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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 Town of Los Gatos 4 Date Printed: September 21, 2009 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 Town of Los Gatos 5 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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 Town of Los Gatos 6 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doe Professional Services Agreement for Alarm Management 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. Town of Los Gatos 7 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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. Town of Los Gatos 8 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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. Town of Los Gatos 9 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Manap-ement 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. Town of Los Gatos 10 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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. Town of Los Gatos 11 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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 +-)E UORAH•: A Notary Public Stet~ROWE Taxes Attest: Mr go /;Aloe) Expres 4 By: N me] [Title] /Uo Town of Los Gatos Alarm Management 12 Date Printed: September 21, 2009 Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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: Town of Los Gatos 13 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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 Town of Los Gatos 14 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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. Town of Los Gatos 15 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doe Professional Services Agreement for Alarm Manaeement 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. Town of Los Gatos 16 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management 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. Town of Los Gatos 17 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc Professional Services Agreement for Alarm Management EXHIBIT "D" CONSULTANT PROPOSAL [ATTACH CONSULTANT PROPOSAL] Town of Los Gatos 18 Date Printed: September 21, 2009 Alarm Management Town of Los Gatos-PMAM Contract.doc 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.., , norr. ~viiauii if a.av. vvv.am .Jy vv... operations to detef ine if three have bee pl .wi.r..w or ~ ..w..., for ts or Pol1ee ea4s for t. I f staff determines t d t 4 h l bl el that there afe no eonoefns the r e o a eo o pro ems, a d to sen,e beer- in addit h t h ll b ll t bli , ion to wine under- the same terms men s a e a owe es a s licant shall be Fes onsi P it Th f thi U lieable to th ble for- all eosts a p se erm . e app 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. N:1DEV\SUZANNhlGouneMcohd PoL-yr20olakohol polioy wpd i i i C3 i I. i ' I ~ cS... I ° - I R - z ur,. m ,eaa.09 N zTem 'ul 'ITCH m ,09AL419 N ue are e m .maee.a9 N s r~ ,0Y01e M .10M-99 N a J-L b o / gory lJ-<1t...- n r 1 1i { w z u. Q N Od u Q r- z Q H x ad O z I1' AUG 7 2009 CIF I.O.S GATP DJVISi~, , O r _z a 0. N O H a c~ y 0 r W O z 0 e EXHIBIT 9 ` r N ~ i f0 ~ tM L andicap access m a 9 011% N C r ~ t0 E Q N a~ > a~ m a t~ e M C O f~6 U w 0 C - C 10 ~ E O L s O C LL G7 O ' 'p (A ~ 7 IB M C1 C w Ira C . ~ ~ a 3 C m _ ~ = ® ? a a~ U M U M d ILL O vl O u. i L ~ o Cr U) +j PA M O M 41 Handicap Emergency Exit Handicap Bathroom ~~II Bathroom h NJ co rl° O MI 24" freezer Iv m N 52" 2 door 9 standing fridge CD 0 x N c d n m 0 o Z N m m m Three comp sink Garbage Slim Jim f'® ( o. M ch o -n (n o o m a 0 0 5 N c A cnD c a w T N a `O 0 `L p 0 0 0. CD 4 am to O m 0 m on O 1 A,; r a a .R I kj . t AUG ` 2009 nF I .GS GAT'' `E ~C.~llCy~'ll 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 r v 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 file://C:\Users\jsavage\AppData\Local\Temp\XPgrpwise\4A9B86E4TOWN DOTOWNP... 8/31/2009 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 file://C:\Users\jsavage\AppData\Local\Temp\XPgrpwise\4AA64ECDTOWN DOTOWNP... 9/8/2009 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 N bl C U) w r O -H -H ro r, 41 U w ~j E O )i Si N a H w ro C Q O H fd a }-1 U E 'N U) ro F. w d ~ u ° 41 x c q (n fo o ro n w 0 3 v w ro U) w 1 3 w 0 O w w w C' 3 V C w C w -r1 w w O U) O w ro U) w r1 -H ro •ri w (d ro n O E C + O C (o 3 a) a) C 3 u JJ .0 a C a " U) A " ro H U) Si (d O -1 'O 16 1 a) O b) E 1 1 ro -ri O <n w v ro ro •~1 V )-I >t ?4 C rd w o w (d U) ) 1 o m C 3 u a Q o •ri w o o 41 A, li C) w ro C A C U w w w C (1) .C u z) u w C C C N H ro dP O O X i•) L ro Sa a) rd (n ro (d w JJ •rl U a) o w Si U) bi a) a) O C a) (d -ri ro 3 C M 1 w ro C ,C w J-) C O ro w U) b) b) 41 •A AJ r > •ri JU O (d N 9 a) C U! 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RC o N 0 O N •r01 N N J-) n• it u C U) V) 41 L) 41 U) 44 )-I W 3 4 C C f-I C ri .u O ro ro W W G 0 U) u r] U H 3 44 (1) u u >I 4, 43 U f. ro W C) q o W N rn \ N z o ro ,J) ii m ) O C9 0 H z H a I P4 "V u) -o O C7 # U) 8 O H ri N rl N M ~M N ~ t` W O~ N N M d~ ,fl l0 1~ W al H N M ~ v) N N N H N N N N H N N N N N N N ~pW N 0 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. 17