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03 -Transmittal-Completed projects A - 1 TOWN OF LOS GATOS CIVIC CENTER 110 E. MAIN STREET P.O. BOX 949 LOS GATOS, CA 95031 May 21, 2012 Honorable Mayor and Town Council: I am pleased to submit to you the Proposed FY 2012/13 – 2016/17 Five-Year Capital Improvement Program (CIP) for the Town of Los Gatos. The CIP is a comprehensive five-year capital improvement plan designed to identify projects to develop and maintain the Town’s infrastructure, which is consistent with the Town Council core value of maintaining the condition and availability of public facilities. Guidance for developing priorities for capital improvement projects is also derived from key plans, including the General Plan. In early 2012, the Town Council reaffirmed its Core Values and 2012-2014 Strategic Goals. One of the core values is to maintain the condition and availability of public facilities, transportation systems, and other public infrastructure. A strategic goal tied to this core value is to address funding needs for street maintenance. FY 2012/13, the first year of the five-year plan, increases funds for basic infrastructure needs, including new public facilities and parks, street repair and reconstruction, street safety projects, retaining walls, sidewalk, curb, and gutter projects, and park projects. Significant projects recommended for FY 2012/13 by category include: Street Program Projects: Blossom Hill Road street improvements, including roadway widening and sidewalk, bicycle lane, and crosswalk construction between Cherry Blossom and Camino del Cerro. Highway 9/University Avenue intersection traffic system improvements, including dedicated left turn lanes, new traffic signal and sidewalks, and ADA improvements. Wedgewood Avenue street improvements, including the construction of sidewalks, a storm drain system, and new landscaping. Almond Grove Street Rehabilitation Project, including the design and first phase of reconstruction of neighborhood streets after funding has been allocated. Installation of a new traffic signal at University and Lark avenues and ADA accessible crosswalks. University Avenue Resurfacing project, including base repairs, storm drain improvements, sidewalk and retaining wall construction, and street resurfacing from Shelbourne Way north to the Vasona Dam. Funding of approximately $1.1 million for residential street repair and rehabilitation. Funding of $250,000 for curb, gutter, and sidewalk repairs throughout the Town. Funding allocation of $100,000 for retaining wall repairs. $25,000 additional funding for annual street restriping. Parks Projects: Completion of Pageant Grounds Landscape Improvements. Completion of the new Los Gatos Creekside Sports Park. Construction of a new, ADA compliant pathway and bicycle trail at Live Oak Manor Park. Public Facilities Projects: Completion of LEED certification for the new Library. Conceptual design and improvements for planned reuse of the existing Library space at the Civic Center. CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 2 In addition to the projects highlighted above, the FY 2012/13 includes other infrastructure projects as detailed in CIP summary documents and further described in the project detail pages by category. CIP FINANCIAL SUMMARY The proposed five-year plan totals $27 million. Approximately, $18.6 million is proposed in the first year of the plan, which is comprised of $14 million in carryover funds from FY 2011/12 and $4.6 million in funding for new projects and/or additions to existing projects. The proposed five-year CIP reflects only $4 million in ongoing dedicated sources (Gas Tax) to help fund the proposed $27 million of planned capital improvements. The balance of CIP funding of $23 million is funded by: Public Improvement Grants funding ($6 million) Sale of Vasona Land revenue to fund the construction of the Los Gatos Creekside Sports Park ($2.7 million) Grant Funds ($2.4 million) Remaining 2002 COP Financing ($42,452) Traffic Mitigation Funds ($3.6 million) Storm Drain Funds ($367,000) Accumulated operating budget savings/excess revenues from the General Fund The primary source of funding for the Town’s capital program is the Town’s General Fund Appropriated Reserves (GFAR). By Council direction, this fund receives transfers from the General Fund’s designated Reserve for Future and Special Projects (current balance projection for July 1, 2011 is approximately $3.8 million) which receives 50% of the Town’s annual revenues above operating expenditures after funding all legally restricted reserves at their required levels. The transfer to GFAR is anticipated to be $700,000 for FY 2012/13. If current projections hold true, the CIP will continue to receive a transfer from the General Fund of approximately $750,000 for FY 2013/14 through FY 2016/17. The funding from this reserve greatly enhances the Town’s ability to implement the CIP; however, the proposed new level of annual funding still falls short of the required funding necessary to support future annual infrastructure maintenance or construct new facilities. Establishing a reliable, dedicated source of funding for basic capital improvements beyond the use of accumulated reserves remains a long-term need and important goal for the Town. Another source of funding for infrastructure improvements is long-term debt. In FY 2009/10 approximately $14 million in Certificate of Participation (COPs) were issued. This financing is secured by tax increment reimbursements via the Redevelopment Property Tax Trust Fund (RPTTF), which funds most of the $18.5 million new library project. In July 2002, the Town successfully issued approximately $10.7 million in COP’s to provide funding for eligible priority projects within the former Redevelopment Agency project area. Notable improvements included the Town Plaza reconstruction, downtown streetscape and street reconstruction, and alleyway projects. The unspent bond proceeds remaining from the July 2002 COP’s (approximately $42,452) have been carried forward to FY 2012/13 to the Almond Grove Street Rehabilitation Project. The Town also receives funding from its Storm Drain Fund, which relies on a previously established charge of $0.75 per square foot of impervious surface created by new development. Depending on development activity, this fee produces approximately $100,000 in revenue annually. This fee has not been adjusted for several years and will need to be evaluated as part of the NPDES planning process. The Utility Undergrounding Fund serves as a funding source for activities generally undertaken in conjunction with street improvement projects. The Utility Undergrounding funding is derived from a CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 3 Town construction tax of 18 cents charged for each square foot of building addition or alteration within the Town, and from Rule 20A funds allocated from a percentage of electric bills. The Town's allocation is typically $15,000 annually. Total cash balances currently on hand from the utility undergrounding construction tax are approximately $2.4 million at FY 2011/12 year-end. No projects are proposed in 2012/13 through 2016/17. The remaining sources are primarily one-time funds from State or Federal government or from special revenue funds that have often fluctuated in tandem with the economy and the state budget. Examples of one-time funds include Federal Stimulus funds and State Proposition 42 Gas Tax funds. PROPOSED FY 2012-17 CIP OVERVIEW The Capital Improvement Program is broadly grouped into: Streets Program, which maintains and ensures functional streets, pedestrian, and bike systems. Parks Program, which repairs or improves parks, park buildings, and urban forestry. Public Facilities Program, which constructs and repairs public buildings and purchases equipment. The proposed CIP projects represent carry-forward projects from the prior year as part of the multi-year programming of projects and new projects not previously programmed. Of the total estimated five-year CIP cost of $26.7 million, approximately $19.7 million (74%) is allocated to the streets, retaining walls, sidewalks, and curbs category, $3.2 million (12%) is allocated to park projects and $3.8 million (14%) is allocated to public facility projects,. Allocations are summarized below by type of major improvements within the program categories. Carryfwd to 2012/13 2012/13 2013/14 2014/15 2015/16 2016/17 Total By Category Total By Program Streets Reconstruct/Resurfacing 5,143,606 1,331,245 1,327,073 1,327,073 1,327,073 1,327,073 11,783,143 Maintenance & Safety 1,019,455 425,000 435,000 435,000 435,000 435,000 3,184,455 Street Improvements 1,843,199 1,914,666 640,000 174,299 65,000 - 4,637,164 Bridges 123,730 - - - - - 123,730 19,728,492 Parks Park Improvements 2,703,495 459,535 30,000 - - - 3,193,030 Trail Improvements- - - - - - - 3,193,030 Public Facilities Infrastructure Projects 2,937,187 477,000 125,000 - - - 3,539,187 Equipment Projects 223,083 - - - - - 223,083 3,762,270 TOTALS 13,993,756 4,607,446 2,557,073 1,936,372 1,827,073 1,762,073 26,683,793 Five Year CIP Summary Total funding for street reconstruction and resurfacing for the next five years is planned at $11.8 million with approximately $5.1 million allocated in FY 2011/12 including carryovers. Over the five-year period, the CIP proposes $7.9 million for various other street-related infrastructure improvements including street maintenance and resurfacing; curb, gutter and sidewalk maintenance; street intersection improvements; retaining wall reconstruction; crosswalk ramps and safety devices; and storm drain improvements. The proposed funding and scope for the annual concrete curb, gutter, and sidewalk repair and replacement maintenance program could be enhanced through cost-sharing with property owners. The Council has expressed interest in exploring this concept; however, due to workload priorities, this approach has not been pursued. Staff will restructure its workload to accommodate this request upon Council direction. CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 4 Although the Proposed FY 2012/13-2016/17 CIP is a five-year plan, only the first year of the plan is formally adopted with funds appropriated by the Town Council as part of the budget process. Future year projects are funded with designated cash reserves on hand, supplemented by estimated annual revenues for capital funding purposes such as Gas Tax funds and state transportation bond funds. The scope and funding estimates may change based on the fiscal situation and evolving priorities. As discussed earlier, the proposed FY 2012/13 CIP appropriation totals $26.7 million. Of this amount, $14 million represents carry forward funds available from the prior year. The following schedule lists the carryforward and new projects by fund and by program for appropriation in FY 2012/13. GFAR Grants and Gas Tax Other Total CARRYFORWARD PROJECTS Awards Streets Street Repair & Resurfacing 526,880$ - - - 526,880$ * Almond Grove Street Rehabiltation Project 4,000,000 - - 38,280 4,038,280 * Univ Ave Resurfacing (Shelbourne to Vasona)78,446 500,000 - 578,446 * Traffic Calming Projects 17,027 - - - 17,027 * Curb, Gutter & Sidewalk Maintenance 285,855 - - - 285,855 * Retaining Wall Repairs 688,716 - - - 688,716 * Annual Street Restriping 27,857 - - - 27,857 * ADA Upgrades to be allocated- - - - - Hwy 9/University Intersection- 829,947 - 247,112 1,077,059 Blossom Hill Road Improvements - 200,000 - 215,414 415,414 Wedgewood Ave Improvements- - - 63,726 63,726 Hicks & Philips Culvert Improvements- - - 285,000 285,000 University Avenue Sidewalk / Creekside Sports Park 2,000 - - - 2,000 * Lark Avenue / Los Gatos Boulevard Restriping Project- - - - - Quito Road - Bridge Replacement 123,730 123,730 Parks Pageant Grounds Phase 3 Improvements 300,054 - - - 300,054 * Los Gatos Creekside Sports Park 2,263,475 - - - 2,263,475 Live Oak Manor Park ADA Upgrades 31,990 107,976 - - 139,966 Public Facilities Town Beautification Projects 10,269 - - - 10,269 Library Facility Project 749,489 - - - 749,489 Civic Center Reuse Project 1,869,086 58,344 - - 1,927,430 * Downtown Improvements 250,000 - - - 250,000 Information System Upgrade 75,175 - - - 75,175 Town-Wide Document Imaging Prj 19,748 - - - 19,748 Audio / Video System Upgrade 58,160 - - - 58,160 Tiburon CAD / RMS Upgrade 70,000 70,000 TOTAL OF CARRYFORWARD PROJECTS 11,447,957$ 1,696,267$ -$ 849,532$ 13,993,756$ NEW PROJECTS Streets Pavement Rehabilitation - Crack Seal 152,073 - - - 152,073 Hicks/Shannon Guardrail 40,000 - - - 40,000 Winchester Blvd. / Knowles Intersection- - - 530,000 530,000 Northside Parking Lot Improvements 74,516 74,516 224 W. Main Street Property Acquisition (Parking Lot 6)1,200,000 1,200,000 Parks Turf Conversion & Water Conversation 25,000 - - - 25,000 Howe's Play Lot Pathway Improvements- 34,535 - - 34,535- - - Public Facilities TOTAL OF NEW PROJECTS 1,491,589$ 34,535$ -$ 530,000$ 2,056,124$ TOTAL OF CARRYFORWARD & NEW PROJECTS 12,939,546$ 1,730,802$ -$ 1,379,532$ 16,049,880$ * These carryforward projects include new money for FY 2012/13 in the amount of $2,551,322 Carryforward & New FY 2012/13 CIP Projects All physical assets, such as road surfaces and buildings, have a useful life and must be refurbished, reconstructed, or replaced. A regular program of preventive maintenance and repair can extend the useful life of these assets. Despite the cyclical nature of some of the revenue sources outlined above, the Town is committed to maintaining its infrastructure assets utilizing the resources available. Approximately 74% of the proposed FY 2012/13-2016/17 CIP funding is allocated to street reconstruction and maintenance projects. These projects include: street base repairs and resurfacing, curb, gutter, and sidewalk replacement, retaining wall construction, and storm drain improvements. This emphasis reflects the Town Council’s priority to address street maintenance needs. The goal is for Town streets to be at an average Pavement Condition Index (PCI) of above 70 (100 being the highest rating CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 5 possible). The Town’s cumulative investment in its streets resulted in raising the PCI from a low of 64 in 2002 to the level of 75 in 2006. The PCI value for Town streets as of Spring 2011 is 71. This value is primarily driven by the condition of residential streets. The PCI for arterials and collector streets is 80 and 70 respectively. Potential Funding Sources As illustrated in the chart below, funding for street repair is based on revenue from two primary sources: gas tax, and transfers from the General Fund Designated Reserve. Potential Funding Source Annual Estimated Amount Per Five-Year CIP Gas Tax Funds $832,290 Transfer from General Fund Designated Reserve $700,000 Five-Year CIP Estimated Annual Total $1,532,290 Gas tax revenues ($832,290) and funding from the General Fund Designated Reserves account for the majority of the $1.5 million annual funds available for street maintenance. Other funds that help support street repair and maintenance are subject to a year-to-year allocation as part of the State budget process. Assuming that the proposed five-year CIP annual investment of $1.5 million in streets continues to be available, options to achieve the Town’s investment target of $2 million include: Further reducing the operating budget by another $100,000 and allocating it annually to the street program. Continuing the current method of allocating unexpended operating costs, assuming that sufficient funds will be available. This approach could involve increasing the percentage of funds allocated to street repair and reducing the amount allocated to other capital projects. Exploring the feasibility of new revenue sources, such as a voter-approved General Obligation Bond, the formation of an assessment district located in specific areas, or other variations of debt, fee or tax financing. The Council has already directed exploration of this potential revenue sources as part of the 2012-14 Strategic Goals. Staff will continue to work within funding limitations to address the Town’s overall pavement conditions while ensuring the continue use of best practices in materials, selection, and construction/project management. In addition, staff will present to Council in late 2012 or early 2013 an identification of existing one-time funding opportunities for potential Council allocation to Almond Grove Street Rehabilitation, Civic Center Reuse, or other capital project priorities. Aside from the significant street infrastructure projects, the Town is also moving forward with several other major capital projects. The construction of the new Town Library will continue into FY 2012/13 for finish work and LEED certification. The new Library facility will provide Town residents with 30,000 square feet of space to provide library services. In addition, the development of a new 2.5 acre sports park, located at 930 University Avenue, is funded through the proposed FY 2012/13 Capital Budget using the proceeds of the Vasona Land sale. This facility will provide a large multi-use athletic field that can accommodate several different sports or activities and is expected to be complete in Fall 2012. CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 6 FY 2011/12 COMPLETED PROJECTS Several high priority projects are expected to be completed by the end of FY 2011/12. The schedule below outlines projects, corresponding funding source, and total expense of the completed projects, which is estimated to be $1.3 million. Prior Years GFAR Grant and RDA Other *Total Awards Estimated Exp Exp Exp Exp Exp Street Program University Avenue Guardrail- 171,342 - - - 171,342$ Hwy 9 Phase 111 Design 13,881 14,177 - - - 28,057$ Lark Avenue Traffic Signal Improvements- 402,409 - - - 402,409$ Park Program Balzer Facility Upgrades- 1,390 - - - 1,390$ OMP Picnic Areas #1 & #2 Renovation- 128,000 - - - 128,000$ Oak Meadow Park Tot Lot Renovation 5,919 18,135 - - - 24,054$ Public Facilities Program Civic Center Site Improvements 435,087 (100,089) - - 4,707 339,705$ Energy Efficient Lighting Project 1,110 - 161,602 - - 162,712$ Adult Rec Center Roofing Project- 71,336 71,336$ Plaza Bus Shelter Renovation Project- 20,000 20,000$ TOTAL OF COMPLETED PROJECTS 455,996$ 726,699$ 161,602$ - 4,707$ 1,349,004$ * Other Funds include Storm Drain Fund, Gas Tax Funds, Utility Underground Funds and Traffic Mitiagtion Funds. PROJECTS COMPLETED IN FY 2011/12 PAST ACCOMPLISHMENTS The Town continues to make substantial investments in its transportation infrastructure and has completed a number of successful traffic circulations, pedestrian safety, and neighborhood traffic projects as briefly discussed below: Street Reconstruction and Maintenance The following table summarizes the funding sources of the high priority CIP street reconstruction and resurfacing projects expended by the Town since FY 2006/07 through the current year. The total value of this investment is approximately $5.3 million. Looking into the future, the proposed CIP includes approximately $14.9 million of additional street or intersection improvements over the next five years. Expenses & Funding Source Expended 2006/07 thru 2011/12 Estimated Carryforward to 2012/13 New Funding 2012/13 thru 2016/17 Total Funding 2012/13 thru 2016/17 GFAR 1,580,760$ 4,650,210$ 3,560,365$ 8,210,575$ Traffic Mitigation 142,581 526,252 1,204,299 1,730,551$ Gas Tax 2,739,390 - 3,250,000 3,250,000$ RDA 41,720 38,280 4,172 42,452$ Grants 829,947 829,947 500,000 1,329,947$ Storm Drains 17,180 285,000 65,000 350,000$ TOTAL 5,351,578$ 6,329,689$ 8,583,836$ 14,913,525$ CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 7 Included with the $14.9 million dollars of street improvements are significant projects completed in recent years, including street reconstruction, repaving of major arterials and collectors, and neighborhood streets including: Rehabilitation of Hillside Streets Resurfacing of University Avenue from Mullen to Main Street Resurfacing of Bachman Avenue between University and North Santa Cruz Avenue Reconstruction of Royce Street between University and North Santa Cruz Avenue Winchester Blvd/Lark Ave Intersection Improvements University Avenue/Blossom Hill Road Intersection Improvements Railroad Crossing at Winchester Boulevard, near Highway 85 Prospect Avenue Resurfacing In addition to the substantial street reconstruction and repaving efforts, the Town has invested in other components of the Town’s transportation system infrastructure, including: Retaining Wall Replacement Several retaining walls were repaired and replaced including those along University Avenue, Cleland Avenue, Wooded View Drive, Kimble Avenue, and adjacent to the Los Gatos Creek Trail near Lark Avenue. Enhanced Pedestrian Access and Safe Routes to Schools New sidewalks were installed and pathways were resurfaced at several locations throughout the Town, including: Winchester Boulevard between Daves Avenue and East Vineland Avenues Pollard Road lighted crosswalk adjacent to Jack Fisher Park Wedgewood Avenue from Wimbledon Drive to Mulberry Drive Mitchell Avenue, between Fisher Avenue and George Street Completion of the new Roberts Road bridge, including bike lanes and sidewalks School/pedestrian enhancements include: Upgrade of traffic control timing and re-striping of crosswalks near elementary schools Upgrade of neon green “pedestrian crossing” signs Installation of pedestrian countdown signals on Los Gatos Boulevard Installation of new speed radar signs on Oka Road and Pollard Road Installation of new traffic signals at the intersection of Daves Avenue/Winchester Boulevard, Lark /University, and University Avenue/Blossom Hill Road to improve pedestrian safety and bicycle access Traffic Calming Projects Several projects were completed in recent years, including neighborhood projects focusing on: Massol Avenue Wraight Avenue Vista Del Monte Belwood Gateway Short Road Bella Vista CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 8 Park Improvement Projects Several projects have been successfully completed over the last several years, including: Resurfacing hard courts at Bachman, Blossom Hill, and La Rinconada parks Renovation of play lots at Bachman, Belgatos, and Blossom Hill parks Replacement of play lot equipment at Live Oak Manor park Construction of a new ADA compliant pathway at Oak Meadow park Renovation of Picnic Area 1 & 2 at Oak Meadow Park Safety enhancements to the decorative interactive fountain at the Town Plaza CONCLUSION The challenge of finding a reliable ongoing revenue stream available for capital projects continues to be a Town priority. Recognizing the realties of funding challenges and uncertain local economic trends, the Town’s Proposed FY 2012/13 – 2016/17 Capital Improvement Plan continues a strategy of funding the Town’s most urgent capital needs. I wish to thank all of the departments, in particular Department Directors and members of their management and support staff, for their countless hours of work and tireless efforts to present this Capital Improvement Program to the Town Council, as well as the following staff members: Pamela Jacobs, Assistant Town Manager Todd Capurso, Parks & Public Works Director Kevin Rohani, Town Engineer Wendie Rooney, Community Development Director Stephen Conway, Finance and Administrative Services Director Jenny Haruyama, Assistant Finance/Budget Director Linda Isherwood, Accountant/Finance Analyst Gitta Ungvari, Administrative Analyst Respectfully submitted, Larson Town Manager CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 9 FY 2012/13 – 2016/17 CAPITAL IMPROVEMENT PROGRAM BUDGET ADDENDUM The Council’s adoption of the Capital Improvement Program will appropriate the first year of budgeted revenues, expenditures, and operating transfers as outlined in the budget document. The CIP’s out years reflect the established plan at the time of adoption. As appropriate, out-year plans will be reviewed and adjusted in following year’s Capital Improvement Programs. This budget addendum section, which follows the proposed budget’s Transmittal Letter, conveys Council directed revisions to the proposed budget as determined in the May 2012 public hearing on the proposed CIP budget, as well as corrections and project revisions. Council did not direct any project changes, additions, deletions, or funding revisions for the FY 2012/13 – 2016/17 Capital Improvement Program. CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 10 BUDGET PROCESS OVERVIEW he Town of Los Gatos adopts an annual Operating and Capital Budget and an annual budget update of the five-year Capital Improvement Program (CIP) for the Town of Los Gatos and the Successor Agency of the Town of Los Gatos Redevelopment Agency (RDA). The budgets contain summary level information for revenue and expenditure appropriations for the fiscal year beginning July 1st and ending June 30th. The budget documents are prepared in accordance with generally accepted accounting principles (GAAP). Budget Purpose The Operating and Capital Summary Budget and the Capital Improvement Program serve as the Town’s financial plan, as well as a policy document, a communications tool, and an operations guide. Developed with an emphasis on long range planning, service delivery, and program management, a fundamental purpose of these documents is to provide a linkage between the services and projects the Town and Redevelopment Agency intends to accomplish, and the resources committed to get the work done. The format of the budget facilitates this linkage by clearly identifying program purpose, key projects, and work plan goals, in relation to revenue and expenditures appropriations. CIP Purpose In particular, the CIP is designed to identify projects and funds required to adequately develop and maintain the Town’s infrastructure, which is consistent with the Town Council strategic goal of maintaining the condition and availability of public facilities. The following plans provide additional guidance in developing priorities for capital improvement projects: • General Plan • Street Improvement Program • Storm Drain Master Plan In addition, project prioritization criteria such as health and safety issues, infrastructure or system condition, short-term versus long-term impacts and availability of external funding sources are assessed as part of the process that staff uses to rank projects from high to low in preparing the proposed CIP. As it develops and matures in its application, the Town’s Infrastructure Assessment Program will further support the Town’s long-range Capital Improvement Program, focusing attention on the current and future infrastructure needs of the community and balancing the community’s needs with funding requirements and financial resources. Other technology tools used in CIP development include the use of the geographic information system, the traffic monitoring system, electronic files for tracking unfunded projects and replacement schedules, and an asset management program to track work requests. The Town’s capital projects are categorized as follows: The Streets Program provides funding for maintaining a functional street and pedestrian system. Proposed projects are consistent with the General Plan, provide for a safe and efficient traffic flow through intersections while minimizing unnecessary traffic movement and noise through residential neighborhoods, and provide street lighting for traffic safety at intersections and on public streets. Also included are sidewalk improvements. The Public Facilities Program includes projects for constructing and repairing public buildings and purchasing equipment. Town buildings include the Civic Center, the new library, Adult Recreation Center, Service Center, Tait Avenue and Forbes Mill Museums, and partial service to the Recreation Center, which is a Town-owned building leased to Los Gatos-Saratoga Community Education and Recreation. Although the Town owns the three fire stations within town limits, the Santa Clara County Fire District maintains them under contract. The Parks Program includes projects for parks, park buildings, urban forestry, and urban beautification. T PROPOSED CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 11 Basis of Budgeting and Accounting Developed on a program basis with fund level authority, the operating and capital budgets represent services and functions provided by the Town in alignment with the resources allocated during the fiscal year. The Town’s Governmental Funds consist of the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Project Funds for both the Town and the Successor Agency of the Town of Los Gatos Redevelopment Agency (RDA). Basis of Accounting and Budget refers to the timing factor concept in recognizing transactions. This basis is a key component of the overall financial system because the budget determines the accounting system. For example, if the budget anticipates revenues on a cash basis, the accounting system must record only cash revenues as receipts. If the budget uses an accrual basis, accounting must do likewise. The Town’s budgeting and accounting systems both use a combination of modified accrual and full accrual basis in the accounting and budget systems. Governmental Fund types and Successor Agency fund budgets are developed using the modified accrual basis of accounting. Under this basis, revenues are estimated for the period if they are susceptible to accrual, e.g. amounts can be determined and will be collected within the current period. Principal and interest on general long-term debt are budgeted as expenditures when due, whereas other expenditures are budgeted for liabilities expected to be incurred during the current period. Proprietary fund budgets are adopted using the full accrual basis of accounting whereby revenue budget projections are developed recognizing revenues expected to be earned during the period, and expenditures are developed for expenses anticipated to be incurred in the fiscal year. The Town maintains one type of proprietary fund: Internal Service Funds. The Town’s fiduciary funds are also budgeted under the modified accrual basis. The Town administers five trust funds and one agency fund. Trust funds are subject to trust agreement guidelines, and the Agency Fund is held in a purely custodial capacity involving only the receipt, temporary investment, and remittance of resources. Summary of Budget Development The Town develops it budgets with a team-based budgeting approach. Town management and the Finance Department guide the process through budget development; however, program budgets and workplans are developed with each department’s Director, Analyst, and Program Manager’s oversight and expertise. This approach allows for hands-on planning and creates a clearer understanding for both management and staff of a program’s goals and functions to be accomplished in the next budget year. The Development Process Typically both the Operating and Capital Budget and Capital Improvement Program processes begin in the fall with the Town Council and Town Manager’s collaborative development and refinement of initiatives and directives for the upcoming budget year. In January, the budget preparation process begins officially for staff with a budget kickoff meeting. Budget assumptions, directives, and initiatives developed by Town Council and management are provided to set the Town’s overall objectives and goals. Department and agency staff identify and analyze program revenue and expenditure projections in coordination with Finance/Budget staff and Town management. Capital improvement projects are assessed and refined, and CIP funding and appropriation requirements are finalized. Through rounds of budget briefings and revisions, staff’s final program budget and workplans are developed by the end of April. Operational and capital workplans are finalized, and the Finance/Budget staff prepares financial summary information for Town Council review in addition to departmental budgets and workplans. PROPOSED CAPITAL IMPROVEMENT PROGRAM Introduction Section A - 12 CIP Development Process The long-term Capital Improvement Program includes projects that have a value of $25,000 or more with a minimum useful life of 5 years at a fixed location. Equipment, operating, and maintenance costs associated with the CIP projects are identified where feasible, and will be included in future operating budgets. Cost estimates for new projects are based on 2011 dollars; however, engineering estimates for carryover projects from the prior year are updated to reflect current industry costs. Under direction from the Town Manager’s Office, the Parks and Public Works Department took the lead in the preparation of the proposed projects for consideration in the 2012-17 Capital Improvement Program. In coordination with other Town departments, projects were reviewed to ensure that the Town’s priorities are addressed within available resources. In some cases, previously approved projects have been deferred due to reallocation of funding to other priorities and thus have been noted as unfunded projects in each program section of the CIP. The Town Manager’s Office reviews the prioritized list of proposed capital improvement projects and funding sources in conjunction with the preparation of the FY 2012/13 Operating Budget. The Proposed CIP is then presented by the Town Manager to the Town Council. The Proposed CIP is also submitted to the Planning Commission for review to ensure that the proposed projects are consistent with the Town’s General Plan. The Planning Commission reviewed the CIP on April 25, 2012. The CIP is reviewed during this time to determine funding capabilities and project priorities, and to refine project work plans. Although the CIP budget document is prepared separately from the Operating and Capital Budget, CIP program information is incorporated into the Operating and Capital Summary Budget document through the resulting financial appropriations and service level requirements. Budget Adoption During the month of May, the Town Council reviews the proposed Operating and Capital Summary Budget, and the Capital Improvement Program for the five year period in a public hearing. Notice of the hearing is published in a local newspaper at least ten days prior to the Council’s public hearing date. The public is invited to participate and copies of the proposed budgets are available for review in the Clerk Department and at the budget hearing. Under requirements established in Section 65401 of the State Government Code, the Town’s Planning Commission also reviews the proposed Capital Improvement Program and reports back to the Town Council as to the conformity of the plan with the Town’s Adopted General Plan or part thereof. Final Council-directed revisions to the proposed budget are made and the budget documents are resubmitted to the Town Council for adoption, again in a publicized public hearing prior to the beginning of the fiscal year. Section 2.30.295(b) of the Los Gatos Town Code requires the Town Manager to annually prepare and submit a budget to the Town Council. This is accomplished in June, when the final proposed budget is formally submitted to the Town Council in the subsequent public hearing. The approved resolutions to adopt the CIP and operating budgets and the appropriation limitation (Gann Limit) follow this section. Budget Amendments During the course of the fiscal year, workplan changes and unanticipated needs will necessitate adjustments to the adopted budgets. The Town Manager is authorized to transfer appropriations between categories, departments, projects, and programs within a fund in the adopted budget, whereas the Town Council holds the authority for budget increases and decreases and transfers between funds. COMPLETED CIP PROJECTS FY 2011/12 A-13 L O S G A T O S - S A R A T O G A R D LOS GATOS BLVD E M AI N S T HWY 17 H W Y 17 N SANTA CRUZ AV WINCHESTE R BLVD B LOSSOM HILL RD L O S G A TOS BLVD H W Y 85 KENNEDY RD SHANNON RD L A R K A V UNIVERSITY AV WEDGEWOOD P O L L A R D R D D C "E" WAS A TOWN-WIDE PROJECT F B A G PROJECT LOCATIONS A University Avenue Guardrail E Energy Efficient Lighting Project B Hwy 9 Phase III Design F Oak Meadow Park Picnic Areas 1 & 2 Renovation C Lark Avenue Traffic Signal Improvements G Adult Recreation Center Roofing Project D Plaza Bus Shelter Renovation Project COMPLETED CIP PROJECTS FY 2011/12 A-14 A University Avenue Guardrail University Avenue Guardrail This project included removal and replacement of an old metal beam guard railing on University Avenue along Vasona Lake up to the entrance of the new Los Gatos Creekside Sports Park. The new guardrail is compliant with State safety standards. The total project cost was $171,300. B Hwy 9 Phase III Design Highway 9 Phase III This project installed bicycle loop detectors on Highway 9 at the Santa Cruz Avenue and University Avenue intersections. A new bike lane and retaining wall will also be constructed on Highway 9 and Los Gatos Boulevard intersection. This project was partially funded by State Grants. The Los Gatos portion of the project cost was $27,000. C Lark Avenue Traffic Signal Improvements Lark Avenue Traffic Signal Improvements This project included a traffic engineering study to examine the vehicular traffic movements at Lark Avenue from Winchester Boulevard to Charter Oaks Drive. It also included the design and construction of a new traffic signal system at the Lark/University intersection. The total project cost was $402,000. COMPLETED CIP PROJECTS FY 2011/12 A-15 D Plaza Bus Shelter Renovation Project Plaza Bus Shelter Renovation Project This project repaired the Town Plaza bus shelter roof and added an electrical outlet to enhance access for the Town Plaza Park Holiday Tree Lighting and other special events. The total project cost was $20,000. E Energy Efficient Lighting Project Energy Efficient Lighting Project This project replaced old outdoor lighting at Town parking lots and parks with energy efficient induction and LED lighting. A total of 176 energy efficient lighting fixtures and bulbs were installed in 16 different Town-owned parking lots and parks. The total project cost was $163,000. F Oak Meadow Park Picnic Areas #1 & #2 Renovation Oak Meadow Park Picnic Areas #1 & #2 Renovation This project involved the replacement of a concrete deck and repair of a retaining wall in picnic areas 1 and 2. Surrounding fences, benches, and barbeque pits were also repaired and/or replaced. The total project cost was $128,000. COMPLETED CIP PROJECTS FY 2011/12 A-16 G. Oak Meadow Park ADA Pathway Access Upgrades Adult Recreation Center Roofing Project This project involved replacing the roof at the Adult Recreation Center. The existing roof was aging and in need of replacement. The total project cost was $80,000.