non-compliance. The revised ordinance will not change how officers respond to alarms.
The ordinance has been revised to reflect Town Council's direction to implement permits for
only a commercial business alarm permit fee and to reduce the number of false alarms requiring
a charge from three to two for residential and commercial properties. It is well established that
the overwhelming majority (approximately 94%) of residential and commercial alarms are false,
requiring a diversion of resources to these locations, sometimes requiring response to these
alarms on average 10 times during a 24 hour shift.
Additionally, several cities in California (Rocklin, Lincoln, Newark, Woodland and Santa Maria)
have entered into an agreement with PMAM Corporation, an alarm management consulting firm
out of Irving, Texas to manage all aspects of the alarm permit and false alarm process, including:
O a web based solution for business owners to obtain their permit, pay
renewals, fines and access their account;
O identify and maximize the number of businesses with alarms;
O electronically upload calls for service regarding false alarms from the
Police Department Record Management System;
O provide training and education to citizens and business owners in Town
concerning alarm operations;
O the ability for the Police Department or PMAM to run monthly or
specialized reports;
O provide annual audits; and
13 collect all fees
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: AMENDMENT TO POLICE ALARM ORDINANCE
PMAM will collect 35% of the revenue generated by the new commercial alarm permit fee and
false alarm fees. All of the cities in California were contacted and expressed positive feedback
regarding the consultant in addition to higher revenue being generated. Staff has reviewed
PMAM's product/services and recommends use of this service instead of utilizing existing staff
to perform these functions.
CONCLUSION:
In order to reduce the number of false alarm responses, recover costs and increase accurate
contact information, staff is recommending the Town Council approve the revised ordinance and
authorize the Town Manager to enter into an agreement with PMAM Corporation for alarm
management.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA and no further action is required.
FISCAL IMPACT:
Based on approximately 300 commercial businesses in Town in which the Police Department
has received an alarm in the last year, the revenue was estimated at $10,000 for FY 09-10. The
low estimate was due to the unknown time frame of implementation of this program and
potential difficulty initially in compliance. It is anticipated that there will be more commercial
business locations identified by PMAM and revenue could increase significantly. Revenue for
the second alarm fee could rise slightly but was not included in the revenue estimate for
FY 09-10.
Attachments:
1. Ordinance
2. Agreement with PMAM Corporation
3. Resolution
ORDINANCE
ORDINANCE OF THE TOWN OF LOS GATOS
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES ORDAIN AS
FOLLOWS:
SECTION I
Sections 12.50,010 through and including 14,050,240 of Article V of Chapter 14 of the
Los Gatos Town Code are hereby repealed in their entirety and replaced with the following:
Sec. 14.50.010. Findings and purpose,
The Town Council hereby finds as follows:
(1) The public is malting increasing use of police alarms, and the Police
are therefore being called to respond to such alarms with increasing
frequency.
(2) More than ninety (90) percent of the alarms received and responded
to turn out to be false.
(3) False alarms not only impose a financial burden on the Town, but also, by
demanding fast Police response, cause substantial risk both to Police personnel
and the public.
(4) It is therefore necessary to regulate the use of police alarm systems in the
Town and to establish service charges to be assessed in the event of repeated false
alarms.
Sec. 14.50.015. Definitions.
The following words, terms and phrases, when used in this article, shall have the
meanings ascribed to them in this section, except where the context clearly indicates a different
meaning:
Alarm Permit. Documentation that a commercial establishment has filed the appropriate
form and paid applicable fees to the Town of Los Gatos to operate an alarm system at a specified
location. Alarm permits are non-transferable.
Calendar Year. January 1 through December 31 of the current year.
False alarm. Activation of a police alarm system, to which personnel of the Police
Department respond, in circumstances where no Police emergency exists; provided, that such
activation shall not be deemed a false alarm if the owner thereof establishes, by a preponderance
of evidence, that the alarm was activated by matters entirely beyond the owner's control,
including but not limited to acts of God or utility failures.
Notice. A written notice, given by personal service, or by the United States mail, postage
prepaid, addressed to the person to be notified at the person's last known address. Service of such
notice shall be effective upon the completion of personal service, or upon the placing of the
notice into the custody of the United States Postal Service.
ATTACHMENT 1
Owner. The person who owns or controls a police alarm system, including but not
limited to a lessee, tenant, or other agent of the legal owner of the premises wherein the alarm
system is installed, provided that such agent had actual control of and responsibility for the
operation of the premises at the time of any false alarm.
Police alarm system. Any mechanical or electrical device which is designated or used for
the detection or warning of unauthorized entry into a building, structure, or facility, or for
alerting others of the commission of an unlawful act within a building, structure, or facility, or
both, and which emits a sound or transmits a signal or message when activated. Police alarm
systems include but are not limited to direct-dial telephone devices, audible alarms, and
proprietor alarms. Devices which are not designated or used to register alarms perceptible from
outside of the protected building, structure, or facility are excluded from this definition, as are
auxiliary devices installed to protect the telephone system from damage or disruption by the use
of an alarm system.
Police emergency. The unauthorized violent breaking, and/or entering, damaging or
burglary of a building, structure, vehicle, or other facility, or the commission of a violent act
likely to produce immediate bodily harm, or an attempt or serious threat of any of the acts
described herein.
Premises. Those buildings, structures, vehicles or other facilities protected by a police
alarm system and shall not include smaller or discrete subdivisions within such buildings,
structures or facilities.
DIVISION 2. OUTSIDE ALARMS
Sec. 14.50.080. Requirements.
(a) Notices required to be posted. Every person maintaining an outside audible alarm
shall post a notice containing the names and telephone numbers of the persons to be notified in
order to render repairs and service or secure the premises during any hour of the day or night if
the alarm is activated. Such notice shall be posted near the alarm in such a position as to be
legible from the ground level adjacent to the building where the alarm is located. The wording
"Police Alarm--Call Los Gatos/Monte Sereno Police Department" shall be placed in a visible
location next to the alarm device
(b) Siren sounds prohibited. It shall be unlawful for any person to install or use a police
alarm system which upon activation emits a sound similar to sirens in use on public emergency
vehicles or for public disaster warning purposes.
(c) Timing devices. All local exterior bells, gongs, noise-making devices or pulsating
lights shall have a timing device that will silence or turn off such devices or lights within ten (10)
minutes following initial activation.
Sec. 14.50.085. Investigation.
One (1) of the law enforcement officers responding to each alarm shall attempt to
ascertain by investigation whether such alarm was a false alarm. If the investigation indicates to
the investigating officer that the alarm was a false alarm, the officer shall forward a report of this
investigation to the Chief of Police or designee setting forth the findings.
Sec. 14.50.090. Notice to owner and review.
(a) Upon receipt of the report of a false alarm, the Chief of Police or designee shall
review the report and may overrule, affirm, or modify the findings of the officer as can be
determined from the facts and this article. If the Chief or designee determines that a false alarm
occurred as defined by this article, the Chief will cause a written notice to be served upon the
owner of the alarm system. The notice will state the following:
(1) A false alarm was apparently made from the described property and the
circumstance involved in the false alarm; and
(2) The suggested steps that should be taken to prevent future false alarms; and
(3) A warning that if two (2) or more false alarms occur on the premises within a six-
month period within a calendar year, an escalating service charge may be assessed by the Town
against the owner; and
(4) A statement that the owner may file a written response to the notice with the Chief
within thirty (30) days of the date of the notice for the Chief or designee to consider in mitigation
of the determination that a false alarm occurred, and a warning that the filing of a response is a
necessary prerequisite to any current or future contention that the alarm was not false in either a
judicial or administrative proceeding; and
(5) If the false alarm will subject the owner to an assessment pursuant to section
14.50.225, a statement of the charge to be assessed and the basis for the charge.
(b) The owner may respond in writing to the notice from the Chief within thirty (30) days of the
notice. If such a response is filed, the Chief or designee will review the response and may
conduct additional investigation as appropriate to determine whether a false alarm as defined in
this article occurred. The determination of the Chief or designee following such a review shall be
final, unless the determination of a false alarm would subject the owner to a false alarm
assessment under section 14.50.225 because it would be the third or more false alarm within a
six-month period within a calendar year, in which case, the appeal rights under 14.50.105 apply.
If no response, or appeal if applicable, is timely filed, the original determination shall be final.
Sec. 14.50.095. Notice of right to appeal.
In any case where the false alarm will subject the owner to an assessment pursuant to
section 14.50.225, the written decision of the Chief of Police will state that the owner may
appeal the decision to the Town Manager by filing a notice of appeal with the Town Manager
pursuant to section 14.50.100, and a warning that the filing of an appeal is a necessary
prerequisite to any current or future contention that the alarm was not false in either a judicial or
administrative proceeding.
Sec. 14.50.100. Appeals.
Any person who has filed a response to the Chief of Police and has received an adverse
decision regarding a second or more false alarm within a six-month period within a calendar year
or a notice of a "no response status" pursuant to section 14.50.110 may appeal by filing a written
notice of appeal with the Town Manager within fifteen (15) days after service of the notice of
Chiefs decision. The written notice of appeal shall specify the grounds for the appeal, and the
stated grounds shall constitute the scope of review for the appeal. Filing of a notice of appeal
shall stay an assessment until the appeal has been heard by the Town Manager, The appeal shall
be set for hearing within thirty (30) days from the filing of the notice of appeal,
The Town Manager may overrule, affirm, or modify the decision of the Chief of Police
regarding the false alarm or assessment amount, and the decision of the Town Manager shall be
final and conclusive.
Sec. 14.50.105. Payment.
Within thirty (30) days of the service of the notice of assessment described in section
14.50.095, the owner of the subject alarm shall remit to the Tax and License Collector the full
amount of the service charge.
Sec. 14.50.110. No response status.
After the police department has recorded more than five (5) false alarms within the
calendar year, and after the responsible party of the location has been notified by first class mail
that false alarms have occurred, the Chief of Police may authorize that the site be placed on a "no
response status." The effective date of any no response status shall be twenty (20) days from the
date of the notification, subject to an appeal filed pursuant to section 14.50.100, Once
established, a no response status shall remain in effect until the Chief of Police is satisfied that
adequate measures have been taken to eliminate the occurrence of false alarms, in which event
the no response status shall be provisionally stayed for a maximum period of twelve (12) months.
The occurrence of any additional false alarms during that provisional stay shall result in an
immediate and non appealable reinstatement of the no response status. When completed, without
additional false alarms, the provisional stay shall terminate. A responsible party whose alarm
system has been placed on no response status may appeal that decision as prescribed in section
14.50.100.
DIVISION 3. AUTOMATIC CALLS
Sec. 14.50.160. Prohibited without prior written consent.
(a) No person, except a public utility engaged in the business of providing
communications services and facilities shall use or operate, attempt to use or operate, or cause to
be used or operated, or arrange, adjust, program or otherwise provide or install any device or
combination of devices that will, upon activation either mechanically, electronically or by other
automatic means, initiate an intrastate call and deliver a recorded message to any telephone
number without the prior written consent of such subscriber.
(b) The term telephone number includes any additional numbers assigned by a public
utility company engaged in the business of providing communications services and facilities to
be used by means of a rotary or other system to connect with the subscriber to such primary
number when the primary telephone number is in use,
Sec. 14.50.165. Registration.
Owners of police alarm systems which operate in the manner described in section
14.50.160 shall register them with the Chief of Police or designee and shall provide the
following information:
(1) Name of alarm system owner.
(2) Business name, if any.
(3) Address where alarm system is located.
(4) Billing address.
(5) Alternate responsible parties
(6) Such other pertinent information as is required by the Chief of Police.
DIVISION 4. FALSE ALARMS
Sec. 14.50.225. Service charge.
There is hereby imposed a service charge upon every owner who reports, causes to be, or
permits to be reported two (2) or more false alarms within a six-month period within a calendar
year. Such service charge shall be set by the Town Council by resolution. A separate charge shall
be imposed for each false alarm beyond two (2) within a six-month period within a calendar year
Sec. 14.50.230. Exemptions.
For thirty (30) days after completion of an installation, new installations shall be exempt
from this division.
Sec. 14.50.235. Collection.
If any person fails to pay the charges assessed pursuant to the provisions of this article,
the Town may institute an action in any court of competent jurisdiction to collect any charges
which may be due and payable in the same manner as any other debts owing to the Town and
placed on a "no response status" until all past due debts are received.
DIVISION 5. ALARM PERMIT REQUIREMENT
Sec. 14.050.240 - Alarm Permit Process
(a) Permits. No commercial building owner or operator shall operate or cause to be
operated any alarm system within the Town of Los Gatos without a permit. Alarm system
permits are not transferable.
(b) Exemptions. The provisions of this chapter are not applicable to residential alarms,
motor vehicles or facilities of the Town of Los Gatos.
(c) Obtaining alarm system permits and renewal. Application for an alarm system permit
and renewal required under this chapter shall be made by the Chief of Police on forms provided
by the Police Department, along with the payment of an alarm system permit fee. Permit fees are
collected at the time of application and will not be pro-rated. The alarm system permit must be
renewed annually by the last business day in December for the next calendar year.
Such permit and renewal fees shall be established by Council Resolution.
(d) Contents of the form. The completed form for an alarm system permit or renewal
form shall state the name, address and telephone number of the applicant, the address and
telephone number of the applicant's property serviced by any alarm system, as well as the name
and address of at least three responsible parties who can render service to the alarm system at
any hour of the day or night and such other information as the Chief of Police may deem
appropriate.
(e) Permit display at alarm site. Alarm system permits issued pursuant to this chapter
shall be kept at the alarm site. No person shall use an alarm system in the Town of Los Gatos
without posting the alarm system permit in a visible location or be able to be produced to any
Town official upon request.
(f) Penalty. If the Police Department responds to an alarm at any business operating in the
Town of Los Gatos without a permit pursuant to Section 14.050.240 (a) such business shall be
charged double the annual permit fee. This fee is payable within 30 days to the Town of Los
Gatos. If the alarm additionally was determined to be false, the business shall also incur one false
alarm violation pursuant to Section 14.050.225.
(g) Any alarm business registered with the Police Department shall immediately report in
writing to the Police Chief any change in the address or ownership of the business, name of the
business, address of the manager of operations or responsible party list.
SECTION II
In the event that any part of this ordinance is held to be invalid, the invalid part or pants
shall be severed from the remaining portions which shall remain in full force and effect.
SECTION III
This ordinance was introduced at a regular meeting of the Town Council of the Town of
Los Gatos on , 20^ and adopted by the following vote as an ordinance of the
Town of Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on
, 20 This ordinance takes effect 30 days after it is adopted.
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA Rev. 6/2/04
Professional Services Agreement for
Alarm Management
TOWN OF LOS GATOS
PROFESSIONAL SERVICES AGREEMENT
FOR ALARM MANAGEMENT
This Agreement is entered into this day of , 20_, by and between the
Town of Los Gatos, a California municipal town ("Town"), and PMAM Corporation, 105
Decker Court #675, Irving, Texas 75062 ("Consultant")
RECITALS
A. Consultant desires to perform and assume responsibility for the provision of
professional alarm management consultant services required by the Town on the terms and
conditions set forth in this Agreement.
B. Consultant has presented a proposal for such services to the Town, dated August
13, 2009, (attached hereto and incorporated `herein as Exhibit "D") and is duly licensed, qualified
and experienced to perform those services.
C. Consultant agrees it has satisfied itself by its own investigation and research
regarding the conditions affecting the work to be done and labor and materials needed, and that
its decision to execute this Agreement is based on such independent investigation and research.
D. Town desires to engage Consultant to render such services as set forth in this
Agreement.
AGREEMENT
I. SCOPE OF SERVICES.
1.1 General Scope of Services. Consultant promises and agrees to furnish to the
Town all labor, materials, tools, equipment, services and incidental and customary work
necessary to fully and adequately supply the necessary professional alarm management
consultant services ("Services"). The Services are more particularly described in Exhibit "A."
2. SCHEDULE OF SERVICES.
2.1 Schedule of Services. The Services of Consultant are to commence upon
execution of this Agreement by the Town and shall be undertaken and completed in a prompt
and timely manner, pursuant to the schedule outlined in the Scope of Work, more particularly
Town of Los Gatos
Alarm Management
Date Printed: September 21, 2009
WPD-PMAM Contract.doc
ATTACHMENT 2
Professional Services Agreement for
Alarm Management
described in Exhibit "A." With regards to the responsibilities of the Town in order for
Consultant to begin this Project, such responsibilities are specified in Exhibit "C".
2.2 Extension of Time. Consultant may, for good cause, request extensions of time to
perform the Services required hereunder. Such extensions shall be authorized in advance by the
Town in writing and shall be incorporated in written amendments to this Agreement.
3. FEES AND PAYMENTS.
3.1 Compensation. Consultant shall receive compensation, including authorized
reimbursements, for all Services rendered under this Agreement at the rates set forth in
Exhibit "B." The total compensation shall not exceed 35% of all fees collected as specified in
Exhibit "B" without Town's prior written approval. Extra Work may be authorized, as described
below, and if authorized, will be compensated at the rates and manner set forth in this
Agreement.
3.2 Payment of Compensation. Consultant shall submit to Town a monthly itemized
statement which indicates work completed and an itemized list of Services rendered by
Consultant. The statement shall describe the amount of Services and supplies provided since the
initial commencement date, or since the start of the subsequent billing periods, as appropriate,
through the date of the statement. Payment will be processed as described in Exhibit B.
3.3 Extra Work. At any time during the term of this Agreement, Town may request
that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is
determined by Town to be necessary for the proper completion of the Project, but which the
parties did not reasonably anticipate would be necessary at the execution of this Agreement.
Consultant shall not perform, nor be compensated for, Extra Work without written authorization
from Town's Representative.
4. CHANGES.
4.1 The Parties may, from time to time, request changes in the scope of the Services
of Consultant to be performed hereunder. Such changes, including any increase or decrease in
the amount of Consultant's compensation and/or changes in the schedule must be authorized in
advance by the Town in writing. Mutually agreed changes shall be incorporated in written
amendments to the Agreement.
5. RESPONSIBILITIES OF CONSULTANT.
5.1 Independent Contractor; Control and Payment of Subordinates. Consultant enters
into this Agreement as an independent contractor and not as an employee of the Town.
Consultant shall have no power or authority by this Agreement to bind the Town in any respect.
Nothing in this Agreement shall be construed to be inconsistent with this relationship or status.
All employees, agents, contractors or subcontractors hired or retained by the Consultant are
Town of Los Gatos 2 Date Printed: September 21, 2009
Alarm Management Town of Los Gatos-PMAM Contract.doc
Professional Services Agreement for
Alarm Management
employees, agents, contractors or subcontractors of the Consultant and not of the Town. The
Town shall not be obligated in any way to pay any wage claims or other claims made against
Consultant by any such employees, agents, contractors or subcontractors, or any other person
resulting from performance of this Agreement.
5.2 Conformance to Applicable Requirements. All work prepared by Consultant shall
be subject to the approval of the Town.
5.3 Project Manager. The Consultant shall designate a project manager who at all
times shall represent the Consultant before the Town on all matters relating to this Agreement.
The project manager shall continue in such capacity for the Town unless and until he or she is
removed at the request of the Town, is no longer employed by Consultant or replaced with the
written approval of the Town which shall not be unreasonably withheld.
5.4 Coordination of Services. Consultant agrees to work closely with Town staff in
the performance of Services and shall be available to Town staff, consultants and other staff at
all reasonable times. The Town agrees to work closely with Consultant's staff in the
performance of Services and shall be available to Consultant's staff at all reasonable times.
5.5 Warranty. Consultant agrees and represents that it is qualified to properly provide
the Services set forth in Exhibit "A" in a manner which is consistent with the generally accepted
standards of Consultant's profession. Consultant further represents and agrees that it will
perform said Services in a legally adequate manner in conformance with applicable federal, state
and local laws and guidelines.
5.6 Interest in Contract. Consultant covenants that neither it, nor any of its
employees, agents, contractors, sub-contractors has any interest, nor shall they acquire any
interest, direct or indirect, in the subject of the Contract, nor any other interest which would
conflict in any manner or degree with the performance of its services hereunder.
Consultant shall make all disclosures required by the Town's conflict of interest code in
accordance with the category designated by the Town, unless the Town Manager determines in
writing that Consultant's duties are more limited in scope than is warranted by the category
designated by the Town code and that a narrower disclosure category should apply. Consultant
also agrees to make disclosure in compliance with the Town conflict of interest code if, at any
time after the execution of this agreement, the Town determines and notifies Consultant in
writing that Consultant's duties under this agreement warrant greater disclosure by Consultant
than was originally contemplated. Consultant shall make disclosures in the time, place and
manner set forth in the conflict of interest code and as directed by the Town.
6. INSURANCE.
6.1 Time for Compliance. Consultant shall not commence Services under this
Agreement until it has provided evidence satisfactory to the Town that it has secured all
Town of Los Gatos 3 Date Printed: September 21, 2009
Alarm Management Town of Los Gatos-PMAM Contract.doc
Professional Services Agreement for
Alarm Management
insurance required under this section. In addition, Consultant shall not allow any sub-consultant
to commence work on any subcontract until it has provided evidence satisfactory to the Town
that the sub-consultant has secured all insurance required under this section.
6.2 Types of Required Coverages. As a condition precedent to the effectiveness of
this Agreement for work to be performed hereunder and without limiting the indemnity
provisions of the Agreement, the Consultant in partial performance of its obligations under such
Agreement, shall procure and maintain in full force and effect during the term of the Agreement,
the following policies of insurance.
6.2.1 Commercial General Liabilitv: Commercial General Liability Insurance
which affords coverage at least as broad as Insurance Services Office "occurrence" form CG
0001, with minimum limits of at least $1,000,000 per occurrence. Defense costs shall be
paid in addition to the limits.
The policy shall contain no endorsements or provisions limiting coverage for
(1) products and completed operations; (2) contractual liability; (3) third party action over
claims; or (4) cross liability exclusion for claims or suits by one insured against another.
6.2.2 Automobile Liabilitv: Automobile Liability Insurance with coverage at
least as broad as Insurance Services Office Forin CA 0001 covering "Any Auto" (Symbol 1)
with minimum limits of $1,000,000 each accident.
6.2.3 Workers' Compensation: Workers' Compensation Insurance, as required
by the State of California and Employer's Liability Insurance with a limit of not less than
$1,000,000 per accident for bodily injury and disease.
6.2.4 Professional Liabilitv: Professional Liability insurance for errors and
omissions with minimum limits of $1,000,000. Covered Professional Services shall
specifically include all work to be performed under the Agreement.
If coverage is written on a claims-made basis, the retroactive date shall
precede the effective date of the initial Agreement and continuous coverage will be
maintained or an extended reporting period will be exercised for a period of at least three (3)
years from termination or expiration of this Agreement.
6.3 Endorsements.
6.3.1 The policy or policies of insurance required by Sections 6.2.1 Commercial
General Liability and 6.2.2 Automobile Liability shall be endorsed to provide the following:
6.3.1.1 Additional Insured: The indemnified parties shall be additional
insureds with regard to liability and defense of suits or claims arising out of the
performance of the Agreement. Additional Insured Endorsements shall not (1) be
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Alarm Management Town of Los Gatos-PMAM Contract.doc
Professional Services Agreement for
Alarm Management
restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict
coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to
the Agreement.
6.3.1.2 Primary Insurance and Non-Contributing Insurance: This
insurance shall be primary and any other insurance, deductible, or self-insurance
maintained by the indemnified parties shall not contribute with this primary insurance.
6.3.1.3 Severability: In the event of one insured, whether named or
additional, incurs liability to any other of the insureds, whether named or additional, the
policy shall cover the insured against whom claim is or may be made in the same manner
as if separate policies had been issued to each insured, except that the limits of insurance
shall not be increased thereby.
6.3.1.4 Cancellation: The policy shall not be canceled or the coverage
suspended, voided, reduced or allowed to expire until a thirty (30) day prior written
notice of cancellation has been served upon the Town except ten (10) days prior written
notice shall be allowed for non-payment of premium.
6.3.1.5 Duties: Any failure by the named insured to comply with
reporting provisions of the policy or breaches or violations of warranties shall not affect
coverage provided to the indemnified parties.
6.3.1.6 Applicability: That the coverage provided therein shall apply to
the obligations assumed by the Consultant under the indemnity provisions of the
Agreement, unless the policy or policies contain a blanket form of contractual liability
coverage.
6.3.1.7 The policy or policies of insurance required by Section 6.2.3
Workers' Compensation shall be endorsed, as follows:
6.3.1.1 Waiver of Subrogation: A waiver of subrogation stating that the
insurer waives all rights of subrogation against the indemnified parties.
6.3.1.2 Cancellation: The policy shall not be canceled or the coverage
suspended, voided, reduced or allowed to expire until a thirty (30) day prior written
notice of cancellation has been served upon the Town except ten (10) days prior written
notice shall be allowed for non-payment of premium.
6.3.1.3 The policy or policies of insurance required by Section 6.2.4
Professional Liability shall be endorsed, as follows:
6.3.1.1 Cancellation: The policy shall not be canceled or the coverage
suspended, voided, reduced or allowed to expire until a thirty (30) day prior written
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notice of cancellation has been served upon the Town except ten (10) days prior written
notice shall be allowed for non-payment of premium.
6.4 Deductible. Any deductible or self-insured retention must be approved in writing
by the Town and shall protect the indemnified parties in the same manner and to the same extent
as they would have been protected had the policy or policies not contained a deductible or self-
insured retention.
6.5 Evidence of Insurance. The Consultant, concurrently with the execution of the
Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified
copies of the required policies, or original certificates and endorsements on forms approved by
the Town. The certificates and endorsements for each insurance policy shall be signed by a
person authorized by that insurer to bind coverage on its behalf. At least fifteen (15) days prior
to the expiration of any such policy, evidence of insurance showing that such insurance coverage
has been renewed or extended shall be filed with the Town. If such coverage is cancelled or
reduced, Consultant shall, within ten (10) days after receipt of written notice of such cancellation
or reduction of coverage, file with the Town evidence of insurance showing that the required
insurance has been reinstated or has been provided through another insurance company or
companies.
6.6 Failure to Maintain Coverage. Consultant agrees to suspend and cease all
operations hereunder during such period of time if the required insurance coverage is not in
effect and evidence of insurance has not been furnished to the Town. The Town shall have the
right to withhold any payment due Consultant until Consultant has fully complied with the
insurance provisions of this Agreement.
In the event that the Consultant's operations are suspended for failure to maintain
required insurance coverage, the Consultant shall not be entitled to an extension of time for
completion of the Work because of production lost during suspension.
6.7 Acceptability of Insurers. Each such policy shall be from a company or
companies with a current A.M. Best's rating of no less than A:VII and authorized to do business
in the State of California, or otherwise allowed to place insurance through surplus line brokers
under applicable provisions of the California Insurance Code or any federal law.
6.8 Insurance for Subconsultants. All sub-consultants shall be included as additional
insureds under the Consultant's policies, or the Consultant shall be responsible for causing sub-
consultants to purchase the appropriate insurance in compliance with the terms of this
Agreement, including adding the Town as an Additional Insured to the sub-consultant's policies.
7. OWNERSHIP OF MATERIALS AND CONFIDENTIALITY.
7.1 Documents & Data• Licensing of Intellectual Property. This Agreement creates a
non-exclusive and perpetual license for Town to copy, use, modify, reuse or sublicense any and
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all copyrights, designs and other intellectual property embodied in plans, specifications, studies,
drawings, estimates and other documents or works of authorship fixed in any tangible medium of
expression, including but not limited to, physical drawings or data magnetically or otherwise
recorded on computer diskettes, which are prepared or caused to be prepared by Consultant
under this Agreement ("Documents & Data").
Consultant shall require all sub-consultants to agree in writing that Town is
granted a non-exclusive and perpetual license for any Documents & Data the sub-consultant
prepares under this Agreement. Consultant represents and warrants that Consultant has the legal
right to license any and all Documents & Data. Consultant makes no such representation and
warranty in regard to Documents & Data which were prepared by design professionals other than
Consultant or provided to Consultant by the Town.
Consultant shall provide electronic copies of the finished products in the original
software format at the conclusion of the respective phases of work. Complex documents such as
reports that utilize more than one type of software shall also be provided in a common format
such as Adobe Acrobat (*.pdf). Files of construction drawings shall be provided in a current
version of AutoCAD.
Town shall not be limited in any way in its use or modification of the Documents
and Data at any time, provided that any such use or modification not within the purposes
intended by this Agreement shall be at the Town's sole risk.
7.2 Confidentiality. All Documents & Data are confidential and Consultant agrees
that they shall not be made available to any individual or organization without the prior written
approval of the Town, except by court order.
8. ACCOUNTING RECORDS.
8.1 Maintenance and Inspection. Consultant shall maintain and make available for
inspection by the Town and its auditor's accurate records of all its costs, disbursements and
receipts with respect to any work under this Agreement. Such inspections may be made during
regular office hours at any time until one (1) year after the final payments under this Agreement
are made to the Consultant.
9. SUBCONTRACTING.
9.1 Prior Approval Required. Consultant shall not subcontract any portion of the
work required by this Agreement, except as expressly stated herein, without prior written
approval of the Town. Subcontracts, if any, shall contain a provision making them subject to all
provisions stipulated in this Agreement.
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10. TERMINATION OF AGREEMENT.
10.1 Grounds for Termination. The Town may, by written notice to Consultant,
terminate all or any part of this Agreement at any time and without cause by giving written
notice to Consultant of such termination, and specifying the effective date thereof, at least thirty
(30) days before the effective date of such termination. Upon termination, Consultant shall be
compensated only for those Services which have been adequately rendered to Town, and
Consultant shall be entitled to no further compensation. Consultant may not terminate this
Agreement except for cause.
10.2 Effect of Termination. If this Agreement is terminated as provided herein, the
Town may require Consultant to provide all finished or unfinished Documents and Data and
other information of any kind prepared by Consultant in connection with the performance of
Services under this Agreement. Consultant shall be required to provide such document and other
information within fifteen (15) days of the request. Specifically, in the event the Town shall
terminate this Agreement:
10.2.1 Consultant shall deliver copies of all writings prepared by it pursuant to
this Agreement. The term "writings" shall be construed to mean and include: handwriting,
typewriting, printing, photostating, photographing, and every other means of recording upon
any tangible thing any form of communication or representation, including letters, words,
pictures, sounds, or symbols, or combinations thereof.
10.2.2 All data relating to alarm permits shall be owned by the Town. Upon
termination of this agreement, PMAM shall deliver to the Town all data in MS-SQL format.
10.2.3 PMAM retains all right and title to the Application software, including
but not limited to, all publication rights, all development rights, all reproductions rights,
and all rights that may follow from the commercial development of the software. The Town
does not acquire any ownership rights to the Application software. The Software is
protected in favor of PMAM, as well as any future registered trademarks, are trademarks of
PMAM.
10.2.4 The proprietary software will be loaned to the Town during the duration of
this agreement as laid out in this contract and the Town will not have any access to our
proprietary software after the conclusion of the contract.
10.2.5 The Town shall pay Consultant the reasonable value of services rendered
by Consultant to the date of termination pursuant to this Agreement not to exceed the amount
documented by Consultant and approved by the Town as work accomplished to date;
provided, however, that in no event shall any payment hereunder exceed 35%0 of all revenues
collected as per EXHIBIT B. The foregoing is cumulative and does not affect any right or
remedy which Town may have in law or equity.
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10.2.6 Consultant may terminate its services under this Agreement upon thirty
(30) working days written notice to the Town, without liability for damages, if it is not
compensated according to the provisions of the Agreement or upon any other material breach
of the Agreement by Town.
10.3 Additional Services. In the event this Agreement is terminated in whole or in part
as provided herein, Town may procure, upon such terms and in such manner as it may determine
appropriate, services similar to those terminated.
11. GENERAL PROVISIONS.
11.1 Delivery of Notices. All notices permitted or required under this Agreement shall
be given to the respective parties at the following address, or at such other address as the
respective parties may provide in writing for this purpose:
Town:
Consultant:
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95031
Attn: Captain Alana Forrest, Police Department
[INSERT NAME, ADDRESS & CONTACT PERSON]
Such notice shall be deemed made when personally delivered or when mailed,
forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to
the party at its applicable address. Actual notice shall be deemed adequate notice on the date
actual notice occurred, regardless of the method of service.
11.2 Indemnification. To the fullest extent permitted by law, Consultant shall defend,
indemnify and hold the Town, its elected officials, officers, employees, agents and volunteers
free and hannless from any and all claims, demands, causes of action, costs, expenses, liability,
loss, damage or injury, in law or equity, to property or persons, including wrongful death, to the
extent arising out of or caused by the negligence, recklessness or willful misconduct of
Consultant, its officials, officers, employees, agents, subcontractors and sub-consultants,
including without limitation the payment of all consequential damages and attorneys' fees and
other related costs and expenses except such loss or damage which was caused by the active
negligence, sole negligence, or willful misconduct of the Town.
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Consultant shall pay and satisfy any judgment, award or decree that may be
rendered in any and all such aforesaid suits, actions or other legal proceedings of every kind that
are brought or instituted against Town, its elected officials, officers, employees, agents or
volunteers. Consultant shall reimburse the Town and its elected officials, officers, employees,
agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in
connection therewith or in enforcing the indemnity herein provided.
Consultant's obligation to indemnify shall not be restricted to insurance proceeds,
if any, received by the Town, its elected officials, officers, employees, agents or volunteers.
11.3 Laws and Regulations. Consultant shall keep itself fully informed of and in
compliance with all local, state and federal laws, rules, regulations and ordinances in any manner
affecting the performance of the Project or the Services, including without limitation the Town
business license requirements and all Cal/OSHA requirements, and shall give all notices required
by law.
11.4 Prohibited Interests. Consultant covenants that neither it, nor any of its
employees, agents, contractors or subcontractors has any interest, nor shall they acquire any
interest, direct or indirect, in the subject of the Agreement, nor any other interest which would
conflict in any manner or degree with the performance of the Services hereunder.
11.5 Prevailing Wages. Consultant is aware of the requirements of California Labor
Code section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8,
section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage
rates and the performance of other requirements on "public works" and "maintenance" projects.
If the Services are subject to the Prevailing Wage Laws, Consultant agrees to fully comply with
such Prevailing Wage Laws.
11.6 Equal Opportunity Emplo nMent. Consultant shall not engage in unlawful
employment discrimination. Such unlawful employment discrimination includes, but is not
limited to, employment discrimination based upon a person's race, religious creed, color,
national origin, ancestry, physical handicap, medical condition, marital status, gender, citizenship
or sexual orientation.
11.7 Labor Certification. By its signature hereunder, Consultant certifies that it is
aware of the provisions of Section 3700 of the California Labor Code which require every
employer to be insured against liability for Worker's Compensation or to undertake self-
insurance in accordance with the provisions of that Code, and agrees to comply with such
provisions before commencing the performance of the Services.
11.8 Attorneys' Fees. If either party commences an action against the other party,
either legal, administrative or otherwise, arising out of or in connection with this Agreement, the
prevailing party in such litigation shall be entitled to reasonable attorneys' fees and all other
costs of such action.
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11.9 Assignment or Transfer. Consultant shall not assign or transfer any interest in this
Agreement whether by assignment or novation, without the prior written consent of the Town,
which will not be unreasonably withheld. Provided, however, that claims for money due or to
become due Consultant from the Town under this Agreement may be assigned to a financial
institution or to a trustee in bankruptcy, without such approval. Notice of any assignment or
transfer, whether voluntary or involuntary, shall be furnished promptly to the Town.
11.10 Successors and Assigns. This Agreement shall be binding on the successors and
assigns of the Parties.
11.11 Amendment; Modification. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing and signed by both Parties.
11.12 Waiver. No waiver of any default shall constitute a waiver of any other default or
breach, whether of the same or other covenant or condition. No waiver, benefit, privilege or
service voluntarily given or performed by a Party shall give the other Party any contractual rights
by custom, estoppel or otherwise.
11.13 Entire Agreement. This Agreement constitutes the entire agreement between the
Parties relative to the Services specified herein. There are no understandings, agreements,
conditions, representations, warranties or promises with respect to this Agreement, except those
contained in or referred to in the writing.
11.14 Governing Law. This Agreement shall be governed by the laws of the State of
California. Venue shall be in Santa Clara County.
11.15 Tune of Essence. Time is of the essence for each and every provision of this
Agreement.
11.16 Interpretation. Since the Parties or their agents have participated fully in the
preparation of this Agreement, the language of this Agreement shall be construed simply,
according to its fair meaning, and not strictly for or against any Party.
11.17 No Third Party Beneficiaries. There are no intended third party beneficiaries of
any right or obligation assumed by the Parties.
11.18 Authority to Enter Agreement. Each Party warrants that the individuals who have
signed this Agreement have the legal power, right and authority to make this Agreement and
bind each respective Party.
11.19 Invalidity; Severability. If any portion of this Agreement is declared invalid,
illegal or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions
shall continue in full force and effect.
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11.20 Counte arts. This Agreement may be signed in counterparts, each of which shall
constitute an original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
TOWN OF LOS GATOS
By:
Greg Larson
Town Manager
Attest:
By:
Jackie Rose
Clerk Administrator
IMAM Corporation
By:
Mr. Pankaj Kumar
CEO
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Notary Public Stet~ROWE
Taxes
Attest: Mr go
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By:
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[Title]
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Town of Los Gatos
Alarm Management
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EXHIBIT "A"
SCOPE AND SCHEDULE OF SERVICES
PMAM shall provide a false alarm tracking software and web based management utility which
shall include at a minimum, the following components:
1. Creation of database and website interface
A. PMAM shall provide a web-based solution that will provide the Town an opportunity to
direct Internet users to the established PMAM website via the Town's website or other
means directly to do at least the following actions:
1. Allow citizens and business owners to enter information initially for their permit, pay
renewals, pay fines, and access their accounts on the Internet.
2. The website will also provide information, including text, video training, and
education for citizens and business owners.
B. On a weekly basis, PMAM shall access directly into the Los Gatos/Monte Sereno Police
Department's Records Management Database and electronically upload the calls for
service related to false alarms. On a weekly basis, PMAM shall download new and
updated information for residences, businesses, alarm companies, and responsible
information into the premise files of the Los Gatos/Monte Sereno Police Department's
Records Management System.
C. PMAM shall provide CD-ROM discs to citizens and business owners in the Town with
training and educational information concerning operating an alarm in the Town. PMAM
will personalize the CD-ROM with graphics and symbols representing the Town and the
Los Gatos/Monte Sereno Police Department.
II. Enforcement of the False Alarm Ordinance
A. During the term of this agreement, PMAM Corporation will deploy a proprietary
software package that maintains and tracks false alann data and generate related reports.
1. This software package and associated website shall do at a minimum, the following
functions:
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a) Send alarm permit applications to residents and businesses who may have
alarms but are not registered in their system.
b) Maintain a method to track permits that have been revoked.
c) Send alarm permit applications for renewals
d) Send letters and invoices to the residences/businesses for false burglar and
robbery alarms as per the False Alarm Ordinance and conduct any follow-up
necessary.
e) Collect all associated fees and conduct all interactions either via letters or
telephone calls with permit holders concerning collection of fees and reconcile
accounts on a monthly basis.
f) Respond to all queries from citizens and businesses and send out renewal
notices when appropriate.
2. All data relating to alarm permits shall be owned by the Town and upon termination of
this agreement, PMAM shall deliver to the Town of Los Gatos all data in Town's
selected format.
a) PMAM retains all rights and title to the Application software, including but
not limited to, all publication rights, all development rights, all reproductions
rights, and all rights that may follow from the commercial development of
the software. The Town does not acquire any ownership rights to the
Application software. The Software is protected by copyright in favor of
PMAM, as well as any future registered trademarks, are trademarks of PMAM.
b) All information from the Town will be considered confidential and will not
be shared with anybody outside of a designated list without the express
permission of the Chief of Police.
c) All members of PMAM, who will have access to the information from the
Town of Los Gatos, will be designated by PMAM to the Town and will
undergo a background check conducted by the Los Gatos/Monte Sereno
Police Department.
d) Dedicated personnel who will be responsible for answering calls, educating
residents on the existing ordinance, explaining invoices and all other related
issues will be located at PMAM's site.
e) Printing of all stationery, postage and other related overhead costs that
involves correspondence with permit holders will be undertaken by PMAM.
f) PMAM Corporation will produce an educational multi media CD at their
cost.
g) Under this agreement, the software that is deployed and all related IP
(Intellectual Property) will remain with PMAM
h) A dedicated telephone # will paid for and provided by PMAM Corporation
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III. Report Generation
1. PMAM shall provide the following information to the Town upon request at any
time.
a) Provide a monthly report detailing all funds received and an associated detail
of monies distributed to both PMAM and the Town.
b) Specialized reports with any variables as required by the Town. Some of the
reports shall include:
1) Annual permit renewals billed and fees collected.
2) Permits inactivated and reason for inactivation.
3) Permits reactivated and reason for reactivation.
4) Number of false burglar alarms.
5) Number of false burglar alarms billed and fees collected.
6) Number of false robbery alarms.
7) Number of false robbery alarms billed and fees collected.
8) Number of reinstatement fees billed and fees collected.
9) False burglary and/or robbery alarms for permit owners.
10) False burglary and/or robbery alarms for non-permit owners.
2. PMAM shall also do the following:
a)
Generate suspension notices based upon Town ordinance.
b)
Generate notice to alarm users without permits.
c)
Maintain historical information on permit issuance, renewal, suspension and
reinstatement on each property.
d)
Maintain current pen-nit status information.
e)
Maintain incident count (true/false alanns) information on each permit.
f)
Perform searches on permit holders and business names.
g)
Print permits in batch or online.
h)
Archive inactive permits.
i)
Make adjustments/corrections on fees relating to accounting errors.
j)
Generate incidents manually for account.
k)
Issue notice to permit holders with excessive false alarms.
1)
Issue notice to non-permit holders with false alarms.
m)
Archive historical data.
n)
Accept and establish temporary account numbers for non-permit holders who
have incurred false alarm charges.
o)
Transfer temporary account number charges to a permanent account (permit)
number.
p)
Determine false alarm charges based on the Town of Los Gatos's Alarm
Ordinance fee schedule.
q)
Show all incidents and their associated charges during the current billing
period.
r)
Provide itemized balance forward capabilities on billings.
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EXHIBIT "B"
PAYMENT FOR SERVICES RENDERED
1. PMAM Corporation agrees to manage the False Alarm Program under this agreement.
PMAM shall receive 35% of all revenue that it collects under this agreement and the
remaining 65% will be sent to the Los Gatos/Monte Sereno Police Department, 110 E.
Main Street, Los Gatos, CA 95031, once a month using a paper check format. The check
shall be received by the Los Gatos/Monte Sereno Police Department before the 15"' of
each month.
2. The areas in which fees are collected include the following.
1. New Permit Fees
2. Permit Renewal Fees
3. Related fees as per the Town of Los Gatos's ordinance. This includes fines that are
assessed when permit holders violate the Town's False Alarm Ordinance.
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EXHIBIT "C"
FACILITIES, EQUIPMENT, AND OTHER MATERIALS, AND OBLIGATIONS OF THE TOWN
To facilitate the execution of this agreement, the Town of Los Gatos will provide the following
information and authorization to PMAM Corporation.
1. Town shall provide PMAM with a database of current permit holders and false alarm data
("Data") for the previous 18 months and PMAM will accurately convert all Data provided
by the Town to populate the false alarm system. This will be a one-time activity that will be
derived from the existing Land Database.
2. A letter from the Town of Los Gatos authorizing PMAM to open a Bank Account with
Bank of America where all checks received from the residents are deposited. This account
is dedicated only to the Town of Los Gatos and there will be no other activity on this
account.
3. A letter from the Town of Los Gatos authorizing PMAM to open a dedicated P.O. Box
where all correspondence regarding the Alarm Tracking and Billing will be received.
4. At the end of each month, two checks will be issued in the ratio of 65% to the Town of Los
Gatos and 35% to the PMAM Corporation
5. This account is open to audit from the Town staff at any time.
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EXHIBIT "D"
CONSULTANT PROPOSAL
[ATTACH CONSULTANT PROPOSAL]
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RESOLUTION
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO NEGOTIATE AND EXECUTE AN
AGREEMENT WITH PMAM CORPORATION FOR PROFESSIONAL ALARM
MANAGEMENT CONSULTANT SERVICES
WHEREAS, it is necessary for the Council to secure professional consultant
services to provide professional alarm management consultant services for the Police
Department; and
WHEREAS, the Town Council has selected the firm of PMAM Corporation for
professional alarm management consultant services; and
NOW, THEREFORE, IT IS RESOLVED that the Town Council of the Town
of Los Gatos hereby authorizes the Town Manager to negotiate and execute a Professional
Services Agreement with PMAM Corporation to provide professional alarm management
services in connection with police alarm services, outreach, tracking of false alarms and
collection of fees,
PASSED AND ADOPTED at a regular meeting of the Town Council held on the
19th day of October, 2009 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTACHMENT 3
~o\4N 0 MEETING DATE: 10/19/09
ITEM NO:
tos os COUNCIL AGENDA REPORT
DATE: October 9, 2009
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: CONSIDER A REQUEST OF APPROVAL TO OPERATE A RETAIL WINE
ESTABLISHMENT WITH FOOD, BEER, AND WINE SERVICE ON
PROPERTY ZONED C-1. APN 529-07-047. PROPERTY LOCATION: 414-
416 N. SANTA CRUZ AVENUE. PROPERTY OWNER: JIM ZANARDI.
APPLICANT: MICHAEL GUERRA / JOSEPH CANNISTRACI. FILE U-09-
007.
RECOMMENDATION:
1. Open and hold the public hearing and receive public testimony.
2. Close the public hearing.
3. Make the following motions:
Accept the Planning Commission's recommendation and approve the Conditional Use Permit
Application. If the Council decides to approve the proposed project, the following actions
are recommended:
■ Make the required findings for approving the Conditional Use Permit (Attachment 1) and
approve the application subject to the conditions included in Attachment 2 (motion
required).
Alternatively, the Council may take one of the following actions:
Continue the matter to a date certain with specific direction (motion required); or
■ Approve the application with additional and/or modified conditions of approval (motion
required); or
■ Deny the Conditional Use Permit Application (motion required).
ti
PREPARED BY: Wendie R. Rooney, Director of Community Development
Reviewed by. V~yAssistant Town Manager AA1 Town Attorney
Clerk Administrator Finance Community Development
N:\DEV\CNCLRPTS\2009\NSC414-416.doc
Reformatted: 5/30/02
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: 414-416 N. SANTA CRUZ AVENUE
October 7, 2009
4. Refer to the Town Attorney for the preparation of the appropriate resolution if approved or
denied (no motion required).
BACKGROUND:
The proposed project will occupy two tenant lease spaces, 414 and 416 N. Santa Cruz Avenue, in
the Los Gatos Shopping Center (Exhibit 1 of Attachment 3). The subject spaces have been
vacant for several years due to a substantial remodel at the shopping center. The spaces were
previously occupied by a restaurant and a nail salon. The conditional use permit for the
restaurant use expired due to inactivity for more than one year.
DISCUSSION:
A. Project Summary
The applicant is requesting approval of the following:
• Operation of a retail wine establishment with food, beer, and wine service.
Please see Attachment 3 (the September 9, 2009 Planning Commission staff report) for
additional information regarding the proposed project.
B. Planning Commission
On September 9, 2009, the Planning Commission considered the application (see Attachment
5). The Commission recommended approval (vote: 6-0, with Commissioner Micciche
absent) of the application with the following changes to condition number three (added
wording is underlined, deleted wording is struck out):
APPROVED USE. The subject approval is for a retail wine establishment with food,
beer, and wine a-ad ie oholie-be vefa-ge service as generally described in the
applicant's letter of justification (Exhibit 5 of U-09-007 Staff Report). Fol owing t.., ,
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o
s
administrative -
pp
The Commission recommended approval of the application based on the applicant's
documentation and written and verbal support. The Town has received nine written public
comments and one verbal testimony in support of the project; the Town has not received any
public comment or testimony against the proposal. The Commission recommended the
modification to condition number three (3) because the service of beer does not seem to
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: 414-416 N. SANTA CRUZ AVENUE
October 7, 2009
present any problems. Additionally, the applicant's existing business in a neighboring
community has not had any complaints in its six years of operation.
The Planning Commission suggested that Town Council should consider amending the
Alcoholic Beverage Policy (ABP) at some future date to include a "wine bar" category. The
existing ABP defines a restaurant and a bar. There are businesses that lie outside these
definitions, such as the subject application, and a new category could remove ambiguity for
similar proposals in the future. A revision could provide clear requirements and review
procedures for wine bars or other chosen category. If Council determines there is merit in
amending the ABP, staff should be directed to initiate the amendment.
CONCLUSION:
The Alcoholic Beverage Policy gives the hearing body discretion to approve alcoholic beverage
service when the proposal will not negatively impact residential neighbors, alcohol related
incidents will not occur, and when the application will provide a positive impact to the
commercial area. The Planning Commission and staff believe this application fits such a case
and recommend approval of the application.
ENVIRONMENTAL ASSESSMENT:
The project is Categorically Exempt according to Section 15301 Class 1 of CEQA as adopted by
the Town, which exempts permitting an existing facility with no expansion.
FISCAL IMPACT:
None.
Attachments:
1. Required Findings.
2. Recommended Conditions of Approval.
3. Report to the Planning Commission for the meeting of September 9, 2009.
4. Desk Item for the Planning Commission meeting of September 9, 2009.
5. Excerpt of the Verbatim Plamiing Commission meeting minutes for September 9, 2009.
Distribution:
cc: Michael E. Guerra and Joseph J. Cannistraci, 333 Santana Unit #307, San Jose, CA 95128
Jim Zanardi, P.O. Box 23027, San Jose, CA 95153
WR:JS:cgt
N:\DEV\CNCLRPTS\2009\NS C414-416.doe
REQUIRED FINDINGS FOR:
414-416 N. Santa Cruz Avenue
Conditional Use Permit U-09-007
Requesting approval to operate a retail wine establishment with food, beer, and wine
service on property zoned C-1. APN 529-07-047.
PROPERTY OWNER: Jim Zanardi
APPLICANT: Michael Guerra/Joseph Cannistraci
FINDINGS
Required finding for CEQA:
■ The project is Categorically Exempt pursuant to Section 15301 of the State Environmental
Guidelines as adopted by the Town.
Required findings for a Conditional Use Permit:
■ As required by Section 29.20.190 of the Town Code for granting a Conditional Use Permit:
The deciding body, on the basis of the evidence submitted at the hearing, may grant a
conditional use permit when specifically authorized by the provisions of the Town Code if it
finds that;
(1) The proposed uses of the property are essential or desirable to the public convenience or
welfare in that the use will provide retail and basic food and beverage service to the
community as well as bring visitors, shoppers, and residents to a less frequented area of
North Santa Cruz Avenue. In addition, the economic viability of the Town's
neighborhood commercial centers can be contingent upon the number of vacancies.
Currently the subject site has nine vacancies. The addition of this use will therefore
increase the center's vitality; and
(2) The proposed uses will not impair the integrity and character of the zone in that the use
will not impair the integrity of the zone since the use will be in a commercial zone; and
(3) The proposed uses would not be detrimental to public health, safety or general welfare in
that the use will not be detrimental to public health safety or general welfare because the
use will not conduct business during late night hours and will be subject to provisions of
the Alcoholic Beverage Policy; and
(4) The proposed uses of the property are in harmony with the various elements or objectives
of the General Plan and the purposes of the Town Code in that the proposed use meets
the objectives of the General Plan and Town Code as discussed within the staff report.
Attachment 1
414-416 N. Santa Cruz Avenue/U-09-007
October 19, 2009
Page 2 of 2
Required finding for the Redevelopment Plan for the Central Los Gatos Redevelopment
Project Area:
■ That the proposed project is consistent with the Redevelopment Plan for the Central Los
Gatos Redevelopment Project Area (Section IV.B).
N:\DEV\FINDINGS\2009\NSC414 416.doc
RECOMMENDED CONDITIONS OF APPROVAL - October 19, 2009
414-416 N. Santa Cruz Avenue
Conditional Use Permit U-09-007
Requesting approval to operate a retail wine establishment with food, beer, and
wine service on property zoned C-1. APN 529-07-047.
PROPERTY OWNER: Jim Zanardi
APPLICANT: Michael Guerra/Joseph Cannistraci
TO THE SATISFACTION OF THE DIRECTOR OF COMMUNITY DEVELOPMENT:
Planning Division
1. APPROVAL. This application shall be completed in accordance with all of the
conditions of approval listed below and in substantial compliance with the
development plans and letter of justification approved and noted as received by
the Town on August 7, 2009 and July 23, 2009, respectively. Any changes or
modifications to the approved plans shall be approved by the Community
Development Director, the Development Review Committee, the Planning
Commission, or Town Council, depending on the scope of the changes.
2. EXPIRATION. The approval will expire two years from the approval date
pursuant to Section 29.20.320 of the Town Code, unless the approval has been
vested.
3. APPROVED USE. The subject approval is for a retail wine establishment with
food, beer, and wine service as generally described in the applicant's letter of
justification (Exhibit 5 of U-09-007 Staff Report).
4. HOURS OF OPERATION. Maximum hours of operation shall be Monday to
Wednesday 10:00 am to 9:00 pin; Thursday 10:00 am to 10:00 pin; Friday and
Saturday 10:00 am to 11:00 pm; Sunday 12:00 pm to 8:00 pm.
5. HOURS OF ALCOHOLIC BEVERAGE SERVICE. The service of alcoholic
beverages shall not be permitted after 8:00 pm Monday through Wednesday, after
9:00 pin Thursday, after 10:00 pm Friday and Saturday, and after 7:00 pm on
Sunday.
6. NUMBER OF SEATS. The maximum number of seats is sixteen (16), inclusive
of the tasting bar and private event room. Note: number of individuals on-site at
any given time is limited during specials events (see EVENTS condition).
7. EVENTS. Tasting events and/or classes shall be limited to two (2) per month.
During tasting events and/or classes, the maximum number of attendees shall be
limited to 25. The maximum number of individuals on site at any given time shall
be 30, inclusive of employees, instructors, or presenters (based on ten (10)
allotted parking spaces). Note: The maximum number of individuals is not in
addition to the maximum seating of sixteen.
8. ENTERTAINMENT. Live entertainment and amplified music in prohibited.
9. SIGN PERMIT. A Sign Pen-nit from the Community Development Department is
required for any new sign or any change of face of an existing sign.
10. BUSINESS LICENSE. A business license is required prior to commencement of
use.
Attachment 2
11. CERTIFICATE OF USE AND OCCUPANCY. A Certificate of Use and
Occupancy is required prior to commencement of use.
12. ENVIRONMENTAL HEALTH APPROVAL. The applicant shall submit plans to
the County of Santa Clara Department of Envirommental Health for review prior
to commencement of use. The applicant shall provide a copy of the approval
from the County of Santa Clara Department of Environmental Health with the
Certificate of Use and Occupancy application.
13. TWO YEAR REVIEW. Town staff shall review the Conditional Use Permit
within two years from approval to determine if there are any problems associated
with the Permit and report their findings to the Planning Commission. The
Planning Commission may direct that a public hearing be held to review the
permit as specified in Section 29.20.3 10 of the Town Code.
14. ALCOHOLIC BEVERAGE POLICY. The applicant shall be subject to comply
with any new requirements in the Town's Alcoholic Beverage Policy within two
(2) years from the commencement of operation.
15. TOWN INDEMNITY. Applicants are notified that Town Code Section 1.10.115
requires that any applicant who receives a permit or entitlement from the Town
shall defend, indemnify, and hold harmless the Town and its officials in any
action brought by a third party to overturn, set aside, or void the permit or
entitlement. This requirement is a condition of approval of all such permits and
entitlements whether or not expressly set forth in the approval, and may be
secured to the satisfaction of the Town Attorney.
TO THE SATISFACTION OF THE CHIEF OF POLICE:
16. UNIFORMED SECURITY: Uniformed privately provided security guards may
be required in or around the premises by the Chief of Police if alcohol related
problems recur that are not resolved by the licensed owner.
17. CONSULTATION AND TRAINING: At the discretion of the Chief of Police,
periodic meetings will be conducted with representatives from the Police
Department for on-going employee training on alcoholic beverage service to the
general public.
18. TRAINING MANUAL: The restaurant operator shall use an employee training
manual that addresses alcoholic beverage service consistent with the standards of
the California Restaurant Association.
19. DESIGNATED DRIVER PROGRAM: The restaurant operator shall actively
promote a designated driver program such as complimentary non-alcoholic
beverages for designated drivers.
20. POSTING OF TAXICAB TELEPHONE NUMBERS: Taxicab telephone
numbers shall be posted in a visible location.
NADEV\C0NDITNS\2009\NSC414 416.doc
N TOWN OF LOS GATOS ITEM NO: 4
PLANNING COMMISSION STAFF REPORT
cos sA~os Meeting Date: September 9, 2009
PREPARED BY: Jennifer L. Savage, Assistant Planner
jlsavage@losgatosca.gov
APPLICATION NO.: Conditional Use Permit Application U-09-007
LOCATION: 414-416 N. Santa Cruz Avenue (east side of N. Santa Cruz
Avenue, approximately 250 feet north of Los Gatos-Saratoga
Road)
APPLICANT: Michael E. Guerra and Joseph J. Cannistraci
PROPERTY OWNER: Jim Zanardi
CONTACT PERSON: Michael E. Guerra and Joseph J. Cannistraci
APPLICATION SUMMARY: Requesting approval to operate a retail wine establishment with
food, beer, and wine service on property zoned C-1. APN 529-
07-047.
DEEMED COMPLETE: August 14, 2009
FINAL DATE TO TAKE ACTION: March 14, 2010
RECOMMENDATION: Forward Conditional Use Permit U-09-007 to the Town Council
with a Recommendation of Approval, Subject to the Conditions
Contained in this Report
PROJECT DATA: General Plan Designation: Neighborhood Commercial
Zoning Designation: C-1 - Neighborhood Commercial
Applicable Plans & Standards: Central Los Gatos
Redevelopment Plan
Parcel Size: 12,544 square feet
Surrounding Area:
* Residential uses are directly east of, and adjacent to, the parking lot.
Attachment 3
Planning Commission Staff Report - Page 2
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
CEQA: The project is Categorically Exempt according to Section 15301
of the State Environmental Guidelines as adopted by the Town
because the project consists of permitting an existing facility
with no expansion.
FINDINGS: ■ As required by Section 15301 of the State Environmental
Guidelines as adopted by the Town that this project is
Categorically Exempt.
■ As required by Section 29.20.190 of the Town Code for
granting a Conditional Use Permit.
■ As required by Section IV.B of the Redevelopment Plan for
the Central Los Gatos Redevelopment Project that it meets
the use set forth in the Town's General Plan.
CONSIDERATIONS: None.
ACTION: Forward Conditional Use Permit U-09-007 to the Town Council
with a Recommendation of Approval, Subject to the Conditions
Contained in this Report
EXHIBITS: 1.
Location Map (one page)
2.
Findings and Considerations (two pages)
3.
Recommended Conditions of Approval (three pages)
4.
Written Description (one page), received July 23, 2009
5.
Letter of Justification (five pages), received July 23, 2009
6.
Sample Menu (one page), received August 7, 2009
7.
Wine Education Curriculum (five pages), received
August 7, 2009
8.
Town's Alcoholic Beverage Policy (six pages)
9.
Development Plans (three pages), received August 7, 2009
10
. Outreach Packet (nine pages), received August 28, 2009
11
. Public Comment (five pages), received August 31, 2009 and
September 2, 2009
BACKGROUND:
The proposed project will occupy two tenant lease spaces, 414 and 416 N. Santa Cruz Avenue, in
the Los Gatos Shopping Center. The subject spaces have been vacant for several years due to a
Planning Commission Staff Report - Page 3
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
substantial remodel at the shopping center. The spaces were previously occupied by a restaurant
and a nail salon. The conditional use permit for the restaurant use expired due to inactivity for
more than one year.
The amended Alcoholic Beverage Policy (ABP) was adopted by the Town Council in September
2001 (Exhibit 8). The purpose of the ABP is to provide parameters for alcoholic beverage
service and direction through a General Policy and a Specific Policy. The ABP is discussed in
the Analysis Section below.
PROJECT DESCRIPTION:
A. Conditional Use Permit
The applicant is requesting approval to operate a retail wine establishment with food and
alcoholic beverage service. The applicant provided a written description and letter of
justification describing the proposal (Exhibits 4 & 5). The service of food and alcoholic
beverages requires a Conditional Use Permit. The Planning Commission shall make a
recommendation to the Town Council, who will be the final deciding body pursuant to the
Alcoholic Beverage Policy (ABP).
B. Location and Surrounding Neighborhood
The project site is located at 414 and 416 N. Santa Cruz Avenue, on the east side of N.
Santa Cruz Avenue and approximately 250 feet north of Los Gatos-Saratoga Road. The
property is surrounded by commercial uses to the north, west, and south. To the east is a
Town parking lot. Single family residential uses are located beyond the Town parking lot.
C. Zoning Compliance
Retail use is a permitted use in the C-1 Zone District. The zoning designation allows food
and beverage service subject to the approval of a Conditional Use Permit.
ANALYSIS:
A. Business Proposal
The letter of justification explains the proposal as "a centuries' old business model that
combines elements of wine and good appreciation in a traditional and civil atmosphere"
(Exhibit 5). The proposed business will sell wine by the bottle, wine accessories, and
specialty food items. In addition, they will offer food and beverage service, including the
service of wine and beer. The applicant provided a sample menu, floor plan, and interior
Planning Commission Staff Report - Page 4
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
elevation illustrating the location and arrangement of the food preparation area (Exhibits 6
and 9, respectively). The wine tasting and food service area is approximately 252 square
feet of floor area or 10% of the entire lease space.
The applicant is proposing up to two events per month. Events include wine education
(Exhibit 7), hosted tastings, corporate meetings, and private tastings. The maximum
number of attendees per event will be 25. The applicant explains that the food. and
beverage service will enhance the objective of well-rounded wine education and the
experience of wine culture.
The applicant is proposing a maximum of 16 seats. Operating hours will be Monday
through Wednesday from 10:00 am to 9:00 pm, Thursday 10:00 am to 10:00 pm, Friday
and Saturday from 10:00 am to 11:00 pm, and Sunday from 12:00 pm to 8:00 pm (Exhibit
5). Alcoholic beverage service will cease one hour prior to closure. The Alcoholic
Beverage Policy requires specific findings for alcohol service after 10:00 pm. The subject
application does not propose alcohol service after 10:00 pm and, therefore, the findings are
not required.
The proposal does not appear to fit into the Town's current definitions of restaurant or bar
because retail is a large component of the business and the use includes wine education
classes. Town Code Section 29.10.020 provides the following definitions for a bar and a
restaurant:
`Bar means a drinking place where alcoholic beverages and snacks are served;
possibly with entertainment such as music, television screens, video games or
pool tables.'
`Restaurant means a retail food service establishment in which food or beverage
is prepared, served and sold to customers for on-site or take-out consumption.'
B. Alcoholic Beverage Policy (ABP)
Purpose
The requirements contained in the ABP are intended to protect nearby residential
neighborhoods, while maintaining `the viability of our commercial centers.' The policy
provides assurance that hours of operation will be regulated for a variety of reasons,
including proximity to residential neighborhoods and concentration of alcoholic beverage
serving establishments within one area.
Planning Commission Staff Report - Page 5
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
The site is located in an established shopping center that fronts on. N. Santa Cruz Avenue.
To the rear of the building is a Town parking lot. On the opposite side of the parking lot is
a residential neighborhood. The applicants are sensitive to the proximity of residential
uses. The alcoholic beverage service will not occur after 10:00 pm. Additionally, the
applicants have experience operating a business near residential uses. They have an
existing business located in a neighboring community in a mixed use development under
residential condos. The applicants have stated that they have not had a single complaint or
incident in the six years that the business has been in operation.
General Policy
The ABP'S General Policy contains eight requirements. Although requirement No. 1 does
not apply to the subject application, the requirement is discussed. Requirements 5 and 7
are applicable to the subject application. Requirements 2, 3, 4, 6, and 8 do not apply to the
subject application because there will be no entertainment, no alcoholic beverage service
after 10:00 pm, and there will not be any outdoor seating.
Requirement No. 1 states `the Town shall continue to strongly discourage new applications
for stand alone bars or restaurants with separate bars.' The proposal does not fall into the
definition of a bar in that retail sales are a large component of the business and they will
offer wine education classes. As noted previously, only 10% of the two lease spaces are
dedicated to wine and food service.
Requirement No. 5 states an establishment serving alcoholic beverages is subject to five
provisions related to alcohol service (Exhibit 8). The Police Department has discretion
over two of the provisions in Requirement 5. The Police Department has reviewed the
proposal and concur with the staff findings and recommendations in the report. The
subject application meets requirement No. 5 (Exhibit 3).
Requirement No. 7 defines a meal as `a combination of food items selected from menu.'
The applicants provided a sample food service menu and offers food pairing education as
well (Exhibits 6 & 7).
Specific Policy
The Specific Policy has two requirements that address alcoholic beverage service at
restaurants. The first states "alcoholic beverages may only be served with meals." The
business will provide food service from a menu. The second requirement states that "meal
service shall be available until closing." The business will offer food and beverage service
that will cease an hour before closing - Monday through Wednesday at 8:00 pm, Thursday
at 9:00 pm, Friday and Saturday at 10:00 pm, and Sunday at 7:00 pm. While food is not
Planning Commission Staff Report - Page 6
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
proposed to be served during the final hour of operations, neither will alcoholic beverages.
The intent of the Policy is to ensure that food will be served in conjunction with alcoholic
beverages. In this case, neither food nor alcoholic beverages will be served during the final
hour of operations; however, patrons will be allowed to finish their food and beverages and
retail sales will be permitted. Staff believes that the proposal is consistent with the intent of
the policy.
Lastly, as noted in the applicant's letter of justification (Exhibit 5), in addition to wine
service, the applicant is also proposing to serve beer. The applicant's Alcohol Beverage
Control License is an On-Premise Beer and Wine license. Given the Town's historical
concern for establishments that serve alcohol, staff is suggesting that for the first two years
of operation, the use be limited to serving wine only. After two years, staff will conduct an
administrative review of the operations to determine if there have been any undesired
incidences, police calls for service or complaints. Provided there are no reported issues, the
applicant will be allowed to serve beer in addition to wine and non-alcoholic beverages.
Staff has added a condition for the administrative staff review that will occur two (2) years
from the date the business opens to the public.
C. Parking
The shopping center consists of four parcels and has 124 parking spaces. The proposed use
requires ten parking spaces. The parking requirement is based on the most intensive
portion of the proposed use - the special events (for description of special events see
business proposal discussion above). One parking space is required for every three
attendees. The maximum number of individuals on site at any given time shall be 30. This
allows a 25 person maximum for attendees and a five person maximum for employees,
instructors, and/or presenters. The shopping center contains adequate parking for the
existing and proposed uses (see parking table below).
Planning Commission Staff Report - Page 7
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
404 - 442 N. Santa Cruz Avenue Parking Table
Seats
Requi
red Par
kin
Suite
Business Name
Type of Use
SF
Res't
Other
Retail
School
Res't
Other
Total
404
vacant
retail
400
1.3
1.3
406
vacant
retail
2900
9.7
9.7
408
vacant
retail
1870
6.2
6.2
410
vacant
retail
5007
16.7
16.7
414/416
The Boot Enoteca
restaurant
2400
16
10.0
10.0
418
Bianco
retail
1200
4.0
4.0
420
vacant
retail
3000
10.0
10.0
430
vacant
retail
3100
10.3
10.3
434
Studio Kicks
school
4200
14.0
14.0
438
vacant
retail
5400
18.0
18.0
440
Aldo's Deli
restaurant
1600
22
5.5
5.5
442
Starbuck's
restaurant
1600
32
8.0
8.0
-
Total Required Parkin
114
Total Provided Parkin
124
D. Traffic
The retail aspect of the business does not create traffic impacts. The proposed use will
have 16 seats, which is less than the 21 seats allowed in the discontinued restaurant.
Therefore, the proposed use has no traffic impact. As noted, there may be special events,
including wine education classes and private tastings. Per the applicant's proposal, only
two events per month will occur with a maximum of 25 attendees. These limited events
will not adversely affect the traffic conditions.
E. General Plan
The proposed use meets the following goals and policies of the General Plan:
• Policy L.P.1.12 - When the deciding body's decision on a zoning approval is based on
assumptions derived from the applicant's promises and/or description of the proposal,
those assumptions should become conditions of the approval. The project is
conditioned to limit the number of events, the number of seats, and the hours of
operation as proposed by the applicant (Exhibit 3).
• Goal L.G.5.1 - To provide residents with adequate commercial and industrial services.
The proposed use provides a service to the Town residents.
• Goal L.G.5.2 - To maintain a balanced, economically stable community within
environmental goals. The proposed use fills an otherwise vacant commercial space and
should encourage additional foot traffic to a vacant commercial area.
Planning Commission Staff Report - Page 8
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
• Policy L.G.5.1 - Maintain a variety of commercial uses (a strong downtown
commercial area combined with Los Gatos Boulevard and strong neighborhood
commercial centers) to meet the shopping needs of residents and to preserve the small-
town atmosphere. The use contributes to the variety of uses available at the subject
commercial center.
• Policy L.P.5.6 - Encourage development that maintains and expands resident-oriented
services and/or creates employment opportunities for local residents consistent with
overall land use policies of the Town. The proposed use provides a service to the
Town's residents.
F. Environmental Review
The project is Categorically Exempt according to Section 15301 Class 1 of CEQA as
adopted by the Town, which exempts permitting an existing facility with no expansion.
G. Redevelopment Plan for the Central Los Gatos Redevelopment Project Area
The Redevelopment Plan contains a Redevelopment Land Use Map that designates
proposed land uses to be permitted in the Central Los Gatos Redevelopment Project Area.
The subject property is designated commercial and, per the Redevelopment Plan, shall be
used for the general commercial uses set forth and described in the Town's General Plan.
The proposed use falls under general commercial uses.
H. Conditional Use Permit Findings
In order to grant approval of a Conditional Use Permit, the hearing body must make the
following findings:
(1) The proposed uses of the property are essential or desirable to the public convenience
or welfare, and
(2) The proposed uses will not impair the integrity and character of the zone; and
(3) The proposed uses would not be detrimental to public health, safety or general
welfare; and
(4) The proposed uses of the property are in harmony with the various elements or
objectives of the General Plan and the purposes of the Town Code.
In regards to finding one, the use will provide retail and basic food and beverage service to
the community as well as bring visitors, shoppers, and residents to a less frequented area of
North Santa Cruz Avenue. In addition, the economic viability of the Town's neighborhood
commercial centers can be contingent upon the number of vacancies. Currently the subject
site has nine vacancies. The addition of this use will therefore increase the center's vitality.
Planning Commission Staff Report - Page 9
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
In regards to the second finding, the use will not impair the integrity of the zone since the
use will be in a commercial zone. In regards to finding three, the use will not be
detrimental to public health safety or general welfare because the use will not conduct
business during late night hours and will be subject to provisions of the Alcoholic Beverage
Policy. In regards to the final finding, the proposed use meets the objectives of the General
Plan and Town Code as discussed within this report.
PUBLIC COMMENTS:
The applicants conducted outreach to the local neighborhood and local business. The applicants
prepared and circulated 60 outreach packets (Exhibit 10). At this time, the Town has received
four public comments in support of the proposal (Exhibit 11).
SUMMARY AND RECOMMENDATION:
A. Summary:
Staff recommends conditions of approval consistent with the applicant's proposed use
regarding the number seats, number of events, and operating hours. The project site
contains sufficient parking to accommodate the existing and proposed uses. The use will
not operate during late night hours consistent with the requirements set forth in the ABP.
The discretionary privilege of alcohol service may be acceptable pursuant to the application
proposal and associated conditions.
B. Recommendation:
The Alcoholic Beverage Policy gives the hearing body discretion to approve alcoholic
beverage service when the proposal will not negatively impact residential neighbors,
alcohol related incidents will not occur, and when the application will provide a positive
impact to the commercial area. Based on the evidence submitted by the applicants, staff
believes this application fits such a case.
If the Planning Commission finds merit with the proposal, it should:
1. Find that the proposed project is categorically exempt, pursuant to Section 15301 of
the California Environmental Quality Act as adopted by the Town (Exhibit 2); and
2. Make the required findings as required by Section 29.20.190 of the Town Code for
granting approval of a Conditional Use Permit (Exhibit 2); and
3. Make the required finding as required by Section IV.B of the Redevelopment Plan for
the Central Los Gatos Redevelopment Project that it meets the use set forth in the
Town's General Plan (Exhibit 2); and
Planning Commission Staff Report - Page 10
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
4. Recommend approval Conditional Use Permit application U-09-005 with the
conditions contained in Exhibit 3.
If the Commission has concerns with the application, it can:
1. Recommend approval of the application to Council with additional and/or modified
conditions of approval, or
2. Recommend denial of the application.
Approved by:
Wendie R. Rooney
Director of Community Development
WRR:JS:cgt
cc: Michael Guerra and Joseph Cannistraci, 333 Santana Row Unit #307, San Jose, CA 95128
Jim Zanardi, P.O. Box 23027, San Jose, CA 95153
N:\DEV\REPORTS\2009\NSC414 416.doe
I
414 & 416 N. Santa Cruz Avenue
r
d
EXHIBIT 1
REQUIRED FINDINGS FOR:
414-416 N. Santa Cruz Avenue
Conditional Use Permit U-09-007
Requesting approval to operate a retail wine establishment with food, beer, and wine
service on property zoned C-1. APN 529-07-047.
PROPERTY OWNER: Jim Zanardi
APPLICANT: Michael Guerra/Joseph
FINDINGS
Required finding for CEQA:
■ The project is Categorically Exempt pursuant to Section 15301 of the State Environmental
Guidelines as adopted by the Town.
Required findings for a Conditional Use Permit:
■ As required by Section 29.20.190 of the Town Code for granting a Conditional Use Permit:
The deciding body, on the basis of the evidence submitted at the hearing, may grant a
conditional use permit when specifically authorized by the provisions of the Town Code if it
finds that:
(1) The proposed uses of the property are essential or desirable to the public convenience or
welfare in that the use will provide retail and basic food and beverage service to the
community as well as bring visitors, shoppers, and residents to a less frequented area of
North Santa Cruz Avenue. In addition, the economic viability of the Town's
neighborhood commercial centers can be contingent upon the number of vacancies.
Currently the subject site has nine vacancies. The addition of this use will therefore
increase the center's vitality; and
(2) The proposed uses will not impair the integrity and character of the zone in that the use
will not impair the integrity of the zone since the use will be in a commercial zone; and
(3) The proposed uses would not be detrimental to public health, safety or general welfare in
that the use will not be detrimental to public health safety or general welfare because the
use will not conduct business during late night hours and will be subject to provisions of
the Alcoholic Beverage Policy; and
(4) The proposed uses of the property are in harmony with the various elements or
objectives of the General Plan and the purposes of the Town Code in that the proposed use
meets the objectives of the General Plan and Town Code as discussed within the staff
report.
EXHIBIT 2
414-416 N. Santa Cruz Avenue/U-09-007
September 9, 2009
Page 2 of 2
Required finding for the Redevelopment Plan for the Central Los Gatos Redevelopment
Project Area:
® That the proposed project is consistent with the Redevelopment Plan for the Central Los
Gatos Redevelopment Project Area (Section IV.B).
N:\DEV\FINDINGS\2009WSC414 416.doc
RECOMMENDED CONDITIONS OF APPROVAL - September 9, 2009
414-416 N. Santa Cruz Avenue
Conditional Use Permit U-09-007
Requesting approval to operate a retail wine establishment with food, beer, and
wine service on property zoned C-1. APN 529-07-047.
PROPERTY OWNER: Jim Zanardi
APPLICANT: Michael Guerra/Joseph
TO THE SATISFACTION OF THE DIRECTOR OF COMMUNITY DEVELOPMENT:
Planning Division
1. APPROVAL. This application shall be completed in accordance with all of the
conditions of approval listed below and in substantial compliance with the
development plans and letter of justification approved and noted as received by
the Town on August 7, 2009 and July 23, 2009, respectively. Any changes or
modifications to the approved plans shall be approved by the Community
Development Director, the Development Review Committee, the Planning
Commission, or Town Council, depending on the scope of the changes.
2. EXPIRATION. The approval will expire two years from the approval date
pursuant to Section 29.20.320 of the Town Code, unless the approval has been
vested.
3. APPROVED USE. The subject approval is for a retail wine establishment with
food, wine and non-alcoholic beverage service as generally described in the
applicant's letter of justification (Exhibit 5 of U-09-007 Staff Report). Following
two (2) years of operation, Town Staff will conduct an administrative review of
the operations to determine if there have been any complaints or Police calls for
service related to alcohol problems. If staff determines that there are no concerns,
the establishment shall be allowed to serve beer in addition to wine under the
same terms of this Use Permit. The applicant shall be responsible for all costs
applicable to the administrative review.
4. HOURS OF OPERATION. Maximum hours of operation shall be Monday to
Wednesday 10:00 am to 9:00 pm; Thursday 10:00 am to 10:00 pm; Friday and
Saturday 10:00 am to 11:00 pm; Sunday 12:00 pm to 8:00 pm.
5. HOURS OF ALCOHOLIC BEVERAGE SERVICE. The service of alcoholic
beverages shall not be permitted after 8:00 pm Monday through Wednesday, after
9:00 pm Thursday, after 10:00 pm Friday and Saturday, and after 7:00 pm on
Sunday.
6. NUMBER OF SEATS. The maximum number of seats is sixteen (16), inclusive
of the tasting bar and private event room. Note: number of individuals on-site at
any given time is limited during specials events (see EVENTS condition).
7. EVENTS. Tasting events and/or classes shall be limited to two (2) per month.
During tasting events and/or classes, the maximum number of attendees shall be
limited to 25. The maximum number of individuals on site at any given time shall
be 30, inclusive of employees, instructors, or presenters (based on ten (10)
allotted parking spaces). Note: The maximum number of individuals is not in
addition to the maximum seating of sixteen.
EXHIBIT 3
8. ENTERTAINMENT: Live entertainment and amplified music in prohibited.
9. SIGN PERMIT. A Sign Permit from the Community Development Department is
required for any new sign or any change of face of an existing sign.
10. BUSINESS LICENSE. A business license is required prior to commencement of
use.
11. CERTIFICATE OF USE AND OCCUPANCY. A Certificate of Use and
Occupancy is required prior to commencement of use.
12. ENVIRONMENTAL HEALTH APPROVAL. The applicant shall submit plans to
the County of Santa Clara Department of Environmental Health for review prior
to commencement of use. The applicant shall provide a copy of the approval
from the County of Santa Clara Department of Environmental Health with the
Certificate of Use and Occupancy application.
13. TWO YEAR REVIEW. Town staff shall review the Conditional Use Permit
within two years from approval to determine if there are any problems associated
with the Permit and report their findings to the Planning Commission. The
Planning Commission may direct that a public hearing be held to review the
permit as specified in Section 29.20.3 10 of the Town Code.
14. ALCOHOLIC BEVERAGE POLICY. The applicant shall be subject to comply
with any new requirements in the Town's Alcoholic Beverage Policy within two
(2) years from the commencement of operation.
15. TOWN INDEMNITY. Applicants are notified that Town Code Section 1.10.115
requires that any applicant who receives a permit or entitlement from the Town
shall defend, indemnify, and hold harmless the Town and its officials in any
action brought by a third party to overturn, set aside, or void the permit or
entitlement. This requirement is a condition of approval of all such permits and
entitlements whether or not expressly set forth in the approval, and may be
secured to the satisfaction of the Town Attorney.
TO THE SATISFACTION OF THE CHIEF OF POLICE:
16. UNIFORMED SECURITY: Uniformed privately provided security guards may
be required in or around the premises by the Chief of Police if alcohol related
problems recur that are not resolved by the licensed owner.
17. CONSULTATION AND TRAINING: At the discretion of the Chief of Police,
periodic meetings will be conducted with representatives from the Police
Department for on-going employee training on alcoholic beverage service to the
general public.
18. TRAINING MANUAL: The restaurant operator shall use an employee training
manual that addresses alcoholic beverage service consistent with the standards of
the California Restaurant Association.
19. DESIGNATED DRIVER PROGRAM: The restaurant operator shall actively
promote a designated driver program such as complimentary non-alcoholic
beverages for designated drivers.
20. POSTING OF TAXICAB TELEPHONE NUMBERS: Taxicab telephone
numbers shall be posted in a visible location.
NADEV\C0NDITNS\2009WSC414 416.doc
CE-11JE
DESCRIPTION OF PROPOSED PROJECT JUL E~ 2009
For
THE BOOT ENOTECA AND WINE MERCHANT ; _ AN;01` 1 >OS GATOS
IVJSIuiJ
Both wine novices and enthusiasts enjoy convivial experiences involving wine and the
surrounding wine culture. People in general are becoming more interested in experiencing
better, authentic, more eclectic wines and foods. Due to the increased popularity of wine and
food related television programming and associated books, the interested consumer also has an
eye toward education, wine & food pairing, healthy and responsible consumption in a casual,
friendly setting. It is our intention to provide both products and services that will directly tap
into these expanding areas of demand and create a unique, innovative and authentic business
based on these principles.
We intend to provide a broad range of wines by the bottle, ranging from inexpensive, easy-to-
drink wines to limited production, premium quality collectibles. We will feature a large
percentage of Italian wines and a focus on local wineries from Santa Clara and Santa Cruz
counties, yet we will have wines from all the major wine growing regions of the world. Beer and
other non-alcoholic beverages, such as bottled water, soda, juices, and the like will also be
available. In addition, we will sell a variety of wine-related accessories, such as corkscrews,
decanters, stemware, wine gift bags, coasters, games, cleaning products, and similar items. We
also plan to sell a selection of premium quality, artisanal specialty food items such as chocolates,
cookies, crackers, cheeses, cured meats, as well as other packaged items.
We also intend to provide a selection of wine "by the glass" as well as beer and other non-
alcoholic beverages, such as bottled water, soda, juices, and the like. We also plan to provide
"small plate" food items such as cheeses, cured meats, condiments and other charcuterie as well
as other prepared foods like cookies, cake, chocolates. The food offerings shall be simple, easy
to execute, and will not require any commercial equipment to prepare.
In addition to our regular food and beverage service, we intend to provide, on a regular basis,
hosted wine tastings with wine makers and/or winery representatives that will discuss their
wines, the winery, the winemaking process, etc. We also plan to conduct hosted tastings for both
corporate and private customers in a small, intimate setting in a separate room, off the retail
floor. We will also conduct a wide range of wine classes that will appeal to wine novices as well
as knowledgeable wine enthusiasts. Our establishment will create an entire culture and convivial
atmosphere based on the appreciation and responsible consumption of wine and accompanying
food pairings.
EXHIBIT 4
LETTER OF JUSTIFICATION
For Jul, 2009
THE BOOT ENOTECA AND WINE MERCHANT .,-)13 G,,_: .
DESCRIPTION OF BUSINESS
The Boot Enoteca is a centuries old business model that combines elements of wine and food
appreciation in a traditional and civil atmosphere. We will provide a selection of fine wines,
available both by the glass (on-premise) and for retail purchase (off-premise) in combination
with a selection of wine-related small plates to be enjoyed on-site. In keeping with our goal of
creating a culture of passionate, informed and responsible wine and food enjoyment, we will
provide a separate room, off the main retail space, to be used for private, intimate events such as
hosted tastings, corporate meetings, private tastings, and wine education classes. We intend to
conduct hosted wine tastings and wine education classes on a regular basis in order to increase
our customer's knowledge and appreciation of fine wines and specialty foods. We also intend to
capitalize on popular and powerful media, specifically our website, to expand our presence
beyond local boundaries and increase our customer base by offering on-line wine courses, video-
based wine commentaries and interviews, blogs and other content.
Vision and Values: Both wine novices and enthusiasts enjoy convivial experiences involving
wine and the surrounding wine culture. People in general are becoming more interested in
experiencing better, authentic, more eclectic wines and foods. Due to the increased popularity of
wine and food related television programming and associated books, the interested consumer
also has an eye toward broadening his/her experience, expanding his/her knowledge, becoming
educated about wine & food pairing, and fostering healthy and responsible consumption in a
casual, friendly setting. The Boot will provide both products and services that will directly tap
into these expanding areas of demand and create a unique, innovative and authentic business
based on these principles in order to help support our retail operation.
HOURS OF OPERATION:
Monday -Wednesday: 10:00 AM to 9:00 PM
Thursday: 10:00 AM to 10:00 PM
Friday and Saturday: 10:00 AM to 11:00 PM
Sunday: 12:00 PM to 8:00 PM
Please note: Food and Beverage service will terminate ONE HOUR prior to close.
NUMBER OF EMPLOYEES:
We plan to employ 4 full-time employees (including ourselves) and 2 to 5 part-time employees,
as the demands of the business necessitate.
PRODUCTS AND SERVICES:
OFF PREMISE PRODUCTS: We intend to provide a broad range of wines by the bottle,
ranging from inexpensive, easy-to-drink wines to limited production, premium quality
EXHIBIT 5
collectibles. We will feature a large percentage of Italian wines as well as a focus on local
wineries from Santa Clara and Santa Cruz counties, yet we will have wines from all the major
wine growing regions of the world. Beer and other non-alcoholic beverages, such as bottled
water, soda, juices, and the like will also be available. In addition, we will sell a variety of wine-
related accessories, such as corkscrews, decanters, stemware, wine gift bags, coasters, games,
cleaning products, and similar items. We also plan to sell a selection of premium quality,
artisanal specialty food items such as chocolates, cookies, crackers, cheeses, cured meats, as well
as other packaged items.
ON PREMISE PRODUCTS: We intend to provide a modest selection of wine "by the
glass" as well as beer and other non-alcoholic beverages, such as bottled water, soda, and juices.
We also plan to provide focused selection of "small plate" food items such as cheeses, cured
meats, condiments and other charcuterie as well as other prepared foods like cookies, cake,
chocolates. The food offerings shall be simple, easy to execute, and will not require any
commercial equipment to prepare.
SERVICES: In addition to our standard food and beverage service, we intend to provide,
on a regular basis, hosted wine tastings with wine makers and/or winery representatives that will
discuss their wines, the winery, the winemaking process, etc. We also plan to conduct hosted
tastings for both corporate and private customers in a small, intimate setting in a separate room,
off the retail floor. We will also conduct a wide range of wine classes that will appeal to wine
novices as well as knowledgeable wine enthusiasts. Our establishment will create an entire
culture and convivial atmosphere based on the appreciation of wine and accompanying food
pairings which we believe will benefit our retail operation.
Maximum number of seats: 16
Maximum number of Tasting Events/Classes per month: 2
Maximum number of attendees per Event/Class (Private): 6
Maximum number of attendees per Event/Class (Public): 25
NOTE: Tastings and classes are typically held after 6:00 PM if on a weekday OR on
Saturday afternoons.
BENEFITS TO THE COMMUNITY:
• Currently, there is no existing business that offers a wide range of eclectic wines (and
specialty foods) in town, so residents have to drive to neighboring areas to purchase
wines and to interact with passionate, friendly, and knowledgeable staff. We will fulfill
this unmet need for Los Gatos residents, thereby increasing their satisfaction with the
amenities found in town and alleviate any frustrations they may have about having to
drive elsewhere in order to procure the products and services they desire.
• Our business will provide the type of products and services that will also attract upscale
patrons, both private and corporate, into the town from outlying areas, bringing more
collateral business and sales revenue into town which will benefit other local businesses
and the town.
• We plan to do a high volume of sales for the modest physical footprint of our business
which will provide always-needed sales tax revenue to the town.
By providing a unique and popular destination in the Los Gatos Shopping Center, we will
draw people into an area beyond the downtown core, thereby expanding activity and
business into a less-frequented, less "popular" section of town.
Promotion of Local Wineries: We intend to dedicate a portion of our inventory to wines
from local wineries (from Santa Clara and Santa Cruz counties) as well as host tasting
events featuring local wine makers and/or winery representatives in order to help increase
their exposure and expand their customer base.
FACTS THAT JUSTIFY APPLICATION:
• Our business will comply with the Noise Element in the General Plan.
• Our business will comply with the town's Alcohol Beverage Policy in that we will not
serve any wine/beer past 10 PM (see note under Hours of Operation).
• We operate a similar business in Santana Row which is a very impacted, densely-
populated residential/retail center where we have residents that live directly above our
establishment. In nearly 6 years of operation,
o. We have not had a SINGLE complaint filed by any residents regarding noise,
disruptive customer behavior or ANY other reason.
o We have never had a SINGLE incident of drunken or disorderly conduct by any
of our patrons.
o We have never had a SINGLE incident in which we or any SR resident has
contacted SR security or local law enforcement because of problematic behavior
of our patrons.
• Our business would help achieve the objective of providing a "diverse shopping
experience" as outlined in the General Plan because we would provide a unique,
interactive and mutli-level wine-related experience that is not currently available in the
town limits.
• Our business would help achieve the objective of "preserving the small town character"
of the town as outlined in the General Plan because we would be a small, privately owned
and operated business. One of the principals has long-standing roots in the local
community.
• Our business would help achieve the objective of supporting "an active business
community that provides a wide variety of goods and services and a broad range of
employment opportunities, minimizing the need to travel to other communities" in order
to obtain sought-after products and services as outlined in the General Plan.
• The proposed uses of the property are desirable to the public conveniences; the proposed
uses will not impair the integrity and character of the zoning district; the proposed uses
would not be detrimental to public health, safety, or ,general welfare-, theproposed uses of
the property are in harmony with the various elements or objectives of the General Plan
(as outlined above) and the purposes of the Town Ordinance.
BIOGRAPHIES OF BUSINESS PRINIPALS:
Joseph Cannistraci
Joe's initial work background was in the trades as a Journeyman Plasterer. Before joining the
trade union, he was an Apprentice Machinist at the Defrancisi Machine Corporation, a renowned
manufacturer of commercial pasta machines from 1990 to 1991.
Prior to developing his passion for wine, Joe expanded his entrepreneurial pursuits and was a key
founding owner of Coastal Sol Foods, an energy bar company, which he shepherded from
conception to product launch. He did product research and development, worked closely with a
consultant to create a business plan, recruited outside co-investors, and was responsible for all
aspects of product development, including formulations and branding.
Joe began his career in the wine industry by working at a South Bay wine retailer, which was one
of the largest in the US. Joe immediately demonstrated a special knack for developing both
customer and business relationships, as well as an aptitude for absorbing and utilizing a vast
amount of wine knowledge. Within his first year, he was promoted to Assistant Manager and
made the Italian Wine Buyer.
Since 2002, Joe Cannistraci has been working as a founding partner at Vintage Wine Merchants,
the premiere wine retailer/wine bar in the San Francisco Bay Area. As a partner, he has managed
all operational aspects of the business, as well as purchasing, hiring collateral staff, acting as the
key person in the front end of the business, as well as building his key customer contacts
All four of Joe's grandparents were Sicilian immigrants, and he is the youngest of four children.
His family of origin gave him a taste and appreciation for good food and wine, as well as many
family recipes for traditional Italian food. He is currently married to Louise, his wife of nine
years, and resides in San Jose. Besides wine and fine food, Joe has a passion for surfing.
Work History and Associations:
Vintage Wine Merchants Founding Partner
Wine Club Assistant Manager and Italian Wine Buyer
Coastal Sol Foods
Defrancisi Machine Corporation
Bricklayers and Allied Craftsmen, Local 13 in Newark, New Jersey
Michael Guerra
Prior to working in the wine business, Mike's work background was as a family and child
therapist for 5 years in Solano County as a Mental Health Clinician in the Children's Day
Treatment Program in Vallejo, CA. Prior to accepting this position, he was awarded and
completed a one-year Post-Master's Clinical Fellowship at the Yale University Child Study
Center in New Haven, CT.
In 1999, Mike took a position with a South Bay wine retailer in order to more formally explore
his passion for wine, and it changed his world. He was only there a brief time before he accepted
a position at another wine retailer in the San Francisco Bay Area, where he was able to put his
knowledge and passion of Italy and Italian wines to use and become the Assistant Italian Wine
Buyer.
He left the wine industry briefly for a two year sojourn as a Human Resource Specialist for an
internet security company before joining Vintage Wine Merchants. The founders of Vintage
Wine Merchants, a premiere wine retailer/wine bar in the San Francisco Bay Area, recruited
Mike during the build-out stage of their business in 2002. Mike. quickly established himself as a
key contributor at Vintage by taking on wine buying responsibilities, developing and
implementing the food program, developing and implementing the Wine Education program and
acting as the Event Coordinator and Customer Liaison for private parties and corporate
functions. As a result of his commitment and contributions to the growth and success of the
business, he became one of the four partners to eventually run the business. Because of the
excellent reputation he developed during his tenure at Vintage, Mike has been featured in the San
Jose Business Journal, San Jose Magazine and interviewed on "In Wine Country" and for 2
different features on KRON-TV.
Mike is the third generation of Italian immigrants from Calabria, Italy, and is the youngest of two
children. He spent his junior year in college studying abroad in Rome, Italy, which, he says, was
a pivotal year and one of the experiences that eventually led him to pursue his current career and
passion. He still has a passion for international travel and foreign languages.
Work History and Education:
Vintage Wine Merchants 2002-present
Human Resource Specialist for an internet security company, 2000-2002
K&L Wine Merchants, 1999-2000
Mental Health Clinician - Solano County Children's Day Treatment Program, 1994-1999
Post-Master's Clinical Fellowship -Yale University Child Study Center, 1992-1993
Master's degree in Social Welfare - University of California at Berkeley, 1991
B.S. Psychology - Santa Clara University, 1986
High School Diploma - Bellarmine College Prep., 1982
X- _ m „ ~ D ~ -K.
r
This is a sample Menu AU G 7 2009
')WN OF I-OS CaA-
Antipasti -ANNiNG DNLD' Jam- 4)
6
Antipasti- Salumi Finocchiona, ~Sopesatta, Coppa, La Tur cheese with Coponata and Acme
Bread Small 1- 2 people $15 Large 3-4 people $22
Cold Mediterranean Seafood Salad, Octopus, Scungilli, Prawns, Calamari Celery, Lemon,
Extra Virgin Olive Oil and Capers $13
Little Gem Lettuces with Asparagus, Peas & Pecorino $16
Bruschetta
Bruschetta Classico Crostini topped with diced organic Roma tomatoes marinated in Extra
Virgin Olive Oil with Basil, Sicilian Sea Salt, Crushed Pepper and a Shaved Slice of Reggiano
$8
From the Mozzarella Bar
Mozzarella tasting: Burrata, Fior di Latte & Bufala Mozzarella $24
Bufala Mozzarella with Prosciutto $16
Burrata with Extra Virgin Olive Oil and Ground Pepper $16
Panini
Siciliano Grilled Eggplant, Roasted Red Peppers, Ricotta Salata,
Baby Greens on Acme Focaccia. $9 y
Entree
Melanzane alla Parrnigiana Breaded Eggplant Layered with Tomatoes, Basil,
Mozzarella & Parmigiano. $14
Pollo ally Diavola Boneless Skinless Grilled Chicken Breast Poached in Wine, Tomatoes,
Capers Lemon and Garlic $18
Pizza
Pizza Margherita Mozzarella and tomato sauce $18
EXHIBIT 6
Greetings Friends, Customers and Fellow Wine Enthusiasts! AUG 7 2009
Well, we've just finished our inaugural session of our "Decanting" series wine classes~)FTfYey GAT,
were very well received and very successful-which is good, because we are very_%&'eJited Dlv;,,,- .
about our "new and improved" offerings. Okay, we can't take all the credit. After all, we did
receive some great suggestions from some of the "Decanting alumni" and have tried to
incorporate them into our new curriculum. To those of you alumni to whom this applies, we
say, "Thank you...and we'd like to offer you a laurel ...and hardy handshake as a show of our
appreciation..."
Drum roll please ...as we are ready to unveil our new class offerings. As an introductory note,
let us just say that, following the example of the great visionary and awesome filmmaker,
George Lucas, we decided to launch our project with the "second installment" of a three-part
series. No offense George (and fellow Star Wars fans), but we hope that our other
installments are a bit more satisfying than their movie counterparts...
That being said, here are the new Vintage Wine Merchant class offerings:
"Uncorking" Series
This might be referred to as "Introductory" Level classes in normal nomenclature, but you
know us, we like to do things a little differently and, hopefully, more creatively... These
classes will focus on introductory subject matter and skill development. They are great for
beginners and for those of you who want to take a "refresher" class to hone your skills.
Examples of future "Uncorking" classes would be: Beginning Wine Appreciation, Component
Tasting, and Food & Wine Pairing 101.
"Decanting" Series
These would otherwise be known as "Intermediate" Level classes, which focus on
introductory and/or general overviews of selected topics, such as an overview of wines from
a particular country or an overview of certain categories of wine. Though beginners are
always welcome, having some knowledge of basic wine terminology and styles will allow
attendees to receive maximum enjoyment from these more "advanced" topics. Some of the
upcoming classes that are tentatively scheduled in this series are: Decanting Sparkling
Wines, Decanting Dessert Wines, and Decanting Austria.
"Savoring" Series
These classes provide even more focused, in-depth coverage of specific topics. More than
just a cursory overview, in these classes we'll take the time to really explore each topic to the
fullest extent. These weekly classes may take from 1 to 4 sessions, depending on the
breadth of the material covered, and are just the ticket for those of you who really want to
become "experts" on certain topics. Some examples of upcoming classes that are tentatively
scheduled in this series are: Savoring Italy (a three session class): Northern Italy, Central
Italy, and Southern Italy.
EXHIBIT 7
"Follow That Grape" Series
This is an independent series of classes that will focus on incarnations of individual grape
varietals (i.e., Cabernet Sauvignon, Pinot Noir, Chardonnay, etc.) from various viticultural
regions around the globe. Attendees will examine the similarities and differences in the
terroir, winemaking practices, philosophies, and styles of the various wines. For example,
we'll take a look at "typical" Cabernets from Napa, France, Australia, Chile, Italy, and see
how they compare with each other. These classes are a great way to really get familiar with
your favorite grapes, in all their many shapes and sizes.
WARNING: F.T.G. classes may foster heated debates among attendees (including the
instructor). Attendees are advised to wear comfortable, old clothing, as opinions, quips,
wine, and quite possibly, food are expected (and encouraged) to be flung at some point
during the evening.
VINTAGE DECANTATIONS
Decantation (de-can-TA-tion), n. The act of pouring (a liquid) from one vessel into another in
order to separate from sediment and allow for maximum exposure and optimal expression.
We're taking a little poetic license and using this concept to refer to the fact that we'll be doing more than
just popping corks in our new classes. In keeping with our philosophy that wine appreciation should be FUN,
our classes are designed to be interactive and informal, as well as informative. We'll leave all the myths and
pomposity behind and retain the more pleasurable aspects of sharing knowledge, stories, and impressions
with each other about the wines and regions we'll be exploring-"to allow for maximum exposure and optimal
expression!"
Our initial Decanting Series provides a general overview of the various topics (more intensive, in-depth
courses will be offered in the future). Though we encourage you to attend any of the classes that interest
you, those totally new to wine might gain a fuller appreciation of the Decanting classes if they "wet their
lips" with the Basics class first. Each class is $40.00/person. Classes will be held in the store or (depending
on the size) at a nearby location at Santana Row. We'll provide the stemware and educational materials. All
attendees must be at least 21 years of age. To ensure maximum enjoyment of the wines, we ask that
attendees refrain from wearing strong perfume or cologne. Capacity is limited, so sign up quickly.
Sign up for any 4 classes in advance and get the 5c" class free!!!
CLASS SCHEDULE
Basic Wine Appreciation - What is This Thing Called Wine?
This class is a wine snob's worst nightmare and a wine novice's dream come true! In this class, we'll discuss
the basics of wine appreciation: grape varieties and major growing regions, wine making basics, the "How-
To's" of tasting wine, proper wine storage, food and wine pairing, and ordering a wine in a restaurant. After
this class, you'll never feel intimidated (about wine) again!
Decanting Australia - Like A Bridge Over Coonawarra or Home, Home on the Grange
The Land of Oz has just surpassed France as the second leading wine-exporting country to the US! Just
marketing you say? Well, they DO have that (How many of you have had the Tait "Ball Buster" Shiraz??).
They also have made a reputation for palate and pocketbook-pleasing wines. However, they are making
world-class wines in all price ranges. We'll taste some great values and expensive collectibles as we learn
about the main grape varieties, growing regions and producers (large and small) of the Land Down Under.
Woop, Woop!
Decanting California - Sipping by the Dock of the Bay
California is the "new kid on the block" in terms of fine wine production when compared to most other
countries-but we've come a long way in a short time, no? Fearlessness and innovation have made this state
a titan of the wine world. France has Cabernet, Merlot, Chardonnay and Viognier-so do we! Italy has
Sangiovese and Pinot Grigio-us too! Spain has Tempranillo and Garnacha-same hereI Germany has
Riesling-no problem! We also have a little grape called Zinfandel... anyone? Didn't think so! California has it
all-the Good, the Bad and, yes, the Ugly. Well "tell all" as we learn about the wines, the regions, and the
producers that have made this state so great.
Decanting Spain - Sweet Home Albarino
Spain has more land under vine than any other country in the world-and is the third largest producer and
exporter of wine (only behind France and Italy)! Until recently, quality Spanish wines were hard to come by
here in the States-but there has been a wine revolution going on in Espana! The current generation of
Spanish wine producers has been focusing on quality wine production-and the results are astounding! Spain
is making exciting wines at ALL price levels-just pick up any current wine periodical and check out the
scores. Become more acquainted with the likes of Crianza, Cava (sparkling wine), Albarino, Priorato, Rioja,
and Ribero del Duero among other things as we explore the Land of La Mancha!
Decanting France - Show Me the Way to Go Rhone
No other country in the world produces more world-class, highly-prized (and expensive) wines than France.
You've heard the names bandied about: Bordeaux, Burgundy, Champagne ...Costieres de Nimes ...That's right,
though France set the standard for the rest of the world with magical elixirs that have now become household
names, there are many other glorious wines and regions to sample and enjoy-and we will! We'll explore the
major grape varieties and growing regions of France as well as some lesser-known values that will tease your
palate and please your wallet.
Decanting Italy - Whenever I Call You Firenze
Ah, Bella Italia ...or as the Greeks called it "Oenotria," Land of Vines. Wine has been produced in Italy for
thousands of years and there are reported to be over 400 grape varieties growing in Italy-and we'll taste
them all! Well, not quite ...but we'll travel from the foot of the Alps (Piemonte), land of Barbera, Dolcetto,
Barolo, down through Tuscany, where Sangiovese is King, on to Sicily, where Nero D'Avola reigns supreme,
sampling and discussing the important grape varietals, producers and growing areas as we go. Experience La
Dolce Vita in your own home town!
Decanting Germany - Like A Rhine-stone Cowboy
Often overlooked by the casual wine enthusiast, Deutschland is where Riesling, some say the noblest of white
grape varietals, reaches its ultimate expression. Come and learn about such wines and terms as Spatlese and
Trockenberenauslese or Nahe and Mosel. We'll discuss how to decode German wine labels and cover the
various growing regions and producers and why these wines provide a near-religious experience when paired
with Asian or Indian foods. Auf Wiedersehen!
"A little learning is a dangerous thing; drink deep, or taste not the Pierian spring: there shallow
draughts intoxicate the brain, and drinking largely sobers us again." Alexander Pope (1688-1744)
- An Essay on Criticism -
COME AND DRINK LARGELY!
VINTAGE WINE MERCHANTS
VINTAGE WINE MERCHANTS
FALL CLASS SCHEDULE
Cat[ 408-260-1115 to reserve a space or visit us at www.vintagewinemerchants.com for more details
Thursday, October 14th: INTRO TO CHEESE - A SLICE OF HEAVEN (BACK BY POPULAR DEMAND!)
Are you a closet Caseophile or do you share your love of cheese with the rest of the world? Maybe
you're just a casual cheese consumer... Perhaps you've come to one of our Friday Night Wine and
Cheese pairings and tried something new and interesting... or just maybe you think Vetveeta is the
cat's meow (as our own Harry Fong often rants). In any case, you may want to learn more about
cultured milk (a.k.a. cheese). In this introductory class, we'll explore the vast world of cheese:
how it's made, the main types of milk used, the many kinds of cheese and the major regions in
which it's produced. Don't just say "Cheese"...eat it!
Capacity: 20 Students Cost: $20.00/person + tax
Thursday October 28th (White) and November 4th (Red): DECANTING: BURGUNDY
Okay, so we could spend a lifetime exploring the vast nuances, varied character, and multitude of
vineyards and vignerons that make up the complicated, delectable fabric that is Burgundy (maybe a
future candidate for an "Indulging In" series? but let's crawl before we run, shall we? In this
introductory class, we'll conduct a general overview of the region, breaking down the classes into
"White" and "Red." See, that isn't so scary, is it? Come and learn about the region that many
believe gives birth to the highest expressions of the Pinot Noir and Chardonnay grapes. If nothing
else, you'll learn a valuable secret: Good Burgundy doesn't necessarily HAVE to be
expensive ...sshh, don't tell anyone we told you! More secrets are yet to be revealed...
Capacity: 15 Students Cost: $30.00/person + tax ($55.00/person for both sessions)
Thursday, November 11th: UNCORKING: HOLIDAY WINES
Happy Festivus, everyone! The holidays are upon us and visions of sugar plums (and other sundry
comfort foods) dance in our heads-bringing to mind the annual question of "Which wine do I serve
with this cornucopia of textures and tastes?! From Thanksgiving turkey with all the fixin's to
Holiday dinners and cocktail parties ...the season is chock full of occasions to explore the vagaries of
food and wine pairings-and the options are boundless! We'll sample everything from the sublime
to the ridiculous before moving on to "The Airing of Grievances..."
Capacity: 20 Students Cost: $20.00/person + tax
Thursday, November 18th: UNCORKING: SPARKLING WINES
Dom Perignon may have said it best when, upon first imbibing some of the bubbly elixir, he
exclaimed to his fellow monks, "Come quickly, I'm drinking stars!" Sparkling wine is one of the
true treats of the wine world-exuberant, titillating, uplifting, sensuous, and delicious-far too
wonderful to save for special occasions only! Nothing rejuvenates the spirit like a bottle of bubbly,
so why not "pop" open a bottle to add a little sparkle to a Tuesday night or to add a little panache
to a Sunday brunch? Most all of the major wine-producing regions produce sparkling wines-and
some are very inexpensive! We'll taste an array from Italy, Spain, Australia, California and, of
course, France! Capacity: 20 Students "Cost: - 25:00/person + tax
Thursday, December 2"d: UNCORKING: DESSERT WINES
Do the words "Late Harvest" send a shiver down your spine? Does the term "residual sugar" make
your heart go pitty-pat? When dining out, do you check out the dessert menu BEFORE you look at
the dinner menu? If you answered "Yes" to any of these questions, then this class is for you! We
will indulge our sweet tooths with some of the world's finest "stickies" from French Sauternes to
German Eiswein to Spanish Sherry to some domestic Last Harvest wines ...learn about the grapes, the
regions and the techniques used to make what some slightly lascivious folks refer to as "belly
button" wines ...yum! Capacity: 20 Students Cost: $25.00/person + tax
RESOLUTION 2001 106
RESOLUTION OF THE TOWN COUNCIL
OF THE TOWN OF LOS GATOS
AMENDING THE TOWN'S ALCOHOLIC BEVERAGE POLICY
WHEREAS, the sale of alcoholic beverages, if not regulated, can jeopardize public safety,
result in an increase of calls for police services and compromise the quality of life for Town
residents; and
WHEREAS, The Town Council wants to balance the regulation of alcoholic beverage
service and protection of residential neighborhoods with the goal of maintaining a vibrant and
successful Downtown and commercial areas throughout Los Gatos; and.
WHEREAS, the Town Council held a study session on July 2, 2001 to discuss issues
relating to service of alcoholic beverages; and
WHEREAS, the Town Council has indicated a desire to review all applications for new
alcohol service or change in existing service, and a need to amend the existing Alcohol Policy,
THEREFORE' BE IT RESOLVED: the Town Council of the TOWN OF LOS GATOS
does hereby adopt the amended.. Alcoholic Beverage Policy attached hereto as Exhibit A.
EXHIBIT 8
PASSED AND ADOPTED at a regular meeting of the Town Council held on the 171 day
of September, 2001, by the following vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Steven Blanton, Sandy Decker, Steve Glickman,
Mayor Joe :Pirzynski.
NAYS: None
ABSENT: None
ABSTAIN: None
~ / .
SIGNED:
YTOWN OF LOS GATOS
LOS GA.TOS, CALIFORNIA
ATTEST:
,
CLERK OF TB E TOWN OF LOS GATOS
LOS GAT10S-
~ CALIFORNIA
2
POLICY REGULATING THE CONSUM MON AND
SERVICE OF ALCOHOLIC BEVERAGES
I. Purpose
The consumption or service of alcoholic beverages, if not regulated, can jeopardize public
safety, result in an increase of calls for police services and compromise the quality of life for
Town residents. This policy provides parameters for alcoholic beverage service, particularly
addressing late night service when alcohol related incidents are most likely to. occur and when
the disturbances to Town residents is least tolerable.
The service of alcoholic beverages, with or without meals, past 10 PM is a discretionary
privilege to be determined on a case by case basis. The following provisions are intended to
balance the protection ofresidential neighborhoods in close proximity to commercial districts
and still maintain the viability of our commercial centers in which restaurants have an essential
role. Hours of operation may be regulated based on an establishment's proximity to
residential neighborhoods or schools, the concentration of establishments in an area serving.
alcoholic beverages or for other reasons that may arise at the public hearing.
The deciding body may approve a conditional use permit to serve alcoholic beverages based
on the merits ofthe application and subject to the following:requirements:
II. General policy
1. The Town shall continue to strongly discourage new applications for standalone bars
or restaurants with separate bars..
2. The Town shall continue to discourage applications for entertainment establishments
serving alcoholic beverages.
3. Entertainment in association with an eating or drinking establishment maybe allowed
if standards and a permit process are adopted. . '
4. Alcoholic beverage service for new conditional use permit applications or applications
for modification of a conditional use permit shall not be allowed:
A After 11 PM Sunday through Thursday, except for holidays and evenings
before holidays.
B. After 1 AM Friday, Saturday, holidays or evenings before holidays.
An existing establishment with a conditional use permit in good standing allowed to serve
alcoholic beverages past the hours stated above may continue to operate under their existing
hours of operation.
Exhibit A
Town of Los Gatos
Alcoholic Beverage Policy
Page 2 of 4
5. Any establishment serving alcoholic beverages shall be subject to the following:
A. Uniformed privately provided security guards may be required in or around
the premises by-the Chief of Police if alcohol related problems recur that are
,not resolved by the licensed owner.
B. At the discretion of the Chief of Police, periodic meetings will be conducted
with representatives from the Police Department for on-going employee
training on alcoholic beverage service to the general public.
C. All establishments shall use an employee training manual that addresses
alcoholic beverage service consistent with the standards of the Californian
restaurant Association.
D. All licensed operators shall have and shall actively promote a designated
driver program such as complimentary non-alcoholic beverages for designated
drivers.
E. Taxicab telephone numbers shall be posted in a visible location.
6. The deciding body shall make the following findings prior to approving an application
for conditional use permit to serve alcoholic beverages past l OPM:
A. Late night service will not adversely 'impact adjacent residential
neighborhoods..
B. The applicant does not have a history of complaints and non-compliance with
local ordinances or the Alcoholic Beverage Policy.
C. The applicant has demonstrated a clear benefit to the community.
7. A meal is defined as a combination of food items selected from a menu (breakfast,
lunch or dinner). Appetizers such as popcorn, nachos, pretzels, potato skins, relish
trays, etc. (hot or cold) are not meals.
8. Alcoholic beverage service in approved outdoor seating areas may be permitted if
adequate separation from public areas is provided as determined by the Town
Manager. The separation shall clearly suggest that alcohol is not allowed outside the
restaurant seating area.
Tawn of Los Gatos
Alcoholic Beverage 1'olicY
Page 3 of 4
III. Specific Policy
Restaurants:
Alcoholic beverages may only be served with meals.
2. Restaurants With Separate Bars:
Alcoholic beverage service is permitted in the dining area only in conjunction with
meal service: Meal service shall be available until closing or 1 I PM Sunday through
Thursday and until 12 midnight Friday, Saturday, holidays and evenings before
holidays, whichever is earlier,, if late night bar service is available. Specific hours of
operation for each establishment are determined upon issuance of a conditional use
permit.
IV. Review Process
1. Proposals for new bars or restaurants with bars and all requests for new alcohol
service or a change to existing service shall be reviewed by the planning Commission.
The Commission will make a recommendation to the Town Council and the Council
shall have final review authority.
2. Changes in ownership for businesses involving service of alcoholic beverages shall be
reviewed by the Community Development Department. The following process will
be followed:
a. The Director of Community Development shall contact the new business
owner to make them aware of the conditions of approval attached to the Use
Permit for the location.
b. One year following issuance of a business license, surrounding/impacted
property owners shall be notified and any comments regarding the operation
of the business shall be solicited.
C. If the Director of Community Development becomes aware of any alcohol
related impacts on the surrounding neighborhood, the Director shall review
the operation of the business to determine whether there is a violation of the
use permit.
Town of Los Gatos
Alcoholic Beverage Policy
Page 4 of 4
d. If there are violations of the use permit that have not been voluntarily
corrected by the business owner the matter will be forwarded to the. Planning
Com m ssion for public hearing pursuant to Section. 29.20.3 10 of the Zoning
Ordinance.
Pursuant to Section 29.20,315 of the Zoning Ordinance the Planning
Commission may revoke or modify the conditional use permit if it finds that
sufficient grounds exist.
IV. Enforcement
All conditional use permits issued to establishments for alcoholic beverage service on site
shall be subject to Section 29.30;310(b) of the Town Code authorizing the Town.Manager
to take enforcement action if it is determined that the sale of alcohol has become a nuisance
to the Town's public health, safety or welfare. Enforcement of section 29.20.310(b) of the
Town, Code will be based on, but not limited to, the following factors:.
I. The number and types of calls for service at or near the establishment which that are
a direct result of patrons actions;
IL The number of complaints received from residents ad other citizens concerning the
operation of an establishment;
M., The number of arrests for alcohol, drug, disturbing the peace, fighting and public
nuisance violations associated with an establishment;
IV. The number and kinds of complaints received from the State Alcoholic Beverage
Control office and the County Health Department;
V. Violation of conditions of approval related to alcoholic beverage service.
The AlcoholicBeverage Policy is not to be construed to bea right of development. The Town retains
the right of review and approval (or denial) of each project based on its merits.
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September 2009
Dear Sir or Madam:
Our names are Mike Guerra and Joe Cannistraci. We have an application going before the Los Gatos Town
Planning Commission on Wednesday, September 9th to open a wine retail store and tasting room (based on the
time-honored concept of "Enoteca" in Italy) in the Los Gatos Shopping Center at 416 N. Santa Cruz Avenue.
Please accept this packet of materials as our way of introducing ourselves to you and letting you know about
our plans to open a business near you.
In brief, we are seasoned and serious wine industry professionals who intend to create an upscale, yet casual
environment of passionate, informed and responsible wine and food enjoyment. We will offer eclectic
selection of fine wines, wine-related accessories, and specialty foods available for retail purchase, as well as a
modest selection of wines for tasting and a menu of substantial, yet simple food choices to be enjoyed on
premise. In keeping with our core belief of ever increasing our customers' knowledge and appreciation of fine
wines, we also plan to conduct hosted tastings and wine education classes on premise and feature videos of
interviews of wine industry professionals (such as winemakers, Master Sommeliers, wine importers, etc.) and
other wine-related commentary on our website.
In order to provide you with as much information about who we are and our proposed venture as possible, we
have enclosed a detailed description of our concept, short biographies of ourselves, a DVD of an interview we
conducted with an Italian winemaker, a copy of a wine class curriculum we conducted at a prior location, and a
sample menu of food offerings we intend to provide.
We hope to become an active, responsible and beneficial addition to the Los Gatos community. In order to
help us achieve this, we invite you to contact us to share any questions, concerns or comments you may have
about our proposed venture, as your input and support are very important to us. You can reach us at:
joe@joccannistraci.com.
We look forward to hearing from you.
Thank you for your consideration, ;J r'l
f
Michael Guerra and Joseph Canni~traci, Prin ' als
AUG 2 8 2009
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EXHIBIT 10
ENOTECA AND WINE MERCHANT
DESCRIPTION OF BUSINESS:
Our Enoteca is based on a centuries old business model that combines elements of wine and food
appreciation in a traditional and civil atmosphere. We will provide a fairly significant selection of
fine wines for retail purchase (off-premise) as well as a modest selection of wine offered by-the-glass
for tasting (on-premise) and for pairing with our menu of wine-related food offerings. We intend to
conduct hosted wine tastings and wine education classes in order to increase our customer's
knowledge and appreciation of fine wines and specialty foods. We also intend to capitalize on
popular and powerful media, specifically our website, to expand our presence beyond local
boundaries and increase our customer base by offering on-line wine courses, video-based wine
commentaries and interviews, a blog and other content.
Both wine novices and enthusiasts enjoy convivial experiences involving wine and the surrounding
wine culture. People in general are becoming more interested in experiencing better, authentic,
more eclectic wines and foods. Due to the increased popularity of wine and food related television
programming and associated books, the interested consumer also has an eye toward broadening
his/her experience, expanding his/her knowledge, becoming educated about wine & food pairing,
and fostering healthy and responsible consumption in a casual, friendly setting. Our Enoteca will
provide both products and services that will fulfill these expanding areas of demand and create a
unique, innovative and authentic business based on these principles in order to help support our
retail operation.
HOURS OF OPERATION:
Monday -Wednesday: 10:00 AM to 9:00 PM
Thursday: 10:00 AM to 10:00 PM
Friday and Saturday: 10:00 AM to 11:00 PM
Sunday: 12:00 PM to 8:00 PM
Please note: Food and Beverage service will terminate ONE HOUR prior to close.
BENEFITS TO THE COMMUNITY: -
• Currently, there is no existing business that offers a wide range of eclectic wines (and
specialty foods) in town, so residents have to drive to neighboring areas to purchase wines
and to interact with passionate, friendly, and knowledgeable staff. We will fulfill this unmet
need for Los Gatos residents, thereby increasing their satisfaction with the amenities found
in town and alleviate any frustrations they may have about having to drive elsewhere in order
to procure the products and services they desire.
• Our business will provide the type of products and services that will also attract upscale
patrons, both private and corporate, into the town from outlying areas, bringing more
collateral business and sales revenue into town which will benefit other local businesses and
the town.
• We plan to do a high volume of sales for the modest physical footprint of our business
which will provide always-needed sales tax revenue to the town.
By providing a unique and popular destination in the Los Gatos Shopping Center, we will
draw people into an area beyond the downtown core, thereby expanding activity and
business into a less-frequented, underutilized section of town.
Promotion of Local Wineries: We intend to dedicate a portion of our inventory to wines
from local wineries (from Santa Clara and Santa Cruz counties) as well as host tasting events
featuring local wine makers and/or winery representatives in order to help increase their
exposure and expand their customer base.
We intend to be active in the Chamber of Commerce and participate in as many community-
sponsored events as possible.
FACTS THAT SUPPORT OUR APPLICATION:
• Our business will comply with the Noise Element in the General Plan.
• Our business will comply with the town's Alcohol Beverage Policy in that we will not serve
any wine/beer past 10 PM (see note under Hours of Operation).
• All employees will receive third-party training on proper service of alcoholic beverages.
• We operate a similar business in Santana Row which is a very impacted, densely-populated
residential/retail center where we have residents that live directly above our establishment.
In nearly 6 years of operation,
o We have not had a SINGLE complaint filed by any residents regarding noise,
disruptive customer behavior or ANY other reason.
o We have never had a SINGLE incident of drunken or disorderly conduct by any of
our patrons.
o We have never had a SINGLE incident in which we or any SR resident has
contacted SR security or local law enforcement because of problematic behavior of
our patrons.
• Our business would help achieve the objective of providing a "diverse shopping experience"
as outlined in the General Plan because we would provide a unique, interactive and mutli-
level wine-related experience that is not currently available in the town limits.
Our business would help achieve the objective of "preserving the small town character" of
the town as outlined in the General Plan because we would be a small, privately owned and.
operated business. One of the principals has long-standing roots in the focal community.
• Our business would help achieve the objective of supporting "an active business community
that provides a wide variety of goods and services and a broad range of employment
opportunities, minimizing the need to travel to other communities" in order to obtain
sought-after products and services as outlined in the General Plan.
• The proposed uses of the property are desirable to the public conveniences; the proposed
uses will not impair the integrity and character of the zoning district; the proposed uses
would not be detrimental to public health, safety, or general welfare; the proposed uses of
the property are in harmony with the various elements or objectives of the General Plan (as
outlined above) and the purposes of the Town Ordinance.
SPECIFIC ISSUES RELATED TO SERVING ALCOHOLIC BEVERAGES:
• The stated purpose of the Alcohol Beverage Policy is to avoid the potential to "jeopardize
the public safety" which may "result in an increase of calls for police services."
o As stated above, in 6 years of operating a similar concept in Santana Row, we have
not had a SINGLE incident involving disruptive behavior, public drunkenness OR
any incidents requiring security or local law enforcement intervention.
The Alcohol Beverage Policy "provides parameters for alcoholic beverage service,
particularly addressing late night service when alcohol-related incidents are most likely to
occur and when the disturbances to Town residents is least tolerable."
o The latest our food and beverage service will terminate on any given night will be
10:00 PM (which will only be on Friday and Saturday nights). Most nights it will
terminate at 5:00 PM
Our proposed use would not be classified as a "Bar."
o The typical definition of a "Bar" is an establishment whose primary service/ function
is the service of alcoholic beverages, mainly hard liquor and mixed drinks, to be
consumed ON-PREMISE, usually until late in the evening (closing at 2:00 AM).
• Our primary function is the retail sale of wines and wine-related items, other
products and services are meant as collateral support to this function.
• We will not serve or sell any hard liquor or mixed drinks.
• We will not be open past 11:00 PM
■ Any on-premise wine tasting selections will be accompanied by a menu of
food selections. (See Sample Menu)
• "Stand-alone Bars" typically do not offer educational classes or hosted
tastings (with winemakers or winery representatives) - we will, as part of our
goal to increase our customers' knowledge and appreciation of wine.
Our proposed use would be classified as a "Restaurant."
o We will offer a menu of food offerings that will be substantial, yet simple and easy to
execute. (See Sample Menu)
■ A meal is defined as "a combination of food items selected from a menu."
o Our beverage service will be offered in conjunction with meal service.
o Our meal service and tasting area are in the same location - there is no separation
between the meal service and wine tasting area.
o Our hours of operation are in conjunction with typical restaurant hours (versus late
night "bar" hours).
VISION AND VALUES:
Our fundamental belief is that wine is meant to be consumed with food. Selling wine in an
environment where the consumer has the opportunity to pair it with food facilitates a greater
understanding of this concept. It also helps us to educate our customers and promote an increased
interest in wine appreciation in terms of. winemaking techniques, the various wine regions around
the world, the multitude of grape varietals and their unique characteristics, proper techniques of
wine assessment, fundamentals of food and wine pairing and the like. It is our goal to encourage
our customers to engage their intellect whenever they enjoy wine. We want them to become
interested in "the Story" behind each wine they try, such that whenever they taste or drink tivine
they ask themselves: Who made this wine? Where did it come from? What grapes are in it? What
scents and flavors to I detect? Why does it smell/taste the way it does? How is different or similar
to other wines I've tasted? What foods would it pair well with? Wine is a unique beverage that
engages all the senses and appeals to one's intellect, emotions, and spirit. We intend to share our
passion for and knowledge of fine wine and food with every customer that walks through our door.
BIOGRAPHIES OF BUSINESS PRINCIPALS:
Joseph Cannistraci
Joe's initial work background was in the trades as a journeyman Plasterer. Before joining the trade
union, he was an Apprentice Machinist at the Defrancisi Machine Corporation, a renowned
manufacturer of commercial pasta machines from 1990 to 1991.
Prior to developing his passion for wine, Joe expanded his entrepreneurial pursuits and was a key
founding owner of Coastal Sol Foods, an energy bar company, which he shepherded from
conception to product launch. He did product research and development, worked closely with a
consultant to create a business plan, recruited outside co-investors, and was responsible for all
aspects of product development, including formulations and branding.
Joe began his career in the wine industry by working at a South Bay wine retailer, which was one of
the largest in the US. Joe immediately demonstrated a special knack for developing both customer
and business relationships, as well as an aptitude for absorbing and utilizing a vast amount of wine
knowledge. Within his first year, he was promoted to Assistant Manager and made the Italian Wine
Buyer.
Since 2002, Joe Cannistraci has been working as a founding partner at Vintage Wine Merchants, the
premiere wine retailer/wine bar in the San Francisco Bay Area. As a partner, he has managed all
operational aspects of the business, as well as purchasing, hiring collateral staff, acting as the key
person in the front end of the business, as well as building his key customer contacts
All four of Joe's grandparents were Sicilian immigrants, and he is the youngest of four children. His
family of origin gave him a taste and appreciation for good food and wine, as well as many family
recipes for traditional Italian food. He is currently married to Louise, his wife of nine years, and
resides in San Jose. Besides wine and fine food, Joe has a passion for surfing.
Work History and Associations:
Vintage Wine Merchants Founding Partner
Wine Club Assistant Manager and Italian Wine Buyer
Coastal Sol Foods
Defrancisi Machine Corporation
Bricklayers and Allied Craftsmen, Local 13 in Newark, New Jersey
Michael Guerra
Prior to working in the wine business, Mike's work background was as a family and child therapist
for 5 years in Solano County as a Mental Health Clinician in the Children's Day Treatment Program
in Vallejo, CA. Prior to accepting this position, he was awarded and completed a one-year Post-
Master's Clinical Fellowship at the Yale University Child Study Center in New Haven, CT.
In 1999, Mike took a position with a South Bay wine retailer in order to more formally explore his
passion for wine, and it changed his world. He was only there a brief time before he accepted a
position at another wine retailer in the San Francisco Bay Area, where he was able to put his
knowledge and passion of Italy and Italian wines to use and become the Assistant Italian Wine
Buyer.
He left the wine industry briefly for a two year sojourn as a Human Resource Specialist for an
internet security company before joining Vintage Wine Merchants. The founders of Vintage Wine
Merchants, a premiere wine retailer/wine bar in the San Francisco Bay Area, recruited Mike during
the build-out stage of their business in 2002. Mike quickly established himself as a key contributor
at Vintage by taking on wine buying responsibilities, developing and implementing the food
program, developing and implementing the Wine Education program and acting as the Event
Coordinator and Customer Liaison for private parties and corporate functions. As a result of his
commitment and contributions to the growth and success of the business, he became one of the
four partners to eventually run the business. Because of the excellent reputation he developed during
his tenure at Vintage, Mike has been featured in the San Jose Business Journal, San Jose Magazine
and interviewed on "In Wine Country" and for 2 different features on KRON-TV.
Mike is the third generation of Italian immigrants from Calabria, Italy, and is the youngest of two
children. He spent his junior year in college studying abroad in Rome, Italy, which, he says, was a
pivotal year and one of the experiences that eventually led him to pursue his current career and
passion. He still has a passion for international travel and foreign languages.
Work History and Education:
Vintage Wine Merchants 2002-present
Human Resource Specialist for an internet security company, 2000-2002
K&L Wine Merchants, 1999-2000
Mental Health Clinician - Solano County Children's Day Treatment Program, 1994-1999
Post-Master's Clinical Fellowship -Yale University Child Study Center, 1992-1993
Master's degree in Social Welfare - University of California at Berkeley, 1991
B.S. Psychology - Santa Clara University, 1986
High School Diploma - Bellarmine College Prep., 1982
Class Categories
"Uncorking" Series
This might be referred to as "Introductory" Level classes in normal nomenclature, but you know us,
we like to do things a little differently and, hopefully, more creatively... These classes will focus on
introductory subject matter and skill development. They are great for beginners and for those of you
who want to take a "refresher" class to hone your skills. Examples of future "Uncorking" classes
would be: Beginning Wine Appreciation, Component Tasting, and Food Et Wine Pairing 101.
"Decanting" Series
These would otherwise be known as "Intermediate" Level classes, which focus on introductory and/or
general overviews of selected topics, such as an overview of wines from a particular country or an
overview of certain categories of wine. Though beginners are always welcome, having some
knowledge of basic wine terminology and styles will allow attendees to receive maximum enjoyment
from these more "advanced" topics. Some of the upcoming classes that are tentatively scheduled in
this series are: Decanting Sparkling Wines, Decanting Dessert Wines, and Decanting Austria.
"Savoring" Series
These classes provide even more focused, in-depth coverage of specific topics. More than just a
cursory overview, in these classes we'll "indulge ourselves" and take the time to really explore each
topic to the fullest extent. These weekly classes may take from 1 to 4 sessions, depending on the
breadth of the material covered, and are just the ticket for those of you who really want to become
"experts" on certain topics. Some examples of upcoming classes that are tentatively scheduled in this
series are: Savoring Italy (a three session class): Northern Italy, Central Italy, and Southern Italy.
"Follow That Grape" Series
This is an independent series of classes that will focus on incarnations of individual grape varietals
(i.e., Cabernet Sauvignon, Pinot Noir, Chardonnay, etc.) from various viticuttural regions around the
globe. Attendees will examine the similarities and differences in the terroir, winemaking practices,
philosophies, and styles of the various wines. For example, we'll take a took at "typical" Cabernets
from Napa, France, Australia, Chile, Italy, and see how they compare with each other. These classes
are a great way to really get familiar with your favorite grapes, in all their many shapes and sizes.
DECAIOTTATIONS
Decantation (de-can-TA-tion), n. The act of pouring (a liquid) from one vessel into another in
order to separate from sediment and allow for maximum exposure and optimal expression.
We're taking a little poetic license and using this concept to refer to the fact that we'll be doing more than
just popping corks in our new classes. In keeping with our philosophy that wine appreciation should be FUN,
our classes are designed to be interactive and informal, as well as informative. We'll leave all the myths and
pomposity behind and retain the more pleasurable aspects of sharing knowledge, stories, and impressions
with each other about the wines and regions we'll be exploring-"to allow for maximum exposure and optimal
expression I"
Our initial Decanting Series provides a general overview of the various topics (more intensive, in-depth
courses will be offered in the future). Though we encourage you to attend any of the classes that interest
you, those totally new to wine might gain a fuller appreciation of the Decanting classes if they "wet their
lips" with the Basics class first. We'll provide the stemware and educational materials. All attendees must
be at least 21 years of age. To ensure maximum enjoyment of the wines, we ask that attendees refrain from
wearing strong perfume or cologne. Capacity is limited, so sign up quickly.
CLASS SCHEDULE
Basic Wine Appreciation - What is This Thing Called Wine?
This class is a wine snob's worst nightmare and a wine novice's dream come true! In this class, we'll discuss
the basics of wine appreciation: grape varieties and major growing regions, wine making basics, the "How-
To's" of tasting wine, proper wine storage, food and wine pairing, and ordering a wine in a restaurant. After
this class, you'll never feel intimidated (about wine) againl
Decanting Australia - Like A Bridge Over Coonawarra or Home, Home on the Grange
The Land of Oz has just surpassed France as the second leading wine-exporting country to the USI Just
marketing you say? Well, they DO have that (How many of you have had the Tait "Ball Buster" Shiraz??).
They also have made a reputation for palate and pocketbook-pleasing wines. However, they are making
world-class wines in all price ranges. We'll taste some great values and expensive collectibles as we learn
about the main grape varieties, growing regions and producers (large and small) of the Land Down Under.
Woop, WoopI
Decanting California - Sipping by the Dock of the Bay
California is the "new kid on the block" in terms of fine wine production when compared to most other
countries-but we've come a long way in a short time, no? Fearlessness and innovation have made this state
a titan of the wine world. France has Cabernet, Merlot, Chardonnay and Viognier-so do wet Italy has
Sangiovese and Pinot Grigio-us toot Spain has Tempranillo and Gamacha-same here! Germany has
Riesling-no problem! We also have a little grape called Zinfandel... anyone? Didn't think sol California has it
all-the Good, the Bad and, yes, the Ugly. We'll "tell all" as we learn about the wines, the regions, and the
producers that have made this state so great.
Decanting Spain - Sweet Home Albarino
Spain has more land under vine than any other country in the world-and is the third largest producer and
exporter of wine (only behind France and italy)l Until recently, quality Spanish wines were hard to come by
here in the States-but there has been a wine revolution going on in Espanal The current generation of
Spanish wine producers has been focusing on quality wine production-and the results are astounding) Spain
is making exciting wines at ALL price levels-just pick up any current wine periodical and check out the
scores. Become more acquainted with the likes of Crianza, Cava (sparkling wine), Albarino, Priorato, Rioja,
and Ribero del Duero among other things as we explore the Land of La Manchal
Decanting France - Show Me the Way to Go Rhone
No other country in the world produces more world-class, highly-prized (and expensive) wines than France.
You've heard the names bandied about: Bordeaux, Burgundy, Champagne ...Costieres de Nimes ...That's right,
though France set the standard for the rest of the world with magical elixirs that have now become household
names, there are many other glorious wines and regions to sample and enjoy-and we Mill Well explore the
major grape varieties and growing regions of France as well as some lesser-known values that will tease your
palate and please your wallet.
Decanting Italy - Whenever I Call You Firenze
Ah, Bella Italia ...or as the Greeks called it "Oenotria," Land of Vines. Wine has been produced in Italy for
thousands of years and there are reported to be over 400 grape varieties growing in Italy-and we'll taste
them aill Well, not quite ...but we'll travel from the foot of the Alps (Piemonte), land of Barbera, Dolcetto,
Barolo, down through Tuscany, where Sangiovese is King, on to Sicily, where Nero D'Avola reigns supreme,
sampling and discussing the important grape varietals, producers and growing areas as we go. Experience La
Dolce Vita in your own home townI
Decanting Germany - Like A Rhine-stone Cowboy
Often overlooked by the casual wine enthusiast, Deutschland is where Riesling, some say the noblest of white
grape varietals, reaches its ultimate expression. Come and learn about such wines and terms as Spatlese and
Trockenberenauslese or Nahe and Mosel. We'll discuss how to decode German wine labels and cover the
various growing regions and producers and why these wines provide a near-religious experience when paired
with Asian or Indian foods. Auf Wiedersehenl
Page 1 of 2
Jennifer Savage - Support for Enoteca Wine Bar
From: "Kathy Sulgit (ksulgit)" <ksulgit@cisco.com>
To: <planning@losgatosca.gov>
Date: 8/30/2009 8:28 PM
Subject: Support for Enoteca Wine Bar
Attachments: logo.gif; green.gif
AU(j' 3 2009
Dear Los Gatos Planning Commission
am a fourteen year resident of Los Gatos.
r l r) Q r"
..JIV v,
I am writing a Letter of Support on behalf of Michael Guerra and Joe Cannistraci in support of their application to
open a wine retail store and tasting room in the Los Gatos Shopping Center at 416 N. Santa Cruz Avenue.
Michael and Joe plan to open a business that will provide the type of products and services that will attract
upscale patrons, both private and corporate, into the town from outlying areas, bringing more collateral business
and sales revenue into town which will benefit other local businesses and the town. I have visited their wine shop
in Santana Row on numerous occasions, and would much prefer to spend my money locally! They run a
wonderful operation.
There is no comparable business on this side of town. By providing a unique and popular destination in the Los
Gatos Shopping Center, they will draw people into an area beyond the downtown core, thereby expanding activity
and business into a less-frequented section of town and possibly make downtown less impacted.
I also support their commitment to promote local wineries. This unique facet of our community is sorely untapped
and underutilized. Michael and Joe can help us to promote these local specialty businesses and help make Los
Gatos more of a "destination" region for locals and non-residents/tourists who are interested in fine wines, pe of
fine dining, and fine living. Theirs is exactly the type of business that our town needs to grow and develop in a
way that is consistent with our vision and goals of being a diverse, culturally rich, and unique place to visit, live
and work.
Michael and Joe have a proven track record for operating a successful, well-respected and well-run business. I
am confident that Michael and Joe will create another successful business and will become active, responsible
and beneficial additions to the Los Gatos community.
Thank you for your consideration,
Kathy Sulgit
I11111111
C1sC+..
Kathleen Sulgit
Director, Corporate Events
Marketing / CMC
ksu~ta&cisco com
Phone: (408) 525-8431
Fax: (408) 608-0474
Cisco Systems, Inc.
170 West Tasman Drive,
San Jose, CA 95134-1706
USA
_ aeo home_:page
EXHIBIT 11
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Page 2 of 2
A Think before you print.
This e-mail may contain confidential and privileged material for the sole use of
the intended recipient. Any review, use, distribution or disclosure by others is
strictly prohibited. If you are not the intended recipient (or authorized to receive
for the recipient), please contact the sender by reply e-mail and delete all
copies of this message.
Cisco Systems Limited (Company Number: 02558939), is registered in England
and Wales with its registered office at 1 Callaghan Square, Cardiff, South
Glamorgan CF10 5BT
file://C:\Users\jsavage\AppData\Local\Temp\XPgrpwise\4A9B86E4TOWN DOTOWNP... 8/31/2009
September 1, 2009
Dear Los Gatos Planning Commission:
My name is Carrie Castro, I have been a resident in Los Gatos for five years. I have an eclectic background but
to summarize it simply, I have been in some kind of sales for more than twenty years. I've managed sales
teams in the Waste industry in the Bay Area and have enjoyed at different times in my career selling art,
furniture, clothing and even wine. I have had the great pleasure of working one night a week for several years
with Mike Guerra and Joe Cannistraci at the Vintage Wine Merchants. I have a passion for food and wine and
wanted to learn more about wine, I was given an opportunity to expand my knowledge with hands on
experience. Actually, I could never have imagined the amazing people I'd meet, the eclectic variety of wines I'd
taste and the friends I've gained while in company with these two.
Enough about me, I am writing to you, to show my support for Mike and Joe in their application before the
Town of Los Gatos Planning Commission and the Town Council to open a wine retail store and tasting room
in the Los Gatos Shopping Center at 416 N. Santa Cruz Ave.
I'd like to tell you a little about how it is to work with Mike and Joe and give you a bit of the inside scoop. First
off, these two men have been at the heart of the success at the Vintage, they share a gift with people and wine,
rare even in this state rich with grapes. Professional and ethical, always friendly without intimidating people
who are in search of the perfect wine for their special event or just for dinner that night. Joe is one of the
best story tellers I've ever met, but the stories lead you to a new wine or give you incite on a wine maker or the
history behind the winery he's a researcher and will find an answer to any wine question one might have, most
of them he knows already. Mike is a brilliant writer/educator so expect to get an incredible lesson on a variety
of wines from local wineries as well as an assortment of places he and Joe may have traveled to in Italy or
France. One of the best testaments to their potential here in town is the people that return, the "regulars,"
locals and professionals that fly in to the area and wish to buy from someone who knows what they like, its
fairly amazing and I'm sure I don't know the half of it.
Living here in town, it would be great to be able to meet friends down town for a glass of wine and a cheese
plate, to meet a winemaker at a scheduled event or to take one of Mike's wine classes. I belong to several
organizations through my company and would love to have an establishment like Mike and Joe are proposing
to hold business events. The location suggested is perfect, plenty of parking and I hardly get to that side of
highway nine and always say I should.
Mike and Joe are hard working, creative, businessmen with a history of running successful operations. I can't
think of a better addition to the Town of Los Gatos than a wine retail shop with wine tasting and small plates.
We'd be lucky to have them, they live the motto, "Good food, good wine and good friends!"
I hope you'll take into consideration what I've written and please don't hesitate to call me with any questions
you may have.
Sincerely,
c
Carrie Castro
Cell (650) 454-5821 E I YEE D
S E P 0 2 zoos
TOWN OF LOS GATOS
PLANNING DIVISION
,
{ THE ART &.SO'U!. OP •C.OBKiNG
28.August, 2009
f1 /
To Tie Los`Gatos Manning eomf~iissfon '
`Y am'writing to you to express my> enthusiasm and e4ger anticip`atiori of thet proposed r `
enere in
Enoteca and':y~ine Bar that Joseph Gannistraci and Mi hael Guerra.plan. to op 'h
`rthe town of 'Los Ga~os~
I have been a loyal customer at their formekWine Bar'located m Santana Row for over
0n6stfy tell you that you vyill not find two mofe knovyledgeable,'' "
six years I can-1 ,
enthusiastic*andpass}o'nate~people in the Wirielbusness They are both wme enthusiasts r
n x r.,
that ejoy sharing: heir`k'nowledge and stories to anyone,who,w:alks iri their'
establishment r , r
I am`a long time retailer(in the.Towri,`of Los` Gatos, being part of thepemng~
i- management teamhere at Sur La Table m 1999, and recently. returning as tle manager of }
the Los Gatos'location I`aruly: feel theWine Bar will be a perfect addition to the town of
Los Gatos which has evolved into the. mecca for peo le who,_enjoy and that have a true r.
passion for greaffood,fine wines and all the finer'thmg~ in hfe!
' Milva GObbi
Sur La Table, Store'Manager.
j _
Los CTatos & Santana Row
408:3'95:,6946 ; i
DONALD A. PERRUM
August 31, 2009
Planning Commission
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
Having known and done business with Joe Cannistraci and Michael Guerra for many
years, I have become familiar with their plans to open a quality wine shop in Los Gatos.
Both have superior wine knowledge, and their plans to pair wine with specialty foods
should create a venue that will be most desirable for Los Gatos residents. I am excited
about the possibility of being able to make my wine purchases locally, rather than
drivin o San Jose. I encourage the Town to approve their application so that Joe and
40*0 can jo' the fine list of Town merchants as soon as possible.
Yoh rsVery trgly,
on;Id A. Perrucci
DAP/cb
2009
96 N. THIRD ST., SUITE 275, SAN JOSE, CA 95112-5572 • TEL. (408) 275-0550 FAX (408) 298-0702
TOWN OF LOS GATOS
PLANNING COMMISSION STAFF REPORT
~03 GpS~S Meeting Date: September 9, 2009
PREPARED BY: Jennifer L. Savage, Assistant Planner
jlsavagenlosgatosea. gov
APPLICATION NO.: Conditional Use Permit Application U-09-007
ITEM NO: 4
DESK ITEM
LOCATION: 414-416 N. Santa Cruz Avenue (east side of N. Santa Cruz
Avenue, approximately 250 feet north of Los Gatos-Saratoga
Road)
APPLICANT: Michael E. Guerra and Joseph J. Cannistraci
PROPERTY OWNER: Jim Zanardi
APPLICATION SUMMARY: Requesting approval to operate a retail wine establishment with
food, beer, and wine service on property zoned C-1. APN 529-
07-047.
EXHIBITS: 1-11. Previously received with September 9, 2009 Staff Report.
12. Public Comments (seven pages), received September 8-9,
2009.
REMARKS :
The Town received five letters in support of the application after the staff report was circulated.
The comments are attached as Exhibit 12.
t / ~ c
P ep red Qirector proved
J ifer L. Sava _ endie R. .oney
Assistant Planner of Community Development
WRR:JS:cgt
N:\DEV\REPORTS\2009\NSC414 416 desk.doc
Attachment 4
I I i
September 3, 2009
Planning Commission
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95030
Dear Planning Commission:
We are excited to hear of the application from THE BOOT and encourage
support of this new business in town. Knowing the applicants, Mike and Joe, and
their prior experience, we are confident they will bring a unique and upscale
business offering - especially to an area that needs revitalization.
Their idea of an upscale retail wine shop with tasting area is very pertinent at this
time of a growing wine industry, especially in this region where we are becoming
known for wines and vineyards. Their plan to be active in the community and to
participate in some of the destination marketing activities will be a benefit to them
as well as the other local merchants.
Their targeted market is upscale and affluent and since they are not getting into
hard liquor or a typical "bar scene," I believe they will be an asset to the
community in their presentation, customer draw and community involvement.
Thank you for your consideration.
Yours truly,
I
Patti A. Rice
Owner/Spa Director
par
EXHIBIT 12
Page 1 of 2
Jennifer Savage - Fwd: Re: Enoreca and Wine merchant by Joe Cannistraci and Mike
Guerra at 414and 416 north Santa Cruz Ave.
From:
Wendie Rooney
To:
Patsy Garcia
Date:
9/8/2009 12:32 PM
Subject: Fwd: Re: Enoreca and Wine merchant by Joe Cannistraci and Mike Guerra at 414and 416 north Santa
Cruz Ave.
CC: Cindie Taylor; Jennifer Savage
Thanks Patsy: We will include this in the Planning Commission's public record. Thanks, Wendie
Wendie Rooney
Director of Community Development
Town of Los Gatos
110 E. Main Street
Los Gatos, CA 95031
(408) 399-5768
WRooney@LosGatosCA.gov
> > > Patsy Garcia 9/8/2009 12:16 PM > > >
Hi Wendie: For your attention - PC agenda item
George Montanari <gmontana@apr.com> 9/3/2009 12:58 PM
Mike,
If I can ask you a favor, please forward this to the appropriate people at planning I would appreciate it. I
don't think the City Council is involved at this level.
I am in strong support of Enoreca and Wine merchant by Joe Cannistraci and Mike Guerra at 414 and 416
north Santa Cruz Ave. Mr. Cannistraci was invoked with vintage wine merchants in Santa Row. He was
excellent operator with many loyal customers. This type of retail business would be a welcome addition
to Los Gatos. This business will serve us citizens of Los Gatos, as well as help bring back the lost customers
that Los Gatos has lost in recent years. They will appeal to both and create energy in a part of town which
is lacking.
The Los Gatos planning department has scheduled a meeting on September 9th at 7:00 PM in which we
unfortunately cannot attend. We want to make sure that the planning department knows the we strongly
encourage their swift approval
If you have any questions, Please fee 1 free to call or email us anytime
George and Jill Montanari
160 Longmeadow Dr
Los Gatos 95032
408-358-5455
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Page 2 of 2
George Montanari
Alain Pinel Realtors
George@apr.com
Top producer since 1980
408-357-8808 Direct Line
www,gmontanari_com
Click on this link for my website
(mis listings, school scores, mortgages etc...)
D.R.E # 00780027
file://C:\Users\jsavage\AppData\Local\Temp\XPgrpwise\4AA64ECDTOWN DOTOWNP... 9/8/2009
Septembr 6, 2009
Los Gatos Town Council
110 E. Main Street
Los Gatos, CA 95030
To whom it may concern
This letter is in support of the proposal from The Boot Enoteca and Wine Merchant. I believe
they will be an excellent addition to the Los Gatos community. It's important that citizens have
many choices to shop and The Boot will be a great for Los Gatos residents.
Their plan to support the local vintners by providing wine tastings and educational classes will
make for a great addition to the Los Gatos cultural scene. It should also be a great draw for
tourists visiting the Santa Cruz Mountain Wine Region. Our family has known one of the
proprietors, Michael Guerra for over 30 years. We believe they will be a credit to the local
business community.
Sincerely,
Angier
229 Massol Avenue
Los Gatos, CA 95030-7240
p.1
September 8, 2009
To: Los Gatos planning Commission
From: Jannette Scott
420 Alberto Way #18
Los Gatos, CA 95032
I have had the fortune of living in Los Gatos since the summer of 1995 and more blessed to become a
homeowner in the year 2000. I absolutely love this townt I do the majority of my business here in Los Gatos:
Peer's, Andale, Steamers, Wine Cellar, Icing on the Cake, Bunches, Pet People, Campo di Bocce, Whole Foods,
Los Gatos Dog and Cat Hospital, Banana Republic, Willow Street, just to mention a few I visit regularly. I have
always wished we had a domestic wine shop/tasting bar in town so when I want to meet a friend or colleague
for a just a glass of wine in a quiet atmosphere. Or even a place to host a small networking event, or a small
team building project, in a relaxed, yet classy environment.
I am writing abetter of Support on behalf of Michael Guerra and Joe Cannistraci in regards to their
application going before the Town Planning Commission and Town Council to open a wine retail store and
tasting room in the Los Gatos Shopping Center at 416 N. Santa Cruz Avenue.
Michael and Joe are seasoned and serious wine industry professionals who intend to create an upscale, yet
casual environment of passionate, informed and responsible wine and food enjoyment. Currently, there is no
existing business that offers a wide range of eclectic wines (and specialty foods) in town, so
residents/employees have to drive to neighboring areas to purchase wines and to interact with passionate,
friendly, and knowledgeable staff. Their concept will fulfill this need, Their business will also provide the type
of products and services that will also attiact upscale patrons, both private and corporate, into the town from
outlying axeas, bringing more collateral business and sales revenue into town which will benefit other local
businesses and the town. Furthermore, by providing a unique and popular destination in the Los Gatos
Shopping Center, they will drag' people into an area beyond the downtown core, thereby expanding activity and
business into a less-frequented section of town and possibly make downtown less impacted. I also support
their commitment to promote local wineries. This unique facet of our community is sorely untapped and
underutilized- Michael and Joe can help us to promote these local specialty businesses and help make Los
Gatos more of a "destination" region for locals and non-residents/tourists who are interested in fine wines, of
fine dining, and fine living. Theirs is exactly the type of business that our town needs to grow and develop in a
way that is consistent with our vision and goals of being a diverse, culturally rich, and unique place to visit, live
and work.
Michael and Joe have a proven track record for operating a successful, well-respected and well-run business. I
am confident that Michael and Joe will create another successful business and will become active, responsible
and beneficial additions to the Los Gatos community.
Thank you fox your consideration,
September 9, 2009
Dear Los Gatos Planning Commission,
My name is Brian Crane; I am married to Heather Crane. I have lived at 131 Ann
Arbor Drive in Los Gatos for over 7 years. I am a founder of Intero Real Estate
Services and I personally started the office of Intero Real Estate Services in Los
Gatos. I am a part owner of the building at 518 N Santa Cruz in Los Gatos. I have 3
children ages 18, 16 and 14. I am a board member of the Los Gatos-Monte Sereno
Police Foundation.
I am writing this letter to support the project (retail wine store and tasting room) that
Michael Guerra and Joe Cannistraci have proposed to the Town Planning Commission
at 416 N Santa Cruz Avenue.
Michael and Joe are veteran business owners and wine industry professionals who
'intend to create an upscale, casual environment designed so that wine enthusiasts in
Town and outside of town can go to enjoy a few hours together. My wife and I have
often thought that it would be nice to have a specialty wine shop (with knowledgeable
employees) that we could go to without leaving town. In the past we have gone
outside of Los Gatos to purchase wine for various functions we have hosted or
attended.
This shop will be a destination for upscale gatherings prior to other events here in
town, or prior to dinner here in town. For this reason I believe this shop will enhance
the downtown Los Gatos dinning experience. I think they will add to the great
experience that is "Los Gatos". Michael and Joe have a proven track record. I have
been to their shop at Santana Row many times, not only to buy specialty wine, but to
meet friends and enjoy the environment and experience they have created there.
Michael and Joe have contributed to the communities they serve. I have attended
several "charity" events that they "donated" to various community groups. This is a
project that fits with Los Gatos residents and visitors. I encourage the commission to
support this project.
Sincerely,.
Brian Crane
cT~ (GJ
131 Ann Arbor Drive
supoort for Michael Guerra.doc
Page 2 of 2
Los.-Gatos,-CA 95032
Intero Real Estate Services
518 N Santa Cruz Avenue
Los Gatos, CA 95030
http://mail.google.com/mail/?ui=2&ik=4e9b 1 eeb37&view=att&th=1239fcee89b59d54&atti... 9/9/2009
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t~s caT~s COUNCIL AGENDA REPORT
DATE: AUGUST 13, 2009
MEETING DATE: 10/19/09
ITEM NO: ) 0
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON TOWN MANAGER
SUBJECT: TOW CONTRACT SERVICES
A. INTRODUCE AN ORDINANCE AMENDING TOWN CODE SECTION 28.30.030
AND 28.30.035 TO ELIMINATE POLICE ROTATION TOWS
B. APPROVE A RESOLUTION AUTHORIZING THE TOWN MANAGER TO
NEGOTIATE AND EXECUTE A CONTRACT WITH SOUTH BAY TOWING TO
PROVIDE TOWING SERVICES FOR POLICE INITIATED TOWS
RECOMMENDATION:
1. Take public comment
2. Direct Cleric to read title of proposed ordinance (Attachment 1) (No Motion Required)
3. Motion and vote to waive reading of text (Motion Required)
4. Motion to introduce ordinance (Attachment 1) (Motion Required)
5. Direct Cleric Administrator to publish notice (No Motion Required)
6. Adopt the resolution of the Town of Los Gatos authorizing the Town Manager to execute a
contract with South Bay Towing to provide towing services for police initiated tows (Attachment
2) (Motion Required)
BACKGROUND:
Town Code section 28.30.030 establishes a rotation system for police initiated tows of vehicles and
directs that the police chief maintain a list of tow operators to call to move and store motor vehicles in
accident, arrest, disabled vehicle and similar cases. Staff propose to contract with a single tow company
for police initiated tows and no longer utilize a rotation tow system. The Town Code must be amended
to eliminate the requirement that a rotation system be utilized.
DISCUSSION:
The current tow rotation list is comprised of five local tow companies. A request for a tow initiated by
the police department either for its own purposes or on behalf of a motorist who otherwise has no
preference for a specific tow company is given to one of the five companies on a rotation basis.
PREPARED BY: SCOTT R. SEAMAN, CHIEF OF POLICE %/m~ CSC
C:\DOCUME-I\ISHRIE-I.LOS\LOCALS-I\Temp\XPgrpwise\Tow Franchise Resolution Council Memo.doc
Reviewed by:~Assistant Town Manager Town Attorney
Cleric Administrator -4 ,/Finance Finance ommunity Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: TOW CONTRACT SERVICES
OCTOBER 19, 2009
The Town Code requires that each company meet established standards for response time, facilities and
licensing, among other requirements. No fee is collected by the Town from a tow company responding
to a police initiated tow request.
While this system has worked well for the department and the public, staff has considered a different
model for tow services wherein the Town would contract with a single tow company to handle police
initiated tows for an established fee to the Town. This model is similar to that utilized in San Jose and
other cities in California. In San Jose, individual tow companies are contracted to provide service within
an established zone. The City of San Jose charges $50 per car towed for this contract. Benefits of this
model include consistency of service within the contract area, close access to the tow yard for the
owners of towed vehicles and revenue to the jurisdiction. Staff surveyed all California police
departments and determined that a number of police departments utilize either this or a similar model.
The department uses towing services for police initiated tows approximately 350 times per year. The
towing of cars initiated by a police department can be managed through several means. Rotational tow
systems distribute towing business to a range of established towing companies, most commonly without
any revenue to the municipality. Municipalities have the ability to establish a towing function within
their service provision model and perform their own towing for police initiated tows with the ability to
collect all fees and charges associated with the towing, storage and release of the vehicle. A third option
is to contract for this service with an established business. While the creation of a towing function is
within the authority and ability of municipalities, staff believes that it makes sense to instead contract for
this service with an established business.
The five tow companies in the current rotation system are: Bob's Towing, Dick's Towing, Lima
Towing, South Bay Towing and Courtesy Tow Service. South Bay Towing and Courtesy Tow Service
are owned by the same person and for the purposes of this issue are considered by staff as one company.
South Bay Towing/Courtesy Tow Service is the only tow company that is based in Los Gatos at 615
University Avenue. The other companies are located in Campbell. In early 2009, the Town and the
police department were approached by the owner of South Bay Towing/Courtesy Tow Service and
asked to consider creating a single vendor agreement. Under such an agreement, the contractor would
have exclusive right to police initiated tows for a specified period of time; five years is currently being
considered. This agreement gives the contractor a degree of revenue certainty which would allow them
to make capital investments in facilities and equipment to maintain and improve services. As proposed,
South Bay Towing would be the actual contractor and the Town would receive revenue of $50 for every
vehicle which is towed under the agreement.
Town purchasing guidelines direct the Town Manager or designee, acting as Purchasing Agent, to `give
preference to merchants whose place of business is located within the Town limits, quality and price
being equal' (Town Code Section 2.50.115). Such preference applied in the case of a tow contract would
provide direct benefit to residents and visitors whose car has been towed by having them travel only to a
location in Los Gatos to pick up their car, as opposed to tow locations located outside the Town.
The Town Code currently specifies that the police department will establish and utilize a rotation system
for police initiated tows. The attached ordinance amends the Town Code rescinding the rotation system.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: TOW CONTRACT SERVICES
OCTOBER 19, 2009
If the ordinance is introduced by council, the ordinance will return to council at the next meeting. The
Town Manager would then be authorized to execute an agreement with South Bay Towing to provide
towing services for police initiated tows for a five year period.
CONCLUSION:
Staff recommends adoption of the resolution rescinding rotation tows. If adopted, staff would negotiate,
and the Town Manager would execute, an agreement with South Bay Towing to provide contract towing
services for police initiated tows.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
A franchise agreement would be expected to increase revenues to the Town in the amount of $17,000
per year. This is based upon an estimated 350 police initiated tows each generating a $50 fee. The FY
09/10 budget contains anticipated revenues from a tow franchise agreement within the police department
budget in this amount.
Attachments:
1) Ordinance
2) Resolution
Distribution:
Bob Coen
South Bay Towing
Courtesy Towing
615 University Ave.
Los Gatos, CA
Ata Nayebzedeh
Bob's Towing
70 Cristich Ln,
Campbell, CA
Steve Sgarlato
Dick's Towing
888 Camden Ave.
Campbell, CA
Paul and Lupe Lima
Lima Towing
180 E. Sunnyoaks Ave.
Campbell, CA
ORDINANCE
ORDINANCE OF THE TOWN OF LOS GATOS
AMENDING DIVISION 1 OF ARTICLE III OF CHAPTER 28 OF THE
LOS GATOS TOWN CODE REGARDING POLICE-INITIATED TOW SERVICES
WHEREAS, Los Gatos Town Code section 28.30.030 requires the Chief of Police to maintain a list of tow operators to
call to move and store motor vehicles in accident, arrest, disabled vehicle and similar cases; and
WHEREAS, Los Gatos Town Code section 28.30.035 authorizes the Chief of Police to impose more stringent
operating standards for tow operators included on the rotation list required pursuant to section 28.30.030; and
WHEREAS, the Town may at its option provide its own tow services for police-initiated tows or contract with private
contractors to provide such services; and
WHEREAS, the Town Council desires to authorize the Town Manager to enter into one or more contracts to provide
police-initiated tow services and to repeal the rotation list required by Town Code sections 28.30.030 and 28.30.035.
THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ORDAINS AS FOLLOWS:
SECTION I.
Division 1 of Article III of Chapter 28 of the Los Gatos Town Code is amended by repealing sections 28.30.030 and
28.30.035 in their entirety and reserving said section numbers.
SECTION II
In the event that any part of this ordinance is held to be invalid, the invalid part or parts shall be severed from the
remaining portions which shall remain in full force and effect.
SECTION III
This Ordinance takes effect 30 days after the date it is adopted.
This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on
2009, and adopted by the following vote as and Ordinance of the Town of Los Gatos at a regular meeting of
the Town Council on _'2009.
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
NAMGR\AdminWorkFiles\2009 Council Reports\No Tow Rotation Ordinance 10-19-09.doc
ATTACHMENTI
RESOLUTION
RESOLUTION OF THE TOWN OF LOS GATOS
AUTHORIZING THE TOWN MANAGER TO NEGOTIATE AND EXECUTE A
CONTRACT WITH SOUTH BAY TOWING TO PROVIDE
TOWING SERVICES FOR POLICE INITIATED TOWS
WHEREAS, it is necessary for the Town Council to secure an agreement with a
towing company to provide towing services; and
WHEREAS, the Town has selected.South Bay Towing to provide towing services.
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town Manager is authorized to negotiate and execute an
agreement with South Bay Towing to provide towing services for Police initiated tows for a
period of five years.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the day of , 2009 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR
LOS GATOS, CALIFORNIA
NAMGR\AdminWorkFiles\2009 Council Reports\South Bay Towing Resolution 10-19-09.doc
ATTACHMENT 2
{C \N~ F MEETING DATE: 10/19/09
ITEM NO: I
° s COUNCIL/AGENCY AGENDA REPORT
OS GASO
DATE: OCTOBER 19, 2009
TO: MAYOR AND TOWN COUNCIL/
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT: FISCAL YEAR 2009/10 FIRST OUARTER BUDGET PERFORMANCE AND
STATUS REPORT FOR THE PERIOD JULY 1 2009 - SEPTEMBER 30 2009
A. ACCEPT 2009/10 FIRST QUARTER BUDGET PERFORMANCE STATUS
REPORT
B. AUTHORIZE BUDGET ADJUSTMENTS AS RECOMMENDED IN THE
ATTACHED FIRST QUARTER BUDGET PERFORMANCE REPORT.
RECOMMENDATION:
1. Accept Fiscal Year 2009/10 First Quarter Budget Performance and Status Report.
2. Authorize budget adjustments as recommended in the attached First Quarter Budget
Performance report.
PURPOSE:
The purpose of this report has three primary goals. First, the report informs the Town Council on
the status of the Town's Fiscal Year 2009/10 Adopted Budget and status of the local economy at
the first quarter. Second, staff provides the Town Council an update on the preliminary General
Fund financial results (unaudited) as of June 30, 2009. Third, the report includes an update on
the state budget's impact to the Town and Redevelopment Agency, and staff s most
recommended budget adjustments for FY 2009/10 as of the first quarter.
BACKGROUND:
The attached Budget Performance Report covers the first three months of the fiscal year
beginning July 1, 2009 and ending September 30, 2009. The report presents analysis and
recommendations related to key General Fund revenues by category and expenditures by fund.
PREPARED BY: STEPHI 'CO ~AY
Finance and Admi>~rrstrative Services Director
N:xFINANCPQtrly Financial Reports\FY 2010\lst Qtr\10-19-09 1st Qtr Budget Report.doc
Reviewed by: Xt~lAssistant Town Manager/Deputy Director Town Attorney/General
Counsel Clerk Administrator/Secretary ,,ti.Finance
Community Development
PAGE 2
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT
AGENCY
SUBJECT: FISCAL YEAR 2009/10 FIRST QUARTER BUDGET PERFORMANCE AND
STATUS REPORT FOR THE PERIOD JULY 1, 2009 - SEPTEMBER 30, 2009.
OCTOBER 14,2009i
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 on the Town's General Fund. Though financial results are limited to the first three
months, staff is able to provide an update based on early revenue trends for the current fiscal
year, and to advise on potential future revenue and expenditure challenges which may
materialize during the fiscal year.
DISCUSSION:
The attached first quarter budget report includes a recap (prior to final audit) of last year's
General Fund fiscal results. The General Fund closed FY 2008/09 with a moderate amount of
revenue over expenditures, primarily from budget savings, cost containment strategies and
property tax revenues exceeding earlier estimates. These dollars (approximately $525K) at year
end are available to aid in addressing revenue shortfalls this fiscal year, and/or to supplement the
limited dollars set aside in the General Fund for capital improvements.
State Budget Impacts.
Upon passage of the State's FY 2009/10 budget, two major takes from the Town and the
Redevelopment Agency were approved by state lawmakers. The State proposes to take in the
form of a loan approximately $980,000 of the Town's local property tax. The enabling
legislation provides a mechanism referred to as Prop 1A Securitization, wherein the Town can
sell its property tax state loan and receive full payment in kind through the securitization
proceeds of the amount borrowed. If the securitization is successful, no fiscal impact is expected
to the Town. A separate item authorizing staff to proceed with the securitization is part of the
October 19th 2009 Council Agenda.
The State also proposes to take approximately $2.7 million ($2.2 million in 09/10 and $0.5
million in 10/11) from the Town's Redevelopment Agency. Similar to the take attempted by
the State in FY 2008/09, which was found to be unconstitutional, the California Redevelopment
Association believes this take will also be found unconstitutional and unenforceable. The CRA
intends on filing a lawsuit this year and staff has assisted the CRA in that effort by providing
information about the Agency's project area. Once the lawsuit has been filed, more news about
the status of the lawsuit and the state "take" may be available during the spring FY 2010/11
budget development. In the meantime, staff will include the "take" in its mid-year budget
adjustments, if necessary.
There has also been concern that the Town's COP'S Grant monies ($200K) are also vulnerable
due to state budget problems. Staff is monitoring this item very closely, and support for the
program is being communicated strongly to the legislature by the various groups including the
California Police Chiefs Association. There is also increased certainty with this revenue source
due to a linkage with the vehicle license fees. No action or budget change is reconunended at
this time. Other small local government program funding (e.g.certain state mandate
PAGE 3
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT
AGENCY
SUBJECT: FISCAL YEAR 2009/10 FIRST QUARTER BUDGET PERFORMANCE AND
STATUS REPORT FOR THE PERIOD JULY 1, 2009 - SEPTEMBER 30, 2009.
OCTOBER 14, 2009
reimbursements) has also been reduced or eliminated; those revenue changes will be quantified
at the mid-year budget review.
CONCLUSION:
Despite a severe recession, the state budget crisis, and a troubled real estate market, the Town
continues to manage effectively through the current fiscal challenges. Shortfalls were dealt with,
priority services maintained, and General Fund contingency reserves are preserved. Fey goals
are to minimize the impact on Town services, maintain the community's quality of life, and
remain a competitive employer while sustaining the Town's fiscal health.
FORMAT OF THE REPORT
The attached Budget Performance Report includes a financial overview comprised of. a brief
discussion of the Town's financial condition; the FY 2009/10 financial outlook; a summary of
the performance of the Town's primary General Fund revenue sources and necessary budget
adjustments.
ENVIRONMENTAL ASSESSMENT:
This budget report is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
The attached First Quarter Budget Performance Report includes a section providing a detailed
list of recommended expenditure and revenue budget adjustments recommended for the first
quarter of FY 2009/10. Upon approval of the recommended budget adjustments by Town
Council, the adopted appropriations for the fiscal year will be adjusted accordingly.
Attachment:
Budget Perfonnance Report for the Three Months Ended September 30, 2009
TOWN OF LOS GATOS
BUDGET PERFORMANCE REPORT
FOR THE THREE MONTHS ENDED SEPTENIBER 30, 2009
October 19, 2009
FINANCIAL OVERVIEW - EXECUTIVE SUMMARY
Status of FY 2009/10 Adopted Budget:
First Quarter revenue trends are mixed. Staff was pleased that the Town's property tax receipts
for the year ending June 30, 2009 achieved an approximate 6% growth rate from the prior year in
a very tough real estate eriviromnent. Despite the worst national recession in seven years, and the
loss in recent years of five automobile dealerships that were in the top ten sales tax providers,
sales tax receipts for the first quarter are trending slightly ahead of collections for the prior year.
The chief reasons for this are the continued success of Netflix and a state "true-up" payment
relating to an underpayment of sales tax based on state estimates the prior fiscal year. Despite
this favorable trend, the Town's sales tax revenue of $8.7 million may need to be lowered by
approximately $300 to $500K at the mid-year budget review due to the loss of one car dealership
six months earlier than planned in the financial estimates and the general effect of the recession
across all sectors of the local economy.
Department expenditure totals for the first quarter FY 2009/10 are also trending favorably, with
departmental spending at the end of the first quarter averaging 21% expended, or 4% below the
25% benchmark level used for 3 months of 12 months operations. With only three months of
data available, it is difficult to predict revenues and expenditures for the whole year. The
uncertainty of the economic effects of potential rises in energy costs or a more dramatic downturn
in the local real estate market may impact consumer behavior. In light of this uncertainty and
being fully aware that the local economy's recovery remains vulnerable, staff continues to be
cautiously optimistic while monitoring fiscal developments very closely. Consequently, further
adjustments may be necessary during the fiscal year. Any mid-year course corrections or budget
adjustments necessary to balance operating revenue and expenditures will be brought to Town
Council's attention at the earliest opportunity.
Prior Fiscal Year Closing Results:
The FY 2008/09 closing financial results continue to affirm the positive effects of the Town's
budgetary actions taken in response to the continuing flat revenue growth or downturns in key
operating revenues the "Town experienced since FY 2001/02. In developing the FY 2008/09
"status quo" budget, Town Council approved a combination of budgetary initiatives that held the
line on service level delivery coupled with revenue adjustments in the Town's "Charges for
Services" category. The bulk of these fees are to recover costs related to private development
activity aligning fees charged for services with the current cost incurred by the Town. This
strategy coupled with the effect of Town-wide expenditure reduction strategies continued from
prior years and other revenue gains like continued strong performance by Netflix sales tax
generated a favorable General Fund closing balance of approximately $525K of available
revenues over expenditures at fiscal year end June 30, 2009.
The Town's General Fund reserves closed the year (unaudited) at a total of approximately $22.7
million (including the Town's Reserve for Economic Uncertainty intact at $3,678,000), compared
to $17.1 million balance upon the close of the prior year, an increase of approximately $5.6M in
total General Fund reserves. This large increase comes primarily from the receipt of the sale of
Town land in Vasona park for $6 million, all of which was in a designated reserve at June 30,
2009.
The following factors led to the $525K from FY 2008/09 savings to be available for the Town's
Revenue Stabilization Reserve and Reserve for Future and Special Projects:
• Property tax revenue final collections exceeded mid-year estimates by approximately
$600K due primarily to stronger than expected real estate assessed values and property
turnover.
• Sales tax estimates exceeded FY 2008/09 mid-year estimates by approximately $300K
due primarily to stronger performance by Netflix than staff's estimates.
• Investment earnings exceeded mid-year estimates by approximately $416,000 largely due
to increases in the overall interest yield market.
• These revenue gains were offset by plan check and building permit fees which were
approximately $550K below estimates made at mid-year FY2008/09. Revenues collected
last year for work to be performed in this fiscal year were recorded as unearned revenue,
earmarked as such in the General Fund, and accordingly were not included in the
determination of revenues available for reserve designation at fiscal year end.
• General fund expenditures were approximately $1.8 million FY 2008/09 below adjusted
budget levels, due primarily to salary and benefit savings '($1.1 million) obtained from
hiring freezes, reorganizations and other successful cost containment strategies.
In each fiscal year it is likely that the Town's cost of services will be impacted by potential or
pre-bargained labor and benefit cost increases and other operating expenditure increases. It is
reasonable to anticipate these costs to trend upward in the future for no other reason than
inflationary pressures. This reality will continue to require strong performance in the Town's
economically-sensitive revenues, to offset the cost increases likely to occur. The Town's efforts
over the past five years, including expenditure reductions, alignment of user fees to cost of
service delivery, operational reviews and service level adjustments, along with ongoing efficiency
efforts, have allowed the Town's revenue base to keep pace with the cost of providing services
and provide funding for much needed capital improvements such as road resurfacing, sidewalk
repairs, retaining walls, and trail and park facility refurbishments.
General Fund Reserve Status - June 30, 2009
General Fund reserves are classified into two categories - Restricted and Designated. Restricted
reserves are those which are restricted in use by accounting standards or legal agreements and are
not considered as available for use for another purpose. Designated reserves are established by
Council policy for an intended purpose.
Currently Restricted Reserves in the General Fund are approximately $2.1 million as presented
below.
Restricted General Fund Reserves Amount
(Millions)
Reserved for RDA Loan $ 1._`
Reserved for LT Notes Receivable: OE
Total Restricted General Hind Reserves $ 2.]
As stated earlier the total General Fund Reserves closed at a balance of approximately $22.7
million at June 30, 2009. h-i addition to the approximate $2.1 million of General Fund Reserves
set aside for restricted purposes, the Town has approximately $20.6 million in designated reserves
established in accordance with Town financial policies and operating and capital budget
requirements.
Designated Reserves:
" Amount '
{Millions)
Vasona Land Sale
$ 6.1
Designated for Revenue Stabilization '
4.6
Designated for Economic Uncertainty
3,7
Designated for Capital & Special Projects
3,7
Market Fluctuations
0.8
Designated for Open Space
OA
Retiree Medical Acturial
0.4
Sustainability Reserve
0.2
Designated for Mgr's Contingency & Prod.
0,2
YE Savings Budget Adjustments .
0:2
Designated for Authorized Carryforwards
0.1
Total Designated Reserves
$ 20.
The Reserve for Capital and Special projects, whose source is derived from half of the annual
available General Fund budget savings, serves as the primary source for replenishment to the
Town's Capital Improvement Fund (GFAR) in addition to the budgeted transfer from the General
Fund ($850,000 in FY 09/10). As such, it represents the source for a large number of unfunded
needs identified during the annual capital improvement plan process. This reserve also functions
as a potential funding source for new capital projects or augmentations to authorized projects
funded through the Town's Five Year Capital Improvement Program (CIP). The Town continues
to be challenged in identifying an ongoing source of funds to meet the annual $1.5 million
recommended for the street repair and maintenance program and other priority infrastructure
improvements such as sidewalk repair and replacement.
The Revenue Stabilization Reserve was established to serve as a transitional or "bridge" funding
source that could be used to mitigate or smooth out cyclical ups and downs in locally generated
revenues due to temporary downturns in the local economy or "one-time" revenue losses where
recovery of the revenue base is deemed likely to be restored in the near future.
3
1n its public communications, staff refers to the $20.1 million in Designated General Fund
reserves as the Town's "reserves" since these are established by Council policy for their intended
purpose. The availability of approximately $20.1 million in Designated General Fund reserves
provides the Town with resources to manage through future fiscal challenges and opportunities,
mindful of the.many competing priorities for resource allocation, ranging from restoration of core
set-vices to the community to a large amount of unfunded capital improvements.
GENERAL FUND - KEY REVENUE ANALYSIS FY 2:009/10
The following provides the status of significant General Fund revenue sources as of the first
quarter ending September 30, 2009. Staff monitors each revenue source closely and at this time
recommends certain revenue adjustments based on revenue actuals or state budget actions.
Adjustments necessary (if any) will be brought forward to Town Council for approval at mid-year
(approximately February 2010), when more revenue data is available.
BUDGET PERFORMANCE REPORT FY 2009/10
+ Sales Ta-x Revenue
Description
The State Board of Equalization, with the
implementation of the "triple flip," now
allocates .75 cents of the 8.25 cents of local
sales tax collected by merchants on retail sales
and taxable services transacted within the Town
of Los Gatos. This .25 cents of local sales tax is
being replaced by the state with an equal
amount of property tax. Revenues are remitted
to the Town on a monthly basis. This revenue is
placed in the General Fund for unrestricted uses.
Analysis
According to a recent update from Muni
Services, the Town's sales tax analysis
consultant, a majority of jurisdictions across
California experienced significant declines in
sales tax revenues, averaging 8.2% statewide in
early 2009. The Town's decline is
approximately 6.4% for the same time period,
which is slightly better than the statewide
average The UCLA Anderson Forecast for the
California economy concludes that the worst
recession in seven decades likely ended in third
calendar quarter of 2009, but it expects the
negative impact of the downturn will last well
into the next decade.
With the closure of five auto dealerships in
recent years that were "top ten sales tax"
generators, the fact that sales tax collections are
down only moderately from the prior year's
pace is encouraging. The continued success of
Netflix has prevented a more dramatic decline
in sales tax, but staff believes that at mid-year, it
may have to adjust sales tax for 2009/10
downwards by approximately $300K to $500K
in 2009/10, based upon Muni Services "most
likely" projection and some other factors whose
outcome is unknown at this time. As always,
diversification of the revenue base continues to
be a goal for this revenue category. The Town
continues to seek more balance in business
sectors that generate sales tax.
Quarterly and Annual Revenues
5-Year History
$10,000,000
$3,000,000
$6,000,000
$4,000,000
$2,000,000
j ® Ist Quarter j
Actual Revenues
i
i ❑ Fiscal Year Total.
Actual Revenues
i
I
® Fiscal Year
Budgeted
Revenues
FY 05/06 FY 06/07 FY 07/08 FY 08/09
lst Quarter Actual Revenues $ 1,392,150 $ 1,407,997 $ 1,568,805 $ 1,508,479
Fiscal Year Total Actual Revenues $ 8,655,565 $ 9,253,891 $ 9,345,432 . $ 8,487,000
Fiscal Year Budgeted Revenues
FY 2004/05 forward will reflect the Safes Tax In Lieu paid by Santa Clara County
FY 09/10
$ 1,672,973
$ 8,677,460
Ist Quarter Percent of Total 16.08% 15.22% 16.79% 17.77% 19.28%
Recommended Budget Revision No Change
* Includes a true-up from FY 08109
5
FY 05/06 FY 06/07 PY 07/08 FY 08/09 FY 09/10
BUDGET PERFORMANCE REPORT FY 2009/10
1 Property Tmy Revenue
Description
Property Tax is one of the Town's largest
revenue sources, accounting for 21.8% of the
Town's budgeted General Fund revenue for FY
2008/09.
Property Tax distributions are largely received
in the third and fourth quarters of the fiscal year,
meaning revenue receipts are not reflected
proportionately by quarter in the chart below.
Property Tax is levied at 1 % of a property's
assessed value, of which the Town currently
receives approximately 9.5 cents on each dollar
paid to the County Assessor's Office. The
assessed value of real property appraised by the
County Assessor is the 1975-76 assessment role
value, adjusted by a. two percent inflation factor
thereafter. However, when property changes
hands or new construction occurs, property is
reassessed at 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 the
limitation on rates, the higher the aggregate
property value, the higher the revenue
generated.
Analysis
Property taxes performed better than expected in
FY 2008/09 (approximately 6% increase from
the prior year) which was budgeted for flat
revenue growth. 2009/10 property tax was
budgeted at a minimal growth, but is below the
amount received the prior year, so it may need
to be adjusted positively at mid-year. The Santa
Clara County Assessor's 2010/11 roll for July 1,
2010 lien date indicates a 2.09 % growth in total
assessed value for the Town. Los Gatos is in
the top four of the cities in the county still
anticipating positive assessed valuation growth
for FY 2009/ 10.
Quarterly and Annual Revenues
5-Year History
$10,000,000
$8,000,000
$6;000,000
$4;000,000
$2,000,000
iM 1st Quarter Actual
Revenues
~0 Fiscal Year Total
Actual Revenues
® Fiscal Year
Budgeted Revenues"
FY 05/06 FY 06/07 FY 07/08 FY 08/09
1st Quarter Actual Revenues $ 105,271 $ 75,831 $ 138,916 $ 91,597
Fiscal Year Total Actual Revenues $ 7,755,200 $ 8,584,612 $ 9,178,869 $ 9,724,070
Fiscal Year Budgeted Revenues
FY 2004105prward will reflect an increase in Property Tae due to "Permanent" Realignment of VLF
I st Quarter Percent orTotal
FY 09/10
$ 65,628
$ 9,248,120
1.36% 0.88% 1.51% 0.94% 0.71%
Recommended Budget Revision No Change
FY 05/06 FY 06/07 FY 07/08 FY 08/09 FY 09/10
BUDGET PERFORMANCE REPORT FY 2009/10
♦ Transient Occupancy Tax
Description
The Town of Los Gatos levies a 10 per cent
Transient Occupancy Tax on all hotel/hotel
rooms within Town limits as a method to help
fiend Town services provided to transitory
lodgers.
Analysis
The Transient Occupancy Tax revenues
received in the first quarter of FY 2009/10
reflect a decrease in collections compared to the
prior year. This year the State of California is
projecting flat growth in domestic and
international visitation compared to the prior
year.
The California Travel & Tourism Commission
reports for the period ending June 30, 2009 that
domestic travel spending statewide was
approximately $79.2 billion, compared to its
forecast of approximately $79.3 billion. Due to
the lower than expected first quarter collections,
staff may advise a change in estimate for
2009/10 at the Town's mid-year budget review.
Quarterly and Annual Revenues
5-Year History
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
N 1st Quarter Actual i
Revenues
❑ Fiscal Year Total
Actual Revenues
i
IN Fiscal Year Total
Budgeted Revenues
FY 05/06
FY 06/07
FY 07/08
FY 08/09
FY 09/10
1st Quarter Actual Revenues
$ 107,529
$ 116,118
$ 90,367
$ 134,569
$ 99,179
Fiscal Year Total Actual Revenues
$ 1,028,664
$ t,108,257
$ 1,245,078
$ 966,638
Fiscal Year Total Budgeted Revenues
$ 1,080,000
1st Quarter Revenue Percent of Total
10.45%
10.48%
7.26%
13.92%
9.18%
Recommended Budget Revision
No Change
7
FY 05/06 FY 06/07 FY 07/08 FY 08/09 FY 09/10
BUDGET PERFORMANCE REPORT FY 2009/10
Interest Income Revenue
Description
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.
Anal
The Town's Interest Income earning has been
impacted this fiscal year years by use of Town
funds to make significant investments in Town
infrastructure, most notably the purchase of land
downtown, among other infrastructure
investments made in carrying out the Town's
approved capital improvements plan.
Current year interest revenues are tracking
below budget estimates due to historical low
yields available in the market. Actual LAIF
yields have declined significantly to an average
yield of 0.75% in September 2009 (a new record
low), from 4.801% as recently as December
2007, Despite very low yields available in the
market, with the receipt of property tax in the
second quarter, more average dollar balances
will be available for investment. Staff
recommends no adjustment to budgeted
revenues at this time.
Quarterly and Annual Revenues
5-Year History
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
® I st Quarter Actual
Revenues
I
❑ Fiscal Year
Revenues
9 Fiscal Year Total
Budgeted Revenues
FY 05/06
FY 06/07
FY 07/08
FY 08/09
FY 09/10
1st Quarter Actual Revenues
$ 272,325
$ 489,730
$ 562,339
$ 461,985
$ 210,301
Fiscal Year Revenues
$ 1,439,685
$ 1,977,233
$ 2,221,338
$ 1,627,727
Fiscal Year Total Budgeted Revenues
$ 1,430,000
lst Quarter Revenue Percent of Total
t8.9%
24.8%
25.3%
28.4%
14.7%
Recommended Budget Revision
_
No Change
* Estimated
8
FY 05/06 FY 06/07 FY 07/08 FY 08/09 FY 09/10
BUDGET PERFORMANCE REPORT FY 2009/10
♦ 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.
based businesses are pro-rated by quarter, from
the date of application to the end of the year.
Analysis
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,
and comprise approximately 40%0 of the
Business License Tax revenue. Other Business
License Tax revenues are based on flat fees as
set forth in the Town Code, and make up the
remaining 60% of revenue.
Annual business license renewals are due and
payable in advance on January 2nd of each year.
New business license applications for flat-fee
The Business License Tax revenue received in
the first quarter is primarily comprised of new
Business License fees. The majority of
revenues come from renewals, which are
received in the second and third quarters.
The actual first quarter collections are trending
positively in comparison to prior years due to
some significant collections on amounts past
due from various businesses either that were
unlicensed and or had become delinquent in
payments. Because of this success, staff intends
on conducting additional audit efforts again this
fiscal year.
Quarterly and Annual Revenues
5-Year History
1,200,000
1,000,000
800,000
600,000
400,000
200,000
IN Ist Quarter
Actual Revenues
0 Fiscal Year Total
Actual Revenues
® Fiscal Year Total
Budgeted
Revenues
FY 05/06
FY 06/07
FY 07/03
FY 03/09
1st Quarter Actual Revenues
42,402
63,057
55,900
65,330
Fiscal Year Total Actual Revenues
$ 1,019,336 3
1,176,422 $
1,133,057 S
1,139,107
Fiscal Year Total Budgeted Revenues
$
1st Quarter Revenue Percent of Total
4.16%
5.36%
4.91%
5.73%
FY 09/10
99,179
1,080,000
9.13%
Recommended Budget Revision No Change
9
FY 05/06 FY 06/07 FY 07/08 FY 08/09 FY 09/10
BUDGET PERFORMANCE REPORT FY 2009/10 .
Description
1 Franchise Fee
achieving 11.75% of budget versus 11.87% of
budget collected at the first quarter in FY
2008/09. With the transition in the spring of
2007 to the new garbage contract, the franchise
fees were established at 16%. The prior
contract provided for a 10% franchise fee and
approximately $300,000 in annual surcharge
fees for solid waste program expenses. The new
contract increases the franchise fees but
eliminated the solid waste surcharge fees.
Franchise Fees are collected by the Town for the
privilege of operating a utility service within
Town limits, and as a fee in lieu of business
license tax.
Franchise Fees are currently received from
Comeast for cable television services, PG&E for
gas and electric service, and West Valley
Collection and Recycling for solid waste
collection services.
Analysis
First quarter results are pacing slightly behind
the percentage collected the prior year,
$2,000,000
$1,500,000
$1,000,000
$500,000
I st Quarter Actual Revenues
Fiscal Year Total Actual Revenues
Fiscal Year Total Budgeted Revenues
FY 2007/08 Total Actual Revenues
I st Quarter Revenue Percent of Total
Staff recommends no change to this revenue
source.
Quarterly and Annual Revenues
5-Year History
FY 05/06
$ 22,702
$ 1,030,189
-eflect in creased reven
2.20%
FY 06/07
$ 28,661
$ 1,162,037
we based on inc
2.47%
FY 07/08
$ 215,985
$ 1,659,829
rease of Garba
13.01%
10 1st Quarter Actual
i Revenues
O Fiscal Year Total
i Actual Revenues
i
11 Fiscal Year Total
Budgeted Revenues
FY 08/09
$ 196,630
$ 1,656,100
;e Franchise A
11.87%
FY 09/10
$ 198,499
$ 1,689,260
;reetnent
11.75%
Recommended Budget Revision No Change
10
FY 05/06 FY 06/07 FY 07/08 FY 08/09 FY 09/10
Budget adjustments are recommended for the following revenues and expenditures at the first
quarter as described below:
RECOMMENDED BUDGET ADJUSTMENTS
General ,Fund RuNenucs
JAG Grant (including Interest) $ 14,100
Other Fund Revenues
GFAR
Pollard Crosswalk Project from El Camino Hospital 15,620
Blosssom Hill/University Undergrounding Project- transfer to GFAR 23,260
Grant Funds
Transportation Development Sidewalks 28,000
Grant Funded - from ARRA 102,000
~(:cncral 1"1111d Lxpendithu-es
Art in the Council Chambers Receptions $ 500
JAG Grant + Interest 14,100
Other Funds Expenditures
GFAR
Pollard Crosswalk Project
15,620
Blosssom Hill/University Undergrounding Project
23,260
Utility Undergroundung Fund
Utility Undergrounding Fund - transfer to GFAR
23,260
Grant Funded
Rebuild Together Silicon Valley - reallocate from CDBG
5,000
Mitchell Avenue Sidewalks from Transportation Development Act
28,000
Prospect Avenue Resurfacing
102,000
Storm Drain #1
Hernandez Ave Storm Drain Pipe Replacement
11,000
Equipment Replacement Fund
Urban Runoff Equipment
15,275
JAG (Justice Assistance Grant) - $14,100
This grant is available through the American Recovery and Reinvestment Act of 2009. The
Town intends to use.these funds for the purchase of software and computer equipment used in the
Police Deparment's property and evidence functions.
Community Services Department: Arts in the Council Chambers Reception - $500
Art in the Council Chambers is a series of rotating exhibits in the Council Chambers of work by
local artists, curated by the Arts and Culture Commission. Traditionally, the opening of each new
exhibit is celebrated with an opening night reception. There are not currently any funds budgeted
for refreshments to be provided at these receptions, so the artist, or in some cases an Arts and
Culture Commission member, have paid for reception food. It is recommended that $500 per
fiscal year, for five fiscal years, be directed to the Arts in the Council Chambers opening night
receptions (a total of $2,500 over five years).
11
Community Development Block Grant - $5, 000
In FY 2006/07, $5,000 of the Town's federal Community Development Block Grant (CDBG)
funds was allocated to Rebuilding Together Silicon Valley, a local nonprofit agency. Rebuilding
Together did not use these funds in 2006/07, but they remained available to be drawn down from
the CDBG program. The Town has signed a contract extension with Rebuilding Together to
allow them to use these funds in the current fiscal year, but a budget adjustment is also required
in order to allow the funds to be drawn down from the federal CDBG program and passed
through to Rebuilding Together. The funds are targeted for the "House of Hope" project, a joint
effort of West Valley Community Services, Calvary Church, and Rebuilding Together. This
project has converted a facility owned by the church into a place to provide food pantry and case
management services to low-income families from the Los Gatos area. Rebuilding Together's
work included plumbing, flooring, painting, and installation of an ADA-compliant restroom. An
Open House for the remodeled facility was held September 17.
Hernandez Avenue Storm Drain pipe replacement: - $11, 000
The Town was notified of a collapsed storm drain pipe on upper part of Hernandez Avenue in
early October 2009. After inspection, it was noticed that an old corrugated metal pipe across the
road which has been rusted over the years has collapsed and created a sink hole on the road. To
keep the roadway safe, the collapsed section of road was barricaded and covered with steel plates
until pipe could be replaced. Staff has solicited bids from several contractors for this storm drain
pipe replacement and the lowest bid for the project is about $11,000. This storm drain pipe is
located within Town Storm Drain basin #1. Sufficient fund balance is available to fund this
project.
Mitchell Avenue Sidewalks: - $28, 000
The Town of Los Gatos has received a Transportation Development Act (TDA) grant from State
of California for construction of sidewalks and related improvements on Mitchell Avenue from
Fisher Avenue to George Street. This section of roadway is in direct route to Fisher Middle
School and does not have a safe and functional way for pedestrians to walk due to lack of
sidewalks. This project will construct concrete curb, gutter, and sidewalk and related
improvements on Mitchell Avenue to provide safe way for pedestrians to walk to and from
school.
Blossom Hill University Intersection Utility Undergrounding- $23,260
The Town has received Federal Stimulus Grant Funding for the construction of improvements to
the intersection of University Avenue and Blossom Hill Road. This project will replace the old
and outdated traffic signal at University Avenue/Blossom Hill Road with a new, more functional
traffic signal system. Additionally, there will be dedicated left turn lanes constructed to improve
the operation of this intersection. Sidewalks will be built along University Avenue adjacent to
Oak Meadow Park in order to fill in missing sections of existing sidewalks and provide safe
access for pedestrians. There will also be pavement repairs and stone drainage improvements as
part of this project. In conjunction with this project, sections of overhead electric lines on
University Avenue at this intersection will be relocated into underground system to not only
enhance the aesthetic aspects of the site, but also accommodate the location of new traffic signal
posts. The relocation and undergrounding of the overhead electric lines will be performed by
PG&E. The cost of this undergr`ounding, $23,260 will be paid by the Town from the Town utility
undergrounding fiends.
12
Tier 2 Stimulus Project: Prospect Avenue Resurfacing: - $102,000
The Town of Los Gatos has received a federal grant as part of The American Recovery and
Reinvestment Act (ARRA) of 2009. The Town was informed by Caltrans that there is an
additional grant related to the American Recovery and Reinvestment Act which the Town has
received and it can be used for resurfacing projects. Since this Tier 2 grant is relatively small, it is
recommended to be used to resurface Prospect Avenue area to complete the resurfacing that was
done to College Avenue in the same neighborhood earlier this year as a part of another State grant
El Camino Hospital Crosswalk - $15,620
The location of El Camino Los Gatos Hospital on Pollard Road and alignment of the roadway do
not provide an ideal crosswalk placement for pedestrians who want to access the hospital from
other side of the road. The Town has received a number of inquires in the past about construction
of a formal and safe crosswalk for pedestrians in this vicinity. The Town has worked with the
new El Camino Los Gatos Hospital and VTA on selecting a new crosswalk location at
intersection of Pollard Road and Teakwood Avenue which will provide much improved access to
the hospital for pedestrians. The construction of this project will be fully reimbursed by the El
Camino Los Gatos Hospital
Equipment Replacement Fund - $15,2 75
Parks and Public Works Department has advised staff that an important vehicle used for debris
removal requires extensive maintenance and, repair prior to the rainy season. Sufficient funds are
available in the Town's Equipment Replacement fund.
FINANCIAL SUMMARIES, PROJECTIONS AND RECOMMENDATIONS
General Fund
The following page presents the Schedule of FY 09110 General Fund Operating Revenues vs.
Operating Expenditures for the first quarter and comparison information from the prior year. In
the last column, the Finance Department projects final balances for the fiscal year based upon the
early trends observed through the first quarter.
13
Town of Los Gatos
Schedule of General Fund
Operating Revenues vs. Operating Expenditures
For the period ended September 30, 2009
Unaudited
FY08/09
PY08/09
FY08/09
FY08/09 FY09/10
FY09/lO
FY09/l0
FY09/10 FY09110
Final
Adjusted
Ist Qtr
% Adopted
Adjusted
Ist Qtr
% Finance
Balance
Budget
Actuals
YTD Budget
Budget
Actuals
YTD Projection
Revenues
General Property Tax
S 7,417,030
$ 6,924,370
S 91,597
1% $ 6,922,920
$ 6,922,920
S 65,628
l% $ 6,922,920
Prop Tax Car Tax Backfll
2,307,040
2,206,250
-
$ 2,325,200
$ 2,325,200
0% $ 2,325,200
Sales & Use Tax
3,487,000
3,198,300
1,508,479
18% S 8,677,460
$ 3,677,460
1,672,973
19% S 8,677,460
Franchise Fees
1,698,061
1,656,100
196,630
12% $ 1,689,260
$ 1,689,260
198,499
l2% S 1,689,260
Transient Occ Tax
966,638
1,100,000
134,570
12% S 1,080,000
$ 1,080,000
99,179
9% s 1,080,000
Business.License Tax
1,139,107
1,100,000
65,831
6% $ 1,122,000
S 1,122,000
75,003
7% $ 1,122;000
Licenses & Permits
1,323 205
2,185,150
633,599
31% S 2,204,610
$ 2,204,610
503,134
23% $ 2,204,610
Motor Vehicle In Lieu
10l?65
168,100
35,581
21% $ 144,280
$ 144,230
17,289
12% S 144,230
Intergovernmental
533,316
679,980
66,379
10% S 651,310
$ 651,310
79,804
12% $ 665,335
Charges for Services
2,054,601
1,982;673
321,762
16% S 2,353,015
$ 2,353,015
516,898
22% $ 2,353,015
Fines & Forfeitures
618,771
500,000
43,220
10% $ 496,040
$ 496,040
119,837
24% $ 496,040
Interest
1,777,726
1,690,800
461,935
27% $ 1,580,000
S 1,580,000
43,643
3% $ 1,580,000
GASB investment to market per audit
329,479
$ -
$ -
S -
Miscellaneous/Other
3,307,329
8,836,783
575,711
7% $ 2,824,395
$ 2,324,395
556,333
20% $ 2,824,395
Fund Transfers
437,925
184,370
435
0% S 475,920
S 475,920
844
$ 475,920
Total Revenues
38,498,493
37,412,831
4,190,778
11% 32,546,910
32,546,910
3,954,214
12% 32,560,985
Use of Other Funding Sources:
'
Use of Reserves
2,437,000
1,350,000
1,350,000
1,350,000
1,350,000
Fund Balance Reallocations
(1,411,609)
Vasona Reserve
(6,078,967)
Carryfonvard Allocations
-
20,918
160,528
160,528
160,525
PERS Liability Account
-
300,000
300,000
300,000
300,000
Use of Internal Service Reserves
-
194,000
194,000
194,000
194,000
Total Other Funding Sources
(5,053,576)
-
1,864,918
2,004,528
2,004,528
2,004,528
Total Revenues plus Reserves
$ 33.444,917
$ 37,412,381
S 4,190,773
S 34,411,828
S 34.551.438
S 5,953,742
$ 34,565,513
Expenditures (includes Of but no encumb
rances)
-
Mayor & Council
164,336
183,800
34,774
19% 159,321
159,321
35,766
22% 159,321
Attorney
229,978
247,900
49,628
20% 214,912
214,912
41,925
20% 214,912
Administrative Services
2,443,581
2,628,170
562,048
21% 2,361,440
2,36t,441
513;466
22% 2,361,441
Comm Development
3,297,602
3,954,460
674,120
17% 3,343,824
3,860,953
702,107
l8% 3,860,963
Police
13,055,759
13,037,030
2,992,580
23% 12,926,566
12,926,556
2,911,497
23% 12,940,666
Parks & Public Works
5,791,776
6,314,768
1,203,324
19% 5,617,569
5,617,569
1,091,175
19% 5,617,569
Community Services
1,145,136
1,336,350
127,795
16% 1,283,151
1,290,608
222,774
17% 1,291,108
Library
2,018,590
2,122,380
499,374
24% 2,067,116
2,120,910
493.646
23% 2,120,910
Total Dept Expenses
S 28,146,358
S 29,875,358
S 6.243,643
21% $ 23,471399
S 28,552,289
$ 6.012,356
21% S 23,566,889
Non-Dept Expenditures and other uses
General Government
4,772,235
4,871,200
165,700
3% 4,086,970
4,148,190
337,694
3% 4,148,190
Total Non-Dept Expenses
S 4,772,235
$ 4,871,200
$ 165,700
3% S 4,086,970
S 4.148;190
S 337,694
8% S 4,148,190
Total Operating Expenditures
$ 32,919,093
S 34.746558
$ 6.409343
18% S 32,560,869
$ 32.700,479
S 6,350,049
19% S 32,715,079
Net Operating Revenues Before Capital T
rsfrs
& Budgeted Beg Fund Balance
$ 525,824
S 2,666,323
S (2,218,565)
S 1,350,959
S 1,850.959
S (391,307)
$ 1,350,434
Authorized Use of Reserves
Capital Projects/Special Projects 1,350.000 4,350,000 1,350,000 1,350,000
Total Budgeted Use of Reserves - 1,350,000 1,350,000 1,350,000 1,350,000
Net Surplus or (Use) of Reserves 525.824 500,95') 500,959 (t.741,307) 500,434
Guide to Presentation:
Each of the following groups of financial summaries present data by governmental fiend type - the
types are Special Revenue Funds, Capital Projects Funds, Internal Service Funds, and
Redevelopment Agency Funds. In each of the following projections a similar format is presented.
The fund information starts with beginning fiend balances and adds current year revenues and
subtracts current year expenditures resulting in ending fund balance, Budget amounts are also
provided for revenues and expenditures, useful for comparing actual amounts received or spent
to date versus budget for FY 2009110.
14
Special Revenue Fund - Special Revenue Funds, which account for the proceeds derived from
specific revenue sources that are legally restricted or assigned to special purposes including the
Community Development Block Grant Fund, Non Point Source Fund, Landscaping and Lighting
District Funds, and the Operating Grants Fund.
Special Revenue Funds
Budget to Actuals Comparisons
CDBG
Non Point
Grants
Source
LIDS
Beginning Fund Balance (Pre-audit)
475,999
20,181
96,980
Budgeted Revenues
149,319
135,000
35,860
Actual Revenues - 1st Qtr
2,565
135,000
69
Budgeted Expenditures
374,438
147,335
43,290
Total Actual Expenditures - 1st Qtr
3,347
23,456
640
1st Quarter Ending Fund Balance
475,217
131,725
96,409
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 CIF's Fund, Storm Drains Fund, Utility Undergrounding Fund, and the Gas Tax Fund.
Capital-Project Funds are tracking in accordance with the FY 2009/10 adopted budget.
If operating revenues will support it, the FY 2009/10 budget includes a General Fund's current
year transfer of designated Future Year's Capital & Special Projects reserves in the amount of
$850,000 in support of the first year of the Town's adopted Five-Year Capital Improvement Plan.
Capital Project Funds
Budget to Actuals Comparisons
Beginning Fund Balance
Budgeted Revenues
Actual Revenues - Ist Qtr
Budgeted Expenditures
Total Actual Expenditures - 1st Qtr
GFAR Traffic Grant Fund Storm Utility Gas
Fund Mitigation CIP's Drains Undergd Tax
9,528,699 4,117,527 (161,410) 681,867 2,462,596 683,180
15,328,564 65,000 2,563,646
79,899 - -
23,930,205 65,000 2,364,275
1,301,351 6,375 21,699
t05,850 52,080 595,670
21,248 2,971 -
55,000 350,000 941,601
- 23,260 153,135
1st Quarter Ending Fund Balance 8,307,248 4,111,153 (183,108) 703,115 2,442,306 530,045
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,
15
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 2009/10 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, if needed, from these funds as
excess balances exist in amounts needed for funding in a number of these funds.
Internal Service Funds
Budget to Actuals Comparisons
Equipment
Workers
Self
Office .
i*v[nigt Info
vehicle
Building
Replacemt
Comp
Insurance
Stores
Systems
Maint.
Maint.
Beginning Fund Balance
3,078,191
2,583,280
2,091,699
263,444
2,175,717
268,331
716,700
Budgeted Revenues
339,280
692,510
528,990
124,500
1,038,420
618,400
1,085,200
Actual Revenues - 1st Qtr
83,640
5
-
26,326
105,038
154,650
271,463
Budgeted Expenditures
472,698
648,781
606,812
146,000
1,151,488
610,324
1,171,245
Total Actual Expenditures - lstQtr
70,783
191,771
407,775
36,760
240,593
90,468
177,852
1st Quarter Ending Fund Balance
3,091,048
2,391,514
1,683,923
253,011
2,040,162
332,513
810,311
Trust and Agency Funds - Town Trust and Agency Funds have fund balances as of June 30,
2009 of $206,258 for Parking. District #88 and $328,526 in the Library Trust Funds. No budget
revisions are contemplated at this time for these funds.
Redevelopment Agency - The Agency's FY 09/10 and FY 2009-14 Capital Improvement Plan
adopted budgets are incorporated into the Redevelopment Agency's financial statements and
year-to-date actuals as presented below. The. Capital Projects Fund balances include
approximately $144,938 dollars of remaining unexpended funds at September 30, 2009 from the
Agency's $10.7 million dollar 2002 COP issue. Approximately $65,000 of the remaining
proceeds are encumbered to be spent on the S. Santa Cruz/Wood Road Gateway project, and
$78,080 for Almond Grove Concrete Rehabilitation Pilot project.
Redevelopment Agency Funds
Budget to Actuals Comparisons
Beginning Fund Balance
Budgeted Revenues
Actual Revenues - 1st Qtr
Budgeted Expenditures
Total Actual Expenditures - 1st Qtr
1st Quarter Ending Fund Balance
Capital
Debt
Low[Mod
Total
Projects
Service
Housing
RDA Funds
2,065,624
7,988,113
8,631,125
18,684,862
635,000
6,744,490
1,771,430
9,150;920
575,000
96,096
8,721
679,817
1,424,724
6,295,300
383,354
8,103,378
428,468
1,169,348
1,366,266
2,964,082
2,212,156 6,914,861 7,273,580 16,400,597
Since 1992 redevelopment agencies across the state-have been required to make Educational
Revenue Augmentation Fund (ERAF) payments to the State. In accordance with the State budget
agreement, the ERAF payment was increased $303,000 for FY 2004/05 & FY 2005/06. The
State suspended this "take" for FY's 2006/07 & 2007/08, but the FY 2008/09 Budget Bill
16
reintroduced a new ERAF payment of approximately $456,910 which was eventually ruled to be
unconstitutional. Once again, the State has proposed an additional ERAF take of approximately
$2.2 million for FY 2009/10, disallowing the Agency to retain this amount of tax increments to be
used for important future Agency projects, The California Redevelopment Association expects to
file a second lawsuit on this "take" and that it will once again be found to be unconstitutional.
Proposition 1A approved in 2004 does not contain specific protections for redevelopment
agencies. These were not included because there are existing legal opinions that conclude that
redevelopment agency tax increment revenue is constitutionally protected from. state revenue
takes.
It is important that the Town continue to monitor developments regarding Redevelopment
Agencies to discourage the legislature from further State takes from Redevelopment Agency Tax
Increment. Protecting Redevelopment Agency funds for all cities is also a strategic priority for
the League of California cities. 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.
CONCLUSION
The financial results from the prior fiscal year coupled with the FY 2009/10 first quarter data
point towards continued adherence to conservative fiscal planning and efforts to sustain and
develop the Town's sources of economically-sensitive revenues. This is especially important in
light of the loss of five top ten sales tax providers in the past three years. Though the update to
the Five-Year Financial Plan presented in the spring 2009/10 budget process projected future
revenue shortfall challenges, these challenges will be made less so if the Town's economically-
sensitive revenues can sustain their momentum and the cost of core service delivery can be kept
in check.
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